Attached files
Exhibit 10.17
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into as of August 9,
2011 by and between:
X-CHANGE CORPORATION ("BUYER"), A NEVADA CORPORATION.
AND
OLD WEST ENTERTAINMENT CORP ("SELLER"), A NEVADA CORPORATION.
RECITALS
A. Seller desires to sell, assign, transfer and convey to the Buyer all of
the Seller's rights, titles and interest in and to its NON Operating Music and
Entertainment Business (the "Assets").
B. Subject to the terms and conditions of this Agreement, the Seller agrees
to sell to the Buyer and the Buyer agrees to purchase from the Seller, the
Seller's Assets with all liabilities or obligations or encumbrances attached to
the Seller's Assets.
C. Management Consulting Agreements between the Buyer and Arthur Molina Jr.
("Frost") and the Buyer and Bogat Family Trust are essential parts of this
Agreement.
D. Exhibit A to be provided according to the Sellers Assets as listed below
("Assets"):
a. Website
b. Client Base
c. All Capital Assets
d. All Hardware and Software
e. Intellectual Property
f. Internal Systems
g. All contracted artists, rights, properties, patents, trademarks, and
distribution rights and agreements pertaining to its Music and
Entertainment Business.
E. The Buyer shall assume all liabilities and obligations with respect to
the Seller's Assets. As listed on Exhibit B attached hereto:
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement, the following terms and variations on
them have the meanings specified in this Section 1:
"Assets" is defined as all tangible and intangible assets of the business
of the Seller at Closing and as represented in Exhibit A of this Agreement,
excluding undisclosed liabilities.
"Buyer" is defined in the first paragraph of this Agreement.
"Buyer Shares" means one million (1,000,000) newly issued Rule 144
restricted common shares of Buyer common stock, par value $0.001 per share.
"Closing" means the consummation and completion of the purchase and sale of
the Shares.
"Closing Date" means the date on which the Closing actually takes place
that shall occur on or before August 31, 2011.
"Consent" means any approval, consent, ratification, waiver or other
authorization.
"Consulting Shares" means Ten million (10,000,000) issued Rule 144
restricted common shares of Buyer common stock, par value $0.001 per share.
"Contemplated Transactions" means all of the transactions to be carried out
in accordance with this Agreement, including the purchase and sale of the
Shares, the performance by the parties of their other obligations under this
Agreement.
"Contract" means any contract, agreement, commitment, understanding, lease,
license, franchise, warranty, guaranty, mortgage, note, bond or other instrument
or consensual obligation (whether written or oral and whether express or
implied) that is legally binding.
"Contravene" -- an act or omission would "Contravene" something if, as the
context requires:
(a) the act or omission would conflict with it, violate it, result in a
breach or violation of or failure to comply with it, or constitute a default
under it;
(b) the act or omission would give any Governmental Body or other Person
the right to challenge, revoke, withdraw, suspend, cancel, terminate or modify
it, to exercise any remedy or obtain any relief under it, or to declare a
default or accelerate the maturity of any obligation under it; or
(c) the act or omission would result in the creation of an Encumbrance on
the Assets.
"Encumbrance" means any charge, claim, mortgage, servitude, easement, right
of way, community or other marital property interest, covenant, equitable
interest, license, lease or other possessory interest, lien, option, pledge,
security interest, preference, priority, right of first refusal or similar
restriction.
"Financial Statements" is defined in Section 3.4.
"GAAP" means generally accepted accounting principles for financial
reporting in the United States.
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"Governing Document" means any charter, Sections, bylaws, certificate,
statement, statutes or similar document adopted, filed or registered in
connection with the creation, formation or organization of an entity, and any
Contract among all equityholders, partners or members of an entity.
"Governmental Authorization" means any Consent, license, permit or
registration issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Law.
"Governmental Body" means any (a) nation, region, state, county, city,
town, village, district or other jurisdiction, (b) federal, state, local,
municipal, foreign or other government, (c) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department
or other entity and any court or other tribunal), (d) multinational
organization, (e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature, or (f) official of any of the foregoing.
"Knowledge" means, with respect to Seller, the actual knowledge after
reasonable investigation of Seller or of its officers or senior managerial
employees.
