EXHIBIT 1 TO PROXY STATEMENT
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into on January 24, 2003,
by and between iCrystal, Inc., a Delaware corporation (the "COMPANY"), and
Wellington Holdings Ltd., a Belize corporation ("WELLINGTON").
R E C I T A L S
A. The COMPANY has authorized capital stock consisting of 30,000,000
shares of common stock ("Common Stock"), $.01 par value, of which 19,932,764
shares of Common Stock are issued and outstanding, and is a public company
trading on the OTC Bulletin Board.
B. The COMPANY has certain assets it desires to sell to WELLINGTON, as
more specifically set forth on Schedule "A" attached hereto, together with
certain liabilities, and WELLINGTON desires to purchase such assets (the"
Assets").
C. The COMPANY wishes to sell, and WELLINGTON wishes to acquire, all of
the Assets on the Closing Date (as defined below), in exchange for WELLINGTON's
assumption of certain liabilities totaling the sum of US$724,000.00
(specifically identified in Schedule "B"), as and for full consideration for the
Assets, subject to and upon the terms and conditions hereinafter set forth.
A G R E E M E N T
It is agreed as follows:
1. ASSET PURCHASE.
______________
1.1 AGREEMENT TO SELL ASSETS. Subject to the terms and upon the conditions set
forth herein, the COMPANY agrees to sell, assign, transfer and deliver to
WELLINGTON, and WELLINGTON agrees to purchase from the COMPANY, at the Closing,
Assets owned by the COMPANY as set forth on Exhibit "A", in exchange for the
transfer, at the Closing, by WELLINGTON to the COMPANY of the Funds (the
"Transaction"). The Asset purchase price shall be allocated among the Assets in
accordance with Exhibit "B" to this Agreement.
The Assets shall be conveyed free and clear of all liabilities, obligations,
liens and encumbrances, excepting only the Assumed Liabilities (defined below).
1.1 (a) On the Closing Date, and subject to the terms and conditions of
this Agreement, WELLINGTON agrees to assume and become responsible for only
those liabilities identified in Exhibit B (the "Assumed Liabilities") (upon
receipt of Exhibit B, Buyer shall identify which of the liabilities, contracts,
leases and/or other agreements it will assume and will xxxx such schedule with
such designations). WELLINGTON shall execute an Assumption Agreement, set forth
in Attachment 1 hereto, delineating the Assumed Liabilities concurrent with the
Closing.
Trader Labeling, L.L.C.
June __, 2002
Page 2
(b) Other than the Assumed Liabilities, WELLINGTON shall not
assume, by virtue of this Agreement or the transactions contemplated hereby, any
other current or long-term liabilities or obligations of the COMPANY of any kind
whatsoever including, without limitation, any claims by current or former
officers, directors, employees, creditors or shareholders of the COMPANY of any
nature whatsoever, all of which liabilities and obligations (the "Excluded
Liabilities") the COMPANY shall be and remain liable to pay, satisfy and
discharge.
1.2 INSTRUMENTS OF TRANSFER.
_______________________
(a) THE ASSETS. The COMPANY shall deliver to WELLINGTON, at the
Closing Date, a Xxxx of Sale, as set forth in Attachment 2 hereto, evidencing
sale of all the Assets, along with other duly executed documents in form and
substance satisfactory to WELLINGTON, in order to effectively vest in WELLINGTON
all right, title and interest in and to the Assets sold by the COMPANY. From
time to time after the Closing Date, and without further consideration, the
COMPANY will execute and deliver such other instruments of transfer and take
such other actions as WELLINGTON may reasonably request in order to more
effectively transfer to WELLINGTON the Assets intended to be transferred
hereunder.
(b) WELLINGTON ASSUMPTION AGREEMENT. WELLINGTON shall deliver the
Assumption Agreement to the COMPANY on the Closing Date.
1.3 CLOSING. The closing ("Closing") of the sale of Assets shall take place at
the offices of the COMPANY, at Vancouver, B.C., at the earlier of (i) as soon as
all conditions of the Agreement specified in paragraph 4 hereof have been
satisfied (other than conditions with respect to actions that the respective
parties hereto will take at Closing itself) have been satisfied or waived by the
appropriate party, or (ii) at 10:00 a.m., local time, on January 24, 2003, or at
such other time and place as may be agreed to by the COMPANY and WELLINGTON
("Closing Date"). The purchase of the Assets shall be effective as of the close
of business on the Closing Date. Each of the parties will use its reasonable
best efforts to take all actions and do all things necessary (including
satisfaction, but not waiver, of the closing conditions set forth below) in
order to cause the Closing to be not later than January 24, 2003, time being of
the essence. The parties shall bear their own attorneys' fees and, except as
expressly provided in this Agreement, other costs of Closing.
1.3.2 From the date hereof until Closing, the COMPANY shall take steps
to ensure that WELLINGTON and its representatives shall be permitted access
during all normal business hours to all the COMPANY books, records, operational
information and physical facilities and that the COMPANY and all of its
personnel will provide all requested information and endeavor to assist
WELLINGTON and its representatives in their review of such matters and the
Assets.
1.3.3 The COMPANY shall be responsible for the expenses in connection
with all matters relating to the SEC filings contemplated hereunder, including
but not limited to, the legal and audit costs.
1.3.4 Closing is conditional upon the parties' delivery of the
following:
a) WELLINGTON shall deliver, at its expense, these items:
1) The Assumption Agreement, as set forth in Attachment 1 hereto;
2) An opinion letter from its legal counsel substantially similar
to that attached as Attachment 4.
b) The COMPANY shall deliver, at its expense, these items:
1) The COMPANY's fully executed Xxxx of Sale for all of the Assets,
as set forth in Attachment 2 hereto;
Trader Labeling, L.L.C.
June __, 2002
Page 3
2) All books and records of the COMPANY relating to the Assets and
Assumed Liabilities, including all financial records, computer data and source
codes;
3) An opinion letter from its legal counsel substantially similar
to Attachment 3.
