ASSET PURCHASE
AGREEMENT
THIS
ASSET PURCHASE AGREEMENT (the "Agreement") is executed as of December 2,
2008, by and among GRUPO GRANDIOSO, LLC , a
limited liability company organized in California ("Seller"),
Jeffrey Alan Schwartz , the managing member of
Seller ("JAS"), and ASIANADA, INC. , a Delaware
corporation ("Buyer") (collectively, the "Parties").
RECITALS
WHEREAS, the
Seller is the owner and operator of various sites currently
accessible at the information resource locations set forth on
Schedule 1B attached hereto (the “Sites”) on the World
Wide Web (as defined below) part of the Internet and certain
software programs related to the operation of such Sites as more
particularly described herein; and
WHEREAS, the
Seller has the current registrations with eNom, Inc.
(“eNom”) to the domain names of the Sites reflected on
Schedule 1B attached hereto (the “Domain Names”);
and
WHEREAS, the
Seller desires to sell and the Buyer desires to purchase the
Purchased Assets (as defined below) and Seller desires to transfer
its rights to the Purchased Assets to the Buyer and Buyer desires
to acquire such rights from Seller upon the terms and conditions
set forth herein; and
WHEREAS, in
order to induce Buyer to purchase such assets, properties and
rights of Seller, JAS, who has served as the principal manager of
Seller and who will receive a direct, tangible and material benefit
from the transactions contemplated by this Agreement by virtue of
the fact that JAS, and/or a revocable trust established by JAS for
the benefit of his family, owns all of the issued and outstanding
membership or other equity interests of Seller, and is willing to
be party to this Agreement as set forth herein.
AGREEMENT
NOW, THEREFORE,
in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Parties hereto agree as
follows:
ARTICLE
1
DEFINITIONS
For purposes of
this Agreement, the following terms shall have the following
meanings:
"Accounts
Receivable" shall mean the amounts owing to Seller as of the
Closing Date for goods sold or services provided prior to Closing,
whether or not Seller has submitted an invoice for such goods or
services, or for goods to be sold or services to be provided after
the Closing for which Seller has submitted an invoice.
"Assumed
Liabilities" shall mean only the duties, liabilities or obligations
of Seller, if any, arising after the Closing Date in connection
with the items identified on Schedule 1A , except as
otherwise noted on Schedule 1A , and shall specifically
exclude, among other things, (i) any liabilities for
employment, income, sales, property or other Taxes incurred or
accrued by Seller or JAS, including without limitation as a result
of this transaction; (ii) any fees or expenses incurred by
Seller or JAS in connection with this transaction; (iii) any
liabilities for sums borrowed from banks or other Persons (other
than term notes for trade payables), including any interest thereon
or expenses related thereto; (iv) any debt, payables or other
liabilities to Related Persons other than as set forth on
Schedule 1A ; (v) any liabilities related to any employee
benefit plan, including, without limitation, any 401(k), profit
sharing or pension plan, whether or not sponsored by Seller; and
(vi) any litigation pending against Seller.
"Closing" shall
mean the consummation of the purchase and sale transaction
described herein.
"Closing Date"
shall mean the date on which the Closing occurs, as specified in
Section 2.4.
"Customer List"
shall mean the list of the names and addresses of the customers of
the Seller.
"Governmental
Entity" shall mean any court, administrative agency, commission,
state, municipality or other governmental authority or
instrumentality, domestic or foreign, national or
international.
"Liens" shall
mean, with respect to the Purchased Assets, all liabilities,
claims, liens, charges, pledges, security interests, options,
restrictions or other encumbrances of any kind.
"Material
Adverse Effect" shall mean a material adverse effect on the results
of operations, financial condition or prospects of the Seller or
the Purchased Assets.
"Person" shall be construed broadly and shall
include an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization or a Governmental
Entity (or any department, agency or political subdivision
thereof).
