REORGANIZATION AND STOCK PURCHASE AGREEMENT
by and between
Go Online Networks Corporation
a Delaware corporation
and
Auctionomics, Inc.
a Nevada corporation
and its shareholders
REORGANIZATION AND STOCK PURCHASE AGREEMENT
REORGANIZATION AND STOCK PURCHASE AGREEMENT ("Agreement"), effective as of
May 10, 2000, by and among Go Online Networks Corporation, a Delaware
corporation (hereinafter referred to as "GONT"), Auctionomics, Inc., a Nevada
corporation (hereinafter referred to as "Auction"), and Xxxxxx X. Xxxxxx, an
individual ("Xxxxxx") and Xxxxxx Xxxxxxxxx, an individual ("Wolfstein") (each of
Xxxxxx and Wolfstein shall be referred to as a "Shareholder" and collectively
the "Shareholders"). Each of GONT, Auction, and the Shareholders shall be
referred to herein as a "Party" and collectively as the "Parties."
W I T N E S S E T H
WHEREAS, pursuant to that certain Reorganization and Stock Purchase
Agreement dated June 10, 1999, as amended on June 25, 1999 (the "1999
Agreement"), GONT (formerly known as Xxxxx Xxxxxxxx Entertainment, Inc., a
Colorado corporation) acquired 7,500 shares of Auction (the "Auction Shares"),
representing 75% of the issued and outstanding common stock of Auction, from the
Shareholders;
WHEREAS, pursuant to the terms of the 1999 Agreement, GONT was required to
issue to the Shareholders an aggregate of 500,000 shares of GONT "restricted"
common stock (the "GONT Shares"); however, the GONT Shares were never issued or
delivered to the Shareholders;
WHEREAS, pursuant to the terms of the 1999 Agreement, GONT was required to
issue to the Shareholders warrants to acquire 500,000 shares of GONT
"restricted" common stock exercisable for a period of two (2) years at an
exercise price of $0.50 per share (the "GONT Warrants"); however, the GONT
Warrants were never issued or delivered to the Shareholders;
WHEREAS, pursuant to the terms of the 1999 Agreement, GONT provided Auction
with the sum of $25,000 for working capital purposes (the "Cash Advance");
WHEREAS, pursuant to the terms of the 1999 Agreement, GONT entered into
that certain Consulting Agreement dated June 10, 1999 (the "Consulting
Agreement") with WLTC, LLC, a California Limited Liability Company owned and
controlled by the Shareholders;
WHEREAS, GONT desires to sell, and the Shareholders desire to purchase from
GONT, on the terms and conditions set forth herein, the Auction Shares.
NOW THEREFORE, in consideration of the premises and respective mutual
agreements, covenants, representations and warranties herein contained, it is
agreed between the parties hereto as follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 Sale of the Auction Shares. At the Closing, subject to the terms
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and conditions herein set forth, and on the basis of the representations,
warranties and agreements herein contained, GONT shall sell to the Shareholders
and the Shareholders shall purchase from GONT, all of the Auction Shares. The
Shareholders shall give to GONT, or their assigns, as consideration for the
receipt of the Auction Shares, the following:
A. Purchase Price. On or before 5pm, Los Angeles time, on May 12,
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2000, the Shareholders shall pay to GONT the sum of $140,000.
B. Cancellation of Prior Agreements. The Shareholders, and each of
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them, hereby acknowledge and agree that the 1999 Agreement and the Consulting
Agreement, and all of the terms, rights, obligations, privileges and preferences
set forth therein, shall be terminated in their entirety.
C. Forfeiture of GONT Shares and GONT Warrants. The Shareholders, and
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each of them, hereby acknowledge and agree that any rights or interest they may
have in the GONT Shares and/or the GONT Warrants is hereby terminated, and the
Shareholders shall not have nor make any claim to them in the future.
1.2 GONT Obligations. Effective as of the Closing, GONT hereby agrees
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to execute a consulting agreement with each of Xxxxxx and Wolfstein in
substantially the form as set forth in Exhibits A and B hereto.
1.3 Resignation of Director and Officer. Effective as of the Closing,
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as evidenced by his signature on this Agreement, Xxx Xxxxxxxx shall resign as a
Director, Secretary and Treasurer of Auction, as well as any other positions he
holds as an officer, director, and/or employee of Auction.
