UNITED STATES
SECURITIES 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):
December 17, 1999
LEISURE CONCEPTS INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-4032991
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
20 Purple Martin Drive
Hackettstown, New Jersey 07840
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number 908-813-0418
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FORWARD LOOKING STATEMENTS
Except for the Historical Information Contained Herein, Certain
Matters Discussed in this Report May Be Considered
"Forward-looking Statements" Within The Meaning of The Securities
Act of 1933 And The Securities Exchange Act of 1934, as Amended
by The Private Securities Litigation Reform Act of 1995. Those
Statements Include Statements Regarding The Intent, Belief or
Current Expectations of The Company and Members of its Management
as Well as the Assumptions on Which Such Statements Are Based.
Prospective Investors Are Cautioned That Any Such Forward-looking
Statements Are Not Guarantees of Future Performance and Involve
Risks and Uncertainties, and That Actual Results May Differ
Materially from Those Contemplated by Such Forward-looking
Statements. Important Factors Currently Known to Management That
Could Cause Actual Results to Differ Materially from Those in
Forward-looking Statements Include "The Company's Operating
Results Could Fluctuate, Causing Its Stock Price to Fall", "If
the Company Cannot Integrate Acquired Companies in its Business,
its Profitability May Be Adversely Effected", and "The Company
May Not Be Able to Compete Successfully Against Other Companies."
These and Additional Important Factors to Be Considered Are Set
Forth in the Safe Harbor Compliance Statement for Forward-looking
Statements the Company Undertakes No Obligation to Update or
Revise Forward-looking Statements to Reflect Changed Assumptions,
the Occurrence of Unanticipated Events or Changes to Future
Operating Results.
Item 2. Acquisition or Disposition of Assets
Leisure Concepts International Inc., on December 17, 1999
acquired all the outstanding shares of common stock of CI4Net.com
Inc., a Delaware company operating as an Internet holding
company. Additionally, the Company has effectuated a 15 for 1
reverse split of its outstanding shares of common stock which has
effectively left 555,446 shares of common stock outstanding.
Subsequent to the acquisition, and pursuant to the terms of the
Acquisition Agreement, the Company issued 20,500,000 shares of
common stock to the shareholders of Ci4net.com Inc., as
consideration of their sale of the shares of the shares acquired
by the Company. Control of the Company now vests in the hands of
the shareholders of Ci4net.com Inc.
The Company has also agreed to acquire all of the outstanding
shares of common stock of MSK Industries, Inc., in a transaction
was to issue 2,238,400 shares of its common stock to the
shareholders of MSK Industries.
Pursuant to the terms of the Acquisition Agreement, the Company
has changed its name to CI4Net.com, Inc.
ABOUT CI4NET.COM
Ci4net.com is an Internet holding company actively engaged in
European business-to-business, known as B2B, e-commerce,
Business-to-Consumer, known as B2C, e-commerce, and the building
of an e-commerce technological global infrastructure to serve
global e-commerce through a network of affiliate companies. Its
goal is to become the leading global e-commerce company by
establishing an e-commerce presence in major segments of the
global economy. Ci4net believes that its focus on the e-commerce
industry enables it to capitalize rapidly on new opportunities to
attract and develop leading e-commerce companies. Ci4net's
primary focus is on Europe, however it maintains affiliate
operations in Australia and the United States. Ci4net are
developing businesses with first to market concepts (or first to
market geographically). Ci4net will also take the successful
business models that have had accelerated growth in the United
States and apply them to the European marketplace through
strategic relationships and joint ventures, as well as taking the
internal business models that it develops to other marketplaces.
Ci4net believes it is well positioned to fully exploit the
opportunity in European Internet growth in a market that is
potentially larger and now growing faster than the United States
market. Ci4net utilizes a 'incubator' strategy for building or
buying the best Internet properties. Ci4net intends to become
the premier partner for developing Internet properties throughout
Europe.
Ci4net intends to expand through the European market in two
stages by penetrating two categories of markets. Category One
market encompasses the UK, Germany, France and Italy. Category
Two markets include Spain, Netherlands, Switzerland, Belgium,
Sweden, Austria, Denmark and Norway. The Company believes that
the potential for accelerated growth with the correct business
models is immense. It finds that such growth can be attained and
surpass the successful B2B markets in Europe.
Ci4net has a diverse portfolio of wholly owned, majority owned
and minority owned investments in Internet related Consumer
e-commerce, B2B e-commerce and Infrastructure Enabling Technology
Companies. These investments are termed 'affiliate' companies.
The inter-relationship between these affiliate companies creates
'value added' synergy and co-operative technological development.
Ci4net's ability as an 'incubator' helps companies by way of
being able to make a committed long term investment and to help
those affiliate companies by developing their own individual
business strategies. Ci4net is committed to increasing
shareholder value through its incubator strategy, leading to
eventual floats or strategic sales of the affiliate companies.
Because of the relatively underdeveloped European marketplace,
the group has formed advantageous strategic relationships with
media partners on various of the Consumer e-commerce sites. The
competition in the European marketplace for consumer content e-
commerce channels is sparse as the European Internet has not yet
fully developed. This is evidenced by the fact that Amazon only
established UK operations in November 1998. Ci4net is confident
of being able to develop more European centric sites ahead of US
based competitors.
An integral part of Ci4net's structure is the groups
Infrastructure Enabling Technology Companies (IETC) that create
the operational infrastructure for the affiliate companies. The
IETC are all existing business with proprietary technology and
experienced management, which will all benefit from additional
relationships with the Ci4net B2C and B2B companies. The
synergistic relationships that exist between the IETC companies
gives the Ci4net affiliate companies a solid technological
platform on which to develop site and e-commerce operations.
ABOUT MSK INDUSTRIES INC.
MSK Industries, Inc., a developmental stage company, was
organized on December 31, 1996 under the laws of the State of
Delaware, having the stated purpose of engaging in any lawful act
or activity for which corporations may be organized. MSK
Industries had previously sought to develop theme restaurant bars
throughout the United Kingdom catering to sports enthusiasts. The
company abandoned these plans once it determined that it could
not obtain sufficient funding to develop a test restaurant for
the purpose of gauging consumer demand for such a concept. As a
result, the Company determined that it would be beneficial for
its shareholders to be acquired by Leisure Concepts International
as it would provide an opportunity to become part of a entity
which, in the shareholders' opinion, had a potential for growth
and sound investment.
MSK Industries has no recent operating history and minimal assets
and liabilities based upon its developmental stage status.
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Item 5. Other Events
Subsequent to the closing of the Acquisition Agreement between
Leisure Concepts International, Inc., and CI4net.com, Inc., the
Company has decided to change its name to CI4net.com, Inc.
Item 7. Financial Statements and Exhibits
At this time, it is impracticable to provide the required
financial statements for Ci4net.com, Inc. The Company however
expects to file such financial statements as an amendment to this
Form as soon as practicable, but not later than sixty (60) days
after the report on this Form is to be filed.
At this time, it is impracticable to provide the required
financial statements for MSK Industries, Inc. The Company
however expects to file such financial statements as an amendment
to this Form as soon as practicable, but not later than sixty
(60) days after the report on this Form is to be filed.
A copy of the Acquisition Agreement between the Company and
Ci4net.com, Inc., is attached hereto as an exhibit. A copy of
the Acquisition Agreement between the Company and MSK Industries,
Inc., is attached hereto as an exhibit.
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: December 17, 1999
Ci4net.com, Inc.
