Asset Purchase Agreement between EncounterCare Solutions, Inc., HealthDatix, Inc., and iGambit Inc.
This agreement, dated April 5, 2017, is between EncounterCare Solutions, Inc. (the seller), HealthDatix, Inc. (the purchaser), and iGambit Inc. The seller agrees to sell certain assets related to its CyberCare Health Network Business to the purchaser, a subsidiary of iGambit, free of liens and encumbrances. The agreement outlines which assets and liabilities are included or excluded, and sets the terms for the transfer. The parties define key terms and conditions for the sale, including what is being transferred and what remains with the seller.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (“Agreement”), dated as of April 5, 2017 is
by and between EncounterCare Solutions, Inc., a Delaware corporation (“Seller”), and
HelathDatix, Inc., a Florida for profit corporation (“Purchaser”) and IGAMBIT INC.
(“iGambit”), a Delaware corporation.
W I T N E S S E T H:
Seller is an Energy and Healthcare company that operates its business through
three divisions, the Energy Division, the Healthcare Technology Division and the Healthcare
Services Division. Its Healthcare Technology Division, through its CyberCare Health Network
platform provides a FDA approved health wearable watch sensor-to-server IoT connected
Telemedicine monitoring system (the “CyberCare Health Network Business”).
Purchaser is a wholly owned subsidiary of iGambit.
iGambit is a fully reporting publicly traded company.
The parties hereto wish to enter into this Agreement which sets forth the terms and
conditions upon which Purchaser agrees to purchase from the Seller and the Seller agrees to sell
to Purchaser, for the consideration stated herein, certain assets of Seller (other than to the extent
specifically set forth herein) free and clear of all liens, liabilities and encumbrances.
In consideration of the foregoing and of the covenants, agreements, conditions,
representations and warranties hereinafter contained, and intending to be legally bound hereby,
Purchaser, and the Seller hereby agree as follows:
1.
DEFINITIONS.
Unless otherwise defined below in this Section 1, the various capitalized terms used in
this Agreement shall have the definitions ascribed to them herein. As used in this Agreement,
the following terms shall have the meanings specified in this Section 1:
“Accounts Receivable” means: (1) all trade accounts receivable and other rights to
payment from customers of the Seller and the full benefit of all security for such accounts or
rights to payment, including all trade accounts receivable representing amounts receivable in
respect of services rendered to customers of the Seller; (2) all other accounts or notes receivable
of the Seller and the full benefit of all security for such accounts or notes; and (3) any Claim,
remedy or other right related to any of the foregoing.
“Assumed Liabilities” means: (a) the total normal vendor and trade payables, capital
lease obligations, deferred liabilities, deferred revenue, and certain accrued expenses as set forth
on Schedule 2.2(a), (b) all debt of Seller as set forth on Schedule 2.2(a), and (c) all Liabilities of
Seller accruing and to be performed, after the Closing Date, as set forth on Schedule 2.2(a) under
the executory portion of each of the Assigned Contracts and any other Assets (e.g. assigned
licenses and leases).
“Assumed Contracts” means all of the Contracts except for the Excluded Contracts.
“Claim” means an action, suit, proceeding, demand, claim or counterclaim or legal,
administrative or arbitral proceeding or investigation.
“Contract” means all agreements, whether oral or written and whether express or
implied (whether legally binding or not), including contracts, contract rights, promises,
commitments, undertakings, customer accounts, orders, leases, guarantees, warranties and
representations and franchises to which either the Seller is a party.
“Copyrights” means all copyrights (whether or not registered), moral rights, and all
registrations and applications for registration thereof, as well as rights to renew copyrights, in
each case that are licensed by Seller and/or otherwise used in the CyberCare Health Network
Business as currently operated.
“Creditors” means, those parties to which either Seller owes any one or more of the
liabilities included in the Assumed Liabilities Amount, as set forth on Schedule 2.2(a).
“Excluded Assets” means: (a) Excluded Contracts; (b) any of the Purchase Price (as
defined in Section 2.2(a)); (c) the minute books, seal and other records having to do with the
organization of Seller; (d) Seller’s or any of its affiliate’s rights under this Agreement and any
Transaction Document; (e) all Tax credits, and refunds pertaining to Taxes which are not
Assumed Liabilities hereunder, and all related Tax Returns and associated work papers; (f) all
Employee Benefit Plans (as defined in Section 3.18(a)) and assets held in trust or otherwise by or
for the benefit of any current or former employees of Seller under any Employee Plan; and (g) the
excluded assets set forth on Schedule 2.1(a).
“Excluded Contracts” means the Contracts not to be assigned by Seller pursuant to this
Agreement, as set forth on Schedule 3.22.
“Governmental Authorities” means all agencies, authorities, bodies, boards,
commissions, courts, instrumentalities, legislatures and offices of any nature whatsoever of any
government, quasi-governmental unit or political subdivision, whether foreign, federal, state,
county, district, municipality, city or otherwise (each, a “Governmental Authority”).
“Intellectual Property” means all (i) Patents, (ii) Know-how, (iii) Trademarks, (iv)
Copyrights, (v) Software Programs (including but not limited to “off-the-shelf” shrink-wrap and
click-wrap software programs), in each case that are licensed by Seller and/or otherwise used in
the CyberCare Health Network Business as currently operated, and (vi) all other intellectual
property rights and industrial property rights (of every kind and nature throughout the universe
and however designated), whether arising by operation of law, contract, license or otherwise, in
each case that are licensed by Seller and/or otherwise used in the CyberCare Health Network
Business as currently operated.
“Intellectual Property Rights” means, collectively, any and all known or hereafter known
tangible and intangible rights under patent, trademark, copyright and trade secret laws, and any
other intellectual property, industrial property and proprietary rights worldwide, of every kind
and nature throughout the universe, however designated, whether arising by operation of law,
contract, license or otherwise.
“Know-how” means any and all product specifications, processes, methods, product
designs, plans, trade secrets, ideas, concepts, inventions, manufacturing, engineering and other
manuals and drawings, physical and analytical, safety, quality control, technical information,
data, research records, all promotional literature, customer and supplier lists and similar data and
information, which, in each case, are licensed to or owned by Seller and/or otherwise used in the
CyberCare Health Network Business as currently operated; and any and all other confidential or
proprietary technical and business information which are licensed to or owned by Seller and/or
otherwise used in the CyberCare Health Network Business as currently operated.
“Knowledge” means, with respect to a given matter the actual knowledge of the Seller,
any officer thereof, or the knowledge that the Seller, any officer thereof, should possess in the
exercise of reasonable diligence and investigation with respect to the matter.
“Liability” means any direct or indirect indebtedness, liability, assessment, expense,
claim, loss, damage, deficiency, obligation or responsibility, known or unknown, disputed or
undisputed, joint or several, vested or unvested, executory or not, fixed or unfixed, choate or
inchoate, liquidated or unliquidated, secured or unsecured, determinable or undeterminable,
accrued or unaccrued, absolute or not, actual or potential, contingent or otherwise (including but
not limited to any liability under any guarantees, letters of credit, performance credits or with
respect to insurance loss accruals).
“Material Adverse Effect” means any material adverse change in or effect upon (a) the
financial condition, assets, liabilities, or operations of (x) the Seller taken as a whole, (y) the
CyberCare Health Network Business of the Seller and the Assets (taken as a whole), or (b) the
ability of the Seller to execute, deliver and perform this Agreement, provided that none of the
following shall be deemed to constitute, and none of the following shall be taken into account in
determining whether there has been, a Material Adverse Effect: any adverse change, event,
development, or effect arising from or relating to (i) general business or economic conditions,
including such conditions which affect the CyberCare Health Network Business industry
generally (provided they do not have a materially disproportionate effect on the Seller, as a
whole), (ii) national or international political or social conditions, (iii) financial, banking, or
securities markets (including any disruption thereof and any decline in the price of any security or
any market index), (iv) changes in United States generally accepted accounting principles, or (v)
changes in law, rules, regulations, orders, or other binding directives issued by any governmental
authority, provided they do not have a materially disproportionate effect on the Seller.
“Moral Rights” means, collectively, rights to claim authorship of a work, to object to or
prevent any modification of a work, to withdraw from circulation or control the publication or
distribution of a work, and any similar rights, whether existing under judicial or statutory law of
any country or jurisdiction worldwide, or under any treaty or similar legal authority, regardless of
whether such right is called or generally referred to as a “moral right.”
“Patents” means all patents, patent disclosures and patent applications (including,
without limitation, all reissues, divisions, continuations, continuations-in-part, renewals, re-
examinations and extensions of the foregoing) owned by or licensed to Seller and/or otherwise
used in the CyberCare Health Network Business as currently operated.
“Permitted Liens” means (i) the Assumed Liabilities, and Liens associated therewith, and
(ii) with respect to Licensed Intellectual Property, the rights held by the applicable licensors
thereof.
“Person” means any individual, corporation, joint venture, partnership, limited
partnership, limited liability company, limited liability partnership, syndicate, trust, association,
entity or government or political subdivision, agency or instrumentality of a government.
“Software Programs” shall have the meaning set forth in Section 3.17(f).
“Tangible Personal Property” means all machinery, equipment, tools, furniture, fixtures
and equipment, computer hardware, supplies, materials, leasehold improvements, automobiles,
computing and telecommunications equipment and other items of tangible personal property, of
every kind owned or leased by the Seller and/or otherwise used in the CyberCare Health Network
Business (wherever located and whether or not carried on the books of the Seller), together with
any express or implied warranty by the manufacturers or sellers or lessors of any item or
component part thereof, and all maintenance records and other documents relating thereto.
“Taxes” means: (1) any and all taxes, fees, levies, duties, tariffs, imposts and other
charges of any kind, imposed by any Governmental Authority or taxing authority, including taxes
or other charges on, measured by, or with respect to income, franchise, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’
compensation, unemployment compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes; license, registration
and documentation fees; and customers’ duties, tariffs and similar charges; (2) any Liability for
the payment of any amounts of the type described in (1) as a result of being a member of an
affiliated, combined, consolidated or unitary group for any taxable period; (3) any Liability for
the payment of amounts of the type described in (1) or (2) as a result of being a transferee of, or a
successor in interest to, any Person or as a result of an express or implied obligation to indemnify
any Person; and (4) any and all interest, penalties, additions to tax and additional amounts
imposed in connection with or with respect to any amounts described in (1), (2) or (3).
