ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and
entered into to be effective as of the _______ day of December,
1999, by and among EYESITE.COM, INC., a Delaware corporation
(hereinafter referred to as "Buyer"), and GARY EDWARDS, M.D., an
individual (hereinafter referred to as "Seller").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business of creating,
publishing, updating and maintaining that certain commercial web
site with the registered domain of "http://www.eyesite.com," and
other businesses, activities and endeavors related thereto (the
businesses, activities and endeavors (but expressly excluding
Seller's ophthalmology practice and Seller's Success
International corporation) related thereto are hereinafter
collectively referred to as the "Business"); and
WHEREAS, pursuant to the terms and provisions contained
herein, Seller desires to sell to Buyer and Buyer desires to
purchase from Seller, the Business as a going concern and certain
properties, assets and rights of Seller's Business as provided
herein.
NOW, THEREFORE, for and in consideration of the premises and
the mutual representations, warranties, covenants and agreements
contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I
TERMS OF PURCHASE AND SALE
Section 1.1 Purchase and Sale of Assets.
(a) Pursuant to the terms and provisions contained
herein, Seller hereby agrees to sell, assign, transfer and convey
to Buyer at Closing (as defined hereafter), and Buyer hereby
agrees to purchase from Seller at Closing, certain properties,
assets and rights of Seller as described as follows, and as
identified on Exhibit A attached hereto and incorporated herein
by reference:
(i) All of Seller's right, title and interest in
and to the registered domain "http://www.eyesite.com" (the "Web
site") as such Web site exists as to the date of Closing;
(ii) All right, title and interest, if any and of
whatever kind or character, of Seller in and to all customer
lists, customer files, customer information, marketing and
promotional materials, manuals, marketing studies or analysis or
any other records or memoranda relating in any manner whatsoever
to Seller's Web site customers or
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advertisers (collectively, the "Customers") or sales directly or
indirectly related to the Web site (hereinafter collectively
referred to as the "Customer Lists");
(iii) All original files, books and records of
Seller with respect to the Customers and Customer Lists
including, without limitation, all Customer files, Customer
account histories, Customer purchasing and payment history,
Customer credit files, etc., as well as a list of all current and
previous suppliers or manufacturers to the Business within the
past two (2) years with sales in excess of Five Thousand and
00/100 Dollars ($5,000.00) per year;
(iv) To the extent such are assumable, all right,
title and interest of Seller as of the date of Closing in, to and
under the contracts, leases, franchises, agreements,
arrangements, understandings, commitments and business
relationships and all of Seller's rights (including rights of
refund and offset), including without limitation, the Internic
and Cybercom relationships and agreements, deposits, privileges,
claims, causes of action and options relating to or pertaining to
the Web site (collectively, the "Contract Rights");
(v) All of Seller's right, title and interest in
and to any and all income and payments due Seller relating to and
arising out of the Business as of the date of Closing;
(vi) To the extent transferable, all right, title
and interest of Seller as of the date of Closing in, to and under
all permits and licenses relating to the Web site, the Business
or all or any of the Assets (as defined below);
(vii) All right, title and interest of Seller in and
to all prepaid rentals and other prepaid expenses, bonds,
deposits and financial assurance requirements relating to any of
the Assets or the Business, including without limitation, any
prepaid amounts to Internic;
(viii) All right, title and interest of Seller in and
to any benefit of and the right to enforce the covenants and
warranties, if any, the Seller is entitled to enforce with
respect to the Assets against Seller's predecessors and title to
the Assets;
(ix) All of Seller's right, title and interest in
the name "eyesite.com," "Eyesite.Com," "Eyesite" and all related
and similar names, logos and trade names including, without
limitation, any of Seller's corporate, copyright, trademark,
trade name and service mark rights and interest in such names,
logos and trade names; provided, however, that Buyer and Seller
agree and acknowledge that parties other than Seller may have
certain rights in the trade name "Eyesite";
(x) All right, title and interest of Seller in, to
and under all rights, privileges, claims, causes of actions and
options relating or pertaining to the Business or the Assets;
(xi) All right, title and interest of Seller in and
to the goodwill of the Business;
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All of the assets, properties and rights listed in this
subparagraph (a) shall hereinafter be referred to collectively as
the "Assets."
(b) Notwithstanding anything to the contrary contained
herein, the Assets shall not include (i) all claims of Seller for
refunds for any income taxes (whether federal, state, local,
foreign or other) applicable to periods prior to the or after the
date of Closing; (ii) any rights accruing as a result of, or any
proceeds paid or payable in accordance with the Agreement; (iii)
any and all insurance proceeds and insurance claims of Seller,
except for proceeds and claims relating to any damage, loss or
casualty to the Assets accruing after the execution of this
Agreement but prior to the date of Closing; or (iv) any assets
and contracts relating to Seller's ophthalmology practice or
Seller's Success International corporation or as specifically
listed on Schedule 1.1(b) hereto (hereinafter collectively
referred to as the "Excluded Assets").
(c) It is expressly understood and agreed among the
parties hereto that Buyer is not assuming, and shall not be
deemed to assume, any liabilities of Seller relating to the
Assets or arising out of the Business, except those specifically
listed on Schedule 1.1(c) hereto (the "Assumed Liabilities").
Section 1.2 Purchase Price and Other Consideration.
(a) The total consideration to be paid by Buyer to
Seller (the "Purchase Price") for all of the Assets purchased
hereunder shall be equal to: (i) cash in the aggregate amount of
Fifty Thousand and No/100 Dollars ($50,000.00), payable in six
(6) equal monthly installments, the first of which shall be paid
at Closing; and (ii) the greater of Five Hundred Thousand
(500,000) shares of Buyer's founders' common stock, or ten
percent (10%) of Buyer's then-outstanding founders' common stock
as of the date of Closing. The Purchase Price shall be payable
at or before Closing by (a) the issuance to Seller or Seller's
designee(s) of certain common stock of Buyer, (b) delivery by
Buyer of one or more certified checks or wire transfers drawn on
Buyer's bank account of an amount not to exceed Eight Thousand
Three Hundred Thirty-Three and 33/100 Dollars ($8,333.33),
payable to Seller, and (c) assumption of certain obligations of
Seller as set forth specifically on Schedule 1.1(c) hereto.
(b) In addition, Buyer and Seller agree and acknowledge
that, at the sole option of Buyer, Buyer may elect to terminate
all of its obligations under this Agreement with no further
obligation of Buyer, in the event of a material change in the
Business prior to the Closing; for purposes of illustration but
not for purposes of exclusion, a "material change" in the
Business would include but shall not be limited to a loss of a
one or more customer relationship(s) which constitute
individually or in the aggregate more than ten percent (10%) by
gross revenue of the Business.
(c) After the Closing, Buyer shall offer a Consulting
Arrangement to Seller, and Seller shall agree to be engaged by
Buyer, subject to the terms and conditions set forth in the
Consulting
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Agreement on Exhibit B, which is incorporated herein for all
purposes. Additionally, Seller shall be offered a seat on
Buyer's board of directors including, without limitation,
reasonable protection under Buyer's director and officer errors
and omissions insurance policy.
(d) The parties hereto acknowledge and agree that Buyer
shall not be required to, nor shall Buyer assume, adopt or accept
any employee benefit plan, contract, practice, program, policy or
arrangement or any kind of Seller.
Section 1.3 Compliance with Uniform Commercial Code - Bulk
Transfers. Seller and Buyer acknowledge and agree that the
purchase and sale of the Assets may be subject to Chapter 6 of
the Uniform Commercial Code enacted in the State of Hawaii
regarding bulk transfers. In that regard, Seller hereby agrees
to indemnify, defend and hold harmless Buyer, and Buyer's
directors, officers and agents from and against any and all
demands, claims, actions or causes of actions, assessments,
losses, damages, liabilities, costs and expenses, including
reasonable attorney's fees, asserted against or imposed upon or
incurred by Buyer, its directors, officers and agents, as the
case may be, directly or indirectly, in whole or in part,
resulting from any alleged noncompliance of such former
provisions by Seller.
Section 1.4 Allocation of Purchase Price. The Purchase
Price shall be allocated among the Assets in the manner set forth
in a schedule to be delivered by Buyer to Seller within thirty
(30) days of the Closing Date, and the parties agree (a) to
comply with all filing, notice and reporting requirements
described in Section 1060 of the Internal Revenue Code of 1986,
as amended (the "Code") and (b) that, without the consent of both
parties, neither party will make any representation to any party
as to such allocation that is at variance with the allocation set
forth on such schedule.
Section 1.5 Deferred Vesting of the Assets; Possible
Reversion to Seller.
