ASSET PURCHASE AGREEMENT
Exhibit
10.23
ASSET
PURCHASE AGREEMENT, dated as of August 21, 2003, by and between Viper
Networks, Inc., a Utah corporation with offices located at 0000 Xxx Xxx., Xxxxx
X000, Xx Xxxxx, Xxxxxxxxxx 00000 ("Buyer") and Young’s Environmental Solutions,
LLC, a Nevada limited liability company, with offices located at 0000 X Xxxxx
Xxxxx 00, Xxx Xxxxx, Xxxxxx 00000 (“Seller”).
WHEREAS,
Buyer is in the business of telecommunications and network services, with a
specialization in the cost-effective design, implementation, maintenance and
management of VolP communications (the “Business”);
WHEREAS,
Buyer desires to purchase from the Seller, and the Seller desires to sell to
the
Buyer, certain specified real estate assets, as set forth in this
Agreement;
NOW,
THEREFORE, in consideration of the mutual promises herein set forth and
upon the terms and subject to the conditions hereof, the parties agree as
follows:
ARTICLE
I. PURCHASE AND SALE OF ASSETS
1.01 Sale
of the Purchased Assets; Assumed Liabilities. Upon the terms and subject to
the conditions of this Agreement, at the Closing (i) Seller will sell, transfer,
assign, convey and deliver to Buyer, and Buyer will purchase, accept and acquire
from Seller, the following property and assets of the Seller, free and clear
of
any option, lien, pledge, mortgage, security interest or other encumbrance
or
any kind (”Purchased Assets”):
(i) a
one half (1/2) interest in property, represented by the purchase of 99,970.00
square feet. Seller is owner of 199,940 square feet of real property,
located at State and Xxxxxx known as parcel # 434-070-038-3.
1.02 Purchase
Price. The aggregate purchase price to be paid by Buyer for the
Purchased Assets shall consist of the Consideration described in Section 1.02(a)
hereof.
|
|
(a)
|
Consideration. The
consideration payable to Seller shall be an amount equal to $400,000
Dollars, payable at the Closing in the form of four million shares
of
common stock issued as follows:
|
-1-
|
|
(b)
|
|
|
(i)
|
Four
Common Stock Certificates Issued to Xxxxxx Xxxxx for
250,000 shares each, restricted under Rule 144 however, with
piggy-back registration rights to the Buyer’s proposed SB-2 Registration
Statement to the U.S. Securities and Exchange Commission, making
the
shares issued pursuant to section 1.02 (ii), freely tradable upon
the
effectiveness of the SB-2 Registration Statement. Upon
effectiveness of the SB-2 Registration, Seller will be limited to
the sale
of no more than 250,000 Common Shares per
quarter; and
|
|
|
(ii)
|
Four
Common Stock Certificates Xxxx Xxxxxxx for 250,000 restricted common
shares each of Buyer, restricted under Rule 144, however, with piggy-back
registration rights to the Buyer’s proposed SB-2 Registration Statement to
the U.S. Securities and Exchange Commission, making the shares issued
pursuant to section 1.02 (ii), freely tradable upon the effectiveness
of
the SB-2 Registration Statement. Upon effectiveness of the SB-2
Registration, Seller will be limited to the sale of no more than
250,000
Common Shares per quarter.
|
|
|
(iii)
|
One
Common Stock Certificates issued to Xxxxxx Xxxxx for 1,000,000 shares,
restricted under Rule 144 for one full year. Upon effectiveness,
Seller
will be limited to the sale of no more than 250,000 Common Shares
per
quarter.
|
|
|
(iv)
|
One
Common Stock Certificates issued to Xxxx Xxxxxxx for 1,000,000 shares,
restricted under Rule 144 for one full year. Upon effectiveness,
Seller
will be limited to the sale of no more than 250,000 Common Shares
per
quarter.
|
|
|
(v)
|
Total
of all shares equal 4,000,000
|
1.03
No Assumption of Liabilities. The Buyer is not assuming, and
shall not be deemed to have assumed, any obligations or liabilities of the
Seller.
