Exhibit 10.37
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of the 27
day of July, 2000, by and between CARNEGIE INTERNATIONAL CORPORATION, or
assigns, a Colorado corporation ("Buyer") and Xxxxxx Milsna ("Seller").
RECITALS
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WHEREAS, Seller owns all of the assets of Phone Stop, Inc., an Illinois
corporation ("Company");
WHEREAS, Seller believes that it will be in the best interests of Seller
and Company to sell all the Assets to Buyer;
WHEREAS, Seller desires to sell, and Buyer desires to purchase, all of the
Shares, as hereinafter set forth; and
WHEREAS, Buyer is a public holding company whose stock is traded on the
Over the Counter Bulletin Board exchange ("OTCBB") under the OTCBB symbol
"CGYC".
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
Section 1.1. Closing Date. Subject to the terms and conditions hereof, the
consummation of the purchase and sale of the Assets (as defined in Section 1.2
below) provided for in this Agreement (the "Closing") will take place at the
offices of Blank Rome Xxxxxxx & XxXxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxx, Xxxxxxxx 00000 on _______, 2000, or at such other place or time as
the parties hereto shall agree in writing. The time and date of the Closing are
herein referred to as the "Closing Date". The parties hereto agree to use their
best efforts to cause the Closing Date to occur as soon as possible consistent
with the provisions of this Agreement.
Section 1.2. Purchased Assets. Subject to the terms and conditions hereof
and on the basis of and in reliance upon the covenants, agreements,
representations and warranties set forth herein, Seller shall sell, assign and
transfer to Buyer, at the Closing, and Buyer agrees to purchase, acquire and
accept from Seller, at the Closing, all of the assets of Company as more fully
described below:
(a) All account receivables of Company;
(b) All inventories of Company;
(c) All equipment, owned by Company and used or operated in connection
with the facility located at 0000 X. Xxxx Xx., Xxx Xxxx, XX 00000 and the
facility located at same (collectively, the "Facility");
(d) All contract rights of Company (subject to obligations imposed on
Company) arising out of orders, purchase contracts, or otherwise, whether
or not such orders have been commenced or completed;
(e) All assignable permits, licenses, patents, copyrights, trademarks,
tradenames, franchises and other intangible personal property of Company;
(f) All books and records, operating data, sales and promotional data
and advertising materials, customer lists, credit information, costs and
pricing information, supplier lists, reference catalogs and software
packages of Company; and
(g) All other assets of Company appearing, or which should appear, on
the financial statement of Company as of July 27, 2000.
For purposes of this Agreement, all of the foregoing assets shall be hereinafter
collectively referred to as the "Assets".
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Section 1.3. Liabilities Assumed. Except as identified on Schedule 1.3
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attached hereto and made a part hereof, Buyer shall not assume and shall not be
responsible for any liabilities of Company and Seller, which shall remain and be
obligations of Company and Seller. Buyer undertakes to perform only such duties
as are expressly set forth herein. Company and Seller agree that neither Buyer
nor any of its directors, officers, employees or agents (each, an "Indemnified
Party") shall not be responsible for any liabilities of Company and Seller.
Company and Seller agree, jointly and severally, to indemnify each Indemnified
Party and hold it harmless from and against any and all claims, other than those
identified on Schedule 1.3 attached hereto and made a part hereof, and from and
against any damage, penalties, judgments, liabilities, loss or expense
(including reasonable attorneys' fees and disbursements) incurred as a result of
the assertion of any claim, by any person or entity, arising out of, or
otherwise related to, any transaction contemplated by this Agreement.
