SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):December 31, 2000
JUNUM INCORPORATED
(Exact name of registrant as specified in charter)
DELAWARE 000-21566 84-1219819
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1590 Corporate Drive, Costa Mesa, California 92626
(Address of principal executive offices) (Zip Code)
EURBID.COM, INC.
(Former name or former address, if changed since last report.)
21 Patrick Street, Kilkenny, Ireland
(Former name or former address, if changed since last report.)
Registrant's telephone number, including area code: (714)979-5063
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Item 2. Acquisition or Disposition of Assets
The attached Exhibits are incorporated by reference herein, and the descriptions
set forth below are qualified in their entirety by reference to the Exhibits.
Effective December 31, 2000, EURBID.COM, INC. (the "Company") acquired a
non-performing portfolio of approximately $352.5 million in credit card
receivables (the "Receivables") representing approximately 189,000 individual
accounts, as well as certain intellectual property and business systems relating
to the conversion of non-performing receivables into performing receivables. The
above transactions were completed pursuant to an Asset Purchase Agreement, dated
as of December 31, 2000, by and between the Company and eCard Solutions, Inc.
The purchase price of the assets was $5,100,000, payable in the form of 5,100
shares of the Company's Series C Preferred Stock (the "Preferred Stock").
The holder of the Preferred Stock is entitled to convert each share of Preferred
Stock, plus any accrued but unpaid dividends, into 1,000 shares of Common Stock
of the Company. The holders of the Preferred Stock are not entitled to vote on
matters submitted to shareholders of the Company, except as required by law. The
Preferred Stock also is subject to a per share liquidation preference of
$1,000.00, plus any accrued but unpaid dividends. There are no mandatory
dividends.
The Preferred Stock issued to eCard Solutions, and all shares of common stock
issuable upon conversion of such Preferred Stock, is not transferable for a
period of 24 months following the Closing Date without the prior written consent
of the Company. Each certificate representing such shares of Preferred Stock or
common stock shall contain a legend describing such restriction.
The Company has the right, at any time following November 15, 2002, to redeem
for a redemption price of $0.10 per share of Series C Preferred Stock, plus the
Redemption Assignment (as defined below) all or any portion of the Preferred
Stock, but only in the event the Company receives and collects less than
$4,900,000 in Net Collections from the Receivables. In such event, on or after
November 15, 2002, the Company shall have the right to redeem a number of shares
of Preferred Stock equal to the difference between $4,900,000 and the Net
Collections.
Net Collections means the amount of all balance transfers arising from
conversion of debts constituting a part of the Receivables, plus the amount of
actual cash collections received by the Company in satisfaction of any portion
of the Receivables that are not considered balance transfers, less (i) all
direct operating costs of the Company relating to the collection or conversion
of the Receivables, (ii) any third party commissions or fees relating to the
collection or conversion of the Receivables, and (iii) any other direct costs of
collection or conversion of the Receivables. A "balance transfer" refers to the
amount of debt agreed to be transferred to a new credit card issued by or
through the Company, and for which the Company or its agent receives at least
one cash payment from the debtor.
In the event any portion of the Preferred Stock is redeemed as described above,
than the Company shall transfer the Redemption Assignment to Seller upon receipt
of the certificates evidencing the redeemed Preferred Stock. The Redemption
Assignment refers to an assignment of a portion of the Receivables which have
not been previously converted or paid, equal to a fraction, the numerator of
which is the number of shares of Preferred Stock redeemed and to be redeemed,
and the denominator of which is equal to 4,900.
The Company will file financial statements required by Item 7 hereof by
amendment hereto within 60 days from the date hereof.
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Item 5. Other Events
Effective January 12, 2001, the Company has changed its name to Junum
Incorporated, and its new ticker symbol is JUNM.
Item 7. Exhibits
Exhibit No. Description
1. Asset Purchase Agreement, dated December 31, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EURBID.COM, INC.
/s/
David B. Coulter, Chief Executive Officer
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Exhibit 1
ASSET PURCHASE AGREEMENT
DATED AS OF DECEMBER 31, 2000
by and among
JUNUM.COM, INC.,
EURBID.COM, INC.,
and
eCard Solutions, Inc.
