XXXXXXXX.XXX, INC.
A Florida Corporation
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February 18, 1999
ARTWORKS INTERNATIONAL CORP.
a Barbados International Business Company
- and to -
EACH OF THE SHAREHOLDERS OF
ARTWORKS INTERNATIONAL CORP.
Dear Sirs:
Re: XXXXXXXX.XXX, INC. (the "Company")
- Offer to Acquire 100% of Artworks International Corp., a
Barbados international business company ("Artworks")
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We write to set out the offer of the Company to each of you, as the
holders of all of the issued and outstanding shares of Artworks
(each a "Shareholder" and together the "Shareholders") to acquire
all of the issued and outstanding shares of Artworks (the "Artworks
Shares").
This offer is on the terms and is subject to the conditions set
forth in this letter. If this offer is acceptable, we ask that you
indicate your agreement by signing this letter where indicated
below, completing the required information and returning an
executed copy to us. This offer is open for acceptance until
12:00 p.m. (Pacific Time) on February 19, 1999 (the "Expiry Time"),
at which time this offer will terminate unless extended in writing.
The offer is conditional upon acceptance by all of the
Shareholders.
The Company's offer is as follows:
1. Offer to Purchase
-----------------
The Company offers to purchase from the Shareholders all of the
Artworks Shares on the terms and subject to the conditions set
forth in this offer.
-2-
2. Payment for the Artworks Shares
-------------------------------
Upon acceptance, the Company will issue to the Shareholders a total
of 375,000 common shares of the Company (each a "Company Share" and
together, the "Company Shares") in consideration for the Artworks
Shares. The number of Company Shares issued to each Shareholder
will equal the percentage interest of the Artworks Shares held by
the Shareholder of the total Artworks Shares outstanding,
multiplied by the total number of Company Shares to be issued, as
more particularly set forth in Schedule A to this Agreement.
Each Shareholder acknowledges and agrees that the Company Shares
are being issued pursuant to available exemptions from the
prospectus and registration requirements of each of the Securities
Act (British Columbia) and the United States Securities Act of
1933. Each Shareholder agrees to abide by all applicable resale
restrictions and hold periods imposed by such statutes.
All shares certificates representing the Company Shares will be
endorsed with the following legend pursuant to the United States
Securities Act of 1933 and the British Columbia Securities Act:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE
BEING OFFERED AND SOLD ONLY TO ACCREDITED INVESTORS IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT. SUCH SECURITIES MAY NOT BE
REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE REGISTERED UNDER THE APPLICABLE
PROVISIONS OF THE ACT OR ARE EXEMPT FROM SUCH
REGISTRATION. THE SECURITIES REPRESENTED BY THIS SHARE
CERTIFICATE ARE SUBJECT TO A HOLD PERIOD AND MAY NOT BE
TRADED IN BRITISH COLUMBIA UNTIL THE EXPIRY OF THE HOLD
PERIOD EXCEPT AS PERMITTED BY THE SECURITIES ACT BRITISH
COLUMBIA) AND THE REGULATIONS MADE UNDER THE ACT.
Each Shareholder acknowledges that the Company may issue prior to
the Closing Date a total of up to 700,000 common shares at a price
of $1.00 per share for proceeds of $700,000 US. Each Shareholder
consents to these issuances of shares that may be completed prior
to or after Closing, and agrees the Company has no obligation to
complete these share issuances.
3. Closing Date
------------
The date of the closing of the purchase and sale of the Artworks
Shares will be the 19th day of February, 1999 (the "Closing Date").
