EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
by and between
COMEDYNET.TV, INC.
as Seller
and
RED ROCK PICTURES HOLDINGS, INC.
as Purchaser
March __, 2009
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ASSET
PURCHASE AGREEMENT
This Agreement ("Agreement") is
entered into as of March 24, 2009, by and
between Red Rock Pictures Holdings, Inc., a Nevada
Corporation (the "Purchaser"
or the "Company"), and
ComedyNet.TV, Inc., a Delaware
corporation (the
"Seller").
WHEREAS, Seller is a business
primarily centered around providing
comedy
entertainment through different media sources (the "Business");
WHEREAS, Seller wishes to sell to Purchaser and Purchaser wishes to
purchase and
assume from Seller, certain assets with respect to the Business on
the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, Seller anticipates arranging
an investment into the Purchaser of
approximately $1,000,000 (the "Investment") funded in two
tranches;
NOW THEREFORE, In
consideration of the mutual covenants,
agreements,
representations and warranties contained in this Agreement, the
parties agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Sale and Transfer of Assets. On and
subject to the terms and conditions
set forth in this Agreement, Seller agrees to sell, convey,
transfer, assign and
deliver to Purchaser, and Purchaser agrees to purchase and
acquire from Seller,
free and clear of any encumbrances, all of Seller's
right, title, and interest
in and to all of the assets of Seller as set forth
on Schedule 1.1 attached
hereto ("Purchased Assets") at the Closing in
consideration for the payment by
Purchaser of the Purchase Price as specified below in Section
1.3.
1.2 No Assumption of Liabilities. The
Purchaser shall in no event assume or
be responsible for any
liabilities, liens, security
interests, claims,
obligations or encumbrances of Seller, contingent or otherwise.
1.3 Consideration. Upon the
terms and subject to the satisfaction of the
conditions contained in this Agreement, in consideration of
the aforesaid sale,
assignment, transfer and delivery of the Purchased Assets and
fulfillment of the
Investment, Purchaser will pay or cause to be paid a purchase
price consisting
of Sixty-eight million (68,000,000) shares of the
Buyer's common stock, par
value $0.001 per share (the "Common Stock").
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1.3.1 The
Common Stock shall be issued to the Seller in the
following
manner:
(i) 500,000 shares of the Company's Series
A Preferred Stock,
$0.001 par value
(the "Series A Preferred Stock"). Each share of Series
A Preferred Stock
shall be convertible into 100 shares of the Company's
Common
Stock, or an aggregate of 50,000,000 shares
of Common Stock
pursuant to the
terms of the Series A Preferred Stock certificate
of
designation,
a form of which is attached hereto as
Exhibit A. The
Series A Preferred
Stock shall automatically convert into shares of the
Company's
Common Stock at such time as
the Company has filed a
certificate
of amendment with the State of Nevada to
increase the
authorized
shares of common stock of the Company to
a minimum of
500,000,000
shares.
(ii) On the
Closing Date (as defined in Article IV), in addition to
the share issuance
as contemplated by Sections 1.3.1 herein, the Seller
shall
arrange an investment into the
Purchaser by a third-party
investor
(the "Investor"), in the form of a secured
convertible note
(the
"Secured Convertible Note"), attached
hereto on Exhibit B,
$100,000 of
which has been delivered to the Purchaser
prior to the
Closing Date,
$150,000 shall be delivered on the Closing Date (provided
the Registration
Statement, defined below, has been filed with the SEC)
or if the
Registration Statement has not been filed then such
$150,000
shall be
delivered on the date that the Registration
Statement is
filed, and
$50,000 shall be delivered upon proof of the
effectiveness
being declared by
the Securities and Exchange Commission ("SEC") of a
Form S-1 to be
filed at Closing registering the shares of Common Stock
underlying
the preferred shares issued to the Seller
("Registration
Statement"). The
Secured Convertible Note shall have a principal amount
of Three Hundred
Thousand ($300,000) dollars and bear interest of
10%
per annum with a
term of 12 months. The Secured Convertible Note shall
be
convertible at $0.06 per share and the Purchaser can repay the
note
in cash at any
time prior to its maturity.
(iii) In addition, within thirty (30) days of the Closing Date,
the
Investor shall
fund an additional $200,000 (the "Boku Investment")
to
be used for the
Boku Superfood advertising campaign. The Company
will
finance
the production of a 30
minute infomercial (the "Boku
Infomercial") and media to test.
