Asset Purchase Agreement - Helium LLC and Quokka Sports Inc.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this 1st day of June, 2000, by and between HELIUM, LLC, a California
limited liability company ("Seller") and QUOKKA SPORTS, INC., a Delaware
corporation ("Purchaser").
RECITALS
WHEREAS, Seller desires to sell and transfer certain of its software
and related assets to Purchaser;
WHEREAS, Purchaser desires to purchase, acquire and obtain such assets
from Seller;
WHEREAS, contemporaneous with this Agreement, Purchaser and Seller
shall terminate that certain Services Agreement dated September 18, 1998 by and
between the parties to this Agreement (the "Services Agreement") by entering
into a termination agreement, a form of which is attached hereto as Exhibit A
(the "Termination Agreement");
WHEREAS, contemporaneous with the execution of this Agreement,
Purchaser is entering into employment arrangements with Matthew Brocchini
("Brocchini"), Julie Spiegler ("Spiegler"), Gever Tulley ("Tulley"), Geetha
Reddy ("Reddy") and Robert Jellinghaus ("Jellinghaus" and, together with
Brocchini, Spiegler, Tulley and Reddy, the "New Employees"), in the forms
attached hereto as Exhibits B-1, B-2, B-3, B-4 and B-5, respectively (the
"Employment Offers"); and
WHEREAS, contemporaneous with the execution of this Agreement, each of
the New Employees shall execute and deliver to the Purchaser a noncompetition
agreement (each, a "Noncompetition Agreement") and a proprietary information and
inventions agreement (each, a "Proprietary Information and Inventions
Agreement"), forms of which are attached hereto as Exhibits C and D,
respectively.
NOW, THEREFORE, the parties hereto hereby agree as follows:
AGREEMENT
1. SALE OF ASSETS.
1.1 SALE AND PURCHASE OF ASSETS. Seller hereby sells, assigns, grants
and transfers all of its right, title and interest in, and Purchaser hereby
purchases, acquires and obtains all such right, title and interest in, all
tangible and intangible assets solely associated with or solely relating to the
software program known as "Expando," an HTML/Perl macro/templating language (the
"Expando Program"), including, but not limited to, the following: all notes,
drawings, designs, procedures, discoveries and inventions, including without
limitation all copyrights (including any renewal rights), trade secrets,
trademarks, service marks, trade names, brand names, business identifiers,
logos, trade dress and slogans, in word, stylized or design formats, including
all claims for infringement, and all registrations thereof and applications
therefor and any other intellectual property rights solely associated with or
solely related to the
1.
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EXPANDO PROGRAM (THE "ASSETS"). To the extent Seller cannot assign any of the
Assets, Seller hereby waives and agrees never to assert any rights that Seller
may have with respect to the Assets against Purchaser or any of Purchaser's
licensees. If any of the Assets cannot be assigned to Purchaser or waived by
Seller, Seller unconditionally and irrevocably grants to Purchaser, an
exclusive, irrevocable, perpetual, worldwide, fully-paid and royalty-free
license, with rights to sublicense through multiple levels of sublicensees, to
use, reproduce, create derivative works of, distribute, publicly perform and
publicly display the Assets by all means now known or later developed.
1.2 EXCLUDED ASSETS. Seller shall retain ownership rights and all
other rights in and to all of its other assets not specified in Section 1.1
above (the "Excluded Assets"), including without limitation the Seller Options
(as defined in Section 1.3(c)), Seller's accounts receivable, the HELIUM
trademark and the helium.com domain name.
1.3 CONSIDERATION FOR SALE OF ASSETS.
(a) CASH PURCHASE PRICE. As partial consideration for the sale of
the Assets to Purchaser, Purchaser shall pay to Seller Three Hundred Thousand
Dollars ($300,000) in cash payable in four payments pursuant to the following
schedule:
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Payment Date Amount Payable
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July 1, 2000 $75,000
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October 1, 2000 $75,000
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January 1, 2000 $75,000
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April 1, 2001 $75,000
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(b) (b) STOCK ISSUANCE. As additional consideration for the sale
of the Assets to Purchaser, Purchaser shall issue to Seller One-Hundred
Ninety-Thousand, Seven Hundred and Sixty Four (190,764) shares (the "Shares") of
Purchaser's common stock, par value $0.0001 (the "Purchaser Common Stock"). The
certificate(s) representing the Shares shall be delivered to Seller within five
(5) business days after execution of this Agreement.
