ASSET PURCHASE AGREEMENT
---------------------------------------------------------------------
This ASSET PURCHASE AGREEMENT (the "AGREEMENT"), dated as of the 20th
day of April, 2000, by and between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
("Seller"), whose address is Managua 907, ▇▇▇▇▇ Vista, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇.▇., Mexico, and Lexington ▇▇▇▇▇▇ Technologies, Inc. (Buyer),
a Colorado corporation whose address is ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
RECITALS
A. Seller is engaged in the provision of consulting services to
start-up companies.
B. Seller wishes to sell to Buyer and Buyer wishes to buy from
Seller the proprietary knowledge, customer contacts and network of
business professionals of Seller (as defined below "Intangible
Assets"), upon the terms and conditions of this Agreement (the
"PURCHASE").
NOW, THEREFORE, the parties hereby agree as follows:
1. PURCHASE OF INTANGIBLE ASSETS.
(a) Seller hereby sells, transfers and assigns to Buyer (the
"TRANSFER"), and Buyer hereby purchases and accepts from
Seller, in each case free and clear of all Liens (as defined
below), Seller's proprietary knowledge, customer contacts and
network of business professionals, which are used in connection
with or otherwise relate to the Seller's Business (the
"INTANGIBLE ASSETS"), including, without limitation:
i. Proprietary knowledge of business consulting models and
client acquisition methodologies;
ii. Contacts of start-up businesses currently seeking
management, start-up or business consulting services;
iii. Inactive customer files and data relating to the Business;
iv. Network of business professionals containing 426 viable and
established contacts;
v. Jfax telephone numbers and other identifying addresses and
numbers of Seller used in the conduct of the Seller's
Business;
vi. all market research studies, surveys, reports, analyses and
similar information relating to the Business;
vii. all sales data, brochures, catalogues, literature, forms,
mailing lists, art work, photographs and advertising
material, in whatever form or media relating to the
Seller's Business;
(b) If any Assets constituting Contracts or Permits are not by
their terms assignable or require the consent of a third party
in connection with the sale by Seller, Seller will use
reasonable efforts to assist Buyer to obtain such consent
promptly. During the period in which the applicable Contract or
Permit is not capable of being assigned to Buyer due to the
failure to obtain any required consent, Seller will make such
arrangements as may be necessary to enable Buyer to receive all
1
the economic benefits under such Contract or Permit accruing on
and after the execution of this Agreement.
(c) Notwithstanding anything in this Agreement to the contrary, i)
Seller will retain and not transfer to Buyer the assets
described in Schedule 1(c)(i) (the "EXCLUDED ASSETS"); and (ii)
Buyer will not assume and will be deemed not to have assumed
and be responsible for, and Seller will be solely and
exclusively liable and responsible for, any Indebtedness (as
defined below), obligations, Contracts or liabilities of Seller
relating to the Business, including but not limited to, the
obligations described in Schedule 1(c)(ii)(a) (the "RETAINED
LIABILITIES"), other than the Indebtedness, obligations,
Contracts or liabilities listed on Schedule 1(c)(ii)(b) (the
"ASSUMED LIABILITIES").
(d) Notwithstanding anything in this Agreement to the contrary,
Buyer will not assume and will be deemed not to have assumed
and be responsible for, and Seller will be solely and
exclusively liable and responsible for, any debt, obligations
or liabilities of Seller with respect to (i) any federal,
state, local or foreign taxes relating to tax periods (or any
portion thereof) ending on or prior to the date hereof, or (ii)
any tax liability of Seller arising out of or in connection
with the consummation or performance of the transactions
contemplated by this Agreement (the "RETAINED TAXES").