1.04 Allocation
of the
Purchase Price. Buyer and Seller hereby agree that the purchase
price for the Purchased Assets shall be allocated in accordance with Exhibit
3
hereto. The parties agree to be bound by such allocation for all
purposes, including for purposes of all Federal, state, local and foreign tax
returns filed by any of them subsequent to the Closing Date, the determination
by Seller of taxable gain or loss on the sale of the Purchased Assets, and
the
determination by Buyer of its tax basis in the Purchased Assets.
-2-
1.05
Closing Deliveries.
(a) Sellers'
Deliveries. At the Closing, Seller shall deliver to
Buyer:
(i) Such
bills of sale, assignments and other Instruments (in form and substance
satisfactory to Buyer) as shall be necessary or appropriate to vest in Buyer
good and marketable title to the Purchased Assets, free and clear of all liens,
options, pledges, mortgages, security interests or other
encumbrances;
(ii) Such
Consents, Permits and other Instruments as Buyer may reasonably request to
enable it to utilize the assets in the Business without interruption or
disruption;
(iii) A
duly
authorized Resolution of the Board of Directors of Seller approving this
transaction;
(iv) A
current
Certificate of Good Standing of Seller in its State of
Incorporation.
(v) Buyer’s
standard
Subscription Agreement for the Common Stock executed by Seller.
(b) Buyer's
Deliveries. At the Closing, Buyer shall deliver to
Seller:
(i) Eight
(8) Common Stock Certificates of Buyer for 250,000 Common Shares each of
restricted common stock and two (2) Common Stock Certificates of Buyer for
1,000,000 Common Shares each of restricted common stock in the name of Sellers
in accordance with Section 1.02(a) hereof;
(ii) A
duly
authorized Resolution of the Board of Directors of Buyer approving this
transaction;
(iii) A
current
Certificate of Good Standing of Buyer in its State of
Incorporation.
ARTICLE
II. CLOSING CONDITIONS
2.01 Closing. The
closing of the transactions contemplated by this Agreement (the “Closing”) shall
take place by correspondence and facsimile on or before September 15, 2003,
or
on such other date and at such place as the Buyer and Seller may mutually
determine (the “Closing Date”).
2.02 Conditions
Precedent to the Obligations of Seller. All obligations of Seller
under this Agreement are subject to the fulfillment, at the option of Seller,
at
or prior to the Closing Date, of each of the following conditions:
(a) Buyer's
Representations and Warranties. The representations and
warranties of Buyer herein contained shall be true on and as of the Closing
Date
with the same force and effect as though made on and as of said date, except
as
affected by transactions contemplated or permitted by this
Agreement.
(b) Buyer's
Covenants. Buyer shall have performed all its obligations and
agreements and complied with all its covenants contained in this Agreement
to be
performed and complied with by Buyer prior to the Closing Date.
-3-
(c) Consents. Seller
shall have received evidence, satisfactory to Seller and its counsel, that
all
the Consents hereto, including the Board of Directors of Buyer, have been
obtained.
(d) Other
Agreements. On the Closing Date, the Instruments reasonably
necessary to carry out the transactions contemplated by this Agreement shall
have been duly executed and delivered by Buyer.
(e) Documentation. All
matters and proceedings taken in connection with the sale of the Purchased
Assets as herein contemplated, including forms of Instruments and matters of
title, shall be reasonably satisfactory to Seller and its counsel.
2.03 Conditions
Precedent to the Obligations of Buyer. All obligations of Buyer
under this Agreement are subject to the fulfillment of each of the following
conditions:
(a) Seller’s
Representations and Warranties. The representations and
warranties of Seller and the its officers and directors herein contained shall
be true on and as of the Closing Date with the same force and effect as though
made on and as of said date, except as affected by transactions contemplated
or
permitted by this Agreement.
