ASSET PURCHASE AGREEMENT
EXHIBIT
10
THIS ASSET PURCHASE AGREEMENT
is made as of the ___th day of
August, 2008, by and between HNY
Acquisition Corp., (the “Buyer”), and Ckrush Digital Media, Inc.
(the “Seller”). The
Seller and the Buyer may sometimes be referred to herein individually as a
“Party” or
collectively as “Parties.”
RECITALS:
A. The
Seller owns certain assets which
include, but are not limited to, the websites xxx.xxxxxxxxxxx.xxx, xxx.xxxxxxxxx.xxx and xxx.xxxxxxxxxxx.xxx (the “Websites”) including all copyrights (and
renewals and extensions of copyright) and trademarks, whether such assets
consist of literary, dramatic, or any other form of works exclusive of the movie
rights to “livemansion” (collectively the “Assets”).
B. Seller
agrees to sell and Buyer agrees to purchase the Assets in accordance with the
terms and conditions set forth in this Agreement.
C. The
Parties to this Agreement desire to establish their mutual rights and
obligations with regard to the transactions by this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in
this Agreement, and other good and valuable consideration, the Parties hereto
agree as follows:
I. DEFINITIONS.
As used herein, the following terms shall have the meaning set
forth:
A. “Assets” shall have
the definition set forth in Section II.
B. “Closing” shall have
the meaning set forth in Section VI.
C. “Closing Date” shall
have the meaning set forth in Section VI.
D. “Customer List” shall
have the meaning set forth in Section II.A.1.
II.
PURCHASE, SALE AND DELIVERY OF
ASSETS.
A. Subject
to and in accordance with the terms and conditions of this Agreement and in
consideration of the Purchase Price stated in Section III below, Buyer agrees to
purchase, and Seller agrees to sell, transfer, convey and assign all of their
respective right, title, and interest in and good and marketable title, free and
clear of all security interests, liens (including tax liens), encumbrances and
rights of others of any kind whatsoever to the Assets listed on Schedule A, that
are used in the operation of the Websites:
1. A
list of any and all customers of the Websites. (the “Customer List”) in
electronic format at Closing.
2. All
accounts receivable, if any, of Seller from Customers from the Customer List
prior to Closing (the “Accounts
Receivable”). At Closing Seller will provide Buyer with a true and
correct listing of the Accounts Receivable, if any, as of the Closing
Date.
3. All
equipment, if any, from the Seller that is listed in Schedule A.
4. All
intangible personal property specifically relating to the Assets, including
without limitation, Customer contracts and agreements.
5. Certain
Domain Names needed to provide internet and email services and web hosting to
the Customer List which includes the following domain names:
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xxx.xxxxxxxxxxx.xxx,
xxx.xxxxxxxxx.xxx and
xxx.xxxxxxxxxxx.xxx
B. The Seller shall provide
Buyer with a list of all expenses, debts, deficiencies, obligations,
liabilities, assessments, claims, demands, fines or penalties related to any of
the Assets prior to the Closing Date. Seller represents and
warrants that there are no amounts outstanding or owed by Ckrush Digital Media,
Inc., regarding the Assets and there are not any liens or UCC filings currently
on the Assets. The only carrying costs to maintaining the Websites in
their current condition are $864 per month payable to Arcadia Networks, Inc. for
hosting on their servers and $609.10 per month payable to ValueWeb for hosting
on their servers. Any additional changes or modifications to the
Websites would require the hiring of a website designer/tech to make such
additional changes or modifications.
III.
PURCHASE PRICE; ADJUSTMENT AND
PAYMENT.
A. Purchase Price.
Subject to and in accordance with the terms and conditions of this
Agreement, Seller agrees to sell to the Buyer, and Buyer agrees to purchase from
the Seller, all of the Seller’s rights, title, and interest in and to the
Assets, for an aggregate purchase price equal to TWO HUNDRED THOUSAND AND
NO/dollars ($200,000.00) (the “Purchase Price”), to
be paid as provided in Subsection C below of this Section III.
