Exhibit 10.2
ASSET PURCHASE AGREEMENT
THIS AGREEMENT dated the 18th day of January, 1999
BETWEEN:
BINGO, INC.,
a corporation incorporated pursuant to
the laws of Anguilla and having an address of:
X.X. Xxx 0000, The Hansa Bank Building,
Landsome Road, The Valley,
Anguilla, B.W.I.
(herein called the "Vendor")
OF THE FIRST PART
AND:
PROGRESSIVE GENERAL LUMMER, CORP.,
a corporation incorporated pursuant to the laws of
the state of Florida and having an address of:
Xxxxx 0000, X.X. Xxx 0000, 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
(herein called the "Purchaser")
OF THE SECOND PART
WITNESSES THAT WHEREAS:
A. The Vendor is the registered holder of the second-level domain
name"xxxxx.xxx" and is desirous of selling, assigning, transferring and
relinquishing to the Purchaser all of its right, title and interest in and to
that domain name and the registration thereof, on those terms and conditions
hereinafter set forth;
B. The Purchaser is desirous of purchasing from the Vendor and of having
assigned, transferred and relinquished to it all of the right, title and
interest of the Vendor in and to the second-level domain name "xxxxx.xxx" and
the registration thereof, on those terms and conditions hereinafter set forth;
NOW THEREFORE in consideration of the premises and the respective covenants,
agreements representations and warranties of the parties herein contained and
for other good and valuable
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consideration (the receipt and sufficiency of which is hereby acknowledged) the
parties hereto covenant and agree as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 For the purposes of this Agreement, unless the context otherwise requires,
the following terms will have the respective meanings set out below and
grammatical variations of such terms will have corresponding meanings:
(a) "Agreement" means this Asset Purchase Agreement;
(b) "Business Quarter" means the period of three consecutive months
commencing on July 1, 1999 and on each three-month anniversary
thereof, as the case may be;
(c) "Closing" means 5:00 p.m. (Pacific Standard Time) on January 27, 1999
or such other date and time as mutually agreed to by the Vendor and
the Purchaser;
(d) "Domain Name" means the second-level domain name "xxxxx.xxx" under the
InterNIC internet domain name registration service provided and
coordinated by Network Solutions, Inc. and includes all and any
goodwill and intellectual property rights, including any trademarks or
tradenames, that may be associated with the Domain Name;
(e) "Escrow Agent" means Clark, Wilson, Barristers and Solicitors, Xxxxx
000, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx;
(f) "Gross Revenue" means, in respect of any specified period, the gross
revenue of the Purchaser for that period, without setoff of any kind,
as determined in accordance with United States generally accepted
accounting principles and, where the period specified is a Business
Quarter, reportable as such on the financial statements of the
Purchaser for that Business Quarter (or, where that Business Quarter
is the fourth Business Quarter of a fiscal year of the Purchaser, the
financial statements of the Purchaser for that fiscal year, being, by
implication, the difference between the gross revenue of the Purchaser
reportable therein for that fiscal year and the aggregate gross
revenue of the Purchaser previously reported for the first three
Business Quarters of that fiscal year) required to be filed with the
United States Securities and Exchange Commission;
(g) "including" means including without limitation or prejudice to the
generality of any description, definition, term or phrase preceding
that word, and the word "include" and its derivatives will be
construed accordingly;
(h) "Purchase Price" means:
(i) the greater of:
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(A) the sum of $1,100,000; and
(B) 4% of the Gross Revenue derived by the Purchaser during the
period commencing on Closing and ending on December 31, 2098
; and
(ii) five hundred thousand (500,000) common shares without par value
in the capital stock of the Purchaser (the "Purchase Shares");
payable to the Vendor for the Domain Name as provided in section 3
herein.
1.2 Unless otherwise indicated, all dollar amounts in this Agreement are
expressed in United States funds.