(b) Sellers'
Covenants. Seller and its officers and directors shall have
performed all of their obligations and agreements and complied with all of
their
covenants contained in this Agreement to be performed and complied with by
them
prior to the Closing Date.
(c) Consents. Buyer
shall have received evidence, satisfactory to Buyer and its counsel, that all
of
the Consents hereto, including the Board of Directors of Seller, have been
duly
obtained.
(d) Other
Agreements. On the Closing Date, the executed copy of this
instrument of transfer of the Purchased Assets shall have been duly delivered
by
Seller.
(e) No
Litigation. No suit, action or litigation, administrative,
arbitration or other proceeding shall have been commenced and still be pending,
which is expected to prevent or change the transactions contemplated hereby
or
questioning the validity or legality of any of such transactions.
No
investigation by any Governmental Authority shall have been commenced and still
be pending, seeking to restrain, prevent or change the transactions contemplated
hereby or questioning the validity or legality of any of such
transactions.
-4-
No
Proceeding shall have been threatened against Seller or Buyer seeking to
restrain, prevent or change the transactions contemplated hereby or questioning
the validity or legality of any of such transactions.
(f)
Documentation. All matters and proceedings taken in connection
with the sale of the Purchased Assets as herein contemplated, including forms
of
Instruments and matters of title, shall be reasonably satisfactory to Buyer
and
its counsel.
ARTICLE
III REPRESENTATIONS AND WARRANTIES OF SELLER
Seller
hereby represents and warrants to Buyer as follows:
3.01 Organization;
Good Standing;. Seller is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate, and other power and authority
and
legal right to own, operate and lease its properties, and to carry on its
business as now being conducted. Seller is duly qualified to do
business and is in good standing in each jurisdiction where the conduct of
its
business or the ownership or leasing of its property requires such
qualification.
3.02 Authorization. Seller
has all requisite legal right, power, authority and capacity to enter into
this
Agreement and to perform all of its obligations hereunder. Seller has
taken all necessary action to authorize the sale hereunder on the terms and
conditions of this Agreement and to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly executed
by Seller and constitutes a legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or other
similar laws from time to time in effect, which affect the enforcement of
creditors’ rights in general and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).
3.03 Title
to Assets. Seller has good and marketable title to all of the
Purchased Assets, free of Liens, options, pledges, mortgages, security interests
or other encumbrances of any kind.
3.04 Condition
of Property; Maintenance. The Purchased Assets being acquired are
in
good operating condition and repair, subject only to ordinary wear and
tear. Seller has maintained all of the Purchased Assets in customary
repair, order and condition (taking into consideration the age and condition
thereof).
3.05 Litigation,
etc. There is no suit, action or litigation, administrative, arbitration or
other Proceeding or governmental investigation or inquiry or any change in
any
law the effect of which would impair or affect the Purchased Assets or to the
knowledge of Seller, no such action is threatened. To the best knowledge of
Seller, no investigation is pending, or threatened, by any Federal, state,
local
or foreign government or by any agency or instrumentality thereof, the effect
of
which would impair or affect the Purchased Assets.
-5-
3.06 Compliance
with other Instruments, Consents etc. Neither the execution and
delivery of this Agreement by Seller, nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in any violation of or
constitute a default under any term of the certificate of incorporation or
by-laws of Seller, or (ii) conflict with or result in any violation of or
constitute a default under any Law, Instrument, Lien or Contract by which Seller
is, or the Purchased Assets are bound, or (iii) result in the creation or
imposition of any Lien or give to any other Person any interest or right,
including rights of acceleration, termination or cancellation in or with respect
to, or otherwise affect, the Purchased Assets. Seller has, or prior
to the Closing will have, obtained any Consent or Permit which is required
on
the part of Seller in connection with the execution or delivery of this
Agreement or the consummation of the transactions contemplated
hereby.