"Purchased
Assets" shall mean the Domain Names and all of the other assets, if
any, identified on Schedule 1B , including, but not limited
to (i) the Vendor List; (ii) all uniform resource locators
associated with the Domain Names of the Seller, including, without
limitation, the Sites together with all content of such Sites;
(iii) all right, title and interest of Seller in and to all
intellectual property rights relating to the Purchased Assets,
including without limitation patents, patent applications, patent
rights, trademarks, trademark applications, trade names, service
marks, service mark applications, copyrights, copyright
applications, franchises, licenses, databases, domain names, pages
on the World Wide Web, computer programs and other computer
software, including the software program further described on
Schedule 1B (the “Software Program”), secrets, customer
lists, proprietary technology, processes and formulae, source code,
object code, algorithms, architecture, structure, display screens,
layouts, development tools, instructions, templates, marketing
materials, inventions, trade dress, logos and designs, and all
documentation and all media constituting, describing or relating to
the foregoing including but not limited to recommended product
features; (iii) all books, payment records; accounts;
correspondence; production records; technical, accounting and
procedural manuals; development and design data; and other useful
business records utilized in the conduct of or relating to the
Purchased Assets (collectively “Records”).
"Related
Person" shall mean any officer, director, manager, member, employee
or consultant of Seller, or any holder of five percent (5%) or more
of any class of capital stock of Seller, or any member of the
immediate family of any such officer, director, manager, member
employee, consultant, owner or shareholder, or any entity
controlled by any such officer, director, manager, member,
employee, consultant, owner or shareholder, or a member of the
immediate family of any such officer, director, manager, member,
employee, consultant, owner or shareholder.
"Taxes" (or
"Tax" where the context requires) shall mean all federal, state,
county, city, local, foreign and other taxes ( including ,
without limitation, premium, excise, value added, sales, use,
occupancy, gross receipts, franchise, ad valorem, severance,
capital levy, production, transfer, withholding, employment,
unemployment compensation, payroll-related and property taxes,
import duties and other governmental charges and assessments),
whether or not measured in whole or in part by net income,
including deficiencies, interest, additions to tax or interest or
penalties with respect thereto.
“Vendor
List” shall mean those vendors set forth on Schedule
1C.
“World
Wide Web” means the specific part of the Internet that
contains, among other things, documents written in HTML and from
which a World Wide Web document can provide links to other
documents on the Internet.
ARTICLE
2
SALE OF ASSETS;
CLOSING
Section 2.1
. Sale of Assets
. At the Closing,
Seller shall sell, assign, transfer, convey and deliver to Buyer,
free and clear of all Liens, good and marketable title to all of
the Purchased Assets.
Section 2.2
. Consideration
. In addition to the
assumption of the Assumed Liabilities, the aggregate consideration
to be paid by Buyer to Seller at Closing will be (a) a warrant to
purchase 1,800,000 shares of common stock of Buyer at an exercise
price of $1.25 per share, which warrant shall be in substantially
the form attached hereto as Exhibit A (the
“Warrant”) and (b) an unsecured contingent promissory
note of Seller, with an initial principal balance of $1,000,000, in
substantially the form attached hereto as Exhibit B (the
“Note”).
Section 2.3
. Buyer's Assumption of
Liabilities . On
the terms and subject to the conditions set forth in this
Agreement, and in further consideration of the transfer of the
Purchased Assets, at the Closing Buyer shall assume only those
duties, liabilities or obligations of Seller included in the
Assumed Liabilities, if any.
Section 2.4
. Closing
. The Closing shall
take place (via facsimile, telephone, mail and other mutually
acceptable means of communication and delivery) on the date hereof
or at such other time and location as the Parties hereto shall
agree in writing.
