UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 13, 2000
WEBQUEST INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation)
000-24355 86-0894019
(Commission File Number) (IRS Employer Identification No.)
2248 Meridian Blvd., Suite A, Minden, NV 89423-8601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(775)782-0350
(Former name or former address, if changed since last report)
N/A
Item 2. Acquisition or Disposition of Assets.
On March 14, 2000, WebQuest International, Inc., a Nevada
corporation("Registrant"), entered into an Asset Purchase Agreement (the
"Agreement"), with Jun Chen, an individual residing in Oakland, California
("Seller"), pursuant to which Registrant agreed to purchase from Seller all
of Seller's right, title and interest in and to the assets associated with
the Seller's "winbridge.com" web site (the "Assets"). At the effective time
of the transfer, April 13, 2000, Registrant acquired from the Seller the
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Assets in exchange for $200,000.00 in cash, 200,000 shares of the
Registrant's Common Stock, a warrant to purchase 25,000 shares at $3.00 per
share and a warrant to purchase 25,000 shares at $4.00 per share. The amount
of consideration paid by Registrant in connection with this acquisition was
determined based on arms-length negotiations between Registrant and Seller.
The cash component of this acquisition price was paid from the Registrant's
general working capital, which has been principally derived from the proceeds
of private placements of equity securities.
The Assets acquired from the Seller pursuant to the Agreement do not
consist of a plant, equipment or other physical property. The Company
plans to commercialize the web site and is hopeful it can generate an income
stream from the web site.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Acquired Business.
The Registrant has determined that audited financial statements of the
assets acquired are not required.
(b) Pro Forma Financial Information.
The Registrant has determined that Pro Forma financial Statements are not
required.
(c) Exhibits.
2.1 Asset Purchase Agreement dated March 14, 2000 between the
Registrant and Seller.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WEBQUEST INTERNATIONAL, INC.
(Registrant)
Dated: April 25, 2000 By:/s/ Scott Berry
Scott Berry,
Chief Financial Officer
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INDEX TO EXHIBITS
(c) Exhibits.
2.1 Asset Purchase Agreement dated March 14, 2000
between the Registrant and Seller.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 14th day of March, 2000, by and between WEBQUEST INTERNATIONAL,
INC., a Nevada corporation and its assignee(s) or nominee(s) (collectively,
"Purchaser") and JUN CHEN, individual residing in Oakland, California,
("Seller").
R E C I T A L S:
A. Seller is engaged in the Internet development business,
specifically the development of the Internet site www.winbridge.com (the
"Business").
B. Seller desires to sell and Purchaser desires to purchase certain
assets of Seller on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. PURCHASE. On the Closing Date (defined below), Seller shall sell
and Purchaser shall purchase the assets described in Section 2 below on the
terms and conditions set forth in this Agreement.
2. PURCHASED ASSETS. The assets ("Assets") which are the subject of
this Agreement and which Seller has agreed to sell and Purchaser has agreed to
purchase are those described on Exhibit "A" attached hereto and incorporated
herein by this reference. The parties mutually agree and acknowledge that
Purchaser has agreed to purchase only the Assets described on Exhibit A.
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3. PURCHASE PRICE. The purchase price ("Purchase Price") to be paid
to Seller by Purchaser for the Assets shall be EIGHT HUNDRED THOUSAND AND
NO/100THS DOLLARS ($800,000.00), payable as follows:
(a) Purchaser shall pay Seller the sum of TWO HUNDRED THOUSAND
AND NO/100THS DOLLARS ($200,000.00) on the Closing Date by means of cashier's
check and $600,000.00 worth of WebQuest common stock restricted under rule 144
valued at $3.00 per share (200,000 shares). Additionally, Purchaser will issue
Seller two stock warrants, one three year warrant to purchase 25,000 shares of
WebQuest International, Inc. common restricted stock ("shares") for $3.00 per
share, and one warrant to purchase 25,000 shares for $4.00 per share. The
cash, stock certificate and warrants will be sent "overnight" via Federal
Express to Seller.
4. ASSUMED LIABILITIES. Purchaser shall assume and agree to pay,
discharge, and perform no liabilities associated with the Assets, and Seller
shall indemnify and hold Purchaser harmless for any other claims, liabilities
or obligations of Seller or related to the Assets. Any liabilities
associated with winbridge.com, by the Purchaser, incurred after the close
date, will not be the Seller's responsibility.
