Exhibit 99.2
ASSET PURCHASE AND SALE AGREEMENT
By and Among
2U Online.com, Inc.
a Delaware corporation,
and
ASDAR Group,
Nevada corporation.
THIS ASSET PURCHASE AND SALE AGREEMENT; ("Agreement") is made and
entered into in duplicate this ____ day of August, 2000, by and among 2U
Online.com, Inc., a Delaware corporation ("Seller"), and ASDAR Group, a Nevada
corporation ("Purchaser"), and provides for the Purchaser to acquire all of
the business assets of the Seller as provided for in the ASSET PURCHASE AND
SALE AGREEMENT by and between Power Direct, Inc. a Delaware corporation
(Sellers predecessor Company), and Rising Phoenix Development Group Ltd., a
British Columbia corporation, hereinafter referred to as RPDI Asset Purchase
Agreement subject to the liabilities assumed pursuant to the provisions of
this Agreement by the Purchaser and no other liabilities, on the terms and
subject to the conditions specified in this Agreement.
RECITALS
A. The Purchaser desires to acquire, on the terms and subject to the
conditions specified in this Agreement, the business of the Seller insofar as
the same is conducted by the use of the Acquired Assets (as that term is
defined
the provisions of Section 1.1 of this Agreement).
B. The Seller believes that it is in the best interests of the Seller,
and, therefore, it desires, to sell the Acquired Assets to the Purchaser, on
the
terms and subject to the conditions specified in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT
SHALL BE DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL
COVENANTS, PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES
SPECIFIED IN THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO
BE OBLIGATED LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE,
AGREE, REPRESENT AND WARRANT AS FOLLOWS:
ARTICLE I
DEFINITIONS
As used in this Agreement, the capitalized terms specified in this
Agreement shall have the meanings and definitions specified and indicated by
the provisions of this Article I, unless a different and common meaning of
such a term is clearly indicated by the context, and variants and derivatives
of the those terms shall have correlative meanings. To the extent that certain
of the definitions specified in this Article I suggest, indicate, or express
agreements between or among parties to this Agreement, or contain
representations or warranties or covenants of a party, the parties agree to
the same, by execution of this Agreement. Agreements, representations,
warranties and covenants specified in any part or provision of this Agreement
shall for all purposes of this Agreement be treated in the same manner as
other such agreements, representations, warranties and covenants specified
elsewhere in this Agreement, and the article, section or paragraph of this
Agreement within which such an agreement, representation, warranty, or
covenant appears shall have no separate meaning or effect on the same.
1.1 Acquired Assets
The assets of the Seller being acquired by the Purchaser pursuant to the
provisions of this Agreement, as specified on Schedule 2.1 of this Agreement,
and all other assets of that the Seller acquired pursuant to the RPDI Asset
Purchase Agreement, whether tangible or intangible, including contractual,
warranty and other rights, the use or value of which will come within the
Control (as that term is defined by the provisions of Section 1.15 of this
Agreement) by the Purchaser when the Transaction (as that term is defined by
the provisions of Section 1.36 of this Agreement) is consummated.
1.2 "Acquired Business"
The business conducted by the Seller in which the Seller utilized the Acquired
Assets, as described on Schedule 2.1 to this Agreement.
1.3 "Acquired Facilities"
All office space, warehouses, stores, plants, production facilities,
manufacturing facilities, fixtures, furniture, office equipment, computer
equipment, common areas, storage facilities, rights of way, driveways, and
improvements owned or leased by the Seller or otherwise used by the Seller in
connection with the operation of its business or leased or subleased by the
Seller to other person or Entities, but only to the extent that the same
consist of Acquired Assets.
1.4 Affiliate
When used with respect to a person, an Affiliate of that person is a person
controlling, controlled by, or under common control with that person.
1.5 Agreement
This Asset Purchase and Sale Agreement, including all of its schedules and
exhibits and all other documents specifically referred to in this Agreement
that have been or are to be delivered by a party to this Agreement to another
such party in connection with the Transaction or this Agreement, and
including, but not limited to, all duly and validly adopted amendments,
modifications, and supplements to or of this Agreement and such schedules,
exhibits and other documents.
1.6 Assumed Liabilities"
The Liabilities (as that term is defined by the provisions of Section 1.22 of
this Agreement) of the Seller being assumed by the Purchaser pursuant to the
provisions of this Agreement, as specifically identified in Schedule 2.1 to
this Agreement, and no other Liabilities of the Seller or the Acquired
Business.
1.7 "Audited Financial Statements"
The balance sheet, income statement, statement of stockholders' equity, and
statement of cash flows or, in each instance, equivalent statements of the
respective, subject corporation as commonly provided to such corporation's
shareholders, as at December 31, 1999, and for the three (3) years then ended,
as reported on by Auditors.
1.8 "Auditors"
Independent certified public accountants currently retained for the purpose of
auditing financial statements of the respective, particular person.
1.9 Business Day
Any day that is not a Saturday, Sunday or day on which banks in Wilmington,
Delaware are authorized to close.
1.10 Closing
The completion and consummation of the Transaction, to occur as contemplated
in Article II of this Agreement.
1.11 Closing Date
The date on which the Closing actually occurs, which shall be no later than
August __, 2000, unless otherwise agreed by the parties, but shall not in any
event be prior to satisfactio n or waiver of the conditions to Closing
specified in Article VII of this Agreement.
1.12 Closing Time
The time at which the Closing actually occurs. All events that are to occur at
the Closing Time shall, for all purposes, be deemed to occur simultaneously,
except to the extent, if at all, that a specific order of occurrence is
otherwise described.
1.13 Code
The Internal Revenue Code of 1986, as amended and in effect on the date the
parties sign this Agreement.
1.14 Consideration
Five million (5,000,000) shares of $.0001 par value common stock of the
Purchaser to be issued by the Purchaser to the Seller at the Closing
(Subject Shares).
1.15 Control
Generally, the power to direct the management or affairs of an Entity.
1.16 "Dollars" of the symbol "$" refers to and shall mean the currency of the
United States of America, unless otherwise specified.
1.17 Entity
A corporation, trust, association, municipality, partnership, sole
proprietorship, joint venture, or other form of organization formed for the
conduct of a business, whether active or passive.
1.18 ERISA
The Employee Retirement Income Security Act of 1974, as amended and in effect
at the time of execution of this Agreement.
1.19 GAAP
Generally Accepted Accounting Principles as applied consistently in the United
States of America, as in effect on the date of any statement, report or
determination that purports to be, or is required to be, prepared or made in
accordance with GAAP. All references in this Agreement to financial statements
prepared in accordance with GAAP shall mean in accordance with GAAP
consistently applied throughout the periods to which reference is made.
1.20 Inventories
The stock of raw materials, work in process and finished goods, including, but
not limited to, finished goods purchased for resale, held by the Seller for
manufacturing, assembly, processing, finishing, sale, or resale to others from
time to time in the ordinary course of the business of the Seller, in the form
in which such inventories then are held or after manufacturing, assembling,
finishing, processing, incorporating with other goods or items, refining, or
similar processes.
1.21 IRS
The United States Internal Revenue Service.
1.22 Liabilities
At any time ("Determination Time"), the obligations of a person or Entity,
whether known or unknown, contingent or absolute, recorded on its books or
not, resulting in any way from facts, events, agreements, obligations or
occurrences that existed, occurred or transpired at a prior time, or resulted
from the passage of time to the Determination Time, but not including
obligations accruing or payable after the Determination Time to the extent
(but only to the extent) that such obligations (a) result from previously
existing agreements for services, benefits, or other considerations and (b)
accrue or become payable with respect to services, benefits, or other
considerations received by the person or Entity after the Determination Time.
1.23 Multi-employer
Plan A "multiemployer plan," as defined in Section 3(37) of ERISA or Section
414(f) of the Code, or, in either case, successor provisions to such
provisions adopted by amendments to ERISA or the Code, as the case may be, and
including, in each case, other provisions of ERISA, of the Code, or of other
law, and regulations adopted pursuant to ERISA, or the Code, or such other
law, modifying, amending, interpreting, or otherwise affecting the application
of such provisions, either in general or as applied to the nature or
circumstances of a particular Entity that is a party to, or is affected by, or
is involved in, the Transaction and with respect to which Entity the use of
the term in this Agreement, or in the particular provision in this Agreement,
is relevant.
1.24 Payables
Liabilities of a person or Entity resulting from the borrowing of money or the
incurring of obligations for merchandise or goods purchased.
1.25 Pension Plan
A "pension plan" or "employee pension benefit plan," as defined in Section
3(2) of ERISA or successor provisions to such provision adopted by amendments
to ERISA and including other provisions of ERISA; or of other law, and
regulations adopted pursuant to ERISA or such other law, modifying, amending,
interpreting, or otherwise affecting the application of such provision, either
in general or as applied to the nature or circumstances of a particular Entity
that is a party to, or is affected by, or is involved in, the Transaction and
with respect to which Entity the use of the term in this Agreement, or in the
particular provision in this Agreement, is relevant.
