ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made this 27th day of March, 2000 (the
"Agreement"), by and between Financial Intranet, Inc., a Nevada corporation
("Purchaser"), and LongYin Network Technology Co., Ltd., a limited liability
company organized under the laws of the Province of Guangdong, the People's
Republic of China and doing business as Cyber Information System Co., Ltd.
("Seller").
RECITALS
Seller hereby agrees to sell, transfer and assign, and Purchaser hereby
agrees to purchase from the Seller, the Acquired Assets (as defined below),
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency is hereby acknowledged, the parties agree as follows:
1. Certain Definitions.
a. As used in this Agreement, "Domain Names" collectively mean the
top-level internet domain names "xxx.xxxxxx.xxx" and "xxx.xxxxxx.xxx", including
all lower-level internet domain names for which "xxx.xxxxxx.xxx" and
"xxx.xxxxxx.xxx" are a root or parent, whether in the form of an address for use
in electronic mail transfer, a universal resource locator (or URL), a file
transfer protocol (or FTP) location or other form suitable for specifying the
location of an electronic data file over a distributed computer network.
b. As used in this Agreement, "E-mail Magazine" means any and all
magazines owned by Seller and distributed via internet electronic mail to users
and designated as "E-age e- mail magazine," the various "channels" thereto and
the related proprietary databases regarding subscribers and users of such
internet electronic distributed magazines.
c. As used in this Agreement, "Acquired Assets" means (1) the Domain
Names and the registrations thereof, together with the goodwill of the business
connected with and symbolized by such Domain Names, and any intellectual
property rights relating thereto, to the extent any such trademark, service xxxx
or intellectual property rights exist; (2) all information and Intellectual
Property (as defined below) related to or available through the Domain Names
and/or resident on the host servers operated by or on behalf of Seller which
provide access to such Domain Names; and (3) the E-mail Magazine and all
information and Intellectual Property related to, contained in or accessible
through the E-mail Magazine.
d. As used in this Agreement, "Intellectual Property" means all of the
following materials and information (whether or not reduced to writing or
patentable or protectible by
copyright) that Seller has developed, conceived, in whole or in part, in
connection with the Domain Names, the internet web sites operated on the Domain
Names or the E-mail Magazine:
(1) Discoveries, concepts, and ideas including, without
limitation, the nature and results of research and development activities,
processes, formulas, inventions, techniques, "know-how," designs, drawings and
specifications relating to the Domain Names, the internet web sites operated on
the Domain Names or the E-mail Magazine;
(2) Production processes, marketing techniques and
arrangements, mailing lists, purchasing information, pricing policies, quoting
procedures, financial information, customer and prospect names and requirements,
employee, customer, supplier and distributor data and other materials or
information relating to the Domain Name, the internet web sites operated on the
Domain Name or the E-mail Magazine, including, but not limited to affiliations,
links, rights to content, and the portable internet user traffic;
(3) Applications, operating systems, data bases,
communications and other computer software, now existing and developed for use
on any operating system, and all modifications, enhancements and versions and
all options available with respect thereto, including, but not limited to, Java
code, HTML (Hyper-Text Markup Language) code and ASP (Microsoft Active Server
Pages) code;
(4) Source and object codes, flowcharts, algorithms, coding
sheets, routines, sub-routines, compilers, assemblers, design concepts and
related documentation and manuals;
(5) Any other materials or information related to the business
or activities of Seller that are related to the Domain Names, the internet web
sites operated on the Domain Names or the E-mail Magazine and which are not
generally known to others engaged in similar businesses or activities; and
(6) Patents, trademarks, and service marks and registrations
thereon, any applications therefor and the goodwill associated therewith and
with the business of the Domain Names, the internet web sites operated on the
Domain Names or the E-mail Magazine, copyrights, trade secrets, all inventions,
whether or not patentable, and any product, drawing, design, recording, computer
software program, licenses, writing, literary work or other author's work, in
any other tangible form developed in whole or in part by or for Seller in
connection with the Domain Names, the internet web sites operated on the Domain
Names or the E-mail Magazine.
2. Acquired Assets
b. Assignment of Domain Names and E-mail Magazine. For good and valuable
consideration, payable at Closing as provided for in Paragraph 4, Seller agrees
to transfer and assign to Purchaser at the Closing all of the Acquired
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Assets. The transfer and the assignment shall take effect at the Closing as
set forth herein upon delivery of the consideration provided for in Section 3.
b. Cooperation in Transferring Domain Names. Seller agrees to cooperate
with Purchaser and to follow Purchaser's reasonable instructions in order to
effectuate the transfer of the Domain Name registrations in a timely manner.