1.3.6 Conditions Precedent to WELLINGTON's Closing:
The obligations of WELLINGTON to consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of the following
conditions:
1. PROCEEDINGS SATISFACTORY.
________________________
All actions, proceedings, instruments, opinions and documents
required to carry out this Agreement shall be reasonably satisfactory
to WELLINGTON and its counsel. The COMPANY shall have delivered to
WELLINGTON on the Closing Date such documents and other evidence as
WELLINGTON may reasonably request in order to establish the
consummation of transactions relating to the execution, delivery and
performance by the COMPANY of this Agreement, the purchase, transfer
and delivery of the Assets, the taking of all corporate and other
proceedings in connection herewith and the compliance with the
conditions set forth in this agreement, in form and substance
reasonably satisfactory to WELLINGTON. Without limiting the
foregoing, the COMPANY shall have procured all approvals, releases,
approvals, consents and waivers of third parties that may be required
in connection with the transactions contemplated hereunder.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
________________________________________________________
The representations, warranties and covenants made by the
COMPANY shall be true and correct in all material respects when made
and on and as of the Closing Date.
3. COMPLIANCE WITH TERMS AND CONDITIONS.
____________________________________
All the terms, covenants, agreements and conditions of this
Agreement to be complied with and performed by the COMPANY on or before
the Closing Date shall have been complied with and performed in all
material respects.
4. NO ADVERSE LITIGATION.
_____________________
No action, suit or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction wherein an unfavorable
injunction, judgment, order or ruling would (a) prevent consummation of
any of the transactions contemplated by this Agreement, (b) cause any
of the transactions contemplated by this Agreement to be rescinded, or
(c) adversely affect the right of Buyer to own the Assets or to operate
the Assets (and no such injunction, judgment, order or ruling shall be
in effect).
5. ADVERSE DEVELOPMENT.
___________________
Since the Statement Date (defined below), there shall have been
no developments in the business, operations, assets, properties,
condition (financial or otherwise) or prospects of the COMPANY or the
Assets, including, without limitation, any material decline in the
revenue of the Business from that reflected on the income statement of
the COMPANY as of the Statement Date, which in the opinion of
WELLINGTON in its discretion could have a material adverse effect on
the COMPANY or the Assets, or the operations thereof, or on the ability
of the COMPANY to consummate the transactions contemplated hereby.
Trader Labeling, L.L.C.
June __, 2002
Page 4
If (i) the COMPANY has breached any representation, warranty or
covenant contained in this Agreement in any material respect and the
breach has continued without cure for a period of ten (10) days after
notice of breach, or (ii) any of the conditions set forth in this
agreement are not satisfied by January 24, 2003 (unless the failure of
such condition precedent results primarily from WELLINGTON breaching
any representation, warranty or covenant contained in this Agreement),
WELLINGTON may terminate this Agreement and be relieved of all further
obligations. If this Agreement is terminated by WELLINGTON, such
termination shall not be deemed an election of remedies or a waiver of
any of WELLINGTON's rights to damages or indemnification under this
Agreement. However, if WELLINGTON shall have the right to terminate
this Agreement, it may nevertheless elect at its sole option to proceed
with the Closing, and such election shall not in any way be deemed a
waiver of any of WELLINGTON's rights to damages, indemnification or
set-off under this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
_______________________________________________
The COMPANY represents, warrants and covenants to and with
WELLINGTON, as follows:
2.1 POWER AND AUTHORITY; GOOD STANDING; NO BANKRUPTCY. The COMPANY has all
requisite power and authority to enter into and to carry out all of the terms of
this Agreement and all other documents executed and delivered in connection
herewith (collectively, the "Documents"). All individual action on the part of
the COMPANY necessary for the authorization, execution, delivery and performance
of the Documents related to the Transaction by the COMPANY has been taken and no
further authorization on the part of the COMPANY is required to consummate the
transactions provided for in the Documents. When executed and delivered by the
COMPANY, the Documents shall constitute the valid and legally binding obligation
of the COMPANY enforceable in accordance with their respective terms.
The execution and delivery by the COMPANY of this Agreement and the
Ancillary Agreements do not, and the consummation of the transactions
contemplated hereby and thereby will not, conflict with, violate, result in a
breach of or constitute a default under (or an event which, with notice or lapse
of time or both, would cause a default under), or result in the cancellation or
unilateral modification or amendment of, or accelerate the performance required
by, or result in a right of termination or acceleration under or result in the
creation of any lien upon any of the Assets under any of the terms, conditions
or provisions of the Articles of Incorporation or Bylaws of the COMPANY, or the
terms of any agreement or contract, or the terms of any governmental
authorization, law, regulation, order or the like, to which the COMPANY are
subject. The COMPANY is not required to give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order for the parties to consummate the transactions
contemplated by this Agreement.
The COMPANY is duly organized and validly existing corporation in good
standing under and in compliance with all of the laws of the state of its
incorporation, and has adequate power and authority to enter into this Agreement
and all exhibits hereto and instruments required hereunder (the "Ancillary
Agreements") and carry out its terms. The COMPANY is duly qualified and in good
standing as a foreign corporation and licensed to conduct its business as is now
being conducted in Vancouver, B.C. and in each other jurisdiction where the
failure of it to do so could have a material adverse effect on the Assets, or
the financial condition or results of operation of the COMPANY.
Trader Labeling, L.L.C.
June __, 2002
Page 5
The COMPANY is not bankrupt or insolvent or a party to any current or
threatened bankruptcy, insolvency or similar proceeding.
2.2 OWNERSHIP OF AND TITLE TO ASSETS; CONDITION. To its knowledge, the recitals
to this Agreement accurately and completely describe the Assets of the COMPANY.
Schedule "A" to this Agreement accurately and completely sets forth all of the
Assets of the COMPANY owned by the COMPANY being sold hereunder. There are no
claims, encumbrances, liens, charges, or other similar rights of any kind on or
related to the Assets held by the COMPANY or, to its knowledge, any other
person. the COMPANY represent that the COMPANY has and will transfer to
WELLINGTON good and marketable title to the Assets, free and clear of all
pledges, security interests, mortgages, liens, claims, charges, restrictions or
encumbrances.
All of the Assets are fully operational and in working order, have been
installed and are being used in compliance with all applicable software
standards and codes, and with all other agreements, laws, regulations and the
like applicable to their installation and use; the Assets have been maintained
in accordance with normal industry practice and are suitable for the purposes
for which they are used; and, the Assets are all the assets necessary to conduct
the business lawfully and as conducted by the COMPANY.
2.3 INCLUSION OF ASSETS; LICENSES. The purchase of Assets of the COMPANY
includes software and equipment related to software development and source codes
related thereto.
The COMPANY has all necessary licenses, consents, approvals,
authorizations, permissions and the like necessary to own and lawfully operate
the business of the COMPANY as it has been operated, and all such licenses,
consents, approvals, etc., except for those listed on Schedule C, if any, are in
full force and effect and are being assigned to WELLINGTON (any for which any
consent, waiver or approval is required in connection with the transactions
contemplated hereby are noted on Schedule C.
