COMMON STOCK EXCHANGE AND ACQUISITION AGREEMENT
by and among
FamilyWare International Inc.,
a Nevada corporation;
and
CENTROCOM Corp.,
a Nevada corporation;
and
Xxxx Xxxxxxx and Xxxxxx X. Xxxxxx III
and
Xxxxxx Xxxxxx
THIS COMMON STOCK EXCHANGE AND ACQUISITION AGREEMENT ("Agreement") is made
and entered into in quadruplicate this 7th day of May, 1999, by and among
FamilyWare International, Inc., a Nevada corporation ("Purchaser"); CENTROCOM
Corp., a Nevada corporation ("Company"); Xxxxxx Xxxxxx ("Xxxxxx"); Xxxx Xxxxxxx
("Xxxxxxx") and Xxxxxx X. Xxxxxx III ("Xxxxxx") and provides for the Company to
be acquired by the Purchaser and a wholly owned subsidiary of the Purchaser, and
for the stockholders of the Company, by such acquisition, to become stockholders
of the Purchaser. Peacock and Xxxxxx shall be defined in this Agreement,
collectively, as the "Sellers" and each of which may be referred to in this
Agreement singularly as a "Seller".
RECITALS
A. The Purchaser desires to acquire, on the terms and subject to the
conditions specified in this Agreement, the business of the Company.
B. The Company and the Sellers believe that it is desirable and in the best
interests of the Company that its business be acquired by the Purchaser, by the
acquisition by the Purchaser of all of the issued and outstanding shares of
$.001 par value common stock of the Company, which common stock is owned by the
Sellers, on the terms and subject to
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the conditions specified in this Agreement.
X. Xxxxxxx owns fifty percent (50%) of the issued and outstanding shares of
$.001 par value common stock of the Company, and desires to exchange those
shares for shares of $.0005 par value common stock of the Purchaser, on the
terms and subject to the conditions specified in this Agreement.
X. Xxxxxx owns fifty percent (50%) of the issued and outstanding shares of
$.001 par value common stock of the Company, and desires to exchange those
shares of the Company's common stock for shares of $.0005 par value common stock
of the Purchaser, on the terms and subject to the conditions specified in this
Agreement.
X. Xxxxxx is the sole, remaining member of the Board of Directors of the
Purchaser.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE
DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
ARTICLE I
DEFINITIONS
As used in this Agreement, in addition to terms defined elsewhere in this
Agreement, the terms specified below in this Article I shall have the
definitions and meanings specified immediately after those terms, unless a
different and common meaning of the term is clearly indicated by the context,
and variants and derivatives of the following terms shall have correlative
meanings. To the extent that certain of the definitions and meanings specified
below suggest, indicate, or express agreements between or among parties to this
Agreement, or specify representations or warranties or covenants of a party, the
parties agree to the same by execution of this Agreement. The parties to this
Agreement agree that agreements, representations, warranties, and covenants
expressed in any part or provision of this Agreement shall for all purposes of
this Agreement be treated in the same manner as other such agreements,
representations, warranties, and covenants specified elsewhere
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in this Agreement, and the article or section of this Agreement within which
such an agreement, representation, warranty, or covenant is specified shall have
no separate meaning or effect on the same.
1.1 "Accumulated Funding Deficiency". An "accumulated funding deficiency"
as defined by the provisions of Section 302(a)(2) of ERISA or the last two
sentences of Section 412(a)(2) of the Code, or, in either case, successor
provisions to such provisions adopted by amendments to ERISA or the Code, as the
case may be, and including, in each case, other provisions of ERISA, the Code or
other law, and regulations adopted pursuant to ERISA or the Code or such other
law, modifying, amending, interpreting or otherwise affecting the application of
such provisions, either in general or as applied to the nature or circumstances
of a particular person that is a party to, or is affected by, or is involved in,
the Transaction and with respect to which person the use of the term in this
Agreement, or in the particular provision of this Agreement, is relevant.
1.2 "Affiliate". When used with respect to a person, an "affiliate" of that
person is a person controlling, controlled by, or under common Control with that
person.
1.3 "Agreement". This Plan of Reorganization and Agreement, including all
of its schedules and exhibits and all other documents specifically referred to
in this Agreement that have been or are to be delivered by a party to this
Agreement to another such party in connection with the Transaction or this
Agreement, and including all duly adopted amendments, modifications, and
supplements to or of this Agreement and such schedules, exhibits, and other
documents.
1.4 "Audited Financial Statements". The balance sheet, income statement,
statement of stockholders' equity, and statement of cash flows or, in each
instance, equivalent statements of the respective, subject corporation as
commonly provided to such corporation's shareholders, as at December 31, 1998,
and for the three (3) years then ended, as reported on by Auditors.
1.5 "Auditors". Independent certified public accountants currently retained
for the purpose of auditing financial statements of the respective, particular
person.
1.6 "Business Day". Any day that is not a Saturday, Sunday, or a day on
which banks in Los Angeles, California, are authorized to close.
1.7 "Closing". The completion of the Transaction, to occur as contemplated
by the provisions of Article II of this Agreement.
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1.8 "Closing Date". The date on which the Closing actually occurs, which
shall be no later than May 12, 1999, unless otherwise agreed by the parties to
this Agreement, but shall not in any event be prior to satisfaction or waiver of
the conditions to Closing specified by the provisions of Article IX of this
Agreement.
1.9 "Closing Time". The time at which the Closing actually occurs. All
events that are to occur at the Closing Time shall, for all purposes, be deemed
to occur simultaneously, except to the extent, if at all, that a specific order
of occurrence is otherwise described.
1.10 "Code". The Internal Revenue Code of 1986, as amended and in effect at
the time of execution of this Agreement.
1.11 "Company". CENTROCOM Corp., a Nevada corporation, which will, pursuant
to the Transaction, become a wholly owned Subsidiary of the Purchaser.
1.12 "Company Balance Sheet". The most recent balance sheet included in the
Audited Financial Statements of the Company.
1.13 "Complete Withdrawal". A "complete withdrawal" from a Multiemployer
Plan as defined by the provisions of Section 4203 of ERISA or successor
provisions to such provision adopted by amendments to ERISA and including other
provisions of ERISA or of other law and regulations adopted pursuant to ERISA or
such other law, modifying, amending, interpreting or otherwise affecting the
application of such provision, either in general or as applied to the nature or
circumstances of a particular person that is a party to, or is affected by, or
is involved in, the Transaction and with respect to which person the use of the
term in this Agreement, or in the particular provision of this Agreement, is
relevant.
1.14 "Consideration". Nine million (9,000,000) shares of $.0005 par value
common stock of the Purchaser, for which the common stock of the Company issued
and outstanding immediately prior to the consummation of the Transaction will be
exchanged.
1.15 "Control". Generally, the power to direct the management or affairs of
an person.
1.16 "ERISA". The Employee Retirement Income Security Act of 1974, as
amended and in effect at the time of execution of this Agreement.
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1.17 "GAAP". Generally Accepted Accounting Principles, as in effect on the
date of any statement, report or determination that purports to be, or is
required to be, prepared or made in accordance with GAAP. All references in this
Agreement to financial statements prepared in accordance with GAAP shall be
defined and mean in accordance with GAAP consistently applied throughout the
periods to which reference is made.
1.18 "HSR". The Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as
amended.
1.19 "Inventories". The stock of raw materials, work-in-process and
finished goods, including, but not limited to, finished goods purchased for
resale, held for manufacturing, assembly, processing, repairing, finishing,
sale, or resale to others, from time to time in the ordinary course of the
business in the form in which such inventories then are held or after
manufacturing, assembling, finishing, processing, incorporating with other goods
or items, refining, repairing, or similar processes.
1.20 "IRS". The Internal Revenue Service.
1.21 "Liabilities". At any point in time ("Determination Time"), the
obligations of a person, whether known or unknown, contingent or absolute,
recorded on its books or not, arising or resulting in any way from facts,
events, agreements, obligations or occurrences that existed or transpired at a
prior point in time, or resulted from the passage of time to the Determination
Time, but not including obligations accruing or payable after the Determination
Time to the extent (but only to the extent) that such obligations (i) arise
pursuant to previously existing agreements for services, benefits, or other
considerations, and (ii) accrue or become payable with respect to services,
benefits, or other considerations received by the person after the Determination
Time.
1.22 "Multiemployer Plan". A "multiemployer plan," as defined by the
provisions of Section 3(37) of ERISA or Section 414(f) of the Code, or, in
either case, successor provisions to such provisions adopted by amendments to
ERISA or the Code, as the case may be, and including, in each case, other
provisions of ERISA, the Code or other law, and regulations adopted pursuant to
ERISA or the Code or such other law, modifying, amending, interpreting, or
otherwise affecting the application of such provisions, either in general or as
applied to the nature or circumstances of a particular person that is a party
to, or is affected by, or is involved in, the Transaction and with respect to
which person the use of the term in this Agreement, or in the particular
provision of this Agreement, is relevant.
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1.23 "Parent". With respect to any person, a person of which that person
is, directly or indirectly through one or more other Parents, a Subsidiary.
1.24 "Partial Withdrawal". A "partial withdrawal" from a Multiemployer
Plan, as defined in Section 4205 of ERISA or successor provisions to such
provision adopted by amendments to ERISA and including other provisions of ERISA
or of other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, inter preting or otherwise affecting the application of
such provision, either in general or as applied to the nature or circumstances
of a particular person that is a party to, or is affected by, or is involved in,
the Transaction and with respect to which person the use of the term in this
Agreement, or in the particular provision of this Agreement, is relevant.
1.25 "Payables". Liabilities of a party arising from the borrowing of money
or the incurring of obligations for merchandise or goods purchased.
1.26 "Plan Termination". A termination of a Pension Plan, whether partial
or complete, within the meaning of Title IV of ERISA.
1.27 "PBGC". The Pension Benefit Guaranty Corporation.
1.28 "Pension Plan". A "pension plan" or "employee pension benefit plan,"
as defined in Section 3(2) of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting, or otherwise affecting the application of
such provision, either in general or as applied to the nature or circumstances
of a particular person that is a party to, or is affected by or is involved in
the Transaction and with respect to which person the use of the term in this
Agreement, or in the particular provision of this Agreement, is relevant.
1.29 "Prohibited Transaction". A "prohibited transaction," as defined in
Section 406 of ERISA or Section 4975(c) of the Code, or, in either case,
successor provisions to such provisions adopted by amendments to ERISA or the
Code, as the case may be, and including, in each case, other provisions of
ERISA, of the Code or of other law, and regulations adopted pursuant to ERISA or
the Code or such other law, modifying, amending, interpreting, or otherwise
affecting the application of such provisions, either in general or as applied to
the nature or circumstances of a particular person that is a party to, or is
affected by or is involved in the Transaction and with respect to which person
the use of the term in this Agreement, or in the particular provision of this
Agreement, is relevant.
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1.30 "Projections". The projections of economic results of the Company,
prepared quarterly through April 30, 1999, and delivered to the Purchaser
pursuant to the terms of this Agreement. The Projections include projected
financial results for the business operations of the Company. The Purchaser
acknowledges that projections of future economic performance are necessarily
unreliable and subject to the occurrence or nonoccurrence of a variety of
events, but the Company represents and warrants that the Projections have been
prepared on the basis of assumptions that are, in the judgment of the Company,
reasonable in all respects and are not to the knowledge of the Company contrary
in any material respect to fact or to events that have occurred or are presently
in existence.
1.31 "Proprietary Rights". Trade secrets, copyrights, patents, trademarks,
service marks, customer lists, and all similar types of intangible property
developed, created or owned by the person claiming ownership, proprietary or
similar, or used by such person in connection with its business, whether or not
the same are entitled to legal protection.
1.32 "Purchaser". FamilyWare International, Inc., a Nevada corporation,
which, pursuant to the provisions of this Agreement, is acquiring all of the
issued and outstanding shares of $.001 par value common stock of the Company.
The Purchaser shall include FamilyWare International, Inc., a Nevada
corporation, and each of its Subsidiaries, as an entirety, and representations
and warranties as to the Purchaser specified in this Agreement shall be deemed
to mean FamilyWare International, Inc., a Nevada corporation, and each of its
Subsidiaries, both separately and together as a consolidated entity, unless and
except to the extent expressly indicated otherwise.