Section 1.4. Purchase Price; Payment of Purchase Price. The purchase
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price payable by Buyer to Seller for the Assets to be acquired pursuant to this
Agreement shall be the total sum of One Hundred Thousand Dollars ($100,000) (the
"Purchase Price"), which Purchase Price shall be payable by Buyer to (a) Seller
in warrants to acquire shares of common stock of Buyer equivalent to a
cumulative price of Twenty Five Thousand Dollars ($25,000) (the "Milsna
Warrants"), (b) Xxxxxx Xxxxxxxx ("Xxxxxxxx") warrants to acquire shares of
common stock of Buyer equivalent to a cumulative purchase price of Fifty Five
Thousand Dollars ($55,000) (the "Xxxxxxxx Warrants") and (c) Xxxxxx Xxxxx
("Xxxxx") warrants to acquire shares of common stock of Buyer equivalent to a
cumulative purchase price of Twenty Thousand Dollars ($20,000) (the "Xxxxx
Warrants" and together with the Milsna Warrants and the Xxxxxxxx Warrants, the
"Warrants"). The Warrants shall be exercisable at any time from the date hereof
until one hundred twenty (120) days from the Closing Date. The Warrants shall be
restricted securities (the "Restricted Securities") as defined in Securities and
Exchange Commission Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act").
Section 1.5. Sales Tax. Buyer shall pay any and all sales tax, use
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taxes and other similar charges or assessments levied by any governmental agency
with respect to the sale and purchase of the Assets under this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
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As a material inducement to Buyer to enter into and perform its
obligations under this Agreement, Seller hereby represents and warrants to Buyer
as follows:
Section 2.1. Organization and Qualification, Etc. Seller is a
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corporation duly incorporated, validly existing and in good standing under the
laws of the State of Illinois, and has the power and authority to own the Assets
and to carry on its business as it is now being conducted.
Section 2.2. Authority Relative to Agreement. The execution and
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delivery by Seller of this Agreement and the consummation of the transactions
contemplated on its part have been authorized by its Board of Directors. No
other corporate proceedings on its part or the part of its stockholders are
necessary to authorize the execution and delivery of this Agreement by it or the
consummation by it of the transactions contemplated on its part hereby. This
Agreement has been duly executed and delivered by Seller and is a valid and
binding agreement of Seller, enforceable in accordance with its terms.
Section 2.3. Absence of Undisclosed Liabilities. Except as set forth on
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Schedule 2.3 attached hereto, Seller has no obligation or liability (whether
accrued, absolute, contingent, unliquidated or otherwise, whether due or to
become due and whether or not insured) with respect to the Assets.
Section 2.4. Title to Properties; Condition of Equipment. Seller has
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good and marketable title to all of the Assets, free and clear of all liens and
encumbrances.
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Section 2.5. Contracts and Commitments.
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(a) Except as set forth on Schedule 2.5 attached hereto, to
the best of Seller's knowledge, Seller is not a party to any: (i) agreement or
indenture relating to the mortgaging, pledging or otherwise placing a lien on
the Assets; (ii) oral or written direct or indirect guarantee of any obligation
with respect to the Assets; (iii) lease or agreement under which it is lessor of
or permits any third party to hold or operate the Assets, real or personal,
owned or controlled by it and (iv) oral or written contract or agreement for the
sale by Seller of the Assets.
(b) Except as expressly set forth on Schedule 2.5 attached
hereto, Seller has performed all obligations required to be performed by it and
is not in default under or in breach of nor in receipt of any claim of default
or breach under any agreement referred to in Section 2.5(a).
Section 2.6. Litigation. Except as expressly set forth on Schedule 2.6
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attached hereto, to the best of Seller's knowledge, there are no actions, suits,
proceedings, orders, investigations or claims pending or threatened against
Seller with respect to the Assets at law or in equity, or before or by any
governmental department, commission, board, bureau, agency or instrumentality,
or any arbitration proceedings pending under collective bargaining agreements or
otherwise.
Section 2.7. Brokerage. There are no claims for brokerage commissions,
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finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement (oral or
written) binding upon Seller with respect to the Assets.
Section 2.8. Licenses and Permits. All permits, licenses and franchises
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held by Seller, or by its officers, employees or agents, with respect to the
Facility are listed on Schedule 2.8 attached hereto. Except as set forth on
Schedule 2.8, such licenses, permits and franchises are transferable by Seller
subject to governmental and other applicable approvals.
