EX-2
ACQUISITION AGREEMENT
This Acquisition Agreement (the "Agreement") is entered into this
12th day of July 2002 by and between the Shareholders of Secure For
Sure, Inc., a Nevada corporation, herein acting and represented by
Xxxxxx Xxxxxxx, its President, duly authorized, hereinafter referred
to collectively as the "SELLER" and Diamond Xxxxx Production, Inc., a
Nevada corporation, hereinafter referred to as the "PURCHASER".
WHEREAS the SELLER is the owner of One Thousand (1,000) shares in the
common stock of Secure For Sure, Inc. ("COMPANY"), which SHARES
represent all of the issued and outstanding shares of the COMPANY; and
WHEREAS the SELLER wishes to sell and the PURCHASER wishes to
purchase the SHARES on the terms and conditions hereinafter set out.
THE PARTIES THEREFORE AGREE AS FOLLOWS:
SECTION 1 - SALE OF SHARES. Subject to the terms and conditions of
this Agreement, at the Closing SELLER agrees to sell, assign and
transfer and PURCHASER agrees to purchase and acquire, all of the
issued and outstanding shares of the COMPANY Common Stock (the
"Subject Stock").
SECTION 2 - CLOSING. The closing of this transaction (the "Closing")
shall take place at the offices of Xxxxx X. Xxxx or such other place
and time as is mutually agreed to between the parties.
SECTION 3 - CONSIDERATION. The purchase price for the SHARES
("PURCHASE PRICE") to be paid by PURCHASER to SELLER, is as follows:
a. Five Thousand dollars ($5,000) in cash to be paid to SELLER at
the time of closing;
b. Ten Percent (10%) of the gross receipts of the adjusted sales of
the COMPANY for a period of five years to be paid to SELLER within 30
days of the last day of each month for receipts during the five-year
period; and
c. The ADEN stamps (more fully described on Schedule A attached as
an addendum hereto and incorporated herein by reference), which shall
be held in escrow for a period of one year from the date of closing,
and upon the expiration of one year delivered to the SELLER, provided
that:
i. The various proprietary software products of the COMPANY
are proven to be of merchantable quality, free of defects, and
fit for their intended use to PURCHASER's satisfaction, and
ii. The sales of the COMPANY's various software products exceed
$1,000,000 for the 12 months ending August 31, 2003.
SECTION 4 - REPRESENTATIONS AND WARRANTIES OF THE SELLER. The SELLER
hereby represents and warrants that:
a. The SHARES are owned by the SELLER by good and marketable title,
free and clear of any security interests or third party claims of any nature.
b. The SHARES represent one hundred percent (100 %) of the issued
and outstanding capital stock of the COMPANY and have been validly
allotted and issued as fully paid and non-assessable.
c. No person, other than the PURCHASER pursuant to this Agreement,
has any option, right or privilege to purchase of otherwise acquire
the SHARES or any other securities of the COMPANY and the SELLER is
not bound by or subject to any agreement, commitment or restriction
of any nature which would in any way prevent or restrict the sale of
the SHARES to the PURCHASER.
d. None of the SHARES are subject to any voting trust or voting agreement.
e. The certificate representing the SHARES is not subject to the
approval of any regulatory authority or any other person.
WITH RESPECT TO THE COMPANY
a. The COMPANY has been validly incorporated and validly exists
pursuant to the business laws of the state of Nevada and holds all
appropriate licenses and permits and has the corporate power to do
business in all the jurisdictions in which it presently carries on business.
b. The COMPANY is authorized to issue 1,000 shares of Common Stock,
of which 1,000 shares are issued and outstanding There are presently
no other issued and outstanding shares of the COMPANY other than the SHARES.
c. The COMPANY is not in violation of any by-law, ordinance, rule,
policy or regulation of any governing body, or provincial, federal or
municipal or private authority.
