Asset Purchase Agreement
This Asset Purchase Agreement (the "Agreement") is made and
effective February 15, 2000, by and between XxxxxXxxxx.xxx, Inc., a Utah
Corporation ("Buyer") and Xxxxxxxxx.xxx, Inc., a Massachusetts
Corporation. ("Seller").
Seller operates a web site specific to the online rubber-stamping
crafts community under the name Xxxxxxxxx.xxx (the "Business").
Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, certain assets of Seller used in the Business, subject to
the terms of this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Transfer of Assets. At the Closing, subject to the terms of this
Agreement, Seller shall sell, assign, transfer, convey and deliver to
Buyer, and Buyer shall purchase from Seller, free and clear of all liens,
encumbrances, claims, clouds, charges, equities or imperfections of any
nature, all software, databases, contract rights, customer lists,
trademarks, trade names, intellectual property, goodwill, materials,
supplies, telephone numbers, business records, and other assets owned by
Seller and used or useful in the Business and related operations. The
assets and properties to be transferred by Seller to Buyer shall include,
without limitation those identified in Exhibit A attached hereto. It is
understood that other than the website operating hardware and operating and
application software currently used by Seller, that Seller has no other
assets or liabilities that would appear on a financial statement prepared
in accordance with generally accepted accounting principles.
2. Conveyance and Transfer Documents. Seller agrees to deliver to
Buyer at the Closing such stock certificates, bills of sale, documents of
title and other instruments of conveyance and transfer, in form and content
satisfactory to Buyer, as shall be effective to vest in Buyer good and
marketable title in and to any property to be sold, assigned, transferred,
conveyed and delivered hereunder.
3. Payment of Purchase Price. In exchange for full payment for all of the
items purchased from Seller, Buyer shall issue Seller 100,000 shares of its
common stock. Such issued shares shall be "restricted securities" and shall
be imprinted with the following legend or a reasonable facsimilie thereof
on the front and reverse sides thereof:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
sold or otherwise transferred unless compliance with the registration
provisions of such Act has been made or unless availability of an exemption
from such registration provisions has been established, or unless sold
pursuant to Rule 144 under the Act."
4. Nonassumption of Liabilities. Except as otherwise agreed expressly in
writing, Buyer does not and shall not assume or agree to pay any of
Seller's or, where applicable, any shareholder's, partner's, or member's,
liabilities or obligations of any nature or kind. Seller and, where
applicable, any shareholder, partner, or member, shall each remain
responsible for their respective debts and obligations.
5. Further Assurances. From time to time after the date of this Agreement,
Seller shall give to Buyer, and to Buyer's representatives, auditors and
counsel, full access during normal business hours to all of the properties,
books, records, tax returns, contracts, licenses, franchises and all of the
documents of Seller relating to the Business and shall furnish to Buyer all
information with respect to the Business, as Buyer may from time to time
reasonably request. Promptly following execution of this Agreement, Seller
shall use Seller's best efforts to obtain all consents (if any, including,
without limitation, consents of any government or governmental agency)
necessary to effect the sale, assignment, transfer, conveyance and delivery
contemplated by Section 1 hereof. From time to time after the Closing, at
Buyer's request and without further consideration, Seller agrees to execute
and deliver at Seller's expense such other instruments of conveyance and
transfer and take such other action as Buyer reasonably may require more
effectively to sell, assign, transfer, convey, deliver and vest in Buyer,
and to put Buyer in possession of, any property to be sold, assigned,
transferred, conveyed and delivered hereunder.
6. Closing.
A. The issuance of shares, delivery of documents and completion
of other items related to the transfer of the Business and the assets
purchased by Buyer (the "Closing") shall be held on February 18,
2000, at 5:00 p.m., at Andover, MA, or on such other date, and at
such other time and place, as mutually agreed upon by the parties in
writing.
B. At the Closing:
(i) Seller shall execute and deliver to Buyer the
instruments of conveyance and transfer called for in Section 2 hereof;
(ii) Buyer shall deliver to Seller a Board resolution
instructing the Buyer's transfer agent to issue the stock called for in
Section 3 above.
C. In the event that the Closing hereunder shall not be
consummated by February 15, 2000 for any reason other than some act,
omission or material breach by Buyer, this Agreement shall, at the
sole option of Buyer, terminate.
7. Representations and Warranties of Seller. Seller represents and
warrants to and covenants with Buyer, and Buyer's successors and assigns
(which representations, warranties and covenants shall survive the
Closing), as follows:
A. Seller has full power and authority to execute and deliver
the Agreement and to consummate the transactions contemplated hereby.