5. CONVEYANCE. Title to the Assets shall be conveyed to Purchaser
by Seller by means of the Bill of Sale, Assignment & Assumption and any other
documents Purchaser shall reasonably require, including, without limitation,
any necessary consents for the transfer of the Assets.
6. CLOSING DATE. The closing of the transactions contemplated by
this Agreement shall be held on or before March 15, 2000 or a later date
mutually agreed to by the parties (the "Closing Date"). The closing shall be
conducted by overnight courier, mail, facsimile and other means mutually
agreed upon by the parties hereto. On the Closing Date, the conveyance
documents shall be properly executed and delivered to Purchaser, and Seller
shall deliver possession of the Assets and all books, records, and
correspondence appurtenant thereto to Purchaser. Purchaser will provide an
ftp site for the Seller to transfer the site digital files.
Seller will cooperate with Purchaser to change the registration of the
URL winbridge.com from Seller to Purchaser by successfully completing a
Registrant Name Change Agreement with Network Solutions, or equivalent
organization. Seller will have this document notarized. Purchaser will
provide the platform to operate winbridge.com.
7. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to and covenants with Purchaser as follows:
(a) On the Closing Date, the Assets will be free and clear of
all debts, liens, claims, mortgages, and encumbrances whatsoever;
(b) There are no pending or, to the best of Seller's knowledge,
threatened suits or administrative actions relating to or affecting any of the
Assets;
(c) Seller has received no notices from any governmental
authority that Seller or any of the Assets are in violation of any applicable
rule, law, ordinance or regulation, or requiring the removal, modification, or
relocation of any of the Assets;
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(d) All of the Assets are in good condition and will comply with
their normal use by Purchaser;
(e) Seller has all licenses and permits necessary to
operate and own the Assets and the licenses and permits are fully
transferable, in good standing, and in full force and effect;
(f) To the best of Seller's knowledge the execution, delivery,
and performance of this Agreement, the consummation of the transactions
contemplated hereby, and the fulfillment of the terms hereof will not violate
any law, order, judgment, rule, regulation, decree, or ordinance to which
Seller is subject or by which Seller is bound;
(g) All ad Val Orem, personal property and other taxes or
assessments on or relating to the Assets have been paid;
(h) WebQuest International, Inc. is purchasing the assets only
and is not responsible for any taxes past or present.
(i) To the best of Seller's knowledge up to and including
the Closing Date, Seller shall conduct its business in accordance with all
applicable laws and regulations in the same manner as it has in the past, will
not incur any additional liabilities relating to the Assets, and will take no
action that will or may result in a lien, claim, mortgage, or encumbrance
against the Assets;
(j) Seller has the power and authority to enter into and perform
its obligations under this Agreement;
(k) All sales and transfer taxes required to be paid in
connection with any of the Assets and all sales taxes required to be collected
by Seller and paid to the appropriate taxing authority, have been paid,
collected and remitted, or will be paid, collected, and remitted prior to the
Closing Date;
(l) To the best of Seller's knowledge there is no action, suit,
or other legal proceeding or governmental investigation pending or, to the
best of Seller's knowledge, threatened, anticipated or contemplated against
Seller or relating to the Assets, or questioning the validity or enforce
ability of this Agreement. To the best of Seller's knowledge there is no
known or prospective infringement of any lease, contract, or agreements
included in or relating to the Assets;
8. DUE DILIGENCE. Prior to the Closing Date, Seller shall permit
Purchaser and Purchaser's authorized representatives to have reasonable
access to the Assets and to Seller's books and records.
9. CONDITIONS PRECEDENT. The following shall be conditions
precedent to the closing of the transactions contemplated by this Agreement.
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(a) Seller shall have complied with all of its undertakings and
obligations under this Agreement;
(b) The representations, warranties, and covenants of Seller
set forth in this Agreement shall be true and correct in all respects as of
the Closing Date;
(c) All consents and permits required to be obtained for the
transfer of the Assets hereunder shall have been obtained, including, without
limitation, any such consent or permit needed for Purchaser to have all
rights. Seller will transfer the domain names and any accounts relating to the
assets being transferred.
(d) Seller and Purchaser shall have executed the non-
competition agreement attached hereto as Exhibit "D."
