AGREEMENT
Acquisition Agreement ("Agreement") between xxxxxxxxxxx.xxx, inc., a Nevada
corporation ("SSCP"), and the persons executing this Agreement as "Shareholder"
(the "Shareholder"), being the owner of record of all of the issued and
outstanding shares of Xxxx Toys, Inc., a Florida corporation (the "Company").
WHEREAS, SSCP wishes to acquire and the Shareholder wish to transfer all of
the issued and outstanding stock of the Company in exchange for 15,000,000
shares of common stock of xxxxxxxxxxx.xxx, inc. ("SSCP")
WHEREAS, the effective date of the transaction contemplated herein shall be
October 1, 2000.
NOW, THEREFORE, SSCP and the Shareholder agree as follows:
SECTION 1. EXCHANGE OF STOCK
1.01 Number of Shares. The Shareholder agrees to transfer to SSCP at the
Closing the number of shares of common stock of the Company ("Company Shares"),
shown opposite his names below in exchange for an aggregate of 15,000,000 shares
(the "SSCP Shares") of common stock of SSCP, $.001 par value per share. The
SSCP Shares will be issued to the Shareholder immediately upon closing.
1.02 Delivery of Certificates by Shareholder. The transfer of the Company
Shares by the Shareholder shall be effected by the delivery to SSCP immediately
upon Closing of certificates representing the Company Shares endorsed in blank
or accompanied by stock powers executed in blank.
1.03 Further Assistance. At the Closing and from time to time thereafter,
the Shareholder shall execute such additional instruments and take such other
action as SSCP may reasonably request in order to more effectively sell,
transfer and assign the transferred Company Shares to SSCP and to confirm SSCP's
title thereto.
1.04 Changes in SSCP's Capitalization. If between the date of this
Agreement and the Closing, the outstanding shares of SSCP common stock are,
without the receipt of consideration by SSCP, increased, decreased, changed into
or exchanged for a different number or kind of shares or securities of SSCP
through reorganization, reclassification, stock dividend, stock split, reverse
stock split or similar change in SSCP's capitalization, SSCP shall deliver to
the Shareholder in addition to or in lieu of the SSCP Shares specified in
Section 1.01, voting stock of SSCP in equitably adjusted amounts. In the event
of any change in SSCP's capitalization, all references to SSCP Shares herein
shall refer to the number of SSCP Shares as thus adjusted.
1.05 Consulting Agreement for Option to purchase shares of SSCP. Xxx
Xxxxxxxx (the "consultant") shall enter into a consulting agreement to provide
services to the Company for a minimum of two (2) year from the date of closing.
SSCP shall cause the issuance of 6,000,000 stock options for the purchase of
SSCP common stock from SSCP at a price of $0.04 per share to Xxx Xxxxxxxx. These
options shall vest 1/6th at the end of each contract month, and shall expire
in accordance with SSCP's stock option plan, but in any event will not be less
than 5 years.
SECTION 2. CLOSING
2.01 The closing contemplated by Section 1.01 (the "Closing") shall be held
at the offices of SSCP, 0000 Xxxxxxx 0 Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, on
December 7, 2000 or as soon as practical thereafter unless another place or time
is agreed upon in writing by the parties.
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
The Shareholder hereby warrant, represent and agree as follows:
3.01 Corporate Status. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the state of Florida.
3.02 Capitalization. The authorized capital stock of the Company consists
of 10,000 shares of common stock, of which 10,000 shares are issued and
outstanding. All such shares are fully paid and non-assessable.
3.03 Financial Statements. The financial statements of the Company
furnished to SSCP, consisting of an unaudited balance sheet as of December 31,
1999 and a related statement of income for the period then ended (the "Financial
Statements") as well as a September 30, 2000 trial balance, will be delivered at
the Closing, will be correct and fairly present the financial condition of the
Company as of the dates and for the periods involved.
3.04 Undisclosed Liabilities. The Company has no liabilities of any nature
except to the extent reflected or reserved against in the Financial Statements,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, and the Company's
accounts receivable are collectible in accordance with the terms of such
accounts, except to the extent of the reserve therefore in the Financial
Statements.
3.05 Interim Changes. Between September 30, 2000 and the date of this
Agreement, there have not been, (1) any changes in the Company's financial
condition, assets, liabilities, or business which, in the aggregate, have been
materially adverse; (2) any damage, destruction or loss of or to the Company's
property, whether or not covered by insurance; (3) any declaration or payment of
any dividends or other distribution in respect of the Company's capital stock,
or any direct or indirect redemption, purchase or other acquisition or any such
stock; or (4) any increase paid or agreed to in the compensation, retirement
benefits or other commitments to employees.