B. This Agreement and Seller's performance of the obligations
herein do not constitute the breach or violation of any agreement,
covenant, obligation or promise to which Seller is legally bound.
C. Seller's execution, delivery and performance of this
Agreement will not constitute the breach or violation of any
agreement, obligation, promise, covenant or court order with respect
to any spousal maintenance or child support obligation and that
Seller's spouse, if any, does not own any part of the Business and no
consent or waiver by any such spouse is required to complete Seller's
obligations herein.
D. Except as otherwise disclosed by Seller in writing, as of
the date of this Agreement, the assets and properties of Seller are
not, and as of the Closing they will not be, subject to any liens,
encumbrances, claims, clouds, charges, equities or imperfections of
any nature.
E. Neither the execution or delivery by Seller of this
Agreement or the transactions contemplated hereby will: (i) result in
the creation of any lien, security interest, or encumbrance upon any
of the assets of Seller; (ii) violate any order, writ, injunction,
decree, judgment, law, rule, regulation or ruling of any court or
governmental authority applicable to Seller or any of its properties;
or (iii) require any consent, approval or authorization of, or
declaration, filing or registration with, any governmental or
regulatory authority.
F. Seller, and where applicable any shareholder, officer,
director, member or partner, are in violation of, or under
investigation with respect to, or have been charged with or given
notice of, any violation of any applicable law, statute, order, rule,
regulation, policy or guideline promulgated or judgment entered, by
any federal, state or local court or governmental authority relating
to or affecting the Business, Seller or any of Seller's assets.
G. As of the Closing Date there has not been, any materially
adverse change in the financial condition, assets, liabilities,
business or property of Seller, or with respect to its employees or
customers, and Seller has no knowledge of any fact or contemplated
event which may, in the future, cause any such materially adverse
change. As of the date of Closing, the business of the Seller has
been, and will be, conducted only in the ordinary course.
H. Copies of all instruments, agreements and other documents
which have been delivered or may be delivered to Buyer by Seller
pursuant to or in connection with this Agreement are and will be
complete and correct as of the date hereof and as of the Closing.
Exhibits B and C, attached hereto and made a part hereof, are lists
of all contracts, leases, licenses and other agreements relating to
the Business. Seller is not in default and has not received any
notice of default under any such contract, lease, license or other
agreement or under any other obligation relating to the Business.
I. As of the date hereof there is, and on the Closing Date
there will be, no litigation at law or in equity, no proceeding
before any commission or other administrative or regulatory
authority, and no dispute, claim or controversy (including, without
limitation, labor union strikes, elections, arbitrations, grievances,
complaints, or administrative actions) pending, or to the knowledge
of Seller threatened, against or affecting the business or property
of Seller or it right to carry on it business and enter into and
consummate the transactions contemplated by this Agreement.
J. There is no unfair labor practice complaint against Seller
pending before the National Labor Relations Board. There is no labor
strike dispute, slowdown or stoppage, or any union organizing
campaign, pending, or to the best of the knowledge of Seller,
threatened against or involving Seller. No labor agreements have
been filed with Seller which has had, or may have, a materially
adverse effect on Seller's business. No collective bargaining
agreement is currently being negotiated with Seller.
K. Seller has not employed any broker or finder or incurred any
liability for any brokerage fees, commissions, finder fees or similar
fees or expenses, and no broker or finder has acted directly or
indirectly for Seller in connection with this Agreement or the
transactions contemplated hereby.
L. On the date hereof Seller has, and on the Closing Seller
shall have, duly prepared and timely filed all local, state and
federal tax returns (including, without limitation, those which
relate to FICA, withholding and other payroll taxes) required to be
filed by such dates, and paid all taxes, penalties and interest with
respect thereto. To the extent that any tax liabilities have accrued
but not become payable, the full amounts thereof have been reflected
as liabilities or reserved against on the Balance Sheet. After the
Closing, Seller shall duly prepare and timely file any and all local,
state and federal tax returns which pertain, in whole or in part, to
the period on or before the Closing, and pay all taxes, penalties and
interest with respect thereto.
M. On the date hereof, the properties and assets to be
transferred under this Agreement are, and on the Closing they will
be, in good condition and repair.
N. Seller shall permit Buyer and its representatives at all
reasonable times during business hours and without interfering with
the normal conduct of the business of Seller, to examine and have
full access to all of the properties, books and records of Seller and
to copy such books and records (at Buyer's expense).
