EXHIBIT 7.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
FIRST CAPITAL PARTNERS, MM, INC.,
XXXXXX TREE CONSTRUCTION, INC.,
AND
CANADIAN ADVANTAGE LIMITED PARTNERSHIP
DATED JANUARY 4, 2002
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made this 4th day of
January, 2002, by and among First Capital Partners, MM, Inc., a Nevada
corporation (the "Seller"); Xxxxxx Tree Construction, Inc., a Nevada corporation
("JTC" or the "Company"); and Canadian Advantage Limited Partnership, an
Ontario, Canada, limited partnership (the "Buyer").
WITNESSETH
WHEREAS, the Buyer wishes to purchase from Sellers, and Sellers wish to
sell to the Buyer, shares of the securities of the Company owned by them.
NOW THEREFORE, In consideration of the foregoing and the mutual
covenants, agreements and warranties herein contained, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
The following terms shall have the following meanings for the purposes
of this Agreement:
"Affiliate" means, with respect to any specified Person,
(a) any other Person which, directly or indirectly, owns or controls,
is under common ownership or control with, or is owned or controlled by, such
specified Person;
(b) any other Person which is a director, officer or partner or is,
directly or indirectly, the beneficial owner of 10 percent or more of any class
of equity securities of the specified Person or a Person described in clause (a)
of this paragraph;
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(c) another Person of which the specified Person is a director, officer
or partner or is, directly or indirectly, the beneficial owner of 10 percent or
more of any class of equity securities; or
(d) any relative or spouse of the specified Person or any of the
foregoing Persons. "Auditor" means Xxxxxx Xxxxxxxx, Certified Public Accountant,
0000 Xxxx Xxxxxx Xxx Xx. 000, Xxx Xxxxx, Xxxxxx 00000, Telephone:
(000)-000-0000, Facsimile: (000) 000-0000.
"Business Day" means any day of the year other than
(a) any Saturday or Sunday, or
(b) any day which is a Legal Holiday as declared to be such by federal
law.
"Buyer Confidential Information" means all confidential information
concerning the Buyer or its Affiliates that
(a) is not and has not become ascertainable or obtainable from public
or published information,
(b) is not received from a third party or is received from a third
party pursuant to the authorization of the Buyer,
(c) was not in the Company's or in the Seller's possession prior to
disclosure thereof to the Sellers or the Company in connection with the
transactions contemplated herein, and
(d) was not independently developed by the Company or by the Seller.
"Cash Amounts" has the meaning set forth in Section 2.1(b).
"Claim" has the meaning set forth in Section 10.2.
"Closing" means the consummation(s) of the transactions contemplated
herein.
"Closing Date" means the date on which the Closing occurs.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Company Confidential Information" means all confidential information
concerning the Company or its Affiliates that
(a) is not and has not become ascertainable or obtainable from public
or published information,
(b) is not received from a third-party or is received from a
third-party pursuant to the authorization of the Company or the Sellers in
connection with the Buyer's due diligence review of the Company,
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(c) was not in the Buyer's possession prior to disclosure thereof to
the Buyer in connection with the transactions contemplated herein, and
(d) was not independently developed by the Buyer.
"Company Adverse Change" means a change (or circumstance involving a
prospective change) in the business, operations, assets, liabilities, results of
operations, cash flows, condition (financial or otherwise) or prospects of the
Company which the Buyer deems to be adverse.
"Company Adverse Effect" means an effect (or circumstance involving 3a
prospective effect) on the business, operations, assets, liabilities, results of
operations, cash flows, condition (financial or otherwise) or prospects of the
Company which the Buyer deems to be adverse.
"Contract" means any contract, lease, commitment, understanding, sales
order, purchase order, agreement, indenture, mortgage, note, bond, right,
warrant, instrument, plan, permit or license, whether written or oral.
"Dollars" or numbers preceded by the symbol "$" means amounts in United
States Dollars.
"Environmental Law" means any law which relates to or otherwise imposes
liability or standards of conduct concerning mining or reclamation of mined
land, discharges, emissions, releases or threatened releases of noises, odors or
any pollutants, contaminants or hazardous or toxic wastes, substances or
materials, whether as matter or energy, into ambient air, water, or land, or
otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, or hazardous or toxic wastes, substances or materials, including,
but not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 and the Superfund Amendments and Reauthorization Act of
1986 (together, as amended, "CERCLA"), the Resource Conservation and Recovery
Act of 1976, as amended, the Toxic Substances Control Act of 1976, as amended,
the Federal Water Pollution Control Act Amendments of 1972, the Clean Water Act
of 1977, as amended, any so-called "Superlien" law, and any other similar
federal, state or local Law.
"Environmental Permit" means any permit, license, approval, consent or
other authorization required by or pursuant to any applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Existing Borrowing" means all borrowing from lending institutions,
vendors or agencies of federal, state or local governments or their political
subdivisions, as set forth on the Financial Statements or in the books and
records of the Company.
"Financial Statements" means, and includes, all of the following:
(a) the audited financial statements of the Company as of December 31,
2000, (including all schedules and notes thereto), consisting of the balance
sheet at such date and the
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related statements of income and expenses, retained earnings, changes in
financial position and cash flows for the twelve-month period then ended, which
shall be prepared in accordance with GAAP and the SEC's Regulation S-B;
(b) the unaudited financial statements of the Company as of September
30, 2001, (including all schedules and notes thereto), consisting of the balance
sheet at such date and the related statements of income and expenses, retained
earnings, changes in financial position and cash flows for the nine-month period
then ended, which shall be prepared in accordance with GAAP and the SEC's
Regulation S-B (the "Latest Company Financial Statements"); and, in addition
(c) any other financial statements issued by the Company.
"GAAP" means United States generally accepted accounting principles at
the time in effect.
"Governmental Authority" means the government of the United States or
any foreign country or any state or political subdivision thereof and any
entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government. "Group"
shall collectively mean all affiliated groups of corporations of which the
Company is or has been a member that have filed any consolidated Tax Returns for
any period ending on or before the Closing Date for which the statute of
limitations has not yet expired.
"Hazardous Material" means any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance within the meaning of any
applicable Law (including consent decrees and administrative orders) relating to
or imposing liability or standards of conduct concerning any hazardous, toxic or
dangerous waste, substance or material, all as now or at any time hereafter in
effect.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Person" means the Buyer, and its Officers, Directors, and
Shareholders, or those other Persons entitled to, or claiming a right to,
indemnification.
"Indemnifying Person" means the Seller.
"Latest Financial Statements" means the unaudited financial statements
of the Company as of September 30, 2001, (including all schedules and notes
thereto), consisting of the balance sheet at such date and the related
statements of income and expenses, retained earnings, changes in financial
position and cash flows for the twelve-month period then ended, which shall be
prepared in accordance with GAAP and the SEC's Regulation S-B;
"Latest Financial Statements Date" means the date of the Latest
Financial Statements.
"Law" or "Laws" means any law, statute, regulation, ordinance, rule,
order, decree, judgment, consent decree, settlement agreement or governmental
requirement enacted,
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promulgated, entered into, agreed or imposed by any Governmental Authority.
"Lien" means any mortgage, lien, charge, restriction, pledge, security interest,
option, lease or sublease, claim, right of any third party, easement,
encroachment or encumbrance.
"Loss" or "Losses" means any and all liabilities, losses, costs,
claims, damages (including consequential damages), penalties and expenses
(including attorneys' fees and expenses and costs of investigation and
litigation). ["Losses" also include liabilities for taxes that have become due
and payable or which have accrued with respect to the Company that have not been
paid prior to the Closing Date or which have not been reserved on the Financial
Statements. (Any Taxes attributable to the operations of the Company payable as
a result of an audit of any Tax Return shall be deemed to have accrued in the
period to which such Taxes are attributable.)]
In the event any of the foregoing are indemnifiable hereunder, the
terms "Loss" and "Losses" shall include any and all attorneys' fees and expenses
and costs of investigation and litigation incurred by the Indemnified Person in
enforcing such indemnity. No Loss shall be reduced by reason of tax benefits
allegedly enjoyed as a result of such Loss by an Indemnified Party.
"NASD" means the National Association of Securities Dealers.
"NASD Reports" means all reports, filings, and forms required to be
filed by Persons pursuant to the regulations of NASDAQ and the NASD.
"Permits" shall have the meaning set forth in Section 3.16(a).
"Person" means any individual, corporation, proprietorship, firm,
partnership, limited partnership, trust, association or other entity, including
a government or government department, agency or instrumentality.
"Real Property Leases" has the meaning set forth in Section 3.10(b).
"SEC" means the United States Securities and Exchange Commission.
"SEC Reports" means all reports, filings, and forms required to be
filed by Persons under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Security" or "Securities" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call,
straddle, option, or privilege on any security, certificate of deposit, or group
or index of securities (including any interest therein or based on the value
thereof), or any put, call, straddle, option, or privilege entered into
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on a national securities exchange relating to foreign currency, or, in general,
any interest or instrument commonly known as a "security", or any certificate of
interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase, any of the
foregoing.
"Shares" means the 205,000 shares of the Issued and Outstanding Common
Stock, Par Value $0.001 per share, of the Company that the Seller is selling to
the Buyer pursuant to this Agreement.
