ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of February 7,
2006, by and between DIGICORP, a Utah corporation ("Buyer"), and XXXXXXX X.
XXXXXX XX a/k/a AMENO, individually ("Seller").
W I T N E S S E T H:
WHEREAS, Seller owns and operates the website XxxxxxXxxxx.xxx
("PerreoRadio") and associated assets as hereinafter described; and
WHEREAS, Buyer desires to purchase and Seller desires to sell to Buyer
PerreoRadio and its associated assets all on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Purchase and Sale of Assets.
1.1 Sale of Assets. Seller agrees to sell, assign, transfer and deliver to
Buyer, and Buyer agrees to purchase from Seller, free and clear of any liens or
encumbrances of any kind, all of Seller's right, title and interest in and to
all the following assets (collectively, the "Assets"):
(a) Domain Names. The Internet domain names as described in Exhibit
A, including all registrations thereof, including, without limitation, any
applicable registrars, registrations thereof, and all rights to listings or
keyword associations in any Internet search engines or directories associated
with the domain names (collectively, the "Domain Names").
(b) Web Site and Web Site Materials. The web pages created or
acquired by Seller with respect to PerreoRadio business and associated with, or
located at or under, the Domain Names (collectively, the "Web Sites"), including
all Web Site Materials. The "Web Site Materials" include, without limitation:
(i) web pages, support files and related information and data associated with
the Web Sites; (ii) any and all text, graphics, HTML or similar code, applets,
scripts, programs, databases, source code, object code, templates, forms, image
maps, documentation, audio files, video files, log files or customer data; (iii)
all content that has appeared in any past or present editions of the Web Sites,
whether archived on the Web Sites or otherwise; (iv) all e-mail databases; and
(v) the operation, concepts, look and feel of the Web Sites and Web Site
Materials and business ideas associated with the PerreoRadio business.
(c) Intellectual Property. All of Seller's Intellectual Property
relating to the Domain Names, Web Sites and Web Site Materials. For purposes
hereof, the term "Intellectual Property" includes: (i) all drawings, marketing
plans, potential business concepts or similar documents related to the Domain
Names, Web Sites and Web Site Materials; (ii) all patents, patent applications,
patent rights, and inventions and discoveries and invention disclosures related
to the Domain Names, Web Sites and Web Site Materials (whether or not patented);
(iii) Seller's rights to the name "PerreoRadio" and all trade names, trade
dress, logos, packaging design, slogans, any and all Internet domain names used
specifically in connection with the Web Sites and Web Site Materials, registered
and unregistered trademarks and service marks and applications related to the
Web Sites and Web Site Materials; (iv) all copyrights in both published and
unpublished works related to the Web Sites and Web Site Materials, including,
without limitation, all compilations, databases and computer programs, and all
copyright registrations and applications, and all derivatives, translations,
adaptations and combinations of the above; (v) all know-how, trade secrets,
confidential or proprietary information, customer lists, IP addresses, research
in progress, algorithms, data, designs, processes, formulae, drawings,
schematics, blueprints, flow charts, models, prototypes, techniques, Beta
testing procedures and Beta testing results related to the Web Sites and Web
Site Materials; and (vi) all goodwill, franchises, licenses, permits, consents,
approvals, technical information, telephone numbers, ASN numbers, and claims of
infringement against third parties related to the websites, as well as any ideas
related to the Web Sites and Web Site Materials.
(d) Goodwill. All of the goodwill of Seller in, and the going
concern value of, the Websites and Web Site Materials, and all of the ideas and
Intellectual Property, proprietary information, marketing materials and trade
secrets related to the Websites.
(e) Records. All of Seller's files and records, and other files and
records relating to the Websites and Web Site Materials and all files and
records relating to all Intellectual Property and all ideas of Seller in
connection with the Websites and Web Site Materials.
