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ASSET ACQUISITION AGREEMENT
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THIS ASSET ACQUISITION AGREEMENT, made and entered into as of this 31st
day of May 2000, by and between Xxxxx Xxxxxxxxx, a Utah resident having a
principal place of business at 0000 Xxxx Xxxxxx Xxxxx, Xxxx Xxxxxx Xxxx, Xxxx
84128(hereinafter referred to as the "Seller") and Replacement Financial,
Inc., a corporation duly organized under the laws of the State of Nevada and
subject to the reporting requirements imposed pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended, and having its principal place of
business at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000
(hereinafter referred to as the "Purchaser").
W I T N E S S E T H :
WHEREAS, Seller desires to sell certain of its assets relating to the
Seller's operation of TK Originals pursuant to the terms and conditions
hereof; and,
WHEREAS, Purchaser desires to purchase such assets in accordance with the
terms and provisions hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the parties hereto agree as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 Transfer of Assets. Subject to the terms and conditions of this
Agreement, Purchaser, in reliance upon Seller's warranties and representations
herein made, shall purchase and acquire from Seller, and Seller, shall sell,
transfer and convey to Purchaser, with the exceptions set forth herein and in
the schedules annexed hereto, all of the assets, properties and rights of
Seller relating to the Seller's operation of TK Originals, of every type and
description, whether tangible or intangible, including the following:
(a) All rights of Seller under any and all agreements of whatever
nature or kind relating to the Seller's operation of TK Originals;
the foregoing being more specifically defined and described in the
Schedule of Contract Rights, Schedule A, attached hereto and made
a part hereof (hereinafter collectively referred to as the
"Contract Rights").
(b) All patents, patent applications, copyrights, trade secrets,
trademarks, trade names, and other proprietary rights relating to
the Seller's operation of TK Originals; the foregoing being more
specifically defined and described in the Schedule of Proprietary
Rights, Schedule B, attached hereto and made a part hereof
(hereinafter collectively referred to as the "Proprietary
Rights").
(c) Any inventory, material, equipment, machinery, supplies,
receivables or any other assets relating to the Seller's operation
of TK Originals; the foregoing being more specifically defined and
described in the Schedule of Assets, Schedule C, attached hereto
and made a part hereof (hereinafter collectively referred to as
the "Assets").
All assets of Seller to be transferred to the Purchaser pursuant hereto,
including the Proprietary Rights and Contract Rights and Assets, are sometimes
hereinafter collectively referred to as the "Seller's Assets".
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1.2 Excluded Assets. The following shall be excluded from Seller's
Assets being sold and transferred hereunder: (a) All liabilities or
obligations of Seller, in existence as of the date herein.
1.3 Encumbrances. Seller represents that the sale and transfer of
Seller's Assets are free and clear of all obligations, security interests,
liens, infringements and encumbrances whatsoever, except to the extent
expressly included in the Schedule of Encumbrances, Schedule D, attached
hereto and made a part hereof.
1.4 Purchase Price. In consideration for the sale of the Seller's
Assets to Purchaser, Purchaser shall pay Seller as follows: One Million
(1,000,000) shares of Replacement Financial, Inc. common stock, $0.001 par
value, which shall be duly authorized, validly issued, fully paid and
non-assessable (hereinafter referred to as the "Purchaser Stock").
2. COVENANTS, WARRANTIES AND REPRESENTATIONS OF SELLER
Seller warrants and represents to Purchaser as follows:
2.1 Noninfringement. To the best of Seller's knowledge, the
Proprietary Rights, in whole or in part, do not infringe any patents,
copyrights, trade secrets, trademarks or other proprietary rights of any third
parties and, to the best of Seller's knowledge and belief, no rights or
licenses are required from third parties to exercise any rights with respect
to Seller's Assets or any portion thereof.
2.2 Proprietary Rights. The Proprietary Rights are in full force and
effect and there are no liens, claims, proceedings or causes of actions which
in any way affect the validity or enforceability of such Proprietary Rights.