(a) Notwithstanding any other provision of this
Agreement, Seller and Buyer acknowledge and agree that the
ownership of the assets and the full vesting of such ownership in
Buyer is contingent upon Buyer remitting to Seller the amount set
forth in Subsection 1.5(b) below or achieving any two (2) of the
following three (3) performance criteria within thirty-six (36)
months of the Closing Date:
(i) Achievement of status of Buyer as a registered
public company with NASDAQ or any other recognized United States
stock exchange, with its common stock price trading at a minimum
of Three and No/100 Dollars ($3.00) per share (based upon a ten
(10) day average closing bid and ask price);
(ii) Achievement of Buyer of a book value of not
less than Five and No/100 Dollars ($5.00) per share, based upon
generally accepted accounting principles and audited financial
statements; or
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(iii) Completion of funding from any source
whatsoever that makes available to Buyer at least Three Million
Five Hundred Thousand and No/100 Dollars ($3,500,000.00) in cash.
(b) Buyer and Seller hereby further agree that should
Buyer fail to achieve at least two (2) of three (3) criteria set
forth in Subsection 1.5(a) above, Buyer shall alternatively have
the right, in its sole discretion, to remit to Seller the sum of
Five Hundred Thousand and No/100 Dollars ($500,000.00) in cash
within a one (1) month period from the expiration of the thirty-
six (36) month period described in Subsection 1.5(a) above, in
addition to any other consideration set forth in Section 1.2
above.
(c) If Buyer satisfies any two (2) of the three (3)
criteria set forth in Section 1.5(a) above or pays the amount set
forth in Subsection 1.5(b) above, full ownership of the Assets
will immediately and absolutely vest in Buyer without further
actions of either Buyer or Seller. In the event Buyer fails to
achieve two (2) of the three (3) criteria set forth in Subsection
1.5(a) above or, in the alternative, to pay the additional
purchase price of Five Hundred Thousand and No/100 Dollars
($500,000.00) described in Subsection 1.5(b) on or before the
date which is one (1) month following the expiration of the
thirty-six (36) month period described in Subsection 1.5(a)
above, all of Buyer's right, title and interest in and to the
Assets shall be reconveyed back to Seller without any additional
cost to Seller, and Seller shall assume the Assumed Liabilities,
provided, however, that in such event Seller shall assume only
liabilities in an amount equal to or lesser than the aggregate
amount of the Assumed Liabilities as of the Closing Date.
(d) Until such time as the title to the Assets and the
Business fully vest in Buyer, the Parties hereto shall enter into
a License Agreement ("License Agreement") in the form of the
License Agreement attached hereto as Exhibit C and incorporated
herein.
ARTICLE II
REPRESENTATIONS AND
WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows,
and acknowledges that Buyer is relying on such representations
and warranties, in connection with the purchase by Buyer of the
Assets and consummation of the other transactions described
herein.
Section 2.1 Title to and Ownership and Condition of Assets.
(a) Seller has, at the Closing, and shall convey to
Buyer, good and indefeasible title to the Assets, free and clear
of all liens, security interests, claims, demands, charges or
other encumbrances of any kind and character whatsoever, save and
except for any lien burdening the Assets as a result of the
Assumed Liabilities.
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(b) There are no outstanding contractual or other rights
of third parties to acquire any portion of the Assets, and there
are no outstanding agreements, options or other arrangements or
commitments which would require Seller to obtain the consent of
any party to effect the consummation of the transactions
contemplated hereby;
(c) Seller shall pay his remaining liabilities (other
than the Assumed Liabilities) directly or indirectly relating to
the assets that exist as of the date of Closing in the ordinary
course of business, and shall fulfill and satisfy, during the
period after the Closing, all of his debts, obligations and
liabilities which relate to the Business (other than the Assumed
Liabilities) existing as of the Closing Date, in order to ensure
that the purchase of the Assets by Buyer is effective against any
and all persons holding claims against Seller based on
transactions or events occurring prior to the Closing.
Section 2.2 Organization. Seller is an individual who
resides in the State of Hawaii. Seller conducts his Business and
maintains his properties in such jurisdiction and is presently
qualified as a foreign or domestic entity under the laws of all
jurisdictions in which he conducts his Business. Seller has the
requisite power and authority to own or lease his properties and
to carry on his Business as, and in the places where, such
properties are owned or leased and such Business is conducted.
Section 2.3 Power and Authority. Seller has the power,
authority and legal right to enter into and perform this
Agreement and all other documents or instruments contemplated
herein, and the execution, delivery and performance of such
agreements and the consummation of the transactions contemplated
thereby will not (i) result in any material breach or default
under any mortgage, loan agreement, deed of trust, indenture or
other loan-related instrument to which Seller is a party or by
which he is bound, (ii) violate any order, writ, injunction or
decree applicable to any Seller, or (iii) violate any provisions
of laws, rules or regulations to which any Seller is subject.
This Agreement constitutes, and all other agreements and
documents executed in connection herewith by Seller, upon due
execution and delivery by Seller, shall constitute valid and
binding obligations of Seller, enforceable against Seller in
accordance with their terms, except insofar as enforcement hereof
may be limited by bankruptcy, insolvency or similar laws for
general equitable principles, or as otherwise set forth herein.
Section 2.4 Liabilities and Litigation. At Closing, there
shall be no liabilities of any kind whatsoever whether accrued,
absolute, contingent, determined or determinable, which would
encumber the Assets or title thereto or result in any liability
to Buyer with respect thereto. At Closing there shall exist no
claim, circumstances or matter whatsoever, of or relating to the
Assets or the Business (other than in connection with the Assumed
Liabilities) which would encumber the title thereto or result in
any liability to Buyer with respect thereto; provided, however,
Seller shall be permitted to discharge such obligations within a
commercially reasonable period of time after the Closing but
shall not permit any encumbrances or liens to attach to the
Assets. There are no actions, proceedings or investigations
pending or, to the best of Seller's knowledge, threatened against
Seller or any shareholder of Seller or any of their respective
properties or rights, at law or in equity or before or by any
court or federal, state, municipal or other
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governmental department, commission, board, bureau, agency or
other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign (collectively, "Agent"
and "Agency"). Seller is not directly or indirectly, subject to
any continuing court or Agency order, writ, in junction or decree
applicable specifically to it, the Assets or the Business.
Seller shall continue to be solely liable for, and Buyer is not
assuming responsibility or liability for, all matters described
in this Section 2.4, unless specifically set forth as the Assumed
Liabilities.
Section 2.5 Breach of Other Agreements. Seller warrants
that the execution of this Agreement or any documents
contemplated herein, and the consummation of the transactions
contemplated herein, will not violate, conflict with, modify or
breach (i) any material term or provision of, or cause a default
under, or be an event which, with notice and/or lapse of time,
would constitute a default under, or result in the acceleration
of, or result in the creation of any encumbrance upon any of the
Assets pursuant to any material contract or agreement to which
Seller is a party, (ii) any judgment, decree, writ, order or
injunction of any court or arbitration body relating to the
Assets or Seller, or (iii) any order or other action of any
governmental authority, commission, bureau or administrative
agency.
Section 2.6 Taxes. Seller has duly filed all federal,
state, local and other tax returns, including, without
limitation, all federal and state payroll tax returns, all
federal and state income and/or franchise tax returns and state
or local sales tax returns, which are or were required to be
filed by the Business as of Closing, whether separately or as a
component of Seller's individual tax return(s). Seller has paid
all taxes that have become due, have accrued or have been or will
be assessed against him related to the Business or Assets for all
periods through the Effective Date. There are no tax
deficiencies or claims presently being asserted against Seller
relating to the Assets or the operation of his Business. There
is no pending or threatened claim by any federal, state or local
taxing authority against or with respect to Seller relating to
the Business for payment of additional taxes for any period prior
to the date hereof. Notwithstanding anything to the contrary
contained herein, all risk and liability with respect to any tax
obligation or liability of Seller relating to or arising with
respect to his ownership, use, control or operation of the Assets
or the Business during any period up to and including the Closing
Date, or arising as of a result of the transactions contemplated
herein, shall be borne exclusively by Seller.
Section 2.7 Compliance with Laws. To the best of his
knowledge, Seller has not violated and is not now in violation
of, any federal, state or municipal law, ordinance, order,
regulation or requirement affecting the Assets, and no written
notice of any such violation has been issued by any governmental
authority.
Section 2.8 Prior Bulk Sales. Seller has not never
transferred in bulk or otherwise not in the ordinary course of
his business all or any major part of the materials, supplies,
merchandise or other inventory of the Business, or any
substantial portion of the equipment of the Business.
Section 2.9 No Finder's Fees. Seller has not made any
agreement with any broker or other person or entity or taken any
action which would cause any broker or other person or entity
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to become entitled to any fee or commission in connection with
the transactions contemplated hereby.
Section 2.10 Attachments and Other Proceedings. There are
no attachments, executions, assignments for the benefit of
creditors, receiverships or voluntary or involuntary proceedings
in bankruptcy or pursuant to any debtor relief laws contemplated
or filed by or against Seller relating to the Business or the
Assets.
Section 2.11 Governmental and Other Consents. No consent,
approval or other authorization of any governmental authority or
other third party is required in connection with the execution or
delivery of this Agreement by Seller or the consummation by
Seller of the transactions contemplated hereby.
