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EXHIBIT 10.12
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
This Acquisition Agreement and Closing Memorandum ("Agreement") is entered into
effective January 15, 1999, by and between Basic Technologies, Inc., a Colorado
corporation ("Basic"), and Simpco, Inc., a Texas corporation ("Simpco").
Effective this date, Basic and Simpco have consummated and closed a business
combination on the following terms and under the following warranties:
1. The transactions set forth have been duly authorized by the respective boards
of directors of Basic and Simpco, and by the shareholders of Simpco.
2. The undersigned officers and representatives of the respective corporations
certify through their signatures that they have been duly authorized by their
respective boards of directors to execute the agreement on behalf of their
respective corporations.
3. Basic and the undersigned representative of Basic jointly and severally
represent and warrant that all documents and information furnished to Simpco in
connection with the transactions set forth herein are true and accurate to the
best of their knowledge.
4. Simpco and the undersigned representative of Simpco jointly and severally
represent and warrant that all documents and information furnished to Basic in
connection with the transactions set forth herein are true and accurate to the
best of their knowledge.
5. Simpco has delivered to Basic on behalf of Simpco's shareholders stock
certificates representing one hundred per cent (100%) of the issued and
outstanding shares of Simpco ("the Simpco stock"), each certificate bearing an
endorsement in blank and duly signed by the shareholder named on the face of the
certificate.
6. In exchange for the Simpco stock, Basic will cause to be issued through its
transfer agent 850,000 shares ("the Basic shares") of its authorized but
previously unissued voting common stock to the shareholders of Simpco named on
the attached Exhibit A to this Agreement, and in the respective numbers of
shares set forth on the same Exhibit A. The Basic shares will, immediately
following issuance, represent approximately thirteen per cent (13%) of the
issued and outstanding shares of the common stock of Basic.
(1)
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7. Both Basic and Simpco execute this Agreement based upon reliance that this
transaction will be considered to be a tax-free reorganization to both
corporations and to the shareholders of both corporations, under Internal
Revenue Code Sections 354, 361 and 368.
In witness whereof, the undersigned have caused this Agreement to be executed
effective as of the first date above written.
Basic Technologies, Inc.
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx,
President and Chairman of the Board
Simpco, Inc.
By: /s/ XXXX XXXXXXX
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Xxxx Xxxxxxx, President
(2)
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EXHIBIT A
TO
ACQUISITION AGREEMENT AND CLOSING MEMORANDUM
NUMBER OF NUMBER OF
SIMPCO SHARES BASIC SHARES
SIMPCO SHAREHOLDER SURRENDERED ISSUED
Xxxxx X. Xxxxx 2,500 212,500
Simpco Trust #1 2,500 212,500
Simpco Trust #2 2,500 212,500
Simpco Trust #3 2,500 212,500
Total 10,000 850,000
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ADDENDUM TO
ACQUISITION AGREEMENT
AND CLOSING MEMORANDUM
This Addendum to that certain Acquisition Agreement and
Closing Memorandum ("Agreement") entered into effective
January 15, 1999, by and between Basic Technologies, Inc. and
Simpco, Inc. is made effective January 15, 1999.
It is hereby agreed between the parties that paragraph 6 of the Agreement be
corrected and amended by adding the following wording to the said paragraph:
" The parties acknowledge that the number of shares to be issued by Basic
(valued at $ 1.00 per share) and the amount of the $ 90,000.00 promissory note
to be drawn by Basic, have been determined by the mutually agreed upon net value
of the equipment owned by Simpco, Inc.,of $ 940,000.00, and that there is no
goodwill value in the corporation.
On July 15, 2000, the equipment owned by Simpco on January 15, 1999 will
be re-valued by the same procedures used in the initial valuation. Should the
value of that equipment, taken as a whole, then be greater than $ 1,080,000.00,
the shareholders of Simpco currently transferring shares to Basic, or their
assigns, will be entitled to receive additional shares of Basic. The formula for
determining the number of shares to be issued is:
a. The Basic shares will be issued at a valuation equal to the greater of
the traded market price of the stock on July 15, 2000, or $ 1.00 per
share; and
b. The dollar equivalent to be received will be fifty per cent (50%) of the
excess of the equipment value over $ 1,080,000.00.
Basic will cause its transfer agent to issue any
qualified shares as soon as possible."
In witness whereof, the undersigned have caused this Addendum to be executed
effective as of the first date above written.
Basic Technologies, Inc Simpco, Inc.
By: /s/ XXXXX XXXXXX By: /s/ XXXX XXXXXXX
Xxxxx Xxxxxx Xxxx Xxxxxxx
President and Chairman President
of the Board
