EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered
into this 16th day of April, 1999, by and between Hallmark Properties,
Inc., a Colorado corporation ("Buyer") and Norton Acquisition
Corporation, a Minnesota corporation ("Seller").
WITNESSETH:
WHEREAS, Seller has acquired substantially all of the assets of
Norton Motors International Inc. (the "Norton Assets") pursuant to the
terms of the Asset Purchase Agreement dated April 9, 1999 (the "Norton
Acquisition Agreement"-a true fully executed copy of which is attached
hereto as Exhibit 1);
WHEREAS, pursuant to the terms of the Norton Acquisition Agreement,
the Seller agreed to assume, discharge and perform when due certain
liabilities and obligations of Norton Motors International Inc. that
were expressly identified in the Norton Acquisition Agreement (the
"Assumed Liabilities"); and,
WHEREAS, Buyer desires to acquire from Seller the Norton Assets and
Seller desires to sell the Norton Assets upon the terms and conditions
stated herein.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are
mutually acknowledged and accepted, Seller and Buyer, intending to be
legally bound, hereby agree as follows:
ARTICLE 1
SALE AND PURCHASE OF ASSETS
1.1 Assets To Be Purchased By Buyer. Subject to the terms and
conditions set forth herein, Seller agrees to sell, transfer, convey
and assign to Buyer, and Buyer agrees to purchase and acquire from
Seller all of Seller's right, title and interest in and to the Norton
Assets transferred to Seller pursuant to the Norton Acquisition
Agreement.
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ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price and Other Consideration. The Buyer shall provide the
following consideration to Seller in exchange for the Norton Assets :
a) Cash Payment. A cash payment at Closing of twenty-five thousand
dollars ($25,000).
b) Stock of Buyer. Buyer shall cause to be issued in the name of the
Seller, Two hundred and fifty two million (252,000,000) restricted
shares of its common stock on the Closing Date pursuant to the
terms of the Subscription Agreement attached hereto as Exhibit 2.1
(the "Securities"). The Securities shall be issued pursuant to
applicable state and federal securities laws exemptions and shall
contain an appropriate legend restricting their transferability.
c) Assumption of Liabilities. As additional consideration for the
transfer of the Norton Assets, the Buyer agrees to be jointly and
severally liable with the Seller for the Assumed Liabilities to
the same extent and degree as Seller. Notwithstanding the above,
to the extent the Seller has discretion over the assumption and
payment of the Assumed Liabilities the Buyer shall also be given
the right to exercise discretion over its obligation for the
Assumed Liabilities.
2.2 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Norton Assets as approved in writing by
the parties hereto at or after Closing for all purposes and
each of the parties shall file with the Internal Revenue
Service Form 8594 on a basis consistent therewith.
2.3 Further Assurances. Each of the parties hereto, before, at and
after the Closing, upon the request from time to time of
any other party hereto and without further consideration,
shall do each and every act and thing as may be necessary or
reasonably desirable to consummate the transactions
contemplated hereby and to effect an orderly transfer to Buyer
of the Norton Assets.
ARTICLE 3
CLOSING
3.1 Binding Nature of Agreement. The sale contemplated by this
Agreement shall be a legally binding obligation of the parties hereto
upon execution thereof by officers of the respective parties, subject
only to rescission by the affirmative vote of a majority of the
shareholders of Seller. The Seller hereby agrees and warrants to
deliver, on or before Closing, the affirmative vote of at least a
majority of the shareholders of the Seller approving the sale
contemplated by this Agreement.
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3.2 Time and Place of Closing. The closing of the transactions
contemplated hereby (the "Closing") shall take place at the
offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on April 30 , 1999 at 2:00 p.m. or at
such other place or on such other date which the parties may mutually
agree in writing ("Closing Date"). All transfers and other proceedings
required to be made or taken at the Closing shall be deemed to have
taken place simultaneously, and no delivery shall be considered to
have been made until all such proceedings have been completed. Legal
title, equitable title and risk of loss with respect to the Norton
Assets shall be deemed to have passed to Buyer on transfer of such
Norton Assets on Closing.
