EXHIBIT 2.1
ASSET SALE AGREEMENT
This Asset Sale Agreement ("Agreement") is made and entered into as
of the 16th day of March, 2000, by and among Advanced Knowledge, Inc., a
Delaware corporation ("Seller"), Becor Internet, Inc., a Delaware corporation
("Purchaser"), and Buddy Young, an individual ("BY"), and is ratified and
approved by Soccer Magic Inc., an Ontario corporation ("Soccer Magic").
RECITALS
WHEREAS, Seller is a company engaged in the business of producing and
distributing workforce training videos (the "Business");
WHEREAS, Soccer Magic is a company engaged in the design, construction,
ownership and operation of indoor soccer facilities;
WHEREAS, Seller has entered into an Acquisition Agreement dated as of December
14, 1999 (the "Acquisition Agreement") with Soccer Magic, pursuant to which
Seller has agreed to acquire all of the outstanding common shares of Soccer
Magic (the "Soccer Magic Acquisition");
WHEREAS, after acquiring the common shares of Soccer Magic, Seller will be
controlled by the principals of Soccer Magic and intends, thereafter, to focu
exclusively on the business of Soccer Magic;
WHEREAS, Seller therefore wishes to sell, immediately after the Effective Time
(as that term is defined in the Acquisition Agreement) of the Soccer Magic
Acquisition, all of its assets, other than the common shares of Soccer Magic, as
they shall exist at the Effective Time (the "Assets");
WHEREAS, Seller wishes to sell the Assets to Purchase and Purchaser wishes to
purchase the Assets from Seller in exchange for Purchaser's assumption o all of
Seller's debts, liabilities and obligations, whether contingent, contractual or
otherwise, incurred or accrued before the Effective Time, and regardless of
whether or not such debts, liabilities and obligations are related to or concern
or arise out of the Business or the Assets (the "Liabilities");
WHEREAS, Purchaser is owned or controlled by BY;
WHEREAS, the parties desire to set forth in this Agreement the terms of the sale
and purchase of the Assets and the assumption of the Liabilities;
WHEREAS, the Assets to be sold include all rights to Seller's name and the
Internet web domain name "advancedknowledge.com," and the parties therefore wish
to clarify their respective rights and obligations with respect to the transfer
and use of such names.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1
1. TRANSFER, ASSIGNMENT AND ASSUMPTION.
1.1 Transfer and Assignment of Assets. Effective at the
Closing, Seller hereby grants, conveys, sells, transfers, assigns and delivers
to Purchaser all of its right, title and interest in, to and under all of the
Assets, including, but not limited to, the Assets referred to in Paragraphs
1.1.1 through 1.1.6 below. THE ASSETS ARE TRANSFERRED "AS IS," AND THE SELLER
MAKES NO WARRANTY AS TO THE SUITABILITY OF THE ASSETS FOR ANY PARTICULAR
PURPOSE.
1.1.1 Intellectual Property. All of those
trademarks, trade names, service marks, Internet domain names, patents, licenses
and copyrights listed in the Schedule of Trademarks, Patents and Copyrights
attached hereto as Exhibit A and incorporated herein by reference (the
"Intellectual Property");
1.1.2 Personal Property. All items of furniture,
fixtures, production equipment, computer equipment, hardware and other tangible
personal property listed on the Schedule of Personal Property attached hereto as
Exhibit B and incorporated herein by reference (the "Personal Property");
1.1.3 Equipment Leases. All of Seller's right,
title and interest as lessee in and to the properties leased to Seller under
those certain equipment leases listed on the Schedule of Equipment Leases
attached hereto as Exhibit C and incorporated herein by reference (the
"Equipment Leases");
1.1.4 Contracts, Accounts Receivable and
Inventory. All of Seller's contracts, accounts receivable and inventory relating
exclusively to the Business which are listed on the Schedule of Contracts
attached hereto as Exhibit D (the "Contracts");
1.1.5 All Other Assets. All of Seller's other
Assets described in the Schedule of Other Assets attached hereto as Exhibit E
and incorporated herein by reference, whether or not specifically referred to in
any of the preceding paragraphs of this Section 1.1.