1.4 Release. Effective upon execution of this Agreement, each of the
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Parties hereto hereby forever releases and discharges the other, and each of
them, their affiliates, divisions, predecessors, successors and assigns, and
each and all of their present and former agents, officers, directors, attorneys,
and employees, from and against any and all claims, agreements, contracts,
covenants, representations, obligations, losses, liabilities, demands and causes
of action, known or unknown, which such party may now or hereafter have or claim
to have against them, arising out of or pertaining to the 1999 Agreement, the
Consulting Agreement, the GONT Shares, the GONT Warrants, and the Cash Advance
(collectively, the "Released Matters").
Scope of Release. The Parties, and each of them, acknowledge and agree
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that this release applies to all claims that they may have against the other
Parties, their attorneys, employees, officers, and directors (as applicable),
including, but not limited to, causes of action, injuries, damages, claims for
costs or losses to their person and property, real or personal, whether those
injuries, damages, or losses are known or unknown, foreseen or unforseen, or
patent or latent. The Parties, and each of them, agree not to file any
complaints, causes of action, or grievances with any governmental, state or
county entity arising out of the Released Matters.
Section 1542 Release. It is understood and agreed by all Parties hereto
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that all rights under Section 1542 of the Civil Code of California, which
provides as follows:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
are hereby expressly waived. Each Party acknowledges and agrees such Party
understands the consequences of a waiver of Section 1542 of the California Civil
Code and assumes full responsibility for any and all injuries, damages, losses
or liabilities that may hereinafter arise out of or be related to matters
released hereunder. Each Party understands and acknowledges that the
significance and consequence of this waiver of Section 1542 of the Civil Code is
that even if such Party should eventually suffer additional damages arising out
of the subject matter of the action, will not be permitted to make any claim
for those damages. Furthermore, each Party acknowledges that they intend these
consequences even as to claims for damages that may exist as of the date of this
Release but which a Party does not know exists, and which, if known, would
materially affect each Party's decision to execute this Release, regardless of
whether each Party's lack of knowledge is the result of ignorance, oversight,
error, negligence, or any other cause.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Auction and GONT. To induce the
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Shareholders to enter into this Agreement and to consummate the transactions
contemplated hereby, Auction and GONT represent and warrant, to the best of
their knowledge, as of the date hereof and as of the Closing, as follows:
2.1.1 Corporate Existence and Authority of Auction. Auction is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada. It has all requisite corporate power, franchises,
licenses, permits and authority to own its properties and assets and to carry on
its business as it has been and is being conducted. It is in good standing in
each state, nation or other jurisdiction in each state, nation or other
jurisdiction wherein the character of the business transacted by it makes such
qualification necessary.
2.1.2 Capitalization of Auction. The authorized equity securities of
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Auction consists of 100,000 shares of common stock, par value $0.001, of which
10,000 shares are issued and outstanding as of the date hereof. No other shares
of capital stock of Auction are issued and outstanding. All of the issued and
outstanding shares have been duly and validly issued in accordance and
compliance with all applicable laws, rules and regulations and are fully paid
and nonassessable. All presently exercisable voting rights in Auction are
vested exclusively in its outstanding shares of common stock, each share of
which is entitled to one vote on every matter to come before it's shareholders,
and other than as may be contemplated by this Agreement, there are no voting
trusts or other voting arrangements with respect to any of Auction's equity
securities.
2.1.3 Subsidiaries. Auction does not currently have any
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subsidiaries.
2.1.4 Execution of Agreement. The execution and delivery of this
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Agreement does not, and the consummation of the transactions contemplated hereby
will not: (a) violate, conflict with, modify or cause any default under or
acceleration of (or give any party any right to declare any default or
acceleration upon notice or passage of time or both), in whole or in part, any
charter, article of incorporation, bylaw, mortgage, lien, deed of trust,
indenture, lease, agreement, instrument, order, injunction, decree, judgment,
law or any other restriction of any kind to which Auction is a party or by which
it or any of its properties are bound; (b) result in the creation of any
security interest, lien, encumbrance, adverse claim, proscription or restriction
on any property or asset (whether real, personal, mixed, tangible or
intangible), right, contract, agreement or business of Auction; (c) violate any
law, rule or regulation of any federal or state regulatory agency; or (d) permit
any federal or state regulatory agency to impose any restrictions or limitations
of any nature on Auction or any of its actions.
