3/22/00
TECHNOLOGY PURCHASE
This TECHNOLOGY PURCHASE AND RECESSION AGREEMENT (this "Agreement") is
made this 22 day of March 2000(the "Effective Date") by and between,
Children's Technology Group, Inc., a Nevada corporation ("CTG" or "Buyer")and
1st Net Technologies, Inc., a Colorado corporation ("1st Net" or "Seller"),
with reference to the facts set forth in the Recitals below:
RECITALS
Buyer wishes to buy and Seller wishes to sell, certain of Seller's
Technologies in accordance with the terms and conditions set forth herein; and
In connection with, and as a condition of, entering into this Agreement
and the consummation of the transactions contemplated hereby, Buyer and Seller
wish to provide for certain releases as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
DEFINITIONS.
"Documentation" means the following documentation with respect to the
Software: all product user manuals, training materials, product descriptions,
technical and functional specifications, technical manuals, end user
documentation, system design documentation, supporting materials and other
printed information related to the Software, whether distributed in print or
electronic format that currently exists.
"Intellectual Property Rights" means copyright rights, trademark rights,
patent rights, trade secrets, moral rights, right of publicity, authors'
rights, contract and licensing rights, goodwill and all other intellectual
property rights as may exist now and/or hereafter come into existence and all
renewals and extensions thereof, regardless of whether such rights arise under
the laws of the United States, or any other state, country or jurisdiction.
"Object Code" means that form of machine-readable computer software which
is directly executable and which, typically, is created by assembling of
compiling the Source Code of computer software.
"Software" means the current version of Crayon Crawler and MindWalker in
Object Code and Source Code form.
"Source Code" means that form of human or machine-readable computer
software which is typically read and written by programmers (including the
necessary build scripts and/or make files) and which is converted by assembly
or compilation into Object Code prior to execution by a computer.
1. Sale and Transfer of Assets; Closing.
1.1 Technologies. Subject to the terms and conditions of this
Agreement, at the Closing, Seller will sell, convey and transfer to Buyer, and
Buyer will purchase from Seller, the following Technologies (the
"Technologies")
All of Seller's right, title, interest and all Intellectual Property
Rights to the MindWalker Series software and the Crayon Crawler Browser
software et al. including trade names and copyrights associated with the names
"Crayon Crawler" and "Mindwalker", and "Waxie."
Buyer purchases and accepts said Technologies "as is" without warranty of
any kind either express or implied.
1.2 Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at 00000 Xxxx Xxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
on or before March 22, 2000 at 10:00 a.m. (local time), or at such other time
and place as the parties may agree (the "Closing Date").
1.3 Closing Obligations. At the Closing:
(a) Seller will deliver to Buyer instruments of conveyance and
assignment of the Technologies in the form attached hereto (Rights In and
Assignment of Technologies) including software, object code and source code
with respect to the transfer of the Technologies to Buyer; and
(b) Buyer will deliver to Seller the full purchase price to be paid by
Buyer for the Technology being purchased herein by delivery to Seller 250,000
shares of Buyer's common stock (with an arbitrary value of $2.00 per share).
(c) Seller agrees to apply all previous payments made to seller by buyer
for license rights to the purchase price of this technology. As outlined
below:
i. $400,000 cash license fee buyer paid in April 1999 for the
exclusive rights to the Crayon Crawler.
ii. 4,000,000 shares exchanged in lieu of $400,000 cash pursuant to a
warrant agreement for additional license rights to MindWalker
technology in May 1999.
(d) Buyer agrees to issue an additional 35,000 shares of its common
stock to Seller to satisfy the due and payable accrued royalty through March
22,2000 as outlined in the prior licensee Agreement(s).
2. Representations and Warranties of Seller.
Seller represents and warrants to Buyer as follows:
2.1 Organization and Good Standing. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Colorado, with full corporate power and authority to conduct its business
as it is now being conducted and is not currently contemplating any filing for
protection under any bankruptcy, receivership or similar laws.