2.4 NO SHOPPING. The COMPANY represents that it has not conducted discussions in
respect of the disposition of the COMPANY Assets (or the COMPANY's disposition
of its Outstanding Shares) with any other person or party from the date of the
execution of the Memorandum of Understanding executed by the parties, dated
November 20, 2002, and shall not conduct any such discussions unless and until
termination of said Memorandum of Understanding or unless the COMPANY and
WELLINGTON mutually agree otherwise in writing.
2.5 FINDERS' FEES. There is no investment banker, broker, finder or other
intermediary who has been retained by or is authorized to act on behalf of the
COMPANY or any Subsidiary who might be entitled to any fee or commission upon
consummation of the Transaction contemplated by this Agreement.
Trader Labeling, L.L.C.
June __, 2002
Page 6
2.6 GOVERNMENTAL AUTHORIZATION. The execution, delivery and performance by the
COMPANY of this Agreement and the COMPANY' s consummation of the Transaction
contemplated hereby and thereby by the COMPANY, requires no action by or in
respect of, or filing with, any governmental body, agency, official or authority
other than:
(a) compliance with any applicable requirements of the
Xxxx-Xxxxx-Xxxxxx anti-trust Improvements Act of 1976, as amended (the "HSR
Act");
(b) compliance with any applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder;
(c) compliance with any applicable requirements of the Securities Act
of 1933, as amended (the "Securities Act") and the rules and regulations
promulgated thereunder; and
(d) such other filings or registrations with, or authorizations,
consents, or approvals of, governmental bodies, agencies, officials or
authorities, the failure of which to make or obtain would not have a Material
Adverse Effect on the ability of the Parties to consummate the transactions
contemplated hereby.
2.7 COMPLIANCE WITH LAW. The COMPANY is in compliance and has conducted its
business so as to comply with all laws, rules and regulations, judgments,
licenses, permits, decrees or orders of any court, administrative agency,
commission, regulatory authority or other governmental authority or
instrumentality, domestic or foreign applicable to its respective businesses or
properties, except to the extent that non-compliance would not have a material
adverse effect on the COMPANY. There are no judgments or orders, injunctions,
decrees, stipulations or awards (whether rendered by a court or administrative
agency or by arbitration), including any such actions relating to affirmative
action claims or claims of discrimination, against, the COMPANY or against any
of their respective properties or businesses.
2.8 NO DEFAULTS. The COMPANY has not received notice that it would be with the
passage of time, (i) in violation of any provision of its articles or
certificate of incorporation or bylaws or other similar organizational document
or (ii) in default or violation of any term, condition or provision of (a) any
judgment, decree, order, injunction or stipulation applicable to the COMPANY or
(b) any material agreement, note, mortgage, indenture, contract, lease or
instrument, permit, concession, franchise or license to which the COMPANY is a
party or by which the COMPANY or its respective properties or assets may be
bound.
2.9 LITIGATION. There is no action, suit, proceeding, claim or investigation
pending or, to the best of the COMPANY's knowledge, threatened, against the
COMPANY which could, individually or in the aggregate, have a material adverse
effect on the COMPANY taken as a whole, or which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay any of the transactions
contemplated by this Agreement. The COMPANY has delivered to WELLINGTON complete
copies of all audit response letters, if any, prepared by its counsel for the
COMPANY's independent public accountants and all management letters prepared in
connection with the last two years completed audits of the CPMPANY's financial
statements, including the audit conducted in connection with the the COMPANY's
Balance Sheet, and any such correspondence since the the COMPANY's Balance Sheet
Date.
2.10 ABSENCE OF CERTAIN CHANGES. Except as expressly allowed or contemplated by
this Agreement or, since the COMPANY's Balance Sheet Date, there has not
occurred:
(a) A material adverse change with respect to the COMPANY;
(b) Any amendments or changes in the articles or certificate of
incorporation or bylaws, or other similar organizational document of the
COMPANY;
Trader Labeling, L.L.C.
June __, 2002
Page 7
(c) Any damage, destruction or loss, not covered by insurance, in
excess of $25,000 with respect to any of the current or former properties or
businesses of the COMPANY;
(d) Any redemption, repurchase or other acquisition of shares of
capital stock, or ownership units of the COMPANY, or any declaration, setting
aside or payment of any dividend or other distribution (whether in cash, stock
or property) with respect to the capital stock or affecting the Assets of the
COMPANY;
(e) Except as contemplated by this Agreement, and a sale of all
included assets of the COMPANY, as approved by the shareholders of the COMPANY,
any acquisition or sale of a material amount of property or assets by or of the
COMPANY;
(f) Except as contemplated by this Agreement, any (i) incurrence,
assumption or guarantee by the COMPANY of any debt for borrowed money; (ii)
issuance or sale of any securities convertible into or exchangeable for debt
securities of the COMPANY; or (iii) issuance or sale of options or other rights
to acquire from the COMPANY, directly or indirectly, debt securities of the
COMPANY or any securities convertible into or exchangeable for any such debt
securities;
(g) Any creation or assumption by the COMPANY of any Lien on any
material asset, except as permitted or contemplated by this Agreement;
(h) Any entry into, amendment of, relinquishment, termination or
non-renewal by the COMPANY of any material contract, lease, commitment or other
right or obligation other than as permitted or contemplated by this Agreement;
or
(i) To the best of the COMPANY's knowledge, any agreement or
arrangement made by the COMPANY or any Subsidiary to take any action which, if
taken prior to the date hereof, would have made any representation or warranty
set forth in this Section 2.11 untrue or incorrect as of the date when made.
2.11 NO UNDISCLOSED MATERIAL LIABILITIES. There are no liabilities of the
COMPANY or any Subsidiary of any kind whatsoever that are material to the
business of the COMPANY and/or the COMPANY's Subsidiaries, taken as a whole,
other than:
(a) liabilities disclosed or provided for in the COMPANY's Balance
Sheet;
(b) liabilities incurred in the ordinary course of business consistent
with past practice since the COMPANY's Balance Sheet Date; and
(c) liabilities under this Agreement.
