Exhibit 2.5 Acquisition Agreement between Xx0xxx.xxx Inc.
(Delaware) and MSK Industries Inc. (Delaware) December 10, 1999
ACQUISITION AGREEMENT
AGREEMENT dated 10th December 1999 ("the Agreement"), by, between
and among XX0XXX.XXX INC, a company incorporated under the laws
of the state of Delaware (herein referred to as CI4NET), the
persons listed on Exhibit A attached hereto and made a part
hereof, being all of the shareholders and executive officers of
CI4NET (hereinafter referred to as "MANAGEMENT"); MSK INDUSTRIES
INC, a company incorporated under the laws of Delaware
(hereinafter referred to as "MSK "); and the persons listed on
Exhibit "A" attached hereto and made a part hereof, (hereinafter
referred to as the "SELLERS").
WHEREAS, the SELLERS own a total of 2,238,400 shares of common
stock, $0.001 par value, of MSK , said shares being 100% of the
issued and outstanding common stock of MSK .
WHEREAS, the SELLERS desire to sell and CI4NET desires to
purchase one hundred (100%) percent of such shares.
NOW, THEREFORE, in consideration of the mutual convenants,
agreements, representations and warranties herein contained, the
parties hereby agree as follows:
1. Purchase and Sale - The SELLERS hereby agree to sell,
transfer, assign and convey to CI4NET and CI4NET hereby agrees
to purchase and acquire from the SELLERS, a total of 2,238,400
shares of common stock of MSK , which equates to one hundred
percent (100%) percent of all of MSK 's currently issued and
outstanding common stock (the MSK Common Shares"), in a tax-
free stock-for-stock acquisition.
2. Purchase Price - The aggregate purchase price to be paid
by
CI4NET for the MSK Common Shares shall be 2,238,400 post-
reverse split shares of CI4NET $0.001 par value voting common
stock (the "CI4NET Common Shares"). The CI4NET Common Shares
will be issued to the individual SELLERS in accordance with
Exhibit "A-1" attached hereto.
3. Warranties Representations and Covenants of MSK and MSK
PRINCIPALS - In order to induce CI4NET to enter into this
Agreement and to complete the transaction contemplated hereby,
MSK and its principal executive officers (hereinafter
referred to as the "MSK PRINCIPALS", jointly and severally
warrant and represent to CI4NET that:
(a) Organization and Standing MSK is a corporation duly
organized, validly existing and in a good standing under the
laws of the State of Delaware, is qualified to do business
as a foreign corporation in every other state or
jurisdiction in which it operates to the extent required by
the laws of such states and jurisdictions, and has full
power and authority to carry on its business as now
conducted and to own and operate its assets, properties and
business. Attached hereto as Exhibit "B" are true and
correct copies of MSK 's Certificate of Incorporation,
amendments thereto and all current \by-laws of MSK . No
changes thereto will be made in any of the Exhibit "B"
documents before the closing. MSK has no subsidiaries
except as listed or any investments or ownership interests
in any corporation, partnership, joint venture or other
business enterprise which is material to its business.
(b) Capitalization As of the Closing Date of MSK 's entire
authorized equity capital consists of 25,000,000 shares of
$0.001 par value, of which 2,238,400 shares of Common Stock
will be outstanding as of the Closing. As of the Closing
Date, there will be no other voting or equity securities
authorized or issued, nor any authorized or issued securities
convertible into voting stock, and no outstanding
subscriptions, warrants, calls, options, rights, commitments
or agreements by which MSK or the SELLERS are bound, calling
for the issuance of any additional shares of common stock or
any other voting or equity security. The 2,238,400 issued and
outstanding MSK Common Shares to be transferred by SELLERS
constitutes one hundred (100%) percent of the currently issued
and outstanding shares of Common Stock of MSK , which includes
inter-claim, that same percentage of MSK 's voting power,
right to receive dividends, when, as and if declared and paid,
and the right to receive the proceeds of liquidation
attributable to common stock, if any.
