EXHIBIT 2.5
LETTER OF INTENT
----------------
Letter of Intent
between
Digital Snaps Inc., a Nevada Corporation
business address: 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0, Xxxxxx,
and
Alternative Funding Inc., Shareholder
business address: 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0, Xxxxxx,
and
Xxxxxx Kleaman, President, Digital Snaps Inc.
business address: 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0, Xxxxxx,
and
Xxxx Xxxxxx, Vice President, Digital Snaps Inc.
business address: 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0, Xxxxxx,
and
Xxxxxx Xxxxxxx, Shareholder
business address: 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0, Xxxxxx,
and
Premier Financial, Shareholder
business address: 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0, Xxxxxx,
and
599136 B.C. Ltd., Shareholder
business address: 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0, Xxxxxx,
(hereinafter jointly referred to as the "Sellers")
and
ASPi Europe, Inc.
0000 Xxxx 00xx Xxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0, Xxxxxx
(hereinafter referred to as the "Buyer").
A.
Recitals
--------
WHEREAS the Buyer intends to purchase from the Sellers all of the issued and
outstanding equity securities of Digital Snaps Inc., a Nevada Corporation
(hereinafter referred to as the "Company");
AND WHEREAS the Sellers intend to sell to the Buyer all of the issued and
outstanding equity securities of the Company,
NOW THEREFORE, the contracting parties agree as follows:
B.
General Principles
------------------
It is understood between the contracting parties that they intend to base their
definitive stock purchase agreement on the following principles:
I. Sale of Stock and Consideration
1. The Sellers intend to sell to the Buyer 100% of the issued and
outstanding equity securities of the Company, consisting of
42,750,000 shares of common stock of the Company (the "Shares")
and to transfer the Shares to the Buyer.
2. The Buyer intends to give the following consideration for the
transfer of said Shares:
- Transfer of 21,350,000 shares of common stock of the Buyer,
having a par value of $ 0.001 per share (the "Consideration
Shares"). The transfer is intended to be at no tax cost to
the Sellers and will be reviewed by a tax consultant.
3. The consideration shall be given at the Closing Date, the
Consideration Shares shall be transferred to the Company's
lawyer, Xxxxxx Xxxxxxxxxx at Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx,
LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
4. The contracting parties shall enter into definitive documentation
evidencing the terms of this Letter of Intent with a closing date
of no later than February 28, 2001, or such other date as may be
mutually agreed upon by the contracting parties in writing (the
"Closing Date").
5. At the time of closing of the stock purchase referred to herein,
it is understood by the parties that the Board of Directors of
the Buyer will be comprised of seven members. The Buyer will
appoint three members and the Seller will appoint four members.
6. Upon the Closing Date, the Buyer shall have at least U.S. $1.0
million in cash. This will have been completed at the Closing
Date at which time the funds will be available to the Company.
7. The Buyer currently has 7,172,647 shares outstanding together
with 160,000 options exercisable at $5.00 per share and 50,000
warrants exercisable at $14.50 per share. The Buyer can issue
1,000,000 additional shares to raise $1 million to satisfy the
cash requirement in point six above. The Buyer has an
over-allotment option to issue up to an additional 500,000 shares
at a price of $1 per share prior to Closing.
II. Representations and Warranties
1. Standard Representations and Warranties.
The contracting parties will make standard representations and
warranties to be set forth in definitive documentation.
2. Covenants of the Sellers
From the date of this Letter of Intent to the Closing Date, the
Sellers covenant to the Buyer the following:
a. The Sellers will furnish Buyer with whatever corporate
records and documents are available, including the articles
of incorporation, the bylaws, material contracts, and the
audited financial statements (under U.S. generally accepted
accounting principles) of the Company.
b. The Company will not enter into any contract or business
transaction, merger or business combination, or incur any
further debts or obligations (other than in the ordinary
course of business) without the express written consent of
the Buyer. The exception to this is the proposed transaction
with WYSIWG Inc.
c. The Company will not amend or change its articles of
incorporation or bylaws, or issue any additional shares of
its common stock without the express written consent of the
Buyer.
d. The Company will not issue any stock options, warrants or
other rights or interests in or to its shares of common
stock.
e. The Company will not declare any dividend in cash or stock,
or any other benefit.
f. The Company will not institute any bonus, benefit, profit
sharing, stock option, pension retirement plan or similar
arrangement.
g. The Sellers agree to indemnify the Buyer against and to pay
any loss, damage, expense or claim or other liability
incurred or suffered by the Buyer by reason of the
inaccuracy of any warranty or representation contained in
this Letter of Intent.
