Exhibit 10.2
ASSET PURCHASE AGREEMENT
AGREEMENT, dated as of June 30, 2004 among Quik Internet of the
Valley, Inc., an Oregon corporation with offices at 000 Xxxxxxx Xx. XX #000
Xxxxx, XX 97302("Seller"), and Corridor Communications Corp., a Delaware
corporation with offices at 0000 Xxxx Xxx., Xxx. 000, Xxxxxxxx Xxxx, Xxxxxxxxxx
00000 ("Purchaser").
RECITALS
A. Seller is engaged in the business of providing products and
services relating to wireless Internet capabilities.
B. Purchaser desires to acquire certain assets from Seller.
C. Seller desires to sell the same to Purchaser.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein set forth, the parties hereto hereby
agree as follows:
1. SALE OF ASSETS. Subject to the terms and conditions of this Agreement, at the
closing under this Agreement (the "Closing"), Seller shall sell, convey, assign,
transfer and deliver to Purchaser, and Purchaser shall purchase, acquire and
accept from Seller all right, title, and interest in and to all of Seller's
assets, patents and properties used in, useful to and/or relating to the
Business, which shall include (but not be limited to) the following (the
"Assets"):
1.1 Equipment. The items of office equipment and fixtures owned by
Seller and listed on Schedule 1.1 (the "Equipment").
1.2 Intellectual Property. The domain names and Internet websites
owned by Seller and listed on Schedule 1.2 (the "Intellectual Property").
1.3 Records. All business and financial records, books, ledgers,
files, plans, documents, correspondence, specifications, creative materials,
advertising and promotional materials, marketing materials, conference
materials, database materials, supplier lists, equipment repair, maintenance or
service records, and all other printed or written materials whether written or
electronically stored or otherwise recorded.
It is expressly understood that Purchaser 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 Purchaser.
2. PURCHASE CONSIDERATION. In consideration of the purchase and sale of the
Assets, Purchaser shall issue to Seller 7,500,000 shares of common stock of
Purchaser (the "Purchase Consideration") at the Closing.
3. CLOSING.
3.1 Place and Time. The Closing shall take place at the offices of
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, 1065 Avenue of the Xxxxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m. on June 30, 2004, or at such other time
or place as Purchaser and Seller may mutually agree as may be evidenced by their
effecting the Closing (the "Closing Date").
3.2 Deliveries by Seller. At the Closing, Seller shall deliver the
following to the Purchaser:
(a) All of the tangible Assets including without limitation
all books and records related thereto and/or the rights to take
possession thereof.
(b) Such deeds, bills of sale, assignments and other
instruments of conveyance and transfer, and such powers of attorney,
as shall be effective to vest in Purchaser title to or other interest
in, and the right to full custody and control of, the Assets, free
and clear of all liens, charges, encumbrances and security interests
whatsoever including, but not limited to, the Xxxx of Sale form
annexed hereto as Exhibit 3.2(b).
(c) Seller Financial Statements pursuant to Section 4.4
hereof.
(d) All other documents, certificates, instruments or
writings reasonably required by Purchaser to be delivered by Seller
at or prior to the Closing pursuant to this Agreement.
3.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver
the following to the Seller:
(a) the Purchase Consideration in the form of a stock
certificate in the name of Seller for 7,500,000 shares of Purchaser's
common stock.
(b) Purchaser Financial Statements pursuant to Section 5.4
hereof.
3.4 Proceedings. All proceedings which shall be taken and all
documents which shall be executed and delivered by the parties on the Closing
Date shall be deemed to have been taken and executed simultaneously, and no
proceeding shall be deemed taken nor any documents executed or delivered until
all have been taken, executed and delivered.
3.5 Conditions to Purchaser's Obligations. The obligations of
Purchaser to effect the Closing shall be subject to the satisfaction at or prior
to the Closing of the following conditions, any one or more of which may be
waived by Purchaser:
(a) There shall not be in effect any injunction, order or
decree of a court of competent jurisdiction that prohibits or delays
consummation of any or all of the transactions contemplated in this
Agreement nor shall any proceeding seeking any of the foregoing have
been commenced.
(b) The representations and warranties of Seller set forth
in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing Date as though
made at such time.
(c) Seller shall have performed and complied in all
material respects with the agreements contained in this Agreement
required to be performed and complied with by it prior to or at the
Closing.