2.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms. Seller
has the absolute and unrestricted right, power, authority and capacity to
execute and deliver this Agreement and to perform its obligations hereunder.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will, directly or indirectly (with or without notice or lapse of time)
contravene, conflict with or result in a violation of:
(i) any provision of the Articles of Incorporation or Bylaws of
Seller, or any resolution adopted by the board of directors or
the shareholders of Seller;
(ii) any legal requirement or any order to which the Seller, or any of
the assets owned or used by Seller, may be subject; or
(iii) any material Contract of Seller.
c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will, directly or indirectly (with or without notice or lapse of time) result
in the imposition or creation of any encumbrance upon or with respect to any
of the Technologies.
(d) Seller is not and will not be required to give any notice to or
obtain any consent from any person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
transactions contemplated hereby.
2.3 Title and Encumbrances. Seller has valid title to and possession of
the Technologies free and clear of all encumbrances.
2.4 Investment Intent. Seller has experience in making investments of
this type and is acquiring the shares of the Buyer to be delivered at Closing
for its own account and not with a present view to, or for sale in connection
with, any distribution thereof in violation of the registration requirements
of the Securities Act of 1933, as amended. The Seller consents to the placing
of a legend on the certificates representing the shares to be delivered by
Buyer at Closing to the effect that the shares have not been registered under
the Securities Act and may not be transferred except in accordance with
applicable securities laws or an exception there from.
2.5 Suitability. Seller acknowledges that there is an economic risk.
Seller warrants that their business and/or financial experience, can be
reasonably assured to have the capacity to protect their own interests.
2.6 Risks. Seller acknowledges that this investment is speculative in
nature and involves a high degree of risk in that the Seller may not be able
to liquidate this investment and that transferability is extremely limited.
3.0 Representations and Warranties of Buyer.
Buyer represents and warrants to Seller as follows:
3.1 Organization and Good Standing. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Nevada, with full corporate power and authority to conduct its business as
it is now being conducted and is not currently contemplating any filing for
protection under any bankruptcy, receivership or similar laws.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms. Buyer has
the absolute and unrestricted right, power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated hereby
will contravene, conflict with, result in a violation of or give any Person
the right to prevent, delay, or otherwise interfere with any of the
transactions contemplated hereby pursuant to:
(i) any provision of Buyer's Articles of Incorporation or Bylaws;
(ii) any resolution adopted by the board of directors or the
shareholders of Buyer;
(iii) any legal requirement or order to which Buyer may be subject;
or
(iv) any material contract to which Buyer is a party or by which
Buyer may be bound.
(c) Buyer is not and will not be required to obtain any consent from any
person in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the transactions contemplated hereby.
4.0 Termination of Previous License Agreements. Buyer and seller hereby
mutually agree to terminate certain license agreements between Buyer and
Seller executed in the months of April and May 1999. By virtue of this
purchase agreement it is mutually agreed that all previous agreements are of
no further force or effect. Each of the parties hereto hereby fully and
finally terminate, settle, discharge and release all past and present
obligations, claims, controversies, demands, actions, or causes of action
which either party may have or claim to have against the other, which arise
out of or are in any way related to the License Agreements.
5.0 Release. Each of Buyer and Seller, on behalf of themselves and each
of their respective subsidiary and parent corporations, partnerships, business
entities, officers, directors, employees, personal representatives, successors
and assigns, hereby forever releases and discharges each other and each of
their past and present officers, directors, shareholders, principals, joint
ventures, partners, trustees, employees, agents, personal representatives,
successors and assigns, and all entities presently or formerly related to or
affiliated in any way with the other, and any and all persons, predecessors,
firms, associations, insurers, attorneys, limited partnerships or
corporations, and their respective heirs, successors and assigns, and each of
them, with whom the other was, are or may hereafter be, affiliated or
associated in any manner, of and from any and all claims, demands, damages,
actions, causes of action of every kind incurred or caused prior to the
Effective Date in law, equity or otherwise, known or unknown, suspected or
unsuspected, disclosed or undisclosed, for damages actual, consequential or
exemplary, past, present and future, arising out of or in any way related to
their obligations, activities and/or dealings with each other or their
affiliates at any time prior to the Effective Date, including without
limitation all claims and demands arising out of or in any way related to the
Stock Acquisition Agreement and the circumstances thereof.