8. Representations and Warranties of Buyer. Buyer represents and warrants
to and covenants with Seller (which representations and warranties shall
survive the Closing) as follows:
A. Buyer is a Corporation duly organized, validly existing and
in good standing under the laws of the State of Utah.
B. Buyer has full power and authority to execute and deliver
the Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and consummation of this Agreement have been
duly authorized and approved by such directors of Buyer as required
by, and in accordance with, applicable laws and the instruments,
agreements and documents controlling Buyer's governance.
C. As of the date hereof there is, and as of the Closing there
will not be litigation at law or in equity, no proceeding before any
commission or other administrative or regulatory authority, and no
dispute, claim or controversy pending, or to the knowledge of Buyer
threatened, against or affecting the right of Buyer to enter into and
consummate the transactions contemplated by this Agreement.
D. Buyer has not employed any broker or finder or incurred any
liability for any brokerage fees, commissions, finder fees or similar
fees or expenses in connection with the transactions contemplated by
this Agreement, and no broker or finder has acted on Buyer's behalf.
9. Indemnification.
A. Seller indemnifies and holds harmless Buyer against any
loss, damage or expense (including, without limitation, taxes,
penalties, interest and reasonable attorney's fees) asserted against
or suffered by Buyer arising out of or resulting from (i) any breach
of this Agreement by Seller; (ii) any inaccuracy in the
representations, warranties, and covenants made by Seller in this
Agreement, or in any certificate, schedule, exhibit or written
instrument delivered or to be delivered under this Agreement; and
(iii) any liability, obligation, demand, claim, action, or judgment,
known or unknown, which may already have arisen or which may
hereafter arise, by reason of or in connection with the operation of
Seller's business prior to the Closing.
B. (i) Buyer shall promptly notify Seller of any claim or
demand which Buyer determines has given or could give rise to a right
of indemnification under this Agreement. Unless Seller give Buyer
written notice that either contests Buyer's right to indemnification
for a claim or demand within thirty (30) days of the date Buyer
notifies them of such a claim or demand, Seller shall be deemed to
have acknowledged Buyer's right to indemnification for such claim or
demand pursuant to the provisions of this Agreement.
(ii) If any claim or demand relates to a claim or demand asserted
by a third party against Buyer, Seller shall have the duty, at
Seller's expense, to defend any such claim or demand. Buyer shall
make available to Seller and Seller's representatives all records and
other materials reasonably required by them for their use in
contesting any such claim or demand. Buyer shall have the right, but
not the obligation, to employ separate counsel, and to participate
with Seller in the defense of any such claim or demand, but the fees
and expenses of such separate counsel shall be paid by Buyer. In not
event shall Buyer be obligated to defend any such claim or demand.
10. Conditions Precedent to the Obligations of Buyer. The obligations
of Buyer under this Agreement are subject to the following conditions
precedent:
A. The representations, warranties and covenants made by Seller
herein to Buyer shall be true and correct in all material respects on
and as of the Closing Date with the same effect as if such
representations, warranties and covenants had been made on and as of
date of the Closing, and Seller shall have performed and complied
with all agreements, covenants and conditions on their part required
to be performed and complied with on or prior to the Closing.
B. The assets to be purchased by Buyer and the Business shall
not have been adversely affected in any material way (whether or not
covered by insurance) as a result of any fire, casualty, act of God
or other force majeure or any labor dispute or disturbances.
11. Conditions Precedent to the Obligations of Seller. The
obligations of Seller shall be subject to the condition precedent that all
warranties, representations, and covenants made by Buyer to Seller in this
Agreement shall be true and correct in all material respects on and as of
the Closing with the same effect as if such warranties, representations,
and covenants had been made on and as of the date of the Closing, and Buyer
shall have performed or complied with all agreements, covenants and
conditions on its part required to be performed or complied with on or
prior to the Closing.
12. Covenants of Seller. Seller covenants with Buyer as follows:
During the two year period from and after the Closing,
Seller shall not directly or indirectly, or as a partner,
shareholder, employee, manager or otherwise, own, manage, operate,
control, be employed by, participate in, or otherwise be connected
with any other business the same as or similar to the Business. In
the event any of the provisions of this Section shall be determined
to be invalid by reason of their scope or duration, this Section
shall be deemed modified to such extent as required to cure the
invalidity. In the event of a breach, or a threatened breach, of
this covenant, Buyer shall be entitled to obtain an injunction
restraining the commencement or continuance or the breach, as well as
to any other legal or equitable remedies permitted by law.