1.26 "Projections"
The projections of economic results of the Seller, prepared quarterly through
June 30, 2000, and delivered to the Purchaser pursuant to the terms of this
Agreement. The Projections include projected financial results for the
business operations of the Seller. The Purchaser acknowledges that
projections of future economic performance are necessarily unreliable and
subject to the occurrence or nonoccurrence of a variety of events, but the
Seller represents and warrants that the Projections have been prepared on the
basis of assumptions that are, in the judgment of the Seller, reasonable in
all respects and are not, to the knowledge of the Seller, contrary in any
material respect to fact or to events that have occurred or are presently in
existence.
1.27 "Proprietary Information"
For example, but without any limitation, any and all marketing and sales data,
plans and strategies, financial projections, customer lists, prospective
customer lists, promotional ideas, data concerning services, designs, methods,
inventions, improvements, discoveries, designs whether or not patentable,
"know-how", training and sales techniques and any other information of a
similar nature.
1.28 "Proprietary Rights"
Trade secrets, copyrights, patents, trademarks, service marks, customer lists,
and all similar types of intangible property developed, created or owned by
the person claiming ownership, proprietary or similar, or used by such person
in connection with such person's business, whether or not the same are
entitled to legal protection.
1.29 Purchaser
ASDAR Group, a Nevada corporation, which, pursuant to the provisions of this
Agreement, is purchasing the Acquired Assets.
1.30 Receivables
Accounts receivable, notes receivable, and other obligations presented as
assets on the books, records and financial statements of an Entity or a
person, in accordance with GAAP, indicating moneys owed, due and payable to
that Entity or person on whose financial statements such receivables are
presented.
1.31 SEC
The Securities and Exchange Commission.
1.32 "Securities Act"
The Securities Act of 1933, as amended to the date as of which any reference
thereto is relevant pursuant to this Agreement, including any substitute or
replacement statute adopted in place or lieu thereof.
1.33 Seller
2U Online.com, Inc., a Delaware corporation, which, pursuant to the provisions
of this Agreement, is selling the Acquired Assets.
1.34 Seller Balance Sheet
The most recent balance sheet included in the Audited Financial Statements of
the Seller.
1.35 Subsidiary or Subsidiaries
With respect to any Entity, another Entity of which fifty percent (50%) or
more of the effective voting power, or the effective power to elect a majority
of the board of directors or similar governing body, or fifty percent (50%) or
more of the true equity interest, is owned by such first Entity, directly or
indirectly.
1.36 Transaction
The sale of the Acquired Assets, subject to the Assumed Liabilities, for the
consideration as contemplated by, and on the terms and subject to the
conditions of, this Agreement.
1.37 "Unaudited Financial Statements"
The balance sheet, income statement, statement of stockholders' equity and
statement of cash flows or equivalent statements of the respective, subject
Entity or person, as commonly prepared, as at October 31, 1999, with
comparable statements for the similar period of the prior fiscal year.
1.38 Welfare Plan
A "welfare plan" or an "employee welfare benefit plan," as defined in Section
3(1) of ERISA or successor provisions to such provision adopted by amendments
to ERISA and including other provisions of ERISA or of other law, and
regulations adopted pursuant to ERISA or such other law, modifying, amending,
interpreting, or otherwise affecting the application of such provision, either
in general or as applied to the nature or circumstances of a particular Entity
that is a party to, or is affected by, or is involved in, the Transaction and
with respect to which Entity the use of the term in this Agreement, or in the
particular provision in this Agreement, is relevant.
ARTICLE II
THE TRANSACTION
2.1 The Transaction. On the Closing Date, and at the Closing Time, on, and in
all instances subject to, each of the terms, conditions, provisions and
limitations specified in this Agreement, the Seller shall sell, transfer,
convey, assign, deliver and set over to the Purchaser, by instruments
satisfactory in form and substance to the Purchaser, and the Purchaser shall
acquire from the Seller, the Acquired Assets, subject to the Assumed
Liabilities, and only those Liabilities and no others, in exchange for
the Consideration. The assets specified on Schedule 2.1 to this Agreement, the
provisions of which, by this reference, are made a part of this Agreement as
though specified completely and specifically at length in this Section 2.1,
are all the assets reasonably necessary for the conduct of the Acquired
Business in the ordinary course and in the same manner as that in which such
business has been conducted in the immediate past, including, but not limited
to, all Proprietary Rights of the Seller so used in the ordinary conduct of
the Acquired Business and all contract, warranty, and other intangible rights
relating to or resulting from such Acquired Business. Neither the Purchaser
nor any of its Affiliates is assuming, becoming liable for, agreeing to
discharge or in any manner becoming in any way responsible for, any of the
Liabilities of the Seller, other than those Liabilities expressly specified on
Schedule 2.1 and accepted by the Purchaser pursuant to this Section 2.1.
2.2 Delivery of Consideration.
Pursuant this Transaction, the Purchaser shall deliver or cause to be
delivered on the Closing Date the certificate evidencing and representing the
Subject Shares.
Closing. The Closing of the Transaction shall occur at the offices of ASDAR
Group, 1239 West Georgia Street, Suite 3004, Vancouver, B.C., at 10:00 A.M.,
or at such other place as the Purchaser and the Seller may agree, on the
Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as follows:
Organization and Qualification. The Purchaser is a corporation duly
organized, validly existing and in good standing pursuant to
the laws of its jurisdiction of incorporation and has the requisite corporate
power and authority to conduct its business as that business is now being
conducted. The Purchaser is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned or leased by it, or the nature of its activities, is such
that qualification as a foreign corporation in that jurisdiction is required
by law.
Authority Relative to This Agreement. The Purchaser has the requisite
corporate power and authority to carry out its obligations specified by the
provisions of this Agreement. The execution and delivery of this Agreement
and the consummation of the Transaction have been duly authorized and approved
by the requisite corporate authority of the Purchaser and no other corporate
proceedings on the part of the Purchaser are necessary to approve and adopt
this Agreement or to approve the consummation of the Transaction, including
the issuance and delivery of the Subject Shares. The Purchaser has, and any
officer, director or representative executing this Agreement for and on behalf
of the Purchaser has, the legal capacity and authority to enter into and
deliver this Agreement. This Agreement is a valid and legally binding
obligation of the Purchaser and is enforceable completely against the
Purchaser in accordance with its terms, except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium
and similar laws relating to creditors' rights generally, and subject to
approval of any and all governmental regulatory agencies and authorities
having jurisdiction of the relationship between the parties contemplated by
the provisions of this Agreement and the Transaction.
3.3 Absence of Breach; No Consents. The execution, delivery and performance
of this Agreement, and the performance by the Purchaser of its obligations
specified by the provisions of this Agreement (except for compliance with any
regulatory or licensing laws applicable to the business of the Purchaser, all
of which, to the extent applicable to the Purchaser (and to the extent within
its Control), will be satisfied in all material respects prior to the Closing)
do not (i) conflict with, and will not result in a breach of, any of the
provisions of the Certificate of Incorporation or Bylaws of the Purchaser;
(ii) contravene any law, rule or regulation of any state or commonwealth, the
United States, (except for compliance with regulatory or licensing laws, all
of which, to the extent applicable to the Purchaser (and to the extent within
the Control of the Purchaser), will be satisfied in all material respects
prior to the Closing), or any applicable foreign jurisdiction, or contravene
any order, writ, judgment, injunction, decree, determination, or award
affecting or obligating the Purchaser, in such a manner as to provide a
basis for enjoining or otherwise preventing consummation of the Transaction;
(iii) conflict with or result in a material breach of or default pursuant to
any material indenture or loan or credit agreement or any other material
agreement or instrument to which the Purchaser is a party, in such a manner as
to provide a basis for enjoining or otherwise preventing consummation of the
Transaction; or (iv) require the authorization, consent, approval or license
of any third party of such a nature that the failure to obtain the same would
provide a basis for enjoining or otherwise preventing consummation of the
Transaction.
3.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this
Agreement or the Transaction or any related transaction based upon any
agreements, written or oral, made by or on behalf of Purchaser or any of its
Subsidiaries except as stated in Exhibit B.
3.5 Taxes. The Purchaser has properly filed or caused to be filed all
federal, state, local and foreign income and other tax returns, reports and
declarations that are required by applicable law to be filed by the Purchaser
and has paid, or made full and adequate provision for the payment of, all
federal, state, local and foreign income and other taxes properly due for
the periods for which such returns, reports and declarations are applicable.
3.6 Litigation. No investigation or review by any governmental agency with
respect to the Purchaser is pending or threatened (other than inspections and
reviews customarily made of businesses such similar to that the Purchaser),
nor has any governmental agency indicated to the Purchaser an intention to
conduct the same. There is no action, litigation matter or proceeding pending
or threatened against or affecting the Purchaser at law or in equity, or
before any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality.
3.7 Employees, Etc. There are no collective bargaining, bonus, profit sharing,
compensation, or other plans, agreements, trusts, funds, or arrangements
maintained by the Purchaser for the benefit of directors, officers or
employees of, and there are no employment, consulting, severance, or
indemnification arrangements, agreements, or understandings between the
Purchaser, on the one hand, and any current or former directors, officers or
other employees (or Affiliates thereof), on the other hand, except as
disclosed to the Seller in writing. The Purchaser is not, and following the
Closing will not be, obligated by any express or implied contract or agreement
to employ, directly or as consultant or otherwise, any person for any specific
period of time or until any specific age.