Seller covenants to fully cooperate with and assist Purchaser in the submission
of any documentation required by an Internet Corporation for Assigned Names and
Numbers accredited registrar (an "Accredited Registrar") selected by the
Purchaser. Seller acknowledges that the Accredited Registrar selected by the
Purchaser is Network Solutions, Inc. ("NSI") and, subject to change of the
selected Accredited Registrar by Purchaser, Seller shall execute and deliver to
Purchaser at Closing the Internet Domain Name Assignment and NSI's Registrant
Name Change Agreement Version 3 as set forth in Exhibit "A", a copy of which is
attached hereto and incorporated herein by reference.
c. Assignment of Intellectual Property Rights. Seller shall execute and
deliver to Purchaser at Closing an Assignment as set forth in Exhibit "B", a
copy of which is attached hereto and incorporated herein by reference.
d. Warranties. Seller warrants and represents that:
(v) Seller is the sole legal and beneficia owner of the Acquired Assets,
and owns all such properties and assets free and clear of any liens, claims or
encumbrances.
(vi) Seller properly registered the Domain Names with an Accredited
Registrar (or any other entity responsible for maintaining records of ownership
of internet domain names) without committing fraud or misrepresentation.
(vii) Seller is a limited liability company duly organized and validly
existing, is in good standing under the laws of the Province of Guangdong and
the People's Republic of China and has all requisite power and authority to
carry on its business as now conducted and proposed to be conducted.
(viii)All corporate action on the part of Seller, its officers, directors,
shareholders and/or members necessary for the authorization, execution, delivery
and performance of all obligations of Seller under this Agreement and for the
sale, transfer and delivery of the Acquired Assets has been or shall be taken
prior to the Closing; and this Agreement, when executed and delivered, shall
constitute a valid and legally binding obligation of Seller.
(ix) Seller's use of the Acquired Assets ha not infringed on the rights of
any third party, including, without limitation, any Intellectual Property
rights.
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(x) There are no software licenses or contracts, agreements or
understandings with third parties that restrict the use or diminish the value of
the Acquired Assets.
(xi) Purchaser's ownership, operation, use and maintenance of the Acquired
Assets will not violate any law, rule or regulation of the People's Republic of
China (the "PRC") or result in the denial of access to the Acquired Assets by
the PRC to its citizens, provided that Purchaser operates, uses and maintains
the Acquired Assets in substantially the same manner as did Seller immediately
prior to Closing.
(xii) No consents, approvals, orders, authorizations or registration,
qualification, designation and declaration or filing with any governmental
authority on the part of Seller are required in connection with the sale,
transfer and delivery of the Acquired Assets to Purchaser or the other
transactions contemplated in this Agreement.
(xiii)Immediately prior to Closing Seller ha not less than 800,000 distinct
and separate users who access and view through the Internet the Domain Names and
the E-mail Magazine.
(x) Neither Seller nor any officer, employee, agent or representative of
Seller, respectively, nor any person acting on their behalf, has offered,
promised, authorized or made any payment or gift of anything of value in
violation of law to any official, political party or official thereof, or
candidate for political office for the purpose of influencing any act or
decision in an official capacity, or of inducing any act or omission in
violation of a lawful duty, or any use of influence with any government or
instrumentality thereof, in order to assist in obtaining or retaining business
for or with, or directing business to, any person with respect to Seller.
Seller, will not, directly or indirectly, use all or part of any payment
received by it pursuant to this Agreement (including but not limited to any
payment made at the Closing) for any such purpose.
e. Complete Transfer. Seller expressly agrees that the sale of the
Acquired Assets as provided in this Agreement constitutes a complete transfer of
all of its right, title and interest with respect to the Acquired Assets and
that Seller reserves no rights to market, transfer or otherwise deal with the
Acquired Assets. Purchaser shall have no obligation to Seller to support,
maintain, offer or do any other act relating to the Acquired Assets, and may
dispose of the Acquired Assets as Purchaser, in its sole discretion, decides.
f. Liabilities Not Assumed. The parties understand and agree that Purchaser
does not assume, and shall not be liable for, any of the obligations and
liabilities of Seller of any kind or nature, and Seller shall be solely
obligated to discharge all such liabilities and obligations.
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3. Purchase Price.