3.07 Brokers. All
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried on by Seller without the intervention of any other Person
in
such manner as to give rise to any valid claim for a finder's fee, brokerage
commission or other like payment.
3.08
Due Diligence; Investment Intent. Seller acknowledges that it
is acquiring the Shares in Buyer for a long term investment; that the Shares
have not been registered under the Securities Act of 1933 or under the
securities laws of any state, and therefore, the Shares and Warrant cannot
be
resold unless they are subsequently registered under said laws or exemptions
from such registrations are available and a legend to that effect will be
placed
on any certificate representing the Shares; that it recognizes that
the Shares and Warrant as an investment involves a high degree of
risk; that it has conducted due diligence on the Buyer to its
satisfaction and has been given
full and complete access to information regarding Buyer and the Business,
reasonable opportunity to ask questions of and receive answers from
representatives of Buyer to its satisfaction.
|
|
ARTICLE
IV. REPRESENTATIONS AND WARRANTIES OF
BUYER
|
Buyer
represents and warrants to Seller as follows:
4.01 Organization. Buyer
is a Utah corporation duly organized and validly under the laws of the State
of its incorporation, and has all requisite corporate
power and authority to own, operate and lease its properties and
assets.
4.02 Authorization. Buyer
has full corporate power, authority and legal right to execute and deliver,
and
to perform its obligations under, this Agreement, and has taken all necessary
action to authorize the purchase hereunder on the terms and conditions of this
Agreement and to authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly executed by Buyer, and
constitutes a legal, valid and binding obligation of Buyer enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or other similar laws from time to time
in
effect, which affect the enforcement of creditors’ rights in general and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
-6-
4.03 Compliance
with Instruments, Consents, etc. Neither the execution and the
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will conflict with or result in any violation of or constitute a default
under the certificate of incorporation or the by-laws of Buyer, or any Law,
Instrument, Lien or other Contract by which Buyer is bound. Buyer
has, or prior to the Closing will have, obtained any Consent or Permit which
is
required on the part of Buyer in connection with the execution or delivery
of
this Agreement or the consummation of the transactions contemplated
hereby.
4.04 Litigation
etc. There is no suit, action or litigation, administrative,
arbitration or other Proceeding or governmental investigation pending or, to
the
knowledge of Buyer, threatened which might, severally or in the aggregate,
materially and adversely affect the financial condition or prospects of Buyer
or
Buyer's ability to acquire the Purchased Assets as contemplated by this
Agreement.
4.05 Brokers. All
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried on by Buyer without the intervention of any other Person
in
such manner as to give rise to any valid claim for a finder's
fee, brokerage commission or other like payment.
4.06 Absence
of Changes. Since June 30, 2003, there has not been and will not
at closing be any changes in the financial condition or operation of Buyer,
except changes in the ordinary course of business, which changes have not in
the
aggregate had a material adverse effect on Buyer.
4.07 Compliance
with Law. Buyer represents that, to the best of its knowledge, it
has complied with and is not in violation of any applicable federal, state
or
local statutes, laws or regulations which would have a material adverse effect
on the business of Buyer
|
|
ARTICLE
V. POST CLOSING
COVENANTS
|
5.01 Survival
of
Representations and Warranties. The parties hereto agree that,
notwithstanding any right of Buyer fully to investigate the affairs of Seller
and notwithstanding any knowledge of facts determined or determinable by Buyer
pursuant to such investigation or right of investigation, Buyer has the right
to
rely fully upon the representations and warranties of Seller contained in this
Agreement and on the accuracy of any document, certificate, Instrument, Exhibit
or Schedule given or delivered to Buyer herewith or at the
Closing. All statements contained in any such document, certificate,
Exhibit or Schedule or other Instrument given or delivered by Seller to Buyer
herewith or at the Closing shall be deemed to be a representation and warranty
under this Agreement. All covenants, representations, warranties and
agreements made in this Agreement or in any Exhibit, Schedule, Instrument,
certificate or document delivered herewith or at the Closing shall survive
the
execution and delivery thereof and the Closing hereunder.