1.3 The division of this Agreement into sections and subsections and the
insertion of headings are for convenience of reference only and will not affect
the interpretation of this Agreement. Unless otherwise indicated, any reference
in this Agreement to a section or subsection refers to the specified section or
subsection of this Agreement
1.4 In this Agreement, words importing the singular number only will include
the plural and vice versa, words importing gender will include all genders and
words importing persons will include individuals, corporations, partnerships,
associations, trusts, unincorporated organizations, governmental bodies and
other legal or business entities of any kind whatsoever.
2 PURCHASE AND SALE
2.1 Subject to the terms and conditions of this Agreement, effective as at
Closing, the Vendor will sell, assign, transfer and relinquish to the Purchaser
and the Purchaser will purchase from the Vendor the Domain Name, free and clear
of all encumbrances, save and except the rights therein herein retained by the
Vendor as security for payment of the balance of the Purchase Price.
3 PAYMENT OF THE PURCHASE PRICE
3.1 The Purchaser will pay the Purchase Price to the Vendor as follows:
(a) upon execution of this Agreement, payment of a non-refundable deposit
in the sum of twenty five thousand dollars ($25,000) (the "Deposit")
by trust cheque payable to the Vendor,
(b) on Closing, payment of the sum of one hundred and seventy-five
thousand dollars ($175,000.00) by wire transfer to the account of the
Vendor in accordance with the following instructions:
To: Barclays Bank Plc
00 Xxxx Xxxxxx
Xxx Xxxx
XX, XXX.
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ABA Number: 000000000
For Credit To: Barclays Bank Plc
Anguilla
British West Indies
Account Number: 28019840265
For Further Credit
to the account of: Bingo, Inc.
Account Number: 134 -7256
Advising: Xxxxxx Xxxxxx
Tel. (000) 000-0000
(c) at those times specified in Schedule A attached hereto, payment of the
balance of the cash portion of the Purchase Price in those amounts
specified in that schedule by wire transfers to the account of the
Vendor in accordance with the instructions specified in section 3.1
(b); and
(d) on Closing, issuance to the Vendor, as fully paid and non-assessable,
five hundred thousand (500,000) common shares without par value in the
capital stock of the Purchaser pursuant to Rule 144 of the United
States Securities Act of 1933 (the "1933 Act").
3.2 The Purchaser will on or before August 15, 1999, report to the Vendor in
writing the Gross Revenue of the Purchaser for the period commencing on Closing
and ending on June 30, 1999 and will on or before the forty-fifth (45th) day
after the end of each Business Quarter of the Purchaser, report to the Vendor in
writing the Gross Revenue of the Purchaser for that Business Quarter.
4 DEFAULT
4.1 In the event that the Purchaser fails to make a payment in respect of the
Purchase Price as provided in this Agreement, the Vendor will notify the
Purchaser in writing of such default (a "Default Notice") and upon receipt of
any particular Default Notice, the Purchaser shall have sixty (60) days within
which to make the payment specified therein as being outstanding (the "Default
Period" in respect of such Default Notice).
4.2 If, after the expiration of the Default Period in respect of any particular
Default Notice, the Purchaser has not made the outstanding payment specified
therein, the Purchaser will cause the Domain Name and all of the rights, title
and interest of the Purchaser therein and thereto to be transferred, assigned
and relinquished to the Vendor and will cause the Domain Name to be registered
in name of the Vendor. To facilitate such transfer and registration in the event
of such default, the Purchaser shall deliver to the Escrow Agent, pursuant to an
Escrow Agreement to be entered into on Closing between the parties hereto and
the Escrow Agent (the "Escrow Agreement"), not more than thirty (30) days after
completion of registration of the Domain Name in the name of the Purchaser and,
thereafter, if the form of document required by the administrator
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of the InterNIC internet domain name registration service to effect such
transfer and registration is changed from time to time, forthwith after demand
by the Vendor for a replacement therefor, a completed registrant name change
agreement specifying the Vendor as the new registrant for the Domain Name, duly
executed by an authorized officer of the Purchaser before a notary public (in
whatever form, the "Registrant Name Change Agreement"). The Escrow Agent shall
hold each and every Registrant Name Change Agreement unused so long as the
Purchaser is not in default of payment of the Purchase Price as herein provided.