Purchaser agrees to pay Seller as follows:
a. At Closing, Four Hundred Thousand Dollars ($400,000.00). Of such
amount, Two Hundred Thousand Dollars ($200,000.00) shall be paid by wire
transfer in immediately available funds to an account designated by Seller and
Two Hundred Thousand Dollars ($200,000.00) shall be deposited in a trust account
and disbursed as provided in the Trust Agreement attached as Exhibit "C" (the
"Trust Agreement").
b. At Closing, Purchaser shall issue One Million One Hundred Thousand
(1,100,000) shares of its common stock, $0.001 par value per share (the
"Shares"), to Seller, as consideration hereunder, which shall be covered by
Purchaser's Registration Statement on Form SB-2, Registration No. 333-72975, and
declared effective by the Securities and Exchange Commission on October 8, 1999
(the "Registration Statement"). Of such amount, a certificate representing Five
Hundred Thousand (500,000) Shares shall be delivered to Seller at Closing and a
certificate representing Six Hundred Thousand (600,000) Shares shall be
deposited in a trust account and released as provided in the Trust Agreement.
c. At Closing, Purchaser shall also issue an additional Two Hundred Fifty
Thousand (250,000) Shares, which shall not be covered by the Registration
Statement. A certificate representing such Shares shall be deposited in a trust
account and released as provided in the Trust Agreement. In connection with the
issuance of such Shares, Seller represents and warrants that (i) it is an
"accredited investor" (within the meaning of Regulation D of the Securities Act
of 1933, as amended (the "Act")); (ii) it is aware that such Shares will be
"restricted securities" subject to transfer restriction, and will not be
registered under the Securities Act of 1933, as amended; (iii) such Shares are
being acquired solely for its own account for investment and is not being
purchased for resale, fractionalization or distribution; and (iv) it has no
contract, undertaking, agreement or arrangement with any person to sell,
transfer or pledge such Shares, or any part thereof and it has no present plan
to enter into any such contract, undertaking, agreement or arrangement.
d. With respect to the Shares to be issued as provided in Section 3 c.,
Seller agrees not to dispose of such Shares or any interest therein, unless and
until such Shares have been validly registered under the Act and all applicable
state securities laws or transfers are permitted under Rule 144 of the Act, or
Purchaser has been furnished an opinion of counsel reasonably satisfactory to
Purchaser that the intended disposition does not violate the Act, the rules and
regulations of the Securities and Exchange Commission thereunder or any
applicable state securities laws. The certificates representing such Shares
shall bear a legend to the foregoing effect.
4. Closing.
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a. The Closing shall take place at a date, time and
location agreed to by the parties, but not later than the
close of business on March 24, 2000. In the event the Closing
does not occur by such date, then this Agreement shall
terminate and the rights and obligations of the parties to
this Agreement shall be of no further force and effect;
provided, however, that no party hereunder shall be relieved
of any breach of this Agreement occurring prior to such
termination date. At Closing, each party shall deliver to the
other such payments, documents, certificates, consents,
approvals and waivers that shall be reasonably necessary to
consummate the obligations of the parties hereunder. The
representations and warranties of Seller set forth in Section
2 d. shall survive the Closing for a period of five years.
b. At Closing, Seller shall deliver to Purchaser at such location as
Purchaser may reasonably request a copy of those portions of the Acquired Assets
consisting of source code, programmers' notes, test scripts, build scripts and
any and all other documentation and information necessary and useful to
understanding and using the source code for the Acquired Assets downloaded and
transferred to a CD-ROM.
5. Expenses.
Except as specified in Section 11, each party to this Agreement shall
bear all of his or its expenses incurred in the performance hereof, regardless
of whether the transactions contemplated herein are consummated. No broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this
Agreement. If a party, however, has retained the services of such person, such
party shall be solely responsible for any fee or commission.
6. Cooperation.
The parties agree that after Closing they shall provide reasonable
cooperation with respect to the matters that are subject to this Agreement.
7. Confidentiality and Public Relations.
b. No party, without the consent of the other
parties, shall disclose the provisions contained herein to any
third parties (other than as may be required by law, in
connection with legal or administrative proceedings, or to
attorneys, accountants, and consultants they may have retained
to represent them in connection herewith), and this provision
shall survive the Closing. There will be no public
announcement of this Agreement except as provided below.
c. Subsequent public relations and advertising related to the Acquired
Assets shall be strictly under the control and approval of Purchaser, as to
timing
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and content, including any announcements related to this
transaction, which is otherwise to be strictly confidential.
8. Miscellaneous.
a. Choice of Law. This Agreement shall be construed in accordance with the
laws of the State of New York.
b. Venue. The parties agree that all actions or
proceedings arising in connection with this Agreement shall be
tried and litigated exclusively in the federal (if permitted
by law and a party elects to file an action in federal court)
courts located in the County of Westchester. This choice of
venue is intended by the parties to be mandatory and not
permissive in nature, and to preclude the possibility of
litigation between the parties with respect to, or arising out
of, this Agreement in any jurisdiction other than that
specified in this Section. Each party waives any right it may
have to assert the doctrine of forum non-conveniens or similar
doctrine or to object to venue with respect to any proceeding
brought in accordance with this Section.