3.4 Seller's Deliveries At Closing. At the Closing, Seller shall
deliver to Buyer the following:
(a) Any ▇▇▇▇ of Sale document reasonably requested by the Buyer
evidencing the transfer of any tangible assets transferred
hereby and such deeds (together with affidavits of title),
assignments, certificates of title, and other instruments of
conveyance as Buyer shall reasonably require to convey to
Buyer the Norton Assets, including, without limitation,
assignments of any Proprietary Rights included in the Norton
Assets;
(b) A fully executed Subscription Agreement in the form attached
hereto as Exhibit 2.1;
(c) Any consents from third required to permit Buyer to obtain
the benefits of all the Norton Assets under the same terms
and conditions as are applicable to Seller and to prevent
a breach of any agreement or security interest relating to
the Norton Assets. In addition, Seller shall deliver to
Buyer, from time to time, such documentation as Buyer may
reasonably request to assure Buyer the benefit of any of
the Norton Assets for which consents were not required;
(d) A certificate executed by the President or Secretary of
Seller, in form satisfactory to Buyer and the Buyer's
counsel, setting forth the resolutions adopted by the Board
of Directors and shareholders of Seller authorizing the
execution of this Agreement and the taking of any and
all actions deemed necessary or advisable to consummate the
transactions contemplated hereby;
(e) The books and records of the Business, which may be
delivered by Seller at an alternative location to the
location of the Closing upon the written agreement of Seller
and Buyer;
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(f) All other documents, instruments and writings required by
this Agreement or reasonably requested by Buyer to be
delivered at Closing; and,
Seller further agrees, before, at and after the closing upon reasonable
request by Buyer, and without additional consideration, to execute any
additional documentation reasonably necessary to transfer the Norton
Assets to Buyer.
3.5 Buyer's Deliveries At Closing. At the Closing, Buyer shall
deliver to Seller the following:
(a) One or more stock certificates duly approved and executed
by authorized representatives of the Buyer evidencing the
shares of Buyer to be delivered pursuant to Section 3.1
hereof; and,
(b) A certificate from the Secretary of Buyer, in a form
reasonably satisfactory to Seller and Seller's counsel,
setting forth the resolutions adopted by the Board of
Directors of Buyer authorizing the execution of this
Agreement and the taking of any and all actions deemed
necessary or advisable to consummate the transactions
contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the Closing Date as
follows:
4.1 Organization: Power and Authority. Seller is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Minnesota, and has all requisite
power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the
transactions contemplated hereby.
4.2 Due Authorization and Execution: Effect of Agreement. The Board of
Directors and shareholders of Seller have taken all action required
by law, its Articles of Incorporation, its Bylaws or otherwise to
authorize the execution and delivery of this Agreement and the
transactions contemplated hereby and no other corporate action is
necessary to authorize the execution and delivery hereof or the
consummation of the transactions contemplated hereby.
4.3 Litigation Involving Seller. There is no action, suit, proceeding
or investigation pending (including, without limitation, any action,
suit, proceeding or investigation with respect to any federal, state
or local laws, rules or regulations), or to Seller's knowledge,
threatened against or detrimentally affecting Seller and no
governmental entity has served upon Seller any notice claiming any
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violation of any statute, ordinance, or regulation or noting the need
for any repair or remediation, requesting data or access, requiring
testing or other investigation relating to environmental conditions
or otherwise.
4.4 Compliance with Applicable Laws. To the best of its knowledge,
Seller is in compliance with all federal, state and local and foreign
laws, statutes, rules and regulations applicable to Seller.
4.5 No Liability For Employee Benefits. Buyer will incur no liability
to, or on account of any employee benefit plan of Seller, any of its
Affiliates or any predecessor employer of any employee.
4.6 Brokers, Finders, etc. All negotiations relating to this Agreement
and the transactions contemplated hereby have been carried on without
the intervention of any person acting on behalf of Seller in such
manner as to give rise to any valid claim against Seller or Buyer
for any brokerage or finder's commission, fee or similar compensation.
4.7 Investment Intent. The Seller intends to acquire and hold
the shares of stock issued hereunder (the "Securities") for
its own account and for investment purposes only, and not with
a view to, or for resale in connection with, the distribution
thereof within the meaning of the Securities Act of 1933, as
amended (the "Act"). The Seller recognizes (i) that an
investment in the securities involves a high degree of risk,
and that such risks may result in the loss of the total amount
of this investment; (ii) that the purchase of the Securities
is a long-term investment; (iii) that transferability and sale
of the Securities is restricted in many ways; (iv) that the
Buyer makes no representations whatsoever concerning the
present or prospective value of the Securities; and (v) that
in the event of disposition of the Securities, the undersigned
could sustain a total loss of its investment.
The Seller acknowledges that the Securities have not been
registered under the Act and that the Securities may not be
sold, assigned or otherwise transferred (i) except pursuant to
an effective registration statement under the Act and
applicable State securities laws or (ii) unless the Seller
supplies the Buyer with an opinion of an attorney of the
undersigned's choosing to the effect that the proposed sale,
assignment or other transfer is exempt from registration under
applicable federal and state securities laws. As a result
thereof, the Seller may be required to hold the Securities for
an indefinite period of time.