(c) Ownership of MSK Shares Each SELLER warrants and
represents, severally, that as of the date hereof, such SELLER
is the sole owner of the MSK Common Shares listed by his or
her name on Exhibit "A-1", free and clear of all liens,
encumbrances, and restrictions whatsoever, except that the MSK
Common Shares so listed have not been registered under the
Securities Act of 1933, as amended (the "33 Act"), or any
applicable State Securities laws. By SELLERS' transfer of the
MSK Common Shares to CI4NET pursuant to this Agreement.
CI4NET will thereby acquire 100% of the outstanding capital
stock of MSK , free and clear of all liens, encumbrances and
restrictions of any nature whatsoever, except by reason of the
fact that the MSK Common Shares will not have been registered
under the '33 Act, or any applicable State securities laws.
(d) Taxes MSK has filed all federal, state and local income
or other tax returns and reports that it is required to file
with all governmental agencies, wherever situate, and has paid
or accrued for payment all taxes as shown on such returns,
such that a failure to file, pay or accrue will not have a
material adverse effect on MSK . MSK 's income tax returns
have never been audited by any authority empowered to do so.
(e) Pending Actions There are no known material legal
actions,
lawsuits, proceedings or investigations, either administrative
or judicial, pending or threatened, against or affecting MSK ,
or against the MSK PRINCIPALS that arrive out of their
operation of MSK , except as described in Exhibit "C" attached
hereto. MSK is not knowingly in material violation of any
law, material ordinance or regulation of any kind whatever,
including, but not Inc to laws, rules and regulations
governing the sale of its services, the 33 Act, the Securities
Exchange Act of 1934, as amended (the "34 Act"), the Rules and
Regulations of the U.S. Securities and Exchange Commission
("SEC"), or the Securities Laws and Regulations of any state
or nation.
(f) Government and Regulation MSK holds the licenses and
registrations set forth on Exhibit "D" hereto from the
jurisdictions set forth therein, which licenses and
registrations are all of the licenses and registrations
necessary to permit MSK to conduct its current business.
All of such licenses and registrations are in full force and
effect, and there are no proceedings, hearings or other
actions pending that may affect the validity or continuation
of any of them. No approval of any other trade or
professional association or agency of government other than as
set forth on Exhibit "D" is required for any of the
transactions effected by this Agreement, and the completion of
the transactions contemplated by this Agreement will not, in
and of themselves, affect or jeopardize the validity or
continuation of any of them.
(g) Ownership of Assets Except as set forth in Exhibit "E"
attached hereto, MSK has good, marketable title, without any
liens or encumbrances of any nature whatever, to all of the
following, if any; assets, properties and rights of every type
and description, including, without limitation, all cash on
hand and in banks, certificates of deposit, stocks, bonds, and
other securities, good will, customer lists, its corporate
name and all variants thereof, trademarks and trade names,
copyrights and interests thereunder, licenses and
registrations, pending licenses and permits and applications
therefor, inventions, processes, know-how, trade secrets, real
estate and interests therein and improvements thereto,
machinery, equipment, vehicles, notes and accounts receivable,
fixtures, rights under agreements and leases, franchises, all
rights and claims under insurance policies and other contracts
of whatever nature, rights in funds of whatever nature, books
and records and all other property and rights of every kind
and nature owned or held by MSK as of this date, and will
continue to hold such title on and after the completion of the
transactions contemplated by this Agreement; nor, except in
the ordinary course of its business, has MSK disposed of any
such asset since the date of the most recent balance sheet
described in Section 3(0) of this Agreement.
(h) No Debt Owed by MSK to MSK PRINCIPALS Except as set
forth in Exhibit "F" attached hereto, MSK does not owe any
money, securities, or property to either the MSK PRINCIPALS
or any member of their families or to any company controlled
by such a person, directly or indirectly. To the extent that
the MSK PRINCIPLES may have any undisclosed liability to pay
any sum or property to any such person or equity or any member
of their families such liability is hereby forever irrevocably
released and discharged.
(i) Complete Records All of MSK 's books and records,
including, without limitation, its books of account, corporate
records, minute book, stock certificate books and other
records are up-to-date, complete and reflect accurately and
fairly the conduct of its business in all material respects
since its date of incorporation.