c. Indemnity. Each party will indemnify, defend and
hold harmless the other party hereto from and against losses
incurred through claims of third persons or arising from
breach by any party hereto of such party's representations,
warranties or covenants, contained in this Agreement. Seller
authorizes Purchaser to set-off and deduct from any Shares to
be issued as provided in Sections 3 b. and c. the amount of
any claim, loss or damage incurred by Purchaser or Purchaser
by reason of the breach of any representation, warranty or
covenant made by Seller. The number of Shares to be set-off,
if any, shall be equal to the amount of the claim, loss or
damage incurred divided by the closing price of a Share on the
last trading day preceding any such, loss or damage.
d. Agreement Drafted By Both Parties. This Agreement is the result of arm's
length negotiations between the parties and shall be construed to have been
drafted by both parties such that any ambiguities in this Agreement shall not be
construed against either party.
e. Section Headings. The section headings contained herein are for
convenience in reference and are not intended to define or limit the scope of
any provision of this Agreement.
f. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and will become
effective and binding upon the parties as of the execution date at such time as
all the signatories hereto have signed a counterpart of this Agreement.
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g. Notices. Any notices required or permitted under this Agreement shall be
given in writing and shall be deemed effectively given upon delivery (whether by
mail, fax, personal delivery, courier or delivery service or otherwise), unless
delivery occurs after normal business hours or on a day that is not a business
day, which shall result in delivery on the next business day, to a party at its
address shown below or at such other address as such party may designate by ten
days advance written notice to the other party:
To: Purchaser
Financial Intranet, Inc.
000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
and
To: Seller
LongYin Network Technology Co. Ltd.
Xx. 00 Xxxxxxx Xxxx, Xxxxx Xxxxxxx Xxxx
Xxxxxxxxx, 000000
Xxxxx
Attn: Yunneng He
h. Severability. If any provision of this Agreement shall be or be
determined to be unenforceable, void or otherwise contrary to law, such
condition shall in no manner operate to render any other provision of this
Agreement unenforceable, void or contrary to law, and this Agreement shall
continue to be operative and enforceable in accordance with the remaining terms
and provisions hereof.
i. Exhibits. Exhibit A, Exhibit B and Exhibit C attached to this Agreement
are incorporated herein and made a part hereof for all purposes, and references
herein thereto shall be deemed to include this reference and incorporation.
9. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter of this Agreement, and it
supersedes all other prior and contemporary agreements, understandings, and
commitments between the parties with respect to the subject matter of this
Agreement
10. Successors and Assigns. This Agreement is binding on and shall inure to
the benefit of the respective successors and/or assigns of the parties;
provided, however, the rights and obligations of Seller may not be assigned,
transferred or convey without the prior written consent of
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Purchaser. Purchaser may assign and transfer its rights and obligations
under this Agreement to a wholly owned subsidiary of Purchaser.
11. Attorney's Fees. In the event either party files suit t enforce any of
the terms hereof, the prevailing party shall be entitled to an award of all
reasonable attorney's fees and court costs.
12. Additional Agreements. After the Closing, Purchaser contemplates
organizing under the laws of the PRC a wholly owned subsidiary, which may own,
manage and operate the Acquired Assets. Seller covenants and agrees to use its
best efforts to assist Purchaser in organizing such subsidiary and obtaining all
licenses, permits, approvals and registrations as may be necessary or convenient
for conducting internet content provider and related services in the PRC.
13. U.S. Dollars. All amounts of money specified or referred to in or
contemplated by this Agreement shall mean United States Dollars.
14. Signatures.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
[Signatures on next page]
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FINANCIAL INTRANET, INC.
By: /s/Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: President and Chief Operating Officer
LONGYIN NETWORK TECHNOLOGY CO., LTD.
By: /s/Yunneng He
Name: Yunneng He
Title: President
10
EXHIBIT A
INTERNET DOMAIN NAME ASSIGNMENT
THIS INTERNET DOMAIN NAME ASSIGNMENT (this "Assignment"), dated as of March
27, 2000, is by and between LongYin Network Technology Co., Ltd., a limited
liability company organized under the laws of the Province of Guangdong, the
People's Republic of China and doing business as Cyber Information System Co.,
Ltd. ("Seller"), and Financial Intranet, Inc., a Nevada corporation
("Purchaser").
Recitals
WHEREAS, Seller is the sole owner of all right, title and interest in and
to the Domain Names, as defined below; and
WHEREAS, the Purchaser desires to acquire all of Seller's right, title
and interest in and to the Domain Names, and Seller is willing to sell the same
to the Purchaser;
Agreement
THEREFORE, in consideration of the payment and other obligations, the
parties hereto agree as follows:
1. DEFINITION OF DOMAIN NAMES.
As used in this Assignment, "Domain Names" shall mean the top-level
internet domain name "xxxxxx.xxx" including all lower-level internet domain
names for which "xxxxxx.xxx" is a root or parent, whether in the form of an
address for use in electronic mail transfer, a Universal Resource Locator (or
URL), a file transfer protocol (or FTP) location, or other form suitable for
specifying the location of an electronic data file over a distributed computer
network.