Section 2.12 Employees and Benefits.
(a) Seller does not currently and has never engaged or
hired employees in connection with the Business or the Assets.
Accordingly, Seller is not a party to, or bound by, any
collective bargaining agreements or other labor agreements.
Section 2.13 Investment Representations. Seller hereby
makes the following representations and warranties to Buyer with
regard to Buyer's common stock which will make up a part of the
Purchase Price:
(a) The stock of Buyer to be issued to Seller will be
acquired for investment for Seller's own account for investment
only, not as a nominee or agent, and not with a view to or for
resale in connection with, any distribution or public offering of
securities within the meaning of the Securities Act of 1933, as
amended, or any other applicable securities law, and Seller has
no present intention of selling, granting a participation in or
otherwise distributing the same. Seller represents that the
entire legal and beneficial interest of the common stock of Buyer
will be held for Seller's account only, neither in whole or in
part for any other person. By executing this Agreement and
related certificates required by Buyer, Seller further represents
that he has no present 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 common stock of Buyer. Seller understands that the
common stock of Buyer to be issued hereunder may not be
transferred without an effective registration statement covering
such shares under such securities laws, or an opinion of counsel
or other evidence satisfactory to Buyer, in his sole discretion,
that registration is not required under the applicable securities
laws. These restrictions under the applicable securities laws
are in addition to those restrictions contained in this
Agreement. Seller represents and warrants that it, along with
his advisors, is knowledgeable in making investments similar to
the purchase of the common stock of Buyer, and is able to bear
the risk of such illiquidity in his investment and the economic
risk of such investment. Seller hereby additionally represents,
warrants and acknowledges that he has been given the opportunity
to review such information about Buyer so as to make a fully-
informed decision to purchase the common stock
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of Buyer, and further that no guarantees have been given by Buyer
about the value of the common stock of Buyer.
(b) Seller understands and acknowledges that the common
stock of Buyer to be issued pursuant to the Agreement has not
been registered under the Securities Act of 1933, as amended,
(the "Securities Act") or any other applicable state securities
laws.
(c) The share certificate(s) issued to Seller
representing common stock of Buyer or any share certificate(s)
issued or issuable in respect of any such common stock of Buyer
upon any stock split, stock dividend, recapitalization or similar
event, shall contain the following restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ("SHARES") HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED AND ENACTED IN THE UNITED STATES OF AMERICA (THE
"U.S. ACT"), THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES ("STATE ACT") OR THE LAWS OF ANY OTHER COUNTRY OR
LAWFUL JURISDICTION (THE "OTHER APPLICABLE LAWS").
ACCORDINGLY, THE HOLDER OF THIS CERTIFICATE MAY NOT OFFER,
SELL, RENOUNCE OR TRANSFER THE SHARES DIRECTLY OR INDIRECTLY
IN THE UNITED STATES OR TO A UNITED STATES CITIZEN,
RESIDENT, OR RESIDENT ALIEN ("AMERICAN NATIONAL") UNLESS
DONE IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF THE
U.S. ACT, RULE 144 UNDER THE U.S. ACT, ANY APPLICABLE STATE
ACT, AND ALL OTHER APPLICABLE LAWS OR AS PART OF A
TRANSACTION IN CONNECTION WITH WHICH THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL WHICH SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION IS EXEMPT
FROM SUCH REGISTRATION REQUIREMENTS OR THAT COMPLIANCE WITH
SUCH REGISTRATION REQUIREMENTS IS NOT REQUIRED."
"THE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, TO ANY PURCHASER OUTSIDE THE UNITED STATES OR
WHO IS NOT AN AMERICAN NATIONAL UNLESS THE TRANSACTION IS IN
COMPLIANCE WITH THE U.S. ACT, THE SECURITIES LAWS OF THE
JURISDICTIONS IN WHICH THE OFFER AND/OR SALE TAKES PLACE AND
ALL OTHER APPLICABLE LAWS AND REGULATIONS."
(d) Seller acknowledges that the common stock of Buyer
held by the undersigned must be held subject to Rule 144 and
other applicable provisions of the Securities Act. Seller
represents, warrants and acknowledges that the common stock of
Buyer shall not be transferrable except on the conditions
specified in this Agreement and Rule 144 of the Securities Act,
and accordingly, any intended transfer, assignment or sale by
Seller prior to such applicable waiting period under Rule 144 or
in violation of other applicable provisions of the Securities Act
shall be null and void.
(e) The certificates evidencing the common stock of
Buyer shall also bear any legend required pursuant to any state,
local or foreign law governing such securities.
(f) Seller has had the opportunity to review with his
own tax advisors the tax consequences to the undersigned of the
Agreement and transactions contemplated thereby. Seller
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understands that he must solely rely on his advisors and not on
any statements or representations by Buyer or any of his agents.
Seller understands that he (and not Buyer) shall be responsible
for any such tax liability that may arise as a result of the
Agreement or any transactions contemplated thereby.
Section 2.14 Enforceability. This Agreement and any other
agreement to be entered into pursuant to the terms hereof or as
contemplated hereby by Seller constitute valid and binding
obligations of Seller, enforceable in accordance with their
respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting
the enforcement of creditors rights generally and the application
of general principles of equity.
Section 2.15 Full Disclosure. No representation or
warranty of Seller made in this Agreement, nor any written
statement or certificate furnished or to be furnished by Seller
to Buyer pursuant hereto, or in connection with the transactions
contemplated hereby, contains, or will contain, any untrue
statement of a material fact, or omits, or will omit to state, a
material fact necessary to make the statement or facts contained
herein or therein not misleading. No Seller has withheld, and no
Seller will withhold, from Buyer knowledge of any events,
conditions or facts of which Seller has knowledge which could
materially and adversely affect the Assets or Buyer.
ARTICLE III
COVENANTS OF SELLER
Seller hereby covenants and agrees with Buyer as follows:
Section 3.1 Conduct of Business. From September 16, 1999
to the Closing, Seller will, in all material respects, and will
cause such entities to, conduct his Business in the ordinary
course and use good faith and commercially reasonable efforts to
preserve such Business, and shall not, without Buyer's prior
written consent, impair or fail to use his best efforts to
preserve his relationships with employees, suppliers, Customers,
creditors and others having business relationships with Seller.
Section 3.2 Notices and Approvals. Prior to the Closing,
Seller shall, at his sole expense, promptly give all notices to
and use his best efforts to obtain all consents from third
parties which may be necessary or deemed desirable by Buyer in
connection with this Agreement and the consummation of the
transactions contemplated hereby, including without limitation,
those shown on Schedule 3.2 hereto. If all such consents are not
forthcoming by the date of Closing, Seller shall continue to use
their best efforts to obtain all such consents, at the sole
expense of Buyer.
Section 3.3 Fulfillment of All Covenants and Obligations.
Seller shall satisfy and fulfill all of his other obligations and
covenants set forth in this Agreement or as may otherwise be
contemplated herein or necessary or appropriate to consummate the
transactions set forth herein.
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Section 3.4 Termination of Seller's Business. Seller shall
use his best efforts to sell and/or close all remaining portions
of his Business which are not acquired by the Buyer pursuant
hereto and which would otherwise violate the Covenants Not to
Compete, Trade Secrets or Confidentiality set forth in Sections
3.8, 3.9 or 3.10 hereto as soon as possible after the Closing
Date.
Section 3.5 Material Change. From September 16, 1999 to
the date of Closing, Seller shall promptly inform Buyer in
writing of any aterial adverse change to the Business or the
Assets. Notwithstanding the disclosure to Buyer of any such
material adverse change, Seller shall not be relieved of any
liability to Buyer pursuant to this Agreement or, nor shall
provide such information by Seller to Buyer be deemed a waiver by
Buyer of, the breach of any representation or warranty of Seller
contained in this Agreement.
Section 3.6 Material Contracts. From October 15, 1999,
Seller shall not, without the prior written consent of Buyer,
incur any obligation in excess of Five Thousand and No/100
Dollars ($5,000.00); make any purchases in excess of Five
Thousand and No/100 Dollars ($5,000.00) in the aggregate;
increase the compensation paid or payable to any officer,
director, employee or agent of any Seller; or otherwise take any
action outside the ordinary course of business.
Section 3.7 Contracts. Except with Buyer's prior written
consent, Seller shall not waive any material right or cancel any
material contract, debt or claim that constitutes an Asset.
Section 3.8 Non-Competition; Confidentiality.