“Tax Return” means any return, report, statement, form or other documentation
(including any additional or supporting material and any amendments or supplements) filed or
maintained, or required to be filed or maintained, with respect to or in connection with the
calculation, determination, assessment or collection of any Taxes.
“Trademarks” means (i) trademarks, service marks, trade names, trade dress, labels,
logos and all other names and slogans used exclusively with any products or embodying
associated goodwill of the CyberCare Health Network Business related to such products, whether
or not registered, and any applications or registrations therefor, and (ii) any associated goodwill
incident thereto; in each case owned by or licensed to Seller and/or otherwise used in the
CyberCare Health Network Business as currently operated.
“Transferred Assets” means all assets set forth on the bill of sale to be transferred by
Seller to Purchaser pursuant to Section 2.3(c)(1) and all of the Assumed Contracts.
2.
PURCHASE AND SALE OF ASSETS.
2.1
Transferred Assets. On the terms and subject to the conditions set forth in this
Agreement, and in reliance upon the covenants, representations and warranties of the Seller at the
Closing (as defined in Section 2.3 hereof), Seller shall sell, convey, assign, transfer and deliver to
Purchaser, and Purchaser shall purchase from Seller, all of Seller’s right, title and interest in and
to the transferred assets free and clear of any and all Liabilities, pledges, liens, obligations,
claims, charges, tenancies, security interests, exceptions or encumbrances whatsoever
(collectively, “Liens”), other than Permitted Liens, all rights and properties of the Seller, of every
nature, kind and description whatsoever, tangible and intangible, wherever located and as they
exist on the date hereof, (collectively, the “Transferred Assets”). The Assets are more fully set
forth on Schedule 2.1 of the disclosure schedules attached hereto and include (but are not limited
to) the following:
2.2. Purchase Price.
(a)
Purchase Price Payable. In reliance on the representations and warranties
of the Seller and the performance of the covenants and fulfillment of the conditions set forth in
this Agreement, Purchaser will, at the Closing, purchase the Assets from the Seller and in respect
thereof will, subject to the provisions of this Agreement, pay an aggregate purchase price
(“Purchase Price”) to Seller equal to the sum of the amounts set forth in (1) and (2) below.
(1)
Deliver 60,000,000 of iGambit Inc.’s Common voting shares to the
Seller, or Seller’s designees at Closing; and
(2)
Purchaser shall assume the “Assumed Liabilities”
(c)
[Intentionally Omitted]
(d)
Prepaid Items. Liabilities for prepaid items attributable to the Assets, such
as real estate taxes, personal property taxes, rent, fuel, telephone or other utility and service
charges, shall be prorated and allocated between the Seller and Purchaser as of the close of
business on the Closing Date, and the amount of such proration shall be a deduction or addition,
as the case may be, to the Purchase Price.
(e)
Allocation of Purchase Price. The Purchaser and the Seller hereby agree
upon an allocation of the Purchase Price of the Acquired Assets pursuant to Section 1060 of the
Code and the Income Tax Regulations as Exhibit 2.2(e). The Purchaser and the Seller hereby
agree to reflect such allocation on IRS Form 8594 (Asset Acquisition Statement) under Section
1060, including any required amendments or supplements thereto (“Form 8594”), and shall
jointly prepare such Form 8594 for execution promptly after Closing. The parties hereto further
agree that (i) the agreed upon allocation of the Purchase Price shall be used in filing all required
forms under Section 1060 of the Code and all tax returns; and (ii) they will not take any position
inconsistent with such allocation upon any examination of any such tax return, in any refund
claim or in any tax litigation.
2.3
Closing.
(a)
Time and Place. Subject to the terms and conditions of this Agreement, the
sale and purchase of the Assets contemplated hereby (the “Closing”) shall take place at the
offices of iGambit Inc., 1050 W. Jericho Tpke., Suite A, Smithtown, New York, 11787, within
three (3) days of the satisfaction (or waiver, as applicable), of the conditions to Closing set forth
in Section 8 hereof, or at such other time, date or place as the parties hereto may mutually agree
upon in writing hereof, or remotely by exchanging executed counterparts of this Agreement, and
the other agreements, instruments, certificates and other documents to be entered into, or
delivered, in connection herewith or therewith (collectively, the “Transaction Documents”), and
delivery of the Purchase Price. The time and date of the Closing are herein referred to as the
“Closing Date,” and the term “Closing Date” shall include the date on which the transactions
contemplated hereunder are consummated.
(b)
Deliveries by Purchaser to the Seller. At the Closing, Purchaser (or its
designee) shall deliver or cause to be delivered each of the following:
(i)
60,000,000 of iGambit Inc.’s Common Voting Shares in the name
of the Seller or Seller’s designee;
(ii)
A Certificate of the Secretary of Purchaser showing the signatures
of those officers of Purchaser, respectively, authorized to sign this Agreement, the Employment
Agreement, and all other Transaction Documents on behalf of Purchaser certifying that said
signatures are the signatures of said authorized officers;
(iv)
Good standing certificates of each, Purchaser and iGambit dated no
earlier than ten (10) calendar days prior to the Closing Date, certifying that each, Purchaser and
iGambit, are in good standing in the State of Delaware;
(v)
Resolutions of the shareholders (if necessary) and the directors of
iGambit and Purchaser, respectively, certified by the Secretary of iGambit and Purchaser,
respectively, as having been duly and validly adopted and as being in full force and effect on the
date hereof, authorizing the execution and delivery by Purchaser of this Agreement and other
Transaction Documents, and authorizing the performance by Purchaser of the transactions
contemplated hereby and thereby;
(vi)
A duly executed certificate of Purchaser and iGambit, described in
Section 8.1 hereof;
(vii) Duly executed assumptions from Purchaser, assuming all of the
Assumed Liabilities; and
(viii) All other documents necessary or appropriate, in the reasonable
opinion of Seller, to effectuate the purchase and sale of the Assets at the Closing in accordance
with the provisions of this Agreement.
(c)
Deliveries by the Seller. At Closing, the Seller shall deliver or cause to be
delivered to the Purchaser (or its designee) each of the following:
(i)
An Assignment and Bill of Sale, in such form as mutually agreed
by the parties, executed by the Seller, selling, assigning, transferring and delivering to Purchaser
all of the Assets, free and clear of any and all Liens (other than Permitted Liens);
(ii)
A Certificate of the Secretary of Seller showing the signatures of
those officers of Seller, authorized to sign this Agreement on behalf of Seller and certifying that
said signatures are the signatures of said authorized officers;
(iii) A copy of the Articles of Incorporation and By-Laws of Seller,
together with all amendments and supplements thereto, certified by the Secretary of Seller as
being true and complete in all material respects;
(iv)
Good standing certificates of Seller dated no earlier than ten (10)
calendar days prior to the Closing Date, certifying respectively (i) that Seller is in good standing
in the State of Delaware and is qualified to do business in the State of Florida; (ii) that Seller is
qualified to do business in all of the other states in which Seller then does business;
(v)
Resolutions of the shareholders and the directors of Seller certified
by the Secretary of Seller as having been duly and validly adopted and as being in full force and
effect on the date hereof, authorizing the execution and delivery by Seller of this Agreement and
other Transaction Documents, and authorizing the performance by Seller of the transactions
contemplated hereby and thereby;
(vi)
A duly executed certificate of Seller described in Section 8.1
hereof;
(vii) Duly executed non-compete agreements from Seller, in a form
satisfactory to Purchaser, providing for a five (5) year non-compete term (collectively, the “Non-
Competition Agreements”);
(viii) Duly executed intellectual property assignments from each of the
employees, prior employees, consultants and prior consultants of Seller specified on Schedule
2.3(c)(ix) attached hereto in a form satisfactory to Purchaser (collectively, the “Intellectual
Property Assignments”)
(ix)
Duly executed assignments from Seller assigning all of Seller’s
rights in, to and under the Assigned Contracts to the Purchaser on such terms and conditions as
the Purchaser shall in the exercise of reasonable discretion determine (collectively, the “Contract
Assignments”);
(x)
Duly executed written consents from each of the parties to each of
the Assigned Contracts, to the extent such consent is required pursuant to the terms thereof,
consenting to the assignment of the Contracts to the Purchaser, in such form as Purchaser shall in
the exercise of reasonable discretion determine (collectively, the “Consents”).
(xii) A duly executed assignment of Seller’s rights to the Seller’s
trademarks, a duly executed assignment of Seller’s rights to the Seller’s patents, and a duly
executed assignment of Seller’s rights to all of the third party software identified on Schedule
3..17(f), in each case, in form and substance reasonably satisfactory to the Purchaser;
(xiii) All other documents necessary or appropriate, in the reasonable
opinion of Purchaser, to effectuate the purchase and sale of the Assets at the Closing, free and
clear of all Liens (other than Permitted Liens), in accordance with the provisions of this
Agreement; and
2.4
Further Assurances. In addition to the actions, documents and instruments
specifically required to be taken or delivered hereby, prior to and after the Closing and without
further consideration, each party shall execute, acknowledge and deliver such other assignments,
transfers, consents and other documents and instruments and take such other actions as any party
or its/his counsel may reasonably request to complete and perfect the transactions contemplated
by this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to Purchaser that the following representations
and warranties are true and correct in all material respects on the date hereof and will be true and
correct in all material respects on and as of the Closing Date:
3.1
Organization and Good Standing. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and in all other states in
which Seller does business, is qualified to do business in the State of Florida and all other states
in which Seller does business and where the nature of its business or the nature and location of its
assets requires such qualification, except in those jurisdictions where the failure to qualify would
not have a Material Adverse Effect; and has full corporate power to execute, deliver and perform
its obligations under this Agreement.