(e) For purposes of this Agreement,
i. "CONTRACT" means any contract, license, lease (including
any lease for real property), commitment, purchase order or
any other agreement, whether written or oral, relating to
the Business;
ii. "GAAP" means U.S. generally accepted accounting principles,
consistently applied.
iii. "INTELLECTUAL PROPERTY RIGHT" means any trademark, service
▇▇▇▇, trade name, invention, patent, trade secret,
copyright, know-how, proprietary computer software,
computer databases, Internet addresses or domain names
(including any registrations or applications for
registration or renewal of any of the foregoing) or any
other similar type of proprietary intellectual property
right, in each case which is used or held for use or
otherwise necessary in connection with the conduct of the
Business;
iv. "PERMIT" means any governmental or regulatory license,
authorization permit, franchise consent or approval which
is obtained in connection with the conduct of the Business;
v. "PERSON" means an individual, corporation, partnership,
limited liability company, association, trust or other
entity or organization, including a government or political
subdivision or an agency or instrumentality thereof;
vi. "TAXES" means (A) any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits,
license, withholding on amounts paid to or by Seller,
payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental or windfall profit tax,
custom, duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with
any interest, penalty, addition to tax or additional amount
2
imposed by any Taxing Authority in connection with the
conduct of the Business, (B) any liability of Seller for
the payment of any amounts of any of the foregoing types as
a result of being a member of an affiliated, consolidated,
combined or unitary group, or being a party to any
agreement or arrangement whereby liability of Seller for
payment of such amounts was determined or taken into
account with reference to the liability of any other
Person, and (C) any liability of Seller for the payment of
any amounts as a result of being a party to any tax-sharing
agreements in connection with the conduct of the Business
or with respect to the payment of any amounts of any of the
foregoing types as a result of any express or implied
obligation to indemnify any other Person; and
vii. "TAXING AUTHORITY" means any Governmental Authority (as
defined below) responsible for the imposition of any Tax.
2. PRICE AND PAYMENT.
(a) In consideration for the Transfer by Seller to Buyer of the
Intangible Assets in accordance with this Agreement, Buyer
will deliver to Seller consideration in an aggregate amount of
$25,000.00 (the "CONSIDERATION") to be held by Lexington
▇▇▇▇▇▇ Technologies on behalf of itself, which will consist of
the following:
i. $25,000.00, payable by 1,200,000 shares of Buyer's Common
Stock priced at $0.02 per share.
(b) As soon as reasonably practicable after the date of this
Agreement, Seller will deliver to Buyer the following: (i)
such duly executed, good and sufficient instruments of
conveyance, transfer and assignment, other than a ▇▇▇▇ of
sale, as will be reasonably required by Buyer and its counsel
and as will be necessary to convey to Buyer all of Seller's
rights, title and interests in and to the Intangible Assets,
if any; and (ii) all other documents, instruments and writings
necessary to consummate the transaction contemplated hereby or
expressly required to be delivered by Seller in accordance
with this Agreement.
(c) As a condition to Seller entering into this Agreement, Buyer
will deliver to Seller a copy of the documents, instruments
and writings necessary to consummate the transactions
contemplated hereby or expressly required to be delivered by
Buyer in accordance with this Agreement.
(d) For purposes of determining Buyer's Tax basis in the
Intangible Assets and gain or loss recognized by Seller with
respect to the sale of the Intangible Assets to Buyer, Buyer
and Seller will allocate the Consideration among the
Intangible Assets according to the fair market.
3. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Buyer as follows:
(a) Seller is an independent contractor operating in Mexico with
significant business relationships in the United States.
3
(b) Seller has all requisite power and authority to execute
and deliver this Agreement and those other agreements and
instruments required to be executed or delivered under this
Agreement, and to perform its obligations hereunder, and this
Agreement has been duly executed and delivered by each Seller
and constitutes, assuming due authorization, execution and
delivery of this Agreement by Buyer, and any other agreements
to be executed and delivered by Buyer pursuant hereto, when
fully executed and delivered, will constitute, a valid and
binding obligation of each Seller enforceable against it in
accordance with their terms, except to the extent that
enforcement thereof may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
and similar laws now or hereafter affecting creditors' rights
generally and general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or
in equity).
(c) Neither the execution and delivery by Seller of this Agreement
nor the performance by Seller of its obligations hereunder
will (i) conflict with or result in any breach of any
provision of the Certificate of Incorporation or Bylaws of any
corporation or Seller; (ii) result in (with or without the
giving of notice or lapse of time or both) a material
violation or breach of, or constitute a default or give rise
to any right of termination, cancellation or acceleration
under any of the terms, conditions or provisions of any
Indebtedness, license, lease or Contract or similar instrument
or obligation to which any Seller, or by which any of the
Intangible Assets, may be bound; or (iii) violate any order,
injunction, decree, statute, rule or regulation of any
federal, state, local or foreign governmental entity or
municipality or subdivision thereof or court, tribunal,
commission, board, bureau, agency or legislative, executive,
governmental or regulatory authority or agency (a
"GOVERNMENTAL AUTHORITY") to which any Seller or the Business
is subject.
