Asset Purchase Agreement
Exhibit
99.2
This
Agreement for the sale and
purchase of assets is entered into as of the 28th day of September 2007, to
be
effective September 30, 2007, between International Monetary Systems, Ltd.
(“Buyer” or “IMS”), a Wisconsin corporation, and Kansas Trade Exchange, Inc.
(“Seller” or “KTE”), a Kansas corporation.
For
consideration of the mutual
covenants contained herein and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as
follows:
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1.
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Sale
of Client Barter Accounts. On the closing date, Seller
shall sell, transfer, assign and deliver to Buyer, free and clear
of all
liens, claims, encumbrances and charges, its membership list/goodwill
and
all client barter accounts of the members of KTE as listed on the
KTE
software printouts as of the effective date, September 30, 2007.
Should
any account member decide not to enter into an IMS agreement, the
prior
KTE contract will remain in force but will be serviced by and belong
to
IMS. For purposes of this Agreement, a barter trade account is an
account
of a member of KTE, that member having entered into a membership
agreement
with KTE prior to the date of
closing.
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2.
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Sale
of Other Business Assets. On the closing date, Seller
shall transfer, convey, assign and deliver to Buyer certain of the
Seller’s other business assets. These assets shall include but not be
limited to the following:
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A.
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All
client barter accounts (Exhibit A) and accounts receivable (Exhibit
B) as
listed on the KTE software printout as of September 30, 2007. It
is agreed
that any payments on these accounts received by KTE after closing
shall
immediately be remitted to IMS.
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B.
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All
furniture, fixtures and equipment presently being used in the KTE
offices
(Exhibit C).
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C.
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A
Specific list of assets will be agreed upon by September 5,
2007.
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D.
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It
is understood that cash in KTE bank accounts is not included in the
assets
being sold.
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3.
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Consideration.
In consideration of the transfer and delivery at closing
to Buyer
of the assets described in paragraphs 1 and 2, and upon compliance
with
the covenants and agreements set forth herein, Buyer shall pay to
Seller
the amount of $357,664 payable as
follows:
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A.
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Buyer
will execute a $300,000 note payable to the Seller in the form attached
hereto as Exhibit D (the “Note”). Terms of the Note will be 35 monthly
payments of $8,333.33 and a final payment of $8,333.45 plus interest
at
the rate of 6% per annum beginning January 10, 2008. For the period
of
October 1, 2007 through December 31, 2007, interest only of $1,500.00
per
month will be paid. Payments on the note are due on the 10th
day of each
month, with a ten-day grace period.
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B.
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Buyer
shall issue 57,664 shares of the common stock of International Monetary
Systems, Ltd. to Seller or its designees. The stock will be issued
to KTE
on or before January 15, 2008 subject to a one-year lock-up and will
be
restricted from disposal under Rule 144 of the SEC code. The stock
is
currently traded on the over-the-counter bulletin board under the
symbol:
INLM.
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C.
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Buyer
shall assume responsibility for the management of Seller’s client
membership list and the trade account balances of the client barter
accounts transferred as of the date of closing. “Seller’s trade account
balance” is defined as the total amount of trade dollars (positive or
negative) the members have available to use in
trade.
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4.
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Guarantee
of Stock Value.
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Price
Guaranty. Buyer guarantees that Seller will receive a
minimum of $57,664.00 net after all commissions, or One Dollar ($1.00) cash
per
share net (the “Guaranteed Price”), on the 57,664 shares (the “Guaranteed
Shares”) that Seller is accepting under this Agreement. To secure this
guarantee, Buyer agrees to the following:
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A.
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Right
to Redeem. Beginning January 15, 2009, Seller may
require Buyer to buy back up to 3,333 of the Guaranteed Shares per
month
at the Guaranteed Price. This right is cumulative, so that in the
event it
is not exercised during any month, it will carry forward and be
exercisable in any subsequent month. For example, if Seller does
not
exercise this right for two consecutive months, the following month
Seller
would have the right to require Buyer to purchase 6,666 Guaranteed
Shares
at a price of $6,666.00.