If, after the expiration of the Default Period in respect of any particular
Default Notice, the Purchaser has not made the outstanding payment specified in
that Default Notice, the Escrow Agent is authorized and instructed to deliver,
subject to the terms of the Escrow Agreement, the Registrant Name Change
Agreement to the Vendor which may deliver same to the then administrator of the
InterNIC internet domain name registration service in furtherance of
registration of the Domain Name in the name of the Vendor.
4.3 Notwithstanding that the registrant name change agreement to be entered
into between the Vendor and the Purchaser with respect to the Domain Name in
order to give effect to this Agreement will specify that the Vendor desires to
and does relinquish unto the Purchaser all of its interests in the registration
of the Domain Name, the provisions of this section shall take precedence over
the provisions of that registrant name change agreement and the Vendor shall be
and continue to be entitled to, in the manner provided in this section, have the
Domain Name and the rights, title and interests of the Purchaser therein and
thereto transferred, assigned and relinquished to the Vendor in the
circumstances specified in this section.
5 REPRESENTATIONS AND WARRANTIES OF THE VENDOR
5.1 The Vendor represents and warrants to the Purchaser, with the intent that
the Purchaser will rely thereon in entering into this Agreement and in
concluding the transactions contemplated hereby, that:
(a) the Vendor is a corporation duly incorporated, validly existing, and
in good standing under the laws of Anguilla and has the power,
authority, and capacity to enter into this Agreement and to carry out
its terms;
(b) the execution and delivery of this Agreement and the completion of the
transaction contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of the Vendor, and this
Agreement constitutes a valid and binding obligation of the Vendor
enforceable against the Vendor in accordance with its terms;
(c) the Vendor is the legal and beneficial owner of the Domain Name, free
and clear of all encumbrances whatsoever, and is not a party to or
bound by any contract or any other obligation whatsoever that limits
or impairs its ability to sell, transfer, assign or convey, or that
otherwise affects, the Domain Name;
(d) the Vendor has the right to convey the right, title, benefit and
interest in the Domain Name to the Purchaser in the manner provided
herein;
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(e) the Vendor is the registered owner of the Domain Name and all fees or
other costs associated with maintaining the registration of the Domain
Name have been paid as of January 1, 1999 and the registration of the
Domain Name is in good standing with Network Solutions, Inc.;
(f) no person other than the Purchaser has been granted any interest in or
right to use all or any portion of the Domain Name;
(g) the Vendor's use and sale of the Domain Name does not infringe upon,
or induce or contribute to the infringement of, the intellectual
property rights, domestic or foreign, of any other person;
(h) the Vendor is not aware of any claim of infringement (or the inducing
of or contribution to the infringement) of any intellectual property
rights of any other person arising from the use of the Domain Name,
nor has the Vendor received any notice that the use of the Domain Name
infringes upon or breaches any intellectual property rights of any
other person;
(i) the Vendor understands and agrees that the Purchaser will be changing
its corporate name to "Xxxxx.xxx" or some other similar name;
(j) the Vendor understands and acknowledges that the Purchase Shares will
carry a legend indicating that the Purchase Shares may not be traded
except in compliance with the 1933 Act and the United States
Securities Exchange Act of 1934 (the "1934 Act"); and
(k) the Vendor acknowledges that issuance of the Purchaser's common stock
has not been approved or disapproved by the United States Securities
and Exchange Commission, any state securities agency, or any foreign
securities agency and that the Purchaser is not registered under the
1934 Act.
6 COVENANTS OF THE VENDOR
6.1 The Vendor hereby covenants to the Purchaser (which covenants shall survive
closing) that it shall complete, sign and return to the Purchaser as soon as
possible on request by the Purchaser any subscription agreements, documents,
questionnaires, notices and undertakings as may be required by regulatory
authorities, stock exchanges and applicable law or as directed by the
Purchaser's solicitors.
