ASSET PURCHASE AGREEMENT
ACQUISITION
OF
ALL
OF THE ASSETS
OF
CREATIVE
BUSINESS CONCEPTS, INC.
01
March, 2007
I
PARTIES
THIS
ASSET PURCHASE AGREEMENT (the
“Agreement”) is
entered into effective as of the 1st
day of
March, 2007, by and between CREATIVECORP, INC., a Delaware corporation
(“Buyer”); CREATIVE BUSINESS CONCEPTS, INC., a California corporation
(“Seller”), with its principal place of business located at Xxx Xxxxxxxxxx
Xxxxx, Xxxxxxxx X, Xxxxxx, Xxxxxxxxxx; and,
OXFORD
MEDIA, INC., a Nevada corporation (“Oxford”). Buyer, Oxford, and Seller are
sometimes referred to collectively herein as the “Parties”, and each
individually as a “Party”.
II
RECITALS
A. Seller
is
engaged in the business of owning and operating a business, which serves as
a
wireless systems provider specializing in network security, internet technology
integration, “VoIP” telephony, and telecom services. As part of these services,
Seller designs and installs specialty communication systems for data, voice,
video, and telecom (the
“Business”).
B. Seller
conducts the Business at its principal place of business, which is One
Technology Drive, Building H, in the City of Irvine, State of California, 92618
(the “Premises”).
C. Oxford
is
the corporate parent of Seller, owning one hundred percent (100%) of the issued
and outstanding shares of stock Seller. Oxford is a party to this Agreement
only
as specifically provided for herein.
D. Seller
desires to sell all of its assets it owns in connection with the operation
of
the Business, and Buyer desires to purchase said assets from Seller pursuant
to
the terms, covenants, and conditions contained herein.
E. Oxford
is
willing to provide Buyer with certain guarantees and indemnifications with
respect to the sale herein and Seller’s performance of certain of its
obligations under the terms of this Agreement.
NOW,
THEREFORE,
in
consideration of the promises and the mutual covenants contained herein, and
for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Parties, intending to be legally bound, hereby agree
as
follows:
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/ / / /
/
/ / / /
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/ / / /
1
III
SALE
AND TRANSFER OF ASSETS
3.1 Purchase
and Sale.
On the
closing date specified in Section 11.1, herein, Seller shall sell, transfer,
convey, and deliver to Buyer, and Buyer shall purchase from Seller, all of
the
Purchased Assets, pursuant to this Agreement and a Xxxx of Sale in the form
attached hereto as Exhibit
3.1
(the
“Xxxx of Sale”).
3.2 Scope
of the Assets.
The
Purchased Assets shall include any and all tangible and intangible assets owned
by Seller in connection with the Business as of the Closing Date, including,
but
not limited to, those assets reflected on the Closing Balance Sheet attached
hereto as Exhibit 3.2 and incorporated herein by reference (the “Closing Balance
Sheet”), those reflected on any Schedule and/or Exhibit appended to this
Agreement and the following items related to the Business: (1) all real
property, leaseholds, subleaseholds, improvements, and fixtures; (2) all
tangible personal property, such as equipment, machinery, furniture, supplies
and inventories; (3) all Intellectual Property Rights (as defined in
Section 6.15, below and other proprietary information of Seller), including,
but
without limitation, all trade names, including but not limited to the trade
name
“Creative Business Concepts”, and any trademarks, service marks, licenses,
copyrights, patents, all patent applications, and processes, together with
all
designs, models, inventions, artwork, plates, copy, product literature and
promotional materials; and all confidentiality, restrictive covenant and
invention disclosure agreements to which the Seller is a party by name; (4)
all
agreements and contract rights to provide products and/or services, including,
but not limited to, licenses and sublicenses; (5) all financial interests,
such
as accounts receivable, prepaid deposits, insurance policies, claims,
prepayments, refunds, notes, and other forms of indebtedness; (6) all computer
related assets, both hardware and software, and all related licenses; (7) all
Internet related assets, such as domain names, including but not limited to
xxxxxxxxxx.xxx, Web Sites, and all related accounts and rights; (8) all permits,
licenses, approvals, franchises, orders, registrations, certificates, variances,
and all similar rights obtained from regulatory agencies or entities; (9) all
customer lists and all lists with potential customers; (10) the goodwill of
Seller; (11) all telephone and fax lines and numbers, including 949-727-3104
and
the individual direct dial telephone numbers of Creative Business Concepts’
employees, and all E-Mail addresses; and, (12) all records, files and papers
associated with the assets being purchased and the liabilities assumed; andother
tangible and intangible assets and all other assets which are (arising out
of or
related to the conduct of the ) owned, held or used by Seller in connection
with
the Business reflected in the Business Financial Statements prepared by
management, and assets relating to or arising out of the conduct of the Business
after the date of the Business Financial Statements through the Effective
Closing Date, other than assets specifically excluded herein (cumulatively
referred to as the “Purchased Assets” or the “Assets”) unless specifically
excluded to the contrary herein, which Seller may retain for its own use and
benefit, as further described in Section 4.1, below.
3.3 Purchase
Price.
3.3.1
Amount.
At the
Closing, Buyer shall acquire the Assets for an aggregate Purchase Price of
Eight
Hundred Ninety Thousand Dollars ($890,000.00), subject to the adjustments and
Escrow Agreement described below.
3.3.2
Payment.
The
Purchase Price, as determined above, shall be payable at the Closing as
follows:
2
(a) Buyer
shall pay, at the Closing, an amount to be determined as the difference between
$890,000 and the amount by which the total of the Assumed Liabilities (under
Section 4.2, below) exceeds the total of the Accounts Receivable (under Section
4.3, below), less twenty percent (20%) of that amount (the “Hold Back”); in no
event however, will the Hold Back be less than One Hundred Forty Thousand
Dollars ($140,000.00). This payment shall be paid by wire transfer in accordance
with the wire transfer instructions on Schedule
3.3.2,
attached hereto and incorporated herein by reference.
(b) The
Hold
Back shall be paid by wire transfer at Closing in accordance with the wire
transfer instructions on Schedule 3.3.2. The Hold Back shall be administered
in
accordance with the terms and conditions of the Escrow Agreement attached hereto
as Exhibit 3.3.2.(b) and incorporated herein by reference. The Hold Back is
not
intended to, nor shall it be so construed, to limit the amount of liability
under the Seller’s indemnification obligations under this Agreement.
3.4 No
Further Purchase Price Adjustments.
Other
than the Hold Back, there shall be no further adjustments to the Purchase Price.
Any application of the indemnification provisions under Article X of this
Agreement shall not be considered an adjustment to the Purchase
Price.
3.5 Allocation.
The
Purchase Price for the Assets shall be allocated in the manner reflected on
Schedule
3.5,
attached hereto and incorporated herein by reference.
3.6 Tax
Reporting.
Buyer
and Seller hereby agree to report this transaction for Federal Tax purposes
in
accordance with the allocation of the Purchase Price contained on Schedule
3.5,
including all modifications thereto.
3.7 Further
Assurances.
Seller
and Buyer, to the extent permissible by contract or law, shall from time to
time, at either’s reasonable request and without additional consideration,
execute and deliver such
further instruments of transfer, conveyance, assignment, and assumption in
addition to those delivered pursuant to Sections 11.2 and 11.3 hereof, take
such
other action as either may reasonably request to further evidence the transfer,
assumption, conveyance and assignment to and vesting in Buyer of title to and
the benefit of all of the Purchased Assets and the Assignee Agreements. If
reasonably requested by Buyer, Seller further agrees to prosecute or otherwise
enforce in its own name for the benefit of Buyer any claims, rights, or benefits
that are transferred to Buyer under this Agreement and that require prosecution
or enforcement in Seller’s name. Any prosecution or enforcement of claims,
rights, or benefits under this section shall be solely at Buyer’s expense,
unless the prosecution or enforcement is made necessary by a material breach
of
this Agreement by Seller.
IV
ASSETS
AND LIABILITIES
4.1 Excluded
Assets.
Except
as expressly provided to the contrary on Schedule
4.1
(the
“Excluded Assets”), attached hereto and incorporated herein by reference, upon
purchase of the Purchased Assets by Buyer, Seller shall retain no right, title
or interest in and to any assets currently owned by it.
3
4.2 Assumed
Liabilities.