3.8 Compliance With Laws. The Purchaser is in compliance with all, and has
received no notice of any violation of any, laws or regulations applicable to
its operations, including, but not limited to, the laws and regulations
relevant to the use or utilization of premises, or with respect to which
compliance is a condition of engaging in any aspect of the business of the
Purchaser and the Purchaser has all permits, licenses, zoning rights and other
governmental authorizations necessary to conduct its business as presently
conducted.
3.9 Ownership of Assets. The Purchaser has good, marketable and insurable
title, or valid, effective and continuing leasehold rights in the case of
leased property, to all real property (as to which, in the case of owned
property, such title is fee simple) and all personal property owned or leased
by the Purchaser in such a manner as to create the appearance or reasonable
expectation that the same is owned or leased by the Purchaser; such
ownership is free and clear of all liens, claims, encumbrances and charges,
except liens for taxes not yet due and minor imperfections of title and
encumbrances, if any, which, singly and in the aggregate, are not substantial
in amount and do not materially detract from the value of the property subject
thereto or materially impair the use thereof; no other person or Entity has
any ownership or similar right in, or contractual or other right to acquire
any such right in, any of such assets. The Purchaser does not know of any
potential action by any party, governmental or other, and no proceedings with
respect thereto have been instituted of which the Purchaser has notice, that
would materially affect the Purchaser's ability to use and to utilize each of
the Purchaser's assets. The Purchaser has received no notices from any
mortgagee regarding any of its leased properties.
3.10 Proprietary Rights. The Purchaser possesses full and complete ownership
of, or adequate and enforceable long-term licenses or other rights to use
(without payment), all of the Purchaser's Proprietary Rights; the Purchaser
has not received any notice of conflict which asserts the rights of others
with respect thereto; and the Purchaser has in all material respects
performed all of the obligations required to be performed by the Purchaser,
and is not in default in any material respect, pursuant to any agreement
relating to any such Proprietary Right.
3.11 Subsidiaries. All of the Subsidiaries of Purchaser, direct or indirect,
have been identified by the Purchaser to the Seller, and the Purchaser has no
other Subsidiaries.
3.12 Trade Names. The Purchaser has not utilized any fictitious business names
or similar names in the conduct of the Purchaser's business or in the
utilization of the Purchaser's assets.
3.13 Employee Benefit Plans. The Purchaser does not maintain or contribute to
any Pension Plan or any Welfare Plan, nor is the Purchaser presently, nor has
the Purchaser been within the last six (6) years, a participating employer in
any Multiemployer Plan, affecting, in any case, employees of the Purchaser.
3.14 Accounts Receivable. All accounts receivable of the Purchaser represent
transactions in the ordinary course of business and are current and
collectible.
3.15 Accounts Payable. The accounts payable of the
Purchaser at the time of the Closing will be all amounts owed by the Purchaser
in respect of trade accounts due and other Payables of the Purchaser.
3.16 Labor Matters. There are no activities or
controversies, including, but not limited to, any labor organizing activities,
election petitions or proceedings, proceedings preparatory thereto, unfair
labor
practice complaints, labor strikes, disputes, slowdowns, or work stoppages,
pending or, to the best of the knowledge of the Purchaser, threatened,
affecting employees of the Purchaser.
3.17 Insurance. The Purchaser has insurance policies in
full force and effect insuring the assets of the Purchaser and such insurance
policies provide for coverages which are usual and customary in the business
of
the Purchaser as to amount and scope, and are adequate to protect the assets
of
the Purchaser against any reasonably foreseeable risk of loss, including
business interruption. The Purchaser has not within the past three (3) years
received any notice of cancellation of any insurance agreement affecting the
assets of the Purchaser.
3.18 Full Disclosure. The documents, certificates and
other writings furnished or to be furnished by or on behalf of the Purchaser
to
the Seller pursuant to the provisions of this Agreement, taken together her in
the
aggregate, do not and will not contain any untrue statement of a material
fact,
or omit to specify any material fact necessary to make the information
specified
therein, considering the circumstances pursuant to which such information was
specified not misleading.
3.19 Capitalization; the Subject Stock; Related Matters.
The authorized capital stock of the Purchaser consists of Fifty Million
(50,000,000) shares of $.0001 par value common stock. As of the date of this
Agreement, there are Four Million Twenty Six Thousand Nine Hundred and Ninety
Nine (4,026,999) shares of such common stock issued and outstanding. The
Subject Shares, when issued, will be duly, legally and validly issued and will
be non-assessable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser as follows:
4.1 Organization and Qualification. The Seller is a
corporation duly organized, validly existing and in good standing pursuant to
the laws of its jurisdiction of incorporation and has the requisite corporate
power and authority to conduct its business as that business is now being
conducted. The Seller is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned or leased by it, or the nature of its activities, is such
that qualification as a foreign corporation in that jurisdiction is required
by
law.
4.2 Authority Relative to This Agreement. The Seller
has
the requisite corporate power and authority to carry out its obligations
specified by the provisions of this Agreement. The execution and delivery of
this Agreement and the consummation of the Transaction have been duly
authorized
and approved by the requisite corporate authority of the Seller and no other
corporate proceedings on the part of the Seller are necessary to approve and
adopt this Agreement or to approve the consummation of the Transaction,
including the sale and delivery of the Acquired Business and each of the
Acquired Assets, except for shareholder approval specified elsewhere in this
Agreement. The Seller has, and any officer, director or representative
executing this Agreement for and on behalf of the Seller has, the legal
capacity
and authority to enter into and deliver this Agreement. This Agreement is a
valid and legally binding obligation of the Seller and is enforceable
completely
against the Seller in accordance with its terms, except as such enforceability
may be limited by general principles of equity, bankruptcy, insolvency,
moratorium and similar laws relating to creditors' rights generally, and
subject
to approval of any and all governmental regulatory agencies and authorities
having jurisdiction of the relationship between the parties contemplated by
the
provisions of this Agreement and the Transaction.
4.3 Absence of Breach; No Consents. The execution,
delivery
and performance of this Agreement, and the performance by the Seller of its
obligations specified by the provisions of this Agreement, do not (i)
contravene
any law, ordinance, rule or regulation of any State or Commonwealth or
political
subdivision of the United States, except for and compliance with regulatory or
licensing laws all of which, to the extent applicable to the Seller (and to
the
extent within the Control of the Seller), will be satisfied in all material
respects prior to the Closing), or of any applicable foreign jurisdiction, or
contravene any order, writ, judgment, injunction, decree determination, or
award
of any court or other authority having jurisdiction, or cause the suspension
or
revocation of any authorization, consent, approval, or license, presently in
effect, which affects or obligates the Seller or all or any part of the
Acquired
Business or any of the Acquired Assets or any material properties of the
Acquired Business, except in any such event when such contravention will not
have a material adverse effect on the business, condition (financial or
otherwise), operations or prospects of the Acquired Business or any of the
Acquired Assets and will not have a material adverse effect on the validity of
this Agreement or on the validity of the consummation the Transaction; (ii)
conflict with or result in a material breach of or default under any material
indenture or loan or credit agreement or any other material agreement or
instrument to which the Seller or any of part of the Acquired Business is a
party or by which any of the material properties of the Acquired Business may
be
affected or obligated; (iii) require the authorization, consent, approval, or
license of any third party; or (iv) provide justification for the loss or
suspension of any permits, licenses, or other authorizations used in the
Acquired Business.
4.4 Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's, or other fee or commission in
connection with this Agreement or the Transaction or any related transaction
based upon any agreements, written or oral, made by or on behalf of Seller or
any of its Subsidiaries. The Seller does not have any obligation to pay
finder's or broker's fees or commissions in connection with the exercise of
options to renew or extend real estate leases to which the Seller is a party.
4.5 Financial Statements. On or before the Closing,
the
Seller will deliver or cause to be delivered to the Purchaser the following:
1. Audited Financial Statements;
Unaudited
Financial
Statements;
All documents of the Seller filed with the SEC within the four (4) years
preceding the date of
execution of this Agreement; and
The Projections.
All of the historical financial statements contained in such
documents
were prepared from the books and records of the Seller. The Audited Financial
Statements were prepared in accordance with GAAP, and fairly and accurately
present the financial situation and condition of the Seller as at the dates
and
for the periods indicated. Without limiting the foregoing, at the date of the
Seller Balance Sheet, the Seller owned each of the assets specified on the
Seller Balance Sheet, and the valuation of such assets in the Seller Balance
Sheet is not more than their fair saleable value (on an item-by-item basis) at
that date; and the Seller had no Liabilities, other than those specified in
the
Seller Balance Sheet, nor any Liabilities in amounts in excess of the amounts
included for them in the Seller Balance Sheet. The Unaudited Financial
Statements were prepared in a manner consistent with the basis of presentation
used in the Audited Financial Statements, and fairly present the financial
situation and condition of the Seller as at and for the periods indicated,
subject to normal year-end adjustments, none of which will be material. The
Projections reasonably anticipate the results of operations that the Seller
expects it will achieve, absent the occurrence of extraordinary events or
unusual conditions of which the Seller is not presently on notice. From the
date of this Agreement through the Closing Date the Seller will continue to
prepare financial statements on the same basis that it has done so in the
past,
will promptly deliver the same to the Purchaser, and the foregoing
representations will be applicable to each financial statement so prepared and
delivered.