-7-
5.02 Obligation
of Seller to Indemnify. Seller hereby agrees to indemnify,
defend, save and hold Buyer (and its directors, officers, employees and agents)
harmless from and against any and all damage, liability, loss, expense,
assessment, judgment or deficiency of any nature whatsoever (including, without
limitation, reasonable attorneys' fees and other costs and expenses incident
to
any suit, action or proceeding) (together "Losses") incurred or sustained by
Buyer which arises out of or results from (i) the breach of any representation
or warranty of Seller set forth in Article III, (ii) the breach of or failure
to
perform any covenant of Seller set forth in this Agreement, and (iii) any and
all Liabilities and obligations of Seller.
5.03 Obligation
of Buyer to Indemnify. Buyer hereby agrees to indemnify, defend, save and
hold Seller (its directors, officer, employees and agents) harmless from and
against any and all Losses incurred or sustained by Seller which arises out
of
or results from (i) the breach of
any
representation or warranty of Buyer set forth Article VI above,
and (ii) the breach of or failure to perform any
covenant of Buyer set forth in this Agreement.
5.04 Procedures
for Indemnification. Promptly after service of notice of any
claim or of process by any third person in any matter in respect of which
indemnity may be sought from a party pursuant to this Agreement, the party
so
served will notify the indemnifying party of the receipt thereof. The
indemnifying party will have the right to participate in, or assume, at its
own
expense, the defense of any such claim or process (with counsel reasonably
acceptable to the indemnified party) or settlement thereof. After
notice from the indemnifying party of its election so to assume the defense
thereof, the indemnifying party will not be liable to the indemnified party
for
any legal or other expense incurred by the indemnified party in connection
with
such defense. Such defense will be conducted expeditiously (but with
due regard for obtaining the most favorable outcome reasonably likely under
the
circumstances, taking into account costs and expenditures) and the indemnified
party will be advised promptly of all material developments. The
indemnifying party will not settle any such claim without the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld or delayed. With respect to any matter which is the subject
of any such claim and as to which the indemnified party fails to give the other
party such notice as aforesaid, and such failure adversely affects the ability
of the indemnifying party to defend such claim or materially increases the
amount of indemnification which the indemnifying party is obligated to pay
hereunder, the amount of indemnification which the indemnified party will be
entitled to receive will be reduced to an amount which the indemnified party
would have been entitled to receive had such notice been timely
given. No settlement of any such claim as to which the indemnifying
party has not elected to assume the defense thereof will be made without the
prior written consent of the indemnifying party, which consent will not be
unreasonably withheld or delayed.
-8-
5.05 Further
Assurances. Following the Closing, at the request of Buyer,
Seller shall execute and deliver to Buyer such further documents and take such
reasonable action as may be necessary or appropriate to (i) confirm the sale,
transfer, assignment, conveyance and delivery of the Purchased Assets, or (ii)
vest in Buyer all of Seller's right, title and interest to the Purchased
Assets. In connection with the foregoing, from and after the Closing
Date, Buyer shall have the right and authority to endorse, without recourse,
the
name of Seller on any check or similar negotiable instrument received by Buyer
that constitutes any part of the Purchased Assets. In addition,
Seller shall pay to Buyer any amounts, which shall be received by Seller after
the Closing Date which constitute part of the Purchased Assets.
|
ARTICLE
VI. MISCELLANEOUS
|
6.01 Severability. If
any provision of this Agreement or the application of any such provision to
any
party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder
of this Agreement or the application of such provision to such person or
circumstances other than those to which it is so determined to be invalid and
unenforceable, shall not be affected thereby, and each provision hereof shall
be
validated and shall be enforced to the fullest extent permitted by
law.