"Subsidiaries" means any Person 50.1% or more of the voting power of
which is controlled by another Person.
"Survival Date" has the meaning set forth in Section 10.1.
"Taxes" means all taxes, charges, fees, duties, levies or other
assessments, including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel,
excess profits, occupational, interest equalization, windfall profits,
severance, employee's income withholding, other withholding, unemployment and
Social Security taxes, which are imposed by any Governmental Authority, and such
term shall include any interest, penalties or additions to tax attributable
thereto.
"Tax Return" means any report, return or other information required to
be supplied to a Governmental Authority in connection with any Taxes.
"Tax Statute of Limitations Date" means the close of business on the
30th day after the expiration of the applicable statute of limitations with
respect to Taxes, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).
"Tax Warranty" means a representation or warranty in Sections 3.20.
"Territory" means the United States, Canada and all other countries in
which the Company has transacted business prior to the Ending Date as
contemplated by Section 5.8.
"Title and Authorization Warranty" means a representation or warranty
in Sections 3.2, 3.4, or 3.7, 3.8, 3.14, 3.16.
"Two Times Prime Rate" means two times the weighted average prime rate
(as the prime rate as from time to time announced by Citibank, N.A. in New York
City).
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ARTICLE II
SALE AND PURCHASE OF SHARES
2.1 Sale and Purchase of Shares.
(a) The Seller hereby agrees to sell the Shares to the Buyer that
number of Shares set forth on Exhibit 2.1 opposite his or its name, free and
clear of all Liens, and the Buyer hereby agrees to purchase all such Shares,
subject to the terms and conditions of this Agreement.
(b) In consideration for the sale of the Shares by the Seller to the
Buyer, the Buyer shall pay to the Seller the sum of $375,000 (the "Purchase
Price"), payable as follows:
(i) The sum of $10,000 (the "Initial Deposit") upon the
execution of this Agreement; and
(ii) The sum of $365,000 (the Purchase Price Balance") at the
Closing.
(c) The Seller shall pay the Initial Deposit and the Purchase Price
Balance to the Seller, by wire transfer to the client trust account of Seller's
legal counsel as follows:
U.S. Bank, Las Vegas, Nevada
ABA Routing No. 000000000
For credit to the account of Xxxxxx X. Xxxx and
Associates, Ltd.
Client Trust Account
Account No. 153700111096
(d) All payments made in accordance with paragraph 2.1(c) shall be
deemed made to and received by the Seller.
(e) If Seller shall fail to pay the Purchase Price Balance at the
Closing, and the Company and the Seller shall not be in default under this
Agreement, then the Seller shall be entitled to retain the Initial Deposit as
liquidated damages for the Buyer's breach of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
AND OF THE COMPANY
In order to induce the Buyer to enter into this Agreement, the Company
and the Seller, jointly and severally, represent and warrant to the Buyer, as at
the date of this Agreement and as at the Closing Date as follows:
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3.1 Due Incorporation; No Subsidiaries.
(a) The Company is duly organized, validly existing and in good
standing under the laws of the State of Nevada with all requisite power and
authority to own, lease and operate its properties and to carry on its business
as they are now being owned, leased, operated and conducted.
(b) The Company is licensed or qualified to do business and is in good
standing (where the concept of "good standing" is applicable)as a foreign
corporation in each jurisdiction where the nature of the properties owned,
leased or operated by it and the business transacted by it require such
licensing or qualification.
(c) As of the date of the Closing, the Company has no direct or
indirect Subsidiaries, either wholly or partially owned, and the Company does
not hold any direct or indirect economic, voting or management interest in any
Person or directly or indirectly own any security issued by any Person.
(d) True, correct and complete copies of the Certificate of
Incorporation and By-laws, as amended, and all minutes of all meetings (or
written consents in lieu of meetings) of the Board of Directors (and all
committees thereof) and stockholders of the Company have been delivered to the
Buyer.
3.2 Due Authorization.
(a) The Seller and the Company have full power and authority to enter
into this Agreement, and to consummate the transactions contemplated hereby.
(b) The Seller and the Company have duly and validly executed and
delivered this Agreement.
(c) At all material times,
(i) the Seller have, had, and will have, full and valid title
and control of the Shares;
(ii) there was, is, and will be no existing impediment or
encumbrance to the sale and transfer of the Shares to the Buyer, and on
delivery of the Shares to the Buyer,
(A) all of the Shares have been, are, and will be
free and clear of all taxes, liens, encumbrances, charges or
assessments of any kind and shall not be subject to preemptive
rights, tag-along rights, cumulative voting, or similar rights
of any shareholder of the Company,
(B) all of the Shares have been, are, and will be
legally and validly issued in compliance with all applicable
Law, and
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(C) all of the Shares have been, are, and will be
fully paid and non- assessable shares, and the Shares have all
been, are, and will be issued under duly authorized
resolutions of the Board of Directors of the Company.
(d) This Agreement is the legal, valid and binding obligation of the
Seller and the Company, enforceable against each of them, respectively, in
accordance with its terms.
3.3 Consents and Approvals.
The execution, delivery and performance by the Seller and the Company
of this Agreement have been duly and validly approved by their respective boards
of directors, and do not and will not, and the consummation of the transactions
contemplated hereby and thereby does not and will not,
(i) violate any provisions of the Articles of Incorporation or
By-laws of the Company or the Seller;
(ii) permit any Governmental Authority to impose any
restrictions or limitations of any nature on the Seller or the Company
or the Buyer with respect to the transactions contemplated hereby;
(iii) violate, conflict with, or result in the breach of any
of the terms of, result in a material modification of, or otherwise
give any other contracting party the right to terminate, or constitute
a default under, any contract or other agreement to which the Seller or
the Company is a party or by or to which either of them or any of their
respective assets or properties may be bound or subject;
(iv) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or
binding upon, the Seller or the Company, or to which any of their
respective assets or properties may be bound or subject;
(v) result in the creation of any security interest, lien,
encumbrance, adverse claim, proscription or restriction on any property
or asset (whether real, personal, mixed, tangible or intangible),
right, contract, agreement or business of the Seller or the Company; or
(vi) violate, conflict with, modify or cause any default under
or acceleration of (or give any party any right to declare any default
or acceleration upon notice or passage of time or both), in whole or in
part, any charter, article of incorporation, bylaw, mortgage, lien,
deed of trust, indenture, lease, agreement, instrument, order,
injunction, decree, judgment, law or any other restriction of any kind
to which the Seller or the Company is a party or by means of which
either of them or any of their respective properties may be bound or
subject.
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3.4 Compliance With Securities Laws.
(a) Since January 31, 2001, through the Closing Date, the Seller and
the Company have appropriately filed all SEC Reports.
(b) The Seller and the Company have made available to the Buyer true
and complete copies of the SEC Reports and all correspondence between the SEC
and the Seller, or the Company, and their attorneys and accountants and
market-makers. The SEC Reports, at the time filed, complied in all respects with
all applicable Laws.
(c) With respect to the NASD,
(i) The Seller and the Company have made available to the
Buyer true and complete copies of the NASD Reports and all
correspondence between the NASD and the Seller or the Company and its
attorneys and accountants and market-makers;
(ii) The Company is currently listed on the OTC Electronic
Bulletin Board with the following trading symbol: "JSTC". The Company
is not in default with respect to any listing requirements or trading
privileges or policy statements of the SEC or of the NASD or of any
other
(iii) Governmental Authority. There are no investigations
pending or threatened against the Company by the SEC or by the NASD or
by any other Governmental Authority which would threaten or jeopardize
its trading status or listing privileges, and there is no reason
whatsoever for the Sellers or the Company to suspect otherwise,
irrespective of whether or not the Sellers or the Company believe such
rules or regulations, or such investigations, pose such a threat to its
trading status or listing privileges.
(d) Through the date of this Agreement and continuing through the
Closing Date, the Company has offered and sold its Securities only as shown on
Schedule 3.4.
(e) The Company was not, has not been, and is not, at any time between
inception, through the Closing Date, an "Investment Company" as the term is
generally interpreted.
