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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 26, 1999
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ASHFORD.COM, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 0-27357 76-0617905
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3800 Buffalo Speedway, Suite 400, Houston, Texas 77098
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (713) 369-1300
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(Former name or Former Address, if Changed Since Last Report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 26, 1999, Ashford.com, Inc., a Delaware corporation
(the "Company"), acquired the TimeZone.com and paris1925.com Internet domain
names as well as the related trademarks and content (the "Purchase"). The
Purchase was completed pursuant to an Option Agreement dated August 17, 1999 by
and between the Company and Power Reserve, Inc. and Richard E. Paige, an Asset
Acquisition Agreement dated as of October 26, 1999 by and among the Company,
Power Reserve, Inc. and certain shareholders, and an Asset Acquisition Agreement
dated as of October 26, 1999 by and between the Company and Richard E. Paige.
The TimeZone.com and paris1925.com Internet sites provide content and community
related to watches and the watch industry. The Company paid an aggregate
purchase price of $4.3 million consisting of $940,000 of cash and 332,500 shares
of the Company's common stock. The cash component of the aggregate purchase
price was funded from the Company's existing cash and cash equivalent balances.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
Exhibit
Number Description
2.1 Option Agreement dated August 17, 1999 by
and between Ashford.com and Power Reserve,
Inc. and Richard E. Paige
2.2 Asset Acquisition Agreement dated as of
October 26, 1999 by and among the Company,
Power Reserve, Inc. and the Shareholders.
2.3 Asset Acquisition Agreement dated as of
October 26, 1999 by and between the Company
and Richard E. Paige
99.1 Text of Press Release dated October 27,
1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ASHFORD.COM, INC.
Date: November 9, 1999 By: /s/ David F. Gow
------------------------------------
David F. Gow
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
2.1 Option Agreement dated August 17, 1999 by and between
Ashford.com and Power Reserve, Inc. and Richard E.
Paige
2.2 Asset Acquisition Agreement dated as of October 26,
1999 by and among the Company, Power Reserve, Inc.
and the Shareholders.
2.3 Asset Acquisition Agreement dated as of October 26,
1999 by and between the Company and Richard E. Paige
99.1 Text of Press Release dated October 27, 1999.
</TABLE>
<PAGE> 1
EXHIBIT 2.1
August 17, 1999
VIA FACSIMILE
Mr. Richard Paige
Power Reserve, Inc.
403 Oak Crest Road
San Anselmo, CA 94960
Re: Option to Purchase Certain Assets of Power Reserve, Inc. and
Paris1925.com
Dear Mr. Paige:
In connection with our discussions relating to the possible acquisition
(the "Transaction") of all right, title and interest in "timezone.com" and
"paris1925.com" (the "Domains") the InterNic (or other relevant body)
registrations of the same, the trademark/service mark registrations related to
the Domains (the "Trademarks") and the content and end user information
(including e-mail addresses) available at the Domains (the "Content") by
Ashford.com, Inc. (the "Company") from Power Reserve, Inc. ("Power Reserve") and
Richard Paige ("Paige" and together with Power Reserve, the "Sellers") and in
consideration of the time and effort that will be devoted towards the
Transaction, including professional service expenses of the Company's attorneys,
accountants, consultants, and financial advisors, the Company hereby seeks your
agreement to the following:
1. Option. The Sellers hereby grant the Company the option (the
"Option") to purchase the Domains, Trademarks and Content in exchange for
payment by the Company of $300,000 (the "Option Price") to be paid on the date
hereof in cash by wire transfer of immediately available funds to an account
specified in writing by the Sellers. The Option shall be exercisable by the
Company until November 30, 1999; provided, however, that on or prior to November
30, 1999, the Company may elect to extend the Option period until January 31,
2000 in exchange for payment by the Company of $100,000 (the "Extension Price")
to be paid on the date such election, in cash by wire transfer of immediately
available funds to an account specified in writing by the Sellers. In the event
the Transaction is consummated, the Option Price and the Extension Price shall
be applied toward the total cash purchase price of the Transaction. The Company
may exercise the Option in its sole discretion at any time prior to January 31,
2000 by providing written notice (the "Exercise Notice") to the Sellers. If the
Company provides the Exercise Notice to the Sellers on or before January 31,
2000, subject to the Company's rights under Section 6 hereof, each of the
parties covenants and agrees to use their best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to promptly consummate and
make effective the Transaction and execute a definitive agreements substantially
in the form
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Richard Paige
August 17, 1999
Page 2
attached hereto as Exhibit A and Exhibit B, including cooperating fully with the
other party. If the Company does not provide Exercise Notice to the Sellers on
or before January 31, 2000 and has not exercised its rights under Section 6
hereof, the Company shall grant to Paige 15,000 shares of the Company's Common
Stock (appropriately adjusted for any stock split, dividend, combination, or
other recapitalization). Such shares, when issued, shall be fully paid, duly
authorized, nonassessable and validly issued.
