EXHIBIT 2.4
AGREEMENT FOR THE PURCHASE
OF CERTAIN ASSETS OF
ULTIMATE SPORTS PUBLISHING, INC.
BY AND BETWEEN
NATIONAL PUBLISHER SERVICES, INC.,
AND
INTERNET SPORTS NETWORK, INC.
AGREEMENT FOR THE PURCHASE
OF CERTAIN ASSETS OF
ULTIMATE SPORTS PUBLISHING, INC.
BY AND BETWEEN
NATIONAL PUBLISHER SERVICES, INC.,
AN IOWA CORPORATION
(AS "SELLER")
AND
INTERNET SPORTS NETWORK, INC.
A FLORIDA CORPORATION
(AS "BUYER")
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), is dated as of July 1,
1999, (the "execution date") by and between National Publisher Services,
Inc., an Iowa corporation ("NPS" or "Seller") and Internet Sports Network,
Inc., a Florida corporation ("Buyer") with respect to the following:
R E C I T A L S
A. Seller is the owner of certain assets of Ultimate Sports
Publishing, a division of Seller ("USP").
B. Buyer desires to purchase certain assets of USP from Seller and
Seller desires to sell certain assets of USP to Buyer on the terms and subject
to the conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
1. ASSETS TO BE TRANSFERRED.
On the Closing Date, Sellers shall sell, assign and transfer
to Buyer certain assets of Seller described in EXHIBIT "A" and incorporated
herein by this reference as if set forth in full (the "Assets").
2. PRICE AND TERMS.
2.1 PURCHASE PRICE. Buyer shall remit to Seller, as
and for the purchase price of the Assets, the following consideration:
a. 125,000 shares of Common stock of Buyer equal
in value to eight hundred fifty thousand dollars ($850,000.00) (the
"Shares"). The Shares shall be delivered to Buyer over a two year period
commencing within ten days of the Closing Date or July 11, 1999. On each of
July 11, 1999, October 11, 1999, January 11, 2000, April 11, 2000, July 11,
2000, October 11, 2000, January 11, 2001 and April 11, 2001 a certificate
representing 15,625 Shares, a proxy and a stock power shall be delivered to
Seller. The Shares shall be issued immediately upon the execution of this
Agreement and delivered to counsel for Buyer, Xxxxxxx & Beam. The delivery of
the Shares shall be subject to an escrow agreement by and between Buyer and
Seller outlining the conditions of the release of the certificates, a form of
which is attached hereto as EXHIBIT "B" (the "Escrow Agreement").
Concurrently with the execution of this Agreement, Seller shall execute 7
blank irrevocable stock powers with medallion guaranteed signatures and 7
irrevocable proxies to be held by Xxxxxxx & Beam and released to Seller
according to the terms of the Escrow Agreement. The form of stock power and
proxy is attached hereto as EXHIBIT "C".
b. eight hundred sixty thousand dollars
($860,000.00) in cash due and payable to Seller from Buyer upon the execution
of this Agreement. Buyer and Seller further acknowledge that certain funds
will change hands on the Closing Date as related to certain deposits and
prepaid expenses pertaining to the 1999 football publications.
2.2 TRANSACTION TAXES AND OTHER CLOSING COSTS. Any
sales, use or similar transfer taxes, and any transfer, recording or similar
fees and charges arising in connection with the transfer of the Assets from
Seller to Buyer shall be borne by the party incurring such costs. Each party
shall bear their own costs and expenses related to the closing including, but
not limited to fees of legal counsel, accountants and other consultants or
representatives incurred in connection with the transactions contemplated
herein.
2.3 COMMISSIONS AND BROKERAGE FEES. All brokerage
fees and finder's fees shall be borne by the Party incurring such fees.
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3. REPRESENTATIONS AND WARRANTIES BY SELLER
Seller represents and warrants the following:
3.1 DUE DILIGENCE DOCUMENTS. Seller has delivered to
Buyer copies of the books and records related to the Assets material to the
transaction and as requested by Buyer (the "Due Diligence Documents"). The
Due Diligence Documents delivered by Seller are complete and accurate and
fairly present the information provided. If such information includes
financial statements, these financial statements have been prepared in a
manner consistent with prior periods and reflect all material assets,
liabilities and changes in capital.
3.2 ACCOUNTS RECEIVABLE. Seller represents that any and
all accounts receivable transferred as part of the Assets as of the date
hereof and at Closing that arose in the ordinary course of business of USP,
represent valid obligations due to the USP, and have been or are collectible
in the ordinary and usual course of business of USP in their aggregate
recorded amounts in accordance with their terms.