4.6 No Undisclosed Liabilities. The Seller has no
Liabilities which are not adequately presented or reserved against on the
Seller
Balance Sheet, except Liabilities incurred since the date of the Seller
Balance
Sheet in the ordinary course of business and consistent with past practice.
Without limiting the foregoing, (a) there are no unpaid leasehold improvements
at any of the Acquired Facilities or locations for which the Seller is or will
be responsible and (b) there are no deferred rents due to lessors at or with
respect to any of such Acquired Facilities or locations.
4.7 No Material Adverse Change, Etc. Since the date of
the Seller Balance Sheet, other than as contemplated or caused by this
Agreement, there has not been (i) any material adverse change in the business,
condition (financial or otherwise), operations, or prospects of the Seller;
(ii)
any damage, destruction, or loss, whether covered by insurance or not, having
a
material adverse effect on the business, condition (financial or otherwise),
operations or prospects of the Seller; (iii) any entry into or termination of
any material commitment, contract, agreement or transaction (including, but
not
limited to, any material borrowing or capital expenditure or sale or other
disposition of any material asset or assets) of or involving the Seller, other
than this Agreement and agreements executed in the ordinary course of
business;
(iv) any redemption, repurchase or other acquisition for value of its capital
stock by the Seller, or any issuance of capital stock of the Seller or of
securities convertible into or rights to acquire any such capital stock or any
dividend or distribution declared, set aside or paid on capital stock of the
Seller; (v) any transfer of or right granted pursuant to any material lease,
license, agreement, patent, trademark, trade name or copyright of the Seller;
(vi) any sale or other disposition of any asset of the Seller, or any
mortgage,
pledge or imposition of any lien or other encumbrance on any asset of the
Seller, other than in the ordinary course of business, or any agreement
relating
to any of the foregoing; or (vii) any default or breach by the Seller in any
material respect pursuant to any contract, license or permit. Since the date
of
the Seller Balance Sheet, the Seller has conducted its business only in the
ordinary and usual course, and, without limiting the foregoing, no changes
have
been made in (i) executive compensation amounts, (ii) the manner in which
other
employees of the Seller are compensated, (iii) supplemental benefits provided
to
any such executives or other employees, or (d) inventory amounts in relation
to
sales amounts, except, in any such event, in the ordinary course of business
and, in any event, without material adverse effect on the business, condition
(financial or otherwise), operations or prospects of the Seller.
4.8 Taxes. The Seller has properly filed or caused to
be
filed all federal. state, local and foreign income and other tax returns,
reports and declarations that are required by applicable law to be filed by
the
Seller and that relate to or in any way affect the Acquired Business or the
Acquired Assets and has paid, or made full and adequate provision for the
payment of, all federal, state, local and foreign income and other taxes
properly due for the periods for which such returns, reports and declarations
are applicable.
4.9 Litigation. No investigation or review by any
governmental agency with respect to the Acquired Business or any of the
Acquired Assets or the use thereof is pending or threatened (other than
inspections and reviews customarily made of businesses such as the Acquired
Business), nor has any governmental agency indicated to the Seller an
intention
to conduct the same. There is no action, litigation matter or proceeding
pending or threatened against or affecting the Acquired Business or the
Acquired
Assets at law or in equity, or before any federal, state, municipal, or other
governmental department, commission, board, bureau, agency or instrumentality.
4.10 Employees, Etc. There are no collective
bargaining,
bonus, profit sharing, compensation or other plans, agreements, trusts, funds
or
arrangements maintained by the Seller, and there are no employment,
consulting,
severance or indemnification arrangements, agreements, or understandings
between the Seller, on the one hand, and any current or former employees of
the
Seller (or Affiliates thereof), on the other hand. The Seller is not, and
following the Closing will not be, obligated by any express or implied
contract
or agreement to employ, directly, or as a consultant or otherwise, any person
for any specific period of time or until any specific age.
4.11 Compliance With Laws. The Acquired Business and
each
of the Acquired Assets is in compliance with all, and has received no notice
of
any violation of any, laws or regulations applicable to the operations of the
Acquired Business, including, but not limited to, the laws and regulations
relevant to the use or utilization of premises, or with respect to which
compliance is a condition of engaging in any aspect of the business of the
Acquired Business or utilizing any of the Acquired Assets, and the Acquired
Business has all permits, licenses, zoning rights and other governmental
authorizations necessary to conduct the Acquired Business as presently
conducted. All such permits, licenses, zoning rights and other governmental
authorizations will, as a part and consequence of the Transaction, be
transferred to the Purchaser at the Closing.
4.12 Ownership of Assets. The Seller has good, marketable and insurable title,
or valid, effective and continuing leasehold rights in the case of leased
property, to all real property (as to which, in the case of owned property,
such title is fee simple) and all personal property owned or leased by the
Seller and comprising any part of the Acquired Assets or the Acquired
Business, or used by it in the conduct of the Acquired Business in such a
manner as to create the appearance or reasonable expectation that the same is
owned or leased by the Seller; such ownership is free and clear of all liens,
claims, encumbrances and charges, except liens for taxes not yet due and minor
imperfections of title and encumbrances, if any, which, singly and in the
aggregate, are not substantial in amount and do not materially detract from
the value of the property subject thereto or materially impair the use
thereof; no other person or Entity has any ownership or similar right in, or
contractual or other right to acquire any such right in, any of such assets;
and such ownership will be conveyed to the Purchaser at the Closing pursuant
to the Transaction. The Seller does not know of any potential action by any
party, governmental or other, and no proceedings with respect thereto have
been instituted of which the Seller has notice, that would materially affect
the Purchaser's ability to use and to utilize each of such assets in the
business of the Acquired Business. The Seller has received no notices from any
mortgagee regarding any leased properties of the Acquired Business or the
leasehold interest in which comprises any part of the Acquired Assets.
4.13 Proprietary Rights. The Seller possesses full and complete ownership of,
or adequate and enforceable long-term licenses or other rights to use (without
payment), all Proprietary Rights used in the Acquired Business or utilized in
conjunction with the Acquired Assets, and all such ownership, license or other
rights shall be conveyed to the Purchaser at the Closing pursuant to the
Transaction; the Seller has not received any notice of conflict which asserts
the rights of any other person or Entity with respect thereto; and the Seller
has in all material respects performed all of the obligations required to be
performed by the Seller, and is not in default in any material respect,
pursuant to any agreement relating to any such Proprietary Right.
Trade Names. The Seller has not utilized any trade name, fictitious business
name, or other similar name to conduct any part of the Acquired Business or to
utilize any of the Acquired Assets during the ten (10) years preceding the
date of this Agreement.
4.15 Employee Benefit Plans. The Seller does not
maintain or contribute to any Pension Plan or Welfare Plan, nor is the Seller
presently, nor has the Seller been within the last six (6) years, a
participating employer in any Multiemployer Plan, affecting, in any case,
employees of the Acquired Business or employees of the Seller.
4.16 Facilities. The Acquired Facilities are (as to physical plant and
structure) structurally sound and none of the Acquired Facilities, nor any of
the vehicles or other equipment used by the Seller in connection with the
Acquired Business, has any material defects and all of them are in all
material respects in good operating condition and repair and are adequate for
the uses to which they are being put; none of such Acquired Facilities,
vehicles or other equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs which are not material in nature or
cost. The Seller is not in breach, violation or default of any lease affecting
the Acquired Business or the Acquired Assets with respect to, or as a result
of, which the other party (whether lessor, lessee, sublessor, or sublessee)
thereto has the right to terminate the same, and the Seller has not received
notice of any claim or assertion that the Seller is or may be in any such
breach, violation or default.
4.17 Accounts Receivable. All accounts receivable of the Seller, whether or
not specified on the Seller Balance Sheet, represent transactions in the
ordinary course of business, and are current and collectible net of any
reserves specified on the Seller Balance Sheet (which reserves are adequate
and were calculated consistent with past practice).
4.18 Inventories. All Inventories of the Seller are of a quality and quantity
usable and salable in the ordinary course of business, except for obsolete
items and items of below-standard quality, all of which, in the aggregate,
are immaterial in amount. Items included in such Inventories are carried on
the books of the Seller at the lower of cost or market and, in any event, at
not greater than their net realizable value, on an item by item basis, after
appropriate deduction for costs of completion, marketing costs, transportation
expenses and allocation of overhead.
4.19 Contracts. The Schedule 4.19 to this Agreement specifies all contracts,
agreements, or understandings, whether express or implied, written or verbal,
to which the Seller is a party. Schedule 4.19 to this Agreement also
specifies a brief summary of each such contract, agreement or understanding
identified therein. Without in any respect limiting the foregoing, Schedule
4.19 to this Agreement specifies a description of all leases of properties by
the Seller, including all amendments, supplements, extensions and modification
thereof, identifying, inter alia, the date each such document was executed and
its effective period. The Seller is not a party to any executory contract to
sell or transfer any part of any leasehold interest of the Seller. True and
accurate copies of all leases, and of all amendments, supplements, extensions,
modifications thereof, have heretofore been delivered to the Purchaser by the
Seller.