It is
the general intent of the Parties that Buyer shall assume ONLY the trade
accounts payable (excepting herefrom Intercompany trade accounts payable);
accrued vacation salaries and wages of the Seller as reflected in the Business
Financial Statements and after the date of the Business Financial Statements
through the date of the Closing herein’ and, the leases expressly listed on
Schedule 6.13, all as set forth in the attached Schedule
4.2 (the
“Assumed Liabilities”), which is incorporated herein by reference. Any accounts
payable not listed on Schedule
4.2,
shall
not be assumed by Buyer. Buyer may, but shall not be obligated to, assume any
liability not set forth in Schedule
4.2
and in
such event, payment of such liability shall be an offset against the Hold Back
and covered by the Seller’s indemnification obligations under this Agreement.
Any liability of Seller that is not expressly assumed by Buyer herein shall
constitute a retained liability of Seller (“Seller Retained Liabilities”).
Seller Retained Liabilities shall include, but without limitation, the
following: incurred or accruing prior to the Closing: warranty liability for
services provided; liability for taxes, including, but not limited to, property
taxes; litigation claims, including, but not limited to, patent, trademark,
trade name and/or copyright infringement; liability for federal and/or state
security laws; liability for claims of employees of the Business, including,
but
not limited to, claims arising out of violations of federal or state law
governing the employment relationship and environmental and health and safety
laws and regulations or breach of contract, except as otherwise assumed
hereunder; liability for any severance obligations of employees, including,
but
not limited to, any payable pursuant to any employee benefit plan and/or expense
account, except as otherwise assumed hereunder. Buyer shall be liable for all
Indemnified Claims (as defined under Section 10.1, below) attributable to any
event occurring after the Closing relating to the operation by Buyer of the
Business from and after the Closing,
4.3 Accounts
Receivable.
It is
the general intent of the Parties that Buyer shall acquire all of the Accounts
Receivable of Seller (the “Accounts Receivable”), as reflected on Schedule 4.3,
attached hereto and incorporated herein by reference, which represents the
accounts receivable of Seller as of the Closing and which are assigned herein
to
Buyer by Seller. In
the
event that, after the Closing Date, cash or other payments are received by
Seller and/or its affiliates in respect of Accounts Receivables or other moneys
due Buyer hereunder, all such cash and payments shall be promptly remitted
to
Buyer.
4.4 Right
to Additional Payment.
In the
event Buyer fails to timely make any payment with respect to any of the Assumed
Liabilities (the “Unpaid Liabilities”), Seller may elect to pay such Unpaid
Liabilities, in addition to any other costs or charges, if any, directly related
to the assumed liabilities, if Seller determines in exercise of its reasonable
discretion that such payment is necessary. However, (i) Seller shall be required
to give Buyer ten (10) days prior written notice, which notice shall set forth
the amount and identity of the Unpaid Liabilities and Associated Costs; and,
(ii) Buyer shall not have paid such Unpaid Liabilities and Associated Costs
within such ten (10) day period or taken reasonable steps to contest such Unpaid
Liabilities where Buyer has reasonable basis to contest such Unpaid Liabilities.
Buyer hereby acknowledges and agrees that if Seller pays any Unpaid Liabilities
or Associated Costs, Seller shall have the right to immediately collect from
Buyer, and Buyer shall immediately pay to Seller, the amount of such Unpaid
Liabilities and Associated Costs.
4
V
REPRESENTATIONS
AND WARRANTIES BY BUYER
Buyer
represents and warrants to Seller that:
5.1 Status.
Buyer
is a
corporation duly organized, validly existing and in good standing under the
laws
of the State of Delaware, with full corporate power to enter into, and to
perform its obligations under, this Agreement.
5.2 Execution
of Agreement.
Buyer
has the requisite power and authority to enter into and carry out the terms
and
conditions of this Agreement and each of the Settlement Documents to which
it is
a party, as well as all transactions contemplated hereunder. All proceedings
have been taken and all authorizations have been secured which are necessary
to
authorize the execution, delivery, and performance by Buyer of this Agreement,
and each of the Settlement Documents to which it is a party. This Agreement
has
been duly and validly executed and delivered by Buyer and constitutes the valid
and binding obligations of Buyer, enforceable in accordance with the respective
terms.
5.3 Authority
Relative to the Agreement.
The
execution, delivery and performance of this Agreement by Buyer has been duly
authorized by all necessary corporate action and do not, and will not, violate
or conflict with the provisions of the Buyer’s Certificate of Incorporation or
Bylaws or the provisions of any indenture, agreement, or other instrument to
which Buyer is a party or by which any of its property is bound. The Agreement
constitutes a legal, valid and binding obligation of Buyer.
5.4 Effect
of Agreement.
As of
the Closing, the consummation by Buyer of the transactions herein contemplated,
including the execution, delivery and consummation of this Agreement and the
Settlement Documents to which it is a party, will comply with all applicable
law
and will not:
(a) Violate
any judgment, statute, law,
code, act, order, writ, rule, ordinance, regulation, governmental consent or
governmental requirement, or determination or decree of any arbitrator, court,
or other governmental agency or administrative body, which now or at any time
hereafter may be applicable to and enforceable against the relevant party,
work,
or activity in question or any part thereof (collectively, “Requirement of Law”)
applicable to or binding upon Buyer; or
(b) Violate
any material agreement, contract, mortgage, indenture, xxxx, xxxx, note, or
other material instrument or writing binding upon Buyer or to which Buyer is
subject.
5.5 Investigation.
On or
prior to the Closing, Buyer will have had the opportunity to inspect the
condition of the Purchased Assets and Assumed Liabilities. Prior to the Closing,
Buyer will have also had the opportunity to investigate the books, records,
and
the Business Financial Statements. As of the Closing, Buyer will be purchasing
the Assets based upon its own independent investigation and evaluation of the
Seller and its Business and its prospects, as well as the covenants,
representations, and warranties of Seller set forth herein. Buyer is expressly
not relying on any oral representations made by Seller with regard to the Assets
or the Business.
5
VI
REPRESENTATIONS
AND WARRANTIES BY AND RELATED TO SELLER
Seller,
and Oxford as expressly provided for below, hereby represent and warrant to
Buyer that:
6.1 Organization.
Each of
Oxford and Seller
is
a corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation, has all requisite corporate power and
authority to own, operate and lease its properties and carry on its business
as
now conducted, and is duly qualified to do business and is in good standing
as a
foreign corporation in each jurisdiction in which the failure to so qualify
could have a material adverse effect on its business or financial condition.
Each of Oxford and Seller has full corporate power and authority to perform
its
obligations under the Agreement. Seller is a wholly owned subsidiary of Oxford.
Seller has no issued and outstanding securities other than the shares of Seller
common stock held by Oxford. Seller has delivered to Buyer complete and accurate
copies of its Certificate of Incorporation and Bylaws, each as amended, in
the
form of Exhibit
6.1
attached
hereto and incorporated herein by reference.
6.2 Execution
of Agreement.
All
corporate proceedings for Seller and Oxford have been taken and all corporate
authorizations for Seller and Oxford have been secured which are necessary
to
authorize the execution, delivery and performance by Seller of this Agreement,
and each of the Settlement Documents to which it is a party. This Agreement
has
been duly and validly executed and delivered by Seller and Oxford and
constitutes the valid and binding obligations of Seller and Oxford, enforceable
in accordance with the respective terms.
6.3 Effect
of Agreement.
As of
the Closing, the consummation by Seller of the transactions herein contemplated
and the satisfaction of Oxford’s limited obligations hereunder, including the
execution, delivery, and consummation of this Agreement and the Settlement
Documents to which Seller or Oxford, as appropriate, is a party, will comply
with all applicable law and will not:
(a) Violate
any “Requirement
of Law” applicable to or binding upon Seller or any of its assets;
(b) Violate
(i) the terms of the Certificate of Incorporation or Bylaws of Seller; or,
(ii)
any material agreement, contract, mortgage, indenture, xxxx, xxxx, note, or
other material instrument or writing binding upon Seller or to which Seller
is
subject;
(c) Accelerate
or constitute an event entitling the holder of any indebtedness of Seller to
accelerate the maturity of such indebtedness or to increase the rate of interest
presently in effect with respect to such indebtedness; or
(d) Result
in
the breach of, constitute a default under, constitute an event which with notice
or lapse of time, or both, would become a default under, or result in the
creation of any lien, security interest, charge or encumbrance upon any part
of
the assets of Seller or any other assets of Seller under any agreement,
commitment, contract (written or oral) or other instrument to which Seller
is a
party, or by which any of its assets (or any part thereof) is bound or
affected.
6
6.4 Title
to the Assets.