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TABLE OF CONTENTS
Page
ARTICLE ISALE OF RECEIVABLES.......................................3
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Section 1.1 Sale of Assets. ............................3
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Section 1.2 Price. .....................................3
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Section 1.3 Closing......................................3
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ARTICLE IIREPRESENTATIONS OF SELLERS...............................3
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Section 2.1 Authorization and Validity of Agreement......3
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Section 2.2 Consents and Approvals; No Violations........3
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Section 2.3 Existence and Good Standing..................4
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Section 2.4 Title to Property and Assets.................4
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Section 2.5 Compliance with Law...........................4
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Section 2.6 Litigation....................................5
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Section 2.7 Broker's or Finder's Fees....................5
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ARTICLE IIIREPRESENTATIONS OF PURCHASER............................5
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Section 3.1 Preferred Stock...............................5
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Section 3.2 Authorization and Validity of Agreement......5
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Section 3.3 Consents and Approvals; No Violations........5
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Section 3.4 Existence and Good Standing..................6
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Section 3.5 Capital Stock................................6
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Section 3.6 Broker's or Finder's Fees....................6
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Section 3.7 Accuracy of Information......................6
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ARTICLE IVCERTAIN AGREEMENTS.......................................7
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Section 4.1 Reasonable Best Efforts......................7
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Section 4.2 Lock-Up Agreement.............................7
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Section 4.3 No Short Positions............................7
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Section 4.4 Assistance....................................8
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Section 4.5 Broker's Fee..................................8
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Section 4.6 Redemption Option.............................8
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ARTICLE VCONDITIONS TO PURCHASER'S OBLIGATIONS.....................9
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Section 5.1 Truth of Representations and Warranties......9
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Section 5.2 Performance of Agreements....................9
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Section 5.3 No Injunction................................9
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ARTICLE VICONDITIONS TO SELLERS' OBLIGATIONS.......................9
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Section 6.1 Truth of Representations and Warranties......9
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Section 6.2 Performance of Agreements...................10
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Section 6.3 No Injunction...............................10
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ARTICLE VIISURVIVAL OF REPRESENTATIONS; INDEMNIFICATION...........10
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Section 7.1 Survival of Representations.................10
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Section 7.2 Indemnities.................................10
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ARTICLE VIIIMISCELLANEOUS..........................................11
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Section 8.1 Expenses.....................................11
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Section 8.2 Governing Law; Consent to Jurisdiction.......11
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Section 8.3 Captions.....................................12
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Section 8.4 Notices......................................12
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Section 8.5 Parties in Interest..........................13
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Section 8.6 Waiver and Course of Dealing..................13
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Section 8.7 Counterparts.................................13
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Section 8.8 Entire Agreement.............................13
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Section 8.9 Third Party Beneficiaries....................13
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Section 8.10 Waiver of Jury Trial.........................13
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of December 31,
2000, by and among Junum.com, Inc., a Nevada corporation ("Purchaser"),
Eurbid.com, Inc., a Delaware corporation ("EURB"), and eCard Solutions, Inc., a
South Dakota corporation ("Seller").
W I T N E S S E T H :
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WHEREAS, Purchaser is a financial services company which has developed
certain proprietary technologies pertaining to the electronic administration of
consumer credit information databases and related systems for the automated
pre-qualification and solicitation of various consumer and small business
financial services products, all of which services are delivered primarily
through the Internet;
WHEREAS, Seller is a financial services company that has certain
proprietary business systems for the solicitation and origination of niche
consumer financial services products primarily offered by way of an unsecured
VISA credit card (the "Balance Transfer System") and is the owner of
approximately $352,475,289 of non-performing credit card receivables (the
"Receivables") acquired from various financial institutions for the purposes of
implementing aforesaid specialized business systems;
WHEREAS, Purchaser's systems, in part, serve to optimize consumer
credit rating through a series of automated and other processes and Seller's
systems serve to market a credit card-based credit solution to consumers with
impaired credit ratings;
WHEREAS, the parties hereto believe that the Purchaser's and Seller's
systems, taken together, may be further enhanced through the integration of
Purchaser's comprehensive Internet-based credit solutions with the Seller's
Balance Transfer System;
WHEREAS, the Seller desires to sell, and Purchaser desires to purchase,
the Receivables and the Balance Transfer System (together, the "Assets");
WHEREAS, EURB owns approximately 80% of the issued and outstanding
capital stock of Purchaser.
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16
NOW, THEREFORE, IT IS AGREED:
ARTICLE I
SALE OF RECEIVABLES
Section I.1 Sale of Assets. Subject to the terms and conditions herein
stated, Seller hereby agrees to sell, assign, transfer and deliver to Purchaser
on the Closing Date, and Purchaser agrees to purchase from Seller on the Closing
Date, all of the Assets.