2.12 MAJOR CONTRACTS. Schedule 2.12 of the COMPANY's Disclosure Schedule sets
forth a list of all "material contracts" (as defined in Item 601 of Regulation
S-K under the Securities Act) and to which the COMPANY and/or any Subsidiary is
a party or has a beneficial interest in (each a "Material Contract"). Each
Material Contract is valid and binding on the COMPANY and/or any Subsidiary, as
applicable, and except as set forth on Schedule 2.12 of the COMPANY's Disclosure
Schedule, neither the COMPANY nor any Subsidiary, nor to the best of their
knowledge any other party thereto, has breached any provision of, or is in
default under the terms of, any Material Contract.
Trader Labeling, L.L.C.
June __, 2002
Page 8
2.13 TAXES.
_____
(a) All Tax returns, statements, reports and forms (including estimated
Tax returns and reports and information returns and reports) required to be
filed with any Taxing Authority with respect to any Taxable period ending on or
before the Effective Time by or on behalf of the COMPANY any Subsidiaries
(collectively, the "Subsidiary Tax Returns"), the non-filing of which would have
a Material Adverse Effect on the COMPANY or would result in criminal penalties
against it or any Subsidiary or any officer, partner or employee thereof, have
been or will be filed when due (including any extensions of such due date).
(b) The COMPANY and its Subsidiaries have timely paid, withheld or made
provision on their books for all taxes shown as due and payable on Subsidiary
Tax Returns that have been filed.
(c) All Subsidiary Tax Returns relating to income or franchise taxes
filed with respect to taxable years of the COMPANY any Subsidiary ending on or
after December 31, 2001, have been filed or extensions have been duly obtained.
(d) Neither the COMPANY nor any Subsidiary has been granted any
extension or waiver of the limitation period applicable to any Subsidiary Tax
Returns.
(e) To the best of the COMPANY's knowledge, there is no claim, audit,
action, suit, proceeding, or investigation now pending or threatened in writing
against or with respect to the COMPANY or any Subsidiary in respect of any tax
or assessment.
(f) There are no requests for rulings in respect of any taxes pending
between the COMPANY or any Subsidiary and any taxing authority.
(g) None of the property owned or used by the COMPANY or any Subsidiary
is subject to a tax benefit transfer lease executed in accordance with Section
168(f)(8) of the Code.
(h) None of the property owned by the COMPANY or any Subsidiary is
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
(i) Neither the COMPANY nor any Subsidiary, nor any other person on
behalf of the COMPANY or any Subsidiary, has entered into nor will it enter into
any agreement or consent pursuant to Section 341(f) of the Code.
(j) There are no Liens for taxes upon the assets of the COMPANY or any
Subsidiary, except Liens for taxes not yet due.
(k) Neither the COMPANY nor any Subsidiary will be required to include
any adjustment in taxable income for any tax period (or portion thereof) ending
after the Effective Time pursuant to Section 481(c) of the Code (or any similar
provision of the tax laws of any jurisdiction) as a result of a change in method
of accounting for any tax period (or portion thereof) ending on or before the
Effective Time or pursuant to the provisions of any agreement entered into with
any taxing authority with regard to the tax liability of the COMPANY or any
Subsidiary for any tax period (or portion thereof) ending on or before the
Effective Time.
Trader Labeling, L.L.C.
June __, 2002
Page 9
(l) Neither the COMPANY nor any Subsidiary has been a member of an
affiliated group, other than one in which one of the COMPANY was the common
parent, or filed or been included in a combined, consolidated or unitary tax
return other than one filed by the COMPANY (or a return for a group consisting
solely of Subsidiaries or predecessors), or participated in any other similar
arrangement whereby any income, revenues, receipts, gains, losses, deductions,
credits or other tax items of the COMPANY and/or any such Subsidiary was
determined or taken into account for tax purposes with reference to or in
conjunction with any such items of another person other than the COMPANY and/or
any such Subsidiary or predecessor.
(m) Neither the COMPANY nor any Subsidiary is currently under any
contractual obligation to pay the income or franchise tax obligations of, or
with respect to transactions relating to, any other person or to indemnify any
other person with respect to any income or franchise tax.
(n) Neither the COMPANY nor any Subsidiary has signed any letter or
entered into any agreement or arrangement consenting to the surrender or sharing
of any deductions, credits, or other tax attributes with any other person or
transferred or assigned to any other person for tax purposes any such item.
(o) Notwithstanding any of the foregoing, no representation or warranty
is made by the COMPANY and/or any Subsidiary with respect to the Tax
consequences that may result from the Transaction contemplated by this
Agreement.
(p) For the purposes of this Agreement, "Tax" (and, with correlative
meaning, "Taxes" and "Taxable") means, for any entity, (i) any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits, license, withholding on
amounts paid to or by such entity or any subsidiary thereof, payroll employment,
excise, severance, stamp, occupation, property, environmental or windfall profit
tax, or other tax, together with any interest or any penalty, addition to tax or
additional amount imposed by any governmental authority (a "Taxing Authority")
responsible for the imposition of any such tax (domestic or foreign), (ii)
liability of such entity or any subsidiary thereof for the payment of any
amounts of the type described in (i) as a result of being a member of an
affiliated, consolidated, combined or unitary group for any Taxable period and
(iii) liability of such entity or any subsidiary thereof for the payment of any
amounts of the type described in (i) or (ii) as a result of any express or
implied obligation to indemnify any other person.
2.14 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no material agreement,
judgment, injunction, order or decree binding upon the COMPANY or any Subsidiary
which has or could reasonably be expected to have the effect of prohibiting or
materially impairing any of the Assets or the conduct of business by the COMPANY
or any Subsidiary as currently conducted.
2.15 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
______________________________________________________
(a) Schedule 2.15(a) of the COMPANY's Disclosure Schedule sets forth a
true and complete description of all personal property owned or leased (as
lessee) by the COMPANY or any Subsidiary (the "Properties"), the aggregate
annual rental or other fee payable under any such lease, and, with respect to
any such Properties currently under contract for sale, the parties to such
contract or contracts.
(b) Except as set forth on Schedule 2.15(b) of the COMPANY's Disclosure
Schedule, the COMPANY has marketable title to, or, in the case of leased
personal properties and assets, valid leasehold interests in, all of the
COMPANY's Properties, and, except as set forth on Schedule 2.15(b) of the
Trader Labeling, L.L.C.