2. No-Shop. Through November 30, 1999, or January 31, 2000 if the
Option is extended, the Sellers shall not, and will instruct their respective
directors, officers, employees, representatives, investment bankers, agents and
affiliates not to, directly or indirectly, (i) solicit or encourage submission
of, any proposals or offers by any person, entity or group (other than the
Company and its affiliates, agents and representatives), or (ii) participate in
any discussions or negotiations with, or disclose any non-public information
concerning the Domains, Trademarks and Content or afford any access to the
properties, books or records of the Sellers or any subsidiaries to, or otherwise
assist or facilitate, or enter into any agreement or understanding with, any
person, entity or group (other than the Company and its affiliates, agents and
representatives), in connection with any Acquisition Proposal involving the
Domains, Trademarks and Content. For the purposes of this letter, an
"Acquisition Proposal" with respect to an entity means any proposal or offer
relating to (i) any sale or transaction involving the Domains, Trademarks or
Content (ii) any merger, consolidation, sale of substantial assets or similar
transactions involving the entity or any subsidiaries of the entity (other than
sales of assets or inventory in the ordinary course of business), (iii) the
acquisition by any person of beneficial ownership or a right to acquire
beneficial ownership of, or the formation of any "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder)
which beneficially owns, or has the right to acquire beneficial ownership of,
20% or more of the then outstanding shares of capital stock of the entity; or
(iv) any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing. Sellers will
immediately cease any and all existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the foregoing.
Sellers will (i) notify the Company as promptly as practicable if any inquiry or
proposal is made or any information or access is requested in connection with an
Acquisition Proposal or potential Acquisition Proposal and (ii) as promptly as
practicable notify the Company of the terms and conditions of any such
Acquisition Proposal. In addition, subject to the other provisions of this
letter, through November 30, 1999, or January 31, 2000 if the Option is
extended, Sellers will not, and will instruct their respective directors,
officers, employees, representatives, investment bankers, agents and affiliates
not to, directly or indirectly, make or authorize any public statement,
recommendation or solicitation in support of any Acquisition Proposal made by
any person, entity or group (other than the Company).
3. Publicity. From and after the date hereof, the Company and Sellers
agree that they shall not make and shall use their best efforts to cause their
respective representatives, officers, directors, employees and affiliates not to
make any public disclosure regarding this Transaction (other than as may be
required by applicable securities regulations, law or court order) without
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Richard Paige
August 17, 1999
Page 3
the prior consent of the other party which shall not be unreasonably withheld.
Notwithstanding the above, (i) neither party shall be liable to the other party
for disclosure of information that is or becomes (through no improper action or
inaction by a party or any affiliate, agent, consultant or employee) generally
available to the public and (ii) the parties agree that the Company shall be
permitted to issue a press release following the consummation of the
Transaction.
4. Access. From the date hereof and thereafter until the termination of
this letter or the closing of the proposed Transaction if a definitive agreement
is executed, Sellers shall permit the Company and its officers, employees,
directors, agents, advisors and representatives ("Representatives") to have
reasonable access to inspect and evaluate Seller's operations and will, upon
reasonable request from the Representatives, disclose and make available books,
records, agreements, plans and other matters relating to the Sellers and their
ownership, as applicable, operation and financial condition. Both parties shall
arrange for the Representatives to discuss with appropriate officers, employees
and representatives of the disclosing party such matters relative to the
proposed transaction as the Representatives may reasonably request.
5. Conduct of Business. In addition to the restrictions detailed in
Section 1, from and after the date hereof and thereafter until termination of
this letter or the closing if a definitive agreement is executed, Sellers shall
conduct their operations and maintain their assets in the usual and ordinary
course of business and will not enter into, amend or modify any material
contract, commitment or permit, acquire or dispose of any material asset, sell
any equity securities (or right to acquire same), declare or pay any dividend,
incur any debt other than trade payables and accrued liabilities incurred in the
ordinary course of business, or take any other material action without the prior
written approval of the Company, which shall not be unreasonably withheld. In
addition, Sellers shall not sell, pledge, license or sublicense, encumber, or
otherwise enter into agreements with respect to intellectual property or the
Domains, Trademarks and Content except for in the ordinary course of business
consistent with past business practices. Seller shall not sell, pledge, or
encumber or otherwise enter into agreements with respect to any of his equity
interests in Power Reserve except to Mr. Topiol or to Mr. Odetts, or their
respective spouses.