(d) Purchaser shall have received a certificate to the
effect set forth in clauses (b) and (c) above signed by the Secretary
of Seller.
3.6 Conditions to Seller's Obligations. The obligations of Seller to
effect the Closing shall be subject to the satisfaction at or prior to the
Closing of the following conditions, any one or more of which may be waived by
Seller:
(a) There shall not be in effect any injunction, order or
decree of a court of competent jurisdiction that prohibits or delays
the consummation of any or all of the transactions contemplated
herein nor shall any proceeding seeking any of the foregoing have
been commenced.
(b) The representations and warranties of Purchaser set
forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date
as though made at such time.
(c) Purchaser shall have performed and complied in all
material respects with the agreements contained in this Agreement
required to be performed and complied with by it prior to or at the
Closing.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants to Purchaser as follows:
4.1 Organization and Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Oregon. Seller has full power and authority to own its properties and to carry
on its business as it is now being conducted. Seller is duly qualified to
transact business and is in good standing in each jurisdiction wherein the
nature of the business done or the property owned, leased or operated by it
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, operations, properties,
prospects, liabilities, results of operations, assets or condition (financial or
otherwise) of Seller. True, correct and complete copies of Seller's certificate
of incorporation and bylaws and all amendments thereto have been delivered to
Purchaser. The minutes and records of the Seller that have been made available
to Purchaser and are true, correct and complete in all material respects.
4.2 Corporate Authority, No Conflicts.
(a) Seller has the right, power, authority and capacity to
execute and deliver this Agreement and to perform its obligations
under this Agreement.
(b) Neither the execution, delivery or performance of this
Agreement by Seller nor the consummation by Seller of the
transactions contemplated hereby will, directly or indirectly (with
or without notice or lapse of time or both):
(i) contravene, conflict with or result in a
violation or breach of (A) any provision of the
organizational documents of Seller, (B) any resolution
adopted by the Board of Directors, or any committee
thereof, or the owner of Seller, (C) any legal requirement
or any governmental order to which Seller or any of the
properties or assets owned or used by Seller may be
subject, or (D) any authorization, license or permit of any
governmental authority, including any private investigatory
license or other similar license, which is held by Seller
or that otherwise relates to the business of, or any of the
assets owned or used by Seller;
(ii) result in a violation or breach of or
constitute a default, give rise to a right of termination,
cancellation or acceleration, create any entitlement to any
payment or benefit or require the consent or approval of or
any notice to or filing with any third party under any
contract to which Seller is a party or to which it or its
properties or assets may be bound, or require the consent
or approval of or any notice to or filing with any
governmental authority to which the Seller or its
properties or assets may be subject; or
(iii) result in the imposition or creation of any
encumbrance upon or with respect to any of the properties or assets owned or
used by Seller.
4.3 Capitalization. All of the outstanding equity securities of
Seller has been duly authorized and validly issued and are fully paid and
nonassessable.
4.4 Financial Statements.
(a) At Closing, Seller shall deliver to Purchaser an
audited balance sheet of Seller as at December 31, 2003, audited
statements of profit and loss, cash flows and shareholders' equity
for the years ended December 31, 2002 and 2003 ("Seller Financial
Statements").
(b) The Seller Financial Statements when delivered (i)
shall have been prepared from the books and records of Seller in
accordance with GAAP, (ii) fully reflect all liabilities and
contingent liabilities of the Seller required to be reflected therein
on such basis as at the date thereof, and (iii) fairly present in all
material respects the consolidated financial position of Seller as of
the dates of the balance sheets included in the Seller Financial
Statements and the consolidated results of its operations and cash
flows for the periods indicated.
4.5 No Undisclosed Liabilities. Seller has no material liabilities or
obligations of any nature (whether absolute, accrued, contingent, or otherwise)
except for liabilities or obligations which have previously been disclosed to
Purchaser and current liabilities incurred in the ordinary course of business,
which current liabilities are consistent with the representations and warranties
contained in this Agreement and will not, individually or in the aggregate, have
a material adverse change in the business, operations, properties, prospects,
liabilities, results of operations, assets or condition (financial or otherwise)
of Seller.