1.33 "Purchaser Balance Sheet". The most recent balance sheet included in
the Audited Financial Statements of the Purchaser.
1.34 "Purchaser's Securities". Shares of $.0005 par value common stock of
the Purchaser issuable in respect of the outstanding shares of common stock of
the Company, pursuant to the Transaction.
1.35 "Receivables". Accounts receivable, notes receivable, and other
obligations appearing as assets on the books of a particular person, and
customarily presented as assets in the balance sheets of such person prepared in
accordance with GAAP, indicating moneys owed to such person.
1.36 "Reportable Event". A "reportable event," as defined in Section
4043(b) of ERISA or successor provisions to such provision adopted by amendments
to ERISA and including other provisions of ERISA or of other law, and
regulations adopted pursuant to
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ERISA or such other law, modifying, amending, interpreting, or otherwise
affecting the application of such provision, either in general or as applied to
the nature or circumstances of a particular person that is a party to, or is
affected by or is involved in the Transaction and with respect to which person
the use of the term in this Agreement, or in the particular provision of this
Agreement, is relevant.
1.37 "SEC". The Securities and Exchange Commission.
1.38 "Securities Act". The Securities Act of 1933, as amended to the date
as of which any reference thereto is relevant pursuant to this Agreement,
including any substitute or replacement statute adopted in place or lieu
thereof.
1.39 "Sellers". Xxxx Xxxxxxx and Xxxxxx X. Xxxxxx III, who are the only
shareholders of the Company and who are executing this Agreement and thereby
agreeing to be obligated by certain provisions of this Agreement.
1.40 "Subsidiary". With respect to any person, another person of which
fifty percent (50%) or more of the effective voting power, or the effective
power to elect a majority of the board of directors or similar governing body,
or fifty percent (50%) or more of the true equity interest, is owned by such
first person, directly or indirectly.
1.41 "Transaction". The issuance by the Purchaser of the Consideration in
exchange for all of the issued and outstanding shares of $.001 par value common
stock of the Company, held by the Sellers, and pursuant to which the Company
shall become a wholly-owned Subsidiary of the Purchaser.
1.42 "Unaudited Financial Statements". The balance sheet, income statement,
statement of stockholders' equity and statement of cash flows or equivalent
statements of the respective, particular person, as commonly prepared, as at
March 31, 1999, with comparable statements for the similar period of the prior
fiscal year.
1.43 "Welfare Plan". A "welfare plan" or an "employee welfare benefit plan"
defined in Section 3(1) of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting, or otherwise affecting the application of
such provision, either in general or as applied to the nature or circumstances
of a particular person that is a party to, or is affected by or is involved in
the Transaction and with respect to which person the use of the term in this
Agreement, or in the particular provision of this Agreement, is relevant.
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ARTICLE II
THE TRANSACTION
2.1 The Transaction. On the Closing Date, and at the Closing Time, subject
in all instances to each of the terms, conditions, provisions and limitations
specified in this Agreement, the Company will become a wholly owned Subsidiary
of the Purchaser, pursuant to which (i) the Sellers shall sell, transfer,
convey, assign, deliver and set over to the Purchaser, free and clear of any and
all liens and charges, and the Purchaser shall acquire from the Sellers, the
shares of $.001 par value common stock of the Company owned by the Sellers,
comprising, as to each such Seller, his entire ownership of equity securities of
the Company, in exchange for the Consideration payable for each share of such
common stock of the Company held by the Sellers; (ii) the officers of the
Company immediately prior to the effectiveness of the Transaction will hold such
offices with the Purchaser immediately after the effectiveness of the
Transaction, and thereafter subject at all times to the discretion of the Board
of Directors of the Purchaser and their superior officers, if any, to whom the
power to terminate employment has been delegated; (iii) the Board of Directors
of the Company immediately prior to the effectiveness of the Transaction will be
the Board of Directors of the Purchaser immediately after the Transaction; and
(iv) the name of the Purchaser shall thereafter be changed to the name of the
Company as soon as practicable after the Closing.
2.2 Delivery of Consideration. Pursuant to the Transaction, each holder of
shares of $.001 common stock of the Company immediately prior to the Transaction
shall be entitled to receive, from and after the consummation of the
Transaction, in respect of each share of such common stock of the Company
outstanding immediately prior to the Transaction owned by such holder (and upon
surrender of the certificate(s) therefor, duly endorsed and in all respects in
proper form for transfer), nine (9) shares of $.0005 par value common stock of
the Purchaser.
2.3 Closing. The Closing of the Transaction shall take place at the offices
of Xxxxx & Xxxxxxxxx LLP, 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx,
Xxxxxxxxxx, at 10:00 A.M. or at such other place and time as the Purchaser and
the Company may agree upon, on the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND KASSAM
The Purchaser and Kassam, and each of them, to the best of their knowledge,
hereby represent and warrant to the Company and the Sellers that as of the date
that Kassam
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became President of the Purchaser that:
3.1 Organization And Qualification. The Purchaser is a corporation duly
organized, validly existing, and in good standing pursuant to the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to conduct business as that business is now being conducted. The
Purchaser is, or will prior to the Closing be, duly qualified as a foreign
corporation to do business, and in good standing, in each jurisdiction where the
character of the properties owned or leased by it, or the nature of its
activities, is such that qualification as a foreign corporation in that
jurisdiction is required by law.
3.2 Authority Relative to This Agreement. The Purchaser has the requisite
corporate power and authority to enter into this Agreement and to carry out its
obligations created by this Agreement. The execution and delivery of this
Agreement and the consummation of the Transaction have been duly authorized and
approved by the requisite corporate authority of Purchaser and no other
corporate proceedings on the part of the Purchaser are necessary to approve and
adopt this Agreement or to approve the consummation of the Transaction,
including issuance and delivery of the Consideration. This Agreement has been
duly and validly executed and delivered by the Purchaser and constitutes a valid
and binding obligation of the Purchaser, enforceable in accordance with its
terms.
3.3 Absence of Breach; No Consents. The execution, delivery and performance
of this Agreement, and the performance by Purchaser of its obligations created
by this Agreement (except for compliance with the HSR Act and compliance with
any and all regulatory or licensing laws applicable to the business of the
Purchaser, all of which, to the extent applicable to Purchaser (and to the
extent within its control), will be satisfied in all material respects prior to
the Closing) do not, except as disclosed in Schedule 3.3 to this Agreement, (i)
conflict with, and will not result in a breach of, any of the provisions of the
Articles of Incorporation or Bylaws of the Purchaser; (ii) contravene any law,
rule or regulation of any state or commonwealth or of the United States, or of
any applicable foreign jurisdiction, or any order, writ, judgment, injunction,
decree, determination, or award affecting or obligating the Purchaser, in such a
manner as to provide a basis for enjoining or otherwise preventing consummation
of the Transaction; (iii) conflict with or result in a material breach of or
default pursuant to any material indenture or loan or credit agreement or any
other material agreement or instrument to which Purchaser is a party, in such a
manner as to provide a basis for enjoining or otherwise preventing consummation
of the Transaction; or (iv) require the authorization, consent, approval or
license of any third party of such a nature that the failure to obtain the same
would provide a basis for
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enjoining or otherwise preventing consummation of the Transaction.
3.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this Agreement
or the Transaction or any related transaction based upon any agreements, written
or oral, made by or on behalf of the Purchaser.
3.5 Taxes. The Purchaser has properly filed or caused to be filed all
federal, state, local, and foreign income and other tax returns, reports, and
declarations that are required by applicable law ro be filed by it, and has
paid, or made full and adequate provision for the payment of, all federal,
state, local, and foreign income and other taxes properly due for the periods
contemplated by such returns, reports, and declarations, except such taxes, if
any, as are adequately reserved against in the Purchaser Balance Sheet.
3.6 Litigation. No investigation or review by any governmental entity with
respect to the Purchaser is pending or threatened (other than inspections and
reviews customarily made of businesses such as those similar to that the
Purchaser), nor has any governmental entity indicated to the Purchaser an
intention to conduct any such investigation or review. There is no action,
litigation or proceeding pending or threatened against or affecting the
Purchaser, at law or in equity, or before any federal, state, municipal, or
other governmental department, commission, board, bureau, agency, or
instrumentality.
3.7 Employees, Etc. There are no collective bargaining, bonus, profit
sharing, compensation, or other plans, agreements, trusts, funds, or
arrangements maintained by the Purchaser for the benefit of directors, officers
or employees of, and there are no employment, consulting, severance, or
indemnification arrangements, agreements, or understandings between the
Purchaser, on the one hand, and any current or former directors, officers or
other employees (or Affiliates thereof) of the Purchaser, on the other hand. The
Purchaser is not, and following the Closing will not be, obligated by any
express or implied contract or agreement to employ, directly or as consultant or
otherwise, any person for any specific period of time or until any specific age.
3.8 Compliance With Laws. The Purchaser is in compliance with all, and has
received no notice of any violation of any, laws or regulations applicable to
its operations, including, without limitation, the laws and regulations relevant
to the use or utilization of premises, or with respect to which compliance is a
condition of engaging in any aspect of the business of the Purchaser, and the
Purchaser has all permits, licenses, zoning rights, and other governmental
authorizations necessary to conduct its business as presently conducted.
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3.9 Ownership of Assets. The Purchaser has good, marketable and insurable
title, or valid, effective and continuing leasehold rights in the case of leased
property, to all real property (as to which, in the case of owned property, such
title is fee simple) and all personal property owned or leased by the Purchaser
in such a manner as to create the appearance or reasonable expectation that such
property is owned or leased by the Purchaser; such ownership is free and clear
of all liens, claims, encumbrances and charges, except liens for taxes not yet
due and minor imperfections of title and encumbrances, if any, which, singly and
in the aggregate, are not substantial in amount and do not materially detract
from the value of the property subject thereto or materially impair the use
thereof; no other person has any ownership or similar right in, or contractual
or other right to acquire any such right in, any of such assets. The Purchaser
does not know of any potential action by any person and no proceedings with
respect thereto have been instituted of which the Purchaser has notice, that
would materially affect the Purchaser's ability to use and to utilize each of
its assets. The Purchaser has received no notices from any mortgagee regarding
any of its leased properties.
3.10 Proprietary Rights. The Purchaser possesses full and complete
ownership of, or adequate and enforceable long-term licenses or other rights to
use (without payment), all of its Proprietary Rights; the Purchaser has not
received any notice of conflict which asserts the rights of any other person
with respect thereto; and the Purchaser has in all material respects performed
all of the obligations required to be performed by it, and is not in default in
any material respect, pursuant to any agreement relating to any such Proprietary
Right.
3.11 Trade Names. Schedule 3.11 to this Agreement identifies each trade
name, fictitious business name, or other similar name under which the Purchaser
has conducted any part of its business during the ten (10) years preceding the
date of this Agreement.
3.12 Employee Benefit Plans. The Purchaser does not maintain or contribute
to any Pension Plan or any Welfare Plan, nor is the Purchaser presently, nor has
it been within the last six (6) years, a participating employer in any
Multiemployer Plan, affecting, in any case, employees of the Purchaser.
3.13 Facilities. The Purchaser's facilities are (as to physical plant and
structure) structurally sound, ordinary wear and tear excepted, and none of the
Purchaser's facilities, nor any of the vehicles or other equipment used by the
Purchaser in connection with its business, has any material defects and all of
them are in all material respects in good operating condition and repair and are
adequate for the uses to which they are utilized, ordinary wear and tear
excepted; none of Purchaser's facilities, vehicles or other equipment
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is in need of maintenance or repairs, except for ordinary, routine maintenance
and repairs which are not material in nature or cost. The Purchaser is not in
breach, violation or default of any lease affecting the Purchaser's assets with
respect to, or as a result of, which the other party (whether lessor, lessee,
sublessor, or sublessee) thereto has the right to terminate the same, and the
Purchaser has not received notice of any claim or assertion that it is or may be
in any such breach, violation or default.
3.14 Accounts Receivable. All accounts receivable of the Purchaser
represent transactions in the ordinary course of business, and are current and
collectible.