"Law" means any constitution, law, statute, treaty, rule, regulation,
ordinance, code, binding case law, principle of common law or notice of any
Governmental Body.
"Liabilities" includes liabilities or obligations of any nature, whether
known or unknown, whether absolute, accrued, contingent, choate, inchoate or
otherwise, whether due or to become due, and whether or not required to be
reflected on a financial statement prepared in accordance with GAAP.
"Name and Brand" shall mean the Seller's name, logo, brand, image and other
commercial or marketing materials that identify and establish identity for the
company.
"Order" means any order, injunction, judgment, decree, ruling, assessment
or arbitration award of any Governmental Body or arbitrator and any Contract
with any Governmental Body pertaining to compliance with Law.
"Ordinary Course of Business" refers to actions taken in the Seller's
normal operation, consistent with its past practice and having no material
adverse effect on the financial or other condition, results of operations,
assets, liabilities, equity, business or prospects of the Assets.
"Person" refers to an individual or an entity, including a corporation,
share company, limited liability company, partnership, trust, association,
Governmental Body or any other body with legal personality separate from its
equityholders or members.
"Proceeding" means any action, arbitration, audit, examination,
investigation, hearing, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal, and
whether public or private) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental Body or arbitrator.
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"Purchase Price" is defined in Section 2.2.
"Securities Act" means the Securities Act of 1933.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
"Seller Release" is defined in Section 2.4(a)(ii).
"Seller" is defined in the first paragraph of this Agreement.
"Seller's Disclosure Schedule" means the disclosure schedule delivered
pursuant to Section 3 by Seller to Buyer concurrently with the execution of the
Agreement.
"Shares" is defined as all issued and outstanding common or preferred
shares of the Seller.
ARTICLE 2
SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES
Upon the terms and subject to the conditions set forth in this Agreement,
at the Closing, Seller will sell and transfer the Shares to Buyer, and Buyer
will purchase and acquire the Shares from Seller.
2.2 PURCHASE PRICE AND NON-DILUTION
(a) The parties agree that on or prior to the Closing Date, the Buyer shall
pay the Sellers and or its assigns the amount of one million (1,000,000) Buyer
Shares (the "Purchase Price") in the Buyer's company.
2.3 CLOSING
The Closing will take place at the offices of Seller, at 10:00 a.m. (local
time) on the date that is two business days following the satisfaction or waiver
of each of the conditions set forth in Sections 5 and 6, The Closing shall be no
later than 2 days after the execution of this document.
2.4 CLOSING DELIVERIES
At the Closing:
(a) Seller will deliver to Buyer:
(i) Bill of Sale duly endorsed (or accompanied by duly executed Power
of Attorney);
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(ii) a release in the form of Exhibit 2.4(a)(ii) executed by Seller
(the "Seller Release");
(iii) a certificate executed by Seller as to the accuracy of Seller's
representations and warranties as of the date of this Agreement and as of the
Closing in accordance with Section 6.1 and as to their compliance with and
performance of its covenants and obligations to be performed or complied on or
before the Closing Date in accordance with Section 6.2.
(iv) Seller grants Buyer a first right of refusal to purchase the
Assets for the same cash price that it may receive from any third party.
(b) Buyer will deliver:
(i) Stock certificates representing the Buyer Shares;
(ii) a certificate executed by the President of Buyer as to the
accuracy of Buyer's representations and warranties as of the date of this
Agreement and as of the Closing in accordance with Section 7.1 and as to its
compliance with and performance of its covenants and obligations to be performed
or complied with on or before the Closing Date in accordance with Section 7.2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
3.1 ORGANIZATION AND GOOD STANDING
The Assets are those described in Exhibit A attached hereto.
ENFORCEABILITY; NO CONFLICT
(a) Seller has the absolute and unrestricted right, power, authority and
capacity to execute and deliver this Agreement and to perform their obligations
under this Agreement. Assuming due authorization, execution and delivery of this
Agreement by Buyer, this Agreement constitutes the legal, valid and binding
obligation of Seller and the Company, enforceable against Seller and the Company
in accordance with its terms.