4.6 Taxes. Seller has properly and timely filed all federal, state
and local Tax returns and has paid all Taxes, assessments and penalties due and
payable. All such Tax returns were complete and correct in all respects as
filed, and no claims have been assessed with respect to such returns. The
provisions made for Taxes on the balance sheet of the Seller included in the
Seller Financial Statements and the Seller Interim Financial Statements are
sufficient in all respects for the payment of all Taxes whether disputed or not
that are due or are hereafter found to have been due with respect to the conduct
of the business of the Seller up to and through the date of such Seller
Financial Statements or Seller Interim Financial Statements, respectively. There
are no present, pending, or threatened audit, investigations, assessments or
disputes as to Taxes of any nature payable by the Seller, nor any Tax liens
whether existing or inchoate on any of the assets of the Seller, except for
current year Taxes not presently due and payable. The federal income Tax returns
of the Seller have never been audited. No IRS or foreign, state, county or local
Tax audit is currently in progress. The Seller has not waived the expiration of
the statute of limitations with respect to any Taxes. There are no outstanding
requests by the Seller for any extension of time within which to file any Tax
return or to pay Taxes shown to be due on any Tax return. Other than with
respect to the Seller, the Seller is not liable for Taxes of any other person or
entity or is currently under any contractual obligation to indemnify any person
or entity with respect to Taxes or is a party to any Tax sharing agreement or
any other agreement providing for payments by the Seller with respect to Taxes.
For purposes of this Agreement, the term "Tax" shall mean any United
States federal, national, state, provincial, local or other jurisdictional
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, estimated, alternative or add-on minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge imposed by any governmental authority, together
with any interest or penalty imposed thereon.
4.7 Compliance with Law; Governmental Authorizations. To the best of
Seller's knowledge, Seller is in compliance with all federal, state and local
laws, authorizations, licenses and permits of any governmental authority and all
governmental orders affecting the business, operations, properties or assets of
Seller, including federal, state and local: (i) Occupational Safety and Health
Laws; (ii) private investigatory and other similar laws; (iii) the Fair Credit
Reporting Act and similar state and local laws; and (iv) laws regarding or
relating to trespass or violation of privacy rights. Seller has not been charged
with violating, nor to the knowledge of Seller, threatened with a charge of
violating, nor, to the knowledge of Seller, is Seller under investigation with
respect to a possible violation of any provision of any federal, state or local
law relating to any of its respective businesses, operation, properties or
assets.
4.8 Effect of Agreement. This Agreement has been duly executed and
delivered by Seller and constitutes, and such other agreements and instruments
to be executed by Seller pursuant hereto, when so duly executed and delivered,
will constitute, legal, valid and binding obligations of Seller, enforceable in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium or
other similar laws relating to or affecting the rights of creditors generally
and by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
4.9 Title to Assets. After giving effect to the transactions
contemplated by this Agreement, Purchaser will have good and valid title to all
of the Assets, free and clear of all, liens, encumbrances, restrictions,
security interests, mortgages, and claims (including any related to duty or
customs), except with respect to any of the foregoing which may be incurred by
Purchaser.
4.10 Broker's Fees. Seller has not employed any broker or finder or
incurred any liability for any broker's or finder's fees or commissions in
connection with this Agreement or the transactions contemplated herein.
4.11 Relationship with Related Persons. No officer, director or
employee of Seller, nor any spouse or child of any of them or any affiliate of,
or any person associated with, any of them ("Seller Related Person"), has any
interest in any property or asset used in or pertaining to the business of
Seller. No Seller Related Person has owned or presently owns an equity interest
or any other financial or profit interest in a person that has (i) had business
dealings with Seller, or (ii) engaged in competition with Seller. No Seller
Related Person is a party to any contract with, or has any claim or right
against, Seller.
4.12 Equipment. Schedule 1.1 lists all of the Equipment.
4.13 Intellectual Property. Schedule 1.2 lists all of the
Intellectual Property.
4.14 Disclosure. No representation or warranty by Seller in this
Agreement, nor in any certificate, schedule or exhibit delivered or to be
delivered pursuant to this Agreement contains or will contain any untrue
statement of material fact, or omits or will omit to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.
4.15 Accounts Receivable; Accounts Payable.
(a) All accounts receivable of the Seller that
are reflected on the Seller Financial Statements or on the accounts
receivable ledgers of the Seller (collectively, the "Seller Accounts
Receivable") represent valid obligations arising from sales actually
made or services actually performed in the ordinary course of
business. All of the Seller Accounts Receivable are or will be
current and collectible at the full recorded amount thereof, less any
applicable reserves established in accordance with GAAP, in the
ordinary course of business without resort to litigation, except for
such Seller Accounts Receivable, the failure of which to collect
would not have a Material Adverse Effect.
