CONFORMED COPY
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement ("the Agreement"), effective as of the 31st
day of January, 2005, by and among Gateway International Holdings, Inc., a
Nevada corporation ("Gateway") ,and Spacecraft Machine Products, Inc., a
California corporation ("Spacecraft"), Xxxxx X. Xxxxxxx, III, ("LRL") and the
Xxxxxxx Family Trust ("LFT"), sole shareholders of Spacecraft (the
"Shareholders"), with reference to the following:
A. The respective Boards of Directors of Gateway and
Spacecraft have deemed it advisable and in the best interests of
Gateway and Spacecraft that Spacecraft be acquired by Gateway, pursuant
to the terms and conditions set forth in this Agreement.
D. Gateway and Spacecraft propose to enter into this Agreement
which provides, among other things, that all of the outstanding shares
of capital stock of Spacecraft be acquired by Gateway, as more fully
described in the Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization under Section 368 (a)(1)(B) of the Internal Revenue Code
of 1986, as amended.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
THE ACQUISITION
SECTION 1.1
(a) At the Closing, a total of 100,000 shares of common stock (the
"Spacecraft Stock"), which represents all of the issued and outstanding shares
of Spacecraft's capital stock shall be acquired by Gateway in exchange for
600,000 restricted shares of Gateway common stock (the "Initial Shares"). The
Shares will be issued as follows:
500,000 shares or LRL
100,000 shares to LFT
(b) As additional contingent consideration to be paid for the
Spacecraft Stock, if earned, Gateway agrees to issue to LRL an additional 150,00
restricted shares of Gateway common stock following each of the next three (3)
calendar years, if Spacecraft's "net income before income taxes" in such year is
equal to or greater than the amount set forth below:
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Year Ended Target Profit
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December 31, 2005 $200,000
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December 31, 2006 $300,000
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December 31, 2007 $350,000
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"Net income before taxes" shall be determined in accordance with
generally accepted accounting principles and shall be verified by Gateway's
independent accountant. The shares of common stock to be issued pursuant to this
subsection (b) are hereinafter referred to as the "Additional Shares" and
together with the Initial Shares, collectively the "Shares".
In the event that Gateway is purchased or if Gateway decides to terminate the
employment Agreement (Exhibit "B") of LRL, all shares not issued under this
profit for shares agreement would be issued to LRL immediately.
SECTION 1.2 At the Closing, the Shareholders will deliver one or more
certificates representing the Spacecraft Stock, duly endorsed so as to make
Gateway the sole holder thereof, free and clear of all claims and encumbrances
and Gateway shall deliver a transmittal letter directed to the transfer agent of
Gateway directing the issuance of the Shares to the Shareholders.
SECTION 1.3 Following the reorganization, Spacecraft will be a wholly owned
subsidiary of Gateway. Gateway agrees that, following its consummation of a
capital raise after the Closing (as defined below) it will provide Spacecraft
with working capital, at such time as Gateway may determine in its sole
discretion.
ARTICLE II
THE CLOSING
SECTION 2.1 The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Gateway on or before January
15, 2004, (the "Closing Date") or at such other place or date and time as may be
agreed to in writing by the parties hereto.
SECTION 2.2 The following conditions are a part of this Agreement and must be
completed on the Closing Date, or such other date specified by the parties:
(a) LRL shall be offered a one-year employment contract with
Spacecraft, substantially in the form of the attached Exhibit B, at a salary
equal to LRL's current salary. The employment agreement shall also provide for
benefits commensurate with those offered by Gateway to its employees, including
health insurance, cell phone, reasonable automobile expense reimbursement,
including repairs, gas and insurance, and other reasonable and necessary
business expenses.
(b) Gateway agrees that LRL shall serve as its Chief Operating
Officer on a part-time basis during the six months following the Closing. Such
arrangement shall be reviewed at that time and the parties shall consider
negotiating an employment contract with a salary and stock options.
(c) Gateway shall execute and deliver a note payable to LFT in
the principal amount of $220,000 (the "Note"). The Note, a form of which is
attached hereto as Exhibit A, will not bear interest and shall be payable in
equal monthly installments over a period of sixty (60) months. The Note shall be
secured for a period of three (3) years by Gateways' pledge, pursuant to a
pledge agreement, of the Spacecraft Stock. The foregoing shall be in complete
satisfaction of Spacecraft's obligations to repay to LFT the $300,000 loan
previously made to Spacecraft.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDERS
The Shareholders, jointly and severally, represent and warrant to
Gateway as of the Closing Date as follows:
SECTION 3.1 Organization and Qualification. Spacecraft is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and has the requisite power and authority to own, lease and operate
its assets and properties and to carry on its business as it is now being
conducted. Spacecraft is qualified to do business and is in good standing in
each jurisdiction in which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary. True,
Spacecraft and complete copies of Spacecraft's Articles of Incorporation and
By-laws, including all amendments thereto, have heretofore been delivered to
Gateway.
SECTION 3.2 Capitalization.
(a) The authorized capital stock of Spacecraft consists of 1,000,000
shares of common stock , no par value (the "Spacecraft Common Stock"). As of the
date hereof, there were 100,000 shares of Spacecraft Common Stock issued and
outstanding. All of the issued and outstanding shares of Spacecraft Common Stock
are duly authorized, validly issued, fully paid, non-assessable, free of
preemptive rights and were issued in compliance with federal and applicable
state securities laws. All of the issued and outstanding shares of Spacecraft
Common Stock owned beneficially and of record by the Shareholders, are owned
free and clear of all liens, claims, security interests, pledges and other
encumbrances or restrictions on transfer.