6. Termination. The Sellers shall promptly refund the Option Price and
the Extension Price, if previously paid by the Company, to the Company if the
Transaction is not completed due to: (A) the Company has provided the Exercise
Notice and (i) the Sellers' action or failure to act causes or results in the
failure of the Transaction to occur or (ii) if any required approval of the
shareholders of Power Reserve shall not have been obtained by reason of the
failure to obtain the required vote upon a vote held at a duly held meeting of
shareholders or at any adjournment thereof; or (B) at any time prior to January
31, 2000 (i) the Board of Directors of Power Reserve withdraw or modified its
recommendation of this agreement or the Transaction, (ii) there has been any
material adverse change with respect to the Domains, Trademarks or Content or
(iii) the Sellers shall have become subject to any permanent injunction or other
order of a court or other competent authority preventing the consummation of the
Transaction that shall have become final and nonappealable. Prior to exercising
its rights under
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Richard Paige
August 17, 1999
Page 4
this Section 6, the Company shall provide written notice to Sellers of its
intent to terminate and Sellers shall have 45 days to cure such condition
following receipt of such notice.
7. Employment. In the event the Transaction is consummated, the parties
hereby agree to enter into an employment agreement substantially similar to the
agreement attached hereto as Exhibit C whereby Paige shall be a full time
employee of Ashford Buying Company and receive a Base Salary (as defined
therein) of $200,000 per year.
8. Fees. Each party shall pay its own fees and expenses in connection
with the Transaction contemplated hereby, including any legal, accounting,
finder's or investment banking fees incurred by the parties. If a definitive
Transaction agreement is not executed, the Company will have no responsibility
to reimburse Sellers for any fees incurred in contemplation of the Transaction.
9. Governing Law. This Letter shall be governed by and construed under
the laws of the state of Texas.
If the foregoing meets with your approval and accurately reflects our
mutual understanding, please acknowledge by signing where indicated below and
return a copy of this letter to me at your earliest convenience.
Very truly yours,
/s/ Kenny Kurtzman
Kenny Kurtzman
Chief Executive Officer
Acknowledged and Accepted:
POWER RESERVE, INC.
By: /s/ Richard Paige
Name: Richard Paige
Title: President
/s/ Richard Paige
Richard Paige
<PAGE> 1
EXHIBIT 2.2
ASSET ACQUISITION AGREEMENT
This Asset Acquisition Agreement (the "Agreement") is to be made
effective on October 26, 1999 (the "Effective Date") between Power Reserve,
Inc., a California corporation ("Seller"), certain shareholders of Seller set
forth on the signature pages hereto (the "Shareholders") and Ashford.com, Inc.,
a Delaware corporation ("Ashford.com") with respect to the following facts:
RECITALS
A. Seller is the registered owner of the Internet domains listed on
Exhibit A hereto (the "Domains").
B. Seller is also the beneficial owner, with the same registration
rights of certain trademark/service mark registrations and certain common law
trademark/service mark rights in the Domains (collectively "Trademarks") (listed
on Exhibit B hereto).
C. Seller owns the content and end user information (including e-mail
addresses) available at the Domains and also the content and end user
information (including e-mail addresses) available at the timezone.com domains
(the "Content").
D. Seller has agreed to assign the Domains, Trademarks (and associated
goodwill) and Content, on the terms set forth below.
E. Seller intends to adopt a plan of reorganization under the
provisions of Section 368 of the Internal Revenue Code, as amended (the "Code").
AGREEMENT
1. Assignment. The Seller hereby assigns, transfers and conveys to
Ashford.com all right, title and interest (including but not limited to any and
all rights and interest under common law) in the Domains, the InterNic (or other
relevant body) registrations of the same, the Trademarks and the Content. Seller
further waives all claims it has to the Domains, Trademarks and Content and
agrees to cease all use of the Domains, Trademarks and Content.
2. Consideration. In consideration of the assignments set forth in
Section 1 hereof and Seller's representations, warranties and covenants made
hereunder, Ashford.com agrees to issue to Seller 332,500 duly authorized,
validly issued, fully paid and non-assessable shares of Ashford.com Common Stock
(appropriately adjusted for any stock split, dividend, combination or other
recapitalization) (the "Shares").
3. Liabilities. It is understood and agreed that Ashford.com will not
assume any direct or indirect debts, obligations or liabilities of the Seller of
any nature, whether absolute, accrued, contingent, liquidated or otherwise, and
whether due or to become due, asserted or unasserted, known or unknown. Richard
Paige and Walt Odets (together the "Indemnifying
<PAGE> 2
Shareholders") jointly and severally, shall indemnify and hold harmless
Ashford.com and its transferees, successors and assigns for any liabilities,
contingent or otherwise, associated with the Domains, Trademarks and Content
(including but not limited to claims of trademark infringement) or otherwise
associated with the business of Seller for a period of five years from the
Closing; provided, however, that the amount, if any, to be paid by Indemnifying
Shareholders to Ashford.com under this Section 3 shall not exceed two million
six hundred thousand dollars ($2,600,000).
4. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place on October ___, 1999 at the offices of
Gunderson Dettmer Stough Villeneuve Franklin and Hachigian, LLP, 8911 Capital of
Texas Highway, Suite 4240, Austin, Texas 78759 (or such other time or by
facsimile as the parties may agree).
