[*]—CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
Exhibit 10.1
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE
AGREEMENT (this “
Agreement ”) is made as of the 11th day of September,
2006 (“ Effective Date ”) by and between Robert
Fox and Lina Watson, individuals who are British citizens with
principal business offices are located at 5 Welbury Avenue, Luton,
Bedfordshire, LU3 2DZ England (together, “ Seller
”), and Internet Revenue Services, Inc., a Nevada corporation
whose principal offices are located at 222 Kearny Street, Suite
550, San Francisco, CA 94108 (“ Buyer ” or
“ IRS, Inc. ”).
RECITALS
A. Seller is the current registrant
of, and owns registration rights to, the domain name
www.banks.com (the “ Domain Name”) .
Buyer desires to purchase from Seller the Domain Name banks.com,
and Seller desires to sell to Buyer the Domain Name banks.com. NOW
THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions
hereinafter set forth, and intending to be legally bound hereby,
the parties hereto agree as follows.
1 PURCHASE AND SALE OF
ASSETS
1.1. Assets to be Transferred
. Subject to the terms and conditions of this Agreement, on the
Closing Date (as hereinafter defined) Seller shall sell, transfer,
convey, assign, and deliver to Buyer, and Buyer shall purchase, all
of the rights, claims and assets of Seller used, held for use, or
acquired or developed for use with the Domain Name banks.com, other
than assets expressly defined in this Agreement as Excluded Assets
(collectively, the “Purchased Assets”). The Purchased
Assets shall include the following:
1.1.a) Domain Name . All of
Seller’s right, title and interest in, to and associated with
the Domain Name, including, but not limited to, all registrations,
trademark rights, if any, in the Domain Name and Internet traffic
to the Domain Name.
1.1.b) Trade Rights . All of
Seller’s interest in any Intellectual Property associated
with the Domain Name banks.com.
1.1.c) Contracts . To the
extent assignable by Seller, all of Seller’s rights in, to
and under all contracts, agreements, affiliate programs, insertion
orders, licenses, and the like associated with the Domain Name
banks.com (hereinafter “ Contracts ”), all as
listed in Schedule 1.1.(c). Notwithstanding the above, if Seller
fails to disclose any Contracts to Buyer in Schedule 1.1.(c), Buyer
shall have the right to reject as a Purchased Asset any such
Contract within sixty (60) days following Buyer obtaining
actual knowledge of the existence of such Contract, and in such
event Seller shall indemnify Buyer against any third party claim
relating to such Contract. Upon assignment of the Domain Name and
Contracts to Buyer, Buyer shall assume all of the obligations of
Seller under the Contracts.
1.1.d) General Intangibles .
All prepaid items, all causes of action arising out of occurrences
before or after the Closing, and other intangible rights and assets
of the Domain Name banks.com.
1.2. Excluded Assets . The
provisions of Section 1.1 notwithstanding, Seller shall not
sell, transfer, assign, convey or deliver to Buyer, and Buyer shall
not purchase or accept the following assets of Seller (collectively
the “Excluded Assets”).
1.2.a) Equipment .
Seller’s machinery, equipment, hardware, servers, computers,
furniture, and any similar personal property owned or held for use
by Seller on the Closing Date.
1.2.b) Consideration. The
consideration delivered by Buyer to Seller pursuant to this
Agreement.
1.2.c) Real Property. Any lease or
other interest in real property.
1.2.d) Rejected Contracts. Contracts
rejected by Buyer pursuant to Section 1.1(e).
1.2.e) Tax Credits and Records.
Federal, state and local income and franchise tax credits and tax
refund claims and associated returns and records. Buyer shall have
reasonable access to such returns and records related to the Domain
Name banks.com and Purchased Assets and may make excerpts therefrom
and copies thereof subject to the prior approval of Seller, which
approval shall not be unreasonably withheld.
1.2.f) Accounts Receivable/Cash. All
accounts receivable of Seller and Cash on hand or on account for
Seller.
2 LIABILITIES
As used in this Agreement, the term
“ Liability ” shall mean and include any direct
or indirect indebtedness, guaranty, endorsement, claim, loss,
damage, deficiency, cost, expense, obligation or responsibility,
fixed or unfixed, known or unknown, asserted or unasserted,
liquidated or unliquidated, secured or unsecured.
2.1. No Buyer Liabilities .
Buyer is not assuming any Liabilities of Seller and all such
Liabilities shall be and remain the responsibility of Seller.
Nothing contained herein shall cause Buyer to assume any
liabilities or obligations arising out of the operation or
ownership of the Purchased Assets prior to the Closing, whether
known or unknown at the Closing Date.
