Exhibit 99
ASSET
PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this “
Agreement ”), is entered into as of February 4,
2007, by and between NETtime Solutions, LLC, an Arizona limited
liability company (“ NETtime Solutions ”), and
NETtime Solutions, Inc., a Nevada corporation
(“NETtime-NV”), and its wholly-owned subsidiaries,
NETtime Solutions, Inc., an Arizona corporation (NETtime-AZ),
and NetEdge Devices, LLC, an Arizona limited liability company
(“NetEdge” and together with NETtime- AZ, the
“Subsidiaries”).
RECITALS
A.
NETtime-NV, through the Subsidiaries, conducts a business that
involves developing and marketing a line of time and labor
management software products (the “ Business
”).
B.
Certain officers, directors and shareholders of NETtime-NV, as
listed on Exhibit A attached hereto (the
“Contributors”), desire to acquire the Assets (defined
below) in respect of or used in the Business.
C.
NETtime Solutions is an Arizona limited liability company formed
for the purpose of acquiring the Business.
D.
Pursuant to that certain Limited Liability Company Agreement, dated
as of the date hereof, entered into by and among NETtime Solutions
and the Contributors, the Contributors contributed an aggregate of
6,478,693 shares of the issued and outstanding common stock of
NETtime-NV held by them (the “ Contributed Shares
”) to NETtime Solutions in exchange for 100% of the
membership interests in NETtime Solutions.
E.
NETtime Solutions desires to acquire the Business and NETtime-NV
and the Subsidiaries (together, the “ Sellers ”)
desire to sell the same, subject to the terms and conditions of
this Agreement.
In
consideration of the foregoing and the mutual representations,
warranties, covenants and agreements herein contained, NETtime
Solutions and the Sellers agree as follows:
ARTICLE I
SALE OF ASSETS BY NETTIME
1.1
Sale of the Assets
.
1.1.1
Except as disclosed on Schedule 1.1 hereto, and subject to
the terms and conditions of this Agreement, effective as of the
close of business on the Closing Date (as defined below), the
Sellers shall sell, convey, assign, transfer, and deliver to
NETtime Solutions, and NETtime Solutions shall purchase and acquire
from the Sellers, free and clear of any Encumbrances other than
Permitted Encumbrances, all of the assets, properties, and business
of every kind and description; wherever located; real, personal, or
mixed; tangible or intangible; owned or held; or used primarily in
the conduct of the Business by the Sellers, as the same shall exist
on the date of this Agreement not disposed of in the ordinary
course of business, and all assets and property thereafter acquired
by the Sellers in respect of or used in the Business immediately
prior to the Closing Date (collectively, the “ Assets
”). Notwithstanding the foregoing, the transfer of the
assets pursuant to this Agreement (the “ Asset Sale
”) shall not include the assumption of any liability related
to the Assets unless NETtime Solutions expressly assumes such
liability pursuant to Section 1.4.
1.1.2
Notwithstanding any provision of this Agreement or any Conveyance
Instrument to the contrary, NETtime Solutions is acquiring only the
Assets and is not acquiring any other asset of the Sellers, and all
such other assets shall be retained by NETtime-NV (all of such
assets not being acquired hereinafter are set forth in Schedule
1.1, and referred to as the “ Excluded Assets
”)
1.2
Consideration . The
consideration for the Assets (the “ Purchase Price
”) will be (a) One Million Forty Two Thousand Dollars
($1,042,000) and (b) the assumption of all of NETtime
Solution’s indebtedness
existing as of the
closing, including, without limitation, $500,000 of trade payables
and $1,500,000 of short and long-term notes (the “Assumed
Liabilities”). The Purchase Price shall be delivered by
NETtime Solutions to the Sellers as follows:
1.2.1
The Contributed Shares shall be delivered to the Sellers at
Closing.
1.2.2
An unsecured promissory note in the aggregate principal amount of
Two Hundred Thousand Dollars ($200,000) shall be delivered to the
Sellers at Closing.
