270 Legal [Sample Agreements]

ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT, dated as of July 12, 2007 (the “Agreement”), among ROO HD, Inc., a New York corporation (the “Purchaser”), Wurld Media, Inc., a Delaware corporation (the “Seller”), Greg Kerber (“Kerber”), and Kirk Feathers (“Feathers,” with Feathers and Kerber together being referred to as the “Owners”).

W I T N E S S E T H:

WHEREAS, Seller specializes in the P2P distribution of music, movies, games, TV shows and other audio, video, and/or audio/video content (the “Business”);

WHEREAS, subject to the terms and conditions hereof, Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to purchase from Seller, certain selected assets relating to the Business;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

ARTICLE I.
PURCHASE AND SALE OF ASSETS.

1.1. Sale of Assets. Seller agrees to sell, assign, transfer and deliver to Purchaser, and Purchaser agrees to purchase from Seller, all of Seller’s right, title and interest in and to certain assets relating to the Business (specifically excluding the Excluded Assets, as defined below)as follows:

(a) Equipment. All equipment of any kind or nature (whether leased or owned), including, without limitation, all fixed assets, equipment, furniture, fixtures and leasehold improvements located within the Seller’s office located at 63 Putnam Street, Suite#103, Saratoga Springs, New York, inventory, office materials, software, supplies and other tangible personal property of every kind and description owned by Seller and used or held for use in connection with the Business, all as set forth on Schedule 1.1(a) attached hereto (“Equipment”);

(b) Contracts. All of the rights of Seller under, and interest of Seller in and to, certain contracts relating to the Business, as determined by Purchaser in its sole discretion prior to the Closing (the “Selected Contracts”). A true, correct and complete list of all unsecured contracts (the “Contracts”), all outstanding amounts due and owing under each Contract, and contact information for the other party to such Contract is attached hereto as Schedule 1.1(b). It is acknowledged and agreed, without otherwise limiting, expanding or otherwise affecting any other liability of Purchaser, that Purchaser shall have no liability of any nature whatsoever with regard to any Contract that is not a Selected Contract. Purchaser assumes responsibility for satisfying and/or compromising any amounts due and owing under the Selected Contracts (the “Selected Liabilities”).

(c) Proprietary Rights. All formulas, know-how, patents, patent rights, patent applications, trademarks, service marks, trademark and service mark registrations and registration applications, trade names, trade name registrations, logos, trade dress, copyrights, copyright registrations, technology, know-how, trade secrets, inventions, models, processes, formulas, techniques, designs, licenses, pricing policies, information as to the identities or requirements of customers or potential customers, market information, market analyses, marketing plans, operating or management policies, procedures and forms, computer software and computer operating procedures and all other proprietary rights of the Seller used or useful or developed or acquired for use in the Business as set forth on Schedule 1.1(c) attached hereto (collectively the “Intellectual Property”).

(d) Goodwill. All of the goodwill of Seller in, and the going concern value of, the Business, and all of the business and customer lists and accounts, proprietary information, marketing materials and trade secrets related to the Business;

(e) Claims. All claims, entitlements, rebates, refunds, settlements, awards or other rights related to any Assets (as hereinafter defined) or the operation of the Business prior to the Closing Date; and

(f) Records. All of Seller’s customer logs, location files and records, and other business files and records, in each case relating to the Business.

The assets, properties and business of Seller being sold to and purchased by Purchaser under this Section 1.1 are referred to herein collectively as the “Assets.”

1.2. Excluded Assets. There shall be excluded from the Assets and retained by Seller, all assets identified on Schedule 1.2(a) attached hereto, and all other assets of Seller which are not used or held for use in connection with the Business or otherwise necessary to the operation of the Business (the “Excluded Assets”).

1.3. Assumed Liabilities; Excluded Liabilities; Employees.

(a) Assumed Liabilities. Subject to the obligation of the Seller to indemnify the Purchaser with respect to certain obligations and liabilities of the Seller pursuant to Article 8, the Purchaser shall assume, and hereby agrees to pay, perform, fulfill and discharge the following (collectively, the “Assumed Liabilities”):

(i) the liabilities (including interest, costs and fees) identified on Schedule 1.3(a)(i) attached hereto, each of which arises out of a lease (each a “Lease”) of personal property (the “Leased Asset”) entered into by Seller. Notwithstanding the foregoing, if Purchaser is unable to discharge the liabilities associated with each the Leased Asset at a cost equal to one hundred and five (105%) percent or less of the aggregate dollar amount listed on Schedule 1.3(a)(i), or if Purchaser is unable to continue leasing pursuant to the applicable Lease (or obtain ownership of the Leased Asset or if the applicable lease has expired, enter into a new lease at terms acceptable to it, as determined in its sole discretion) then, in such event: (x) Purchaser shall have no obligation to discharge the liability associated with the Leased Asset, and (y) Purchaser shall have the right, in its sole and absolute discretion to terminate this Agreement immediately upon written notice to the Seller.

