ASSET TRANSFER AGREEMENT
This Asset Transfer Agreement is made as of this 18th day of
July, 2001 between SONIC GARDEN, INC., a California corporation
("Buyer") and THE PHOENIX GROUP INTERNATIONAL, LLC, a Delaware
limited liability company ("Seller").
WITNESSETH:
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WHEREAS, Seller has been developing a web-based digital
music business under the name "Sonic Garden";
WHEREAS, Buyer was formed for the purpose of carrying on that
business of Seller;
WHEREAS, Seller desires to transfer to Buyer, and Buyer
desires to acquire from Seller, the assets, properties and
business of Seller as hereinafter described pursuant to Section
351 of the Internal Revenue Code of 1986, as amended, as
hereinafter set forth.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and
covenants herein contained and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Transfer of Assets. Subject to the terms and
conditions of this
Agreement, Seller hereby agrees to assign and transfer to Buyer,
and Buyer hereby agrees to acquire the following assets, rights,
and properties of Seller, free and clear of any and all liens,
claims, liabilities, obligations, pledges, encumbrances, charges
and restrictions of every kind, nature and description (the
"Acquired Assets"):
a. All of the furniture, inventory, fixtures, machinery, and
equipment listed on Schedule 1. hereto;
b. All customer and vendor lists and information, files,
books of account and ledgers or other instruments or documents pertaining
to the assets being acquired by Buyer hereunder;
c. All leases, rental agreements, contracts and agreements of
Seller listed on Schedule 1. hereto (the "Assumed Contracts"); and
d. Certain of Seller's intellectual property and intangibles,
including, without limitation by reason of specification, those designs,
computer programs, software, trademarks, service marks, trade names,
copyrights, copyright registrations and applications therefor, domain names,
technical information, and other confidential information
relating thereto, including those intellectual property assets described
on Schedule 1.
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2. Purchase Price.
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a. Purchase Price. Buyer shall issue to Seller four million
(4,000,000) shares of Buyer's Common Stock, valued at one cent ($0.01) per
share (the "Purchase Price") in exchange for the Acquired Assets.
b. Allocation of Purchase Price. Buyer and the Seller
agree that the fair market value of the Acquired Assets is
forty thousand dollars ($40,000).
3. Assumption of Certain Liabilities and Obligations. Buyer shall
assume and agree to perform Seller's obligations arising under or
incidental to the Assumed Contracts.
4. Representations and Warranties of Seller. Seller represents
and warrants to, and agrees with, Buyer as follows:
a. Binding Effect. This Agreement and each instrument
executed and to be executed by Seller in connection herewith are and
will be the legal, valid and binding obligations of Seller, enforceable
against it in accordance with their respective terms.
b. Authorization. The execution, delivery and performance
by Seller of this Agreement and each instrument executed and to be
executed by Seller in connection herewith, and consummation of the
transactions provided for herein and therein, are within the power of
Seller and do not and will not contravene any law, regulation, judgment,
decree, order or award relating to Seller or conflict with or
result in any breach of any of the terms, conditions or provisions of,
or constitute a default under, or result in the creation of any lien,
charge, security interest or encumbrance upon, any of the assets or
properties of Seller pursuant to any indenture, mortgage, lease,
security agreement, partnership agreement or other agreement to which
Seller is a party or by which Seller is bound.
c. Title. Seller has good and marketable title in and
to all of the Acquired Assets, and upon consummation of the transactions
provided for herein, good and marketable title to the Acquired Assets,
free and clear of all liens, claims, charges, security interests and
encumbrances of any nature whatsoever, shall be vested in Buyer.
d. Contracts.
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i. Seller has delivered to Buyer true, correct and
complete copies of all of the Assumed Contracts.
ii. Seller is not in default under any Assumed Contract,
and Seller has not received any notice or claim to the contrary. Seller
does not know of any default under any Assumed Contract by any other
party thereto.
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e. Claims and Litigation. There are no material claims, suits,
legal, administrative, arbitration or other proceedings pending or threatened
against or affecting Seller or any of the Acquired Assets, and, to the
best of the knowledge of Seller, there is no existing basis for any
thereof, and there are no outstanding judgments, decrees, orders or awards
relating to the Acquired Assets.
5. Representations and Warranties of Buyer. Buyer represents and
warrants to, and agrees with, Seller as follows:
a. Binding Effect. This Agreement and each instrument
executed and to be executed by Buyer in connection herewith are and will be
the legal, valid and binding obligations of Buyer, enforceable in accordance
with their respective terms.
b. Authorization. The execution, delivery and performance
by Buyer of this Agreement, the issuance of the Shares and each instrument
executed and to be executed by Buyer in connection herewith, and
consummation of the transactions provided for herein and therein, are
and will be within the corporate powers of Buyer, have been duly
authorized by all necessary corporate action, require no governmental
approval, and do not and will not contravene any law, regulation, judgment,
decree, order or award relating to Buyer or conflict with or result
in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, lease, security agreement,
partnership agreement or other agreement to which Buyer is a party
or by which Buyer is bound.
