EXHIBIT 10.1 ASSET
PURCHASE AGREEMENT
ASSET PURCHASE
AGREEMENT
This Asset Purchase Agreement (the
" Agreement") dated this,
13 th . Day of March 2007, between Hotel
Movie Network, Inc., a Nevada corporation, a wholly-owned
subsidiary of B2 Digital ("Buyer"); and Creative Domain Investments
Ltd, a Canadian Company, ("Seller"); hereinafter referred to,
collectively, as the “Parties.”
RECITALS
Buyer is owned by a fully SEC
reporting publicly company “B2 Digital”, trading under
the symbol “BTOD.OB” organized in Delaware engaged in
the business of videoconferencing, developing and providing video
on demand systems and otherwise exploiting the internet and
communication based data systems.
Seller is a privately held Ltd under
the laws of the Province of Albert, Canada, and is in the business
of providing design technology with intellectual property rights
for the Pay per View, Wireless Internet and Voice over IP services
(“Services”) to the hospitality industry and other
applications.
WITNESSETH:
WHEREAS, Buyer desires to purchase
from Seller and Seller desires to sell to Buyer, on the terms and
subject to the conditions of this Agreement, the design technology,
intellectual properties to include all software and source codes
involved for all applications other than ad insertion.
THEREFORE, in consideration of the
mutual covenants, agreements, representations and warranties
contained in this Agreement, the parties agree as
follows:
ARTICLE 1. TRANSFER OF ASSETS
Subject to the terms and conditions
set forth in this Agreement, Seller agrees to sell, convey,
transfer, assign and deliver to Buyer, and Buyer agrees to purchase
from Seller at the Closing described in Article 3 hereof, all of
the assets and technology of Seller relating to, the design
technology, intellectual properties to include all software and
source codes involved in all applications other than ad insertion,
including the character and description, whether tangible,
intangible, real, personal or mixed, and wherever located and on an
‘as is’ basis but excluding any assets specifically
excluded in the following Sections of this Article 1), all of which
are sometimes collectively referred to in this Agreement as the
"Assets," including, but without limitation to, the
following:
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1.1
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Intellectual
Properties. All of the design files, schematics,
mechanical drawings, with pcb layout files, all related software
with source codes, that are related to this agreement as listed in
SCHEDULE 1.1 attached hereto (hereinafter referred to as the
"Intellectual Properties").
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1.2
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Books and
records . All
papers and records in Seller's care, custody or control relating to
any or all of the above-described Assets and the operation thereof,
including, but not limited to, all blueprints and specifications,
control records, financial records, maintenance and production
records; only in regards to the Intellectual Properties involved in
this Agreement.
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ARTICLE 2. PURCHASE PRICE
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2.1
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Payment of
Purchase Price . In consideration for the transfer
and assignment by Seller of the whole assets, and in consideration
of the representations, warranties and covenants of the Seller set
forth herein, Buyer on the conditions set forth herein and subject
to the provisions in Article 9 state that:
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(a)
The Buyer shall pay to the Seller, on the closing date, the amount
of US$200,000 (two hundred thousand United States dollars) (the
“Purchase Price”) by issuing an equivalent amount of
shares of Buyer’s restricted common stock (hereafter referred
to as the “Shares”) to the owner of Creative Domain
Investments Ltd, in exchange for his ownership of property as
listed in this agreement as of the date of this
agreement.
(b)
Buyer shall issue a number of shares of restricted common stock
(hereinafter referred to as the “Shares”) to be
calculated in the following manner; 400,000 (Four hundred thousand)
shares restricted at a value of $.50 (Sixty cents), to be held
subject to Rule 144 restrictions and the Investment Representation
Letter and Lock -Up Agreement attached hereto as Exhibit
“B”. Issue of said shares to take place within 30 days
of the signing of said date. Seller will agree to inform the
shareholders of restrictions and they are not to sell any such
shares until the one-year holding period has expired. Seller agrees
to provide a start and end date for the holding period on the
closing date.
(c)
If, for any reason, the closing date is extended and the share
price declines in this time, there will be no penalty assessed. In
the case of an increase of the price in this time, no action will
be taken.
(d)
If, for any reason, the Buyer has not issued the shares within 90
days of the closing date, or offered any other compensation, then
this agreement will be voided.