2. DOMAIN NAME ASSIGNMENT.
Seller hereby, assigns, sells, quitclaims and transfers to Purchaser
all rights of license, assignment, ownership, title or other interest in and to
the Domain Names. Seller covenants to promptly take whatever actions are
reasonably necessary, including, but not limited to, executing additional
assignments as requested by Seller, to assist Purchaser in perfecting
Purchaser's rights to the Domain Names. In particular, Seller hereby covenants
to fully cooperate with and assist Seller in the submission of any electronic
mail messages required by Network Solutions, Inc. ("NSI") (or any other entity
responsible for maintaining records of ownership of Internet domain names) to
transfer the assignment of the Domain Names from Seller to Purchaser, in
accordance with NSI's (or such other entity's) procedures and policies.
11
3. RIGHT TO ASSIGN.
Seller represents and warrants to Purchaser that Seller is the sole
owner of all right, title and interest in and to the Domain Names, free and
clear of any liens, material restrictions or adverse claims, and that Seller has
neither transferred nor caused to be transferred any right, title or interest in
any of the Domain Names to any person not a party to this Assignment.
4. GOVERNING LAW.
This Assignment shall be governed by and construed in accordance with
the laws of the State of Texas without giving effect to choice of law
principles.
5. INTEGRATION CLAUSE.
This Assignment constitutes the entire agreement between the parties
with respect to the assignment of the Domain Names and supersede all prior oral
and written, and all contemporaneous oral, agreements and understandings.
6. NO WAIVER.
Without waiving the applicable statutes of limitations, the parties
understand and agree that no forbearance by any party to enforce any provisions
hereof or any rights existing hereunder shall constitute a waiver of such
provisions or rights, or be deemed to affect an amendment or modification of
this Assignment.
7. MODIFICATION.
This Assignment shall not be amended or modified except in writing
signed by both parties hereto.
8. PROOF OF ASSIGNMENT.
This Assignment may be executed in one or more counterparts, each of
which shall be deemed an original, and it shall not be necessary in making proof
of this Assignment to produce or account for more than one such counterpart.
[Remainder of the Page Intentionally Left Blank]
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SELLER:
LONGYIN NETWORK TECHNOLOGY CO., LTD.
By: /s/Yunneng He
Its: President
PURCHASER:
FINANCIAL INTRANET, INC.
By: /s/Xxxxxxx Xxxxxxxx
Its: President and Chief Operating Officer
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EXHIBIT A
INTERNET DOMAIN NAME ASSIGNMENT
THIS INTERNET DOMAIN NAME ASSIGNMENT (this "Assignment"), dated as of March
27, 2000, is by and between LongYin Network Technology Co., Ltd., a limited
liability company organized under the laws of the Province of Guangdong, the
People's Republic of China and doing business as Cyber Information System Co.,
Ltd. ("Seller"), and Financial Intranet, Inc., a Nevada corporation
("Purchaser").
Recitals
WHEREAS, Seller is the sole owner of all right, title and interest in and
to the Domain Names, as defined below; and
WHEREAS, the Purchaser desires to acquire all of Seller's right, title
and interest in and to the Domain Names, and Seller is willing to sell the same
to the Purchaser;
Agreement
THEREFORE, in consideration of the payment and other obligations, the
parties hereto agree as follows:
1. DEFINITION OF DOMAIN NAMES.
As used in this Assignment, "Domain Names" shall mean the top-level
internet domain name "xxxxxx.xxx" including all lower-level internet domain
names for which "xxxxxx.xxx" is a root or parent, whether in the form of an
address for use in electronic mail transfer, a Universal Resource Locator (or
URL), a file transfer protocol (or FTP) location, or other form suitable for
specifying the location of an electronic data file over a distributed computer
network.
2. DOMAIN NAME ASSIGNMENT.
Seller hereby, assigns, sells, quitclaims and transfers to Purchaser
all rights of license, assignment, ownership, title or other interest in and to
the Domain Names. Seller covenants to promptly take whatever actions are
reasonably necessary, including, but not limited to, executing additional
assignments as requested by Seller, to assist Purchaser in perfecting
Purchaser's rights to the Domain Names. In particular, Seller hereby covenants
to fully cooperate with and assist Seller in the submission of any electronic
mail messages required by Network Solutions, Inc. ("NSI") (or any other entity
responsible for maintaining records of ownership of Internet domain names) to
transfer the assignment of the Domain Names from Seller to Purchaser, in
accordance with NSI's (or such other entity's) procedures and policies.