1.2 Excluded Liabilities. It is expressly understood that Buyer shall not
assume, pay or be liable for any liability or obligation of Seller of any kind
or nature at any time existing or asserted, whether known, unknown, fixed,
contingent or otherwise, not specifically assumed herein by Buyer, including,
without limitation, any liability or obligation relating to, resulting from or
arising out of any fact existing or event occurring prior to, or relating to the
Assets prior to, the Closing Date (collectively, the "Liabilities"), and Seller
shall indemnify, defend and hold harmless Buyer against the Liabilities. Without
limiting the generality of the foregoing, Buyer shall not assume the following
with respect to Seller and the Assets (all of which are deemed to be included
within the "Liabilities"):
(a) any liability or obligation of Seller arising out of or in
connection with the negotiation and preparation of this Agreement and the
consummation and performance of the transactions contemplated hereby, whether or
not such transactions are consummated including, but not limited to, any tax
liability so arising;
(b) any liability or obligation under contracts or other agreements,
whether written or oral, to which Seller is a party or by or to which it or its
assets, properties or rights are bound or subject including, without limitation,
any licenses;
(c) any liability or obligation of the Seller, or any consolidated
group of which Seller is a member, for any foreign, federal, state, county or
local income, franchise, employee withholding, FICA, employment, payroll
related, excise, sales, use, gross receipts, property or any other tax of any
sort relating to the Assets;
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(d) any liability or obligation of Seller for money borrowed;
(e) any liability or obligation for personal injury, property damage
or otherwise because of any matter or thing whatsoever including, but not
limited to, alleged negligence or breach of warranty or under any other theory
of product liability;
(f) any liability or obligation to pay damages by reason of any
breach of any obligations or any other acts or omissions of Seller;
(g) any liability or obligation of Seller relating to claims,
lawsuits, arbitrations or other proceedings;
(h) any liability or obligation of Seller relating to any collective
bargaining agreements, any trust agreements (including but not limited to health
and welfare trusts, pension trusts and legal services trusts) or any employee
benefit programs (including but not limited to wages, vacation entitlement,
severance, holiday pay entitlement, payroll taxes, unemployment compensation
contributions, insurance premiums and workers compensation, employee agreements,
pension or profit sharing fund withdrawal liability).
1.3 Purchase Price; Payment. In consideration of the sale by Seller to
Buyer of the Assets, and subject to satisfaction of the conditions contained
herein, Buyer shall issue to Seller and his nominees (the "Nominees") One
Hundred Thousand (100,000) shares (the "Shares") of Buyer's common stock at
$.001 par value per share (the "Purchase Price") in accordance with Schedule 1.3
hereto. From the Purchase Price, all of the Shares shall be subject to lockup
agreements, in the form attached hereto as Exhibit B, as follows: (a) 25,000
Shares shall be subject to a lockup agreement for a period of one (1) year; (b)
25,000 Shares shall be subject to a lockup agreement for a period of two (2)
years; and (c) 50,000 Shares shall be subject to a lockup agreement for a period
of three (3) years.
1.4 Closing Date. Subject to satisfaction of the conditions contained
herein, the closing of the sale and purchase of the Assets provided for in
Section 1.1 hereof (the "Closing") shall take place at the offices of Danzig
Xxxx Xxxxxx Xxxxx & Xxx, LLP located at 00X Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx
Xxxx, Xxx Xxxxxx 00000 (or at such other place as the parties may designate) no
later than March 20, 2006, unless extended by mutual consent of such parties, or
on such other date as Seller and Buyer may agree. The date on which the Closing
shall be held is referred to in this Agreement as the "Closing Date."
1.5 Further Assurances. Seller shall, from time to time after the
consummation of the transactions contemplated herein, at the request of Buyer
and without further consideration, execute and deliver further instruments of
transfer and assignment and take such other action as Buyer may reasonably
require to more effectively transfer and assign to, and vest in, Buyer the
Assets free and clear of all Liens (defined below).
1.6 Sales and Transfer Taxes. All sales, transfer, use, recordation,
documentary, stamp, excise taxes, personal property taxes, fees and duties under
applicable law incurred in connection with this Agreement or the transactions
contemplated hereby will be borne and paid by Buyer.
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1.7 Transfer of Subject Assets. Seller shall deliver or cause to be
delivered to Buyer a Xxxx of Sale and such other good and sufficient instruments
of transfer required in transferring to Buyer title to all of the Assets,
including any required consents. Such instruments of transfer (a) shall contain
appropriate warranties and covenants that are usual and customary for
transferring the type of property involved under the laws of the jurisdictions
applicable to such transfers, (b) shall be in form and substance reasonably
satisfactory to Buyer and its counsel, (c) shall effectively vest in Buyer good
and marketable title to all of the Assets free and clear of all Liens, and (d)
where applicable, shall be accompanied by evidence of the discharge of all Liens
against the Assets.
2. Representations and Warranties Of Seller. In order to induce Buyer to
enter into this Agreement, Seller hereby represents and warrants to Buyer as
follows:
2.1 Authorization of Agreement. Seller has all requisite power, authority
and legal capacity to execute and deliver this Agreement, and each other
agreement, document, or instrument or certificate contemplated by this Agreement
or to be executed by the Seller in connection with the consummation of the
transactions contemplated by this Agreement (together with this Agreement, the
"Seller Documents"), and to consummate the transactions contemplated hereby and
thereby. This Agreement has been, and each of the Seller Documents will be at or
prior to the Closing, duly and validly executed and delivered by Seller and
(assuming the due authorization, execution and delivery by Buyer hereto and
thereto) this Agreement constitutes, and each of the Seller Documents when so
executed and delivered will constitute, legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
2.2 No Conflicts. The execution, delivery and performance by Seller of
this Agreement and each other Seller Document does not and will not (a)
constitute a violation of, or conflict with or result in any breach of,
acceleration of any obligation under, right of termination under, or default
under, any agreement or instrument to which Seller is a party or by which Seller
or the Assets is bound, (b) violate any judgment, decree, order, statute, rule
or regulation applicable to Seller or the Assets, or (c) require Seller to
obtain any approval, consent or waiver of, or to make any filing with, any
person or entity (governmental or otherwise) that has not been obtained or made.