3. Covenants of the Buyer
The Buyer will obtain requisite approvals to appoint the Sellers'
representatives to its Board of Directors on the Closing Date.
The Buyer currently has 7,172,647 shares outstanding together
with 160,000 options exercisable at $5.00 per share and 50,000
warrants exercisable at $14.50 per share.
From the date of this Letter of Intent to the Closing Date, the
Buyer covenant to the Sellers the following:
a. The Buyer will furnish the Sellers with whatever corporate
records and documents are available, including the articles
of incorporation, the bylaws, material contracts, and the
audited financial statements (under U.S. generally accepted
accounting principles) of the Company.
b. The Company will not enter into any contract or business
transaction, merger or business combination, or incur any
further debts or obligations (other than in the ordinary
course of business) without the express written consent of
the Seller.
c. The Company will not amend or change its articles of
incorporation or bylaws, or issue any additional shares of
its common stock without the express written consent of the
Seller except as expressingly provided for in section I7.
d. The Company will not issue any stock options, warrants or
other rights or interests in or to its shares of common.
e. The Company will not declare any dividend in cash or stock,
or any other benefit.
f. The Company will not institute any new bonus, benefit,
profit sharing, stock option, pension retirement plan or
similar arrangement.
g. The Buyer agree to indemnify the Sellers against and to pay
any loss, damage, expense or claim or other liability
incurred or suffered by the Sellers by reason of the
inaccuracy of any warranty or representation contained in
this Letter of Intent.
4. Access to Records
Between the date of this Letter of Intent and the Closing Date,
both parties will afford any representative of the other party
free and full access to all premises, properties, books,
accounts, and other records of the parties in order to provide
their representatives with full opportunity to make whatever
investigations they may desire. If any such investigation or
inquiry gives reason to believe that the other party may have
breached any term or condition of this Letter of Intent, the
party will advise the other in writing and this Letter of Intent
will be terminated.
III. General Provisions
1. In the course of the parties' discussions, the contracting
parties will receive confidential documents and information that
are necessary or appropriate for the stock transfer. Confidential
documents and information within this meaning include such data
that are only accessible to a limited circle of persons and that,
according to the apparent will of the party concerned, shall not
be disclosed to the public.
The contracting parties agree that these confidential documents
and information are to be treated confidentially and must not be
made available or accessible, whether completely or in part, to
any third party. No party will make use of the documents and
information received from the respective other contracting party,
except for the purpose of the execution of definitive
documentation to effect a closing of this transaction.
2. In case the contracting parties should fail to do such things as
are necessary to close this transaction, they will:
- harmonize all statements to be made; and
- immediately return all confidential documents and other data
received from the respective other contracting party and
destroy any other documents, copies and other duplicated
items, etc.
3. Each contracting party shall bear its own expenses, including but
not limited to the costs of any outside consultants.
4. This Letter of Intent is subject to the laws of the state of
Washington. The contracting parties agree that any disputes
resulting from this Letter of Intent shall be subject to the
jurisdiction of the state of Washington.
5. This Letter of Intent represents the material terms of the
present state of the understanding between the contracting
parties. It is understood by the parties that only the
regulations under Item B III. ("General Provisions") of this
Letter of Intent shall have a binding effect. In the event that
the closing of this transaction should fail, for whatever reason,
any claims for performance and/or damages that the contracting
parties may have, in particular as to this Letter of Intent
(except as to "General Provisions"), shall be excluded.
C.
Due Diligence
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The parties agree that the Buyer may conduct any due diligence activities that
it believes is necessary or appropriate related to the proposed transaction.
SELLERS: BUYERS:
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx
Dated: Dated:
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DIGITAL SNAPS INC. ASPI EUROPE, INC.
By: By:
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Its: Its:
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Xxxxxx Kleaman, President
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Xxxx Xxxxxx, Vic President
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Alternative Funding Inc., Shareholder
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Xxxxxx Xxxxxxx, Shareholder
-------------------------------------
Premier Financial, Shareholder
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Xxxxxxx Xxxxxxxx for 599136 B.C. Ltd., Shareholder