June __, 2002
Page 10
COMPANY's Disclosure Schedule and to the best of the COMPANY's knowledge, such
title or leasehold interests are free and clear of any Liens. Schedule 2.15(b)
of the COMPANY's Disclosure Schedule sets forth a list of all material
management agreements, development agreements or other agreements of any kind
with respect to any of the the COMPANY's Properties to which the COMPANY COMPANY
or any Subsidiary is a party and such agreements are valid and binding on the
COMPANY COMPANY or the Subsidiaries (as the case may be) and, to the best of the
COMPANY's knowledge, without default by any party thereto.
(c) With respect only to the COMPANY's Property commonly known as the
online gaming software, to the best of the COMPANY's knowledge, there are no
material, physical or other defects, and all such software is in operating
condition and neither the COMPANY nor any Subsidiary has received any
notification of noncompliance with any applicable governmental requirements with
respect thereto.
2.16 NO UNTRUE STATEMENTS. No representation or warranty made by either the
COMPANY in this Agreement or in any statement, certificate, schedule or other
writing furnished to WELLINGTON pursuant hereto or in connection with the
transaction contemplated hereby contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements herein or
therein not misleading. All records and documentation provided to WELLINGTON in
connection with the transaction contemplated hereby are true and complete as of
the date to which such records or documentation pertain, and the identity and
description of the COMPANY are true and correct. There is no fact or condition
which has not been disclosed in writing to WELLINGTON that materially adversely
affects the Assets, the condition (financial or otherwise) of the COMPANY, or
the ability of the COMPANY to perform any of its obligations under this
Agreement or the Ancillary Agreements, whether such fact or condition arose
prior to or after the dates of the records and documentation provided to
WELLINGTON in connection herewith.
3. REPRESENTATIONS AND WARRANTIES OF WELLINGTON. WELLINGTON represents, warrants
and covenants to and with the COMPANY as follows:
3.1 ORGANIZATION AND GOOD STANDING. WELLINGTON is a corporation duly organized,
validly existing, and in good standing under the laws of Belize and has full
corporate power and authority to enter into and perform its obligations under
this Agreement.
3.2 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION. WELLINGTON represents
that, to its knowledge, no order of any court or administrative agency is in
effect which restrains or prohibits WELLINGTON from consummating the
transactions contemplated hereby, and no suit, action, investigation, inquiry or
proceeding by any governmental body or other person or legal or administrative
proceeding has been instituted or threatened which questions the validity or
legality of WELLINGTON's consummation of the transactions contemplated hereby.
3.3 VALIDITY OF TRANSACTIONS. This Agreement, and each document executed and
delivered by WELLINGTON in connection with the transactions contemplated by this
Agreement, and the performance of the transactions contemplated therein have
been duly authorized, executed and delivered by WELLINGTON and is each the valid
and legally binding obligation of WELLINGTON, enforceable in accordance with its
terms, except as limited by applicable bankruptcy, insolvency reorganization and
moratorium laws and other laws affecting enforcement of creditor's rights
generally and by general principles of equity.
3.4 APPROVALS AND CONSENTS. WELLINGTON represents that, to its best knowledge,
there are no permits, consents, mandates or approvals of public authorities,
either federal, state or local, or of any third party necessary for the
consummation of the transactions contemplated hereby.
Trader Labeling, L.L.C.
June __, 2002
Page 11
4. CONDITIONS TO CLOSING.
_____________________
4.1 The obligations of each of the parties hereunder shall be subject to and
conditional upon satisfaction of each of the following conditions, failing
which, either the parties may, by written notice to the other, terminate this
Agreement, and the arrangements contemplated hereunder without any liability
whatsoever, other than that provided for pursuant to paragraph 8 hereof:
(a) It is the understanding of all parties that all efforts will be
made to insure that this transaction does not generate significant taxable gains
for any party.
(b) Requisite approval by the all Party's board of directors.
(c) The receipt of all other consents, approvals and authorizations as
may be required under applicable laws, rules and regulations.
(d) The ability of the COMPANY to deliver good, clear and clean title
to all Assets included in this asset purchase agreement.
5. MISCELLANEOUS.
_____________
5.1 CUMULATIVE REMEDIES. Any person having any rights under any provision of
this Agreement will be entitled to enforce such rights specifically, to recover
damages by reason of any breach of any provision of this Agreement, and to
exercise all other rights granted by law, which rights may be exercised
cumulative and not alternatively.
5.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, all
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto will bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or not.
5.3 SEVERABILITY. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement or the other documents.
5.4 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
any one of which need not contain the signatures of more than one party, but all
such counterparts when taken together will constitute one and the same
agreement.
5.5 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter thereof, and
supersedes all prior and contemporaneous agreements and understandings.
5.6 APPLICABLE LAW; BULK SALES. This Agreement is governed by the laws of the
State of Nevada. The parties intend this transaction to be exempt from the bulk
sales laws of the State of Nevada, and will take any action required to insure
same. Any disputes arising from this agreement will be submitted to binding
arbitration under Nevada law.
5.7 CONFIDENTIAL NATURE OF INFORMATION. All Parties agree that all information
obtained by any of them pursuant to this Agreement shall be confidential
information and shall not be disclosed to any person or entity for any reason or
purpose whatsoever, other than in connection with governmental regulatory
filings required to consummate the transaction contemplated hereby, under legal
compulsion or, as to the COMPANY, as a result of SEC requirements. All documents
or copies thereof which one party furnishes to the other party pursuant to this
Agreement shall be returned forthwith in the event that Closing does not occur.
Trader Labeling, L.L.C.
June __, 2002
Page 12
5.8 NOTICES.
For:
iCrystal, Inc.
0000 Xxxx Xxxxxx Xxxxxxx
Xxxxx 000 X X0X 0X0 Xxxxxxx Xxxxxxxx
Xxxxxx
Phone 000- 000-0000
Fax 000- 000-0000
With copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxxxxx Xxxxx, #000
Xxxx, XX 00000
Phone 000-000-0000
Fax 000-000-0000
For:
Wellington Holdings Ltd.
00 Xxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxx, Xxxxxxx America
Phone 000-000-0-00000
Fax 000-000-0-00000
Trader Labeling, L.L.C.
June __, 2002
Page 13
IN WITNESS WHEREOF, each of the parties to this Agreement has
executed or caused this Agreement to be executed as of the date first above
written.
WELLINGTON HOLDINGS LTD., a Belize corporation
By: /s/ XXXXXX XXXXX
___________________________
Xxxxxx Xxxxx,
Chief Executive Officer
iCRYSTAL, INC., a Delaware corporation
By: /s/ XXXXX XXXXX
___________________________
Xxxxx Xxxxx,
Chairman
Trader Labeling, L.L.C.