2.3 Title. Seller has good and marketable title to all of the Assets free
and clear of all mortgages, pledges, security interests, charges, liens,
restrictions and encumbrances of any kind (collectively, "Liens") whatsoever.
Upon the sale, assignment, transfer and delivery of the Assets to Buyer
hereunder and under the Seller Documents, there will be vested in Buyer good,
marketable and indefeasible title to the Assets, free and clear of all Liens.
The Assets include all of the assets and properties (a) held for use by Seller
in connection with the Assets and (b) necessary for Buyer to use the Assets in
the same manner as such Assets are currently used by Seller. All of the tangible
Assets are in good repair, have been well maintained and are in good operating
condition, do not require any material modifications or repairs, and comply in
all material respects with applicable laws, ordinances and regulations, ordinary
wear and tear excepted.
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2.4 No Litigation. Seller is not now involved in nor, to the knowledge of
Seller, is Seller threatened to be involved in any litigation or legal or other
proceedings related to or affecting the Assets or which would prevent or hinder
the consummation of the transactions contemplated by this Agreement. Nor is
Seller in default with respect to or subject to any Court Order, and there are
no unsatisfied judgments against Seller or the Assets.
2.5 Brokers. Seller has not retained any broker or finder or other person
who would have a ny valid claim against any of the parties to this Agreement for
a commission or brokerage fee in connection with this Agreement or the
transactions contemplated hereby.
2.6 Intellectual Property. Seller has exclusive ownership of, and has
good, valid and marketable title to, all of the Intellectual Property, free and
clear of any Liens, and has the right to use all of the Intellectual Property
without payment to any third party.
2.7 Contracts. Seller has provided to Buyer a true, correct and complete
copy of all contracts, licenses, agreements, arrangements and/or commitments for
which Seller is bound pertaining to the Assets (the "Contracts"). Each of the
Contracts is valid and enforceable in accordance with its terms, is in full
force and effect, and neither Seller nor, to Seller's knowledge after due
inquiry, any other party is in default of any of its obligations under the
Contracts and no event has occurred which, with the giving of notice, lapse of
time or both, could constitute such a default by Seller or, to Seller's
knowledge after due inquiry, any other party under the Contracts; Seller has not
assigned any of its rights under the Contracts; no representation or covenant
has been made by Seller to the other parties to the Contracts except as
incorporated in the written Contracts; all representations made by Seller in the
Contracts or any documents relating thereto were true and correct when made; no
consents are required to be obtained or given by Seller under the terms of the
Contracts in connection with this transaction; and neither Seller's interest in
the Contracts are subject to any liens, security interests or adverse claims.
Each party to the Contracts is performing its obligations thereunder. Seller is
not in default under any of the Contracts and Seller has not received or sent
any written notice under any of the Contracts that any party is in default of
the terms of any of such Contracts.
2.8 Investor Status. Seller represents that each of the Seller and the
Nominees (i) is able to bear the economic risks of his or her investment in the
shares of Buyer's common stock included in the Purchase Price and to afford the
complete loss of the investment; and (ii) has a pre-existing personal or
business relationship with either the Buyer or any affiliate thereof of such
duration and nature as would enable a reasonably prudent investor to be aware of
the character, business acumen and general business and financial circumstances
of the Buyer or such affiliate, or by reason of his or her business or financial
experience or the business or financial experience of his or her professional
advisors who are unaffiliated with and who are not compensated by the Buyer or
any affiliate or selling agent of the Buyer, directly or indirectly, could be
reasonably assumed to have the capacity to protect his or her own interests in
connection with the investment, and is otherwise personally qualified to
evaluate and assess the risks, nature and other aspects of the investment.
Seller understands that the Purchase Price is being offered to him in reliance
upon specific exemptions from the registration requirements of United States
federal and state securities laws and that Buyer is relying upon the truth and
accuracy of, and Seller's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Seller set forth herein in
order to determine the availability of such exemptions and the eligibility of
Seller to receive the Purchase Price.
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2.9 Investment Experience; Suitability. Seller is familiar with the type
of risks inherent in the acquisition of securities such as the shares of common
stock of Buyer and each of Seller's and the Nominee's financial position is such
that each can afford to retain the Purchase Price for an indefinite period of
time without realizing any direct or indirect cash return on his or her
investment.
