EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
by and among
IA GLOBAL, INC.
and
IA GLOBAL ACQUISITION CO.
and
NANOCAT TECHNOLOGIES PTE LIMITED
dated as of
9 February , 2005
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TABLE OF CONTENTS
1.
DEFINITIONS................................................................4
2. PURCHASE AND
SALE..........................................................8
2.1. Purchase and Sale of
Assets.........................................8
2.2. Incidental Rights and
Assets........................................9
2.3. Assumed
Liabilities.................................................9
2.4. Retained
Liabilities................................................9
2.5. Agreement to
Purchase...............................................9
2.6.
Consideration......................................................10
2.7. Liquidation of the
Company.........................................11
3. REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND IAO.....................11
3.1.
Organization.......................................................11
3.2. Authorization, Execution and
Enforceability........................11
3.3. Absence of Restrictions,
Conflicts and Required Consents...........11
3.4. Restriction on Assignment or
Sale of Assets........................11
3.5. Ownership of Assets and
Related Matters............................11
3.6. Legal
Proceedings..................................................12
3.7. Compliance with Legal
Requirements.................................12
3.8. Intellectual
Property..............................................12
3.9.
Disclosure.........................................................13
3.10.
Disclosure.........................................................14
3.11. Disclaimer of Other
Representations and Warranties.................14
4. REPRESENTATIONS AND WARRANTIES OF
PURCHASER...............................14
4.1.
Organization.......................................................14
4.2. Authorization, Execution and
Enforceability........................14
4.3. Absence of Restrictions,
Conflicts and Required Consents...........14
5. CERTAIN COVENANTS AND
AGREEMENTS..........................................15
5.1. Access and
Information.............................................15
5.2. Conduct of Business Pending
Closing................................15
5.3. Notice; Efforts to Remedy;
Reports.................................16
5.4.
Taxes..............................................................16
5.5. Further
Assurances.................................................16
5.6. Public
Statements..................................................16
6. CONDITIONS PRECEDENT TO THE
CLOSING.......................................16
6.1. Conditions to Each Party's
Obligations.............................16
6.2. Conditions to the
Obligations of the Company.......................17
6.3. Conditions to the
Obligations of Purchaser.........................17
7.
CLOSING...................................................................18
7.1. Closing
Date.......................................................18
7.2. Closing
Steps......................................................18
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8.
INDEMNIFICATION...........................................................18
8.1.
Survival...........................................................18
8.2. Indemnification Provisions
for Benefit of the Purchaser............19
9.
TERMINATION...............................................................19
9.1.
Termination........................................................19
9.2. Effect of
Termination..............................................20
10.
NOTICES...................................................................20
11.
MISCELLANEOUS.............................................................21
11.1.
Attachments........................................................21
11.2. Entire
Agreement...................................................21
11.3. Disclosure
Schedules...............................................22
11.4. Enforcement of
Agreement...........................................22
11.5. Succession and
Assignment..........................................22
11.6. Number;
Gender.....................................................22
11.7. Captions 22
11.9. Controlling Law; Integration;
Amendment; Certain
Construction
Rules...............................................22
11.9. Counterparts; Execution and
Delivery of Signature Pages............23
11.10. No Third Party
Beneficiary.........................................23
11.11. Waiver
23..........................................................23
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), is made and
entered
into effective this 9th day of February,
2005, by and among IA GLOBAL, INC., a
corporation organized and existing under
the laws of the State of Delaware
("IAO"), IA GLOBAL ACQUISITION CO., a
corporation organized and existing under
the laws of that same state ("Company") and
NANOCAT TECHNOLOGIES PTE LIMITED,
Reg No. 200206435N a corporation registered
under the laws of the Republic of
Singapore ("Purchaser"). Each of IAO, the
Company and the Purchaser shall
hereinafter be referred to individually as
a "Party" and collectively as
"Parties".