(Registrant)
/s/ Kevin R. Leech
President
ACQUISITION AGREEMENT
AGREEMENT dated 10th December 1999 ("the Agreement"), by, between
and among CI4NET.COM INC, a company incorporated under the laws
of the state of Delaware (herein referred to as CI4NET), the
persons listed on Exhibit A attached hereto and made a part
hereof, being all of the shareholders and executive officers of
CI4NET (hereinafter referred to as "MANAGEMENT"); MSK INDUSTRIES
INC, a company incorporated under the laws of Delaware
(hereinafter referred to as "MSK "); and the persons listed on
Exhibit "A" attached hereto and made a part hereof, (hereinafter
referred to as the "SELLERS").
WHEREAS, the SELLERS own a total of 2,238,400 shares of common
stock, $000.1 par value, of MSK , said shares being 100% of the
issued and outstanding common stock of MSK .
WHEREAS, the SELLERS desire to sell and CI4NET desires to
purchase one hundred (100%) percent of such shares.
NOW, THEREFORE, in consideration of the mutual convenants,
agreements, representations and warranties herein contained, the
parties hereby agree as follows:
1. Purchase and Sale - The SELLERS hereby agree to sell,
transfer, assign and convey to CI4NET and CI4NET hereby agrees to
purchase and acquire from the SELLERS, a total of 2,238,400
shares of common stock of MSK , which equates one hundred percent
(100%) percent of all of MSK 's currently issued and outstanding
common stock (the MSK Common Shares"), in a tax-free
stock-for-stock acquisition.
2. Purchase Price - The aggregate purchase price to be paid by
CI4NET for the MSK Common Shares shall be 2,238,400 post-reverse
split shares of CI4NET $0.001 par value voting common stock (the
"CI4NET Common Shares"). The CI4NET Common Shares will be issued
to the individual SELLERS in accordance with Exhibit "A-1"
attached hereto.
3. Warranties Representations and Covenants of MSK and MSK
PRINCIPALS - In order to induce CI4NET to enter into this
Agreement and to complete the transaction contemplated hereby,
MSK and its principal executive officers (hereinafter referred
to as the "MSK PRINCIPALS", jointly and severally warrant and
represent to CI4NET that:
(a) Organization and Standing MSK is a corporation duly
organized, validly existing and in a good standing under the
laws of the State of Delaware, is qualified to do business as
foreign corporation in every other state or jurisdiction in
which it operates to the extent required by the laws of such
states and jurisdictions, and has full power and authority to
carry on its business as now conducted and to own and operate
its assets, properties and business. Attached hereto as
Exhibit "B" are true and correct copies of MSK 's Certificate
of Incorporation, amendments thereto and all current \by-laws
of MSK . No changes thereto will be made in any of theExhibit
"B" documents before the closing. MSK has no subsidiaries
except as listed or any investments or ownership interests in
any corporation, partnership, joint venture or other business
enterprise which is material to its business.
(b) Capitalization As of the Closing Date of MSK 's entire
authorized equity capital consists of 25,000,000 shares of $0.001
par value, of which 2,238,400 shares of Common Stock will be
outstanding as of the Closing. As of the Closing Date, there
will be no other voting or equity securities authorized or
issued, nor any authorized or issued securities convertible into
voting stock, and no outstanding subscriptions, warrants, calls,
options, rights, commitments or agreements by which MSK or the
SELLERS are bound, calling for the issuance of any additional
shares of common stock or any other voting or equity security,
except as set forth in Exhibit "MSK -S", attached hereto. The
2,238,400 issued and outstanding MSK Common Shares to be
transferred by SELLERS constitutes one hundred (100%) percent of
the currently issued and outstanding shares of Common Stock of
MSK , which includes inter-claim, that same percentage of MSK 's
voting power, right to receive dividends, when, as and if
declared and paid, and the right to receive the proceeds of
liquidation attributable to common stock, if any.
(c) Ownership of MSK Shares Each SELLER warrants and
represents, severally, that as of the date hereof, such SELLER is
the sole owner of the MSK Common Shares listed by his or her
name on Exhibit "A-1", free and clear of all liens, encumbrances,
and restrictions whatsoever, except that the MSK Common Shares
so listed have not been registered under the Securities Act of
1933, as amended (the "33 Act"), or any applicable State
Securities laws. By SELLERS' transfer of the MSK Common Shares
to CI4NET pursuant to this Agreement. CI4NET will thereby acquire
100% of the outstanding capital stock of MSK , free and clear of
all liens, encumbrances and restrictions of any nature
whatsoever, except by reason of the fact that the MSK Common
Shares will not have been registered under the '33 Act, or any
applicable State securities laws.
(d) Taxes MSK has filed all federal, state and local income or
other tax returns and reports that it is required to file with
all governmental agencies, wherever situate, and has paid or
accrued for payment all taxes as shown on such returns, such that
a failure to file, pay or accrue will not have a material adverse
effect on MSK . MSK 's income tax returns have never been
audited by any authority empowered to do so.
(e) Pending Actions There are no known material legal actions,
lawsuits, proceedings or investigations, either administrative or
judicial, pending or threatened, against or affecting MSK , or
against the MSK PRINCIPALS that arrive out of their operation of
MSK , except as described in Exhibit "C" attached hereto. MSK
is not knowingly in material violation of any law, material
ordinance or regulation of any kind whatever, including, but not
Inc to laws, rules and regulations governing the sale of its
services, the 33 Act, the Securities Exchange Act of 1934, as
amended (the "34 Act"), the Rules and Regulations of the U.S.
Securities and Exchange Commission ("SEC"), or the Securities
Laws and Regulations of any state or nation.
(f) Government and Regulation MSK holds the licenses and
registrations set forth on Exhibit "D" hereto from the
jurisdictions set forth therein, which licenses and registrations
are all of the licenses and registrations necessary to permit
MSK to conduct its current business. All of such licenses and
registrations are in full force and effect, and there are no
proceedings, hearings or other actions pending that may affect
the validity or continuation of any of them. No approval of any
other trade or professional association or agency of government
other than as set forth on Exhibit "D" is required for any of the
transactions effected by this Agreement, and the completion of
the transactions contemplated by this Agreement will not, in and
of themselves, affect or jeopardize the validity or continuation
of any of them.
(g) Ownership of Assets Except as set forth in Exhibit "E"
attached hereto, MSK has good, marketable title, without any
liens or encumbrances of any nature whatever, to all of the
following, if any; assets, properties and rights of every type
and description, including, without limitation, all cash on hand
and in banks, certificates of deposit, stocks, bonds, and other
securities, good will, customer lists, its corporate name and all
variants thereof, trademarks and trade names, copyrights and
interests thereunder, licenses and registrations, pending
licenses and permits and applications therefor, inventions,
processes, know-how, trade secrets, real estate and interests
therein and improvements thereto, machinery, equipment, vehicles,
notes and accounts receivable, fixtures, rights under agreements
and leases, franchises, all rights and claims under insurance
policies and other contracts of whatever nature, rights in funds
of whatever nature, books and records and all other property and
rights of every kind and nature owned or held by MSK as of this
date, and will continue to hold such title on and after the
completion of the transactions contemplated by this Agreement;
nor, except in the ordinary course of its business, has MSK
disposed of any such asset since the date of the most recent
balance sheet described in Section 3(0) of this Agreement.