Section I.2 Price. On the Closing Date, Purchasers shall pay to Sellers
a purchase price of $5,100,000 (the "Purchase Price"), payable in the form of
5,100 shares of the Series C Preferred Stock, $1,000 par value (the "Preferred
Stock") of EURBID.COM, INC..
Section I.3 Closing. The closing of the Sale referred to in Section 1.1
(the "Closing") shall take place as of December 31, 2000 at the offices of
Purchaser. Such time and date are herein referred to as the "Closing Date." The
Preferred Stock shall be delivered to Seller as soon as possible after the date
EURB files a certificate of designations with the Delaware Secretary of State.
EURB shall file such certificate of designation on or prior to January 31, 2001.
ARTICLE II
REPRESENTATIONS OF SELLERS
As of the date hereof and the Closing Date, Seller represents and
warrants, as follows:
Section II.1 Authorization and Validity of Agreement. Seller has the
absolute and unrestricted right, power, authority, and capacity to execute and
deliver this Agreement and the Closing Documents and to perform its obligations
under this Agreement and the Closing Documents. The execution, delivery and
performance by Seller of this Agreement and the Closing Documents are within its
power and have been duly authorized. Upon execution hereof, this Agreement and
the Closing Documents shall constitute valid and binding agreements and
obligations of Seller, enforceable against Seller in accordance with their
respective terms.
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Section II.2 Consents and Approvals; No Violations. The execution and
delivery of this Agreement by the Sellers and the consummation by the Sellers of
the sale of the Assets as contemplated herein and the other transactions
contemplated hereby (the "Sale") (a) will not violate any statute, rule,
regulation, order or decree of any public body or authority by which any Seller
is bound or by which any of their respective properties or assets are bound, (d)
will not require any filing with, or permit, consent or approval of, or the
giving of any notice to, any United States governmental or regulatory body,
agency or authority on or prior to the Closing Date (as defined in Section 1.3),
and (c) will not result in a violation or breach of, conflict with, constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation, payment or acceleration) under, or
result in the creation of any Encumbrance upon any of the properties or assets
of any Seller under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, franchise, permit, agreement, lease,
franchise agreement or any other instrument or obligation to which any Seller is
a party, or by which they or any of their respective properties or assets may be
bound.
Section II.3 Existence and Good Standing. (a) If any Seller is a
corporation, it is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, and is duly qualified or licensed
as a foreign corporation to conduct its business, and is in good standing in
each jurisdiction in which the character or location of the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification necessary.
Section II.4 Title to Property and Assets. (a) Schedule 2.4 is a list
of all of the Receivables. There is not under any of such Receivables any
default or any claim of default which with notice or lapse of time, or both,
would constitute a default by or on the part of Seller or the original creditor
who created such Receivables. Except as set forth in Schedule 2.4, the Seller
owns and has good title, free and clear of all Encumbrances, to the Assets. For
purposes hereof, an "Encumbrance" means any security interest, mortgage, lien,
charge, claim, condition, equitable interest, pledge, right of first refusal,
option, adverse claim or restriction of any kind, including, but not limited to,
any restriction on the use, transfer, receipt of income or other exercise of any
attributes of ownership.
(b) Upon assignment of the Receivables to Purchaser pursuant to this
Agreement, Purchaser will succeed to all rights and obligations of Seller and
the original creditor thereunder, and shall acquire good and valid title hereto,
free and clear of any Encumbrances. All of the Receivables are valid and in full
force and effect (subject to applicable statutes of limitation and bankruptcy
laws). Upon transfer of the Balance Transfer System to Purchaser pursuant to the
terms of this Agreement, Purchaser will acquire good and valid title thereto,
free and clear of any Encumbrances.
(c) The Receivables constitute all of the receivables which were
audited by KPMG LLP in connection with Seller's December 31, 1999 balance sheet
(under the name Brunswick Capital Partners, Inc.).
<PAGE>
Section II.5 Compliance with Law. Seller is and at all times has been
in full compliance in all respects with all Legal Requirements and Orders
applicable to the Assets. Seller has received no notice of any violation of any
applicable Legal Requirement or Order. No event has occurred or circumstance
exists that (with or without notice or lapse of time or both) may constitute or
result in a violation by Seller of, or a failure by Seller to comply with, any
applicable Legal Requirement or Order. For purposes of this Section 2.5, "Legal
Requirement" or "Law" means any federal, state, local, municipal or other
administrative order, constitution, law, code, rule, directive, ordinance,
principle of common law, regulation, statute and similar provisions having the
force or effect of law, and "Order" means any award, decision, summons, writ,
injunction, judgment, order, ruling, subpoena, citation, notice, demand letter,
directive, decree or verdict entered, issued, made, given or rendered by any
court, administrative agency or other governmental body or by any arbitrator.