(b) All accounts payable of the Seller that are
reflected on the Seller Financial Statements or on the accounts
payable ledgers of the Seller arose in the ordinary course of
business. All material items which are required by GAAP to be
reflected as payables on the Seller Financial Statements and in the
books and records of the Seller are so reflected and have been
recorded in accordance with GAAP in a manner consistent with past
practice. There has been no adverse change since the date of the
Seller Financial Statements in the amount or delinquency of accounts
payable of the Seller and its Subsidiaries (either individually or in
the aggregate) which would have a Material Adverse Effect.
4.16 No Material Adverse Change. Since the date of the Seller
Financial Statements, there has not been any material adverse change in the
business, operations, properties, prospects, liabilities, results of operations,
assets or condition (financial or otherwise) of the Seller taken as a whole (a
"Material Adverse Change") and no event has occurred or circumstance exists that
may result in a Material Adverse Effect.
4.17 Books and Records. The books of account and other records of the
Seller and its Subsidiaries, all of which have been made available to Purchaser,
are true, correct and complete. The minute books of the Seller contain true,
correct and complete records of all meetings held of, and action taken by, the
equity holders, the Boards of Directors, and committees of the Boards of
Directors of the Seller. The books of the Seller are true, correct and complete.
At the Closing, all of those books and records will be in the possession of the
Seller.
4.18 Condition and Sufficiency of Assets. The buildings, vehicles,
furniture, fixtures and equipment and other personal property owned, held or
used by the Seller are structurally sound, are in good operating condition and
repair, and are adequate for the uses to which they are being put, and none of
such buildings, vehicles, furniture, fixtures or equipment or other personal
property is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. The buildings,
vehicles, furniture, fixtures and equipment or other personal property of the
Seller are sufficient for the continued conduct of its business after the
Closing in substantially the same manner as conducted prior to the Closing.
4.19 Legal Proceedings. There is no pending claim, action,
investigation, arbitration, litigation, suit or other proceeding ("Proceeding"):
(a) that has been commenced by or against the
Seller or that otherwise relates to or may affect the business of, or any of the
properties or assets owned, held or used by, the Seller; or
(b) that challenges, or that may have the effect
of preventing, delaying, making illegal, or otherwise interfering with, any of
the transactions contemplated hereby.
To the knowledge of the Seller, (A) no such Proceeding has been
threatened, and (B) no event has occurred or circumstance exists that may give
rise to or serve as a basis for the commencement of any such Proceeding.
4.20 Labor Relations.
(a) The Seller has satisfactory relationships with its
employees.
(b) No condition or state of facts or circumstances exists
which could materially adversely affect the Seller's relations with
its employees, including, to the best of the Seller's knowledge, the
consummation of the transactions contemplated by this Agreement.
(c) The Seller is in compliance in all material respects
with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours and
none of them is engaged in any unfair labor practice.
(d) No collective bargaining agreement with respect to the
business of the Seller is currently in effect or being negotiated.
The Seller has not encountered any labor union or collective
bargaining organizing activity with respect to its employees. Neither
the Seller nor any of its Subsidiaries has any obligation to
negotiate any such collective bargaining agreement, and, to the
knowledge of the Seller, there is no indication that the employees of
the Seller or any of its Subsidiaries desire to be covered by a
collective bargaining agreement.
(e) There are no strikes, slowdowns, work stoppages or
other labor trouble pending or, to the knowledge of the Seller,
threatened with respect to the employees of the Seller or any of its
Subsidiaries, nor has any or the above occurred or, to the knowledge
of the Seller, been threatened.
4.21 Investment Representation. In connection with the receipt of the
Purchase Consideration, Seller hereby represents and warrants:
(a) No Registration. Seller understands that the Purchase
Consideration has not been and will not be, registered under the
Securities Act of 1933, as amended (the "Securities Act") and shall
be issued by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends
upon, among other things, the bona fide nature of the investment
intent and the accuracy of Seller's representations as expressed
herein or otherwise made pursuant hereto.
(b) Investment Intent. Seller is acquiring the Purchase
Consideration for investment for its own account, not as a nominee or
agent, and not with the view to, or for resale in connection with,
any distribution thereof, and Seller has no present intention of
selling, granting any participation in, or otherwise distributing the
same. Seller further represents that it does not have any contract,
undertaking, agreement or arrangement with any person or entity to
sell, transfer or grant participation to such person or entity or to
any third person or entity with respect to the Purchase
Consideration.