3.5 Capitalization.
(a) The Authorized Capitalization of the Company consists of:
(i) 20,000,000 shares of Common Stock, Par Value $0.001 per
share (the "JTC Common Stock") of which approximately 312,230 shares
are issued and outstanding and are held, of record, by approximately 57
persons,
(A) with each holder thereof being entitled to cast
one vote for each share held on all matters properly submitted
to the Shareholders for their vote; and
(B) there being no pre-preemptive rights or
cumulative voting; and
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(b) 5,000,000 shares of Preferred Stock, Par Value $0.001 per share
(the "JTC Preferred Stock") of which no shares are Issued and Outstanding, with
the Board of Directors being authorized from time to time, without shareholder
action, to determine and state the designations and the preferences,
limitations, relative rights, and voting rights, if any, of each such series by
the adoption and filing in accordance with the Laws of the State of Nevada;
(c) All of the issued and outstanding shares of Common Stock of the
Company have been duly and validly issued in accordance and compliance with all
applicable Laws, rules and regulations and are fully paid and non-assessable;
(d) There are no outstanding options, warrants, convertible securities,
scrip, rights to subscribe for, puts, calls, rights of first refusal, tag-along
agreements, nor any other agreements, understandings, claims or other
commitments or rights of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for any Securities of the Company or
arrangements by which the Company is or may become bound to issue additional
Securities of the Company, nor are there any outstanding Securities granted or
issued by the Company that are convertible into any Securities of the Company,
and none is authorized;
(e) No Securities of the Company are subject to preemptive rights or
similar rights of the stockholders of the Company nor are any Securities subject
to any liens or encumbrances imposed through the actions or failure to act of
the Company, or otherwise;
(f) There are no anti-dilution or price adjustment provisions contained
in any Security authorized or issued by the Company (or in the Company's
Articles of Incorporation or By-laws or in any agreement providing rights to
security holders) that will be triggered by the transactions contemplated by
this Agreement;
(g) The Company is not obligated or committed to purchase, redeem or
otherwise acquire any of its Securities;
(h) There are no agreements or arrangements under which the Company is
obligated to register the sale of any of its Securities under the Securities
Act; (j) All presently exercisable voting rights in the Company are vested
exclusively in its outstanding shares of Common Stock, each share of which is
entitled to one vote on every matter to come before its shareholders;
(i) There are no voting trusts or other voting arrangements with
respect to any of the Company's securities; and
(j) The assignments, endorsements, stock powers and other instruments
of transfer delivered by the Sellers to the Buyer at the Closing will be
sufficient to transfer the Sellers' entire interest, legal and beneficial, in
the Shares to the Buyer.
3.6 Financial Statements; Undisclosed Liabilities.
(a) The Financial Statements have been prepared in accordance with GAAP
consistently applied and present fairly the financial position, assets,
liabilities and retained
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earnings of the Company as of the dates thereof and the revenues, expenses,
results of operations, changes in financial position and cash flows of the
Company for the periods covered thereby.
(b) Except as set forth in Exhibit 3.6 or in the Latest Financial
Statements, the Company has no liabilities, debts, claims or obligations,
whether accrued, absolute, contingent or otherwise, whether due or to become
due, other than trade payables and accrued expenses incurred in the ordinary
course of business since the date of the Latest Financial Statements. Any and
all Company liabilities will be paid as of the closing date by Sellers or the
Company, and the Company shall have no outstanding liabilities existing after
the closing date. Buyer specifically is NOT assuming any Company liabilities.
(c) There is no basis for the assertion against the Company, as at the
date of this Agreement, or as at the Closing Date, of any liability of any
nature or in any amount not fully reflected or reserved against in the Financial
Statements, and there is no reason for Company or the Sellers to believe
otherwise, irrespective of whether or not they believe the claim is valid or
not.
3.7 No Adverse Effects or Changes.
Since the Latest Financial Statement Date, the Company has not:
(a) suffered any Company Adverse Change or Effect;
(b) waived, released or canceled any claims against third parties or
debts owing to it, or any rights;
(c) made any changes in its accounting systems, policies, principles or
practices;
(d) authorized for issuance, issued, sold, delivered or agreed or
committed to issue, sell or deliver (whether through the issuance or granting of
options, warrants, convertible or exchangeable securities, commitments,
subscriptions, rights to purchase or otherwise), any of its Securities, or
amended any of the terms of any of its Securities;
(e) split, combined, or reclassified any shares of its Securities,
declared, set aside or paid any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its securities, or
redeemed or otherwise acquired any Securities of the Company or of any other
Person;
(f) entered into, adopted, amended or terminated any bonus, profit
sharing, compensation, termination, stock option, stock appreciation right,
restricted stock, performance unit, pension, retirement, deferred compensation,
employment, severance or other employee benefit agreements, trusts, plans, funds
or other arrangements for the benefit or welfare of any director, officer or
employee, or increased in any manner the compensation or fringe benefits of any
director or officer;
(g) authorized or made any capital expenditure;
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(h) made any Tax election or settled or compromised any federal, state,
local or foreign Tax liability, or waived or extended the statute of limitations
in respect of any such Taxes;
(i) paid any amount, performed any obligation or agreed to pay any
amount or perform any obligation, in settlement or compromise of any suits
against the Company or its Affiliates or any of its directors, officers,
employees, agents, or shareholders;
(j) paid any amount, performed any obligation or agreed to pay any
amount or perform any obligation, in settlement or compromise of any claims of
liability against the Company or its Affiliates or any of its directors,
officers, employees, agents, or shareholders; or
(k) terminated, modified, amended or otherwise altered or changed any
of the terms or provisions of any Contract, or paid any amount not required by
Law or by any Contract.
3.8 Title to Properties.
The Company has, and on the Closing Date will have, good and marketable
title to, and is, and on the Closing Date will be, the lawful owner of, all of
the tangible and intangible assets, properties and rights used in connection
with its business and all of the tangible and intangible assets, properties and
rights reflected in the unaudited financial statements to be delivered on the
closing date , which as of that date shall include only the registered name of
the Company.
3.9 Condition and Sufficiency of Assets. Not applicable.
3.10 Leased Real Property.
(a) The Company does not hold legal title to, or own any legal or
beneficial interest in any real property nor does it presently lease or rent any
such real property.
3.11 Personal Property.
(a) Other than its registered name and contractor's license, the
Company shall have no personal property as such tangible personal property
presently utilized by the Company in the ordinary course of its business shall
be purchased by the Seller. The Seller shall reasonably cooperate with the
buyers in efforts to transfer its contractor's license to new management.
3.12 Inventories.
(a) The Company shall hold no inventories as of the Closing Date as any
inventories the Company may have shall be purchased by the Seller concurrent
with or prior to the closing date.
3.13 Accounts Receivable and Advances.
(a) The Company shall have no accounts receivable, loans and/or
advances payable to any Persons ("Advances") other than as specified in Exhibit
3.6. The Sellers shall cause to be
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extinguished any obligations or liabilities as specified in Exhibit 3.6. by the
closing date or concurrent to the closing date.
3.14 Intellectual Property.
Exhibit 3.14 is a true and complete list of all of the trademarks,
trade names, service marks, patents and copyrights (including any registrations
of or pending applications for any of the foregoing) used by the Company in the
conduct of its business.
3.15 Contracts.
(a) Except as set forth on Exhibit 3.15, there are no pending Contracts
or Agreements to which the Company is a party or by which it is bound, or to
which any of its assets or properties is subject. (See Exhibit 3.15.). Any such
Agreements shall be concluded or terminated concurrent to the closing date.
3.16 Permits and Bonding.
(a) Exhibit 3.16 is a true and accurate list of all licenses,
certificates, permits, franchises, rights, code approvals and private product
approvals and bonds (collectively, "Permits") held by the Company.
(b) Except for the Permits listed on Exhibit 3.16, there are no
Permits, whether federal, state, local or foreign, which are necessary for the
lawful operation of the business of the Company.
3.17 Insurance; Claims.
(a) Exhibit 3.17 contains an accurate and complete list of all policies
of fire, liability, workers' compensation, title and other forms of insurance
owned, held by or applicable to the Company (or its assets or business), and the
Company has heretofore delivered to the Buyer a true and complete copy of all
such policies, including all occurrence-based policies applicable to the Company
(or its business) for all periods prior to the Closing Date. All such policies
are, and will be, in full force and effect, all premiums with respect thereto
covering all periods up to and including the Closing Date have been, and will
be, paid, and no notice of cancellation or termination has been, or will have
been, received with respect to any such policy.
(b) There are no claims which have been made by or against the Company
in the last three years under any workers' compensation, general liability,
property or other insurance policy applicable to the Company or any of its
properties.
(c) There are no pending or threatened claims under any insurance
policy, nor will there be any pending or threatened claims prior to the Closing
Date.
Page 14
3.18 Employee Benefits.
(a) The Company is not a party to and does not participate in or have
any liability or contingent liability with respect to:
(i) any "employee welfare benefit plan" or "employee pension
benefit plan" as those terms are respectively defined in the
appropriate sections of ERISA;
(ii) (any retirement or deferred compensation plan, incentive
compensation plan, stock plan, unemployment compensation plan, vacation
pay, severance pay, bonus or benefit arrangement, insurance or
hospitalization program or any other fringe benefit arrangements for
any current or former employee, director, consultant or agent, whether
pursuant to contract, arrangement, custom or informal understanding,
which does not constitute an "employee benefit plan" (as defined in the
appropriate sections of ERISA); or
(iii) any employment, consulting or agency agreement as of the
Closing Date.
3.19 Employment and Labor Matters.
(a) All directors, officers and employees of the Company shall have
resigned concurrent with the closing date after appointing interim directors as
required under Company's Articles and Bylaws.
(b) The Company has and currently is conducting its business in full
compliance with all Laws relating to employment and employment practices, terms
and conditions of employment, wages and hours, affirmative action, and
nondiscrimination in employment.
(c) All present and prior relationships of the Company with its
employees are good. There is, and during the past two years there has been, no
labor strike, dispute, slow-down, work stoppage or other labor difficulty
actually pending or threatened against or involving the Company, and no attempt
is currently being made or during the past three years has been made to organize
any employees of the Company to form or enter a labor union or similar
organization.
(d) The Company has not had any grievance by any employee during the
past two years.
3.20 Taxes.
(a) Any unpaid liabilities for Taxes, whether or not disputed, that
have accrued with respect to or are applicable to the periods ended on and
including the Closing Date or to any years and periods prior thereto and for
which the Company may be directly or contingently liable shall be paid by
Sellers.
