ASSET PURCHASE AGREEMENT
by and among
GATEWAY DISTRIBUTORS, LTD.
a Nevada corporation,
NUTECH INTERNATIONAL, INC.
a Texas corporation
and
THE STOCKHOLDERS OF
NUTECH INTERNATIONAL, INC.
Dated as of January 4, 1999
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of this 4th day
of January, 1999 among Gateway Distributors, Ltd., a Nevada corporation (the
"Buyer"), NuTech International, Inc., a Texas corporation (the "Seller") and the
stockholders of the Seller listed on the signature page of this Agreement
(individually a "Stockholder" and collectively the "Stockholders").
RECITALS
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A. The Buyer is in the business of network marketing of nutritional,
health and dietary supplements and products throughout North America and Japan.
B. The Buyer desires to acquire certain assets of the Seller heretofore
developed including, but not limited to, the assets listed on Schedule 1 hereto
(the "Acquired Assets").
NOW, THEREFORE, in consideration of the premises and mutual covenants,
warranties and agreements herein contained, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. PURCHASE OF ASSETS
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1.1. PURCHASE. The Seller hereby agrees to transfer to the Buyer and
the Buyer agrees to accept the Acquired Assets.
1.2. PURCHASE PRICE. As consideration for the transfer of the Acquired
Assets, the Buyer shall issue and deliver to the Seller 75,000 shares of the
Buyer's common stock, par value $.001 per share (the "Shares").
1.3. COSTS AND EXPENSES. The Buyer agrees to and shall pay any and all
reasonable costs and expenses, including without limitation, reasonable legal
and accounting fees, arising out of the sale of the Acquired Assets under this
Agreement.
2. REPRESENTATIONS AND WARRANTIES
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As a material inducement to each party to enter into this Agreement,
the Seller makes to the Buyer the following representations and warranties:
2.1. AUTHORIZATION. This Agreement is the legal, valid, binding
obligation of the Seller, enforceable in accordance with its terms, subject to
judicial discretion regarding specific performance or other equitable remedies
and except as may be limited by bankruptcy or other similar laws.
2.2. NO VIOLATIONS. Neither the sale of the Acquired Assets nor the
execution, delivery or consummation of this Agreement will violate, be in
conflict with or constitute a default by the Seller any other agreement or
instrument to which the Seller may be bound.
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2.3. GOOD TITLE. The Seller is the owner of, and has the right to
transfer all of the Acquired Assets to the Buyer, free and clear from any lien,
encumbrance, security agreement, title retention or other device.
3. FURTHER DELIVERIES AND ASSURANCES
---------------------------------
3.1. FURTHER DELIVERIES AND ASSURANCES. The Seller agrees to deliver or
cause to be delivered any and all assignments, documents or instruments
reasonably required to give effect to the transactions contemplated by this
Agreement, including, but not limited to, the Xxxx of Sale attached hereto as
Exhibit "B."
3.2. NOMINATION OF XXXXX XXXXXXXX TO THE BUYER'S BOARD. As soon as
practicable, the Buyer shall cause an increase in the number of authorized
directors of the Buyer and shall take all steps necessary to nominate Xxxxx
XxXxxxxx to be a director of the Buyer and submit such nomination to the Buyer's
stockholders for approval.
3.3. EXCLUSIVE MANUFACTURER. The Buyer agrees that it will engage Aloe
Commodities International, Inc. ("ACI") as the exclusive manufacturer of Body
Balance, Aloe Magic, Non Surgical Face-Lift, Youth Serum, and Mineral Magic
(collectively, the "Products"), subject to the following terms and conditions:
3.3.1. The Buyer shall not have any obligation to engage ACI as
the exclusive manufacturer if the prices of manufacturing which ACI
charges for manufacture of the Products are higher than those at which
other manufacturers can competently manufacture the Products.
3.3.2. The Buyer shall not have any obligation to engage ACI as
the exclusive manufacturer if ACI is unable to manufacture the Products
in a timely manner, as determined by the Buyer's needs.
4. SECURITIES RESTRICTIONS
-----------------------
The Seller and each of the Stockholders acknowledge and represent as
follows:
4.1. The Seller and the Stockholders, personally or through advisors,
have such knowledge and experience in financial and business matters to evaluate
the merits and risk of an investment in the Shares, have the capacity to protect
their own interests in connection with an investment in the Shares and have the
net worth to undertake such risks such that they could be reasonably assumed to
have the capacity to protect their own interests in connection with a purchase
of the Shares.