3.2
Authority and Consents. The Seller has full power to enter into and to carry out
the terms of this Agreement. The Seller and its directors have taken all action, corporate and
otherwise, necessary to authorize the execution, delivery and performance of this Agreement, the
completion of the transactions contemplated hereby and the execution and delivery of any and all
instruments necessary or appropriate to effectuate fully the terms and conditions of this
Agreement. Except as set forth on Schedule 3.2, no consent or approval of any third party, court,
governmental agency, other public authority or third party with any actual or alleged interest in
the Seller’s business or the Assets is required as a condition to (a) the authorization, execution,
delivery and performance of this Agreement or any other instruments necessary to effectuate this
Agreement; or (b) the consummation by the Seller of the transactions contemplated herein. This
Agreement has been properly executed and delivered by the Seller and constitutes the valid and
legally binding obligation of the Seller and is enforceable against the Seller in accordance with
its terms, except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights in
general and subject to general principles of equity and the discretion of courts in granting
equitable remedies.
3.3
Rights of First Refusal; Right of First Negotiation, Etc. There are no applicable
rights of first refusal, rights of first negotiation, rights of first offer or similar rights of any kind
that would require Seller to provide any third party with notice, an opportunity to discuss,
negotiate or to engage in any of the transactions contemplated hereby prior to consummating the
transactions contemplated hereby.
3.4
No Conflict. Neither the execution and delivery of this Agreement nor the
carrying out of the transactions contemplated hereby will result in (a) any violation, termination
or modification of, or conflict with, the articles of incorporation or By-Laws of Seller or any of
the contracts or other instruments to which either Seller is a party, or of any judgment, decree or
order applicable to Seller; or (b) the creation of any Lien on all or any portion of the Assets.
3.5
Broker’s and Finder’s Fees. No broker, finder, agent, representative or similar
intermediary has acted as a broker for or on behalf of the Seller in connection with this
Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to a brokerage commission, finder’s fee, advisory fee or other like
payment (each, a “Broker’s Fee”) in connection herewith, based on any agreement or
understanding with Seller or any action taken by Seller. Any such Broker’s Fee based on any
agreement or understanding with Seller or any action taken by Seller which may be due in
connection with the purchase and sale contemplated by this Agreement will be borne by the
Seller who entered into the agreement to pay.
3.6
Litigation and Compliance. Except as set forth on Schedule 3.6, there is no Claim
pending or, to the Seller’s Knowledge, threatened against the Assets of Seller. Seller is not
subject to any order of any court, regulatory commission, board or administrative body entered in
any proceeding to which Seller is a party or of which any of the foregoing has Knowledge.
Within the last 3 years, the Seller have complied with, in all material respects, and is currently in
compliance with, in all material respects, all laws, rules, regulations, orders, ordinances,
judgments and decrees of any governmental authority applicable to the Assets or the Seller’s
CyberCare Health Network Business.
3.7
Title and Condition of Assets. The Seller has good and marketable title to all of
the Assets, free and clear of all Liens (other than Permitted Liens). The Assets are in good
operating condition and repair, and constitute all of the assets necessary to the conduct of the
Seller and its CyberCare Health Network Business.
3.8
Accounts Receivable. All Accounts Receivable of the Seller reflected in the
balance sheet for the most recently ended period included in the Financial Statements (as defined
in Section 3.10), and all Accounts Receivable that have arisen since the date of the latest balance
sheet of Seller included in the Financial Statements (except Accounts Receivable that have been
collected since such date) are, to the Seller’s Knowledge, valid and enforceable claims, and
constitute bona fide Accounts Receivable resulting from the provision of services in the ordinary
course of the Seller’s CyberCare Health Network Business. To the Seller’s Knowledge, the
Accounts Receivable are subject to no valid defense, offsets, returns, allowances or credits of any
kind, except as reserved against on the most recent balance sheet or those which are not material,
individually or in the aggregate, to Seller and arise in the ordinary course of the Seller’s
CyberCare Health Network Business; and, to Seller’s Knowledge, are fully collectible within
sixty (60) days from their due date. Except for the Accounts Receivable, advances to employees
in the ordinary course of business and prepayment of expenses incurred in the ordinary course of
business, the Seller has not made any loan or advance to any Person.
3.9
Financial and Full Information. The Seller has delivered to Purchaser unaudited
financial statements for Seller covering the periods from January 1, 201 until December 31,
2016 (the “Financial Statements”), copies of which are attached hereto as Exhibit 3.10. To
Seller’s Knowledge, the Financial Statements have been prepared in accordance with generally
accepted accounting principles (“GAAP”), are true, correct and complete in all material respects,
and accurately, in all material respects, reflect the financial position of the Seller for the periods
set forth therein.
3.10 Absence of Undisclosed Liabilities. As of the date hereof and as of the Closing
Date, other than (a) Assumed Liabilities, and (b) Liabilities incurred in connection with the
consummation of the transactions contemplated by this Agreement and other Transaction
Documents, the Seller do not have and shall not have any indebtedness or other Liability of any
kind whatsoever, absolute, or contingent, that is not either (i) specifically reflected on the
Financial Statements, (ii) specifically set forth in a schedule to this Agreement or (iii) otherwise
specifically disclosed in writing to Purchaser in this Agreement. In addition, other than (a)
Assumed Liabilities, and (b) Liabilities incurred in connection with the consummation of the
transactions contemplated by this Agreement and other Transaction Documents, all indebtedness
and/or other Liabilities whatsoever (including trade payables) of Seller are accurately reflected on
Schedule 2.2(a)(2), and Seller has no indebtedness and/or other Liabilities (including trade
payables) whatsoever other than as set forth on Schedule 2.2(a)(2), attached hereto.
3.11 Capitalization. Schedule 3.11 attached hereto accurately sets forth the authorized,
issued and outstanding shares of capital stock of Seller and the class, series and number of such
shares owned by each of Seller’s shareholders. All of the issued and outstanding shares of
capital stock of Seller has been duly authorized, are validly issued, fully paid and non-assessable,
are not subject to, nor were issued in violation of, any preemptive rights, and is owned of record
and beneficially by the parties set forth on Schedule 3.12. Except as may be set forth on the
Schedule 3.12, there are no outstanding or authorized options, warrants, rights, contracts, calls,
puts, rights to subscribe, conversion rights or other agreements or commitments to which Seller
is a party or which are binding upon Seller providing for the issuance, disposition or acquisition
of any of Seller’s capital stock or other equity or any rights or interests exercisable therefor.
There are no voting trusts, proxies or any other agreements or understandings with respect to the
voting of the securities of Seller. Except as set forth on Schedule 3.12, Seller is not subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire its capital
stock. The Seller’s Shareholders are the beneficial and record owners of all of the outstanding
shares of capital stock of the Seller, free and clear of all Liens.
3.12 Licenses and Permits. Schedule 3.12 of the Disclosure Schedules sets forth a
complete list of all of the certificates, licenses, consents, permits or other approvals required of or
obtained by the Seller in connection with the operation of the CyberCare Health Network
Business, including all certificates of use and occupancy (collectively, the “Licenses and
Permits”). The Seller has provided the Purchaser with true and complete copies of all of the
Licenses and Permits. All of the Licenses and Permits are in full force and effect and the Seller
is not in violation in any material respect with respect to any of them. No proceedings are
pending or threatened by any applicable authority to revoke or limit the scope of any of the
Licenses and Permits. Other than those listed on Schedule 3.1, there are no Licenses or Permits
necessary for the conduct of the CyberCare Health Network Business as it is currently being
conducted. None of the Licenses and Permits would be rendered ineffective or be required to be
reissued as a result of the consummation of the transactions contemplated hereby.
3.13 Business Records. All business records of the Seller have been provided to
Purchaser for review, are complete and correct in all material respects, and fairly reflect the
operations of the CyberCare Health Network Business.
3.14 Insurance. Set forth on Schedule 3.14 is a true and complete list and description
of all insurance in force on the date hereof with respect to the Assets and/or the CyberCare
Health Network Business of Seller together with a summary description of the hazards insured
against. To Seller’s Knowledge, such policies are in full force and effect with insurers and
copies thereof have been provided to Purchaser. There are no outstanding unpaid claims under
any such policy, and the Seller has no Knowledge of any notice of cancellation or non-renewal of
any such policy. To Seller’s Knowledge, there are and have been no inaccuracies in any
application for such policies, nor any failure to pay premiums thereon when due. The Seller has
not received any written notice from any of its insurance carriers that any of Seller’s insurance
premiums will be materially increased in the future or that any insurance coverage will not be
available to the Seller in the future on substantially the same terms as now in effect. No such
insurance policies call for any retrospective premium adjustments. All such insurance policies
are freely assignable by the Seller to Purchaser without the consent of any party.
3.15 Operation of the CyberCare Health Network Business. The Assets are sufficient
to operate the CyberCare Health Network Business in accordance with past practice in all
material respects. All of the Assets of Seller are in good condition and repair (subject to ordinary
wear and tear), and have been maintained in accordance with appropriate manufacturer’s
standards in all material respects.
3.16 Absence of Certain Changes. Since August 1, 2016, the business of Seller have
been conducted in the ordinary course, and there has not been any material adverse change, or
occurrence or state of circumstances which, individually or in the aggregate, could reasonably be
expected to result in a material adverse change, in the business, prospects, assets, condition
(financial or otherwise) or results of operations of Seller taken as a whole and there has been no
change in the Seller’s authorized or issued securities, grant of any securities, option or right to
purchase securities of Seller or issuance of any security/securities convertible into capital stock or
other securities of Seller.
3.17 Intellectual Property.
(a)
Schedule 3.17(a) contains a true and complete list of the Intellectual
Property, and includes details of all due dates for further filings, maintenance and other payments
or other actions falling due in respect of the Intellectual Property within twelve (12) months
following the Closing Date, and the current status of the corresponding registrations, filings,
applications and payments. All of the registrations and applications arising from or relating to
the Intellectual Property are and remain valid and subsisting, in good standing, with all fees,
payments and filings due as of the Closing Date duly made, and the due dates specified on
Schedule 3.17(a) are accurate and complete in all material respects. All of these registrations and
applications are enforceable. The Seller has delivered correct and complete copies of all of these
registrations and applications, and has made available for review correct and complete copies of
all other written documentation evidencing ownership of each of the foregoing. The Seller has
made all other registrations relating to the CyberCare Health Network Business that it is required
to have made and is in good standing with respect to such registrations with all fees due as of the
Closing duly made.