Seller
has, and will on the Closing Date, good and marketable title to all of the
Assets, free and clear of all liens, mortgages, conditional sale and other
title
retention agreements, pledges, assessments, tax liens, and other encumbrances
of
any nature, except as expressly disclosed on Schedule
6.4,
attached hereto and incorporated herein by reference, and all such Assets are
located at the premises from which the Business is presently conducted.
6.5 Assets.
The
Assets are in good operating condition and repair, subject to reasonable wear
and tear, constitute all of the assets hereintofore defined, owned by Seller,
and are sufficient for the proper operation of the ordinary course of business
of Seller. Other than as expressly disclosed, in writing and defined on Schedule
6.5, attached hereto, to the contrary herein, there has not been a sale or
transfer of any of the Purchased Assets, or the mortgage, pledge or other
encumbrance of any of the Purchased Assets. Further, Seller has not waived
or
released any material right or claim with respect to or arising out of the
Business or for the Purchased Assets or an agreement to waive or release any
such material right or claim. Schedule 6.5,
attached hereto and incorporated herein by reference, sets forth all liens,
claims, encumbrances, charges, restrictions, covenants, conditions and warranty
rights relating to the Assets.
To
the
extent permitted by law, the warranty rights of Seller referred to herein are
assignable and transferable to Buyer by Seller, and Seller has the right to
assign and transfer the same. Seller has no Knowledge of warranty claims against
any vendor or third party relating to the Purchased Assets as of the date hereof
except as disclosed in Schedule
6.5.
Any
warranty claims of Seller against any vendor or third party disclosed in
Schedule
6.5
or
arising between the date hereof and the Closing shall be assigned to Buyer
at
the Closing and shall inure to Buyer’s benefit.
To
the
extent that any additional assets relating to the Business (either owned by
Seller or over which Seller has the right of transfer, assignment or conveyance)
are discovered by Seller or Buyer after the Closing which reasonably should
have
been included among the Purchased Assets (given the intent of Seller to convey
and transfer the Business to Buyer other than the Excluded Assets), then and
in
that event such after-discovered asset, assets or Assumed Liabilities shall
be
assigned, conveyed, transferred and assigned to Buyer, without the payment
of
any additional consideration to Seller, and such asset or assets shall be
considered a Purchased Asset, Purchased Assets for all purposes of this
Agreement.
6.6 Financial
Statements.
Seller
has delivered to Purchaser an unaudited Balance Sheet and Profit and Loss
Statement and other financial statements, including all Notes related thereto,
as of December 31, 2006 of the Business (collectively the “Business Financial
Statements”). The Business Financial Statements (i) fairly present the financial
condition of the Business as of December 31, 2006; (ii) fairly present the
results of operations and changes in cash flows of the Business for the period
ended December 31, 2006; and, (iii) were prepared in accordance with accounting
principles and conventions consistent with those used by Seller for the
immediately preceding three years. The provisions for Property Taxes in the
Business Financial Statements were sufficient to provide for all such Property
Taxes that, as of the dates of the balance sheets included therein, were due
and
unpaid and for an appropriate accrual for other unpaid Property Taxes as of
such
times. Seller has paid Property Taxes, if any, when due and payable.
The
Business Financial Statements of Seller are true, complete, and accurate in
all
material respects, and present fairly the financial position of Seller as of
the
date thereof. Except to the extent reflected and reserved against in the
Business Financial Statements, Seller did not have, as of the date of the
Business Financial Statements, any debts, liabilities or obligations of any
nature, whether accrued, absolute, contingent or otherwise, and whether due
or
to become due, except for those obligations that are not required by generally
accepted accounting principles to be included in the Business Financial
Statements, which are reflected in Schedule
6.6,
attached hereto and incorporated herein by reference.
7
6.7 Changes
in Financial Condition.
Since
the date of the Business Financial Statements, there has not been:
(a) Any
material change in the condition (financial or otherwise) or Business of Seller,
except changes in the ordinary course of business, none of which has been
materially adverse;
(b) Any
damage, destruction or loss (whether or not covered by insurance) materially
and/or adversely affecting the properties, assets, business or prospects of
Seller;
(c) Any
change in the accounting methods or practices followed by Seller or any change
in the depreciation or amortization policies or rates adopted by Seller (whether
or not presently outstanding); or
(d) Any
sale,
lease, abandonment or other disposition by Seller, other than in the ordinary
course of business, of any Asset, including, but not limited to, machinery,
equipment or other operating properties directly or indirectly related to the
Business, other than sales of products and/or services in the ordinary course
of
business; or
(e) Any
increase in the compensation payable or to become payable by Seller to the
officers and key employees of the Business or any adoption of any increase
in
any bonus, insurance, pension or other employee benefit plan, payment or
arrangement made to or with such officers or key employees; or
(f) Any
entry
into any commitment or transaction relating to the Business, including, without
limitation, any individual borrowing in excess of One Thousand Dollars
($1,000.00), other than in the ordinary course of business.
6.8 Litigation.
There
is no claim, legal action, suit, arbitration, investigation or hearing, notice
of claims or other legal, administrative or governmental proceedings pending
or
to the best Knowledge of Seller, threatened against Seller, the Business, or
any
of the Assets (or in which Seller or the Business is plaintiff or otherwise
a
party thereto), and, to the best Knowledge of Seller, there are no facts
existing which might result in any such claim, action, suit, arbitration,
investigation, hearing, notice of claim or other legal, administrative or
governmental proceeding. Neither Seller nor the Business has waived any statute
of limitations or other affirmative defense with respect to any of its
liabilities. There is no continuing order, injunction, or decree of any court,
arbitrator, or governmental or administrative authority to which Seller or
the
Business is a party or to which it or any of the Assets is subject. Neither
Seller, nor the Business, have been permanently or temporarily enjoined or
barred by order, judgment or decree of any court or other tribunal or any agency
or regulatory body from engaging in or continuing any conduct or practice.
There
is no claim, action, suit, proceeding or investigation pending or, to the
Knowledge of Seller, threatened, against or involving Seller which questions
the
validity of this Agreement or seeks to prohibit or enjoin or otherwise challenge
the transactions contemplated, and, to the Knowledge of Seller, there is no
basis for any such claim, action, suit, proceeding or governmental
investigation.
8
6.9 Permits
and Licenses.
Seller
has all licenses and permits (federal, state and local) required by governmental
authorities to own, operate, and carry on the Business as now being conducted,
and such licenses and permits are in full force and effect. No violations are
or
have been recorded in respect to the licenses or permits, included but not
limited to fire and health and safety law violations, and no proceeding is
pending or threatened looking toward the revocation or limitation of any of
them. All permits, licenses, orders or approvals of governmental or
administrative authorities required to permit Seller to carry on after the
Closing the business of the Business as currently conducted at the Premises
have
been obtained and are in full force and effect.
6.10
Customers
and Suppliers.
The
books and records of Seller contain an accurate list of each of the customers
and suppliers of the Business who have dealt with the Business during the three
(3) year period ending on the date hereof (the “Customers and Suppliers”). To
Seller’s best Knowledge, Schedule
6.10,
attached hereto and incorporated herein by reference sets forth a list of (a)
the four largest customers of Seller in terms of gross sales during the fiscal
year ended December 31, 2006, and (b) the ten largest suppliers of Seller
for the same period. To Seller’s best Knowledge:
(a) None
of
the Customers or Suppliers, or any other person or entity having material
business dealings with the Business, will or may cease to continue such
relationship with Buyer;
(b) None
of
the Customers or Suppliers, or any other person or entity having material
business dealings with the Business, will or may substantially reduce the extent
of such relations with the Business at any time from or after the
Closing;
(c) There
are
no other existing or contemplated material modification or change in the
business relationship of any Customers or Suppliers with Seller;
(d) There
are
no existing conditions or state of facts or circumstances which have materially
affected adversely, or will materially adversely affect, the relationship of
the
Business with Customers or Suppliers it is acquired by Buyer, or which has
prevented or will prevent such business from being carried on by the Business,
after the Closing, in essentially the same manner as it is currently carried
on.
6.11
Regulatory
Compliance.
To the
best Knowledge of Oxford and Seller, Seller has not violated any Requirement
of
Law, the violation of which would be reasonably likely to have a material
adverse effect on the Business or the Purchased Assets. Further, to the best
Knowledge of Parent and Seller, Seller has not violated any material provision
of (i) ERISA with respect to any employee benefit plans subject to ERISA; or
(ii) any applicable environmental laws, orders, regulations, rules, and
ordinances relating to Seller, the Business, or the Purchased
Assets.