(c) Speculative Nature of Investment. Seller understands
and acknowledges that Purchaser has limited financing and working
capital and that an investment in Purchaser is highly speculative and
involves substantial risks. Purchaser can bear the economic risk of
acquiring and holding the Purchase Consideration and is able, without
impairing its financial condition, to hold the Purchase Consideration
for an indefinite period of time and to suffer a complete loss on
such Purchase Consideration.
(d) Accredited Investor. Seller is an "accredited investor"
within the meaning of Regulation D, Rule 501(a), promulgated by the
Securities and Exchange Commission under the Securities Act and shall
submit to Corporation such further assurances of such status as may
be reasonably requested by the Corporation.
(e) Legends. Seller understands and agrees that the
certificates evidencing the Purchase Consideration shall bear the
following legend (in addition to any legend required under applicable
state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE
SECURITIES LAWS, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents and
warrants to Seller as follows:
5.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Purchaser has full corporate power and authority to own its properties
and to carry on its business as it is now being conducted. Purchaser is duly
qualified to transact business and is in good standing in each jurisdiction
wherein the nature of the business done or the property owned, leased or
operated by it requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business, operations,
properties, prospects, liabilities, results of operations, assets or condition
(financial or otherwise) of Purchaser. True, correct and complete copies of the
certificate of incorporation and by-laws of Purchaser and all amendments thereto
have been delivered to Seller. The corporate minutes and corporate records of
Purchaser that have been made available to Seller and are true, correct and
complete in all material respects.
5.2 Corporate Authority, No Conflicts.
(a) Purchaser has the right, power, authority and capacity
to execute and deliver this Agreement and to perform its obligations
under this Agreement.
(b) Neither the execution, delivery or performance of this
Agreement by Purchaser nor the consummation by Purchaser of the
transactions contemplated hereby will, directly or indirectly (with
or without notice or lapse of time or both):
(i) contravene, conflict with or result in a
violation or breach of (A) any provision of the
organizational documents of Purchaser, (B) any resolution
adopted by the Board of Directors, or any committee
thereof, or the owner of Purchaser, (C) any legal
requirement or any governmental order to which Purchaser or
any of the properties or assets owned or used by Purchaser
may be subject, or (D) any authorization, license or permit
of any governmental authority, including any private
investigatory license or other similar license, which is
held by Purchaser or that otherwise relates to the business
of, or any of the assets owned or used by Purchaser;
(ii) result in a violation or breach of or
constitute a default, give rise to a right of termination,
cancellation or acceleration, create any entitlement to any
payment or benefit or require the consent or approval of or
any notice to or filing with any third party under any
contract to which Purchaser is a party or to which it or
its properties or assets may be bound, or require the
consent or approval of or any notice to or filing with any
governmental authority to which the Purchaser or its
properties or assets may be subject; or
(iii) result in the imposition or creation of any
encumbrance upon or with respect to any of the properties or assets owned or
used by Purchaser.
5.3 Capitalization. The authorized equity securities of Purchaser
consist solely of 800,000,000 shares of common stock, par value $.0001 per
share, of which 565,473,001 shares are issued and outstanding, and 20,000,000
shares of preferred stock, par value $.0001, of which none are issued and
outstanding. All of the outstanding equity securities of Purchaser have been
duly authorized and validly issued and are fully paid and nonassessable. There
are no contracts relating to the issuance, sale or transfer of any equity
securities or other securities of Purchaser, and there are not outstanding any
options, warrants or other securities exercisable or exchangeable for or
convertible into any shares of equity securities of Purchaser. None of the
outstanding equity securities or other securities of Purchaser that have been
issued was issued in violation of the Securities Act of 1933, as amended, or any
other legal requirement. No Person has any pre-emptive rights with respect to
any security of Purchaser.
5.4 Financial Statements.
(a) At Closing, Purchaser shall deliver to Seller an
audited balance sheet of Purchaser as at December 31, 2003, audited
statements of profit and loss for the years ended December 31, 2002
and 2003 and for the three month period ended March 31, 2004
("Purchaser Financial Statements").
