EXHIBIT 2.3
ASSET SALE AND PURCHASE AGREEMENT
THIS AGREEMENT, is made and entered into this 30th day of September, 1999,
by and between SITESTAR CORPORATION, a Nevada corporation, hereinafter called
"Seller" or the "Company" and IFCO GROUP, a California partnership, hereinafter
called "Purchaser."
Purchaser hereby agrees to purchase and the Seller agrees to sell all of
the assets presently used in the operation of the Company's business, including
but not limited to the business name "HOLLAND AMERICAN INTERNATIONAL
SPECIALTIES"; telephone number(s) and fax number(s); Seller's office furniture
and equipment; all vehicles and operating equipment; telephone number (s);
telephone equipment; computers and software; supplies; inventories; licenses;
work in progress; and all other items used in the operation of the business in
its present form, historic and present customer and vendor records and
relationships; customer and vendor contracts and agreements, goodwill and all
other assets used in the operation of the business known as HOLLAND AMERICAN
INTERNATIONAL SPECIALTIES, located at ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (a non-exclusive list of such assets is attached hereto as Exhibit "A" and
by reference incorporated herein).
Purchaser is to receive all of the business assets other than cash or cash
equivalents, all as more fully described on Exhibit "B" which is attached hereto
and by reference incorporated herein, and Purchaser is to assume no debts and
/or liabilities of the Company.
1. PURCHASE PRICE The total purchase price of $900,000.00 is payable as
follows:
a. $ 200,000.00 Amount equivalent for the cost of
Sitestar, Inc. with the "Public" status
of Sitestar Corporation (f/k/a Interfoods
Consolidated, Inc.).
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b. $654,000.00 The Assumption of all trade, short and
long term liabilities as of July 31, 1999.
c. $46,000.00 Balance of purchase price to be paid to
Seller pursuant to terms of promissory
note in said amount, in the form attached
hereto as Exhibit "C" and by reference
incorporated herein, payable in four (3)
annual installments of $15,333.00 each
plus accrued interest or more including
interest at eight percent (8%) per annum,
accruing from close of acquisition, until
paid in full.
$900,000.00 Total Purchase Price.
2. PURCHASE PRICE ADJUSTMENT/COMPENSATION AND BENEFITS.
(a) PURCHASE PRICE ADJUSTMENT. The purchase price of Nine Hundred Thousand
and /100 Dollars ($900,000.00) described above is based upon the
company's aggregate assets (current assets plus fixed assets, plus
inventory less prepaid taxes, less all cash and cash equivalents) at
closing being not less than the company's aggregate assets on the
balance sheet dated September 30, 1999, a copy of which is attached
hereto as Exhibit "B" and by reference incorporated herein. In the
event the current aggregate assets at the closing are different than
as stated on the September 30, 1999 balance sheet, the purchase price
shall be subject to adjustment accordingly.
(b) EMPLOYEE BENEFITS. Seller and Purchaser have further agreed that the
Seller will assume 100% responsibility for all obligations to all
personnel of the business for all matters related to accrued vacation
and sick leave incurred by the business prior to the date of closing.
Attached hereto as Exhibit "H", Purchaser and Seller have agreed to
the amounts to which Seller is obligated to employees and this amount
will be paid to the employees by Seller prior to the Date of Closing
(outside of escrow) , or will be given as a credit to Purchaser and
debit Seller, whereupon Purchaser shall assume all such obligations to
said employees.
3. SECURITY. All of the Purchaser's obligations under this Agreement including
the Promissory Note and the Non-Compete Agreement shall be secured by two
(2) Security Agreements in form attached hereto as Exhibits "D" and "E" and
by reference incorporated herein, covering the assets being purchased as a
part of this transaction, including its leasehold interest, approximate
$500,000.00 inventory, of Holland American International Specialties, Inc.
and corporate guarantees of Purchaser. If Purchaser is in material breach
of any of the terms, conditions covenants or obligations to be performed
under any of said instruments or under the underlying Lease, Seller shall
provide written notice to Purchaser, and Purchaser shall have thirty (30)
days from the date of such written notice to cure the material breach. If,
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at the expiration of such thirty (30) day period the material breach has
not been cured, Purchaser shall be in default of such terms, conditions,
covenants or obligations. In the event that Purchaser is in default of any
of the terms, conditions, covenants or obligations to be performed under
any of said instruments or under the underlying lease, said default shall
constitute a default under all of said instruments. In such event Seller is
authorized, at its sole option, to exercise any and all remedies available
to it at law or at equity, as well as by the terms of any or all of said
instruments or the Lease.