-3-
4. Representations and Warranties of Artworks and the Shareholder
--------------------------------------------------------------
The Company's purchase will be based on the joint and several
representations and warranties by Artworks and each Shareholder,
jointly and severally, which will survive closing, that:
(A) Artworks is a limited liability corporation duly
organized, validly existing and in good standing under
the laws of Barbados;
(B) the Artworks Shares are owned by each Shareholder free
and clear of all liens, charges, encumbrances and
security interests;
(C) the Shareholders are the sole shareholders of Artworks.;
(D) the Shareholder is a resident of the jurisdiction
indicated on the execution page of this Agreement;
(E) except as set forth in Schedule B to this Agreement,
Artworks has no indebtedness, debt or other liability to
any Shareholder;
(F) the directors of Artworks consist of Xxxxxxx Xxxxxx,
Xxxxx Xxxxxx and Xxxx Xxxxxx and the officers of Artworks
consist of Xxxxxxx Xxxxxx as President and Xxxxx Xxxxxx
as Secretary;
(G) except as set forth in Schedule C to this Agreement, no
person has any option, warrant or other right to acquire
any shares of Artwork or any interest in the assets or
property of Artworks;
(H) Artworks is the owner of all assets required for the
conduct of its business as disclosed in its financial
statements, in its business plan and as represented to
the Company. The Shareholders are not the owners of any
assets used by Artworks in the conduct of its business or
necessary for the completion of the business plan of
Artworks;
(I) the liabilities and indebtedness of Artworks do not
exceed the amount set forth in the Financial Statements
and there will not be any increase in such liabilities
prior to the Closing Date other than in the ordinary
course of business;
(J) except as provided for in Schedule D to this Agreement,
all assets of Artworks are owned by Artworks free and
clear of all liens, charges and other financial
encumbrances;
(K) the books and records of Artworks fairly and correctly
set out and disclose in all material respects, in
accordance with generally accepted accounting principles,
the
-4-
financial position of Artworks as at the date hereof,
and all material financial transactions of Artworks
relating to its business have been accurately recorded in
such books and records;
(L) the balance sheet of Artworks as at @, 1999 and the
income statement of Artworks for the period from @, 1998
to @, 1999 (the "Financial Statements") as attached
hereto, present fairly and correctly the assets,
liabilities (whether accrued, absolute, contingent or
otherwise) and the financial condition of Artworks as at
the date thereof and there will not be, prior to the
Closing Date, any increase in such liabilities or other
material change other than in the ordinary course of
business;
(M) the business of Artworks has been carried on in the
ordinary and normal course by Artworks since the date of
financial statements;
(N) except as disclosed in the schedules to this Agreement,
Artworks is not in material default or breach of any
agreements to which it is a party and there exists no
state of facts which after notice or lapse of time or
both which would constitute a default or breach of any
such agreements;
(O) there are no actions, suits or proceedings pending or
threatened against or affecting Artworks and the
Shareholders are not aware of any existing ground on
which any such action, suit or proceeding might be
commenced with any reasonable likelihood of success;
(P) Artworks owns all intellectual property, including
patents, trademarks, copyrights and confidential
information, as required to conduct its business in
accordance with its business plan and promotional
material.
5. Representations and Warranties of The Company
---------------------------------------------
The Company represents and warrants to the Shareholders that:
(A) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State
of Florida;
(B) upon issue, the Company Shares will be fully paid and
non-assessable shares in the capital of the Company;
(C) the authorized capital of the Company consists of
50,000,000 shares of common stock, par value of $0.001
per share (the "Common Stock"), of which 7,375,000 shares
of Common Stock have been issued and are outstanding as
of the date of this Agreement;
-5-
(D) with the exception of incentive stock options to purchase
800,000 shares of common stock of the Company granted to
officers, directors, employees and consultants of the
Company, no person has any option, warrant or other right
to acquire any shares of the Company, except as disclosed
in this Agreement;
(E) the Company entered into an agreement dated February 1,
1999 with Xxxxxxx Xxxxxx and MindCorp, LLC whereby the
Company agreed to acquire MindCorp from Irvine;
(F) the Company does not have any liabilities or
indebtedness to any party, other than obligations
occurred in connection with the acquisition of MindCorp;
(G) there are no actions, suits or proceedings pending or
threatened against or affecting the Company and the
Company is not aware of any existing ground on which any
such action, suit or proceeding might be commenced with
any reasonable likelihood of success
(H) the shares of Common Stock of the Company are traded on
the NASD OTC Bulletin Board and the Company is in
compliance with all applicable United States securities
laws.