6.12
Tax
Status and Disputes.
Oxford
and Seller have each paid all taxes (federal, state, and local) known to be
due
and payable and any assessments or penalties received by either. There are
no
audits pending, are no present disputes as to taxes of any nature payable by
Oxford or Seller, and to the best Knowledge of Oxford and Seller, there are
no
outstanding tax liens or similar filings or recordings against Oxford or Seller
for any tax related obligation.
9
6.13
Leases
and Similar Agreements.
Except
as set forth in Schedule 6.13, attached hereto and incorporated herein by
reference, none of the Assets are bound by or subject to any leases or other
similar agreements or instruments, whether as lessor or lessee. With regard
to
all such disclosed leases and similar agreements, Seller has delivered to Buyer
any and all consents or waivers of other parties necessary for the continuation
of the leases and similar agreements upon the same terms and conditions in
effect as of the Closing.
6.14
Accounts
Receivable.
(a) Schedule 6.14 contains
a complete and accurate report showing all Accounts Receivable outstanding
as of
the Closing, together with an accurate aging of such accounts. The Accounts
Receivable have arisen in the ordinary course of business, and are being
transferred at full value, except for the quantity discounts accrual and the
allowance for doubtful accounts arising in the ordinary course of business
shown
on the Closing Balance Sheet. Seller knows of no reason why the accruals and
allowances referred to in the previous sentence will be inadequate. None of
the
Accounts Receivable is subject to any lien or claim of offset, setoff or
counterclaim. Except as disclosed on Schedule
6.14,
there
are no Accounts Receivable which are contingent upon the performance by Seller
of future services.
(b) All
Accounts Receivable of Seller arose from valid sales transactions in the
ordinary course of business and represent valid obligations due Seller, and
are
collectible in the ordinary course of business in the aggregate recorded amounts
thereof in accordance with their terms.
6.15 Intellectual
Property Rights.
(a) For
purposes of this Agreement, the term “Intellectual Property Rights” shall be
defined to include all such assets necessary
for the operation of the Business, as it is currently conducted, and owned
by
Seller, including but not limited to the following:
(1) All
patents, patent applications, and inventions and discoveries that may be
patentable (collectively, the “Patents”);
(2) All
copyrights in both published works and unpublished works (collectively, the
“Copyrights”);
(3) All
rights in mask works (collectively, the “Rights in Mask Works”);
and
(4) All
know-how, trade secrets, confidential information, customer lists, software,
technical information, data, process technology, plans, drawings, and blue
prints owned by Seller (collectively, the “Trade Secrets”);
(5) All
trade
names, including but not limited to: “Creative Business Concepts”, “cbconcepts”
or the like.
10
(b) To
Seller’s Knowledge, all of the Intellectual Property are presently valid and
protectible, and are not in the public domain nor have they been used, divulged,
or appropriated for the benefit of any past or present employees or other
persons, or to the detriment of the Business. To Seller’s and Oxford’s Knowledge
there are no pending or threatened actions which would have a material adverse
affect on the Intellectual Property of Seller.
(c) Seller
is
the owner of all right, title, and interest in and to each of the Intellectual
Property Rights, free and clear of all liens, security interests, charges,
encumbrances, equities, and other adverse claims, including, but not limited
to,
claims of infringement, and has the right to use without payment to a third
party all of the Intellectual Property Rights and all such Intellectual Property
Rights are in full force and effect and have not been abandoned or surrendered
any rights, voluntarily or involuntarily, in connection with such Intellectual
Property Rights.
6.16
Disclosure.
No
representation or warranty made by Seller in this Agreement or in any writing
furnished or to be furnished pursuant to or in connection with this Agreement
knowingly contains or will contain any untrue statement of a material fact,
or
omits or will omit to state any material fact required to make the statements
herein or therein contained not misleading. Seller has disclosed to Buyer all
material information known to it related to Seller and the Business, and their
respective condition, operations and prospects. Seller further warrants and
represents to Buyer that disclosure of any matter in one section of this
Agreement, Schedule or any document delivered pursuant hereto shall be deemed
to
be a disclosure of such matter(s) in response to any other provision of this
Agreement to which such matter may be applicable.
6.17
Material
Defaults.
Neither
Seller nor the Business is in material default, or alleged to be in default,
under any material agreement, contract, lease, mortgage, commitment, instrument
or obligation, and no other party to any agreement, contract, lease, mortgage,
commitment, instrument or obligation to which Seller or the Business is a party
is in default thereunder, which default would materially and adversely affect
the properties, assets, business or prospects of the Business.
6.18
Solvency.
Immediately following the execution of this Agreement and the completion of
all
transactions contemplated by this Agreement, Seller will expect to be able
to
pay its debts as they mature, does not contemplate filing any proceeding for
bankruptcy or similar debtor relief under the federal Bankruptcy Code or similar
state law or make an assignment for the benefit of creditors or similar debtor
relief statute or law, nor is Seller aware of any threatened bankruptcy or
insolvency proceedings against Seller. Seller does not intend to incur debts
beyond its ability to pay as such debts mature.
VII
BULK
SALES ACTS
Buyer
hereby waives its right to require compliance with any Bulk Sales or similar
laws and in consideration therefore.
Oxford
and Seller represent and warrant that the provisions of the California Bulk
Sales Law are not applicable to the transactions envisioned hereunder.
11
VIII
CONDITIONS
PRECEDENT
8.1 Conditions
to Obligations of Buyer.
Unless
otherwise waived, in whole or in part, in writing by Buyer, the obligations
of
Buyer to effect the consummation of the transactions contemplated hereunder,
and
in the other agreements referred to herein, shall be subject to the satisfaction
at the Closing of each of the following conditions in Section 8.2 through and
including Section 8.9:
8.2 Representations
and Warranties of Seller to be True.
The
representations and warranties of Seller contained in this Agreement or in
any
statement, certificate, schedule or other document delivered pursuant to this
Agreement or in connection with the transactions contemplated hereby, shall
be
true and correct in all material respects on the Closing with the same force
and
effect as though made at such time. Seller shall have performed all obligations
and complied with all covenants required by this Agreement, and the other
agreements referred to herein, to be performed or complied with by it prior
to
the Closing.
8.3 No
Proceedings.
No
suit, action or other proceeding of material consequence shall be pending or
threatened before any court or other governmental agency which seeks to restrain
or prohibit the consummation of the transactions contemplated by this Agreement,
or to obtain damages or other relief in connection therewith.
8.4 No
Adverse Change.
Since
the date of this Agreement there shall not have been any material adverse change
in the properties, prospects, results of operation or condition of Seller or
the
Business.
8.5 Consents.
Seller
shall have obtained and delivered to Buyer all written consents of the other
party to all contracts which by their terms or otherwise require the consent
of
such party to the transfer thereof by Seller.
8.6 Regulatory
Approvals.
All
licenses, authorizations, consents, orders and regulatory approvals of
Governmental Bodies necessary for the consummation of Buyer’s acquisition of the
Purchase Assets shall have been obtained and shall be in full force and effect
and any applicable waiting periods shall have expired.
8.7 Agreements.
Buyer’s
performance under this Agreement is specifically subject to and conditional
upon
Buyer entering into a Sublease Agreement with Oxford for the premises at which
the Seller is conducting its Business (the “Sublease”), and employment
agreements with the Seller’s employees listed on Schedule “8.7” with restrictive
covenants and other terms and conditions that are reasonably acceptable to
Buyer
and considered to be legally enforceable under applicable California law, on
or
before the Closing herein.
8.8 Purchased
Assets.
The
Purchased Assets shall not have suffered any destruction or damage by fire,
accident or other casualty or Act of God, whether or not covered by insurance,
which affects in a material way the Purchased Assets or the business being
sold
hereunder.
8.9 Contemporaneous
Transactions.
Seller
shall have executed each of the Settlement Agreements which requires its
signature.
12
8.10 Conditions
to Obligations of Seller.
Unless
otherwise waived, in whole or in part, in writing by Seller, the obligations
of
Seller to effect the consummation of the transactions contemplated hereunder,
and in the other agreements referred to herein, shall be subject to the
satisfaction at the Closing of each of the following conditions in Section
8.11
through and including Section 8.14:
8.11 Representations
and Warranties of Buyer to be True.
The
representations and warranties of Buyer contained in this Agreement or in any
statement, certificate, schedule or other document delivered pursuant to this
Agreement or in connection with the transactions contemplated hereby, shall
be
true and correct in all material respects on the Closing with the same force
and
effect as though made at such time. Buyer shall have performed all obligations
and complied with all covenants required by this Agreement, and the other
agreements referred to herein, to be performed or complied with by it prior
to
the Closing.