(h) No Interest in Suppliers, Customers, Landlords or
Competitors Neither the MSK PRINCIPALS nor any member of their
families have any material interest of any nature whatever in any
supplier, customer, landlord or competitor of MSK .
(i) No Debt Owed by MSK to MSK PRINCIPALS Except as set forth
in Exhibit "F" attached hereto, MSK does not owe any money,
securities, or property to either the MSK PRINCIPALS or any
member of their families or to any company controlled by such a
person, directly or indirectly. To the extent that the MSK
PRINCIPLES may have any undisclosed liability to pay any sum or
property to any such person or equity or any member of their
families such liability is hereby forever irrevocably released
and discharged.
(j) Complete Records All of MSK 's books and records, including,
without limitation, its books of account, corporate records,
minute book, stock certificate books and other records are up-to-
date, complete and reflect accurately and fairly the conduct of
its business in all material respects since its date of
incorporation.
(k) No Misleading Statements or Omissions Neither this Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to CI4NET in connection herewith,
contains any materially misleading statement or omits any fact or
statement necessary to make the other statements or facts therein
set forth not materially misleading.
(l) Validity of this Agreement All corporate and other
proceedings required to be taken by the SELLERS and by MSK in
order to enter into and carry out this Agreement have been duly
and properly taken. This Agreement has been duly executed by the
SELLERS and by MSK , and constitutes the valid and binding
obligation of each of them, enforceable in accordance with its
terms except to the extent Inc by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws relating to
or effecting generally the enforcement of creditors rights. The
execution and delivery of this Agreement and the carrying out of
its purposes will not result in the breach of any of the terms
and conditions of, or constitute a default under or violate, MSK
's Certificate of Incorporation or By-Laws, or any material
agreement, lease, mortgage, bond, indenture, license or other
material document or undertaking, oral or written, to which MSK
or the SELLERS is a party or is bound or may be affected, nor
will such execution, delivery and carrying out violate any law,
rule or regulation or any order, with injunction or decree, of
any court, regulatory agency or other governmental body; and the
business now conducted by MSK can continue to be so conducted
after completion of the transaction contemplated hereby, with MSK
as a wholly owned subsidiary of CI4NET.
(m) Concepts and Approvals: Compliance with Laws Neither MSK
nor the SELLERS are required to make any filing with, or obtain
the consent or approval of, any person or entity as a condition
to the consummation of the transactions contemplated by this
Agreement. The business of MSK has been operated in material
compliance with all laws, rules, and regulations applicable to
its business, including, without limitation, those related to
securities matters, trade matters, environmental matters, public
health and safety, and labor and employment.
(n) Access to Books and Records CI4NET will have full and free
access to MSK 's books during the course of this transaction
prior to Closing, during regular business hours, on reasonable
notice.
(o) MSK Financial Statements Before the Closing, MSK 's
financial statements as of and for the period from inception to
November 30, 1999, will be provided to CI4NET and will be annexed
hereto as Exhibit "G"; the MSK financial statements will
accurately describe MSK 's financial position as of the dates
thereof. The MSK financial statements will have been prepared
in accordance with generally accepted accounting principles in
the United States ("GAAP") (or as permitted by regulation S-X,
S-B, and/or the rules promulgated under the 33 Act and the 34
Act) and for the period from inception to November 30, 1999
audited by independent certified public accountants with SEC
experience.
(p) MSK 's Corporate Summary MSK 's Business Plan, dated
November 1999 (attached hereto as Exhibit "L") accurately
describes MSK 's business assets, proposed operations and
management as of the date thereof; since the date of the
Corporate Plan, there has been no material adverse change in the
Business Plan and no material adverse change in MSK ; provided
that no warranties or representations are made as to any
financial projections.
4. Warranties, representations and Covenants of CI4NET AND
MANAGEMENT OF CI4NET ("MANAGEMENT") In order to induce the
SELLERS and MSK to enter into this Agreement and to complete the
transaction contemplated hereby, CI4NET AND MANAGEMENT jointly
and severally warrant, represent and covenant to MSK and SELLERS
that:
(a) Organization and Standing CI4NET is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware, will be qualified to do
business as a foreign corporation in every other state and
jurisdiction in which it operates to the extent required by
the laws of such states or jurisdictions, and will have full
power and authority to carry on its business as now
conducted and to own and operate its assets, properties and
business. CI4NET has no subsidiaries or any other
investments or ownership interests in any corporation,
partnership, joint venture or other business enterprise.
(b) Capitalization CI4NET's entire authorized equitycapital
consists of 25,000,000 shares of voting common stock, $0.001
par value. As of the Closing, will have issued and
outstanding 23,293,846 shares of voting common stock, $0.001
par value and no shares of preferred stock issued. Upon
issuance, all of the CI4NET Common Stock will be validly
issued, fully paid and non-assessable. The relative rights
and preferences of CI4NET's equity securities are set forth
on the Certificate of Incorporation, as amended and CI4NET's
By-laws (Exhibit "H" hereto). There are no other voting or
equity securities authorized or issued, not any authorized
or issued securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which CI4NET is bound, calling
for the issuance of any additional shares of common stock or
any other voting or equity security. The By-laws of CI4NET
provide that a simple majority of the shares voting at a
stock holders' meeting at which a quorum is present may
elect all of the directors of CI4NET. Cumulative voting is
not provided for by the By-Laws or Certificate of
Incorporation of CI4NET. Accordingly, as of the Closing the
2,238,400 shares being issued to and acquired by the SELLERS
will constitute 9.6% of the 23,293,846 shares of CI4NET
which will then be issued and outstanding (including all
consulting fees) which includes, inter alia, that same
percentage of CI4NET's voting power (subject to the
provisions regarding cumulative rights), right to receive
dividends, when, as and if declared and paid, and the right
to receive the proceeds of liquidation attributable to
common stock, if any.
(c) Ownership of Shares By CI4NET's issuance of the CI4NET
Common Shares to the SELLERS pursuant to this Agreement, the
SELLERS will thereby acquire good, absolute marketable title
thereto, free and clear of all liens, encumbrances and
restrictions of any nature whatsoever, except by reason of
the fact that such CI4NET shares will not have been
registered under the 33 Act, or any applicable state
securities laws.
(d) Significant Agreements CI4NET is not and will not at
Closing be bound by any of the following:
(i) Employment, advisory or consulting contract
(except as described in Section 12 herein).
(ii) Plan providing for employee benefits of any
nature.
(iii) Lease with respect to any property or equipment.
(iv) Contract of commitments for any current
expanditure.
(v) Contract or commitment pursuant to which it has
assumed, guaranteed, endorsed or otherwise become
liable for any obligation of any other person, firm or
organization.
(vi) Contract, agreement, understanding, commitment
or arrangement either than in the normal course of
business, not set forth in the Agreement or an Exhibit
hereto.
(vii) Agreement with any person relating to the
dividend, purchase or sale of securities, that has not
been settled by the delivery of payment of securities
when due, and which remains unsettled upon the date of
this Agreement.
(e)Taxes CI4NET has filed all federal, state and localincome
or other tax returns and reports that it is required to file
with all governmental agencies, wherever situate, and has
paid all taxes as shown on such returns. All of such
returns are true and complete. CI4NET's income tax returns
have never been audited by say authority empowered to do so.
(f)Absence of Liabilities As of the Closing Date CI4NET will
have no liabilities of any kind or nature, fixed or
contingent, except for the costs, including legal and
accounting fees and other expenses, in connection with this
transaction, for which CI4NET agrees to be responsible and
to pay in full at or before the Closing.