(j) No Misleading Statements or Omissions Neither this
Agreement nor any financial statement, exhibit, schedule or
document attached hereto or presented to CI4NET in connection
herewith, contains any materially misleading statement or
omits any fact or statement necessary to make the other
statements or facts therein set forth not materially
misleading.
(k) Validity of this Agreement All corporate and other
proceedings required to be taken by the SELLERS and by MSK
in order to enter into and carry out this Agreement have been
duly and properly taken. This Agreement has been duly
executed by the SELLERS and by MSK , and constitutes the valid
and binding obligation of each of them, enforceable in
accordance with its terms except to the extent Inc by
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws relating to or effecting generally the
enforcement of creditors rights. The execution and delivery
of this Agreement and the carrying out of its purposes will
not result in the breach of any of the terms and conditions
of, or constitute a default under or violate, MSK 's
Certificate of Incorporation or By-Laws, or any material
agreement, lease, mortgage, bond, indenture, license or other
material document or undertaking, oral or written, to which
MSK or the SELLERS is a party or is bound or may be affected,
nor will such execution, delivery and carrying out violate any
law, rule or regulation or any order, with injunction or
decree, of any court, regulatory agency or other governmental
body; and the business now conducted by MSK can continue to
be so conducted after completion of the transaction
contemplated hereby, with MSK as a wholly owned subsidiary of
CI4NET.
(l) Concepts and Approvals: Compliance with Laws Neither MSK
nor the SELLERS are required to make any filing with, or
obtain the consent or approval of, any person or entity as a
condition to the consummation of the transactions contemplated
by this Agreement. The business of MSK has been operated in
material compliance with all laws, rules, and regulations
applicable to its business, including, without limitation,
those related to securities matters, trade matters,
environmental matters, public health and safety, and labor and
employment.
(m) Access to Books and Records CI4NET will have full and
free
access to MSK 's books during the course of this transaction
prior to Closing, during regular business hours, on reasonable
notice.
4. Warranties, representations and Covenants of CI4NET AND
MANAGEMENT OF CI4NET ("MANAGEMENT") In order to induce the
SELLERS and MSK to enter into this Agreement and to complete the
transaction contemplated hereby, CI4NET AND MANAGEMENT jointly
and severally warrant, represent and covenant to MSK and SELLERS
that :
(a) Organization and Standing CI4NET is a corporation
duly
organized, validly existing and in good standing under
the laws of the State of Delaware, will be qualified to
do business as a foreign corporation in every other state
and jurisdiction in which it operates to the extent
required by the laws of such states or jurisdictions, and
will have full power and authority to carry on its
business as now conducted and to own and operate its
assets, properties and business. CI4NET has no
subsidiaries or any other investments or ownership
interests in any corporation, partnership, joint venture
or other business enterprise.
(b) Capitalization CI4NET's entire authorized equity
capital consists of 100,000,000 shares of voting common
stock, $0.001 par value. As of the Closing, will have
issued and outstanding 24,560,513 shares of voting common
stock, $0.001 par value and no shares of preferred stock
issued. Upon issuance, all of the CI4NET Common Stock
will be validly issued, fully paid and non-assessable.
The relative rights and preferences of CI4NET's equity
securities are set forth on the Certificate of
Incorporation, as amended and CI4NET's By-laws (Exhibit
"H" hereto). There are no other voting or equity
securities authorized or issued, not any authorized or
issued securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options,
rights, commitments or agreements by which CI4NET is
bound, calling for the issuance of any additional shares
of common stock or any other voting or equity security.
The By-laws of CI4NET provide that a simple majority of
the shares voting at a stock holders' meeting at which a
quorum is present may elect all of the directors of
CI4NET. Cumulative voting is not provided for by the By-
Laws or Certificate of Incorporation of CI4NET.
Accordingly, as of the Closing the 2,238,400 shares being
issued to and acquired by the SELLERS will constitute
9.1% of the 24,560,513 shares of CI4NET which will then
be issued and outstanding (including all consulting fees)
which includes, inter alia, that same percentage of
CI4NET's voting power (subject to the provisions
regarding cumulative rights), right to receive dividends,
when, as and if declared and paid, and the right to
receive the proceeds of liquidation attributable to
common stock, if any.