(b) There are no Tax Liens (other than Liens for current Taxes not yet
due and payable) upon the properties or assets of the Company.
Page 15
(c) The Company has not granted or been requested to grant any waiver
of any statutes of limitations applicable to any claim for Taxes.
(d) As at the date of this Agreement, and prior to the Closing Date,
all federal, state, local and foreign income, corporation and other Tax Returns
have been, and will be, filed for the Company, and all other filings in respect
of Taxes have been, and will be, made for the Company, for all periods as
required by Law.
(e) As at the date of this Agreement, and prior to the Closing Date,
all Information Returns required to be filed by the Company have been, or will
be, filed, and all statements required to be furnished to payees by the Company
have been, or will be, furnished to such payees, and the information set forth
on such Information Returns and statements is, and will be, true, complete and
correct.
(f) As at the date of this Agreement, and prior to the Closing Date,
all Taxes shown as due on all Tax Returns and other filings have been, and will
be, paid.
(g) As at the date of this Agreement, and prior to the Closing Date,
each Tax Return and filing is, and will be, true and correct, and the Company
does not nor will have any additional liability for Taxes with respect to any
Tax Return or other filing heretofore filed or which was required by Law to be
filed, other than as reflected as liabilities on the Financial Statements.
(h) None of the Tax Returns or other filings that include the
operations of the Company has ever been audited or investigated by any
Governmental Authority, and no facts exist which would constitute grounds for
the assessment of any additional Taxes by any Governmental Authority with
respect to the taxable years covered in such Tax Returns and filings.
(i) No material issues have been raised in any examination by any
Governmental Authority with respect to the business and operations of the
Company which, by application of similar principles, reasonably could be
expected to result in a proposed adjustment to the liability for Taxes for any
other period not so examined.
(j) As at the date of this Agreement, and prior to the Closing Date,
the Sellers are not, nor will be, "foreign persons" as defined in the Code.
(k) The Company is not subject to any joint venture, partnership or
other arrangement or contract which is treated as a partnership for federal
income tax purposes. Except for any tax- sharing agreement which is attached to
Exhibit 3.20 as an exhibit, the Company is not a party to any tax-sharing
agreement.
(l) None of the assets of the Company constitutes tax-exempt bond
financed property or tax-exempt use property within the meaning of Section 168
of the Code, and none of the assets reflected on the Financial Statements is
subject to a lease, safe harbor lease or other arrangement as a result of which
the Company is not treated as the owner for federal income tax purposes.
Page 16
(m) The Company has not made or become obligated to make, and will not
as a result of any event connected with any transaction contemplated herein
become obligated to make, any "excess parachute payment" as defined in section
280G of the code [without regard to subsection (b)(4) thereof].
3.21 Environmental Matters.
(a) the business, operations and facilities (whether owned or leased)
of the Company, and all existing uses of and activities on or at any of the
properties or facilities (whether owned or leased) of the Company, are in
material compliance with all Environmental Laws in effect as of the date hereof,
and no condition exists or event has occurred which, with or without notice or
the passage of time or both, would constitute a violation of or give rise to any
Lien under any Environmental Law, and there is no reason for Company or the
Sellers to believe otherwise, irrespective of whether or not they believe the
claim is valid or not;
(b) the Company is in possession of all Environmental Permits necessary
or desirable for the conduct or operation of its business (or any part thereof),
and is in material compliance with all of the requirements, conditions and
limitations included in such Environmental Permits, and there is no reason for
Company or the Sellers to believe otherwise, irrespective of whether or not they
believe the claim is valid or not;
(c) there is no, and the Company has not used or stored any, Hazardous
Material in, on, or at any of the properties or facilities now or previously
used by the Company;
(d) the Company has not received any notice from any Governmental
Authority or any other Person that any past or present aspect of the business,
operations or facilities (whether owned or leased) of the Company is in
violation of any Environmental Law or Environmental Permit, or that the Company
is responsible or liable (or potentially responsible or liable) for the
investigation, clean up or remediation of any Hazardous Materials at any
location, and there is no reason for the Company or the Sellers to believe that
such a notice may be sent or that the Company may be responsible for an
investigation, clean up, or remediation;
(e) the Company has not at any time deposited or incorporated any
Hazardous Material into, on, beneath, or adjacent to any property, and there is
no reason for the Company or the Sellers to believe otherwise, irrespective of
whether or not they believe the claim is valid or not;
(f) the Company is not the subject of any litigation or proceedings in
any forum, judicial or administrative, involving a demand for damages,
injunctive relief, penalties, or other potential liability with respect to
violations of or liability under any Environmental Law, and there is no reason
for the Company or the Sellers to believe that any such proceedings are
threatened, irrespective of whether or not they believe the litigation or
proceeding is valid or not;
(g) the Company has timely filed all reports and notifications required
to be filed with respect to all of its operations, properties and facilities
(whether owned or leased) and has generated and maintained all required records
and data under all applicable Environmental Laws;
Page 17
(h) neither the Company nor any predecessor thereof has transported or
arranged for the transportation of any Hazardous Material to any location which
is listed or proposed for listing on the National Priorities List pursuant to
CERCLA or on any similar state list; and
(i) no condition exists or has existed or event has occurred with
respect to
(i) any property that was at any time owned or leased, or any
direct or indirect subsidiary that was at any time owned, by the
Company, any predecessor to the Company or any Person that is or was an
Affiliate of the Company, which property or subsidiary has been sold,
transferred or disposed or for which any lease has terminated, and
there is no reason for the Company or the Sellers to believe otherwise,
irrespective of whether or not they believe the condition is valid or
not; or
(ii) any predecessor to the Company, that could [in the case
of either of the foregoing clauses (i) or (ii)], with or without
notice, passage of time or both, give rise to any present or future
liability of the Company pursuant to any Environmental Law, and there
is no reason for the Company or the Sellers to believe otherwise,
irrespective of whether or not they believe the condition is valid or
not.
3.22 Litigation.
There are no actions, suits, arbitrations, regulatory proceedings or
other litigation, proceedings or governmental investigations pending or
threatened against or affecting the Company or any of its officers, directors,
employees, agents or stockholders thereof in their capacity as such, or any of
the Company's properties or businesses, and there is no reason for the Company
or the Sellers to believe otherwise.
3.23 No Conflict of Interest.
Neither the Seller nor its Affiliates have or claim to have any direct
or indirect interest in any tangible or intangible property used in the business
of the Company, except as a holder of Shares.
3.24 Bank Accounts; Holders of Powers of Attorney.
Any accounts held with banks or other financial institutions at which
the Company has an account or safe deposit box shall be closed concurrent with
the closing.
Page 18
3.25 Customers, Suppliers, Etc. Not applicable.
3.26 Claims Against the Seller, Officers and Directors of the Company, and other
Persons There are no pending or threatened claims against any Person which could
give rise to any claim for indemnification against the Company, and there is no
reason for the Company or the Sellers to believe otherwise, irrespective of
whether or not they believe the claim is valid or not.
3.27 Improper and Other Payments.
(a) Neither the Company nor the Seller, nor any director, officer,
employee, agent or representative of the Company, nor any Affiliate of them, nor
any Person acting on behalf of any of them, has made, paid, or received any
bribes, kickbacks or other similar payments to or from any Person, whether
lawful or unlawful.
(b) No contributions have been made, directly or indirectly, to a
domestic or foreign political party or candidate.
(c) No improper foreign payment (as defined in the Foreign Corrupt
Practices Act) has been made by any of said persons or entities.
3.28 Due Diligence Materials.
The Company and the Seller have provided to the Buyer or its
representatives, in accordance with the terms of Section 5.2, all documents of
the character and type requested by the Buyer in connection with its "due
diligence" investigation of the Company and the Seller, and there are no
documents in the possession of the Seller, of the Company or any of their
Affiliates or respective agents or representatives of a character or type
described in such requests which have not been so provided to the Buyer or its
representatives.
3.29 No Defaults or Violations.
(a) The Company has not breached any provision of, nor is in default
under, the terms of any Contract to which it is a party or under which it has
any rights or by which it is bound nor is the Company or any of the Sellers
aware of any event which, with the passage of time would result in such breach
or default;
(i) no other party to any such Contract has breached such
Contract or is in default thereunder nor is the Company or any of the
Sellers aware of any event which, with the passage of time would result
in such breach or default;
(ii) neither the Company nor any other such party to such a
Contract has given notice to the other respecting a claimed breach or
default; and
(iii) there is no reason for the Company or any of the Sellers
to believe otherwise, irrespective of whether or not they believe the
claim is valid or not.
Page 19
(b) The Company and the Seller, are, and at the Closing will be, in
compliance with, and no violation exists, nor will exist, under any and all Laws
applicable to the Company and to the Sellers (insofar as such non-compliance or
violation or Laws may effect ability of any one of them to sell and convey the
Shares to the Buyer and to otherwise consummate the transactions contemplated
hereby), and there is no reason for the Company or the Sellers to believe
otherwise, irrespective of whether or not they believe the violation is valid or
not.