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3. RIGHT TO ASSIGN.
Seller represents and warrants to Purchaser that Seller is the sole
owner of all right, title and interest in and to the Domain Names, free and
clear of any liens, material restrictions or adverse claims, and that Seller has
neither transferred nor caused to be transferred any right, title or interest in
any of the Domain Names to any person not a party to this Assignment.
4. GOVERNING LAW.
This Assignment shall be governed by and construed in accordance with
the laws of the State of Texas without giving effect to choice of law
principles.
5. INTEGRATION CLAUSE.
This Assignment constitutes the entire agreement between the parties
with respect to the assignment of the Domain Names and supersede all prior oral
and written, and all contemporaneous oral, agreements and understandings.
6. NO WAIVER.
Without waiving the applicable statutes of limitations, the parties
understand and agree that no forbearance by any party to enforce any provisions
hereof or any rights existing hereunder shall constitute a waiver of such
provisions or rights, or be deemed to affect an amendment or modification of
this Assignment.
7. MODIFICATION.
This Assignment shall not be amended or modified except in writing
signed by both parties hereto.
8. PROOF OF ASSIGNMENT.
This Assignment may be executed in one or more counterparts, each of
which shall be deemed an original, and it shall not be necessary in making proof
of this Assignment to produce or account for more than one such counterpart.
[Remainder of the Page Intentionally Left Blank]
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SELLER:
LONGYIN NETWORK TECHNOLOGY CO., LTD.
By: /s/Yunneng He
Its: President
PURCHASER:
FINANCIAL INTRANET, INC.
By: /s/Xxxxxxx Xxxxxxxx
Its: President and Chief Operating Officer
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EXHIBIT B
ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS
THIS ASSIGNMENT is dated as of March 27, 2000 and made by and between
LongYin Network Technology Co., Ltd., a limited liability company organized
under the laws of the Province of Guangdong, the People's Republic of China and
doing business as Cyber Information System Co., Ltd., whose office is located at
Xx. 00, Xxxxxxx Xxxx, Xxxxx Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 510055, People's
Republic of China (the "Assignor"), and Financial Intranet, Inc., a Nevada
corporation, whose office is located at 000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxx Xxxx
00000 (the "Assignee").
WHEREAS:
A. Pursuant to an Asset Purchase Agreement dated March 23, 2000,
between the Assignor and the Assignee (the "Asset Purchase Agreement"), the
Assignor has agreed to enter into an assignment to assign to the Assignee all
right, title and interest in and to the Acquired Assets (as defined in the Asset
Purchase Agreement);
B. Accordingly, the parties hereto have agreed to enter into this
Assignment to assign to the Assignee all of Assignor's right, title interest in
and to the Acquired Assets (as defined in the Asset Purchase Agreement).
NOW IT IS HEREBY AGREED as follows:
1. For good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the Assignor HEREBY ASSIGNS with full title
guarantee to the Assignee absolutely free from all liens, charges, security
interests and/or encumbrances whatsoever all its right, title and interest in
and to the Acquired Assets (as defined in the Asset Purchase Agreement)
including all statutory and common law rights attaching thereto and the right to
xxx for past infringements and to retain any damages obtained as a result of
such action, to hold unto the Assignee absolutely.
2. The Assignor, its successors and assigns covenants and agrees to
cooperate with Assignee so that Assignee may enjoy to the fullest extent the
benefit of this Agreement. Such cooperation shall include but not limited to:
(a) Prompt execution of all papers that are deemed necessary or desirable
by Assignee to perfect the right, title and interest herein conveyed, and
(b) Prompt execution of all petitions, oaths, specifications, declarations
or
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other papers that are deemed necessary or desirable by Assignee for prosecuting
patent applications, for filing and prosecuting substitute, division,
continuing, or additional applications in the United States and/or foreign
countries, for filing and prosecuting applications for reissuance or
reexamination of letters patent, and for interference proceedings involving and
covering any of the Acquired Asset, and
(c) Prompt assistance and cooperation, including but not
limited to execution of documents and testifying, in the prosecution of legal
proceedings involving any of the Acquired Assets, including, but not limited to,
patent prosecution, interference proceedings, infringement court actions,
opposition proceedings, cancellation proceedings, priority contests, unfair
competition court actions, trade secret court actions, public use proceedings,
slander, license breach and royalty collection proceedings and any other legal
proceedings.
3. The Assignor represents and warrants that Assignor has the right to make
the assignment set forth herein.