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3.06 Title to Property. The Company has good and marketable title to all
properties and assets, real and personal, reflected in the Financial Statements,
and the Company's properties and assets are subject to no mortgage, pledge, lien
or encumbrance, except for liens shown therein, with respect to which no default
exists.
3.07 Litigation. There is no litigation or proceeding pending, or to
Shareholder' knowledge threatened, against or relating to the Company, its
properties or business.
3.08 Access to Records, etc. From the date of this Agreement to the
Closing, the Shareholder will cause the Company (1) to give to SSCP and its
representatives full access during normal business hours to all of its offices,
books, records, contracts, and other corporate documents and properties so that
CEP may inspect and audit them; and (2) to furnish such information concerning
the Company's properties and affairs as SSCP may reasonably request.
3.09 Confidentiality Until the Closing (and permanently if there is no
Closing), the Shareholder and their representatives will keep confidential any
information which they obtain from SSCP concerning its properties, assets and
business. If the transactions contemplated by this Agreement are not consummated
by December 31, 2000 the Shareholder will return to SSCP all written matter
with respect to SSCP obtained by them in connection with the negotiation or
consummation of this Agreement.
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3.10 Title to Shares. The Shareholder is, in the aggregate, the owner, free
and clear of any liens, claims and encumbrances, of all Company Shares.
3.11 Investment Intent. The Shareholder is acquiring the SSCP Shares for
his own respective accounts, for investment purposes, and not for or with a view
to resale or distribution. The SSCP shares shall bear a legend to the effect
that they represent restricted securities which may not be sold, transferred or
hypothecated in the absence of a registration statement under the Securities Act
of 1933, as amended, or an opinion of counsel that registration is not required.
3.12 Employment Agreement or Consulting Agreement. At the Closing the
Shareholder shall execute an employment agreement or consulting agreement with
the Company at annual rates of $120,000 or $60,000, respectively.
3.13 Specific Identified Assets. The Shareholder represent that the
purchase shall include but not be limited to the following assets in "as is"
condition:
Xxxx Toys, Inc. (company name)
Xxxx Trains License Agreements
Trademark #1,776,628
Xxxx Archives (original sets of plans, drawings, blueprints) Xxxx
Museum Licenses (Erie based Museum, original Xxxx factory) Customer
Lists Prospect Lists Xxxx Toys Web Site Available Xxxx Toy Samples All
"Mexican Inventory" warehoused in Ohio All Xxxx Molds owned by XXXX
TOYS and/or American Plastic Equipment, Inc.
All license agreements related to Xxxx Molds, and Xxxx Trains (Buyer
shall be subject to the specific terms of the license), and the royalties
derived from the license agreements. All Trademark Agreements ("The
Exclusive Trademark Agreement")(Buyer shall be subject to the specific
terms of the Trademark Agreement)
Art & Design Department including Mac/Apple computer & Peripherals
Entertainment Rights
50% of the proceeds of any net recovery of a potential claim against
Disney and/or Mattel (expenses to be covered by Xxxx, suit directed by
Xxx)- If any.
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SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SSCP
SSCP represents and warrants to, and covenants with the Shareholder as
follows:
4.01 Corporate Status. SSCP is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and is
licensed or qualified as a foreign corporation in all jurisdictions in which the
nature of its business or the character or ownership of its properties makes
such licensing or qualification necessary.
4.02 Capitalization. The authorized capital stock of SSCP consists of
200,000,000 shares of common stock, having a par value of $.001 per share.
4.03 Undisclosed Liabilities. SSCP has no undisclosed liabilities of any
nature.
4.04 Title to Property. SSCP has good and marketable title to all
properties and assets, real and personal, and SSCP's properties and assets are
subject to no mortgage, pledge, lien or encumbrance, except for liens shown
therein, with respect to which no default exists.
4.05 Litigation. There is no litigation or proceeding pending, or to SSCP's
knowledge threatened, against or relating to SSCP, its properties or business.
4.06 Confidentiality. Until the Closing (and permanently if there is no
Closing), the Company and its representatives will keep confidential any
information which it obtained from the Company concerning its properties, assets
and business. If the transactions contemplated by this Agreement are not
consummated by December 31, 2000 SSCP will return to the Company all written
matter with respect to the Company obtained by it in connection with the
negotiation or consummation of this Agreement.