3.15 Inventories. All Inventories of the Purchaser are of a quality and
quantity usable and salable in the ordinary course of business, except for
obsolete items and items of below-standard quality, all of which, in the
aggregate, are immaterial in amount. Items included in such Inventories are
presented on the books and records of the Purchaser at the lower of cost or
market and, in any event, at not greater than their net realizable value, on an
item by item basis, after appropriate deduction for costs of completion,
marketing costs, transportation expense and allocation of overhead.
3.16 Accounts Payable. The accounts payable of the Purchaser at the time of
the Closing will be all amounts owed by the Purchaser in respect of trade
accounts due and other Payables of the Purchaser.
3.17 Labor Matters. There are no activities or controversies, including,
without limitation, any labor organizing activities, election petitions or
proceedings, proceedings preparatory thereto, unfair labor practice complaints,
labor strikes, disputes, slowdowns, or work stoppages, pending or, to the best
of the knowledge of the Purchaser, threatened, affecting employees of the
Purchaser.
3.18 Insurance. The Purchaser has insurance policies in full force and
effect insuring the assets of the Purchaser and such insurance policies provide
for coverages which are usual and customary in the business of the Purchaser as
to amount and scope, and are adequate to protect the assets of the Purchaser
against any reasonably foreseeable risk of loss, including business
interruption. The Purchaser has not within the past three (3) years received any
notice of cancellation of any insurance agreement affecting the assets of the
Purchaser.
3.19 Environmental Hazards regarding Real Properties. Each parcel of real
property by the Purchaser in its business is free of any and all hazardous
wastes, toxic substances, or other types of contamination or matters of
environmental concern, and the
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Purchaser is not subject to any Liability resulting from or related to any such
wastes, substances, contaminants, or matters of environmental concern in
connection with any such property.
3.20 Full Disclosure. The documents, certificates, and other writings
furnished or to be furnished by or on behalf of the Purchaser to the Company
pursuant to this Agreement, taken together in the aggregate, do not and will not
contain any untrue state ment of a material fact, or omit to specify any
material fact necessary to make the statements made, considering the
circumstances pursuant to which they are made, not misleading.
3.21 Capitalization; the Subject Stock; Related Matters. The authorized
capital stock of the Purchaser consists of (i) fifty million (50,000,000) shares
of $.0005 par value common stock and (ii) five million (5,000,000) shares of
$.0005 par value preferred stock. As of the date of this Agreement, there are
twelve million four hundred twenty-six thousand one hundred ninety-two
(12,426,192) shares of such common stock are issued and outstanding and no
shares of such preferred stock are issued and outstanding. The Purchaser's
Securities, when issued, will be duly, legally and validly issued and will be
non-assessable.
3.22 Options, Warrants and Other Rights and Agreements Affecting the
Purchaser's Capital Stock. The Purchaser has no authorized or outstanding
options, warrants, calls, subscriptions, rights, convertible securities or other
securities, as defined by the provisions of the Securities Act ("Securities"),
or any commitments, agreements, arrangement or understandings of any manner or
nature whatsoever obligating the Purchaser, in any such case, to issue shares of
the Purchaser's capital stock or other securities or securities convertible into
or evidencing the right to purchase shares of the Purchaser's capital stock or
other Securities. Neither the Purchaser nor any officer, director, or
shareholder of the Purchaser is a party to any agreement, understanding,
arrangement or commitment, or obligated by an provision which creates any rights
in any person with respect to the authorization, issuance, voting, sale or
transfer of any shares of the Purchaser's capital stock or other Securities.
3.23 Subsidiaries. All of the Subsidiaries of the Purchaser, direct or
indirect, have been identified to the Company, and the Purchaser has no other
Subsidiaries. All of the issued and outstanding shares of capital stock of each
Subsidiary of the Purchaser are owned of record and beneficially by the
Purchaser, are validly issued, fully paid and nonassessable and are owned free
and clear of all liens, charges, claims, pledges, security interests, equities,
encumbrances, reservations or contractual restrictions on transfer of any
14
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nature whatsoever; and no Subsidiary of the Purchaser has outstanding any
securities, warrants, options or other rights convertible into or exchangeable
or exercisable for any shares of its capital stock, and there are no contracts,
commitments, understandings, arrangements or restrictions by which any such
Subsidiary is obligated to issue shares of its capital stock.
3.24 Financial Statements. The Purchaser has heretofore delivered to the
Company the following:
1. Audited Financial Statements;
2. Unaudited Financial Statements; and
3. All documents of the Company filed with the SEC within the four (4)
years preceding the date of execution of this Agreement.
All of the historical financial statements contained in such documents were
prepared from the books and records of the Purchaser. The Audited Financial
Statements of the Purchaser were prepared in accordance with GAAP, and fairly
and accurately present the financial situation and condition of the Purchaser as
at the dates and for the periods indicated. Without limited the foregoing, at
the date of the Purchaser Balance Sheet, the Purchaser owned each of the assets
included in preparation of the Purchaser Balance Sheet, and the valuation of
such assets in the Purchaser Balance Sheet is not more than their fair saleable
value (on an item-by-item basis) at that date; and the Purchaser had no
Liabilities, other than those specified in the Purchaser Balance Sheet, nor any
Liabilities in amounts in excess of the amounts included for them in the
Purchaser Balance Sheet. The Unaudited Financial Statements of the Purchaser
were prepared in a manner consistent with the basis of presentation used in the
Audited Financial Statements of the Purchaser, and fairly present the financial
situation and condition of the Purchaser as at and for the periods indicated,
subject to normal year-end adjustments, none of which will be material. From the
date of this Agreement through the Closing Date the Purchaser will continue to
prepare financial statements on the same basis that it has done so in the past,
will promptly deliver the same to the Purchaser, and the foregoing
representations will be applicable to each financial statement so prepared and
delivered.
3.25 No Undisclosed Liabilities. The Purchaser has no Liabilities which are
not adequately presented or reserved against on the face of the Purchaser
Balance Sheet, except Liabilities incurred since the date of the Purchaser
Balance Sheet in the ordinary course of business and consistent with past
practice. Without limiting the foregoing, (a) there are no unpaid leasehold
improvements at any of the Purchaser's facilities or locations for which the
Purchaser is or will be responsible, and (b) there are no deferred rents due to
lessors
15
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at or with respect to any of such facilities or locations.
3.26 No Material Adverse Change, Etc. Since the date of the Purchaser
Balance Sheet, other than as contemplated or caused by this Agreement, there has
not been (i) any material adverse change in the business, condition (financial
or otherwise), operations, or prospects of the Purchaser; (ii) any damage,
destruction, or loss, whether covered by insurance or not, having a material
adverse effect on the business, condition (financial or otherwise), operations
or prospects of the Purchaser; (iii) any entry into or termination of any
material commitment, contract, agreement, or transaction (including, without
limitation, any material borrowing or capital expenditure or sale or other
disposition of any material asset or assets) of or involving the Purchaser,
other than this Agreement and agreements executed in the ordinary course of
business; (iv) any redemption, repurchase, or other acquisition for value of its
capital stock by the Purchaser, or any issuance of capital stock of the
Purchaser or of securities convertible into or rights to acquire any such
capital stock or any dividend or distribution declared, set aside, or paid on
capital stock of the Purchaser; (v) any transfer of or right granted under any
material lease, license, agreement, patent, trademark, trade name, or copyright
of the Purchaser; (vi) any sale or other disposition of any asset of the
Purchaser, or any mortgage, pledge, or imposition of any lien or other
encumbrance on any asset of the Purchaser, other than in the ordinary course of
business, or any agreement relating to any of the foregoing; of (vii) any
default or breach by the Purchaser in any material respect pursuant to any
contract, license or permit. Since the date of the Purchaser Balance Sheet, the
Purchaser has conducted its business only in the ordinary and usual course, and,
without limiting the foregoing, no changes have been made in (i) executive
compensation levels, (ii) the manner in which other employees of the Purchaser
are compensated, (iii) supplemental benefits provided to any such executives or
other employees, or (d) inventory levels in relation to sales levels, except, in
any such case, in the ordinary course of business and, in any event, without
material adverse effect on the business, condition (financial or otherwise),
operations, or prospects of the Purchaser.
3.27 Accounts Receivable. All accounts receivable of the Purchaser, whether
or not specified in the Purchaser Balance Sheet, represent transactions in the
ordinary course of business, and are current and collectible net of any reserves
specified on the Purchaser Balance Sheet (which reserves are adequate and were
calculated consistent with past practice).
3.28 Contracts. The Schedule 3.28 to this Agreement specifies all
contracts, agreements, or understandings, whether express or implied, written or
verbal, to which the company is a party. Schedule 3.28 to this Agreement also
specifies a brief summary of
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each such contract, agreement or understanding identified therein. Without in
any respect limiting the foregoing, Schedule 3.28 to this Agreement specifies a
description of all leases of properties by the Purchaser, including all
amendments, supplements, extensions and modification thereof, identifying, inter
alia, the date each such document was executed and its effective period. The
Purchaser is not a party to any executory contract to sell or transfer any part
of any leasehold interest of the Purchaser. True and accurate copies of all
leases, and of all amendments, supplements, extensions, modifications thereof,
have heretofore been delivered to the Company by the Purchaser.
3.29 Accounts Payable. The accounts payable specified on the Purchaser
Balance Sheet do, and those specified in the most recent balance sheet included
in the Unaudited Financial Statements of the Purchaser do, and those specified
on the books of the Purchaser at the time of the Closing will, specify all
amounts owed by the Purchaser in respect of trade accounts due and other
Payables, and the actual Liabilities of the Purchaser in respect of such
obligations was not, and will not be, on any of such dates, in excess of the
amounts so specified on the balance sheets or the books and records of the
Purchaser, as the case may be.
3.30 Actions Since Balance Sheet Date. Since the date of the Purchaser
Balance Sheet, the Purchaser has taken no actions that would be prohibited
pursuant to the provisions of this Agreement (without the prior consent of the
Company) after the date of this Agreement.
3.31 Year 2000 Compliance. The Purchaser has evaluated the potential impact
of the situation referred to commonly as "Year 2000 problem" or "Y2K", and the
Purchaser has completed its assessments of its computer systems and applications
regarding the Year 2000 problem. The Purchaser has implemented a Year 2000
compliance program designed to ensure that the Purchaser's computer systems and
applications will function properly beyond 1999, which program includes both
systems and applications operated by the Purchaser's business. The Purchaser has
completed the process of identifying, evaluating the implementing changes to its
computer programs necessary to eliminate any Year 2000 problem. The Purchaser
has also communicated with its dealers, suppliers, financial institutions and
other persons with which it conducts business to help them identify and resolve
the Year 2000 problem. The Purchaser has allocated and will continue to allocate
adequate resources to resolve any Year 2000 problem which may come to the
attention of the Purchaser after the date of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, and each of them, to the best of their knowledge, hereby represent
and warrant to the Purchaser the following:
4.1 Title and Ownership of Shares. Each Seller is the sole legal and
beneficial owner of five hundred thousand (500,000) shares of $.001 par value
common stock issued by the Company, free and clear of any and all liens, claims,
pledges, mortgages, encumbrances, security interests, voting trust arrangements,
restriction on sale or transfer, or other restrictions whatsoever, except for
restrictions on transfer pursuant to federal and state securities laws. Each
Seller has the full, complete and unrestricted right, power and authority to
sell, assign, transfer, and deliver all of such shares to the Purchaser, as
provided in this Agreement, and delivery thereof pursuant to this Agreement will
convey to the Purchaser or the Purchaser's successors and assigns, lawful, valid
and marketable title to all such shares. No other person has any direct or
indirect record or beneficial title or interest or claim of any nature
whatsoever to any of such shares.
4.2 Authority Relative to This Agreement. The Sellers have the requisite
power and authority to enter into this Agreement and to carry out their
obligations created by this Agreement. The execution and delivery of this
Agreement and the consummation of the Transaction have been duly authorized and
approved by the Sellers and no other action on the part of the Sellers are
necessary to approve and adopt this Agreement or to approve the consummation of
the Transaction. This Agreement has been duly and validly executed and delivered
by the Sellers and constitutes a valid and binding obligation of the Sellers,
enforceable in accordance with its terms.