5. Further Assurances. The Seller shall assist Ashford.com in every
proper way to evidence, record and perfect the assignments described in Section
1 above and to perfect, obtain, maintain, enforce, and defend the rights
assigned. For example, the Seller agrees that it will immediately apply for and
effect re-registration of the Domains and Trademarks in Ashford.com's name
according to InterNic's (or other relevant body's) current policy. Seller
intends to liquidate in accordance with Section 368 of the Code. Ashford.com
does not make any representation as to the applicability of Section 368 of the
Code.
6. Representations; Warranties. The Seller and each of the
Shareholders, jointly and severally, represent and warrant to Ashford.com that:
a. Seller is the sole owner (other than Ashford.com) of all
rights, title and interest in the Domains, Trademarks, Content and Contracts to
be transferred by Seller.
b. After the Closing, the Seller and Shareholders will
discontinue all further use of the Domains, Trademarks and Content.
c. Seller and Shareholders have full power and authority to
enter into this Agreement, and this Agreement constitutes a valid and legally
binding obligation of Seller and the Shareholders, enforceable in accordance
with its terms.
d. Neither the execution, delivery or performance of this
Agreement nor the consummation of the transactions contemplated thereby,
including without limitation the sale of the Domains, Trademarks and Content to
Ashford.com and Ashford.com's exercise of control over the Domains, Trademarks
and Content after Closing, will conflict with any material contract or result in
the creation of any lien, claim, security interest or encumbrance (collectively,
"Lien") on the Domains, Trademarks and Content pursuant to, or relieve any third
party of any obligation to the Seller or give any third party the right to
terminate or accelerate any obligation.
e. The Seller and the Shareholders acknowledge that
Ashford.com will not be responsible for any income, sales, use, excise or other
tax that arises out of or results from the sale of the Domains, Trademarks and
Content.
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f. The Seller and the Shareholders represent that there are
currently no pending, or to the knowledge of Seller and Shareholders, threatened
lawsuits, administrative proceedings or reviews, or formal or informal
complaints or investigations (including any regarding trademark infringement) by
any individual or other entity against or relating to the Seller or the
Shareholders, Domains, Trademarks and Content.
g. This Agreement is made with Seller and Shareholders in
reliance upon Seller's and Shareholders' representations to Ashford.com, which
by Seller's and Shareholders' execution of this Agreement Seller and
Shareholders hereby confirm, that the Shares to be received by Seller and
Shareholders will be acquired for investment for their own accounts, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and they each have no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, Seller and each Shareholder further represent that, other than a
distribution to the Shareholders from Seller, Seller and Shareholders do not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to any of the Shares.
h. Seller and Shareholders believe they have received all the
information they considers necessary or appropriate for deciding whether to
acquire the Shares. Seller and Shareholders further represent that they have had
an opportunity to ask questions and receive answers from Ashford.com regarding
the terms and conditions of the offering of the Shares and the business,
properties, prospects and financial condition of Ashford.com.
i. Seller and Shareholders acknowledge that they have each
relied on their own tax advisors for the advice regarding the tax consequences
of the transactions contemplated by this Agreement and has not received tax
advice with respect thereto from Ashford.com or any of its officers, employees,
or agents.
j. Seller and Shareholders acknowledge that they are each able
to fend for themselves, can bear the economic risk of the investment, and have
such knowledge and experience in financial, tax and business matters that they
are capable of evaluating the merits and risks of the assignments provided for
herein and the investment in the Shares. Seller also represents it has not been
organized for the purpose of acquiring the Shares.
k. Seller and Shareholders are each "accredited investors"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
l. Seller and each Shareholder understands that the Shares
being acquired are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from Ashford.com in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act of 1933, as amended (the "Act"), only in certain limited
circumstances. In this connection, such Seller and each Shareholder represents
that each is familiar with Securities and Exchange Commission Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
3
<PAGE> 4
m. Without in any way limiting the representations set forth
above, Seller and Shareholders each further agree not to make any disposition of
all or any portion of the Shares unless and until the transferee has agreed in
writing for the benefit of the Company to be bound by this Section 6, provided
and to the extent this Section are then applicable, and:
(i) There is then in effect a Registration Statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(ii) (A) Seller and Shareholders shall have notified
Ashford.com of the proposed disposition and shall have furnished Ashford.com
with a detailed statement of the circumstances surrounding the proposed
disposition, and (B) if reasonably requested by Ashford.com, Seller and
Shareholders shall have furnished Ashford.com with an opinion of counsel,
reasonably satisfactory to Ashford.com, that such disposition will not require
registration of such shares under the Act. It is agreed that Ashford.com will
not require opinions of counsel for transactions made pursuant to Rule 144
except in unusual circumstances.
n. It is understood that the certificates evidencing the
Shares may bear one or all of the following legends:
"These securities have not been registered under the Securities Act of
1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect
to the securities under such Act or an opinion of counsel satisfactory to the
Company that such registration is not required or unless sold pursuant to Rule
144 of such Act."