The Seller acknowledges that its agents and advisors have been
afforded the opportunity to examine all books, records,
agreements and other documents relevant to the Buyer and these
Securities and that it has been given an opportunity to ask
questions and receive answers from duly designated
representatives of the Buyer concerning its investment in the
Securities.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
5.1 Organization: Power and Authority. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Colorado, and has all requisite power and authority to carry
on its business as it is now being conducted, to execute, deliver and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby.
5.2 Due Authorization and Execution: Effect of Agreement. The execution,
delivery and performance by Buyer of this Agreement and the
consummation of Buyer of the transactions contemplated hereby have
been duly authorized by all necessary corporate action required to be
taken on the part of Buyer. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a valid and binding
obligation of Buyer, enforceable in accordance with its terms.
5.3 Consents. No consent, approval or authorization of exemption by, or
filing with, any governmental or regulatory authority or any other
third party is required in connection with the execution, delivery or
performance by Buyer of this Agreement, except for consents,
approvals, authorizations, exemptions and filings, if any, which: (a)
have been, or by the Closing Date will be, obtained; and (b) Seller
is required to obtain or make.
5.4 Brokers, Finders, etc. All negotiations relating to this Agreement
and the transactions contemplated hereby have been carried on without
the intervention of any person acting on behalf of Buyer in such
manner as to give rise to any valid claim against Seller or Buyer for
any brokerage or finder's commission, fee or similar compensation.
ARTICLE 6
CONDITION PRECEDENT TO BUYER'S PERFORMANCE
The obligations of Buyer are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions:
6.1 Accuracy of Representations and Warranties. All representations
and warranties by the Seller in this Agreement shall be true and
correct on and as of the Closing Date.
6.2 Seller's Compliance. Seller shall have performed, satisfied and
complied with all covenants, assignments, agreements and conditions
required by this Agreement to be performed or complied with by
Seller.
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ARTICLE 7
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligations of Seller under this Agreement are subject to the
satisfaction, on or before the Closing Date of the following conditions.
7.1 Accuracy of Representations and Warranties. All representations
and warranties by the Buyer in this Agreement shall be true on and
as of the Closing Date.
7.2 Compliance by Buyer. The Buyer shall have performed, satisfied and
complied with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by the Buyer.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by Seller. Seller hereby agrees to indemnify and
hold the Buyer, its affiliates, and its employees, officers, directors
and agents harmless from, against and in respect of (and shall on
demand reimburse the Buyer for) any and all losses, liabilities,
damages, claims, costs and expenses (whether or not arising out of
third party claims, including without limitation interest, penalties
and reasonable attorneys' fees) sustained or incurred by the Buyer
in connection with or arising out of:
(a) any untrue representation, breach of warranty, or
nonfulfillment of any covenant by Seller contained herein;
or,
(b) any liabilities or obligations of Seller not specifically
assumed by the Buyer pursuant to the terms of this
Agreement.
8.2 Indemnification by the Buyer. Buyer hereby agrees to indemnify
and hold the Seller, its affiliates, and its employees,
officers, directors and agents harmless from, against and in
respect of (and shall on demand reimburse the Seller for) any
and all losses, liabilities, damages, claims, costs and
expenses (whether or not arising out of third party claims,
including without limitation interest, penalties and
reasonable attorneys' fees) sustained or incurred by the
Seller in connection with or arising out of:
(c) any untrue representation, breach of warranty, or
nonfulfillment of any covenant by Buyer contained herein;
or,
(d) any liabilities or obligations of Buyer not specifically
assumed by the Seller pursuant to the terms of this
Agreement.
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ARTICLE 9
TRANSFER OF INTELLECTUAL PROPERTY RIGHTS
9.1 Transfer of Trademarks and other Intellectual Property Rights.
Contemporaneously with the Closing or thereafter, at the request of
Buyer and without additional consideration therefore, Seller shall
sign all documents necessary to transfer to Buyer all trademark rights
owned by Seller to the Norton name as well as all other intellectual
property rights transferred hereunder.
ARTICLE 10
DEFAULTS AND REMEDIES
10.1 Event of Default. Any of the following events shall constitute an
"Event of Default" under this Agreement:
(a) The Buyer shall not pay when due the monetary consideration
or issue the stock as required by Article 2.1 of this
Agreement;
(b) The Seller shall fail to take any action required hereunder
to transfer any of the Norton Assets to Buyer; or,
(e) Any representation made by the Buyer or Seller in this
Agreement or in any document made collateral to this
Agreement shall prove to be untrue in any material respect
or materially misleading at the time such representation or
warranty was made.
