ASSET PURCHASE
AGREEMENT
THIS
ASSET PURCHASE AGREEMENT (this " Agreement ") is made and entered
into as of September 28, 2006, by and between Owen Consulting LLC,
a California limited liability company (" Seller "), and
Futomic Industries, Inc., a New Jersey corporation (" Buyer
").
RECITALS
WHEREAS, Buyer desires to purchase from Seller, and
Seller desires to sell to Buyer, certain assets, pursuant to the
terms and subject to the conditions set forth herein.
NOW
THEREFORE, Seller
and Buyer agree as follows:
ARTICLE
I.
DEFINITIONS
1.1
Defined
Terms . As used
herein, the terms below shall have the following
meanings:
" Acquired
Assets " shall mean the assets of the Seller set forth on
Schedule A hereto.
" Action
" shall mean any action, claim, suit, arbitration, inquiry,
subpoena, discovery request, proceeding or investigation, or threat
thereof, by or before any court or grand jury, any governmental or
other regulatory or administrative agency or commission or any
arbitration tribunal.
"
Affiliate " shall mean, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or
under common control with such Person and any member, general
partner, director, officer or employee of such Person. For purposes
of this definition of Affiliate, "control" shall mean the power of
one or more Persons to direct the affairs of the Person controlled
by reason of ownership of voting stock, contract or
otherwise.
"
Damages " shall mean any and all costs, losses, damages,
liabilities, demands, claims, suits, actions, judgments, causes of
action, assessments or expenses, including interest, penalties,
fines and attorneys' fees incident thereto, incurred in connection
with any claim for indemnification arising out of this Agreement,
and any and all amounts paid in settlement of any such
claim.
"
Intellectual Property " shall mean all copyrights, copyright
registrations, proprietary processes, trade secrets, license
rights, specifications, technical manuals and data, drawings,
inventions, designs, patents, patent applications, mask works,
tradenames, trademarks, service marks, product information and
data, know-how and development work-in-progress, customer lists,
software, business correspondence and marketing plans and other
intellectual or
intangible
property that comprise or are necessary to the use of the Acquired
Assets, whether pending, applied for or issued, whether filed in
the United States or in other countries, including, without
limitation, all associated goodwill; all things authored,
discovered, developed, made, perfected, improved, designed,
engineered, acquired, produced, conceived or first reduced to
practice by Seller or any of its employees or agents that are
embodied in, derived from or relate to the Acquired Assets, in any
stage of development, including, without limitation, modifications,
enhancements, designs, concepts, techniques, methods, ideas, flow
charts, coding sheets, notes and all other information relating to
the Acquired Assets.
"
Knowledge " shall mean an individual shall be deemed to have
"Knowledge" of a particular fact or other matter if such individual
is actually aware of such fact or other matter or if a prudent
individual could be expected to discover or otherwise become aware
of such fact or other matter in the course of conducting a diligent
and comprehensive investigation concerning the truth or existence
of such fact or other matter. Seller shall be deemed to have
"Knowledge" of a particular fact or other matter if any officer or
other representative of Seller has Knowledge of such fact or other
matter.
" Person
" shall mean any person or entity, whether an individual, trustee,
corporation, general partnership, limited partnership, trust,
unincorporated organization, limited liability company, business
association, firm, joint venture, or governmental agency or
authority.
" Taxes
" shall mean all taxes, however denominated, including any
interest, penalties or other additions to tax that may become
payable in respect thereof, (i) imposed by any federal,
territorial, state, local or foreign government or any agency or
political subdivision of any such government, for which Buyer could
become liable as successor to or transferee of the Acquired Assets
or which could become a charge against or lien on the Acquired
Assets, which taxes shall include, without limiting the generality
of the foregoing, all sales and use taxes, ad valorem taxes, excise
taxes, business license taxes, occupation taxes, real and personal
property taxes, stamp taxes, environmental taxes, real property
gains taxes, transfer taxes, payroll and employee withholding
taxes, unemployment insurance contributions, social security taxes
and other governmental charges, and other obligations of the same
or of a similar nature to any of the foregoing, which are required
to be paid, withheld or collected, or (ii) any liability for
amounts referred to in (i) as a result of any obligations to
indemnify another person.
ARTICLE
II.
PURCHASE AND SALE OF
ACQUIRED ASSETS
2.1
Transfer of Acquired
Assets .
Pursuant to the terms and subject to the
conditions of this Agreement, in exchange for the consideration set
forth in Section 2.2 below, at the Closing,
Seller shall sell, assign and deliver to Buyer, and Buyer shall
purchase from Seller, the Acquired
Assets.
2.2
Purchase Price/ Payment
Procedure . As
consideration for the Acquired Assets, Buyer shall tender Seller an
amount equal to Five Million Five Hundred Thousand (5,500,000)
shares of common stock of Buyer (the “ Purchase Price
”), payable as follows:
(a)
At the Closing, Buyer shall
deliver, or cause to be delivered, to Seller a stock certificate
representing the Purchase Price.
2.3
Assets Excluded;
Liabilities Not Assumed . Seller shall not sell nor Buyer purchase any
assets other than the Acquired Assets and Buyer shall not, and
shall not be required to, assume or be obligated to pay, discharge
or perform, any debts, liabilities, adverse claims or obligations
of any kind or nature whatsoever of Seller, whether in connection
with the Acquired Assets or otherwise and whether arising before or
after the consummation of the transactions contemplated herein, or
bear any cost or charge with respect thereto.