10. AGREEMENT TO INDEMNIFY. Seller agrees to indemnify and hold
Purchaser and its affiliates harmless from and against the aggregate of all
reasonable expenses, losses, costs, deficiencies, liabilities and damages
(including, without limitation, related counsel and paralegal fees and
expenses) incurred or suffered by Purchaser (collectively, "Indemnifiable
Damages") resulting from or arising out of (i) any breach of a representation
or warranty made by Seller in or pursuant to this Agreement, (ii) any breach
of the covenants or agreements made by Seller in this Agreement, or (iii) any
liabilities. Each of the representations and warranties made by Seller in
this Agreement or pursuant hereto shall survive the closing of the
transactions contemplated hereby. Notwithstanding any knowledge of facts
determined or determinable by any party by investigation, each party shall
have the right to fully rely on the representations, warranties, covenants and
agreements of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation,
warranty, covenant and agreement of the parties contained in this Agreement is
independent of each other representation, warranty, covenant and agreement.
11. NOTICES. Any notice required or permitted to be sent by either
party under this Agreement to the other shall be in writing and shall be
deemed to be given (i) in the case of actual delivery when delivered to the
other party at the address set forth below, (ii) in the case of mailing, three
(3) days after said notice has been deposited in the United States mail,
postage prepaid, by certified or registered mail, addressed to the other party
at the address set forth below, and (iii) in other cases when actually
received, with a copy in each case to:
In the case of Seller:
Jun Chen
4798 Fair Ave.
Oakland, CA 94619
Telephone: (510) 482-2567
In the case of Purchaser:
WebQuest International, Inc.
2248 Meridian Blvd., Suite A
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Minden, Nevada 89423-8601
Telephone: (775) 782-0350
Facsimile: (775) 782-0397
Attention: Kirk Johnson, CEO and a copy to
Attention: Scott Berry, CFO
Each party may change the address to which notice may be sent by so notifying
the other party in writing as provided herein.
12. BROKERS. Seller and Purchaser represent and warrant to each
other that neither of them has employed a broker in regard to this Agreement
for which any commission may be due and payable. Each party agrees to
indemnify and hold the other party harmless against any brokerage commission
resulting from any breach of this representation.
13. LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Nevada.
14. COSTS AND ATTORNEY'S FEES. Should any dispute arise between the
parties over this Agreement, the prevailing party in any action brought to
resolve said dispute shall be entitled to recover its reasonable costs and
reasonable attorney's fees, including costs and fees on appeal.
15. THIRD PARTY BENEFICIARIES. It is the intent of Seller and
Purchaser that this Agreement is solely for the benefit of the parties hereto
and, therefore, no person or persons other than Seller and Purchaser shall
have any rights whatsoever under this Agreement, either as third party
beneficiaries or otherwise.
16. COSTS AND EXPENSES. Each party shall pay its own costs and
expenses, including attorney's fees, incurred in the negotiation, preparation
and execution of this Agreement and the closing cost hereunder.
17. PRESS RELEASE. Purchaser will release this information to
business wire after the closing of the transaction.
18. USE OF PLAYER INFORMATION. Purchaser will not use winbridge.com
registered player information for any purpose other than Internet game
marketing.
19. COMPLETE AGREEMENT. This Agreement constitutes the complete
agreement between the parties hereto and it may not be amended, changed or
modified except by a writing signed by the party to be charged by said
amendment, change or modifications. This provision itself may not be changed
or altered orally but only in a writing signed by the parties to this
Agreement.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
as of the day and year first above written.
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Purchaser: Seller:
WEBQUEST INTERNATIONAL, INC., /s/ Jun Chen
a Nevada Corporation Jun Chen, an individual
By: /s/ Kirk Johnson
Its: Chief Executive Officer
<PAGE>
EXHIBIT "A"
Assets:
1. Ownership, all rights in and to the Domain name www.winbridge.com
2. Ownership, all rights in and to the Internet site www.winbridge.com
3. Ownership, all rights in and to the game code and all domain files
including logs, scripts, graphics and html. This includes both the Visual
Basic version currently in use and the JAVA 2 prototype version.
4. Any login, passwords needed to retrieve administrative functions or
reports.
5. All existing members and site visitors.
6. Registered player information.
7. Login access to site server, mailing list server and administration.
8. All existing e-mail addresses and mailing accounts.
9. All customers, banner accounts and links.
10. The number of registered players at www.winbridge.com is 10,634
11. Number of e-mail addresses at www.winbridge.com. is 9,437
/s/ Jun Chen
Jun Chen
WEBQUEST INTERNATIONAL, INC.,
a Nevada corporation
By: /s/Kirk Johnson
Its: Chief Executive Officer
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EXHIBIT "B"
None.