(b) As of the date hereof and except as Spacecraft has previously
advised Gateway in writing, there are no outstanding subscriptions, options,
calls, contracts, agreements, commitments, understandings, restrictions,
arrangements, rights or warrants, including any right of conversion or exchange
under any outstanding security, instrument or other agreement, obligating
Spacecraft or any subsidiary of Spacecraft to issue, deliver, sell, purchase,
redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed
or acquired, shares of the capital stock of Spacecraft or obligating Spacecraft
or any subsidiary of Spacecraft to grant, or enter into any such agreement or
commitment, except for this Agreement. There are no outstanding or authorized
stock appreciation, phantom stock, stock participation, or other similar rights
with respect to Spacecraft. There are no voting trusts, proxies, other
agreements or understandings to which Spacecraft, any subsidiary of Spacecraft
or the Shareholders are a party or are bound with respect to the voting of any
shares of capital stock of Spacecraft.
SECTION 3.3 Subsidiaries. Spacecraft has no subsidiaries except those as set
forth on Schedule 3.3 attached hereto.
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SECTION 3.4 Authority; Non-Contravention; Approvals.
(a) The Shareholders have the power and authority to execute, deliver
and perform this Agreement and to consummate the transactions contemplated
hereby and no other legal proceedings are necessary to authorize the execution
of this Agreement and the consummation by the Shareholders of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Shareholders and, assuming the due authorization, execution and
delivery hereof by Gateway, constitutes a valid and binding agreement of the
Shareholders, enforceable against him in accordance with its terms, except that
such enforcement may be subject to (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and (b) general equitable principles.
(b) The execution and delivery of this Agreement by the Shareholders
does not, and the consummation by the Shareholders of the transactions
contemplated hereby will not, violate, conflict with or result in a breach of
any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in a right
of termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Spacecraft or the Shareholders under any of the terms, conditions or provisions
of (i) the Articles of Incorporation or by-laws of Spacecraft, (ii) any statute,
law, ordinance, rule, regulation, judgment, decree, order, injunction, writ,
permit or license of any court or governmental authority applicable to
Spacecraft or the Shareholders or any of their respective properties or assets,
or (iii) any note, bond, mortgage, indenture, deed of trust, license, franchise,
permit, concession, contract, lease or other instrument, obligation or agreement
of any kind to which Spacecraft or either Shareholder is now a party or by which
Spacecraft or the Shareholders or any of their respective properties or assets
may be bound or affected.
(c) No declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any governmental or regulatory body or
authority, including the probate court, is necessary for the execution, delivery
or performance of this Agreement by the Shareholders or the consummation by the
Shareholders of the transactions contemplated hereby. No consent of any party to
any contract, agreement, instrument, lease, license, arrangement or
understanding to which Spacecraft or the Shareholder is a party, or to which any
of them or any of their properties or assets are subject, is required for the
execution, delivery or performance of this Agreement.
SECTION 3.5 Financial Statements. Spacecraft shall deliver to Gateway copies of
its financial statements for the fiscal years ending December 31, 2004 and 2003,
and interim financial statements for the two months ended November 30, 2004 (the
"Spacecraft Financial Statements"). The Spacecraft Financial Statements have
been prepared on a consistent basis and fairly and accurately present the
financial position of Spacecraft as of the dates thereof and the results of
operations and changes in financial position for the periods then ended.
SECTION 3.6 Absence of Undisclosed Liabilities. Except as expressly disclosed
and described in Spacecraft Financial Statements, neither Spacecraft nor any of
its subsidiaries had at November 30, 2004, or has incurred since that date, any
liability, indebtedness, expense, claim, deficiency, guarantee or obligation of
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any type (whether absolute, accrued, contingent, matured, un-matured or
otherwise) or of any nature, except (i) liabilities, obligations or
contingencies which are accrued or reserved against in Spacecraft Financial
Statements or reflected in the notes thereto, and (ii) liabilities or
obligations incurred in the ordinary course of business which, in the aggregate,
do not exceed $10,000.
SECTION 3.7 Absence of Certain Changes or Events. From November 30, 2004 through
the date hereof, there has not been any material adverse change in the business,
operations, properties, assets, liabilities, condition (financial or other),
results of operations or prospects of Spacecraft, taken as a whole other than
those verbally disclosed to Gateway (Loss of the Delphi contract).
SECTION 3.8 Litigation. There are no claims, suits, actions, proceedings or
investigations pending or, to the knowledge of the Shareholders, threatened
against, relating to or affecting Spacecraft, before any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator,
and there is no basis known to the Shareholders for any of the foregoing, except
as disclosed and attached hereto. Neither Spacecraft nor either Shareholder is
subject to any judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or authority or any
arbitrator which prohibits or restricts the consummation of the transactions
contemplated hereby or would have any material adverse effect on the business,
operations, properties, assets, condition (financial or other), results of
operations or prospects of Spacecraft.
SECTION 3.9 Compliance with Laws; Permits. Spacecraft is not in violation of,
nor has it been given notice of or been charged with any violation of, any law,
statute, order, rule, regulation, ordinance, or judgment (including, without
limitation, any applicable environmental law, ordinance or regulation) of any
governmental or regulatory body or authority. As of the date of this Agreement,
no investigation or review by any governmental or regulatory body or authority
is pending or, to the knowledge of the Shareholders, threatened, nor has any
governmental or regulatory body or authority indicated an intention to conduct
the same. Spacecraft holds all permits, licenses, certificates and other
authorizations of foreign, federal, state and local governmental agencies
required for the conduct of its business.
SECTION 3.10 Agreements, Contracts and Commitments.