4. INVENTORY All inventory used in this business is to be transferred to
Purchaser at close of escrow, see Exhibit "L".
5. AGREEMENT NOT TO COMPETE. Seller and Selling Shareholders, individually,
agree that they will not engage, either directly or indirectly, in any
business whose products or activities compete in whole or in part with the
products or activities of Purchaser within the states of Washington and/or
Oregon for a period of three (3) years after cessation of the Selling
Shareholder's employment with the Purchaser all as more fully described in
the Non-Compete Agreement attached hereto as Exhibit "F" and by reference
incorporated herein.
6. TRAINING, TRANSITION AND CONSULTING. Transition training services shall be
provided over a period of three (3) months from the Date of Closing of the
transaction at no cost to Purchaser.
After expiration of the transition training by Seller, if so desired by
both parties, then Seller and Purchaser may enter into a longer term
possible employment contract under such terms as the parties may mutually
agree.
7. SELLER AND SELLING SHAREHOLDERS REPRESENTATIONS AND WARRANTIES. Seller and
Selling Shareholders hereby represent and warrant to Purchaser as follows:
(a) Organization. That Seller is a corporation duly organized and
validly existing under the laws of the State of Nevada and is in good
standing.
(b) Authorization. That the execution, delivery, and performance of
this Agreement by Seller has been duly and effectively authorized by
Seller's Board of Directors and Shareholders.
(c) Binding Obligation. That the officer Of Seller executing this
Agreement on its behalf is duly authorized to do so and to deliver the
same on behalf of Seller, and that this Agreement constitutes a valid
and binding obligation of Seller and Selling Shareholders in
accordance with its terms.
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(d) Business operations. That Seller has not materially altered the
conduct of its business, and has not taken any action; made any sales,
loans, or liquidation outside the ordinary course of business; altered
any business or accounting practices; changed business hours; or
entered into any unusual transactions that are likely to have any
adverse affect on the value of the business from the time of the
mutually agreed upon letter of intent up through the date of closing.
(e) Title. That Seller is the true and lawful owner of all of the
assets and inventory of the business, including, without limitation,
those listed on Exhibit "A," free and clear of all title defects,
security interests, claims, liens or encumbrances and that such assets
and inventory are not subject to any agreement for their sale to or
use by any third party.
(f) Condition. At Closing, to Seller's and Selling Shareholders'
actual knowledge, the leased premises, equipment and other tangible
assets of Seller are in good operating condition and repair. subject
to ordinary wear and tear, are adequate for the uses to which they are
being put, and to the best of Seller's and Selling Shareholders'
knowledge are not in need of maintenance or repairs except for
ordinary, routine maintenance and repairs.
(g) Supplies and Sample Materials. Prior to Closing, Purchaser will
review and agree in writing with Seller as to quantities of supplies
and materials that are transferred.
(h) Taxes. Seller shall pay and shall hold Purchaser harmless from all
taxes due to any governmental body from activities prior to Closing.
Seller has in a timely manner filed all federal, state and local tax
returns relating to the assets or the business, including, but not
limited to, those taxes with respect to income, property, worker's
compensation, Medicaid and unemployment, and has paid all taxes,
penalties and interest on said returns or arising therefrom.
(i) Compensation and Benefits. Attached hereto as Exhibit "H" is an
accurate list and description of all employee compensation rates,
accrued vacation time, sick leave and retirement benefits, bonus,
profit sharing, retirement, stock purchase, stock option, insurance,
hospitalization, or other benefit plans or programs for Seller's
employees in the business, and a statement of their obligations under
such programs.
(j) Labor. Seller is not a party to any labor agreement with any labor
organization. Seller has experienced no attempt by organized labor to
conform to labor demands in any manner. To its best knowledge, Seller
is in compliance with all applicable laws respecting employment and is
not engaged in any unfair labor practice.
