ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of this _____ day of ____________ 20__, by and between Mark Andre ("Seller"), and Aptus, Corp., a Delaware corporation ("Buyer"). Buyer and Seller are referred to collectively herein as the "Parties." RECITALS WHEREAS, Buyer's core business includes Software Solutions and proprietary technology; and WHEREAS, Buyer desires to purchase from Seller source code and computer hardware ("Assets"); and WHEREAS, subject to the terms and conditions contained in this Agreement, Seller desires to sell to Buyer, and Buyer agrees to purchase from Seller, the Assets. NOW, THEREFORE, in consideration of the mutual covenants, representations, and warranties set forth in this Agreement, the parties agree as follows: 1. DEFINITIONS. "Assets" are defined and set forth in Exhibit A. "Buyer" has the meaning set forth in the preface above. "Closing" has the meaning set forth in section 2(c) below. "Closing Date" has the meaning set forth in section 2(c) below. "Code" means the Internal Revenue Code of 1986, as amended. "Disclosure Schedule" has the meaning set forth in section 3 below. "Knowledge" means actual current knowledge after reasonable investigation. "Liability" means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or un-accrued, whether liquidated or un-liquidated, and whether due or to become due), including any liability for Taxes. "Ordinary Course of Business" means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency). "Party" has the meaning set forth in the preface above. "Person" means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof). "Post Closing Obligations" has the meaning set forth in section 8 below. "Purchase Price" has the meaning set forth in section 2(b) below. "Security Interest" means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (a) mechanic's, materialmen's, and similar liens, (b) liens for Taxes not yet due and payable [or for Taxes that the taxpayer is contesting in good faith through appropriate proceedings], (c) purchase money liens and liens securing rental payments under capital lease arrangements, and (d) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money. "Seller" has the meaning set forth in the preface above. "Tax" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. 2. BASIC TRANSACTION. (a) Purchase and Sale of Assets. On and subject to the terms and conditions of this Agreement and the purchase money security interest retained by Seller as evidenced by the security agreement hereafter described, Buyer agrees to purchase from Seller, and Seller agrees to sell, transfer, convey, and deliver to Buyer, all of the Assets at the Closing for the consideration specified below in this section 2. (b) Purchase Price. At Closing, which shall occur on or before January 31, 2004, unless extended, Buyer shall pay as follows: 1. $500,000 payable in common stock as established in Exhibit G. Subject to the terms and conditions herein stated, the certificates representing the common stock shall be tendered, at closing, by Buyer to Seller, duly endorsed or accompanied by stock power(s) duly executed in blank by Buyer, with all necessary transfer tax and other revenue stamps, if any, acquired at Buyer's expense, affixed and cancelled. Buyer agrees to cure any deficiencies with respect to the endorsement of the certificate(s) representing the common stock of Buyer to be conveyed to Seller pursuant to this Agreement, whether now or in the future or with respect to the stock powers accompanying any such certificate(s). 2. 5.5% distribution on all revenues as described in Distribution Agreement hereto attached as Exhibit E. 3. Consulting Agreement for the term of two (2) years with monthly compensation in the amount of $5,000, hereto attached as Exhibit F. 4. Upon the signing of the definitive Purchase Agreement a cash payment of $8,500.00. 5. Seller shall have the right, at any time during the term of the distribution Agreement and Consulting Agreement, and from time to time, in his sole option, to purchase up to an additional 500,000 shares of the common stock of Buyer at the purchase price of $0.50 per share of stock, and Buyer shall have the obligation to sell such stock at such a price upon demand. 6. The assumption by Buyer of all obligations of Seller and/or Appgen Technologies, Inc., a Delaware corporation ("Appgen") to provide continuing customer service and support to the existing licensee of the CODE (as such term is defined in the Distribution Agreement) in accordance with the existing license agreements between such licensees and Appgen and/or Seller. (c) Closing. Closing shall occur at 5:00 P.M., on January 31, 2004 at 1127 Broadway Plaza, Suite 203, Tacoma, Washington 98402 as agreed to between Buyer and Seller, and shall be contingent upon Seller delivering Exhibit A and any required assignments attached hereto as Exhibit B and Buyer delivering the consideration specified in section 2(b). (d) Deliveries at the Closing. At the Closing, (i) Seller shall deliver to Buyer the various certificates, instruments, and documents referred to in section 6(a) below; (ii) Buyer shall deliver to Seller the various certificates, instruments, and documents referred to within 6(b) below; (iii) Seller shall execute, acknowledge (if appropriate), and deliver to Buyer (A) assignments in the forms attached hereto marked