Exhibit 10.2
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made this eleventh day of November, 2016, by and among Red
Giant Entertainment, Inc., a Nevada Corporation ("Buyer"), and Xxxxx X. Xxxxxx
("Seller").
RECITALS
WHEREAS, Seller is the 100% owner of certain intellectual properties
more fully described in Schedule "A" attached hereto (collectively, the
"Properties"); and
WHEREAS, Buyer desires to acquire Properties; and
WHEREAS, Buyer offers to acquire the Properties by issuing two million
five hundred thousand (2,500,000) shares of Seller's Series Z Preferred shares
(the "REDG Series Z Stock" or "REDG Z Shares"); and
WHEREAS, Seller is agreeable to these terms and is willing to tender
its ownership of the Properties in exchange for two million five hundred
thousand REDG Series Z Shares, the value of which is believed to be an
equivalent exchange; and
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, the parties hereto intending to be legally
bound hereby, agree as follows:
ARTICLE 1
SALE AND TRANSFER OF INTELLECTUAL PROPERTY
1.1 IN GENERAL. The Recitals above are incorporated in their entirety as
understandings of the Parties and as consideration of value for entry into this
Agreement.
1.2 SALE AND TRANSFER OF INTELLECTUAL PROPERTY. On the terms and
subject to the conditions set forth in this Agreement, the Seller hereby
covenants and agrees to sell, transfer and convey all of its rights, title and
interests in and to the Properties, including its copyrights and royalty
agreements, if any, which are hereby assigned to Buyer, to the Buyer free and
clear of any and all Encumbrances whatsoever, and the Seller further agrees to
waive any moral rights that the Seller may have with respect to the Properties
in favor of the Buyer.
1.3 NO ASSUMPTION OF LIABILITIES. It is expressly understood and agreed
that Buyer shall not be liable for, and hereby disclaims any assumption of, any
of the obligations, third party claims or liabilities of Seller and/or his
affiliates and/or of any third party of any kind or nature whatsoever arising
from or in connection with any circumstances, causes of action, breach,
violation, default or failure to perform with respect to the Properties.
1.4 FURTHER ASSURANCES. At any time after Closing, and from time to
time thereafter, the Seller shall, upon the Buyer's written request, and at the
Buyer's expense, take any and all action and execute, acknowledge and deliver to
the Buyer any and all further instruments and assurances necessary or expedient
in order to fully vest in the Buyer the Properties and to facilitate the Buyer's
enjoyment, defense and enforcement thereof. If, at any time after Closing, any
entity or person directly or indirectly controlled by the Seller, or a "Seller
Affiliate", is determined or deemed to have any right, title or interest in or
to the Properties, the Seller agrees to use its best efforts to cause that
Affiliate or Seller's Affiliate to transfer, assign, convey or release in favor
of the Buyer any and all right, title or interest that such Affiliate or
Seller's Affiliate may have in or to the Properties without payment of any
additional consideration by the Buyer. The Seller hereby irrevocably designates
and appoints the Buyer and its duly authorized officers and agents, with full
power of substitution, as the Seller's agents and attorneys-in-fact to act for
and on behalf and instead of the Seller, to take any and all actions, including
proceedings at law, in equity or otherwise, to execute, acknowledge and deliver
any and all instruments and assurances necessary or expedient in order to fully
vest in the Buyer or perfect the sale, transfer, assignment and conveyance of
the Properties to the Buyer or to protect the same or to enforce any claim or
right of any kind with respect thereto. The foregoing power is coupled with an
interest and is irrevocable.
1.5 INTELLECTUAL PROPERTY OWNERSHIP. The Parties acknowledge and agree
that, as between Buyer and Seller, Seller irrevocably assigns to Buyer herewith,
and acknowledges that, to the extent permitted under applicable law, Buyer owns
and retains, the entire and exclusive right, title, and interest in and to the
Properties including all their included works and other characteristics
associated therewith and any and all objects, sound and works embodied in the
Properties, and all Intellectual Property or other identifications used with or
in conjunction with the Properties created, designed or developed by Seller or
its contractors from the inception of the development of the Properties, and
each of them individually, and all renewals and extensions thereof inclusive of
Seller's institutional trademarks.