2.2. Seller Liabilities .
Buyer is not assuming and Seller shall not be deemed to have
transferred to Buyer the following Liabilities of Seller
(collectively the “Seller Liabilities”), and nothing
contained herein shall cause Seller to assume any liabilities or
obligations arising out of the operation or ownership of the
Purchased Assets after the Closing:
2.2.a) Taxes Arising from
Transaction . Any taxes applicable to, imposed upon or arising
out of the sale or transfer of the Purchased Assets to Buyer and
the other transactions contemplated by this Agreement, including
but not limited to any income, transfer, sales, use, gross receipts
or documentary stamp taxes. Seller agrees to pay all taxes for
which the Seller is liable.
2.2.b) Income and Franchise
Taxes . Any Liability of Seller for federal income taxes and
any state or local income, profit or franchise taxes (and any
penalties or interest due on account thereof).
2.2.c) Litigation Matters .
Any Liability with respect to any action, suit, proceeding,
arbitration, or investigation or inquiry, whether civil, criminal
or administrative (“ Litigation ”).
2.2.d) Infringements . Any
Liability to a third party arising from the operation or ownership
of the Purchased Assets prior to the Closing Date for infringement
of such third party’s patent, copyright, trademark, trade
secret, or other intellectual or proprietary right.
2.2.e) Employee Claims . Any
Liability to or with respect to any employee or former employee of
the Seller, including, but not limited to, any Liability under any
employee benefit plan, or for unpaid or accrued vacation or sick
time, or severance pay.
2.2.f) Transaction Expenses .
All expenses incurred by Seller in connection with this Agreement
and the transactions contemplated herein.
2.2.g) Liability For Breach .
Liabilities of Seller for any breach or failure to perform any of
Seller’s covenants and agreements contained in, or made
pursuant to, this Agreement, or, prior to the Closing, any other
contract, whether or not purchased hereunder.
2.2.h) Liabilities to
Customers . Liabilities of Seller to its present or former
customers which arise from the operation of the Domain Name
banks.com prior to the Closing.
2.2.i) Violation of Laws or
Orders . Liabilities of Seller for any violation of or failure
to comply with any statute, law, ordinance, rule or regulation
(collectively, “ Laws ”) or any order, writ,
injunction, judgment, plan or decree (collectively, “
Orders ”) of any court, arbitrator, department,
commission, board, bureau, agency, authority, instrumentality or
other body, whether federal, state, municipal, foreign or other
(collectively, “ Government Entities
”).
3 PURCHASE PRICE
PAYMENT
3.1. Purchase Price . The
purchase price (the “Purchase Price”) for the Domain
Name www.banks.com and the Purchased Assets shall be [*],
payable in cash to the Escrow Agent (as defined herein) at Closing.
Buyer and Seller agree to use SEDO.com, LLC (“SEDO”) as
the escrow agent (the “Escrow Agent”) to complete the
transaction. An escrow fee (the “Escrow Fee”) of 3.0%
of the Purchase Price will be paid to the Escrow Agent, payable in
the following manner: Buyer shall pay the portion of the Escrow Fee
representing 1.25%, and Seller shall pay the portion of the Escrow
Fee representing 1.75%. The parties expressly acknowledge and agree
that SEDO.com will not transfer to Seller any of the Purchase Price
held in escrow until registration of Banks.com has been transferred
to the name of Buyer in Buyer’s designated registrar, as
Buyer directs; provided however, that if the Domain Name does not
transfer to Buyer within 15 business days after the Closing, Buyer
shall be entitled, at Buyer’s sole discretion and upon
Buyer’s request to the Escrow Agent at any time after such
15-business day period, to return of the entire Purchase Price held
in escrow.
3.2. Registrar and Transfer
Fees . Seller shall be responsible for any fees payable to any
third party to effectuate the transfer of its right, title and
interest in and registration of the Domain Name, as contemplated
under this Agreement, including, without limitation, any fees
payable to BB Online UK, Ltd., (the “Registrar”) in
connection herewith. Buyer shall be responsible for any
registration fees charged by the Registrar for the continued
registration of the Domain Name after the Closing.
3.3. Finder’s Fees .
Buyer shall have no obligation to Seller or any other third party
with regard a finder’s fee, broker’s fee, or any other
similar fee, and Buyer agrees to indemnify and hold Seller harmless
from any and all claims that such a fee is payable.
3.4. Allocation of Purchase
Price . The aggregate Purchase Price shall be allocated among
the Purchased Assets in the manner required by Section 1060 of
the Internal Revenue Code of 1986, as amended (the
“Code”) and the Treasury Regulations promulgated
thereunder. As such, Seller and Buyer agree that 100% of the
Purchase Price will be allocated to “Intangibles”
related to the purchased Domain Name set forth in this Agreement
and goodwill arising from the transaction. To the extent that
disclosures of this allocation are required to be made to the
Internal Revenue Service (“IRS”) under the provisions
of Section 1060 of the Code or any Treasury Regulations
promulgated thereunder, Buyer and Seller agree to follow and use
such allocation in all tax returns, filings or other related
reports made by them to the IRS or any other United States of
America governmental agency and in the event Seller is required to
make any such disclosures, it shall communicate to Buyer the
content of such disclosures and coordinate with Buyer regarding the
required disclosure prior to the filing with or submission to the
IRS.