1.3
Conveyance Instruments . In order to effectuate
the contribution of the Assets as contemplated by this
Article 1 , NETtime-NV has, or will hereafter, execute
and deliver, or cause to be executed and delivered, all such
documents or instruments of assignment, transfer, or conveyance
(collectively, the “ Conveyance Instruments ”
and together with this Agreement, the “ Transaction
Documents ”), as the parties shall reasonably deem
necessary or appropriate, to vest in or confirm title to the Assets
to NETtime Solutions.
1.4
Assumed Liabilities .
Subject to the terms and conditions of this Agreement, in reliance
on the representations, warranties, covenants, and agreements of
the parties contained herein, NETtime Solutions hereby assumes and
agrees to pay, discharge, or fulfill all of the liabilities and
obligations arising out of or relating to the Assets and/or the
Business existing as of the Closing, excluding those liabilities
relating to any contract breaches existing as of the Closing (the
“ Assumed Liabilities ”).
1.5
Excluded Liabilities
. Notwithstanding any provision of this Agreement or any
Conveyance Instrument to the contrary, NETtime Solutions is
assuming only the Assumed Liabilities and is not assuming any other
liability or obligation of the Sellers (or any predecessor owner of
all or part of its business and assets) of whatever nature whether
presently in existence of arising hereafter, and all such other
liabilities and obligations shall be retained by and remain
liabilities of the Sellers (all of such liabilities and obligations
not being assumed hereinafter are set forth in Schedule 1.5, and
referred to as the “ Excluded Liabilities
”).
1.6
Allocation . The
Purchase Price shall be allocated in accordance with Schedule
1.6. In any proceeding related to the determination of any
Tax, neither NETtime Solutions nor NETtime-NV shall contend or
represent that such allocation is not a correct
allocation.
ARTICLE II
EVENTS OCCURRING ON THE CLOSING DATE
2.1
Closing Date. The
transactions contemplated in Article I of this Agreement shall
occur (the “ Closing ”) effective as of
February 4, 2008 (the “ Closing Date
”).
2.2
Deliveries by the Sellers.
On the Closing Date, the Sellers shall deliver to NETtime
Solutions the following:
2.2.1
Appropriately executed copies of each Transaction Document to which
it is a party, and such other documents as NETtime Solutions shall
have reasonably requested to demonstrate compliance with, and in
the furtherance of the transactions contemplated by, this
Agreement;
2.2.2
The executed counterpart copies of all consents, approvals,
authorizations, and permits, if any, from third parties referred to
in Section 5.3 hereof.
2.3
Deliveries by NETtime
Solutions. On the Closing Date, NETtime Solutions
shall deliver to the Sellers appropriately executed copies of each
Transaction Document to which it is a party, and such other
documents as the Sellers shall have reasonably requested to
demonstrate compliance with, and in the furtherance of the
transactions contemplated by, this Agreement.
2.3.2
NETtime-NV Debt .
Upon the closing the transactions contemplated hereby, NETtime
Solutions shall assume the Assumed Liabilities.
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2.3.3
NETtime-NV Name .
Promptly following the closing of the transactions contemplated by
this Agreement, NETtime-NV shall effect a change in the corporate
names of NETtime-NV and NETtime-AZ, and that the new corporate
names will not include the words “Net”,
“Time”, or “NETtime”, or any combination or
rephrasing of such words. Sellers may continue to use its existing
corporate names until such corporate name change is
effective.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
3.1
Organization .
NETtime-NV is a corporation that is validly existing, and in good
standing under the laws of the State of Nevada, with the power and
authority to own, lease, and operate its properties and to carry on
its business as now being conducted. NETtime-AZ is a
corporation that is validly existing, and in good standing under
the laws of Arizona, with the power and authority to own, lease,
and operate its properties and to carry on its business as now
being conducted. NetEdge is a limited liability company that
is validly existing, and in good standing under the laws of the
State of Arizona, with the power and authority to own, lease, and
operate its properties and to carry on its business as now being
conducted.