(a) Except as Spacecraft has previously advised Gateway in writing,
Spacecraft is not a party to nor is it bound by:
(i) any employment or consulting agreement, contract or
commitment with an employee or individual consultant or salesperson or
consulting or sales agreement, contract or commitment with a firm or
other organization;
(ii) any agreement or plan, including, without limitation, any
stock option plan, stock appreciation rights plan or stock purchase
plan, any of the benefits of which will be increased, or the vesting of
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement;
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(iii) any fidelity or surety bond or completion bond;
(iv) any lease of personal property with fixed annual rental
payments in excess of $10,000;
(v) any agreement, contract, commitment or grant containing
any covenant limiting the freedom of Spacecraft to engage in any line
of business or to compete with any person;
(vi) any agreement, contract or commitment relating to capital
expenditures and involving future payments in excess of $10,000 either
individually or in the aggregate;
(vii) any agreement, contract or commitment relating to the
disposition or acquisition of assets or any interest in any business
enterprise outside the ordinary course of Spacecraft's business;
(viii) any mortgage, indenture, loan or credit agreement,
security agreement or other agreement or instrument relating to the
borrowing of money, the extension of credit or placing of liens on any
assets of Spacecraft;
(ix) any guaranty of any obligation for borrowed money or
otherwise;
(x) any purchase order or contract for the purchase of
materials involving in excess of $10,000 either individually or in the
aggregate;
(xi) any dealer, distribution, joint marketing or development
agreement;
(xii) any sales representative, original equipment
manufacturer, value added, remarketing or other agreement for
distribution of Spacecraft's products or services;
(xiii) any collective bargaining agreement or contract with
any labor union;
(xiv) any bonus, pension, profit sharing, retirement or other
form of deferred compensation plan;
(xv) any medical insurance or similar plan; or
(xvi) any other agreement, contract, commitment or grant
pursuant to which the obligations of any party thereto is in excess of
$10,000.
(b) Spacecraft is in compliance with and has not breached, violated or defaulted
under, or received notice that it has breached, violated or defaulted under, any
of the terms or conditions of any agreement, contract, grant, covenant,
instrument, lease, license or commitment to which Spacecraft is a party or by
which its assets are bound (collectively, a "Contract"), nor is either
Shareholder aware of any event that would constitute such a breach, violation or
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default with the lapse of time, giving of notice or both. Each Contract is in
full force and effect and is not subject to any default thereunder by any party
obligated to Spacecraft pursuant thereto. Spacecraft has obtained, or will
obtain prior to the Closing Date, all necessary consents, waivers and approvals
of parties to any Contract as are required thereunder for such Contracts to
remain in effect without modification or termination after the Closing.
Following the Closing Date, Spacecraft will be permitted to exercise all of its
rights under the Contracts without the payment of any additional amounts or
consideration other than ongoing fees, royalties or payments which Spacecraft
would otherwise be required to pay had the transactions contemplated by this
Agreement not occurred.
SECTION 3.11 Tax Matters.
(a) Definition of Taxes. For the purposes of this Agreement, "Tax" or,
collectively, "Taxes" means (i) any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts; (ii) any liability for the payment of any amounts of the type
described in clause (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group for any period; and (iii) any liability
for the payment of any amounts of the type described in clause (i) or (ii) as a
result of any express or implied obligation to indemnify any other person or as
a result of any obligations under any agreements or arrangements with any other
person with respect to such amounts and including any liability for taxes of a
predecessor entity.
(b) Tax Returns and Audits.
(i) Spacecraft has prepared and timely filed (or have properly
filed the extensions for) all required federal, state, local and
foreign returns, estimates, information statements and reports
("Returns") relating to any and all Taxes concerning or attributable to
Spacecraft, its subsidiaries or operations thereof and such Returns are
true and correct and have been completed in accordance with applicable
law.
(ii) Spacecraft (A) has paid all Taxes it is required to pay
and has withheld with respect to its employees all federal and state
income taxes, Federal Insurance Contribution Act ("FICA"), Federal
Unemployment Tax Act ("FUTA") and other Taxes required to be withheld,
and (B) has accrued on Spacecraft Financial Statements all Taxes
attributable to the periods covered by Spacecraft Financial Statements
and has not incurred any liability for Taxes for the period prior to
the Closing Date other than in the ordinary course of business.
(iii) Spacecraft has not been delinquent in the payment of any
Tax nor is there any Tax deficiency outstanding, assessed or proposed
against Spacecraft by the Internal Revenue Service (the "IRS") or any
other governmental taxing authority, nor has Spacecraft executed any
waiver of any statute of limitations on or extending the period for the
assessment or collection of any Tax.
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(iv) No audit or other examination of any Return of Spacecraft
or any of its subsidiaries is presently in progress, nor has Spacecraft
been notified of any request for such an audit or other examination.
(v) No adjustment relating to any Returns filed by Spacecraft
has been proposed formally or informally by any Tax authority to
Spacecraft or any representative thereof.
(vi) Spacecraft has made available to Gateway or its legal
counsel, copies of all federal and state income and all state sales and
use Returns for Spacecraft filed for the past five (5) years.
(vii) There are (and immediately following the Closing Date
there will be) no liens, pledges, charges, claims, restrictions on
transfer, mortgages, security interests or other encumbrances of any
sort (collectively, "Liens") on the assets of Spacecraft relating to or
attributable to Taxes other than Liens for Taxes not yet due and
payable.
(viii) Neither Shareholder has any knowledge of any basis for
the assertion of any claim relating or attributable to Taxes, which, if
adversely determined, would result in any Lien on the assets of
Spacecraft.
(ix) None of Spacecraft's assets are treated as "tax-exempt
use property" within the meaning of Section 168(h) of the Internal
Revenue Code of 1986, as amended (the "Code").
(x) There is no any contract, agreement, plan or arrangement,
including but not limited to the provisions of this Agreement, covering
any employee or former employee of Spacecraft that, individually or
collectively, could give rise to the payment of any amount that would
not be deductible by Spacecraft or its subsidiaries as an expense under
applicable law.