Section 2.5
. Deliveries by Seller
and JAS at Closing . At the Closing, Seller shall convey, transfer,
assign and deliver to Buyer all of the Purchased Assets, including
good and merchantable title to all personal property included
therein, free and clear of all Liens. Seller and JAS shall deliver
to Buyer:
(a)
A certificate of Seller and JAS,
dated as of the Closing Date, certifying in such detail as Buyer
may specify to the fulfillment of the conditions specified in
Section 6.1;
(b)
Evidence of the assignment of the
name “Recycler Publishing Network” to Buyer and
documents sufficient to effectuate such change and to convey all
rights in such name to Buyer;
(c)
Bill of Sale in the form of
Exhibit C , and such assignments and other instruments of
transfer as may be reasonably satisfactory to Buyer's counsel, and
with such consents to the conveyance, transfer and assignment
thereof as may be necessary to effect the conveyance, transfer,
assignment and delivery of the Purchased Assets and to vest in
Buyer the title specified in this Section and to assure to Buyer
the full benefit of the Purchased Assets, including without
limitation:
(i)
the transfer of all registered
Intellectual Property rights (as the term Intellectual Property is
defined in Section 3.12 hereof) and applications
therefor,
(ii)
the transfer of the Domain Names to
the Buyer, by execution and delivery to the Buyer of an Assignment
of Domain Names, Trademarks and Related Rights, substantially in
the form attached hereto as Exhibit D , and any other
documents necessary to facilitate the transfer of the Domain Names
to the Buyer, and
(iii)
the proper notification to eNom
with respect to the transfer of the Domain Names to the Buyer, and
delivery to the Buyer of evidence of eNom’s receipt of such
notification;
(d)
Assignment of the d/b/a Recycler
Publishing Network;
(e)
An employment agreement between JAS
and Buyer, in the form attached hereto as Exhibit E (the
“Employment Agreement”);
(f)
Good Standing Certificates of
recent date for Seller from the Secretary of State of the State of
California; and
(g)
The lock-up agreement referred to
in Section 6.10 hereof.
Simultaneously
with the delivery referred to in this Section, Seller and JAS shall
take or cause to be taken all such actions as may reasonably be
required to put Buyer in actual possession and operating control of
the Purchased Assets.
Section 2.6
. Deliveries by Buyer at
Closing . At the
Closing, Buyer shall deliver to Seller:
(a)
the Assumption Agreement in the
form attached hereto as Exhibit F , fully executed by Buyer,
pursuant to which Buyer assumes, as of the Closing Date, the future
payment and performance of the Assumed Liabilities;
(d)
the Employment
Agreement.
ARTICLE
3
REPRESENTATIONS AND
WARRANTIES OF SELLER
AND JAS
Seller and JAS
hereby jointly and severally represent and warrant to Buyer as
follows:
Section 3.1
. Organization and
Power . Seller
is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of California. Seller
has full power and authority to own its properties and conduct the
business presently being conducted by it. Seller and JAS have full
legal power, authority and capacity to execute this Agreement and
to consummate the transactions contemplated by this
Agreement.
Section 3.2
. Authorization
. The execution,
delivery and performance of this Agreement by Seller have been duly
authorized and approved by all requisite action on the part of its
managers or Board of Directors, as applicable, and members. This
Agreement constitutes the valid and binding obligation of Seller
and JAS and is enforceable against Seller and JAS in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, and other
similar laws relating to or limiting creditors' rights generally
and by equitable principles.
Section 3.3
. No Conflict
. The execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and the compliance with the terms
hereof will not, (a) violate any law, judgment, order, decree,
statute, ordinance, rule or regulation applicable to Seller or JAS,
or any permit, license or approval of any Governmental Entity,
(b) conflict with any provision of Seller's articles of
organization or operating agreement, (c) result in any
violation of, and will not conflict with, or result in a breach of
any terms of, or constitute a default under, any mortgage,
instrument or agreement to which any of JAS or Seller is a party or
by which Seller or any of the Purchased Assets is bound, or create
any Lien upon any of the Purchased Assets, or (d) require any
notice to, or consent, approval, order or authorization of, or the
registration, declaration or filing with, any Governmental Entity
or other third party, except as set forth on Schedule 3.3
.
Section 3.4
. Title to Purchased
Assets . Except
as stated on Schedule 3.4 , Seller has good, valid and
marketable title to all of the Purchased Assets, free and clear of
all Liens. No other party has any rights or claims to possession of
any of the Purchased Assets. None of the Purchased Assets are
subject to any option, contract, arrangement or understanding that
would restrict Seller's ability to transfer the Purchased Assets to
Buyer as contemplated herein. Seller has a valid registration with
eNom to the Domain Name free and clear of any liens, claims or
encumbrances and such registrations are in full force and effect.