B. Adjustments to Purchase
Price. The Purchase Price is subject to adjustment as
follows:
1. Liens and Encumbrances.
If, as of the Closing, any of the Assets are subject to or encumbered by
any security interests or liens the outstanding aggregate balance (including any
accrued interest or other charges) of the total debts or liabilities underlying
such liens or security interests shall be deducted from the Purchase Price and
paid directly to the applicable creditor of the Seller at the Closing.
2. A/R adjustment.
There will be no adjustment for actual Accounts Receivable being
assumed by Buyer.
C. Payment of Purchase
Price. The Buyer will pay the total Purchase Price to the Seller as
follows:
1. Cash Payment at Closing. The sum of
TWO HUNDRED THOUSAND AND NO/dollars ($200,000.00) shall be paid on the Closing
Date estimated to be September 1, 2008, which amount, subject to the adjustments
set forth herein, will be wired directly to Seller per Seller’s written
instructions.
2. Assumption of
Liabilities. Buyershall assume no liabilities.
IV.
REPRESENTATIONS AND WARRANTIES OF SELLER.
The
Seller represents and warrants, to the best of its knowledge and belief, to the
Buyer, its successors and assigns, that the following facts are true, complete,
and correct as of the date of this Agreement and will be true, correct, and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section IV,
with the knowledge that Buyer is purchasing the Assets in full reliance
thereon):
A. Organization of the
Seller. Seller is corporation duly organized, validly existing, and
in good standing as a domestic corporation under the laws of the State of
Delaware and has the corporate power to carry on its business as now conducted
and to perform its obligations hereunder.
B. Authorization of
Transaction. The Seller has full power and authority (including
full corporate power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of the Seller, enforceable in accordance with its
terms and conditions.
C. Noncontravention.
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby (including the assignments
and assumptions referred to in Section II above), will violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court to which
the Seller is subject.
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D. Legal Compliance.
The Seller has complied with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof), and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
the Seller alleging any failure so to comply.
E. Brokers’ Fees.
The Seller has no liability or obligation to pay any fees or commissions
to any broker, finder, or agent with respect to the transactions contemplated by
this Agreement for which the Buyer could become liable or obligated and Seller
agrees to pay the broker upon closing.
F. Title to Assets.
The Seller has good and marketable title to the Assets being sold to
Buyer. Without limiting the generality of the foregoing, Seller has good and
marketable title to all of the Assets, free and clear of any security interest
or restriction on transfer. Seller owns all right and title to the assets
free of liens, claims or encumbrances of any kind or nature, other than the
security interest in favor of Buyer.
This
Agreement and all of the documents, instruments and agreements related hereto
have been duly and validly executed and delivered by the Seller, as appropriate,
and are valid and binding obligations of each of the Seller, enforceable in
accordance with their terms.
G. Intentionally left
blank.
H. Contracts and
Agreements. The Seller has delivered to the Buyer a correct and
complete copy of each written contract being transferred and assigned to the
Buyer as part of the Assets and referred to in Section II.A.1. and a written
summary setting forth the material terms and conditions of each oral agreement
being transferred and assigned to the Buyer as part of the Assets and referred
to in Section II.A.1. With respect to each such agreement: (A) the agreement is
legal, valid, binding, enforceable, and in full force and effect in all material
respects; (B) no party is in material breach or default, and no event has
occurred which with notice or lapse of time would constitute a material breach
or default, or permit termination, modification, or acceleration, under the
agreement; and (C) no party has repudiated any material provision of the
agreement. Seller may assign all accounts, contracts, agreements, and
service agreements related in any way to the Dial-Up Customers to Buyer without
any requirement for written or oral consent of the Dial-Up Customers. It is up
to the Buyer’s discretion whether or not to accept the contracts or agreements
as an asset, should the buyer term such contracts or agreements as a liability,
and they do not fall within the buyers business model, buyer may reject such
contracts or agreements, and as a result of such rejection seller will be
required to cancel the contracts or agreements as needed.