ARTICLE
III.
CLOSING
3.1
Closing . The closing of the transactions contemplated
herein (the " Closing ") shall occur on September 28, 2006,
or at such other time and place as the parties may agree (the "
Closing Date "), provided that all of the Closing conditions
set forth in Section 3.3 hereof shall have occurred.
3.2
Deliveries . Together with an executed counterpart of this
Agreement, the following items shall be delivered by the parties at
the Closing:
(a)
By Buyer . Buyer shall deliver a certificate representing
the Purchase Price described in Section 2.2(a).
(b)
By Seller . Seller shall deliver to Buyer:
(i)
one or more Bills of Sale, in form
and substance satisfactory to Buyer and sufficient to convey the
Acquired Assets to Buyer;
(ii)
such electronic and paper copies
and representations of the Intellectual Property as may in Buyer's
reasonable judgment be necessary to convey the Intellectual
Property to Buyer;
(iii)
an Assignment of Seller's rights in
the patent application pending before the Patent and Trademark
Office as application no. 60745514, filed by Kelly Owen on or about
April 24, 2006 titled “Invisidesk Private Communication,
Authentication and Connection Portal”; and
(iv)
such other documents and
instruments as are reasonably necessary to consummate the
transactions contemplated hereby.
3.3
Conditions to
Closing . Buyer
and Seller shall not be obligated to consummate the Closing and the
transactions contemplated hereby and may terminate this Agreement
without incurring any liability unless (a) Buyer has delivered the
items specified in Section 3.2(a) and Seller has delivered the
items specified in Section 3.2(b).
ARTICLE
IV.
REPRESENTATIONS AND
WARRANTIES OF SELLER
Seller
represents and warrants to Buyer that:
4.1
Organization . Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of
the State of California and has full power and authority to own,
lease and operate its properties and to carry on its business as it
is now being conducted. Seller is duly qualified or licensed as a
foreign limited liability company to do business, and is in good
standing, in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except
for failures to be so qualified or licensed and in good standing
that would not, individually or in the aggregate, affect the
Acquired Assets in a materially adverse manner.
4.2
Authorization . Seller has all necessary power and authority
and has taken all action necessary to enter into this Agreement, to
consummate the transactions contemplated hereby and to perform its
obligations hereunder. This Agreement has been duly executed and
delivered by Seller and is a valid and binding obligation of
Seller, enforceable against it in accordance with its respective
terms subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting the rights of creditors generally and limitations imposed
by equitable principles, whether considered in a proceeding at law
or in equity, and the discretion of the court before which any
proceeding therefor may be brought.
4.3
Brokers . All negotiations relating to this Agreement
and the transactions contemplated hereby have been conducted
without the intervention of any person or entity acting on behalf
of Seller in such a manner as to give rise to any valid claim
against Buyer for any broker's or finder's commission, fee or
similar compensation and Seller shall indemnify Buyer and hold it
harmless from any liability or expense arising from any claim for
brokerage commissions, finder's fees or other similar compensation
based on any agreement, arrangement or understanding made by or on
behalf of Seller.
4.4
Litigation, Proceedings
and Applicable Law . There are no Actions, suits, investigations or
proceedings, at law or in equity or before or by any governmental
authority or instrumentality or before any arbitrator of any kind,
pending or, to Seller's Knowledge, threatened (a) against Seller
which, if determined adversely against Seller, would have a
material adverse effect on Seller's or Buyer's ability to use the
Intellectual Property in the manner in which it is now being used
by Seller, or (b) seeking to delay or enjoin the consummation of
the
transactions
contemplated hereby. To the Knowledge of Seller, there are no
outstanding orders, decrees or stipulations issued by any federal,
state, local or foreign, judicial or administrative authority in
any proceeding to which Seller is or was a party relating to the
Acquired Assets.
4.5
No Conflict Or
Violation .
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby or thereby
will result in (a) a violation of or a conflict with any provision
of the Articles of Organization or LLC Operating Agreement of
Seller, (b) a material breach or termination of, or a material
default under, any term or provision of any contract to which
Seller is a party or an event which, with notice, lapse of time, or
both, would result in any such material breach, such termination or
such material default, or (c) a material violation by Seller of any
Legal Requirement or an event which, with notice, lapse of time or
both, would result in such a material violation.
4.6
Intellectual
Property .
(a)
Seller owns all rights to the
Acquired Assets without any conflict or infringement of the
intellectual property rights of others. All source code included
within the Intellectual Property constitutes a trade secret of
Seller and is not part of the public knowledge or literature, and
Seller has taken reasonable action to protect such source code as a
trade secret. In addition, Seller has taken reasonable steps
(including, without limitation, entering into Confidentiality
Agreements with all officers and employees of and consultants
involved in Seller's business) to maintain the secrecy and
confidentiality of and its proprietary rights in, all Intellectual
Property.
(b)
Schedule A lists (i) all patents
and patent applications and all registered copyrights, trade names,
trademarks, service marks and other company, product or service
identifiers included in the Intellectual Property, and specifies
the jurisdictions in which each of the foregoing has been
registered, including the respective registration numbers, and/or
any application for any such registration has been filed; (ii) all
licenses, sublicenses and other agreements as to which Seller is a
party and pursuant to which Seller or any other Person is
authorized to use any Intellectual Property; and (iii) all licenses
under which Seller is or may be obligated to make royalty or other
payments. Copies of all licenses, sublicenses and other
agreement