(c) Ownership of Shares By CI4NET's issuance of the
CI4NET
Common Shares to the SELLERS pursuant to this Agreement,
the SELLERS will thereby acquire good, absolute
marketable title thereto, free and clear of all liens,
encumbrances and restrictions of any nature whatsoever,
except by reason of the fact that such CI4NET shares will
not have been registered under the 33 Act, or any
applicable state securities laws.
(d) Significant Agreements CI4NET is not and will not at
Closing be bound by any of the following:
(i) Employment, advisory or consulting contract
(except as described in Section 12 herein).
(ii) Plan providing for employee benefits of any
nature.
(iii) Lease with respect to any property or
equipment.
(iv) Contract of commitments for any current
expanditure.
(v) Contract or commitment pursuant to which it
has
assumed, guaranteed, endorsed or otherwise become
liable for any obligation of any other person, firm
or organization.
(vi) Contract, agreement, understanding, commitment
or arrangement either than in the normal course of
business, not set forth in the Agreement or an
Exhibit hereto.
(vii) Agreement with any person relating to the
dividend, purchase or sale of securities, that has
not been settled by the delivery of payment of
securities when due, and which remains unsettled
upon the date of this Agreement.
(e)Taxes CI4NET has filed all federal, state and local
income or other tax returns and reports that it is
required to file with all governmental agencies, wherever
situate, and has paid all taxes as shown on such returns.
All of such returns are true and complete. CI4NET's
income tax returns have never been audited by say
authority empowered to do so.
(f)No Pending Actions To the best of management's
knowledge, there are no legal actions, lawsuits,
proceedings or investigations, either administrative or
judicial, pending or threatened against or affecting
CI4NET, or against any of the CI4NET MANAGEMENT and
arising out of their operation of CI4NET. CI4NET has been
in compliance with, and has not received notice of
violation of any law, ordinance of any kind whatever,
including, but not Inc to, the 33 Act, the Rules and
Regulations of the SEC, or the Securities Laws and
Regulations of any sale. CI4NET is not an investment
company as defined in, or otherwise subject to regulation
under, the Investment Company Act of 1940. CI4NET is not
required to file reports pursuant to either Section 13 or
Section 15 (d) of the 34 Act.
(g)Corporate Records All of CI4NET's books and records,
including, without limitation, its books of account,
corporate records, minute book, stock certificate books
and other records are up-to-date complete and reflect
accurately and fairly the conduct of its business in all
respects since its date of incorporation; all of said
books and records will be made available for inspection
by MSK's authorized representatives prior to the Closing
as provided by Section 4(I) herein, and will be delivered
to CI4NET's new management at the Closing.
(h)No Misleading Statements or Omissions Neither this
agreement nor any financial statement, exhibit, schedule
or document attached hereto or presented to MSK in
connection herewith contains any materially misleading
statement, or omits any fact or statement necessary to
make the other statements or facts therein set forth not
materially misleading.
(i)Validity of this Agreement All corporate and other
proceedings required to be taken by CI4NET in order to
enter into and to carry out this Agreement will have been
duly and properly taken at or before the Closing. This
Agreement has been duly executed by CI4NET, constitutes a
valid and binding obligation of CI4NET enforceable in
accordance with its terms. The execution and delivery of
this Agreement and the carrying out of its purposes will
not result in the breach of any of the terms or
conditions of, or constitute a default under or violate,
CI4NET's Certificate of Incorporation- or By-Laws, or any
agreement, lease, mortgage, bond, indenture, license or
other document or undertaking, oral or written, to which
CI4NET is a party or is bound or may be affected nor will
such execution, delivery and carrying out violate any
law, rule or regulation or any order, writ, injunction or
decree of any court, regulatory agency or other
governmental body.
(j)Consents and Approvals, Compliance with Laws Except for
the notices to be filed as described in Section 7(a)(v)
herein, neither MSK nor MANAGEMENT is required to make
any filing with, or obtain the consent or approval of,
any person or entity as a condition to the consummation
of the transactions contemplated by this Agreement. The
business of CI4NET has been operated in compliance with
all laws, rules and regulations applicable to its
business, including, without limitation, those related to
securities matters, trade matters, environmental matters,
public health and safety, and labor and employment.