I. Accounts Receivable.
All Accounts Receivable of the Seller which are part of the Assets, as
referred to in Section II.A.2. hereof, are reflected properly on their books and
records of the Seller.
J. Asset Warranties.
Substantially all of the Assets being sold provided by the Seller have
conformed in all material respects with all applicable contractual commitments
and all express and implied warranties, and the Seller has no material liability
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due) for damages in connection therewith. All
of the Assets provided by the Seller are subject to standard terms and
conditions, a listing of which is attached hereto as Exhibit B.
K. Liabilities Related to the
Assets Being Sold. The Seller has no known or asserted material
liability arising out of any injury to individuals or property as a result of
the ownership, possession, or use of any of the Assets.
L. Intellectual
Property. The Seller has not interfered with, infringed upon,
misappropriated, or violated any material Intellectual Property rights of third
parties in any material respect, and the Seller has not ever received any
charge, complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that any of
the Seller must license or refrain from using any Intellectual Property rights
of any third party). To the knowledge of the Seller, no third party has
interfered with, infringed upon, misappropriated, or violated any material
Intellectual Property rights of the Seller in any material respect.
M. Litigation. The
Seller is not (1) subject to any outstanding injunction, judgment, order,
decree, ruling, or charge or (ii) a party or, to its knowledge, threatened to be
made a party to any action, suit, proceeding, hearing, or investigation of, in,
or before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator, which,
individually or in the aggregate, if adversely determined, could materially
impair the Assets or the ability of either of the Seller to perform any of its
obligations hereunder. Furthermore, there are no defaults by the Seller under
any applicable order, writ, injunction, decree or award of any court or
arbitrator or any governmental department, board, agency or instrumentality
which would materially impair either of the Seller’s ability to perform any of
its obligations hereunder.
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N. Disclosure. The
Seller has reviewed all information known to it and has disclosed to Buyer all
known material information relevant to the Assets. None of the
representations and warranties made by Seller in this Agreement or in any
document or exhibit to be furnished by it hereto, or on its behalf, contains or
will contain any untrue statements of material fact, or omit any fact the
omission of which would be materially misleading.
V. REPRESENTATIONS
AND WARRANTIES OF BUYER.
A. Organization of
Buyer. Buyer is corporation duly organized, validly existing, and
in good standing as a domestic corporation under the laws of the State of Nevada
and has the corporate power to carry on its business as now conducted and to
perform its obligations hereunder.
B. Authority of Buyer.
Buyer has full power and authority to enter into and perform this
Agreement, and all proceedings necessary to duly authorize the execution and
delivery of this Agreement by the officer executing the same on the respective
Buyer’s behalf have been taken and this Agreement is the legal and binding
obligation of the Buyer, enforceable in accordance with its terms and conditions
applicable to Buyer.
C. Litigation.
There are no actions, suits, proceedings or investigations pending or, to
the knowledge of Buyer, threatened against Buyer. Buyer is not in default
with respect to or subject to any outstanding judgment, order, writ, injunction,
decree, assessment or other similar command of any court or federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting it.
D. Compliance with Laws.
Buyer has complied with all laws, regulations and orders applicable to its
business.
E. Noncontravention.
The execution and delivery by Buyer of this Agreement, the consummation by
Buyer of the transactions contemplated hereby, and the compliance by Buyer with
the terms hereof, will not conflict with, violate or result in the breach of or
contravene any of the terms conditions or provisions of, or constitute a default
under, Buyer’s articles of incorporation, bylaws, or in any material respect,
any law, regulation, determination or award of any court, governmental
department, board, agency or instrumentality, domestic or foreign, or any
arbitrator applicable to Buyer or its assets and properties.