(b) Seller and the Company are not and will not be required to give any
notice to any Person or obtain any Consent or Governmental Authorization in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will
directly or indirectly (with or without notice or lapse of time) (i) Contravene
any provision of the Governing Documents of the Assets, (ii) Contravene any
Assets Contract, Governmental Authorization, Law or Order to which Assets or
Seller, or any of the assets owned or used by the Assets, may be subject, or
(iii) result in the imposition or creation of any Encumbrance upon or with
respect to any of the assets owned or used by the Assets.
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3.2 CAPITALIZATION AND OWNERSHIP
3.3 SELLER IS THE REGISTERED OWNER OF THE "ASSETS".
3.4 FINANCIAL STATEMENTS
There will be no liabilities owed to Seller or Seller's family.
3.5 NO UNDISCLOSED LIABILITIES
The Assets have no undisclosed Liabilities.
3.6 CONTRACTS; NO DEFAULTS
(a) Section 3.6 of Seller's Disclosure Schedule contains an accurate and
complete list of:
(i) each Seller Contract that involves performance of services or
delivery of goods or materials by the Seller of an amount or value in excess of
$10,000;
(ii) each Seller Contract that involves performance of services for or
delivery of goods or materials to the Seller of an amount or value in excess of
$10,000; and
(iii) each Seller Contract that was not entered into in the Ordinary
Course of Business and that involves the expenditure or receipt by the Seller of
an amount or value in excess of $1,000.
3.7 LEGAL PROCEEDINGS; ORDERS
(b) There exists no pending Proceedings (i) by or against the Seller or
that otherwise relate to or may affect the business of, or any of the assets
owned or used by, the Seller or (ii) that challenge, or that may have the effect
of preventing, delaying, making illegal or otherwise interfering with, any of
the Contemplated Transactions. To Seller's Knowledge, no other such Proceeding
has been threatened, and no event has occurred or circumstance exists that may
give rise to or serve as a basis for the commencement of any such Proceeding.
(c) There exists no pending Order to which the Seller, or any of the assets
owned or used by the Seller, is or has been subject.
3.8 SECURITIES LAW MATTERS
NONE
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3.9 BROKERS OR FINDERS
Seller has not incurred any Liability for brokerage or finders' fees or
agents' commissions or other similar payment in connection with the Contemplated
Transactions.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
4.1 ORGANIZATION
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization.
4.2 ENFORCEABILITY; NO CONFLICT
(a) Buyer has the absolute and unrestricted right, power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement, which actions have been duly authorized and approved by all necessary
corporate action of Buyer. Assuming the execution and delivery of this Agreement
by Seller, this Agreement constitutes the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms.
(b) Buyer is not and will not be required to obtain any Consent or
Governmental Authorization in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
(c) Neither the execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the Contemplated Transactions by Buyer
will give any Person the right to prevent, delay or otherwise interfere with any
of the Contemplated Transactions pursuant to (i) any provision of Buyer's
Governing Documents, (ii) any resolution adopted by the board of directors or
the stockholders of Buyer, (iii) any Law, Order or Governmental Authorization to
which Buyer may be subject or (iv) any Contract to which Buyer is a party or by
which Buyer may be bound.
4.3 BROKERS OR FINDERS
Buyer has not incurred any Liability for brokerage or finders' fees or
agents' commissions or other similar payment in connection with the Contemplated
Transactions.
ARTICLE 5
COVENANTS OF THE PARTIES BEFORE CLOSING
5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date and upon reasonable
advance notice from Buyer, Seller will, and will cause the Assets to, (a) afford
Buyer full and free access to Seller's personnel, properties, Contracts, books
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and records, and other documents and data, (b) furnish such Persons with copies
of all such Contracts, books and records, and other documents and data as Buyer
may reasonably request, and (c) furnish such Persons with such additional
financial, operating and other data and information as Buyer may reasonably
request.