(b) The Purchaser Financial Statements when delivered (i)
shall have been prepared from the books and records of Purchaser in
accordance with GAAP, (ii) fully reflect all liabilities and
contingent liabilities of the Purchaser required to be reflected
therein on such basis as at the date thereof, and (iii) fairly
present in all material respects the consolidated financial position
of Purchaser as of the dates of the balance sheets included in the
Purchaser Financial Statements and the consolidated results of its
operations and cash flows for the periods indicated.
5.5 No Undisclosed Liabilities. Purchaser has no material liabilities
or obligations of any nature (whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the Financial Statements and the Interim Financial Statements and current
liabilities incurred in the ordinary course of business since the date of the
Interim Financial Statements, which current liabilities are consistent with the
representations and warranties contained in this Agreement and will not,
individually or in the aggregate, have a material adverse effect on the
business, operations, properties, prospects, liabilities, results of operations,
assets or condition (financial or otherwise) of Purchaser.
5.6 Taxes. Purchaser has properly and timely filed all federal, state
and local Tax returns and has paid all Taxes, assessments and penalties due and
payable. All such Tax returns were complete and correct in all respects as
filed, and no claims have been assessed with respect to such returns. The
provisions made for Taxes on the balance sheet of the Purchaser included in the
Purchaser Financial Statements and the Purchaser Interim Financial Statements
are sufficient in all respects for the payment of all Taxes whether disputed or
not that are due or are hereafter found to have been due with respect to the
conduct of the business of the Purchaser up to and through the date of such
Purchaser Financial Statements or Purchaser Interim Financial Statements,
respectively. There are no present, pending, or threatened audit,
investigations, assessments or disputes as to Taxes of any nature payable by the
Purchaser, nor any Tax liens whether existing or inchoate on any of the assets
of the Purchaser, except for current year Taxes not presently due and payable.
The federal income Tax returns of the Purchaser have never been audited. No IRS
or foreign, state, county or local Tax audit is currently in progress. The
Purchaser has not waived the expiration of the statute of limitations with
respect to any Taxes. There are no outstanding requests by the Purchaser for any
extension of time within which to file any Tax return or to pay Taxes shown to
be due on any Tax return. Other than with respect to the Purchaser, the
Purchaser is not liable for Taxes of any other person or entity or is currently
under any contractual obligation to indemnify any person or entity with respect
to Taxes or is a party to any Tax sharing agreement or any other agreement
providing for payments by the Purchaser with respect to Taxes.
For purposes of this Agreement, the term "Tax" shall mean any United
States federal, national, state, provincial, local or other jurisdictional
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, estimated, alternative or add-on minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge imposed by any governmental authority, together
with any interest or penalty imposed thereon.
5.7 Effect of Agreement. This Agreement has been duly executed and
delivered by Purchaser and constitutes, and each other agreement, document or
instrument to be executed by Purchaser pursuant hereto, when so duly executed
and delivered, will constitute, legal, valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with their terms, except
as such enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting the
rights of creditors generally and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
5.8 Knowledge. Purchaser's determination with respect to entering
into this Agreement was based solely on the knowledge of its officers and
directors and the representations and warranties made by Seller herein.
Purchaser has not relied on any representations or warranties of any Seller or
any agent of any Seller, whether implied or otherwise, other than those
expressly made by Seller in this Agreement, in making its determination to enter
into and consummate this Agreement.
5.9 Broker's Fees. Purchaser has not employed any broker or finder or
incurred any liability for any broker's or finder's fees or commissions in
connection with this Agreement or the transactions contemplated herein.
6. PRE-CLOSING COVENANTS.
6.1 Compliance with Conditions. The parties hereto shall use their
best efforts to cause the Closing to be consummated and to cause the execution
and delivery of the documents referred to in Section 3 hereof and to bring about
the satisfaction of the conditions to the obligations of the parties hereto set
forth in Sections 3.5 and 3.6, respectively, herein.
6.2 Update of Exhibits. From and after the date hereof and up to the
Closing Date, the parties hereto shall update the exhibits to this Agreement to
the extent necessary to make such exhibits true and accurate as of the Closing
Date and shall deliver copies of such updated exhibits to Purchaser or Seller,
as the case may be, immediately upon their preparation.
6.3 Consents. From and after the date hereof, the parties hereto
shall use their best efforts to obtain all of the certificates, authorizations,
consents or approvals required as set forth in Section 3 hereof. Evidence of
such certificates, authorizations, consents or approvals shall be delivered to
Purchaser or Seller, as the case may be, on or prior to the Closing.