7 REPRESENTATIONS OF THE PURCHASER
7.1 The Purchaser represents and warrants to the Vendor as follows, with the
intent that the Vendor will rely thereon in entering into this Agreement and in
concluding the purchase and sale contemplated hereby, that:
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(a) the Purchaser is a corporation duly incorporated, validly existing,
and in good standing under the laws of State of Florida and has the
power, authority, and capacity to enter into this Agreement and to
carry out its terms;
(b) the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby has been duly and validly authorized
by all necessary corporate action on the part of the Purchaser, and
this Agreement constitutes a valid and binding obligation of the
Purchaser in accordance with its terms; and
(c) until the Purchase Price has been paid in full by the Purchaser, the
Purchaser will not assign, transfer, relinquish, dispose of or
encumber in any manner any of the rights, title, benefits or interests
in and/or to the Domain Name without the written consent of the
Vendor.
8. CONVENANTS OF THE PURCHASER
8.1 The Purchaser hereby covenants with the Vendor (which covenants shall
survive closing) that:
(a) until the Purchase Price has been paid in full by the Purchaser, the
Purchaser will use its commercially reasonable best efforts to
preserve and protect the Domain Name and its rights to utilize the
Domain Name, including the timely payment of all such sustaining and
other fees as may from time to time be or become payable to the
InterNIC internet domain name registration service and/or the
administrator thereof, and, in the event that the Purchaser elects not
to or fails or neglects to make any such payment or duly defend and
preserve and protect such rights against any adverse claim or claims,
the Vendor shall be entitled to make such payment or take all such
actions, in its own name or in the name of the Purchaser, as the
Vendor may deem necessary or prudent to defend against such claim or
claims and to preserve and protect such rights, and to charge to the
Purchaser any amounts so paid and the costs of any and all such
actions taken;
(b) until the Purchase Price has been paid in full by the Purchaser, the
Purchaser will not assign, transfer, relinquish, dispose of or
encumber in any manner any of the rights, title, benefits or interests
in and/or to the Domain name without the written consent of the
Vendor, and
(c) provided that any applicable hold period has expired or the Purchase
Shares are registered to be freely tradeable pursuant to a stock
registration statement accepted by the Security and Exchange
Commission, the Purchaser will , forthwith after being requested in
writing by the Vendor to so do, exchange the legended certificates
representing those of the Purchase Shares for unlegended certificates
of mequal denomination.
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9. NON-MERGER
9.1 The representations, warranties, covenants, and agreements of the Vendor
contained herein and those contained in the documents and instruments delivered
pursuant hereto or in connection herewith will survive the Closing, and the
waiver of any condition contained herein will remain in full force and effect
9.2 The representations, warranties, covenants, and agreements of the Purchaser
contained herein and those contained in the documents and instruments delivered
pursuant hereto or in connection herewith will survive the Closing and the
waiver of any condition contained herein will remain in full force and effect.
10 TRANSACTIQNS OF THE VENDOR AT THE CLOSING
10.1 At the Closing, the Vendor will execute and deliver or cause to be executed
and delivered:
(a) all such documents and instruments as may be necessary to transfer the
Domain Name, to the Purchaser and effectively vest good and marketable
title to the Domain Name in the Purchaser free and clear of any
encumbrances (except as provided herein) including without limitation,
the InterNIC (Network Solutions Inc.) registrant name change
agreement, a sample of which is attached as Schedule B (the "Domain
Name Transfer Documents"); and
(b) all such other documents and instruments as the Purchaser's solicitors
may reasonably require.
10.2 The Purchaser agrees to immediately file with InterNIC the Domain Name
Transfer Documents. If InterNIC for any reason does not effect transfer of the
Domain Name, the Vendor will co-operate fully with the Purchaser to ensure
transfer of the Domain Name, or will take such other steps as required to ensure
the Purchaser's exclusive rights to the Domain Name.