(c) ACCELERATION OF EXERCISABILITY OF OPTIONS. As additional
consideration for the sale of the Assets to Purchaser, at the Closing the
exercisability of those certain options previously granted to Seller to purchase
a total of 195,000 shares of the Purchaser Common Stock (the "Seller Options")
shall be accelerated and shall be fully exercisable. The Seller Options are
those options to purchase shares of the Purchaser Common Stock as represented by
four (4) Amended and Restated Non-Plan Nonstatutory Stock Options effective
September 18, 1998, each granting Seller the right to purchase 45,000 shares of
Purchaser Common Stock, and four (4) Amended and Restated Non-Plan Nonstatutory
Stock Options effective April 2, 1999, each granting Seller the right to
purchase 3,750 shares of Purchaser Common Stock. With respect to the shares
underlying the Seller Options, Seller shall execute a lock-up agreement in the
form attached hereto as Exhibit E (the "Lock-Up Agreement").
2.
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1.4 CASH PURCHASE PRICE OFFSET. In the event any of the Assets are
subject to any claims or liabilities arising from events occurring prior to the
Closing Date (as defined in Section 1.5) that are not paid by Seller according
to Seller's obligations under Section 4.2, Purchaser shall have the right to
offset any amounts related to such claims or liabilities, to the extent arising
prior to the Closing Date, against any amounts owed by Purchaser to Seller
pursuant to Section 1.3(a), in accordance with the provisions of this paragraph.
If Purchaser becomes aware of any claims or liabilities which Purchaser in good
faith reasonably believes arose from events occurring prior to the Closing Date,
Purchaser shall provide detailed written notice to Seller describing such claim
or liability and shall propose an amount of offset ("Proposed Offset") against
the amounts owed by Purchaser to Seller pursuant to Section 1.3(a). Seller shall
have the right to object in writing to the Proposed Offset within thirty (30)
days of the receipt of such notice. In the event Seller timely objects to the
Proposed Offset, the parties agree to negotiate in good faith for a period of
thirty (30) days. If the parties fail to reach agreement on the Proposed Offset
within such thirty (30) day period, the matter may be submitted to arbitration
by either party, which arbitration will be held pursuant to the then-current
rules of the American Arbitration Association.
1.5 CLOSING. The execution and delivery of the Lock-Up Agreement, the
Termination Agreement, and each of the Employment Offers, Noncompetition
Agreements and Proprietary Information and Inventions Agreements (collectively,
the "Related Agreements") and the closing of the sale and purchase of the Assets
under this Agreement (the "Closing") shall take place on the date hereof, at the
offices of the Purchaser, or at such other time or place as the Seller and
Purchaser may mutually agree (such date is hereinafter referred to as the
"Closing Date").
2. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Purchaser as follows:
2.1 ORGANIZATION; POWER AND AUTHORITY. Seller is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of California. Seller has the limited liability company power and
authority to enter into and perform its obligations under this Agreement. All
actions on Seller's part required for the lawful execution and delivery of this
Agreement have been taken. Upon execution and delivery of this Agreement, the
terms of this Agreement will be enforceable, valid and binding obligations of
Seller, except as limited by (i) the application of laws relating to bankruptcy,
insolvency and the relief of debtors and (ii) general principles of equity.
2.2 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement by Seller (i) will not result in the breach of the
terms of, or result in a termination or modification of, or constitute a default
under, or conflict with, any agreement or other instrument by which Seller is
bound or any judgment, decree, order or award of any court, governmental body or
arbitrator or any applicable law, rule or regulation, and (ii) does not require
the consent of any other person or entity.