5.2 OPERATION OF THE BUSINESS OF THE SELLER
Between the date of this Agreement and the Closing Date, Seller will, and
will cause the Seller to, (a) conduct its business only in the Ordinary Course
of Business, (b) use their Best Efforts to preserve intact the current business
organization of the Seller, keep available the services of the current officers,
employees and agents of the Seller, and maintain relations and goodwill with
suppliers, customers, landlords, creditors, employees, agents and others having
business relationships with the Seller, (c) confer with Buyer concerning
operational matters of a material nature and (d) otherwise report periodically
to Buyer concerning the status of the business, operations and finances of the
Seller.
5.3 SHAREHOLDER APPROVAL
Buyer acknowledges that it does not require shareholder approval to
consummate this Agreement.
ARTICLE 6
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by Buyer, in whole or in part):
6.1 ACCURACY OF REPRESENTATIONS
All of Seller's representations and warranties in this Agreement
(considered both collectively and individually) must have been accurate in all
material respects as of the date of this Agreement, and must be accurate in all
material respects as of the Closing Date as if then made.
6.2 SELLERS' PERFORMANCE
All of the covenants and obligations that Seller is required to perform or
to comply with under this Agreement on or before the Closing Date (considered
both collectively and individually) must have been duly performed and complied
with in all material respects.
6.3 STOCKHOLDER APPROVAL
None Required
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ARTICLE 7
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by Seller, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement (considered
both collectively and individually) must have been accurate in all material
respects as of the date of this Agreement and must be accurate in all material
respects as of the Closing Date as if then made.
7.2 BUYER'S PERFORMANCE
The Buyer agrees to contract Seller personnel in accordance with this
Agreement as follows:
(a) Arturo Molina Jr. ("Frost") shall immediately upon Closing be appointed
to serve on the Board of Directors and as President and CEO of the Buyer. As
consideration for this appointment the Buyer shall immediately issue five
million (5,000,000) Consulting Shares to Frost and or his assigns.
(b) Bogat Family Trust ("Bogat")shall immediately upon Closing be appointed
to serve as Managing Consultant of the Buyer to oversee all matters pertaining
to the general operation of the Music and Entertainment Business presented under
the Seller's Assets. As consideration for this appointment the Buyer shall
immediately issue five million (5,000,000) Consulting Shares to Bogat and or its
assigns.
(c) The Buyer represents that it has:
i. Seven Hundred Fifty million (750,000,000) authorized common shares
and Seventy Five million (75,000,000) authorized series A preferred shares;
ii. 17,358,791 issued and outstanding common shares;
iii. Nil issued and outstanding series A preferred shares.
iv. Outstanding warrants consisting of:
(i) 385,714 in warrants exercisable at $0.70 per share;
(ii) 2,500,000 exercisable at $1.00 per share;
(iii) 12,000 exercisable at $4.00 per share; and (iv) 32,000
exercisable at $1.40 per share.
v. Convertible debt consisting of $250,000 convertible at 80% of the
3-day daily average with an attached convertible warrant that is forced to
convert each time the principal is converted at ten times the amount of shares
at a price of $1.00 per share.
vi. $920,000 of debt convertible into common stock at .001 per share?
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(d) The Buyer represents that it will maintain and preserve the Name and
Brand of the Seller after the Closing of this Agreement and that all future
business and operations of the Assets shall be conducted under the same
All of the covenants and obligations that the Buyer is required to perform
or to comply with under this Agreement on or before the Closing Date (considered
both collectively and individually) must have been performed and complied with
in all material respects.
ARTICLE 8
TERMINATION
8.1 TERMINATION EVENTS
Subject to Section 8.2, this Agreement may, by notice given before or at
the Closing, be terminated:
(a) by mutual consent of Buyer and Seller;
(b) by Buyer if the satisfaction of any condition in Section 6 is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such condition;
(c) by Seller if the satisfaction of any condition in Section 7 is or
becomes impossible (other than through the failure of Seller to comply with its
obligations under this Agreement) and Seller has not waived such condition; and
(d) by either Buyer or Seller if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or before August 9, 2011, or
such later date as Buyer and Seller may agree upon.
8.2 EFFECT OF TERMINATION
Each party's right of termination under Section 8.1 is in addition to any
other rights it may have under this Agreement or otherwise, and the exercise of
such right of termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 8.1, all obligations of the parties under this
Agreement will terminate; provided, however, that if this Agreement is
terminated by a party because of the breach of the Agreement by another party or
because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of any other party's failure
to comply with its obligations under this Agreement, the terminating party's
right to pursue all legal remedies will survive such termination unimpaired.