2.10 Investment Purpose. Seller represents that the shares of Buyer's
common stock included in the Purchase Price are being issued to each of the
Seller and the Nominees for his or her own account, for investment purposes only
and not for distribution or resale to others in contravention of the
registration requirements of the Securities Act. Seller agrees that he will not
sell or otherwise transfer the shares of Buyer's common stock included in the
Purchase Price being issued to him unless such shares are registered under the
Securities Act or unless an exemption from such registration is available.
2.11 Information. Seller and his advisors, if any, have been furnished
with all materials relating to the business, finances and operations of Buyer
and materials relating to the offer and sale of the shares of Buyer's common
stock included in the Purchase Price which have been requested by Seller or his
advisors. Seller and his advisors, if any, have been afforded the opportunity to
ask questions of the Buyer. Notwithstanding the foregoing, Buyer has not
disclosed to Seller any material nonpublic information and will not disclose
such information unless such information is disclosed to the public prior to or
promptly following such disclosure to Seller. Neither such inquiries nor any
other due diligence investigation conducted by Seller or any of his advisors or
representatives shall modify, amend or affect Seller's right to rely on Buyer's
representations and warranties contained in Section 3 below. Seller understands
that his investment in the shares of Buyer's common stock included in the
Purchase Price involves a significant degree of risk. Seller represents that the
issuance of the shares of Buyer's common stock included in the Purchase Price is
not being accomplished by the publication of any advertisement.
2.12 Disclosure. The representations, warranties and statements contained
in this Agreement and in the certificates, exhibits and schedules delivered by
Seller to Buyer pursuant to this Agreement do not contain any untrue statement
of a material fact, and, when taken together, do not omit to state a material
fact required to be stated therein or necessary in order to make such
representations, warranties or statements not misleading in light of the
circumstances under which they were made. There are no facts known to Seller
which presently or may in the future have a material adverse effect (financial
or otherwise) on the Assets which have not been specifically disclosed herein or
in a schedule furnished herewith, other than general economic conditions
affecting the Assets generally.
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3. Representations and Warranties Of Buyer. As a material inducement to
Seller's entering into this Agreement, Buyer hereby represents and warrants to
Seller as follows:
3.1 Organization. Buyer is duly organized, validly existing and in good
standing under the laws of the State of Utah, with full corporate power and
authority to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is currently conducted or proposed to be conducted. Buyer is not in
violation of any term of its articles of incorporation, or bylaws.
3.2 Authorization of Agreement. Buyer has full corporate power and
authority to execute and deliver this Agreement, and each other agreement,
document, instrument or certificate contemplated by this Agreement or to be
executed by Buyer in connection with the consummation of the transactions
contemplated by this Agreement (together with this Agreement, the "Buyer
Documents"), and to consummate the transactions contemplated hereby and thereby.
This Agreement has been, and each of the Buyer Documents will be at or prior to
the Closing, duly and validly executed and delivered by Buyer and (assuming the
due authorization, execution and delivery by Seller hereto and thereto) this
Agreement constitutes, and each of the Buyer Documents when so executed and
delivered will constitute, legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
3.3 No Conflicts. The execution, delivery and performance by Buyer of this
Agreement and each Buyer Document does not and will not (a) constitute a
violation of, or conflict with or result in any breach of, acceleration of any
obligation under, right of termination under, or default under, any agreement or
instrument to which Buyer is a party or by which it is bound, (b) violate any
judgment, decree, order, statute, rule or regulation applicable to Buyer, or (c)
require Buyer to obtain any approval, consent or waiver of, or to make any
filing with, any person or entity (governmental or otherwise) that has not been
obtained or made.
3.4 Brokers. Buyer has not retained any broker or finder or other person
who would have any valid claim against any of the parties to this Agreement for
a commission or brokerage fee in connection with this Agreement or the
transactions contemplated hereby.
3.5 Disclosure. The representations, warranties and statements contained
in this Agreement and in the certificates, exhibits and schedules delivered by
Buyer to Seller pursuant to this Agreement do not contain any untrue statement
of a material fact, and, when taken together, do not omit to state a material
fact required to be stated therein or necessary in order to make such
representations, warranties or statements not misleading in light of the
circumstances under which they were made.
4. Conditions Precedent to Buyer's Performance. Buyer's obligations
hereunder shall be subject to the satisfaction, at or before the Closing, of all
the conditions set forth in this Section 4. Buyer may waive any or all of these
conditions in whole or in part without prior notice; provided, however, that no
such waiver of a condition shall constitute a waiver by Buyer of any other
condition of or any of Buyer's other rights or remedies, at law or in equity, if
Seller shall be in default of any of its representations, warranties or
covenants under this Agreement.