o. The Seller and shareholder Richard Paige each represent
that for a period of two (2) years from the date of this Agreement, Seller and
Mr. Paige will not without the prior written consent of the Chief Executive
Officer of Ashford.com, which shall not unreasonably be withheld (except as an
employee of Ashford.com or a subsidiary of Ashford.com), directly or indirectly,
(i) (A) Participate or engage in the design,
development, manufacture, production, marketing, sale or servicing of any
product related to the Domains, Trademarks and Content or (B) provide any
service for any entity whose primary business is to develop or provide products
and/or services similar to the Domains, Trademarks and Content (the "Business")
in the international internet business (the "Geographic Scope of Employee's
Business") or
(ii) Permit the name of Seller or Mr. Paige to be
used in connection with a competitive Business.
With respect to the representations and warranties contained in Section 6(a),
(d), (e) and (f), Messrs. Topiol and Odets make such representations to their
knowledge, and without any independent investigation or verification.
7. Representations; Warranties. Ashford.com represents, warrants and
covenants to the Seller that:
4
<PAGE> 5
a. Ashford.com is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Ashford
Buying Company is a wholly-owned subsidiary of Ashford.com.
b. Ashford.com has full power and authority to enter into this
Agreement, and this Agreement constitutes a valid and legally binding obligation
of Ashford.com, enforceable in accordance with its terms.
c. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate any
provision of the certificate of incorporation or bylaws of Ashford.com, or any
provision of any material agreement or instrument to which Ashford.com is a
party.
d. Prior to the first anniversary of the Closing, Ashford.com
will file an additional listing application with Nasdaq National Market to list
the Shares. In addition, Ashford.com will take all action required to provide
Current Public Information as defined in Rule 144(c).
8. "Market Stand-Off" Agreement. Seller hereby agrees that it will not,
without the prior written consent of the managing underwriter, during the period
commencing on the date of the final prospectus relating to Ashford.com's initial
public offering and ending on the date specified by the Company and the managing
underwriter (such period not to exceed one hundred eighty (l80) days) (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock of Ashford.com or any securities convertible into or
exercisable or exchangeable for Common Stock (whether such shares or any such
securities are then owned by Seller or are thereafter acquired), or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
underwriters in connection with the Company's initial public offering are
intended third party beneficiaries of this Section 8 and shall have the right,
power and authority to enforce the provisions hereof as though they were a party
hereto.
9. Miscellaneous. This Agreement shall be construed pursuant to the
laws of the state of Texas without regard to conflicts of laws provisions
thereof. Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled in Travis County, Texas, by arbitration
in accordance with the National Rules for the American Arbitration Association.
The decision of the arbitrator shall be final and binding on the parties, and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The parties hereby agree that the arbitrator shall
be empowered to enter an equitable decree mandating specific enforcement of the
terms of this Agreement. Employee hereby consents to personal jurisdiction of
the state and federal courts located in the State of Texas for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
5
<PAGE> 6
10. Liquidated Damages. The parties agree that the actual damages that
might be sustained by Ashford.com by reason of the breach by Richard Paige or
Walt Odets of Section 6o are uncertain and would be difficult to ascertain and
that the sum of $3,750,000 would be reasonable compensation for such breach.
Richard Paige and Walt Odets hereby promise to pay, and Ashford.com hereby
agrees to accept, such sum as liquidated damages, and not as a penalty, in the
event of such breach. The parties agree that the damages received by Ashford.com
pursuant to this section and pursuant to Section 10 of the Asset Acquisition
Agreement of even date herewith between Ashford.com and Richard Paige shall not,
in the aggregate, exceed $3,750,000.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties here to have executed this Agreement
effective as of the date first written above.
POWER RESERVE, INC.
By: /s/ Richard Paige
----------------------------------------
Name: Richard Paige
Title:
SHAREHOLDERS
/s/ Richard Paige
-------------------------------------------
Richard Paige
/s/ Nicolas Topiol
-------------------------------------------
Nicolas Topiol
/s/ Walt Odets
-------------------------------------------
Walt Odets
ASHFORD.COM, INC.
By: /s/ James Whitcomb
----------------------------------------
Name: James Whitcomb
Title: President and Chief Operating Officer
6
<PAGE> 7
EXHIBIT A
LIST OF DOMAINS
Timezone.com
<PAGE> 8
EXHIBIT B
LIST OF TRADEMARK/SERVICE MARK REGISTRATIONS
TZ
(COMMON LAW)
Timezone
Timezone.com
<PAGE> 1
EXHIBIT 2.3
ASSET ACQUISITION AGREEMENT
This Asset Acquisition Agreement (the "Agreement") is to be made
effective on October 26, 1999 (the "Effective Date") between Richard Paige (the
"Seller") and Ashford.com, Inc., a Delaware corporation ("Ashford.com") with
respect to the following facts:
RECITALS
A. Seller is the registered owner of the Internet domains listed on
Exhibit A hereto (collectively "Domains").