2.3 ASSETS. Seller holds good and valid title to each of the Assets,
and transfers such title to Purchaser, free and clear of all liens, mortgages,
encumbrances and claims of every kind, nature or character. Prior to the Closing
Date, Seller has taken all measures and precautions
3.
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reasonably necessary to protect and maintain the confidentiality and secrecy of
the Assets. The Assets (i) do not infringe or conflict with any intellectual
property right of any third party and (ii) have not been licensed to any third
party on an exclusive basis.
2.4 INVESTMENT REPRESENTATIONS. Seller understands that the Shares
have not been registered under the Securities Act. Seller also understands that
the Securities are being offered and sold pursuant to an exemption from
registration contained in the Securities Act of 1933, as amended (the
"Securities Act") based in part upon Seller's representations contained in the
Agreement.
(a) SELLER BEARS ECONOMIC RISK. Seller has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Purchaser so that it is capable of evaluating the
merits and risks of its investment in the Purchaser and has the capacity to
protect its own interests. Seller must bear the economic risk of this investment
indefinitely unless the Shares are registered pursuant to the Securities Act, or
an exemption from registration thereunder is available. Seller understands that
the Purchaser has no present intention of registering the Shares. Seller also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Seller to transfer all or any portion of the Shares
under the circumstances, in the amounts or at the times Seller might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Seller is acquiring the Shares for
Seller's own account for investment only, and not with a view towards their
distribution.
(c) PURCHASER CAN PROTECT ITS INTEREST. Seller represents that by
reason of its management's business and financial experience, Seller has the
capacity to protect its own interests in connection with the transactions
contemplated in this Agreement. Further, Seller is aware of no publication of
any advertisement in connection with the transactions contemplated in this
Agreement.
(d) [Deleted.]
(e) PURCHASER INFORMATION. Seller has had an opportunity to discuss
the Purchaser's business, management and financial affairs with directors,
officers and management of the Purchaser and has had the opportunity to review
the Purchaser's publicly filed documents, filed pursuant to the Securities Act
or the Securities Exchange Act of 1934, or amended (the "Exchange Act"). Seller
has also had the opportunity to ask questions of and receive answers from the
Purchaser and its management regarding the terms and conditions of this
investment.
(f) RULE 144. Seller acknowledges and agrees that the Shares must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Seller has been advised
or is aware of the provisions of Rule 144 promulgated under the Securities Act
as in effect from time to time, which permits limited resale of shares purchased
in a private placement subject to the satisfaction of certain conditions,
including, among other things: the availability of certain current public
information about the Purchaser, the resale occurring following the required
holding period under Rule 144 and the number of shares being sold during any
three-month period not exceeding specified limitations.
4.
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Purchaser agrees that it will cooperate in any way reasonably requested by
Seller in ensuring and documenting Seller's compliance with Rule 144 in the
resale of the Shares by Seller.
2.5 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by the Seller in this Section 2, contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
3.1 ORGANIZATION; Power and Authority. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Purchaser has the corporate power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement by Purchaser has been duly authorized by all
necessary corporate action on the part of Purchaser. The obligations of
Purchaser set forth in this Agreement constitute valid and binding obligations
of Purchaser, enforceable in accordance with their terms and conditions, except
as limited by (i) the application of laws relating to bankruptcy, insolvency and
the relief of debtors and (ii) general principles of equity.
3.2 VALID ISSUANCE. The Shares to be issued by Purchaser to Seller
pursuant to this Agreement will, when issued in accordance with the provisions
of this Agreement, be validly issued, fully paid and nonassessable. When and as
delivered to the Seller, the certificates representing the Shares will vest
title to the Shares in Seller, free and clear of any lien or security interest
of any character.
3.2 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement by Purchaser (i) will not result in the breach of
the terms of, or result in a termination or modification of, or constitute a
default under, or conflict with, any agreement or other instrument by which
Purchaser is bound or any judgment, decree, order or award of any court,
governmental body or arbitrator or any applicable law, rule or regulation, and
(ii) does not require the consent of any other person or entity.