6.4 Business Practices. From and after the date hereof and up to the
Closing Date, Seller shall continue to run the business of Seller in a manner
consistent with past business practices including the satisfaction of all of its
then current obligations.
7. INDEMNIFICATIONS BY SELLER AND PURCHASER.
7.1 Indemnification by Seller. Seller shall indemnify and hold
harmless Purchaser and shall reimburse Purchaser for any loss, liability, claim,
damage, expense (including, without limitation, costs of investigation and
defense and reasonable attorney's fees) or diminution of value (collectively,
"Damages") arising from or in connection with:
(a) any inaccuracy in any of the representations and
warranties of Seller in this Agreement or in any certificate
delivered by Seller pursuant to this Agreement, or any actions,
omissions or state of facts inconsistent with any such representation
or warranty (for purposes of this clause (a), each schedule and
exhibit to this Agreement shall be deemed a representation and
warranty);
(b) any failure by Seller to perform or comply with any
agreement made by it under this Agreement;
(c) any operations or business conducted, commitment made,
service rendered or condition existing or any action taken or omitted
by or on behalf of Seller, except for any claims for which Purchaser
is required to indemnify Seller pursuant to Section 7.2 herein;
(d) any claim by any person for brokerage or finder's fees
or commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such person with
Seller (or any person acting on its behalf) in connection with any of
the transactions contemplated herein; and
(e) Seller's failure to comply with the "Bulk Sales Laws"
under the Uniform Commercial Code;
provided, however, that (i) Seller shall have no obligation to indemnify
Purchaser for Damages until the aggregate Damages exceed $20,000 and, in such
event, for the full amount of such Damages, (ii) Seller' aggregate liability for
Damages shall in no event exceed the Purchase Consideration, and (iii) Seller
shall have no obligation to indemnify Purchaser for any claims made by Purchaser
under this Section 7.1 after eighteen (18) months after the Closing Date.
7.2 Indemnification by Purchaser. Purchaser shall indemnify and hold
harmless Seller, and shall reimburse Seller for any Damages arising from or in
connection with:
(a) any inaccuracy in any of the representations and
warranties of Purchaser in this Agreement or in any certificate delivered by
Purchaser pursuant to this Agreement, or any actions, omissions or state of
facts inconsistent with any such representation or warranty (for purposes of
this clause (a), each schedule and exhibit to this Agreement shall be deemed a
representation and warranty);
(b) any failure by Purchaser to perform or comply with any
agreement made by it under this Agreement;
(c) any claim by any person for brokerage or finder's
fees or commissions or similar payments based upon any agreement or
understanding alleged to have been made by such person with Purchaser (or any
person acting on its behalf, regardless of whether such person purported to act
on behalf of Seller) in connection with any of the transactions contemplated in
this Agreement; and
(d) obligations with respect to any product liability
associated with the Equipment for the period after the Closing Date;
provided, however, that (i) Purchaser shall have no obligation to indemnify
Seller for Damages until the aggregate Damages exceed $20,000 and, in such
event, for the full amount of such Damages, (ii) Purchaser's aggregate liability
for Damages shall in no event exceed the Purchase consideration, and (iii)
Purchaser shall have no obligation to indemnify Seller for any claims made by
any Seller under this Section 7.2 after eighteen (18) months after the Closing
Date.
7.3 Procedure for Indemnification. Promptly after receipt by an
indemnified party under Section 7.1 or 7.2 hereof of notice of the commencement
of any action or assertion of any claim, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the commencement or assertion
thereof, but the failure so to notify the indemnifying party shall not relieve
it of any liability that it may have to any indemnified party except to the
extent the indemnifying party demonstrates that the defense of such action is
materially prejudiced thereby. If any such action shall be brought against an
indemnified party and it shall give notice to the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, to assume the defense thereof
with counsel satisfactory to such indemnified party and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such Section for any fees of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party in connection with the
defense thereof, other than reasonable costs of investigation. If an
indemnifying party assumes the defense of such an action:
(a) no compromise or settlement thereof may be effected by
the indemnifying party without the indemnified party's consent which
shall not be unreasonably withheld unless (i) there is no finding or
admission of any violation of law or any violation of the rights of
any person and no effect on any other claims that may be made against
the indemnified party and (ii) the sole relief provided is monetary
damages that are paid in full by the indemnifying party; and
(b) the indemnifying party shall have no liability with
respect to any compromise or settlement thereof effected without its
consent. If notice is given to an indemnifying party of the
commencement of any action and it does not, within ten (10) business
days after the indemnified party's notice is given, give notice to
the indemnified party of its election to assume the defense thereof,
the indemnifying party shall be bound by any determination made in
such action or any compromise or settlement thereof effected by the
indemnified party. Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a reasonable probability
that an action may materially and adversely affect it or its
affiliates other than as a result of monetary damages, such
indemnified party may, by notice to the indemnifying party, assume
the exclusive right to defend, compromise or settle such action at
its cost or expense, but the indemnifying party shall not be bound by
any determination of an action so defended or any compromise or
settlement thereof effected without its consent (which shall not be
unreasonably withheld).