6. Conditions Precedent to Closing
-------------------------------
The Company's obligation to complete the purchase of the Artworks
Shares is subject to each of the following conditions:
(A) all representations and warranties of each Shareholder
will be true and correct in all material respects on the
Closing Date;
(B) there shall have been no material adverse change to the
business of Artworks between the date of acceptance and
the Closing Date;
(C) each Shareholder will have made the deliveries
contemplated in this offer on the Closing Date;
(D) all books, accounting records, legal documentation,
financial statements, material contracts relating to
Artworks or authority over such books, accounting
records, legal documentation, financial statements and
material contracts will have been delivered to the
Company prior to or on the Closing Date.
Each Shareholder's obligation to complete the sale of its Artworks
Shares to the Company is subject to each of the following
conditions:
-6-
(A) all representations and warranties of the Company will be
true and correct in all material respects on the Closing
Date;
(B) the Company will have made the deliveries contemplated in
this offer on the Closing Date.
7. Closing Deliveries
------------------
On the Closing Date, each Shareholder will deliver to the Company:
(A) all executed documents and assignments necessary to
transfer the Artworks Shares held by the Shareholder to
the Company;
(B) written confirmation by each Shareholder, in his
individual, as to the truth and correctness of the
representations and warranties of the Shareholder as of
the Closing Date;
(C) a release, in the form attached hereto as Schedule E,
executed by each of the Shareholders and Artworks;
(D) all other corporate resolutions, agreements, assignments,
consents and documentation as deemed necessary by the
Company's solicitors to give effect to the transactions
contemplated by this agreement in accordance with
accepted commercial practice.
On the Closing Date, the Company will deliver to each Shareholder
the certificates representing the Company Shares to which the
Shareholder is entitled, with the legend contemplated by this
Agreement endorsed upon the share certificates.
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8. Acceptance
----------
If the Shareholder wishes to accept this offer, the Shareholder
must:
(A) execute this offer where indicated below;
(B) complete all information;
(C) deliver a copy of the Shareholder's acceptance to the
Company by no later than 12:00 p.m. (Pacific Time) on
February 19, 1999.
This Offer may be accepted by the Shareholders in counterparts.
Yours truly,
XXXXXXXX.XXX, INC.
by its Authorized Signatory:
Per: \s\ Xxxxxxx Xxxxxx
________________________
President and Director
This offer is accepted and agreed to this 28th day of February,
---- ---------
1999.
ARTWORKS INTERNATIONAL CORP.
by its authorized signatory:
\s\ Xxxxxxx Xxxxxx
____________________________
President
SIGNATURE OF ACCEPTING SHAREHOLDER: \s\ Xxxxxxx Xxxxxx
NAME OF ACCEPTING SHAREHOLDER: XXXXXXX XXXXXX
NUMBER OF SHARES OF ARTWORKS HELD: 000
XXXXXXX XX XXXXXXXXX XXXXXXXXXXX: Xxxx Xxxxxxxxx, XX
JURISDICTION OF ACCEPTING SHAREHOLDER: BC
-8-
SIGNATURE OF ACCEPTING SHAREHOLDER: \s\ Xxxxx Xxxxxx
NAME OF ACCEPTING SHAREHOLDER: XXXXX XXXXXX
NUMBER OF SHARES OF ARTWORKS HELD: 350
ADDRESS OF ACCEPTING SHAREHOLDER: Comrie Wood Contin
By Strathpeffr Rossshire Scotland
JURISDICTION OF ACCEPTING SHAREHOLDER:
SIGNATURE OF ACCEPTING SHAREHOLDER: \s\ Xxxxxxx Xxxxxx"
NAME OF ACCEPTING SHAREHOLDER: XXXXXXX XXXXXX
NUMBER OF SHARES OF ARTWORKS HELD: 50
ADDRESS OF ACCEPTING SHAREHOLDER: 000 X. 00xx Xxx
Xxxxxxxxx, XX
JURISDICTION OF ACCEPTING SHAREHOLDER: BC
SIGNATURE OF ACCEPTING SHAREHOLDER: \s\ Xxxxxxx Xxxxx
NAME OF ACCEPTING SHAREHOLDER: XXXXXXX XXXXX
NUMBER OF SHARES OF ARTWORKS HELD: 45
ADDRESS OF ACCEPTING SHAREHOLDER: 00 Xxxxxxxxxx Xxx
Xxxxxxxx, Xxx Xxxx 00000
JURISDICTION OF ACCEPTING SHAREHOLDER: New York
-9-
SIGNATURE OF ACCEPTING SHAREHOLDER: \s\ Xxxxx Xxxxxx
NAME OF ACCEPTING SHAREHOLDER: XXXXX XXXXXX
NUMBER OF SHARES OF ARTWORKS HELD: 30
ADDRESS OF ACCEPTING SHAREHOLDER: 00 X. 0xx Xx.