3.30 Accuracy of Statements.
The Seller and the Company know of no information or fact which has or
would have an adverse effect on the financial condition, business, or business
prospects of the Company, or on the ability of the Sellers to sell and convey
the Shares to the Buyer, which has not been disclosed to the Buyer, and there is
no reason for Company or the Sellers to believe otherwise, irrespective of
whether or not they believe the claim is valid or not.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
In order to induce the Seller to enter into this Agreement, the Buyer
represents and warrants to the Seller, as at the date of this Agreement and as
at the Closing Date (as if such representations and warranties were remade on
the Closing Date), as follows:
4.1 Due Incorporation.
The Buyer is a limited partnership formed, validly existing and in good
standing under the laws of the State of Nevada, County of Xxxxx, with all power
and authority to own, lease and operate its properties and to carry on its
business as they are now being owned, leased, operated and conducted.
4.2 Due Authorization.
(a) The Buyer has full power and authority to enter into this Agreement
and the Related Agreements and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance by the Buyer of this
Agreement have been duly and validly approved by the general partner of the
Buyer and no other actions or proceedings on the part of the Buyer are necessary
to authorize this Agreement and the transactions contemplated hereby.
(b) The Buyer has duly and validly executed and delivered this
Agreement.
(c) This Agreement is the legal, valid and binding obligation of the
Buyer, in each case enforceable in accordance with its terms, except as such
enforce ability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar Laws in effect which affect the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies.
Page 20
4.3 Consents and Approvals; Authority Relative to this Agreement.
(a) No consent, authorization or approval of, filing or registration
with, or cooperation from, any Governmental Authority or any other Person not a
party to this Agreement is necessary in connection with the execution, delivery
and performance by the Buyer of this Agreement, its respective Related
Agreements or the consummation of the transactions contemplated hereby, or
thereby.
(b) The execution, delivery and performance by the Buyer of this
Agreement and its respective Related Agreements does not and will not, and the
consummation of the transactions contemplated hereby and thereby does not and
will not,
(i) violate any Law;
(ii) violate or conflict with, result in a breach or
termination of, constitute a default or give any third party any
additional right (including a termination right) under, permit
cancellation of, result in the creation of any Lien upon any of the
assets or properties of the Buyer under, or result in or constitute a
circumstance which, with or without notice or lapse of time or both,
would constitute any of the foregoing under any Contract to which the
Buyer is a party or by which the Buyer or any of its assets or
properties are bound;
(iii) permit the acceleration of the maturity of any
indebtedness of the Buyer or indebtedness secured by its respective
assets or properties; or
(iv) violate or conflict with any provision of any of the
organizational instruments of the Buyer.
ARTICLE V
COVENANTS
5.1 Implementing Agreement.
(a) Subject to the terms and conditions hereof, each Party hereto shall
use its reasonable best efforts to take all action required of it to fulfill its
obligations under the terms of this Agreement and to facilitate the consummation
of the transactions contemplated hereby.
(b) The Seller agree that unless this Agreement is terminated in
accordance with the provisions of Section 9.1, the Seller will not encumber the
Shares, will not sell the Shares to any Person other than the Buyer (or an
Affiliate of the Buyer), and will not take any other action which would have the
effect of preventing or disabling the Seller's performance of its obligations
under this Agreement.
Page 21
5.2 Access to Information and Facilities.
(a) From and after the date of this Agreement or such earlier time as
the Buyer and the Seller shall have mutually agreed, the Seller shall, and shall
cause the Company to give the Buyer and the Buyer's representatives unrestricted
access during normal business hours to all of the facilities, properties, books,
contracts, commitments and records of the Company, and the Seller shall make the
officers and employees of the Company available to the Buyer and its
representatives as the Buyer and its representatives shall from time to time
request. The Buyer and its representatives will be furnished with any and all
information concerning the Company which the Buyer or its representatives
reasonably request.
(b) Except as may be reasonably necessary to carry out this Agreement
and the transactions contemplated hereby, the Buyer will not, will cause its
Affiliates not to, and will instruct its and its Affiliates' agents and
financing sources not to disclose the Company Confidential Information to any
Person other than the Buyer's employees, agents and financing sources on a "need
to know" basis without the prior consent of the Company, unless compelled to
disclose any such the Company Confidential Information by judicial or
administrative process or, in the opinion of the Buyer's counsel, by other
requirements of Law.
(c) Except as may be reasonably necessary to carry out this Agreement
and the transactions contemplated hereby, the Seller will not, will cause its
Affiliates not to, and will instruct its Affiliates' agents and financing
sources to not disclose any Buyer Confidential Information to any Person other
than Seller's or the Company's employees, agents and financing sources without
the prior consent of the Buyer, unless compelled to disclose any such the Buyer
Confidential information by judicial or administrative process or, in the
opinion of the Seller's counsel, by other requirements of Law.
5.3 Preservation of Business.
(a) From the date of this Agreement until the Closing Date, the Seller
shall cause the Company to operate only in the ordinary and usual course of
business and consistent with past practice, and the Sellers and the Company
shall use their best efforts to:
(i) preserve the goodwill and advantageous relationships of
the Company with customers, suppliers, independent contractors,
employees and other Persons material to the operation of its business;
and
(ii) not permit any action or omission which would cause any
of the representations or warranties of the Sellers or the Company
contained herein to become inaccurate or any of the covenants of the
Sellers to be breached.
(iii) waive, release or cancel any claims against third
parties or debts owing to it, or any rights which have value;
(iv) make any changes in its accounting systems, policies,
principles or practices;
Page 22
(v) split, combine, or reclassify any shares of its
Securities, declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its securities, or redeem or otherwise acquire
any Securities of the Company or of any other Person;
(vi) terminate, modify, amend or otherwise alter or change any
of the terms or provisions of any contract, or pay any amount not
required by Law or by any contract.
5.4 Consents and Approvals.
(a) The Seller shall, and shall cause the Company to make all filings,
applications, statements and reports to all Governmental Authorities and other
Persons which are required to be made prior to and on the Closing Date by or on
behalf of the Seller or any of its Affiliates pursuant to any applicable Law or
contract in connection with this Agreement and the transactions contemplated
hereby and thereby, including prompt filings under the HSR Act, if applicable
and expedited submission of all materials required by any Governmental Authority
in connection with such filings.
(b) The Buyer shall, and shall cause the Company to, make all filings,
applications, statements and reports to all Governmental Authorities and other
Persons which are required to be made subsequent to the Closing Date by or on
behalf of the Company or any of their respective Affiliates pursuant to any
applicable Law or contract in connection with this Agreement or any of their
respective Related Agreements and the transactions contemplated hereby and
thereby, including prompt filings under the HSR Act, if applicable, and
expedited submission of all materials required by any Governmental Authority in
connection with such filings.
5.5 Maintenance of Insurance. Not applicable.
5.6 Resignation of Officers and Directors.
The Seller shall cause each officer and member of the Board of
Directors of, and each trustee or fiduciary of any plan or arrangement involving
employee benefits of, the Company, if so requested by the Buyer, to tender his
resignation from such position effective as of the Closing Date.
Page 23
5.7 Bank Accounts.
Incident to the Closing, the Sellers will arrange:
(a) for the Company's then current bank account(s) to be closed;
(b) for all funds if any, from said bank account to be transferred into
a bank account to be selected by the Buyer.
5.8 Supplemental Information.
(a) After the date hereof, and from time to time prior to the Closing
Date, the Seller and the Company will promptly disclose in writing to the Buyer
any matter hereafter arising which, if existing, occurring or known at the date
of this Agreement would have been required to be disclosed to the Buyer or which
would render inaccurate any of the representations, warranties or statements set
forth herein.
(b) After the date hereof, and prior to the Closing Date, the Buyer
will promptly disclose in writing to the Seller any matter hereafter arising
which, if existing, occurring or known at the date of this Agreement would have
been required to be disclosed to the Seller or which would render inaccurate any
of the representations, warranties or statements set forth in Article IV hereof.
(c) No information provided to a Party pursuant to this Section shall
be deemed to cure any breach of any representation, warranty or covenant made in
this Agreement or the Related Agreements.
5.9 Non-competition. Not applicable.
5.10 Exclusivity.
(a) Neither the Seller, nor the Company, nor any of their respective
directors, officers, employees, representatives, agents or Affiliates shall,
directly or indirectly, solicit, initiate, encourage, respond favorably to,
permit or condone inquiries or proposals from, or provide any Confidential
Information to, or participate in any discussions or negotiations with, any
Person (other than the Buyer, and the respective directors, officers, employees,
representatives and agents) concerning:
(i) any merger, sale of assets not in the ordinary course of
business, acquisition, business combination, change of control or other
similar transaction involving the Company, or
(ii) any purchase or other acquisition by any Person of the
Shares, or
(iii) any sale, or issuance by the Company of any shares of
its Securities.
Page 24
(b) The Seller will promptly advise the Buyer of, and communicate to
the Buyer, the terms and conditions of (and the identity of the Person making),
any such inquiry or proposal received.
5.11 Use of Name.
From and after the Closing Date, neither the Seller nor any of its
Affiliates will directly or indirectly use in any manner any trade name,
trademark, service xxxx or logo used by the Company or any word or logo that is
similar in sound or appearance other than in the ordinary course of the business
of the Company.