(g)No Pending Actions To the best of management's knowledge,
there are no legal actions, lawsuits, proceedings or
investigations, either administrative or judicial, pending
or threatened against or affecting CI4NET, or against any of
the CI4NET MANAGEMENT and arising out of their operation of
CI4NET. CI4NET has been in compliance with, and has not
received notice of violation of any law, ordinance of any
kind whatever, including, but not Inc to, the 33 Act, the
Rules and Regulations of the SEC, or the Securities Laws and
Regulations of any sale. CI4NET is not an investment company
as defined in, or otherwise subject to regulation under, the
Investment Company Act of 1940. CI4NET is not required to
file reports pursuant to either Section 13 or Section 15 (d)
of the 34 Act.
(h)Corporate Records All of CI4NET's books and records,
including, without limitation, its books of account,
corporate records, minute book, stock certificate books and
other records are up-to-date complete and reflect accurately
and fairly the conduct of its business in all respects since
its date of incorporation; all of said books and records
will be made available for inspection by MSK's authorized
representatives prior to the Closing as provided by Section
4(I) herein, and will be delivered to CI4NET's new
management at the Closing.
(i)No Misleading Statements or Omissions Neither this
agreement nor any financial statement, exhibit, schedule or
document attached hereto or presented to MSK in connection
herewith contains any materially misleading statement, or
omits any fact or statement necessary to make the other
statements or facts therein set forth not materially
misleading.
(j)Validity of this Agreement All corporate and other
proceedings required to be taken by CI4NET in order to enter
into and to carry out this Agreement will have been duly and
properly taken at or before the Closing. This Agreement has
been duly executed by CI4NET, constitutes a valid and
binding obligation of CI4NET enforceable in accordance with
its terms. The execution and delivery of this Agreement and
the carrying out of its purposes will not result in the
breach of any of the terms or conditions of, or constitute a
default under or violate, CI4NET's Certificate of
Incorporation- or By-Laws, or any agreement, lease,
mortgage, bond, indenture, license or other document or
undertaking, oral or written, to which CI4NET is a party or
is bound or may be affected nor will such execution,
delivery and carrying out violate any law, rule or
regulation or any order, writ, injunction or decree of any
court, regulatory agency or other governmental body.
(k)Consents and Approvals, Compliance with Laws Except for
notices to be filed as described in Section 7(a)(v) herein,
neither MSK nor MANAGEMENT is required to make any filing
with, or obtain the consent or approval of, any person or
entity as a condition to the consummation of the
transactions contemplated by this Agreement. The business
of CI4NET has been operated in compliance with all laws,
rules and regulations applicable to its business, including,
without limitation, those related to securities matters,
trade matters, environmental matters, public health and
safety, and labor and employment.
(l)Access to Books and Records MSK and SELLERS will have
fulland free access to MSK 's books and records during the
course of this transaction prior to and at the Closing on
reasonable notice.
(m) CI4NET Financial Statements At or before the Closing,
CI4NET and MANAGEMENT will provide MSK with CI4NET's
audited financial statements for the fiscal year ended
January 31, 1999 which will be audited in accordance with
GAAP by independent certified public accountants with SEC
experience, and which comply with applicable Federal
securities laws and regulations including Regulation S-X.
There will have been no material change in the business,
assets or condition (financial or otherwise) of CI4NET since
the date of such financial statements to the Closing.
(n) CI4NET Financial Condition As of the Closing, CI4NET
will have no assets or liabilities, except as disclosed in
financial statements.
(o)Directors and Shareholders Approval As of the Closing,
CI4NET's Board of Directors and Shareholders, by meeting or
consent shall have properly authorized the matters described
in section 7(a)(iv)herein.
(p)The CI4NET Shares All of the CI4NET Common Shares issued
to SELLERS shall be validly issued, fully-paid
non-assessable shares of CI4NET Common Stock, with full
voting rights, dividend rights, and right to receive the
proceeds of liquidation, if any, as set forth in CI4NET's
Certificate of Incorporation.
5. Term: Indemnification All representations, warranties,
covenants and agreements made herein and in the exhibits attached
hereto shall survive the execution and delivery of this Agreement
and payment pursuant thereto. MANAGEMENT and MSK MANAGEMENT
("management") of both parties to the agreement hereby agree,
jointly and severally, to indemnify, defend, and hold harmless
CI4NET, MSK , and the SELLERS from and against any damage, loss,
liability, or expense (including without limitation, reasonable
expenses of investigation and reasonable attorney's fees) arising
out of any material breech of any representation, warranty,
covenant, or agreement made by MSK MANAGEMENT or management in
this Agreement.
6. Restricted Shares: 1,200,000 of the CI4NET shares to be
issued are free trading shares as per the tax free stock for
stock consideration, the remainder of 1,038,400 CI4NET Common
Shares issued to SELLERS hereunder will be "restricted
securities" as defined in Rule 144 under the 33 Act and each
stock certificate issued to SELLERS hereunder, will bear the
usual restrictive legend to such effect. Appropriate Stop
Transfer instructions will be given to CI4NET '' stock transfer
agent.
7. Conditions Precedent to Closing (a) The obligations of MSK
and the SELLERS under this Agreement shall be and are subject to
fulfillment, prior to or at the Closing, of each of the following
conditions:
(i) That CI4NET's and MANAGEMENT's representations and
warranties contained herein shall be true and correct at the
time of Closing as if such representations and warranties
were made at such time, and MANAGEMENT will deliver an
executed certification confirming the foregoing;
(ii) That CI4NET and MANAGEMENT shall have performed or
complied with all agreements, terms and conditions required
by this Agreement to be performed or complied with by them
prior to or at the time of the Closing;
(iii) That CI4NET's directors and shareholders, by proper
and sufficient vote taken either by consent or at a meeting
duly and properly called and held, shall have properly
approved all of the matters required to be approved by
CI4NET's directors and shareholders, respectively;
(iv) That CI4NET shall have filed the notice of the
reverse split required by Rule 10b-17 under that Act, and
shall have sent notice to its stockholders of the
transactions contemplated herein; and
(v) That CI4NET's Board of Directors, by proper and
sufficient vote, shall have approved this Agreement and the
transactions contemplated hereby; approved the contemplated
reverse split of CI4NET's outstanding Common Stock without
changing either the authorized shares or the par value;
approved the change of CI4NET's corporate name to a name
selected by MSK ; approved the resignation of all of
CI4NET's current directors and the election of up to three
designees of MSK to serve as directors in place of CI4NET's
current directors; and will have approved such other changes
as are consistent with this Agreement and approved by MSK
and CI4NET; and
(b) The obligations of CI4NET and MANAGEMENT under this
Agreement shall be and are subject to fulfillment, prior to
or at the Closing of each of the following conditions:
(i) That MSK 's and SELLERS' representations and warranties
contained herein shall be true and correct at the time of
Closing as if such representations and warranties were made
at such time and MSK and the MSK PRINCIPALS shall deliver
an executed certification confirming the foregoing;
(ii) That MSK and MSK PRINCIPALS shall have performed or
complied with all agreements, terms and conditions required
by this Agreement to be performed or complied with by them
prior to or at the time of Closing; and
(iii) That MSK 's officers will have signed non-compete
clauses in the form attached hereto as Exhibit "J".