10.2 Notice of Default. Upon the occurrence of one of the defaults
described in this Agreement, the non-breaching party shall give
written notice to the other specifying:
(a) the default;
(b) the action required to cure the default;
(c) if applicable, a date not less than thirty (30) days from
the date the notice is mailed to the party in which such
default must be cured; and
(d) that failure to cure such default on or before the date
specified in the notice shall result in the non-breaching
exercising its remedies at law or as specified in this
Agreement.
10.3 Remedies. Upon the occurrence of an Event of Default, the non-
breaching party, shall be entitled to bring an action for all
remedies to which it might by law be entitled.
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10.4 Remedies Not Exclusive. No right or remedy by this Agreement or by
any document or instrument delivered by a party hereto, shall be or
is intended to be exclusive of any other right or remedy, and each
and every right and remedy shall be cumulative and in addition to any
other right or remedy now or hereafter existing at law or in equity
or by statute.
10.5 Waiver; Forbearance. Except as the parties may hereafter
otherwise agree in writing, no waiver by a party of any breach
or default of the other party, of any of its obligations,
agreements or covenants under this Agreement shall be deemed
to be waiver of any subsequent breach of the same, or any
other obligation, agreement or covenant under this Agreement,
nor shall forbearance by a party to seek a remedy for such
breach be deemed a waiver of its rights and remedies with
respect to such breach, nor shall a party be deemed to have
waived any of its rights and remedies unless it be in writing
and executed with the same formality as this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Survival. The representations and warranties made in this
Agreement or in any certificate or other document delivered
pursuant hereto or in connection herewith and the covenants
and agreements contained herein to be performed or complied
with at the Closing, prior to the Closing Date or in
connection with the Closing shall survive the Closing and the
purchase and sale of the Norton Assets contemplated hereby.
11.2 Entire Agreement: Amendment. This Agreement, including the
Exhibits and other writing referred to herein or delivered
pursuant to this Agreement constitutes the sole understanding
of the parties with respect to the subject matter hereof and
it supercedes all prior oral or written agreements,
commitments or understandings with respect to the matters
provided for herein. No amendment, modification or alteration
of the terms or provisions of this Agreement shall be binding
unless the same shall be in writing and duly executed by the
parties hereto.
11.3 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto;
provided, however, that this Agreement may not be assigned by
any party without the express prior written consent of the
other party hereto. If this Agreement is assigned with such
consent the terms and conditions hereof shall be binding upon
and shall inure to the benefit of such assignee; provided,
however, that no assignment of this Agreement or any of the
rights or obligations hereof shall relieve any party of its
obligations under this Agreement.
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11.4 Counterparts. This Agreement may be executed in counterparts,
each of which shall, for all purposes, be deemed to be an
original and all of which taken together shall constitute the
same instrument.
11.5 Headings. The headings of the Articles, Sections and
paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement
or to affect the construction hereof.
11.6 Waiver. Any of the terms or conditions of this Agreement may
be waived in writing at any time by the party which is
entitled to the benefits thereof. No waiver of any of the
provisions of this Agreement shall be deemed or shall
constitute a waiver of such provisions at any time in the
future or a waiver of any other provision hereof.
11.7 Expenses. Seller and Buyer shall each pay all costs and
expenses incurred by themselves or on their behalf in
connection with this Agreement and the transactions
contemplated hereby, including without limitation, fees and
expenses of their own financial consultants, accountants and
counsel.
11.8 Notices. Any notice, request, instruction, consent or other
document to be given hereunder by any party hereto to any
other party shall be in writing and delivered personally or
sent by registered or certified mail, postage prepaid, and
shall be deemed given when postmarked and addressed as
follows:
If to Buyer: Hallmark Properties, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Seller: Norton Acquisition Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or at such other address for a party as shall be specified by
like notice. Any notice which is delivered personally in the
manner provided herein shall be deemed to have been duly given
to the party to whom it is directed upon actual receipt by
such party or its agent for notices hereunder.
11.9 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Minnesota.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above
written.
Buyer: HALLMARK PROPERTIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: CEO
Seller: NORTON ACQUISITION CORPORATION
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
Its: President
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INDEX TO EXHIBITS
EXHIBIT 1 Norton Acquisition Agreement (w/Exhibits)
Exhibit 2.1 Subscription Agreement
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