6.0 Miscellaneous.
6.1 Publicity. All notices to third parties and all other publicity
concerning the transactions contemplated by this Agreement shall be jointly
planned and coordinated by both CTG and 1st Net. Neither party shall act
unilaterally in this regard without the prior express written approval of the
other; provided, however, this approval shall not be unreasonably withheld.
6.2 Assignment. This Agreement shall be binding on, and shall inure to
the benefit of, the parties and their respective heirs, legal representatives,
successors and assigns.
6.3 Survival of Representations and Obligations. All representations,
warranties, covenants and agreements of the parties contained in this
Agreement, or in any instrument, certificate, opinion or other writing
provided for in it, shall survive the Effective Date.
6.4 Finality. It is understood that this Agreement is a full and final
release of any and all claims described above, and the parties expressly agree
that it shall apply to all unknown, unanticipated, unsuspected and undisclosed
claims, demands, liabilities, actions or causes of action, as well as those
which are now known, anticipated, suspected or disclosed.
6.5 Nonwaiver. No failure by a party to take action by reason of any
default by the other party, whether in a single instance or repeatedly, shall
constitute a waiver of any such default or of the performance required of the
defaulting party. No express waiver by a party of any provision of this
Agreement or a default by the other party in any one instance shall be
construed as a waiver of the same provision or default in any subsequent
instance.
6.6 Attorneys; Attorneys' Fees. If any action is instituted among the
parties related to this Agreement, the prevailing party or parties shall be
entitled to recover from the losing party or parties all of the prevailing
party's costs and expenses, including court costs and reasonable attorneys'
fees.
6.7 Nature of Agreement. This Agreement constitutes the entire and
whole agreement between the parties and supersedes any prior agreements
between the parties. This Agreement may not be modified or amended except by
a written instrument, signed by the parties expressing such amendment or
modification.
6.8 Choice of Law. Except as otherwise expressly provided, this
Agreement and the respective contractual obligations of the parties incurred
hereunder shall be governed by and construed in accordance with the laws of
the State of California pertaining to agreements entered into, and fully
performed, in California, without reference to principles of conflicts of law.
6.9 Venue and Jurisdiction. For purposes of venue and jurisdiction,
this Agreement shall be deemed made and to be performed in the City of Rancho
Xxxxxxxx and County of San Diego, California, United States of America. In
the event of any litigation between the parties arising out of or relating to
this Agreement, the parties hereby consent to the exclusive and sole
jurisdiction of the United States District Court for the District of San Diego
in San Diego, California. In the event such court determines that it does not
have jurisdiction over the parties or the subject matter of the dispute in
question, the parties hereby consent to the exclusive and sole jurisdiction of
the District Court of the City and County of San Diego, California.
6.10 Service of Process. In the event of any litigation related to this
Agreement, the moving party's service of process shall be deemed effective
immediately upon the personal delivery of such process to the other party's
designated agent for service.
6.11 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of any provision of this Agreement.
6.12 Gender and Number. Whenever the context so requires, the masculine
gender herein shall include the feminine or neuter (and vice versa), and the
singular number shall include the plural.
6.13 Notices.
(a) Method of Delivery. Any notice, request, demand, consent, approval
or other communication (hereafter "notice") required or permitted under this
Agreement or by law shall be in writing and delivered by any of the following:
(1) personally delivering the notice to a senior officer or duly authorized
representative of the other party, (2) depositing the notice in the United
States mail, postage prepaid, duly certified (return receipt requested), (3)
sending the notice by private express mail service (with return receipt or
proof of delivery), or (4) sending the notice by electronic facsimile (fax).
(b) Addresses. Notices shall be addressed as follows:
If to Buyer: CTG Technologies, Inc.
00000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Mr. Xxxx Writer
Telecopier: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxx & Ass.
0000 Xxxxx Xxxxxxxx Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxx Xxxxxx
Telecopier: 000-000-0000
If to Seller: 1st Net Technologies, Inc.
00000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Mr. Xxxxx Xxxxxx
Telecopier: (000) 000-0000
With a copy to: Xxxx Xxxxx Xxxxxxxx & Xxxxxx
600 17th Street, Ste. 0000 Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
Any party may, from time to time, by written notice to the other, designate a
different address, which shall be substituted for that specified above.