13. Notices.
Any notice under this Agreement shall be effectively given upon deposit
in the United States mail, postage prepaid, or by recognized overnight
delivery service, and addressed as follows (or at such change of address
given by one party to the other in writing after the date hereof):
If to Buyer: XxxxxXxxxx.xxx, Inc., 000 Xxxxxx Xxxx., Xxxxx Xxx
Xxx, XX 00000
If to Seller: Xxx Xxxxxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxx, XX
14. Final Agreement.
This Agreement represents the full agreement between the parties and
supersedes any and all prior negotiations and understandings between
them. This Agreement may not be modified or amended except by a written
instrument executed by all of the parties.
15. Governing Law.
This Agreement shall be governed by and construed according to the laws
of the State of Utah.
16. Force Majeure.
Nonperformance of either party shall be excused to the extent that
performance is rendered impossible by strike, fire, flood, governmental
acts, orders or restrictions, or any other reason where failure to
perform is beyond the control and not caused by the negligence of the
non-conforming party.
17. No Assignment.
The parties agree that neither party may assign or transfer any rights
and obligations under this Agreement, directly or indirectly except upon
the prior written consent of the other party. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.
18. Severability.
If any provision of this Agreement is held to be invalid by a court of
competent jurisdiction, then the remaining provisions shall nevertheless
remain in full force and effect.
19. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original.
20. Headings.
Headings used in this Agreement are provided for convenience only and
shall not be used to construe meaning or intent.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
XxxxxXxxxx.xxx, Inc. Xxxxxxxxx.xxx,
Inc.
By: /s/Xxxxx X. Xxxxxx /s/Xxx Xxxxxxxx
Xxxxx X. Xxxxxx Xxx Xxxxxxxx
Chief Executive Officer
EXHIBIT A
Seller's Assets
Operating hardware currently running the Company's website.
All software relating to the Business, including but not limited to
operating and application software.
All domain names registered to the Business, including but not limited
to xxxxxxxxx.xxx.
All e-mail lists and registered member and customer information.
Complete access including passwords to the Business web site.
Any information that is stored in the databases of the Business.
Interwest Transfer Co.
0000 Xxxx Xxxxxx-Xxxxxxxx Xx.
P. O. Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxxxxxx.xxx, Inc.
000 Xxxxxx Xxxx.
Xxxxx Xxx Xxx, Xxxxxxxxxx 00000
Re: Sale of assets of Xxxxxxxxx.xxx, Inc., a Massachusetts
Corporation ("Stamparoo") in exchange for shares of
Xxxxxxxxxx.xxx, Inc., a Utah corporation ("Craftclick
or "the Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Asset Purchase Agreement (the
"Agreement") between the undersigned I acknowledge that I have approved
this sale and exchange; that I am aware of all of the terms and
conditions of the Agreement; that I have received and personally
reviewed a copy of any and all material documents regarding the Company,
including, but not limited to Articles of Incorporation, Bylaws, minutes
of meetings of directors and stockholders, financial statements and the
Company's Annual and Quarterly and Current Reports filed with the
Securities and Exchange Commission for the past twelve months which can
be reviewed in the Xxxxx Archives at xxx.xxx.xxx. I represent and
warrant that no director or officer of the Company or any associate of
either has solicited this exchange; that I am an "accredited investor"
as that term is known under the Rules and Regulations of the Securities
and Exchange Commission; and/or, I represent and warrant that I have
sufficient knowledge and experience to understand the nature of the
exchange and am fully capable of bearing the economic risk of the loss
of my entire cost basis. I hereby compromise and waive any claims I
have or may have against Stamparoo under any federal or state securities
laws, rules or regulations or otherwise, or for any other reason
whatsoever.
I understand that you have and will make books and records
of your Company available to me for my inspection in connection with the
contemplated exchange of my shares, and that I have been encouraged to
review the information and ask any questions I may have concerning the
information of any director or officer of the Company or of the legal
and accounting firms for the Company. I understand that the accounting
firm for Craftclick is Xxxxxxx, XxXxxxxxxx & Assoc., 0000 Xxxxx 000
Xxxx, #000, Xxxx Xxxx Xxxx, Xxxx 00000; Telephone: (000) 000-0000; and
that legal counsel for Craftclick is Xxxxxxx X. Xxxxxxxxxx, Esq., 000
Xxxx 0xx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000, Telephone #801-
000-0000.