1.2 Assumption of Liabilities. Effective at the Closing,
Purchaser hereby accepts the grant, conveyance, sale, transfer, assignment and
delivery of the Assets as provided in Section 1.1, and in exchange for Seller's
transfer of Assets, Purchaser hereby irrevocably and unconditionally assumes all
of Seller's Liabilities (including taxes), including, but not limited to, each
of the Liabilities described on the Schedule of Assumed Liabilities attached as
Exhibit F and incorporated herein by reference. Effective at the Closing, each
of BY and Purchaser hereby releases and forever discharges Seller from all
liabilities now or ever owed by Seller to BY or Purchaser, including, but not
limited to, all amounts of principal, interest and other charges payable by
Seller to BY under that certain Secured Promissory Note dated August 18, 1998,
as amended to date. Purchaser and BY shall each jointly and severally indemnify,
defend and hold harmless Seller and its officers, directors, representatives and
agents from and against, any and all loss, damage, or liability due to, arising
out of, or in any manner related to the Liabilities. Seller does not have in
effect:
2
1.2.1 any collective bargaining agreements; or
1.2.2 any employee benefit plan as defined in
ERISA.
1.3 The Closing. The closing (the "Closing") of the
transactions described in Sections 1.1 and 1.2 shall occur immediately after the
"Effective Time," as that term is defined in the Acquisition Agreement. The
Closing shall take place at such place or places as the parties may agree. At
the Closing, Seller shall deliver to Purchaser those Assets that are in the
possession or control of Seller.
2. No Further Conveyance Necessary. Except as otherwise required by
law, this Agreement shall effectively assign, transfer and convey all of the
interest in the Assets from Seller to Purchaser without any further documents of
conveyance, and this Agreement shall fully evidence the assumption of all of the
Assumed Liabilities by Purchaser without any further instrument of conveyance or
assumption.
3. Representations of Purchaser. Purchaser represents and warrants as
of the date hereof and at the Closing as follows:
3.1 Authority. Purchaser has full power, authority, and legal
right to purchase the Assets from Seller, and Purchaser's execution of this
Agreement does not require the consent of, or notice to, any party not
previously obtained or given.
3.2 Enforceability. This Agreement constitutes the legal and
binding obligation of Purchaser and is valid and enforceable against Purchaser
and Purchaser's successors and permitted assigns in accordance with its terms
except as enforcement may be limited by applicable bankruptcy, insolvency or
other similar laws affecting creditors' rights generally and except that the
remedies of specific performance, injunction and other forms of equitable relief
may be subject to equitable defenses and to the equitable discretion of the
court before which any proceeding therefor may be brought.
3.3 Acknowledgment of "As Is" Transfer. Purchaser is owned or
controlled by BY, who is currently an officer and director of Seller and is
familiar with the Assets and the Liabilities. Purchaser understands that the
Assets are being transferred to Purchaser pursuant to the terms of this
Agreement in "as is" condition. PURCHASER UNDERSTANDS AND ACKNOWLEDGES THAT
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES TO PURCHASER CONCERNING THE
SUITABILITY OF THE ASSETS FOR ANY PARTICULAR PURPOSE.
3.4 No Reliance on Seller's Advisers. Purchaser acknowledges
that Seller's legal, tax, accounting and other advisers do not represent
Purchaser with respect to this Agreement or the transactions contemplated by
this Agreement, and Purchaser has, if desired, obtained legal, tax, accounting
and other advice from Purchaser's own advisers.
3
4. Representations of BY. BY represents and warrants as of the
date hereof and at the Closing as follows: 4.1 Authority. BY's execution of this
Agreement does not require the consent of, or notice to, any party not
previously obtained or given.
4.2 Enforceability. This Agreement constitutes the legal and
binding obligation of BY and is valid and enforceable against BY and BY's
successors and permitted assigns in accordance with its terms except as
enforcement may be limited by applicable bankruptcy, insolvency or other similar
laws affecting creditors' rights generally and except that the remedies of
specific performance, injunction and other forms of equitable relief may be
subject to equitable defenses and to the equitable discretion of the court
before which any proceeding therefor may be brought.
4.3 No Reliance on Seller's Advisers. BY acknowledges that
Seller's legal, tax, accounting and other advisers do not represent BY with
respect to this Agreement or the transactions contemplated by this Agreement,
and BY has, if desired, obtained legal, tax, accounting and other advice from
BY's own advisers.