3.3 CONTRACTS. Seller represents and warrants that it has
delivered to Buyer copies of all the following contracts, understandings,
commitments and agreements which are being transferred as part of the Assets.
Seller represents that there are no other contracts, understandings,
commitments and agreements to which pertain to the Assets that have not been
disclosed to Buyer:
(a) Oral or written contracts, understandings
or commitments, whether in the ordinary course of business or not, involving
a present or future obligation to deliver goods or services;
(b) Bonus, incentive or deferred
compensation, profit sharing, pension, vacation, group insurance or employee
welfare plans of any nature whatsoever;
(c) Collective bargaining agreements or other
contracts or commitments to or with any labor union, employee representative
or group of employees;
(d) Employment contracts, and all other
contracts, agreements or commitments (whether written or oral) to or with
individual employees, agents or representatives, for a period in excess of
thirty days, identifying the individual and his position;
(e) Oral or written contracts, understandings
or commitments regarding the Assets which require the consent of any party
thereto to the consummation of the transactions contemplated by the Agreement;
(f) Contracts, agreements or commitments
which restrict the ability of Sellers to carry on its business anywhere in
the world; and
(g) Any other contract or commitment which is
or may be material to the use of the Assets by Buyer.
To the best of Seller's knowledge there has not been any material default in
any obligation to be performed by USP or Seller in connection with the Assets
under any contract, commitment or agreement which default could adversely
affect the Assets in a material manner, and Seller has not waived any right
under any such contract, commitment or agreement so as to adversely affect
the Assets. Seller acknowledges that any contract, commitment, understanding
or agreement that has not been disclosed to Buyer and which is not related to
the business of the Company shall remain the obligation of the Seller insofar
as it does not relate to the Assets transferred herein.
3.4 TRADEMARKS, LICENSES, ETC. Seller represents and
warrants that it has delivered a list of all trademarks, trade names,
trademark licenses, service marks, patents, patent applications therefor,
franchises, licenses, copyrights authorizations, product registrations being
transferred as part of the Assets (hereinafter "licenses and other
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rights"). Seller represents and warrants that it is the owner of all licenses
and other rights being transferred hereby and that such licenses and other
rights are not the subject of any lien or encumbrance preventing their
transfer to Buyer.
3.5 LITIGATION. There is no actual or threatened
litigation, action, proceeding, claim, complaint, accusation, or governmental
investigation pending or threatened, nor is there basis for any against or
affecting the Assets. To the best of Seller's knowledge, there is no
outstanding order, judgment or award by any court, arbitrator or governmental
body against or affecting the Assets.
3.6 INSURANCE. Seller represents and warrants that it has
delivered a list of all full force and effect fire, liability and other
insurance insuring the Assets, in amounts and against such losses and risks
as are therein set out, and represent and warrant that these policies for
such insurance as is shown to be in effect on the date of this Agreement will
be outstanding and duly in force on the Closing Date.
3.7 INDEBTEDNESS AND GUARANTIES. Seller represents and
warrants that they have delivered a full list, including the names of the
parties thereto and summary description of the terms thereof, of all debt
instruments, loan agreements, indentures, guaranties or other obligations,
whether written or oral, relating to indebtedness for borrowed money, money
loaned to others or the performance of any obligation secured by or secured
in part by the Assets. Seller represents and warrants that all such
obligations except those assumed by Buyer as indicated in EXHIBIT "D" shall
remain the sole and complete obligation of Seller and that Seller shall
indemnify and defend Buyer from any and all obligations thereunder.
3.8 TAXES. The Company has duly filed all required
federal, state, local, foreign and other tax returns, notices and reports
(including, but not limited to, income, property, sales, use, franchise,
capital stock, excise, added value, employees' income withholding, social
security and unemployment tax returns) required to be filed in connection
with the Assets.
3.9 DUE AUTHORIZATION AND VALIDITY OF AGREEMENT. Seller
has all requisite power and authority to enter into this Agreement, to sell
and convey the Assets and to carry out the other provisions and conditions
hereof. This Agreement has been duly authorized, executed and delivered by
Seller and constitutes a valid and legally binding agreement of Seller
enforceable in accordance with its terms.
3.10 FULL DISCLOSURE. No representation or warranty of
Seller made in this Agreement, nor any written statement furnished by Seller
pursuant hereto, or in connection with the transactions contemplated hereby,
heretofore furnished to Buyer by Seller, contains or will contain any untrue
statement of a material fact which affects the business of financial
condition of the Company or Seller, or omits or will omit to state a material
fact necessary to make the statements or facts contained herein or therein
not misleading.