8 Termination This Agreement may be terminated at any time
before or at Closing, by;
(a)The mutual agreement of the parties;
(b)Any party if:
(iv) Any legal proceeding shall have been instituted
or shall be imminently threatening to delay, restrain
or prevent the consummation of this Agreement.
Upon termination of this Agreement for any reason, in accordance
with the terms and conditions set forth in this paragraph, each
said party shall bear all costs and expenses as each party has
incurred and no party shall be liable to the other.
9. Exhibits All Exhibits attached hereto are incorporated
herein by this reference as if they were set forth in their
entirety.
10. Miscellaneous Provisions This Agreement is the entire
agreement between the parties in respect of the subject matter
hereof, and there are no other agreements, written or oral, nor
may this Agreement be modified except in writing and executed by
all of the parties hereto. The failure to insist upon strict
compliance with any of the terms, covenants or conditions of this
Agreement shall not be deemed a waiver or relinquishment of such
rights or power at any other time or times.
11. Closing The Closing of the transactions contemplated by this
Agreement ("Closing") shall take place at the offices of Shane H
Sutton, P.C. attorneys for CI4NET, at 1.00 P.M. on the first
business day after the letter of the approval of SELLERS owning
at least 80% of MSK 's Common Stock or the shareholders of CI4NET
approving this Agreement and the matters referred to in section
7(a)(vi) herein, or such other date as the parties hereto shall
mutually agree upon. At the Closing, all of the documents and
items referred to herein shall be exchanged.
12. Prohibited Actions Between the date hereof and the effective
date of the merger, neither Purchaser nor Seller will, except
with the prior written consent of the other:
(a)issue or sell any stock, bonds, or other corporate securities;
(b)incur any obligation or liability (absolute or contingent),
except current liabilities incurred, and obligations under
contracts entered into, other than in the ordinary course of
business;
(c) discharge or satisfy any lien or encumbrance or pay any
obligation or liability (absolute or contingent) other than in
the ordinary course of business;
(d) make any dividend or other payment or distribution to its
shareholders or Purchase or redeem any shares of its capital
stock other than in the ordinary course of business;
(e)mortgage, pledge, create a security interest in, or subject to
lien or other encumbrance any of its assets, tangible or
intangible other than in the ordinary course of business;
(f)sell or transfer any of its tangible assets or cancel any
debts or claims except in each case in the ordinary course of
business other than in the ordinary course of business;
(g)sell, assign, or transfer any trademark, trade name, patent,
or other intangible asset;
(h)waive any right of any substantial value other than in the
ordinary course of business; or
(i) enter into any other transaction other than in the ordinary
course of business.
13. Further Instruments From time to time, as and when requested
by the either of the parties or by its successors or assigns, the
other party will execute and deliver, or cause to be delivered,
all such deeds and other instruments; and will take or cause to
be taken such further or other action as the parties may deem
necessary or desirable in order to vest in and confirm to the
purchaser title to and possession of all its property, rights,
privileges, possessions, and franchises and otherwise to carry
out the intent and purposes of this agreement.
(b) Fees and Commissions: (a) Except as described in this
Section 12, no broker, finder, or other person or entity is
entitled to any free or commission from CI4NET or MSK for
services rendered on behalf of CI4NET or MSK in connection with
the transactions contemplated by this Agreement.
15. Governing Law This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Delaware.
16. Counterparts This Agreement may be executed in duplicate
facsimile counterparts, each of which shall be deemed an original
and together shall constitute one and the same binding Agreement,
with one counterpart being delivered to each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals as of the date and year above first written.
CI4NET.COM INC
By: ____________________________
____________________________
MSK Industries INC
By: ____________________________
ACQUISITION AGREEMENT
AGREEMENT dated 2nd December 1999 ("the Agreement"), by, between
and among LEISURE CONCEPTS INTERNATIONAL INC, a company
incorporated under the laws of the state of Delaware (herein
referred to as LCI), the persons listed on Exhibit A attached
hereto and made a part hereof, being all of the shareholders and
executive officers of LCI (hereinafter referred to as
"MANAGEMENT"); CI4NET.COM, INC, a company incorporated under the
laws of Delaware (hereinafter referred to as "CI4NET"); and the
persons listed on Exhibit "A" attached hereto and made a part
hereof, (hereinafter referred to as the "SELLERS").
WHEREAS, the SELLERS own a total of 100 shares of common stock,
$000.1 par value, of CI4NET, said shares being 100% of the issued
and outstanding common stock of CI4NET.
WHEREAS, the SELLERS desire to sell and LCI desires to purchase
one hundred (100%) percent of such shares.
NOW, THEREFORE, in consideration of the mutual convenants,
agreements, representations and warranties herein contained, the
parties hereby agree as follows:
1. Purchase and Sale - The SELLERS hereby agree to sell,
transfer, assign and convey to LCI and LCI hereby agrees to
purchase and acquire from the SELLERS, a total of 100 shares
of common stock of CI4NET, which equates one hundred percent
(100%) percent of all of CI4NET's currently issued and
outstanding common stock (the CI4NET Common Shares"), in a
tax-free stock-for-stock acquisition.
2. Purchase Price - The aggregate purchase price to be paid by
LCI for the CI4NET Common Shares shall be 20,500,000 post-
reverse split shares of LCI $0.001 par value voting common
stock (the "LCI Common Shares"). The LCI Common Shares will
be issued to the individual SELLERS in accordance with Exhibit
"A-1" attached hereto.
3. Warranties Representations and Covenants of CI4NET and
CI4NET PRINCIPALS - In order to induce LCI to enter into this
Agreement and to complete the transaction contemplated hereby,
CI4NET and its principal executive officers (hereinafter
referred to as the "CI4NET PRINCIPALS", jointly and severally
warrant and represent to LCI that:
(a) Organization and Standing CI4NET is a corporation duly
organized, validly existing and in a good standing under the
laws of the United Kingdom, is qualified to do business as a
foreign corporation in every other state or jurisdiction in
which it operates to the extent required by the laws of such
states and jurisdictions, and has full power and authority
to carry on its business as now conducted and to own and
operate its assets, properties and business. Attached
hereto as Exhibit "B" are true and correct copies of
CI4NET's Certificate of Incorporation, amendments thereto
and all current \by-laws of CI4NET. No changes thereto will
be made in any of the Exhibit "B" documents before the
closing. CI4NET has no subsidiaries except as listed or any
investments or ownership interests in any corporation,
partnership, joint venture or other business enterprise
which is material to its business.
(b) Capitalization As of the Closing Date of CI4NET's entire
authorized equity capital consists of 25,000,000 shares of
$0.001 par value, of which 100 shares of Common Stock will be
outstanding as of the Closing. As of the Closing Date, there
will be no other voting or equity securities authorized or
issued, nor any authorized or issued securities convertible
into voting stock, and no outstanding subscriptions, warrants,
calls, options, rights, commitments or agreements by which
CI4NET or the SELLERS are bound, calling for the issuance of
any additional shares of common stock or any other voting or
equity security, except as set forth in Exhibit "CI4NET-S",
attached hereto. The 100 issued and outstanding CI4NET Common
Shares to be transferred by SELLERS constitutes one hundred
(100%) percent of the currently issued and outstanding shares
of Common Stock of CI4NET, which includes inter-claim, that
same percentage of CI4NET's voting power, right to receive
dividends, when, as and if declared and paid, and the right to
receive the proceeds of liquidation attributable to common
stock, if any.