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2.2
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Payment in
Immediately Available Funds . Buyer may, at his option, present
a cashier’s check in lieu of restricted common shares if
Funds are available at the time of closing.
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2.3
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Sales and
Transfer Taxes . Seller shall be responsible for
the payment of any sales or transfer taxes associated with the
transfer of the Acquired Assets to Buyer.
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2.4
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Buyer shall assume and discharge,
and shall indemnify Seller against, liabilities and obligations of
the Seller under the Intellectual Properties or other agreements,
if any as specified on SCHEDULE 1.1, but only to the extent that
such liabilities or obligations accrue on or after the Closing
Date.
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Buyer grants to Seller, to secure
payment and performance of the obligations of Seller under this
Agreement, a security interest in the Intellectual Properties,
equipment and inventory that is listed in SCHEDULES 1.1 and
SCHEDULES 1.2
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2.5
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Piggy-Back
Registration Subject to the provisions of the
Agreement, if the Company proposes to file a registration statement
under the Securities Act, with respect to an offering of any equity
securities by the Company for its own account or for the account of
any of its equity holders (other than a registration statement on
Form S-4 or S-8 or any substitute form that may be adopted by the
SEC or any registration statement filed in connection with an
exchange offer or offering of securities solely to the
Company’s existing security holders), then the Company shall
give written notice of such proposed filing to the holder of the
Shares as soon as practicable (but in no event less than 10 days
before the anticipated initial filing date of such registration
statement), and such notice shall offer such holder of the Shares
the opportunity to registration such number of the Shares as the
holder of the Shares may request (a “Piggyback
Registration”). The Company shall include in each such
Piggyback Registration all Shares requested to be included in the
registration for such offering; provided, however, that the Company
may at any time withdraw or cease proceeding with such
registration. The holder of the Shares shall be permitted to
withdraw all or part of its Shares from a Piggyback Registration at
any time prior to the effective date thereof.
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ARTICLE 3. THE CLOSING
The
closing of the purchase and sale of the assets by Seller to Buyer
(the " Closing") shall
take place at the offices of B-2 Corporate office, which are
located at 1030 S. Mesa Drive, Mesa, Arizona, on or before 10:00 AM
local time, on March 30, 2007, or at such other place and/or time
as the parties may agree in writing (the "Closing Date"). In the
event that the conditions specified in this Agreement have not been
fulfilled by such date, Buyer may extend the Closing Date for a
period or periods not exceeding an aggregate of 30 days by giving
written notice to the Seller.
Buyer shall perform its due
diligence inspection of Sellers; equipment, properties,
Intellectual Properties and all other items reasonably necessary to
complete the inspection on or before the Closing Date of closing
set forth above.
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3.1
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Sellers
Obligations at the Closing . At the Closing, Seller shall
deliver or cause to be delivered to Buyer:
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(a)
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The
certificate of the President or Secretary of the Seller confirming
that proper minutes and resolutions of the Seller's Board of
Directors and Shareholders have been secured prior to the Closing
whereby the sale of the assets has been approved.
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(b)
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And, at time of fulfillment of the
purchase price and its applicable terms and conditions;
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1.
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A
Bill Of Sale certificate equal to all of the assets involved in
this agreement;
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Simultaneously with the consummation
of the purchase, Seller, through its officers, agents, and
employees, shall put Buyer into full possession and enjoyment of
all the Assets involved in this agreement.
Seller, at any time before or after
the closing Date, shall execute, acknowledge, and deliver any
further assignments, conveyances and other assurances, documents
and instruments of transfer, reasonably requested by Buyer and
shall take any other action consistent with the terms of this
Agreement that may reasonably be requested by Buyer for the purpose
of assigning, transferring, granting, conveying and confirming to
Buyer, or reducing to possession, any or all Intellectual
Properties and assets to be conveyed and transferred by this
Agreement. If requested by Buyer, Seller further agree to prosecute
or otherwise enforce in their own names for the benefit of Buyer
any claims, rights, or benefits that are transferred to Buyer by
this Agreement and that require prosecution or enforcement in
either of the Sellers name. Any prosecution or enforcement of
claims, rights, or benefits under this Section shall be solely at
Buyer's expense; unless Seller makes the prosecution or enforcement
necessary by breach of this Agreement.