3.2
Authority; Enforceability
. Each of the Sellers has full power and authority to
consummate the Asset Sale contemplated in the Transaction
Documents. The execution and delivery by each of the Sellers of the
Transaction Documents to which it is a party and the consummation
by each of the Sellers of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary
corporate or similar organizational action. Each Seller has duly
executed and delivered each Transaction Document to which it is a
party, and each Transaction Document to which it is a party
constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency or similar laws affecting
creditors’ rights generally or equitable principles relating
to or limiting creditors’ rights generally.
3.3
No Violations .
Except for the filing with the SEC of (a) a proxy statement
relating to the approval by the stockholders of NETtime-NV of the
principal terms of this Agreement and the transactions contemplated
hereby (the “ Proxy Statement ”) and
(b) such reports under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated
hereby, neither the execution nor delivery of this Agreement, nor
the consummation of the transactions contemplated
hereby:
3.3.1
Requires any filing or registration with, or consent,
authorization, approval, or permit of, any governmental or
regulatory authority on the part of the Sellers;
3.3.2
Violates or will violate (i) any order, writ, injunction,
judgment, decree, or award of any court or governmental or
regulatory authority, or (ii) to the knowledge of the Sellers,
any law of any governmental or regulatory authority to which the
Sellers or any of their respective properties or assets are
subject;
3.3.3
Violates or will violate, or conflicts with or will conflict with,
any provision of, or constitutes a default under, the Certificate
or Articles of Incorporation or the Bylaws or Operating Agreement,
as applicable, of any of the Sellers; or
3.3.4
Violates or breaches or constitutes a default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, or give rise to a right to terminate, any mortgage,
contract, agreement, deed of trust, license, lease, or other
instrument, arrangement, commitment, obligation, understanding, or
restriction of any kind to which any of the Sellers is a party or
by which any of their respective properties may be bound, or
(ii) will cause, or give any person grounds to cause, to be
accelerated (with notice or lapse of time or both) the maturity of,
or will increase, any liability or obligation of any of the Sellers
which violation, breach, default, liability, or obligation,
individually or in the aggregate, is or would be material to the
business or financial condition of any of the Sellers or the
Business taken as a whole.
3
3.4
Patents, Trademarks, and Similar
Rights .
3.4.1
Schedule 3.4 contains a list of all patents, copyrights,
trademarks, trade names, technology, know-how, processes, trade
secrets, inventions, proprietary data, formulae, research and
development data, computer software programs, and other intangible
property, and any applications for the same, used in the Business
and all goodwill associated with such intangible property
(collectively, the “ Intangible Property ”);
owned by the Sellers and used primarily in the Business and a list
of all licenses and other agreements relating to Intangible
Property that the Sellers are licensed or authorized to use by
others in connection with the Business.
3.4.2
The Sellers have the sole and exclusive right to use the Intangible
Property and the consummation of the transactions contemplated by
this Agreement will not alter or impair any such rights and will
result in NETtime Solutions having the sole and exclusive right to
use all such Intangible Property used primarily in the
Business;
3.4.3
No claims have been asserted by any person or entity for the use of
any such Intangible Property or challenging or questioning the
validity or effectiveness of any such license or agreement, and the
Sellers have no knowledge of any valid basis for any such claim;
and
3.4.4
To the knowledge of the Sellers, the use of such Intangible
Property by the Sellers does not infringe on the rights of any
person or entity.
3.5
Title to Assets;
Encumbrances . The Sellers own good and transferable
title to all Assets free and clear of any Encumbrances other than
those described in Schedule 3.5. NETtime-NV warrants to
NETtime Solutions that, at the time of the Closing, all Assets
shall be free and clear of all Encumbrances other than those
identified on Schedule 3.5 as acceptable to NETtime Solutions
(“ Permitted Encumbrances ”).