(A) Seller recognizes and acknowledges that he will
derive substantial benefit from the consummation of the
transactions contemplated by this Agreement. Seller further
recognizes and acknowledges that Buyer is making a substantial
investment pursuant to this Agreement in reliance upon the fact
that the knowledge and expertise developed by Seller and his
management of the affairs of the Business will be preserved and
will not be used in competition with the Business purchased by
Buyer. Seller hereby agrees that the covenants contained herein
are reasonable and necessary for the protection of Buyer and the
Business to be purchased by Buyer, and that Seller agrees to take
all necessary actions to assure that Seller will not, directly or
indirectly, except for the benefit of Buyer or with the prior
written consent of Buyer, which consent may be granted or
withheld at Buyer's sole discretion:
(i) Own, manage, engage in, control, be employed
by, participate in or be connected with, in any manner
whatsoever, the ownership, management, operation or control of
any business which sells, promotes or distributes products or
services, or which otherwise performs services, which are
reasonably like and which may reasonably compete with those
products or services previously offered by Seller's Business
and/or the Web site (but specifically excluding any existing non-
eye product or service web site of Seller) at any time during the
term of this Agreement;
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(ii) Canvas, solicit or accept business from
"Customers of the Buyer" after the Closing (except on behalf of
the Buyer) which, for purposes of this Agreement, shall mean any
person or entity which has been contacted by Seller or his
affiliates or subsidiaries, or has engaged in business with
Seller or any of his affiliates or subsidiaries, during the two
(2) year period prior to the effective date of this Agreement;
(iii) Directly or indirectly request or advise any
Customer of the Buyer to withdraw, curtail or cancel such
Customer's business with the Buyer, or otherwise interfere with
the business relationship between such Customers and the Buyer,
or any of his affiliates or subsidiaries;
(iv) Otherwise aid, consult or assist anyone
engaged in any business which is competitive with the "Business
of the Buyer," which "Business of the Buyer" shall include all
business activities in which the Buyer or any of his affiliates
or subsidiaries is engaged at any time after the date of Closing
(including, but not limited to, the publication of one or more
eye-related web sites, sales therefore, sales and acquisitions of
such types of business) or in which the Buyer or any of his
affiliates or subsidiaries plans to engage after the date of
Closing; or
(v) communicate to any person or entity any trade
secrets, customer lists, information (financial or otherwise),
strategies, systems, methods or any other business data or
secrets of the Buyer, any of the Buyer's affiliates or
subsidiaries.
(b) Seller's covenants against competition as set forth
in subparagraph (a) above shall commence on the date of this
Agreement and shall continue for a period of two (2) years after
the date of Closing of this Agreement. The restraints against
competition imposed on and agreed to by each Seller hereunder
shall apply to, and be enforceable in, the State of Hawaii,
and/or an area within fifty (50) miles of any location where the
Buyer, or any of its affiliates or subsidiaries is doing
business.
Section 3.9 Trade Secrets.
(a) Seller covenants and agrees that he will not,
directly or indirectly, for his own account or benefit, or for
the account or benefit of any other person or party, communicate
to any person or entity any trade secrets, customer lists,
information (financial or otherwise), strategies or any other
business data or secrets of Buyer.
(b) Seller's covenant against disclosure as set forth in
subparagraph (a) above shall commence on the date of this
Agreement and shall continue for a period of two (2) years after
the date of Closing of this Agreement.
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Section 3.10 Nondisclosure of Confidential Information.
(a) Seller acknowledges that Buyer may disclose or has
previously disclosed certain confidential information to such
party. Seller hereby covenants and agrees that he will not,
without prior written consent of Buyer, at the closing or at any
time thereafter, disclose or permit to be disclosed to any third
party by any method whatsoever any of the confidential
information of Buyer whether acquired prior to or after the
Closing Date. For purposes of this Agreement, "confidential
information" shall include, but not be limited to, any and all
records, notes, memoranda, data, ideas, processes, methods,
techniques, systems, formulas, patents, models, devices,
programs, computer software, writings, research, personnel
information, plans, or any other information of whatever nature
in the possession or control of Buyer which has not been
published or disclosed to the general public, or which gives to
Buyer an opportunity to obtain an advantage over competitors who
do not know of or use it.
(b) The foregoing paragraph shall not be applicable if
and to the extent Seller is required to testify in a judicial or
regulatory proceeding pursuant to an order of a judge or
administrative law judge issued after such party and his legal
counsel urge that the aforementioned confidentiality be
preserved.
(c) Any breach of this nondisclosure covenant will
result in the waiver by Seller of any and all rights to
compensation and any additional Purchase Price, if any, unpaid at
the time of the breach. In such event Buyer shall have no
further obligation to pay any amounts related thereto.
Section 3.11 Remedy for Breach.
(a) The parties hereto, recognizing that irreparable
injury will result to Buyer, his business and property in the
event of a breach or threatened breach of any of the above
covenants in Section 3.8, 3.9 or 3.10, respectively, by Seller
and that Buyer's purchase of the Assets pursuant hereto, agree
that in the event of a violation of any of the covenants herein
against competition or disclosure of confidential information by
Seller:
(i) Seller's Consulting Agreement described
hereunder may be terminated in the sole discretion of Buyer;
(ii) all payments otherwise due hereunder to
Seller, including without limitation any deferred Purchase Price,
may be immediately terminated without further obligation to the
Buyer in the sole discretion of the Buyer; and
(iii) in addition to any other legal or equitable
remedies and damages available, the Buyer shall be entitled to
the issuance of restraining orders or injunctions, both temporary
and permanent, in order to restrict the violation thereof by
Seller, his partners, agents, servants, employees and employers,
and all persons acting directly or indirectly for or with it.
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(b) The restrictive covenants contained in this
Agreement shall survive the date of Closing provided under the
terms of this Agreement and any termination of this Agreement,
and shall be enforceable according to his terms.
(c) If any court of competent jurisdiction should
hereinafter determine in the course of litigation that the
provisions of this paragraph are unreasonable with respect to
length of time, geographical area, or activities so restrained,
then this clause shall be construed to operate for such period of
time and such geographical area or areas and in respect of such
activities as said court shall determine to be the maximum
reasonable restraint in the circumstances, and the parties agree
to submit such question or questions to such court in the event
of any such determination of unreasonableness.
(d) The waiver of any party of a breach of any provision
of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by either such party. The failure to
enforce any provision(s) of the Agreement shall not be construed
as a waiver of such provision(s).
(e) The covenants of Sections 3.8, 3.9, 3.10 or 3.11
hereof shall survive the Closing of this Agreement, and be
enforceable according to their terms.
ARTICLE IV
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to purchase the Assets and
consummate the transactions at the Closing shall be subject to
the satisfaction on or prior to the Closing Date (as defined
below) of all of the following conditions, except such conditions
as Buyer may waive in writing:
Section 4.1 Representations, Warranties and Covenants of
Seller. All of the representations and warranties of Seller
contained herein shall be accurate in all material respects when
made and as of the Closing Date with the same effect as though
such representations and warranties (in the exact language
contained herein with appropriate modification of tense in the
case of representations and warranties relating to statements of
fact as of specified dates) had been made as of the Closing Date,
and Seller shall have complied in all material respects with all
of his respective agreements and covenants contained herein to be
performed on or prior to the Closing Date.
Section 4.2 Further Action. All action that shall be
required to be taken by Seller in order to effect the sale and
transfer of the Assets to Buyer and to consummate the other
transactions contemplated herein shall have been taken.
Section 4.3 Authorizing Resolutions. Seller shall have
delivered to Buyer copies of evidence of authority for Seller
relating to consummation of the transactions contemplated herein.
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ARTICLE V
REPRESENTATIONS OF BUYER
Buyer hereby represents and warrants to Seller as follows,
and acknowledges that Seller is relying upon such representations
and warranties, in connection with the purchase by Buyer of the
Assets and the consummation of the other transactions described
herein.
Section 5.1 Organization. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Delaware. Buyer conducts his business and
maintains his properties in each jurisdiction and is presently
qualified as a foreign or domestic entity under the laws of all
jurisdictions in which he conducts his business. Buyer has the
requisite power and authority to own or lease properties and to
carry on his businesses as, and in the places where, such
properties are owned or leased and such business is conducted.
Section 5.2 Power and Authority. Buyer has the power,
authority and legal right to enter into and perform this
Agreement and all other documents or instruments contemplated
herein, and the execution, delivery and performance of such
agreements and the consummation of the transactions contemplated
thereby will not (i) result in any breach of, default under,
violation of, or conflict with or require consent under any term
or provision of Buyer's Certificate of Incorporation or Bylaws,
(ii) result in any material breach or default under any mortgage,
loan agreement, deed of trust, indenture or other loan-related
instrument to which any Buyer is a party or by which he is bound,
(iii) violate any order, writ, injunction or decree applicable to
any Buyer, or (iv) violate any provisions of laws, rules or
regulations to which any Buyer is subject. This Agreement
constitutes, and all other agreements and documents executed in
connection herewith by Buyer upon due execution and delivery by
Buyer shall constitute valid and binding obligations of Buyer,
enforceable against him in accordance with their terms, except
insofar as enforcement hereof may be limited by bankruptcy,
insolvency or other similar laws for general equitable
principles, or as otherwise set forth herein.