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EXHIBIT "C"
BILL OF SALE, ASSIGNMENT & ASSUMPTION
THIS BILL OF SALE, ASSIGNMENT & ASSUMPTION is dated March 14, 2000, and
is made by and between Jun Chen (the "Transferor") and WEBQUEST INTERNATIONAL,
INC., a Nevada corporation (the "Transferee").
For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, each intending to be legally bound
and to bind their respective successors and assigns, hereby covenant and agree
as follows:
1. Transferor does hereby convey, assign, transfer and deliver to
Transferee, its successors and assigns, all of Transferor's right, title and
interest, legal and equitable, in and to all of the assets of Transferor set
forth on Exhibit "A" attached hereto and incorporated herein by this
reference) (the "Assets"), to have and to hold all of the Assets hereby
transferred, assigned, conveyed and delivered unto Transferee, its successors
and assigns, to its and their own use and behalf forever.
2. Transferor for itself and its successors and assigns has covenanted
and by this Bill of Sale, Assignment & Assumption does covenant with
Transferee, its successors and assigns, that Transferor, and its successors
and assigns, will do, execute and deliver, or will cause to be done, executed
and delivered, all such further acts, transfers, assignments, conveyances,
powers of attorney and assurances, for the better assuring, conveying and
confirming unto Transferee, its successors and assigns, all of its right,
title and interest, legal and equitable, in the Assets hereby conveyed,
transferred, assigned and delivered by it as Transferee, its successors and
assigns, shall reasonably require. Nothing herein contained shall be deemed
to limit or restrict the properties, assets and rights conveyed, assigned or
transferred to or acquired by Transferee from Transferor, under or by virtue
of any other conveyance, assignment, or other document respecting the Assets.
3. Transferor hereby constitutes and appoints Transferee, its
successors and assigns as Transferor's true and lawful agent and attorney to
demand and receive any and all Assets, to do and perform any and all acts
necessary to carry out the transfer and assignment of the Assets, Transferor
hereby declaring that the foregoing powers are coupled with an interest and
shall be irrevocable by Transferor or by Transferor's dissolution or in any
manner or for any reason whatsoever.
4. Nothing in this instrument, express or implied, is intended or shall
be construed to confer upon or give to any person, firm or corporation other
than Transferee or Transferor, and their respective successors and assigns,
any remedy or claim under or by reason of this instrument or any term,
covenant or condition hereof, and all the terms, covenants and conditions,
promises and agreements contained in this instrument shall be for the sole and
exclusive benefit of Transferee and Transferor and their respective successors
and assigns.
<PAGE>
5. Transferee hereby accepts said assignment of Transferor's right,
title and interest in and to the Assets and hereby assumes none of the
obligations of Transferor with respect to or associated with such Assets.
6. This Bill of Sale, Assignment & Assumption shall be governed and
enforced in accordance with the laws of the State of Nevada without giving
effect to principles of conflicts of law thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale,
Assignment & Assumption as of the date first above written.
TRANSFEROR:
/s/ Jun Chen
Jun Chen
TRANSFEREE:
WEBQUEST INTERNATIONAL, INC.,
a Nevada corporation
By: /s/ Kirk Johnson
Its: Chief Executive Officer
<PAGE>
EXHIBIT "D"
NON-COMPETITION AGREEMENT
This Non-Competition Agreement is made and entered into by and between
Jun Chen (the "Seller") and WEBQUEST INTERNATIONAL, INC., a Nevada corporation
(the "Company") effective as of March 14, 2000, such date being hereafter
referred to as the "Effective Date" of this Agreement.
WHEREAS, pursuant to an Asset Purchase Agreement dated March 14, 2000
(the "Purchase Agreement"), by and between Seller and the Company, the Company
has agreed to purchase certain assets of Seller;
WHEREAS, it is a condition to the Company's purchase of Seller's assets
that Seller agree to be bound by the terms of this Agreement; and
NOW, THEREFORE, in consideration of the mutual agreements and obligations
contained in this Agreement, the parties agree as follows:
1. Non-Competition Covenants of Seller.
(a) Seller shall not, during the period specified in Section 2
below, do any of the following without the prior written consent of the
Company, directly or indirectly (whether as a shareholder, partner, principal,
agent, director, affiliate, consultant or otherwise):
(i) Carry on in any jurisdiction in the United States of
America or any other country in the world (the "Restricted Territory") any
business activity directly competitive with winbridge.com;
(b) For purposes of the foregoing covenants, the following
definitions shall apply:
(i) The "Competing Business" shall mean any business activity
that involves the development or marketing of a bridge game on the Internet.