F. Governmental
Approvals. No authorization, approval or consent of any
governmental or regulatory authority or agency is necessary to permit Buyer to
execute and deliver this Agreement and to perform its obligations
hereunder.
G. Brokers’ Fees.
The Buyer has no liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement for which the Seller could become liable or
obligated.
H. Disclosures. No
representation, warranty or covenant by Buyer in this Agreement, or any
certificate or any other instrument furnished or to be furnished to Seller
pursuant hereto or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of material fact or omits or will
omit any material fact which will make the statements contained herein or
therein materially misleading.
VI. COVENANTS
A. Payment of Post-Closing
Monies Received. Seller will immediately upon receipt forward to
Buyer any and all monies received or collected by the Seller on or after the
Closing Date related to the Customer and/or its Accounts
Receivable.
B. Support. After
the Closing, Seller will provide support and advice to Buyer regarding the
Assets, subject to Seller’s availability.
C. Non-Compete
Agreement.
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(i)
Agreement Not to
Compete. For a period of twelve (12) months after the Closing Date,
except as otherwise stated in this section, Seller shall not be engaged or
interested in any social medial business.
(ii)
Non-solicitation. For
a period of one (1) year after the Closing Date, Seller shall not, directly or
indirectly, cause or attempt to cause any customer, client, account or vendor,
or prospective customer, client, account or vendor to divert, terminate, limit
or in any manner modify or fail to enter into any actual or potential business
relationship with the Buyer. For purposes of this Section, a prospective
customer, client, account or vendor shall mean any customer, client, account or
vendor that the Seller was involved with for the twelve (12) month period prior
to the Closing Date.
(iii)
Necessary and
Reasonable. The Seller agrees that the covenants provided for in this
Section are necessary and reasonable in order to protect the Buyer in the
conduct of its business, to protect the trade secrets and other proprietary
information of the Buyer and to protect the Buyer in the utilization of the
assets, tangible and intangible, including the goodwill of the
Buyer.
D. Further Acts.
Each Party shall on the reasonable request of the other party execute and
deliver in proper form any instruments and documents and perform any and all
acts necessary or desirable for perfecting in the other party title to all items
intended to be transferred under this Agreement and placing that party in actual
possession of the item(s).
E. Assistance with
Transition. Seller will provide reasonable transition services
to Buyer in order to help the smooth transfer of all Customers, contracts and
other Assets to Buyer.
VII. INDEMNIFICATION
A. Buyer
agrees to indemnify, defend and hold the Seller and its successors and assigns,
harmless against any and all losses, damages, demands, claims, assessments,
actions, taxes, deficiencies, penalties, interest, reasonable attorney’s fees,
costs and expenses, arising out of, or incident to, any of the following (the
“Losses”): (i) any inaccuracy, misrepresentation or breach of any warranty made
by Buyer in this Agreement; and (ii) any failure by Buyer to perform in
accordance with the terms hereof any of the obligations or covenants to be
performed by it hereunder. The indemnification obligations of the Buyer
under this Section VII.A, and the representations, warranties, agreements and
covenants of the Buyer under this Agreement shall survive the Closing for a
period of two (2) years from the Closing Date.
B. The
Seller agrees to indemnify, defend and hold the Buyer and its shareholders,
directors, officers, affiliates, successors and assigns harmless against any and
all Losses (as defined above) arising out of or incident to any of the
following:
1. any
inaccuracy, misrepresentation or breach of any representation or warranty made
by Seller, or either of them, in this Agreement;
2. any
failure by the Seller to perform in accordance with the terms hereof any of the
agreements, obligations or covenants to be performed by it hereunder;
and
3. any
liability of the Seller, whether accrued, absolute, contingent or otherwise, and
whether due or to become due unless otherwise expressly assumed by Buyer
pursuant to this Agreement and the documents and agreements executed pursuant
hereto.
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The
indemnification obligations of the Seller under this Section VII.B. and the
representations, warranties, agreements and covenants of the Sellers under this
Agreement shall survive the Closing for a period of two (2) years from the
Closing Date.