4.20 Accounts Payable. The accounts payable specified on the Seller Balance
Sheet do, and those specified in the most recent balance sheet included in the
Unaudited Financial Statements do, and those specified on the books and
records of the Seller at the time of the Closing will, specify all amounts
owed by the Seller in respect of trade accounts due and other Payables, and
the actual Liabilities of the Seller in respect of such obligations was not,
and will not be, on any of such dates, in excess of the amounts so specified
on the balance sheets or the books and records of the Seller, as the case may
be.
4.21 Labor Matters. There are no activities or controversies, including, but
not limited to, any labor organizing activities, election petitions or
proceedings, proceedings preparatory thereto, unfair labor practice
complaints, labor strikes, disputes, slowdowns, or work stoppages, pending or,
to the best of the knowledge of the Seller, threatened, affecting employees of
the Seller.
4.22 Insurance. The Seller has insurance policies in full force and effect
insuring the Acquired Assets and the Acquired Business, and such insurance
policies provide for coverages which are usual and customary in the business
of the Acquired Business as to amount and scope, and are adequate to protect
the Acquired Business and the Acquired Assets against any reasonably
foreseeable risk of loss, including business interruption. The Seller has not
within the past three (3) years received any notice of cancellation of any
insurance agreement affecting the Acquired Assets or the Acquired Business.
4.23 Title to and Utilization of Real Properties. The Seller owns fee,
simple, insured title to all real property included in the Acquired Assets and
has the unfettered right to use the same, and is not aware of any claim,
notice or threat to the effect that the Seller's right to own and use such
property is subject in any way to any challenge, claim, assertion of rights,
proceeding toward condemnation or confiscation, in whole or in part, or is
otherwise subject to challenge. Each parcel of real property the ownership of,
or leasehold interest in, which is included among the Acquired Assets is free
of any and all hazardous wastes, toxic substances, or other types of
contamination or matters of environmental concern, and the Seller is not
subject to any liability resulting from or related to any such wastes,
substances, contaminants or matters of environmental concern in connection
with any such property. The Seller has, in conjunction with acquiring
ownership of, or any leasehold interest in, each parcel of real property the
ownership of, or leasehold interest in, which is included among the Acquired
Assets, (i) caused an audit and examination to be made as to the existence of
any hazardous wastes, toxic substances or other types of contamination or
matters of environmental concern affecting each such property, which
examination indicated that such property was free of any such wastes,
substances, contaminants or other matters of environmental concern, and the
Seller has delivered a copy of the report of such audit and examination to the
Purchaser; and (ii) obtained an appropriate policy of title insurance insuring
the interest of the Seller in such property, which insurance policy was not
subject to any exceptions not reasonably acceptable in the ordinary course of
business, and a copy of which has been delivered to the Purchaser.
4.24 Full Disclosure. The documents, certificates, and other writings
furnished or to be furnished by or on behalf of the Seller to the Purchaser
pursuant to the provisions of this Agreement, taken together in the aggregate,
do not and will not contain any untrue statement of a material fact, or omit
to specify any material fact necessary to make the information specified,
considering the circumstances pursuant to which such information was
specified, not misleading.
4.25 Actions Since Seller Balance Sheet Date. Since the date of the Seller
Balance Sheet, the Seller has taken no actions that would be prohibited
pursuant to the provisions of this Agreement (without the prior consent of the
Purchaser) after the date of this Agreement.
4.26 The Seller's Acquisition Intention. Seller represents and confirms to the
Purchaser that it (i) is an "accredited investor" within the meaning of Rule
501(a) pursuant to the Securities Act or, if not such an accredited investor,
has, alone or together with a purchaser representative within the meaning of
Rule 501(h) pursuant to the Securities Act, such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Purchaser's securities; (ii) is aware of the
limits on resale of the Subject Shares imposed because of the nature of the
Transaction (Rule 144); and (iii) is receiving the Subject Shares without
registration pursuant to the Securities Act, in reliance on that exemption
from registration and prospectus delivery requirements of the Securities Act
specified by Regulation S promulgated pursuant to the Securities Act for
investment, and without any intent to sale, resale, or otherwise distribute
the Subject Shares in any manner that is in violation of the Securities Act.
The certificates representing the Subject Shares, when delivered to the Seller
at the Closing, may have appropriate orders restricting transfer placed
against them on the records of the transfer agent for such securities, and may
have placed upon them the following legend:
THE SUBJECT SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933. THE SUBJECT SHARES HAVE BEEN ACQUIRED
FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
SECURITIES ACT OF 1933, OR A PRIOR OPINION OF COUNSEL, SATISFACTORY TO THE
ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
Seller shall not transfer or attempt any transfer of any the Subject Shares
without first complying with the substance of that legend, and satisfaction of
the Purchaser may, if the Purchaser so requests, depend in part upon an
opinion of counsel acceptable in form and substance to the Purchaser, a no-
action letter of the SEC, or equivalent evidence. Seller acknowledges,
without limitation, that the foregoing agreement and representation shall
apply to the Subject Shares issued to Seller.
ARTICLE V
COVENANTS OF THE PURCHASER
5.1 Affirmative Covenants. From the date of this Agreement through the Closing
Date, the Purchaser will take every action reasonably required of the
Purchaser in order to satisfy the conditions to Closing set forth in this
Agreement and otherwise to ensure the prompt and expedient consummation of the
Transaction, substantially as contemplated by this Agreement and will exert
all reasonable efforts to cause the Transaction to be consummated; provided,
however, in all instances that the representations and warranties of the
Seller in this Agreement are and remain true and accurate and that the
covenants and agreements of the Seller in this Agreement are honored and that
the conditions to the obligations of the Purchaser set forth in this Agreement
are not incapable of satisfaction.
5.2 Cooperation. The Purchaser shall cooperate with the Seller and its
counsel, accountants and agents in every way in closing and consummating the
Transaction and in delivering all documents and instruments deemed reasonably
necessary or useful by counsel to the Seller.
5.3 Expenses. Whether or not the Transaction is consummated, all costs and
expenses incurred by the Purchaser in connection with this Agreement and the
Transaction shall be paid by the Purchaser.
5.4 Publicity. Prior to the Closing any written news releases by the Purchaser
pertaining to this Agreement or the Transaction shall be submitted to the
Seller for review and approval prior to release by the Purchaser, and shall be
released only in a form approved by the Seller; provided, however, that (i)
such approval shall not be unreasonably withheld, and (ii) such review and
approval shall not be required of releases by the Purchaser, if prior review
and approval would prevent the timely and accurate dissemination of such press
release as required to comply, in the judgment of counsel, with any applicable
law, rule or policy.
5.5 Access and Information. The Purchaser shall provide to the Seller and to
the Seller's accountants, counsel, and other representatives reasonable access
during normal business hours throughout the period prior to the Closing to all
of the Purchaser's properties, books, contracts, commitments, records
(including, but not limited to, tax returns) and personnel relating to the
Purchaser and, during such period, the Purchaser shall furnish promptly to the
Seller (i) all written communications relating to the business of the
Purchaser, (ii) internal monthly financial statements of the Purchaser when
and as available, and (iii) all other information relating to the business of
the Purchaser, as the Seller may reasonably request, but no investigation
pursuant to this Section 5.5 shall affect any representations or warranties of
the Purchaser or the conditions to the obligations of the Seller to consummate
the Transaction. In the event of the termination of this Agreement, the Seller
will, and will cause its representatives to, deliver to the Purchaser or, upon
Purchaser's request, destroy all documents, work papers and other material,
and all copies thereof, obtained by the Seller or on the Seller's behalf from
the Purchaser as a result of this Agreement or in connection with this
Agreement or the Transaction, whether so obtained before or after the
execution of this Agreement, and will hold in confidence all confidential
information that has been designated as such by the Purchaser in writing or by
appropriate and obvious notation and will not use any such confidential
information, except in connection with the Transaction, until such time as
such information is otherwise publicly available. Seller and its
representatives shall assert their rights pursuant to this Section 5.5 in such
manner as to minimize interference with the business of the Purchaser.