Section II.6 Litigation. There are no (i) actions, suits or legal,
equitable, arbitrative or administrative proceedings pending, or to the
Knowledge of Seller, threatened against Seller or (ii) judgements, injunctions,
writs, rulings or orders by any Governmental Person against any Seller.
Section II.7 Broker's or Finder's Fees. No agent, broker, firm or other
Person acting on behalf of Sellers is, or will be, entitled to any commission or
broker's or finder's fees from the Purchaser in connection with any of the
transactions contemplated herein.
ARTICLE III
REPRESENTATIONS OF PURCHASER
As of the date hereof and the Closing Date, Purchaser represents and
warrants as follows:
Section III.1 Preferred Stock. Upon the execution and delivery of this
Agreement, and the issuance of the shares of Preferred Stock which constitute
the Purchase Price, such shares shall be duly authorized, validly issued, fully
paid and nonassessable.
Section III.2 Authorization and Validity of Agreement. Purchaser has
full power and authority (corporate or otherwise) to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Purchaser and, assuming the due execution of this Agreement by
Sellers, is a valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization and similar laws affecting the enforcement of creditors' rights
generally and to general equitable principles.
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Section III.3 Consents and Approvals; No Violations. The execution and
delivery of this Agreement by Purchaser and the consummation by Purchaser of the
purchase of the Assets as contemplated herein and the other transactions
contemplated hereby (the "Sale") (a) will not violate the provisions of the
Certificate of Incorporation or Bylaws of Purchaser, (b) will not violate any
statute, rule, regulation, order or decree of any public body or authority by
which Purchaser is bound or by which any of their respective properties or
assets are bound, (c) will not require any filing with, or permit, consent or
approval of, or the giving of any notice to, any United States governmental or
regulatory body, agency or authority on or prior to the Closing Date (as defined
in Section 1.3), and (d) will not result in a violation or breach of, conflict
with, constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, payment or
acceleration) under, or result in the creation of any Encumbrance upon any of
the properties or assets of the Purchaser under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
agreement, lease, franchise agreement or any other instrument or obligation to
which Purchaser is a party, or by which they or any of its properties or assets
may be bound.
Section III.4 Existence and Good Standing. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. Purchaser is duly qualified or licensed as a foreign corporation to
conduct its business, and is in good standing in each jurisdiction in which the
character or location of the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except where the failure to be so duly qualified or licensed would not have a
Material Adverse Effect. The term "Material Adverse Effect" means any
circumstance, change in or effect on Purchaser that is materially adverse to the
business, operations, properties, financial condition or results of operations
of Purchaser, taken as a whole.
Section III.5 Capital Stock. As of November 29, 2000, and after giving
effect to the 1:40 reverse stock split completed in November 2000, EURB had an
authorized capitalization consisting of 50,000,000 shares of common stock, par
value $.01 per share, of which 11,221,848 shares are issued and outstanding, and
10,000,000 shares of preferred stock, of which no shares are outstanding. All
such outstanding shares have been duly authorized and validly issued and are
fully paid and nonassessable. Pursuant to that certain Stock Exchange Agreement,
dated as of November 15, 2000 (the "Stock Exchange Agreement"), a copy of which
has been provided to Seller, as well as other agreements, EURB has agreed to
issue (i) 1,346 shares of the Series A Preferred Stock, (ii) 750 shares of
Series B Preferred Stock, (iii) 200,000 shares of common stock, and (iv)
warrants to purchase 2,690,000 shares of common stock, and has agreed to assume
Junum's obligations under certain outstanding stock options and warrants to
purchase the equivalent of 5,775,000 shares of EURB common stock (assuming
exercise of all such stock options and warrants).
Section III.6 Broker's or Finder's Fees. No agent, broker, firm or
other Person acting on behalf of Purchaser is, or will be, entitled to any
commission or broker's or finder's fees from any of the parties hereto, or from
any Person controlling, controlled by or under common control with any of the
parties hereto, in connection with any of the transactions contemplated herein,
except as set forth in Section 4.5.
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Section III.7 Accuracy of Information. None of the representations and
warranties of Purchaser contained herein or in the documents furnished by them
pursuant hereto contain any material misstatement of fact, or omit to state any
material fact necessary to make the statements herein or therein in light of the
circumstances in which they were made not misleading.