(k) Default. Seller is not in default under any contract for work or
services to be performed. There has been no unresolved claim for
negligence or breach of warranty or breach of contract arising out of
services delivered or installed, or services rendered by the business.
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(l) Litigation. There is no pending or anticipated litigation,
proceeding, investigation, controversy, judgment, order, writ,
injunction or decree which would jeopardize the business or
Purchaser's title to the assets being sold.
(m) Compliance With Law and Other Instruments. Seller holds, and has
at all times held, all material licenses, permits and authorizations
necessary for the lawful conduct of its business pursuant to all
applicable statutes, laws, ordinances, rules and regulations of all
federal, state and local governmental agencies having jurisdiction
over it or over any part of its operations or the Assets, and Seller
knows of no violations thereof. The execution and delivery of this
Agreement and the compliance with the provisions hereof by Seller will
not conflict with or result in any breach of any of the terms,
conditions and provisions of, or constitute a default under, or result
in the creation of a lien, charge or encumbrance upon any of the
assets or outstanding capital stock of Seller pursuant to any charter
documents, indenture, mortgage, lease, agreement or other instrument
to which Seller is a party or by which it is bound.
(n) Environmental. Seller has not: caused or permitted its business to
generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process any "hazardous substances" or
other toxic substances, except in compliance with all applicable
federal, state and local laws or regulations.
(o) Material Misstatements or Omissions. No representations or
warranties by Seller or Selling Shareholders in this Agreement nor any
document, statement, certificate or schedule provided by seller or
Selling Shareholders, contains any untrue statement of a material
fact. Seller and Selling Shareholders have not withheld knowledge of
any material event, condition or fact which they know or have
reasonable grounds to believe may affect Seller's business.
(p) Sufficiency of the Assets. The assets sold pursuant to this
Agreement include all assets necessary to the operation of the
business. Said assets are sufficient to carry on the business as
carried on by Seller prior to Closing.
(q) Terminability Of Employees. The employment of all employees of
Seller is terminable at will. Seller will terminate the employment of
all employees as of the Closing Date. Purchaser may, but is not
required to, employ one or more said employees following Closing on
terms to be determined by Purchaser and said employee(s).
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(r) No Violations. Neither this Agreement nor the transactions
contemplated herein shall cause seller to be in violation of any
order, decree or law, or in violation of any contract or other
document by which Seller is or may be bound.
(s) Vendors & Suppliers. At closing, to Seller's and Selling
Shareholders, actual knowledge, no notice has been received from any
current vendors stating their intentions to cease selling products to
Seller on substantially the same terms and conditions as said products
have been sold in the past.
(t) Current Customers. At closing, to Seller's and Selling
Shareholders, actual knowledge, no notice has been received from any
current customer who accounts for more than 5% of the prior twelve
(12) months revenue of the Seller that said customer no longer intends
to purchase products from Seller on substantially the same terms and
conditions as said customer has purchased products in the past;
provided however these warranties and representation do not pertain to
customers whose business is obtained via public bids.
8. PURCHASER REPRESENTATIONS AND WARRANTIES. Purchaser represents and warrants
to Seller as follows:
(a) That Purchaser is a corporation duly organized and validly
existing under the laws of the State of California.
(b) That the execution, delivery, and performance of this Agreement by
Purchaser has been duly and effectively authorized by Purchaser's
Board of Directors.
(c) That the officer of Purchaser executing this Agreement on its
behalf is duly authorized to do so and to deliver the same on behalf
of Purchaser, and that this Agreement constitutes a valid and binding
obligation of Purchaser in accordance with its terms.
(d) The Purchaser has had full opportunity to review any and all
financial information from Seller, including financial statements, tax
returns, income and expense information, and all other information
related to the business that Purchaser deems important in evaluating
this business.
(e) Financial statements and any other financial records which
Purchaser has provided to Seller are true and correct in every respect
as of the dates thereof; and that there have been no material changes
in Seller's financial position since the dates thereof.
9. SURVIVAL 0F REPRESENTATIONS AND WARRANTIES. Seller's and Purchaser's
representations and shall survive the closing of this transaction.