11 TRANSACTIONS OF THE PURCHASER AT THE CLOSING
11.1 At the Closing the Purchaser will deliver or cause to be delivered to the
Vendor:
(a) confirmation in writing from the Vendor's or the Vendor's solicitors'
bank that that portion of the purchase price specified in section 3(b)
hereof has been wire transferred to the account of the Vendor in
accordance with the instructions specified in that section; and
(b) confirmation in writing that ten (10) share certificates, each
representing 50,000 common shares without par value in the capital
stock of the Purchaser, legended in accordance with the requirements
of Rule 144 under the 1993 Act and registered in the name of the
Vendor at its address first set out above, have been delivered to the
Escrow Agent.
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11.2 The Escrow Agent is hereby irrevocably instructed to hold the Purchase
Shares in escrow until:
(a) confirmation (the "Confirmation") is received from InterNIC that the
Domain Name has been transferred to the Purchaser in which case the
Escrow Agent shall deliver the certificates representing the Purchase
Shares to the Vendor; or
(b) if the Confirmation is not received within thirty (30) days after
Closing, the Escrow Agent shall deliver the certificates representing
the Purchase Shares to the Purchaser.
12 TAXES
12.1 The Purchaser will be liable for and will pay all applicable sales taxes
properly payable in connection with the sale of the Domain Name by the Vendor to
the Purchaser.
13 SUCCESSQRS AND ASSIGNS
13.1 This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.
14 ENTIRE AGREEMENT
14.1 This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral. There are
no conditions, covenants, agreements, representations, wan-antics or other
provisions, express or implied, collateral, statutory or otherwise, relating to
the subject matter hereof except as hereof provided.
15 TME OF ESSENCE
15.1 Time will be of the essence of this Agreement.
16 APPLICABLE LAW
16.1 This Agreement will be construed, interpreted and enforced in accordance
with, and the respective rights and obligations of the parties will be governed
by, the laws of the state of Washington and the federal laws of the United
States applicable therein without reference to its choice of law rules, and each
party hereby submits to the jurisdiction of the state of Washington and all
courts competent to hear appeals therefrom.
17 AMENDMENT AND WAIVER
17.1 No amendment or waiver of any provision of this Agreement will be binding
on either party unless consented to in writing by such party. No waiver of any
provision of this
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Agreement will constitute a waiver of any other provision, nor will any waiver
constitute a continuing waiver unless otherwise provided.
18 SEVERABILITY
18.1 If any provision or any part thereof is held by a court of competent
jurisdiction, after appeals therefrom have been exhausted, to be unenforceable,
invalid or illegal, then it will be severable or deemed to be limited in respect
of such territory and time to the extent necessary to render such provision
enforceable, valid or legal, and the remaining provisions will remain valid and
binding.
19 COUNTERPARTS
19.1 This Agreement may be executed in several counterparts, each of which will
be deemed to he an original and all of which will together constitute one and
the same instrument.
20 ELECTRONIC MEANS
20.1 Delivery of an executed copy of this Agreement by electronic facsimile
transmission, telecopy, telex, or other means of electronic communication
producing a printed copy will be deemed to be execution and delivery of this
Agreement on the date of such communication by the party so delivering such
copy.
21 NOTICES
21.1 Any notice or other documents required or permitted to be given under this
Agreement will be in writing and may be given by personal service, telecopier or
by prepaid registered mail, posted in Canada or by certified mail, posted in the
United States, and addressed to the proper party at the address stated below:
(c) if to the Vendor:
Bingo, Inc.
X.X. Xxx 0000
The Hansa Bank Building
Landsome Road
The Valley
Anguilla, B.W.I.
Telecopier No.: (000) 000-0000
Attention: Xxx Xxxxxx
(d) If to the Purchaser:
Progressive General Lumber, Corp.
