TRANSFER AND REPAYMENT AGREEMENT
Exhibit
10.1
This
Transfer and Repayment Agreement (the “Agreement”) is entered into effective as
of April 1, 2005 (the “Effective
Date”),
among YP CORP., a Nevada corporation, f/k/a XX.Xxx, Inc. and f/k/a RIGL
Corporation (the “Company”),
XXXXXX & XXXXXX, LTD., an Antigua corporation (“Xxxxxx
& Xxxxxx”),
XXXXXX AND XXXXXXX, LTD., an Antigua corporation (“Xxxxxx
and Markson”
and together with Xxxxxx & Xxxxxx, the “Shareholders”).
All of the parties to this Agreement are collectively referred to as the
“Parties.”
BACKGROUND
Xxxxxx
and Markson and Telco Billing, Inc., a Nevada corporation (“Telco”)
executed that certain Exclusive Licensing Agreement, dated September 21, 1998
(the “Licensing
Agreement”),
pursuant to which Xxxxxx and Xxxxxxx granted a 20-year exclusive license to
Telco with respect to the name “XXXXXX-XXXX.XXX,” including the name, the trade
name, trademark and the URL xxx.xxxxxx-xxxx.xxx (collectively, the “Name”)
in exchange for certain payments.
The
Parties and Telco executed that certain Stock Purchase Agreement, dated March
16, 1999 (the “Stock
Purchase Agreement”),
pursuant to which the Company acquired all of the outstanding shares of Telco,
including those shares owned by the Shareholders. The Stock Purchase Agreement
provided the Shareholders with the right to “put” shares of the Company owned by
them back to the Company under certain circumstances. In connection with the
execution of the Stock Purchase Agreement, the Company agreed to pay an
accelerated payment under the Licensing Agreement in exchange for the
acquisition of the Name.
The
Parties then executed that certain Amendment to the Stock Purchase Agreement,
dated March 16, 1999 (the “First
Amendment”),
which cured a technical default under the Stock Purchase Agreement.
Subsequently,
the Parties executed that certain 2nd Amendment to Stock Purchase Agreement,
effective September 12, 2000 (the “Second
Amendment”),
pursuant to which the “put” rights of the Shareholders were terminated in
exchange for the creation of revolving lines of credit for the benefit of the
Shareholders. Under the lines of credit, the Company agreed to lend up to
$10,000,000 to each Shareholder, subject to certain limitations (the
“Revolvers”).
In
December 2001, the Company and Xxxxxx and Markson executed a binding term sheet
to address previous and existing defaults by the Company on payments owed to
Xxxxxx and Xxxxxxx in connection with the accelerated payments and the
assignment of the Name to the Company (the “Term
Sheet Agreement”).
The Term Sheet Agreement provided for a final payment by the Company to Xxxxxx
and Markson of $550,000 (the “Company
Debt”)
to be evidenced by a promissory note and was secured by a pledge of 2,000,000
shares of Company stock (“Collateral
Shares”).
$115,865 of the Company Debt has not been paid to date.
As
of October 31, 2003, the Parties executed that certain Amendment No. 3 to Stock
Purchase Agreement (the “Third
Amendment”
and collectively with the Stock Purchase Agreement, the First Amendment and
the
Second Amendment, the “Purchase
Agreement”),
pursuant to which the Revolvers were terminated in exchange for the Company’s
agreement to (a) make final, predetermined advances to the Shareholders; and
(b)
pay quarterly dividends to all of the Company’s shareholders, subject to
applicable law and the terms and conditions of the Third Amendment.
The
Parties desire to have the Shareholders repay the advances made pursuant to
the
Third Amendment and to clarify and resolve certain matters between the Parties
on the terms set forth in this Agreement.
AGREEMENT
In
consideration of the mutual promises set forth in this Agreement and other
valuable consideration, the receipt and sufficiency of which are acknowledged,
the Parties agree as follows:
1.
Confirmation
of Prior Assignment of Name; Assignment of Additional Intellectual Property;
Continuing Indemnity.