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3.2
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Buyer’s Obligations at Closing
. Subject to the
provision of Article 9, at the Closing, Buyer shall deliver to
Seller the following instruments and documents against delivery of
the items specified in Section 3.1:
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a)
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Buyer Stock Certificates issued in
the names of the shareholders of Creative Domain Investments Ltd,
as defined in 2.1(b);
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b)
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The
certificate of the President or Secretary of the Buyer confirming
that proper minutes and resolutions of the Buyer's Board of
Directors have been secured prior to the Closing whereby the
purchase of the assets has been approved.
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ARTICLE 4. ASSUPTION OF LIABILITIES
Buyer is not assuming any debt,
liability or obligation of Seller, at the closing date, whether
known or unknown, fixed or contingent excepts as herein
specifically otherwise provided. Seller agree to indemnify and hold
Buyer harmless against all debts, claims, liabilities and
obligations of Seller not expressly assumed by Buyer hereunder, and
to pay any and all attorneys fees and legal costs incurred by
Buyer, its successors and assigns in connection therewith. Buyer
shall have the benefit of and shall perform all Intellectual
Properties and commitments if any specifically disclosed in
SCHEDULE 1.1, in accordance with the terms and conditions thereof,
except to the extent modifications are specifically disclosed on
such SCHEDULE 1.1.
ARTICLE 5. EXCISE AND PROPERTY TAXES
Seller shall pay all sales, use and
transfer taxes arising out of the transfer of the assets and shall
pay its portion, prorated as of the Closing Date, of property taxes
of the business. Buyer shall not be responsible for any business,
occupation, withholding or similar tax, or for any taxes of any
kind related to any period before the Closing Date.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF
SELLER
Seller hereby represents and
warrants to Buyer that the following facts and circumstances are,
and except as contemplated hereby, at all times up to the Closing
Date will be true and correct, and hereby acknowledge that such
facts and circumstances constitute the basis upon which Buyer is
induced to enter into and perform this Agreement. Each warranty set
forth in this Article 6 shall survive the Closing and any
investigation made by or on behalf of Buyer.
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6.1
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Organization. Good Standing and
Qualification. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of
the Province of Alberta, AB, has all necessary ownership powers to
carry on its business as now owned and operated by it, and is duly
qualified to transact business across Canada and is in good
standing in all jurisdictions in which the nature of its business
or of its properties makes such qualification necessary.
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6.2
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Absence of Specified Changes , there has not been any:
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(a)
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transaction by Seller except in the
ordinary course of business as conducted on that date;
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(b)
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destruction, damage to, or loss of
any assets of Seller (whether or not covered by insurance) that
materially and adversely affects the financial condition, business
or prospects of Seller;
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(c)
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revaluation by Seller of any of its
assets;
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(d)
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sale or transfer of any asset of
Seller, except in the ordinary course of business;
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(e)
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execution, creation, amendment or
termination of any contract, agreement or license to which Seller
is a party;
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(f)
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mortgage, pledge or other
encumbrance of any asset of Seller;
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(g)
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agreement by Seller to do any of the
things described in the preceding clauses (a) through (f) with
regards to any asset as listed in Schedule 1.1 of
Seller.
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6.3
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Inventories. No items included in the Seller's
inventories have been pledged as collateral or are held by the
Seller on consignment from others.
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6.4
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Other
Tangible Personal Property. The Equipment described in Section
1.2 and SCHEDULE 1.2 of this Agreement constitutes all the items of
tangible personal property owned by, in the possession of, or used
by Seller in connection with the business sold pursuant to this
Agreement. The Equipment listed in SCHEDULE 1.2 constitutes all
tangible personal property necessary for the conduct by Seller of
the business as now conducted.
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No
Equipment used by Seller in connection with its business to be sold
pursuant to this agreement is held under any lease, security
agreement, conditional sales contract, or other title retention or
security arrangement.