ARTICLE IV
CERTAIN AGREEMENTS
Section IV.1 Reasonable Best Efforts. Each of the parties hereto agrees
to use its reasonable best efforts to take, or cause to be taken, all action to
do or cause to be done, and to assist and cooperate with the other party hereto
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including, but not limited to, (a) the obtaining
of all necessary waivers, consents and approvals from governmental or regulatory
agencies or authorities and the making of all necessary registrations and
filings and the taking of all reasonable steps as may be necessary to obtain any
approval or waiver from, or to avoid any action or proceeding by, any
governmental agency or authority, (b) the obtaining of all necessary consents,
approvals or waivers from third parties and (c) the defending of any lawsuits or
any other legal proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the transactions contemplated hereby,
including, without limitation, seeking to have any temporary restraining order
entered by any court or administrative authority vacated or reversed.
Section IV.2 Lock-Up Agreement.
(a) All of the Preferred Stock constituting the Purchase Price, and all
shares of common stock issuable upon conversion of such Preferred Stock, shall
not be transferrable for a period of 24 months following the Closing Date;
provided, however, that with the prior written consent of EURB, Seller shall
have the right to transfer in a private transaction in compliance with all
applicable federal and state securities laws, all or any portion of the
Preferred Stock to any transferee (a) who executes an agreement satisfactory to
EURB acknowledging the lock-up and redemption provisions contained herein, and
that the Preferred Stock shall be subject to EURB's rights and claims, if any,
against Seller, and (b) who is reasonably acceptable to EURB and not in
competition with EURB or Purchaser.
(b) EURB hereby acknowledges that Seller shall have the right to
transfer 200 shares of Preferred Stock to Datel Communications, Inc. Such shares
shall not be subject to redemption as set forth in Section 4.6 below.
(c) Each certificate representing such shares of Preferred Stock or
common stock shall contain a legend describing the restrictions contained in
this Agreement.
<PAGE>
Section IV.3 No Short Positions. Without the prior written consent of
EURB, for a period of two years following the date hereof (the "Lock-up
Period"), Seller hereby agrees not to sell, loan, pledge, assign, transfer,
encumber, distribute, grant or otherwise dispose of, directly or indirectly, or
offer, contract or otherwise agree to do any of the foregoing, any rights with
respect to (a) any shares of the common stock (the "Common Stock") of EURB, (b)
any options or warrants to purchase any shares of Common Stock or any securities
convertible into, or exchangeable for, shares of Common Stock, or (c) any
securities convertible into or exchangeable for shares of Common Stock
(collectively, the "Securities"), in each case now owned or hereafter acquired
directly or indirectly by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition (collectively a
"Disposition"). The foregoing restriction is expressly agreed to preclude the
undersigned holder of the Securities from engaging during the Lock-up Period in
any hedging or other transaction which is designed to, or could reasonably
expected to lead to or result in a Disposition of the Securities, even if such
Securities would be disposed of by someone other than the undersigned.
Section IV.4 Assistance. As further consideration for the issuance of
the Preferred Stock, and to further induce EURB to issue such Preferred Stock,
Seller hereby agrees to use its best efforts to assist Purchaser in collecting
the Receivables.
Section IV.5 Broker's Fee. In consideration for introducing Purchaser
and Seller and assisting in the closing of the transactions contemplated herein,
Purchaser shall pay to GCH Capital, Ltd. a fee equal to (i) 600 shares of Series
B Preferred Stock, and (ii) an amount equal to ten percent (10%) of the amount
of the Receivables collected (the "Collection Fee"). EURB shall pay the
Collection Fee in quarterly payments, payable within 45 days after the end of
each fiscal quarter, and shall provide within such time period a statement
showing the total amount of collections received by EURB in such quarter.
Notwithstanding anything herein to the contrary, the fees described in this
Section 4.5 shall not be considered a cost, commission or fee relating to the
cost of collections for purposes of Section 4.6(c).
Section IV.6 Redemption Option.
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(a) EURB shall have the right, at any time following November 15, 2002,
to redeem for a redemption price of $0.10 per share of Series C Preferred Stock,
plus the Redemption Assignment (as defined in Section (d) below) all or any
portion of the Series C Preferred Stock which constitutes the Purchase Price,
but only in the event Purchaser receives and collects less than $4,900,000 in
Net Collections from the Receivables. In such event, on or after November 15,
2002, EURB shall have the right to redeem a number of shares of Preferred Stock
equal to the difference between $4,900,000 and the Net Collections.