5. Access to Information. Purchaser and its legal, tax,
accounting and other personal advisers shall have full access during normal
business hours to all properties, books, accounts, records, contracts and
documents of or relating to the Business, Assets and Liabilities of Seller, and
Seller shall furnish to Purchaser and its advisers all information concerning
the Business, Assets and Liabilities that Purchaser reasonably requests in
connection with the transactions contemplated hereby.
6. Covenants of Seller.
6.1 Covenant Regarding Names and Domain Names. Seller agrees
that, after the Closing, Seller and every business or entity in which Seller has
an ownership interest or financial stake shall not use or register for use in
commerce any form of the name "Advanced Knowledge," including any trade name,
trademark, service mark or Internet domain name that is identical or similar to
the name "Advanced Knowledge"; provided, however, that Seller may continue to
use the corporate name "Advanced Knowledge, Inc." for non-commercial, general
corporate purposes until such time as Seller is able to change its corporate
name. Seller agrees to use its best efforts to promptly change Seller's name to
a name that is consistent with the business done by Soccer Magic.
6.2 Covenant to Maintain Existing Transfer Agent. For two
years after the Effective Time, Seller covenants and agrees not to change the
transfer agent for its common stock. Currently, the transfer agent for Seller's
common stock is U.S. Stock Transfer Company, 1745 Gardena Avenue, Glendale,
California.
6.3 Covenant to Maintain Existing Equity Capitalization. For
two years after the Effective Time, Seller covenants and agrees not to engage in
any recapitalization, reorganization, or reverse split or consolidation of
shares. The foregoing sentence shall not, however, preclude Seller from
authorizing and issuing additional shares of common stock.
4
6.4 Covenant to Limit Number of Shares Issued. During the
period after the Effective Date and prior to the Private Placement Deadline (as
defined in the Acquisition Agreement), Seller covenants and agrees not to issue
more than a total of 6,000,000 shares of its common stock or other securities
which may be converted into or exercised for the purchase of shares of common
stock. This total of 6,000,000 shares includes 2,000,000 shares which Seller is
required to issue pursuant to existing consulting agreements.
6.5 Covenant to Facilitate Rule 144 Sales. Seller agrees that
it will use its best efforts to facilitate in a timely manner, and will not
unreasonably prevent, proposed sales by Purchaser or any other person, pursuant
to Rule 144 under the Securities Act of 1933, of those shares of Seller's common
stock which were issued in connection with the August 26, 1998 merger of
Advanced Knowledge, Inc. with and into DMA-Radtech, Inc.
7. Covenants of Purchaser and BY. Purchaser and BY each jointly and
severally covenant and agree to pay to Miller & Holguin all legal fees and costs
for services rendered as counsel to Seller in connection with the transactions
contemplated by this Agreement and the Acquisition Agreement and which are not
paid by Soccer Magic at the closing of the Soccer Magic Acquisition.
8. Indemnification. Seller agrees to indemnify and hold harmless
Purchaser and BY, and Purchaser and BY each jointly and severally agree to
indemnify and hold Seller harmless, as follows:
8.1 Seller shall indemnify, defend and hold harmless
Purchaser and BY from any and all loss, cost, expense and liability (including
attorneys' fees) incurred in connection with any claim or asserted claim which
may be made against Purchaser or BY and which arises directly or indirectly from
any breach of this Agreement by Seller.
8.2 Purhaser shall indemnify, defend and hold harmless
Seller from any and all loss, cost, expense and liability (including attorneys'
fees) incurred in connection with any claim or asserted claim which may be made
against Seller and which arises directly or indirectly from any breach of this
Agreement by Purchaser or in respect of the Liabilities.
8.3 BY shall indemnify, defend and hold harmless Seller
from any and all loss, cost, expense and liability (including attorneys' fees)
incurred in connection with any claim or asserted claim which may be made
against Seller and which arises directly or indirectly from any breach of this
Agreement by BY or in respect of the Liabilities.