Funds generated from the Boku
Infomercial
shall be paid in the following order: (i) to the
Company
until it has
recouped 100% of all verifiable direct, out
of pocket
expenses incurred by the
Company in connection with the
Boku
Infomercial,
including but not limited to; cost of goods sold, media,
telephones,
fulfillment, actual cost of shipping, customer service and
credit
card processing, (ii) to the Investor
until Investor has
recouped the
Boku Investment in full , (iii) a management fee shall be
paid to the
Company equal to 3% of Adjusted Gross Revenue ( as
defined
in
Section 1.3.1(iv)), and (iv) a
commission equal to 15% of all
revenue generated
in perpetuity for every customer acquired as a result
of the Company's
marketing shall be paid to the Company, 1/3rd of which
(5% of Gross)
shall be immediately paid to Investor upon the Company's
receipt
thereof in return for its investment
set forth herein in
perpetuity.
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(iv) Additionally, Investor shall be
granted a right of first
refusal
("ROFR") to fund all future
infomercial projects of the
Company. If
Investor has not received repayment in full of
its Boku
Investment,
then Adjusted Gross Revenue (as defined below) from future
infomercial
deals produced by the Company shall first be used to repay
Investor
any amounts outstanding from the
repayment of the Boku
Investment until
such Boku Investment has been repaid in full. Adjusted
Gross
Revenue shall be defined as gross revenue
less cost of goods
sold, media,
phones, fulfillment, customer service costs, actual costs
of shipping,
returns and credit card charge-backs
(v) An additional 18,000,000 shares of the Purchaser's Common
Stock
shall be issued to
the Seller in the following manner (1)
9,000,000
shares of Common
Stock shall be issued to the Seller in exchange for an
additional
investment of $150,000, (2) 9,000,000 shares of Common Stock
shall be issued in
exchange for an additional investment of $350,000.
Such amounts are
over and above the amounts set forth in (ii) and (iii)
above.
1.4 Consulting Agreement. On the Closing
Date, the Company shall enter into
a consulting agreement with Mark
Graff, substantially in the form of the
consulting agreement attached hereto on
Exhibit C. The basic terms of the
consulting agreement shall include
the following: (i) $5,000 per
month
consulting fee for a period of six months; each such
payment to be paid on the
last day of each month, commencing on the date
when the Company receives an
additional $150,000 in funding from Investor,
(ii) consultant shall have the
exclusive right to sell and distribute the
ComedyNet programming catalog to
broadcast, cable and other ancillary markets in North America for a
2 year term,
(iii) consultant shall be entitled to a 30% distribution fee from
all sales, and
(iv) sales reports to the Company shall be on
a quarterly basis and any due
revenue to the Company shall be disbursed no later than 30 days
after receiving
it.
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ARTICLE
II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to
Purchaser that the statements contained
in this Article II are correct and complete as of the date
hereof:
2.1. Due Incorporation. Seller
is a corporation duly organized, validly
existing and in good standing under
the laws of the jurisdiction of its
incorporation and has the requisite corporate power to own its
properties and to
carry on its business as now being conducted.
Seller is duly qualified as a
foreign corporation to do business and is in good standing in
each jurisdiction
where the nature of the business conducted or
property owned by it makes such
qualification necessary, other than those jurisdictions in
which the failure to
so qualify would not have a material adverse effect on the
business, operations
or financial condition of Seller.
2.2. Authority;
Enforceability. This Agreement and any other
agreements
delivered together with this Agreement or in connection
herewith have been duly
authorized, executed and delivered by
Seller and are valid and binding
agreements enforceable in accordance with their
terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of
general applicability relating to or affecting
creditors' rights generally and
to general principles of equity; and
Seller has full corporate power and
authority necessary to enter into this
Agreement, and such other agreements
delivered together with this Agreement or in connection
herewith and to perform
its obligations hereunder and under all other agreements
entered into by Seller
relating hereto.
2.3. Approvals;
Consents. Seller has, and on the Closing Date will have,
the right, power and authority to
enter into this Agreement and to sell,
transfer and deliver the Purchased Assets and to perform
all undertakings and
obligations hereunder. No approval,
authorization, consent, order or other
action of, or filing with, any third party, including
without limitation, any
public, governmental, administrative or
regulatory authority, agency or body
(collectively, "consents"), is required
in connection with the execution,
delivery and/or performance of this Agreement by Seller or
the consummation of
the transactions contemplated hereby.