(xi) Spacecraft has not filed any consent agreement under
Section 341(f) of the Code or agreed to have Section 341(f)(4) of the
Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by Spacecraft or its subsidiaries.
(xii) Spacecraft is not a party to any tax sharing,
indemnification or allocation agreement nor does Spacecraft owe any
amount under any such agreement.
SECTION 3.12 Employment.
(a) Except as set forth and attached hereto, at the date hereof,
Spacecraft does not maintain, contribute to or have any liability under any
employee benefit plans, programs, arrangements or practices, including employee
benefit plans within the meaning set forth in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), any deferred
compensation or retirement plans or arrangements, or other similar material
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arrangements for the provision of benefits (excluding any "Multi-employer Plan"
within the meaning of Section 3(37) of ERISA or a "Multiple Employer Plan"
within the meaning of Section 413(c) of the Code). Spacecraft does not have any
obligation to create any such plan.
(b) With respect to each plan listed the attached schedule: (i)
Spacecraft has performed in all material respects all obligations required to be
performed by it under each such plan and each such plan has been established and
maintained in all material respects in accordance with its terms and in
compliance with all applicable laws, statutes, rules and regulations, including
but not limited to the Code and ERISA; (ii) there are no actions, suits or
claims pending or, to the knowledge of the Shareholders, threatened (other than
routine claims for benefits) against any such plan; (iii) each such plan can be
amended or terminated after the Closing Date in accordance with its terms,
without liability to Spacecraft; and (iv) there are no inquiries or proceedings
pending or, to the knowledge of either Shareholder, threatened by the IRS or the
Department of Labor with respect to any such plan.
(c) At or prior to the Closing, Spacecraft shall provide to Gateway a
complete list of the employees for Spacecraft, including job title, current
compensation, vacation accrued and service credited for purposes of vesting and
eligibility to participate under any pension, retirement, profit-sharing,
thrift-savings, deferred compensation, stock bonus, stock option, cash bonus,
employee stock ownership, severance pay, insurance, medical, welfare or vacation
plan. No employee of Spacecraft is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality, non-competition, or
proprietary rights agreement, between such employee and any other person or
entity that in any way adversely affects or will affect (i) the performance of
his or her duties as an employee of Spacecraft, or (ii) the ability of
Spacecraft to conduct its business. Neither Spacecraft nor the Shareholders have
received verbal or written notice that any of the employees listed in such
employee list will not continue their employment relationship with Spacecraft
after the Closing Date. All employees of Spacecraft are terminable at will by
Spacecraft.
SECTION 3.13 Labor Controversies. There are no significant controversies pending
or, to the knowledge of either Shareholder, threatened between Spacecraft and
its employees. There are no material organizational efforts presently being made
involving any of the presently unorganized employees of Spacecraft. Spacecraft
has complied in all material respects with all laws relating to the employment
of labor, including, without limitation, any provisions thereof relating to
wages, hours, and the payment of social security and similar taxes, and no
person has asserted that Spacecraft is liable in any material amount for any
arrears of wages or any taxes or penalties for failure to comply with any of the
foregoing.
SECTION 3.14 Environmental Matters. Spacecraft (i) has obtained all applicable
permits, licenses and other authorizations which are required under federal,
state or local laws relating to pollution or protection of the environment
("Environmental Laws"), including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants or hazardous or
toxic materials or wastes into ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants
or hazardous or toxic materials or wastes by Spacecraft (or its agents); (ii) is
in full compliance with, and not in violation of, any terms and conditions of
any required permits, licenses and authorizations, and any other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in Environmental Laws or in any regulation,
code, plan, order, decree, judgment, notice or demand letter issued, entered,
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promulgated or approved thereunder; (iii) is not aware of nor has it received
notice of any event, condition, circumstance, activity, practice, incident,
action or plan which is reasonably likely to interfere with or prevent continued
compliance with or which would give rise to any Environmental Law or statutory
liability, or otherwise form the basis of any claim, action, suit or proceeding,
based on or resulting from Spacecraft's (or any agent's) manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge or release into the environment, of any
pollutant, contaminant, or hazardous or toxic material or waste; (iv) has taken
all actions necessary under applicable requirements of Environmental Laws, rules
or regulations to register any products or materials required to be registered
by Spacecraft (or its agents) thereunder; and (v) has not transported, stored,
used, manufactured, released, disposed of or handled any hazardous substance or
any product containing a hazardous substance in violation of any Environmental
Law.
SECTION 3.15 Interested Party Transactions. Spacecraft is not a party to any
oral or written (a) consulting or similar agreement with any present or former
director, officer or employee or any entity controlled by any such person, (b)
agreement with any executive officer or other key employee of Spacecraft the
benefits of which are contingent, or the terms of which are materially altered,
upon the occurrence of a transaction involving Spacecraft or any of its
subsidiaries of the nature contemplated by this Agreement or (c) agreement with
respect to any executive officer or other key employee of Spacecraft providing
any term of employment or compensation guarantee. Spacecraft is not a party to
any agreement, contract, lease, license, arrangement, or other understanding
with the Shareholders or any employee of Spacecraft (except employment
agreements disclosed to Gateway at or prior to the Closing, any relative or
affiliate of either Shareholder or any employee of Spacecraft, or any other
partnership or enterprise in which the Shareholders or any employee of
Spacecraft, or any such relative or affiliate thereof, had or now has a 5% or
greater ownership interest, or other substantial interest, other than contracts
or agreements provided to Gateway at or prior to the Closing.