8.4 Promptly after receipt of notice of the commencement
of any action in respect of which indemnity may he sought against either party
under this Agreement, the indemnified party will notify the other party in
writing of the commencement thereof and the other party shall, subject to the
provisions stated below, assume the defense of such action (including the
employment of counsel who shall be counsel reasonably satisfactory to the
indemnified party and shall not be counsel to the other party), and the payment
of expenses insofar as such action shall relate to any alleged liability in
respect of which indemnity as available. The indemnified party shall have the
5
right to employ separate counsel in any action and to participate in the defense
thereof, but the fees and expenses of its counsel shall not be at the expense of
the other party unless the employment of that counsel has been specifically
authorized by the other party.
9. Miscellaneous.
9.1 Inurement. This Agreement shall be binding upon each
of the parties, and it shall benefit, respectively, each of the parties and
their respective successors and permitted assigns. There are no third party
beneficiaries to this Agreement.
9.2 Assignment. No assignment or transfer of any
interest, right or obligation of any party hereunder shall be allowed without
the prior written consent of each of the parties to this Agreement.
9.3 Amendments. This Agreement may not he amended,
supplemented or otherwise modified except in a writing signed by or on behalf of
each party hereto.
9.4 Further Assurances. Each of the parties hereto agrees
that, from and after the date hereof, upon the reasonable request of the other
party hereto and without further consideration, such party shall execute and
deliver to such other party such documents and shall take such other actions as
such other party may reasonably request in order to carry out the purposes and
intentions of this Agreement, including, without limitation, the vesting in
Purchaser of the title to the Assets in accordance with the terms of this
Agreement and the correction of any errors and defects.
9.5 Notice. All notices, requests, demands, directions
and other communications ("Notices") required or permitted in this Agreement
shall be in writing and shall be mailed or delivered personally or sent by
telecopier or facsimile to the applicable party at the address of such party set
forth below. When mailed, each such Notice shall be sent by prepaid first class
certified mail, return receipt requested, and shall be effective on the third
business day after it has been deposited in the mail. When delivered personally,
each such Notice shall be effective when delivered to the address for the
respective party set forth below. When sent by telecopier or facsimile, each
such Notice shall be effective on the first business day on which or after which
it is sent to the number set forth below. Each such Notice shall be addressed to
the party to be notified as shown below:
Purchaser: Becor Internet, Inc.
c/o Buddy Young
17337 Ventura Boulevard, Suite 224
Encino, California 91316
Facsimile No.: (818) 784-8660
6
Seller: Advanced Knowledge, Inc.
Attention: Secretary
17337 Ventura Boulevard, Suite 224 (Before Closing)
Encino, California 91316
Facsimile No.: (818) 784-8660
10 Planchet Road, Unit #21 (After Closing)
Concord, Ontario L4K 2C8
Facsimile No: (905) 738-8804
BY: Buddy Young
17337 Ventura Boulevard, Suite 224
Encino, California 91316
Facsimile No.: (818) 784-8660
9.6 Survival. The representations, warranties and
covenants of each party shall survive for two years after the execution of this
Agreement and the performance of each respective party's obligations under this
Agreement.
9.7 Headings. The headings to this Agreement are for
convenience only and shall not be considered in the interpretation of this
Agreement.
9.8 Severability. In the event that any provision of this
Agreement shall be held to be invalid, illegal or unenforceable, in whole or in
part, such invalidity, illegality or unenforceability shall not in any way
affect the validity of the other provisions of this Agreement, and such other
provisions shall remain in full force and affect.
9.9 Counterparts. This Agreement may be executed in one
or more counterparts, all of which taken together shall constitute a single
instrument.
9.10 Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof.
9.11 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SELLER:
ADVANCED KNOWLEDGE, INC., a Delaware corporation
By: /s/ Stephen Albright
---------------------------------------------
L. Stephen Albright, Secretary and Director
PURCHASER:
BECOR INTERNET, INC., a Delaware corporation
By: /s/ Buddy Young
----------------------------------------------
Buddy Young, President and Chief Executive Officer
BY:
/s/ Buddy Young
--------------------------------------------------
Buddy Young, an individual
RATIFIED AND APPROVED:
SOCCER MAGIC:
SOCCER MAGIC INC., an Ontario corporation
By: /s/ Manny Gross
------------------------------------
Manny Gross, Chief Executive Officer
8