W I T N E S S E T H T H A T :
WHEREAS, QuikCAT Australia Pty Limited of 3/56 Mount Street, West
Perth
WA 6005, Australia ABN 82 106 946 043
("QuikCAT Australia"), IAO and the Company
are parties to a non-binding letter
agreement dated December 20, 2004 ("Letter
Agreement") which describes, subject to
longer form definitive agreements to be
negotiated by them in good faith, the
general terms on which the Purchaser will
acquire or have assigned to it certain of
the assets or rights of the Company,
including:
(a) all assets and rights acquired by IAO
from QuikCAT.COM Inc, a Delaware
corporation (being the then
Debtor-In-Possession in Case No. 03-12179-H in the
United States Bankruptcy Court for the
Northern District of Ohio), pursuant to
the Asset Purchase Agreement between those
parties dated 13 April 2004 and
approved by that court (the "Bankruptcy
Assets");
(b) any and all rights, including
Intellectual Property rights or rights to
acquire Intellectual Property rights,
obtained by IAO under the ICG Security
Documentation executed by Innovative
Computing Group, Inc, a corporation
organized and existing under the laws of
the State of Ohio ("ICG"), in favour of
IAO and dated 5 February 2004 (the "Miliki
Supercompressor Rights"); and
(c) any additions, developments and
modifications to the assets and rights of
the Company (including but not limited to
the Bankruptcy Assets, the Kyocera
Project and the Miliki Supercompressor
Rights (also known as "Shrink")); and
(d) all right, title and interest of the
Company in certain agreed Contracts.
WHEREAS, the Parties desire to formalise the Letter Agreement
by
entering into this Agreement pursuant to
which the Company proposes to sell to
the Purchaser, and the Purchaser proposes
to purchase, or have assigned to it,
the assets and rights referred to above and
assume certain of the accounts
payable and other contractual liabilities
and obligations of the Company as set
out in this Agreement.
WHEREAS, the Parties wish to make certain other agreements and
undertakings;
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NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein,
the Parties hereto, intending to be
legally bound, hereby agree as follows:
1.
DEFINITIONS.
For purposes of this Agreement, the following terms shall have
the
following meanings:
"Affiliate" of any Person (as hereinafter defined) means (i)
any
director, officer or employee of such
Person, (ii) any direct or indirect holder
of five percent (5%) or more of the
outstanding capital stock of such Person,
(iii) any spouse, parent, sibling, or
descendant of such Person, (iv) any trust,
partnership, limited partnership or limited
liability company, in whole or in
part, for the benefit of, or owned by, such
Person or any Person specified in
clauses (i), (ii) or (iii) hereof, and (v)
any other Person that, directly or
indirectly, controls, is controlled by or
is under common control with such
Person. For the purposes of this
definition, "control" (including with
correlative meanings, the terms
"controlling," "controlled by," and "under
common control with") as applied to any
Person, means the possession, directly
or indirectly, of the power to direct or
cause the direction of the management
and policies of that Person, whether
through ownership of voting securities or
by contract or otherwise.
"Ancillary Documents" means, collectively, the Company
Ancillary
Documents (as defined below) and the
Purchaser Ancillary Documents (as defined
below).
"Assets" has the meaning given to it in clause 2.1.
"Bankruptcy Assets" has the meaning given to it in paragraph (a) of
the
preamble to this Agreement.
"Breach" means any violation or breach of, any misrepresentation
or
inaccuracy in, any default under, any
conflict with, or any failure to perform
or comply with any representation,
warranty, covenant, obligation or other
provision of, or any event which results in
Liability or Encumbrance under this
Agreement or any Ancillary Document, any
Contract any Governing Document or
other instrument or any event which with
the passing of time or the giving of
notice, or both, would constitute such a
violation, breach, misrepresentation,
inaccuracy, default, conflict or failure.
When used with respect to this
Agreement or any Ancillary Document, a
"Breach" will also be deemed to include
any occurrence or circumstance that is or
was inconsistent with any
representation, warranty, covenant,
promise, obligation, duty under, or other
provision of, this Agreement or such
Ancillary Document, respectively.
"Business" means the business of the Company in providing software
that
accelerates the transfer of data using the
Internet and compresses data for the
purposes of storage, and includes
commercial activities concerning the use or
exploitation of the Assets and the
performance of the Assumed Contracts.
"Business Day" means any day on which banks are not required to
trade
or authorized to close in Fairfax,
Virginia.
"Closing" has the meaning given to it in clause 7.1.
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"Closing Date" has the meaning given to it in clause 7.1.
"Company Ancillary Document" means each certificate, agreement,
document and instrument executed and
delivered by the Company in connection with
the Contemplated Transactions.
"Consent" means any consent, approval, ratification,
registration,
filing, application, notice, transfer,
qualification, waiver or authorization of
any kind of any Person.
"Contemplated Transactions" means such transactions as are required
to
be consummated by the Parties hereto
pursuant to this Agreement and the
Ancillary Documents.
"Contract" means any contract, agreement, purchase order,
mortgage,
promissory note, deed to secure debt, deed
of trust, debt instrument, lease,
easement, franchise, lease, license,
commitment, arrangement, warranty,
undertaking or understanding to which any
Person is a party or bound or to which
his, her or its property is subject,
whether written or oral, and including each
and every amendment, modification or
supplement to any of them.
