ASSET PURCHASE AGREEMENT
THIS AGREEMENT (together with the exhibits and schedules
attached hereto, this “ Agreement ”)
dated as of June __, 2008.
BETWEEN:
DK GROUP N.A. N.V., a company incorporated in
Curaçao, Netherlands Antilles and having a registered
address at Kaya
W.F.G. (Jombi) Mensing 36, Curaçao, Netherlands
Antilles
(herein
called the “ Seller
”)
AND:
1
ST HOME BUY
AND SELL LTD. , a company
incorporated under the laws of the State of Nevada and having a
registered address at 15612-37A
Avenue, Surrey, BC CANADA V3S 0H7
(herein
called the “ Purchaser
”)
WHEREAS,
the Purchaser desires to purchase and acquire from the Seller
and the Seller desires to sell and assign to the Purchaser all
of the Seller’s rights, title and interest in all assets
and liabilities that belong to the Seller other than those
assets and liabilities specifically set forth in Schedule A
attached hereto (the “ Assets and
Liabilities ”); and
WHEREAS,
the parties desire to enter into this Agreement to set forth
their mutual agreements concerning the above
matter;
NOW,
THEREFORE, in consideration of the mutual promises of the
parties hereto, and of good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it
is mutually agreed by and between the parties hereto as
follows:
ARTICLE 1
SALE AND TRANSFER OF ASSETS AND LIABILITIES; CLOSING
1.1
Sale of Assets and Liabilities . Subject to the terms and
conditions of this Agreement and in reliance upon the
representations, warranties, covenants and agreements contained
herein, at the closing of the transactions contemplated hereby, the
Seller will sell, convey, assign and transfer the Assets and
Liabilities to the Purchaser, and the Purchaser will purchase and
acquire the Assets and Liabilities from the Seller.
1.2
Forward Split . Upon the satisfaction of the Conditions
Precedent set forth in this Agreement and prior to Closing (as
defined herein), the Purchaser shall complete a forward split of
its authorized and issued share capital on a one old share for 3
new shares basis.
1.3
Consideration . In consideration of the sale,
transfer and assignment to the Purchaser of the Assets and
Liabilities, the Purchaser shall, at Closing, issue in the name of
the Seller or in such other name as the Seller may otherwise
direct, an aggregate of 40,222,095 shares of common stock of the
Purchaser (the " Shares ") equal to
approximately 81% of the shares of common stock of the Purchaser on
a fully diluted basis (hereinafter referred to as the “
Purchase
Price ”); provided, however, that if the Purchaser has
not obtained financing in the aggregate amount of at least $45
million within nine months of the Closing, the Escrow Shares (as
defined below) shall be decreased by a percentage equal 100%
multiplied by the quotient of (a) the difference between $45
million and the aggregate financing commitments obtained by the
Purchaser, divided by (b) $45 million.
1.4
The Closing . The transfer and delivery of the
documents transferring the Assets and Liabilities to the Purchaser
and the Shares to the Seller and the exchange and delivery by the
parties of the other documents and instruments contemplated by this
Agreement, (the “ Closing ”) will
take place on September 30, 2008 or such earlier date as may be
mutually acceptable to the Seller and the Purchaser, subject to the
satisfaction or waiver (by the party receiving the benefit thereof)
of the conditions precedent set forth in Section 6 of this
Agreement (the “ Closing Date
”).
1.5
Deliveries. At the Closing on the Closing
Date:
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(a)
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The
Purchaser shall deliver or cause to be delivered to the Seller a
certificate issued in the name of the Seller, or in such other name
as the Seller may otherwise direct, evidencing the
Shares.
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(b)
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The
Purchaser shall deliver or cause to be delivered 5,226,600 of its
shares of common stock due to DeBondo Capital Inc. (the “
Escrow
Shares ”) to an escrow agent agreed upon by the
parties (the “ Escrow Shares Agent
”). The Escrow Shares Agent shall release (i) 62%
of the Escrow Shares upon the closing of a financing for the
Company equal to at least $25 million; (ii) an additional 19% of
the Escrow Shares upon the closing of a financing for the Company
equal to at least $45 million in the aggregate; and (iii) an
additional 19% of the Escrow Shares upon the acceptance of the
Purchaser’s common stock for listing on the American Stock
Exchange.
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(c)
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The
Seller shall deliver to the Purchaser executed and duly
acknowledged assignments in the forms set forth in Exhibit A hereto
conveying all right, title and interest of the Seller to the Assets
and Liabilities to the Purchaser.
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(d)
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The
Seller and the Purchaser shall each execute and deliver such other
instruments and take such other action as may be necessary to carry
out its obligations under this Agreement; including, without
limitation, working together to cause the title to any assets to be
transferred into the name of the Purchaser in the applicable
governmental records.
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1.6
Condition on Obligation of the Seller to Close .
Notwithstanding anything herein contained to the
contrary, the Seller shall have no obligation to consummate the
transactions contemplated by this Agreement unless the Purchaser
shall have completed, on or before the Closing Date, the first
phase of the Financing described in Section 6.5 hereof and the
proceeds of such Financing have been placed in escrow as described
in Section 1.7 hereof.
1.7
Escrow Agreement. The proceeds from the Financing as
described in Section 6.5 shall be subject to an Escrow Agreement,
which is attached as Exhibit B hereto.
1.8
Expenses of Seller . Any liability or obligation
of the Seller arising or incurred in connection with the
negotiation, preparation and execution of this Agreement and the
transactions contemplated hereby and any fees and expenses of
counsel, accountants and other experts employed by Seller shall be
paid by the Purchaser following the Closing.
ARTICLE 2
TITLE DUE DILIGENCE
2.1
Access to Assets and Liabilities . The Seller
shall grant the Purchaser such access to the Assets and
Liabilities, including all records relating to same, as is
necessary to permit the Purchaser to conduct a thorough due
diligence investigation of the title to the Assets and
Liabilities. The Purchaser shall have a maximum of
fifteen (15) days from the date of this Agreement to conduct its
due diligence (this 15-day period, as it may be extended in
accordance with this Agreement or by other agreement of the
parties, will be referred to herein as the “ Due Diligence Period
”).
2.2
The
Purchaser shall notify the Seller in writing (the “
Defect
Notice ”) by the end of the Due Diligence Period of
any failures or defects in title (“ Title Defects ”)
that the Purchaser may have identified as pertaining to the Assets
and Liabilities. The Defect Notice shall identify the
alleged defective Asset and the nature of the
defect. Any Assets and Liabilities not identified in
said written notice shall be deemed as the Purchaser’s
acceptance of title for said Assets and
Liabilities. Upon receipt of Defect Notice, the Seller
shall have until the Closing to cure any such Title Defects or, if
not curable prior to the Closing, advise the Purchaser how such
Title Defects will be cured following the Closing and provide a
satisfactory commitment to the Purchaser with respect to curing of
such Title Defects. If the Seller is unable to cure any material
Title Defects to the Purchaser’s reasonable satisfaction or
provide a plan and commitment to cure such Title Defects prior to
the Closing, then the Purchaser may (i) terminate this Agreement;
or (ii) proceed with the Closing with no reduction in the Purchase
Price. Title Defect, as used in this Agreement, shall
mean any lien, encumbrance, encroachment or other defect in the
Seller’s title to an Asset that would cause the Seller not to
have defensible title to such Asset.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER
To
induce the Purchaser to execute, deliver and perform this
Agreement, and in acknowledgement of the Purchaser’s
reliance on the following representations and warranties (in
addition to the representations and warranties in Section
1.1), the Seller represents and warrants to the Purchaser as
follows as of the date hereof and as of the Closing
Date:
3.1
Organization . The Seller is a corporation duly
organized, validly existing and in good standing under the
applicable laws of the Netherlands Antilles, with the power and
authority to conduct its business as it is now being conducted and
to own its assets.
3.2
Power and Authority . The Seller has the power
and authority to execute, deliver, and perform this Agreement and
the other agreements and instruments to be executed and delivered
by them in connection with the transactions contemplated hereby,
and the Seller will have taken all necessary action to authorize
the execution and delivery of this Agreement and such other
agreements and instruments and the consummation of the transactions
contemplated hereby, including but not limited to the receipt of
all necessary regulatory approvals. The execution,
delivery and performance by the Seller of the Agreement has been
duly authorized. This Agreement is, and the other agreements and
instruments to be executed and delivered by the Seller in
connection with the transactions contemplated hereby, when such
other agreements and instruments are executed and delivered, shall
be, the valid and legally binding obligations of the Seller
enforceable against the Seller in accordance with their respective
terms.
3.3
Directors and Officers of Seller . The duly elected or
appointed directors and the duly appointed officers of Seller are
as set out in Schedule 3.3.
3.4
Non-Contravention . To the Seller’s knowledge, neither
the execution, delivery and/or performance of this Agreement, nor
the consummation of the transactions contemplated hereby,
will:
(a) conflict
with, result in a violation of, cause a default under (with
or without notice, lapseof time or both) or give rise to a
right of termination, amendment, cancellation or acceleration
of any obligation contained in or the loss of any material
benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the
material properties or assets of Seller under any term,
condition or provision of any loan or credit agreement, note,
debenture, bond, mortgage, indenture, lease or other
agreement, instrument, permit, license, judgment, order,
decree, statute, law, ordinance, rule or regulation
applicable to Seller, or any of its material property or
assets;
(b) violate
any provision of the articles or bylaws of Seller;
or
(c) violate
any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory
authority in the Netherlands Antilles that would result in a
Seller Material Adverse Effect (defined below).
3.5
Actions and Proceedings . To the knowledge of Seller, (i)
there is no basis for and there is no action, suit, judgment,
claim, demand or proceeding outstanding or pending, or threatened
against or affecting Seller or which involves any of the business,
or the properties or assets of Seller that, if adversely resolved
or determined, would have a material adverse effect on the
business, operations, assets, properties, or conditions of Seller
taken as a whole (a “ Seller Material Adverse
Effect ” ), and (ii)
there is no reasonable basis for any claim or action that, based
upon the likelihood of its being asserted and its success if
asserted, would have such a Seller Material Adverse
Effect.
3.6
Compliance .
(a) To
the knowledge of Seller, Seller is in compliance with, is not
in default or violation in any material respect under, and
has not been charged with or received any notice at any time
of any material violation of any statute, law, ordinance,
regulation, rule, decree or other regulation in the
Netherlands Antilles that would constitute a Seller Material
Adverse Effect;
(b) To
the knowledge of Seller, Seller is not subject to any
judgment, order or decree entered in any lawsuit or
proceeding applicable to its business and operations that
would result in a Seller Material Adverse Effect;
and
(c) To
the knowledge of Seller, Seller has duly filed all reports
and a return required to be filed by it with governmental
authorities in the Netherlands Antilles and has obtained all
governmental permits and other governmental consents, except
as may be required after the execution of this
Agreement. To the knowledge of Seller, all of such
permits and consents are in full force and effect, and no
proceedings for the suspension or cancellation of any of
them, and no investigation relating to any of them, is
pending or to the knowledge of Seller, threatened, and none
of them will be adversely affected by the consummation of
this Agreement.
3.7
Filings, Consents and Approvals . To the knowledge of
Seller, no filing or registration with, no notice to and no permit,
authorization, consent, or approval of any public or governmental
body or authority or other person or entity is necessary for the
consummation by Seller of the transactions contemplated by this
Agreement.
3.8
Tax Matters. All Federal, state and other tax
returns and reports of the Seller required by law to be filed have
been duly filed, and all federal, state and other taxes,
assessments, fees and other governmental charges upon the Seller
with respect to its properties, assets, incomes, franchises or
business which are due and payable have been paid or a reasonable
reserve for such payment established on the Seller’s balance
sheet.
3.9
Certain Transactions . Seller is not a guarantor or
indemnitor of any indebtedness of any third party, including any
person, firm or corporation.
3.10
Financial Representations . Attached hereto as Schedule 3.10
are true, correct, and complete copies of audited balance sheets
for Seller dated as of December 31, 2007 and December 31, 2006,
together with related statements of income, cash flows, and changes
in shareholder’s equity for the fiscal year then ended
(collectively, the “ Seller Financial
Statements
”). The Seller Financial Statements and the Seller’s
unaudited Financial Statements as of March 31, 2008 have been
prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards
Board.
Seller
has not received any advice or notification from its
independent certified public accountants that Seller has used
any improper accounting practice that would have the effect of
not reflecting or incorrectly reflecting in the Seller
Financial Statements or the books and records of Seller, any
properties, assets, liabilities, revenues, or expenses. Seller
has not engaged in any transaction, maintained any bank
account, or used any funds of Seller, except for transactions,
bank accounts, and funds which have been and are reflected in
the normally maintained books and records of
Seller.
3.11
Absence of Certain Events . Since the Seller Accounting
Date, except as and to the extent disclosed herein, there has not
been:
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(a)
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a Seller Material
Adverse Effect; or |
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(b)
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any material change
by Seller in its accounting methods, principles or
practices. |
3.12
Fees. Seller has not incurred any obligation or liability to
any party for any brokerage fees or agent’s commissions in
connection with this Agreement, other than the fees to Pacific Wave
Partners Limited (“ Pacific Wave ”)
and the Escrow Shares Agent.
3.13
Investor Representations. The Seller
acknowledges and agrees that the Shares representing the Purchase
Price will be offered and sold to the Seller without such offers
and sales being registered under the United States Securities Act
of 1933, as amended (the “ Securities Act
”). As such, the Seller further acknowledges and
agrees that all Shares will, upon issuance, be “restricted
securities” within the meaning of the Securities
Act.
3.14
Share Certificates. The Seller acknowledges and
agrees that legend in substantially the following form will be
placed on any certificate(s) evidencing the Shares:
THE SHARES OF COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
'ACT'), OR UNDER ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF UNLESS A
REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS WITH RESPECT TO SUCH DISPOSITION IS THEN IN EFFECT
OR UNLESS THE PERSON PROPOSING TO MAKE THE DISPOSITION SHALL
FURNISH, WITH RESPECT TO SUCH DISPOSITION, AN OPINION OF COUNSEL
(BOTH COUNSEL AND OPINION TO BE SATISFACTORY TO THE CORPORATION) TO
THE EFFECT THAT SUCH SALE, TRANSFER, ASSIGNMENT OR OTHER
DISPOSITION WILL NOT INVOLVE ANY VIOLATION OF THE REGISTRATION
PROVISIONS OF THE ACT (OR ANY SUPERSEDING STATUTE) OR ANY
APPLICABLE STATE SECURITIES LAWS.
3.15
Issuance of Shares. The Seller represents and
warrants to the Purchaser as follows, and acknowledges that the
Purchaser is relying upon such covenants, representations and
warranties in connection with the issuance of the Shares to the
Seller:
(a) the
Seller has such knowledge, sophistication and experience in
business and financial matters such that it is capable of
evaluating the merits and risks of the investment in the
Shares. The Seller has evaluated the merits and risks of an
investment in the Shares. The Seller can bear the
economic risk of this investment, and is able to afford a
complete loss of this investment;
(b) the
Seller acknowledges that the Purchaser’s success is
subject to a number of significant risks, including the risk
that the Purchaser will not be able to finance its plan of
operations. The Seller further acknowledges that
(i) the Purchaser has limited cash and working capital, (ii)
the Purchaser will have to raise additional capital in order
to finance its plan of operations which capital may be raised
by the issuance of additional shares of its common stock
which will result in dilution to the Seller, and (iii) the
Purchaser is working on the Financing (defined below) but
there is no assurance that the Financing will be
completed;
(c) the
Shares will be acquired by the Seller for investment for the
Seller's own account, not as a nominee or agent, and not with
a view to the resale or distribution of any part thereof,
and, except for possible transfers of a portion of the Shares
to officers, directors, agents, shareholders and up to five
creditors of the Seller, that the Seller does not have any
contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the
Shares;
(d) the
Seller has been afforded access to information about the
Purchaser and the Purchaser’s financial condition,
results of operations, business, properties, management and
prospects sufficient it to evaluate its investment in the
Shares. The Seller further represents that it has
had an opportunity to ask questions and receive answers from
representatives of the Purchaser regarding the terms and
conditions of the offerings completed by the Purchaser and
the business, properties, prospects and financial condition
of the Purchaser, each as is necessary to evaluate the merits
and risks of investing in the Shares. The Seller
believes it has received all the information it considers
necessary or appropriate for deciding whether to purchase the
Shares. The Seller has had full opportunity to
discuss this information with the Seller’s legal and
financial advisers prior to execution of this
Agreement;
(e) the
Seller acknowledges that the Purchaser will rely on these
representations in completing the issuance of the Shares to
the Seller;
(f) the
Seller acknowledges that the offering of the Shares by the
Purchaser has not been reviewed by the United States
Securities and Exchange Commission or any state securities
regulatory authority; and
(g) this
Agreement has been duly authorized, validly executed and
delivered by the Seller.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
To
induce the Seller to execute, deliver and perform this
Agreement, and in acknowledgement of Seller’s reliance
on the following representations and warranties, the Purchaser
hereby represents and warrants to the Seller as follows as of
the date hereof and as of the Closing Date:
4.1
Organization . The Purchaser is a corporation
duly incorporated, validly existing and in good standing under the
laws of the State of Nevada, with the power and authority to
conduct its business as it is now being conducted and to own and
lease its properties and assets.
4.2
Share Capital . The Purchaser has authorized capital
consisting of 100,000,000 shares of Common Stock and 10,000,000
shares of Preferred Stock of which 6,707,337 shares of Common Stock
and zero shares of Preferred Stock are issued and outstanding prior
to the completion of the Forward Split as described in Section 1.2.
Upon the completion of the transactions contemplated by this
Agreement, the Purchaser will have 49,670,706 shares of Common
Stock and zero shares of Preferred Stock issued and
outstanding. There are no options, warrants, calls,
rights, commitments or agreements of any character, written or
oral, to which the Purchaser is a party or by which it is obligated
to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Purchaser or obligating the Purchaser to
grant, extend, accelerate the vesting of, change the price of,
otherwise amend or enter into any such option, warrant, call,
right, commitment or agreement. The Purchaser has no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or other similar rights or plans.
4.3
Issuance of the Shares . The Shares are duly
authorized and, when issued and paid for in accordance with this
Agreement, will be duly and validly issued, fully paid and
nonassessable, free and clear of all liens.
4.4
Listing . The Purchaser is a reporting company
under the United States Securities and Exchange Act of 1934, as
amended, and its shares of Common Stock are registered for sale and
are quoted for trading on the OTC Bulletin Board under the symbol
FHBY.
4.5
SEC Reports; Financial Statements . The Purchaser
has filed all reports required to be filed by it under the
Securities Act and the Securities Exchange Act of 1934, as amended,
including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the
Purchaser was required by law to file such material) (the foregoing
materials, including the exhibits thereto, being collectively
referred to herein as the “ SEC Reports ”) on
a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the
SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of
the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the
Purchaser included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the
periods involved (“ GAAP ”), except
as may be otherwise specified in such financial statements or the
notes thereto and except that unaudited financial statements may
not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Purchaser and
its consolidated subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
4.6
Power and Authority. The Purchaser has the power
and authority to execute, deliver, and perform this Agreement and
the other agreements and instruments to be executed and delivered
by it in connection with the transactions contemplated hereby, and
the execution, delivery and performance of the Agreement by the
Purchaser has been duly authorized. This Agreement is,
and, when such other agreements and instruments are executed and
delivered, the other agreements and instruments to be executed and
delivered by the Purchaser in connection with the transactions
contemplated hereby shall be, the valid and legally binding
obligations of the Purchaser, enforceable in accordance with their
respective terms.
4.7
Broker’s or Finder’s Fees . The
Purchaser has not authorized any person to act as broker, finder,
or in any other similar capacity in connection with the
transactions contemplated by this Agreement and other than the fee
to Pacific Wave and the Escrow Shares Agent, the Seller shall have
no liability for payment of any such fee arising through the
Purchaser.
4.8
No Conflict . Neither the execution and delivery
by the Purchaser of this Agreement and of the other agreements and
instruments to be executed and delivered by the Purchaser in
connection with the transactions contemplated hereby or thereby,
nor the consummation by the Purchaser of the transactions
contemplated hereby, will or do violate or conflict with: (a) any
foreign or local law, regulation, ordinance, governmental
restriction, order, judgment or decree applicable to the Purchaser;
(b) any provision of any charter, bylaw, or (c) under any material
agreement to which the Purchaser is a party.
4.9
Required Consents . No permit or approval,
authorization, consent, permission, or waiver to or from any
person, or notice, filing, or recording to or with, any person is
necessary for the execution and delivery of this Agreement and the
other agreements and instruments to be executed and delivered by
the Purchaser in connection with the transactions contemplated
hereby, or the consummation by the Purchaser of the transactions
contemplated hereby.
4.10
Litigation . There are no proceedings pending or,
to the knowledge of the Purchaser, threatened against the Purchaser
which (i) seek to restrain or enjoin the consummation of the
Agreement or the transactions contemplated hereby or (ii) could
reasonably be expected to have a material adverse effect on the
Purchaser or its abilities to perform its obligations under the
Agreement and the other agreements and instruments to be executed
and delivered by the Purchaser in con