collectively Exhibit B, if required, and (B) such other instruments of sale, transfer, conveyance, and assignment as Buyer and its counsel reasonably may request; (iv) Buyer shall execute, acknowledge (if appropriate), and deliver to Seller (A) an assumption in the form attached hereto as Exhibit C, if required, and (B) such other instruments of assumption as Seller and its counsel reasonably may request; (v) Buyer shall deliver to Seller, or on Seller's behalf, the consideration specified in section 2(b) above and (vi) Buyer shall deliver to Seller a security agreement, in the form attached hereto as Exhibit I hereto, pledging Buyer's interest in the CODE, the Assets (as defined hereunder), and the "Assets" (as such term is defined within that certain Asset Purchase Agreement between Appgen and Buyer of even date) to secure Buyer's obligations under this Agreement, the Distribution Agreement and the Consulting Agreement. 3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller, to the best of Seller's knowledge, represents and warrants to Buyer that the statements contained in this section 3 are materially correct and complete as of the date of this Agreement and shall be materially correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this section 3), except as set forth in the Disclosure Schedule, attached as Exhibit D hereto, accompanying this Agreement and initialed by the Parties ("Disclosure Schedule"). The Disclosure Schedule shall be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this section 3. (a) Authorization of Transaction. Seller has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Seller, enforceable in accordance with its terms and conditions. (b) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in ss.2 above), shall (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject or any provision of the charter or bylaws of Seller or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Seller is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets). Seller is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in ss.2 above). (c) Brokers' Fees. With the exception of obligations to Mark Levine, Seller has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Buyer could become liable or obligated. (d) Title to Assets. Seller has good and marketable title to all of the Assets, free and clear of any Security Interest or restriction on transfer. The assets of Seller being acquired through this Agreement consist of various confidential business and technical information and other operational relationships. (e) Seller has not previously sold, leased, transferred, encumbered or assigned any of the Assets, except as enumerated in Exhibit B which shall include the licensees of the CODE as previously disclosed to Buyer. (f) Seller has not imposed any Security Interest upon any of the Assets. (g) Seller has not experienced any substantial loss or change in the Assets, their nature and scope within the past three months, except regarding the loss of business relationships due to the closure and obligations of Appgen. (h) Disclosure Schedule. The Disclosure Schedule shall list all exceptions to the warranties set out in the preceding paragraph, in any. The Disclosure Schedule shall be approved in writing by the Buyer before closing. The Disclosure Schedule shall also set forth each instance in which the Assets are subject to any outstanding injunction, judgment, order, decree, ruling, or charge in any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator, or the absence thereof. (i) Disclosure. The representations and warranties contained in this section 3 do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this section 3 not misleading. 4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Seller that the statements contained in this section 4 are correct and complete as of the date of this Agreement and shall be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this section 4), except as set forth in the Disclosure Schedule. The Disclosure Schedule shall be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this section 4. (a) Organization of Buyer. Buyer is a Delaware corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation. (b) Authorization of Transaction. Buyer has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Buyer, enforceable in accordance with its terms and conditions. (c) Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in section 2 above), shall (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Buyer is subject or any provision of its charter or bylaws or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Buyer is a party or by which it is bound or to which any of its assets is subject. Buyer does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in section 2 above). (d) Value of Shares. Buyer must establish its value so as to determine the value of shares in section 2.b.1 in attached Exhibit G, and enumerate all terms, conditions and articles of incorporation that relate to the shares in section 2.b.1. The Establishment of Buyer's Value (Exhibit G) shall be approved in writing by the Seller before closing. (e) Stock Representations. Seller has an authorized capitalization consisting of 275,000,000 shares consisting of 250,000,000 shares of Common Stock having a par value of $0.001 per share, 5,000,000 shares of Class A Common Stock