d. Neither the COMPANY nor the SELLER has received notice or advice
of or has knowledge of a violation of any zoning regulation,
ordinance or other law, order or regulation relating to the COMPANY's
operations or properties.
e. Neither the COMPANY nor the SELLER has received notice or advice
of or has knowledge of a violation of any environmental regulatory
law, order or regulation relating to the COMPANY'S operations or properties.
f. The COMPANY's only place of business is located at 000 Xxxxxx
Xxxxxxx Xxxxxxx, Xxxxxx XX 00000.
g. The minute books of the COMPANY contain copies of the articles
of incorporation or other documents and all amendments thereto issued
to the COMPANY, the complete by-laws of the COMPANY and the minutes
of all meetings and all resolutions of the directors and shareholders
of the COMPANY from the time of its incorporation to date.
h. The current corporate Officers and Directors of the COMPANY are:
Xxxxxx Xxxxxxx, Chief Executive Officer, President,
Treasurer, Director.
i. There are no open bank accounts standing in the name the COMPANY.
j. The COMPANY is not a member of any partnership, joint venture or
other form of business organization and owns no shares in any other
corporation.
k. The COMPANY has never been convicted of a criminal or any other
offence and is not presently involved in an investigation or
prosecution of any such offense.
WITH RESPECT TO THE ASSETS OF THE COMPANY
a. The COMPANY has the corporate power to own and owns all of its
assets by good and marketable title, free and clear of any and all
encumbrances, restrictions, and rights of first refusal, liens or
security interests of any nature whatsoever.
b. No person has any option, right or privilege to purchase,
acquire, lease of use any asset of the COMPANY, with the exception of
pending orders for the purchase of inventory in the normal course of business.
c. The COMPANY has no current obligations to sell, lease, mortgage,
pledged or otherwise encumbered or disposed of any of its assets or
properties, except in the ordinary course of its business.
d. The COMPANY has no current obligations to acquire, or lease or
agreed to lease, any additional assets.
e. All License agreements and leases including without limitation,
real estate and equipment leases, to which the COMPANY is a party are
listed on the attached Schedule "B," are in full force and effect and
vary in the degree of their status.
f. All buildings, machinery, equipment, vehicles and other assets
of the COMPANY are in an "as is" condition.
g. The COMPANY has no known claims against it since inception.
WITH RESPECT TO THE BUSINESS OF THE COMPANY
a. Since inception, the operations of the COMPANY have been carried
on in the normal course, and no contract, arrangement or transaction
has been made nor any liability or obligation incurred, nor release
or cancellation of any debt made, nor any commitment made since such
date, other than in the ordinary course of business, and no material
adverse change has occurred in the business, financial condition or
assets of the COMPANY, and neither the COMPANY nor the SELLER knows
of any facts which may materially adversely affect the business of
the COMPANY.
b. The COMPANY is not in breach of or in default under any
agreement, commitment or security instrument to which it is a party.
c. The COMPANY is not liable through insurance, guarantee or
otherwise for the obligations of any other person, firm or corporation.
d. The execution of this Agreement and its implementation do not
contravene the contesting documents or by-laws of the COMPANY nor any
agreement, commitment or security instrument to which the COMPANY is
a party or which affects it, and no consent of any party to any
indenture, mortgage or other agreement of the COMPANY is required for
the carrying out of this Agreement.
e. The COMPANY is not engaged in any controversy with its employees
and there is no claim, action, court proceeding, arbitration, labor
dispute, petition for union certification or administrative
proceeding pending or, to the knowledge of any SELLER, threatened
against or affecting the COMPANY.
f. There are no agreements, which restrict the activities of the
COMPANY, any of its employees, agents or representatives or the
COMPANY's right to compete with any person or disclose any information.
g. The COMPANY has kept its business organization intact and
insofar as possible, maintained its business relationship with
distributors, suppliers, customers and others, and has not done or
permitted to be done anything which might reasonably be expected to
diminish the business or goodwill of the COMPANY, and there has been
no notice of any possible termination of continuing relations with
any such persons, other than such as may be the consequence of their
knowledge of the transaction contemplated herein.