5.12 Tax Indemnity.
The Seller agrees to indemnify the Buyer against, and agree to hold it
harmless from, any and all liabilities for Taxes that have become due and
payable or which have accrued with respect to the Company that have not been
paid prior to the Closing Date or which have not been reserved on the Financial
Statements. (Any Taxes attributable to the operations of the Company payable as
a result of an audit of any Tax Return shall be deemed to have accrued in the
period to which such Taxes are attributable.)
5.13 Termination of Certain Agreements.
The Seller shall, and the Seller agree that it shall cause its
Affiliates and the Company to, and that its Affiliates and the Company shall,
effective as of the Closing Date, without any cost to the Company, terminate,
rescind, cancel and render void and of no effect all of the Contracts between
the Company, on the one hand, and the Seller or any of its Affiliates, as the
case may be (other than the Company), on the other hand, except for those
Contracts entered into pursuant to this Agreement.
5.14 Sellers not to Inhibit.
Neither the Seller nor the Company will take any action (nor omit to
take any action) which would adversely affect the ability of the Seller to sell
and convey the Shares to the Buyer or adversely affect the business or business
prospects of the Company.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER
The obligations of the Buyer under Article II of this Agreement are
subject to the satisfaction or waiver by the Buyer of the following conditions
precedent on or before the Closing Date unless otherwise specified:
6.1 Warranties True as of Both Present Date and Closing Date.
The representations and warranties of the Seller and the Company
contained herein shall have been accurate, true and correct on and as of the
date of this Agreement, and shall also be
Page 25
accurate, true and correct on and as at the Closing Date with the same force and
effect as though made by the Sellers and the Company on the Closing Date.
6.2 Compliance with Agreements and Covenants.
The Seller and the Company shall have performed and complied with all
of their respective covenants, obligations and agreements contained in this
Agreement to be performed by them and complied therewith, on or prior to the
Closing Date.
6.3 Consents and Approvals.
The Buyer shall have received written evidence satisfactory to the
Buyer that all consents and approvals required for the consummation of the
transactions contemplated hereby or the ownership and operation by the Buyer of
the Company and its business have been obtained, and all required filings have
been made, including those set forth on Exhibit 3.3.
6.4 Expiration of HSR Waiting Period (if any). Not applicable.
6.5 Documents.
The Buyer shall have received all of the agreements, documents and
items specified in Section 8.2.
6.6 Delivery of Exhibits.
All exhibits respecting the Company and/or the Seller or either of them
have been, or shall be, delivered to Buyer in final form prior to, or concurrent
with, the Closing Date and no such exhibit shall contain or reflect a Company
Adverse Change or Effect from the last previous draft of such exhibit or, if
none, the last oral discussion or written memorandum respecting such exhibit or
schedule.
6.7 No Adverse Change.
No Company Adverse Change or Effect shall have occurred, and no event
shall have occurred which, in the reasonable judgment of the Buyer, is likely to
have a Company Adverse Change or Effect.
6.8 Actions or Proceedings.
No action or proceeding by any Governmental Authority or other Person
shall have been instituted or threatened which:
(a) might have a Company Adverse Effect or Change, or
(b) could enjoin, restrain or prohibit, or could result in substantial
damages in respect of, any provision of this Agreement or any of the Related
Agreements or the consummation of the transactions contemplated hereby or
thereby or any integration of any operations of the Company with those of the
Buyer and its Affiliates.
Page 26
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER
The obligations of Seller under Article II of this Agreement are
subject to the satisfaction or waiver by the Seller of the following conditions
precedent on or before the Closing Date:
7.1 Warranties True as of Both Present Date and Closing Date.
The representations and warranties of the Buyer contained herein shall
have been accurate, true and correct on and as of the date of this Agreement,
and shall also be accurate, true and correct on and as at the Closing Date with
the same force and effect as though made by the Buyer on the Closing Date.
7.2 Compliance with Agreements and Covenants.
The Buyer shall have performed and complied with all of its respective
covenants, obligations and agreements contained in this Agreement to be
performed and complied with by it on or prior to the Closing Date.
7.3 Expiration of HSR Waiting Period (if any). Not applicable.
7.4 Documents.
The Sellers shall have received all of the agreements, documents and
items specified herein.
7.5 Actions or Proceedings.
No action or proceeding by any Governmental Authority or other Person
shall have been instituted or threatened which could enjoin, restrain or
prohibit, or could result in substantial damages in respect of, any provision of
this Agreement or any of the Related Agreements or the consummation of the
transactions contemplated hereby or thereby or any integration of any operations
of the Company with those of the Buyer and its Affiliates.
Page 27
7.6 Consents and Approvals.
The Sellers shall have received written evidence satisfactory to the
Sellers that all consents and approvals required for the consummation of the
transactions contemplated hereby have been obtained, and all required filings
have been made.
ARTICLE VIII
THE CLOSING
8.1 The Closing.
(a) The Closing shall be scheduled to occur at the offices of Thomson
Kernaghan & Co. Limited, 16th Floor, 000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
on: (i) January 8, 2002, or (ii) on such later date as the Parties hereto shall
mutually agree.
(b) The Closing, and all transactions to occur at the Closing, shall be
deemed to have taken place at, and shall be effective as of, the close of
business on the Closing Date.
8.2 Deliveries by the Seller.
At the Closing, in addition to any other documents or agreements
required under this Agreement, the Seller shall deliver to the Buyer the
following:
(a) Certificates evidencing all of the Shares, which certificates shall
be duly endorsed in blank or accompanied by stock powers executed in blank, with
all signatures medallion guaranteed and with all necessary transfer taxes and
other revenue stamps affixed and acquired at the Seller's expense, together with
such other duly executed instruments or documents as may be reasonably requested
by the Buyer in order to consummate the transactions contemplated by this
Agreement.
(b) The written resignations of the persons listed in Exhibit 8.2(b) as
directors and officers of the Company and the termination of any and all
management and consulting agreements;
(c) Evidence, in form satisfactory to the Buyer, that all consents and
approvals referred to herein have been obtained;
(d) The Certificates of Incorporation or similar instruments of the
Company certified by the Secretary of State or equivalent Person of the
jurisdiction of incorporation of the Company, and Bylaws or similar instruments
of the Company, certified by the Secretary of the Company;
(e) Certificates of Good Standing for the Company from the State of
Nevada;
Page 28
8.3 Deliveries by the Buyer.
At the Closing, the Buyer shall deliver to the Sellers the following:
(a) the Purchase Price Balance; and
(b) Evidence, in form satisfactory to the Seller, that all consents and
approvals required herein to be obtained by the Buyer have been obtained.
ARTICLE IX
TERMINATION
9.1 Termination.
This Agreement may be terminated at any time on or prior to the Closing
Date:
(a) By the mutual consent of the Seller and the Buyer;
(b) By the Seller or the Buyer, if the Closing shall not have taken
place on or before January 15, 2002; provided however, that the right to
terminate this Agreement under this Section 9.1(b) shall not be available to any
Party whose willful failure to fulfill any obligation under this Agreement has
been the cause of or resulted in the failure of the Closing to occur on or
before such date;
(c) By the Buyer, if there shall have been a breach of any covenant,
representation or warranty or other agreement of any Seller or of the Company
hereunder, and such breach shall not have been remedied within ten Business Days
after receipt by the Sellers of a notice in writing from the Buyer specifying
the breach and requesting such be remedied; or
(d) By any Seller, if there shall have been a breach of any covenant,
representation or warranty or other agreement of the Buyer hereunder, and such
breach shall not have been remedied within ten Business Days after receipt by
the Buyer of notice in writing from the Sellers specifying the breach and
requesting such be remedied.
9.2 Effect of Termination.
If this Agreement is terminated pursuant to Section 9.1, all
obligations of the Parties hereunder shall terminate, except for the obligations
set forth in Sections 5.2(b) and (c), 11.1, 11.11 and 11.12, which shall survive
the termination of this Agreement, and except that no such termination shall
relieve any party from liability for any prior willful breach of this Agreement.
Page 29
ARTICLE X
INDEMNIFICATION
10.1 Survival.
Except as otherwise specified, the representations and warranties of
the Seller contained herein shall survive the Closing for a period expiring at
the close of business on the date that is one year after the Closing Date (the
"Survival Date") except that:
(a) Tax Warranties shall survive until the Tax Statute of Limitations
Date; and
(b) Title and Authorization Warranties shall survive forever.
10.2 Indemnification by Seller.
The Seller agrees to indemnify the Buyer against, and agrees to hold
Buyer harmless from, any and all Losses or claims incurred or suffered by it
relating to or arising out of or in connection with any of the following
(collectively, "Claims"):
(a) any misrepresentation, breach of warranty, or any inaccuracy in any
representation or warranty made by any Seller or the Company in this Agreement
or in any document, certificate, or affidavit delivered by any Seller or the
Company pursuant to the provisions of this Agreement; or
(b) any breach of or failure by any Seller or the Company to perform
any covenant or obligation of such party set out or contemplated in this
Agreement or any Related Agreement or any document delivered at the Closing; or
(c) any liability, obligation, or commitment of any nature (absolute,
accrued, contingent, or other) to any Person, including the Buyer,
(i) of the Company; or
(ii) of the Seller, insofar as it effects its rights and
duties with respect to its ownership of, and the sale and conveyance of
the Shares, or with respect to the operation of the business of the
Company;
(d) any Environmental Expenses, any Environmental claims, any
Environmental Conditions, or any violation of Environmental Requirements; or
10.3 Claims.
(a) The provisions of this Section 10.3 shall be subject to Section
10.4.