1.1
Confirmation
of Assignment.
The Shareholders acknowledge, agree and confirm that (a) all of the right,
title, interest, and goodwill, including common law rights, in the Name was
sold, conveyed, transferred and assigned to Telco and the Company, their
successors, assigns and legal representatives, exclusively throughout the world
on a quit claim basis, in March 1999 in connection with the Stock Purchase
Agreement and the Licensing Agreement was thereby terminated and (b) the Parties
intended to effect the assignment and transfer of the Name at that
time.
1.2
Assignment
of Additional Intellectual Property.
The Shareholders hereby sell, convey, transfer and assign to Telco, its
successors, assigns and legal representatives, exclusively throughout the world,
on a quit claim basis all of their respective right, title, interest, and
goodwill, including common law rights, in and to the names, tradenames,
trademarks, URL’s and domain names listed on Exhibit
A
(collectively, the “Assigned
IP”)
in the United States of America and in all countries and jurisdictions of the
world, including the right to file for protection of the Assigned IP throughout
the world. Shareholders agree to perform, at the Company’s expense, all acts and
to execute such other documents, if any, necessary for the Company to perfect
its ownership in and to the Assigned IP.
1.3
Indemnification.
Despite the termination of the Licensing Agreement, the Company’s
indemnification obligations pursuant to Sections 5 and 6 of the Licensing
Agreement shall remain in full force and effect.
2.
Repayment
of Advances; Satisfaction of Company Debt.
2.1
Advances
Generally.
The Parties agree that: (a) the Company has no obligation to make any additional
Advances (as defined in the Third Amendment) to the Shareholders; and (b) the
amount owed by the Shareholders to the Company with respect to the Advances
already made, including principal, interest and all other amounts due pursuant
to the Third Amendment, is $3,895,000 (the “Repayment
Amount”).
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2.2
Repayment
of Advances.
The Shareholders shall pay and satisfy the Repayment Amount to the Company
by
(i) offsetting the balance of the Company Debt against the Repayment Amount;
(ii) making the assignment required by Section
1.2;
(iii) providing the restrictive covenants set forth in Section
2.5;
(iv) releasing any liens on the Collateral Shares in accordance with
Section
2.3;
and (v) delivering to the Company one or more stock certificate(s) evidencing
1,889,566 shares of Company common stock (the “Repayment
Shares”)
for cancellation by the Company. The parties hereby agree that upon delivery
of
such payment or consideration, including the Repayment Shares, (A) the Repayment
Amount shall be deemed paid in full, the Shareholders shall have no obligation
to make any further payments with respect to the Advances, and all security
for
repayment of the Advances contemplated by the Third Amendment shall be deemed
to
be released, and (B) the Company Debt is satisfied and paid and the Company
has
no further obligation of payment to the Shareholders with respect to the Company
Debt.
2.3
Release
of Collateral.
The Shareholders hereby release and extinguish any and all liens the
Shareholders may have pertaining to the Collateral Shares. The Company hereby
releases any and all liens it may have pertaining to any shares of Company
common stock, warrants, or convertible securities owned by or registered to
the
Shareholders.
2.4
Effect
on Third Amendment.
Upon satisfaction of the Repayment Amount pursuant to Section
2.2,
the Third Amendment shall be deemed amended as follows:
2.4.1 all
references to Advances are deleted;
2.4.2 all
provisions of Article 1 of the Third Amendment (other than Section 1.2) are
deleted;
2.4.3 Section
1.2 of the Third Amendment is amended to read in its entirety as
follows:
“1.2 Termination
of Revolvers.
The Revolvers have terminated and expired and are of no further force or effect.
The Company is no longer obligated to advance any funds to the Shareholders
or
any assignee of the Shareholders.”; and
2.4.4 all
provisions of Article 4 of the Third Amendment are deleted.
Except
as set forth in this Agreement, the Third Amendment shall remain in full force
and effect.
3
2.5
Non-Competition
and Non-Solicitation.