4.3 Absence of Breach; No Consents. The execution, delivery and performance
of this Agreement, and the performance by the Sellers of their obligations
created by this Agreement do not, except as disclosed in Schedule 4.3 to this
Agreement, (i) contravene any law, rule or regulation of any state or
commonwealth or of the United States, or of any applicable foreign jurisdiction,
or any order, writ, judgment, injunction, decree, determination, or award
affecting or obligating the Sellers, or either of them, in such a manner as to
provide a basis for enjoining or otherwise preventing consummation of the
Transaction; (ii) conflict with or result in a material breach of or default
pursuant to any material indenture or loan or credit agreement or any other
material agreement or instrument to which the Sellers, or either of them, is a
party, in such a manner as to provide a basis for enjoining or otherwise
preventing consummation of the Transaction; or (iii) require the authorization,
consent, approval or license of any third party of such a
18
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nature that the failure to obtain the same would provide a basis for enjoining
or otherwise preventing consummation of the Transaction.
4.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this Agreement
or the Transaction or any related transaction based upon any agreements, written
or oral, made by or on behalf of the Sellers, or either of them.
4.5 Litigation. No investigation or review by any governmental entity with
respect to the Sellers, or either of them, is pending or threatened which would
provide a basis for enjoining or otherwise preventing consummation of the
Transaction, nor has any governmental entity indicated to the Sellers, or either
of them, an intention to conduct any such investigation or review. There is no
action, litigation or proceeding pending or threatened against or affecting the
Sellers, or either of them, at law or in equity, or before any federal, state,
municipal, or other governmental department, commission, board, bu xxxx, agency,
or instrumentality which would provide a basis for enjoining or otherwise
preventing consummation of the Transaction.
4.6 Compliance With Laws. The Sellers, and each of them, are in compliance
with all, and has received no notice of any violation of any, laws or
regulations which would provide a basis for enjoining or otherwise preventing
consummation of the Transaction.
4.7 Full Disclosure. The documents, certificates, and other writings
furnished or to be furnished by or on behalf of the Sellers to the Purchaser
pursuant to this Agreement, taken together in the aggregate, do not and will not
contain any untrue statement of a material fact, or omit to specify any material
fact necessary to make the statements made, considering the circumstances
pursuant to which they are made, not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to the Purchaser and the Sellers as follows:
5.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing pursuant to the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to conduct its business as that business is now being conducted. The
Company is duly qualified as a foreign
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corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned or leased by it, or the nature of its
activities, is such that qualification as a foreign corporation in that
jurisdiction is required by law.
5.2 Capitalization. The authorized capital stock of the Company consists of
fifty million (50,000,000) shares of common stock, $.001 par value. There is no
other capital stock authorized for issuance. As of the date of the Company
Balance Sheet one million (1,000,000) shares of the Company's $.001 par value
common stock were validly issued and outstanding, fully paid, and nonassessable,
no shares of its common stock were held in the Company treasury, and no shares
were reserved for issuance, nor were there outstanding any options, warrants,
convertible instruments or other rights, agreements or commitments to acquire
common stock of the Company, except a fully and completely described on Schedule
5.2 to this Agreement. Since the date of the Company Balance Sheet, no shares of
the Company's capital stock, or options, warrants, or other rights, agreements
or commitments (contingent or otherwise) obligating the Company to issue shares
of capital stock, have been executed or issued.
5.3 Authority Relative to this Agreement. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid and
binding Agreement of the Company enforceable in accordance with its terms. The
Company has all requisite corporate power and authority to enter into this
Agreement and to carry out the Transaction, and its doing so has been duly and
sufficiently authorized.
5.4 Absence of Breach; No Consents. The execution, delivery, and
performance of this Agreement, and the performance by the Company of its
obligations created by this Agreement, do not, except as disclosed in Schedule
5.4 to this Agreement, (i) conflict with or result in a breach of any of the
provisions of the Articles of Incorporation or Bylaws of the Company; (ii)
contravene any law, ordinance, rule, or regulation of any State or political
subdivision of either or of the United States (except for the HSR Act and
compliance with regulatory or licensing laws all of which, to the extent
applicable to the Company (and to the extent within the control of the Company),
will be satisfied in all material respects prior to the Closing), or of any
applicable foreign jurisdiction, or contravene any order, writ, judgment,
injunction, decree, determination, or award of any court or other authority
having jurisdiction, or cause the suspension or revocation of any authorization,
consent, approval, or license, presently in effect, which affects or obligated,
the Company or any of its material properties, except in any such case where
such contravention will not have a material adverse effect on the business,
condition (financial or otherwise), operations or prospects of the Company, and
will not have a material adverse effect on the validity of this Agreement or on
the validity of the consummation the
20
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Transaction; (iii) conflict with or result in a material breach of or default
pursuant to any material indenture or loan or credit agreement or any other
material agreement or instrument to which the Company is a party or by which it
may be affected or obligated; (iv) require the authorization, consent, approval,
or license of any third party; or (v) constitute any reason for the loss or
suspension of any permits, licenses, or other authorizations used in the
business of the Company.
5.5 Brokers. No broker, finder, or investment banker is entitled to any
brokerage, finder's, or other fee or commission in connection with this
Agreement or the Transaction or any related transaction based upon any
agreements, written or oral, made by or on behalf of the Company. The Company
does not have any obligation to pay finder's or broker's fees or commissions in
connection with the exercise of options to renew or extend real estate leases to
which the Company is a party.
5.6 Financial Statements. On or before the Closing, the Company will
deliver or cause to be delivered to the Purchaser the following:
1. Audited Financial Statements;
2. Unaudited Financial Statements;
3. All documents of the Company filed with the SEC within the four (4)
years preceding the date of execution of this Agreement; and
4. The Projections.
All of the historical financial statements contained in such documents were
prepared from the books and records of the Company. The Audited Financial
Statements were prepared in accordance with GAAP, and fairly and accurately
present the financial situation and condition of the Company as at the dates and
for the periods indicated. Without limited the foregoing, at the date of the
Company Balance Sheet, the Company owned each of the assets included in
preparation of the Company Balance Sheet, and the valuation of such assets in
the Company Balance Sheet is not more than their fair saleable value (on an
item-by-item basis) at that date; and the Company had no Liabilities, other than
those specified in the Company Balance Sheet, nor any Liabilities in amounts in
excess of the amounts included for them in the Company Balance Sheet. The
Unaudited Financial Statements were prepared in a manner consistent with the
basis of presentation used in the Audited Financial Statements, and fairly
present the financial situation and condition of the Company as at and for the
periods indicated, subject to normal year-end adjustments, none of which will be
material. The Projections reasonable anticipate the results of operations that
the Company expects it will achieve absent extraordinary events or unusual
conditions of which the Company is not presently on notice. From the date of
this Agreement through the Closing
21
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Date the Company will continue to prepare financial statements on the same basis
that it has done so in the past, will promptly deliver the same to the
Purchaser, and the foregoing representations will be applicable to each
financial statement so prepared and delivered.
5.7 No Undisclosed Liabilities. The Company has no Liabilities which are
not adequately presented or reserved against on the face of the Company Balance
Sheet, except Liabilities incurred since the date of the Company Balance Sheet
in the ordinary course of business and consistent with past practice. Without
limiting the foregoing, (a) there are no unpaid leasehold improvements at any of
the Company's facilities or locations for which the Company is or will be
responsible, and (b) there are no deferred rents due to lessors at or with
respect to any of such facilities or locations.
5.8 No Material Adverse Change, Etc. Since the date of the Company Balance
Sheet, other than as contemplated or caused by this Agreement, there has not
been (i) any material adverse change in the business, condition (financial or
otherwise), operations, or prospects of the Company; (ii) any damage,
destruction, or loss, whether covered by insurance or not, having a material
adverse effect on the business, condition (financial or otherwise), operations
or prospects of the Company; (iii) any entry into or termination of any material
commitment, contract, agreement, or transaction (including, without limitation,
any material borrowing or capital expenditure or sale or other disposition of
any material asset or assets) of or involving the Company, other than this
Agreement and agreements executed in the ordinary course of business; (iv) any
redemption, repurchase, or other acquisition for value of its capital stock by
the Company, or any issuance of capital stock of the Company or of securities
convertible into or rights to acquire any such capital stock or any dividend or
distribution declared, set aside, or paid on capital stock of the Company; (v)
any transfer of or right granted under any material lease, license, agreement,
patent, trademark, trade name, or copyright of the Company; (vi) any sale or
other disposition of any asset of the Company, or any mortgage, pledge, or
imposition of any lien or other encumbrance on any asset of the Company, other
than in the ordinary course of business, or any agreement relating to any of the
foregoing; of (vii) any default or breach by the Company in any material respect
pursuant to any contract, license or permit. Since the date of the Company
Balance Sheet, the Company has conducted its business only in the ordinary and
usual course, and, without limiting the foregoing, no changes have been made in
(i) executive compensation levels, (ii) the manner in which other employees of
the Company are compensated, (iii) supplemental benefits provided to any such
executives or other employees, or (d) inventory levels in relation to sales
levels, except, in any such case, in the ordinary course of business and, in any
event, without material adverse effect on the business, condition (financial or
otherwise), operations, or prospects of the Company.
22
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5.9 Taxes. The Company has properly filed or caused to be filed all
federal, state, local, and foreign income and other tax returns, reports, and
declarations that are required by applicable law ro be filed by it, and has
paid, or made full and adequate provision for the payment of, all federal,
state, local, and foreign income and other taxes properly due for the periods
contemplated by such returns, reports, and declarations, except such taxes, if
any, as are adequately reserved against in the Company Balance Sheet.
5.10 Litigation No material investigation or review by any governmental
entity with respect to the Company is pending or, to the best of the knowledge
of the Company, threatened (other than inspections and reviews customarily made
of businesses such as that of the Company), nor has any governmental entity
indicated to the Company an intention to conduct the same. There is no action,
litigation or proceeding pending or, to the best of the knowledge of the
Company, threatened against or affecting the Company at law or in equity, or
before any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality.
5.11 Employees, Etc. There are no collective bargaining, bonus, profit
sharing, compensation, or other plans, agreements, trust, funds, or arrangements
maintained by the Company for the benefit of its directors, officers, or
employees, and there are no employment, consulting, severance, or
indemnification arrangements, agreements, or understandings between the Company,
on the one hand, and any current or former directors, officers, or other
employees (or Affiliates thereof) of the Company, on the other hand. The Company
is not, and following the Closing will not be, obligated by any express or
implied contract or agreement to employ, directly or as a consultant or
otherwise, any person for any specific period of time or until any specific age
except as executed pursuant to the provisions of this Agreement, if any.
5.12 Compliance With Laws. The Company is in substantial compliance with
all, and has received no notice of any violation of any, laws or regulations
applicable to its operations, including, without limitation, the use of premises
occupied by it, or with respect to which compliance is a condition of engaging
in any aspect of the business of the Company and has all permits, licenses,
zoning rights, and other governmental authorizations necessary to conduct its
business as presently conducted.
5.13 Ownership of Assets. The Company has good, marketable, and insurable
title, or valid, effective, and continuing leasehold rights in the case of
leased property, to all real property (as to which, in the case of owned
property, such title is fee simple) and all personal property owned or leased by
it or used by it in the conduct of its business in such a manner as to create
the appearance or reasonable expectation that such property is owned
23
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or leased by it, free and clear of all liens, claims, encumbrances, and charges,
except liens for taxes not yet due and minor imperfections of title and
encumbrances, if any, which singly and in the aggregate are not substantial in
amount and do not materially detract from the value of the property subject
thereto or materially impair the use thereof. The Company does not know of any
potential action by any person and no proceedings with respect thereto have been
instituted of which the Company has notice, that would materially affect the
Company's ability to use and to utilize each of such assets in its business. The
Company has received no notices from any mortgagee regarding any properties
leased by the Company.
5.14 Proprietary Rights. The Company possesses full ownership of, or
adequate and enforceable long-term licenses or other rights to use (without
payment), all Proprietary Rights owned by or registered in the name of the
Company or used in the business of the Company; the Company has not received any
notice of conflict which asserts the rights of other persons with respect
thereto; and the Company has in all material respects performed all of the
obligations required to be performed by it, and is not in default in any
material respect, pursuant to any agreement relating to any Proprietary Right.