(c) Ownership of CI4NET Shares Each SELLER warrants and
represents, severally, that as of the date hereof, such SELLER
is the sole owner of the CI4NET Common Shares listed by his or
her name on Exhibit "A-1", free and clear of all liens,
encumbrances, and restrictions whatsoever, except that the
CI4NET Common Shares so listed have not been registered under
the Securities Act of 1933, as amended (the "33 Act"), or any
applicable State Securities laws. By SELLERS' transfer of the
CI4NET Common Shares to LCI pursuant to this Agreement. LCI
will thereby acquire 100% of the outstanding capital stock of
CI4NET, free and clear of all liens, encumbrances and
restrictions of any nature whatsoever, except by reason of the
fact that the CI4NET Common Shares will not have been
registered under the '33 Act, or any applicable State
securities laws.
(d) Taxes CI4NET has filed all federal, state and local income
or other tax returns and reports that it is required to file
with all governmental agencies, wherever situate, and has paid
or accrued for payment all taxes as shown on such returns,
such that a failure to file, pay or accrue will not have a
material adverse effect on CI4NET. CI4NET's income tax
returns have never been audited by any authority empowered to
do so.
(e) Pending Actions There are no known material legal actions,
lawsuits, proceedings or investigations, either administrative
or judicial, pending or threatened, against or affecting
CI4NET, or against the CI4NET PRINCIPALS that arrive out of
their operation of CI4NET, except as described in Exhibit "C"
attached hereto. CI4NET is not knowingly in material
violation of any law, material ordinance or regulation of any
kind whatever, including, but not Inc to laws, rules and
regulations governing the sale of its services, the 33 Act,
the Securities Exchange Act of 1934, as amended (the "34
Act"), the Rules and Regulations of the U.S. Securities and
Exchange Commission ("SEC"), or the Securities Laws and
Regulations of any state or nation.
(f) Government and Regulation CI4NET holds the licenses and
registrations set forth on Exhibit "D" hereto from the
jurisdictions set forth therein, which licenses and
registrations are all of the licenses and registrations
necessary to permit CI4NET to conduct its current business.
All of such licenses and registrations are in full force and
effect, and there are no proceedings, hearings or other
actions pending that may affect the validity or continuation
of any of them. No approval of any other trade or
professional association or agency of government other than as
set forth on Exhibit "D" is required for any of the
transactions effected by this Agreement, and the completion of
the transactions contemplated by this Agreement will not, in
and of themselves, affect or jeopardize the validity or
continuation of any of them.
(g) Ownership of Assets Except as set forth in Exhibit "E"
attached hereto, CI4NET has good, marketable title, without
any liens or encumbrances of any nature whatever, to all of
the following, if any; assets, properties and rights of every
type and description, including, without limitation, all cash
on hand and in banks, certificates of deposit, stocks, bonds,
and other securities, good will, customer lists, its corporate
name and all variants thereof, trademarks and trade names,
copyrights and interests thereunder, licenses and
registrations, pending licenses and permits and applications
therefor, inventions, processes, know-how, trade secrets, real
estate and interests therein and improvements thereto,
machinery, equipment, vehicles, notes and accounts receivable,
fixtures, rights under agreements and leases, franchises, all
rights and claims under insurance policies and other contracts
of whatever nature, rights in funds of whatever nature, books
and records and all other property and rights of every kind
and nature owned or held by CI4NET as of this date, and will
continue to hold such title on and after the completion of the
transactions contemplated by this Agreement; nor, except in
the ordinary course of its business, has CI4NET disposed of
any such asset since the date of the most recent balance sheet
described in Section 3(0) of this Agreement.
(h) No Interest in Suppliers, Customers, Landlords or
Competitors Neither the CI4NET PRINCIPALS nor any member of
their families have any material interest of any nature
whatever in any supplier, customer, landlord or competitor of
CI4NET.
(i) No Debt Owed by CI4NET to CI4NET PRINCIPALS Except as set
forth in Exhibit "F" attached hereto, CI4NET does not owe any
money, securities, or property to either the CI4NET PRINCIPALS
or any member of their families or to any company controlled
by such a person, directly or indirectly. To the extent that
the CI4NET PRINCIPLES may have any undisclosed liability to
pay any sum or property to any such person or equity or any
member of their families such liability is hereby forever
irrevocably released and discharged.
(j) Complete Records All of CI4NET's books and records,
including, without limitation, its books of account, corporate
records, minute book, stock certificate books and other
records are up-to-date, complete and reflect accurately and
fairly the conduct of its business in all material respects
since its date of incorporation.
(k) No Misleading Statements or Omissions Neither this Agreement
nor any financial statement, exhibit, schedule or document
attached hereto or presented to LCI in connection herewith,
contains any materially misleading statement or omits any fact
or statement necessary to make the other statements or facts
therein set forth not materially misleading.
(l) Validity of this Agreement All corporate and other
proceedings required to be taken by the SELLERS and by CI4NET
in order to enter into and carry out this Agreement have been
duly and properly taken. This Agreement has been duly
executed by the SELLERS and by CI4NET, and constitutes the
valid and binding obligation of each of them, enforceable in
accordance with its terms except to the extent Inc by
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws relating to or effecting generally the
enforcement of creditors rights. The execution and delivery
of this Agreement and the carrying out of its purposes will
not result in the breach of any of the terms and conditions
of, or constitute a default under or violate, CI4NET's
Certificate of Incorporation or By-Laws, or any material
agreement, lease, mortgage, bond, indenture, license or other
material document or undertaking, oral or written, to which
CI4NET or the SELLERS is a party or is bound or may be
affected, nor will such execution, delivery and carrying out
violate any law, rule or regulation or any order, with
injunction or decree, of any court, regulatory agency or other
governmental body; and the business now conducted by CI4NET
can continue to be so conducted after completion of the
transaction contemplated hereby, with CI4NET as a wholly owned
subsidiary of LCI.
(m) Concepts and Approvals: Compliance with Laws Neither CI4NET
nor the SELLERS are required to make any filing with, or
obtain the consent or approval of, any person or entity as a
condition to the consummation of the transactions contemplated
by this Agreement. The business of CI4NET has been operated
in material compliance with all laws, rules, and regulations
applicable to its business, including, without limitation,
those related to securities matters, trade matters,
environmental matters, public health and safety, and labor and
employment.
(n) Access to Books and Records LCI will have full and free
access to CI4NET's books during the course of this transaction
prior to Closing, during regular business hours, on reasonable
notice.
(o) CI4NET Financial Statements Before the Closing, CI4NET's
financial statements as of and for the period from inception
to December 31, 1998, will be provided to LCI and will be
annexed hereto as Exhibit "G"; the CI4NET financial statements
will accurately describe CI4NET's financial position as of the
dates thereof. The CI4NET financial statements will have been
prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (or as permitted by
regulation S-X, S-B, and/or the rules promulgated under the 33
Act and the 34 Act) and for the period from inception to
December 31, 1998 audited by independent certified public
accountants with SEC experience.
(p) CI4NET's Corporate Summary CI4NET's Business Plan, dated
November 1999 (attached hereto as Exhibit "L") accurately
describes CI4NET's business assets, proposed operations and
management as of the date thereof; since the date of the
Corporate Plan, there has been no material adverse change in
the Business Plan and no material adverse change in CI4NET;
provided that no warranties or representations are made as to
any financial projections.