SECTION 3.16 Insurance. At or prior to the Closing, Spacecraft shall provide to
Gateway a list of all insurance policies and fidelity bonds covering the assets,
business, equipment, properties, operations, employees, officers and directors
of Spacecraft. All insurance policies listed are in full force and effect. There
is no claim by Spacecraft pending under any of such policies or bonds as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds. All premiums due and payable under all such policies and
bonds have been paid and there is no retroactive premium adjustment obligation
of any kind, and the is otherwise in compliance with the terms of such policies
and bonds (or other policies and bonds providing substantially similar insurance
coverage). The Shareholders have no knowledge of any threatened termination of,
or premium increase with respect to, any of such policies.
SECTION 3.17 Intellectual Property Rights.
(a) If applicable, a schedule attached lists all of Spacecraft's
federal, state and foreign patents, inventions and discoveries that may be
patentable, copyrights, trade names, trademarks, service marks and all pending
applications for any patents or other intellectual property rights or in which
Spacecraft has any interest whatsoever and all other trade secrets, know-how,
confidential information, customer lists, software, technical information, data,
plans, drawings and blueprints and intellectual property rights, whether or not
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registered, created or used by or on behalf of Spacecraft, in each case relating
to its business (collectively, "Spacecraft Intellectual Property Rights").
(b) No person has a right to receive a royalty or similar payment in
respect of any Spacecraft Intellectual Property Rights. Spacecraft does not have
any licenses granted, sold or otherwise transferred by or to it or other
agreements to which it is a party, relating in whole or in part to any of
Spacecraft Intellectual Property Rights.
(c) Spacecraft Intellectual Property Rights are all those necessary for
the operation of the business of Spacecraft as it is currently conducted.
Spacecraft is the owner of all right, title, and interest in and to Spacecraft
Intellectual Property Rights, free and clear of all liens, security interests,
charges, encumbrances and other adverse claims, and has the right to use without
payment to a third party all of Spacecraft Intellectual Property Rights. All
employees of Spacecraft that work with or have access to Spacecraft Intellectual
Property Rights have signed nondisclosure agreements and intellectual property
agreements.
(d) None of Spacecraft Intellectual Property Rights is involved in any
pending or threatened litigation, nor has been the subject of any interference,
opposition or cancellation proceedings. Spacecraft has not received any notice
of invalidity or infringement of any rights of others with respect to Spacecraft
Intellectual Property Rights. Spacecraft has taken all reasonable and prudent
steps to protect Spacecraft Intellectual Property Rights from infringement by
any other firm, corporation, entity or person. The use of Spacecraft
Intellectual Property Rights by Spacecraft is not infringing upon or otherwise
violating the rights of any third party in or to such Spacecraft Intellectual
Property Rights, nor has any third party alleged any such infringement. All of
Spacecraft Intellectual Property Rights are valid and enforceable rights of
Spacecraft or a subsidiary and will not cease to be valid and in full force and
effect by reason of the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated by this Agreement. To the
knowledge of the Shareholders, there is no infringement by any third party of
Spacecraft Intellectual Property Rights.
SECTION 3.18 Books and Records. The books of account, minute books, stock record
ledgers and other records of Spacecraft, all of which have been made available
to Gateway, are complete and correct and have been maintained in accordance with
sound business practices, including the maintenance of an adequate system of
internal controls. The minute books of Spacecraft contain accurate and complete
records of all meetings held of, and corporate action taken by, the
Shareholders, the Board of Directors and committees of the Board of Directors of
Spacecraft and no meeting of the Shareholders, Board of Directors, or committee
has been held for which minutes have not been prepared and are not contained in
such minute books.
SECTION 3.19 Title To and Condition of Properties.
(a) Spacecraft owns good and marketable title to the properties and
assets reflected on Spacecraft Financial Statements or acquired since the date
thereof, free and clear of all liens and encumbrances, except for (i) liens for
current taxes not yet due and payable, and (ii) assets disposed of since October
31, 2004, in the ordinary course of business.
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(b) (i) Spacecraft does not own any real estate; (ii) the properties
subject to the real property leases attached hereto constitute all of the real
estate used or occupied by Spacecraft (the "Spacecraft Real Estate"), and (iii)
Spacecraft Real Estate has access, sufficient for the conduct of Spacecraft's
business, to public roads and to all utilities, including electricity, sanitary
and storm sewer, potable water, natural gas and other utilities, used in the
operations of Spacecraft.
(c) The real property leases attached are in full force and effect, and
Spacecraft has a valid and existing leasehold interest under each such lease for
the term set forth therein. Spacecraft has delivered to Gateway complete and
accurate copies of each of the leases and none of such leases has been modified
in any respect, except to the extent that the copies delivered to Gateway
disclose such modifications. Spacecraft is not in default, and no circumstances
exist which could result in such default, under any of such leases, nor, to the
knowledge of either Shareholder, is any other party to any of such leases in
default.
(d) All of the buildings, machinery, equipment and other tangible
assets necessary for the conduct of Spacecraft's business are in good condition
and repair, ordinary wear and tear excepted, and are usable in the ordinary
course of business. At or prior to the Closing, Spacecraft shall provide to
Gateway a complete list of all items of machinery and equipment used in the
business of Spacecraft. Spacecraft owns or leases under valid leases, all
buildings, machinery, equipment and other tangible assets necessary for the
conduct of its business. At or prior the Closing Spacecraft shall deliver to
Gateway copies of all equipment leases. None of such equipment leases has been
modified in any respect, except to the extent that the copies disclose such
modifications delivered to Gateway. Spacecraft is not in default, and no
circumstances exist which could result in such default, under any of such
equipment leases, nor, to the knowledge of the Shareholder, is any other party
to any of such equipment leases in default.
(e) Spacecraft is not in any material respect in violation of any
applicable zoning ordinance or other law, regulation or requirement relating to
the operation of any properties used in the operation of its business, and
Spacecraft has not received any notice of any such violation, or of the
existence of any condemnation proceeding with respect to any properties owned or
leased by Spacecraft.