5.6 Conduct of Business Pending the Transaction. Prior to the consummation of
the Transaction or the termination of this Agreement pursuant to its terms,
unless the Seller shall otherwise consent in writing, which consent shall not
be unreasonably withheld or delayed, and except as otherwise contemplated by
this Agreement, the Purchaser will comply with each of the following:
The business of the Purchaser will be conducted only in the ordinary and usual
course, the Purchaser shall keep intact the business organization and
goodwill of the Purchaser's business, keep available the services of the
employees of the Purchaser and maintain good relationships with suppliers,
lenders, creditors, distributors, employees, customers and others having
business or financial relationships with the Purchaser, and the Purchaser
shall immediately notify the Seller of any event or occurrence or emergency
material to, and not in the ordinary and usual course of business of, the
Purchaser;
(2) The Purchaser shall not create, incur or assume any long-term or short-
term indebtedness for money borrowed or make any capital expenditures or
commitment for capital expenditures, affecting the business of the Purchaser;
(3) The Purchaser shall not (a) adopt, enter into, or amend any bonus, profit
sharing, compensation, stock option, warrant, pension, retirement, deferred
compensation, employment, severance, termination, or other employee benefit
plan, agreement, trust fund, or arrangement for the benefit or welfare of any
employees of the Purchaser or (b) agree to any material (in relation to
historical compensation) increase in the compensation payable or to become
payable to, or any increase in the contractual term of employment of, any such
employee;
(4) The Purchaser shall not sell, lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of its assets;
(5) The Purchaser shall not enter into, or terminate, any material contract,
agreement, commitment, or understanding relating to or affecting the business
of the Purchaser;
(6) The Purchaser shall not enter into any agreement, commitment, or
understanding, whether in writing or otherwise, with respect to any of the
matters referred to in subparagraphs (1) through (5) above;
(7) The Purchaser will continue properly and promptly to file when due all
federal, state, local, foreign and other tax returns, reports and declarations
required to be filed by the Purchaser, and will pay, or make full and
adequate provision for the payment of, all taxes and governmental charges due
from or payable by the Purchaser;
(8) The Purchaser will comply with all laws and regulations applicable to the
operations of the Purchaser;
(9) The Purchaser shall not issue or agree to issue any additional shares of,
or rights of any kind to acquire any shares of, the Purchaser's capital stock
of any class, or enter into any contract, agreement, commitment, or
arrangement with respect to any of the foregoing, except as provided in
Exhibit B; and
(10) The Purchaser will maintain in full force and effect insurance coverage
relating to the Purchaser's business of a type and amount customary in the
business of the Purchaser (but not less than that presently in effect).
5.7 Updating of Exhibits. The Purchaser shall notify the Seller of any
changes, additions or events which may cause any change in or addition or
events to any schedules or exhibits delivered by the Purchaser pursuant to
this Agreement, promptly after the occurrence of the same and at the Closing
by the delivery of updates of all schedules and exhibits. No notification
made pursuant to this section shall be deemed to cure any breach of any
representation or warranty made in this Agreement, unless the Seller
specifically agrees thereto in writing nor shall any such notification be
considered to constitute or be a waiver by the Seller of any condition set
forth in this Agreement.
5.8 Issuance and delivery of the Subject Shares. On the Closing, the
Purchaser shall issue and deliver or caused to be issued and delivered to the
Seller a certificate evidencing Five Million (5,000,000) shares of the
Purchaser's $.0001 par value common stock, which certificate shall specify
appropriate legend regarding the restricted nature of those shares.
ARTICLE VI
COVENANTS OF THE SELLER
6.1 Affirmative Covenants. From the date of this Agreement through the
Closing Date, the Seller will take every action reasonably required of the
Seller to satisfy the conditions to closing set forth in this Agreement and
otherwise to ensure the prompt and expedient consummation of the Transaction
substantially as contemplated hereby and will exert all reasonable efforts to
cause the Transaction to be consummated; provided, however, in all instances
that the representations and warranties of the Purchaser in this Agreement are
and remain true and accurate and that the covenants and agreements of the
Purchaser in this Agreement are correct and that the conditions to the
obligations of the Seller set forth in this Agreement are not incapable of
satisfaction.
6.2 Name. The Seller agrees that following consummation of the Transaction,
neither the Seller nor any Entity the Seller Controls or Affiliate of the
Seller shall make any attempt to make any use of any name pursuant to which
the Seller has conducted the Acquired Business, or authorize any other person
or Entity to do so, without the consent of the Purchaser.
6.3 Access and Information. The Seller shall provide to the Purchaser and to
the Purchaser's accountants, counsel and other representatives reasonable
access during normal business hours throughout the period prior to the Closing
to all of its properties, books, contracts, commitments, records (including,
but not limited to, tax returns) and personnel relating to the Acquired Assets
or the Acquired Business and, during such period, the Seller shall furnish
promptly to the Purchaser (i) all written communications relating to the
Acquired Assets or the Acquired Business, (ii) internal monthly financial
statements of the Acquired Business when and as available, and (iii) all other
information relating to the Acquired Assets or the Acquired Business as the
Purchaser may reasonably request, but no investigation pursuant to this
Section 6.3 shall affect any representations or warranties of the Seller, or
the conditions to the obligations of the Purchaser to consummate the
Transaction. In the event of the termination of this Agreement, the Purchaser
will, and will cause the Purchaser's representatives to, deliver to the Seller
or, upon Seller's request, destroy all documents, work papers, and other
material, and all copies thereof, obtained by the Purchaser or on the
Purchaser's behalf from the Seller as a result of this Agreement or in
connection with this Agreement or the Transaction, whether so obtained before
or after the execution of this Agreement, and will hold in confidence all
confidential information that has been designated as such by the Seller in
writing or by appropriate and obvious notation, and will not use any such
confidential information except in connection with the Transaction, until such
time as such information is otherwise publicly available. Purchaser and its
representatives shall assert their rights pursuant to this Section 6.3 in such
manner as to minimize interference with the business of the Seller.
6.4 No Solicitation. The Seller and those acting on behalf of the Seller will
not, and the Seller will use its best efforts to cause its employees, agents,
and representatives (including any investment banker) not, directly or
indirectly, to solicit, encourage, or initiate any discussions with, or
negotiate or otherwise deal with, or provide any information to, any person or
Entity other than the Purchaser and its officers, employees, and agents,
relating to the Acquired Assets or the Acquired Business. The Seller will
notify the Purchaser immediately upon receipt of any inquiry, offer or
proposal relating to any of the foregoing. None of the foregoing shall
prohibit providing information to others in a manner in keeping with the
ordinary conduct of the Seller's business, or providing information to
government authorities.
6.5 Conduct of Business Pending the Transaction. The Seller covenants and
agrees with the Purchaser that, prior to the consummation of the Transaction
or the termination of this Agreement pursuant to its terms, unless the
Purchaser shall otherwise consent in writing, which consent shall not be
unreasonably withheld or delayed, and except as otherwise contemplated by this
Agreement, the Seller will comply with each of the following:
(1) The Acquired Business, and the other businesses of the Seller that relate
to, use or affect the Acquired Assets, if any, will be conducted only in the
ordinary and usual course, the Seller shall keep intact the business
organization and goodwill of the Acquired Business, keep available the
services of the employees of the Seller and maintain good relationships with
suppliers, lenders, creditors, distributors, employees, customers and others
having business or financial relationships with the Acquired Business, and the
Seller shall immediately notify the Purchaser of any event or occurrence or
emergency material to, and not in the ordinary and usual course of business
of, the Acquired Business or affecting any material part of the Acquired
Assets;
(2) The Seller shall not create, incur or assume any long-term or short-term
indebtedness for money borrowed or make any capital expenditures or commitment
for capital expenditures, affecting the Acquired Business or any of the
Acquired Assets, except in the ordinary course of business and consistent with
past practice;
(3) The Seller shall not (a) adopt, enter into, or amend any bonus, profit
sharing, compensation, stock option, warrant, pension, retirement, deferred
compensation, employment, severance, termination, or other employee benefit
plan, agreement, trust fund, or arrangement for the benefit or welfare of any
employees of the Seller, or (b) agree to any material (in relation to
historical compensation) increase in the compensation payable or to become
payable to, or any increase in the contractual term of employment of, any such
employee;
(4) The Seller shall not sell, lease, mortgage, encumber, or otherwise dispose
of or grant any interest in any of the Acquired Assets except for sales,
encumbrances and other dispositions or grants in the ordinary course of
business of the Acquired Business and consistent with past practice and except
for liens for taxes not yet due or liens or encumbrances that are not material
in amount or effect and do not impair the use of the property, or as
specifically provided for or permitted in this Agreement;
(5) The Seller shall not enter into, or terminate, any material contract,
agreement, commitment, or understanding relating to or affecting the Acquired
Assets or the Acquired Business;
(6) The Seller shall not enter into any agreement, commitment, or
understanding, whether in writing or otherwise, with respect to any of the
matters referred to in subparagraphs (1) through (5) above;
(7) The Seller will continue properly and promptly to file when due all
federal, state, local, foreign and other tax returns, reports and declarations
required to be filed by it relating to the Acquired Assets or the Acquired
Business, and will pay, or make full and adequate provision for the payment
of, all taxes and governmental charges due from or payable by the Seller
relating to the Acquired Assets or the Acquired Business;
(8) The Seller will comply with all laws and regulations applicable to the
operations of the Acquired Business and the utilization of the Acquired
Assets; and
(9) The Seller will maintain in full force and effect insurance coverage
relating to the Acquired Assets and the Acquired Business of a type and amount
customary in the business of the Acquired Business (but not less than that
presently in effect).
6.6 Cooperation. The Seller will cooperate with the Purchaser and the
Purchaser's counsel, accountants and agents in every way in consummating and
closing the Transaction and in delivering all documents and instruments deemed
reasonably necessary or useful by the Purchaser. 6.7 Expenses. Whether or not
the Transaction is consummated, all costs and expenses incurred by the Seller
in connection with this Agreement and the Transaction shall be paid by the
Seller.