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4.07 Investment Intent. SSCP is acquiring the Company Shares to be
transferred to it under this Agreement for investment and not with a view to the
sale or distribution thereof, and SSCP has no commitment or present intention to
liquidate the Company or to sell or otherwise dispose of the Company Shares.
4.08 Corporate Authority. SSCP has full corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder and will
deliver to the Shareholder at the Closing a certified copy of resolutions of its
Board of Directors authorizing execution of this Agreement by its officers and
performance thereunder.
4.09 Due Authorization. Execution of this Agreement and performance by SSCP
hereunder has been or prior to the Closing will be duly authorized by all
requisite corporate and shareholder action on the part of SSCP, and this
Agreement constitutes a valid and binding obligation of SSCP and performance
hereunder will not violate any provision of SSCP's Articles of Incorporation,
Bylaws, mortgages, agreements with third parties or other commitments.
SECTION 5. CONDUCT OF COMPANY PENDING THE CLOSING
The Shareholder agree that from the date of this Agreement until the
Closing the Company will conduct itself in the following manner:
5.01 Certificate of Incorporation and Bylaws. The Company will not change
its Certificate of Incorporation or Bylaws.
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5.02 Capitalization, etc. The Company will not make any change in its
authorized, issued or outstanding capital stock; grant any stock option or right
to purchase shares of its capital stock; issue any security convertible into
shares of its capital stock; purchase, redeem, retire, or otherwise acquire any
shares of its capital stock; or agree to do any of the foregoing; or declare,
set aside or pay any dividend or other distribution in respect of its capital
stock.
5.03 Business in Ordinary Course. The Company will conduct its business in
the ordinary course and will (1) use its best efforts to preserve its business
organization intact, to keep available to SSCP the services of its present
officers and employees and to preserve the goodwill of suppliers, customers and
others having business relations with it; (2) maintain its properties in
customary repair, working order and condition, reasonable wear and tear and
damage by casualty excepted; (3) keep in force at no less than their present
limit all policies of insurance; (4) make no material change in the customary
terms and conditions on which it extends credit to customers; and (5) enter into
no sale, lease, contract, commitment or other transaction; provided, however,
that nothing in this Section 5.03 shall prohibit compliance by the Company with,
or the Company's borrowings or repayment funds pursuant to, and agreements or
other commitments disclosed by the Company to SSCP.
5.04 Banking Arrangements; Powers of Attorney. The Company will not make
any change in its banking and safe deposit arrangements and will not grant any
powers of attorney.
5.05 Accounting Practices. Except as required by generally accepted
accounting principles, the Company will not make any changes in its accounting
methods or practices.
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5.06 Merger, etc. The Company will not merge or consolidate with any other
corporation; sell or lease all or substantially all of its assets and business;
acquire all or substantially all of the stock of the business or assets or any
other person, corporation or business organization; or agree to do any of the
foregoing.
SECTION 6. COVENANTS AFTER THE CLOSING
6.01 After Closing. From and after the Closing, all parties hereto agree to
issue certificates representing the SSCP Shares to the Shareholder of the
Company pursuant to Paragraph 1.01 hereof.
6.02 Working Capital. SSCP agrees to provide or arrange for sufficient
capital infusions to successfully carry out the business plan of the Company
currently estimated to be approximately $1,000,000 during the first year.
6.03 Personal Guarantees. SSCP shall make every effort to relieve Xxx
Xxxxxxxx of any and all personal guarantees given by him for the benefit of the
Company. SSCP shall in any case indemnify him from any liability whatsoever
related to such personal guarantees.
SECTION 7. CONDITIONS PRECEDENT - SSCP
All obligations of SSCP under this Agreement are subject, at SSCP's option,
to the fulfillment, before or at the Closing, of each of the following
conditions:
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7.01 Representations and Warranties True at Closing. The Shareholder'
representations and warranties contained in this Agreement shall be true and
correct as of the date hereof and as of the Closing in all material respects.
7.02 Due Performance. The Shareholder shall have performed and complied
with all the terms and conditions required by this Agreement to be performed or
complied with by them before the Closing.
7.03 Books and Records. The Shareholder has caused the Company to make
available to SSCP all books and records of the Company, including minute books
and stock transfer records.
7.04 Acceptance by the Shareholder. The terms of this Agreement shall have
been accepted by the Shareholder of the Company as evidenced by their signatures
on the signature page of this Agreement.