3.4 SECURITIES DOCUMENTS. Purchaser has filed all required documents
(the "Securities Documents") with the SEC and all other federal and state
securities regulatory authorities (the "Securities Authorities"). As of their
respective dates, the Securities Documents complied in all material respects
with the requirements of the Securities Authorities and none of the Securities
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
4. COVENANTS.
The parties hereby covenant as follows:
4.1 ACCESS TO RECORDS. Seller agrees to provide Purchaser with access
to all records pertaining to the Assets, during normal business hours upon
reasonable notice, and to permit Purchaser to make copies thereof.
5.
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4.2 LIABILITIES. Seller will be responsible for all liabilities
associated with the Excluded Assets, including without limitation outstanding
debt, liabilities related to legal claims and office lease obligations. Further,
Seller will be responsible for all liabilities associated with the Assets,
including without limitation outstanding debt, liabilities related to legal
claims and office lease obligations, to the extent arising from events occurring
prior to the Closing Date and will promptly pay all such amounts when due.
4.3 PAYMENT OF INVOICES. Purchaser shall pay to Seller within thirty
(30) days after the Closing Date all amounts owed under any outstanding invoices
issued by Seller to Purchaser for work performed under the Services Agreement.
As of the Closing Date, the amount owed for work performed under the Services
Agreement is $161,517.15. The parties acknowledge and agree that,
notwithstanding anything to the contrary herein, the IOC Maintenance Agreement
between Seller and Purchaser will continue in full force and effect after
Closing, and that any current or future invoices under the IOC Maintenance
Agreement will be paid according to its terms.
4.3 COOPERATION. Upon and after the execution of this Agreement,
Seller shall cooperate with Purchaser in an orderly transfer of the Assets,
including, without limitation, promptly executing any and all additional
instruments reasonably requested by Purchaser to effect or memorialize the
assignment, sale and transfer of the Assets. Contemporaneous with the Closing,
Seller will execute and deliver an Assignment of Trademark and an Assignment of
Copyright in the forms of Exhibits F and G for each registered trademark and
copyright which is among the Assets, and a Bill of Sale, in the form of Exhibit
H.
5. MISCELLANEOUS.
5.1 ENTIRE AGREEMENT. This Agreement is the entire agreement between
the parties and supersedes any previous agreements, whether oral or written,
with respect to the subject matter hereof and shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.
5.2 ASSIGNMENT. No party may assign or otherwise transfer this
Agreement or any of its rights or obligations hereunder to any person or entity
without the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. Subject to the foregoing, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
successors and assigns.
5.3 EXPENSES. Each party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
this Agreement and the Related Agreements and the consummation of the
transactions contemplated herein and therein, including costs and expenses
related to legal fees, accounting and tax consultants, sales, use and other
taxes, filing fees and termination fees.
5.4 NOTICE. All notices required under this Agreement shall be in
writing, shall be addressed to the parties at the addresses set forth on the
signature page hereof, and shall be deemed delivered (i) upon delivery when
delivered by hand or by overnight service, (ii) upon
6.
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receipt if delivered by fax and (iii) five days after deposit in the US mail, if
sent by first class mail, postage prepaid.
5.5 CONFIDENTIALITY. On and at all times after the Closing Date, (a)
each party shall keep confidential and not use or disclose to any other person,
any non-public document or other non-public information in such party's
possession that relates to the business of the other party and (b) each party
shall keep the terms of this Agreement, the Related Agreements and the
transactions contemplated herein and therein strictly confidential; provided
however, that either party may disclose such information if required to be
disclosed by order of a court or as a matter of law, including without
limitation any voluntary filing under the Securities Act or the Exchange Act.
Notwithstanding the foregoing, Purchaser may, at its option, make a public
statement regarding the hiring of the New Employees at any time after the
Closing Date.
5.6 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California as such laws are applied to agreements
between California residents entered into and performed entirely in California.
5.7 TITLES AND HEADINGS. The titles and headings in this Agreement are
for convenience of reference only and are not to be considered in construing
this Agreement.
5.8 COUNTERPARTS. This Agreement may be executed in counterparts,
whether by original photocopy or facsimile, each set of which shall be deemed an
original.