WITH RESPECT TO THE SELLER
a. No representation, warranty or covenant of or by the SELLER
contained in the Agreement or in any Schedule hereto, and no
statement or certificate furnished or to be furnished to the
PURCHASER or upon which the PURCHASER has relied contains not shall
contain any untrue or inaccurate statement of any fact or any
omission or anything which shall constitute it as materially
misleading to the PURCHASER. No fact is known or should be known to
the SELLER which should be disclosed to the PURCHASER which would
make any of the foregoing warranties, representations, covenants,
statements or certificates misleading or inaccurate or which, if
disclosed, would cause the PURCHASER, acting reasonable, not to
proceed with this transaction.
b. There is no legal impediment known to the SELLER to prevent or
delay the consummation by the SELLER of this transaction.
SECTION 5 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
PURCHASER hereby represents and warrants that:
a. It has been validly incorporated and validly exists under the
laws of the State of Nevada.
b. This Agreement has been duly authorized by all necessary
corporate action on the part of the PURCHASER and duly executed and
delivered by the PURCHASER, and this Agreement constitutes a valid
and binding obligation of the PURCHASER enforceable against it in
accordance with its terms.
c. The operations of the PURCHASER have been carried on in the
normal course, and no material contract, arrangement or transaction
has been made nor any liability or obligation incurred, nor release
or cancellation of any debt made, nor any commitment made since such
date, other than in the ordinary course of business, and no material
adverse change has occurred in the business, financial condition or
assets of the PURCHASER, and PURCHASER knows not of any facts which
may materially adversely affect the business of PURCHASER or the
COMPANY after acquisition.
d. PURCHASER has no knowledge of current liability through
insurance, guarantee or otherwise for the obligations of any other
person, firm or corporation, except as represented.
e. The execution of this Agreement and its implementation do not
contravene the contesting documents or by-laws of PURCHASER nor any
agreement, commitment or security instrument to which PURCHASER is a
party or which affects it, and no consent of any party to any
indenture, mortgage or other agreement of PURCHASER is required for
the carrying out of this Agreement.
f. PURCHASER is not presently engaged in and has no knowledge of
any present controversy with its employees and there is no claim,
action, court proceeding, arbitration, labor dispute, petition for
union certification or administrative proceeding pending or, to the
knowledge of PURCHASER, threatened against or affecting PURCHASER.
g. PURCHASER is in good standing with all applicable federal and
state regulatory agencies including the Securities and Exchange Commission.
SECTION 6 - DELIVERIES AT CLOSING
PURCHASER Deliveries. At the Closing, PURCHASER shall deliver the
following, duly executed:
a. A check in the amount of Five Thousand Dollars ($5,000); and
b. An escrow agreement evidencing the placement of the ADEN in the
possession of a mutually agreed upon escrow agent, for the benefit of SELLER.
SELLER Deliveries. At the Closing, SELLER shall deliver the following,
duly executed:
a. One or more stock certificates representing 100% of the
outstanding shares of the COMPANY, duly endorsed for transfer.
SECTION 7 - SURVIVAL AND CONSEQUENCES OF THE REPRESENTATIONS AND
WARRANTIES OF THE SELLER
a. The foregoing representations, warranties and covenants of the
SELLER are essential, true and correct and shall survive the
execution hereof until statute-barred, and regardless of any
investigation by or on behalf of the PURCHASER, they shall continue
in full force and effect for its benefit. The parties acknowledge
that the PURCHASER would not have entered into the present Agreement
without such representations, warranties and covenants.