Section 2.9. Compliance. Except as set forth on Schedule 2.9 attached
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hereto, at all times prior hereto, the conduct and operation of Seller's
business with respect to the Assets were conducted and complied in all respects
with all applicable laws, regulations and requirements of all foreign, United
States, state and local authorities claiming jurisdiction thereof. Except as set
forth on Schedule 2.9, there are no pending or outstanding violations or notices
of violation of law, municipal ordinances, orders or requirements noted in or
issued by any governmental authority claiming to have jurisdiction over the
operations of the Facility, any property, rights or assets of Seller; and Seller
has neither received notice nor has knowledge of the intended issuance of
notices of violations of law, regulation, ordinances, criteria, orders or
requirements as aforesaid.
Section 2.10. Effective Date of Warranties, Representations and
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Covenants. Each warranty, representation, and covenant set forth in this Article
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2 shall be deemed to be made on and as of and speak on and as of the date hereof
and as of the Closing (except as otherwise specifically provided herein) and
shall not survive the Closing. Prior to the Closing, Seller will revise
counterparts of each Exhibit hereto so that such Exhibit shall, at the Closing,
reflect any material fact affecting such Exhibit occurring after the date hereof
and prior to the Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
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As a material inducement to Seller to enter into and perform its
obligations under this Agreement, Buyer represents and warrants to Seller as
follows:
Section 3.1. Organization, Etc. Buyer is a corporation duly organized,
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validly existing and in good standing under the laws of the State of Colorado.
Section 3.2. Authority Relative to Agreement. Buyer has the corporate
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power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated on its part hereby. The execution and delivery by
Buyer of this Agreement and the consummation by it of the transactions
contemplated on its part hereby have been duly authorized by the members of
Buyer. No other proceedings on its part or the part of its members are necessary
to authorize the execution and delivery of this Agreement by it or the
consummation by it of the transactions contemplated on its part hereby. This
Agreement has been duly executed and delivered by Buyer and is the valid and
binding agreement of Buyer.
Section 3.3. No Breach; Consents. The execution, delivery and
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performance of this Agreement by Buyer and the consummation of the transactions
contemplated hereby (a) do not and will not conflict with or result in any
breach of any of the provisions of, constitute a default
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under, result in a violation of, result in the creation of any lien, security
interest, charge or encumbrance upon the assets of Buyer under, or require any
authorization, consent, approval, exemption or other action by or notice to any
third party under the provisions of the Articles of Incorporation or by-laws of
Buyer or any license, indenture, mortgage, lease, loan agreement or other
agreement (oral or written) or instrument to which Buyer is a party and (b) do
not require any authorization, consent, approval, exemption or other action by
or notice to any court or governmental body under any law, statute, rule,
regulation or decree to which Buyer is subject.
Section 3.4. Brokerage. There are no claims for brokerage commissions,
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finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of Buyer.
ARTICLE 4
CONDITIONS TO CLOSING
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Section 4.1. Conditions Precedent to Buyer's Obligations. The
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obligations of Buyer hereunder are expressly contingent upon the satisfaction,
by the Closing, of the following conditions:
(a) Each of the defined acts and undertakings of Seller to be
performed on or before the Closing hereunder shall have been duly performed in
every respect.
(b) The representations and warranties made by Seller in this
Agreement shall be true and correct of and as of the Closing, and those
representations and warranties shall not survive the Closing.
(c) At the Closing, Buyer shall have received the following
documents:
(i) Copies of all necessary third party and governmental
consents that Seller is required to obtain in order to consummate the
transactions contemplated by this Agreement; and
(ii) A Xxxx of Sale, transferring all of Seller's right, title
and interest in and to the Assets.
Section 4.2. Conditions Precedent to Seller's Obligations. The
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obligations of Seller hereunder are expressly contingent upon the satisfaction,
by Closing, of the following conditions:
(a) Each of the material acts and undertakings of Buyer to be
performed on or before the Closing hereunder pursuant to the terms hereof shall
have been duly performed in every respect.