5.15 Subsidiaries. The Company has no subsidiaries.
5.16 Trade Names. The Company has not utilized any fictitious business name
or similar name in the conduct of its business or in the utilization of the
Company's assets.
5.17 Employee Benefit Plans. The Company does not maintain or contribute to
any Pension Plan or any Welfare Plan, nor is the Company presently, nor has it
been within the last six (6) years, a participating employer in any
Multiemployer Plan, affecting, in any case, employees of the Company.
5.18 Facilities. The Company's facilities are (as to physical plant and
structure) structurally sound, ordinary wear and tear excepted, and none of the
Company's facilities, nor any of the vehicles or other equipment used by the
Company in connection with its business, has any material defects and all of
them are in all material respects in good operating condition and repair and are
adequate for the uses to which they are utilized, ordinary wear and tear
excepted; none of Company's facilities, vehicles or other equipment is in need
of maintenance or repairs, except for ordinary, routine maintenance and repairs
which are not material in nature or cost. The Company is not in breach,
violation or default of any lease affecting the Company's assets with respect
to, or as a result of, which the other party (whether lessor, lessee, sublessor,
or sublessee) thereto has the right to terminate the same, and the Company has
not received notice of any claim or assertion that
24
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it is or may be in any such breach, violation or default.
5.19 Accounts Receivable. All accounts receivable of the Company, whether
or not specified in the Company Balance Sheet, represent transactions in the
ordinary course of business, and are current and collectible net of any reserves
specified on the Balance Sheet (which reserves are adequate and were calculated
consistent with past practice).
5.20 Inventories. All Inventories of the Company, whether or not specified
in the Company Balance Sheet, are of a quality and quantity usable and saleable
in the ordinary course of business, except for obsolete items and items of
below-standard quality, all of which, in the aggregate, are immaterial in
amount. Items included in such Inventories are carried on the books of the
Company, and are valued on the Company Balance Sheet, at the lower of cost or
market and, in any event, at not greater than their net realizable value, on an
item by item basis, after appropriate deduction for costs of completion,
marketing costs, transportation expense, and allocation of overhead.
5.21 Contracts. The Schedule 5.21 to this Agreement specifies all
contracts, agreements, or understandings, whether express or implied, written or
verbal, to which the company is a party. Schedule 5.21 to this Agreement also
specifies a brief summary of each such contract, agreement or understanding
identified therein. Without in any respect limiting the foregoing, Schedule 5.21
to this Agreement specifies a description of all leases of properties by the
Company, including all amendments, supplements, extensions and modification
thereof, identifying, inter alia, the date each such document was executed and
its effective period. The Company is not a party to any executory contract to
sell or transfer any part of any leasehold interest of the Company. True and
accurate copies of all leases, and of all amendments, supplements, extensions,
modifications thereof, have heretofore been delivered to the Purchaser by the
Company.
5.22 Accounts Payable. The accounts payable specified on the Company
Balance Sheet do, and those specified in the most recent balance sheet included
in the Unaudited Financial Statements do, and those specified on the books of
the Company at the time of the Closing will, specify all amounts owed by the
Company in respect of trade accounts due and other Payables, and the actual
Liabilities of the Company in respect of such obligations was not, and will not
be, on any of such dates, in excess of the amounts so specified on the balance
sheets or the books and records of the Company, as the case may be.
5.23 Labor Matters. There are no activities or controversies, including,
without limitation, any labor organizing activities, election petitions or
proceedings, proceedings preparatory thereto, unfair labor practice complaints,
labor strikes, disputes, slowdowns,
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or work stoppages, pending or, to the best of the knowledge of the Company,
threatened, between the Company and any of its employees.
5.24 Insurance. The Company has insurance policies in full force and effect
which provide for coverages which are usual and customary in the business of the
Company as to amount and scope, and are adequate to protect the Company against
any reasonably foreseeable risk of loss, including business interruption.
Schedule 5.24 to this Agreement identifies each of the Company's insurance
policies, indicating the carrier, amount of coverage, annual premium, risks
covered, placing broker or agent and other relevant information as to each. The
Company has not within the past three (3) years received any notice of
cancellation of any insurance agreement.
5.25 Environmental Matters re: Real Properties. Each parcel of real
property owned or leased by the Company is free of any and all hazardous wastes,
toxic substances or other types of contamination or matters of environmental
concern, and the Company is not subject to any Liability resulting form or
related to any such wastes, substances, contaminants or matters or environmental
concern in connection with any such property.
5.26 Full Disclosure. The documents, certificates, and other writings
furnished or to be furnished by or on behalf of the Company to the Purchaser
pursuant to this Agreement, taken together in the aggregate, do not and will not
contain any untrue statement of a material fact, or omit to disclose or specify
any material fact necessary to make the statements made, considering the
circumstances pursuant to which they are made, not misleading.
5.27 Actions Since Company Balance Sheet Date. Since the date of the
Company Balance Sheet, the Company has taken no actions that would be prohibited
pursuant to the provisions of this Agreement (without the prior consent of the
Purchaser) after the date of this Agreement.
5.28 Year 2000 Compliance. The Company has evaluated the potential impact
of the situation referred to commonly as "Year 2000 problem" or "Y2K", and the
Company has completed its assessments of its computer systems and applications
regarding the Year 2000 problem. The Company has implemented a Year 2000
compliance program designed to ensure that the Company's computer systems and
applications will function properly beyond 1999, which program includes both
systems and applications operated by the Company's business. The Company has
completed the process of identifying, evaluating the implementing changes to its
computer programs necessary to eliminate any Year 2000 problem. The Company has
also communicated with its dealers, suppliers, financial
26
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institutions and other persons with which it conducts business to help them
identify and resolve the Year 2000 problem. The Company has allocated and will
continue to allocate adequate resources to resolve any Year 2000 problem which
may come to the attention of the Company after the date of this Agreement.
5.29 Options, Warrants and Other Rights and Agreements Affecting the
Purchaser's Capital Stock. The Purchaser has no authorized or outstanding
options, warrants, calls, subscriptions, rights, convertible securities or other
securities, as defined by the provisions of the Securities Act ("Securities"),
or any commitments, agreements, arrangement or understandings of any manner or
nature whatsoever obligating the Purchaser, in any such case, to issue shares of
the Purchaser's capital stock or other securities or securities convertible into
or evidencing the right to purchase shares of the Purchaser's capital stock or
other Securities. Neither the Purchaser nor any officer, director, or
shareholder of the Purchaser is a party to any agreement, understanding,
arrangement or commitment, or obligated by an provision which creates any rights
in any person with respect to the authorization, issuance, voting, sale or
transfer of any shares of the Purchaser's capital stock or other Securities.
ARTICLES VI
COVENANTS OF THE PURCHASER AND KASSAM
6.1 Affirmative Covenants. From the date of this Agreement through the
Closing Date, the Purchaser will take every action reasonably required of it in
order to satisfy the conditions to Closing set forth in this Agreement and
otherwise to ensure the prompt and expedient consummation of the Transaction
substantially as contemplated by the provisions of this Agreement, and the
Purchaser will exert all reasonable efforts to cause the Transaction to be
consummated; provided, however, in all instances that the representations and
warranties of the Company and the Sellers specified in this Agreement are true
and correct and that the conditions to the obligations of the Purchaser set
forth in this Agreement are not incapable of satisfaction.
6.2 Cooperation. The Purchaser shall cooperate with the Company and its
counsel, accountants and agents in every way in consummating the Transaction,
and in delivering all documents and instruments deemed reasonably necessary or
useful by counsel to the Company.
6.3 Expenses. Whether or not the Transaction is consummated, all costs and
expenses incurred by the Purchaser in connection with this Agreement and the
Transaction
27
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shall be paid by the Purchaser.
6.4 Publicity. Prior to the Closing any written news releases by the
Purchaser pertaining to this Agreement or the Transaction shall be submitted to
the Company for review and approval prior to release by the Purchaser, and shall
be released only in a form approved by the Company, provided, however, that (i)
such approval shall not be unreasonably withheld and (ii) such review and
approval shall not be required of releases by the Purchaser if prior review and
approval would prevent the timely and accurate dissemination of such press
release as required to comply, in the judgment of counsel, with any applicable
law, rule or policy
6.5 Updating of Exhibits. The Purchaser shall notify the Company of any
changes, additions or events which may cause any change in or addition or events
to any schedules or exhibits delivered by the Purchaser pursuant to this
Agreement, promptly after the occurrence of the same and at the Closing by the
delivery of updates of all schedules and exhibits. No notification made pursuant
to this section shall be deemed to cure any breach of any representation or
warranty made in this Agreement, unless the Company specifically agrees thereto
in writing nor shall any such notification be considered to constitute or give
rise to a waiver by the Company of any condition set forth in this Agreement.
6.6 Conduct of Business Pending the Transaction. Prior to the consummation
of the Transaction or the termination of this Agreement pursuant to its terms,
unless the Company shall otherwise consent in writing, which consent shall not
be unreasonably withheld or delayed, and except as otherwise contemplated by
this Agreement, the Purchaser will comply with each of the following:
(1) The business of the Purchaser will be conducted only in the ordinary
and usual course, the Purchaser shall keep intact the business
organization and goodwill of the its business, keep available the
services of the employees of the Purchaser and maintain good
relationships with suppliers, lenders, creditors, distributors,
employees, customers and others having business or financial
relationships with the Purchaser, and the Purchaser shall immediately
notify the Company of any event or occurrence or emergency material
to, and not in the ordinary and usual course of business of, the
Purchaser.
(2) The Purchaser shall not create, incur or assume any long-term or
short-term indebtedness for money borrowed or make any capital
expenditures or commitment for capital expenditures, affecting the
business of the Purchaser.
28
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(3) The Purchaser shall not (a) adopt, enter into, or amend any bonus,
profit sharing, compensation, stock option, warrant, pension,
retirement, deferred compensation, employment, severance, termination,
or other employee benefit plan, agreement, trust fund, or arrangement
for the benefit or welfare of any employees of the Purchaser or (b)
agree to any material (in relation to historical compensation)
increase in the compensation payable or to become payable to, or any
increase in the contractual term of employment of, any such employee.
(4) The Purchaser shall not sell, lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of its assets.
(5) The Purchaser shall not enter into, or terminate, any material
contract, agreement, commitment, or understanding relating to or
affecting the business of the Purchaser.
(6) The Purchaser shall not enter into any agreement, commitment, or
understanding, whether in writing or otherwise, with respect to any of
the matters referred to in subparagraphs (1) through (5), inclusive,
of this section.
(7) The Purchaser will continue properly and promptly to file when due all
federal, state, local, foreign, and other tax returns, reports, and
declarations required to be filed by it, and will pay, or make full
and adequate provision for the payment of, all taxes and governmental
charges due from or payable by it.
(8) The Purchaser will comply with all laws and regulations applicable to
the operations of the Purchaser.
(9) The Purchaser will maintain in full force and effect insurance
coverage relating to its business of a type and amount customary in
the business of the Purchaser (but not less than that presently in
effect).
6.7 Employment Contracts. Pending the Closing, and effective upon the
consummation of the Transaction, the Purchaser will exert its best efforts to
execute three (3) year employment contracts with Peacock and Xxxxxx, and each of
them, in the form of Exhibits 6.7(A) and 6.7(B) to this Agreement, respectively;
such contracts shall provide that the Purchaser may terminate them at any time
for cause, or without cause may
29
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terminate them upon payment to the other party thereto of an amount equal to
three (3) months salary. The Purchaser will also execute a noncompetition
agreement with the form of which will be substantially as in Exhibit 6.7(C), and
will preclude such persons from engaging in business competitive with that of
the Purchaser, directly or indirectly, alone or in collaboration with others,
except with the written consent of the Purchaser or as a shareholder of less
than one percent (1%) of the common stock of a publicly held company engaged in
one or more of such businesses.
6.8 Indemnification Agreements. Pending the Closing, and effective upon the
consummation of the Transaction, the Purchaser will exert its best efforts to
execute indemnification agreements with Peacock and Xxxxxx, and each of them, in
the form of Exhibits 6.8(A) and 6.8(B) to this Agreement, respectively.
