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EXHIBIT 10.38
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
This Acquisition Agreement and Closing Memorandum ("the Agreement") is entered
into effective by and between Basic Technologies, Inc. ("Basic"), a Colorado
corporation, and Cyber City Honolulu, Inc. ("Cyber City"), a Hawaiian
corporation.
Effective this date, Basic and Cyber City have consummated and closed a business
combination on the following terms and under the following warranties:
1. The transactions and provisions of the Agreement have been duly authorized by
the respective boards of directors of Basic and Cyber City, and by the
shareholders of Cyber City, in compliance with the respective By Laws of each
entity. Cyber City will provide Basic with copies of executed resolutions and
the shareholder voting lists. A copy of the letter of intent executed by Basic
and by Cyber City is attached hereto as "Exhibit A".
2. The undersigned officers and representatives of the respective corporations
certify through their signatures that they have been duly authorized by their
respective boards of directors to execute the Agreement and related documents on
behalf of their respective corporations.
3. Basic and the undersigned representatives of Basic jointly and severally
represent and warrant that all documents and information furnished to Cyber City
in connection with the transactions set forth herein are true and accurate to
the best of their knowledge.
4. Cyber City and the undersigned representatives of Cyber City jointly and
severally represent and warrant that all documents and information furnished to
Basic in connection with the transactions set forth herein are true and correct
to the best of their knowledge.
5. In all parts of the Agreement, the word "Basic" can be construed as also
referring to any legal entity which is a wholly-owned subsidiary of Basic, and
which Basic elects to use as a vehicle for holding any assets and liabilities
which are transferred from Cyber City. Basic will provide the name of such
entity for execution of transfer and documents other than the Agreement.
6. For the consideration set forth in other provisions of the Agreement, Basic
will acquire all of the assets of Cyber City, both tangible and intangible,
known and unknown, specific or contingent, wherever located. Attached "Exhibit
B" to this Agreement lists and describes those physical assets which are known,
and which are being transferred. This exhibit is also the exhibit referred to in
the attached ▇▇▇▇ of Sale, which is the document actually transferring title to
Basic. Attached "Exhibit C" lists and describes all equipment in which Cyber
City has an interest by virtue of a lease agreement, and which interests are
being transferred, subject to the assumption of the related lease obligations.
Transfer of title will be by both the ▇▇▇▇ of Sale and the Assignment form.
Attached "Exhibit D" to this Agreement lists and describes those intangible
assets which are known, and which are being transferred. The attached "Exhibit
E" lists and describes those
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financial and other assets which are being transferred. These exhibits are also
the exhibits referred to in the attached Assignment form, which is the document
actually transferring ownership to Basic. Attached "Exhibit F" lists and
describes those assets which are used by and/or located at a Cyber City
facility, and which are not being transferred to Basic.
7. As partial consideration for the transfer, Basic will assume certain
liabilities, or take assets subject to liabilities, of Cyber City. Attached
"Exhibit G" lists and describes those notes payable or other liabilities which
are secured by Cyber City assets, and which will be assumed. Attached "Exhibit
H" lists and describes those trade or unsecured notes or accounts payable of
Cyber City which Basic will assume. Attached "Exhibit I" lists and describes
those credit card or other payables which are not in Cyber City's name, but
which have been incurred on behalf of and benefited Cyber City, and which Basic
will assume. Attached "Exhibit C" lists and describes those equipment leases
referred to previously, which are being assumed by Basic.
8. Basic will also take responsibility for the existing property leases, which
are described in summary in the attached "Exhibit J".
9. The attached "Exhibit K" lists and describes all liabilities and obligations
of Cyber City for which the officers, directors or shareholders have made
personal guaranties. Basic will attempt to secure the release of these personal
obligations, but cannot guarantee that it will be able to do so.