June __, 2002
Page 14
EXHIBIT A
LIST OF THE COMPANY ASSETS
1. All software and software development tools and engines, including source
codes and other proprietary information and data related to the gaming software
produced and developed by icrystal, Inc., as currently licensed to Wellington
Holdings Ltd., together with the Master License and all sub-licenses thereunder,
specifically including any rights to royalties and payments thereunder.
2. all hardware utilized by icrystal, inc., to develop the software, but
excluding all hardware utilized by icrystal, inc., in performance of general
business, corporate, bookkeeping and administrative functions and tasks,
unrelated to software development.
EXHIBIT B
LIST OF LIABILITIES
$724,000.00
EXHIBIT C
THE COMPANY DISCLOSURE SCHEDULE
Schedule 2.12, Schedule 2.15 (a) and (b): see Exhibit A.
EXHIBIT D
THE WELLINGTON DISCLOSURE SCHEDULE
None
Trader Labeling, L.L.C.
June __, 2002
Page 15
ATTACHMENT 1
ASSIGNMENT AND ASSUMPTION AGREEMENT
Pursuant to that certain Asset Purchase Agreement, dated January 24, 2003
(the "Asset Purchase Agreement") ICRYSTAL, INC., a Delaware corporation
("Seller"), and WELLINGTON HOLDINGS LTD., a Belize corporation ("Buyer"), except
as otherwise stipulated in the Asset Purchase Agreement, Seller hereby assigns,
and Buyer hereby accepts and assumes: (1) the Assets set forth on Exhibit A of
the Asset Purchase Agreement, and (2) only the liabilities listed on Exhibit B
of the Asset Purchase Agreement which have been designated thereon by Buyer as
accepted and assumed liabilities which Buyer will assume, in the aggregate
amount of US$724,000.00 (collectively, the "Assumed Liabilities").
Anything in this Assignment and Assumption Agreement to the contrary
notwithstanding, this Assignment and Assumption Agreement shall not constitute
an agreement to assign any Asset or any claim or right of any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
consent of a third party thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights of Buyer or
Seller thereunder. Seller and Buyer will use their best efforts (but without any
payment of money by Seller or Buyer) to obtain the consent of the other parties
to any such Asset or claim or right or any benefit arising thereunder for the
assignment thereof to Buyer as Buyer may request. If such consent is not
obtained, or if an attempted assignment thereof would be ineffective or would
adversely affect the rights of Seller thereunder so that Buyer would not in fact
receive all such rights, Seller and Buyer will cooperate in a mutually agreeable
arrangement under which Buyer would obtain the benefits and assume the
obligations thereunder in accordance with this Assignment and Assumption
Agreement, including subcontracting, sublicensing, or subleasing to Buyer, or
under which Seller would enforce for the benefit of Buyer, with Buyer assuming
Seller's obligations, any and all rights of Seller against a third party
thereto. Seller will promptly pay to Buyer when received all monies received by
Seller from any Asset or any claim or right or any benefit arising thereunder,
effective as of the Closing Date of the Asset Purchase Agreement.
This Assignment and Assumption Agreement constitutes a firm, binding and
irrevocable commitment on the part of Buyer to undertake certain obligations to
Seller, and no third party shall have any rights hereunder.
This Assignment and Assumption Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada.
This Assignment and Assumption Agreement is executed and delivered under
seal, and the designation "[SEAL]" on this Agreement shall be as effective as
the affixing of a seal physically hereto.
Trader Labeling, L.L.C.
June __, 2002
Page 16
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the day and year first above written.
ICRYSTAL, INC., a
Delaware corporation
[SEAL] By: /s/ XXXXX XXXXX
_____________________
Name: Xxxxx Xxxxx
Title: Chairman
WELLINGTON HOLDINGS LTD., a
Belize corporation
[SEAL] By: /s/ XXXXXX X. XXXXX
_________________________
Name: Xxxxxx X. Xxxxx
Title: Director
Trader Labeling, L.L.C.
June __, 2002
Page 17
ATTACHMENT 2
XXXX OF SALE AND ASSIGNMENT
KNOW ALL MEN BY THESE PRESENTS: That the undersigned ICRYSTAL, INC., a
Delaware corporation ("Seller"), pursuant to an Asset Purchase Agreement (the
"Asset Purchase Agreement") dated as of January 24, 2003, by and between Seller
and WELLINGTON HOLDINGS LTD., a Belize corporation ("Buyer"), for the
consideration set forth in the Asset Purchase Agreement and other good and
valuable consideration, receipt of which is hereby acknowledged, does hereby
grant, bargain, sell, transfer, set over, assign and convey unto Buyer all of
Seller's right, title and interest in and to all the assets used in connection
with the Seller's software development business (as defined in the Asset
Purchase Agreement), except those assets set forth on Schedule B to this Xxxx of
Sale (the "Excluded Assets," as defined in the Asset Purchase Agreement). The
assets to be sold hereunder include those assets set forth on Exhibit A, as well
as (i) Seller's files, data, books, data bases and records relating to the
software development business (the "Business"); however, Seller may keep copies
of all records turned over to Buyer needed for income tax purposes; (ii) all
ownership and/or license rights in all computer software used in the Business;
(iii) all other assets (including goodwill and intangible assets) relating to
and used in connection with the operation of the Business of every kind and
nature owned by Seller, including contract rights, licenses, franchise rights,
privileges and to the extent the same are assignable, business licenses, and
other governmental and regulatory licenses and permits relating to the Business;
(iv) all of Seller's rights under the Master License Agreement (as defined in
the Asset Purchase Agreement) and (viii) all outstanding and contingent claims
of Seller (other than the Seller's Receivables, as defined in the Asset Purchase
Agreement) against third parties arising out of the operation of the Business,
and all unexpired warranties and guaranties now in effect with respect to any of
the assets sold hereunder (all such assets sold and assigned hereunder are the
"Acquired Assets").
Seller hereby represents and warrants to Buyer that: Seller is the sole
and lawful owner of the Acquired Assets; the Acquired Assets are free from all
judgments, liens or encumbrances except obligations to perform future services
attendant to the contracts assumed by Buyer in that certain Assignment and
Assumption Agreement of even date herewith; Seller has the power and authority
to sell the Acquired Assets; and Seller will warrant and defend the same against
the claims and demands of all persons.
TO HAVE AND TO HOLD the same unto Buyer, its successors and assigns,
forever.