B. Seller is also the beneficial owner, with the same registration
rights of certain trademark/service mark registrations and certain common law
trademark/service mark rights in the Domains (collectively "Trademarks") (listed
on Exhibit B hereto).
C. Seller owns the content and end user information (including e-mail
addresses) available at the Domains and also the content and end user
information (including e-mail addresses) available at the paris1925.com (the
"Content").
D. Seller has agreed to assign the Domains, Trademarks (and associated
goodwill) and Content, on the terms set forth below.
E. Seller is a party to certain authorized dealership relationships
(the "Relationships") listed on Exhibit C hereto.
AGREEMENT
1. Assignment. The Seller hereby assigns, transfers and conveys to
Ashford.com all right, title and interest in the Domains, the InterNic (or other
relevant body) registrations of the same, the Trademarks (including all
associated goodwill), Content and the Relationships. Seller further waives all
claims it has to the Domains, Trademarks, Content and Relationships and agrees
to cease all use of the Domains, Trademarks and Content.
2. Consideration. In consideration of the assignments set forth in
Section 1 hereof and Seller's representations, warranties and covenants made
hereunder, Ashford.com agrees to pay the Seller as follows:
a. six hundred thousand dollars ($600,000) on the date of this
Agreement in cash by wire transfer of immediately available funds to an account
specified in writing by the Seller and
b. up to one hundred thousand dollars ($100,000) on the date
of the Closing (as defined below) (subject to Section 3 below) in cash by wire
transfer of immediately available funds to an account specified in writing by
the Seller.
3. Relationships.
<PAGE> 2
a. The consideration set forth in Section 2(b) above shall be
paid to the Seller on the date of the Closing if, on that date, the
Relationships identified on Exhibit C endure to the benefit of Ashford.com. The
parties agree that three days prior to the Closing, Seller shall provide
Ashford.com a list of Relationships Seller in good faith believes will endure to
the benefit of Ashford.com and the existence of which may be publicly disclosed.
Ashford.com shall pay Seller $7,143 for each Relationship (with the exception of
IWC, for which Seller may receive $3,571.50) in existence that benefits
Ashford.com on the date of the Closing which Seller and Ashford.com mutually
agree in good faith benefits Ashford.com. To facilitate certain of these
Relationships, Ashford.com, shall, within six months of the Effective Date, open
a retail store in the state of Texas.
b. On August 27, 2000, Ashford.com shall pay to Seller $5,000
for each Relationship identified on Exhibit D which the parties agree in good
faith benefits Ashford.com and which may be publicly disclosed. If on August 27,
2000, the relationship with IWC may be publicly disclosed, Ashford.com shall pay
to Seller an additional $2,500.
4. Liabilities. It is understood and agreed that Ashford.com will not
assume any direct or indirect debts, obligations or liabilities of the Seller of
any nature, whether absolute, accrued, contingent, liquidated or otherwise, and
whether due or to become due, asserted or unasserted, known or unknown. Seller
shall indemnify and hold harmless Ashford.com and its transferees, successors
and assigns for any liabilities, contingent or otherwise, associated with the
Domains, Trademarks, Content and Relationships (including but not limited to
claims of trademark infringement) or otherwise associated with the business of
Seller for a period of five years from the date of the Closing; provided,
however, that the amount, if any, to be paid by Seller to Ashford.com under this
Section 4 shall not exceed two hundred thousand dollars ($200,000).
5. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place on __________, 1999 at the offices of
Gunderson Dettmer Stough Villeneuve Franklin and Hachigian, LLP, 8911 Capital of
Texas Highway, Suite 4240, Austin, Texas 78759 (or such other time or by
facsimile as the parties may agree).
6. Further Assurances. The Seller shall assist Ashford.com in every
proper way to evidence, record and perfect the assignments described in Section
1 above and to perfect, obtain, maintain, enforce, and defend the rights
assigned. For example, the Seller agrees that he will immediately apply for and
effect re-registration of the Domains and Trademarks in Ashford.com's name
according to InterNic's (or other relevant body's) current policy.
7. Representations; Warranties. The Seller represents and warrants to
Ashford.com that:
a. Seller is the sole owner (other than Ashford.com) of all
rights, title and interest in the Domains, Trademarks, Content and Relationships
to be transferred by Seller.