2.5.1 For
a period of five years from the Effective Date, the Shareholders, and their
officers, managers, employees, consultants, members, partners, liaisons,
affiliates, or control persons will not, directly or indirectly, either
individually or in connection with another entity or any third-party, compete
with the current business of the Company or participate or invest in the
development of a product or the provision of services that reasonably could
be
deemed to be competitive with any current products, services, concepts or lines
of business of the Company.
2.5.2 For
a period of five years from the Effective Date, the Shareholders, and their
officers, managers, employees, consultants, members, partners, liaisons,
affiliates, or control persons will not, directly or indirectly, either
individually or in connection with another entity or any third-party, solicit,
do business with, call upon, handle, deliver products or render services to
any
active or prospective customer of the Company (including, without limitation,
a
corporate customer itself, the representatives of a corporate customer, and
any
affiliated entity of a corporate customer) for the purpose of soliciting or
selling such active or prospective customer the same as, similar to, or related
products or services that the Company currently provides.
2.5.3 The
Shareholders expressly acknowledge and agree that the restrictions contained
in
this Section
2.5
are entirely reasonable and are properly and necessarily required for the
adequate protection of the Company’s current business and intellectual property
rights. If a court of competent jurisdiction determines that five years is
unreasonable or unenforceable, then the period will be four years. If a court
of
competent jurisdiction determines that four years is unreasonable or
unenforceable, then the period will be three years. If a court of competent
jurisdiction determines that three years is unreasonable or unenforceable,
then
the period will be two years. If a court of competent jurisdiction determines
that two years is unreasonable or unenforceable, then the period will be two
years. If a court of competent jurisdiction determines that two years is
unreasonable or unenforceable, then the period will be one year.
3.
Representations
and Warranties.
3.1
Representations
and Warranties of Shareholders.
The Shareholders jointly and severally represent to the Company that (i) they
have not assigned, transferred, licensed, pledged or otherwise encumbered any
Assigned IP or agreed to do so; (ii) to the best of their knowledge none of
the
Assigned IP contains any intellectual property or associated rights owned,
authored or created by, or licensed to, any third-party; (iii) they have full
power and authority to enter into this Agreement and to make the assignments
made herein and prior hereto; and (iv) they are not aware of any violation,
infringement or misappropriation of any third party’s rights (or any notice or
claim thereof) by any person or entity with respect to the use of the Assigned
IP or Name. Some of the items included in the Assigned IP may have expired,
but
to the best of the Shareholders’ knowledge, no one has obtained any right to use
any expired items that are superior to the rights of the Shareholders. Except
for the representations contained in this Section
3.1,
the Assigned IP is conveyed “as is, where is” and “with all faults,” and the
Shareholders have not made, and the Shareholders hereby expressly disclaim
and
negate, any other representation or warranty, express or implied, of any kind
or
nature whatsoever, relating to the Assigned IP or the Name (including any
implied or expressed warranty of title, non-infringement, merchantability or
fitness for a particular purpose).
4
3.2
Representations
and Warranties of the Company and Telco.
Each of the Company and Telco represents and warrants that (i) it has taken
all
requisite corporate or other action necessary to authorize its execution and
performance of this Agreement and (ii) this Agreement is binding upon it in
accordance with its terms.
4.
Further
Assurance and Post-closing Covenants.