having a par value of $0.001 per share, 10,000,000 shares of Class A Preferred Stock having a par value of $0.001 per share and 10,000,000 shares of Class B Preferred Stock having a par value of $0.001 per share. Currently, _________ shares of the Common Stock are issued and outstanding, _________ shares of the Class A Common Stock are issued and outstanding, _________ shares of the Class A Preferred Stock are issued and outstanding and _________ shares of the Class B Preferred Stock are issued and outstanding. All such outstanding shares have been duly authorized and validly issued and are fully paid and non-assessable. All of the stock to be conveyed to Seller, both now and, if so determined by Seller, in the future shall have been duly authorized and validly issued and are fully paid and non-assessable. Except as may be disclosed within the Disclosure Schedule, there are no outstanding options, warrants, rights, calls, commitments, conversion rights, rights of exchange, plans or other agreements of any character providing for the purchase, issuance or sale of any shares of the capital stock of Buyer, other than as contemplated by this Agreement. Buyer is the lawful owner of all the issued and outstanding shares to be conveyed to Seller pursuant to the terms of this Agreement, free and clear of all liens, encumbrances, restrictions and claims of every kind. The delivery to Seller of the common stock of Buyer, both now and in the future pursuant to the provisions of this Agreement will transfer to Seller valid title thereto, free and clear of all liens, encumbrances, restrictions and claims of every kind. 5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to the period between the execution of this Agreement and the Closing. (a) General. Each of the Parties shall use its reasonable best efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in section 6 below). (b) Notice of Developments. Each Party shall give prompt written notice to the other Party of any material adverse development causing a breach of any of its own representations and warranties in section 3 and section 4 above. No disclosure by any Party pursuant to this section 5(b), however, shall be deemed to amend or supplement the Disclosure Schedule or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant. (c) Exclusivity. Seller shall not (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any capital stock or other voting securities, or any substantial portion of the assets, of Seller (including any acquisition structured as a merger, consolidation, or share exchange) or (ii) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing. Seller shall notify Buyer immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing. 6. CONDITIONS TO OBLIGATION TO CLOSE. (a) Conditions to Obligation of Buyer. The obligation of Buyer to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions: (i) the representations and warranties set forth in section 3 above shall be true and correct in all material respects at and as of the Closing Date; (ii) Seller shall have performed and complied with all of its covenants hereunder in all material respects through the Closing; (iv) no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, or (C) affect adversely the right of Buyer to own the Assets and to operate the former businesses of Seller; and (v) Seller shall have delivered to Buyer a certificate to the effect that each of the conditions specified above in section 6(a)(i)-(iv) is satisfied in all respects. Buyer may waive any condition specified in this section 6(a) if it executes a writing so stating at or prior to the Closing. (b) Conditions to Obligation of Seller. The obligation of Seller to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions: (i) the representations and warranties set forth in section 4 above shall be true and correct in all material respects at and as of the Closing Date; (ii) Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the Closing; (iii) no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement or (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect); and (iv) Buyer shall have delivered to Seller a certificate to the effect that each of the conditions specified above in section 6(b)(i)-(iii) is satisfied in all respects. Seller may waive any condition specified in this section 6(b) if it executes a writing so stating at or prior to the Closing. 7. TERMINATION. (a) Termination of Agreement. Certain of the Parties may terminate this Agreement as provided below: (i) Buyer and Seller may terminate this Agreement by mutual written consent at any time prior to the Closing; (ii) Buyer may terminate this Agreement by giving written notice to Seller at any time prior to the Closing (A) in the event Seller has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Buyer has notified Seller of the breach, and the breach has continued without cure for a period of ten (10) days after the notice of breach or (B) if the Closing shall not have occurred on or before February 10, 2004, by reason of the failure of any condition precedent under ss.6(a) hereof (unless the failure results primarily from Buyer itself breaching any representation, warranty, or covenant contained in this Agreement); and (iii) Seller may terminate this Agreement by giving written notice to Buyer at any time prior to the Closing (A) in the event Buyer has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, Seller has notified Buyer of the breach, and the breach has continued without cure for a period of ten (10) days after the notice of breach or (B) if the Closing shall not have occurred on or before January 31, 2004 , by reason of the failure of any condition precedent under section 6(b) hereof (unless the failure results primarily from Seller itself breaching any representation, warranty, or covenant contained in this Agreement). (b) Effect of Termination. If any Party terminates this Agreement pursuant to section 7(a) above, all rights and obligations of the Parties hereunder shall terminate without any Liability of any Party to any other Party (except for any Liability of any Party then in breach). 