Section 5.3 Breach of Other Agreements. The execution of
this Agreement or any documents contemplated herein, and the
consummation of the transactions contemplated herein, will not
violate, conflict with, modify or breach (i) any material term or
provision of, or cause a default under, or be an event which,
with notice and/or lapse of time, would constitute a default
under, or result in the acceleration of, or result in the
creation of any encumbrance upon any of the Assets pursuant to
any material contract or agreement to which Buyer is a party,
(ii) any judgment, decree, writ, order or injunction of any court
or arbitration body relating to the Assets, or (iii) any order or
other action of any governmental authority, commission, bureau or
administrative agency.
Section 5.4 Taxes. Buyer has duly filed all federal,
state, local and other tax returns, including, without
limitation, all federal and state payroll tax returns, all
federal and state income and/or franchise tax returns and state
or local sales tax returns, which are or were required to be
filed by him as of Closing. Buyer has paid all taxes that have
become due, have accrued or have
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been or will be assessed against him for all periods through the
date of Closing. There are no tax deficiencies or claims
presently being asserted against Buyer relating to the operations
of his business.
Section 5.5 Finder's Fees. Buyer has not made any
agreement with any person or entity or taken any action which
would cause any person or entity to become entitled to any fee or
commission in connection with the transactions contemplated
hereby.
Section 5.6 Full Disclosure. No representation or warranty
of Buyer made in this Agreement, nor any written statement or
certificate furnished or to be furnished by Buyer to Seller
pursuant hereto, or in connection with the transactions
contemplated hereby, contains, or will contain, any untrue
statement of a material fact, or omits, or will omit to state, a
material fact necessary to make the statement or facts contained
herein or therein not misleading. Buyer has withheld, nor will
he withhold, from Seller knowledge of any events, conditions or
facts of which Buyer has knowledge which could materially and
adversely affect the Assets or Seller.
ARTICLE VI
COVENANTS OF BUYER
Section 6.1 Assumption of Liabilities. Buyer hereby
covenants to, effective with the date of Closing, assume the
Assumed Liabilities as set forth in Schedule 1.1(c). Buyer shall
undertake to remit payment for the Assumed Liabilities, including
without limitation the accounts payable assumed by Buyer, to be
paid in the normal course of business on a basis consistent with
his normal business practices.
Section 6.2 Fulfillment of all Covenants and Obligations.
Buyer shall satisfy and fulfill all of his other obligations and
covenants set forth in this Agreement including, without
limitation, those contained in Section 1.5 above or as may
otherwise be contemplated herein or necessary or appropriate to
consummate the transactions set forth herein.
Section 6.3 Certified Corporate Documents. At or prior to
the Closing, Buyer shall deliver to Seller or his representative
certified copies of the resolutions of his Board of Directors
authorizing this Agreement and the consummation of the
transactions contemplated hereby.
ARTICLE VII
CLOSING
Section 7.1 Closing. (a) The closing (the "Closing")
of the purchase and sale of the Assets and the other transactions
contemplated hereby shall take place at the offices of Buyer
beginning at 10:00 a.m. on December 22nd, 1999 (the "Closing
Date"), or at such other place, date and time as the parties may
agree upon in writing. The Closing of the transactions
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contemplated herein shall be effective as of the close of
business on December 22nd, 1999 ("Effective Date"). In
particular, the parties hereto shall deliver the following at the
Closing:
(i) Seller shall deliver to Buyer fully and validly
executed bills of sale, filings, assignments, licenses, consents
and all other documents contemplated or specifically identified
in this Agreement or which are otherwise necessary or appropriate
to fully effectuate the transfer of the Assets to Buyer as
contemplated herein, including, without limitation, the transfer
of the Internic domain registration and the Cybercom web site
hosting agreement.
(ii) Buyer shall deliver to Seller the Purchase Price as
specified in Section 1.2 hereof, including any certificates of
Seller deemed necessary by Buyer to issue the applicable
certificates of stock and cash, as applicable.
(iii) Seller shall deliver to Buyer possession of all
books, accounts, records, documents, agreements and reports held
by Seller with respect to the Customers.
(iv) Buyer shall deliver to Seller the Consulting
Agreement.
Following the Closing Date, Buyer and Seller hereby agree to
provide for the following:
(i) The Purchase Price shall be allocated among the
Assets as set forth in Section 1.4 within thirty (30) days of the
Closing Date; and
(ii) Payment by Buyer of the remaining five (5)
installments of the cash Purchase Price.
ARTICLE VII
INDEMNIFICATION AND ARBITRATION
Section 8.1 Agreement to Indemnify.
(a) Subject to the conditions and provisions set forth
in this Article VIII, Seller agrees, upon the lapse of the thirty
(30) day period after Seller is notified in writing of such a
demand, claim, action or cause of action, to indemnify, defend
and hold harmless the Buyer from and against all demands, claims,
actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses, including reasonable attorney's
fees, asserted against or imposed upon or incurred by the Buyer,
as the case may be, directly or indirectly, in whole or in part,
resulting from (i) all debts, liabilities and obligations, actual
or alleged, arising at any time from or related to the ownership,
control or operation of the Assets or Business by Seller prior to
Closing, (ii) sales taxes imposed upon Seller and arising out of
the operation of the Businesses or with respect to Seller's
ownership, use, control, operation or sale of the Assets, (iii)
any obligation of Seller pertaining to interest on the
shareholder loans whether directly to the shareholder advancing
funds
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to Seller or to any federal, state or local tax authority, (iv) a
breach of any covenant, or the inaccuracy in any respect of any
representation or warranty, of Seller contained in or made
pursuant to this Agreement and (v) all other liabilities for
which the Buyer may become liable and which are covered by this
indemnity, including, without limitation, all federal, state and
local taxes applicable to the ownership, control or operation of
the Assets on and prior to the Closing Date and liabilities
arising as a result of the calculation of same.
(b) Subject to the conditions and provisions of this
Article VIII, Buyer agrees, upon the lapse of the thirty (30) day
period after Buyer is notified in writing of such a demand,
claim, action or cause of action, to indemnify, defend and hold
harmless the Seller from and against all demands, claims, actions
or causes of action, assessments, losses, damages, liabilities,
cost and expenses, including reasonable attorney fees, asserted
against or imposed upon or incurred by the Seller, as the case
may be, directly or indirectly, in whole or in part, resulting
from (i) the failure of Buyer to pay any of the Assumed
Liabilities (except as may be set forth in Section 1.2 above),
(ii) a breach of any covenant, or other inaccuracy in any respect
of any representation or warranty, of Buyer contained in or made
pursuant to this Agreement, (iii) any and all claims and
contingent liabilities relating to the Assumed Liabilities,
including without limitation any contingent liabilities, whether
now existing or hereafter arising, pertaining to Seller's and/or
Buyer's utilization of the names "Eyesite" and "eyesite.com", and
(iv) all other liabilities for which Seller may become liable and
which are covered by this indemnity, including, without
limitation, all federal, state and local taxes applicable to the
ownership, control or operation of the Assets after the Closing
Date and liabilities arising as a result of the calculation of
same.
(c) All of the adjustments, demands, claims, actions or
causes of action, assessments, losses, damages, liabilities,
costs and expenses to which a party may be entitled to recover or
for which such party may be entitled to indemnification pursuant
to this Agreement shall hereinafter be referred to as the
"Indemnification Claims".
Section 8.2 Arbitration. Any and all disputes arising
between the parties with respect to the validity and/or payment
of any Indemnification Claim as provided by this Article VIII
shall be finally settled by binding arbitration pursuant to the
commercial rules of the American Arbitration Association
following the Federal Rules of Civil Procedure. If the parties
cannot agree on a single arbitrator for purposes of settling such
a dispute, the indemnifying party and the indemnified party shall
each appoint an arbitrator and so advise the other party, and
these two arbitrators will appoint a third arbitrator. If either
party fails to appoint an arbitrator within thirty (30) days
after receipt of written request to do so, the decision of the
appointed arbitrator shall be final. If an arbitrator fails or
is unable to act, his successor will be appointed in the same
manner as the arbitrator whom he succeeds. The arbitrators
appointed as aforesaid shall immediately proceed to arbitrate the
dispute between the indemnified party and the indemnifying party,
and they shall, within fifteen (15) days of the arbitration
proceeding, or as soon thereafter as may be practicable, render
their decision in writing and transmit such written decision to
the parties hereto. The forum for such proceeding shall be in
the city of San Francisco, California and the arbitrators shall
be entitled to such information, including the business records
of Buyer and Seller, as they deem necessary or desirable for
purposes of determining or resolving the
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dispute. The decision of the majority of the arbitrators then
serving shall be binding and final upon the parties, and judgment
made upon the order may be entered in any court having
appropriate jurisdiction. The arbitrator shall determine which
party shall bear the costs, including attorney's fees, of the
proceedings or the portion of such cost which each party should
bear.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Date of Agreement. The term "date of this
Agreement" as used herein shall mean the date this Agreement has
been fully executed by Seller and the Buyer as indicated by their
signatures below.