i. If the COMPANY, or the PURCHASER on its behalf, after the
effective date hereof but relating to any event or period prior
thereto, would be required to pay any amount ("AMOUNT") in
connection with any liability, loss, damage, injury, expense or
disbursement including, without limitation, all interest and all
reasonable legal and accounting fees, arising out of or
resulting from a breach of or the inaccuracy or falsity of any
of the representations, warranties or covenants made or
undertaken by the SELLER in Section 3 of this Agreement, then
the SELLER shall hold the COMPANY and the PURCHASER free and
harmless there from and shall pay the AMOUNT, as well as all
reasonable related expenses incurred by the PURCHASER or the
COMPANY including, without limitation, interest and legal and
accounting fees and expenses.
ii. No actual or deemed waiver or acceptance of any
representations, warranties or covenants shall be implied or
considered as having occurred as a result of any investigation
having been carried out by or on behalf of the PURCHASER prior
to the effective date hereof.
iii. Any AMOUNT shall bear interest at an annual rate equal to
the COMPANY's principal bank's prime lending rate for commercial
loans, plus one percent (1%), calculated from the date the
amount is paid by the COMPANY or the PURCHASER and shall be paid
by the SELLER at the same time as the AMOUNT.
b. In the event the PURCHASER shall have knowledge of any claim or
liability indemnified against pursuant to this Section 5, it shall
give prompt written notice thereof to the SELLER. The SELLER may, at
it's expense, resist and defend and action, suit or proceeding in
respect of which he would be required to indemnify hereunder, or
cause the same to be resisted and defended by counsel which he may
designate, and reasonable acceptable to the PURCHASER. Upon payment
in full of any indemnity, the SELLER shall be subrogated in such
rights, if any, as the PURCHASER or the COMPANY may have in respect
of the matter against which the indemnity was given. The PURCHASER
shall cause the COMPANY to lend the SELLER reasonable cooperation in
the event that the SELLER wishes to resist or defend any such action,
suit or proceeding, including the filing of any notices of
contestation or appeal of any tax assessments or reassessments.
SECTION 8 - SURVIVAL AND CONSEQUENCES OF THE REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER
a. The representations and warranties of the PURCHASER contained in
the Agreement are essential, true and correct and shall survive the
execution hereof and regardless of any investigation by or on behalf
of the SELLER with respect thereto, shall continue in full force and
effect for the benefit of the SELLER; provided, however, that such
representations and warranties shall terminate when statute barred.
b. The PURCHASER covenants and agrees to indemnify and save
harmless the SELLER from and against any loss suffered or incurred by
the SELLER as a result of any breach or representation, warranty or
covenant contained in the Agreement and all claims, demands, costs
and expenses and including, without limitation, reasonable legal
expenses in respect thereof.
c. In the event that the SELLER shall have knowledge of any claim
or liability indemnified against pursuant to this Section 6, the
SELLER shall give prompt written notice thereof to the PURCHASER. The
PURCHASER may, at its expense, resist and defend any action, suit or
proceeding in respect of which it would be required to indemnify
hereunder, or cause the same to be resisted and defended by counsel
designated by it. Upon payment in full of any indemnity, the
PURCHASER shall be subrogated in such rights, if any, as the SELLER
may have in respect of the matter against which indemnity was given.
SECTION 9 - TERMINATION This Agreement may be terminated in the
following manner:
a. Mutual Agreement. The parties may terminate this Agreement by
mutual written agreement.
b. By PURCHASER's non-payment of any payment installment in a timely fashion.
c. Effect of Termination. Upon any termination of this Agreement,
this Agreement shall terminate and be of no further force and effect
without any further liability of any party, provided, however, that no
termination of this Agreement shall relieve or release any of the
parties hereto from liability with respect to any breaches or
violations of any representations, warranties, covenants or agreements
contained in this Agreement.
SECTION 10 - GENERAL
a. Notice. All notices in connection with this agreement shall be
in writing and shall be delivered, mailed by registered or certified
mail or transmitted by telex or telecopier. A notice shall be deemed
to have been received on the date of the delivery, telecopy or telex
transmission or on the fifth business day following the date of
mailing. The addresses for such notices are:
SELLER: Xxxxxx Xxxxxxx
000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000
PURCHASER: Diamond Xxxxx Production, Inc.