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B.
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Release
of Buyer’s Obligations – Market Conditions. In the
event that at any time beginning one year after the closing date
the IMS
stock is trading in the public market above one dollar ($1.00) per
share,
average daily trading volume for the IMS stock for 20 consecutive
trading
days is greater than 20,000 shares and Seller is eligible to sell
shares
under Rule 144, Buyer shall have the right to give notice to Seller
of
such circumstance and to require that Seller elect either: (i) to
sell
3,333 of the Guaranteed Shares into the market, (ii) to allow Buyer
to
redeem such 3,333 Guaranteed Shares at the Guaranteed Price,
or (iii) to retain such 3,333 Guaranteed Shares for investment,
in which case Buyer shall be relieved of $3,333.00 of its obligations
under this guaranty of stock value. Seller shall notify Buyer of
its
election hereunder within ten days following receipt of Buyer's notice.
If
Seller shall fail to give such notice, Seller shall be deemed to
have
elected to retain 3,333 Guaranteed Shares for investment pursuant
to
clause (iii) above.
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The
price
guaranty will be considered satisfied at such time as Seller has received a
total of $57,664.00 through any of the options described in Section 4(B) or
any
combination thereof. In such an event, all Buyer’s obligations under this
Agreement will have been fulfilled.
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5.
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Liabilities. IMS
shall not be considered a successor corporation of KTE and will not
be
responsible for any KTE liabilities, with the exception of member
trade
account balances, not specifically included in this
Agreement.
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6.
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Default.
If Buyer fails to make any of the payments required
under this Agreement or the Note, such failure shall be a Default
and upon
written notice of the Default from Seller, Buyer will have twenty
(20)
days to cure the Default. Should Buyer fail to cure the Default,
Seller
shall have the right to require Buyer to make all remaining payments
required under the promissory note.
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In
the
event of Default as described above, in lieu of demanding payment in full and
buy back of all remaining shares, Seller may instead require Buyer to re-assign
all client barter accounts and all assets of the former KTE back to Seller.
To
ensure that this can be done, Buyer agrees that for the term of this contract,
Buyer will keep the original KTE client barter accounts, along with any that
may
be added in the market, posted in its Tradeworks software as an
individual, separate office.
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7.
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Non-Compete
Agreement. Xxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx agree
that that for a period of eighteen (18) months from the date of closing,
they will not engage in or otherwise affiliate with any barter or
trade
exchange located within a fifty (50) mile radius of any IMS office,
nor
with any other business operations directly or indirectly related
to, or
in competition with, the business operation of International Monetary
Systems, Ltd. They also agree that they will not influence nor attempt
to
influence any IMS customers or clients to transfer their patronage
relating to IMS’ business from IMS to any other business or company
engaged in a similar business.
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8.
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Representations
and Warranties. Buyer and Seller hereby covenants,
represents and warrants to the other
that:
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A.
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Due
Authorization. It has the necessary corporate
authority and capacity to enter into this Agreement and any other
instruments contemplated herein and to perform its obligations hereunder.
The execution and delivery of this Agreement and the agreements and
other
instruments contemplated herein and the performance of the transactions
contemplated hereunder have been duly authorized by all necessary
corporate action on its part.
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B.
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No
Violation. It is not a party to, bound by or subject
to any indenture, mortgage, lease, agreement, instrument, charger
or bylaw
provision, statute, regulation, order, judgment, decree or law which
would
be violated, breached by or under which any default would occur as
a
result of the execution and delivery by it of this Agreement or the
performance by it of any of the terms of this
Agreement.
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C.
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Valid
and Binding. It has the full power, legal capacity and
authority to execute and deliver this Agreement and to perform its
obligations under this Agreement. This Agreement constitutes the
legal,
valid and binding obligation of it, enforceable against it in accordance
with its terms, except as that enforceability may be (i) limited
by any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar
laws affecting the enforcement of creditors’ rights generally and (ii)
subject to general principles of equity. It has taken all actions
necessary for the authorization, execution, delivery and performance
by it
of this Agreement.