6.9 Stock Option Plan. Pending the Closing, and effective upon the
consummation of the Transaction, the Purchaser will adopt a Qualified Stock
Option Plan and a NonQualified Stock Option Plan, in the form of Exhibits 6.9(A)
and 6.9(B) to this Agreement, respectively.
6.10 Delivery of Books, Records and Documents. On the Closing, Kassam, as
the sole, remaining director of the Purchaser, shall deliver to the Sellers all
the books, records, memoranda, logs, journals, ledgers, tapes, disks, records,
instruments and other writings which he has in his possession and which are the
property of, or in any way relate to, the Purchaser.
6.11 Issuance and delivery of the Consideration. On the Closing, the
Purchaser shall issue or cause to be issued to Xxxxxx a certificate evidencing
and representing four million five hundred thousand (4,500,000) shares of the
Purchaser's $.0005 par value common stock, which certificate shall specify
appropriate legends regarding the restricted nature of those shares.
6.12 Issuance and delivery of the Consideration. On the Closing, the
Purchaser shall issue or cause to be issued to Peacock a certificate evidencing
and representing four million five hundred thousand (4,500,000) shares of the
Purchaser's $.0005 par value common stock, which certificate shall specify
appropriate legends regarding the restricted nature of those shares.
6.13 Appointment of Additional Directors. On the Closing, Kassam, in his
capacity as the sole, remaining member of the Board of Directors of the
Purchaser, shall appoint Peacock and Xxxxxx, and each of them, as members of the
Board of Directors of
30
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the Purchaser.
6.14 Resignation from Board of Directors. On the Closing, after Kassam has
appointed Peacock and Xxxxxx as members of the Board of Directors of the
Purchaser, Kassam shall resign as a member of the Board of Directors of the
Purchaser.
ARTICLES VII
COVENANTS OF THE SELLERS
7.1 Affirmative Covenants. From the date of this Agreement through the
Closing Date, the Sellers, and each of them, will take every action reasonably
required of them in order to satisfy the conditions to Closing set forth in this
Agreement and otherwise to ensure the prompt and expedient consummation of the
Transaction substantially as contemplated by the provisions of this Agreement,
and the Sellers, and each of them, will exert all reasonable efforts to cause
the Transaction to be consummated; provided, however, in all instances that the
representations and warranties of the Purchaser specified in this Agreement are
true and correct and that the conditions to the obligations of the Sellers set
forth in this Agreement are not incapable of satisfaction.
7.2 Cooperation. The Sellers, and each of them, shall cooperate with the
Purchaser and its counsel, accountants and agents in every way in consummating
the Transaction, and in delivering all documents and instruments deemed
reasonably necessary or useful by counsel to the Purchaser.
7.3 Expenses. Whether or not the Transaction is consummated, all costs and
expenses incurred by the Sellers in connection with this Agreement and the
Transaction shall be paid by the Sellers.
7.4 Publicity. Prior to the Closing any written news releases by the
Sellers, or either or them, pertaining to this Agreement or the Transaction
shall be submitted to the Purchaser for review and approval prior to release by
the Sellers, or either of them, and shall be released only in a form approved by
the Purchaser; provided, however, that (i) such approval shall not be
unreasonably withheld and (ii) such review and approval shall not be required of
releases by the Sellers, or either of them, if prior review and approval would
prevent the timely and accurate dissemination of such press release as required
to comply, in the judgment of counsel, with any applicable law, rule or policy.
7.5 Updating of Exhibits. The Sellers, or either of them, shall notify the
Purchaser of any changes, additions or events which may cause any change in or
addition or events
31
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to any schedules or exhibits delivered by the Sellers, or either of them,
pursuant to this Agreement, promptly after the occurrence of the same and at the
Closing by the delivery of updates of all schedules and exhibits. No
notification made pursuant to this section shall be deemed to cure any breach of
any representation or warranty made in this Agreement, unless the Purchaser
specifically agrees thereto in writing nor shall any such notification be
considered to constitute or give rise to a waiver by the Purchaser of any
condition set forth in this Agreement.
7.6 Delivery of Certificates. On the Closing, the Sellers, and each of
them, shall deliver or cause to be delivered to the Purchaser each and every
certificate representing the one million (1,000,000) shares of $.001 par value
common stock of the Company issued by the Company to the Sellers, which
certificates shall be duly endorsed by the Sellers for transfer of those shares
to the Purchaser.
7.7 Acceptance of Appointment to Board of Directors. On the Closing, the
Sellers, and each of them, shall accept the appointment by Kassam of the Sellers
as members of the Board of Directors of the Purchaser.
ARTICLE VIII
COVENANTS OF THE COMPANY
8.1 Affirmative Covenants. From the date hereof through the Closing, the
Company will take every action reasonably required of it to satisfy the
conditions to Closing set forth in this Agreement and otherwise to ensure the
prompt and expedient consummation of the Transaction substantially as
contemplated by the provisions of this Agreement, and will exert all reasonable
efforts to cause the Transaction to be consummated, provided in all instances
that the representations and warranties of the Purchaser in this Agreement are
and remain true and accurate and that the covenants and agreements of the
Purchaser in this Agreement are performed and that the conditions to the
obligations of the Company set forth in this Agreement are not incapable of
satisfaction and subject, at all times, to the right and ability of the
directors of the Company to satisfy their fiduciary obligations.
8.2 Access and Information. The Company shall afford to the Purchaser and
to the Purchaser's accountants, counsel and other representatives reasonable
access during normal business hours throughout the period prior to the Closing
to all of its properties, books, contracts, commitments, records (including, but
not limited to, tax returns), and personnel, and, during such period, the
Company shall furnish promptly to the Purchaser (i) all written communications
to its directors or to its shareholders generally, (ii) internal monthly
32
E-76
financial statements when and as available, and (iii) all other information
concerning its business, properties, and personnel as the Purchaser may request,
but no investigation pursuant to this section shall affect any representations
or warranties of the Company, or the conditions to the obligations of the
Purchaser to consummate the Transaction specified in this Agreement. In the
event of the termination of this Agreement, the Purchaser will, and will cause
its representatives to, deliver to the Company or destroy all documents, work
papers, and other material, and all copies thereof, obtained by the Purchaser or
on its behalf from the Company as a result of this Agreement or in connection
with this Agreement, whether so obtained before or after the execution of this
Agreement, and the Purchaser will hold in confidence all confidential
information, that has been designated as such by the Company in writing or by
appropriate and obvious notation, and will not use any such confidential
information except in connection with the Transaction, until such time as such
information is otherwise publicly available. The Purchaser and its
representatives shall assert their rights pursuant to this Agreement in such
manner as to minimize interference with the business of the Company.
8.3 No Solicitation. The Company, and those acting on behalf of any of the
Company will not, and the Company shall use its best efforts to cause its
officers, employees, agents, and representatives (including any investment
banker) not, directly or indirectly, to solicit, encourage, or initiate any
discussions with, or negotiate or otherwise deal with, or provide any
information to, any person other than the Purchaser and its officers, employees,
and agents, concerning any merger, sale of substantial assets, or similar
transaction involving the company or division of the Company or any sale of any
of its capital stock or division of the Company. The Company will notify the
Purchaser immediately upon receipt of any inquiry, offer or proposal relating to
any of the foregoing. None of the foregoing shall prohibit providing information
to others in a manner in keeping with the ordinary conduct of the Company's
business, or providing information to government authorities.
8.4 Conduct of Business Pending the Transaction. The Company covenants and
agrees with the Purchaser that, prior to the consummation of the Transaction or
the termination of this Agreement pursuant to its terms, unless the Purchaser
shall otherwise consent in writing, and except as otherwise contemplated by this
Agreement, the Company will comply with each of the following:
(1) The business of the Company shall be conducted only in the ordinary
and usual course, it shall use reasonable efforts to use reasonable
efforts to keep intact its business organization and goodwill, keep
available the services of its officers and employees and maintain good
relationships with suppliers,
33
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lenders, creditors, distributors, employees, customers, and other
persons having business or financial relationships with the Company
and the Company shall immediately notify the Purchaser of any event or
occurrence or emergency material to, and not in the ordinary and usual
course of business of, the Company.
(2) The Company shall not (a) amend its Articles of Incorporation or
Bylaws, or (b) split, combine, or reclassify any of its outstanding
securities or declare, set aside, or pay any dividend or other
distribution on or make or agree or commit to make any exchange for or
redemption of any such securities payable in cash, stock, or property.
(3) The Company shall not issue or agree to issue any additional shares
of, or rights of any kind to acquire any shares of, its capital stock
of any class, or (b) enter into any contract, agreement, commitment,
or arrangement with respect to any of the foregoing.
(4) The Company shall not create, incur, or assume any long-term or
short-term indebtedness for money borrowed or make any capital
expenditures or commitment for capital expenditures, except in the
ordinary course of business and consistent with past practice.
(5) The Company shall not (a) adopt, enter into, or amend any bonus,
profit-sharing, compensation, stock option, warrant, pension,
retirement, deferred compensation, employment, severance, termination,
or other employee benefit plan, agreement, trust fund, or arrangement
for the benefit or welfare of any officer, director or employee; or
(b) agree to any material (in relation to historical compensation)
increase in the compensation payable or to become payable to, or any
increase in the contractual term of employment of, any officer,
director, or employee except, with respect to employees who are not
officers or directors, in the ordinary course of business in
accordance with past practice.
(6) The Company shall not sell, lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of the Company's assets or
properties, except for sales, encumbrances, and other dispositions or
grants in the ordinary course of business and consistent with past
practice and except for liens for taxes not yet due or liens or
encumbrances that are not material in amount or effect and do not
impair the use of the Company's property, or as specifically
34
E-78
provided for or permitted in this Agreement.
(7) The Company shall not enter into, or terminate, any material contract,
agreement, commitment, or understanding.
(8) The Company shall not enter into any agreement, commitment, or
understanding, whether in writing or otherwise, with respect to any of
the matters referred to in subparagraphs (1) through (7), inclusive,
of this section.
(9) The Company will continue properly and promptly to file when due all
federal, state, local, foreign and other tax returns, reports, and
declarations required to be filed by the Company, and will pay, or
make full and adequate provision for the payment of, all taxes and
governmental charges due from or payable by the Company.
(10) The Company will comply with all laws and regulations applicable to
the Company and the Company's operations.
(11) The Company will maintain in full force and effect insurance coverage
of a type and amount customary in its business, but not less than that
presently in effect.
8.5 Cooperation. The Company will cooperate with the Purchaser and its
counsel, accountants and agents in every way in consummating the Transaction and
in delivering all documents and instruments deemed reasonably necessary or
useful by the Purchaser.
8.6 Expenses. Whether or not the Transaction in consummated, all costs and
expenses incurred by the Company in connection with this Agreement and the
Transaction shall be paid by the Company.
8.7 Publicity. Prior to the Closing, any written news releases by the
Company pertaining to this Agreement or the Transaction shall be submitted to
the Purchaser for review and approval prior to release by the Company, and shall
be released only in a form approved by the Purchaser, provided, however, that
(i) such approval shall not be unreasonably withheld and (ii) such review and
approval shall not be required of releases by the Company, if prior review and
approval would prevent the timely and accurate dissemination of such press
release as required to comply, in the judgment of counsel, with any applicable
law, rule, or policy.
35
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8.8 Updating of Exhibits and Schedules. The Company shall notify the
Purchaser of any changes, additions, or events which may cause any change in or
addition to any schedule or exhibits delivered by the Company pursuant to this
Agreement promptly after the occurrence of the same and again at the Closing by
delivery of appropriate updates to all such schedules and exhibits. No such
notification made pursuant to this section shall be deemed to cure any breach of
any representation or warranty made in this Agreement, unless the Purchaser
specifically agrees thereto in writing nor shall any such modification be
considered to constitute or result in a waiver by the Purchaser of any condition
specified in this Agreement.