<PAGE>
(b) The Purchaser shall provide to Seller a statement showing the total
amount of Net Collections within 45 days following the end of each fiscal
quarter, and, upon delivery of such statement, an amount of Preferred Stock
equal to such Net Collections shall thereafter be non-redeemable. Seller or its
agents shall have the right, at Seller's sole expense, to examine and audit (the
"Statement Audit") the books and records of Purchaser with respect to the Net
Collections and any statement of Net Collections delivered by EURB to Seller
pursuant to this Agreement. In the event the Statement Audit reveals a
discrepancy pursuant to which the actual amount of Net Collections were more
than ten percent (10%) greater than the Net Collections reported to Seller on a
Net Collections Statement, than the Purchaser shall reimburse the Seller for the
reasonable out-of-pocket costs and expenses of conducting the Statement Audit.
(c) For purposes hereof, the term "Net Collections" shall mean the
amount of all balance transfers arising from conversion of debts constituting a
part of the Receivables, plus the amount of actual cash collections received by
Junum in satisfaction of any portion of the Receivables that are not considered
balance transfers, less (i) all direct operating costs of Junum relating to the
collection or conversion of the Receivables, (ii) any third party commissions or
fees relating to the collection or conversion of the Receivables, and (iii) any
other direct costs of collection or conversion of the Receivables; provided,
however, that monthly third party servicing fees which are deducted from debtor
payments shall not be considered a cost of collection. A "balance transfer"
shall mean the amount of debt agreed to be transferred to a new credit card
issued by or through Purchaser, and for which Purchaser or Purchaser's agent
receives at least one cash payment from the debtor.
(d) In the event any portion of the Series C Preferred Stock is
redeemed pursuant to Section(a) above, than the Purchaser shall transfer the
Redemption Assignment to Seller upon receipt of the certificates evidencing the
redeemed Series C Preferred Stock. The Redemption Assignment shall mean an
assignment of all or a portion of the Receivables which have not been previously
converted or paid, equal to a fraction, the numerator of which is the number of
shares of Series C Preferred Stock redeemed and to be redeemed pursuant to
Section (a), and the denominator of which is equal to 4,900; provided, however,
that such fraction shall in no event exceed 1.00.
Section IV.7 Registration Rights.
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<PAGE>
(a) If anytime prior to the date that the common stock issuable upon
conversion of the Preferred Stock can be sold (without regard to any Lock-Up
Agreements contained herein or otherwise) without registration pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the "Securities Act"), EURB proposes to register any of its Common
Stock under the Securities Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely for the
sale of securities to participants in a Company stock plan or a registration on
Form S-4 promulgated under the Securities Act or any successor or similar form
registering stock issuable upon a reclassification, upon a business combination
involving an exchange of securities or upon an Exchange offer for securities of
the issuer or another entity), EURB shall, at such time, promptly give Seller
written notice of such registration (a "Piggyback Registration Statement"). Upon
the written request of Seller given by fax within ten (10) days after mailing of
such notice by EURB, EURB shall cause to be included in such registration
statement under the Securities Act ("Piggyback Registration") all of the common
stock issuable upon conversion of the Preferred Stock that Seller has requested
to be registered (the "Registrable Securities") to the extent such inclusion
does not violate the registration rights of any other security holder of EURB;
provided, however, that nothing herein shall prevent EURB from withdrawing or
abandoning such registration statement prior to its effectiveness.
(b) In the case of a Piggyback Registration pursuant to an underwritten
public offering by EURB, if the managing underwriter determines and advises in
writing that the inclusion in the related Piggyback Registration Statement of
all Registrable Securities proposed to be included would interfere with the
successful marketing of the securities proposed to be registered by EURB, then
the number of such Registrable Securities to be included in such Piggyback
Registration Statement, to the extent any such Registrable Securities may be
included in such Piggyback Registration Statement, shall be reduced as requested
by such managing underwriter. If required by the managing underwriter of such an
underwritten public offering, holders of the Registrable Securities shall enter
into an agreement limiting the number of Registrable Securities to be included
in such Piggyback Registration Statement and the terms, if any, regarding the
future sale of such Registrable Securities.
ARTICLE V
CONDITIONS TO PURCHASER'S OBLIGATIONS
The purchase of the Assets by Purchaser on the Closing Date is
conditioned upon the satisfaction or waiver, at or prior to the consummation of
the Sale, of the following conditions:
Section V.1 Truth of Representations and Warranties. The
representations and warranties of Seller contained in this Agreement or in any
Schedule delivered pursuant hereto shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties have been made on and as of such date (except to
the extent that any such representation and warranty is stated in this Agreement
to be made as of a specific date, in which case such representation and warranty
shall be true and correct as of such specified date).