Section 9.2 Date of Performance. In the event the Closing
Date or any other date or provision provided herein should fall,
expire or be due on a legal holiday, Saturday or Sunday, such
date or provision shall be extended to the next working day which
is not a legal holiday, Saturday or Sunday, and such next working
day shall be considered to be the due date, performance date or
expiration date for all purposes hereunder. Similarly, upon the
occurrence of any act of God or any other event which is out of
either party's control or otherwise considered to be a condition
of force majeure, the performance hereunder including the Closing
hereunder shall be extended until such time as performance is
possible.
Section 9.3 Entire Agreement. This Agreement contains the
complete agreement between the parties hereto and cannot be
varied, modified or altered except by the written agreement of
the parties hereto. The parties agree that there are no oral
agreements, understandings, representations or warranties which
are not expressly set forth herein. This Agreement (including
the Exhibits and Schedules hereto) shall supersede all prior
agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter hereof and no
party shall be liable or bound to the other in any manner by any
warranties, representations or covenants not set forth herein or
contemplated hereby.
Section 9.4 Successors and Assigns. The terms and
conditions of this Agreement shall inure to the benefit of and be
binding upon the respective parties hereto and their successors,
representatives, heirs, administrators, executors and assigns.
This Agreement may not be assigned by any party without the prior
written consent of the other party hereto.
Section 9.5 Third Party Beneficiary. Nothing in this
Agreement shall be deemed to create any right in any creditor or
other person not a party hereto, and this instrument shall not be
construed in any respect to be a contract in whole or in part for
the benefit of any other party except as aforesaid.
Section 9.6 Identical Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all
purposes be deemed to be an original and all of which
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shall constitute the same instrument, but only one of which need
be produced to evidence the agreement of the parties hereto.
Section 9.7 Headings. The captions and headings of the
paragraphs and subparagraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of,
or to construe or limit the meaning of, this Agreement or to
affect the construction hereof.
Section 9.8 Use of Certain Terms. As used in this
Agreement, the words "herein", "hereof", and "hereunder" and the
other words of similar import refer to this Agreement as a whole
and not to any particular paragraph, subparagraph or other
subdivision.
Section 9.9 Consent and Waiver. No consent or waiver,
express or implied, by any party hereto of any breach or default
by any other party hereto in the performance of his obligations
hereunder shall be deemed or construed to be a consent or waiver
to or of any other breach or default in the performance by such
party of the same or any other obligations of such party
hereunder. Failure on the part of any party to complain of any
act or failure to act of the other party or to declare the other
party in default, irrespective of how long such failure
continues, shall not constitute a waiver by such party of his
rights hereunder.
Section 9.10 Severability. If any provision of this
Agreement or the application thereof to any person or
circumstance shall be held invalid or unenforceable to any
extent, such illegality or unenforceability shall extend to that
provision solely, and the remainder of this Agreement shall be
enforced to the greatest extent permitted by law as if such
illegal or unenforceable provision were not incorporated herein.
Section 9.11 Exhibits, Schedules, Etc. All statements
contained in any Exhibit, Schedule, certificate or other
instrument delivered by or on behalf of the parties hereto, or in
connection with the transactions contemplated hereby, are an
integral part of this Agreement, and shall be deemed to be
incorporated herein by reference. The Parties agree that certain
schedules may be delivered after Closing.
Section 9.12 Notices. Any notice or communication required
or permitted hereunder shall be deemed to be delivered and
received when actually received by the intended recipient or,
whether actually received or not, on the third (3rd) day after it
is deposited in the United States mail, postage fully prepaid,
registered or certified mail, return receipt requested, addressed
to the intended recipient at the address shown below:
If to the Buyer, to: Eyesite.Com, Inc.
2925 LBJ Freeway, Suite 188
Dallas, Texas 75234
Attn: George W. Flinn
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with a copy to: Bellinger & DeWolf, L.L.P.
750 North St. Paul, Suite 900
Dallas, Texas 75201
Attn: Glen A. Bellinger, Esq.
If to Seller, to: Gary Edwards, M.D.
1329 Lusitana Street
Suite 806
Honolulu, Hawaii 96813
with a copy to: ______________________________
______________________________
______________________________
______________________________
Attn: ________________________
or at such other address for a party as shall be specified by
like notice.
Section 9.13 Survival. The representations and warranties
of the parties contained herein shall survive the Closing for the
period specified herein. All covenants and agreements made in
this Agreement shall survive, and shall not be extinguished by,
the Closing for the period specified herein.
Section 9.14 Expenses. Except as otherwise expressly
provided herein, each party will pay all of his expenses,
including attorneys' fees, in connection with the negotiation of
this Agreement, the performance of his obligations hereunder and
the consummation of the transactions contemplated by this
Agreement.
Section 9.15 Further Assurances. The parties hereto will
execute and deliver such further instruments of conveyance and
transfer and take such additional actions as the other party may
reasonably request to effect, consummate, confirm or evidence the
transfer to the Buyer of the Assets. Seller will execute such
documents as may be necessary to assist the Buyer in preserving
or perfecting his rights in the Assets and will also do such acts
as are necessary to fully perform any Seller's representations,
warranties and agreements contained herein.
Section 9.16 Governing Law. This agreement and the
obligations of the parties hereto shall be governed by and
interpreted, construed and enforced in accordance with the laws
of the State of Texas. Each of the parties hereto agrees that
any suit, action or proceeding for the enforcement of this
Agreement shall be brought only in the State courts or Federal
courts in the State of Texas, County of Dallas, and each party
hereby consents to the jurisdiction of such courts.
Section 9.17 Knowledge. As used herein, the term "to the
best of their knowledge" or "to the best of his knowledge", and
all similar terms or phrases shall mean all facts and information
presently known to such person and any facts and information
which such person
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should have known in the exercise of such care as a reasonable
and prudent person would exercise under the same or similar
circumstances, without the need for any independent
investigation.
Section 9.18 Time. The parties hereto agree that time is
of the essence.
Section 9.19 Facsimile Signatures. The parties hereto
agree that the Closing may occur simultaneously, with facsimile
signatures of each party serving for purposes of the Closing,
with the understanding that the parties shall obtain fully
executed original signatures following the Closing.
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement as of the date set forth above.
SELLER:
/s/ GARY EDWARDS, M.D.
--------------------------
Gary Edwards, M.D.
BUYER:
EYESITE.COM, INC.
a Delaware corporation
By: /s/ GEORGE W. FLINN
-------------------------
George W. Flinn, President
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EXHIBIT A
ASSETS SUBJECT TO PURCHASE
(i) All of Seller's right, title and interest in and to
the registered domain "http://www.eyesite.com" (the "Website");
(ii) All right, title and interest, if any and of
whatever kind or character, of Seller in and to all customer
lists, customer files, customer information, marketing and
promotional materials, manuals, marketing studies or analysis or
any other records or memoranda relating in any manner whatsoever
to Seller's Website customers or advertisers (collectively, the
"Customers") or sales directly or indirectly related to the
Website (hereinafter collectively referred to as the "Customer
Lists");
(iii) All original files, books and records of Seller with
respect to the Customers and Customer Lists including, without
limitation, all Customer files, Customer account histories,
Customer purchasing and payment history, Customer credit files,
etc., as well as a list of all current and previous suppliers or
manufacturers to the Business within the past two (2) years with
sales in excess of Five Thousand and 00/100 Dollars ($5,000.00)
per year;
(iv) To the extent such are assumable, all right, title
and interest of Seller as of the date of Closing in, to and under
the contracts, leases, franchises, agreements, arrangements,
understandings, commitments and business relationships and all of
Seller's rights (including rights of refund and offset),
including without limitation, the Internic and Cybercom
relationships and agreements, deposits, privileges, claims,
causes of action and options relating to or pertaining to the
Website (collectively, the "Contract Rights");
(v) All of Seller's right, title and interest in and to
any and all income and payments due Seller relating arising out
of the Business as of the date of Closing;
(vi) To the extent transferable, all right, title and
interest of Seller as of the date of Closing in, to and under all
permits and licenses relating to the Website, the Business or all
or any of the Assets (as defined below);
(vii) All right, title and interest of Seller in and to
all prepaid rentals and other prepaid expenses, bonds, deposits
and financial assurance requirements relating to any of the
Assets or the Business, including without limitation, any prepaid
amounts to Internic;
(viii) All right, title and interest of Seller in and to
any benefit of and the right to enforce the covenants and
warranties, if any, the Seller is entitled to enforce with
respect to the Assets against Seller's predecessors and title to
the Assets;
Exhibit A - Page 1
<PAGE>
(ix) All of Seller's right, title and interest in the
name "eyesite.com," "Eyesite.Com," "Eyesite" and all related and
similar names, logos and trade names including, without
limitation, any of Seller's corporate, copyright, trademark,
trade name and service mark rights and interest in such names,
logos and trade names; provided, however, that Buyer and Seller
agree and acknowledge that parties other than Seller may have
certain rights in the trade name "Eyesite";
(x) All right, title and interest of Seller in, to and
under all rights, privileges, claims, causes of actions and
options relating or pertaining to the Business or the Assets;
(xi) All right, title and interest of Seller in and to
the goodwill of the Business and Seller;
Exhibit A - Page 2
<PAGE>
EXHIBIT B
CONSULTING AGREEMENT
<PAGE>
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made and
entered into to be effective as of December _____, 1999, by and
between EYESITE.COM, INC., a Delaware corporation (the
"Company"), and GARY EDWARDS, M.D. ("Consultant").