To the extent Seller owns or controls intellectual property rights
related to the Properties but not assigned herein, Seller hereby licenses such
rights to Buyer on a non-exclusive, non-transferable basis solely to the extent
necessary to fulfill the spirit of this Agreement.
1.6 REVENUE. As per the Effective Date, any and all revenue derived
directly or indirectly from the Properties is the property of the Buyer
exclusively.
1.7 PAYMENT OF PURCHASE PRICE. Subject to all of the terms and
conditions of this Agreement, Buyer agrees to deliver newly issued, Series Z,
REDG Series Z Stock totaling Seven Million Five Hundred Thousand (7,500,000)
Shares issued in the name of Xxxxx X. Xxxxxx, and/or his assigns, in exchange
for one hundred percent of the ownership, title, and interest in the Properties
shown on Schedule "A" of this Agreement owned by Seller, and Seller hereby
agrees to transfer full title and interest in the Properties to Buyer, subject
to the terms of this Agreement. Delivery of the REDG Z Shares may be book entry
on the books of Buyer or by physical certificate.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
SELLER REPRESENTS AND WARRANTS TO BUYER THAT:
2.1 TITLE. Seller has all necessary power to own the Properties and to
carry on their business as now owned and operated by them, and they are duly
qualified to do business and are in good standing in each of the states and
other jurisdictions where their business requires qualification.
2.2 COMPLIANCE WITH LAWS. Seller has substantially complied with, and
is not in violation of, all applicable federal, state or local statutes, laws
and regulations, including, without limitation, any applicable building, zoning,
environmental, employment or other law, ordinance or regulation affecting the
Properties, products or the operation of their business except where such
non-compliance would not have a materially adverse effect on the business or
financial condition of Seller. Seller has all licenses and permits required to
conduct his business as now being conducted.
2.3 LITIGATION. Seller is not a party to any suit, action, arbitration
or legal, administrative or other proceeding, or governmental investigation
pending or, to the best knowledge of Seller, threatened against or affecting
Seller or his business, assets or financial condition, except for matters which
would not have a material affect on Seller or the Properties. Seller is not in
default with respect to any order, writ, injunction or decree of any federal,
state, local or foreign court, department, agency or instrumentality applicable
to him. Seller is not engaged in any lawsuits to recover any material amount of
monies due to him.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER.
BUYER REPRESENTS AND WARRANTS TO SELLER THAT:
3.1 ORGANIZATION. Buyer is a corporation duly organized but is not
validly existing or in good standing at the present time under the laws of
Nevada, but it or its subsidiaries otherwise have all necessary corporate powers
to own their properties and to carry on their businesses as now owned and
operated, and are duly qualified to do business in each of such states and other
jurisdictions where their respective business requires such qualification.
3.2 COMPLIANCE WITH LAWS. Buyer has substantially complied with, and is
not in violation of, all applicable federal, state or local statutes, laws and
regulations, including, without limitation, any applicable building, zoning,
environmental, employment or other law, ordinance or regulation affecting its
properties, products or the operation of its business except where such
non-compliance would not have a materially adverse effect on the business or
financial condition of Buyer, except for Buyer's non-compliance with applicable
federal securities laws. Buyer has all licenses and permits required to conduct
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its business as now being conducted other than Buyer's delinquencies with the
State of Nevada which are known to Seller.
3.3 LITIGATION. Buyer is not a party to any suit, action, arbitration
or legal, administrative or other proceeding, or governmental investigation
pending or, to the best knowledge of Buyer, threatened against or affecting
Buyer or its business, assets or financial condition, except for matters which
would not have a material affect on Buyer or its properties. Buyer is not in
default with respect to any order, writ, injunction or decree of any federal,
state, local or foreign court, department, agency or instrumentality applicable
to it. Buyer is not engaged in any lawsuits to recover any material amount of
monies due to it.
3.4 BUSINESS. Following the closing, the only business and operations
of Buyer shall be that conducted by Buyer.