Seller agrees for tax reporting purposes to be bound by the price
allocations for the Acquired Assets as set forth on Exhibit A.
Seller shall remain liable for the performance of all obligations
arising from events first occurring prior to the date hereof in connection with
the Acquired Assets assigned above and Seller shall indemnify and save Buyer
harmless from and against any loss, damages, claims, liabilities and expenses
(including reasonable attorneys' fees) in connection with such obligations.
Buyer assumes no liabilities of Seller whatsoever except those relating to the
Acquired Assets which are specifically assumed by Buyer pursuant to that certain
Assignment and Assumption Agreement among the parties of even date herewith.
With respect to the Acquired Assets sold hereunder, and should
additional assets properly deemed to be part of the Acquired Assets later be
discovered at any time, Seller shall cooperate however necessary to effect or
complete the transfer of such assets to Buyer, free and clear of all judgments,
liens or other encumbrances of any kind. The costs associated with clearing
title to the Acquired Assets, and otherwise releasing the Acquired Assets from
any liens or encumbrances, shall be borne by Seller, which shall act with all
due diligence to clear any such title to the Acquired Assets and otherwise
release the Acquired Assets from any liens or encumbrances and to provide Buyer
with satisfactory evidence thereof.
This Xxxx of Sale and Assignment shall be governed by and construed in
accordance with the laws of the State of Nevada, the provisions of which are
deemed not applicable to this transaction.
Trader Labeling, L.L.C.
June __, 2002
Page 18
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale and
Assignment as of the day and year first above written.
ICRYSTAL, INC., a
Delaware corporation
[SEAL] By: /s/ XXXXX XXXXX
_____________________
Name: Xxxxx Xxxxx
Title: Chairman
Trader Labeling, L.L.C.
June __, 2002
Page 19
ATTACHMENT 3
OPINION LETTER OF ICRYSTAL'S COUNSEL
XXXXXXX X. XXXXXXXX
Attorney and Counselor at Law
0000 Xxxxx0xxxx Xxxxx, Xxxxx 000
Xxxx, Xxxxxx 00000
(000) 000-0000
January 24, 0000
Xxxxxxxxxx Xxxxxxxx Ltd.
00 Xxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxx, Xxxxxxx America
Gentlemen:
This opinion is furnished to you pursuant to the Asset Purchase
Agreement, dated January 27, 2003, (the "Agreement") Wellington Holdings Ltd., a
Belize corporation ("Buyer"), and iCrystal, Inc., a Delaware corporation
("Seller"). Terms not otherwise defined herein are used herein as defined in the
Agreement.
We have acted as counsel for Seller in connection with the preparation,
execution and delivery of the Agreement and the consummation of the transactions
contemplated thereby. In that connection, we have reviewed:
(a) the Agreement including all attachments, schedules and
exhibits thereto (collectively, the "Transaction Documents");
(b) the Articles of Incorporation and Bylaws of Seller, as
amended to date;
(c) the resolutions of the Board of Directors and shareholders of
Seller, authorizing the execution, delivery and performance of the Transaction
Documents and conclusion of the transactions contemplated thereby; and
(d) such certificates of officers of Seller, or public officials,
and such other records and documents as we deemed necessary or appropriate in
connection with rendering the opinions contained herein.
We have assumed the genuineness of all signatures (other than the
signatures of Seller), the authenticity of all items submitted to us as
originals and the conformity with originals of all items submitted to us as
copies. We have assumed the valid existence, power and capacity of the parties
signatory thereto, other than Seller, and the due authorization, execution and
delivery of the Transaction Documents by such parties other than Seller. We have
further assumed that the Transaction Documents constitute the valid, binding and
enforceable obligation of the parties thereto other than Seller.
As to questions of fact material to the opinions herein expressed, we
have, when relevant facts were not independently established, relied upon
certificates of Seller, or representations and warranties of Seller contained in
the Transaction Documents.
We do not express any opinion herein on the laws of any jurisdiction
other than the laws of the States of Nevada and Delaware and the Federal laws of
the United States. The Transaction Documents provide that they shall be governed
by and construed in accordance with the laws of the State of Nevada, and insofar
as the opinions stated herein involve the laws of the State of State, we have
assumed, without independent inquiry, verification or examination that the laws
of Nevada applicable thereto are the same as the laws of the State of Nevada. We
have made such examinations of Delaware law, Nevada law and the laws of the
United States as we deemed necessary and appropriate for the purposes and
preparation of the opinions expressed herein. We have not, however, examined the
statutes, codes, ordinances or other regulations of any other state or
jurisdiction, nor are we qualified to express opinions on the effect thereof,
where applicable.
Trader Labeling, L.L.C.
June __, 2002
Page 20
On the basis of the foregoing, and subject to the assumptions,
limitations, and exceptions contained herein, we are of the opinion that:
1. Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Seller has all requisite
power and authority to own, lease or hold the properties included in the
Acquired Assets and to carry on its business as is now being conducted. Seller
is duly qualified and in good standing as a foreign corporation and licensed to
conduct its business as is now being conducted in each jurisdiction where the
failure of it to do so could have a material adverse effect on its business, the
Acquired Assets or the financial condition or results of operation of the
Business.
2. Seller has all requisite power and authority to execute and deliver
each of the Transaction Documents and to consummate the transactions
contemplated thereby.
3. All acts and proceedings required to be taken by or on the part of
Seller and its shareholders to authorize it to execute, deliver and perform its
obligations under each of the Transaction Documents, and to carry out the
transactions contemplated thereby, have been duly and properly taken.
4. Each of the Transaction Documents has been duly executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
Seller enforceable in accordance with its terms except as enforcement may be
limited by the following assumptions and limitations and exceptions:
(a) Enforceability of the Transaction Documents may be limited by
Title 11 of the United States Code and other applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights or the
relief of debtors generally; and
(b) The enforceability of the Transaction Documents is subject to
general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
5. Neither the execution and delivery of the Transaction Documents by
Seller, nor the performance by Seller of the transactions contemplated by the
Transaction Documents, will: (a) conflict with, or result in a breach of, the
terms, conditions or provisions of, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or result in
the creation of a lien or encumbrance on any of the Acquired Assets pursuant to,
the Articles of Incorporation or Bylaws of Seller, or to our knowledge any
indenture, mortgage, lease, agreement or other instrument to which any Seller is
a party or by which any Seller or any of the Acquired Assets may be bound or
affected, or (b) subject to the assumptions and limitations and exceptions set
forth herein, violate any law or regulation to which any Seller is subject or by
which the Acquired Assets are bound.