(k)Access to Books and Records MSK and SELLERS will have
full and free access to MSK 's books and records during
the course of this transaction prior to and at the
Closing on reasonable notice.
(l)Directors and Shareholders Approval As of the Closing,
CI4NET's Board of Directors and Shareholders, by meeting
or consent shall have properly authorized the matters
described in section 7(a)(iv)herein.
(m)The CI4NET Shares All of the CI4NET Common Shares
issued
to SELLERS shall be validly issued, fully-paid non-
assessable shares of CI4NET Common Stock, with full
voting rights, dividend rights, and right to receive the
proceeds of liquidation , if any, as set forth in
CI4NET's Certificate of Incorporation.
5. Term: Indemnification All representations, warranties,
covenants and agreements made herein and in the exhibits
attached hereto shall survive the execution and delivery of
this Agreement and payment pursuant thereto. MANAGEMENT and
MSK MANAGEMENT ("management") of both parties to the
agreement hereby agree, jointly and severally, to indemnify,
defend, and hold harmless CI4NET, MSK , and the SELLERS from
and against any damage, loss, liability, or expense (including
without limitation, reasonable expenses of investigation and
reasonable attorney's fees) arising out of any material breech
of any representation, warranty, covenant, or agreement made
by MSK MANAGEMENT or management in this Agreement.
6. Restricted Shares: Legend 1,200,000 of the CI4NET shares
to
be issued are freetrading shares as per the tax free stock for
stock consideration, the remainder of 1,038,400 CI4NET Common
Shares issued to SELLERS hereunder will be "restricted
securities" as defined in Rule 144 under the 33 Act and each
stock certificate issued to SELLERS hereunder, will bear the
usual restrictive legend to such effect. Appropriate Stop
Transfer instructions will be given to CI4NET '' stock
transfer agent.
7. Conditions Precedent to Closing (a) The obligations of
MSK
and the SELLERS under this Agreement shall be and are subject
to fulfillment, prior to or at the Closing, of each of the
following conditions:
(i) That CI4NET's and MANAGEMENT's representations and
warranties contained herein shall be true and correct at
the time of Closing as if such representations and
warranties were made at such time, and MANAGEMENT will
deliver an executed certification confirming the
foregoing;
(ii) That CI4NET and MANAGEMENT shall have performed or
complied with all agreements, terms and conditions
required by this Agreement to be performed or complied
with by them prior to or at the time of the Closing;
(iii) That CI4NET's directors and shareholders, by
proper
and sufficient vote taken either by consent or at a
meeting duly and properly called and held, shall have
properly approved all of the matters required to be
approved by CI4NET's directors and shareholders,
respectively;
(iv) That CI4NET shall have filed the notice of the
reverse split required by Rule 10b-17 under that Act, and
shall have sent notice to its stockholders of the
transactions contemplated herein; and
(v) That CI4NET's Board of Directors, by proper and
sufficient vote, shall have approved this Agreement and
the transactions contemplated hereby; approved the
contemplated reverse split of CI4NET's outstanding Common
Stock without changing either the authorized shares or
the par value; approved the change of CI4NET's corporate
name to a name selected by MSK ; approved the resignation
of all of CI4NET's current directors and the election of
up to three designees of MSK to serve as directors in
place of CI4NET's current directors; and will have
approved such other changes as are consistent with this
Agreement and approved by MSK and CI4NET; and
(b) The obligations of CI4NET and MANAGEMENT under this
Agreement shall be and are subject to fulfillment, prior to or
at the Closing of each of the following conditions:
(i) That MSK 's and SELLERS' representations and
warranties
contained herein shall be true and correct at the time of
Closing as if such representations and warranties were
made at such time and MSK and the MSK PRINCIPALS shall
deliver an executed certification confirming the
foregoing;
(ii) That MSK and MSK PRINCIPALS shall have performed
or complied with all agreements, terms and conditions
required by this Agreement to be performed or complied
with by them prior to or at the time of Closing; and
8 Termination This Agreement may be terminated at any time
before
or at Closing, by;
(a)The mutual agreement of the parties;
(b)Any party if:
(iii) Any legal proceeding shall have been
instituted
or shall be imminently threatening to delay,
restrain or prevent the consummation of this
Agreement.