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4.1 Accuracy of Representation. Except as otherwise permitted by this
Agreement, all representations and warranties by Seller in this Agreement, or in
any written statement that shall be delivered to Buyer by Seller under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
4.2 Performance. Seller shall have performed, satisfied, or complied with
all covenants, agreements and conditions required by this Agreement to be
performed or complied with by either of them, on or before the Closing Date.
4.3 Absence of Litigation. No action, suit or proceeding before any court
or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against any of the parties hereto on or before the
Closing Date.
4.4 Stuart Employment Agreement. Seller will have entered into a three (3)
year employment agreement with Buyer providing for full-time employment at a
salary of $60,000 per year, together with other terms in accordance with Buyer's
standard employment policies, and a non-compete and confidentiality clause (the
"Stuart Employment Agreement").
4.5 Xxxxxxxx Employment Agreement. Xxxxx Xxxxxxxx ("Xxxxxxxx") will have
entered into a three (3) year employment agreement with Buyer providing for
full-time employment at a salary of $40,000 per year, together with other terms
in accordance with Buyer's standard employment policies, and a non-compete and
confidentiality clause (the "Xxxxxxxx Employment Agreement").
4.6 Investment and Lockup Agreements. Each of the Nominees shall have
completed and delivered Investment Agreements in such form satisfactory to the
Buyer and the Seller and each of the Nominees shall have delivered the lockup
agreements as provided for in Section 1.3.
4.7 Due Diligence. Buyer shall have completed usual, customary and
reasonable due diligence of Seller and the Assets to its reasonable
satisfaction.
4.8 Certificate. Seller shall have delivered to the Buyer a certificate
dated the Closing Date, and signed by Seller certifying that each of the
conditions specified in Sections 4.1 through 4.6 hereof have been fulfilled.
5. Conditions Precedent to Seller's Performance. Seller's obligations
hereunder shall be subject to the satisfaction, at or before the Closing, of all
the conditions set forth in this Section 5. Seller may waive any or all of these
conditions in whole or in part without prior notice; provided, however, that no
such waiver of a condition shall constitute a waiver by Seller of any other
condition of or any of Seller's other rights or remedies, at law or in equity,
if Buyer shall be in default of any of their representations, warranties or
covenants under this Agreement.
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5.1 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by Buyer in this Agreement or in
any written statement that shall be delivered to Seller by Buyer under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
5.2 Performance. Buyer shall have performed, satisfied and complied with
all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
5.3 Absence of Litigation. No action, suit or proceeding before any court
or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against any of the parties hereto on or before the
Closing Date.
5.4 Stuart Employment Agreement. Buyer and Seller will have entered into
the Stuart Employment Agreement.
5.5 Incentive Options. Seller will have been granted 400,000 options (the
"Options") to acquire 400,000 shares of Buyer's common stock with an exercise
price set at the closing price on the date of grant, which will vest as follows:
(i) the first 50,000 Options shall vest upon the latter of PerreoRadio achieving
an aggregate of 10,000 valid Registered Users ("Users") or six (6) months from
the date of grant; (ii) the next 50,000 Options shall vest upon the latter of
PerreoRadio achieving an aggregate of 20,000 Users or 12 months from the date of
grant; (iii) the next 100,000 Options shall vest upon the latter of PerreoRadio
achieving an aggregate of 80,000 Users or 18 months from the date of grant; (iv)
the next 100,000 Options shall vest upon the latter of PerreoRadio achieving an
aggregate of 200,000 Users or 24 months from the date of grant; and (v) the next
100,000 Options shall vest upon the latter of PerreoRadio achieving an aggregate
of 300,000 Users or 30 months from the date of grant. The award agreement shall
provide that Seller must be an employee of Buyer for any Options to vest.
5.6 Officer's Certificate. Buyer shall have delivered to Seller a
certificate, dated the Closing Date, and signed by an authorized officer of
Buyer, certifying that each of the conditions specified in Sections 5.1 through
5.5 have been fulfilled.
6. Documents to be Delivered by Seller at Closing. In addition to the
other documents required elsewhere hereunder, Seller shall execute and deliver
to Buyer in connection with the Closing, in form and substance reasonably
satisfactory to Buyer and Buyer's counsel, the following:
6.1 a xxxx of sale conveying, transferring and selling to Buyer all right,
title and interest of Seller in and to all of the Assets;
6.2 endorsements and assignments of contracts, licenses, permits, plans,
sales orders, commitments and other binding agreements used or useful in
connection with the Assets transferred to Buyer hereunder;
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6.3 all originals, or if the original is unavailable, copies of (i)
records and other documents pertaining to the Assets as may be in Seller's
possession, together with an assignment thereof in form acceptable to Buyer;
6.4 all books and records relating to the Assets as are in Seller's
possession;
6.5 such other documents as may be reasonably required to effectuate the
transaction contemplated by this Agreement.