4. This Assignment shall be binding on the Assignor and its heirs,
administrators, executors, successors, trustees, devisees and assigns and shall
inure to Assignee, its successors, trustees, devisees and assigns.
EXECUTED as of the date first above written.
LONGYIN NETWORK TECHNOLOGY
CO., LTD.
By: /s/Yunneng He
Name: Yunneng He
Title: President
FINANCIAL INTRANET, INC.
By: /s/Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: President and Chief Operating Officer
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EXHIBIT C
TRUST AGREEMENT
8. This Trust Agreement (the "Agreement") is entered into a of the 27th day
of March, 2000 by and among Financial Intranet, Inc., a Nevada corporation
("Purchaser"), LongYin Network Technology Co., Ltd., a limited liability company
("Seller"), and Xxxxxxxx Nakazawa & Xxxxx ("Trustee"). This Agreement is the
Trust Agreement provided for in Section 3 of that certain Asset Purchase
Agreement ("Asset Purchase Agreement") of even date herewith by and between
Seller and Purchaser.
9. Purchaser has delivered to Trustee certificates representing an
aggregate 850,000 shares of the common capital stock, $0.001 par value per
share, of Purchaser (the "Escrowed Shares") issued in the name of Seller, of
which 250,000 shares are restricted securities. Purchaser has also paid
US$200,000.00 (the "Escrowed Cash") to Trustee. (The Escrowed Shares and the
Escrowed Cash are referred to collectively as the "Escrowed Property".) Trustee
acknowledges receipt of the Escrowed Property and agrees to hold the Escrowed
Property on the terms and subject to the conditions of this Agreement.
10. Trustee shall invest the Escrowed Cash in accordance with the
requirements of the State Bar of California.
11. Trustee shall hold the Escrowed Property until Trustee receives the
appropriate Instruction to Release such property upon the occurrence of an event
specified in Exhibit A, which is subject to adjustment as provided in Section 8
.c of the Asset Purchase Agreement.
12. If an event specified in Exhibit A occurs before the specified
performance deadline date, Purchaser shall promptly deliver an Instruction to
Release to Trustee confirming such occurrence and the Escrowed Property to be
released, whereupon Trustee shall deliver such Escrowed Property to the
President of Seller.
13. The form of Instruction to Release is attached as Exhibi B.
14. If appropriate Instruction(s) to Release are not receive by Trustee by
5:00 P.M., local time, in New York, New York on each of the performance deadline
dates specified on Exhibit A, Purchaser may elect to terminate this Agreement as
to the Escrowed Property set forth opposite such specified date by written
notice to Seller and Trustee. Upon receipt of such notice, Trustee shall pay any
Escrowed Cash and deliver the Escrowed Shares set forth opposite such date to
Purchaser.
15. All parties understand and agree that Trustee is not a principal,
participant, or beneficiary of the underlying transaction which necessitates
this Agreement. The Trustee shall be obligated only for the performance of such
duties as are specifically set forth herein and
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may rely and shall be protected in acting or refraining from acting on
any instrument believed by it to be genuine and to have been signed or
presented by the proper party or parties, their officers,
representatives or agents. Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to be
authorized hereby, nor for action taken or omitted by it in accordance
with the advice of its counsel. Trustee shall be responsible for
holding, investing and disbursing the Escrowed Property pursuant to the
Agreement, but in no event shall it be liable for any exemplary or
consequential damages.
16. Trustee shall not be liable for losses on any investment made by it
pursuant to and in compliance with Paragraph 3.
17. If any controversy should arise between the undersigned with respect to
this Agreement or with respect to the right to receive the Escrowed Property,
Trustee shall have the right to consult counsel and/or to institute a xxxx of
interpleader in any court of competent jurisdiction to determine the rights of
the parties. In the event it is a party to any dispute, Trustee shall have the
additional right to refer such controversy to binding arbitration.
18. Trustee shall have no liability under, or duty to inquir beyond the
terms and provision of this Agreement, and it is agreed that its duties are
purely ministerial in nature, and that Trustee shall incur no liability
whatsoever, except for willful misconduct or gross negligence so long as it has
acted in good faith. Trustee shall not be bound by any modification, amendment,
termination, cancellation, rescission or suspension of this Agreement unless the
same shall be in writing and signed by Seller and Purchaser and, if its duties
as Trustee hereunder are affected thereby, unless it still have consented
thereto.
19. Trustee may at any time resign hereunder by giving written notice of
its resignation to the other parties hereto, at least 30 days prior to the date
specified for such resignation to take effect, and upon the effective date of
such resignation, the Escrowed Property hereunder shall be delivered to such
person as may be designated in writing by the appropriate parties executing this
Trust Agreement, whereupon all Trustee's obligation hereunder shall cease and
terminate. Trustee's sole responsibility until such termination shall be to keep
safely all Escrowed Property and to deliver the same to a person designated by
the appropriate parties executing this Trust Agreement or in accordance with the
directions of a final order or judgment of a court of competent jurisdiction.