6.8 Publicity. Prior to the Closing any written news releases by the Seller
relating to this Agreement or the Transaction shall be submitted to the
Purchaser for review and approval prior to release by the Seller, and shall be
released only in a form approved by the Purchaser.
6.9 Updating of Exhibits and Disclosure Documents. The Seller shall notify the
Purchaser of any changes, additions, or events which may cause any change in
or addition to any schedules or exhibits delivered by the Seller pursuant to
this Agreement promptly after the occurrence of the same and again at the
Closing by delivery of appropriate updates to all such schedules and exhibits.
No such notification made pursuant to this section shall be deemed to cure any
breach of any representation or warranty made in this Agreement, unless the
Purchaser specifically agrees thereto in writing nor shall any such
notification be considered to constitute or be a waiver by the Purchaser of
any condition set forth in this Agreement.
6.10 Payment of Unassumed Liabilities. The Seller agrees promptly to pay when
due, or otherwise to discharge, without cost or expense to the Purchaser, each
and every Liability of the Seller that is not specifically assumed by the
Purchaser pursuant to this Agreement, as described in Section 2.1 of this
Agreement.
6.11 Continued Action Regarding Exemption. The Seller shall take any and all
additional action which is necessary or appropriate to maintain that exemption
from the registration and prospectus delivery requirements of the Securities
Act provided by Rule 144 promulgated pursuant to the Securities Act.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Obligation of Purchaser.
The obligation of the Purchaser to effect and consummate the Transaction shall
be subject to the fulfillment at or prior to the Closing of the following
conditions, unless the Purchaser shall waive such fulfillment in writing:
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other regulatory
agencies and other third parties (including lenders, holders of debt
securities and lessors) required to consummate the Transaction;
(2) There shall not be in effect a preliminary or permanent injunction or
other order by any federal or state court which prohibits the consummation of
the Transaction;
(3) The Seller shall have performed in all material respects each of the
Seller's agreements and obligations specified in this Agreement and required
to be performed on or prior to the Closing and shall have complied with all
material requirements, rules, and regulations of all regulatory authorities
having jurisdiction relating to the Transaction;
(4) No material adverse change shall, in the judgment of the Purchaser,
have taken place in the business condition (financial or otherwise),
operations, or prospects of the Acquired Business or the Acquired Assets since
the date of this Agreement other than those, if any, that result from the
changes permitted by this Agreement;
(5) The representations and warranties of the Seller set forth in this
Agreement shall be true in all material respects as of the date of this
Agreement and, except in such respects as, in the judgment of the Purchaser,
do not materially and adversely affect the business, condition (financial or
otherwise), operations, or prospects of the Acquired Business or the Acquired
Assets, as of the Closing, as if made as of the Closing; and
(6) The Purchaser shall have received from the Seller an officers
certificate, executed by the Chief Executive Officer and Chief Financial
Officer of the Seller (in their capacities as such), dated the Closing Date,
as to the satisfaction of the conditions in Paragraphs (3), (4), and (5) of
this section (to the best of their knowledge).
7.2 Conditions to Obligation of the Seller. The obligation of the Seller to
effect the Transaction shall be subject to the fulfillment at or prior to the
Closing of the following conditions, unless the Seller shall waive such
fulfillment in writing:
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other regulatory
agencies and other third parties (including lenders, holders of debt
securities and lessors required by law to consummate the Transaction;
(2) There shall not be in effect a preliminary or permanent injunction or
other order by any federal or state authority which prohibits the consummation
of the Transaction;
(3) The Purchaser shall have performed in all material respects the
Purchaser's agreements and obligations specified in this Agreement required to
be performed on or prior to the Closing;
(4) The representations and warranties of the Purchaser set forth in this
Agreement shall be true in all material respects as of the date of this
Agreement and, except in such respects as do not materially and adversely
affect the business of the Purchaser, as of the Closing Date as if made as of
the Closing Date; and
(5) The Seller shall have received from the Purchaser an officers'
certificate, executed by the Chief Financial Officer and the Chief Executive
Officer of the Purchaser (in their capacities as such), dated the Closing
Date, as to the satisfaction of the conditions of Paragraphs (3) and (4) of
this section (to the best of their knowledge).
ARTICLE VIII
DOCUMENTS AND INSTRUMENTS TO BE DELIVERED AT CLOSING
8.1 The Purchaser to the Seller. On the Closing, the Purchaser shall deliver
or cause to be delivered the following instruments and documents to the
Seller:
(1) certificate evidencing and representing Five Million (5,000,000) shares of
the Purchaser's $.0001 par value common stock (the Subject Shares), which
certificate shall specify the appropriate legend regarding the restricted
nature of those Subject Shares; and
(2) The Officers Certificate contemplated by the provisions of Paragraph (5)
of Section 7.2 of this Agreement.
8.2 The Seller to the Purchaser. On the Closing, the Seller shall deliver or
cause to be delivered the following instruments and documents to the
Purchaser:
(1) A Bill of Sale, executed by the President and the Secretary of the Seller,
pursuant to which title to the Acquired Assets are transferred and vested in
the Purchaser;
(2) All books, records, journals, disks, checks, minute books, documents,
memoranda and other instruments relating to the business of the Seller which
are necessary or appropriate to enable the Purchaser to carry on and conduct
the business and affairs of the Acquired Business and to utilize the Acquired
Assets after the Closing; and
(3) The Officers' Certificate contemplated by the provisions of Paragraph (6)
of Section 7.1 of this Agreement.
ARTICLE IX
TERMINATION, AMENDMENT WAIVER
9.1 Termination. This Agreement and the Transaction may be terminated at any
time prior to the Closing:
(1) By mutual consent of the Purchaser and the Seller; or
(2) By either Purchaser or the Seller, upon written notice to the other,
if the conditions to such party's obligations to consummate the Transaction,
in the case of Purchaser, as specified in Section 7.1 of this Agreement, or,
in the case of the Seller, as provided in Section 7.2 of this Agreement, were
not, or cannot reasonably be, satisfied on or before August __, 2000, unless
the failure of condition is the result of the material breach of this
Agreement by the party seeking to terminate this Agreement.
9.2 Amendment. This Agreement may be amended by the Purchaser and the Seller
by action taken at any time. This Agreement may not be amended, except by an
instrument in writing signed on behalf of the Purchaser and the Seller.
9.3 Waiver. At any time prior to the Closing, the Purchaser or the Seller may
(i) extend the time for the performance of any of the obligations or other
acts of the other party, (ii) waive any inaccuracies in the representations
and warranties specified in this Agreement or in any document delivered
pursuant to this Agreement, or (iii) waive compliance with any of the
agreements or conditions specified in this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
ARTICLE X
GENERAL PROVISIONS
10.1 Notices. Any notice, direction or instrument required or permitted to be
given pursuant to this Agreement shall be given in writing by (i) telegram,
facsimile transmission or similar method, if confirmed by mail as herein
provided, by mail; (ii) if mailed postage prepaid, by certified mail, return
receipt requested; or (iii) hand delivery to any party at the addresses of the
parties specified, below. If given by telegram or facsimile transmission or
similar method or by hand delivery, such notice, direction or instrument shall
be deemed to have been given or made on the day on which it was given, and if
mailed, shall be deemed to have been given or made on the second (2nd)
business day following the day after which it was mailed. Any party may, from
time to time by similar notice, give notice of any change of address, and in
such event, the address of such party shall be deemed to be changed
accordingly. The address, telephone number and facsimile transmission number
for the notice of each party are:
IF TO PURCHASER: IF TO SELLER:
ASDAR Group 2U Online.com, Inc.
1239 West Georgia Street, Suite 3004 1288 Alberni Street, Suite 806
Vancouver, British Columbia V6E 4R8 Vancouver, British Columbia V6E 4N5
10.2 Indemnification. Seller shall save Purchaser harmless from and against
and shall indemnify Purchaser for any liability, loss, costs, expenses or
damages howsoever caused by reason of any injury (whether to body, property or
personal or business character or reputation) sustained by any person or to
property by reason of any act, neglect, default or omission of Seller or any
of Seller's agents, employees or other representatives, and Seller shall pay
all amounts to be paid or discharged in case of an action or any such damages
or injuries. If Purchaser is sued in any court for damages by reason of any
of the acts of Seller, Seller or such other party shall defend the resulting
action (or cause same to be defended) at Seller's expense and shall pay and
discharge any judgment that may be rendered in any such action; if Seller
fails or neglects to so defend in such action, Purchaser may defend such
action and any expenses, including reasonable attorneys' fees, which Purchaser
may pay or incur in defending such action and the amount of any judgment which
Purchaser may be required to pay shall be promptly reimbursed by Seller upon
demand by Purchaser.
10.3 Recovery of Enforcement Costs. In the event either party shall institute
any action or proceeding to enforce any provision of this Agreement to seek
relief from any violation of this Agreement, or to otherwise obtain any
judgment or order relating to or arising from the subject matter of this
Agreement, the prevailing party shall be entitled to receive from the losing
party such prevailing party's actual attorneys' fees and costs incurred to
prosecute or defend such action or proceeding.