SECTION 8. CONDITIONS PRECEDENT - THE SHAREHOLDER
All obligations of the Shareholder under this Agreement are subject, at
their option, to the fulfillment, before or at the Closing, of each of the
following conditions:
8.01 Representations and Warranties True at Closing. SSCP's representations
and warranties contained in this Agreement shall be true and correct as of the
date hereof at and as of the Closing in all material respects.
8.02 Due Performance. SSCP shall have performed and complied with all of
the terms and conditions required by this Agreement to be performed or complied
with by it before the Closing.
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8.03 Revocation of Prior Authorizations. The Shareholder shall have
delivered to SSCP certified copies of resolutions of the Company's Board of
Directors revoking as of the Closing all prior authorizations, powers of
attorney, designations and appointments relating to the signing of checks,
borrowing of funds, access to corporate safe deposit boxes and other similar
matters, to the extent requested by SSCP.
8.04 Resignations. There shall have been delivered to SSCP the signed
resignations of such directors of the Company as SSCP shall request, dated as of
the Closing.
SECTION 9. INDEMNIFICATION
9.01 Indemnification of SSCP. The Shareholder agrees to indemnify SSCP
against any loss, damage or expense (including reasonable attorneys' fees)
suffered by SSCP from (1) any breach by the Shareholders of this Agreement; or
(2) any inaccuracy in or breach of any of the representations, warranties or
covenants by the Shareholder herein; provided, however that (a) SSCP shall be
entitled to assert rights of indemnification hereunder only if and to the extent
that it suffers losses, damages and expenses (including reasonable attorneys'
fees) exceeding $25,000 in the aggregate; and (b) SSCP shall give notice of any
claims hereunder within the twenty-four (24) month period beginning on the date
of the Closing. No loss, damage or expense shall be deemed to have been
sustained by SSCP to the extent of insurance proceeds paid to, or tax benefits
realizable by, SSCP or the Company as a result of the event giving rise to such
light indemnification.
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9.02 Indemnification of Shareholder. SSCP agrees to indemnify the
Shareholder against any loss, damage or expense (including reasonable attorneys'
fees) suffered by any of the Shareholder from (1) any breach by SSCP of this
Agreement; or (2) any inaccuracy in or breach of any of SSCP's representations,
warranties or covenants herein.
9.03 Defense of Claims. Upon obtaining knowledge thereof, the indemnified
party shall promptly notify the indemnifying party of any claim which has given
or could give rise to a right of indemnification under this Agreement. If the
right of indemnification relates to a claim asserted by a third party against
the indemnified party, the indemnifying party shall have the right to employ
counsel acceptable to the indemnified party to cooperate in the defense of any
such claim. So long as the indemnifying party is defending any such claim in
good faith, the indemnified party will not settle such claim. If the
indemnifying party does not elect to defend any such claim, the indemnified
party shall have no obligation to do so.
SECTION 10. TERMINATION
10.01 Termination. This Agreement may be terminated (1) by mutual consent
in writing; (2) by either the Shareholder or SSCP if there has been a material
misrepresentation or material breach of any warranty or covenant by the other
party; or (3) by either the Shareholder or SSCP if the Closing shall not have
taken place, unless adjourned to a later date by mutual consent in writing by
December 31, 2000.
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SECTION 11. GENERAL PROVISIONS
11.01 Further Assurances. At any time, and from time to time, after the
Effective Date, each party will execute such 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.
11.02 Waiver. Any failure on the part of either party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
11.03 Brokers. Each party agrees to indemnify and hold harmless the other
party against any fee, loss or expense arising out of claims by brokers or
finders employed or alleged to have been employed by it. The parties agree that
any fees agreed by SSCP shall be paid by SSCP.
11.04 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt requested, as
follows:
To: Xx. Xxxxx Xxxxxxx, Chairman & CEO
xxxxxxxxxxx.xxx, inc.
0000 Xxxxxxx 0 Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
To: Xxx Xxxxxxxx
c/x Xxxx Toys, Inc.
0000 XX 000xx Xxxxxx
X. Xxxxx, Xxxxxxx 00000
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11.05 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof and can only be modified in writing SIGNED BY both parties.
11.06 Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.07 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New Jersey.
11.08 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided,
however, that any assignment by either party of its rights under this Agreement
without the written consent of the other party shall be void.
11.09 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Facsimile
signatures shall be considered as original signatures.
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Executed as of this 7th day of December, 2000.
Xxxxxxxxxxx.xxx, inc.
By:____________________________
SHAREHOLDER OF XXXX TOYS, INC.
----------------------------
Xxx Xxxxxxxx
Shares of Company: 10,000 shares
Shares of SSCP: 15,000,000 shares
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