(b)
The Intellectual Property consists solely of items and rights that are: (1)
owned by the Seller; (2) in the public domain; or (3) rightfully used by either the Seller pursuant
to a valid license, sublicense, consent or other similar written agreement (the “Licensed
Intellectual Property”). The parties and date of each such agreement regarding the Licensed
Intellectual Property are set forth on Schedule 3.17(b). To the Seller’s Knowledge, the Seller has
all rights in the Intellectual Property reasonably necessary and reasonably sufficient to carry out
the Seller’s current activities and proposed activities relating to the CyberCare Health Network
Business (and had all rights necessary to carry out its former activities at the time such activities
were being conducted), including and to the extent required to carry out such activities, rights to
make, use, reproduce, modify, adapt, create derivative works based on, translate, distribute
(directly and indirectly), transmit, display and perform publicly, license, rent and lease and, as
applicable, assign and sell, the Intellectual Property. The Seller has delivered correct and
complete copies of all material license agreements to the Purchaser, and, as applicable, has made
available for review correct and complete copies of all other written documentation evidencing
that the Seller has rights in each of the foregoing.
(c)
To Seller’s Knowledge, Seller has not infringed upon or misappropriated
any Intellectual Property Rights or personal right of any person anywhere in the world. Except as
outlined in Schedule 3.17(c), no Claims or written notice (1) challenging the validity,
effectiveness or ownership by the Seller of any of the Intellectual Property, or (2) to the effect
that the use, distribution, licensing, sublicensing, sale or any other exercise of rights in any
product, service, work, technology or process as now used or offered or proposed for use,
licensing, sublicensing, sale or other manner of commercial exploitation by the Seller infringes or
will infringe on any Intellectual Property Rights or personal right of any Person have been
asserted or, to Seller’s Knowledge, are threatened by any Person. To Seller’s Knowledge, there
is and has been no unauthorized use, infringement or misappropriation of any Intellectual
Property by any third party, employee or former employee.
(d)
All personnel (including employees, agents, consultants and contractors),
who have contributed to or participated in the conception and/or development of the Intellectual
Property on behalf of the Seller have executed nondisclosure agreements in the form set forth on
Schedule 3.17(d) and either (1) have been a party to a “work-for-hire” and/or other arrangement
or agreements with the Seller in accordance with applicable international, national, state and
local Law that has accorded the Seller full, effective, exclusive and original ownership of all
tangible and intangible property and Intellectual Property Rights thereby arising or relating
thereto, or (2) have executed appropriate instruments of assignment in favor of the Seller as
assignee that have conveyed to the Seller effective and exclusive ownership of all tangible and
intangible property and intellectual property rights thereby arising and related thereto. Prior to
the date hereof, the Seller has provided copies of all such written agreements or provided a
summary of the terms of any such oral agreements to Purchaser.
(e) The Seller is not, nor as a result of the execution or delivery of this Agreement, or
performance of the Seller’s obligations hereunder, will the Seller be, in violation of any license,
sublicense, agreement or instrument relating to the Intellectual Property to which the Seller is a
party or otherwise bound, nor will execution or delivery of this Agreement, or performance of the
Seller’s obligations hereunder, cause the diminution, termination or forfeiture of any Intellectual
Property or any rights therein or thereto.
(f)
Schedule 3.17(a) contains a true and complete list of all of the Seller’s
computer software programs, products and services included in the Intellectual Property,
including all program code, databases and documentation, without regard to form of media or
storage (collectively, the “Software Programs”). Except with respect to third party software or
technology licensed by the Seller (to which the Seller holds appropriate and valid licenses
providing the Seller with the rights necessary to conduct the CyberCare Health Network Business
as presently conducted or as anticipated to be conducted), the Seller owns full and unencumbered
right and good, valid and marketable title to such Software Programs free and clear of all Liens.
(g)
The source code and system documentation relating to the Software
Programs (1) have at all times been maintained in strict confidence; (2) have been disclosed by
the Seller only to employees who have a “need to know” the contents thereof in connection with
the performance of their duties to the Seller and who have executed the nondisclosure
agreements referred to in Section 3.17(d); and (3) have not been disclosed to any third party,
except those third parties set forth on Schedule 3.17(d) who have executed restrictive license and
nondisclosure agreements and/or source code escrow agreements with the Seller. Schedule
3.17(g) identifies all agreements pursuant to which source code to the Software Programs has
been escrowed with any third party. The Seller has provided true and complete copies of all such
escrow agreements and such other license and nondisclosure agreements as are identified above,
and as applicable, has made available for review correct and complete copies of all other written
documentation evidencing agreements to release of any source code of the Software Programs to
any third party.
(h)
Except as set forth on Schedule 3.17(h), the Software Programs do not
contain any open source program code, modules, utilities or libraries that are covered by open
source licenses that require as a condition of use, modification or redistribution of such Software
Program and/or other software programs combined or distributed with any such Software
Program that it be (1) disclosed or distributed in source code form, (2) licensed for the purpose of
making derivative works, or (3) redistributable at no charge subject to the open source license
applicable to such open source program code, modules, utilities or libraries (collectively, “Open
Source Code”). All Software Programs will be scanned for Open Source Code prior to Closing.
If Purchaser determines that any Software Program includes any Open Source Code, this will
need to be remedied to Purchaser’s satisfaction at Seller’s sole cost and expense prior to and as a
condition to Closing.
(i)
The Seller has taken all reasonable steps, in accordance with normal
industry practice, to preserve and maintain complete notes and records relating to the Intellectual
Property and to cause the same to be readily understood, identified and available.
(j)
The Intellectual Property is free and clear of any and all Liens and nothing
shall interfere with the quiet enjoyment of the Purchaser with respect to the Intellectual Property
following consummation of the transactions contemplated hereby.
(k)
The Seller does not owe any royalties, license fees, guaranteed
maintenance fees or other payments to third parties in respect of the Intellectual Property. All
royalties, license fees, guaranteed maintenance fees or other payments that have accrued, or will
accrue, prior to the Closing have been paid or will be paid prior to Closing. The Seller will not
owe any such payments or any additional payments as a result of the consummation of the
transactions contemplated hereby.
(l)
The Seller has used its commercially reasonable efforts to regularly scan
the Software Programs and the other items of Intellectual Property with “best-in-class” virus
detection software. The Software Programs and other Intellectual Property contain no “viruses”,
Trojan horses, trap doors, Easter eggs, time bombs, cancel bots or other computer programming
routines that are intended to damage, detrimentally interfere with or surreptitiously intercept with
or expropriate any system, data or personal information. For the purposes of this Agreement,
“virus” means any computer code intentionally designed to disrupt, disable or harm in any
manner the operation of any software or hardware. None of the foregoing contains any worm,
bomb, backdoor, clock, timer, or other disabling device code, or any other design or routine that
causes any system, software, data or information to be erased, inoperable, or otherwise incapable
of being used, either automatically or upon command by any party.
(m)
The Seller has taken and will continue to take all reasonable measures to
protect the secrecy, confidentiality, and value of all trade secrets and Intellectual Property Rights
included in the Intellectual Property transferred pursuant to this Agreement. Neither the Seller
nor any other party has taken any action or failed to take any action that directly or indirectly
caused any Intellectual Property to enter the public domain or in any way adversely affect its
value to the Purchaser, or its absolute ownership thereof. The Seller acknowledges and agrees
that from and after the Closing, the Purchaser will have a legitimate and continuing proprietary
interest in the protection of trade secrets and non-public confidential information, knowledge,
data and similar information relating to the Intellectual Property and the confidential information
included therein (the “Confidential Information”). The Seller agrees that prior to and following
the Closing it shall secure and maintain the confidentiality of the Confidential Information in a
manner consistent with the importance and value of such information and the maintenance of the
Purchaser’s rights therein, but in no event using less than reasonable efforts. The Seller shall not
use, sell, transfer, publish, disclose or otherwise make available any of the Confidential
Information to any third party. If the Seller is compelled by a duly authorized subpoena, court
order or government authority to disclose any of the Confidential Information, the Seller shall
immediately notify the Purchaser of same prior to disclosure, and fully cooperate with the
appropriate party in seeking a protective order or other appropriate remedy prior to disclosure.
3.18 Assumed Contracts. Schedule 3.18(a) sets forth a list of all Contracts to which
the Seller is a party or any of the Assets is bound as of the date hereof, and which is necessary for
the operation of the CyberCare Health Network Business.
(a)
Schedule 3.18(a) denotes with an asterisk all of the Contracts (if any) that
will be Excluded Contracts.
(b)
None of the Assumed Contracts was awarded to the Seller as a result of (in
whole or in part) the Seller’s status as a minority-owned or disadvantaged business or similar
status.
(c)
All of the Assumed Contracts may be assigned to the Purchaser without
obtaining the consent of any party thereto, other than to the extent specifically set forth on
Schedule 3.18(e).
(d)
Purchaser does not assume and shall in no event be liable for any
Liabilities of Seller to any Person, whether fixed or non-fixed, known or unknown, liquidated or
unliquidated, secured or unsecured, contingent or otherwise, except for any Liabilities expressly
set forth in an Assumed Contract. Purchaser shall perform and pay all Liabilities as set forth in
the Assumed Contracts, but only to the extent that such Liabilities arise after the Closing Date (or
in the case of payments due, only to the extent such payments are not due until after the Closing
Date) (the “Assumed Liabilities”).
3.19 Solvency. No insolvency proceeding of any character including bankruptcy,
receivership, reorganization, composition or arrangement with creditors, voluntary or
involuntary, affecting, the Seller (other than as a creditor) or any of the Assets are pending or are
being contemplated by the Seller, or, to Seller’s Knowledge, are being threatened against the
Seller by any other Person, and the Seller has not made any assignment for the benefit of
creditors or taken any action in contemplation of which that would, to Seller’s Knowledge,
constitute the basis for the institution of such insolvency proceedings. Immediately after giving
effect to the consummation of the transactions contemplated hereby, (a) the Seller will be able to
pay the Excluded Liabilities as they become due; (b) the value of the remaining assets (if any) of
the Seller (calculated at fair market value) will exceed the Excluded Liabilities; and (c) taking
into account all pending and threatened litigation of which Seller has Knowledge, final
judgments against the Seller in actions for money damages are not reasonably anticipated to be
rendered at a time when, or in amounts such that, the Seller will be unable to satisfy any such
judgments promptly in accordance with their terms (taking into account the maximum probable
amount of such judgments in any such actions and the earliest reasonable time at which such
judgments might be rendered) as well as all other obligations of the Seller.