SECTION 3.20 Accounts Receivable. All Accounts Receivable that are reflected on
the balance sheet as of October 31, 2004, contained in the Financial Statements
represent, and all Accounts Receivable from that date to the Closing date will
represent, valid obligations arising from sales actually made or services
actually performed by Spacecraft in the ordinary course of business. Except to
the extent collect prior to the Closing Date, such Accounts Receivable are or
will be as of the Closing Date current and collectible net of the respective
reserves shown on the balance sheet (which reserves are adequate and calculated
consistent with past practice). Subject to such reserves, and any immaterial
amounts that are written off quarterly, each of such Accounts Receivable either
has been or will be collected in full, without any setoff, within ninety (90)
days after the day on which it first becomes due and payable. There is no
contest, claim, defense or right of setoff, other than returns in the ordinary
course of business of Spacecraft, under any Contract with any account debtor of
an Account Receivable relating to the amount or validity of such Account
Receivable. Schedule 3.20 contains a complete and accurate list of all Accounts
Receivable as of October 31, 2004, which list sets forth the aging of each
Account Receivable.
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SECTION 3.21. Inventories. All items included in the inventories on the balance
sheet contained in the Financial Statements consist of a quality and quantity
usable and, with respect to finished goods, saleable, in the ordinary course of
business of Spacecraft except for obsolete items and items of below-standard
quality, all of which have been written off or written down to net realizable
value in such balance sheet as of the Closing Date. Spacecraft is not in
possession of any inventory not owned by it, including goods already sold other
than Divaricate inventory which is located at Spacecraft. When the Divaricate
inventory is sold the proceeds are split _____. All of the inventories have been
valued at the lower costs or [market][net realizable] value on a [last in, first
out] [first in, first out] basis. Inventories now on hand that were purchased
after the date of the balance sheet were purchased in the ordinary course of
business at a cost not exceeding market prices prevailing at the time of
purchase. The quantities of each item of inventories (whether raw materials,
work-in-process or finished goods) are not excessive but are reasonable in the
present circumstances of Spacecraft. Work-in-process inventories are now valued,
and will be valued on the Closing Date, according to generally accepted
accounting principles.
SECTION 3.22 Representations Complete. None of the representations or warranties
nor any statement made by the Shareholders in this Agreement or any Schedule or
certificate furnished by the Shareholders pursuant to this Agreement, contains
any untrue statement of a material fact, or omits to state any material fact
necessary in order to make the statements contained herein or therein, in the
light of the circumstances under which made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GATEWAY
Gateway hereby represents and warrants to the Shareholders as of the
Closing Date as follows:
SECTION 4.1 Organization and Qualification. Gateway is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has the requisite power and authority to own, lease and operate its
assets and properties and to carry on its business as it is now being conducted.
Gateway is qualified to do business and is in good standing in each jurisdiction
in which the properties owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary. True, accurate and
complete copies of Gateway's Articles of Incorporation and By-laws, in each case
as in effect on the date hereof, including all amendments thereto, have
heretofore been delivered to Spacecraft.
SECTION 4.2 Capitalization. The authorized capital stock of Gateway consists of
100,000,000 shares of Gateway Common Stock and 0 shares of preferred stock
("Gateway Preferred Stock"). As of January 15, 2005, there were 37,207,254
shares of Gateway Common Stock issued and outstanding and no shares of Gateway
Preferred Stock outstanding. All of the issued and outstanding shares of Gateway
Common Stock are duly authorized, validly issued, fully paid, non-assessable and
free of preemptive rights.
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SECTION 4.3 Authority, Non-Contravention, and Approvals.
(a) Gateway has full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. Gateway's
Board of Directors has duly authorized the execution and delivery of this
Agreement, and the consummation by Gateway of the transactions contemplated
hereby, and no other corporate proceedings on the part of Gateway are necessary
to authorize the execution and delivery of this Agreement and the consummation
by Gateway of the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Gateway and, assuming the due
authorization, execution and delivery hereof by the Shareholders, constitutes a
valid and binding agreement of Gateway, enforceable against Gateway in
accordance with its terms, except that such enforcement may be subject to (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally and (b)
general equitable principles.
(b) The execution and delivery of this Agreement by Gateway does not,
and the consummation by Gateway of the transactions contemplated hereby will
not, violate, conflict with or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Gateway under any
of the terms, conditions or provisions of (i) the charter or by-laws of Gateway,
(ii) any statute, law, ordinance, rule, regulation, judgment, decree, order,
injunction, writ, permit or license of any court or governmental authority
applicable to Gateway or any of its properties or assets, or (iii) any note,
bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of any
kind to which Gateway is now a party or by which Gateway or any of its
properties or assets may be bound or affected.
(c) No declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any governmental or regulatory body or
authority is necessary for the execution and delivery of this Agreement by
Gateway or the consummation by Gateway of the transactions contemplated hereby.
SECTION 4.4 Absence of Certain Changes or Events. From September 30, 2004
through the date hereof, there has not been any material adverse change in the
business, operations, properties, assets, liabilities, condition (financial or
other), results of operations or prospects of Gateway and its subsidiaries,
taken as a whole.
SECTION 4.5 Litigation. There are no claims, suits, actions, proceedings or
investigations pending or, to the knowledge of Gateway, threatened against,
relating to or affecting Gateway or any of its subsidiaries, before any court,
governmental department, commission, agency, instrumentality or authority, or
any arbitrator, except as disclosed and attached hereto. Neither Gateway nor any
of its subsidiaries is subject to any judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or authority or any arbitrator which prohibits or restricts the consummation of
the transactions contemplated hereby or would have any material adverse effect
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on the business, operations, properties, assets, condition (financial or other),
results of operations or prospects of Gateway and its subsidiaries.