2.2 Representations and Warranties of the Shareholders. To induce
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Auction and GONT to enter into this Agreement and to consummate the transactions
contemplated hereby, the Shareholders, and each of them, to the best of their
knowledge, represents and warrants, as of the date hereof and as of the Closing,
as follows:
2.2.1 The Shareholders have the full right, power and authority to
enter into this Agreement and to carry out and consummate the transaction
contemplated herein. This Agreement constitutes the legal, valid and binding
obligation of the Shareholders.
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMENTS
3.1 Closing. The Closing shall be deemed to have occurred as of the
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date that each of the Parties hereto have executed this Agreement. Subsequent
to the Closing the following shall occur as a single integrated transaction:
3.2 Delivery by GONT:
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(a) GONT shall deliver to the Shareholders the Auction Shares and all
instruments of conveyance and transfer required by herein subject to no liens,
security interests, pledges, encumbrances, charges, restrictions, demands or
claims in any other party whatsoever, except as may be set forth on the
certificates.
3.3 Delivery by The Shareholders:
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(a) The Shareholders shall deliver to GONT the Purchase Price as set
forth in Section 1.1(A) hereof.
ARTICLE 4
CONDITIONS, TERMINATION, AMENDMENT AND WAIVER
4.1 Conditions Precedent. This Agreement, and the transactions
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contemplated hereby, shall be subject to the approval of the Board of Directors
of GONT, which shall be delivered at the Closing.
4.2 Termination. Once executed, this Agreement may be terminated only
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by mutual written consent of the Parties.
4.3 Waiver and Amendment. Any term, provision, covenant,
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representation, warranty or condition of this Agreement may be waived, but only
by a written instrument signed by the party entitled to the benefits thereof.
The failure or delay of any party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any condition, or
of the breach of any term, provision, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
parties hereto.
ARTICLE 5
COVENANTS
5.1 Each of the Parties hereto covenants and agrees as follows:
5.1.1 Notices and Approvals. Each Party agrees: (a) to give and to
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cause GONT or Auction to give all notices to third parties which may be
necessary or deemed desirable by GONT or Auction in connection with this
Agreement and the consummation of the transactions contemplated hereby; (b) to
use its best efforts to obtain and to cause GONT or Auction to obtain all
federal and state governmental regulatory agency approvals, consents, permits,
authorizations, and orders necessary or deemed desirable by GONT or Auction in
connection with this Agreement and the consummation of the transaction
contemplated hereby; and (c) to use its best efforts to obtain, and to cause
GONT or Auction to obtain, all consents and authorizations of any other third
parties necessary or deemed desirable by GONT or Auction in connection with this
Agreement and the consummation of the transactions contemplated hereby.
5.1.2 Information for Statements and Applications. The Parties and
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their employees, accountants and attorneys shall cooperate fully with GONT and
Auction in the preparation of any statements or applications made by GONT or
Auction to any federal or state governmental regulatory agency in connection
with this Agreement and the transactions contemplated hereby and to furnish GONT
or Auction with all information concerning the GONT, the Shareholders and
Auction necessary or deemed desirable by GONT or Auction for inclusion in such
statements and applications, including, withoutlimitation, all requisite
financial statements and schedules.
5.1.3 Access to Information. GONT and Auction, together with their
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appropriate attorneys, agents and representatives, shall be permitted to make
the full and complete investigation of the other and have full access to all of
the books and records of the other during reasonable business hours.
Notwithstanding the foregoing, such parties shall treat all such information as
confidential and shall not disclose such information without the prior consent
of the other.
ARTICLE 6
MISCELLANEOUS
6.1 Expenses. Except as otherwise specifically provided for herein,
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whether or not the transactions contemplated hereby are consummated, each of the
parties hereto shall bear all taxes of any nature (including, without
limitation, income, franchise, transfer and sales taxes) and all fees and
expenses relating to or arising from its compliance with the various provisions
of this Agreement and such party's covenants to be performed hereunder, and
except as otherwise specifically provided for herein, each of the parties hereto
agrees to pay all of its own expenses (including, without limitation, attorneys
and accountants' fees and printing expenses) incurred in connection with this
Agreement, the transactions contemplated hereby, the negotiations leading to the
same and the preparations made for carrying the same into effect, and all such
taxes, fees and expenses of the parties hereto shall be paid prior to Closing.