(d) Seller owns the Intangible Assets and has and will deliver to
Buyer, good, valid and marketable title to, all of the
Intangible Assets, in each case, free and clear of all
mortgages, pledges, security interests, liens (including tax
liens), charges, options or other encumbrances of any nature
whatsoever (collectively, "LIENS").
4. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and
warrants to as follows:
(a) Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the state of Colorado.
(b) Buyer has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered
by Buyer and constitutes, assuming due authorization,
execution and delivery of this Agreement by Seller and any
other agreements to be executed by Seller pursuant hereto,
when fully executed and delivered, will constitute a valid and
4
binding obligation of Buyer, enforceable against Buyer in
accordance with their terms, except to the extent that
enforcement thereof may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
and similar laws now or hereafter affecting the enforcement of
creditors' rights generally and general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity).
(c) Neither the execution and delivery by Buyer of this nor the
performance by Buyer of its obligations hereunder will (i)
conflict with or result in any breach of any provision of the
Certificate of Incorporation or Bylaws of Buyer or (ii)
violate any order, injunction, decree, statute, rule or
regulation of any Governmental Authority to which Buyer is
subject.
5. INDEMNIFICATION.
(a) The representations and warranties of the parties contained
herein or in any signed writing delivered in connection with
this Agreement will survive for a period of 3 years after the
execution of this Agreement.
(b) Seller will indemnify Buyer and its employees, officers,
directors, agents and representatives, in their capacities as
such, and the successors, heirs and personal representatives
of any of them (collectively, the "BUYER INDEMNIFIED PARTIES")
against and hold them harmless from any and all damage, loss,
liability and expense (including, without limitation,
reasonable expenses of investigation and attorneys' fees and
expenses) (collectively "LOSS") incurred or suffered by any
Buyer Indemnified Party arising out of or relating to (i) any
breach of any representation, warranty, covenant or other
agreement of Seller contained herein, (ii) any Retained
Liabilities, (iii) any Retained Taxes or (iv) any alleged,
claimed or established negligence or breach of Seller (or any
of its affiliates or predecessors or any of the respective
officers, directors, agents, consultants or employees of
Seller or any of its affiliates or predecessors) with respect
to the performance by such parties of services, Contracts,
agreements, policies or similar undertakings on or prior to
the execution of this Agreement.
(c) Buyer will indemnify Seller and its employees, officers,
directors, agents and representatives, in their respective
capacities as such, and the successors, heirs and personal
representatives of any of them (collectively, the "SELLER
INDEMNIFIED PARTIES") against and hold them harmless from any
and all Loss incurred or suffered by any Seller Indemnified
Party arising out of or relating to (i) any breach of any
representation, warranty, covenant or other agreement of Buyer
contained herein or (ii) any Assumed Liabilities.