10. Upon execution of the agreement, Basic will cause to be issued to Cyber City
through its transfer agent authorized but previously unissued shares of voting
common stock, the number of which will be determined by the following formula:
a. Basic shares will be valued at $ 0.67 per share; and
b. The value of the transferred Cyber City assets, net of the balances of
liabilities assumed or taken subject to, is based upon a value of $
1.75 per share of outstanding Cyber City common stock. At the time of
execution of the letter of intent, Cyber City represents that there
were 289,000 shares issued and outstanding. Prior to closing, Cyber
City will provide Basic with a current list of shareholders, including
addresses and numbers of shares held. For purposes of the final
calculations of values and the determination of the number of Basic
shares to be issued, the shareholder transfer ledger of Cyber City
shall be closed effective the day prior to the closing date.
c. The date of Closing shall be 31 December 1999. Upon this date, the
Chief Executive Officer of Cyber City Honolulu, Inc. shall deliver the
▇▇▇▇ of Sale to the Chief Executive Officer of Basic Technologies,
Inc. Upon delivery of the ▇▇▇▇ of Sale, the Chief Executive Officer of
Basic Technologies, Inc. shall complete the calculations called for
above.
11. After receipt of the shares of Basic, the directors of Cyber City will
provide to Basic and its transfer agent a list of shareholders and the number of
shares of Basic which are to be assigned from Cyber City to such shareholders.
Then in order to complete the tax-free transactions, the board of directors will
adopt a plan of liquidation of Cyber City, executing it and filing all necessary
state and federal forms once it is deemed to have distributed its sole asset of
Basic stock to its shareholders.
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12. After closing Basic will provide a seat on its board of directors to a
representative of Cyber City's shareholders, to serve until the next annual
meeting of shareholders, or until his replacement is duly appointed. Seats on
the board of directors of Basic's new subsidiary will, in a number to be
determined, be provided to certain of Cyber City's officers who remain with the
company.
13. Each officer or key employee of Cyber City that remains with the new company
will execute a restricted employment agreement, which will contain non-compete
and non-disclosure clauses. These employment agreements, or addendums thereto,
will also address matters of performance evaluation, etc.
14. Each party hereto acknowledges that it or its representatives have completed
a due diligence process to their satisfaction.
15. Both Basic and Cyber City execute this agreement based upon the reliance
that the transactions will be considered to be a tax-free reorganization to both
corporations and to the shareholders of both corporations, under Internal
Revenue Code Sections 354, 361 and 368.
16. Cyber City warrants that it has no knowledge of any pending or potential
lawsuits or legal actions of any kind, other than what it has disclosed to
Basic. The discovery of any undisclosed claims or legal action of any kind can
void this contract at the option of Basic.
17. Between the date of execution of the Agreement and the execution of transfer
documents, the officers of Cyber City will not allow Cyber City to incur
additional debt, other than in the normal course of business, without the
approval of Basic.
18. Basic is not providing any hold-harmless or indemnification releases to any
officer, director or shareholder of Cyber City for any actions or omissions in
the course of their duties performed for Cyber City that may ultimately be
determined to be negligence or a breach of fiduciary duties to shareholders, or
negligence in regards to duties owed to state or federal agencies on behalf of
Cyber City.
19. Since Cyber City is an S Corporation for both federal and Hawaiian income
tax purposes, any changes to the tax returns, records and tax liabilities for
periods prior to the execution of the Agreement and implementing documents will
be the sole responsibilities of the officers and shareholders of Cyber City.
Basic is providing no indemnification of income tax liabilities.
20. In the event of any dispute under the Agreement, the parties agree that
resolution shall be made through arbitration in accordance with the rules of the
American Arbitration Association.
21. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereto, and can be amended only in writing.
22. This Agreement shall be interpreted and applied under the laws of the State
of Hawaii, which shall be the venue for any legal proceedings between the
parties.
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23. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, legal representatives, successors and
assigns.
Dated: Tuesday, November 30, 1999.