XX, XX 00000
JURISDICTION OF ACCEPTING SHAREHOLDER:
-10-
SCHEDULE A
to the Artworks Acquisition Agreement dated February 19, 1999
Name of Artworks Shareholder Number of Shares
---------------------------- ----------------
Xxxxxxx Xxxxxx 196,875
Xxxxx Xxxxxx 131,250
Xxxxxxx Xxxxxx 18,750
Xxxxxxx Xxxxx 15,000
Xxxxx Xxxxxx 13,125
-11-
SCHEDULE B
to the Artworks Acquisition Agreement dated February 18, 1999
By agreement entered into with Artworks and Xxxxx Xxxxxx certain
sums were to be paid to Xxxxx Xxxxxx out of the revenues generated
by sales of posters; as well as certain sums were agreed to be paid
to various parties; By virtue of the share issuances completed
under the terms of this agreement as consideration therefor, Xxxxx
Xxxxxx and the other shareholders provide the form of release
attached as a closing document to the share issuances.
-12-
SCHEDULE C
to the Artworks Acquisition Agreement dated February 18, 1999
FORM OF RELEASE ATTACHED
MUTUAL GENERAL RELEASE OF ALL CLAIMS
WHEREAS:
1. By virtue of the acquisition by XXxxxxxx.Xxx, Inc., a
Florida Corporation, of the shares in Artworks International
Corp. owned by the signatories to this release, the parties
hereto agreed in an agreement dated February 18, 1999 that all
matters as between Artworks and themselves personally and/or
corporately were to be finalized and completed, full consideration
therefore being delivery of the shares in XXxxxxxx.Xxx, Inc. in
exchange for the shares in Artworks (the "Agreement");
NOW THEREFORE by these presents, Xxxxxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx and Xxxxx Xxxxxx (collectively
herein called Shareholders) for and in consideration of the
premises and other good and valuable consideration (the receipt
and sufficiency of which is hereby acknowledged) HEREBY REMISE,
RELEASE AND FOREVER DISCHARGE each other and Artworks
International Corp. of and from any and all manner of actions,
causes of action, suits, debts, dues, sums of money, accounts,
covenants, contracts, undertakings, claims, loss, expenses
(including solicitors fees and disbursements on a solicitor and
his own client basis), and damages, of every nature and kind
whatsoever, at law or in equity, which the Shareholders ever had
or now has, or which the Shareholders shall or may have by reason
of any matter, thing or cause whatsoever existing up to the
present time at all and any and all covenants and agreements
otherwise binding upon them in connection with or arising out of
the creation and operation of Artworks, any and all agreements
between Artworks and any or all of the Shareholders, including any
agreements giving rise to any indebtedness of Artworks to any of
the Shareholders, and the transfer by the Shareholders to Artworks
of assets in consideration for any shareholders loans or shares of
Artworks.
FURTHER THEREFORE by these presents, for and in consideration of
the premises and other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged) Artworks
International Corp. HEREBY REMISES, RELEASES AND FOREVER
DISCHARGES the Shareholders as hereinbefore defined jointly and
severally of and from any and all manner of actions, causes of
action, suits, debts, dues, sums of money, accounts, covenants,
contracts, undertakings, claims, loss, expenses (including
solicitors fees and disbursements on a solicitor and his own
client basis), and damages, of every nature and kind whatsoever,
at law or in equity, which Artworks ever had or now has, or which
Artworks shall or may have by reason of any matter, thing or cause
whatsoever existing up to the present time at all and any and all
covenants and agreements otherwise binding upon them in connection
with or arising out of the creation and operation of Artworks, any
and all agreements between Artworks and the Shareholders and the
transfer by the Shareholders to Artworks of assets in
consideration for any shareholders loans or shares of Artworks.