4.2. The Buyer has made available to the Seller and the Stockholders or
The Seller's and the Stockholder's advisors the opportunity to obtain
information to evaluate the merits and risks of the investment in the Shares,
and the Seller and the Stockholders have received all information requested from
the Buyer. The Seller and the Stockholders have had an opportunity to ask
questions and receive answers from the Buyer regarding the terms and conditions
of the offering of the Shares and the business, properties, plans, prospects and
financial condition of the Buyer and to obtain additional information as the
Seller and the Stockholders have deemed appropriate for purposes of investing in
the Shares pursuant to the Agreement.
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4.3. The Seller and the Stockholders recognize that the Buyer has a
limited operating history and that the Shares as an investment involve a high
degree of risk, including, but not limited to, the risk of economic losses from
operations of the Company.
4.4. The Seller and the Stockholders realize that (i) the purchase of
the Shares is a long-term investment; (ii) the purchaser of the Shares must bear
the economic risk of investment for an indefinite period of time because the
Shares have not been registered under the Securities Act of 1933 ("1933 Act") or
under the securities laws of any other jurisdiction and, therefore, the Shares
cannot be resold unless they are subsequently registered under said laws or
exemptions from such registrations are available; and (iii) that the
transferability of the Shares is restricted and that a legend may be placed on
any certificate representing the Shares substantially to the following effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "1933 ACT"). THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF A CURRENT AND EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT WITH
RESPECT TO SUCH SHARES, OR AN OPINION OF THE
ISSUER'S COUNSEL TO THE EFFECT THAT REGISTRATION
IS NOT REQUIRED UNDER THE 1933 ACT.
4.5. The Seller and the Stockholders are purchasing the Shares in the
name of the Seller solely for the Seller's and the Stockholders' own beneficial
interest and not as nominee for, or on behalf of, or for the beneficial interest
of, or with the intention to transfer to, any other person, trust or
organization. The Seller and the Stockholders are acquiring these securities for
investment and not with a view towards resale or distribution.
4.6. The Seller and each Stockholder is an "Accredited Investor" as
defined in Rule 501(a) under the 1933 Act. The Seller and the Stockholders
acknowledge that the offering of the Shares is subject to the Federal securities
laws of the United States and state securities laws of those states in which the
Shares are offered, that the offering of the Shares is exempt from registration
and qualification under Sections 4(2) and 18 of the 1933 Act, and that, pursuant
to the U.S. Federal securities laws and state securities laws, the Shares may be
purchased only by persons who come within the definition of an "Accredited
Investor" as that term is defined in Rule 501(a) of Regulation D promulgated
under the 0000 Xxx.
4.7. The Seller, and each Stockholder who is not an individual, make
the following additional representations:
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4.7.1. The Seller and each such Stockholder was not organized for
the specific purpose of acquiring the Shares; and
4.7.2. This Agreement has been duly authorized by all necessary
action on the part of the Seller and each such Stockholder, has been
duly executed by an authorized representative of the Seller and each
such Stockholder, and is legal, valid and binding obligations of the
Seller and each such Stockholder enforceable in accordance with its
terms.
5. MISCELLANEOUS
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5.1. EFFECT OF HEADINGS. The subject headings of the paragraphs and
subparagraphs of this Agreement are included for convenience only and shall not
affect the construction or interpretation of any of its provisions.
5.2. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
contained in it and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties. No supplement, modification,
or amendment of this Agreement shall be binding unless executed in writing by
all the parties. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
5.3. COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
5.4. SCHEDULES. All Schedules attached hereto or referred to herein are
hereby incorporated by reference in this Agreement and are made a part hereof.
5.5. PARTIES IN INTEREST. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over against any party to this Agreement.
5.6. ASSIGNMENT. This Agreement shall be binding on, and shall inure to
the benefit of, the parties to it and their respective heirs, legal
representatives, successors, and assigns; provided, however, that the Buyer may
assign any of its rights under this Agreement, to an affiliate of the Buyer.
5.7. GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed by, the laws of the State of Nevada.
5.8. SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by any court of final jurisdiction, it is the intent of the
parties that all other provisions of this Agreement be construed to remain fully
valid, enforceable, and binding on the parties.
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5.9. ATTORNEYS' FEES. In the event of any action arising out of or
pertaining to this Agreement or the rights and duties of any person in relation
thereto, in addition to such other relief that may be granted, the prevailing
party shall be entitled to receive a reasonable sum as and for his attorneys'
fees as the court may award.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first above written.
The "Buyer"
GATEWAY DISTRIBUTORS, LTD.
By:/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
The "Seller"
NUTECH INTERNATIONAL, INC.
By:/s/ Xxxxx XxXxxxxx
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Xxxxx XxXxxxxx, President
"Stockholder"
By:/s/ Xxxxx XxXxxxxx
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Xxxxx XxXxxxxx
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