3.5 RIGHTS UPON LIQUIDATION OF BUYER. Buyer represents, covenants, and
warrants to Seller that in the event of a liquidation or insolvency of Buyer,
that Seller retain a lien on, and Buyer hereby automatically assigns to Seller
upon an event of liquidation or insolvency, any and all rights then owned or
controlled by Buyer to the Properties.
In the event of a liquidation or insolvency of Buyer, the rights to the
Properties shall automatically transfer to Seller without further order,
authorization or consent, and these Properties shall not be considered property
of the estate of Buyer in any bankruptcy or insolvency proceeding because all
rights, title, and interest in and to these Properties will belong to Buyer.
ARTICLE 4
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 OWNERSHIP. Seller owns and holds the Properties listed in Schedule
"A". Such Properties are owned of record, and such Properties are not subject to
any lien, encumbrance or pledge but are subject to any applicable pre-existing
contracts with participating artists, excluding Buyer, if any. Seller has the
authority to sell, assign, and transfer the Properties pursuant to this
Agreement.
4.2 INVESTMENT INTENT. Seller understands and acknowledges that the
REDG Series Z Stock is being issued as payment in reliance upon the exemption
from registration provided in Section 4(a)(2) of the Securities Act of 1933 (the
"Securities Act") for non-public offerings, and/or any other applicable
exemption from registration; and Seller makes the following representations and
warranties with the intent that the same may be relied upon in determining the
suitability of Seller as a purchaser of securities.
(a) The REDG Series Z Shares are being acquired solely for the
account of Seller, for investment purposes only, and not with a view to, or for
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sale in connection with, any distribution thereof and with no present intention
of distributing or reselling any part of the REDG Series Z Shares.
(b) Seller agrees not to dispose of his REDG Series Z Shares
or any portion thereof unless and until counsel for Buyer shall have determined
that the intended disposition is permissible and does not violate the Securities
Act or any applicable state securities laws, or the rules and regulations
thereunder.
(c) Seller acknowledges that Buyer has made all documentation
pertaining to all aspects of Buyer and the transaction herein available to him
and to his qualified representative(s), if any, and has offered such person or
persons an opportunity to discuss Buyer and the transaction herein with the
officers of Buyer.
4.3 INDEMNIFICATION. Seller recognizes that the offer of REDG Series Z
Shares to him/her is based upon his/her representations and warranties set forth
and contained herein and hereby agrees to indemnify and hold harmless Buyer
against all liability, costs or expenses (including reasonable attorney's fees)
arising as a result of any misrepresentations made herein by Seller.
4.4 RESTRICTIVE LEGEND. When issued, the certificates evidencing the
REDG Preferred Z Shares issued pursuant to this Agreement will have a legend
placed thereon which will restrict the sale of said shares for times and upon
conditions that are subject to federal and state securities laws.
4.5 WAIVER OF NON-COMPLIANCE. Seller waives any claim of lack of
authority or non-compliance with the laws of the State of Nevada by Buyer for
its failure to file its Annual Report and pay its registration fees with the
State of Nevada, and further waives any claim that Buyer lacks the authority to
enter into this Agreement by virtue of Buyer's non-compliance with any other
laws applicable to Buyer or Buyer's business or operations.
ARTICLE 5
PRE-CLOSING COVENANTS
5.1 INVESTIGATIVE RIGHTS. From the date of this Agreement each Party
shall provide to the other Party, and such other Party's counsels, accountants,
auditors, and other authorized representatives, full access during normal
business hours to all of Buyer's and Seller's respective properties, books,
contracts, commitments, and records for the purpose of examining the same. Each
Party shall furnish the other Party with all information concerning Buyer's and
Seller's affairs as the other party may reasonably request.
5.2 CONDUCT OF BUSINESS. Prior to the Closing, Buyer and Seller shall
each conduct their respective businesses in the normal course, and shall not
sell, pledge, or assign any assets, without the prior written approval of the
other Party, except in the regular course of business. Buyer shall not amend its
Articles of Incorporation or Bylaws, declare dividends, redeem or sell stock or
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other securities, incur additional or newly-funded liabilities, acquire or
dispose of fixed assets, change employment terms, enter into any material or
long-term contract, guarantee obligations of any third party, settle or
discharged any balance sheet receivable for less than its stated amount, pay
more on any liability than its stated amount, or enter into any other
transaction other than in the regular course of business. Seller shall take no
action that would or could result in the attachment of a lien on the Properties.