3.20 Sufficiency of Acquired Assets. To the best of Seller’s Knowledge, the Assets
constitute all of the assets, tangible and intangible, of any nature whatsoever, reasonably
necessary to operate the CyberCare Health Network Business in accordance with Seller’s past
practices, and include all of the operating assets of Seller (other than Excluded Assets).
3.21 Affiliate Transactions. No officer, manager, member, director, employee or
affiliate of the Seller or any entity in which any such entity or individual is an officer, director,
manager or the owner of five percent (5%) or more of the beneficial ownership interests, is a
party to any contract (written or oral) with the Seller, or has any interests in any property used in
the CyberCare Health Network Business or has any claim or right against the Seller, other than,
with respect to officers, directors and managers, agreements relating to their employment by the
Seller (including without limitation employment, confidentiality, and inventions agreement), and
with respect to members, relating to their respective membership interests in the Seller. Each
affiliate transaction, if any, was effected on terms equivalent to those which would have been
established in an arm’s-length negotiation. None of the Seller or any of its affiliates has any
direct or indirect interest in any competitor of the Seller, except for passive ownership of less
than five percent (5%) of the outstanding capital stock of any competing business that is publicly
traded on any recognized exchange or in the over-the-counter market.
3.22 Securities Act Acknowledgements, Representations, Warranties and Covenants.
(a)
Acknowledgments. Seller, and its Shareholders, agree and acknowledge
that: (1) no federal or state agency has made any finding or determination as to the fairness of the
distribution of the Shares for investment, or any recommendation or endorsement of the Shares;
(2) the Shares have not been registered under the Securities Act of 1933, as amended (the “Act”),
or the securities acts of any state and, as a result, the Shareholder must bear the economic risk of
the investment indefinitely because the Shares may not be sold unless subsequently registered
under the Act and the securities laws of any appropriate states or an exemption from such
registration is available, and that such registration under the Act and the securities laws of any
such states is unlikely at any time in the future; (3) iGambit does not have any present intention
and is under no obligation to register the Shares, whether upon initial issuance or upon any
transfer thereof under the Act and applicable state securities laws, and Rule 144 and/or Rule 145
may not be available as a basis for exemption from registration; and (4) unless and until
registered under the Act, all certificates evidencing the Shares, whether upon initial issuance or
upon any transfer thereof, will bear a legend, prominently stamped or printed thereon, reading
substantially as follows:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES
MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS.”
(b)
Representations, Warranties and Covenants. (1) The Shares are being
acquired for the Seller’s Shareholders (collectively “Shareholder”) own account for investment
and not for distribution or resale to others and the Shareholder will not sell or otherwise transfer
the Shares, whether by dividend or other distribution or upon liquidation or dissolution or
otherwise, unless they are registered under the Act and the securities acts of any appropriate state
or unless an exemption from such registration is available and iGambit is satisfied that such
exemption is available; (2) the acquisition of the Shares by the Shareholder hereunder is
consistent with its general investment objectives and the Shareholder understands that the
acquisition of the Shares is a speculative investment involving a high degree of risk, including
the risk of total loss of such investment, and there is now no established market for iGambit’s
capital stock and there is no assurance that any public market for such stock will develop; (3) the
Shareholder has adequate means of providing for his current needs and possible personal
contingencies and he has no need for liquidity in this investment and can bear the risk of losing
his entire investment in the Shares; (4) iGambit has made available to the Shareholder at a
reasonable time prior to its investment the opportunity to ask questions and receive answers
concerning the Shares and to obtain any additional information which iGambit possesses or can
acquire without unreasonable effort or expense that is necessary in connection with the
investment but the Shareholder agrees and acknowledges, however, that he has relied solely upon
this Agreement and his own independent investigation in making the decision to invest in the
Shares; (5) the Shareholder understands that the distribution of the Shares is limited solely to
“accredited investors,” as that term is defined under Regulation D of the Securities Act and the
Seller is an “accredited investor” (as so defined); (6) the Shareholder is a sophisticated investor
and has such knowledge and experience in financial and business matters that he is capable of
understanding the merits and risks inherent in the proposed acquisition of the Shares; (7) the
Shareholder is acquiring the Shares without having been furnished any specific offering literature
or prospectus but has relied generally upon information filed by iGambit with the Securities and
Exchange Commission and acknowledges that no representations or warranties have been made
to the Shareholders or his representatives by iGambit or the Purchaser, or any officer, employee,
agent or affiliate of iGambit or the Purchaser other than as contained in this Agreement and the
Shareholder must independently seek advice from its own tax and other advisor(s) and is not
relying on any tax or other advice received from iGambit or the Purchaser in connection with the
transactions contemplated by this Agreement; and (8) the Shareholder has neither relied upon nor
seen any form of advertising or general solicitation in connection with the distribution of the
Shares.
4.
COVENANTS OF THE SELLER.
The Seller hereby covenant and agree as follows:
4.1
Full Cooperation; Access to Information. The Seller shall cooperate in good faith
with Purchaser in causing the transactions that are the subject of this Agreement to be
consummated. Seller shall permit Purchaser and its counsel, accountants, employees and other
representatives, prior to Closing, to make such investigations of Seller’s business, operations,
assets, employees, contracts, books, records and financial information, all as Purchaser deems
necessary or advisable in the conduct of its due diligence investigation into Seller’s business,
operations and assets. Seller shall give to Purchaser and its counsel, accountants, employees and
other representatives access, to the fullest extent possible without unreasonably interfering with
Seller’s business operations, to all of Seller’s personnel, properties, books, contracts,
commitments and records, and will promptly furnish to Purchaser copies of all such documents
and records and information with respect to Seller’s affairs as Purchaser may from time to time
in the exercise of its sole and absolute discretion request. Purchaser shall not be under any
obligation to continue with its due diligence investigation if, at any time, the results of its due
diligence investigation are not fully satisfactory to it for any reason in its sole discretion.
4.2
No Inconsistent Action. Seller will not take any action which is inconsistent with
or impairs the consummation of the transactions contemplated by this Agreement or which would
make inaccurate the representations or warranties made by the Seller herein.
4.3
Non-Solicitation. In consideration of the expense and effort that will be expended
by Purchaser in its due diligence investigation, the Seller, nor their affiliates will, directly,
indirectly or otherwise, solicit or entertain offers from, negotiate with or in any manner
encourage, discuss, entertain, accept or consider any proposal of any other person or entity
relating to a disposition (directly or indirectly) of all or any portion of the Assets of the Seller, the
stock of the Seller, or a merger involving Seller, or the issuance of any shares of or other equity
securities of the Seller, at any time during the term of this Agreement, or, to raise funds in the
form of debt or equity for use in the Seller’s operations, other than as contemplated pursuant to
Section 10 hereof, until the earlier to occur of the Closing Date, or, if applicable, the termination
of this Agreement.
4.4
[Reserved].
4.5
Prohibited Actions Pending Closing.
Unless otherwise provided for herein or approved by Purchaser in writing, from
the date hereof until the Closing Date, the Seller shall cause the Seller not to do or enter into the
following:
(a)
amend or otherwise change its Articles of Incorporation, By-Laws or
other organizational documents;
(b)
issue or sell, authorize for issuance or sale, grant any options or make any
other agreements with third parties with respect to the Seller’s stock, other than to the extent
specifically contemplated by Section 3.17(e) hereof;
(c)
authorize or incur any additional debt for money borrowed, or incur any
additional debt, liability or obligation related to the Transferred Assets, other than in favor of
Purchaser;
(d)
mortgage, pledge or subject to Lien or other encumbrance any of the
Transferred Assets;
(e)
sell or otherwise dispose of, or agree to sell or dispose of any of the
Trasnferred Assets;
(f)
amend or terminate any lease, contract, undertaking or other commitment
listed in any of the disclosure schedules annexed hereto to which it is a party, or to take action or
fail to take any action, constituting any event of default thereunder;
(g)
assume, guarantee or otherwise become responsible for the obligations of
any other party or agree to do so that affects the Transferred Assets;
(h)
make any change in accounting methods or principles;
(i)
compromise or settle any material Claim related to the Transferred
Assets, other than with the consent of the Purchaser;
(j)
acquire into any of the Seller’s capital stock or other ownership interests
of any other entity or acquire all or substantially all of the assets of another entity;
(k)
take any action prior to the Closing Date which would breach any of the
representations and warranties contained in this Agreement;
(l)
take any action or omit to take any action if taking or omitting to take
such action could have a Material Adverse Effect, as defined in Section 8.5 hereof, or
(m)
agree to take any of the actions described in this Section 4.5.
4.6
Conduct of Business Pending Closing.
From the date hereof until the Closing Date, the Seller covenants and agrees to
cause the Seller to:
(a)
maintain its existence in good standing;
(b)
maintain proper business and accounting records;
(c)
maintain all insurance on the Assets in effect on the date of this
Agreement; and
(d)
continue to diligently operate its business in the ordinary course.
4.8
Further Assurances. Upon the reasonable request of any party at any time after the
Closing, the other parties shall promptly execute and deliver such documents and instruments
and take such additional action as the requesting party may reasonably request to effectuate the
purposes of this Agreement.
4.10 Litigation Support. In the event and for so long as any party actively is contesting
or defending against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand in connection with any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or transaction prior to the
Closing Date involving the Seller, the Assets, the Excluding Liabilities, the Assumed Liabilities,
Purchaser or Seller (other than adversary proceedings between Purchaser, on the one hand, and
Seller, on the other hand), each of the parties, as applicable, shall (a) reasonably cooperate with
the contesting or defending party and its counsel, (b) as applicable, make reasonably available
their employees to provide testimony, to be deposed, to act as witnesses and to assist counsel,
and (c) provide reasonable access to its books and records as shall be necessary in connection
with the defense or contest; provided that the contesting or defending party shall pay the out-of-
pocket expenses reasonably incurred by the party so cooperating (unless the contesting or
defending party is entitled to indemnification from such party under Section 6).