SECTION 4.6 Compliance with Laws. Neither Gateway nor any of its subsidiaries is
in violation of, or has been given notice or been charged with any violation of,
any law, statute, order, rule, regulation, ordinance, or judgment (including,
without limitation, any applicable environmental law, ordinance or regulation)
of any governmental or regulatory body or authority, except for violations
which, in the aggregate, do not have a material adverse effect on the business,
operations, properties, assets, condition (financial or other), results of
operations or prospects of Gateway and its subsidiaries, taken as a whole. As of
the date of this Agreement, to the knowledge of Gateway, no investigation or
review by any governmental or regulatory body or authority is pending or
threatened, nor has any governmental or regulatory body or authority indicated
an intention to conduct the same.
ARTICLE V
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
CONCERNING THE SHARES
The Shareholders hereby represents and warrants to Gateway as of the
Closing Date as follows:
SECTION 5.1 Purchase Entirely For Own Account.
This Agreement is made with the Shareholders in reliance upon such
Shareholder's representation to Gateway, which by Shareholder's execution of
this Agreement such Shareholders hereby confirm, that the Shares to be acquired
by such Shareholder will be acquired for investment for such Shareholder's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Shareholders have no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, the Shareholders further represents that
such Shareholder does not presently have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any person, with respect to any of the Shares.
SECTION 5.2 Disclosure Of Information.
The Shareholders believes they have received all of the information
they consider necessary or appropriate for deciding whether to acquire the
Shares. The Shareholder further represent that they have had an opportunity to
ask questions and receive answers from Gateway regarding the Shares. The
foregoing, however, does not limit or modify the representations and warranties
of Gateway contained in Article 4 or the right of each Shareholder to rely
thereon.
SECTION 5.3 Restricted Securities.
The Shareholder understand that the Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act") by reason of
a specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of such Shareholder's representations as expressed
herein. The Shareholders understand that such unregistered the Shares are
"restricted securities" under applicable U.S. federal and state securities laws
and that, pursuant to these laws, the Shareholders must hold the Shares unless
and until they are registered with the Securities and Exchange Commission and
15
qualified by state authorities, or an exemption from such registration and
qualification requirements is available. The Shareholders acknowledge that
Gateway has no obligation to register or qualify any of the Shares for resale.
Each Shareholder further acknowledges that if an exemption from registration or
qualification is available, such as that under Rule 144 under the Securities
Act, it may be conditioned on various requirements including, but not limited
to, the time and manner of sale, the one (1) year holding period for the Shares,
and on requirements relating to Gateway which are outside of such Shareholder's
control.
SECTION 5.4 Legends.
(a) Each Shareholder understands that the certificates representing the
Shares, and any securities issued in respect of or exchange for the Shares, may
bear one or all of the following legends:
(i) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM REASONABLY SATISFACTORY TO THE PURCHASER THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933"; and
(ii) Any legends required by the laws of the State of
California, including any legend required by the California Department of
Corporations.
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.1 Conditions to Obligations of Spacecraft. The obligation of
Spacecraft to perform this Agreement is subject to the satisfaction of the
following conditions on or before the Closing unless waived in writing by
Spacecraft.
(a) Representations and Warranties. There shall be no
information disclosed in the schedules delivered by Gateway, which in the
opinion of Spacecraft would materially adversely affect the proposed transaction
and intent of the parties as set forth in this Agreement. The representations
and warranties of Gateway set forth in Article 4 hereof shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing as though made on and as of the Closing, except as otherwise permitted
by this Agreement.
(b) Performance of Obligations. Gateway shall have in all
material respects performed all agreements required to be performed by it under
this Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and Gateway shall have
complied in all material respects with the course of conduct required by this
Agreement.
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(c) Consents. Execution of this Agreement by the shareholders
of Spacecraft and any consents necessary for or approval of any party listed on
any Schedule delivered by Gateway whose consent or approval is required pursuant
thereto shall have been obtained.
SECTION 6.2 Conditions to Obligations of Gateway. The obligation of Gateway to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing unless waived in writing by Gateway.
(a) Representations and Warranties. There shall be no
information disclosed in the schedules delivered by the Shareholders, which in
the opinion of Gateway, would materially adversely affect the proposed
transaction and intent of the parties as set forth in this Agreement. The
representations and warranties of the Shareholders set forth in Articles 3 and 5
hereof shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing as though made on and as of the Closing, except
as otherwise permitted by this Agreement.
(b) Performance of Obligations. The Shareholders shall have in all
material respects performed all agreements required to be performed by them
under this Agreement and shall have performed in all material respects any
actions contemplated by this Agreement prior to or on the Closing and Spacecraft
shall have complied in all respects with the course of conduct required by this
Agreement.
(c) Consents. Any consents necessary for or approval of any
party listed on any Schedule delivered by the Shareholders, whose consent or
approval is required pursuant thereto, shall have been obtained.
(d) Statutory Requirements. All statutory requirements for the
valid consummation by the Shareholders of the transactions contemplated by this
Agreement shall have been fulfilled.
(e) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state governmental agencies
required to be obtained by Spacecraft for consummation of the transactions
contemplated by this Agreement shall have been obtained.
ARTICLE VII
MATTERS SUBSEQUENT TO CLOSING
SECTION 7.1 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such further
or other actions as the other party or parties to this Agreement may reasonably
deem necessary in order to carry out the purposes and intent of this Agreement.
SECTION 7.2 Repayment of Shareholder Loan. Following the Closing, Gateway agrees
that the LRL's loan to Spacecraft in the principal amount of $75,000 will be
repaid to the Shareholder in twelve (12) equal monthly installments.