8.9 Access and Information. The Company shall afford to the Purchaser and
to the Purchaser's accountants, counsel, and other representatives reasonable
access during normal business hours throughout the period prior to the Closing
to all of the Company's properties, books, contracts, commitments, records
(including, but not limited to, tax returns), and personnel and, during such
period, the Company shall promptly furnish to the Purchaser (1) all written
communications to its directors or to its shareholders generally, (2) internal
monthly financial statements when and as available, and (3) all other
information concerning its or any of its subsidiaries' business, properties, and
personnel as the Purchaser may reasonably request, but no investigation pursuant
to this Section 8.9 shall affect any representations or warranties of the
Company, or the conditions to the obligations of the Purchaser to consummate the
Transaction. In the event of the termination of this Agreement, the Purchaser
will, and will cause its representatives to, deliver to the Company or destroy
all documents, work papers, and other material, and all copies thereof, obtained
by it or on its behalf from the Company as a result of this Agreement or in
connection with this Agreement or the Transaction, whether so obtained before or
after the execution of this Agreement, and will hold in confidence all
confidential information that has been designated as such by the Company in
writing or by appropriate and obvious notation, and will not use any such
confidential information, except in connection with the Transaction, until such
time as such information is otherwise publicly available. Purchaser and its
representatives shall assert their rights pursuant to this Section 8.9 in such
manner as to minimize interference with the business of the Company.
ARTICLE IX
CONDITIONS TO CLOSING
9.1 Conditions to Obligation of Purchaser. The obligation of the Purchaser
to effect the Transaction shall be subject to the fulfillment at or prior to the
Closing of the following conditions, unless the Purchaser shall waive such
fulfillment in writing:
36
E-80
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other
regulatory agencies and other third parties (including lenders,
holders of debt securities and lessors) required to consummate the
Transaction.
(2) There shall not be in effect a preliminary or permanent in junction or
other order by any federal or state court which prohibits the
consummation of the Transaction.
(3) The Company and the Sellers shall have performed in all material
respects each of its agreements and obligations specified in this
Agreement and required to be performed on or prior to the Closing and
shall have complied with all material requirements, rules, and
regulations of all regulatory authorities having jurisdiction relating
to the Transaction.
(4) No material adverse change shall, in the judgment of the Purchaser,
have taken place in the business condition (financial or otherwise),
operations, or prospects of the Company since the date of this
Agreement other than those, if any, that result from the changes
permitted by this Agreement.
(5) The representations and warranties of the Company and the Sellers set
forth in this Agreement shall be true in all material respects as of
the date of this Agreement and, except in such respects as, in the
judgment of the Purchaser, do not materially and adversely affect the
business, condition (financial or otherwise), operations, or prospects
of the Company, as of the Closing, as if made as of the Closing.
(6) The Purchaser shall have received from the Company an officers'
certificate, executed by the Chief Executive Officer and Chief
Financial Officer of the Company (in their capacities as such), dated
the Closing Date, as to the satisfaction of the conditions in
Paragraphs (3), (4), and (5) of this section.
9.2 Conditions to Obligation of the Company. The obligation of the Company
to effect the Transaction shall be subject to the fulfillment at or prior to the
Closing of the following conditions, unless the Company shall waive such
fulfillment in writing:
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other
regulatory agencies and other third parties (including lenders,
holders of debt securities
37
E-81
and lessors required by law to consummate the Transaction.
(2) There shall not be in effect a preliminary or permanent injunction or
other order by any federal or state authority which prohibits the
consummation of the Transaction.
(3) The Purchaser and Kassam shall have performed in all material respects
its agreements and obligations specified in this Agreement required to
be performed on or prior to the Closing.
(4) The representations and warranties of the Purchaser and Kassam set
forth in this Agreement shall be true in all material respects as of
the date of this Agreement and, except in such respects as do not
materially and adversely affect the business of the Purchaser, as of
the Closing Date as if made as of the Closing Date.
(5) The Company shall have received from the Purchaser an officers'
certificate, executed by the Chief Financial Officer and the Chief
Executive Officer of the Purchaser (in their capacities as such),
dated the Closing Date, as to the satisfaction of the conditions of
Paragraphs (3) and (4) of this section (to the best of their
knowledge).
9.3 Conditions to Obligation of the Sellers. The obligation of the Sellers
to effect the Transaction shall be subject to the fulfillment at or prior to the
Closing of the following conditions, unless the Sellers shall waive such
fulfillment in writing:
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other
regulatory agencies and other third parties (including lenders,
holders of debt securities and lessors required by law to consummate
the Transaction.
(2) There shall not be in effect a preliminary or permanent injunction or
other order by any federal or state authority which prohibits the
consummation of the Transaction.
(3) The Purchaser and Kassam shall have performed in all material respects
its agreements and obligations specified in this Agreement required to
be performed on or prior to the Closing.
38
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(4) The representations and warranties of the Purchaser and Kassam set
forth in this Agreement shall be true in all material respects as of
the date of this Agreement and, except in such respects as do not
materially and adversely affect the business of the Purchaser, as of
the Closing Date as if made as of the Closing Date.
(5) The Sellers shall have received from the Purchaser an officers'
certificate, executed by the Chief Financial Officer and the Chief
Executive Officer of the Purchaser (in their capacities as such),
dated the Closing Date, as to the satisfaction of the conditions of
Paragraphs (3) and (4) of this section (to the best of their
knowledge).
9.4 Conditions to Obligation of Kassam. The obligation of Kassam to effect
the Transaction shall be subject to the fulfillment at or prior to the Closing
of the following conditions, unless Kassam shall waive such fulfillment in
writing:
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other
regulatory agencies and other third parties (including lenders,
holders of debt securities and lessors) required to consummate the
Transaction.
(2) There shall not be in effect a preliminary or permanent in junction or
other order by any federal or state court which prohibits the
consummation of the Transaction.
(3) The Company and the Sellers shall have performed in all material
respects each of its agreements and obligations specified in this
Agreement and required to be performed on or prior to the Closing and
shall have complied with all material requirements, rules, and
regulations of all regulatory authorities having jurisdiction relating
to the Transaction.
(4) No material adverse change shall, in the judgment of Kassam, have
taken place in the business condition (financial or otherwise),
operations, or prospects of the Company since the date of this
Agreement other than those, if any, that result from the changes
permitted by this Agreement.
(5) The representations and warranties of the Company and the Sellers set
forth in this Agreement shall be true in all material respects as of
the date of this Agreement and, except in such respects as, in the
judgment of the Purchaser,
39
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do not materially and adversely affect the business, condition
(financial or otherwise), operations, or prospects of the Company, as
of the Closing, as if made as of the Closing.
(6) The Purchaser shall have received from the Company an officers'
certificate, executed by the Chief Executive Officer and Chief
Financial Officer of the Company (in their capacities as such), dated
the Closing Date, as to the satisfaction of the conditions in
Paragraphs (3), (4), and (5) of this section.
ARTICLE X
DOCUMENTS TO BE DELIVERED AND INSTRUMENTS AT CLOSING
10.1 The Purchaser to the Sellers. On the Closing, the Purchaser shall
deliver or cause to be delivered the following instruments and documents to the
Sellers:
(1) A certificate evidencing and representing four million five hundred
thousand (4,500,000) shares of the Purchaser's $.0005 par value common
stock to Xxxxxx.
(2) A certificate evidencing and representing four million five hundred
thousand (4,500,000) shares of the Purchaser's $.0005 par value common
stock to Peacock.
(3) The employment agreement attached to this Agreement marked Exhibit
6.7(A), pursuant to which Peacock is employed by the Purchaser.
(4) The employment agreement attached to this Agreement marked Exhibit
6.7(B), pursuant to which Xxxxxx is employed by the Purchaser.
(5) The noncompetition agreement which is attached to this Agreement
marked Exhibit 6.7(C).
(6) The Indemnification Agreement attached to this Agreement marked
Exhibit 6.8(A), pursuant to the provisions of which the Purchaser
shall indemnify Peacock in his capacity as an officer and director of
the Purchaser.
(7) The Indemnification Agreement attached to this Agreement marked
Exhibit 6.8(B), pursuant to the provisions of which the Purchaser
shall indemnify
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Xxxxxx in his capacity as an officer and director of the Purchaser.
(8) The Qualified Stock Option Plan attached to this Agreement marked
Exhibit 6.9(A).
(9) The Non-Qualified Stock Option Plan attached to this Agreement marked
Exhibit 6.9(B).
(10) All books, records, journals, disks, checks, minute books, documents,
memoranda and other instruments relating to the business of the
Purchaser which are necessary or appropriate to enable the Sellers, in
their capacities as officers and directors of the Purchaser, to carry
on and conduct the business and affairs of the Purchaser after the
Closing.
(11) The Officers' Certificate contemplated by the provisions of Paragraph
(5) of Section 9.3 of this Agreement.
(12) The Officers' Certificate contemplated by the provisions of Paragraph
(5) of Section 9.2 of this Agreement.
10.2 The Company to the Purchaser. On the Closing, the Company shall
deliver or cause to be delivered the following instruments and documents to the
Purchaser the Officers' Certificate contemplated by the provisions of Paragraph
(6) of Section 9.1 of this Agreement.
10.3 The Sellers to the Purchaser. On the Closing, the Sellers, and each of
them, shall deliver or cause to be delivered to the Purchaser the certificates
evidencing and representing the one million (1,000,000) shares of $.001 par
value common stock issued by the Company to the Sellers, which certificates
shall be duly endorsed by the Sellers for transfer of those shares to the
Purchaser.
10.4 Kassam to the Sellers. On the Closing, Kassam, in his capacity as the
sole, remaining member of the Board of Directors, shall deliver or cause to be
delivered to the Sellers (i) a resolution of the Purchaser appointing the
Sellers, and each of them, as members of the Board of Directors of the
Purchaser, and (ii) the books, records, memoranda, logs, journals, ledgers,
tapes, disks, records, instruments and other writings specified by the
provisions of Section 6.10 of this Agreement. Additionally, on the Closing,
after he has appointed the Sellers as members of the Board of Directors of the
Purchaser, Kassam shall deliver or cause to be delivered to the Sellers Kassam's
resignation
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as a member of the Board of Directors of the Purchaser.
ARTICLE XI
THE PURCHASER'S SECURITIES AND THE SELLERS
11.1 Investment Representation. Each of the Sellers, each a shareholder of
the Company who is signing this Agreement, severally and not jointly, represents
and confirms to the Purchaser that he (i) is an accredited investor within the
meaning of Rule 501(a) pursuant to the Securities Act or, if not such an
accredited investor, has, alone or together with a purchaser representative
within the meaning of Rule 501(h) pursuant to the Securities Act, such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of an investment in the Purchaser's securities; (ii) is
aware of the limits on resale of the Purchaser's Securities imposed because of
the nature of the Transaction (Rule 144); and (iii) is receiving the
Consideration without registration pursuant to the Securities Act, in reliance
on the exemption from registration specified in Section 4(2) of the Securities
Act for investment, and without any intent to sale, resale, or otherwise
distribute the Purchaser's Securities in any manner that is in violation of the
Securities Act. The certificates representing the Purchaser's Securities, when
delivered to the Sellers at the Closing, may have appropriate orders restricting
transfer placed against them on the records of the transfer agent for such
securities, and may have placed upon them the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION PURSUANT TO THE SECURITIES ACT OF 1933. THOSE SECURITIES MAY
NOT BE TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, UNLESS THE
TRANSFEROR FIRST SATISFIES THE ISSUER AND ITS COUNSEL THAT THE PROPOSED
TRANSFER, IN THE MANNER PROPOSED, DOES NOT VIOLATE THE REGISTRATION REQUIREMENTS
OF THAT ACT.
Each Seller agrees not to attempt any transfer of any the Purchaser's
Securities without first complying with the substance of that legend and agrees
that satisfaction of the Purchaser may, if the Purchaser so requests, depends in
part upon an opinion of counsel acceptable in form and substance to the
Purchaser, a no-action letter of the SEC, or equivalent evidence. Each of the
Sellers acknowledges, without limitation, that the foregoing agreement and
representation shall apply to the Purchaser's Securities issued to such Seller.
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ARTICLE XII
TERMINATION, AMENDMENT WAIVER
12.1 Termination. This Agreement and the Transaction may be terminated at
any time prior to the Closing:
(1) By mutual consent of the Purchaser and the Company; or
(2) By either Purchaser or the Company, upon written notice to the other,
if the conditions to such party's obligations to consummate the
Transaction, in the case of Purchaser, as specified in Section 9.1 of
this Agreement, or, in the case of the Company, as provided in Section
9.2 of this Agreement, were not, or cannot reasonably be, satisfied on
or before May 12, 1999, unless the failure of condition is the result
of the material breach of this Agreement by the party seeking to
terminate this Agreement.
12.2 Amendment. This Agreement may be amended by the Company and the
Purchaser by action taken at any time. This Agreement may not be amended, except
by an instrument in writing signed on behalf of the Company and the Purchaser.
12.3 Waiver. At any time prior to the Closing, the Purchaser or the Company
may (i) extend the time for the performance of any of the obligations or other
acts of the other party, (ii) waive any inaccuracies in the representations and
warranties specified in this Agreement or in any document delivered pursuant to
this Agreement, or (iii) waive compliance with any of the agreements or
conditions specified in this Agreement. Any agreement on the part of a party to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party.
ARTICLE XIII
GENERAL PROVISIONS
13.1. Notices. Any notice, direction or instrument required or permitted to
be given pursuant to this Agreement shall be given in writing by (a) telegram,
facsimile transmission or similar method, if confirmed by mail as herein
provided, by mail; (b) if mailed postage prepaid, by certified mail, return
receipt requested; or (iii) hand delivery to any party at the addresses of the
parties specified, below. If given by telegram or facsimile transmission or
similar method or by hand delivery, such notice, direction or instrument shall
be deemed to have been given or made on the day on which it was given, and if
mailed, shall be deemed to have been given or made on the second (2nd) business
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day following the day after which it was mailed. Any party may, from time to
time by similar notice, give notice of any change of address, and in such event,
the address of such party shall be deemed to be changed accordingly. The
address, telephone number and facsimile transmission number for the notice of
each party are:
If to the Company: CENTROCOM Corp.
0000 Xxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
If to the Sellers: Xxxxxx X. Xxxxxx III
0000 Xxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxxx
0000 Xxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
If to the Purchaser: FamilyWare International, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
If to Kassam: Xxxxxx Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
13.2. Recovery of Enforcement Costs. In the event any party shall institute
any action or proceeding to enforce any provision of this Agreement to seek
relief from any violation of this Agreement, or to otherwise obtain any judgment
or order relating to or arising from the subject matter of this Agreement, each
prevailing party shall be entitled to receive from each losing party such
prevailing party's actual attorneys' fees and costs incurred to prosecute or
defend such action or proceeding.
13.3. Assignment. No party shall have the right, without the consent of the
other party, to assign, transfer, sell, pledge, hypothecate, delegate, or
otherwise transfer, whether voluntarily, involuntarily or by operation of law,
any of such party's rights or obligations created by the provisions of this
Agreement, nor shall the parties' rights be subject to encumbrance or the claim
of creditors. Any such purported assignment, transfer,
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or delegation shall be null and void.
13.4. Captions and Interpretations. Captions of the articles and sections
of this Agreement are for convenience and reference only, and the works
specified therein shall in no way be held to explain, modify, amplify or aid in
the interpretation, construction, or meaning of the provisions of this
Agreement. The language in all parts to this Agreement, in all cases, shall be
construed in accordance with the fair meaning of that language as if prepared by
all parties and not strictly for or against any party. Each party and counsel
for such party have reviewed this Agreement. The rule of construction which
requires a court to resolve any ambiguities against the drafting party shall not
apply in interpreting the provisions of this Agreement.
13.5. Entire Agreement. This Agreement and the exhibits to this Agreement
are the final written expression and the complete and exclusive statement of all
the agreements, conditions, promises, representations, warranties and covenants
between the parties with respect to the subject matter of this Agreement, and
this Agreement supersedes all prior or contemporaneous agreements, negotiations,
representations, warranties, covenants, understandings and discussions by and
between and among the parties, their respective representatives, and any other
person, with respect to the subject matter specified in this Agreement. No
provision of any exhibit or schedule to this Agreement shall supersede or annul
the terms and provisions of this Agreement, unless the matter specified in such
exhibit or schedules shall explicitly so provide to the contrary, in the event
of ambiguity in meaning or understanding between the provisions of this
Agreement proper and the appended exhibits, the provisions of this Agreement
shall prevail and control in all instances.
13.6 Waiver and Modification. No modification, supplement or amendment of
this Agreement or of any covenant, representation, warranty, condition, or
limitation specified in this Agreement shall be valid unless the same is made in
writing and duly executed by both parties. No waiver of any covenant,
representation, warranty, condition, or limitation specified in this Agreement
shall be valid unless the same is made in writing and duly executed by the party
making the waiver. No waiver of any provision of this Agreement shall be deemed,
or shall constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver.
13.7 Further Assurances. The parties shall from time to time sign and
deliver any further instruments and take any further actions as may be necessary
to effectuate the intent and purposes of this Agreement.
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13.8 Number and Gender. Whenever the singular number is used in this
Agreement and, when required by the context, the same shall include the plural,
and vice versa; the masculine gender shall include the feminine and the neuter
genders, and vice versa, and the word "person" shall include individual,
company, sole proprietorship, corporation, joint venture, association, joint
stock company, fraternal order, cooperative, league, club, society,
organization, trust, estate, governmental agency, political subdivision or
authority, firm, municipality, congregation, partnership, or other form of
entity, whether active or passive.
13.9 Successors and Assigns. This Agreement and each of its provisions
shall obligate the heirs, executors, administrators, successors, and assigns of
each of the parties. Nothing specified in this section, however, shall be a
consent to the assignment or delegation by any party of such party's respective
rights and obligations created by the provisions of this Agreement.
13.10 Third Party Beneficiaries. Except as expressly specified by the
provisions of this Agreement, this Agreement shall not be construed to confer
upon or give to any person, other than the parties hereto, any right, remedy or
claim pursuant to, or by reason of, this Agreement or of any term or condition
of this Agreement.
13.11 Severability. In the event any part of this Agreement, for any
reason, is determined by a court of competent jurisdiction to be invalid, such
determination shall not affect the validity of any remaining portion of this
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated. It
is hereby declared the intention of the parties that they would have executed
the remaining portion of this Agreement without including any such part, parts,
or portion which, for any reason, may be hereafter determined to be invalid.
13.12 Governmental Rules and Regulations. The Transaction is and shall
remain subject to any and all present and future orders, rules and regulations
of any duly constituted authority having jurisdiction of the Transaction.
13.13 Execution in Counterparts. This Agreement may be prepared in multiple
copies and forwarded to each of the parties for execution. All of the signatures
of the parties may be affixed to one copy or to separate copies of this
Agreement and when all such copies are received and signed by all the parties,
those copies shall constitute one agreement which is not otherwise separable or
divisible. Counsel for the Purchaser shall keep all of such signed copies and
shall conform one copy to show all of those signatures and the dates thereof and
shall mail a copy of such conformed copy to each of the parties
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within thirty (30) days after the receipt by such counsel of the last signed
copy, and such counsel shall cause one such conformed copy to be filed in the
principal office of such counsel.
13.14 Reservation of Rights. The failure of any party at any time or times
hereafter to require strict performance by any other party of any of the
warranties, representations, covenants, terms, conditions and provisions
specified in this Agreement shall not waive, affect of diminish any right of
such party failing to require strict performance to demand strict compliance and
performance therewith and with respect to any other provisions, warranties,
terms, and conditions specified in this Agreement. Any waiver of any default
shall not waive or affect any other default, whether prior or subsequent
thereto, and whether the same or of a different type.
13.15 Survival of Covenants, Representations and Warranties. All covenants,
representations, and warranties made by each party to this Agreement shall be
deemed made for the purpose of inducing the other party to enter into and
execute this Agreement. The representations, warranties, and covenants specified
in this Agreement shall survive the Closing and shall survive any investigation
by either party whether before or after the execution of this Agreement. The
covenants, representations, and warranties of the Company and the Sellers, on
the one hand, and the Purchaser, on the other hand, are made only to and for the
benefit of each other and shall not create or vest rights in other persons.
13.16 Concurrent Remedies. No right or remedy specified in this Agreement
conferred on or reserved to the parties is exclusive of any other right or
remedy specified in this Agreement or by law or equity provided or permitted;
but each such right and remedy shall be cumulative of, and in addition to, every
other right and remedy specified in this Agreement or now or hereafter existing
at law or in equity or by statute or otherwise, and may be enforced concurrently
therewith or from time to time. the termination of this Agreement for any reason
whatsoever shall not prejudice any right or remedy which any party may have,
either at law, in equity, or pursuant to the provisions of this Agreement.
13.17 Governing Law. This Agreement shall be deemed to have been entered
into in the County of Orange, State of California, and all questions concerning
the validity, interpretation, or performance of any of the terms, conditions and
provisions of this Agreement or of any of the rights or obligations of the
parties shall be governed by, and resolved in accordance with, the laws of the
State of California, without regard to conflicts of law principles. Any and all
actions or proceedings, at law or in equity, to enforce or interpret the
provisions of this Agreement shall be litigated in courts having situs within
the
00
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Xxxxxx xx Xxxxxx, Xxxxx of California. No claim, demand, action, proceeding,
litigation, hearing, motion or lawsuit resulting from or with respect to this
Agreement shall be commenced or prosecuted in any jurisdiction other than the
State of California, and any judgment, determination, finding or conclusion
reached or rendered in any other jurisdiction shall be null and void. Each party
hereby consents expressly to the jurisdiction of any local, state or federal
court located within the State of California and consents that any service of
process in such action or proceeding may be made by personal service upon such
party wherever such party may be then located, or by certified or registered
mail directed to such party at such party's last known address.
13.18 Force Majeure. If any party is rendered unable, completely or
partially, by the occurrence of an event of "force majeure" (hereinafter
defined) to perform such party's obligations created by the provisions of this
Agreement, such party shall give to the other party prompt written notice of the
event of "force majeure" with reasonably complete particulars concerning such
event; thereupon, the obligations of the party giving such notice, so far as
those obligations are affected by the event of "force majeure," shall be
suspended during, but no longer than, the continuance of the event of "force
majeure." The party affected by such event of "force majeure" shall use all
reasonable diligence to resolve, eliminate and terminate the event of "force
majeure" as quickly as practicable. The requirement that an event of "force
majeure" shall be remedied with all reasonable dispatch as hereinabove
specified, shall not require the settlement of strikes, lockouts or other labor
difficulties by the party involved, contrary to such party's wishes, and the
resolution of any and all such difficulties shall be handled entirely within the
discretion of the party concerned. The term "force majeure" as used in this
Agreement shall be defined as and mean any act of God, strike, civil
disturbance, lockout or other industrial disturbance, act of the public enemy,
war, blockage, public riot, earthquake, tornado, hurricane, lightening, fire,
public demonstration, storm, flood, explosion, governmental action, governmental
delay, restraint or inaction, unavailability of equipment, and any other cause
or event, whether of the type enumerated specifically in this section or
otherwise, which is not reasonably within the control of the party claiming such
suspension.
13.19 Consent to Agreement. By executing this Agreement, each party, for
itself represents such party has read or caused to be read this Agreement in all
particulars, and consents to the rights, conditions, duties and responsibilities
imposed upon such party as specified in this Agreement. Each party represents,
warrants and covenants that such party executes and delivers this Agreement of
its own free will and with no threat, undue influence, menace, coercion or
duress, whether economic or physical. Moreover, each party represents, warrants,
and covenants that such party executes this Agreement acting on such party's own
independent judgment and upon the advice of such party's counsel.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed on
the date first written above.
FamilyWare International, Inc.,
a Nevada corporation
By: /s/ Xxxxxx Xxxxxx /s/ Xxxx Xxxxxxx
-------------------------------- ------------------------------
Xxxx Xxxxxxx
Its: President
By: /s/ Xxxxxx Xxxxxx /s/ Xxxxxx X. Xxxxxx III
-------------------------------- ------------------------------
Xxxxxx X. Xxxxxx III
Its: Secretary
/s/ Xxxxxx Xxxxxx
CENTROCOM Corp., ------------------------------
a Nevada corporation Xxxxxx Xxxxxx
By: /s/ Xxxx Xxxxxxx
--------------------------------
Its: President
By: /s/ Xxxxxx X. Xxxxxx III
--------------------------------
Its: Secretary
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