4.11 Taxes.
(a)
In order to apportion appropriately any Tax relating to a period that begins before
the Closing Date and ends after the Closing Date, Taxes that are based upon or related to income
or any sales or use Tax shall be allocable based upon a closing of the books accounting method,
and any other Taxes shall be allocable in proportion to the number of days in the period prior to
and including the Closing Date, and the number of days in the period following the Closing Date.
(b)
To the extent that, following the Closing, Seller is required to pay Taxes included
in the Assumed Liabilities, Seller shall provide Purchaser with documentation and information
reflecting such Tax, and Purchaser shall timely pay to Seller the amount of such Tax due. To the
extent that, following the Closing, Purchaser is required to pay Taxes included in the Excluded
Liabilities, Purchaser shall provide Seller with documentation and information properly
reflecting such Tax, and Seller shall timely pay to Purchaser the amount of such Tax due.
(c)
The parties shall (i) each provide the other with such assistance as may reasonably
be requested by any of them in connection with the preparation of any return, audit, or other
examination by any Taxing authority or judicial or administrative proceedings relating to
Liability for Taxes, (ii) each retain and provide the other with any records or other information
that may be relevant to such return, audit or examination, proceeding or determination, and (iii)
each provide the other with any final determination of any such audit or examination, proceeding,
or determination that affects any amount required to be shown on any Tax Return of the other for
any period. Without limiting the generality of the foregoing, Purchaser and Seller shall each
retain, until the applicable statutes of limitations (including any extensions) have expired, copies
of all Tax Returns, supporting work schedules, and other records or information that may be
relevant to such returns for all Tax periods or portions thereof ending on or before the Closing
5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to the Seller, that the following representations
and warranties are true and correct in all material respects on the date hereof and will be true and
correct in all material respects on and as of the Closing Date:
5.1
Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware and has full power
to carry on its business as it is now being conducted and to own or hold under lease the properties
it now owns or holds under lease
5.2
Authority. Purchaser has full power and authority to enter into this Agreement.
Purchaser and its members, officers and directors have taken all action necessary to authorize the
execution, delivery and performance of this Agreement, the completion of the transactions
contemplated hereby and the execution and delivery of any and all instruments necessary or
appropriate to effectuate fully the terms and conditions of this Agreement. This Agreement has
been properly executed and delivered by Purchaser and (assuming the due authorization,
execution and delivery thereof by the Seller) constitutes the valid and legally binding obligation
of Purchaser, and is enforceable against Purchaser in accordance with its terms.
5.3
No Conflict. Neither the execution and delivery of this Agreement nor the
carrying out of the transactions contemplated hereby will result in any violation, termination or
modification of, or conflict with, the articles of organization, certificate of incorporation or by-
laws of Purchaser or any of the contracts or other instruments to which Purchaser is a party, or of
any judgment, decree or order applicable to Purchaser.
5.4
Broker’s and Finder’s Fees. No broker, finder, agent, representative or similar
intermediary has acted as a broker for or on behalf of the Purchaser in connection with this
Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to a Broker’s Fee in connection herewith, based on any agreement or
understanding with Purchaser or any action taken by Purchaser. Any such Broker’s Fee based on
any agreement or understanding with Purchaser or any action taken by Purchaser which may be
due in connection with the purchase and sale contemplated by this Agreement will be borne by
the Purchaser who has entered into the agreement to pay.
5.5
Valid Issuance of Shares. The Shares, when issued, sold and delivered in
accordance with the terms and for the consideration set forth in this Agreement, will be validly
issued, fully paid and free of restrictions on transfer other than applicable state and federal
securities laws and Liens created by or imposed by the Seller and/or Shareholder. Assuming the
accuracy of the representations of the Seller in Section 3.26 of this Agreement, the Shares will be
issued in compliance with all applicable federal and state securities laws. The Shares have been
duly reserved for issuance, and upon issuance, will be validly issued, fully paid and free of
restrictions on transfer other than restrictions on transfer under applicable federal and state
securities laws and Liens created by or imposed by the Shareholder. Based in part upon the
representations of the Seller in Section 3.26 of this Agreement, the Shares will be issued in
compliance with all applicable federal and state securities laws. No Person has any preemptive
rights or rights of first refusal by reason of or in connection with the issuance of any Shares.
5.6
Litigation. There are no Claims pending or, to the knowledge of Purchaser,
threatened against Purchaser which seek to enjoin or rescind the transactions contemplated by
this Agreement or otherwise prevent Purchaser from complying with the terms and provisions of
this Agreement.
5.7
Limitation on Warranties. Purchaser has any knowledge that (a) any of the
representations and warranties of Seller in this Agreement and the Schedules are not true and
correct in all material respects or (b) there are any material errors in, or material omissions from,
the Schedules.
6.
INDEMNIFICATION AND SURVIVAL.
6.1
Indemnification by the Seller. Subject to the other provisions of this Section 6,
the Seller hereby covenants and agrees to jointly and severally indemnify and hold harmless the
Purchaser and its respective successors and assigns, at all times from and after the date of
Closing, against and in respect of any and all demands, Claims, causes of action, administrative
orders and notices, losses, costs, fines, liabilities, penalties, interest, damages and expenses
(including, without limitation, reasonable attorney fees and expenses) (“Losses”), resulting from,
in connection with or arising out of:
(i)
any damage or loss resulting from any misrepresentation, breach of
warranty or breach or non-fulfillment of any agreement or covenant on the part of the
Seller under (A) this Agreement, including Seller covenants and representations the
Excluded Liabilities, operation of Seller prior to Closing, (B) the Assignments, (C) the
Non-Competition Agreement or (D) any Employment Agreement to which Seller is a
party, or from any inaccuracy or misrepresentation in or omission from any certificate or
other instrument or document furnished or to be furnished by or on behalf of the Seller at
Closing;
(ii)
all Claims, assessments, judgments, costs, reasonable attorneys’ fees and
expenses of any nature incident to any of the matters indemnified against pursuant to this
Section 6.1, including, without limitation, all such costs and expenses incurred in the
defense thereof or in the enforcement of any rights of the Purchaser hereunder.
6.2
Indemnification by Purchaser. The Purchaser hereby covenants and agrees to
indemnify and hold harmless the Seller and their respective successors and assigns, at all times
from and after the date of Closing against and in respect of any and all Losses resulting from, in
connection with or arising out of:
(i)
any misrepresentation, breach of warranty or breach or non-fulfillment of
any agreement or covenant on the part of the Purchaser under (A) this Agreement
(including Purchaser’s covenants and representations) or (B) any Employment Agreement
to which Purchaser is a party, or from any inaccuracy or misrepresentation in or omission
from any certificate or other instrument or document furnished or to be furnished by or on
behalf of Purchaser at Closing;
(ii)
any Assumed Liability;
(iii) all Claims, assessments, judgments, costs, reasonable attorneys’ fees and
expenses of any nature incident to any of the matters indemnified against pursuant to this
Section 6.2, including, without limitation, all such costs and expenses incurred in the
defense thereof or in the enforcement of any rights of the Seller hereunder; and/or
(iv)
the operation or ownership of the CyberCare Health Network Business
after the Closing, except to the extent a Purchaser is indemnified pursuant to Section 6.1
hereof.
6.3
Notice and Defense.
(a)
If at any time a party entitled to indemnification hereunder (the “Indemnitee”)
shall receive notice from any third party of any asserted Loss claimed to give rise to
indemnification hereunder, the Indemnitee shall promptly give notice thereof (“Claims Notice”)
to the party obligated to provide indemnification (the “Indemnitor”) of such Loss. The Claims
Notice shall set forth a brief description of the Loss, in reasonable detail, and, if known or
reasonably estimable, the amount of the Loss that has been or may be suffered by the Indemnitee.
The failure of the Indemnitee to give a Claims Notice promptly shall not waive or otherwise
affect the Indemnitor’s obligations with respect thereto, except to the extent that the Indemnitor
is prejudiced as a result of such failure (or to the extent the associated claim is barred by another
provision hereof regarding any survival period). All indemnity claims by the Indemnitee shall be
bona fide. Any claim for indemnification with respect to any of such matters which is not
asserted by a notice given as herein provided specifically identifying the particular breach
underlying such claim and the reasonable detail of facts and Losses relating thereto within the
specified periods of survival may not be pursued until and unless properly made, and if regarding
a representation or warranty, within the applicable survival period as set forth in Section 6.7.
Thereafter, the Indemnitor shall have, at its election, the right to compromise or defend any such
matter at the Indemnitor’s sole cost and expense through counsel chosen by the Indemnitor and
approved by the Indemnitee (which approval shall not unreasonably be withheld); provided,
however, that (i) Indemnitor provides evidence reasonably satisfactory to Indemnitee that
Indemnitor has the financial wherewithal to satisfy and discharge the Loss in full, and (ii) any
such compromise or defense shall be conducted in a manner which is reasonable and not contrary
to the Indemnitee’s interests, and the Indemnitee shall in all events have a right to veto any such
compromise or defense which is unreasonable or which would jeopardize in any material respect
any assets or business of the Indemnitee or any of its affiliates or increase the potential liability
of, or create a new liability for, the Indemnitee or any of its affiliates and, provided further that
the Indemnitor shall in all events indemnify the Indemnitee and its affiliates against any damage
resulting from the manner in which such matter is compromised or defended, including any
failure to pay any such claim while such litigation is pending. Notwithstanding the foregoing, if
the Indemnitor receives a firm offer to settle a third party Claim, and the Indemnitor desires to
accept such offer, the Indemnitor will give written notice to the Indemnitee to that effect. In the
event that the Indemnitor does so undertake to compromise and defend a claim, the Indemnitor
shall notify the Indemnitee of its intention to do so. Each party agrees in all cases to use
commercially reasonable efforts to cooperate with the defending party and its counsel in the
compromise of or defending of any such liabilities or claims. In addition, the nondefending party
shall at all times be entitled to monitor such defense through the appointment, at its own cost and
expense, of advisory counsel of its own choosing.