(d) A Person seeking indemnification pursuant to Sections 5(b) and
5(c) (an "INDEMNIFIED PARTY") with respect to a claim, action
or proceeding by a Person who is not a Buyer Indemnified Party
or a Seller Indemnified Party will give prompt written notice
5
to the party from whom such indemnification is sought (the
"INDEMNIFYING PARTY") of the assertion of any claim, or the
commencement of any action or proceeding, in respect of which
indemnity may be sought hereunder; provided that the failure
to give such notice will not affect the Indemnified Party's
rights to indemnification hereunder, unless such failure would
prejudice in any material respect the Indemnifying Party's
ability to defend such claim, action or proceeding. The
Indemnifying Party will have the right to assume the defense
of any such action or proceeding at its expense, provided that
(x) in the reasonable judgment of the Indemnified Party, the
Indemnifying Party has adequate resources to undertake such
defense and satisfy any indemnifiable Loss arising from such
action or proceeding and (y) the selection of counsel is
approved by the Indemnified Party (which approval will not be
unreasonably withheld or delayed). If the Indemnified Party so
determines that the Indemnifying Party does not have adequate
resources, or the Indemnifying Party does not elect to assume
the defense of any such action or proceeding, or fails to make
such an election within 20 days after it receives such notice
pursuant to the first sentence of this Section 5(d), the
Indemnified Party may assume such defense at the expense of
the Indemnifying Party. The Indemnified Party will have the
right to participate in (but not control) the defense of an
action or proceeding defended by the Indemnifying Party
hereunder and to retain its own counsel in connection with
such action or proceeding, but the fees and expenses of such
counsel will be at the Indemnified Party's expense unless (i)
the Indemnifying Party and the Indemnified Party have mutually
agreed in writing to the retention of such counsel or (ii) the
named parties in any such action or proceeding (including
impleaded parties) include the Indemnifying Party and the
Indemnified Party, and representation of the Indemnifying
Party and the Indemnified Party by the same counsel would
create a conflict, provided that, unless otherwise agreed by
the Indemnifying Party, if the Indemnifying Party is obligated
to pay the fees and expenses of such counsel, the Indemnifying
Party will be obligated to pay only the fees and expenses
associated with one attorney or law firm, as applicable, for
the Indemnified Party. An Indemnifying Party will not be
liable under Sections 5(b) or 5(c) for any settlement effected
without its written consent, which consent will not be
unreasonably withheld or delayed, of any claim, action or
proceeding in respect of which indemnity may be sought
hereunder.
6. FURTHER ASSURANCES BY SELLER. Seller will execute such additional
documents as Buyer may reasonably request to vest or confirm the
vesting in Buyer of all of the Intangible Assets and title
thereto.
7. AMENDMENT. This Agreement may be amended only by an instrument in
writing signed by Seller and Buyer.
8. FEES AND EXPENSES. All fees and expenses incurred in connection
with this Agreement and the transactions contemplated by this will
be paid by the party incurring such fees or expenses, whether or
not the transactions contemplated hereby are consummated.
6
9. SELLER'S KNOWLEDGE. All references to the "Seller's knowledge" or
to words of similar import will be deemed to be references to the
actual knowledge of one or more of the officers or directors of
Seller.
10. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Colorado, without regard
to its conflict of law rules, principles or provisions of such
state or of any other state. The sole jurisdiction and venue for
any litigation arising out of this Agreement will be an
appropriate federal or district court located in the State of
Colorado, and each party hereby consents to such jurisdiction.
Each party agrees not to raise and waives any objection to or
defense based on the venue of any such court or forum non
conveniens.
11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR
TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12. SECTION HEADINGS. Section headings are for convenient reference
only and will not affect the meaning or have any bearing on the
interpretation of any provision of this Agreement.
13. ENTIRE AGREEMENT. This Agreement, together with any other
documents referred to herein or delivered pursuant hereto that
form a part hereof, constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both
written and oral, between the parties or either of them with
respect to the subject matte hereof.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of
which will constitute one and the same instrument.
15. EFFECTIVE TIME. Notwithstanding anything to the contrary contained
in this Agreement, this Agreement will be deemed to be effective
for all accounting, tax and other purposes as of 12:00 a.m. on
April 20, 2001 (such date and time, the "EFFECTIVE TIME").
All notices and writings, required or given pursuant to this
Agreement, shall be signed by the party relying thereon to be sent by
prepaid postal mail rates or by facsimile transmission, to a location
or number set forth below:
Lexington ▇▇▇▇▇▇ Technologies, Inc. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
----------------------------------- ------------------------------------
A) Lexington ▇▇▇▇▇▇ Technologies, Inc. B) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇. ▇▇▇▇ Managua ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇.▇., Mexico
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: Email:
7
In witness whereof the parties have set their hands and seals as of
the date first written above.
Lexington ▇▇▇▇▇▇ Technologies, Inc. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Signature:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Signature: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
--------------------- -----------------------------------
Title: Chief Executive Officer Title: Seller
8
SCHEDULE 1(c)(i)
EXCLUDED ASSETS
1. Accounts receivable (including billed and unbilled) of Seller
from the conduct of the Business.
SCHEDULE 1(c)(ii)(a)
RETAINED LIABILITIES
1. Accounts payable and accrued expenses arising prior to the
Effective Time.
SCHEDULE 1(c)(ii)(b)
ASSUMED LIABILITIES
1. All liabilities arising at or after the Effective Time.
9