The Shareholders agree immediately following the execution of this Agreement
to
assist the Company in every legal way to (i) evidence, record and perfect the
assignments of the Name and the Assigned IP; (ii) apply for and obtain
recordation of and from time to time enforce, maintain, and defend the assigned
rights; (iii) register and/or transfer the registration of the Name and any
domains and URL’s included in the Assigned IP into the Company’s name or its
designees; (iv) evidence, record and perfect the transfer of the Repayment
Shares to the Company in a prompt and expeditious manner; and (v) evidence
and/or record the release and extinguishment of any liens on the Collateral
Shares. If the Company is unable for any reason to secure the Shareholders’
signatures to any document or instrument it is entitled to under this Agreement
and reasonably necessary to fulfill any of the Shareholders’ obligations under
Section
1.2
and this Section
4
after using its reasonable efforts to do so, the Shareholders hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents,
as their respective agent and attorney-in-fact with full power of substitution
to act for and on their behalf and instead of Shareholders, to execute and
file
any such document or documents and to do all other lawfully permitted acts
to
further the purposes of the foregoing with the same legal force and effect
as if
executed by Shareholders. If any part of the Name or Assigned IP is based on,
incorporates, or is an improvement or derivative of, or cannot be reasonably
and
fully made, used, reproduced, distributed and otherwise exploited without using
or violating technology or intellectual property rights owned or licensed by
Shareholders and not assigned hereunder, Shareholders hereby grant the Company
and its successors a perpetual, irrevocable, worldwide, royalty-free, exclusive,
sublicensable right and license to exploit and exercise all such technology
and
intellectual property rights in support of the Company’s exercise or
exploitation of the Name and Assigned IP or any assigned rights (including
any
modifications, improvements and derivatives of any of them).
5.
Stock.
The parties agree that all Company capital stock, warrants or convertible
securities owned by or registered to the Shareholders, except for the Repayment
Shares, are the sole property of the Shareholders, free from any claims or
liens
by the Company.
6.
Fees
and Expenses.
Except as set forth in Section
15,
each Party shall bear all of its own fees, costs and expenses (including
attorneys’ fees and costs) arising out of or relating in any way to the
negotiation and preparation of this Agreement.
7.
No
Admission of Liability.
Each Party acknowledges and agrees that this Agreement does not, and shall
not
be construed to constitute any admission of liability or fault of any kind
whatsoever by any Party by whom liability always has been and now is expressly
denied, but is made solely in compromise and settlement of disputed
matters.
5
8.
Entire
Agreement; Binding Effect.
This Agreement, as well as any exhibits attached hereto, constitutes the entire,
integrated agreement among the Parties with regard to the matters set forth
herein and supersedes any and all prior and contemporaneous agreements,
promises, representations, negotiations and understandings, whether written
or
oral, with respect to the subject matter hereof. Notwithstanding the foregoing,
except as amended by this Agreement, the Purchase Agreement shall remain in
full
force and effect. This Agreement shall be binding upon and inure solely to
the
benefit of the Parties and their successors and assigns, and is not for the
benefit of any third party.
9.
Drafting
of Documents; Construction of Agreement.
Each Party represents and warrants that it is not relying on the advice of
any
other Party or anyone associated with such other Party as to the legal, tax,
or
other consequences of any kind arising out of this Agreement. Accordingly,
each
Party hereby completely releases and forever discharges each other Party from
any and all claims or other rights of any kind which such releasing Party may
assert because the legal, tax or other consequences of this Agreement are other
than those anticipated by such Party. In addition, each Party acknowledges
that
(a) it is represented by legal counsel; (b) this Agreement has been fully
negotiated among the Parties; and (c) it has fully reviewed the terms of this
Agreement, has a complete knowledge and understanding of its rights, obligations
and duties under this Agreement and of the rights waived or released under
this
Agreement, and has voluntarily accepted the terms of this Agreement. In the
event of any ambiguity, no presumption shall arise against any Party as a result
of any provision of this Agreement having been prepared or drafted in the first
instance by such Party or by legal counsel representing such Party. As used
in
this Agreement, unless the context otherwise requires, the singular number
will
include the plural and the singular, and the use of any gender will be
applicable to all genders. The captions and headings used in this Agreement
are
for convenience only and do not in any way affect, limit, amplify, or modify
the
terms and provisions of this Agreement.