2.3 Contracts, Licenses, Permits and Approvals.
(a) To the best of Seller's knowledge, Seller has no presently
existing contracts or commitments extending beyond the execution
date hereof which in any way relate to Seller's Assets that are
not included in the Schedule of Contract Rights, Schedule A
hereto.
(b) Seller does not have any obligation under any collective
bargaining agreement or any other contract with a labor union.
Except to the extent set forth in the Schedule of Contract Rights,
Schedule A hereto, Seller is not a party to any executive or
employee compensation plan or agreement or compensatory plan or
agreement with any independent contractors, or employees or agents
of Seller, including, without limitation, any pension, retirement,
profit sharing, stock purchase, stock option, bonus or savings
plan. Seller agrees to pay or allow as a credit to the Purchaser
any vacation or sick pay accrued to Seller's employees at Closing
up to and including the Closing Date.
2.4 Litigation. There is no suit or action, or legal, administrative,
arbitration or other proceeding or governmental investigation affecting
Seller's Assets pending, or to the best knowledge and belief of Seller,
threatened against Seller which materially or adversely affects the business
of Seller relating to Seller's Assets or Seller's Assets. Seller further
warrants and represents that there is no outstanding judgment, decree or order
against Seller which affects Seller or Seller's Assets in any way.
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2.5 Representations and Warranties. No representation or warranty by
Seller in this Agreement or any document provided hereunder contains or will
contain any untrue statement or omissions, or will omit to state any material
fact necessary to make the statements contained herein or therein not
misleading. All representations and warranties made by Seller in this
Agreement and any document provided hereunder shall be true and correct as of
the date of Closing with the same force and effect as if they had been made on
and as of such date.
2.6 Due Performance. Seller has in all material respects performed
all obligations required to be performed by it under, and is not in default in
any material respect under, or in violation in any material respect of, its
Certificate of Incorporation or by-laws, as amended, or any agreement, lease,
mortgage, note, bond, indenture, license or other documents or undertaking,
oral or written, to which it is a party or by which it is bound, or by which
it or any of its properties or assets may be materially affected. To the best
of its knowledge, Seller is not in violation or default in any material
respect of any order, regulation, injunction or decree of any court,
administrative agency or governmental body. The execution and delivery of
this Agreement, and the consummation of the transactions contemplated hereby
will not result in any of the violations or defaults referred to in this
paragraph.
2.7 Subsidiaries. Seller does not have any subsidiaries nor does it
have any interest in any undisclosed business enterprise relating to or
competing with Seller's Assets or any portion thereof.
3. COVENANTS, WARRANTIES AND REPRESENTATIONS OF PURCHASER
Purchaser warrants and represents to Seller as follows:
3.1 Corporate Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada
and is subject to the reporting requirements imposed pursuant to Section
12(g,) of the Securities Exchange Act of 1934, as amended, and has full power
and authority to carry on its current business and to purchase, own, use and
sell its assets and properties.
3.2 Corporate Authority. The execution and delivery of this Agreement
to Seller and the carrying out of the provisions hereof have been duly
authorized by the Board of Directors of Purchaser, and at Closing, Purchaser
shall furnish Seller duly certified copies of the authorizing resolutions of
Purchaser's Board of Directors.
3.3 Capitalization. The authorized capital common stock of the
Purchaser immediately prior to giving effect to the transactions contemplated
hereby consists of 250,000,000 shares, $0.001 par value, of which 22,000,000
shares of its $0.001 par value common stock are issued and outstanding as of
the date hereof. The authorized capital of preferred stock of the Purchaser
is 5,000,000 shares, $0.001 par value, of which no shares are issued and
outstanding as of the date hereof. After giving effect to the issuance of its
shares, as provided herein, the Purchaser shall have 23,000,000 shares of its
$0.001 par value common stock issued and outstanding. Additionally, to the
best of Purchaser's knowledge, all securities issued by Purchaser as of the
date of this Agreement have been issued in compliance with all applicable
state and federal laws.
3.4 Binding Nature. This Agreement shall be, when duly executed and
delivered, a legal and binding obligation of Purchaser, enforceable in
accordance with its terms.