(b) Promptly(and in any event within 5 days after the service of any
citation or summons) after becoming aware of a claim for indemnification under
this Agreement, the Indemnified Person shall give notice to the Indemnifying
Person of such claim provided that the
Page 30
failure of the Indemnified Person to promptly give notice shall not relieve the
Indemnifying Person of its obligations except to the extent (if any) that the
Indemnifying Person shall have been prejudiced thereby.
(c) If the Indemnifying Person does not object in writing to such claim
within twenty (20) days of receiving notice thereof, the Indemnified Person
shall be entitled to recover, on the 25th day after such notice was given, from
the Indemnifying Person the full amount of such claim, and any objection
thereafter by the Indemnifying Person shall be deemed waived and shall not be
permitted.
(d) If the Indemnifying Person agrees that he, she or it has an
indemnification obligation but states that he, she or it is obligated to pay
only a lesser amount, the Indemnified Person shall nevertheless be entitled to
recover, on the 25th day after such notice was given, from the Indemnifying
Person the lesser amount, without prejudice to the Indemnified Person's claim
for the difference.
(e) In addition to the amounts recoverable by the Indemnified Person
from the Indemnifying Person pursuant to the foregoing provisions, the
Indemnified Person shall also be entitled to recover from the Indemnifying
Person interest on such amounts at the rate of Two Times Prime from, and
including, the 25th day after such notice of an indemnification claim is given
to, but not including, the date such recovery is actually made by the
Indemnified Person.
10.4 Notice of Third-Party Claims; Assumption of Defense.
(a) Promptly (and in any event within five (5) days after the service
of any citation or summons) after becoming aware of any claim or the
commencement of any suit, action or proceeding made or brought by any Person not
a party hereto, in respect of which indemnity may be sought under this
Agreement, the Indemnified Party shall give notice thereof to the Indemnifying
Party; provided, however, that the failure of the Indemnified Person to promptly
give notice shall not relieve the Indemnifying Person of its obligations except
to the extent (if any) that the Indemnifying Person shall have been prejudiced
thereby.
(b) The Indemnifying Person may, at its own expense,
(i) participate in the defense of any claim, suit, action or
proceeding, and
(ii) upon notice to the Indemnified Person and the delivery by
the Indemnifying Person to the Indemnified Person of a written
agreement that the Indemnified Person is entitled to indemnification
for all Losses arising out of such claim, suit, action or proceeding
and that the Indemnifying Person shall be liable for the entire amount
of any Loss, at any time during the course of any such claim, suit,
action or proceeding, assume the defense thereof, provided that:
(iii) the Indemnifying Person's counsel is reasonably
satisfactory to the Indemnified Person; and
Page 31
(iv) the Indemnifying Person shall thereafter consult with the
Indemnified Person upon the Indemnified Person's reasonable request for
such consultation from time to time with respect to such claim, suit,
action or proceeding.
(c) If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Person.
(d) If, however, the Indemnified Person reasonably determines in its
judgment that representation by the Indemnifying Person's counsel of both the
Indemnifying Person and the Indemnified Person would present such counsel with a
conflict of interest, then such Indemnified Person may employ separate counsel
to represent or defend it in any such claim, action, suit or proceeding, and the
Indemnifying Person shall pay the fees and disbursements of such separate
counsel.
(e) Whether or not the Indemnifying Person chooses to defend or
prosecute any such claim, suit, action or proceeding, all of the Parties hereto
shall cooperate in the defense or prosecution thereof.
10.5 Settlement or Compromise.
(a) Any settlement or compromise made or caused to be made by the
Indemnified Person or the Indemnifying Person, as the case may be, of any claim,
suit, action or proceeding shall also be binding upon the Indemnifying Person or
the Indemnified Person, as the case may be, in the same manner as if a final
judgment or decree had been entered by a court of competent jurisdiction in the
amount of such settlement or compromise; provided, however, that no obligation,
restriction, or Loss shall be imposed on the Indemnified Person as a result of
such settlement without its prior written consent.
(b) The Indemnified Person will give the Indemnifying Person at least
ten (10) days notice of any proposed settlement or compromise of any claim,
suit, action or proceeding it is defending, during which time the Indemnifying
Person may reject such proposed settlement or compromise; provided, however,
that from and after such rejection, the Indemnifying Person shall be obligated
to assume the defense of and full and complete liability and responsibility for
such claim, suit, action or proceeding and any and all Losses in connection
therewith in excess of the amount of un-indemnifiable Losses which the
Indemnified Person would have been obligated to pay under the proposed
settlement or compromise.
Page 32
10.6 Failure of Indemnifying Person to Act.
In the event that the Indemnifying Person does not elect to assume the
defense of any claim, suit, action or proceeding, then any failure of the
Indemnified Person to defend or to participate in the defense of any such claim,
suit, action or proceeding or to cause the same to be done, shall not relieve
the Indemnifying Person of its obligations hereunder.
10.7 Claims Against Escrow. Not applicable.
ARTICLE XI
MISCELLANEOUS
11.1 Expenses.
(a) The Seller shall pay all expenses of the Seller and the Company
(including attorneys' fees and expenses), and the Buyer shall pay all expenses
of the Buyer (including attorneys' fees and expenses), in each case incurred in
connection with this Agreement and the transactions contemplated hereby.
(b) The Seller shall pay all sales, use, stamp, transfer, service,
recording, real estate and like taxes or fees, if any, imposed by any
Governmental Authority in connection with the transfer and assignment of the
Shares.
11.2 Amendment.
This Agreement may be amended, modified or supplemented but only in
writing signed by each of the Parties hereto.
11.3 Notices.
(a) Any notice, request, instruction or other document required by the
terms of this Agreement to be given to any other Party hereto shall be in
writing and shall be given either
(i) by telephonic facsimile, in which case notice shall be
presumptively deemed to have been given at the date and time displayed
on the sender's transmission confirmation receipt showing the
successful receipt thereof by the recipient;
(ii) by hand delivery or Federal Express or other method in
which the date of delivery is recorded by the delivery service, in
which case notice shall be presumptively deemed to have been given at
the time that records of the delivery service indicate the writing was
delivered to the addressee;
(iii) by prepaid telegram, in which case notice shall be
presumptively deemed to have been given at the time that the records of
the telegraphic agency indicate that the telegram was telephoned or
delivered to the recipient or addressee, as the case may be; or
Page 33
(iv) by U.S. mail to be sent by registered or certified mail,
postage prepaid, with return receipt requested, in which case notice
shall be presumptively deemed to have been given forty-eight (48) hours
after the letter was deposited with the United States Postal Service.
(b) Notice shall be sent:
(i) If to the Seller, to:
First Capital Partners, MM, Inc.
0000 X. Xxxxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Tel: (000)-000-0000
Facsimile Telephone Number: (000) 000-0000
(ii) If to the Company, to:
Xxxxxx Tree Construction
0000 X. Xxxxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Telephone Number: (000) 000-0000
Facsimile Telephone Number: (000)000-0000
(iii) If to the Buyer, to:
Canadian Advantage Limited Partnership
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxx Xxxxxxx
Fax No. (000) 000-0000
(iv) or to such other address as a Party may have specified in
writing to the other Parties using the procedures specified above in
this Section.
11.4 Effect of Investigation.
(a) Any due diligence review, audit or other investigation or inquiry
undertaken or performed by or on behalf of the Buyer shall not limit, qualify,
modify or amend the representations, warranties or covenants of, or indemnities
by, the Sellers or the Company made or undertaken pursuant to this Agreement,
irrespective of the knowledge and information received (or which should have
been received) therefrom by the Buyer.
(b) Any due diligence review, audit or other investigation or inquiry
undertaken or performed by or on behalf of the Sellers or the Company shall not
limit, qualify, modify or amend the representations, warranties and covenants
of, or indemnities by, the Buyer made or
Page 34
undertaken pursuant to this Agreement, irrespective of the knowledge and
information received (or which should have been received) therefrom by the
Sellers or the Company.
11.5 Waivers.
(a) The failure of a Party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same.
(b) No waiver by a Party of any condition or of any breach of any term,
covenant, representation or warranty contained in this Agreement shall be
effective unless in writing, and no waiver in any one or more instances shall be
deemed to be a further or continuing waiver of any such condition or breach in
other instances or a waiver of any other condition or breach of any other term,
covenant, representation or warranty.
11.6 Counterparts.
This Agreement may be executed in one or more counterparts, and by
different Parties hereto in separate counterparts, each of which when so
executed shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.7 Interpretation.
(a) The headings preceding the text of Articles and Sections included
in this Agreement and the headings to Exhibits attached to this Agreement are
for convenience only and shall not be deemed part of this Agreement or be given
any effect in interpreting this Agreement.
(b) The use of the masculine, feminine or neuter gender herein shall
not limit any provision of this Agreement. The use of the terms "including" or
"include" shall in all cases herein mean "including, without limitation" or
"include, without limitation", respectively.
(c) Underscored references to Articles, Sections, Subsections or
Exhibits shall refer to those portions of this Agreement.