8.12 No
Proceedings.
No
suit, action, or other proceeding of material consequence shall be pending
or
threatened before any court or other governmental agency which seeks to restrain
or prohibit the consummation of the transactions contemplated by this Agreement,
or to obtain damages or other relief in connection therewith.
8.13 Consents.
Buyer
shall have obtained and delivered to Seller all written consents of the other
party to all contracts which by their terms or otherwise require the consent
of
such party to the acquisition thereof by Buyer.
8.14 Contemporaneous
Transactions.
Buyer
shall have executed each of the Settlement Agreements which requires its
signature.
IX
CONDUCT
OF SELLER’S BUSINESS
9.1 Prior
to Closing.
Seller
hereby covenants, agrees, represents and warrants to Buyer that, except as
otherwise consented to in writing by Buyer, pending the Closing:
(a) Seller
will carry on the Business in a good and diligent manner consistent with prior
practice, and will use its best efforts to preserve its business organization
intact, and to keep available the services of all of its present employees,
agents, and representatives.
(b) Seller
will not sell or otherwise dispose of the Assets or any other properties or
assets, purchase or otherwise acquire any properties or assets, incur any
liabilities or enter into any transactions, except in the ordinary course of
business.
(c) From
and
after the execution of this Agreement, Seller will permit Buyer and its duly
authorized agents to have reasonable access to the offices, properties, Assets,
books, and records of Seller for the purpose of investigating the business
and
examining the records of Seller, verifying the representations made in this
Agreement and the performance of the conditions set forth in this
Agreement.
13
9.2 Covenant
not to Compete.
(a) For
a
period of five (5) years following the Closing Date, neither Seller nor Oxford
nor any of their respective affiliates shall, throughout the United States,
Canada and all other countries in which any currently, or within during the
two-year period ending on the Closing Date, conducts Business, directly or
indirectly, engage in any business that directly competes with the Business,
as
engaged in by Seller on the Closing Date. However, this Section shall not apply
to any aspect of the business of Seller, Oxford, or any of their respective
affiliates to the extent such business is conducted or engaged in by such party
as incidental or in direct support of a business of such party which is not
otherwise in direct competition with the Business. By way of example and not
limitation, offering high speed internet access and related internet technology
services to hotel properties shall not be a violation of this Section.
(b) Buyer
and
Seller acknowledge and agree that the time, scope, geographic area and other
provisions of this Section have been specifically negotiated by sophisticated
commercial parties and specifically hereby agree that such time, scope,
geographic area and other provisions are reasonable under the circumstances.
Buyer and Seller further agree that if, at any time, despite express agreement
of the parties hereto, a court of competent jurisdiction holds that any portion
of this Section is unenforceable because any of the restrictions herein is
unreasonable or for any other reason, the maximum restrictions of time, scope
or
geographic area reasonable under the circumstances, as determined by such court,
will be substituted for any such restrictions held unenforceable.
(c) At
no
time after the date hereof will Seller or any of its affiliates directly or
indirectly disclose, or solicit any person employed by Buyer to disclose or
communicate to any person or entity, in any form or manner, directly or
indirectly any Confidential Information, except as may be specifically
contemplated by the Agreement. “Confidential Information” as used in this
Section 9.2 shall mean information including but not limited to marketing or
sales, personnel, customers, suppliers, advertisers, pricing or financial
information which has been maintained with respect to the Business as
confidential by Seller. Seller hereby stipulates that Confidential Information
is important and material, represents Trade Secrets and substantially affects
the conduct of the Business and its goodwill and that any breach of this Section
9.2 shall constitute a material breach of the Agreement.
(d) In
the
event of breach by Seller of any provision of this Section, Seller acknowledges
that any such breach may cause irreparable damage to Buyer, the exact amount
of
which will be difficult or impossible to ascertain, and that remedies of law
for
any such breach may be inadequate. Accordingly, Buyer may be entitled, in
addition to any other rights or remedies existing in its favor, to obtain,
without the necessity for any bond or other security, specific performance
for
injunctive relief in order to enforce, or prevent the breach of, any such
provision.
9.3 Change
of Name.
Upon
the Closing, Seller shall duly execute and deliver for filing with the Secretary
of State of the State of California Articles of Amendment changing its name,
“Creative Business Concepts, Inc.”, to another name sufficiently dissimilar from
the aforementioned name as determined within the reasonable judgment of the
Buyer, at the sole cost and expense of Seller.
14
X
INDEMNIFICATION
10.1 Indemnification
by Seller and Oxford.
Seller
and Oxford jointly and severally hereby covenant and agree that notwithstanding
any investigation made at any time by or on behalf of Buyer or any information
Buyer may have and regardless of the Closing of the purchase of the Assets
hereunder, Seller and Oxford shall jointly and severally indemnify Buyer and
its
directors, officers, shareholders, affiliates, attorneys, Xxxx Xxxxx, and each
of their successors and assigns (each individually referred to herein as a
“Buyer Indemnified Party”) and hold each harmless from, against and in respect
of any and all costs (including interest which may be imposed in connection
therewith, court costs and reasonable fees and disbursements of legal counsel)
losses, claims, liabilities, fines, penalties, damages, demands, judgments,
debts, obligations, causes of action and expenses (cumulatively referred to
as
the “Indemnified Claims”) arising by reason of or in connection with any of the
following:
(a) Any
and
all Indemnified Claims against a Buyer Indemnified Party of any nature, whether
accrued, absolute, contingent or otherwise, other than the Assumed Liabilities
referenced on Schedule
4.2,
arising
out of the business of Seller (whether known or unknown to Seller or any Buyer
Indemnified Party), to the extent arising out of the operation of the Business
or incurred by Seller on or prior to the Closing, including but not limited
to
liabilities in excess of the Assumed Liabilities;
(b) Any
material breach of, or any material inaccuracy in, any of the representations,
warranties, covenants or agreements made by Seller in this Agreement, any other
agreement referred to herein, any Exhibit or Schedule hereto, any of the
Settlement Documents, or any certificate, instrument or writing delivered in
connection therewith, except that Oxford shall only afford indemnification
hereunder for those representations and warranties which it specifically made
in
this Agreement;
(c) Any
attempt (whether or not successful) by any person and/or entity to cause or
require a Buyer Indemnified Party to pay or discharge any debt, obligation,
liability or commitment of Seller other than the Assumed Liabilities in the
specific amounts and to the persons and/or entities set forth in Schedule
4.2;
(d) Any
tax
liabilities (including but not limited to all applicable State and County sales
tax associated with any and all sales made prior to the Closing), and all
interest, penalties, assessments and all other Indemnified Claims in respect
thereof, arising out of the business of Seller prior to the Closing;
;
(e) Any
and
all Indemnified Claims arising by reason of or in connection with any act or
omission pursuant to, or in breach of this Agreement, any other agreement
referred to herein, any Exhibit or Schedule to this Agreement, any of the
Settlement Documents, or any certificate, instrument or writing delivered in
connection therewith, by Seller; and
(f) Any
and
all Indemnified Claims arising from or in any way related to any bonus, pension,
profit sharing, retirement, deferred compensation, savings, stock purchase,
stock option, hospitalization, insurance or other plan providing benefits to
employees of Seller.
15
(g) Any
and
all warranties whether stated or implied with respect to any hardware delivered
and/or installed, and/or any services performed prior to the
closing.
10.2 Indemnification
by Buyer.