3.12 INVESTMENT REPRESENTATIONS. Seller acknowledges that
the Shares are restricted securities" (as such term is defined under the
Securities Act of 1933), that the certificates representing this Shares will
include a restrictive legend, and, except as otherwise set forth in this
Agreement, that the Shares cannot be sold unless registered with the United
States Securities and Exchange Commission ("SEC") and qualified by
appropriate state securities regulators, or unless Seller obtains written
consent from Buyer and otherwise complies with an exemption from such
registration and qualification. Seller further represents and warrants that:
a. Seller has adequate means of providing for current needs
and contingencies, has no need for liquidity in the Shares, and is able to
bear the economic risk of an investment in the Shares of the size
contemplated. Seller represents that Seller is able to bear the economic risk
of the investment and at the present time could afford a complete loss of
such investment. Seller has had a full opportunity to inspect the books and
records of the Buyer and to make any and all inquiries of Buyer's officers
and directors regarding Buyer as Seller has deemed appropriate.
b. Seller is an "Accredited Investor" as that term is
defined in Regulation D of the Act or Seller, either alone or with Seller's
professional advisers who are unaffiliated with, have no equity interest in
and are not compensated by Buyer or any affiliate or selling agent of Buyer,
directly or indirectly, has sufficient knowledge and experience in
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financial and business matters that Seller is capable of evaluating the
merits and risks of an investment in the Shares and of making an informed
investment decision with respect thereto and have the capacity to protect
Seller's interests in connection with Seller's proposed investment in the
Shares.
c. Seller is acquiring the Shares solely for Seller's own
account as principal, for investment purposes only and not with a view to the
resale or distribution thereof, in whole or in part, and no other person or
entity has a direct or indirect beneficial interest in such Shares.
d. Seller will not sell or other-wise transfer the Shares
without registration under the Act or an exemption therefrom and fully
understands and agrees that Sellers must bear the economic risk of the
investment in the Shares-for an indefinite period of time because, among
other reasons, the Shares have not been registered under the Act or under the
securities laws of any state and, therefore, cannot be resold, pledged,
assigned or other-wise disposed of unless they are subsequently registered
under the Act and under the applicable securities laws of such states or
unless an exemption from such registration is available.
e. Seller understands that Buyer is under no obligation to
register the Shares on Seller's behalf or to assist Seller in complying with
any exemption from registration under the Act, except as set forth herein.
f. Seller understands it is purchasing the Shares without
being furnished any offering literature or prospectus other than any specific
information which Seller may have requested that Buyer provide Seller.
4. REPRESENTATIONS AND WARRANTIES BY BUYER.
4.1 ORGANIZATION AND CAPACITY. Buyer is an corporation
with legal capacity to enter into this Agreement under the laws under the
State of Florida.
4.2 AUTHORITY. The execution of this Agreement by Buyer,
its delivery to Seller and the performance of its terms has been fully
authorized by those individuals required to do so, and no further action will
be necessary on its part to make this Agreement valid and binding upon Buyer
in accordance with its terms.
5. AGREEMENTS BY SELLER.
5.1 NOTICES AND APPROVALS. Buyer and Sellers agree to
cooperate in giving all notices to third parties and obtaining all consents,
approvals, permits and authorizations which may be necessary in connection
with this Agreement and the consummation of the transactions contemplated
herein.
5.2 PERSONAL SERVICES AGREEMENTS. As a condition of this
Agreement, Seller has agreed to provide the services of Xxxxxx XxXxxxxx, Xxxx
Xxxxx and X'Xxxxx Creative Enterprises, Inc. (the "Service Providers") to
Buyer. In connection with this, Buyer and Seller has approved the terms of
such personal services agreement of which executed copies are being delivered
concurrently herewith. Seller agrees that it will do nothing to dissuade any
of the Service Providers to enter into the Personal Services Agreements nor
will it terminate, lay off or transfer any such Service Providers without the
prior written consent of Buyer during the terms of the Personal Service
Agreements. The Personal Service Agreements are attached hereto as EXHIBIT
"E" and incorporated herein by this reference. Seller understands and
acknowledges that the continued requirement of Buyer to deliver the Shares
pursuant to the schedule set forth in this Agreement is subject to the Xxxxxx
XxXxxxxx providing continued services to Buyer.