6. Further Assurances. If at any time any further
assignments, conveyances or assurances in law are necessary or desirable
to vest, perfect or confirm of record in Buyer the title to any of the
Acquired Assets, or to confirm the assumption by Buyer of any
liability or obligation of Seller expressly assumed by Buyer
hereunder, or otherwise to carry out the provisions hereof, the
proper officers and directors of Seller or of Buyer, as the case may
be, shall execute and deliver any and all proper deeds, assignments,
instruments of assumption, powers of attorney and assurances in
law, and do all things necessary or proper to vest, perfect or
confirm title to such property or rights in Buyer or to confirm
the assumption by Buyer of any such liability or obligation of
Seller, as the case may be, and otherwise to carry out the
provisions hereof.
7. Miscellaneous.
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a. Parties in Interest. This Agreement shall inure solely to
the benefit of and shall be binding upon the successors and assigns of the
parties hereto.
b. Prior Agreements; Modifications. This Agreement shall
supersede all prior agreements, documents or other instruments with respect
to the matters covered hereby. This Agreement may be amended only by an
instrument in writing, duly signed by or on behalf of the parties hereto.
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c. Captions. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision hereof.
d. Governing Law. The terms of this Agreement shall be
governed by, and interpreted and construed in accordance with the provisions
of, the laws of the State of California.
e. Counterparts. This Agreement may be executed in any
number of counterparts, each of which, when so executed, shall constitute
an original copy hereof.
f. Notices. Any notice, request, instruction or other
document to be given hereunder shall be in writing and delivered
personally or sent by certified mail, postage prepaid, addressed as follows:
To Buyer:
Sonic Garden, Inc.
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Fax (000) 000-0000
To Seller:
The Phoenix Group International, LLC
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Fax (000) 000-0000
Any party may from time to time change its address for purpose of notices
to that party by a similar notice specifying a new address, but no
such change shall be deemed to have been given until it is
actually received by the parties to be charged therewith.
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IN WITNESS WHEREOF, each of the parties hereto, intending to
be legally bound hereby, has caused this Agreement to be signed
in its name by the undersigned thereunto duly authorized, all as
of the date first above written.
"Buyer"
Sonic Garden, Inc.
By:_______________________________
Xxxxx Xxxxxxxxx, Director
& Secretary
"Seller"
The Phoenix Group International, LLC
By: _______________________________
Xxxx Xxxxxxxx, President
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Schedule 1
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Seller's Furniture, Fixtures, Inventory, Machinery,
and Equipment Seller's Leases, Rental Agreements,
Contracts And Agreements
Seller's Intellectual Property
I. License of Intellectual Property & Contracts
a. Database, File-Server & Web Site. TPGI assigns to Sonic all
of TPGI's rights to the elements that currently comprise
TPGI's XXXXxxxxxx.xxx, including, but not limited to, the
graphics, source-code, multimedia files, database, database
infrastructure, artist information and such other elements
as may be required to make use of such properties. All files shall
be delivered free of password protection or together with a schedule
of all requisite passwords.
II. Assignment of Contracts & Materials
a. Assignment of Rights. TPGI hereby assigns to Sonic any and all
residual or continuing rights under the terms of the Recording
Contract(s) with The Color Red and AcidNine and any related or
subsequent agreements, settlements or contracts relating thereto.
b.Transfer of Artist Materials. In conjunction with the license in
item I(b) & II(a) above, TPGI hereby assigns to Sonic all artist
Materials (CDs, Merchandise etc.) currently in TPGI's possession for
the primary purpose of marketing such Materials under the terms and
conditions of Artist compensation as those agreed upon in the related
Agreement(s) or subsequently agreed upon by the Artists. Sonic
shall be responsible for the transportation of such Materials and
shall be solely responsible for the payments to Artists required
under the terms of the Artist Agreement(s) for any sales of such
Materials by Sonic or its assignee, and/or the return of such
Materials to the Artists as may be requested or required by the
Artists or their authorized representatives under the terms of the
Artist Agreement(s).
III. Assignment of Hardware Purchased
a. Fileserver and related Hardware. TPGI assigns to Sonic all
rights and ownership of the computer servers and hardware
currently being used by TPGI to develop and host the Sonic site,
including:
i. Compaq Proliant 8000 server (retail cost $45,000)
ii. Six (6) 1" 10k rpm 73.4GB Seagate hard drives
iii. Hardware & Software associated with same
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