VIII.
MISCELLANEOUS
A. This
Agreement shall not confer any rights or remedies upon any person other than the
parties hereto and their respective successors and permitted
assigns.
B. This
Agreement (including the documents referred to herein) constitutes the entire
agreement among the parties hereto and supersedes any prior understandings,
agreements, or representations by or among the parties, written or oral, to the
extent they have related in any way to the subject matter hereof.
C. This
Agreement shall be binding upon and inure to the benefit of the parties named
herein and their respective successors and permitted assigns. No party may
assign either this Agreement or any of his or its rights, interests, or
obligations hereunder without the prior written approval of the other
party.
D. Each
party shall be responsible for its own legal and transactional expenses,
including the cost of any fees owed to any broker or finder engaged by a party
in connection with the transactions contemplated by this Agreement.
E. All
covenants, agreements, representations and warranties of the parties made herein
and in the certificates, lists, exhibits, schedules or other written information
delivered, attached, or furnished in connection therewith and herewith shall be
deemed material and to have been relied upon by the other party, and, except as
provided otherwise in this Agreement, shall survive the delivery of the
certificates representing the shares and the payment of the Purchase Price and
shall bind the respective successors and permitted assigns of the parties,
whether so expressed or not, and, except as provided otherwise in this
Agreement, all such covenants, agreements, representations and warranties shall
inure to the benefit of each party’s respective successors and permitted
assigns, whether so expressed or not.
F. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument. The facsimile signature of any party shall be deemed to be an
original signature of such party and shall be given the same effect as an
original signature of such party.
G. The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
H. This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Connecticut without regard to conflict of laws rules and
principles.
I. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by both of the parties hereto. No waiver by
any party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
J. Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.
K. The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word “including” shall
mean including without limitation. The exhibits, if any, identified in
this Agreement are incorporated herein by reference and made a part
hereof.
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L. All
notices and communications pursuant to this Agreement shall be in writing and
shall be deemed properly given and effective when received if (a) personally
delivered, (b) sent by a national delivery service providing evidence of
delivery, or (b) sent by facsimile, to the following:
If to
Seller, to:
(p)
(f)
If to
Buyer, to:
Xxxxx
Xxxxxxxx
00 Xxxx
Xxxxxx
Xxxxx
0000
Xxx Xxxx,
Xxx Xxxx 00000
(p)
(f)
M. If
either party hereto shall breach any of the terms hereof, such party shall pay
to the non-defaulting party all of the non-defaulting party’s costs and
expenses, including attorney’s fees, incurred by such party in enforcing the
terms of this Agreement.
IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals as
of the day and year first written above.
| HNY Acquisition Corp. | Ckrush Digital Media, Inc. | |||
|
By:/s/ Xxxxx
Xxxxxxxx
|
By:
/s/ Xxxxxx Xxxxxx
|
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|
Xxxxx
Xxxxxxxx, its CEO and President
|
Xxxxxx
Xxxxxx, President
|
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|
|
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SCHEDULE
A – LIST OF ASSETS.
Software:
all program software, as is, on services with license(s), and web sites,
portals, databases, including all rights to and copies of the source code and
associated documentation, developers notes and any other material required to
support and/or modify the said source code. Domain names/URL’s; xxx.xxxxxxxxxxx.xxx,
xxx.xxxxxxxxx.xxx and
xxx.xxxxxxxxxxx.xxx
(the “Websites”) including
all copyrights (and renewals and extensions of copyright) and trademarks,
whether such assets consist of literary, dramatic, or any other form of works of
the rights to “livemansion” (collectively the “Assets”).
Exclusion: Specifically
excluded are movie rights to a proposed movie that would have the title “Live
Mansion”. The site Live Mansion (found at xxx.xxxxxxxxxxx.xxx)
was engaged to provide contests related to the proposed movie of the same title
which title is owned by a related entity Live Mansion: the Movie
LLC.
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