"Customary Enforceability Limitations" means bankruptcy, insolvency
or
other similar laws affecting the
enforcement of creditors' rights generally and
general principles of equity (regardless of
whether enforcement is sought or
considered in a Proceeding in equity or at
law).
"Disclosure Schedule" means each Schedule which relates to a
representation or warranty herein by any
Party.
"Encumbrance" means any charge, claim, condition, equitable
interest,
encumbrance, lien, option, pledge, security
interest, mortgage, right of way,
easement, encroachment, servitude, right of
first option, right of first refusal
or restriction of any kind, including any
restriction on use, voting (in the
case of any security), transfer, receipt of
income, or on the exercise of any
other attribute of ownership.
"Exhibit" means each written document which is labeled as an
"Exhibit"
or which is attached to and referenced in a
written document labeled as an
"Exhibit," and which is attached to, or
placed underneath or adjacent to, the
executed version of this Agreement.
"Governing Documents" means, (a) with respect to the Company,
the
Company's certificate of incorporation and
bylaws; (b) with respect to the
Purchaser, the Purchaser's certificate of
incorporation and bylaws; and (c) with
respect to the Company or the Purchaser or
any other Person (other than an
individual natural person), any other
indenture, trust, charter or similar
document adopted or filed in connection
with the creation, formation or
organization of such Person; all
securityholders' agreements, voting agreements,
voting trust agreements, joint venture
agreements, registration rights
agreements or other agreements or documents
relating to the organization,
management or operation of such Person, or
relating to the rights, duties and
obligations of the stockholders, members,
beneficiaries, trustees, partners or
other Persons having legal or beneficial
interests in such aforementioned
Persons; and any amendment or supplement to
any of the foregoing.
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"Governmental Authorization" means any Consent, license,
registration,
plan, certificate or permit issued,
granted, given or otherwise made available
by or under the authority of any
Governmental Body (as defined below) or
pursuant to any Legal Requirement (as
defined below).
"Governmental Body" means, with respect to any Jurisdiction (as
defined
below) or combination of Jurisdictions, (i)
any federal, state, local,
municipal, foreign or other government;
governmental or quasi-governmental
authority of any nature (including any
agency, branch, department, board,
commission, court, tribunal or other entity
exercising governmental or
quasi-governmental powers); (ii) any
multi-national organization or body; (iii)
any body exercising, or entitled to
exercise, any administrative, executive,
judicial, legislative, police, regulatory
or taxing authority or power over such
Jurisdiction, with respect to its Persons,
properties or otherwise; and (iv) any
official of any of the foregoing.
"ICG Letter Agreement" means the letter agreement by and between
IAO
and ICG dated 5 February 2004.
"ICG Security Agreement" means the Security Agreement dated 5
February
2004 between ICG and IAO executed in
conjunction with the issuance of the
Secured Promissory Note.
"ICG Security Documentation" means the ICG Security Agreement,
ICG
Letter Agreement and Secured Promissory
Note.
"Intellectual Property" means (a) all discoveries, innovations,
inventions and all improvements thereto and
all classes and types of patents,
including, without limitation, utility
models, utility patents and design
patents, and all patent applications and
patent disclosures, together with all
reissuances, continuations,
continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all registered
and unregistered trademarks, service
marks, trade dress and logos, including all
goodwill associated therewith, and
all applications, registrations, and
renewals in connection therewith, (c) all
works of authorship and all copyrights
therein, whether such works are published
or unpublished works, and all applications,
registrations and renewals in
connection therewith, (d) all trade
secrets, know-how, product prototypes, and
all proprietary, technical and
non-technical data and information, including,
without limitation, customer lists,
supplier lists, pricing and cost
information, business and marketing plans
and other confidential business
information, (e) all computer programs and
related code and software other than
commercially available "off-the-shelf"
software, (f) all domain name
registrations and URL addresses, (g) all
other recognizable equivalent
proprietary rights, and (h) all copies and
tangible embodiments of the
foregoing, whether arising under the laws
of the United States or any other
Jurisdiction.
"Internet Accelerator Agreement Deed of Variation" shall mean the
deed
of variation to the Internet Accelerator
Agreement between IAO, the Company and
QuikCAT Australia dated the same date as
this Agreement.