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6.5
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Trade Names
Trademarks and Copyrights . Except as set forth in SCHEDULE
6.8, Seller does not use any trademark, service mark, trade name or
copyright in its business to be sold pursuant to this Agreement, or
own any trademarks, trademark registrations or applications, trade
names, service marks, copyrights, or copyright registrations or
applications. No person (other than Seller) owns any trademark,
trademark registration or application, service mark, trade name,
copyright, or copyright registration or application, the use of
which is necessary or contemplated in connection with the
performance of any of the Intellectual Properties.
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6.6
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Title to
Assets .
Seller has good and marketable title to all of the Assets and
interests in Assets, whether personal, tangible, and intangible,
which constitute all the Assets and interests in assets that are
used in the business of Seller to be sold pursuant to this
Agreement. All the Assets are free and clear of mortgages, liens,
pledges, charges, encumbrances, equities, claims, easements, rights
of way, covenants, conditions, or restrictions, (i) the lien of
current taxes not yet due and payable; and (ii) possible minor
matters that, in the aggregate, are not substantial in amount and
do not materially detract from or interfere with the present or
intended use of any of the Assets, nor materially impair business
operations. All tangible personal property of Seller is in good
operating condition and repair, ordinary wear and tear accepted.
Except as set forth on the appropriate SCHEDULE listing such
Assets, neither any officer, nor any director or employee of
Seller, nor any spouse, child or other relative of any of these
persons, owns, or has any interest, directly or indirectly, in any
of the personal property owned by or leased to Seller or any
copyrights, patents, trademarks, trade names or trade secrets
licensed by Seller for use in the business to be sold pursuant to
this Agreement. Seller does not occupy any real property in
violation of any law, regulation or decree.
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6.7
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Customers
and Sales .
SCHEDULE 1.1 to this Agreement is a correct and current list of all
customers of Seller for the business to be sold pursuant to this
Agreement.
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Seller has no information and is not
aware of any facts indicating that any of these customers intend to
cease doing business with Seller or materially alter the amount of
the business that they are presently doing with Seller.
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6.7
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Insurance
Policies .
SCHEDULE 6.11 to this Agreement is a description of all insurance
policies held by Seller concerning the Assets. All these policies
are in the respective principal amounts set forth in SCHEDULE 6.11,
Seller has maintained and now maintains (i) insurance on all the
Assets of a type customarily insured, covering property damage and
loss of income by fire or other casualty, and (ii) adequate
insurance protection against all liabilities, claims, and risks
against which it is customary to insure.
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6.8
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Other
Intellectual Properties . Except as set forth in SCHEDULE
1.2, the Assets are not bound by any distributor's or
manufacturer's representative or agency agreement, any agreement
not entered into in the ordinary course of business, any indenture,
mortgage, deed of trust, lease or any agreement that is unusual in
nature, duration or amount. The performance by Buyer of any of the
agreements described on SCHEDULE 1.1 will not result in Buyer
becoming bound or liable under any distributor or manufacturer's
representative or agency agreement. All Intellectual Properties,
which will be assigned to or assumed by Buyer under this Agreement,
are valid and binding upon the parties thereto. There is no default
or event that with notice or lapse of time, or both, would
constitute default by any party to any of the agreements listed in
SCHEDULE 1.1. Seller has not received notice that any party to any
of the agreements listed in SCHEDULE 1.1 intends to cancel or
terminate any of these agreements or to exercise or not exercise
any options under any of these agreements. Seller is not a party
to, nor is Seller or the Assets bound by, any agreement that is
materially adverse to the business, property, or financial
condition of Seller.
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6.9
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Compliance
with Laws .
Seller has complied with, and is not in violation of,
applicable federal, state or local statutes, laws and
regulations (including, without limitation, any applicable
environmental, health, building, zoning or other law, ordinance or
regulation) affecting the Assets or the operation of its business
to be sold pursuant to this Agreement.
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6.10
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Compliance
with Laws .
Seller has complied with, and is not in violation of,
applicable federal, state or local statutes, laws and
regulations (including, without limitation, any applicable
environmental, health, building, zoning or other law, ordinance or
regulation) affecting the Assets or the operation of its business
to be sold pursuant to this Agreement.
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6.11
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Litigation.