2
<PAGE> 3
b. After the Effective Date, the Sellers will discontinue all
further use of the Domains, Trademarks and Content.
c. Seller has full power and authority to enter into this
Agreement, and this Agreement constitutes Seller's valid and legally binding
obligation, enforceable in accordance with its terms.
d. Neither the execution, delivery or performance of this
Agreement nor the consummation of the transactions contemplated thereby,
including without limitation the sale of the Domains, Trademarks, Content and
Relationships to Ashford.com and Ashford.com's exercise of control over the
Domains, Trademarks, Content and Relationships after Closing, will conflict with
any material contract or result in the creation of any lien, claim, security
interest or encumbrance (collectively, "Lien") on the Domains, Trademarks,
Content and Relationships pursuant to, or relieve any third party of any
obligation to the Seller or give any third party the right to terminate or
accelerate any obligation.
e. The Seller acknowledges that Ashford.com will not be
responsible for any income, sales, use, excise or other tax that arises out of
or results from the sale of the Domains, Trademarks, Content and Relationships.
f. The Seller represents that there are currently no pending,
or to the Seller's knowledge, threatened lawsuits, administrative proceedings or
reviews, or formal or informal complaints or investigations by any individual or
other entity against or relating to the Seller or the Domains, Trademarks,
Content and Relationships.
g. The Seller represents that for a period of two (2) years
from the date of this Agreement, Seller will not without prior written consent
from the Chief Executive Officer of Ashford.com which shall not be unreasonably
withheld (except as an employee of Ashford.com or a subsidiary of Ashford.com),
directly or indirectly,
(i) (A) Participate or engage in the design,
development, manufacture, production, marketing, sale or servicing of any
product related to the Domains, Trademarks, Content and Relationships, or (B)
provide any service for any entity whose primary business is to develop or
provide products and/or services similar to the Domains, Trademarks, Content and
Relationships (the "Business") in the international internet business (the
"Geographic Scope of Employee's Business") or
(ii) Permit the name of Seller to be used in
connection with a competitive Business.
8. Representations; Warranties. Ashford.com represents, warrants and
covenants to the Seller that:
a. Ashford.com is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Ashford
Buying Company is a wholly-owned subsidiary of Ashford.com.
3
<PAGE> 4
b. Ashford.com has full power and authority to enter into this
Agreement, and this Agreement constitutes a valid and legally binding obligation
of Ashford.com, enforceable in accordance with its terms.
c. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate any
provision of the certificate of incorporation or bylaws of Ashford.com, or any
provision of any material agreement or instrument to which Ashford.com is a
party.
9. Miscellaneous. This Agreement shall be construed pursuant to the
laws of the State of Texas without regard to conflicts of laws provisions
thereof. Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled in Travis County, Texas, by arbitration
in accordance with the National Rules for the American Arbitration Association.
The decision of the arbitrator shall be final and binding on the parties, and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The parties hereby agree that the arbitrator shall
be empowered to enter an equitable decree mandating specific enforcement of the
terms of this Agreement. Seller hereby consents to personal jurisdiction of the
state and federal courts located in the state of Texas for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
10. Liquidated Damages. The parties agree that the actual damages that
might be sustained by Ashford.com by reason of the breach by Seller of Section
7g are uncertain and would be difficult to ascertain and that the sum of
$3,750,000 would be reasonable compensation for such breach. Seller hereby
promises to pay, and Ashford.com hereby agrees to accept, such sum as liquidated
damages, and not as a penalty, in the event of such breach. The parties agree
that any damages received by Ashford.com pursuant to this section and pursuant
to Section 10 of the Asset Acquisition Agreement of the same date as this
Agreement among Ashford.com, Power Reserve, Inc. and certain shareholders of
Power Reserve, Inc. shall not, in the aggregate, exceed $3,750,000.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY.]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties here to have executed this Agreement
effective as of the date first written above.
SELLER
By: /s/ Richard Paige
------------------------------------
Richard Paige
ASHFORD.COM, INC.
By: /s/ James Whitcomb
------------------------------------
James Whitcomb
President and Chief Operating Officer
<PAGE> 6
EXHIBIT A
LIST OF DOMAINS
Paris1925.com
<PAGE> 7
EXHIBIT B
LIST OF TRADEMARK/SERVICE MARK REGISTRATIONS
(COMMON LAW)
Paris1925
Paris1925.com
<PAGE> 8
EXHIBIT C
RELATIONSHIPS
o Bell & Ross
o Dubey & Schaldenbrand
o IWC
o RGM
o Van der Bauwede
o Xemex
<PAGE> 9
EXHIBIT D
RELATIONSHIPS
o Chronoswiss
o Fortis
o Ikepod Watch Co.
o Minerva
o Omega
o Oris
o Ulysse Nardin
o Ventura
<PAGE> 1
EXHIBIT 99.1
ASHFORD.COM TO ADD COMMUNITY AND CONTENT
THROUGH ACQUISITION OF TIMEZONE.COM
Ashford.com to Build TimeZone.com Audience and Resources
HOUSTON, Oct. 27 /PRNewswire/ -- Ashford.com (Nasdaq: ASFD), the
leading Internet retailer of luxury and premium products, today announced that
it will add community features and content to its luxury retail site through the
acquisition of TimeZone.com, a community site devoted to watches and the watch
industry. Terms of the deal were not disclosed.