"Jurisdiction" means any nation, state, commonwealth, judicial
circuit,
region, county, city, town, village,
district or other jurisdiction;
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"Knowledge": An individual natural person shall be deemed to
have
"Knowledge" of a particular fact or other
matter if:
(a) such individual natural person is actually aware of such fact
or
other matter; or
(b) a prudent individual natural person in a similar position could
be
expected to discover or otherwise become
aware of such fact or other matter in
the course of conducting a reasonable
investigation regarding the accuracy of
any representations or warranties contained
in this Agreement, which
investigation such prudent individual
natural person shall be deemed to have
conducted.
A Person (other than an individual natural
person) will be deemed to have
"Knowledge" of a particular fact or other
matter if any individual natural
person who is serving, or who has at any
time served, as a director, officer,
partner, manager, executor or trustee of
such Person (or in any similar
capacity) has, or at any time had,
Knowledge of such fact or other matter (under
the standards set forth in clauses (a)
and/or (b) above), provided that in the
case of each of IAO and the Company such
Persons shall be deemed to have
"Knowledge" of a particular fact or other
matter only if Alan Margerison or Mark
Scott has Knowledge of such fact or matter
under the standards set forth in
clauses (a) and/or (b) above.
"Legal Requirement" means any federal, state, local, municipal,
foreign, international, multinational or
other constitution, law, statute, rule,
regulation, ordinance, principle of common
law or treaty.
"Letter Agreement" has the meaning given to it in the preamble to
this
Agreement.
"Liability" means, with respect to any Person, any claim, loss
(including diminution in value), cost,
expense, penalty, fine, judgment, damage,
liability, loss of rights, or obligation of
such Person of any kind, character
or description, whether known or unknown,
absolute or contingent, accrued or
unaccrued, asserted or unasserted,
liquidated or unliquidated, secured or
unsecured, joint or several, due or to
become due, vested or unvested,
executory, determined, determinable or
otherwise and whether or not the same is
required to be accrued on the financial
statements of such Person and whether or
not involving a third party claim.
"Material Adverse Effect" means any state of facts, event,
development,
change or effect that either individually
or together with any other state(s) of
fact, event(s), development(s), change(s)
or effect(s) has had or could
reasonably be expected to have, a material
adverse effect on the Assets taken as
a whole, or which could reasonably be
expected to prevent or materially delay
the consummation of the Contemplated
Transactions.
"Miliki Supercompressor Rights" has the meaning given to it in
paragraph (c) of the preamble to this
Agreement.
"Non-Governmental Authorisation" has the meaning given to it in
clause
3.6.
"Notice" has the meaning given to it in clause 9.
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"Order" means any order, injunction, judgment, decree, ruling, writ
or
arbitration award of any Governmental Body
or arbitrator.
"Ordinary Course of Business" means any action taken by the
Company
with respect to the Business if such action
is similar in nature, scope and
magnitude to actions customarily taken,
without any separate or special
authorization, in the ordinary course of
the normal day-to-day operations of
other Persons that are in the same line of
business as the Business.
"Person" means any individual natural person and any
partnership,
limited liability company, corporation,
trust, government agency or governmental
subdivision and any other legal entity.
"Proceeding" means any claim, action, arbitration, audit,
hearing,
investigation of which the Person making a
representation or warranty has
Knowledge, litigation or suit (whether
civil, criminal, administrative or
judicial, whether formal or informal, and
whether public or private) commenced,
brought, conducted, or heard by or before,
any Governmental Body or arbitrator,
or which seeks or requests the issuance of
an Order.
"Purchase Price" has the meaning given to it in clause 2.6.2.
"Purchaser Ancillary Document" means each certificate,
agreement,
document and instrument executed and
delivered by the Purchaser in connection
with the Contemplated Transactions.
"Purchaser Security Agreement" means an agreement between the
Purchaser
and IAO creating a first priority security
over the Assets in favour of IAO in
the form contemplated in clause 2.6.
"Secured Promissory Note" means the secured promissory note
executed by
ICG in favour of IAO dated 5 February
2004.
"Share Sale Agreement Deed of Variation" means the deed of
variation to
the Share Sale Agreement between IAO, the
Company, QuikCAT Australia and
Marie-Rose Pontre dated the same date as
this Agreement.
"Taxes" means all taxes, assessments, charges, duties, fees, levies
or
other governmental charges (including
interest, penalties or additions
associated therewith) and all other taxes
of any kind for which a Person may
have any Liability imposed by a
Governmental Body, whether disputed or not.
"Uncured Breach" means, with respect to any Breach of any
representation, warranty, covenant or
agreement in this Agreement, a Breach
which is not cured within ten (10) Business
Days following the receipt by the
Breaching Party of notice of such
Breach.
2.