(b) The representations and warranties made by Buyer in this
Agreement shall be true and correct at and as of the Closing, and those
representations and warranties shall survive the Closing.
(c) At Closing, Seller shall have received the following:
(i) payment of the Purchase Price in the manner described in
Section 1.4 hereof; and
(ii) such certificates, documents, instruments and writings to
be delivered pursuant to this Agreement.
ARTICLE 5
PRE-CLOSING AGREEMENTS
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Section 5.1. Best Efforts. The parties agree to use their best efforts
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to cause all conditions to Closing to be satisfied and to cause the transactions
contemplated hereby to be consummated.
ARTICLE 6
POST-CLOSING AGREEMENTS
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Section 6.1. Further Assurances. Seller shall, at any time and from
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time to time on and after the Closing Date, upon request by Buyer and without
further consideration, through Seller's best efforts, take such actions or cause
others to do so, and execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, all transfers, conveyances, powers of attorney and
assurances, as may be required or desirable for the better conveying,
transferring, assigning, delivering, assuring and confirming to Buyer, or its
respective successors and
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assigns, or for aiding and assisting in collecting or reducing to possession,
the Assets, and any or all of Seller's obligations under this Agreement.
ARTICLE 7
MISCELLANEOUS
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Section 7.1. Survival. The representations and warranties of Seller
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set forth in this Agreement shall not survive Closing.
Section 7.2. Termination. Anything herein or elsewhere to the contrary
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notwithstanding, this Agreement may be terminated and abandoned at any time
prior to consummation of the transactions contemplated hereby by the mutual
consent of Buyer and Seller. Except as set forth below, any termination pursuant
to this Section 7.2 shall be without liability on the part of any party.
Section 7.3. Expenses. Each party will pay all of its expenses in
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connection with the negotiation of this Agreement, the performance of its
obligations hereunder, and the consummation of the transactions contemplated by
this Agreement.
Section 7.4. Amendments and Waivers. The parties hereto, by mutual
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agreement in writing, may amend, modify and supplement this Agreement. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
Section 7.5. Notices. All notices or other communications required or
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permitted hereunder shall be in writing and shall be given by hand or by
registered mail, return receipt requested, addressed as follows:
If to Buyer:
Carnegie International Corporation
11350 XxXxxxxxx Road
Executive Plaza III, Suite 1001
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Fax No. 000.000.0000
If to Seller:
Phone Stop, Inc.
0000 X. Xxxx Xxxxxx
Xxx Xxxx, Xxxxxxxx
Attention: Xxxxxx Milsna
Fax No. 000-000-0000
Any party hereto may specify in writing a different address for such purpose by
notice to the other parties.
Section 7.6. Assignment. This Agreement and all of the provisions
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hereof will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, except that neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any party without the prior written consent of the other parties
hereto. Notwithstanding the foregoing, Buyer may assign its rights and
obligations hereunder to its corporate parent or any of Buyer's wholly-owned
subsidiaries with the effect that the purchase of the Assets contemplated hereby
may be made by such parent or subsidiary.
Section 7.7. Severability. Whenever possible, each provision of this
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Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provision of this Agreement unless the
consummation of the transaction contemplated hereby is adversely affected
thereby.
Section 7.8. Complete Agreement. This document and the documents
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referred to herein contain the complete agreement between the parties and
supersede any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way.
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Section 7.9. No Third-Party Beneficiaries. This Agreement shall be for
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the benefit only of the parties hereto, and their respective successors and
assigns.
Section 7.10. Governing Law. All questions concerning the
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construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement will be governed by the internal
laws, not the law of conflicts, of the State of Maryland.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
SELLER:
PHONE STOP, INC.
By: (SEAL)
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Name: /s/
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Title:
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BUYER:
CARNEGIE INTERNATIONAL CORPORATION
By: /s/ (SEAL)
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Xxxxxx Xxxxxx, President
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