3.5 Warranties and Representations. No representation or warranty by
Purchaser in this Agreement contains or will contain any untrue statement or
omission, or will omit to state a material fact necessary to make the
statements contained herein not misleading. All representations and
warranties made by Purchaser in this Agreement shall be true and correct as of
Closing with the same force and effect as if they had been made on and as of
such date.
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3.6 Compliance with Securities Laws. Neither Purchaser nor any
officer, director, affiliate, or controlling person of Purchaser has committed
any violation, or been in any way in contravention, of any law, rule or
regulation governing transactions in securities, in connection with the
transactions herein.
3.7 Inspection and Value. Purchaser has formed its own opinion as to
the value of Seller's Assets being purchased hereunder. Seller's warranties
include only such express written warranties as are contained in this
Agreement. Any other express warranty, oral or written, not contained in this
Agreement are of no force and effect. Seller hereby disclaims all implied
warranties, including without limitation, implied warranties of
merchantability and implied warranties of fitness for special or ordinary uses
or purposes. Purchaser has inspected Seller's Assets to the full extent of
Purchaser's desire, and Seller has given Purchaser ample opportunity to
conduct such inspections. Seller's Assets, except as expressly warranted or
represented herein, are purchased "As Is" and "With All Faults."
3.8 Litigation. There are no pending, or to the best knowledge and
belief of the Purchaser, threatened actions or proceedings before any court or
administrative agency or other authority which might or will materially or
adversely affect Purchaser's ability or right to perform all of Purchaser's
obligations hereunder.
3.9 SEC Filings. As of the date of this Agreement, Purchaser has
accurately and timely filed with the Securities and Exchange Commission
("SEC") all registration statements, financial statements, applications,
reports, schedules, forms, proxy statements and all other instruments,
documents and written information (collectively, the "SEC Filings") required
to be filed by Purchaser under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended. At the date hereof, none of the
SEC Filings contains or, on the Closing Date, will contain any untrue
statement of a material fact or omits or, on the Closing Date, will omit to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances in which they were made or shall have
been made, not misleading.
4. MISCELLANEOUS.
4.1 Bulk Sales Law. Purchaser and Seller hereby waive compliance by
Seller with the provisions of the Bulk Sale Transfer Article of the Nevada and
Utah Uniform Commercial Codes, to the extent applicable. Seller hereby
represents and warrants that it presently has sufficient amount of net cash
proceeds in its operating and/or trust account to pay all of Seller's
creditors, if any, as and when their claims come due and to indemnify and hold
Purchaser harmless from and against any loss, damage or expense, including a
reasonable attorneys' fees and court costs, incurred by Purchaser as a result
of or attributable to the Seller's failure to comply with said provisions.
4.2 The execution and performance of this Agreement has been duly
authorized by all requisite individual or corporate actions and approvals and
is free of conflict or violation of any other individual or corporate actions
and approvals entered into jointly and severally by the parties hereto. This
Agreement represents the entire Agreement between the parties hereto, and
supersedes any prior agreements with regards to the subject matter hereof.
This Agreement may be executed in any number of facsimile counterparts with
the aggregate of the counterparts together constituting one and the same
instrument. This Agreement constitutes a valid and binding obligation of the
parties hereto and their successors, heirs and assigns and may only be
assigned or amended by written consent from the other party.
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4.3 No term of this Agreement shall be considered waived and no breach
excused by either party unless made in writing. In the event that any one or
more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be constructed as if it never contained
any such invalid, illegal or unenforceable provisions. The parties hereto
shall cooperate with each other to achieve the purpose of this Agreement.
From time to time, each party will execute additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
4.4 The validity, interpretation, and performance of this Agreement
shall be controlled by binding arbitration in the State of Utah under the
rules then obtaining of the American Arbitration Association. Such
arbitration ruling shall be final and binding amongst the parties herein. If
any action is brought to enforce or interpret the provisions of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees, court costs, and other costs incurred in proceeding with the
action from the other party.