6.15 Effectiveness. All notices shall be deemed effective upon receipt.
If personally delivered, notices shall be deemed received at the time of
delivery. If sent by mail, the notice shall be deemed fully delivered and
received three (3) business days after the date of the postmark on the
certified mail receipt. If sent by private express mail service, the notice
shall be deemed fully delivered and received three (3) business days after the
date of deposit with such express mail service. If sent by telex, telegram,
fax or other electronic means of communication, notices shall be deemed
received twenty-four (24) hours after transmission. Rejection or other
refusal to accept a notice or the inability to deliver the same because of a
changed address of which no notice was given shall be deemed to be receipt of
the notice sent. In the event of a postal strike, all notices shall be
personally delivered, sent by private express mail service, or sent by telex,
telegram, fax or other electronic means of communication.
6.16 Severability. In the event that any provision of this Agreement, in
whole or in part (or the application of any provision to a specific
situation), is held to be invalid or unenforceable by the final judgment of an
arbitration panel and/or a court of competent jurisdiction after appeal or the
time for appeal has expired, such invalidity shall be limited to such specific
provision or portion thereof (or to such situation), and this Agreement shall
be construed and applied in such manner as to minimize such unenforceability.
This Agreement shall otherwise remain in full force and effect.
6.17 Force Majeure. No party shall be liable for any failure or delay
in performance under this Agreement which is due in whole or in part directly
or indirectly to any cause of any nature beyond the reasonable control of such
party, including, without in any way limiting the generality of the foregoing,
fire, explosion, earthquake, storm, flood, strike, lockout, activities of a
combination of xxxxxxx or other labor difficulties, wars, insurrection, riot,
acts of God or the public enemy, law, act, order, export or import control
regulations, proclamation, decree, regulation, ordinance, or instructions of
local, federal or foreign government or other public authorities, or judgment
or decree of a court of competent jurisdiction (not arising out of a breach by
the party to this Agreement seeking the benefit of this Section 7.20). In the
event of the occurrence of such a cause, the affected party shall give prompt
written notice to the other party, stating the period of time the same is
expected to continue, and shall take all reasonable measures to ensure that
the effects of such cause of force majeure are kept as minimal as possible.
6.18 Further Assurances. Each party shall execute, acknowledge and
deliver such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the purposes of this Agreement.
6.19 Consents. The consent by one party to any act by the other for
which such consent was required shall not be deemed to imply consent or waiver
of the necessity of obtaining such consent for the same or any similar acts in
the future. No waiver or consent shall be implied from silence or any failure
of a party to act, except as otherwise specified in this Agreement.
6.20 Invalidity of Provision. If any provision of this Agreement as
applied to either party or to any circumstance shall be adjudged by a court of
competent jurisdiction to be void or unenforceable for any reason, the same
shall in no way affect (to the maximum extent permissible by law) any other
provision of this Agreement, the application of any such provision under
circumstances different from those adjudicated by the court, or the validity
or enforceability of this Agreement as a whole.
7.0 Counterparts. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
8.0 Confidentiality. Neither party to this Agreement shall disclose the
terms and conditions of this Agreement to any third party, nor will either
party issue a press release and/or otherwise disclose the existence of this
Agreement to the media or general public, without the express written consent
of the other. The parties shall work together, in good faith, to issue a
mutually agreeable joint press release. Notwithstanding the foregoing, neither
Seller nor Buyer shall be prevented from disclosing all or part of the
Confidential Information: (a) in a legal proceeding to enforce its rights or
defend itself under this agreement; (b) if it is legally compelled to do so
by oral deposition, interrogatories, request for information or documents,
subpoena, civil investigative demand, or other legal process, or (c) if it is
required to do so by the Securities and Exchange Commission in relation to a
public filing requirement under the Securities Act of 1933 or the Exchange Act
of 1934 provided a request is made to make the material contained within the
filing confidential.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
"1ST NET"
1ST NET Technologies, Inc.,
a Colorado corporation
_________________________________
Name: Xxxxx X Xxxxxx, Xx.
Title: Chief Executive Officer
"CTG"
Children's Technology Group, Inc.
a Nevada corporation
_________________________________
Name: Xxxxxxx X. Writer, Jr.
Title: Chief Executive Officer