10.4 Assignment. Neither party shall have the right, without the consent of
the other party, to assign, transfer, sell, pledge, hypothecate, delegate, or
otherwise transfer, whether voluntarily, involuntarily or by operation of law,
any of such party's rights or obligations created by the provisions of this
Agreement, nor shall the parties' rights be subject to encumbrance or the
claim of creditors. Any such purported assignment, transfer, or delegation
shall be null and void.
10.5 Captions and Interpretations. Captions of the articles, sections and
paragraphs of this Agreement are for convenience and reference only, and the
works specified therein shall in no way be held to explain, modify, amplify or
aid in the interpretation, construction, or meaning of the provisions of this
Agreement. The language in all parts to this Agreement, in all cases, shall
be construed in accordance with the fair meaning of that language as if
prepared by all parties and not strictly for or against any party. Each party
and counsel for such party have reviewed this Agreement. The rule of
construction, which requires a court to resolve any ambiguities against the
drafting party, shall not apply in interpreting the provisions of this
Agreement.
10.6 Entire Agreement. This Agreement and the exhibits to this Agreement are
the final written expression and the complete and exclusive statement of all
the agreements, conditions, promises, representations, warranties and
covenants between the parties with respect to the subject matter of this
Agreement, and this Agreement supersedes all prior or contemporaneous
agreements, negotiations, representations, warranties, covenants,
understandings and discussions by and between and among the parties, their
respective representatives, and any other person, with respect to the subject
matter specified in this Agreement. No provision of any exhibit or schedule
to this Agreement shall supersede or annul the terms and provisions of this
Agreement, unless the matter specified in such exhibit or schedule shall
explicitly so provide to the contrary, in the event of ambiguity in meaning or
understanding between the provisions of this Agreement proper and the appended
exhibits or schedules, the provisions of this Agreement shall prevail and
control in all instances.
10.7 Choice of Law. This Agreement shall be deemed to have been entered into
in the State of Delaware. All questions concerning the validity,
interpretation, or performance of any of the terms, conditions and provisions
of this Agreement or of any of the rights or obligations of the parties shall
be governed by, and resolved in accordance with, the laws of the State of
Delaware without regard to conflicts of law principles.
10.8 Number and Gender. Whenever the singular number is used in this
Agreement and, when required by the context, the same shall include the
plural, and vice versa; the masculine gender shall include the feminine and
the neuter genders, and vice versa.
10.9 Successors and Assigns. This Agreement and each of its provisions shall
obligate the heirs, executors, administrators, successors, and assigns of each
of the parties. Nothing specified in this article, however, shall be a
consent to the assignment or delegation by any party of such party's
respective rights and obligations created by the provisions of this Agreement.
10.10 Third Party Beneficiaries. Except as expressly specified by the
provisions of this Agreement, this Agreement shall not be construed to confer
upon or give to any person, other than the parties hereto, any right, remedy
or claim pursuant to, or by reason of, this Agreement or of any term or
condition of this Agreement.
10.11 Severability. In the event any part of this Agreement, for any reason,
is determined by a court of competent jurisdiction to be invalid, such
determination shall not affect the validity of any remaining portion of this
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated.
It is hereby declared the intention of the parties that they would have
executed the remaining portion of this Agreement without including any such
part, parts, or portion which, for any reason, may be hereafter determined to
be invalid.
10.12 Governmental Rules and Regulations. The transactions contemplated by
the provisions of this Agreement are and shall remain subject to any and all
present and future orders, rules and regulations of any duly constituted
authority having jurisdiction of that transaction.
10.13 Execution in Counterparts. This Agreement may be prepared in multiple
copies and forwarded to each of the parties for execution. All of the
signatures of the parties may be affixed to one copy or to separate copies of
this Agreement and when all such copies are received and signed by all the
parties, those copies shall constitute one agreement which is not otherwise
separable or divisible. Counsel for the Purchaser shall keep all of such
signed copies and shall conform one copy to show all of those signatures and
the dates thereof and shall mail a copy of such conformed copy to each of the
parties within thirty (30) days after the receipt by such counsel of the last
signed copy, and such counsel shall cause one such conformed copy to be filed
in the principal office of such counsel.
10.14 Reservation of Rights. The failure of any party at any time or times
hereafter to require strict performance by any other party of any of the
warranties, representations, covenants, terms, conditions and provisions
specified in this Agreement shall not waive, affect of diminish any right of
such party failing to require strict performance to demand strict compliance
and performance therewith and with respect to any other provisions,
warranties, terms, and conditions specified in this Agreement. Any waiver of
any default shall not waive or affect any other default, whether prior or
subsequent thereto, and whether the same or of a different type. None of the
representations, warranties, covenants, conditions, provisions and terms
specified in this Agreement shall be deemed to have been waived by any act or
knowledge of any party, its agents, trustees, officers, or employees and any
such waiver shall be made only by an instrument in writing, signed by the
waiving party and directed to any non-waiving party specifying such waiver,
and each party reserves such party's rights to insist upon strict compliance
herewith at all times.
10.15 Survival of Covenants, Representations and Warranties. All covenants,
representations, and warranties made by each party to this Agreement shall be
deemed made for the purpose of inducing the other party to enter into and
execute this Agreement. The representations, warranties, and covenants
specified in this Agreement shall survive the Closing and shall survive any
investigation by either party whether before or after the execution of this
Agreement. The covenants, representations, and warranties of the Seller and
the Purchaser are made only to and for the benefit of the other and shall not
create or vest rights in other persons.
10.16 Concurrent Remedies. No right or remedy specified in this Agreement
conferred on or reserved to the parties is exclusive of any other right or
remedy specified in this Agreement or by law or equity provided or permitted;
but each such right and remedy shall be cumulative of, and in addition to,
every other right and remedy specified in this Agreement or now or hereafter
existing at law or in equity or by statute or otherwise, and may be enforced
concurrently therewith or from time to time. The termination of this
Agreement for any reason whatsoever shall not prejudice any right or remedy
which any party may have, either at law, in equity, or pursuant to the
provisions of this Agreement.
10.17 Force Majeure. If any party is rendered unable, completely or
partially, by the occurrence of an event of "force majeure" (hereinafter
defined) to perform such party's obligations created by the provisions of this
Agreement, such party shall give to the other party prompt written notice of
the event of "force majeure" with reasonably complete particulars concerning
such event; thereupon, the obligations of the party giving such notice, so far
as those obligations are affected by the event of "force majeure," shall be
suspended during, but no longer than, the continuance of the event of "force
majeure." The party affected by such event of "force majeure" shall use all
reasonable diligence to resolve, eliminate and terminate the event of "force
majeure" as quickly as practicable. The requirement that an event of "force
majeure" shall be remedied with all reasonable dispatch as hereinabove
specified, shall not require the settlement of strikes, lockouts or other
labor difficulties by the party involved, contrary to such party's wishes, and
the resolution of any and all such difficulties shall be handled entirely
within the discretion of the party concerned. The term "force majeure" as used
herein shall be defined as and mean any act of God, strike, civil disturbance,
lockout or other industrial disturbance, act of the public enemy, war,
blockage, public riot, earthquake, tornado, hurricane, lightening, fire,
epidemics, quarantine restrictions, public demonstration, storm, flood,
explosion, freight embargoes, governmental action, governmental delay,
restraint or inaction, unavailability of equipment, default of a party's
subcontractors or suppliers, and any other cause or event, whether of the kind
enumerated specifically herein, or otherwise, which is not reasonably within
the control of the party claiming such suspension.
10.18 Consent to Agreement. By executing this Agreement, each party, for
itself represents such party has read or caused to be read this Agreement in
all particulars, and consents to the rights, conditions, duties and
responsibilities imposed upon such party as specified in this Agreement. Each
party represents, warrants and covenants that such party executes and delivers
this Agreement of its own free will and with no threat, undue influence,
menace, coercion or duress, whether economic or physical. Moreover, each
party represents, warrants, and covenants that such party executes this
Agreement acting on such party's own independent judgment.
10.19 Waiver and Modification. No modification, supplement or amendment of
this Agreement or of any covenant, representation, warranty, condition, or
limitation specified in this Agreement shall be valid unless the same is made
in writing and duly executed by both parties. No waiver of any covenant,
representation, warranty, condition, or limitation specified in this Agreement
shall be valid unless the same is made in writing and duly executed by the
party making the waiver. No waiver of any provision of this Agreement shall
be deemed, or shall constitute, a waiver of any other provision, whether or
not similar, nor shall any waiver constitute a continuing waiver. Further
Assurances. The parties shall from time to time sign and deliver any further
instruments and take any further actions as may be necessary to effectuate the
intent and purposes of this Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
signed in duplicate on the date first written above by their respective
officers
thereunto duly authorized.
SELLER
2U Online.com, Inc.,
a Delaware corporation
/S/ Jack Sha
Its: President
PURCHASER
ASDAR Group
a Nevada corporation
/S/ Stephen Nemergut
By:________________________________________________________
Stephen J. Nemergut
Its: President
/S/ Ferdinand Marehard /S/ Jack Sha
By:____________________________ By:____________________________
Ferdinand Marehard Jack Sha
Its: Secretary Its: Secretary