0000X Xxxxx Xxx Xxx. Xx. XXX000
Xxxxxxx Xxxxx XX 00000
Any of the foregoing may, at any time, give notice of any change of
address to all of the others, and after the giving of such notice,
the address specified therein shall be such person's address for the
purpose of receiving notices.
b. All representations and warranties contained in this Agreement,
which are for the benefit of any party hereto, may be waived by such party.
c. The SELLER will make every reasonable effort to preserve and
improve, where possible, the present relationships with and between
its distributors, suppliers, customers and others having business
relationships with the COMPANY.
d. The rights and recourses of the PURCHASER and of the SELLER
shall be cumulative and not alternative and not limited by specification.
e. No waiver of any breach hereunder shall be a waiver of any
subsequent breach hereunder, nor shall any forbearance or delay or
failure to proceed to litigation or to seek a remedy for any breach
be a waiver or renunciation of any right or remedy with respect to
such breach or any subsequent breach of the Agreement.
f. The Agreement and the benefits hereunder shall be non-assignable
except pursuant to statutory amalgamation or other corporate
reorganization and shall be binding upon the parties hereto and their
respective successors, administrators, permitted assigns and
representatives.
g. The parties agree to do, sign and execute all acts, deeds,
documents and corporate proceedings necessary or desirable in the
reasonable opinion of their respective counsel to give full force and
effect to this Agreement.
h. This Agreement, inclusive of all schedules hereto annexed,
constitutes the whole agreement between the parties and repeals and
replaces any previous agreements, written or verbal, relating to the
sale and purchase of the SHARES. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express
or implied, collateral, statutory or otherwise relating to the
COMPANY which the PURCHASER may have received prior to the execution
hereof and including, without limitation, any information memorandum
with respect to the business of the COMPANY.
i. This Agreement shall be governed by and construed in accordance
with the Laws of the State of California and subject to the foregoing
obligatory and binding arbitration, the courts of the judicial
districts of the state of California shall be the exclusive forum for
any legal proceedings arising from the Agreement.
j. If any term, covenant or condition of the Agreement or the
application thereof to any person or circumstance shall, to any
extent, be held to be invalid or unenforceable, and unless such term,
covenant or condition is essential, the remainder of the Agreement,
or the applications of such term, covenant or condition to persons or
circumstances other then those to which it is held invalid or
unenforceable, shall not be affected thereby, and each term, covenant
and condition of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
k. Unless otherwise dictated by the context, the singular shall
include the plural and vice versa; the masculine shall include the
feminine and vice versa and, where applicable to firms, companies or
corporations, the neuter.
l. If the expiry of any delay provided for in this Agreement falls
on a non-juridical day, then the delay shall be extended to the next
following juridical day.
m. No disclosure or announcements, public or otherwise, in respect
of this or any prior agreement or any other aspect of the transaction
shall be made without the consent of the SELLER, except as may be
required by applicable legislation.
IN WITNESS HEREOF, the parties have executed this Agreement this 12th
day of July 2002.
SELLER:
Shareholders of Secure For Sure, Inc.
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Its: Chief Executive Officer
PURCHASER:
Diamond Hits Production, Inc.
By: /s/ Xxxx Xxxxx
Xxxx Xxxxx
Its: President
SCHEDULE "A"
Certain collectable postage stamps issued by:
The Qu'aiti State in Hadhramaut,
The Kathiri State of Seiyun, and
The Mahra State,
collectively known as the "ADEN" stamps, numbering 884,200 individual
stamps, which are valued, for all purposes herein at the 40% of the
price listed in the year 2000 Michel Catalog published by
Schwaneberger Verlag GmbH (Munich), converting from Deutschmarks at
the rate of 2DM per U.S. Dollar, at US$753,400.
SCHEDULE "B"
There are no items to be listed on this Schedule.