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ARTICLE 9
INDEMNIFICATION; REMEDIES
9.1 SURVIVAL
All representations, warranties, covenants and obligations in this
Agreement, and any other certificate or document delivered pursuant to this
Agreement will survive the Closing and the consummation of the Contemplated
Transactions.
ARTICLE 10
GENERAL PROVISIONS
10.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of its Representatives.
10.2 FURTHER ACTIONS
Upon the request of any party to this Agreement, the other parties will (a)
furnish to the requesting party any additional information, (b) execute and
deliver, at their own expense, any other documents and (c) take any other
actions as the requesting party may reasonably require to more effectively carry
out the intent of this Agreement and the Contemplated Transactions.
10.3 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the parties with
respect to its subject matter a complete and exclusive statement of the terms of
the agreement between the parties with respect to its subject matter. This
Agreement may not be amended, supplemented or otherwise modified except in a
written document executed by the party against whose interest the modification
will operate.
10.4 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand, (b) sent by facsimile (with written confirmation of receipt),
or (c) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses and facsimile numbers set forth below:
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If to Buyer: X-Change Corporation
---------------------------------------
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Attention:
-----------------------------
If to Seller: Old West Entertainment Corp
---------------------------------------
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Attention: Mark Jordon. ("Seller")
10.5 CONFIDENTIALITY
Unless otherwise agreed to by Seller, the Buyer shall make no public
announcement or other disclosure in any way relating to this proposed
transaction to any person including, but not limited to, clients, service
contract holders and Buyer's employees and suppliers.
10.6 ENFORCEABILITY
Notwithstanding anything to the contrary set forth herein, the Seller's
obligation to consummate the transaction described herein shall be subject to
(i) negotiation of acceptable documentation, (ii) approval of the transaction by
its Board of Directors and (iii) satisfactory completion of its due diligence as
described herein.
10.7 WAIVER
Neither the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent permitted by
applicable law, no party will be deemed to have waived any of its rights or
privilege under this Agreement or the documents referred to in this Agreement
unless the waiver is in writing and no waiver given by a party will be
applicable except in the specific instance for which it is given.
10.8 MODIFICATION
This Agreement may not be amended except by written agreement executed by
the party to be charged with the amendment.
10.9 ASSIGNMENTS, SUCCESSORS, AND THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement without the
prior written consent of the other party, other than a wholly owned (direct or
indirect) Related Person that affirms in writing that it will be bound to the
representations, warranties, and obligations of Buyer under this Agreement as if
it signed the Agreement as the original signatory Buyer (with such factual
changes, such as jurisdiction of organization, as reasonably may be required).
Subject to the preceding sentence, this Agreement will apply to, be binding in
all respects upon, and inure to the benefit of the successors and permitted
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assigns of the parties. Nothing expressed or referred to in this Agreement will
be construed to give any Person other than the parties to this Agreement any
legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.
10.10 SEVERABILITY
If a court of competent jurisdiction holds any provision of this Agreement
invalid or unenforceable, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
10.11 SECTION HEADINGS; CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
10.12 GOVERNING LAW
This Agreement will be governed by and construed under the laws of
California without regard to conflicts of laws principles that would require the
application of any other law.
10.13 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date indicated in the first sentence of this Agreement.
X-CHANGE CORPORATION OLD WEST ENTERTAINMENT CORP
Per: /s/ Haviland Wright Per: /s/ Mark Jordan
------------------------------- ---------------------------------
Haviland Wright Mark Jordon ("Seller"), President
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EXHIBIT `A'
ASSETS
The business and operating assets of Old West Entertainment include, but are not
limited to, the following:
a. Website: www.oldwestent.com
b. Client Base
c. All Capital Assets
d. All Hardware and Software
e. Intellectual Property
f. Internal Systems
g. All contracted artists, rights, properties, patents, trademarks, and
distribution rights and agreements pertaining to its Music and
Entertainment Business.