6.2 Notices. Any notice, request, instruction or other document
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required by the terms of this Agreement, or deemed by any of the parties hereto
to be desirable, to be given to any other party hereto shall be in writing and
shall be given by prepaid telegram or delivered or mailed by registered or
certified mail, postage prepaid, with return receipt requested, to the following
addresses:
To GONT:
Go Online Networks Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxx Xxxxxxxx
Facsimile (000) 000-0000
with a copy to:
Xxxxxx Law Group
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: M. Xxxxxxx Xxxxxx, Esq.
Facsimile (000) 000-0000
To Auction or The Shareholders:
Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxxxxx
Auctionomics, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxx 000
Xxxxxxx, XX 00000
Facsimile (000) 000-0000
The persons and addresses set forth above may be changed from time to time
by a notice sent as aforesaid. If notice is given by delivery in accordance
with the provisions of this Section, said notice shall be conclusively deemed
given at the time of such delivery. If notice is given by mail in accordance
with the provisions of this Section, such notice shall be conclusively deemed
given forty-eight (48) hours after deposit thereof in the United States mail.
If notice is given by telegraph in accordance with the provisions of this
Section, such notice shall be conclusively deemed given at the time that the
telegraphic agency shall confirm delivery thereof to the addressee.
6.3 Entire Agreement. This Agreement, together with the schedule and
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exhibits hereto, sets forth the entire agreement and understanding of the
parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement, or exhibits hereto or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set forth.
6.4 Survival of Representations. All statements of fact (including
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financial statements) contained in the schedules, the exhibits, the certificates
or any other instrument delivered by or on behalf of the parties hereto, or in
connection with the transactions contemplated hereby, shall be deemed
representations and warranties by the respective party hereunder. All
representation, warranties agreements and covenants hereunder shall survive the
Closing and remain effective regardless of any investigation or audit at any
time made by or on behalf of the parties or of any information a party may have
in respect thereto. Consummation of the transactions contemplated hereby shall
not be deemed or construed to be a waiver of any right or remedy possessed by
any party hereto, notwithstanding that such party knew or should have known at
the time of Closing that such right or remedy existed.
6.5 Incorporated by Reference. All documents (including, without
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limitation, all financial statements) delivered as part hereof or incident
hereto are incorporated as a part of this Agreement by reference.
6.6 Remedies Cumulative. No remedy herein conferred upon and Party is
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intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
6.7 Execution of Additional Documents. Each party hereto shall make,
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execute, acknowledge and deliver such other instruments and documents, and take
all such other actions as may be reasonably required in order to effectuate the
purposes of this Agreement and to consummate the transactions contemplated
hereby.
6.8 Finders' and Related Fees. Each of the parties hereto is
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responsible for, and shall indemnify the other against, any claim by any third
party to a fee, commission, bonus or other remuneration arising by reason of any
services alleged to have been rendered to or at the instance of said party to
this Agreement with respect to this Agreement or to any of the transactions
contemplated hereby.
6.9 Governing Law. This Agreement has been negotiated and executed in
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the State of California and shall be construed and enforced in accordance with
the laws of such state.
6.10 Forum. Each of the parties hereto agrees that any action or suit
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which may be brought by any party hereto against any other party hereto in
connection with this Agreement or the transactions contemplated hereby may be
brought only in a federal or state court in Orange County, California.
6.11 Attorneys' Fees. Except as otherwise provided herein, if a
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dispute should arise between the parties including, but not limited to
arbitration, the prevailing party shall be reimbursed by the nonprevailing party
for all reasonable expenses incurred in resolving such dispute, including
reasonable attorneys' fees exclusive of such amount of attorneys' fees as shall
be a premium for result or for risk of loss under a contingency fee arrangement.
6.12 Binding Effect and Assignment. This Agreement shall inure to the
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benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, legal representatives and assigns.
6.13 Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date first written hereinabove.
GO ONLINE NETWORKS CORPORATION, AUCTIONOMICS, INC.,
A DELAWARE CORPORATION A NEVADA CORPORATION
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxx
______________________________ ______________________________
By: Xxxxxx Xxxxxxxx By: Xxxxxx Xxxxxx
Its: President Its: President
/s/ Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxxx
______________________________ _______________________________
Xxxxxx Xxxxxx, an individual Xxxxxx Xxxxxxxxx, an individual