Buyer
hereby covenants and agrees that notwithstanding any investigation made at
any
time by or on behalf of Seller or any information Seller may have and regardless
of the Closing of the purchase of the Assets hereunder, Buyer shall indemnify
Seller and its directors, officers, shareholders, affiliates, attorneys and
each
of their successors and assigns (each individually referred to herein as a
“Seller Indemnified Party”) and hold each harmless from, against and in respect
of any and all Indemnified Claims arising by reason of or in connection with
any
of the following:
(a) Any
and
all Indemnified Claims against a Seller Indemnified Party of any nature, whether
accrued, absolute, contingent or otherwise attributable to any event occurring
after the Closing (whether known or unknown to Seller, or Buyer) relating to
the
Seller or operation by Buyer of the Business from and after the Closing, except
if (i) such liability results from or arises in connection with the breach
of
any of the representations, warranties, covenants or agreements made by Seller
in this Agreement, any other agreement referred to herein, any Schedule or
Exhibit hereto, any of the Settlement Documents, or any certificate, instrument
or writing delivered in connection herewith or therewith; or, (ii) such
liability is included under Section 10.1, above;
(b) Any
material breach of, or any material inaccuracy in, any of the representations,
warranties, covenants or agreements made by Buyer in this Agreement, any other
agreement referred to herein, any Exhibit or Schedule to this Agreement, any
of
the Settlement Documents, or any certificate, instrument or writing delivered
in
connection therewith;
(c) Any
attempt (whether or not successful) by any person to cause or require a Seller
Indemnified Party to pay or discharge any debt, obligation, liability, or
commitment of the Buyer;
(d) Any
tax
liabilities, and all interest, penalties, assessments and all other Indemnified
Claims in respect thereof, arising out of the business of Buyer arising after
the Closing;
(e) Any
and
all Indemnified Claims arising by reason of or in connection with any act or
omission pursuant to, or in breach of this Agreement, any other agreement
referred to herein, any Exhibit or Schedule to this Agreement, any of the
Settlement Documents, or any certificate, instrument or writing delivered in
connection therewith, by Buyer; and
(f) Any
and
all Indemnified Claims arising from or in any way related to any bonus, pension,
profit sharing, retirement, deferred compensation, savings, stock purchase,
stock option, hospitalization, insurance or other plan providing benefits to
employees of Buyer.
16
10.3
Right
to Defend
If the
facts giving rise to any claim for indemnification under this Article X shall
involve any actual claim or demand by any third person against a Buyer
Indemnified Party or a Seller Indemnified Party (cumulatively referred to
hereinafter as an “Indemnified Party”), the indemnifying party shall be entitled
to notice of and entitled to (without prejudice to the right of any Indemnified
Party to participate at its own expense with counsel if its own choosing) defend
or prosecute such claim at its own expense and through counsel of its own
choosing if it gives written notice of its intention to do so no later than
the
time by which the interests of the Indemnified Party would be materially
prejudiced as a result of its failure to have received such notice. However,
if the
defendants in any action shall include both the indemnifying party and the
Indemnified Party, and the Indemnified Party shall have reasonably concluded
that counsel selected by the indemnifying party has a conflict of interest
because of the availability of different or additional defenses to the
Indemnified Party, the Indemnified Party shall have the right to select separate
counsel to participate in the defense of such action on its behalf, at the
expense of the indemnifying party. The Indemnified Party shall cooperate fully
in the defense of such claim and shall make available to the indemnifying party
pertinent information under its control relating thereto, but shall be entitled
to be reimbursed, as provided in this Article IX, for all costs and expenses
incurred by it in connection therewith. If the Indemnifying Party fails to
defend a claim for which it is responsible hereunder within a reasonable time
after receipt of Timely Notice, the Indemnified Party shall have the right,
but
not the obligation, to undertake the defense of and to compromise or settle
the
claim and Indemnifying Party shall nevertheless remain liable therefore.
10.4 Right
to Offset.
In the
event that Seller is obligated to pay any amount to Buyer under Section 10.1,
Buyer shall give Seller written notice of a brief description and the amount
of
the obligation. If Seller fails to (i) satisfy said obligation; or, (ii) provide
to Buyer a written denial of the request for indemnification, within five (5)
days of receipt of the notice, then Buyer shall have the right to offset the
amount of the unpaid obligation as a reduction in the amount due to Seller
under
the Hold Back. In the event that the amount of claimed offset is equal to or
greater than the amount still due and owing to Seller under the Hold Back,
Buyer
shall have the right to pursue all other legal remedies for
remainder.
XI
CLOSING
DATE AND TRANSFER DATE
11.1 Closing
Date.
The
closing of the transactions contemplated under this Agreement (the “Closing”)
and the transfer of the Assets by Seller to Buyer shall have taken place on
the
____ day of __________, 2007, at such place as the parties may agree, or at
such
other time as the parties may agree. The date on which the Closing occurs is
also referred to herein as the “Closing Date”.
11.2 Obligations
of Seller.
At the
Closing, Seller shall deliver or cause to be delivered to Buyer the following:
(a) Executed
Xxxx of Sale;
(b) Executed
Settlement Documents;
(c) Executed
Board of Directors resolution authorizing the transactions contemplated
hereunder and under the Settlement Documents; and
(d) Any
governmental and third party consents (specifically including but not limited
to
the consent of the Secured Lenders of Oxford), approvals, assurances, or UCC-2
termination statements necessary for the consummation of the transactions
contemplated by this Agreement or as may be required to permit Seller to deliver
the Assets free and clear of any and all liens, claims, encumbrances, or
restrictions (except as otherwise expressly assumed by Buyer hereunder).
17
11.3
Obligations
of Buyer.
At the
Closing, Buyer shall deliver or cause to be delivered to Seller:
(a) Buyer’s
funds, by wire transfer, in the amount of required under Section 3.3.2(a),
above;
(b) Buyer’s
funds,
by wire transfer, in the amount of the Hold Back, as required under Section
3.3.2(b), above;
(c) Executed
Settlement Documents; and
(d) Executed
Board of Directors resolution authorizing the transactions contemplated
hereunder and under the Settlement Documents.
11.4
Failure
of Conditions Precedent. In
the
event that either party fails to meet any condition precedent to Closing, the
other party may cancel and terminate this Agreement and upon such cancellation
and termination, this Agreement shall be of no further force and effect and
the
parties shall be relieved of all further liability hereunder. Notwithstanding
the foregoing, the Party that fails to meet any condition precedent to Closing
which entities the other party to cancel and terminate this Agreement, shall
nevertheless remain liable for all losses, damages, costs, including reasonable
attorneys’ fees, incurred by the other party in connection with this Agreement
and its performance hereunder.
11.4
Transfer
of Ownership.
The
Business and the Assets shall be under the ownership of Buyer as of 12:01 A.M.
on the ____ day of __________, 2007.
XII
ADDITIONAL
OBLIGATIONS AND AGREEMENTS
12.1
Survival
of Representations.
All of
the covenants, agreements, representations, and warranties made by each party
in
this Agreement, or pursuant hereto or in connection with the transactions
contemplated hereby, shall survive the Closing for a period of two (2) years.
Notwithstanding anything herein contained to the contrary, the warranty and
representation concerning taxes under Section 6.12 hereof, shall survive for
the
period of time specifically set forth herein. Buyer shall be able to offset
any
amount due Seller under the Hold Back from any damages suffered as a result
of
the breach of any covenant, agreement, representation and/or warranty made
in
this or in connection with this Agreement, or any schedule and/or exhibit
appended hereto and/or referred to herein as incorporated.
12.2
Brokers.
Each
Party represents and warrants that other than as disclosed on Schedule 12.2,
attached hereto and incorporated herein by reference, no broker or finder has
acted for it in connection with this Agreement or the transactions contemplated
hereby and that no broker or finder is entitled to any brokerage or finder’s fee
or other commission. Each party to this Agreement agrees to indemnify and hold
harmless the other parties hereto with respect to any claim for any brokerage
or
finder’s fee or other commission.
18
12.3
Settlement
Documents.
Concurrent with the execution hereof, the Parties shall execute a number of
additional agreements, among these being the Xxxx of Sale, the Escrow Agreement,
and the Sublease. The foregoing documents, together with this Agreement and
any
other agreements attached hereto as Exhibits, will be referred to herein as
the
“Settlement Documents”.
12.4
Expenses.
All
costs and expenses incurred in conducting the purchase and sale described in
this Agreement in the manner prescribed by this Agreement shall be borne by
the
Party incurring such expense. As such, each Party shall pay their own costs
and
expenses of attorneys’ fees, and any and all other costs and expenses arising
from the performance of this Agreement and the purchase and sale described
in
this Agreement shall be borne by the Party incurring said expense.
12.5 Early
Termination.
This
Agreement shall terminate upon:
(a) The
mutual agreement of Buyer and Seller, provided, however, that such termination
is set forth in a writing executed by both parties; or
(b) By
either
Buyer or Seller, in a writing, if the Closing does not occur on or prior to
the
2nd
day of
March, 2007, other than by reason of a breach of a duty or an obligation
hereunder of the Party electing to terminate this Agreement. In the event of
such termination, no Party shall have any obligation or liability to any other
in respect to this Agreement, except for any breach of contract occurring prior
to such termination.
12.6 Right
of Endorsement.