None of the Seller’s registration and use of the Domain Names
has been disturbed or placed “on hold” by eNom and no
claim (oral or written) has been asserted against the Seller
adverse to its rights to such Domain Names.
Section 3.5
. Condition of Purchased
Assets . All of
the Purchased Assets are in good operating condition and repair,
ordinary wear and tear excepted, and in the state of maintenance,
repair and operating condition required for the proper operation
and use thereof.
Section 3.6
. Litigation
. There is no suit,
action or proceeding pending against or affecting Seller or JAS or
the employees of Seller relating to the Purchased Assets, or the
transactions contemplated hereby, nor is there any such suit,
action or proceeding threatened against Seller, JAS or any of the
employees of Seller. Seller is not subject to any order of a
Governmental Entity.
Section 3.7
. Insurance
. The Purchased
Assets are insured for Seller's benefit and will continue to be so
insured through the Closing, in amounts and against risks that are
commercially reasonable.
Section 3.8
. Brokers
. There are no
claims for brokerage commissions, finder's fees or similar
compensation arising out of or due to any act of or on behalf of
Seller or JAS in connection with the transactions contemplated by
this Agreement.
Section 3.9
. Compliance: Business
Practices . Seller has all necessary licenses, permits and
other approvals of Governmental Entities necessary to own and
operate the Purchased Assets as now conducted, each of which is in
good standing, and Seller has owned and operated the Purchased
Assets and properly filed all necessary reports in accordance with
applicable laws and regulations.
Section 3.10
. Absence of Undisclosed
Liabilities . Seller does not have any liabilities or
obligations, either accrued, contingent or otherwise, which are not
reflected in this Agreement or the Schedules hereto. All
liabilities of Seller at the Closing Date are listed on Schedule
3.10 hereto.
Section 3.11
. Pre-Bill
. Seller has not
pre-billed or received prepayment for products to be sold, services
to be rendered, or expenses to be incurred subsequent to the
Closing Date.
Section 3.12
. Intellectual
Property . (a)
Schedule 3.12 attached hereto contains a description of all
U.S. and foreign patents, pending patent applications, trademarks,
trademark registrations, pending applications for trademark
registration, service marks, service mark registrations, pending
applications for service mark registration, trade names,
copyrights, pending copyright applications and any other
intellectual property rights or licenses (collectively, the
"Intellectual Property") owned or used by Seller in connection with
the Purchased Assets. !Schedule 3.12 separately discloses
all Intellectual Property under license, all of which licenses are
assignable to Buyer. No Intellectual Property rights not described
on Schedule 3.12 are necessary in connection with the
ownership or operation of the Purchased Assets. Seller owns the
entire right, title and interest in and to, and has the exclusive
perpetual royalty-free right to use, the Intellectual Property,
free and clear of all Liens. There are no pending or, to the
knowledge of Seller and JAS, threatened claims against Seller or
JAS by any Person with respect to any of the items, or their use,
listed on Schedule 3.12 . No Person is infringing upon nor
has any Person misappropriated the Intellectual Property and Seller
is not infringing upon the Intellectual Property rights of any
other Person.
(b)
Seller employs procedures to
maintain the proprietary nature of, and owns and has the
unrestricted right to use all, trade secrets, including know-how,
inventions, designs, processes, computer software and documentation
for such software and technical data required for or incident to
the development, manufacture, operation and sale of all products
and services sold or proposed to be sold by Seller, free and clear
of any Liens, including without limitation, all claims of current
and former employees, consultants, officers, directors, owners and
shareholders of Seller. Each employee and officer of Seller has
executed an agreement with Seller regarding confidentiality and
proprietary information. Seller and JAS, after reasonable
investigation, are not aware that any of Seller’s employees
are in violation thereof, and Seller and JAS will use their best
efforts to prevent any such violation.
(c)
Schedule 3.12
contains a complete and accurate
list of all computer software owned by Seller (the "Owned
Software"), and identifies all contracts and agreements pursuant to
which computer programming services for Seller were performed.