CYBER CITY HONOLULU, INC. BASIC TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ B ▇▇▇▇▇▇
------------------------- ---------------------------
Director Chief Executive Officer
Chairman of The Board
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Director By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Chief Financial Officer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Director
--------------------------
Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ Secretary
--------------------------- Director
Director
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Addresses
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 63,240 ▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ 31,900 ▇▇▇▇ ▇'▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ 1,000 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ 3,667 ▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ 500 ▇▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ 500 ▇▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 22,000 ▇▇▇▇ ▇'▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1,500 ▇▇-▇▇▇▇ ▇▇▇▇▇▇'▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 1,500 ▇▇-▇▇▇▇ ▇▇'▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 500 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ 42,566 ▇▇▇▇ ▇'▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 12,666 ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ 10,000 ▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 6,666 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ 4,000 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ 13,000 ▇▇-▇▇▇ ▇▇▇'▇▇▇'▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,000 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 200 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇. ▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ 2,500 ▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 1,667 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ 27,700 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,000 ▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ #▇-▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,000 ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 200 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇ 200 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 200 ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 200 ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 200 ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 200 ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 1,333 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,000 ▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 14,858 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 8,000 ▇▇-▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 8,500 ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ 2,500 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 13,485 ▇▇ ▇▇▇▇'▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,750 ▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ #▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 23,500 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ #▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 1,250 ▇▇▇ ▇▇ ▇/▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 7,450 ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇ FPO AP 09501
▇▇▇▇▇ ▇▇▇ Dillinger ▇▇▇ ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ III 500 7532 Puu ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 1,750 ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 1,250 ▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ 1,250 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ 1,500 USS KAMEHAMEHA (SSN-642) FPO AP 96670-2063
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 500 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ 1,251 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1,500 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Irving and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 500 ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 1,250 ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 1,250 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 5,500 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
J. ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 500 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 200
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 200
▇▇▇▇▇▇▇ ▇▇▇▇▇ 200
▇▇▇▇▇ ▇▇▇▇▇ 1,500
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1,250 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 1,000 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇. #▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,500 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,500 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,500 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Chief Information Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇ Director
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ Director of Operations
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Honolulu Site Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Chief Executive Officer
▇▇▇▇▇▇ ▇▇▇▇▇▇ Still needs shares issues
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Chief Financial Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Maui Site Manager
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ###-##-####
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ III
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ###-##-#### ▇▇▇▇▇▇▇ ###-##-####
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ###-##-#### ▇▇▇▇▇▇▇▇ ###-##-####
Irving and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Irving ###-##-#### Virginia ###-##-####
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ###-##-####
▇▇▇▇▇ ▇▇▇▇▇ ###-##-####
▇. ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ###-##-#### ▇▇▇▇▇▇▇▇▇ ###-##-####
J. ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ###-##-#### ▇▇▇▇ - Joint owner with grandson
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Billing Clerk
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Tech Support
▇▇▇▇▇▇▇ ▇▇▇▇▇ Tech Support Maui
▇▇▇▇▇ ▇▇▇▇▇ Honolulu Site Manager
▇▇▇▇▇▇ ▇▇▇▇ Tech Support
▇▇▇▇▇▇ ▇▇▇▇▇ Tech Support
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ###-##-####
▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ###-##-#### ▇▇▇▇ ###-##-####
▇▇▇▇ ▇▇▇▇▇▇▇▇ ###-##-####
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ###-##-#### ▇▇▇▇▇ ###-##-####
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ###-##-####
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Total Number Outstanding Shares 376,199
Total Number Basic Shares 978,117
6
Final Answer on Shares
Subject: Final Answer on Shares
Date: Tue, 09 Jan 2001 18:46:51-1000 From: "▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇"
(mbacon~▇▇▇▇▇▇.▇▇▇)
Organization: Cyber City Honolulu, Inc.
To: ▇▇▇▇▇ ▇▇▇▇▇▇ (bw(@▇▇▇▇▇▇▇▇▇.▇▇▇)
Please add 429 shares of Cyber City Honolulu, Inc. stock to the name ▇▇▇▇
▇▇▇▇▇▇▇▇▇. This is the final change. Audit is complete.
▇▇▇▇▇▇▇
7
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "B PAGE 1"
Physical Assets To Be Transferred to Basic Technologies, Inc.