8. POST CLOSING OBLIGATIONS. Buyer remains obligated to the ongoing distributions as defined in Exhibit E, and all ongoing fees or payments as enumerated in Exhibit F the consulting agreement. Buyer hereby assumes and obligates itself to perform, at no expense to Seller, all outstanding obligations of Seller and/or Appgen to provide continuing customer service and support to the existing licensee of the CODE in accordance with the existing license agreements between such licensees and Appgen and/or Seller. Buyer shall use its absolute best efforts to complete, as soon as possible, the registration of the Common Stock of Buyer with all applicable state and federal regulatory and governmental authorities (including, but not limited to, the Securities and Exchange Commission), so that such common stock is fully registered and readily transferable without restriction in compliance with all applicable state and federal securities laws, and shall timely take such actions and submit such information as such state and federal regulatory and governmental authorities may require in connection with such registration efforts. 9. MISCELLANEOUS. (a) Survival of Representations and Warranties. All of the representations and warranties of the Parties contained in this Agreement shall survive the Closing hereunder as and to the extent provided in the Agreement with Seller Stockholders. (b) Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement prior to the Closing without the prior written approval of the other Party; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly-traded securities (in which case the disclosing Party shall use its reasonable best efforts to advise the other Party prior to making the disclosure). (c) No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns. (d) Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement between the Parties and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, to the extent they related in any way to the subject matter hereof. (e) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective heirs, successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party; provided, however, that Buyer may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (ii) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases Buyer nonetheless shall remain responsible for the performance of all of its obligations hereunder). (f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. (g) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. (h) Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by "Priority International" or "Priority Overnight" service through Federal Express, all fees prepaid, and addressed to the intended recipient as set forth below: If to Buyer: John P. Gorst, President Aptus, Corp. 1127 Broadway Plaza, Suite 203 Tacoma, Washington 98402 If to Seller: Mark Andre PO Box 86 Great River, NY 11739 Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth. (i) Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. (j) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Buyer and Seller. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. (k) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. (l) Expenses. Each of Buyer and Seller shall bear his or its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. (m) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. (n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. (o) Specific Performance. Each of the Parties acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter (subject to the provisions set forth in section 8(p) below), in addition to any other remedy to which it may be entitled, at law or in equity. (p) Submission to Jurisdiction. Each of the Parties submits to the jurisdiction of any state or federal court sitting in the Western District of Washington in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. (q) Bulk Transfer Laws. Buyer acknowledges that Seller shall not comply with the provisions of any bulk transfer laws, if any, of any jurisdiction in connection with the transactions contemplated by this Agreement. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of the date first above written. SELLER: Mark Andre By: /s/ Mark Andre Mark Andre BUYER: Aptus, Inc. By: /s/ John P. Gorst Name: John P. Gorst Title: President EXHIBIT A Itemization of Assets EXHIBIT B List and Forms of Assignments EXHIBIT C List of Assumptions EXHIBIT D Disclosure Schedule EXHIBIT E Distribution Agreement EXHIBIT F Consulting Agreement EXHIBIT G Establishment of Buyer's Value EXHIBIT H Articles of Incorporation EXHIBIT I Security Agreement