Upon termination of this Agreement for any reason, in accordance
with the terms and conditions set forth in this paragraph, each
said party shall bear all costs and expenses as each party has
incurred and no party shall be liable to the other.
9. Exhibits All Exhibits attached hereto are incorporated
herein
by this reference as if they were set forth in their entirety.
10. Miscellaneous Provisions This Agreement is the entire
agreement between the parties in respect of the subject matter
hereof, and there are no other agreements, written or oral,
nor may this Agreement be modified except in writing and
executed by all of the parties hereto. The failure to insist
upon strict compliance with any of the terms, covenants or
conditions of this Agreement shall not be deemed a waiver or
relinquishment of such rights or power at any other time or
times.
11. Closing The Closing of the transactions contemplated by
this Agreement ("Closing") shall take place at the offices of
CI4NET, at 1.00 P.M. on the first business day after the
letter of the approval of SELLERS owning at least 80% of MSK
's Common Stock or the shareholders of CI4NET approving this
Agreement and the matters referred to in section 7(a)(vi)
herein, or such other date as the parties hereto shall
mutually agree upon. At the Closing, all of the documents and
items referred to herein shall be exchanged.
12. Prohibited Actions Between the date hereof and the
effective date of the merger, neither Purchaser nor Seller
will, except with the prior written consent of the other:
(a)issue or sell any stock, bonds, or other corporate
securities;
(b)incur any obligation or liability (absolute or contingent),
except current liabilities incurred, and obligations under
contracts entered into, other than in the ordinary course of
business;
(c) discharge or satisfy any lien or encumbrance or pay any
obligation or liability (absolute or contingent) other than in
the ordinary course of business;
(d) make any dividend or other payment or distribution to its
shareholders or Purchase or redeem any shares of its capital
stock other than in the ordinary course of business;
(e)mortgage, pledge, create a security interest in, or subject
to
lien or other encumbrance any of its assets, tangible or
intangible other than in the ordinary course of business;
(f)sell or transfer any of its tangible assets or cancel any
debts or claims except in each case in the ordinary course of
business other than in the ordinary course of business;
(g)sell, assign, or transfer any trademark, trade name, patent,
or other intangible asset;
(h)waive any right of any substantial value other than in the
ordinary course of business; or
(i) enter into any other transaction other than in the ordinary
course of business.
13. Further Instruments From time to time, as and when
requested by the either of the parties or by its successors or
assigns, the other party will execute and deliver, or cause to
be delivered, all such deeds and other instruments; and will
take or cause to be taken such further or other action as the
parties may deem necessary or desirable in order to vest in
and confirm to the purchaser title to and possession of all
its property, rights, privileges, possessions, and franchises
and otherwise to carry out the intent and purposes of this
agreement.
15. Governing Law This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Delaware.
16. Counterparts This Agreement may be executed in duplicate
facsimile
counterparts, each of which shall be deemed an original and
together shall constitute one and the same binding Agreement,
with one counterpart being delivered to each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals as of the date and year above first written.
XX0XXX.XXX INC
By: ____________________________
____________________________
MSK Industries INC
By: ____________________________
LIST OF EXHIBITS
Exhibit "A" True and correct copies of MSK 's Certificate of
Incorporation, amendments thereto and all current
By-laws.
Exhibit "B" Any material legal actions, lawsuits, proceedings
of investigations, either administrative or
judicial, pending or threatened, against or
affecting MSK, or against the Sellers that arise out
of their operation of MSK .
Exhibit "C" Evidence of MSK 's licenses and
registrations
necessary to permit MSK to conduct its
current business.
Exhibit "D" Any impediments to MSK 's good, marketable title
including liens or encumbrances of any nature
whatever.
Exhibit "E" Any money, securities, or property owed by MSK
to either the Principals of MSK or any member of
their families or to any company controlled by such
a person, directly or indirectly.
Exhibit "F" True and correct copies of CI4NET's Certificate
of Incorporation amendments thereto and all current
By-laws.