Except as set forth in SCHEDULE
6.14, there is no suit, action, arbitration or legal,
administrative or other proceeding, or governmental investigation
pending, or to the best knowledge of Seller, threatened, against or
affecting Seller, or any of its business, assets or financial
condition. Seller is not in default with respect to any order,
writ, injunction or decree of any federal, state, local or foreign
court, department, agency or instrumentality. Except as set forth
in Schedule 6.12, Seller is not presently engaged in any legal
action to recover moneys due to it or damages sustained by
it.
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6.12
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Assets Sufficient for Conduct of
Business .
The Assets constitute all of the assets required for Buyer to
conduct the business of Seller as it is presently
conducted.
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6.13
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Agreement will Not Cause Breach or
Violation. Neither the entry into this
Agreement nor the consummation of the transactions contemplated
hereby will result in or constitute any of the following: (i) a
breach of any term or provision of this Agreement; (ii) a default
or an event that, with notice or lapse of time, or both, would be a
default, breach or violation of the Articles of Incorporation or
Bylaws of Seller or any lease, license, promissory note,
conditional sales contract, commitment, indenture, mortgage, deed
of trust or other agreement, instrument or arrangement to which
Seller is a party or by which Seller or the Assets are bound; (iii)
an event that would permit any party to terminate any agreement or
to accelerate the maturity of any indebtedness or other obligation
of Seller; (iv) the creation or imposition of any lien, charge or
encumbrance on any of the Assets; or (v) the violation of any law,
regulation, ordinance, judgment, order or decree applicable to or
affecting Seller or the Assets.
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6.14
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Authority and Consents
. Seller has the right,
power, legal capacity and authority to enter into, and perform its
obligations under this Agreement, and no approvals or consents of
any persons or entity other than Seller are necessary in connection
with it. The execution and delivery of this Agreement by Seller
have been duly authorized by all necessary corporate action of
Seller (including any necessary action by Seller's security
holders), and this Agreement constitutes a legal, valid and binding
obligation of Seller enforceable in accordance with its
terms.
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6.15
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Interest in Customers. Suppliers and
Competitors. Neither the Seller, nor any
officer, director or employee of any of the Seller, nor any spouse
or child of any of them has any direct or indirect interest in any
competitor, supplier or customer of Seller or in any person with
whom Seller is doing business in the pay-per-view and cable
services to hotel/lodging rooms business to be sold pursuant to
this Agreement.
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6.16
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Documents Delivered
. Each copy or original
of any agreement, contract or other instrument which is identified
in any exhibit delivered by Seller or their counsel to Buyer (or
its counsel or representatives), whether before or after the
execution hereof, is in fact what it is purported to be by the
Seller and has not been amended, canceled or otherwise
modified.
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6.17
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Full Disclosure
. None of the
representations and warranties made by Seller or made in any
letter, certificate or memorandum furnished or to be furnished by
Seller, or on their behalf, contains or will contain any untrue
statement of a material fact, or omits any material fact the
omission of which would make the statements made misleading. There
is no fact known to Seller, which materially adversely affects, or
in the future may (so far as Seller can now reasonably foresee)
materially adversely affect the condition, Assets, liabilities,
business operations or prospects of Seller that has not been set
forth herein or heretofore communicated to Buyer in writing
pursuant hereto.
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ARTICLE 7. REPRESENTATIONS AND WARRANTIES OF PARENT AND
BUYER .
Buyer, represent and warrant to the
Seller and the Shareholders as follows:
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7.1
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Organizations and Qualification
. Buyer is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. All subsidiaries of Buyer are legal
entities that are duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation. Buyer has all requisite power and authority to own
or operate its properties and conduct its business as it is now
being conducted. Buyer is duly qualified and in good standing as a
foreign corporation or entity authorized to do business in each of
the jurisdictions in which the character of the properties owned or
held under lease by it or the nature of the business transacted by
it makes such qualification necessary.
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7.2
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Capitalization; Subsidiaries.
The authorized capital
stock of Buyer consists of 1,000,000,000 shares of Buyer's Common
Stock. and 2,000,000 shares of preferred stock in classes to be
designated by B2 Digital. As of the Closing Date, no other shares
of preferred stock shall be issued by B2 Digital or shall be
outstanding other than those 2,000,000 shares of Series A Preferred
Stock currently issued and the shares to be issued contemplated by
this Agreement. All issued and outstanding shares of capital stock
of Buye
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