This Release shall be binding upon all of the parties hereto and
their respective heirs, executors, administrators, successors and
assigns and it shall endure to the benefit of all parties.
This Release may be executed in counterparts, and such parts if
more than one, when taken together, shall be deemed to constitute
on completely executed Release.
IN WITNESS WHEREOF Artworks International Corp by its authorized
signatory and the Shareholders have duty executed this Release at
Vancouver, British Columbia, this 28 day of February, 1999.
ARTWORKS INTERNATIONAL CORP. )
By its authorized signatory: )
)
\s\ Xxxxxxx Xxxxxx )
_________________________________ )
Signature of Authorized Signatory )
)
)
_________________________________ )
Name of Authorized Signatory )
SIGNED, SEALED AND DELIVERED )
BY Xxxxxxx Xxxxxx in the presence of: )
)
\s\ Xxxx Xxxxxxxxxx )
__________________________________ )
Signature )
Xxxx Xxxxxxxxxx ) \s\ Xxxxxxx Xxxxxx
__________________________________ ) __________________
Name ) XXXXXXX XXXXXX
)
307 0000 Xxxxxx Xx. )
__________________________________ )
Address )
)
W.Vancouver, BC )
__________________________________ )
SIGNED, SEALED AND DELIVERED )
BY Xxxxx Xxxxxx in the presence of: )
)
)
__________________________________ )
Signature )
)
Fraser Hill ) \s\ Xxxxx Xxxxxx
__________________________________ ) _________________
Name ) Xxxxx Xxxxxx
)
Little Scatwell )
__________________________________ )
Address )
)
Xxxx-xxxxx 1V149EW )
__________________________________ )
2
all parties.
This Release may be executed in counterparts, and such parts if
more than one, when taken together, shall be deemed to constitute
on completely executed Release.
IN WITNESS WHEREOF Artworks International Corp by its authorized
signatory and the Shareholders have duly executed this Release at
Vancouver, British Columbia, this 28 day of February 1999.
Executed by Artworks International Corp. )
By its authorized signatory: )
)
\s\ Xxxxxxx Xxxxxx )
___________________________________ )
Authorized Signatory )
Signed, Sealed, and Delivered by )
Xxxxxxx Xxxxxx in the presence of: ) \s\ Xxxxxxx Xxxxxx
) ____________________
____________________________________ )
Name )
Signed, Sealed, and Delivered by )
Xxxxx Xxxxxx in the presence of: )
) ____________________
____________________________________ )
Name )
Signed, Sealed, and Delivered by )
Xxxxxxx Xxxxx in the presence of: ) \s\ Xxxxxxx Xxxxx
) _____________________
\s\ Xxxxxxx Konepid )
____________________________________ )
Name )
Signed, Sealed, and Delivered by )
Xxxxxxx Xxxxxx in the presence of: ) \s\ Xxxxxxx Xxxxxx
) _____________________
\s\ Xxxx Xxxxxxxxxx )
____________________________________ )
Name )
Signed, Sealed, and Delivered by )
Xxxxx Xxxxxx in the presence of: )
) \s\ Xxxxx Xxxxxx
\s\ Xxxxxxx Xxxxx ) _____________________
____________________________________ )
Name )
2
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SCHEDULE D
to the Artworks Acquisition Agreement dated February 18, 1999
The contracts with Xxxxx Xxx and Xxx Xxxxxx have certain royalty
and payment provisions that are contingent upon sales as well as
performance by provision of certain artworks yet to be received.
Particulars of these items are in negotiation and may be obtained
from management. In addition, the endorsement of the Red Cross
carries with it the requirement to make royalty payments and timing
of the final implementation of the project has moved past certain
earlier milestone dates. Management believes that these factors
will not be material with the continuation of the projects as
provided for by this agreement.
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SCHEDULE E
to the Artworks Acquisition Agreement dated February 18, 1999
Inventory of the latest runs of the Xxxxx posters is at the
publishers. While copyright, subject to artists remainder rights,
remains with Artworks, the posters will be released upon completion
of agreements for consideration.