I also understand that I must bear the economic risk of
ownership of any of the Craftclick shares for a long period of time, the
minimum of which will be one (1) year, as these shares are
"unregistered" shares and may not be sold unless any subsequent offer or
sale is registered with the United States Securities and Exchange
Commission or otherwise exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), or other applicable
laws, rules and regulations.
I intend that you rely on all of my representations made
herein and those in the personal questionnaire (if applicable) I
provided for use by Craftclick as they are made to induce you to issue
me the shares of Craftclick under the Agreement, and I further represent
(of my personal knowledge or by virtue of my reliance on one or more
personal representatives), and agree as follows, to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the
phrase "for investment purposes and not with a view toward further
distribution";
3. That I understand the meaning of "unregistered shares"
and know that they are not freely tradeable;
4. That any stock certificate issued by you to me in
connection with the shares being acquired shall be imprinted with a
legend restricting the sale, assignment, hypothecation or other
disposition unless it can be made in accordance with applicable laws,
rules and regulations;
5. I agree that the stock transfer records of your
Company shall reflect that I have requested the Company not to effect
any transfer of any stock certificate representing any of the shares
being acquired unless I shall first have obtained an opinion of legal
counsel to the effect that the shares may be sold in accordance with
applicable laws, rules and regulations, and I understand that any
opinion must be from legal counsel satisfactory to the Company and,
regardless of any opinion, I understand that the exemption covered by
any opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer,
assign, hypothecate or make any other disposition of any interest in the
shares being acquired except as may be pursuant to any applicable laws,
rules and regulations;
7. I fully understand that my shares which are being
exchanged for shares of the Company are "risk capital," and I am fully
capable of bearing the economic risks attendant to this investment,
without qualification; and
8. I also understand that without approval of counsel for
Craftclick, all shares of Craftclick to be issued and delivered to me
shall be represented by one stock certificate only and which such stock
certificate shall be imprinted with the following legend or a reasonable
facsimile thereof on the front and reverse sides thereof:
The shares of stock represented by this
certificate have not been registered under the
Securities Act of 1933, as amended, and may not
be sold or otherwise transferred unless
compliance with the registration provisions of
such Act has been made or unless availability of
an exemption from such registration provisions
has been established, or unless sold pursuant to
Rule 144 under the Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder setting
forth all relevant facts relating to the request. Craftclick will
attempt to accommodate any stockholders' request where Craftclick views
the request is made for valid business or personal reasons so long as in
the sole discretion of Craftclick, the granting of the request will not
facilitate a "public" distribution of unregistered shares of common
voting stock of Craftclick.
You are requested and instructed to issue a stock certificate as
follows, to-wit:
Xxxxxx Xxxxxxxx and Xxxxxxx Xxxxxxxx
(Name(s) and Number of Shares)
000 Xxxxxx Xxxxxx
(Xxxxxxx)
Xxxxxxx, XX 00000
(City, State and Zip Code)
If joint tenancy with full rights of
survivorship is desired, put the initials JTRS
after your names.
Dated this 15th day of February, 2000.
Very truly yours,
/s/Xxxxxx Xxxxxxxx
/s/Xxxxxxx Xxxxxxxx
UNANIMOUS CONSENT OF THE MEMBERS OF THE BOARD
OF DIRECTORS
OF
Xxxxxxxxx.xxx, Inc.
The undersigned, constituting all of the directors of
Xxxxxxxxx.xxx Inc., a Massachusetts corporation (the "Company"), acting
pursuant to the corporate laws of the State of Wisconsin, do hereby adopt the
following resolutions, effective as of the latest date hereof, unless
indicated otherwise:
RESOLVED, that the Company exchange 100% of its outstanding
securities in consideration of the exchange of an aggregate
total of 100,000 shares of the $0.001 par value common stock
("restricted securities") of XxxxxXxxxx.xxx, Inc., a Utah
corporation ("CraftClick"), pursuant to the Asset Purchase
Agreement (the "Agreement") between the Company, and
CraftClick as presented to a meeting of the Board of
Directors;
FURTHER, RESOLVED, that in the good faith judgment of the
directors, the Agreement is fair, just and equitable, and in
the best interests of the stockholders of the Company;
FURTHER, RESOLVED, that the officers of the Company be and
they hereby are authorized and directed to execute and
deliver the Agreement and all other documents required or
deemed necessary to complete the Agreement for and on behalf
of the Company pursuant to which the Company shall exchange
100% of its outstanding securities in exchange for shares of
CraftClick.
Dated: 2/15/2000 /S/Xxx Xxxxxxxx
Xxx Xxxxxxxx, Director
Dated: 2/15/2000 /s/Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx, Director