2. Duration. The covenants set forth in Section 1 and Section 5 shall
be effective commencing as of the Effective Date and shall continue until the
third (3rd) anniversary of the Effective Date of this Agreement.
3. Consideration. Twenty Thousand and 00/100ths Dollars of the
purchase price of the Seller's assets purchased by the Company from the
Seller shall be treated as consideration for the foregoing covenant not to
compete and the parties hereto agree that such consideration shall be
sufficient to make all obligations of Seller herein binding and fully
enforceable.
4. Limitations on Non-Competition Covenant. Section 1 of this
Agreement shall not be deemed to apply to any investments Seller may make,
directly or indirectly, in any publicly traded company so long as Seller's
aggregate holdings do not exceed one percent (1%) of the outstanding voting
securities of such company.
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5. Confidentiality. In addition to the confidentiality provisions of
any other Agreement among Seller, the Company or any of them, Seller agrees
not to disclose, communicate, in any way, any proprietary or confidential
information of the Company such as information relating to winbridge.com
business, trade secrets, personnel, processes, techniques, know-how, formulas
and other information and technical data or any intellectual property rights
of winbridge.com.
6. Remedies. The parties hereto acknowledge and agree that the extent
of damages to the Company in the event of a breach of the covenants contained
in this Agreement by Seller would be difficult or impossible to ascertain and
that the remedies available at law to the Company in the event of any such
breach would be inadequate. Consequently, Seller hereby agrees that in the
event of such breach, the Company shall be entitled to enforce any or all of
the covenants contained in this Agreement by injunctive or other equitable
relief.
7. Representations of Seller. Seller represents that: (i) Seller is
familiar with the covenants not to compete and not to solicit set forth in
this Agreement, (ii) Seller is fully aware of his obligations hereunder,
including, without limitation, the length of time, scope and geographic
coverage of these covenants, (iii) Seller finds the length of time, scope and
geographic coverage of these covenants to be reasonable, and (iv) execution of
this Agreement and performance of Seller's obligations hereunder, will not
conflict with, or result in a violation or breach of, any other agreement to
which Seller is a party or any judgment, order or decree to which the Seller
is subject.
8. Assignment. All contracts, representations, warranties and
agreements of the parties contained herein shall be binding on and inure to
the benefit of the parties, their respective heirs, personal representatives,
and successors and assigns; provided, however, this Agreement shall not be
assigned by Seller without the express written consent of the Company.
9. Entire Agreement. This Agreement, along with the exhibits thereto,
sets forth the entire Agreement and understanding between the Company and
Seller with respect to the subject matter hereof, and supersedes any other
negotiations, agreements, understandings, representations or past or future
practices, whether written or oral.
10. Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing to each such affected
party and shall be deemed given on the date of delivery, if delivered, or five
days after mailing, if mailed first-class mail, postage prepaid, to the
following addresses:
In the case of Seller:
Jun Chen
4798 Fair Ave.
Oakland, CA 94619
Telephone: (510) 482-2567
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In the case of the Company:
WebQuest International, Inc.
2248 Meridian Blvd., Suite A
Minden, Nevada 89423-8601
Telephone: (775) 782-0350
Facsimile: (775) 782-0397
Attention: Kirk Johnson, CEO and a copy to
Attention: Scott Berry, CFO
or to such other address as any party hereto may designate by notice given as
herein provided.
11. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada without giving
effect to principles regarding conflict of laws of any state.
12. Amendments. This Agreement shall not be changed or modified in whole
or in part except by an instrument in writing signed by each party hereto, nor
shall any covenant or provision of this Agreement be considered waived except
by an instrument in writing signed by the party against whom enforcement of
such waiver is sought.
13. Attorneys' Fees. In the event of any legal action or proceeding to
enforce or interpret the provisions hereof, the prevailing party shall be
entitled to reasonable attorneys' fees, whether or not the proceeding results
in a final judgment.
14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same /agreement.
15. Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction or interpretation of this
Agreement.
16. Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to either party upon any breach or default of the
other party hereto shall impair any such right, power or remedy of such non-
defaulting party, nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver, single breach or default
be deemed a waiver of any other breach or default theretofore or thereafter
occurring.
IN WITNESS WHEREOF, the parties hereto have executed this Non-Competition
Agreement as of the Effective Date.
Company: Seller:
WEBQUEST INTERNATIONAL, INC., /s/ Jun Chen
a Nevada Corporation Jun Chen
By: /s/ Kirk Johnson
Its: Chief Executive Officer