PURCHASE AND SALE.
2.1. Purchase and Sale of Assets. Subject to the terms and
conditions
of this Agreement, at the Closing Date, the
Company shall grant, sell, convey,
assign, transfer and
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deliver to the Purchaser, and the Purchaser
shall purchase, acquire and accept
from the Company, all of the Company's
right, title and interest in and to:
2.1.1. the Bankruptcy Assets;
2.1.2. the Miliki Supercompressor Rights;
2.1.3. those additions, modifications and developments to the
above assets and rights of the Company that
are the property of the Company as
at the date of this agreement and any
further additions, modifications and
developments to the above assets and rights
of the Company between the date of
this agreement and the Closing Date, as
collectively to be documented by the
Parties in a document to be entitled
"Agreed Additions, Modifications and
Developments prior to Closing" and
initialed by the parties for identification
on Closing,
whether those rights are real, personal and
mixed, tangible or intangible and
wherever situated (which assets, properties
and rights are hereinafter
collectively referred to as the "Assets"),
free and clear of any Encumbrances
other than the Assumed Liabilities.
2.2. Incidental Rights. Without limiting clause 2.1 above, the
Parties
agree that the Assets shall include:
2.2.1. Without compromise to the obligation on the Company to
deliver
the Assets free from any Encumbrance
pursuant to clause 2.1, all rights to
causes in action, lawsuits, judgments,
claims and demands of any nature
available to or being pursued by the
Company with respect to the Assets or the
ownership, use, function or value of any
Asset, whether arising by way of
counterclaim or otherwise; and
2.2.2. All rights in and under all express or implied
guarantees, warranties, representations,
covenants, indemnities and similar
rights in favor of the Company relating to
any Asset, and all rights to proceeds
under insurance policies with respect to
any Asset.
2.3. Assumed Liabilities. Except as set forth in this Section 2.3,
the
Purchaser shall not assume any Liabilities
of the Company, whether or not
related to the Assets. As the sole
exception to the foregoing, on the Closing
Date, the Purchaser shall assume and agree
to discharge only the following
specifically enumerated obligations and
liabilities of the Company
(collectively, the "Assumed
Liabilities"):
2.3.1. Any Liability arising from the ownership, use or
operation of any Asset by the Purchaser
after the Closing Date.
2.4. Retained Liabilities. "Retained Liabilities" shall mean
every
Liability of the Company other than the
Assumed Liabilities. All of the Retained
Liabilities shall remain the sole
responsibility of and shall be retained, paid,
performed and discharged solely by the
Company.
2.5. Agreement to Purchase. On the Closing Date, the Purchaser
shall
purchase the Assets from the Company and
assume the Assumed Liabilities, upon
and subject to the terms
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and conditions of this Agreement and in
reliance on the representations,
warranties and covenants of the Company
contained herein.
2.6. Consideration.
2.6.1. Deposit. The Purchaser shall deliver a deposit to the
Company of $25,000 by wire transfer of
immediately available U.S. funds on
execution of this Agreement (the
"Deposit"), which for the avoidance of doubt
comprises that part of the Purchase Price
referred to in clause 2.6.2(a) below.
The deposit will be non-refundable unless:
(1) this Agreement does not close due
to lack of good faith by or the default of
the Company or IAO, or (2) any event
occurs or circumstance arises in relation
to the Company subsequent to the date
of this Agreement and prior to Closing that
has a Material Adverse Effect.
2.6.2. Purchase Price. On the terms and subject to the
conditions set forth in this Agreement, in
consideration of the transfer of the
Assets and the other undertakings of the
Company hereunder, the purchase price
(the "Purchase Price") for the Assets (in
addition to the Purchaser's assumption
of the Assumed Liabilities, the variations
described in sub-clause 2.6.4 below
and the creation of the security described
in sub-clause 2.6.5 below) shall be
$650,000 comprised and paid by the
Purchaser to the Company by wire transfer of
immediately available U.S. funds as follows
(subject to satisfaction of the
conditions precedent described in clause 6
in so far as (b) through (e) below
are concerned):
(a) the Deposit, in accordance with clause 2.6.1 above;
(b) $105,000 on Closing;
(c) $220,000, within 15 days after Closing;
(d) $100,000, within 60 days after Closing; and
(e) $200,000, within 75 days after closing.
2.6.3. Deeds of Variation. Each Party agrees:
(a) to the extent it is a party, to execute; and
(b) otherwise, to use its best endeavours to procure the
execution of,
the Internet Accelerator Agreement Deed of Variation and the
Share Sale Ag