DESCRIPTION MODEL / SERIAL NUMBERS LOCATION
----------- ---------------------- --------
Computer - Pentium 150 with Kailua Honolulu
64Mb Ram, 21" Monitor, Altec
Lansing Speakers with Subwoofer,
Keyboard & Mouse
Computer - Pentium 200 w/64Mb Kaneohe Honolulu
Ram, 17" Monitor, Keyboard & Mouse
Computer - Pentium 166 w/128Mb Ram, Aiea ▇▇▇▇▇▇▇▇
▇▇" monitor, 100Mb Zip drive, Keyboard
& Mouse
Computer - Pentium 166 w/64Mb Ram, Waikiki Honolulu
14" monitor, Keyboard & Mouse
Computer - Pentium 166 w/64Mb Ram, Ewa Honolulu
17" Monitor, 100Mb Zip drive,
Keyboard and Mouse
Computer - Pentium 200 w/64Mb Ram, Windward Honolulu
14" Monitor, Keyboard and Mouse
Typewriter Brother GX-6750 Honolulu
Typewriter Silver ▇▇▇▇ EZ-20 Honolulu
2 Backup Power Supplies APC, Back-Ups 600 Honolulu
1 Backup Power Supply APC Personal Powercell Honolulu
1 Backup Power Supply APC Smart Ups 1400 Honolulu
2 Stereos 1 Portable, 1 Receiver unit Honolulu
8
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "B PAGE 2"
Physical Assets To Be Transferred to Basic Technologies, Inc.
DESCRIPTION MODEL / SERIAL NUMBERS LOCATION
----------- ---------------------- --------
Computer, Macintosh w/ Standalone Honolulu
Keyboard and Mouse
1 Unix dual pentium pro server Southshore Honolulu
with CD Rom tower
1 Unix Server Pentium 233 Honolulu Honolulu
1 Unix Server W/removable hard New Honolulu ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Zip Drive and
Keyboard
1 Unix Server W/removable hard Northshore Honolulu
drive and Keyboard.
1 Unix Server W/Keyboard Shells Honolulu
6 14" monitors Various Makes ▇▇▇▇▇▇▇▇
▇ ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇ Cisco Router Model 2600 Honolulu
1 Television SR 2000 Series Honolulu
1 Laser Printer Hewlett Packard 5L Honolulu
1 Dot Matrix Printer Panasonic KX-P1150 Honolulu
1 Dot Matrix Printer Epson LX-810 Honolulu
1 fish tank w/filter and pump Honolulu
1 Microwave Goldstar Honolulu
1 Coffee Maker Mr. Coffee Accel Honolulu
9
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "B PAGE 3"
Physical Assets To Be Transferred to Basic Technologies, Inc.
DESCRIPTION MODEL / SERIAL NUMBERS LOCATION
----------- ---------------------- ---------
1 answering machine General Electric Honolulu
1 Pencil Sharpener Panasonic Honolulu
1 Fax Machine Brother Intelifax 625 Honolulu
1 Label Printer ▇▇▇▇▇ Corona PC Label Printer 1.0 Honolulu
1 HP Scanjet Scanjet ADF Honolulu
1 HP Color Printer Deskjet 820Cse Honolulu
3 desks all stand alone Honolulu
assorted computer parts/tools Honolulu
4 Office chairs reclining w/wheels Honolulu
4 Office Chairs standard Honolulu
2 Stools Honolulu
1 Wall attached organizing unit incl 2 cabinets & 1 table Honolulu
4 filing cabinets 2 drawer Honolulu
1 filing cabinet 4 drawer Honolulu
1 refrigerator small absocold Honolulu
4 Chairs Grey/Black Maui
1 AST workstation no internal parts Workstation 1 Maui
10
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "B PAGE 4"
Physical Assets To Be Transferred to Basic Technologies, Inc.