5.3 CIRCULATION/OVERHEAD AGREEMENT. As a condition to
this Agreement, Seller and Buyer have entered into a Circulation/Overhead
Agreement, the form of which is attached hereto as EXHIBIT "F" wherein Seller
will provide Buyer will certain marketing and publishing services. Seller
understand and acknowledges that its performance under the
Circulation/Overhead Agreement is a material consideration for Buyer entering
into this Agreement and that Seller shall utilize its best efforts to perform
in good faith under the terms of that agreement.
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5.4 ASSIGNMENT OF TRADEMARKS. Part of the Assets consist
of trademarks owned by Seller. Seller has executed and delivered in the form
attached hereto as EXHIBIT "G" trademark assignments. Seller agrees to
execute such further documentation as may be necessary to transfer and assign
the trademarks to Buyer.
5.5 FURTHER INSTRUMENTS. Sellers will, at the request of
Buyer, execute and deliver to Buyer all such further instruments,
assignments, assurances and documents as Buyer may reasonably request in
connection with the carrying out of this Agreement.
6. CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE.
In addition to all obligations of Buyer contained in this Agreement,
the obligation of Buyer to close shall be subject to the following conditions
precedent:
6.1 COMPLIANCE WITH OBLIGATIONS. Fulfillment by Seller of
its covenants, obligations and agreements as set forth in this Agreement.
6.2 CORRECTNESS OF REPRESENTATIONS. The representations
of Seller contained in this Agreement shall be accurate in all material
respects on the date when made and shall also be accurate on the Closing Date
to the same extent as if made on such date and that all covenants, agreement
and conditions required by this Agreement to be performed by Sellers prior to
Closing have been performed on or prior to the Closing Date.
6.3. DELIVERY OF DOCUMENTS. Execution and delivery of the
following documents to Buyer:
a. The Personal Services Agreements attached hereto as
Exhibit "E".
b. The Circulation/Overhead Agreement attached hereto as
Exhibit "F".
c. The trademark assignment forms attached hereto as
Exhibit "G"
d. Irrevocable proxies and Irrevocable stock powers
attached hereto as Exhibit "C".
e. The Escrow Agreement attached hereto as Exhibit "B"
f. The Asset Purchase Agreement.
7. CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE.
In addition to all obligations of Seller contained in this
Agreement, the obligation of Sellers to close shall be subject to the
following conditions precedent:
7.1 CORRECTNESS OF REPRESENTATIONS. The representations
and warranties of Buyer contained in this Agreement shall be accurate in all
material respects on the Closing Date to the same extent as if made on such
date, and that all conditions precedent to Closing to be performed by Buyer
shall have been performed.
7.2 COMPLIANCE WITH OBLIGATIONS. Fulfillment by Buyer of
its covenants, obligations, and agreements as set forth in this Agreement.
7.3 DELIVERY OF DOCUMENTS: Execution and Delivery of the
following documents:
a. The Personal Services Agreements attached
hereto as Exhibit "E".
b. The Circulation/Overhead Agreement attached
hereto as Exhibit "F".
c. The Escrow Agreement attached hereto as
Exhibit "B"
d. The Asset Purchase Agreement.
e. A certificate representing 15,625 shares of
common stock of Buyer.
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7.4 DELIVERY OF PURCHASE PRICE. Delivery by Buyer of
the full Purchase Price as outlined in section 2 herein.
8. OTHER AGREEMENTS.
8.1 FURTHER ASSURANCES. From time to time, at Buyer's
request, whether at or after the Closing and without further consideration,
Sellers will execute and deliver such further instruments of assignment,
conveyance and transfer as are necessary to transfer full an complete title
to the Shares.
8.2 MAINTENANCE AND RETENTION OF BOOKS AND RECORDS. For
a period of seven years after the Closing Date, the parties shall retain all
books or records relating to the Assets, and any party, wishing to dispose or
destroy books or records, shall provide not less than sixty days prior
written notice to the other parties of such proposed action. If the recipient
of such notice desires to obtain any of such documents, it may do so by
notifying the other party in writing at any time prior to the scheduled date
for such destruction or disposal. Such notice must specify the documents
which the requesting party wishes to obtain. The parties shall then promptly
arrange for the delivery of such documents. All out-of-pocket costs
associated with the delivery of the requested documents shall be paid by the
requesting party.