7. Documents to be Delivered by Buyer at Closing. In addition to the other
documents required elsewhere hereunder, Buyer shall execute and deliver to
Seller in connection with the Closing, in form and substance reasonably
satisfactory to Seller and Seller's counsel, the following:
7.1 stock certificates of the Buyer representing in the aggregate 100,000
shares of Common Stock of Buyer which Seller is entitled hereunder;
7.2 such other documents as may be reasonably required to effectuate the
transaction contemplated by the Agreement.
8. Indemnification. Seller and Buyer (respectively an "Indemnifying
Party") each hereby agrees to indemnify and hold harmless the other party, its
affiliates and the other party's and its affiliates' respective directors,
officers, partners, members, managers, employees, agents, heirs, executors,
administrators, successors and assigns (each an "Indemnified Party", as
applicable), against and in respect of all losses, liabilities, obligations,
damages, deficiencies, actions, suits, proceedings, demands, assessments,
orders, judgments, costs and expenses (including the reasonable fees,
disbursements and expenses of attorneys and consultants) of any kind or nature
whatsoever, but net of the proceeds from any insurance policies or other third
party reimbursement for such loss, to the extent sustained, suffered or incurred
by or made against any Indemnified Party, to the extent based upon, arising out
of or in connection with: (a) any breach of any representation or warranty made
by the Indemnifying Party in this Agreement or in any schedule, exhibit,
certificate, agreement or other instrument delivered pursuant to this Agreement;
(b) any breach of any covenant or agreement made by the Indemnifying Party in
this Agreement or in any schedule, exhibit, certificate, agreement or other
instrument delivered pursuant to this Agreement; (c) in the case where Seller is
the Indemnifying Party, any claim made by any person or entity which relates to
the Assets which arises in connection with or on the basis of events, acts,
omissions, conditions or any other state of facts occurring on or existing
before the Closing Date; and (d) in the case where Buyer is the Indemnifying
Party, any claim made by any person or entity which relates to the Assets which
arises solely in connection with or on the basis of events, acts, omissions,
conditions or any other state of facts occurring on or existing after the date
hereof.
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9. Miscellaneous.
9.1 Assignability; Binding Effect. This Agreement shall not be assignable
by Seller except with the written consent of Buyer. This Agreement shall be
binding upon and shall inure to the benefit of, the parties hereto and their
respective successors and assigns.
9.2 Headings. The subject headings used in this Agreement are included for
purposes of convenience only and shall not affect the construction or
interpretation of any of its provisions.
9.3 Post-Closing Covenants; Survival. All representations, warranties,
covenants, agreements and indemnities contained in this Agreement, or in any
schedule, exhibit, certificate, agreement, document or statement delivered
pursuant hereto, are material, shall be deemed to have been relied upon by the
parties, and shall survive the consummation of the transactions contemplated
herein for a period of two (2) years regardless of any investigation conducted
by or knowledge of any party hereto.
9.4 Access to Books and Records. During the course of this transaction
through Closing, Seller agrees to make available for inspection all books,
records and assets, and otherwise afford to Buyer and its representatives,
reasonable access to all documentation and other information concerning the
Assets for the purpose of conducting a due diligence investigation thereof. Such
due diligence investigation shall be for the purpose of satisfying Buyer as to
the business, financial and legal condition of the Assets for the purpose of
determining the desirability of consummating the proposed transaction. Buyer
agrees to keep confidential and not use for its own benefit, except in
accordance with this Agreement, any information or documentation obtained in
connection with any such investigation.
9.5 Budget. For a period of three (3) years from the Closing Date, there
will be a minimum budget of $200,000 per annum made available to the business
operations of Buyer pertaining to the Assets being acquired hereunder, subject
to the Buyer's other reasonable cash needs.
9.6 Amendments; Waivers. This Agreement may not be amended or modified,
nor may compliance with any condition or covenant set forth herein be waived,
except by a writing duly and validly executed by Buyer and Seller or, in the
case of a waiver, the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any such right,
power or privilege, or any single or partial exercise of any such right, power
or privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
9.7 Bulk Sales Law. Buyer hereby waives compliance by Seller of any
applicable bulk sales law and Seller agrees to make full and timely payment when
due of all amounts owed by such Seller to its creditors. Seller agrees to
indemnify and hold Buyer harmless from, and reimburse Buyer for any loss, cost,
expense, and liability or damage (including reasonable counsel fees and
disbursements and expenses) that Buyer may suffer or incur by virtue of the
non-compliance by Seller with such laws.