10. Notices.
All notices, demands, requests, and other communications required or permitted
hereunder will be in writing and will be delivered by hand, telegram, facsimile
or deposited with the United States Postal Service postage prepaid, registered
or certified mail, return receipt requested, or delivered by courier or personal
delivery addressed as follows:
If
to Company:
0000
Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx,
Xxxxxxx 00000-0000
Facsimile:
000-000-0000
Telephone:
000-000-0000
Attention:
President
6
If
to Shareholders:
Xxxx
Xxxxxx
Xxxxxx
& Xxxxxx, Ltd.
Xxxxx
Centre
St.
John’s, Antigua, W.I.
Facsimile:
000-000-0000
Telephone:
000-000-0000
and:
Xxxx
Xxxxxx
Xxxxxx
and Xxxxxxx, Ltd.
Xxxxx
Centre
St.
John’s, Antigua, W.I.
Facsimile:
000-000-0000
Telephone:
000-000-0000
with
a copy to:
Xxxxx
X. Xxxxxxx, Esq.
Xxxxxxxxx
Xxxxx
0000
Xxxxx Xxxxxxx Xxxxxx
Xxxxx
0000
Xxxxxxx,
Xxxxxxx 00000-0000
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
All
notices sent within the United States shall be deemed delivered two business
days after deposit with the United States Postal Service, or if delivered by
facsimile, telegram, courier or by personal delivery, then notice is deemed
delivered upon the date and time of actual receipt or refusal of delivery by
the
representative’s agents and employees of the Company and each Shareholder. All
notices sent outside of the United States shall be deemed delivered 5 business
days after deposit with the United States Postal Service, or if delivered by
facsimile, telegram, courier or by personal delivery, then notice is deemed
delivered upon the date and time of actual receipt or refusal of delivery by
the
representative’s agents and employees of the Company and each Shareholder. Any
party may designate a different address or person to whom such notices should
be
sent by giving notice thereof as provided herein, which change of address will
be effective upon receipt.
11. Amendments;
Modifications.
No provision of this Agreement may be amended or modified, except by instrument
in writing executed by the Parties.
12. No
Waiver.
No waiver by any Party of any of its rights or remedies under this Agreement
or
otherwise will be considered a waiver of any other or subsequent right or remedy
of such Party; no delay or omission in the exercise or enforcement by any Party
of any rights or remedies will be construed as a waiver of any other right
or
remedy of such Party; and, to the extent permitted by applicable law, no
exercise or enforcement of any such rights or remedies will be held to exhaust
any right or remedy of such Party.
7
13. Governing
Law.
This Agreement shall be governed by and construed in accordance with the laws
of
the State of Arizona, without giving effect to conflict of laws
principles.
14. Time
of the Essence.
Time is of the essence with respect to each and every term and condition of
this
Agreement.
15. Attorneys’
Fees.
If any Party breaches its representations or warranties under this Agreement
or
fails to fulfill or perform any of its covenants or obligations in this
Agreement, such Party shall pay all costs, including, without limitation,
reasonable attorneys’ fees and expert witness fees, that may be incurred by the
other Parties to enforce the terms, covenants, conditions and provisions of
this
Agreement, or that may be incurred as a result of the default under or breach
of
this Agreement, whether or not legal action is commenced.
16. Execution
in Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories. Any photographic or xerographic copy of
this Agreement, with all signatures reproduced on one or more sets of signature
pages, shall be considered for all purposes as if it were an executed
counterpart of this Agreement. Signatures
may be given by facsimile or other electronic transmission, and such signatures
shall be fully binding on the party sending the same.
17. Specific
Performance.
Each of the parties to this Agreement acknowledges and agrees that the parties’
respective remedies at law for a breach or threatened breach of any of the
provisions of this Agreement would be inadequate and, in recognition of that
fact, agrees that, in the event of a breach or threatened breach of the
provisions of this Agreement by any other party, then in addition to any
remedies at law, each other party shall be entitled to obtain equitable relief
in the form of specific performance, a temporary restraining order, a temporary
or permanent injunction or any other equitable remedy which may then be
available.
18. Provisions
Severable.