4. Warranties, representations and Covenants of LCI AND
MANAGEMENT OF LCI ("MANAGEMENT") In order to induce the SELLERS
and CI4NET to enter into this Agreement and to complete the
transaction contemplated hereby, LCI AND MANAGEMENT jointly and
severally warrant, represent and covenant to CI4NET and SELLERS
that :
(a) Organization and Standing LCI is a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware, will be qualified to
do business as a foreign corporation in every other state
and jurisdiction in which it operates to the extent
required by the laws of such states or jurisdictions, and
will have full power and authority to carry on its
business as now conducted and to own and operate its
assets, properties and business. LCI has no subsidiaries
or any other investments or ownership interests in any
corporation, partnership, joint venture or other business
enterprise.
(b) Capitalization LCI's entire authorized equity capital
consists of 100,000,000 shares of voting common stock,
$0.001 par value. As of the Closing, after giving effect
to (I) the proposed one-for-15 reverse split of LCI's
8,332,000 currently outstanding shares into 555,446
shares; and (II) the issuance of 20,500,000 post-reverse
split shares to the SELLERS as described in Section 2
herein; LCI will have authorized 100,000,000 shares of
Common Stock, par value $0.001; and will have issued and
outstanding 21,055,446 shares of voting common stock,
$0.001 par value and no shares of preferred stock issued.
Upon issuance, all of the LCI Common Stock will be
validly issued, fully paid and non-assessable. The
relative rights and preferences of LCI's equity
securities are set forth on the Certificate of
Incorporation, as amended and LCI's By-laws (Exhibit "H"
hereto). There are no other voting or equity securities
authorized or issued, not any authorized or issued
securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options,
rights, commitments or agreements by which LCI is bound,
calling for the issuance of any additional shares of
common stock or any other voting or equity security. The
By-laws of LCI provide that a simple majority of the
shares voting at a stock holders' meeting at which a
quorum is present may elect all of the directors of LCI.
Cumulative voting is not provided for by the By-Laws or
Certificate of Incorporation of LCI. Accordingly, as of
the Closing the 20,500,000 shares being issued to and
acquired by the SELLERS will constitute 97% of the
21,055,446 shares of LCI which will then be issued and
outstanding (including all consulting fees) which
includes, inter alia, that same percentage of LCI's
voting power (subject to the provisions regarding
cumulative rights), right to receive dividends, when, as
and if declared and paid, and the right to receive the
proceeds of liquidation attributable to common stock, if
any.
(c) Ownership of Shares By LCI's issuance of the LCI Common
Shares to the SELLERS pursuant to this Agreement, the
SELLERS will thereby acquire good, absolute marketable
title thereto, free and clear of all liens, encumbrances
and restrictions of any nature whatsoever, except by
reason of the fact that such LCI shares will not have
been registered under the 33 Act, or any applicable state
securities laws.
(d) Significant Agreements LCI is not and will not at
Closing be bound by any of the following:
(i) Employment, advisory or consulting contract
(except as described in Section 12 herein).
(ii) Plan providing for employee benefits of any
nature.
(iii) Lease with respect to any property or
equipment.
(iv) Contract of commitments for any current
expanditure.
(v) Contract or commitment pursuant to which it has
assumed, guaranteed, endorsed or otherwise become
liable for any obligation of any other person, firm
or organization.
(vi) Contract, agreement, understanding,
commitment or arrangement either than in the normal
course of business, not set forth in the Agreement
or an Exhibit hereto.
(vii) Agreement with any person relating to the
dividend, purchase or sale of securities, that has
not been settled by the delivery of payment of
securities when due, and which remains unsettled
upon the date of this Agreement.
(e)Taxes LCI has filed all federal, state and local income
or other tax returns and reports that it is required to
file with all governmental agencies, wherever situate,
and has paid all taxes as shown on such returns. All of
such returns are true and complete. LCI's income tax
returns have never been audited by say authority
empowered to do so.
(f)Absence of Liabilities As of the Closing Date LCI will
have no liabilities of any kind or nature, fixed or
contingent, except for the costs, including legal and
accounting fees and other expenses, in connection with
this transaction, for which LCI agrees to be responsible
and to pay in full at or before the Closing.
(g)No Pending Actions To the best of management's knowledge,
there are no legal actions, lawsuits, proceedings or
investigations, either administrative or judicial,
pending or threatened against or affecting LCI, or
against any of the LCI MANAGEMENT and arising out of
their operation of LCI. LCI has been in compliance with,
and has not received notice of violation of any law,
ordinance of any kind whatever, including, but not Inc
to, the 33 Act, the Rules and Regulations of the SEC, or
the Securities Laws and Regulations of any sale. LCI is
not an investment company as defined in, or otherwise
subject to regulation under, the Investment Company Act
of 1940. LCI is not required to file reports pursuant to
either Section 13 or Section 15 (d) of the 34 Act.
(h)Corporate Records All of LCI's books and records,
including, without limitation, its books of account,
corporate records, minute book, stock certificate books
and other records are up-to-date complete and reflect
accurately and fairly the conduct of its business in all
respects since its date of incorporation; all of said
books and records will be made available for inspection
by CI4NET's authorized representatives prior to the
Closing as provided by Section 4(I) herein, and will be
delivered to LCI's new management at the Closing.
(i)No Misleading Statements or Omissions Neither this
agreement nor any financial statement, exhibit, schedule
or document attached hereto or presented to CI4NET in
connection herewith contains any materially misleading
statement, or omits any fact or statement necessary to
make the other statements or facts therein set forth not
materially misleading.
(j)Validity of this Agreement All corporate and other
proceedings required to be taken by LCI in order to enter
into and to carry out this Agreement will have been duly
and properly taken at or before the Closing. This
Agreement has been duly executed by LCI, constitutes a
valid and binding obligation of LCI enforceable in
accordance with its terms. The execution and delivery of
this Agreement and the carrying out of its purposes will
not result in the breach of any of the terms or
conditions of, or constitute a default under or violate,
LCI's Certificate of Incorporation- or By-Laws, or any
agreement, lease, mortgage, bond, indenture, license or
other document or undertaking, oral or written, to which
LCI is a party or is bound or may be affected nor will
such execution, delivery and carrying out violate any
law, rule or regulation or any order, writ, injunction or
decree of any court, regulatory agency or other
governmental body.
(k)Consents and Approvals, Compliance with Laws Except for
the notices to be filed as described in Section 7(a)(v)
herein, neither CI4NET nor MANAGEMENT is required to make
any filing with, or obtain the consent or approval of,
any person or entity as a condition to the consummation
of the transactions contemplated by this Agreement. The
business of LCI has been operated in compliance with all
laws, rules and regulations applicable to its business,
including, without limitation, those related to
securities matters, trade matters, environmental matters,
public health and safety, and labor and employment.
(l)Access to Books and Records CI4NET and SELLERS will have
full and free access to CI4NET's books and records during
the course of this transaction prior to and at the
Closing on reasonable notice.
(m) LCI Financial Statements At or before the Closing, LCI
and MANAGEMENT will provide CI4NET with LCI's audited
financial statements for the fiscal year ended January
31, 1999 which will be audited in accordance with GAAP by
independent certified public accountants with SEC
experience, and which comply with applicable Federal
securities laws and regulations including Regulation S-X.
There will have been no material change in the business,
assets or condition (financial or otherwise) of LCI since
the date of such financial statements to the Closing.
(n) LCI Financial Condition As of the Closing, LCI will have
no assets or liabilities, except as disclosed in
financial statements.
(o)Directors and Shareholders Approval As of the Closing,
LCI's Board of Directors and Shareholders, by meeting or
consent shall have properly authorized the matters
described in section 7(a)(iv)herein.