(b)
In the event any Indemnitee should have an indemnity claim against any
Indemnitor hereunder which does not involve a third party Claim, the Indemnitee shall transmit
to the Indemnitor a Claims Notice. The Indemnitor shall have fifteen (15) business days after
receipt of any such Claims Notice in which to object in writing to the claim or claims made by
Indemnitee in such Claims Notice, which written objection (the “Objection Notice”) shall state,
in reasonable detail, the basis for Indemnitor’s objection. In the event that Indemnitor does
deliver an Objection Notice with respect to any claim or claims made in any Claims Notice, the
Indemnitor and the Indemnitee shall, within the fifteen (15) day period beginning as of the date
of the receipt by Indemnitee of the Objection Notice, attempt in good faith to agree upon the
proper resolutions of each of such claims. If the parties should so agree, a written memorandum
setting forth such agreement shall be prepared and signed by both parties. If no agreement can be
reached after good faith negotiations within such 15-day negotiating period (or such extended
period as the Indemnitor and the Indemnitee shall mutually agree upon in writing), the parties
may pursue their remedies at law (subject to the terms and conditions of this Agreement).
6.4
Indemnification Limits and Restrictions.
(a)
De Minimis. No indemnification shall be payable by Seller with respect to
any indemnity claim under clause (i) of Section 6.1 with respect to any individual Loss (or series
of related Losses arising out of the same or substantially similar circumstances) which is (or, for
such a series, are in the aggregate) less than Twenty Thousand Dollars ($25,000.00) (the “De
Minimis Amount”); provided, however, that, in each case subject to the other terms of this
Section 6, if such Loss (or Losses) exceeds the De Minimis Amount, then all of such
indemnification shall be payable for the entire amount of such Loss (or Losses), including the
portion that is less than the De Minimis Amount.
(b)
[Reserved].
(c)
Notwithstanding anything in this Agreement to the contrary, Losses shall
not include (i) consequential, special or punitive damages or (ii) fees and expenses of more than
one counsel with respect to any indemnified claim or claims arising out of the same general
allegations or circumstances unless counsel to the Indemnitee has provided a written opinion to
the Indemnitor stating that legal conflict of interest requires that the Indemnitor have separate
counsel.
(d)
The limitations set forth in this Section 6.4 shall not apply to any claims of
intentional misrepresentation or fraud.
6.5
Seller Indemnification. With respect to any indemnity claim under Section 6.1,
Purchaser hereby agrees that it shall seek recourse and remedy for such indemnifiable Losses
(subject to Sections 6.4 below) in the following order of priority:
(a)
first, Purchaser shall enforce its set-off rights pursuant to Section 2.2(c),
including against any earn-out payments which are due or may become due under clause (4) of
Section 2.2(a), to the extent of such indemnifiable Losses;
(b)
to the extent that such indemnifiable Losses shall not be fully paid
pursuant to the foregoing clause, Purchaser shall seek recourse and remedy against Seller.
6.6
Subrogation. After any indemnification payment is made to Purchaser pursuant to
this Section 6, Seller shall, to the extent of such payment and to the extent permitted by
applicable law and applicable contracts, be subrogated to all rights (if any) of the Purchaser
against any third party in connection with the Losses to which such payment relates. Without
limiting the generality of the preceding sentence, Purchaser shall execute, upon the written
request of the Indemnitor, any instrument reasonably necessary to evidence such subrogation
rights.
6.7
Survival. All representations and warranties of Seller, Shareholder and Purchaser
under this Agreement will survive the Closing until, and will expire at 5:00 p.m., Eastern time,
onthe first (1st) anniversary of cafter the Closing (the “Survival Date”). All covenants requiring
performance prior to Closing shall expire on the Closing Date and all covenants requiring
performance by any party after the Closing shall survive the Closing in accordance with their
terms and claims for breach therefor may be made at any time until the expiration of the statute
of limitations applicable to such claims. If a Claim Notice is delivered before the expiration of
the applicable survival period, the matters that are the subject of such Claim Notice shall survive
until such indemnity claim is finally resolved. Any Claim Notice resulting from any alleged
breach or inaccuracy of any representation or warranty herein must be asserted in writing which
contains specific facts, allegations and amounts sought by an Indemnitee to the Indemnitor prior
to the Survival Date.
7.
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER.
The obligations of the Seller under this Agreement are subject only to the delivery
by Purchaser of the Purchase Payment Amount as described in Section 2.2(a)(1) hereof and the
delivery of (or, at the option of Seller, the waiver of delivery of) the documents described in
Section 2.3(b) hereof and the satisfaction of each of the following conditions:
7.1
Accuracy of Representations and Warranties. Each of the representations and
warranties of the Purchaser contained herein and in any other agreements or instruments
provided for herein shall have been true and correct in all material respects on the date hereof.
Purchaser shall deliver to Seller a certificate to such effect at the Closing as to the representations
and warranties of the Purchaser.
7.2
No Action or Proceeding. No claim, action, suit, investigation or other court
proceeding shall be pending or threatened before any court or governmental agency which
presents a risk of the restraint or prohibition of the transactions contemplated by this Agreement
or the obtaining of material damages or other relief in connection therewith.
7.3
Consents and Actions; Contracts. All requisite regulatory and/or other consents
and approvals of third parties, including but not limited to those set forth on Schedule 3.2 or
Schedule 3.22(e), shall have been obtained and completed.
7.4
Other Evidence. The Purchaser shall have furnished to Seller such further
certificates and documents evidencing their due action in accordance with this Agreement as
Seller shall reasonably request.
8.
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser to proceed to Closing under this Agreement are
subject to the fulfillment (or, at the option of Purchaser, the waiver) at or prior to the Closing
Date of each of the following conditions:
8.1
Delivery of Audited Financials. The Seller shall have delivered to Purchaser
audited Financial Information as defined in Section 3.10 herein.
8.2
Accuracy of Representations and Warranties. Each of the representations and
warranties of the Seller contained herein and in any other agreements or instruments provided for
herein shall have been true and correct in all material respects on the date hereof. Seller shall
deliver to Purchaser a certificate to such effect at the Closing as to the representations and
warranties of the Seller.
8.3
No Action or Proceeding. No claim, action, suit, investigation or other court
proceeding shall be pending or threatened before any court or governmental agency which
presents a risk of the restraint or prohibition of the transactions contemplated by this Agreement
or the obtaining of material damages or other relief in connection therewith.
8.3
Consents and Actions; Contracts. All requisite regulatory and/or other consents
and approvals of third parties, including but not limited to those set forth on Schedule 3.2 or
Schedule 3.22(e), shall have been obtained and completed. The Seller shall have provided
Purchaser with evidence satisfactory to Purchaser in its reasonable discretion that (i) there are no
applicable rights of first refusal, rights of first negotiation, rights of first offer or similar rights of
any kind that would require Seller to provide any third party with notice, an opportunity to
discuss, consent, negotiate or to engage in any of the transactions contemplated hereby prior to
consummation by Seller; or (ii) that any and all such rights have been waived by the party
possessing such rights.
8.4
No Outstanding Options or Warrants. The Seller has provided Purchase with
evidence satisfactory to Purchaser, in its sole and absolute discretion that outstanding or
authorized options, warrants, rights, contracts, calls, puts, rights to subscribe, conversion rights
or other agreements or commitments to which Seller is a party to or which are binding upon
Seller providing for the issuance, disposition or acquisition of any of Seller’s capital stock or
other equity or any rights or interests exercisable therefor, as set forth on Schedule 3.12, have
been (a) cancelled or (b) have been duly authorized, are validly issued, fully paid and non-
assessable, are not subject to, nor were issued in violation of, any preemptive rights, and is
owned of record and beneficially by the parties set forth on Schedule 3.12
8.5
Delivery of Ancillary Agreements. The Seller shall have furnished to Purchaser
documents described in Section 2.3(c) hereof.
8.6
Delivery of Lease Agreement. The Seller shall have furnished to Purchaser a fully
executed assignment of Lease and consent of Landlord pursuant to Section 2.3(c) hereof.
8.7
Other Evidence. The Seller Shall have furnished to Purchaser such further
certificates and documents evidencing their due action in accordance with this Agreement as
Purchaser shall reasonably request.
9.
TERMINATION.
This Agreement may be terminated only as follows:
(a)
At any time upon the mutual written consent of the parties hereto;
(b)
At any time prior to the Closing by Purchaser by written notice to the
Seller if Purchaser is not satisfied for any reason with its due diligence review; or
(c)
Automatically and without further act if the Closing has not occurred on or
prior to January 31, 2017, as such date may have been extended by the mutual written consent of
the parties hereto.
In the event of the default by the Seller hereunder or the breach by the Seller of
any representation, warranty or covenant contained in this Agreement, Purchaser shall have all
rights available to it at law and/or in equity, including but not limited to the right to specific
performance, notwithstanding the termination of the Agreement in accordance with this Section
9.
10.
PIGGYBACK REGISTRATIONS
(a)
Right to Piggyback. After Closing, if the Purchaser at any time determines
to file a registration statement with the Securities and Exchange Commission with respect to any
offering of its securities for its own account or for the account of any stockholder who holds its
securities (other than (i) a registration on Form S-4 or S-8 or any similar or successor form to
such forms, (ii) a registration of securities solely relating to an offering and sale to employees,
directors or consultants of the Purchaser pursuant to any employee stock plan or other employee
benefit plan arrangement or (iii) a registration of non-convertible debt securities) (a “Piggyback
Registration”) then, as expeditiously as reasonably possible following such determination, the
Purchaser shall give written notice (the “Incidental Registration Notice”) of its intention to
effect such a registration to the Seller, and such notice shall offer Seller the opportunity to
register such number of registrable securities as each such Seller may request in writing. The
Purchaser shall include in such registration statement all such registrable securities which are
requested in writing by the Seller (a “Piggyback Participation Notice”) to be included therein, on
the same terms and conditions as the securities otherwise being sold in such registration, such
Piggyback Participation Notice to be received within fifteen (15) days after the date of the
Incidental Registration Notice. If Seller does not timely deliver a Piggyback Participation Notice,
then he shall be deemed to have waived his right to participate in the Piggyback Registration. If
the Seller decides not to include all of his registrable securities in any Piggyback Registration,
then Seller shall nevertheless continue to have the right to include any registrable securities in
any subsequent Piggyback Registration as may be filed by the Purchaser with respect to offerings
of the Purchaser’s securities, all upon the terms and conditions set forth herein.