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9.
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Notices. All
payments and communications which may be or are required to be given
by
either party shall, in the absence of a specific provision to the
contrary, be in writing and delivered or sent by facsimile to the
parties
at their following respective addresses and shall be deemed to have
been
received at the time of delivery or facsimile transmission as the
case may
be. Either party may from time to time change its address by providing
written notice to the other party.
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For
the Seller:
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Xxxxx
X. Xxxxxxxx
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(address
removed for filing)
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For
the Buyer:
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International
Monetary Systems, Ltd.
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Attn:
Xxxxxx X. Xxxxxx, President
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00000
X Xxxxxxxx Xx
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Xxx
Xxxxxx, XX 00000
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10.
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Indemnification. Seller
and Buyer agree to indemnify and hold each other harmless against
any and
all costs, including actual reasonable attorney fees, arising out
of any
material misstatement or breach of the Asset Purchase Agreement.
Buyer
agrees to indemnify Seller against any and all costs, including actual
reasonable attorneys fees, relative to any claims or liabilities
incurred
after Closing with respect to any member trade account activities
or
balances acquired by Buyer hereunder. Buyer shall assume all liability
for
positive trade account balances as disclosed in the books and records
of
KTE, and shall hold KTE harmless and indemnify KTE with regard to
claims
made concerning said balances. Seller agrees to indemnify Buyer against
any and all costs, including actual reasonable attorneys fees, relative
to
any claims or liabilities incurred prior to Closing with respect
to any
member trade account activities or balances acquired by Buyer
hereunder.
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11.
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Governing
Law; Submission to Jurisdiction. This agreement shall
be construed in accordance with the laws of the State of Wisconsin.
Venue
for any disputes arising from this Agreement shall be placed exclusively
with the courts of the State of Wisconsin. Seller hereby
irrevocably submits to the jurisdiction of any state or Federal court
located in the State of Wisconsin and agrees that process may be
served
upon it by any means resulting in actual notice to
it.
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12.
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Assignment. Neither
this Agreement nor any rights or obligations hereunder shall be assignable
by Buyer without the prior written consent of the Seller. Subject
thereto,
this Agreement shall inure to the benefit of and be binding upon
the
parties hereto and their respective successors and permitted
assigns. Nothing herein shall prohibit Buyer from selling any
or all of the assets acquired herein, either independently, or as
part of
a sale of Buyers other assets or a merger or acquisition of Buyer
after
closing.
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13.
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Entire
Agreement. This Agreement and the attached exhibit
represent the entire agreement between the parties and any persons
who
have in the past or who are now representing either of the parties.
Each
party acknowledges and represents that this Agreement is entered
into
after full investigation and that no party is relying upon any statement
or representation made by any other which is not embodied in this
Agreement. Each party acknowledges that it shall have no right
to rely upon any amendment, promise, modification, statement or
representation made or occurring subsequent to the execution of this
Agreement unless the same is in writing and executed by both
parties.
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14.
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Counterparts. This
Agreement may be executed in one or more counterparts, each of which
shall
be deemed to be an original, but all of which together shall constitute
one and the same instrument.
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15.
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Headings. The
headings in this Agreement are for reference purposes only and shall
not
be deemed a part of this Agreement.
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16.
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Closing.
The closing shall take place on any mutually agreed-upon
date
prior to September 15, 2007 (the “Closing Date”). Closing shall be held at
the KTE trade exchange offices located at 000 Xxxxx Xxxxxxxxx, Xxxxxxx,
Kansas at 10 a.m. on that date, or at such other time and place as
the
parties may agree upon in writing.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the date and year first above written.
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International
Monetary Systems, Ltd
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Kansas
Trade Exchange, Inc
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\s\Xxxxxx
X. Xxxxxx
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\s\Xxxxx
X. Xxxxxxxx
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Xxxxxx
X. Xxxxxx, President
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Xxxxx
X. Xxxxxxxx, President
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\s\Xxxxxx
X. Xxxxxxxx
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Xxxxxx
X. Xxxxxxxx
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Secretary/Treasurer
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