6. To our knowledge, there is no action, suit, proceeding or
investigation pending or threatened (a) against, by or affecting any Seller or
the Acquired Assets, in any court or by or before any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind, or
(b) which questions the validity or propriety of the Transaction Documents or
any action taken or to be taken by Seller in connection with the Transaction
Documents.
7. The general and specific bills of sale, endorsements, assignments,
deeds and other instruments of transfer and conveyance, and each of the
Transaction Documents and other agreements delivered by Seller to Buyer have
been duly authorized, executed and delivered by Seller and are valid and
enforceable on Seller in accordance with their respective terms except as
enforcement may be limited by the exceptions specified in paragraphs (a) and (b)
under item 4 above and, subject to the assumptions and limitations and
exceptions set forth herein, are effective to vest in Buyer the interest
purported to be conveyed.
8. Subject to the assumptions and limitations and exceptions set forth
herein, no approval, authorization, consent or other order or action of or
filing or registration with any court, administrative agency or other
governmental authority is required for the execution, delivery and performance
of any of the Transaction Documents by Seller or the consummation of the
transactions contemplated therein.
The opinions expressed herein are based upon the applicable laws, rules
and regulations in effect as of the date hereof and shall not be considered to
be an opinion as to matters set out herein with respect to any such law, rule or
regulation as subsequently modified, amended or repealed.
Very truly yours,
/s/ XXXXXXX X. XXXXXXXX
_____________________________
Xxxxxxx X. Xxxxxxxx, Esq.
ATTACHMENT 4
OPINION LETTER OF BUYER'S COUNSEL
LIONEL X.X. XXXXX
Attorney at Law & Notary Public
00 Xxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxx, Xxxxxxx Xxxxxxx
011-501-2-77063
January 24, 2003
Xxxxx Xxxxx, Chairman
iCrystal, Inc.
0000 Xxxx Xxxxxx Xxx., Xxxxx 000-X
Xxxxxx, X.X. Xxxxxx X0X 0X0
Dear Mr. Hrabi:
This opinion is furnished to you pursuant to the Asset Purchase Agreement,
dated January 24, 2003 (the "Agreement") between iCrystal, Inc., a Delaware
corporation ("Seller"), and Wellington Holdings Ltd., a Belize corporation
("Buyer"). Terms not otherwise defined herein are used herein as defined in the
Agreement.
We have acted as counsel for Buyer in connection with the preparation,
execution and delivery of the Agreement and the consummation of the transactions
contemplated thereby. In that connection, we have reviewed:
(a) The Agreement, including all attachments, schedules and exhibits
thereto (collectively, the "Transaction Documents");
(b) The Articles of Organization and Operating Agreement of Buyer (and any
amendments thereto); and
(c) Such other instruments, certificates and other documents of public
officials, officers and representatives of Buyer as we have deemed relevant and
proper as a basis for our opinions set forth herein.
In the examinations referred to above, we have assumed, with respect to all
contracts, agreements, instruments and other documents referred to herein, the
genuineness of all signatures other than the signatures of parties signing on
behalf of Buyer and any parent, affiliate or subsidiary of Buyer (its "related
entities") and the conformity to the original of all certified or photostatic
copies submitted to us. We have assumed the valid existence, power and capacity
of the parties signatory thereto, other than Buyer and its related entities, and
the due authorization, execution and delivery of the Transaction Documents by
such parties other than Buyer and its related entities. We have further assumed
that the Transaction Documents constitute the valid, binding and enforceable
obligation of the parties thereto other than Buyer and, where applicable, its
related entities.
Xxxxx Xxx Xxxxxxx
Auteo Media, Inc.
June __, 2002
Page 2
As to questions of fact material to the opinions herein expressed, we have,
when relevant facts were not independently established, relied upon certificates
of Buyer and its related entities, or representations and warranties of Buyer
contained in the Transaction Documents.
The Transaction Documents provide that they shall be governed by and
construed in accordance with the laws of the State of Nevada. We have made such
examinations of Nevada law and the laws of the United States as we deemed
necessary and appropriate for the purposes and preparation of the opinions
expressed herein. We have not, however, examined the statutes, codes, ordinances
or other regulations of any other state or jurisdiction, nor are we qualified to
express opinions on the effect thereof, where applicable.
Based on and subject to the foregoing, and to the further assumptions and
qualifications set forth below, we are of the opinion that:
1. Buyer is a corporation duly formed and in good standing under the laws
of Belize.
2. Buyer has all requisite limited liability company power and authority to
execute and deliver each of the Transaction Documents and to consummate the
transactions contemplated thereby.
3. All acts and other proceedings required to be taken by or on the part of
Buyer to authorize Buyer to execute, deliver and perform its obligations under
the Transaction Documents and to carry out the transactions contemplated thereby
have been duly and properly taken.
4. Each of the Transaction Documents has been duly executed and delivered
by Buyer (as its signatures may appear) and constitutes the legal, valid and
binding obligation of Buyer, enforceable against it in accordance with its terms
(except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws, presently or hereinafter in effect, affecting
the enforcement of creditors' rights generally and subject to general equity
principles).
The foregoing opinions are subject to the following:
Xxxxx Xxx Xxxxxxx
Auteo Media, Inc.
June __, 2002
Page 3
A. We express no opinion as to the enforceability of any right or
obligation created or evidenced by any instrument or agreement other than the
Articles of Organization and Operating Agreement of Buyer and the "Transaction
Documents," as that term is defined above, nor the effect of any other such
instrument or agreement upon the enforceability of any right or obligation
created under or evidenced by the Transaction Documents. Our opinions are
limited to the matters stated herein, and no opinion is implied or may be
inferred beyond the matters expressed herein.
B. The opinions expressed above are limited to the laws of Belize, and no
opinion is expressed as to any matter governed by the laws of any other state or
jurisdiction. The opinions expressed herein are based upon the applicable laws,
rules and regulations in effect as of the date hereof and shall not be
considered to be an opinion as to matters set out herein with respect to any
such law, rule or regulation as subsequently modified, amended or repealed.
This opinion is solely for your benefit and is not to be quoted in any
manner or otherwise referred to in any statement, document or opinion, without
the written consent of this firm.
Very truly yours,
/s/ LIONEL X.X. XXXXX
______________________
Lionel X.X. Xxxxx,
Attorney at Law