To: Artworks International Corp., a Barbados IBC;
From: Xxxxx Xxxxxx
Re: Execution, Escrow and Closing of Share Exchange with
Xxxxxxxx.xxx, Inc. a Florida Corporation;
Date: February 28, 1999
Attached hereto are the form of share exchange agreement, release
and power of attorney transferring shares. These documents are
delivered to Xxxxxxx Xxxxxxxxxx on the trust condition that they
be released in original form when share certificates evidencing my
ownership of shares in Xxxxxxxx.xxx, Inc. have been delivered to
Xxxxxxx Xxxxxxxxxx in trust for me.
At the time that the shares in Xxxxxxxx.xxx, Inc, are delivered to
Xxxxxxx Xxxxxxxxxx I hereby tender this letter as my resignation
as a director and officer of Artworks International Corp.
effective the date of the delivery of the Xxxxxxxx.xxx, Inc. share
certificate aforesaid.
Yours truly,
\s\ Xxxxx Xxxxxx
Xxxxx Xxxxxx
RESOLUTIONS CONSENTED TO IN WRITING
BY ALL OF THE DIRECTORS OF
Artworks International Corp.
(the "Company")
WHEREAS documents evidencing the transfer of shares in the capital
of the Company have been provided to the directors for approval of
such transfer;
Be it resolved that the transfer of shares in the outstanding
capital of the Company as setout below (being all the issued
shares of the Company) from the noted shareholders to
Xxxxxxxx.xxx, Inc., a Florida company, evidenced by the endorsement
of the authorized signatory to the powers of attorney for such
transfers attached hereto, be ratified, confirmed and approved
effective the date appearing on this resolution.
Transferor No. Shares Transferee No. Shares
Xxxxxxx Xxxxxx 525 Xxxxxxxx.xxx, Inc. 1000
Xxxxx Xxxxxx 350
Xxxxxxx Xxxxxx 50
Xxxxxxx Xxxxx 45
Xxxxx Xxxxxx 30
Be it further resolved that the President of the Company is
authorized on behalf of the board to take all necessary steps to
cause the aforesaid transfers to take place and to cause entries
in the registers of the company to be made such that all of such
shares are registered in the name of Xxxxxxxx.xxx, Inc.
And in that regard share certificates 5, 6, 7, 8 and 9 be
cancelled, and in its place certificate 10 for 1000 common shares
be issued in the name of Xxxxxxxx.xxx Inc.
Be it further resolved that upon the aforementioned transfer of
shares taking place the resignation of Xxxxx Xxxxxx is hereby
accepted as a director of the Company. The resignation of Xxxxx
Xxxxxx as secretary of the Company is also accepted.
Dated at West Vancouver, British Columbia, this 3rd day of March,
1999.
\s\ Xxxxxxx Xxxxxx
__________________________
director
\s\ Xxxxx Xxxxxx
__________________________
director
__________________________
director
SIGNED, SEALED AND DELIVERED )
BY Xxxxxxx Xxxxx in the presence of: )
)
\s\ Xxxxxxx Konepid )
__________________________________ )
Signature )
)
Xxxxxxx Konepid ) \s\ Xxxxxxx Xxxxx
__________________________________ ) __________________
Name ) Xxxxxxx Xxxxx
)
162 Monitor St. )
__________________________________ )
Address )
)
Xxxxxxxx, XX 00000 )
__________________________________ )
3
SIGNED, SEALED AND DELIVERED )
BY Xxxxxxx Xxxxxx in the presence of: )
)
)
__________________________________ )
Signature )
)
) \s\ Xxxxxxx Xxxxxx
__________________________________ ) ___________________
Name ) Xxxxxxx Xxxxxx
)
)
__________________________________ )
Address )
)
)
__________________________________ )
SIGNED, SEALED AND DELIVERED )
BY Xxxxx Xxxxxx in the presence of: )
)
\s\ Rich Blank )
__________________________________ )
Signature )
)
Rich Blank ) \s\ Xxxxx Xxxxxx
__________________________________ ) __________________
Name ) XXXXX XXXXXX
)
00 Xxxxxxxxxx Xxx )
__________________________________ )
Address )
)
Xxxxxxxx, XX 00000 )
__________________________________ )