After
the Closing, Buyer shall have the absolute and unconditional right and authority
to endorse, without recourse, the name of Seller on any check or any other
evidence of indebtedness received by Buyer on account of any of the Assets,
and
Seller shall deliver to Buyer after the Closing a letter of instruction executed
by Seller sufficient to permit Buyer to deposit such checks or other evidences
of indebtedness in bank accounts in the name of Buyer.
12.7 Events
of Default.
For
purposes of this Agreement, “An Event of Default” shall be defined as:
(a) A
default
in any of Buyer’s monetary obligations hereunder which is not cured within ten
(10) days after written notice of such default has been delivered by Seller
to
Buyer; or
(b) An
Event
of Default under this Agreement and/or any of the Settlement Documents, as
such
term is defined in the applicable Settlement Document.
12.8 Taxes.
12.8.1. Payment
of Taxes: Filing of Returns.
Seller
shall remain liable for the filing of all tax returns and reports and for the
payment of all federal, state, and local taxes of Seller.
19
12.8.2.
Sales
Taxes.
Buyer
shall bear the responsibility for sales, use, or other similar taxes, if any,
arising out of the consummation of the transactions contemplated herein, and
shall immediately pay to Seller all such taxes when and if imposed, or in the
sole discretion of Buyer, Buyer may pay such taxes directly on behalf of Seller.
However, in no event shall Buyer’s obligation under this Section exceed Nine
Thousand Dollars ($9,000).
12.8.3.
Exclusivity;
Publicity; Regulatory Matters.
From
the
date hereof until the earlier of the Closing or the termination of this
Agreement, Seller shall not solicit or negotiate or enter into any agreement
with any other Person with respect to or in furtherance of any proposal for
a
merger or business combination involving, or acquisition of any interest in,
or
(except in the ordinary course of business) sale of assets by Seller, except
as
set forth herein.
Between
the date of this Agreement and the Closing Date, and for a period of ten (10)
days after the Closing, Seller and Buyer shall discuss and coordinate with
Buyer
any announcement or any internal or private announcement (including any general
announcement to employees) concerning the contemplated transaction.
Seller
and Buyer shall: (a) file with applicable regulatory authorities any
applications and related documents required to be filed by them in order to
consummate the contemplated transaction and (b) cooperate with each other as
they may reasonably request in connection with the foregoing.
12.9
Sublease
and Reasonable Cooperation.
Oxford
and Buyer agree to negotiate in good faith to execute the Sublease, which shall
include, among other things, provisions for the continued reasonable access
to
Oxford’s computer servers and network necessary for the continued operation of
the Business for a period of time not to exceed the expiration of the Sublease,
which in no event shall exceed six (6) months from the Closing Date.
XIII
NOTICES
All
notices, requests, demands and other communications required or permitted to
be
given hereunder shall be effected pursuant to Section 14.13, below, as
follows:
|
If
to Seller:
|
With
a copy to:
|
|
Xx.
Xxxxx Xxxxx
|
Xxxxx
X. Xxxxxxxxx, Esq.
|
|
SPECTRUM
LAW GROUP, LLP
|
|
|
One
Technology Drive, Bldg. H
|
0000
Xxxx Xxxxxx, Xxxxx 000
|
|
Xxxxxx,
Xxxxxxxxxx 00000
|
Xxxxxx,
Xxxxxxxxxx 00000
|
|
If
to Buyer:
|
With
a Copy to:
|
|
Xx.
Xxxx Xxxxxxxx
|
Xxxxxxx
X.Xxxxxx, Esq.
|
|
CREATIVECORP,
INC.
|
XXXXXXX,
XXXXXX & XXXXXXX, LLP
|
|
One
Technology Drive, Bldg. H
|
000
Xxxxxxxx Xxxxxx, Xxxxx 000X
|
|
Xxxxxx,
Xxxxxxxxxx 00000
|
Xxxxxxx,
Xxxxxxxxxxxxx 00000
|
20
XIV
ADDITIONAL
PROVISIONS
14.1
Executed
Counterparts.
This
Agreement may be executed in any number of counterparts,
all of which when taken together shall be considered one and the same agreement,
it being understood that all Parties need not sign the same counterpart. In
the
event that any signature is delivered by fax or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation
of
the Party executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile or “.pdf” signature page were an
original thereof.
Each of
the Parties hereby expressly forever waives any and all rights to raise the
use
of a fax machine or E-Mail to deliver a signature, or the fact that any
signature or agreement or instrument was transmitted or communicated through
the
use of a fax machine or E-Mail, as a defense to the formation of a
contract.
14.2 Successors
and Assigns.
Except
as expressly provided in this Agreement, each and all of the covenants, terms,
provisions, conditions and agreements herein contained shall be binding upon
and
shall inure to the benefit of the successors and assigns of the Parties
hereto.
14.3 Article
and Section Headings.
The
article and section headings used in this Agreement are inserted for convenience
and identification only and are not to be used in any manner to interpret this
Agreement.
14.4 Severability.
Each
and every provision of this Agreement is severable and independent of any other
term or provision of this Agreement. If any term or provision hereof is held
void or invalid for any reason by a court of competent jurisdiction, such
invalidity shall not affect the remainder of this Agreement.
14.5 Governing
Law.
This
Agreement shall be governed by the laws of the State of California, without
giving effect to any choice or conflict of law provision or rule (whether of
the
State of California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California. If any
court
action is necessary to enforce the terms and conditions of this Agreement,
the
Parties hereby agree that the Superior Court of California, County of Orange,
shall be the sole jurisdiction and venue for the bringing of such action.
14.6 Entire
Agreement.
This
Agreement, and all references, documents, or instruments referred to herein,
contains the entire agreement and understanding of the Parties hereto in respect
to the subject matter contained herein. The Parties have expressly not relied
upon any promises, representations, warranties, agreements, covenants, or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes any and all prior written or oral agreements,
understandings, and negotiations between the Parties with respect to the subject
matter contained herein.
21
14.7 Additional
Documentation.
The
Parties hereto agree to execute, acknowledge, and cause to be filed and
recorded, if necessary, any and all documents, amendments, notices, and
certificates which may be necessary or convenient under the laws of the State
of
California.
14.8 Attorney’s
Fees.
If any
legal action (including arbitration) is necessary to enforce the terms and
conditions of this Agreement, the prevailing Party shall be entitled to costs
and reasonable attorney’s fees.
14.9 Amendment.
This
Agreement may be amended or modified only by a writing signed by all
Parties.
14.10
Remedies.
14.10.1.
Specific
Performance.
The
Parties hereby declare that it is impossible to measure in money the damages
which will result from a failure to perform any of the obligations under this
Agreement. Therefore, each Party waives the claim or defense that an adequate
remedy at law exists in any action or proceeding brought to enforce the
provisions hereof.
14.10.2.
Cumulative.
The
remedies of the Parties under this Agreement are cumulative and shall not
exclude any other remedies to which any person may be lawfully entitled.
14.11
Waiver.
No
failure by any Party to insist on the strict performance of any covenant, duty,
agreement, or condition of this Agreement or to exercise any right or remedy
on
a breach shall constitute a waiver of any such breach or of any other covenant,
duty, agreement, or condition.
14.12
Assignability.
This
Agreement is not assignable by either Party without the expressed written
consent of all Parties.
14.13
Notices.
All
notices, requests and demands hereunder shall be in writing and delivered by
hand, by facsimile transmission, by E-Mail, by mail, by telegram, or by
recognized commercial over-night delivery service (such as Federal Express,
UPS,
or DHL), and shall be deemed given (a) if by hand delivery, upon such delivery;
(b) if by facsimile transmission, upon telephone confirmation of receipt of
same; (c) if by E-Mail, upon telephone confirmation of receipt of same; (d)
if
by mail, forty-eight (48) hours after deposit in the United States mail, first
class, registered or certified mail, postage prepaid; (e) if by telegram, upon
telephone confirmation of receipt of same; or, (f) if by recognized commercial
over-night delivery service, upon such delivery.
14.14
Time.
All
Parties agree that time is of the essence as to this Agreement.
14.15
Disputes.
The
Parties agree to cooperate and meet in order to resolve any disputes or
controversies arising under this Agreement. Should they be unable to do so,
then
either may elect arbitration under the rules of the American Arbitration
Association, and both Parties are obligated to proceed thereunder. Arbitration
shall proceed in Orange County, State of California and the Parties agree to
be
bound by the arbitrator’s award, which may be filed in the
Superior
Court of Orange County, State of California. The
Parties consent to the jurisdiction of State of California Courts for
enforcement of this determination by arbitration. The prevailing Party shall
be
entitled to reimbursement for his attorney’s fees and all costs associated with
arbitration. In any arbitration proceeding conducted pursuant to the provisions
of this Section, both Parties shall have the right to conduct discovery, to
call
witnesses and to cross-examine the opposing Party’s witnesses, either through
legal counsel, expert witnesses or both, and the provisions of the California
Code of Civil Procedure (Right to Discovery; Procedure and Enforcement) are
hereby incorporated into this Agreement by this reference and made a part
hereof. EACH
PARTY HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTER CLAIM
BROUGHT BY ANY OF THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH
OR
THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN.