1 AST Workstation Pentium 133 Workstation 2 Maui
32Mb Ram, 1.2Gb Hard Drive
1 Cisco Router Model 2501 Maui
1 CSU/DSU Adtran Maui
1 Cyrix 133MHz Server 32Mb EDO Ram, Falcon Maui
10Mb Ethernet Card, Matrox video card
1 External 4GB Hard Drive Wide Ultra-SCSI-3 Maui
1 External 4GB Tape Drive w/ DAT SCSI Maui
5 DAT tapes
1 Mini Refrigerator General Electric Maui
1 desktop workstation Workstation 3 Maui
1 inoperative workstation Workstation 4 Maui
1 12 port Half-Duplex Hub DLINK Maui
11
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "C"
Leased Equipment To Be Transferred to Basic Technologies, Inc.
DESCRIPTION MODEL / SERIAL NUMBERS LOCATION LESSOR / LEASE NUMBER
----------- ---------------------- -------- ---------------------
1 Ascend Box 4000 Series/728104704 Honolulu
1 Ascend Box 4000 Series/719100107 Honolulu
1 Ascend Box 4000 Series/725106473 Honolulu
1 Ascend Box 4000 Series/725106082 Honolulu
1 Postage Meter Pitney ▇▇▇▇▇/09082005 Honolulu
(includes 1 scale)
1 ▇▇▇▇▇▇▇▇▇▇ PM-2E Maui
1 ▇▇▇▇▇▇▇▇▇▇ PM-2E Maui
1 ▇▇▇▇▇▇▇▇▇▇ PM-3 Maui
1 ▇▇▇▇▇▇▇▇▇▇ PM-3 Maui
1 Microcomm 33.6 Maui
modem pool
12
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "D"
Intangible Assets To Be Transferred to Basic Technologies, Inc.
DESCRIPTION
CUSTOMER USER BASE (APPROX 3500) GENERATING $410,654.28 IN 1999
CCHONO BILLING PROGRAM (A CUSTOM DESIGNED PROGRAM FOR USE BY AN ISP)
ALL INTELLECTUAL MATERIALS AND WEB WORK PERFORMED TO DATE
ALL TRADE NAMES REGISTERED OR USED, DIRECTLY OR INDIRECTLY, BY CYBER CITY
HONOLULU, INC., INCLUDING BUT NOT LIMITED TO "CYBER CITY HONOLULU", AND "CYBER
CITY MAUI."
13
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "E"
Financial and Other Assets To Be Transferred to Basic Technologies, Inc.
DESCRIPTION
-----------
BUSINESS CHECKING ACCOUNTS:
MAIN ACCOUNT BANK OF HAWAII ACCOUNT # 0027-012612 BALANCE $50,904.99
HONO OFFICE ACCOUNT BANK OF HAWAII ACCOUNT # 0080-244452 BALANCE $ 115.05
MAUI OFFICE ACCOUNT BANK OF HAWAII ACCOUNT # 0080-244436 BALANCE $ 471.45
14
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "F"
Assets Not To Be Transferred to Basic Technologies, Inc.
DESCRIPTION LOCATION
----------- ---------
Cyber City Honolulu Tax Account Bank of Hawaii Business Checking Acct #
0080-244444
BALANCE $ 500.00
15
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "G"
Secured Notes and Other Liabilities To Be
Assumed By or Taken Subject To By Basic Technologies, Inc.