Seller has exclusive title to the Owned Software, free and clear of
all claims, including claims or rights of employees, agents,
consultants, customers, licensees or other parties involved in the
development, creation, marketing, maintenance, enhancement or
licensing of such computer software. The Owned Software is not
dependent on any Licensed Software (as defined in paragraph (d)
below) in order to fully operate in the manner in which it is
intended. No Owned Software has been published or disclosed to any
other parties, except pursuant to contracts requiring such other
parties to keep the Owned Software confidential. No such other
party has breached any such obligation of
confidentiality.
(d)
Schedule 3.12
contains a complete and accurate
list of all software under which Seller is a licensee, lessee or
otherwise has obtained the right to use such software (the
"Licensed Software"). Schedule 3.12 also sets forth a list
of all license fees, rents, royalties or other charges that Seller
is required or obligated to pay with respect to the Licensed
Software. Seller is in full compliance with all provisions of any
license, lease or other similar agreement pursuant to which it has
rights to use the Licensed Software. None of the Licensed Software
has been incorporated into or made a part of any Owned Software or
any other Licensed Software. Seller has not published or disclosed
any Licensed Software to any other party.
(e)
The Owned Software and Licensed
Software constitute all software currently used in or necessary for
the ownership and operation of the Purchased Assets (the "Seller
Software"). The transactions contemplated herein will not cause a
breach or default under any licenses, leases or similar agreements
relating to the Seller Software or impair Buyer's ability to use
the Seller Software in the same manner as such computer software is
currently used by Seller. Seller is not infringing any intellectual
property rights of any other Person with respect to the Seller
Software, and no other Person is infringing any intellectual
property rights of Seller with respect to the Seller Software or is
claiming any right, title or interest in the Seller Software or any
infringement by Seller of any intellectual property right which
such other Person may possess.
(f)
Seller has not taken or failed to
take any actions under the law of any applicable foreign
jurisdictions where Seller has marketed or licensed the Seller
Software that would restrict or limit the ability of Seller to
protect, or prevent it from protecting, its ownership interests in,
confidentiality rights of, and rights to market, license, modify or
enhance, the Seller Software.
Section 3.13
. Contracts
. Schedule
3.13 lists all of the contracts, leases, arrangements and
understandings including, without limitation, sales orders,
purchase orders and distribution agreements, which relate to the
Purchased Assets (the "Contracts"), each of which was entered into,
arrived at or conducted on behalf of Seller with appropriate
authority and in accordance with Seller's customary practices. None
of the sales orders has been pre-billed to, or prepaid by, the
customer, except in the ordinary course of business and consistent
with Seller's past practices, nor does any sales order contain or
entitle the customer to any discount, credit, rebate or allowance
of any kind or nature that reflects prepayment made by a customer.
Neither Seller nor the other parties to such Contracts,
arrangements and understandings are in default thereof and all
Contracts are valid and in effect. Neither Seller nor JAS has
received notice of default under any Contract, and neither Seller
nor JAS know of any event that has occurred or that is expected to
occur which (after notice and lapse of time or both) would become a
breach or default under, or otherwise permit unilateral
modification, cancellation, acceleration or termination of any such
Contract. No customer, supplier or vendor of Seller has given any
notice or made any threat or otherwise revealed an intent to cancel
or otherwise terminate its relationship with Seller, to materially
and adversely change the relationship, to substantially reduce the
volume of business it currently does with Seller or to refuse to
renew any Contract when it expires.
Section 3.14
. Labor
. Seller has no
employees and, except as set forth on Schedule 3.14 , Seller
is not, and, as of the Closing Date will not be, a party to any
employment or consulting agreement or to any collective bargaining
agreement.
(a)
Seller has prepared and filed all
federal, state, local and foreign returns, estimates, information
statements and reports ("Returns") relating to any and all Taxes
concerning or attributable to Seller or the Purchased Assets which
Seller is required to file on or before the Closing and such
Returns were true and accurate and were completed in accordance
with applicable law when filed.
(b)
Seller has (i) paid all Taxes it is
required to pay and (ii) withheld wi
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