22
14.16
Provision
Not Construed Against Party Drafting Agreement.
This
Agreement is the result of negotiations by and between the Parties, and each
Party has had the opportunity to be represented by independent legal counsel
of
its choice. This Agreement is the product of the work and efforts of all
Parties, and shall be
deemed
to have been drafted by all Parties. In the event of a dispute, no Party hereto
shall be entitled to claim that any provision should be construed against any
other Party by reason of the fact that it was drafted by one particular
Party.
14.17
Incorporation
of Exhibits and Schedules.
The
Exhibits and Schedules identified in this Agreement are incorporated herein
by
reference and made a part hereof as if set out in full herein.
14.18
Recitals.
The
facts recited in Article II, above, are hereby conclusively presumed to be
true
as between and affecting the Parties.
14.19
Consents,
Approvals, and Discretion.
Except
as herein expressly provided to the contrary, whenever this Agreement requires
consent or approval to be given by a Party, or a Party must or may exercise
discretion, the Parties agree that such consent or approval shall not be
unreasonably withheld, conditioned, or delayed, and such discretion shall be
reasonably exercised. Except as otherwise provided herein, if no response to
a
consent or request for approval is provided within ten (10) days from the
receipt of the request, then the consent or approval shall be presumed to have
been given.
14.20
No
Third Party Beneficiaries.
This
Agreement has been entered into solely by and between Buyer and Seller, solely
for their benefit. Other than acknowledging that Oxford is a third party
beneficiary as to Seller under this Agreement, there is no intent by either
Party to create or establish any other third party beneficiary to this
Agreement, and no such third party shall have any right to enforce any right,
claim, or cause of action created or established under this
Agreement.
14.21
Best
Efforts.
The
Parties shall use and exercise their best efforts, taking all reasonable,
ordinary and necessary measures to ensure an orderly and smooth relationship
under this Agreement, and further agree to work together and negotiate in good
faith to resolve any differences or problems which may arise in the
future.
14.22
Definitional
Provisions.
For
purposes of this Agreement, (i) those words, names, or terms which are
specifically defined herein shall have the meaning specifically ascribed to
them; (ii) wherever from the context it appears appropriate, each term stated
either in the singular or plural shall include the singular and plural; (iii)
wherever from the context it appears appropriate, the masculine, feminine,
or
neuter gender, shall each include the others; (iv) the words “hereof”, “herein”,
“hereunder”, and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole, and not to any particular provision of
this
Agreement; (v) all references to designated “Articles”, “Sections”, and to other
subdivisions are to the designated Articles, Sections, and other subdivisions
of
this Agreement as originally executed; (vi) all references to “Dollars” or “$”
shall be construed as being United States dollars; (vii) the term “including” is
not limiting and means “including without limitation”; (viii) all references to
all statutes, statutory provisions, regulations, or similar administrative
provisions shall be construed as a reference to such statute, statutory
provision, regulation, or similar administrative provision as in force at the
date of this Agreement and as may be subsequently amended; and, (ix) “Business
Financial Statements” refers to the Balance Sheet, Profit and Loss Statements
and all other financial statements, including, all Notes related thereto as
of
December 31, 2006, submitted by management of Seller to Buyer.
23
14.23
Knowledge.
For
purposes of this Agreement, the term “Knowledge” shall mean, with respect to any
Party, the actual knowledge of the officers of such Party after reasonable
investigation.
XV
EXECUTION
IN
WITNESS WHEREOF,
this
ASSET PURCHASE AGREEMENT has been duly executed by the Parties in Orange County,
State of California, and shall be effective as of and on the Effective Date
set
forth in Article I of this Agreement. Each of the undersigned Parties hereby
represents and warrants that it (i) has the requisite power and authority to
enter into and carry out the terms and conditions of this Agreement, as well
as
all transactions contemplated hereunder; and, (ii) it is duly authorized and
empowered to execute and deliver this Agreement.
|
BUYER:
|
SELLER:
|
|
CREATIVECORP,
INC.,
a
Delaware corporation
By:
Name:
Title:
Dated:
|
CREATIVE
BUSINESS CONCEPTS, INC.,
a
California corporation
By:
Name:
Title:
Dated:
|
OXFORD:
a
Nevada
corporation
By:
Name:
Title:
Dated:
24
EXHIBITS
AND SCHEDULES
EXHIBITS:
|
Exhibit
3.1
|
Xxxx
of Sale
|
|
Exhibit
3.2
|
Closing
Balance Sheet
|
|
Exhibit
3.3.2.(b)
|
Escrow
Agreement
|
|
Exhibit
6.1
|
Seller’s
Certificate
of Incorporation and Bylaws
|
SCHEDULES
|
Schedule
3.3.2
|
Wire
Transfer Instructions
|
|
Schedule
3.5
|
Purchase
Price Allocation
|
|
Schedule
4.1
|
Excluded
Assets
|
|
Schedule
4.2
|
Assumed
Liabilities
|
|
Schedule
4.3
|
Accounts
Receivable
|
|
Schedule
6.4
|
Title
to Assets
|
|
Schedule 6.5
|
Sale
of Assets
|
|
Schedule
6.6
|
Business
Financial Statements
|
|
Schedule
6.10
|
Customers
and Suppliers
|
|
Schedule
6.13
|
Leases
and Similar Agreements
|
|
Schedule
6.14
|
Accounts
Receivable
|
|
Schedule
8.7
|
Employment
Agreements
|
|
Schedule
12.2
|
Broker
and Finder Fees
|
25
EXHIBIT
3.1
XXXX
OF SALE
26
EXHIBIT
3.2
CLOSING
BALANCE SHEET
The
Parties have agreed to waive the requirement of a Closing Balance Sheet at
Closing.
27
EXHIBIT
3.3.2.(b)
ESCROW
AGREEMENT
28
EXHIBIT
6.1
SELLER’S
CERTIFICATE
OF INCORPORATION AND BYLAWS
29
SCHEDULE
3.3.2.
WIRE
TRANSFER INSTRUCTIONS
|
Bank:
|
California
Bank & Trust - Irvine Center Branch
|
|
Bank
Info:
|
0000
Xxxx Xxxxxx, Xxxxx 000
|
|
Xxxxxx,
Xxxxxxxxxx 00000
|
|
|
(000)
000-0000
|
|
|
ABA
Routing Number:
|
000000000
|
|
Account
Name:
|
Spectrum
Law Group, LLP Attorney Client Trust Account
|
|
0000
Xxxx Xxxxxx, Xxxx 000
|
|
|
Xxxxxx,
Xxxxxxxxxx 00000
|
|
|
Account
Number:
|
3090028061
|
30
SCHEDULE
3.5
PURCHASE
PRICE ALLOCATION
The
Parties agree to negotiate in good faith to determine a Purchase Price
Allocation as soon as practicable after Closing.
31
SCHEDULE
4.1
EXCLUDED
ASSETS
None.
32
SCHEDULE
4.2
ASSUMED
LIABILITIES
33
SCHEDULE
4.3
ACCOUNTS
RECEIVABLE
34
SCHEDULE
6.4
TITLE
TO ASSETS
UCC-1
Financing Statement in favor Xxxxxx Micro.
35
SCHEDULE 6.5
SALE
OF ASSETS
UCC-1
Financing Statement in favor Xxxxxx Micro.
36
SCHEDULE
6.6
BUSINESS
FINANCIAL STATEMENTS
37
SCHEDULE
6.10
CUSTOMERS
AND SUPPLIERS
38
SCHEDULE
6.13
LEASES
AND SIMILAR AGREEMENTS
1. HP
Lease
for computers.
2. Lease
with Connectwise for the software application.
39
SCHEDULE
6.14
ACCOUNTS
RECEIVABLE
40
SCHEDULE
8.7
EMPLOYMENT
AGREEMENTS
41
SCHEDULE
12.2
BROKER
AND FINDER FEES
$45,000
fee payable solely by Seller in favor of Mansfield Sales Partners (Xxxxx Xxxxx).
42