2.4. Liens. Seller has good and
marketable title to the Purchased Assets
and has full power and authority to sell, assign and
transfer to Purchaser all
of the Purchased Assets free and clear of
restrictions on or conditions to
transfer or assignment, and free and
clear of mortgages, liens, pledges,
charges, encumbrances, equities, claims, covenants, conditions, or
restrictions.
All of the Purchased Assets are in good operating condition and
repair, ordinary
wear and tear excepted.
2.5. Taxes. Except for
$11,000 in past due taxes due to the State of New
York, Seller has filed all federal, state, local,
foreign or other tax returns
which are required Taxes to be filed by any of
them or been approved for an
extension of same, and such returns are, to the best
knowledge of Seller, true
and correct. There is no material liability
for the payment of any federal,
state, local, foreign or other taxes
whatsoever (including any interest or
penalties) with respect to Seller except for which non-compliance
would not have
a material adverse effect on the business, operations or
financial condition of
Seller.
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2.6. Applicable Laws. Seller
has complied with all applicable laws, rules
and regulations of the City, County, State and
federal government as required
except for which non-compliance would not have a material
adverse effect on the
business, operations or financial condition of the Seller.
2.6. Material Information. No
material fact regarding the Purchased Assets
has been omitted which would reasonably affect a prudent
investor's decision to
purchase the Purchased Assets being
sold to Purchaser herein; and
the
information furnished by or on behalf of Seller in
connection with its sale of
the Purchased Assets and the transactions contemplated hereby do
not contain any
untrue statement of a material fact, or omit to state a material
fact, necessary
in order to make the statements made, in light of the
circumstances under which
they were made, not misleading.
2.7. No Brokers. No broker, finder
or intermediary has been employed by or
on behalf of Seller in connection with the transactions
contemplated hereby, and
to the best knowledge of Seller there is no such person entitled,
as a result of
Purchaser's action, to any fee or
commission upon the consummation of the
transactions contemplated hereby.
2.8. Legal Proceedings. To the
best knowledge of the Seller, there is no
(a) legal proceeding pending or threatened, against,
involving or affecting the
Seller and/or any of its respective assets or
rights, including the Purchased
Assets; (b) judgment, decree, injunction,
rule, or order of any governmental
entity applicable to the Seller that has had or is
reasonably likely to have,
either individually or in the aggregate, a Material
Adverse Effect; (c) legal
proceeding pending or threatened, against the
Seller that seeks to restrain,
enjoin or delay the consummation
of this Agreement or any of the
other
transactions contemplated by this Agreement or that seeks
damages in connection
therewith; or (d) injunction, of any type.
2.9. Licenses; Compliance with
Regulatory Requirements. The Seller holds
all licenses, franchises, ordinances,
authorizations, permits, certificates,
variances, exemptions,
concessions, leases, rights of
way, easements,
instruments, orders and approvals,
domestic or foreign (collectively, the
"Licenses") required for or which are material to the ownership of
the Purchased
Assets. The Seller is in compliance with, and has
conducted its business so as
to comply with, the terms of its respective
Licenses and with all applicable
laws, rules, regulations, ordinances and codes
(domestic or foreign). Without
limiting the generality of the foregoing,
the Seller (i) has all Licenses of
foreign, state and local governmental entities required for the
operation of the
Purchased Assets (the "Permits"), (ii) has duly and currently
filed all reports
and other information required to be filed
with any governmental entity in
connection with such Permits and
(iii) is not in violation of any of such
Permits.
2.10. SEC Documents; Financial
Statements. Except as set forth on Schedule
2.11, during the two (2) years prior to the date
hereof, the Company has filed
all reports, schedules, forms, statements and
other documents required to be
filed by it with the SEC
pursuant to the reporting
requirements of the
Securities Exchange Act of 1934, as
amended (the 1934 Act") (all of the
foregoing filed prior to the date hereof and all exhibits
included therein and
financial statements, notes and schedules thereto and
documents incorporated by
reference therein being hereinafter referred to as the
"SEC Documents"). The
Company has delivered to the Seller or their
respectiv