8. MISCELLANEOUS.
8.1 Bulk Sales Laws: The parties hereto hereby agree to waive
compliance with "Bulk Sales Laws" under the Uniform Commercial Code and the
related notice provisions thereof.
8.2 Survival. All representations, warranties and agreements
contained in this Agreement or in any certificate delivered pursuant to this
Agreement shall survive eighteen (18) months after Closing.
8.3 Waivers and Amendments.
(a) This Agreement may be amended, modified or supplemented
only by a written instrument executed by the parties hereto. The
provisions of this Agreement may be waived only by an instrument in
writing executed by the party granting the waiver. No action taken
pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance
with any representation, warranty, covenant or agreement contained
herein. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or
subsequent breach.
(b) No failure on the part of any party to exercise, and no
delay in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of such right, power or remedy by such party preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive
of any other remedies provided by law.
8.4 Fees and Expenses. Each party shall be responsible for its
respective fees and expenses incurred in connection with this transaction.
8.5 Notices. All notices, requests, demands and other communications
that are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given or made: if by hand, immediately upon
delivery; if by telex, telecopier, telegram or similar electronic device,
immediately upon sending, provided it is sent on a business day, but if not,
then immediately upon the beginning of the first business day after being sent;
if by Federal Express, Express Mail or any other overnight delivery service, on
the first business day after dispatch; if by registered or certified mail,
return receipt requested, upon receipt by the addressee. All notices, requests
and demands are to be given or made to the parties at the following addresses
(or to such other address as either party may designate by notice in accordance
with the provisions of this paragraph):
IF TO SELLER:
Quik Internet of the Valley, Inc.
000 Xxxxxxx Xx. XX #000
Xxxxx, XX 00000
Main: 000-000-0000
Fax: 000-000-0000
WITH A COPY TO:
------------------------------
------------------------------
------------------------------
------------------------------
IF TO PURCHASER: Corridor Communications Corp.
0000 Xxxx Xxx., Xxx. 000
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile:
WITH A COPY TO: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
1065 Avenue of the Americas, 21st Floor
Attn: Xxxxxxx Xxxxxxxxx, Esq.
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8.6 Entire Agreement. This Agreement and the schedules and exhibits
hereto set forth the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede any prior
negotiations, agreements, letters of intent, understandings or arrangements
between the parties hereto with respect to the subject matter hereof.
8.7 Binding Effect, Benefits, Construction. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto, or their
respective successors, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
8.8 Non-Assignability. This Agreement and any rights pursuant hereto
shall not be assignable by any party hereto without the prior written consent of
the other party.
8.9 Applicable Law, Venue, Jurisdiction. This Agreement and the legal
relations between the parties hereto shall be governed by and construed in
accordance with the laws of the State of California, applicable to contracts
made and to be enforced in such state. Each of the parties hereto hereby
consents to the personal jurisdiction of the courts of the State of California
and the federal courts situated therein over any judicial proceeding under or
which may otherwise arise out of this Agreement or any other agreement or
instrument entered into in connection herewith and agree not to contest venue
for any such proceeding commenced in the courts of the State of California or in
the United States District Courts located in the State of California.
8.10 Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
8.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement
to be signed by their duly authorized respective officers all as of the date
first written above.
SELLER: QUIK INTERNET OF THE VALLEY, INC.
AN OREGON CORPORATION
By:
-------------------------
Name: Xxxxx Xxxxxxxx
Title: President
PURCHASER: CORRIDOR COMMUNICATIONS CORP.
A DELAWARE CORPORATION
By:
-------------------------
Name:
Title:
