ASSET PURCHASE AGREEMENT
This Agreement is made and entered into this 18th day of April
2005, by and
between Gateway Venture Holdings Inc. a Nevada corporation
("Seller"), and
Cal-Bay International (THE "Buyer") The parties hereto are
collectively and
individually referred to herein as the "Parties."
RECITALS:
WHEREAS, Seller, who owns real-estate property known as Aspen Cove
Resort wishes
to sell to Buyer Aspen Cove Resort property. (Sometimes referred to
hereinafter
as "Business");
WHEREAS, Buyer desires to acquire Aspen Cove Resort from Seller and
Seller
desires to sell, transfer and assign same to Buyer;
;
WHEREAS, Gateway Venture Holdings Inc. is owner of Aspen Cove
Resort
WHEREAS, Seller is not issuing a fairness opinion as to this
transaction;
NOW THEREFORE, in consideration of the mutual promises and
covenants herein
contained, the Parties, intending to be legally bound, agree as
follows:
1.
ASSETS TO BE CONVEYED.
On the Closing Date and at the Closing Place,
Seller will sell, assign, convey, transfer and deliver to Buyer,
and Buyer will
acquire, purchase and accept all of the following (hereinafter
collectively
referred to as the "Assets"), free and clear of all debts, liens,
security
interests, mortgages, trusts, claims, liabilities and encumbrances,
except as
specifically assumed by Buyer: All accounts payable and Receivables
are the
responsibility of the Buyer.
(a) All of the
tangible personal property, physical assets and equipment
used or intended to be used in the operation of the business,
including but not
limited to those assets set forth in Exhibit A attached hereto,
except for those
items of tangible personal property specifically identified as
excluded assets
on Exhibit A, together with any replacements thereof or additions
thereto made
between the date hereof and the Closing Date, less any retirements
made in the
ordinary and usual course of business in connection with the
acquisition of
similar property or assets of greater or equal value (hereinafter
referred to as
the "Personal Tangible Assets");
(b) All right, title
and interest to any and all rights, licenses, permits,
trademark names, websites, authorizations and other intangibles, to
the
extent lawfully transferable, which are used, useful or intended to
be used
in
the operation of Business listed on Exhibit A Assets.
(c) All of Sellers
cash or prepaid deposits, accounts receivable as all are
listed on Exhibit B attached hereto ("Balance Sheet") (the
supporting
documentation shall be provided by Seller to Buyer under Exhibit
B);
Payables are the burden of Buyer and the Receivables belong to
Buyer, and
2.
EXCLUDED ASSETS, LIABILITIES AND CONTRACTS. Seller shall be solely
responsible for, and there shall be no assumption of liability by
Buyer of, any
liabilities, obligations or commitments of Seller of any nature
whatsoever
except as agreed to by both parties after the due diligence process
is
completed. Without
limiting the generality of the foregoing, Buyer shall not
assume or be liable for any liability or obligation of Seller
arising out of (i)
any contract of employment, collective bargaining agreement,
insurance, pension,
retirement, deferred compensation, incentive bonus or profit
sharing plan or
trust; or (ii) any litigation, proceeding or claim of any person or
entity
relating to the business or operation of the Business prior to and
through the
Closing Date, whether or not such litigation, proceeding or claim
is pending,
threatened or asserted before, on or after the Closing Date.
3.
PURCHASE PRICE. The
purchase price for the Assets to be conveyed
pursuant to this Agreement is as follows:
(a)
The sum of Two Million Six Hundred Thousand Dollars ($2,600,000)
minus
current note of approximately $800,000 to an individual,
engineering fees of
$27,000 on the payables, Reduction of $200,000 for the pink sheet
shell
given to the Seller. Transfer,
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conveyance of restricted shares ("Shares") of Buyers preferred "B"
non dilutable
stock equivalent to balance owed appx $1.6M based on an agreed
price of $0.05
per share. These shares will be restricted for a one- year period
at which time
Seller has the right to convert the shares and sell the stock.
(b)
Shares will be Cal-Bay Class "B" Preferred shares with1-1 voting
and
conversion rights
(c)
Sellers two principal Officers and Directors shall be appointed to
the
Board of Directors of Cal-Bay International, Inc.
(d)
The note held by the individual on the Aspen Cove property shall
be
assumed or conveyed to Cal-Bay International, Inc at the time of
closing.
(e)
The liquor license shall remain in place and be transferred by mutual
agreement upon acceptance by the necessary governing authority.
(f)
Purchaser shall bring the note to individual to current status at
the
time of closing.
(g)
Seller shall fully disclose to buyer any and all outstanding
debts,
taxes and other compensations prior to the closing.
4.
ALLOCATION. It is
agreed between the Parties hereto that the purchase
price is being paid for the Assets in the amounts set forth in this
agreement.
