ASSET PURCHASE AGREEMENT
AGREEMENT made as of March 1, 1997 between AllNet Technology Services,
Inc., 0 Xxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 ("Seller"), and Internet
Broadcasting System, Inc. (d/b/a IBS Interactive, Inc.), a Delaware Corporation
with its main office located at 000 Xxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxx 00000
("Purchaser").
Recitals
Seller owns and operates an Internet access business (the "Business") in
New Jersey.
Purchaser desires to purchase from Seller, and Seller desires to sell to
Purchaser, the Business, as a going concern, exclusive of cash and accounts
receivable and free of any obligations for accounts payable or other liabilities
of Seller.
It is therefore agreed:
1. SALE OF BUSINESS. Seller shall sell to Purchaser and Purchaser shall
purchase and acquire the Business owned and operated by Seller at 0 Xxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000, as a going concern. Such sale shall include
the following: the goodwill of the Business; the exclusive right to use the
trade name AllNet Technology Services; the equipment of the Business as set
forth in Schedule A attached hereto and made a part hereof; all records, book of
account, customers' lists and correspondence, files, research data, drawings,
and work in process at the date of closing; and all contracts with the clients
of the Business (collectively, the "Transferred Assets")
2. EXCLUSIONS. This sale does not include any cash on hand or in banks at
the date of closing. This sale does not include any accounts receivable due the
Business at the date of closing, or accounts receivable paid after the date for
internet access services for periods before the date of closing (collectively,
the "Excluded Assets") . For the purpose of this Agreement, "Internet access
provided before the date of closing" includes Internet access and other services
provided to a client before the date of closing.
3. COLLECTION OF ACCOUNTS RECEIVABLE. All checks or other proceeds
received, after closing, by Purchaser in payment of accounts receivable due the
Business at the date of closing and in payment of accounts receivable for
Internet access services provided prior to the date of closing shall be
immediately turned over to Seller in the form in which they are received. Any
checks received by Purchaser shall be first applied to Seller's accounts
receivables. Seller may endorse the name of Seller on all such checks and other
proceeds, and shall deposit them in a bank account maintained in his own name.
4. OBLIGATIONS OF SELLER. All accounts payable and other liabilities
incurred by the Business up to the date of closing, including liabilities for or
in connection with the provision of Internet access services before the date of
closing, shall be paid by Seller, who shall indemnify and hold the Purchaser
harmless against all such accounts payable and other liabilities. Unless
specifically provided in this Agreement, Purchaser is not acquiring, directly or
indirectly, any of Seller's liabilities, and no such assumption shall accrue to
Purchaser by operation of law or otherwise. Purchaser is, however, undertaking
the responsibility to service the clients on the customer list and to pay, from
the date of closing forward, all costs associated with same, including but not
limited to the cybernex and Xxxx Atlantic charges.
5. CONTRACTS. Purchaser acknowledges that Seller has made no
representations with respect to contracts or other arrangements with the
Business's clients ("Contracts"). Purchaser assumes the risk that all such
Contracts may be cancelled at will, and without notice, by the Business's
clients. Seller makes no representation that any Contracts are assignable.
Nevertheless, Seller undertakes, before the date of closing, to notify all the
Business's present clients of the change in ownership and to urge them to
continue to use the Internet access and other services offered by Seller.
6. PURCHASE PRICE. The purchase price for all the assets referred to in
paragraph 1 is $127,000.00 consisting of $75,000 in cash and thirteen (13)
shares of the common stock of Purchaser with a value of $4,000 per share (due
and payable to Seller as set forth in Schedule B attached hereto and made a part
hereof), attributable as follows: sixty five thousand dollars ($65,000) to the
physical assets, and sixty two thousand dollars ($62,000) to Seller's goodwill,
trade name, and other intangible assets.
7. NON-COMPETITION AGREEMENT. As a condition to this sale, Xxxxxxx Xxxxx
and Xxxxxxxx Xxxxxxx agree to execute the non-competition agreements contained
in Schedules C and D attached hereto and deliver same at closing.
8. CONDUCT OF BUSINESS PENDING CLOSING. Between the date of this Agreement
and the date of closing, Seller shall: conduct the Business in the same manner
in which it has previously been conducted; not increase the compensation payable
to any employee or any employee benefits; use its best efforts to preserve the
organizational efficiency of the Business; and continue to maintain the
standards of work achieved by Seller. The covenants set forth in this paragraph
shall not survive the closing.
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9. REPRESENTATIONS OF SELLER. Seller represents and warrants to Purchaser:
a) The assets to be transferred to Purchaser under this Agreement,
whether tangible or intangible, shall be at the time of transfer, free of all
liens, security interests, claims, and encumbrances.
b) To the best of Seller's knowledge Seller is not in breach or
default of any contract, lease, or arrangement to be assigned under this
Agreement, and Seller shall duly perform such contracts, leases, and
arrangements until closing.
c) Seller has not assigned or licensed any interest in the name
AllNet Technology Services, Inc. and has all right and title to use such name.
d) There are no outstanding agreements with any labor unions, or any
pension or retirement plans or programs for the benefit of employees.
e) There are no written or oral employment agreements with any
employee which are not terminable at will without penalty, and salaries and
wages are not in arrears.
f) Seller has and shall continue to make current and timely payment
of federal and New Jersey employee withholding taxes, New Jersey sales taxes,
and all other taxes, other than income taxes, which are due or may become due by
reason of the operation of the Business to be transferred.
g) To the best of Seller's knowledge, there are no actions or
proceedings pending or threatened against Seller or the Business.
h) Seller has not engaged a broker for the sale of the Business, and
no broker is involved in this transaction.
i) Neither Seller nor the Business is insolvent, and neither will be
rendered insolvent by this sale.
j) To the best of Seller's knowledge, all of Seller's equipment set
forth in Schedule A are in good operating condition and repair.
k) To the best of Seller's knowledge it has complied with federal,
state, and local laws in any and all ways related to the conduct and operation
of the Business.