8.3 CONFIDENTIALITY. Each party hereto will hold and
will cause its consultants and advisors to hold in strict confidence, unless
compelled to disclose by judicial or administrative process or, in the
opinion of its counsel, by other requirements of law, all documents and
information concerning the other party furnished it by such other party or
its representatives in connection with the transactions contemplated by this
Agreement (except to the extent that such information can be shown to have
been (i) previously known by the party to which it was furnished, (ii) in the
public domain through no fault of such party, or (iii) later lawfully
acquired from other sources by the party to which it was furnished), and each
party will not release or disclose such information to any other person,
except its auditors, attorneys, financial advisors, bankers and other
consultants and advisors in connection with this Agreement. Each party shall
be deemed to have satisfied its obligation to hold confidential information
concerning or supplied by the other party if it exercises the same care as it
takes to preserve confidentiality for its own similar information. In the
event of termination of this Agreement, each party shall use its best efforts
to return to the other party all documents and copies thereof received from
the other party that contain information subject to the confidentiality
requirements of this Section.
9. CLOSING DATE AND TERMINATION.
9.1 CLOSING. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the
offices of the Company at 10:00 o'clock a.m. on the date that the all
conditions precedent are satisfied by Buyer and Seller but no later than July
11, 1999.
9.2 TERMINATION. This Agreement may be terminated: (i) at
any time prior to Closing by mutual consent of all parties, or (ii) by either
Buyer or Seller should the party responsible fail to fulfil all conditions
precedent prior to the Closing Date unless waived by the non responsible
party.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. The
representations and agreements made herein are true and binding as of the
date hereof and shall continue in full force and effect on and after the
Closing Date notwithstanding any investigations which may have been made by
any of the parties prior thereto.
11. INDEMNIFICATION. Buyer and Seller shall indemnify and hold
harmless each other from any liability, damage, deficiency, loss, cost or
expense, including attorney fees and any costs of investigation (being
hereafter referred to as "Costs"), arising from or attributable to any breach
of any representation, warranty or agreement made by either party herein or
in any certificate delivered at the Closing with respect thereto.
12. EXPENSES. Each party hereto shall bear their own expenses
incurred pursuant to this Agreement except as otherwise specifically set
forth herein.
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13. ENTIRE AGREEMENT. This Agreement, together with the Schedules
and Exhibits referred to herein which are incorporated herein by this
reference, and the agreements referred to herein, shall constitute the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby.
14. CONSTRUCTION. The parties hereto agree that this Agreement
shall be construed in accordance with the laws of the State of Florida
without giving effect to its principles of conflicts of laws. The parties
irrevocably consent to the jurisdiction of the courts of the state of Iowa or
such other place as Buyer has an office at the time of the claim or dispute
for resolution of any and all claims and disputes arising out of this
Agreement.
15. INVALID PROVISIONS. If any provision hereof is held to be
illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable. This
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically by the Company as
a part hereof a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and legal, valid and enforceable.
16. NUMBER AND GENDER OF WORDS. When the context so requires in
this Agreement, words of gender shall include either or both of the other
genders and the singular number shall include the plural.
17. ASSIGNMENT. This Agreement shall be binding upon the parties
hereto, their successors and assigns, and prior to the Closing Date shall not
be assignable without the express written consent of all parties hereto.
18. AMENDMENTS. This Agreement may be amended only by a written
agreement executed by all of the parties hereto.
19. NOTICES. Any notice, request, instruction, or other document
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 facsimile, personal delivery, overnight
delivery, or mailed by registered or certified mail, postage prepaid, with
return receipt requested, to the following addresses:
To: "Seller" National Publisher Services, Inc.
0 Xxxxxx Xxxxxx, Xxxx X
Xxxxxxxx, XX 00000
To: "Buyer" Internet Sports Network, Inc.
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
With a copy to: Xxxxxxx & Xxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. X. XxXxxxxxx, Esq.
Fax: 949/000-0000
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 facsimile,
personal delivery, or overnight 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 seven
business days after deposit thereof in the United States mail.
20. AUTHORITY. Each party executing this Agreement warrants his
authority to execute this Agreement.
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21. COUNTERPARTS. This Agreement may be executed in several
counterparts and it shall not be necessary for each party to execute each of
such counterparts, but when all of the parties have executed and delivered
one of such counterparts, the counterparts, when taken together, shall be
deemed to constitute one and the same instrument, enforceable against each
party in accordance with its terms.
22. FACSIMILE SIGNATURES. The parties hereto agree that this
Agreement may be executed by facsimile signatures and such signatures shall
be deemed originals. The parties further agree that within ten days following
the execution of this Agreement, they shall exchange original signature pages.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
"SELLER" "BUYER"
NATIONAL PUBLISHER SERVICES, INC. INTERNET SPORTS NETWORK, INC.
By: /s/ XXXX XXXXXX By: /s/ XXX XXXXX
---------------------------------- -------------------------------
Its: Its: Chief Executive Officer
---------------------------------
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