(d) Consummation of the transactions contemplated herein shall not be
deemed a waiver of a breach of or inaccuracy in any representation, warranty or
covenant or of any party's rights and remedies with regard thereto.
(e) No specific representation, warranty or covenant contained herein
shall limit the generality or applicability of a more general representation,
warranty or covenant contained herein.
(f) A breach of or inaccuracy in any representation, warranty or
covenant shall not be affected by the fact that any more general or less general
representation, warranty or covenant was not also breached or inaccurate.
Page 35
11.8 Assignment.
(a) This Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their respective estates, heirs, legal representatives,
successors and assigns.
(b) No assignment of any rights or obligations hereunder may be made by
any Seller or by the Company without the prior written consent of the Buyer.
(c) The Buyer may freely assign its rights and obligations hereunder
without the consent of the Sellers or of the Company, and upon such assignment,
the rights and obligations of the Buyer under this Agreement shall be binding
upon and inure to the benefit of the Buyer's Assignee or its Successor in
interest, as the case may be.
11.9 No Third-Party Beneficiaries.
This Agreement is solely for the benefit of the Parties hereto and, to
the extent provided herein, their respective estates, heirs, successors,
Affiliates, directors, officers, employees, agents and representatives, and no
provision of this Agreement shall be deemed to confer upon other third parties
any remedy, claim, liability, reimbursement, cause of action or other right.
11.10 Publicity.
Prior to the Closing Date, except as required by Law or the rules of
any stock exchange, no public announcement or other publicity regarding the
transactions referred to herein shall be made by the Buyer, the Seller, the
Company or any of their respective Affiliates, officers, directors, employees,
representatives or agents, without the prior written agreement of the Buyer and
the Seller, in any case, as to form, content, timing and manner of distribution
or publication; provided, however, that nothing in this Section shall prevent
such parties from discussing such transactions with those Persons whose
approval, agreement or opinion, as the case may be, is required for consummation
of such particular transaction or transactions.
11.11 Liquidated Damages. See Paragraph 2.1(e).
11.12 Further Assurances.
Upon the reasonable request of the Buyer, the Seller will on and after
the Closing Date execute and deliver to the Buyer such other documents,
releases, assignments and other instruments as may be required to effectuate
completely the transfer and assignment to the Buyer of, and to vest fully in the
Buyer title to, the Shares, and to otherwise carry out the purposes of this
Agreement.
11.13 Severability.
If any provision of this Agreement shall be held invalid, illegal or
unenforceable, the validity, legality or enforce ability of the other provisions
hereof shall not be affected thereby, and there shall be deemed substituted for
the provision at issue a valid, legal and enforceable provision as similar as
possible to the provision at issue.
Page 36
11.14 Remedies Cumulative.
Unless otherwise specified, the remedies provided in this, Agreement
shall be cumulative and shall not preclude the assertion or exercise of any
other rights or remedies available by law, in equity or otherwise.
11.15 Entire Understanding.
This Agreement sets forth the entire agreement and understanding of the
Parties hereto and supersede any and all prior agreements, arrangements and
understandings among the Parties.
11.16 Intentionally Deleted.
11.17 Applicable Law; Resolution of Disputes; Venue.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Nevada, County of Xxxxx; The courts of the State of
Nevada, County of Xxxxx shall have exclusive jurisdiction to hear, adjudicate,
decide, determine and enter final judgment in any action, suit, proceeding,
case, controversy or dispute, whether at law or in equity or both, and whether
in contract or tort or both, arising out of or related to this Agreement or any
other Transaction Document, or the construction or enforcement hereof or thereof
(any such action, suit, proceeding, case, controversy or dispute, a "Related
Action"). The Company and each Organizer, Shareholder and Investor hereby
irrevocably consent and submit to the exclusive personal jurisdiction of the
Courts of the State of Nevada, County of Xxxxx to hear, adjudicate, decide,
determine and enter final judgment in any Related Action. The Company and each
Organizer, Shareholder and Investor hereby irrevocably waive and agree not to
assert any right or claim that it is not personally subject to the jurisdiction
of the courts of the State of Nevada, County of Xxxxx, in any Related Action,
including any claim of forum non conveniens, or that the courts of the State of
Nevada, County of Xxxxx is not the proper venue or form to adjudicate any
Related Action. If any Related Action is brought or maintained in any court
other than the courts of the State of Nevada, County of Xxxxx, then that court
shall, at the request of any party, dismiss that action.
Page 37
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
THE SELLER:
FIRST CAPITAL PARTNERS, MM, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx, President,
THE COMPANY:
XXXXXX TREE CONSTRUCTION, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx, President
THE BUYER:
CANADIAN ADVANTAGE LIMITED PARTNERSHIP
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------------
VMH Management, Ltd., General Partner
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------------
Xxxx X. Xxxxxxxxx, President
EXHIBITS BEGIN ON THE FOLLOWING PAGE
Page 38
EXHIBIT 3.3
CONTRACTS
None.
EXHIBIT 3.6
LIABILITIES, DEBTS, CLAIMS OR OBLIGATIONS
None.
EXHIBIT 3.8
ENCUMBERED TANGIBLE AND INTANGIBLE ASSETS,
PROPERTIES AND RIGHTS
None.
EXHIBIT 3.12
INVENTORY
None.
EXHIBIT 3.14
TRADEMARKS, TRADE NAMES,
SERVICE MARKS, PATENTS AND COPYRIGHTS
1. The entity name, "Xxxxxx Tree Construction, Inc." duly registered with the
Secretary State of Nevada.
Page 39
EXHIBIT 3.15
PENDING CONTRACTS OR AGREEMENTS
None.
EXHIBIT 3.16
LICENSES, CERTIFICATES, PERMITS, FRANCHISES, RIGHTS, CODE APPROVALS
AND PRIVATE PRODUCT APPROVALS
LICENSEE NAME: XXXXXX TREE CONSTRUCTION INC
ADDRESS: 0000 XXXXXX XXXXXX XXXXXX XXX XXXXX, XX 00000
PHONE: (000) 000-0000
LICENSE STATUS: ACTIVE
STATUS DATE: 03/29/2001
STATUS REASON: LICENSE
ORIGIN DATE: 03/29/2001
LICENSE EXPIRE DATE: 03/31/2002
BUSINESS TYPE: CORPORATION
LIMIT AMOUNT: $100,000.00
LICENSE CLASS: B - GENERAL BUILDING
SUBCLASSES: 2 - RESIDENTIAL & SMALL COMMERCIAL
BOND TYPE: SURETY BOND
BOND NUMBER: PM011075209
BOND AGENT: XXXXXXXXX, XXXXXXXX X.
XXXX COMPANY: PEERLESS INSURANCE COMPANY
BOND AMOUNT: $10,000.00
EFFECTIVE DATE: 3/28/2001
CANCELLATION DATE: N/A
PRINCIPALS: XXXXXX, XXXXX XXXXXXX
XXXXXXX, XXXX XXX
XXXX XX, XXXXX R
/ PRESIDENT / QUAL EMPLOYEE / OTHER
Page 40
EXHIBIT 3.17
POLICIES OF FIRE, LIABILITY, WORKERS' COMPENSATION, TITLE AND OTHER
FORMS OF INSURANCE OWNED, HELD BY OR APPLICABLE TO THE COMPANY (OR
ITS ASSETS OR BUSINESS)
None.
EXHIBIT 3.17(a)
WORKERS' COMPENSATION, GENERAL LIABILITY, PROPERTY OR OTHER
INSURANCE POLICY CLAIMS
None.
EXHIBIT 3.21
ENVIRONMENTAL MATTERS
None.
EXHIBIT 3.22
LITIGATION
None.
Page 41
SCHEDULE 3.4
ISSUANCES OF SECURITIES
The Company's capitalization history is as follows:
1. On July 26, 1999, two founding shareholders purchased 2,000,000 shares of the
authorized common stock at par value for cash, or $2,000.00. This original stock
offering was made according to Section 4(2) of the Securities Act of 1933, as
amended.
2. In February of 2000, the Company completed an offering of 997,301 shares of
its common stock to approximately 54 unaffiliated shareholders at a price of
$0.05 per share for gross total receipts of $49,865.00. This offering was made
in reliance upon an exemption from the registration provisions of the Securities
Act of 1933, as amended, in accordance with Regulation D, Rule 504 of the Act.
3. During July 2000, the Company entered into an management agreement with Xxxx
Xxxxxxx, a shareholder and director, whereby the Company issued 100,000 shares
of its $0.001 par value common stock valued at $5,000. Of the total, $100 is
considered common stock and $4,900 is considered additional paid-in capital. The
$5,000 has been appropriately expensed as consulting fees.
4. On November 6, 2001, the Company issued to Xxxxxxxxx Xxxxx, 25,000 restricted
shares of Common Stock as an equity kicker in conjunction with a loan made by
Xx. Xxxxx to the Company for the principal sum of $50,000.00 as reflected in a
promissory executed by the Company on March 20, 2001.
5. On November 28, 2001, the Company effected a one-for-ten reverse split of its
common stock, as a result of which the Company has 312,230 shares of common
stock issued and outstanding.
SCHEDULE 3.24
BANK ACCOUNTS
Page 42