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Xxxxx 0000, X.X. Xxx 0000
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx, X0X 0X0
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
or to such other address as any party may specify by notice. Any notice sent by
telecopier will be
PAGE 11
deemed conclusively to have been effectively given and received at the time of
successful transmission. Any notice sent by registered mail as aforesaid will be
deemed conclusively to have been effectively given and received on the fifth
business day after posting; but if at the time of posting or between the time of
posting and the fifth business day thereafter there is a strike, lockout or
other labour disturbance affecting postal service, then such notice will not be
effectively given until actually received.
22 REFERENCES TO AGREEMENT
22.1 The terms "this Agreement", "hereof', "herein", "hereby", "hereto", and
similar terms refer to this Asset Purchase Agreement and not to any particular
clause, paragraph or other part of this Agreement. References to particular
clauses are to clauses of this Agreement unless another document is specified.
IN WITNESS WHEREOF the parties have executed and delivered this Agreement on the
day of January, 1999.
BINGO, INC.
Per: --------------------------------------
Authorized Signatory
PROGRESSIVE GENERAL LUMBER, CORP.
Per: --------------------------------------
Authorized Signatory
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SCHEDULE A
PAYMENT SCHEDULE FOR BALANCE OF PURCILASE PRICE
The balance of the Purchase Price shall be payable to the Vendor at the
following times in the following amounts:
1. on August 29, 1999 four percent (4%) of the Gross Revenue of the Purchaser
for the period commencing on Closing and ending on June 30, 1999; and
2. on the sixtieth (60th) day of each of the four Business Quarters next
following the first Business Quarter the lesser of:
(a) the greater of
(i) four percent (4% ) of the Gross Revenue of the Purchaser for the
Business Quarter immediately preceding the Business Quarter in
which such payment is required to be made; and
(ii) the sum of $50,000; and
(b) the sum of $1,100,000 less the aggregate of all cash payments
theretofore made by the Purchaser in respect of the cash portion of
the Purchase Price; and
3. on the sixtieth (60th) day of each of the four Business Quarters next
following those four Business Quarters specified in section 2 above, the
lesser of:
(a) the greater of
(i) four percent (4% ) of the Gross Revenue of the Purchaser for the
Business Quarter immediately preceding the Business Quarter in
which such payment is required to be made; and
(ii) the sum of $75,000; and
(b) the sum of $1,100,000 less the aggregate of all cash payments
theretofore made by the Purchaser in respect of the cash portion of
the Purchase Price; and
4. on the sixtieth (60th) day of each of the four Business Quarters next
following those four Business Quarters specified in section 3 above, the
lesser of
(a) the greater of
(i) four percent (4% ) of the Gross Revenue of the Purchaser for the
Business Quarter immediately preceding the Business Quarter in
which such payment is required to be made; and
(ii) the sum of $100,000; and
(b) the sum of $1,100,000 less the aggregate of all cash payments
theretofore made by the Purchaser in respect of the cash portion of
the Purchase Price; and
5. on the sixtieth (60th) day of the Business Quarter in which the aggregate
of all cash payments made by the Purchaser pursuant to sections 1, 2, 3 and
4 above first equals or exceeds $1,100,000, in addition to the payment then
being made pursuant to section 1, 2, 3 or 4 above in respect of the
Business Quarter immediately preceding that Business Quarter, the
difference between four percent (4% ) of the Gross Revenue of the Purchaser
for the Business Quarter immediately preceding that Business Quarter and
the amount then required to be paid in respect of the Business Quarter
immediately preceding that Business Quarter pursuant to section 1, 2, 3 or
4 above; and
6. on the sixtieth (60th) day of each Business Quarter after the Business
Quarter in which the aggregate of all cash payments made by the Purchaser
pursuant to sections 1, 2, 3 and 4 above first equals or exceeds $1,100,000
and before and including the Business Quarter coming on January 1, 2098,
four percent (4% ) of the Gross Revenue of the Purchaser for the Business
Quarter immediately preceding the Business Quarter in which such payment is
required to be made.