CREDITOR ACCOUNT NUMBER BALANCE SECURITY DESCRIPTION
--------- -------------- ------- --------------------
AC Financial Creditor $ 25,500.00 Outstanding T-Link Owed
▇. ▇▇▇▇ Accountant $ 800.00 Owed for 1998 Tax Prep
AMEX LOC (plus Interest) Credit Line $ 4,500.00 ▇. ▇▇▇▇▇ Personal Guarantor
Ascend Leases Combined $ 36,708.00 Est Balance
Bank Vest Lease $ 14,040.00 Est Balance remaining
Hawaiian Tel ▇▇▇-▇▇▇-▇▇▇▇ $ 32,394.97 As of 1Dec99, Pers Guar
GTE Hawaiian Tel H1M EQN 5094 $ 4,060.32 As of 1Dec99, Pers Guar
GTE Hawaiian Tel Creditor * Outstanding T-Link Owed
HealthComp24 Vendor $ 705.00 Workers Comp Ins,Est 2000
IRS ▇▇-▇▇▇▇▇▇▇ $ 492.25 Company guaranteed
IRS ▇▇-▇▇▇▇▇▇▇ $ 6,012.00 4th Qtr Employment Taxes
IRS ▇▇-▇▇▇▇▇▇▇ $ 1,500.00 Est. 1998 940 Liability
IRS ▇▇-▇▇▇▇▇▇▇ $ 1,500.00 Est. 1999 940 Liability
▇. ▇▇▇▇▇ Corp Officer $ 15,400.00 Owed for 1998*
▇. ▇▇▇▇▇ Corp Officer $ 16,400.00 Owed for 1999*
▇. ▇▇▇▇▇ Corp Officer $ 6,000.00 Owed for Loan to Company
▇▇▇▇ ▇▇▇▇▇▇ Loan $ 35,250.00 $700 monthly - TLink Agmt
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ Loan $ 7,500.00 $1,000 monthly - TLink Agmt.
MNBA (Plus Interest) Credit Card $ 10,825.00 ▇. ▇▇▇▇▇ Personal Guarantor
PIXI Creditor * Residual True Link Debt Now
Prime Lease Lease $ 9,360.00 Estimated Balance remaining
State Of Hawaii Creditor * Excise Tax, Est Outstanding
State Of Hawaii Creditor $ 5,226.00 Empl Taxes Owed, 1998
State Of Hawaii Creditor $ 1,000.00 Empl Taxes Owed, 1999
▇. ▇▇▇▇▇▇▇▇ Corp Officer $ 3,400.00 Owed for 1997
▇. ▇▇▇▇▇▇▇▇ Corp Officer $ 1,372.90 Reimbursement for Equip.
▇. ▇▇▇▇▇ Loan $ 5,000.00 Owed for 1997 Loan Guar
*TOTAL OUTSTANDING DEBT
NOTE - The above is estimated outstanding liabilities based on current invoices,
outstanding agreements, and/or estimates for balances outstanding where an exact
invoice or balance is not currently available (in general, this applies to
taxes, and credit card amounts where interest and/or late fees and penalty fees
may apply). Some amounts may differ due to interest and penalties assigned by
Creditor, Tax Agency, and/or Vendor. Some amounts may differ as a result of
residuals required to buy equipment currently under lease at the end of the
leasing period. All tax amounts shown are estimates and do not reflect any
interest or penalties that may be assessed.
* The amounts due are not determinable at this time. BASIC acknowledges
sufficient disclosure of this exhibit.
[INITIALS]
16
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "H"
Trade and Unsecured Notes and Accounts Payable
To Be Assumed by Basic Technologies, Inc.
CREDITOR ACCOUNT / INVOICE NUMBER ACCOUNT BALANCE
-------- ------------------------ ---------------
None
17
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "I"
Officer / Director / Stockholder Payables
To Be Assumed By Basic Technologies, Inc.
CREDITOR NAME ON ACCOUNT ACCOUNT NUMBER BALANCE
-------- --------------- -------------- -------
Contained in Exhibit G
18
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "J"
Property Leases To Be Assumed or
Taken Subject To By Basic Technologies, Inc.
LOCATION ADDRESS LESSOR NAME LEASE EXPIRATION DATE
---------------- ----------- ---------------------
LEASE AMOUNTS CONTAINED IN EXHIBIT G.
PHYSICAL LEASE AGREEMENTS SHALL BE FORWARDED TO LEWISVILLE
19
[INITIALS]
ACQUISITION AGREEMENT
AND
CLOSING MEMORANDUM
EXHIBIT "K"
List of Personal Guaranties of Officer /
Director / Stockholders To Be Assumed By Basic Technologies, Inc.
DESCRIPTION OF OBLIGATION CREDITOR NAME ON GUARANTY
------------------------- -------- ----------------