20. The parties agree to indemnify, defend and hold Trustee harmless form
and against any and all losses, damages, taxes, liability and expense that may
be incurred by Trustee hereunder, including the legal costs and expense of
defending itself against any claim or liability in connection with its
performance hereunder.
21. Seller agrees to pay Trustee its fees for the services rendered
pursuant to the provisions of this Trust Agreement and will reimburse Trustee
for reasonable expenses, including reasonable attorneys' fees incurred in
connection with the negotiations, drafting and performance of such services.
Activities requiring excessive administrator time or out-of- pocket expenses
such as optional substitution of collateral or securities shall be deemed
extraordinary expenses for which related costs, transaction charges, and
additional fees will be billed to Seller at Trustee's standard charges for such
items.
22. The parties warrant to Trustee that there are no Federal state or local
tax liability or filing requirements whatsoever concerning Trustee's actions
contemplated hereunder and warrant and represent to Trustee that Trustee has no
duty to withhold or file any report or any tax liability under any Federal or
State income tax, local or State property tax, local or State sales or use
taxes, or any other tax by any taxing authority. The parties hereto agree to
jointly and severally indemnify Trustee fully for any tax liability, penalties
or interest incurred by the Trustee arising hereunder and agree to pay in full
any such tax liability together with penalty and interest if any tax liability
is ultimately assessed against Trustee for any reason as a result of its action
hereunder (except for Trustee's individual income tax liability arising from its
income or fees).
23. Trustee shall have no liability for loss arising from an cause beyond
its control, including, but not limited to, the following: (a) the act, failure
or neglect of any agent or correspondent selected by Trustee or the parties
hereto; (b) any delay, error, omission or default connected with the remittance
of funds; (c) any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator; or (d) the acts or edicts of any
government or governmental agency or other group or entity exercising
governmental powers.
IN WITNESS WHEREOF, the parties hereto have, by their duly authorized officers
or agents, executed this Agreement in multiple originals on the dates set forth
next to their respective names below, but effective as of the day and year first
above written.
XXXXXXXX NAKAZAWA & XXXXX
By: /s/Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Partner
FINANCIAL INTRANET, INC.
By: /s/Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: President and Chief Operating Officer
LONGYIN NETWORK TECHNOLOGY CO., LTD.
By: /s/Yunneng He
20
Name: Yunneng He
Title: President
21
EXHIBIT A
Event Escrowed Property to Performance
be Released Deadline Date
1. Execution and delivery of A certificate in the April 3, 2000
Consulting Agreements in form and name of Seller
content satisfactory to Purchaser by representing 175,000
Weicao Huo, Xxxxxxx Xxxx, shares of Purchaser
Xxxxxxxx Xxxx and Yu Ke
2. Execution and delivery of A certificate in the June 30, 2000
written agreements in form and name of Seller
content satisfactory to Purchaser by representing 175,000
not less than nine existing internet shares of Purchaser
content providers of Seller to
continue to provide content and
other services to Purchaser or its
foreign owned entity
3. Approval by the People's US$200,000 and a September 30, 2000
Republic of China and its political certificate in the name subdivisions
(collectively, "PRC") of Seller representing of Purchaser's organization and
500,000 shares of ownership of a foreign owned utility Purchaser, of which for
the purpose of Purchaser's 250,000 shares shall be ownership, operation, use and
restricted securities as maintenance of the Acquired Assets provided in Sections
(as defined in that certain Asset 3.c and 3.d of the Asset Purchase Agreement of
even date Purchase Agreement herewith between Seller and Purchaser) and
Purchaser's receipt of all consents, approvals, orders, authorizations,
registrations or qualifications from the PRC necessary for such foreign owned
enterprise to own, operate, maintain and use a server located in the PRC and
download and upload electronic files, materials and other data therefrom or
thereto.
--------------------------------------------- ------------------------------- -----------------------------
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EXHIBIT B
FORM OF INSTRUCTION TO RELEASE
Xxxxxxxx Nakazawa & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxx
Re: Trust Agreement dated March 27, 2000
Dear Sirs:
We hereby confirm that the following event specified in Exhibit B to the
Trust Agreement has occurred: [Specify name of event]
Accordingly, you are authorized and instructed to release to Seller the
following Escrowed Property: [Specify amount and type of Escrowed Property to be
released]
Words and expressions defined in the Trust Agreement shall have the same
meanings herein.
Very truly yours,
Financial Intranet, Inc.
By: /s/Xxxxxxx Xxxxxxxx
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