W I T N E S S E T H:
WHEREAS, the Company desires to contract with Consultant to
assist the Company in (i) assisting the Company in its
maintaining and upgrading that certain commercial web site with
the registered domain of "http://www.eyesite.com" (the "Web
site") and other related activities for the benefit of the
Company (collectively, the "Consulting Services");
WHEREAS, Consultant has particular skills, knowledge and
abilities related to the provision of such Consulting Services;
and
WHEREAS, the Company desires to compensate Consultant in
full satisfaction of all of Consultant's past services and
contributions to the Company; and
WHEREAS, the Company desires to retain Consultant to perform
the Consulting Services pursuant to the terms and provisions
contained herein.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and conditions contained herein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
CONTRACT
Section 1.1 Contract. (a) The parties hereby agree that
the Company shall retain Consultant to perform the Consulting
Services for the Company for a thirty-six (36) month period,
commencing on the date hereof and ending thirty-six (36) months
later, subject to the provisions of Article III and the other
terms and conditions hereinafter set forth. In this regard,
Consultant agrees to perform the Consulting Services using his
professional and good faith judgment. Consultant shall be an
independent contractor of Company in performing the Consulting
Services, and nothing contained herein shall be construed to
create an employment relationship or a partnership or joint
venture between the Company and Consultant.
(b) Unless otherwise authorized by the Board of
Directors of the Company, Consultant shall not have the right to
make any contracts or commitments for or on behalf of the Company
relating to the Web site or otherwise, to sign or endorse any
commercial paper, contracts or instruments of any nature or to
enter into any obligation binding the Company to the payment of
money or otherwise.
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Section 1.2 Offer to Employ Consultant. Following the term
of this Agreement, Consultant may be offered an employment or a
continuing consulting position, upon the mutual agreement and
mutually agreeable terms negotiated between the Company and
Consultant. In this regard, the parties intend that this
Agreement to compensate Consultant for his actual services
rendered to and for the benefit of the Company during the term of
this Agreement. This Agreement does not preclude a conversion of
Consultant's status into an employment relationship with the
Company as an executive of the Company; rather, the Company
acknowledges a strong interest at this time in entering into such
a relationship with Consultant, should the work demands of the
Company and the availability of Consultant make such an
arrangement possible.
ARTICLE II
COMPENSATION
Section 2.1 Compensation. As full compensation for all
services rendered pursuant to this Agreement during the term of
this Agreement, Consultant shall be paid by the Company a minimum
monthly consulting fee (hereinafter referred to as the
"Consulting Fee") equal to Seven Thousand and No/100 Dollars
($7,000.00). Such Consulting Fee amount is based upon the
mutual understanding of Consultant and the Company that
Consultant is obligated to render Thirty Five (35) documented
consulting hours on a monthly basis for the benefit of the
Company at an agreed rate equal to Two Hundred and No/100 Dollars
($200.00) per hour. Any consulting hours rendered by Consultant
in excess of Thirty Five (35) hours per month shall be approved
in advance by an officer or other official of the Company based
upon specific project requirements of the Company in blocks
(each, a "Block") of Ten (10) hours per Block at the agreed rate
of One Thousand Five Hundred and No/100 Dollars ($1,500.00) per
Block (each, a "Block Fee"). Prior to the payment of any Block
Fee by the Company, Consultant shall document each Block to the
satisfaction of the officer or other official of the Company who
authorized such additional services. The monthly Consulting Fee
and any Block Fee, as applicable, to be paid to Consultant
hereunder shall be paid on the fifteenth (15th) day of each
calendar month following the month actual services were rendered
to the Company (and, in the case of a Block Fee, documented) by
Consultant during the term.
ARTICLE III
TERMINATION
Section 3.1 Termination. This Agreement may be terminated
by the Company at any time only (i) for "cause", as determined by
the Company's Board of Directors, or (ii) for a violation of any
of Consultant's covenants against non-competition,
confidentiality or nondisclosure of trade secrets or confidential
information as set forth in Article IV below prior to the
expiration of this Agreement, upon written notice delivered to
Consultant.
ARTICLE IV
Section 4.1 Non-Competition and Confidentiality. (a)
Consultant recognizes and acknowledges that he will derive
substantial benefit from the consummation of the transactions
contemplated by this Agreement. Consultant further recognizes
and acknowledges that The
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Company is making a substantial investment pursuant to this
Agreement and that certain Asset Purchase Agreement (the
"Purchase Agreement") of even date herewith in reliance upon the
fact that the knowledge and expertise developed by Consultant and
his management of the affairs of the business of the Company (the
"Business") will be preserved and will not be used in competition
with the Business purchased by the Company. Consultant hereby
agrees that the covenants contained herein are reasonable and
necessary for the protection of the Company and the Business to
be purchased by the Company, and that Consultant agrees to take
all necessary actions to assure that Consultant will not,
directly or indirectly, except for the benefit of the Company or
with the prior written consent of the Company, which consent may
be granted or withheld at the Company's sole discretion:
(i) Own, manage, engage in, control, be employed by,
participate in or be connected with, in any manner whatsoever,
the ownership, management, operation or control of any business
which sells, promotes or distributes products or services, which
are reasonably like and which may reasonably compete or which
otherwise performs services, which are reasonably like and which
may reasonably compete with those products or services previously
offered by Consultant's Business and/or the Web site (but
specifically excluding any existing non-eye product or service
Website of Consultant) at any time during the term of this
Agreement;
(ii) Canvas, solicit or accept business from
"Customers of the Company" after effective date hereof (except on
behalf of the Company) which, for purposes of this Agreement,
shall mean any person or entity which has been contacted by
Consultant or his affiliates or subsidiaries, or has engaged in
business with Consultant or any of his affiliates or
subsidiaries, during the two (2) year period prior to the
effective date of this Agreement;
(iii) Directly or indirectly request or advise any
Customer of the Company to withdraw, curtail or cancel such
Customer's business with the Company, or otherwise interfere with
the business relationship between such Customers and the Company,
or any of his affiliates or subsidiaries;
(iv) Otherwise aid, consult or assist anyone engaged
in any business which is competitive with the "Business of the
Company," which "Business of the Company" shall include all
business activities in which the Company or any of his affiliates
or subsidiaries is engaged at any time after the date of Closing
(including, but not limited to, the publication of one or more
eye-related web sites, sales therefore, sales and acquisitions of
such types of business) or in which the Company or any of his
affiliates or subsidiaries plans to engage after the date of
Closing; or
(v) communicate to any person or entity any trade
secrets, customer lists, information (financial or otherwise),
strategies, systems, methods or any
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<PAGE>
other business data or secrets of the Company, any of the
Company's affiliates or subsidiaries.
(b) Consultant's covenants against competition as set
forth in subparagraph (a) above shall commence on the date of
this Agreement and shall continue for a period of two (2) years
after the date of Closing of this Agreement. The restraints
against competition imposed on and agreed to by each Consultant
hereunder shall apply to, and be enforceable in, the State of
Hawaii, and/or an area within fifty (50) miles of any location
where the Company, or any of its affiliates or subsidiaries is
doing business.
Section 4.2 Trade Secrets.
(i) Consultant covenants and agrees that he will not,
directly or indirectly, for his own account or benefit, or for
the account or benefit of any other person or party, communicate
to any person or entity any trade secrets, customer lists,
information (financial or otherwise), strategies or any other
business data or secrets of the Company.
(ii) Consultant's covenant against disclosure as set
forth in subparagraph (a) above shall commence on the date of
this Agreement and shall continue for a period of two (2) years
after the date of Closing of this Agreement.
Section 4.3 Nondisclosure of Confidential Information.
(i) Consultant acknowledges that the Company may
disclose or has previously disclosed certain confidential
information to such party. Consultant hereby covenants and
agrees that he will not, without prior written consent of the
Company, at the closing or at any time thereafter, disclose or
permit to be disclosed to any third party by any method
whatsoever any of the confidential information of the Company
whether acquired prior to or after the Closing Date. For
purposes of this Agreement, "confidential information" shall
include, but not be limited to, any and all records, notes,
memoranda, data, ideas, processes, methods, techniques, systems,
formulas, patents, models, devices, programs, computer software,
writings, research, personnel information, plans, or any other
information of whatever nature in the possession or control of
the Company which has not been published or disclosed to the
general public, or which gives to the Company an opportunity to
obtain an advantage over competitors who do not know of or use
it.