11
9.8 Notices. All communications, notices, requests, consents or demands
given or required under this Agreement shall be in writing and shall be deemed
to have been duly given when delivered to, or received by prepaid registered or
certified mail or recognized overnight courier addressed to, or upon receipt of
a facsimile sent to, the party for whom intended, as follows, or to such other
address or facsimile number as may be furnished by such party by notice in the
manner provided herein:
If to Buyer:
Digicorp
0000 Xxxxxxx Xxxxxx
Xxxxxx Xxx Xxx, XX 00000
Attn: Xxx Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Danzig Xxxx Xxxxxx Xxxxx & Xxx, LLP
00X Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
If to Seller:
Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (___) ___-____
9.9 Entire Agreement. This Agreement, together with the exhibits hereto,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes and cancels any and all prior or contemporaneous
arrangements, understandings and agreements between them relating to the subject
matter hereof.
9.10 Termination of Agreement. This Agreement may be terminated prior to
the Closing as follows:
(a) At the election of Seller or Buyer, on or after March 20, 2006,
if the Closing shall not have occurred by the close of business on such date,
provided that the terminating party is not in default of any of its obligations
hereunder;
(b) by mutual consent of Seller and Buyer; or
(c) by Seller or Buyer if there shall be in effect a final
nonappealable order of a governmental body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby; it being agreed that the parties hereto shall
promptly appeal any adverse determination which is not nonappealable (and pursue
such appeal with reasonable diligence).
12
If this Agreement is terminated as provided herein each party shall deliver all
documents, work papers and other material of any other party relating to the
transactions contemplated hereby, whether so obtained before or after the
execution hereof, to the party furnishing the same. In the event this Agreement
is validly terminated as provided herein, then each of the parties shall be
relieved of their duties and obligations arising under this Agreement after the
date of such termination and such termination shall be without liability to
Seller or Buyer; provided, however, that nothing in this Section 9.10 shall
relieve Seller or Buyer of any liability for a breach of this Agreement.
9.11 Severability. In the event that any provision or any portion of any
provision of this Agreement shall be held to be void or unenforceable, then the
remaining provisions of this Agreement (and the remaining portion of any
provision held to be void or unenforceable in part only) shall continue in full
force and effect.
9.12 Governing Law. This Agreement and the transactions contemplated
hereby shall be governed and construed by and enforced in accordance with the
laws of the State of California without regard to conflict of laws principles.
9.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute the same instrument.
9.14 Expenses. Each party shall pay its own expenses incident to the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby, including all fees and expenses of its counsel and
accountants for all activities of such counsel and accountants undertaken
pursuant to this Agreement, whether or not the transactions contemplated hereby
are consummated.
9.15 Remedies. It is specifically understood and agreed that certain
breaches of this Agreement will result in irreparable injury to the parties
hereto, that the remedies available to the parties at law alone will be an
inadequate remedy for such breach, and that, in addition to any other legal or
equitable remedies that the parties may have, a party may enforce its rights by
an action for specific performance and the parties expressly waive the defense
that a remedy in damages will be adequate.
9.16 Dispute Resolution. Except as provided below, the parties agree to
submit disputes between them relating to this Agreement and its formation,
breach, performance, interpretation and application to arbitration as follows:
Each party will provide written notice to the other party of any dispute within
one year of the date when the dispute first arises or occurs. If a party fails
to provide such notice, recovery on the dispute will be barred. Arbitration will
be conducted in Los Angeles County, California pursuant to the Rules of the
American Arbitration Association ("AAA"), as modified herein. The arbitration
shall be conducted by one (1) arbitrator chosen in accordance with the rules of
the AAA. Unless the arbitrator finds that exceptional circumstances require
otherwise, the arbitrator will grant the prevailing party in arbitration its
costs of arbitration and reasonable attorneys' fees as part of the arbitration
award. Neither party will be required to arbitrate any dispute relating to
actual or threatened violation of Intellectual Property rights. Either party
will be entitled to receive in any court of competent jurisdiction injunctive,
preliminary or other equitable relief, in addition to damages, including court
costs and fees of attorneys and other professionals, to remedy any actual or
threatened violation of its rights with respect to which arbitration is not
required hereunder.
13
9.17 Third Party Rights. Except as regards to the indemnification rights
and obligations herein, this Agreement is for the benefit of the parties hereto
and is not entered into for the benefit of, and shall not be construed to confer
any benefit upon, any other party or entity.
9.18 Representation by Counsel. Each of the parties hereto represents,
warrants and covenants that it has had ample opportunity to consider entering
into this Agreement and has had an opportunity to consult with counsel regarding
this Agreement prior to executing the same. The parties further agree that any
rule that provides that an ambiguity within a document will be interpreted
against the party drafting such document shall not apply.
IN WITNESS WHEREOF, Seller and Buyer have caused this Asset Purchase
Agreement to be executed as of the date first above written.