The provisions of this Agreement are independent of and severable from each
other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part. Further, if a court of competent
jurisdiction determines that any provision of this Agreement is invalid or
unenforceable as written, such court may interpret, construe, rewrite or revise
such provision, to the fullest extent allowed by law, so as to make it valid
and
enforceable consistent with the intent of the parties.
8
IN
WITNESS WHEREOF, this Agreement is executed and delivered by the Parties as
of
the Effective Date set forth in the preamble.
| YP CORP. | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxxxx | |
|
|
||
|
Xxxxx
X. Xxxxxxxx
President and Chief Executive
Officer
|
||
| XXXXXX & XXXXXX, LTD. | ||
| |
|
|
| By: | /s/ Xxxx X. Xxxxxx | |
|
|
||
| AMT, Director | ||
| XXXXXX AND XXXXXXX, LTD. | ||
| |
|
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| By: | /s/ Xxxx X. Xxxxxx | |
|
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||
| AMT, Director | ||
9
Exhibit
A
Assigned
IP
List
of Marks
|
“MINI
WEB PAGE”
|
TRADEMARK
|
|
|
|
||
|
“YELLOW
PAGE FINGERS ON A GLOBE WITH A YELLOW SKY IN A BOX”
|
STATE
LEVEL SERVICE XXXX
|
|
|
“MAKING
IT EASY FOR YOU”
|
TRADEMARK
|
|
|
“AMERICA’S
LOCAL YELLOW PAGES”
|
TRADEMARK
|
|
|
“YOUR
LOCAL YELLOW PAGES”
|
TRADEMARK
|
List
of Domain Names (“URLs”)
XXXXXX-XXXX.XXX
XXXXXX-XXXX.XXX
XXXXXXXXXX.XXX
XXXXXXXXXXX-XXXX.XXX
XXXXXX-XXXXX-XXXX.XXX
XXXXXXXXXXXXXXX.XXX
XXXXXX-XXXX.XXXX
XXXXXXXXXXXXXX.XXX
XXXXXXXXXXXXXX.XXX
XXXXXXXX-XXXXXX-XXXX.XXX
XXXXXXXX-XXXXXX-XXXX.XXX
XXXXXXXX-XXXXXX-XXXXX.XXX
XXXXXXXX-XXXXXX-XXXXX.XXX
XXXXXXXX-XXXXXX-XXXX.XXX
XXXXXXXX-XXXXXX-XXXXX.XXX
XXXXXXXXXXXXX.XXX
XXXXXXXXXXXXX.XXX
XXX-XXXXXX-XXXX.XXX
XXX-XXXXXX-XXXX.XXX
XXX-XXXXXX-XXXX.XXX
XXX-XXXXXX-XXXXX.XXX
XXX-XXXXXX-XXXXX.XXX
XXX-XXXXXX-XXXXX.XXX
XXX-XXXXXX-XXXX.XXX
XXX-XXXXXX-XXXX.XXX
XXXXX-XXXXXX-XXXX.XXX
XXXXX-XXXXXX-XXXX.XXX
A-1
Exhibit
A
XXXXX-XXXXXX-XXXX.XXX
XXXXX-XXXXXX-XXXXX.XXX
XXXXX-XXXXXX-XXXXX.XXX
XXXXXXXXXXXXXXX.XXX
XXXXXXXXXXXXXXX.XXX
XXXXX-XXXX-XXXXXX-XXXX.XXX
XXXXX-XXXX-XXXXXX-XXXX.XXX
XXXXXX-XXXXXX-XXXX.XXX
XXXXXX-XXXXXX-XXXX.XXX
XXXXXX-XXXXXX-XXXXX.XXX
XXXXXX-XXXXXX-XXXXX.XXX
XXXXXXXXXXXXXXXX.XXX
XXXXXXXXXXXXXXXXX.XXX
XXX-X-XXXXXX-XXXX.XXX
XXX-X-XXXXXX-XXXX.XXXXXX-XX-XXXX.XXX
XXX-XX-XXXX.XXX
XXX-XX-XXXX.XXX
XXXXXXXXXXX.XXX
A-2