1) No special consents are required to carry out the transaction
contemplated by this Agreement.
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m) A prior principal of Seller, Xxxxxx Xxxxxxxxxx, agreed in
writing, a copy of which was provided to Purchaser, that he would never solicit
any of Seller's customers or make use of its proprietary material or trade
secrets.
The representations and warranties in this paragraph shall survive
closing.
10. COVENANT OF PURCHASER. Purchaser shall indemnify and hold Seller
harmless from any liability on those Contracts referred to in Paragraph 5, which
have been initiated by Seller and which are continued by Purchaser for any
period of time after the closing.
If the operation continues, past the date of closing, at 00
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxx Xxxxxx, the Purchaser shall be responsible
for the utility charges plus rent as set forth in a certain agreement between
Allnet and Xxxxxx Xxxxxxxxxx dated December 31, 1996. If applicable, Purchaser
shall pay Seller such sum due and Seller shall pay Brandinger.
If Purchaser continues to use the following equipment past April 1,
1997, then they shall pay a monthly rental of $250.00 per month in advance. The
equipment is: 1 router, a CSU4, an Ethernet switch, and all other equipment in
place at 77 Sandpiper, that is not listed on Schedule A.
11. CLOSING. The closing shall take place at the office of Purchaser, 000
Xxxx Xxxxxx, Xxxxxxx, New Jersey on Friday, February 28, 1997 at 11:30 A.M.
Contemporaneously with the payment of the portion of the purchase price due
Seller, delivery of the stock certificates, delivery of a Security Agreement and
UCC-l, Seller shall execute and deliver a xxxx of sale and corporate resolution
covering all the assets set forth in Schedule A and Xxxxxxxx X. Xxxxxxx and
Xxxxxxx X. Xxxxx shall each respectively execute the non-competition agreements
set forth as Schedules C and D hereto. All such instruments shall be subject to
the provisions hereof and shall be in the form agreed to and which are attached
hereto and made a part thereof as Schedule E (Xxxx of Sale), Schedule F-l and
F-2 (corporate resolutions of Seller and Purchaser), Schedule G (Security
Agreement) and Schedule H (UCC-l).
12. INDEMNIFICATION BY SELLER. Seller shall indemnify and hold Purchaser
hamless of and from all liabilities, losses or damages arising out of any
misrepresentation, breach of warranty, or nonfulfillment of any provision of
this Agreement, including, but not limited to, any error or omission in any
statement delivered to Purchaser or any claim, liability, or obligation of
Seller including, but not limited to the obligations imposed on Seller under
Paragraph 4. The indemnification shall in no event exceed the purchase price as
set forth in this Agreement.
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13. TAX SETOFF. In lieu of an escrow being held pursuant to N.J.S.A.
54:32B-221 the Purchaser shall have the right to set off the amount of any State
of New Jersey tax obligation for which they may be held responsible as a result
of purchaser's failure to file the 10 day notice prior to closing. Purchaser
shall first advise Seller of any claims for taxes due which are Seller's
responsibility. If Seller fails to pay same within a reasonable time, Purchaser
may then pay such New Jersey Taxes on Seller's behalf and set off such payment
against.the installment payments due herein.
14. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of both the parties hereto and their respective heirs, successors and
assigns.
15. NON-WAIVER. No delay or failure by either party to exercise any right
hereunder, and no partial or single exercise of any such right, shall constitute
a waiver of that or any other right, unless otherwise expressly provided herein.
16. HEADINGS. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
18. 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.
19. ENTIRE AGREEMENT. This Agreement and Schedules A thru H attached
hereto and made a part hereof and the Xxxx of Sale supersede all prior
agreements and constitute the entire Agreement between the parties hereto with
respect to the subject matter hereof.
20. NOTICES. All notices hereunder shall be in writing and delivered
personally or mailed by certified mail, postage prepaid, addressed to the
respective parties at their last known addresses.
IN WITNESS whereof the parties have signed this Agreement.
ALLNET TECHNOLOGY SERVICES, INC.
ATTEST:
/s/ Xxxxxxx Xxxxx BY: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------- --------------------------------
Secretary Xxxxxxxx X. Xxxxxxx, President
ATTEST: INTERNET BROADCASTING SYSTEM, INC.
(D/b/a IBS INTERACTIVE, INC.)
/s/ Xxxxx Xxxxxxx BY: /s/ Xxxxxxxx Xxxxxxxx, Xx.
-------------------------- --------------------------------
Secretary Xxxxxxxx Xxxxxxxx, Xx. President
DATED: March 1, 1997
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