10. AGENCY DISCLOSURE. At the signing of this Agreement the selling/listing
agent and Acquisition Services Group, Inc. represented Seller. Each party
signing this document confirms that prior oral and/or written disclosure of
agency was provided to him/her in this transaction.
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11. LIABILITIES. Purchaser assumed only those liabilities that are expressly
set forth in the agreements between the parties. Seller warrants that at
Closing it will give a good, clear and marketable title to business or
business assets being sold; and that it has disclosed all known liabilities
of any kind to the Purchaser regardless of whether such liabilities affect
title to the assets and expressly agrees to hold Purchaser free and
harmless from any such liabilities. Seller agrees to furnish to Purchaser a
copy of a Uniform Commercial Code 11R showing no encumbrances except for
those mentioned above.
12. ATTORNEY'S FEES - Purchaser and Seller agree that in the event of any
litigation, between any of the parties, arising out of the transaction
(whether closed or not), is instituted, the prevailing party or parties
shall be entitled to recover from the other(s) their reasonable attorney's
fees and reasonable costs incurred (whether or not statutory).
13. PRO-RATIONS. The sales (use) tax on furniture and equipment shall be paid
by the Purchaser at settlement through escrow and personal property taxes,
other taxes, and similar expenses shall he prorated as of the date of
transfer of ownership.
14. SEVERABILITY. Each paragraph, section and/or provision of this agreement
shall be considered severable, and if, for any reason, any paragraph,
section and/or provision herein is determined to be invalid and contrary to
any existing or future law or regulation, such shall not impair the
operation of or affect the remaining paragraphs, sections and/or provisions
of this agreement.
15. GENERAL PROVISIONS.
AS TO PURCHASER: By signing this agreement, Purchaser hereby acknowledges that
Purchaser is relying solely on Purchaser's own inspection of the business
and its assets and representations of seller with regard to the prior
operating history of the business and all other material facts relating to
Purchaser's decision to purchase.
AS TO SELLER: Seller acknowledges no representations were made concerning
the credit-worthiness or ability of Purchaser to complete this transaction
and relies solely on Purchaser's representations.
16. ALLOCATION OF VALUES SHALL BE:
Vehicles: $_________
Machinery & Equipment: $_________
Non-Competition Agreement: $_________
Goodwill: $_________
Net Other Assets Transferred: $_________
----------
TOTAL: $900,000.00
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17. DATE OF CLOSING. The Date of Closing of this transaction shall be defined
as September 30, 1999. Purchaser is entitled to possession on October 1,
1999 at 12:01 a.m. At closing, Purchaser shall deposit all funds required
to close this along with all executed original documents required by Seller
to close this transaction.
18. ASSET SALE AND INDEMNIFICATIONS. This is a purchase of certain specified
assets and the assumption of certain specified liabilities of seller, as
set forth elsewhere in this document and attached Exhibits.
(a) Seller and Selling Shareholders agree to indemnify and hold
Purchaser harmless with respect to any and all obligations and claims
arising from the operation of the business, including but not limited
to taxes due (except as assumed), wages payable, and accounts payable
(except as assumed), which indebtedness or claims arose or were
incurred prior to the date of possession by Purchaser. In the event
Purchaser is required to satisfy any obligation or claim arising from
Seller's operation of the business, Purchaser may deduct said amount
from the next installment(s) after a minimum fifteen (15) day notice
to Seller and-Seller shall thereafter have a period of thirty (30)
days (or such greater time as may be mutually agreed to by the
parties) to settle, compromise or otherwise resolve said claim.
Provided, however, Purchaser's right of offset shall be cumulative and
not an exclusive remedy for any such default and Purchaser shall have
any and all legal and equitable remedies available to it in addition
to such right of offset. It is further agreed that said right of
offset shall cover claims for a period of one (1) year following the
close of escrow.
(b) Purchaser agrees to indemnify and hold Seller harmless with
respect to any loss, liability, cost, expense, or claim arising out of
Purchaser's operation of the business after the date of possession by
Purchaser.