(p)The LCI Shares All of the LCI Common Shares issued to
SELLERS shall be validly issued, fully-paid non-
assessable shares of LCI Common Stock, with full voting
rights, dividend rights, and right to receive the
proceeds of liquidation , if any, as set forth in LCI's
Certificate of Incorporation.
5. Term: Indemnification All representations, warranties,
covenants and agreements made herein and in the exhibits
attached hereto shall survive the execution and delivery of
this Agreement and payment pursuant thereto. MANAGEMENT and
CI4NET MANAGEMENT ("management") of both parties to the
agreement hereby agree, jointly and severally, to indemnify,
defend, and hold harmless LCI, CI4NET, and the SELLERS from
and against any damage, loss, liability, or expense (including
without limitation, reasonable expenses of investigation and
reasonable attorney's fees) arising out of any material breech
of any representation, warranty, covenant, or agreement made
by CI4NET MANAGEMENT or management in this Agreement.
6. Restricted Shares: Legend All of the LCI Common Shares
issued to SELLERS hereunder will be "restricted securities" as
defined in Rule 144 under the 33 Act and each stock
certificate issued to SELLERS hereunder, will bear the usual
restrictive legend to such effect. Appropriate Stop Transfer
instructions will be given to LCI '' stock transfer agent.
7. Conditions Precedent to Closing (a) The obligations of
CI4NET and the SELLERS under this Agreement shall be and are
subject to fulfillment, prior to or at the Closing, of each of
the following conditions:
(i) That LCI's and MANAGEMENT's representations and
warranties contained herein shall be true and correct at
the time of Closing as if such representations and
warranties were made at such time, and MANAGEMENT will
deliver an executed certification confirming the
foregoing;
(ii) That LCI and MANAGEMENT shall have performed or
complied with all agreements, terms and conditions
required by this Agreement to be performed or complied
with by them prior to or at the time of the Closing;
(iii) That LCI's directors and shareholders, by proper
and sufficient vote taken either by consent or at a
meeting duly and properly called and held, shall have
properly approved all of the matters required to be
approved by LCI's directors and shareholders,
respectively;
(iv) That LCI shall have filed the notice of the
reverse split required by Rule 10b-17 under that Act, and
shall have sent notice to its stockholders of the
transactions contemplated herein; and
(v) That LCI's Board of Directors, by proper and sufficient
vote, shall have approved this Agreement and the
transactions contemplated hereby; approved the
contemplated reverse split of LCI's outstanding Common
Stock without changing either the authorized shares or
the par value; approved the change of LCI's corporate
name to a name selected by CI4NET; approved the
resignation of all of LCI's current directors and the
election of up to three designees of CI4NET to serve as
directors in place of LCI's current directors; and will
have approved such other changes as are consistent with
this Agreement and approved by CI4NET and LCI; and
(b) The obligations of LCI and MANAGEMENT under this Agreement
shall be and are subject to fulfillment, prior to or at the
Closing of each of the following conditions:
(i) That CI4NET's and SELLERS' representations and
warranties contained herein shall be true and correct at
the time of Closing as if such representations and
warranties were made at such time and CI4NET and the
CI4NET PRINCIPALS shall deliver an executed certification
confirming the foregoing;
(ii) That CI4NET and CI4NET PRINCIPALS shall have
performed or complied with all agreements, terms and
conditions required by this Agreement to be performed or
complied with by them prior to or at the time of Closing;
and
(iii) That CI4NET's officers will have signed non-
compete clauses in the form attached hereto as Exhibit
"J".
8 Termination This Agreement may be terminated at any time before
or at Closing, by;
(a)The mutual agreement of the parties;
(b)Any party if:
(iv) Any legal proceeding shall have been
instituted or shall be imminently threatening to
delay, restrain or prevent the consummation of this
Agreement.
Upon termination of this Agreement for any reason, in accordance
with the terms and conditions set forth in this paragraph, each
said party shall bear all costs and expenses as each party has
incurred and no party shall be liable to the other.
9. Exhibits All Exhibits attached hereto are incorporated
herein by this reference as if they were set forth in their
entirety.
10. Miscellaneous Provisions This Agreement is the entire
agreement between the parties in respect of the subject matter
hereof, and there are no other agreements, written or oral,
nor may this Agreement be modified except in writing and
executed by all of the parties hereto. The failure to insist
upon strict compliance with any of the terms, covenants or
conditions of this Agreement shall not be deemed a waiver or
relinquishment of such rights or power at any other time or
times.
11. Closing The Closing of the transactions contemplated by this
Agreement ("Closing") shall take place at the offices of
Shane H Sutton, P.C. attorneys for LCI, at 1.00 P.M. on the
first business day after the letter of the approval of SELLERS
owning at least 80% of CI4NET's Common Stock or the
shareholders of LCI approving this Agreement and the matters
referred to in section 7(a)(vi) herein, or such other date as
the parties hereto shall mutually agree upon. At the Closing,
all of the documents and items referred to herein shall be
exchanged. Upon signing LCI will carry out a corporate name
change to Ci4net.com Inc and upon approval by the NASD shall
carry out the aforementioned 15 for 1 reverse split and the
issuance of the shares to the SELLERS.
12. Prohibited Actions Between the date hereof and the effective
date of the merger, neither Purchaser nor Seller will, except
with the prior written consent of the other:
(a)issue or sell any stock, bonds, or other corporate securities;
(b)incur any obligation or liability (absolute or contingent),
except current liabilities incurred, and obligations under
contracts entered into, other than in the ordinary course of
business;
(c) discharge or satisfy any lien or encumbrance or pay any
obligation or liability (absolute or contingent) other than in
the ordinary course of business;
(d) make any dividend or other payment or distribution to its
shareholders or Purchase or redeem any shares of its capital
stock other than in the ordinary course of business;
(e)mortgage, pledge, create a security interest in, or subject to
lien or other encumbrance any of its assets, tangible or
intangible other than in the ordinary course of business;
(f)sell or transfer any of its tangible assets or cancel any
debts or claims except in each case in the ordinary course of
business other than in the ordinary course of business;
(g)sell, assign, or transfer any trademark, trade name, patent,
or other intangible asset;
(h)waive any right of any substantial value other than in the
ordinary course of business; or
(i) enter into any other transaction other than in the ordinary
course of business.
13. Further Instruments From time to time, as and when requested
by the either of the parties or by its successors or assigns,
the other party will execute and deliver, or cause to be
delivered, all such deeds and other instruments; and will take
or cause to be taken such further or other action as the
parties may deem necessary or desirable in order to vest in
and confirm to the purchaser title to and possession of all
its property, rights, privileges, possessions, and franchises
and otherwise to carry out the intent and purposes of this
agreement.
(b) Fees and Commissions: (a) Except as described in this
Section 12, no broker, finder, or other person or entity is
entitled to any fee or commission from LCI or CI4NET for
services rendered on behalf of LCI or CI4NET in connection
with the transactions contemplated by this Agreement.
15. Governing Law This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Delaware.
16. Counterparts This Agreement may be executed in duplicate
facsimile counterparts, each of which shall be deemed an
original and together shall constitute one and the same
binding Agreement, with one counterpart being delivered to
each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and
seals as of the date and year above first written.
LEISURE CONCEPTS INTERNATIONAL INC
By: ____________________________
____________________________
CI4NET.COM INC
By: ____________________________