TimeZone.com, located at http://www.timezone.com, is the premier Web site for
watch education and entertainment, offering a vast information resource for
watch aficionados, hobbyists and novices. Visitors to the Ashford.com(TM) retail
site can now participate in a variety of TimeZone.com community forums and
discussion groups and access content such as in-depth technical articles and
watch reviews via links from the Ashford.com site. After the new year, the
TimeZone.com community features will be fully integrated with Ashford.com,
allowing Ashford.com customers to do research on a watch or a brand or even ask
others' opinions at any point while they shop on the site. TimeZone.com will
also help Ashford.com customers learn more about watch technology, features,
design and care.
The acquisition will introduce Ashford.com's nearly 500,000 monthly
viewers to TimeZone.com, expanding the TimeZone.com's audience. In addition, the
acquisition will provide TimeZone.com with resources to access better
technologies and to continue to grow its membership.
"This acquisition will enable Ashford.com to bring a whole new audience
toTimeZone.com, creating a broader set of people who can appreciate the
sophisticated engineering and technical merit of high-end, Swiss-made,
mechanical watches," said Kenny Kurtzman, CEO of Ashford.com. "In addition,
because Ashford.com is a publicly traded company, we're able to put more
resources and investment into the TimeZone.com community. This acquisition is
just our first step toward building an Internet luxury destination that includes
valuable community and content."
TimeZone.com generates three million page views and receives more than
80,000 visitors each month, with members buying between two and ten watches
annually. TimeZone.com will continue to oversee the editorial for its community
features and will maintain its policy of commercial neutrality for user
postings.
Richard Paige, director of TimeZone.com said: "We are very pleased to
become a part of Ashford.com and participate in this new endeavor. We feel that
Ashford.com's combination of resources and commitment to the watch industry make
them the best partner for TimeZone.com."
"After the new year, the following TimeZone.com site features will be
fully integrated into Ashford.com:
o Public Forums - open venues for discussions as well as questions
and answers on watches and related products. The public forums
receive hundreds of postings per day, and several leading
international watch experts, including presidents of watch
companies, are part of this community.
o Brand Forums - 12 forums specializing in Swiss name brand watch
manufacturers allow for further in-depth discussions and
education. The forums include Blancpain,
<PAGE> 2
Omega, Rolex, IWC, Lange & Sohne, Jaeger LeCoultre, Minerva, Patek
Philippe, Ulysses Nardin, Breitling, Vintage and clocks.
o Classics - an area where the watch community can contribute
information on a more comprehensive level than in the Public
Forum. This includes important watch reviews by owners and others,
in-depth technical papers and essay-type postings on a wide
variety of watch-related topics. The Classics Board is the most
important place in the world to find in-depth information about
the world of watches.
o The Sales Corner - a unique trading forum for the sale and
purchase of watches by individuals.
o The Horologium - watch reviews, technical articles and special
features contributed by Walt Odets, one of the most respected
authorities in the world of wristwatches.
o Articles from the Community - articles written by the most
talented writers in the watch community. This link is a great
place to obtain content and be published on the Internet.
o Price List - a collection of suggested list prices for the most
popular models from leading watch manufacturers.
o Watch School - the Watch School, produced and supervised by Walt
Odets, offers an illustrated, interactive course on watch service
and repair for the beginner. Both the School Discussion Forum and
occasional School Live Chat allow an ongoing exchange between
students and instructors.
About Ashford.com
Ashford.com is the leading Internet retailer of luxury and premium
products. The company's e-commerce site, located at http://www.ashford.com,
offers a vast selection of diamonds and more than 10,000 styles of new and
vintage watches, jewelry, fragrances, leather accessories, sunglasses and
writing instruments from 270 leading brands. Dedicated to creating a comfortable
and safe shopping environment, Ashford.com offers customers the Ashford.com
Protection Plus(TM) policy, which provides best-in-industry warranties, privacy
and security. Ashford.com is headquartered in Houston, Texas.
About TimeZone.com
Founded in 1995, TimeZone.com is the world's most complete watch
resource. TimeZone.com is the premier Web site for watch education and
entertainment, offering a vast information resource for watch aficionados,
hobbyists and novices. Located at http://www.timezone.com, TimeZone.com is a
place for all watch enthusiasts to gather and discuss the many aspects of
watches and the watch industry.
Ashford and Ashford.com are trademarks of Ashford.com. All other marks
are the property of their respective owners.
SOURCE Ashford.com
Web site: http://www.timezone.com http://www.ashford.com
<PAGE> 3
CONTACT: Stephanie Gnibus of Gnibus Public Relations, media,
408-776-9727, or [email protected]; or Wendy McCarthy of
McCarthy & Company, media, 650-961-9202, or
[email protected] for Ashford.com
NOTE TO EDITORS: A copy of this press release and a photo can be
found at http://www.ashford.com/information/news.stm"
target=_newhttp://www.ashford.com/information/news.stm