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SECTION 7.3 Life Insurance. Following the Closing, the $1,000,000 life insurance
policy maintained by Spacecraft on the life of the Xxxxx X. Xxxxxxx shall
thereafter be paid by the LFT. Notwithstanding the foregoing, in the event that
any benefits are paid out from the policy, the first amount so paid shall be
deemed to be full satisfaction of the any amount due under the Note (in full
satisfaction of Gateway's obligations thereunder), with the balance to be paid
to the Shareholder's heirs in accordance with the policy.
SECTION 7.4 Conduct of Business. Following the Closing, LRL shall continue to
have responsibility for making day-to-day management decision on behalf of the
Spacecraft. Gateway agrees that Xx. Xxxxxxxx will make himself available to
assist in the operations of Spacecraft. The Shareholders and other authorized
Spacecraft individuals will continue to be authorized signatories on
Spacecraft's bank accounts, and will continue to be responsible for monthly
accounting and budget controls. Spacecraft and the Shareholders agree that
Spacecraft will provide timely monthly financial statements for consolidation
with Gateway's and its other subsidiaries' financial statements, and Gateway and
its representatives shall have access to Spacecraft's books and records at any
time upon request.
ARTICLE VIII
NATURE AND SURVIVAL OF REPRESENTATIONS
SECTION 8.1 All statements contained in any written certificate, schedule,
exhibit or other written instrument delivered by Gateway, the Shareholders or
Spacecraft pursuant hereto, or otherwise adopted by Gateway, by its written
approval, or by Shareholders or Spacecraft by his or its written approval, or in
connection with the transactions contemplated hereby, shall be deemed
representations and warranties by Gateway or Spacecraft as the case may be. All
representations, warranties and agreements made by either party shall survive
for the period of the applicable statute of limitations and until the discovery
of any claim, loss, liability or other matter based on fraud, if longer.
ARTICLE IX
SHAREHOLDERS INDEMNIFICATION
Following the Closing, each of the Shareholders, jointly and severally,
agrees to protect, defend, indemnify and hold Gateway harmless with respect to
any and all claims, demands, suits, actions, administrative proceedings, losses,
damages, obligations, liabilities, costs and expenses, including without
limitation reasonable legal and other costs and expenses of investigating and
defending any actions or threatened actions which arise as a result of or which
are related to any active or passive act, omission, occurrence, event or
condition that occurred prior to the Closing Date in connection with any
misrepresentation or breach of any of the representations, covenants or
warranties of the Shareholders contained herein.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of California excluding the conflicts of
laws.
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SECTION 10.2 Notices. All notices necessary or appropriate under this Agreement
shall be effective when personally delivered or deposited in the United States
mail, postage prepaid, certified or registered, return receipt requested, and
addressed to the parties last known address which addresses are currently as
follows:
If to Gateway If to the Shareholders
Xx. Xxxxx Xxxxxxxx Xx. Xxxxx X. Xxxxxxx, III
Gateway International Holdings, Inc. Spacecraft Machine Products, Inc.
0000 Xxxx Xxxxx Xxxxx 00000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000 Xxxxxxxx, XX 00000
SECTION 10.3 Amendment and Waiver. The parties hereby may, by mutual agreement
in writing signed by each party, amend this Agreement in any respect. Any term
or provision of this Agreement may be waived in writing signed by an authorized
officer at any time by the party which is entitled to the benefits thereof, such
waiver right shall include, but not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the
obligations of the other;
(b) Waive any inaccuracies in representations by the other
contained in this Agreement or in any document delivered pursuant
hereto;
(c) Waive compliance by the other with any of the covenants
contained in this Agreement, and performance of any obligations by the
other; and
(d) Waive the fulfillment of any condition that is precedent
to the performance by the party so waiving of any of its obligations
under this Agreement.
Any writing on the part of a party relating to such amendment,
extension or waiver as provided in this Section 10.3 shall be valid if
authorized or ratified by the Board of Directors of such party.
SECTION 10.4 Remedies not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies by Gateway or
Spacecraft shall not constitute a waiver of the right to pursue other available
remedies.
SECTION 10.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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SECTION 10.6 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of Gateway and Spacecraft and
its shareholders.
SECTION 10.7 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigned regarding the
subject matter hereof, and supersedes all prior written or oral understandings
or agreements between the parties.
SECTION 10.8 Cost and Expenses. Spacecraft shall bear all expenses incurred in
connection with the negotiation, execution, closing, and performance of this
Agreement, including counsel fees and accountant fees.
SECTION 10.9 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
Executed as of the date first written above.
Gateway International Holdings, Inc. Spacecraft Machine Products, Inc.
By: // S // By: // S //
----------------------------------- -----------------------------------
Xxxxx Xxxxxxxx, President Xxxxx X. Xxxxxxx, III, President
The undersigned hereby approves the Share Exchange Agreement with
Gateway International Holdings, Inc. The undersigned hereby represent and
warrant that the undersigned have read the Share Exchange Agreement and
understand its terms and conditions.
Sole Shareholders of Spacecraft Machine Products, Inc.
// S // Date: January 28, 2005
----------------------------------------
Xxxxx X. Xxxxxxx, III
// S // Date: January 22, 2005
----------------------------------------
The Xxxxxxx Family Trust
By Xxxxx X. Xxxxxxx
// S // Date: January 22, 2005
----------------------------------------
The Xxxxxxx Family Trust
By Xxxx X. Xxxxxxx
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SPOUSAL CONSENT TO SHARE EXCHANGE AGREEMENT
The undersigned spouses of the Shareholders hereby represent and warrant that
the undersigned have read the Share Exchange Agreement and understand its terms
and condition. Each of the undersigned hereby consents to her spouses transfer
of his Shares pursuant to the terms thereof.
// S // Date: January 26, 2005
--------------------------------------
Jo. X. Xxxxxxx
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