5.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. Seller represents,
warrants and covenants to Buyer that:
(a)
Organization and Standing. Seller on the Closing Date shall
be a
corporation duly organized, validly existing and in good standing
under the laws
of the State of Nevada, and is authorized to do business and has
all necessary
power and authority to own, lease and operate the Assets and to
operate the
Business as now being conducted and as proposed to be conducted by
Seller
between the date hereof and the target Closing Date; April 30th,
2005 is the
official closing date and signature of this agreement which
consummates the
entire agreement.
(b)
Authorization. Seller
has full right, power and authority to enter into
and perform this Agreement and the transactions contemplated
hereby. All
necessary corporate action to approve the execution, delivery and
performance of
this Agreement and the consummation of the transaction contemplated
hereby has
been taken by Seller, and this Agreement constitutes a valid and
binding
agreement of Seller enforceable in accordance with its terms;
(c)
Personal Property. All
of the Personal Tangible Assets are listed and
described in Exhibit A, attached hereto. Seller now has, or on the Closing
Date
shall have, good valid and marketable title to the Personal
Tangible Assets
listed and described in Exhibit A, free and clear of all mortgages,
liens,
charges, claims, pledges, security interests and encumbrances
whatsoever, except
as assumed by Buyer;
(d)
Insurance. All of the
Personal Tangible Assets are now, and will be
through the Closing Date, insured by Seller, including but not
limited to
protection against fire, casualty, liability, vandalism, and
burglary for the
full replacement value thereof, and Seller maintains, and will
maintain through
the Closing Date, all policies currently in effect;
(e)
Condition and Adequacy of Assets. Seller now owns and on the
Closing
Date will own and transfer to Buyer the Assets. The Personal Tangible Assets
are now and on the Closing Date will be in good operating condition
and repair,
reasonable wear and tear from ordinary use accepted, and is now and
on the
Closing Date will be adequate and suitable for the purposes for
which they are
presently used and intended to be used.
(f)
Litigation. No
judgment is issued or outstanding against the Business.
To the best of Seller's knowledge, except for matters affecting the
Business
generally or as set forth in Exhibit E, attached hereto, presently
and as of the
Closing Date there is no litigation, action, claim, special
assessment, suit,
fine, judgment, proceeding or investigation pending or outstanding
before any
arbitrator, forum, court or governmental body, department or agency
of
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any kind, to which Seller or the Business is a party. To the best of Seller's
knowledge, no such litigation, action, claim, special assessment,
suit, fine,
proceeding or investigation is now or on the Closing Date shall be
threatened,
which might result in any material adverse change in the business,
prospects or
financial conditions of the Business.
(g)
Contracts. With
respect to the Business, except for contracts listed on
Exhibit B, Seller has no existing contract, agreement, lease,
commitment or
understanding, written or oral, expressed or implied, not
terminable upon thirty
(30) days' notice or less without penalty or premium The contracts,
leases and
agreements listed in Exhibit B, attached hereto, are now and on the
Closing Date
shall be in full force and effect and unimpaired by any act of
Seller, its
employees or agents, and Seller will not modify in any significant
respect any
such contracts, leases and agreements without Buyer's written
consent, which
will not be unreasonably withheld or delayed. Seller shall indemnify, defend
and hold Buyer harmless against all claims, directly or indirectly,
obligations,
liabilities, actions, or causes of action, including Buyer's
reasonable
attorneys' fees and costs, arising out of Seller's contracts not
listed in
Exhibit B, attached hereto. Seller is now and on the Closing
Date shall be in
compliance in all material respects with the terms and conditions
of all of the
Business's contracts, and shall not be in default hereunder; and
there is no
claim of such breach or default known to Seller.
(h)
Absence of Restrictions. The execution, delivery and
performance of
this Agreement and the transaction contemplated hereby by Seller do
not and on
the Closing Date will not: (i) require the consent of any
third party, except
the contracts being assumed by Buyer; (ii) violate any material
provision of law
applicable to Seller or conflict with, result in the termination or
breach of
any term, condition of provision of, or constitute a default under,
the Articles
of Incorporation or by-laws of Seller, or of any contract, lease,
agreement or
other instrument or condition to which Seller is a party or to
which the Assets
are subject, or result in the creation of any lien, charge, claim,
pledge,
security interest or encumbrance on any of the Assets; or (iii)
cause or result
in the advancement or acceleration of maturity of any liability of
the Seller or
the alteration or modification to the detriment of Buyer of the
terms,
conditions or provisions of any contract, lease agreement or other
instrument or
condition by which Seller is bound or to which any of the Assets
are subject;
(i)
Disclosure. Seller has
made full disclosure of all material events and
facts pertaining to