(b)
Underwriter Exception. If a Piggyback Registration is an underwritten
secondary registration on behalf of holders of the Company’s securities, and the managing
underwriters advise the Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the Company will include
in such registration a pro rata share of registrable securities requested to be included in such
registration statement as calculated by dividing the number of registrable securities requested to
be included in such registration statement by the number of the Company’s securities requested
to be included in such registration statement by all selling security holders. In such event, the
Seller shall continue to have registration rights under this Agreement with respect to any
registrable securities not so included in such registration statement.
(c)
Piggyback Expenses. The registration expenses of the Seller shall be paid
by the Purchaser in all Piggyback Registrations. The obligation of the Purchaser to bear, or to pay
or reimburse the Seller for, registration expenses shall apply irrespective of whether any sales of
registrable securities ultimately take place.
(d)
Demand Registration Rights. At any time following the expiration of one
hundred eighty days (180) after the Closing date (the “Minimum Holding Period”), with respect
to any Shares acquired by the Seller pursuant to this Agreement, the Seller shall have the right,
exercisable by written request to the Company, to require the Company to prepare and file with
the Commission on a registration statement on Form S-1 or Form S-3 or such successor form or
other form as may be designated by the Seller and such other documents, including a prospectus,
as may be necessary in the opinion of both counsel for the Company and counsel for the Seller, in
order to comply with the provisions of the Securities Act, so as to permit a public offering and
sale of such Shares, as the case may be.
11.
MISCELLANEOUS.
11.1 Expenses. Each party to this Agreement shall pay all of its own closing costs and
other expenses relating hereto, including fees and disbursements of its counsel and accountants,
whether or not the transactions contemplated hereby are consummated.
11.2 Taxes. The Seller shall bear any and all Taxes of any nature or type whatsoever,
including, but not limited to taxes that may become due and payable as a result of the
consummation of the transactions contemplated hereby, and the Seller shall indemnify and hold
Purchaser harmless with respect thereto pursuant to Section 6.
11.3 Notices. All notices and other communications hereunder or in connection
herewith shall be in writing and delivered as follows:
If to the Seller, to:
with a copy to:
If to Purchaser, to:
Elisa Luqman, EVP and General Counsel
iGambit Inc.
1050 W. Jericho Tpke, Suite A
Smithtown, New York 11787
with a copy to:
Dickinson- Wright
450 East Las Olas Boulevard, Suite 730
Ft. Lauderdale, FL
33301
Phone: 954 ###-###-####
Attention: Joel Mayersohn
Except as otherwise specifically provided herein, all notices, requests, instructions
and demands which may be given by any party hereto to any other party in the course of the
transactions herein contemplated shall be in writing and shall be served by express mail through
the U.S. Postal Service or similar expedited overnight commercial carrier. Service of such
notices, demands and requests shall be presumed to have occurred on the date that is one (1) day
after the date upon which the item was delivered to the U.S. Postal Service or similar expedited
overnight commercial carrier, provided the item was properly addressed, all postage and shipping
charges were prepaid by the sender and the commercial carrier issued a dated receipt to the
sender acknowledging the commercial carrier’s receipt of the item. All such notices, demands
and requests shall be addressed as set forth above. Any party may change the address at which it
is to receive notice by like written notice to all other parties hereunder.
11.4 Entire Agreement. This Agreement (including the exhibits hereto and the lists,
schedules and documents delivered pursuant hereto, which are a part hereof) is intended by the
parties to and does constitute the entire agreement of the parties with respect to the transactions
contemplated by this Agreement. This Agreement supersedes any and all prior understandings,
written or oral, between the parties, and this Agreement may be amended, modified, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of the amendment, modification, waiver, discharge or termination is sought.
11.5 Severability. If any provision of this Agreement shall be declared by any court of
competent jurisdiction illegal, void or unenforceable, the other provisions shall not be effected,
but shall remain in full force and effect.
11.6 Modification and Amendment. This Agreement may not be modified or amended
except by an instrument in writing duly executed by the parties hereto, and no waiver of
compliance of any provision or condition hereof and no consent provided for herein shall be
effective unless evidenced by an instrument in writing duly executed by the party hereto seeking
to be charged with such waiver or consent.
11.7 Time of the Essence. Time is of the essence in every provision of this Agreement
where time is a factor.
11.8 Governing Law; Jurisdiction; Exclusive Venue.
(a)
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida exclusive of the choice of law rules thereof.
(b)
Exclusive Venue. The parties hereto agree that exclusive venue for any
litigation, action or proceeding arising from or relating to this Agreement shall lie in the County
Court in and for County, Florida, or, if federal diversity jurisdiction then exists, in the United
States District Court for the District of Florida and each of the parties hereto expressly waives
any right to contest such venue for any reason whatsoever.
(c)
Waiver of Trial By Jury. EACH OF THE PARTIES HERETO
EXPRESSLY WAIVES THE RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION, ACTION OR PROCEEDING RELATING TO OR ARISING OUT OF THIS
AGREEMENT.
11.9 Specific Performance.
The parties hereto recognize that if the Seller does not perform under the
provisions of this Agreement or any other agreements or instruments provided for in this
Agreement, then monetary damages alone would not be adequate to compensate the Purchaser
for its injury. The Purchaser shall therefore be entitled, in addition to any remedies that may be
available at law or in equity including, without limitation, monetary damages, to obtain specific
performance of the obligations of the Seller. If any action is brought by the Purchaser to
specifically enforce this Agreement or any other agreements or instruments provided for herein,
the Seller shall waive the defense that there is an adequate remedy at law.
11.10 Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, legatees, beneficiaries, personal
representatives and other legal representatives and assigns, as the case may be. This Agreement
may not be assigned by any party hereto without the prior written consent of each other party
hereto; provided, however, that each party may assign its rights and obligations hereunder to any
affiliate of such party.
11.11 Enumerations and Headings. The enumerations and headings contained in this
Agreement are for convenience of reference only and shall in no way be held or deemed to
define, limit, describe, explain, modify, amplify or add to the interpretation, construction or
meaning of any provision or the scope or intent of this Agreement, or in any way effect this
Agreement.
11.12 Counterparts. This Agreement may be signed in two or more counterparts, all of
which taken together shall be deemed to constitute one original Agreement. This Agreement
may be executed by delivery of a facsimile or .pdf copy of an executed signature page with the
same force and effect as the delivery of an originally executed signature page. In the event any
party delivers a facsimile or .pdf copy of a signature page to this Agreement, such party shall
deliver an originally executed signature page at any time thereafter upon request; provided,
however, that the failure to deliver any such originally executed signature page shall not affect
the validity of the signature page delivered by facsimile or .pdf, which has and shall continue to
have the same force and effect as the originally executed signature page.
11.13 Waiver of Bulk Sales Compliance. Each of the parties hereto waives compliance
with any applicable bulk sales or similar provisions, provided however, that the Seller hereby
agrees to indemnify and hold harmless Purchaser from and against any and all losses, expenses,
claims, liabilities or attorney’s fees arising as a result of such waiver.
11.14 Disclosure. The parties hereto will consult with each other and reach mutual
agreement before issuing any press release or otherwise making any statement or disclosure, oral
or written, with respect to this Agreement or the transactions contemplated hereby; provided,
however, that each party will be permitted to make, without the agreement of the other, such
disclosures to the public or to governmental entities as that party’s counsel reasonably deems
necessary to maintain compliance with applicable laws. Except as provided above, the existence
and/or contents of this Agreement shall not be disclosed by the Seller without the Purchaser’s
prior written consent.
11.15 Confidentiality. Except as required by law or to carry out the transactions
contemplated by this Agreement (the “Transactions”), neither the Seller, nor the Purchaser, nor
the employees, attorneys, accountants and other agents and representatives of any of the
foregoing (collectively, “Representatives”) will disclose or use any Confidential Information (as
defined below), whether already furnished or to be furnished in the future to any party hereto or
their Representatives in any manner other than in connection with the evaluation and negotiation
of the transactions proposed in this Agreement once executed and delivered; except to the extent
that disclosure is required by law. For purposes of this Agreement, “Confidential Information”
means the existence and terms of this Agreement and any information regarding Purchaser, the
Seller, their affiliates or the Transactions. Confidential Information does not include information
that a party to this Agreement can demonstrate (i) is generally available to or known by the
public other than as a result of improper disclosure; (ii) is obtained by the disclosing party from a
source other than the other party or its Representatives; or (iii) was in the possession of the other
party prior to the date hereof other than as a result of improper disclosure and was obtained other
than in connection with consideration of the transactions set forth in this Agreement, provided
that such source was not bound by a duty of confidentiality with respect to such information.
Upon the written request of any party, the other party will promptly return any Confidential
Information in its possession or in the possession of its Representatives.
11.16 Survival. All representations and warranties made by the parties in this
Agreement and in any other certificates and documents delivered in connection herewith shall
survive the Closing.
11.17 Rules of Usage. In this Agreement, unless a clear intention appears otherwise:
(a) the singular number includes the plural number and vice versa; (b) reference to any Person
includes such Person’s successors and assigns but, if applicable, only if such successors and
assigns are not prohibited by this Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually; (c) reference to any gender includes
each other gender; (d) reference to any agreement, document or instrument means such
agreement, document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof; (e) reference to any law means such law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder; (f) ”hereunder,” “hereof,” “hereto,” and
words of similar import shall be deemed references to this Agreement as a whole and not to any
particular section or other provision hereof; (g) ”including” (and with correlative meaning
“include”) means including without limiting the generality of any description preceding such
term; (h) ”or” is used in the inclusive sense of “and/or”; (i) with respect to the determination of
any period of time, “from” means “from and including” and “to” means “to but excluding”;
(j) references to documents, instruments or agreements shall be deemed to refer as well to all
addenda, schedules or amendments thereto; and (k) section references shall be deemed to refer to
all subsections thereof, unless otherwise expressly indicated.
[Signatures appear on the following page]
IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement under seal on the date first above written.
WITNESS:
PURCHASER:
HealthDatix, Inc.
a Florida corporation
By:__________________________(SEAL)
Name: John Salerno
Title: Chairman
SELLER:
EncounterCare Solutions, Inc
By:___________________________(SEAL)
Name: Ronald Mills
Title: CEO & President
IGAMBIT:
iGambit Inc.
a Delaware coproration
By:__________________________(SEAL)
Name: John Salerno
Title: Chairman