(ii) The foregoing paragraph shall not be applicable
if and to the extent Consultant is required to testify in a
judicial or regulatory proceeding pursuant to an order of a judge
or administrative law judge issued after such party and his legal
counsel urge that the aforementioned confidentiality be
preserved.
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<PAGE>
(iii) Any breach of this nondisclosure covenant will
result in the waiver by Consultant of any and all rights to
compensation and any additional Purchase Price, if any, unpaid at
the time of the breach. In such event the Company shall have no
further obligation to pay any amounts related thereto.
Section 4.4. Remedy for Breach. Consultant expressly
recognizes and acknowledges that the terms and conditions of this
Agreement and specifically Article IV hereunder are reasonable as
to time and area, necessary to protect the legitimate business
interests of the Company, and are not unduly burdensome to
Consultant.
Further, Consultant expressly acknowledges and agrees that
irreparable injury will result to the Company and to its business
and properties in the event of any breach by Consultant of any of
the provisions of this Article IV, and that Consultant's
continued engagement is predicated on the commitments undertaken
by him pursuant thereto. In the event of any breach of any of
Consultant's commitments pursuant to this Article IV, the Company
shall be entitled to immediately terminate this Agreement with
no further obligation to Consultant hereunder and to any other
remedies and damages available, including without limitation to
injunctive relief to restrain the violation of such commitments
by Consultant or by any person or persons acting for or with
Consultant in any capacity whatsoever.
If any court of competent jurisdiction should hereinafter
determine in the course of litigation that the provisions of this
Article IV are unreasonable with respect to length of time,
geographical area, or activities so restrained, then this clause
shall be construed to operate for such period of time and such
geographical area or areas and in respect of such activities as
said court shall determine to be the maximum reasonable restraint
in the circumstances, and the parties agree to submit such
question or questions to such court in the event of any such
determination of unreasonableness.
Section 4.5. Waiver of Breach. The waiver of either party
of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach by either
the Company or Consultant. The failure to enforce any
provision(s) of the Agreement shall not be construed as a waiver
of such provision(s).
Section 4.6. Survival of Covenants. The covenants of
Article IV hereof shall survive any termination of Consultant's
engagement and any termination of this Agreement, and be
enforceable according to their terms.
ARTICLE V
MISCELLANEOUS
Section 5.1 Notices. All notices, demands or other
communications required or provided hereunder shall be in writing
and shall be deemed to have been given at the earlier of (a)
actual receipt, or (b) three (3) days after deposit in the United
States Mail as provided below. Notice may be sent by personal
service to the parties or by deposit in the United States mail,
certified or
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<PAGE>
registered, postage prepaid, return receipt requested, addressed
to the parties at the addresses set forth below or at such other
addresses as such parties may designate by notice to the other
parties.
If to Company: Eyesite.Com, Inc.
2925 LBJ Freeway
Suite 188
Dallas, Texas 75234
Attention: George W. Flinn, President
with a copy to: Bellinger & DeWolf, L.L.P.
750 North St. Paul, Suite 900
Dallas, Texas 75201
Attention: H. Len Musgrove, Esq.
If to Consultant: Gary Edwards, M.D.
1329 Lusitana Street, Suite 806
Honolulu, Hawaii 96813
Section 5.2 Applicable Law. This Agreement and the
obligations of the parties hereunder shall be interpreted,
construed, governed and enforced in accordance with the laws of
the State of Texas, and shall be performed in Dallas County,
Texas.
Section 5.3 Entire Agreement. This Agreement, together
with the Purchase Agreement, contains the entire agreement among
the parties hereto relative to the transactions contemplated
hereby, and supersedes all other oral and written agreements,
express or implied, concerning the subject matter of this
Agreement. No variations, modifications or changes in this
Agreement shall be binding upon a party unless set forth in a
document duly executed by or on behalf of such party.
Section 5.4 Assignability. Neither this Agreement, nor
the rights and obligations created under it, may be assigned by
either party without the prior written consent of the other party
to this Agreement.
Section 5.5 Severability. If any provision of this
Agreement or the application thereof to any person or
circumstance shall be held invalid or unenforceable to any
extent, such illegality or unenforceability shall extend to that
provision only, and the remainder of this Agreement shall be
enforced to the greatest extent permitted by law as if such
illegal or unenforceable provision were not incorporated herein.
Section 5.6 Third Party Beneficiary. Nothing in this
Agreement shall be deemed to create any right in any creditor or
other person not a party hereto (other than the successors and
assigns of a party hereto), and this instrument shall not be
construed in any respect to be a contract in whole or in part for
the benefit of any other party except as aforesaid.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first set forth above.
COMPANY:
EYESITE.COM,
a Delaware corporation
By: /s/ GEORGE W. FLYNN
------------------------------
George W. Flinn, President
CONSULTANT:
/s/ GARY EDWARDS, M.D.
---------------------------------
Gary Edwards, M.D.
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<PAGE>
EXHIBIT C
LICENSE AGREEMENT
<PAGE>
WEB SITE LICENSE AGREEMENT
THIS WEB SITE LICENSE AGREEMENT (the "Agreement") is made
and entered into to be effective as of the ______ day of
December, 1999, by and between GARY EDWARDS, M.D., an individual
("Edwards") and EYESITE.COM, INC., a Delaware corporation
("Licensee").
R E C I T A L S:
A. Edwards owns certain proprietary intellectual property,
including without limitation, that certain commercial web site
with the registered domain of "http://www.eyesite.com" and
related intellectual property, a more specific description which
is set forth below (collectively, the "Web Site"); and
B. Licensee desires to obtain the exclusive use of the Web
Site during the term of this Agreement, and Edwards is agreeable
to exclusively licensing the Web Site to Licensee, on the terms
and conditions contained herein.
NOW, THEREFORE, for and in consideration of the premises and
other good and valuable consideration contained herein, the
receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. License of Web Site.
1.1 Edwards grants to Licensee an exclusive,
irrevocable worldwide royalty-free license to use, reproduce,
improve, update, enhance, modify, market, distribute, license,
rent, lease and sell advertising and products on the Web Site as
part of its products and services to Licensee's customers, in
Licensee's sole discretion.
1.2 Licensee's exclusive license rights to the Web
Site shall be for a term of forty (40) months from the effective
date of this Agreement.
2. Ownership of the Web Site by Edwards. Edwards and
Licensee stipulate and agree that the ownership of the "Web
Site," which includes without limitation Edwards' Web Site
(including updates, enhancements and modifications made during
the term of this Agreement) shall be retained by Edwards during
the term of this Agreement, except as provided in Section 3
below.
3. Vesting of Ownership. The parties further agree and
acknowledge that (i) this Agreement is entered into
simultaneously with that certain Asset Purchase Agreement (the
"Purchase Agreement") of even date between Edwards and Licensee,
and (ii) Licensee shall have the right to acquire the fully
vested ownership in the Web Site, subject to certain terms and
conditions described in Section 1.5 of the Purchase Agreement.
Notwithstanding any other provision of this Agreement, upon
Licensee's attainment or satisfaction of the conditions set forth
in Section 1.5 of the Purchase Agreement. Licensee shall be the
fully vested owner of the Web Site in all respects and shall have
no further obligation to Edwards hereunder.
1
<PAGE>
4. License. As used in this Agreement, the term
"exclusive license" shall mean that Edwards shall not without the
prior written consent of Licensee, for his own benefit or the
benefit of a third party market, sell or distribute the Web Site
to any party other than Licensee, nor shall Edwards license any
third party to develop, create, publish, improve, market, sell or
distribute the Web Site.
5. Entire Agreement. This Agreement shall constitute
the entire agreement of the parties as to Licensee's use of the
Web Site, and all prior written or oral agreements are null and
void.
6. No Assignment. Neither party shall have the right to
assign its obligations hereunder without the prior written
consent of the other party.
Dated to be effective as of the date above first written.
LICENSEE: EDWARDS:
EYESITE.COM, INC.,
a Delaware corporation
By: /s/ GEORGE W. FLYNN /s/ GARY EDWARDS, M.D.
-------------------------- ----------------------------
George W. Flinn, President Gary Edwards, M.D.
Address for Notice: Address for Notice:
Eyesite.Com, Inc. 1329 Edwards Street
2925 LBJ Freeway, Suite 188 Suite 806
Dallas, Texas 75234 Honolulu, Hawaii 96813
Attn: G. W. Flinn
2
<PAGE>
SCHEDULE 1.1(c)
ASSUMED LIABILITIES
Any and all contingent liabilities, whether now existing or
arising in the future, resulting from any potential litigation
pertaining to the past or present utilization by Seller of the
names "Eyesite" and/or "eyesite.com".
<PAGE>
SCHEDULE 3.2
NOTICES AND APPROVALS
1. Internic Agreement
2. Cybercom Agreement
<PAGE>