4.5 The parties hereto agree to indemnify, hold harmless and defend
the other from and against all demands, claims, actions, losses, damages,
liabilities, costs and expenses, including without limitation, interest,
penalties, court fees, and attorney's fees and expenses asserted against or
imposed or incurred by either party by reason of or resulting from a breach of
any representation, warranty, covenant condition or agreement of the other
party to this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
in their respective corporate names by their respective Presidents, duly
authorized by resolution of their respective Boards of Directors, on the day
and year first above written.
SELLER: PURCHASER:
Xxxxx Xxxxxxxxx (TK Originals) Replacement Financial, Inc.
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxxxxxx
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Xxxxx Xxxxxxxxx Xxxx Xxxxxxxxxx, President
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Schedule A
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Schedule of Contract Rights
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None
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Schedule B
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Schedule of Proprietary Rights
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None
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Schedule C
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Schedule of Assets
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Inventory $1,500.00
To Include:
Material
Patterns
Sewing Notions
Furniture and Equipment $750.00
To Include:
Sewing Machine
Serger
Iron
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Schedule D
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Schedule of Encumbrances
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None
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Exhibit A
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Investment Letter
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Replacement Financial, Inc.
c/o Xxxx Xxxxxxxxxx, president
Re: INVESTMENT LETTER DATED May 31, 2000
Dear Xxx. Xxxxxxxxxx:
As consideration of a sale of assets by Xxxxx Xxxxxxxxx ("Xxxxxxxxx") to
Replacement Financial, Inc. ("RFI"), Xxxxxxxxx has agreed to acquire 1,000,000
restricted shares of Common Stock of RFI, a Nevada corporation, par value
$0.001 (the "Securities"). To induce RFI to issue the Securities, Xxxxxxxxx
hereby represents to RFI that:
1. The Securities which are to be acquired by Xxxxxxxxx are being
acquired for its own account and for investment and not with a
view to the public resale or distribution thereof.
2. Xxxxxxxxx acknowledges and understands that the Securities have
not been registered pursuant to any federal or state securities
laws and therefore may not be resold unless the Securities are
subsequently registered under the Securities Act of 1933, as
amended (the "Act"), or an exemption from such registration is
available. The Securities are thus "restricted securities" as
that term is defined in Rule 144 (the "Rule") promulgated under
the Act, which Rule addresses the resale of unregistered
securities.
3. Xxxxxxxxx agrees not sell, transfer or otherwise dispose of the
Securities unless, in the opinion of the RFI's counsel, such
disposition conforms with applicable securities laws requirements.
4. Xxxxxxxxx further acknowledges that it is fully aware of the
applicable limitations on the resale of the Securities. These
restrictions for the most part are set forth in the Rule. If and
when the Rule is available to Xxxxxxxxx, it may only make sales of
the Securities in accordance with the terms and conditions of the
Rule.
5. Xxxxxxxxx has received and reviewed all of the information it
deems necessary from RFI including RFI's 10-SB filing dated August
10, 1999 and RFI's 10-QSB filing dated February 28, 1999.
Xxxxxxxxx acknowledges that it has had an opportunity to ask
questions of and receive answers from duly designated
representatives of RFI concerning the finances of RFI and the
proposed business plan of RFI.
6. By reason of Xxxxxxxxx'x knowledge and experience in financial and
business matters in general and investments in particular it is
capable of evaluating the merits and risks of an investment in the
Securities.
7. Xxxxxxxxx is capable of bearing the economic risks of an
investment in the Securities. Xxxxxxxxx fully understands the
speculative nature of the Securities and the possibility of loss.
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8. Xxxxxxxxx'x present financial condition is such that she is under
no present or contemplated immediate future need to dispose of any
portion of the Securities to satisfy any existing or contemplated
immediate undertaking, need, or indebtedness.
9. Any and all certificates representing the Securities, and any and
all securities issued in replacement thereof or in exchange
therefor, shall bear a restrictive legend.
10. Xxxxxxxxx further agrees that RFI shall have the right to issue
stop-transfer instructions to its transfer agent until such time
as sale is permitted under the Act and acknowledge that RFI hereby
informs Xxxxxxxxx of its intention to issue such instructions.
Very truly yours,
Xxxxx Xxxxxxxxx
By: /s/ Xxxxx Xxxxxxxxx
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Date: 05/31/2000
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