ARTICLE 6
POST-CLOSING COVENANTS
6.1 FOLLOWING THE CLOSING HEREIN:
(A) PROMPT REGISTRATION OF TRANSFER. Buyer shall register
transfer of the Series Z shares on its books and Seller shall upon Closing have
all rights of ownership of Series Z Shares, including voting rights, provided
that, no physical certificates of Series Z Preferred Shares shall be issued to
Seller until such time as applicable fees are paid to Buyer's stock transfer
agent.
(B) DELIVERY OF PROPERTIES. Seller will deliver to Buyer
within 10 days of Closing all Properties.
ARTICLE 7
CLOSING
7.1 CLOSING. Subject to the satisfaction or waiver of all of the
conditions precedent to Closing as set out in this Agreement, including the
acceptance of the Agreement by the Board of Directors of Buyer, Closing of the
transactions contemplated herein shall take place at such place and time on the
Closing Date as may be agreed to by the Parties hereto. The Closing Date shall
be such date as is agreed upon by the Parties hereto, but shall be no later than
November 30, 2016. Unless otherwise agreed to by each of the parties hereto, if
Closing does not occur on or before November 30, 2016, this Agreement shall
automatically be terminated and of no further force and effect.
7.2 ATTORNEY'S FEES. Each of Buyer and Seller shall be responsible to
the other party for their attorney fees (if any) incurred herewith, as further
defined, below.
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ARTICLE 8
MISCELLANEOUS
8.1 CONFIDENTIALITY. Unless compelled by a subpoena or otherwise
required under the rule of law no party to this transaction will discuss terms
of the transaction, its parties, or any other aspect of this transaction,
contemplated, executed, or finalized with any individual other than counsel and
individuals or parties directly related to this transaction.
8.2 CAPTIONS. The Article and paragraph headings throughout this
Agreement are for convenience and reference only, and shall in no way be deemed
to define, limit, or add to the meaning of any provision of this Agreement.
8.3 NO ORAL CHANGE. This Agreement and any provision hereof, may not be
waived, changed, modified, or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharged is sought.
8.4 NON-WAIVER. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver with
respect to any other or subsequent breach.
8.5 TIME OF THE ESSENCE. Time is of the essence of this Agreement and
of each and every provision hereof.
8.6 ENTIRE AGREEMENT. This Agreement contains the entire Agreement and
understanding among the parties hereto, supersedes all prior agreements and
understandings, and constitutes a complete and exclusive statement of the
agreements, responsibilities, representations and warranties of the parties.
8.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.8 BINDING EFFECT. This Agreement shall inure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the Parties to this Agreement.
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8.9 ANNOUNCEMENTS. The Parties will consult and cooperate with each
other as to the timing and content of any announcements of the transactions
contemplated hereby to the general public or to employees, customers or
suppliers.
8.10 BROKERAGE. The Parties each represent that no finder, broker,
investment banker or other similar person has been involved in this transaction.
Each party agrees to indemnify and hold the others harmless from payment of any
brokerage fee, finder's fee or commission claimed by any other person or entity
who claims to have been involved in the transaction herein because of an
association with such party.
8.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the parties set forth in this Agreement or in any instrument,
certificate, opinion, or other writing providing for it, shall survive the
Closing irrespective of any investigation made by or on behalf of any party for
a period of one year.
8.12 CHOICE OF LAW. This Agreement and its application shall be
governed by the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their authorized representatives, all as of the date first written
above.
RED GIANT ENTERTAINMENT INC:
(a Nevada Corporation)
By:
----------------------------------- -------------------------------------
Xxxxx X. Xxxxxx, President Date
By:
----------------------------------- -------------------------------------
Xxxxx X. Xxxxxx, Individually Date
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SCHEDULE "A"
1. Xxxxxx & Xxxxx
2. Armory
3. Channel: Arena Earth
4. Crazy Train
5. Hero Zero
6. Xxxxxxx
7. Marble Comics
8. Pockets
9. Robotopia
10. Viral Media
11. Warriors Way
12. Wayward Souls
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