6.02 Waivers. Any
failure by any party to this Agreement to comply with any of its obligations,
agreements or covenants hereunder may be waived by Seller in the case of a
default by Buyer and by Buyer in the case of a default by
Seller. Buyer and Seller will not be deemed as a consequence of any
act, delay, failure, omission, forbearance or other indulgences granted from
time to time by Buyer or Seller: (i) to have waived, or to be stopped from
exercising, any of its rights or remedies under this Agreement, or (ii) to
have
modified, changed, amended, terminated, rescinded, or superseded any of the
terms of this Agreement, unless such waiver, modification, amendment, change,
termination, rescission, or supersession is express, in writing and signed
by a
duly authorized officer of Seller or a duly authorized officer of Buyer, as
the
case may be. No single or partial exercise by Buyer or Seller of any
right or remedy will preclude other or further exercise thereof or preclude
the
exercise of any other right or remedy, and a waiver expressly made in writing
on
one occasion will be effective only in that specific instance and only for
the
precise purpose for which given, and will not be construed as a consent to
or a
waiver of any right or remedy on any future occasion or a waiver of any right
or
remedy against any other Person.
6.03 Notices. All
notices, consents, demands, requests, approvals and other communications which
are required or may be given hereunder shall be in writing and shall be deemed
to have been duly given if personally delivered (including by overnight courier
service) or mailed certified first class mail, postage prepaid:
-9-
(a) If
to Seller:
|
Young’s
Environmental Solutions, LLC
|
|
0000
X Xxxxx Xxxxx 00
|
|
Xxx
Xxxxx, Xxxxxx 00000
|
(b) If
to
Buyer:
Viper
Networks, Inc.
Attn: Xxxxx
Xxxxxxxx
0000
Xxx Xxx., Xxxxx X000
Xx
Xxxxx, Xxxxxxxxxx 00000
or
to
such other person or persons at such address or addresses as may be designated
by written notice to the other parties hereunder. Notice shall be
deemed delivered at the time received for personal delivery, or when mailed
at a
United States Post Office box
or
branch office.
6.04 Binding
Effect,
Benefits. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns;
provided, however, that nothing in this Agreement shall be
construed to confer any rights, remedies, obligations or liabilities on any
Person other than the parties hereto or their respective successors and
assigns.
6.05 Entire
Agreement;
Amendment. This Agreement, together with the other Instruments delivered in
connection herewith, embodies the entire agreement and understanding of the
parties hereto and supersedes any prior agreement or under-standing between
the
parties with respect to the subject matter of this Agreement. This
Agreement cannot be amended or terminated orally, but only by a writing duly
executed by the parties.
6.06 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the same
document.
6.07 Headings. Headings
of the sections in this Agreement are for reference purposes only and shall
not
be deemed to have any substantive effect.
6.08 Assignment. This
Agreement may not be assigned by either party without the prior written consent
of the other.
-10-
6.09
Costs
and
Expenses. Each party shall bear all costs and expenses incurred
by it in connection with the transactions contemplated hereby; provided however,
Seller shall pay for all packaging expenses in preparation of the shipping
of
the Purchased Assets to Buyer and Buyer shall pay all shipping
expenses.
6.10 Applicable
Law. This Agreement shall be governed, construed and interpreted
in accordance with the laws of the State of California, without regard to
conflict of law principles.
6.11
Arbitration; Attorney Fees. Any controversy or
claim arising out of or relating to this Agreement, or the making, performance,
or interpretation thereof, shall be resolved by binding arbitration in San
Diego, California, in accordance with the Rules of the American Arbitration
Association then existing, and judgment on the arbitration award may be entered
in any court having jurisdiction over the subject matter of the
controversy. In any such arbitration award, the
prevailing party shall be entitled to recover its attorney fees and costs of
arbitration.
IN
WITNESS WHEREOF,
the parties have executed this Agreement as of the date
first written above.
|
Viper
Networks, Inc.:
|
Young’s
Environment Solutions, LLC:
|
|
By:
|
By:
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
-11-