3.6
Brokers or Finders .
The Sellers have not employed any agent, broker, investment banker,
financial advisor or other firm or Person who is or may be entitled
to any broker’s or finder’s fee or any other commission
or similar fee in connection with any of the contemplated
transactions hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NETTIME SOLUTIONS
4.1
Organization .
NETtime Solutions is a limited liability company that is validly
existing, and in good standing under the laws of the State of
Arizona, with the organizational power and authority to own, lease,
and operate its properties and to carry on its business as now
being conducted.
4.2
Authority; Enforceability
. NETtime Solutions has full power and authority to
consummate the transactions contemplated in the Transaction
Documents. The execution and delivery by NETtime Solutions of the
Transaction Documents to which it is a party and the consummation
by the NETtime Solutions of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary
corporate action. NETtime Solutions has duly executed and delivered each
Transaction Document to which it is a party, and each Transaction
Document to which it is a party constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its
terms except as enforcement may be limited by bankruptcy,
insolvency or similar laws affecting creditors’ rights
generally or equitable principles relating to or limiting
creditors’ rights generally.
4.3
No Violations .
Neither the execution or delivery of this Agreement, nor the
consummation of the transactions contemplated hereby:
4.3.1
Requires any filing or registration with, or consent,
authorization, approval, or permit of, any governmental or
regulatory authority on the part of NETtime Solutions;
4.3.2
Violates or will violate (i) any order, writ, injunction,
judgment, decree, or award of any court or governmental or
regulatory authority, or (ii) to the knowledge of NETtime
Solutions, any law of any governmental or regulatory authority to
which NETtime Solutions or any of its properties or assets are
subject;
4
4.3.3
Violates or will violate, or conflicts with or will conflict with,
any provision of, or constitutes a default under, the Certificate
of Formation or the Operating Agreement of NETtime Solutions;
or
4.3.4
Violates or breaches or constitutes a default (or an event which,
with notice or lapse of time or both, would constitute a default)
under, or give rise to a right to terminate, any mortgage,
contract, agreement, deed of trust, license, lease, or other
instrument, arrangement, commitment, obligation, understanding, or
restriction of any kind to which NETtime Solutions is a party or by
which its properties may be bound, or (ii) will cause, or give
any person grounds to cause, to be accelerated (with notice or
lapse of time or both) the maturity of, or will increase, any
liability or obligation of NETtime Solutions which violation,
breach, default, liability, or obligation, individually or in the
aggregate, is or would be material to the business or financial
condition of the NETtime Solutions.
4.4
Brokers or Finders .
NETtime Solutions has not employed any agent, broker, investment
banker, financial advisor or other firm or Person who is or may be
entitled to any broker’s or finder’s fee or any other
commission or similar fee in connection with any of the
contemplated transactions hereunder.
ARTICLE V
COVENANTS OF THE PARTIES
5.1
Interim Operations of the
Sellers . Each of the Sellers covenants and agrees
that, after the date of this Agreement and prior to the Closing
Date, except as may otherwise be agreed upon by the parties to this
Agreement, it shall not (a) enter into, modify, amend or
terminate any material contract, or waive, release or assign any
material rights or claims, (b) incur any material liability or
material indebtedness, or (c) sell, transfer, lease, license
or otherwise dispose of all or any of the Assets, or otherwise
permit the Assets to become subject to any Encumbrances, excluding
Encumbrances set forth on Schedule 3.5.
5.2
Stockholder Consent .
NETtime-NV shall, as promptly as practicable following the
execution of this Agreement, establish a record date for, duly
call, give notice of, convene and hold a meeting of its
stockholders, or solicit the written consent of stockholders
holding the requisite number of shares of NETtime-NV’s common
stock, to approve the principal terms of this Agreement and the
Transactions. NETtime-NV shall, through its Board of
Directors, recommend to its stockholders approval of th
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