Section V.2 Performance of Agreements. Each and all of the agreements
of Sellers to be performed at or prior to the Closing Date pursuant to the terms
hereof shall have been duly performed in all material respects.
Section V.3 No Injunction. No court or other government body or public
authority shall have issued an order which shall then be in effect restraining
or prohibiting the completion of the transactions contemplated hereby.
<PAGE>
ARTICLE VI
CONDITIONS TO SELLERS' OBLIGATIONS
The sale of the Assets on the Closing Date is conditioned upon
satisfaction or waiver, at or prior to the consummation of the Sale of the
following conditions:
Section VI.1 Truth of Representations and Warranties. The
representations and warranties of Purchaser contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of such date.
Section VI.2 Performance of Agreements. Each and all of the agreements
of Purchaser to be performed at or prior to the Closing Date pursuant to the
terms hereof shall have been duly performed in all material respects.
Section VI.3 No Injunction. No court or other government body or public
authority shall have issued an order which shall then be in effect restraining
or prohibiting the completion of the transactions contemplated hereby.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section VII.1 Survival of Representations. The representations and
warranties set forth in this Agreement shall survive for three years after the
Closing Date.
Section VII.2 Indemnities. (a) Each Seller hereby agrees to indemnify
and hold harmless Purchaser from and against any and all damages, claims, losses
or expenses (including reasonable attorneys' fees and expenses) ("Damages")
actually suffered or paid by Purchaser, Junum and/or their Subsidiaries as a
result of the breach of any representation or warranty made by such Seller in
this Agreement. To the extent that Seller's undertakings set forth in this
Section 7.2(a) may be unenforceable, Sellers shall contribute the maximum amount
that they are permitted to contribute under applicable law to the payment and
satisfaction of all Damages incurred by the parties entitled to indemnification
hereunder.
(b) Purchaser hereby agree to indemnify and hold harmless Sellers
against Damages actually suffered or paid by Sellers as a result of the breach
of any representation or warranty made by the Purchaser in this Agreement. To
the extent that the Purchaser's undertakings set forth in this Section 7.2(b)
may be unenforceable, the Purchaser shall contribute the maximum amount that
they are permitted to contribute under applicable law to the payment and
satisfaction of all Damages incurred by the parties entitled to indemnification
hereunder.
<PAGE>
(c) Any party seeking indemnification under this Article VII (an
"Indemnified Party") shall give each party from whom indemnification is being
sought (each, an "Indemnifying Party") notice of any matter for which such
Indemnified Party is seeking indemnification, stating the amount of the Damages,
if known, and method of computation thereof, and containing a reference to the
provisions of this Agreement in respect of which such right of indemnification
is claimed or arises. The obligations of an Indemnifying Party under this
Article VII with respect to Damages arising from any claims of any third party
which are subject to the indemnification provided for in this Article VII
(collectively, "Third Party Claims") shall be governed by and contingent upon
the following additional terms and conditions: if an Indemnified Party shall
receive, after the Closing Date, initial notice of any Third Party Claim, the
Indemnified Party shall give the Indemnifying Party notice of such Third Party
Claim within such time frame as is necessary to allow for a timely response and
in any event within 30 days of the receipt by the Indemnified Party of such
notice; provided, however, that the failure to provide such timely notice shall
not release the Indemnifying Party from any of its obligations under this
Article VII except to the extent the Indemnifying Party is materially prejudiced
by such failure. The Indemnifying Party shall be entitled to assume and control
the defense of such Third Party Claim at its expense and through counsel of its
choice if it gives notice of its intention to do so to the Indemnified Party
within 30 days of the receipt of such notice from the Indemnified Party;
provided, however, that if there exists or is reasonably likely to exist a
conflict of interest that would make it inappropriate in the judgment of the
Indemnified Party (upon advice of counsel) for the same counsel to represent
both the Indemnified Party and the Indemnifying Party, then the Indemnified
Party shall be entitled to retain its own counsel, at the expense of the
Indemnifying Party, provided that the Indemnified Party and such counsel shall
contest such Third Party Claims in good faith. In the event the Indemnifying
Party exercises the right to undertake any such defense against any such Third
Party Claim as provided above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the Indemnifying Party,
at the Indemnifying Party's expense, all witnesses, pertinent records, materials
and information in the Indemnified Party's possession or under the Indemnified
Party's control relating thereto as is reasonably required by the Indemnifying
Party. Similarly, in the event the Indemnified Party is, directly or indirectly,
conducting the defense against any such Third Party Claim, the Indemnifying
Party shall cooperate with the Indemnified Party in such defense and make
available to the Indemnified Party, at the Indemnifying Party's expense, all
such witnesses, records, materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control relating thereto as is
reasonably required by the Indemnified Party. The Indemnifying Party shall not,
without the written consent of the Indemnified Party, (i) settle or compromise
any Third Party Claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the delivery by the claimant or
plaintiff to the Indemnified Party of a written release from all liability in
respect of such Third Party Claim or (ii) settle or compromise any Third Party
Claim in any manner that may adversely affect the Indemnified Party. Finally, no
Third Party Claim which is being defended in good faith by the Indemnifying
Party or which is being defended by the Indemnified Party as provided above in
this Section 7.2(c) shall be settled by the Indemnified Party without the
written consent of the Indemnifying Party.