(iii) all fees, including fees for professional services rendered, and expenses owed which are identified on Schedule 1.3(a)(iii) incurred in connection with the Seller’s Intellectual Property and necessary for the Purchaser to avail itself of all rights and interests to the Intellectual Property.

(ii) the liabilities listed on Schedule 1.3(a)(ii)

(iv) fees for professional services rendered by John Carusone listed on Schedule 1.3(a)(iv).

The assumption of the Assumed Liabilities by Purchaser hereunder shall not enlarge any rights of third parties under contracts or arrangements with Purchaser or Seller or any of their respective affiliates or subsidiaries.

(b) Excluded Liabilities. It is expressly understood that, except for the Assumed Liabilities, Purchaser shall not assume, pay or be liable for any liability or obligation of Seller of any kind or nature at any time existing or asserted, whether, known, unknown, fixed, contingent or otherwise, not specifically assumed herein by Purchaser, including without limitation any liability or obligation relating to, resulting from or arising out of (i) the Excluded Assets, (ii) the employees of the Business or (iii) any fact existing or event occurring prior to, or relating to the operation of the Business prior to, the date hereof, collectively the “Excluded Assets.”

(c) Employees, Wages and Benefits.

(i) Purchaser specifically reserves the right, on or after the date hereof, to employ or reject any of Seller’s employees or other applicants in its sole and absolute discretion. Except as otherwise expressly agreed to herein nothing in this Agreement shall be construed as a commitment or obligation of Purchaser to accept for employment, or otherwise continue the employment of, any of Seller’s employees, and no employee shall be a third party beneficiary of this Agreement.

(ii) Seller shall pay all wages, salaries, commissions, and the cost of all fringe benefits provided to its employees which shall have become due for work performed as of and through the Closing Date, and Seller shall collect and pay all Taxes in respect of such wages, salaries, commissions and benefits.

(iii) Seller acknowledges and agrees that Purchaser shall not acquire any rights or interests of Seller in, or assume or have any obligations or liabilities of Seller under, any benefit plans maintained by Seller, or for the benefit of any employees of Seller, including, without limitation, obligations for severance.

1.4. Purchase Price In consideration of the sale by Seller to Purchaser of the Assets and satisfaction of the conditions contained herein, the purchase price shall be as follows:

(a) $800,000, which has been advanced to the Seller, pursuant to that certain Secured Promissory Note issued by the Seller to ROO Group, Inc.(“ROO Group”) dated February 26, 2007;

(b) such amounts necessary to fully satisfy and/or compromise the Assumed Liabilities consistent with Paragraph 1.3(a) hereof, including all costs incurred by Purchaser in connection therewith;

(c) any amounts paid or advanced by ROO Group, to, or, on behalf of Seller or any of the Owners prior to the Closing;

(d) such amounts necessary to fully satisfy and compromise the Selected Liabilities consistent with Paragraph 1.1(b) hereof, including all costs incurred by Purchaser in connection therewith;

(e) [INTENTIONALLY LEFT BLANK]

(f) an aggregate of Four Hundred Fifty Six Thousand Eighty Seven Dollars ($456,087) (the “Escrow Funds”) which shall be held in escrow, pursuant to the terms of an escrow agreement in substantially the form set forth on Exhibit A (the “Compensation Escrow Agreement”) to settle outstanding amounts of up to forty (40%) percent of the gross wages plus such amount which shall constitute employer’s contribution (less statutory payroll deductions, less advances previously made to the employees) owed to the employees identified on Schedule 1.4(f). Any Employee as defined in Section 2.2(d) not hired by Purchaser shall prior to Closing be added to Schedule 1.4(f) by an amendment and shall be treated in the same manner as those employees listed on said schedule at the time of the execution of the Agreement. The Escrow Funds shall be utilized solely for the purpose set forth in this Section 1.4(f) and may not be released to the Sellers until all claims by the employees listed on Schedule 1.4(f) have been fully settled and compromised and the employees have executed and delivered to the Seller, a release in the form set forth on Exhibit A-1 to the Escrow Agreement. A copy of said release shall be furnished to the Purchaser simultaneously with the Seller’s receipt from each employee.

(g) Such amount as may be necessary to pay the statutory payroll deductions and the employer’s contributions with respect to those employees of the Seller with whom the Purchaser has entered into a satisfactory arrangement for employment by the Purchaser. Such employees are included in Schedule 2.2(d). It is the intention of the parties that loans or advances to all current and former employees of the Seller be “grossed up” and that all withholding taxes and employer contributions be paid by Purchaser.
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