5.9 ATTORNEYS' FEES. In the event of any litigation or arbitration
arising out of or relating to this Agreement or the transactions consummated
hereby, the prevailing party shall be entitled to an award of attorneys' fees
and costs.
7.
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
QUOKKA SPORTS, INC.
By: /s/ Al Ramadan
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Name/Title: President & CEO
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Address: 525 Brannan Street,
Ground Floor
Attn. General Counsel
San Francisco, CA 94107
Fax: (415) 908-4069
HELIUM, LLC
By: /s/ Matt Brocchini
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Name/Title: Manager
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Address: 199 Mississippi Street
San Francisco, CA 94107
Fax: (415) 865-3799
8.
<PAGE> 9
EXHIBIT A
TERMINATION AGREEMENT
<PAGE> 10
EXHIBIT B-/1
BROCCHINI EMPLOYMENT OFFER
<PAGE> 11
EXHIBIT B-2
SPIEGLER EMPLOYMENT OFFER
<PAGE> 12
EXHIBIT B-3
TULLEY EMPLOYMENT OFFER
<PAGE> 13
EXHIBIT B-4
REDDY EMPLOYMENT OFFER
<PAGE> 14
EXHIBIT B-5
JELLINGHAUS EMPLOYMENT OFFER
<PAGE> 15
EXHIBIT C
NONCOMPETITION AGREEMENT
<PAGE> 16
EXHIBIT D
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
<PAGE> 17
EXHIBIT E
LOCK-UP AGREEMENT
<PAGE> 18
EXHIBIT F
ASSIGNMENT OF TRADEMARKS
WHEREAS, HELIUM, LLC, a California limited liability company
("Seller"), has adopted, used and is using the trademarks listed on Schedule F
attached hereto; and
WHEREAS, QUOKKA SPORTS, INC., a Delaware corporation ("Purchaser"),
desires to acquire said trademarks and any applications and regulations
therefor;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, Seller hereby assigns to Purchaser all of its
right, title and interest worldwide in and to the trademarks listed on Schedule
F together with the goodwill of the business symbolized by said trademarks, and
any registrations and applications for such trademarks.
Executed this 1st day of June, 2000.
HELIUM, LLC
By:
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Name/Title:
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Address:
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SCHEDULE F
TRADEMARKS
TRADEMARK APPLICATION OR REGISTRATION NUMBER
1. Expando NONE
<PAGE> 20
EXHIBIT G
ASSIGNMENT OF COPYRIGHTS
WHEREAS, HELIUM, LLC, a California limited liability company
("Seller"), has adopted, used and is using the copyrights listed on Schedule G
attached hereto; and
WHEREAS, QUOKKA SPORTS, INC., a Delaware corporation ("Purchaser"),
desires to acquire said copyrights and any applications and regulations
therefor;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, Seller hereby assigns to Purchaser all of its
right, title and interest worldwide in and to the copyrights listed on Schedule
G, together with the goodwill of the business symbolized by such copyrights and
recordation thereof, and any registrations and applications for such copyrights.
Executed this 1st day of June, 2000.
HELIUM, LLC
By:
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Name/Title:
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Address:
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SCHEDULE G
COPYRIGHT APPLICATION OR CERTIFICATE NUMBER
<PAGE> 22
EXHIBIT H
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, and pursuant to the Asset Purchase Agreement of even date herewith
(the "Agreement"), the undersigned hereby sells, assigns, transfers and conveys
unto QUOKKA SPORTS, INC., a Delaware corporation ("Purchaser"), the Assets as
defined in the Agreement.
The undersigned hereby constitutes and appoints Purchaser its
attorney-in-fact with full power of substitution in the name and stead of the
undersigned to take such actions as Purchaser shall deem necessary to collect
any of the Assets conveyed or intended to be conveyed hereby.
IN WITNESS WHEREOF, the undersigned has executed this Bill of Sale as
of this 1st day of June, 2000.
HELIUM, LLC
By:
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Name/Title:
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Address:
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