<PAGE>
ARTICLE VIII
MISCELLANEOUS
Section VIII.1 Expenses. The parties hereto shall pay all of their own
expenses relating to the transactions contemplated by this Agreement, including,
without limitation, the fees and expenses of their respective counsel, financial
advisors and accountants.
Section VIII.2 Governing Law; Consent to Jurisdiction. (a) The
interpretation and construction of this Agreement, and all matters relating
hereto, shall be governed by the laws of the State of California applicable to
contracts made and to be performed entirely within the State of California. In
the event of litigation, the prevailing party shall be entitled to reasonable
attorneys fees and costs.
(b) Each of the parties agrees that any legal action or proceeding with
respect to this Agreement may be brought in the Courts of the State of
California or the United States District Court for the Central District of
California, and, by execution and delivery of this Agreement, each party hereto
hereby irrevocably submits itself in respect of its property, generally and
unconditionally, to the non-exclusive jurisdiction of the aforesaid courts in
any legal action or proceeding arising out of this Agreement. Each of the
parties hereto hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to in the preceding sentence. Each party hereto hereby consents
to process being served in any such action or proceeding by the mailing of a
copy thereof to the address set forth opposite its name below and agrees that
such service upon receipt shall constitute good and sufficient service of
process or notice thereof. Nothing in this paragraph shall affect or eliminate
any right to serve process in any other manner permitted by law.
Section VIII.3 Captions. The Article and Section captions used herein
are for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section VIII.4 Notices. Any notice or other communications required or
permitted hereunder shall be sufficiently given if delivered in person or sent
by telecopy or by registered or certified mail, postage prepaid, addressed as
follows:
if to Purchaser, to it at:
1590 Corporate Drive
Costa Mesa, California 92626
Attention: President
Tel: (714) 979-5063
Fax: (714) 979-5067
<PAGE>
and if to Seller, to it at:
eCard Solutions, Inc.
100 South Dakota Ave, Suite 200
Sioux Falls, South Dakota 57104
Attention: Director
Tel: (605) 338-1241
Fax: (605) 338-4237
or such other address or number as shall be furnished in writing by any such
party, and such notice or communication shall be deemed to have been given as of
the date so delivered, sent by telecopy or mailed.
Section VIII.5 Parties in Interest. This Agreement may not be
transferred, assigned, pledged or hypothecated by any party hereto, other than
by operation of law. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
Section VIII.6 Waiver and Course of Dealing. No course of dealing or
any delay or failure to exercise any right hereunder on the part of any party
thereto shall operate as a waiver of such right or otherwise prejudice the
rights, powers or remedies of such party.
Section VIII.7 Counterparts. This Agreement may be executed in two or
more counterparts, all of which taken together shall constitute one instrument.
Section VIII.8 Entire Agreement. This Agreement, including the
Exhibits, Schedules and other documents referred to herein which form a part
hereof, contain the entire understanding of the parties hereto with respect to
the subject matter contained herein and therein.
Section VIII.9 Third Party Beneficiaries. Each party hereto intends
that this Agreement shall not benefit or create any right or cause of action in
or on behalf of any Person other than the parties hereto.
Section VIII.10 Waiver of Jury Trial. THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, each of the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, all as of
the day and year first above written.
<PAGE>
4
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PURCHASER SELLER:
JUNUM.COM, INC., a Nevada corporation eCard Solutions, Inc.
By: _________________________ By: _________________________
David B. Coulter Name:
President and CEO Title:
----------------------------------------- -------------------------------------
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EURBID.COM, INC, a Delaware corporation
By:
David B. Coulter
President and CEO
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