DIGICORP
By: /s/ Xxx Xxxxxx
------------------------------------
Name: Xxx Xxxxxx
Title: President and CEO
/s/ Xxxxxxx X. Xxxxxx
------------------------------------
XXXXXXX X. XXXXXX XX
14
SCHEDULE 1.3
Xxxxxxx X. Xxxxxx XX - 40,000 shares
Xxxxx X. Xxxxxxxx- 45,000 shares
Xxxx Xxxxxx - 15,000 shares
EXHIBIT A
DOMAIN NAMES
Xxxxxxxxxxx.xxx
Xxxxxxxxxxx.xxx
Xxxxxxxxxxxx.xxx
Xxxxxxxx.xxx
Xxxxxxxxxx.xxx
Xxxxxxxxxxxxx.xxx
Xxxxxxxxxxxxxx.xxx
Xxxxxxxxxxxxxxx.xxx
Xxxxxxxxxxxx.xxx
Xxxxxxxxxxxx.xxx
Xxxxxxxxxxxxx.xxx
Xxxxxxxxxxxxx.xxx
Exhibit B
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) ten thousand (10,000) shares of
Digicorp's common stock issued to the undersigned pursuant to the Asset Purchase
Agreement until one (1) year after the Closing Date (as defined in the Asset
Purchase Agreement) without the prior written consent of Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: 2/7, 2006
Signature
/s/ Xxxxxxx X. Xxxxxx XX
-------------------------------
Xxxxxxx X. Xxxxxx XX
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-1
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) ten thousand (10,000) shares of
Digicorp's common stock issued to the undersigned pursuant to the Asset Purchase
Agreement until two (2) years after the Closing Date (as defined in the Asset
Purchase Agreement) without the prior written consent of Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: 2/7, 2006
Signature
/s/ Xxxxxxx X. Xxxxxx XX
-------------------------------
Xxxxxxx X. Xxxxxx XX
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-2
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) twenty thousand (20,000) shares of
Digicorp's common stock issued to the undersigned pursuant to the Asset Purchase
Agreement until three (3) years after the Closing Date (as defined in the Asset
Purchase Agreement) without the prior written consent of Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: 2/7, 2006
Signature
/s/ Xxxxxxx X. Xxxxxx XX
-------------------------------
Xxxxxxx X. Xxxxxx XX
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-3
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) eleven thousand two hundred fifty
(11,250) shares of Digicorp's common stock issued to the undersigned pursuant to
the Asset Purchase Agreement until one (1) year after the Closing Date (as
defined in the Asset Purchase Agreement) without the prior written consent of
Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: Feb. 7, 2006
Signature
/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-4
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) eleven thousand two hundred fifty
(11,250) shares of Digicorp's common stock issued to the undersigned pursuant to
the Asset Purchase Agreement until two (2) years after the Closing Date (as
defined in the Asset Purchase Agreement) without the prior written consent of
Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: Feb. 7, 2006
Signature
/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-5
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) twenty-two thousand five hundred
(22,500) shares of Digicorp's common stock issued to the undersigned pursuant to
the Asset Purchase Agreement until three (3) years after the Closing Date (as
defined in the Asset Purchase Agreement) without the prior written consent of
Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: Feb. 7, 2006
Signature
/s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-6
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) three thousand seven hundred fifty
(3,750) shares of Digicorp's common stock issued to the undersigned pursuant to
the Asset Purchase Agreement until one (1) year after the Closing Date (as
defined in the Asset Purchase Agreement) without the prior written consent of
Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: ________, 2006
Signature
-------------------------------
Xxxx Xxxxxx
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-7
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) three thousand seven hundred fifty
(3,750) shares of Digicorp's common stock issued to the undersigned pursuant to
the Asset Purchase Agreement until two (2) years after the Closing Date (as
defined in the Asset Purchase Agreement) without the prior written consent of
Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: ________, 2006
Signature
-------------------------------
Xxxx Xxxxxx
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-8
Lock-Up Agreement
Pursuant to Section 1.3 of that certain Asset Purchase Agreement dated
February 7, 2006 by and between Digicorp, a Utah corporation, and Xxxxxxx X.
Xxxxxx XX a/k/a Ameno (the "Asset Purchase Agreement"), the undersigned hereby
agrees that he will not, directly or indirectly, agree or offer to sell, sell,
grant an option for the purchase or sale of, transfer, pledge, assign,
hypothecate, distribute or otherwise encumber or dispose of (other than to
donees who agree to be similarly bound) seven thousand five hundred (7,500)
shares of Digicorp's common stock issued to the undersigned pursuant to the
Asset Purchase Agreement until three (3) years after the Closing Date (as
defined in the Asset Purchase Agreement) without the prior written consent of
Digicorp.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop-transfer orders with the transfer agent
of the securities of Digicorp with respect to the above referenced shares
registered in the name of the undersigned or beneficially owned by the
undersigned.
Dated: ________, 2006
Signature
-------------------------------
Xxxx Xxxxxx
_______________________________
_______________________________
_______________________________
Address
_______________________________
Print Social Security Number
or Taxpayer I.D. Number
B-9