19. PREMISES LEASE. Purchaser acknowledges receipt of a valid Lease Agreement
from the landlord for the premises occupied by the business prior to the
Date of Closing, which Lease Agreement is a condition of closing.
20. EQUIPMENT LEASES. There are no leased items of personal property subject to
leases with Seller.
21. NOTICES. Any notice, request, or other document to be given under this
Agreement after the date hereof by any party to any other, shall be in
writing and shall be sent by hand delivery, or by mail, postage prepaid,
return receipt requested. The effective date of mailed notice shall be
deemed to be three (3) calendar days following mailing.
PURCHASER: IFCO Group
c/o ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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SELLER: Sitestar Corporation
C/O ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
25. WAIVERS/EXTENSION. The parties may, by written instrument, extend the time
for the performance for any of the obligations or other act of any other
party and (a) waive any inaccuracy of such other party in any
representation or warranties contained herein or in any document delivered
pursuant to this Agreement; (b) waive compliance with any of the covenants
of such other parties' performance of any of the obligation set out in this
Agreement. Any waiver or extension hereunder shall not constitute a waiver
or extension of any other provision of this Agreement.
26. SUCCESSORS/ASSIGNS. This Agreement shall be binding on the parties, their
successors, assigns and subsidiaries.
27. REMEDIES IN EQUITY. The parties agree that damages at law may be an
inadequate remedy for breach or threatened breach of the terms of this
Agreement and agree that the respective rights and obligations hereunder
shall be enforceable, pending ultimate resolution of any dispute by
arbitration or appeals therefrom, by specific enforcement, injunction, or
other equitable remedy, as well as at law.
28. PERIODIC FINANCIAL STATEMENTS. Purchaser hereby agrees to provide accurate
and timely financial statements on a quarterly basis to Seller throughout
the term of this Agreement so long as there is a balance due and owing to
Seller under the Promissory Note, the Non-Compete Agreements and/or the
Employment Agreement (if any), and anticipating breach provisions will be
included.
29. WORK IN PROCESS. Work in Progress will be memorialized by schedules
supplied as of the closing of business on October 30, 1999, and attached as
Exhibit "K".
30. ENTIRE AGREEMENT. This Agreement together with its exhibits and attachments
contains the entire agreement between the Seller and Purchaser, and
supersedes or cancels any prior agreements, understandings or inducements
relating to the transaction provided for herein.
31. TRANSFER DOCUMENTS. At closing, Seller shall execute and deliver to
Purchaser a ▇▇▇▇ Of Sale in the form attached hereto as Exhibit "G".
32. COOPERATION AND ADJUSTMENTS. The parties agree to take all steps, and to
execute all documents, whether before, at or after Closing, reasonably
necessary or advisable to carry out this Agreement and the transactions
described herein. The parties recognize that there may be some overlooked
or unclear. technicalities that need to be cleared up after Closing, and
they shall attempt to resolve those by mutual agreement.
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33. CROSS-DEFAULT. Since the obligations of the parties are interdependent, the
parties intend for such obligations to be cross-secured. Therefore, a
default by a party under this Agreement, the Lease Agreement or any of the
agreements referenced herein, subject to the provisions of paragraph 3
above, shall be a default under the others as well, at the option of the
non-defaulting party-
34. ARBITRATION. All disputes relating to this Agreement and/or the
relationship of the parties hereunder shall be settled and finally
determined by arbitration in Vancouver under the American Arbitration
Association (AAA) Commercial Arbitration Rules with Expedited Procedures in
effect on the date hereof. There shall be one arbitrator, who shall be an
attorney with at least 15 years commercial law experience, selected by the
parties as follows: each party shall submit a list of three proposed
arbitrators within ten (10) days of the arbitration demand, and if the
parties do not select an arbitrator within five (5) days, then within three
(3) days one impartial arbitrator shall be appointed by the Presiding
Judge. California law shall apply and arbitrator may award attorneys fee.
The judgment upon the award rendered in any such arbitration shall be final
and binding upon the parties, and may be entered in any court having
jurisdiction thereof.
SIGNED and DATED this 30th day of September, 1999.
SELLER: PURCHASER:
Sitestar Corporation IFCO Group
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By: _____________________ By: __________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
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