4 REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller makes the following
representations and warranties to Buyer, each of which is true and
correct on the date hereof and shall remain true and correct to and
including the Closing Date.
4.1. Domain Name .
4.1.a) Seller is the registrant
listed in the records of the Registrar as the sole owner of the
registration of the Domain Name.
4.1.b) Seller has not used any
fraud, misrepresentation, or otherwise made any false statement in
the process of registration and maintenance of the registration of
the Domain Name on or in connection with the transaction underlying
this Agreement.
4.1.c) No fees are owing to the
Registrar or any other government agency or other entity or party
with regard to the registration of the Domain Name. Seller
represents and warrants that all registration fees to the Registrar
are current and shall remain so through the Closing. Furthermore,
Seller represents and warrants that it shall deliver under this
Agreement all of Seller’s right, title and interest in the
Domain Name, free and clear of all “Liens”, as defined
in Section 4.8.
4.1.d) Seller has not licensed or
otherwise allowed or enabled the use of the Domain Name to any
other person or entity, or granted any right with respect to the
Domain Name to any other person or entity, that may, in any manner,
whether currently or in the future, restrict, impede or adversely
affect Buyer’s rights therein.
4.1.e) Other than one trademark
application filed with the U.S. Patent and Trademark Office which
was rejected and is no longer valid, Seller has not obtained or
filed an application to register a trademark with the US Patent and
Trademark Office or other agency (domestic or foreign) of the
Domain Name or any other mark confusingly similar to the Domain
Name.
4.1.f) To the best of Seller’s
knowledge, the ownership of registration of the Domain Name, and
use and operation of the Domain Name, do not infringe upon the
trademark or other Trade Rights of any third party.
4.2. Power and Authority
.
4.2.a) Identity of Seller .
Seller is comprised of two individuals who are citizens of the
United Kingdom.
4.2.b) Power . Seller has all
requisite power and authority to own assets and carry on business
as and where such is now being conducted, to enter into this
Agreement and the other documents and instruments to be executed
and delivered by Seller pursuant hereto and to carry out the
transactions contemplated hereby and thereby..
4.2.c) Authority . Seller
represents and warrants that no other or further act or proceeding
on the part of Seller is necessary to authorize this Agreement or
the other documents and instruments to be executed and delivered by
Seller pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and
when executed and delivered, the other documents and instruments to
be executed and delivered by Seller pursuant hereto shall
constitute, valid binding agreements of Seller, enforceable in
accordance with their respective terms.
4.3. No Violation . Neither
the execution and delivery of this Agreement or the other documents
and instruments to be executed and delivered by Seller pursuant
hereto, nor the consummation by Seller of the transactions
contemplated hereby and thereby (a) shall violate any
applicable Law or Order, (b) shall require any authorization,
consent, approval, exemption or other action by or notice to any
Government Entity, or (c) shall violate or conflict with, or
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or shall result
in the termination of, or accelerate the performance required by,
or result in the creation of any Lien (as defined in
Section 4.8 upon any of the assets of Seller under, any term
or provision of the Articles of Organization or Bylaws of Seller or
of any contract, commitment, understanding, arrangement, agreement
or restriction of any kind or character to which Seller is a party
or by which Seller or any of its assets or properties may be bound
or affected.
4.4. Tax Matters . Seller has
paid all federal, state and local taxes currently due relating to
the Purchased Assets and the Business through and including the
Closing Date, including without limitation all sales and use tax,
franchise tax and excise tax.
4.5. Absence of Undisclosed
Liabilities . Except as and to the extent specifically
disclosed in this Agreement, Seller does not have any Liabilities
in respect of the Domain Name or the Purchased Assets other than
commercial liabilities and obligations incurred in the ordinary
course of business and consistent with past practice and none of
which has or shall have a material adverse effect on the Domain
Name banks.com or the Purchased Assets. Seller has no actual
knowledge of any basis for the assertion against Seller of any
Liability in connection with the Domain Name banks.com , and there
are no circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may give rise to
Liabilities, except commercial liabilities and obligations incurred
in the ordinary course of Seller’s business and consistent
with past practice.
4.6. No Litigation . There is
no pending or, to Seller’s actual knowledge, threatened,
Litigation against Seller, its affiliates, or their respective
officers or directors (in such capacity), its business or any of
its assets, in any way relating to or affecting the Domain Name
banks.com , nor does Seller know, or have grounds to know, of any
basis for any Litigation. Neither Seller
