EXHIBIT 10.1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT ("AGREEMENT") is entered into as of this 2nd
day of September 2011, by and among DATAMILL MEDIA CORP , a Nevada corporation
having an address at 0000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx Xxxxx, Xxxxxxx
00000 ("Company") and YOUNG AVIATION, LLC , a Florida limited liability company
having an address at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000
("Young"), and the persons executing this Agreement listed on the signature page
hereto under the heading "Young Aviation Members " (referred to as the "Young
Members"), each a "Party" and collectively the "Parties," upon the following
premises:
RECITALS
WHEREAS, the Young Members own between 82,500,000 and 87,500,000 of Young's
member's interests ("Units");
WHEREAS, the Company is a fully reporting, publicly-held corporation
organized under the laws of the State of Nevada whose common stock ("Common
Stock") is quoted on the OTC Market under the symbol "SPLI";
WHEREAS, Young is a privately held limited liability company organized
under the laws of the State of Florida;
WHEREAS, the Company desires to acquire 100% of the issued and outstanding
Units of Young in exchange for unissued shares of the Company's Common Stock ,
so that Young will become a wholly-owned subsidiary of the Company;
WHEREAS, a majority of the Young Members ("Majority Members") desire to
exchange all of their Units in Young for authorized, but unissued, shares of
Common Stock of the Company; and
WHEREAS, the Majority Members believe that all of the Young Members will
desire to exchange all of their Units in Young for shares of authorized, but
unissued, shares of Common Stock of the Company, once they are advised of the
proposed exchange offer and receive adequate disclosure from the Company and
management of Young, and the Majority Members believe they can convince the
other Young Members to join in this Agreement.
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
YOUNG AND THE YOUNG MEMBERS
As an inducement to and to obtain the reliance of the Company, except as
set forth on the Young Schedules (as hereinafter defined, which shall contain
any exceptions or qualifications to the representations and warranties as set
forth below), Young and the Young Members represent and warrant as follows:
Section 1.01 ORGANIZATION. Young is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Florida. Young has the company power and is duly authorized and qualified under
all applicable laws and regulations to own all of its properties and assets and
to carry on its business in all material respects as it is now being conducted,
including qualifications to do business as a foreign corporation in the states
in which the character and location of the assets owned by it or the nature of
the business transacted by it requires qualification, except where failure to be
so qualified would not have a material adverse effect on its business. Included
in the Young Schedules (as defined in Section 1.17 hereof) are complete and
correct copies of the Articles of Organization and Operating Agreement of Young
as in effect on the date hereof. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby, will not
violate any provision of Young's Articles of Organization or Operating
Agreement. Young has taken all actions required by law, its Articles of
Organization and Operating Agreement, or otherwise, to authorize the execution
and delivery of this Agreement. Young has full power, authority and legal right
and has taken all action required by law, its Articles of Organization
and Operating Agreement and otherwise to consummate the transactions herein
contemplated, subject to the approval of the Young Members.
Section 1.02 CAPITALIZATION.
(a) The authorized capitalization of Young consists of 100,000,000 Units of
which 82,500,000 Units are currently issued and outstanding.
(b) All issued and outstanding Units of Young are legally issued, fully paid
and non-assessable and were not issued in violation of the preemptive or
other rights of any person or in violation of federal and/or state
securities laws, rules or regulations.
(c) Young does not have over 35 non-accredited investors among its members.
Section 1.03 SUBSIDIARIES AND PREDECESSOR COMPANIES. Young does not have
any predecessor company or any subsidiary.
Section 1.04 OTHER INFORMATION.
(a) Young has no liabilities with respect to the payment of any federal state,
county, local or other taxes (including any deficiencies, interest or
penalties), except for taxes accrued, but not yet due and payable, or as
provided in the Young Schedules.
(b) Young has filed all federal state or local income and/or franchise tax
returns required to be filed by it from inception to the date hereof. Each
of such income and/or tax returns reflects the taxes due for the period
covered thereby.
(c) The books and records of Young are in all material respects complete and
correct and have been maintained in accordance with good business and
accounting practices.
(d) Young has no material liabilities or accounts payable, direct or indirect,
matured or unmatured, contingent or otherwise, except as disclosed in
writing to the Company on the Young Schedules..
Section 1.05 INFORMATION. The information concerning Young set forth in
this Agreement and in the Young Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 1.06 OPTIONS, WARRANTS, CONVERTIBLE SECURITIES. There are no
existing options, warrants, calls, convertible securities or commitments of any
character relating to the authorized and unissued Units of Young.
Section 1.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
this Agreement or the Young Schedules, since July 31, 2011:
(a) There has not been (i) any material adverse change in the proposed
business, operations, properties, assets or condition of Young or (ii) any
damage, destruction, or loss to Young (whether or not covered by insurance)
materially and adversely affecting the business or financial condition of
the Young;
(b) Young has not (i) amended its Articles of Organization or Operating
Agreement; (ii) declared or made, or agreed to declare or make, any payment
of dividends or distributions of any assets of any kind whatsoever to
members or purchased or redeemed, or agreed to purchase or redeem, any of
its Units; (iii) waived any rights of value which in the aggregate are
outside of the ordinary course of business or material considering the
business of Young; (iv) made any material change in its method of
management, operation or accounting; (v) entered into any other material
transaction other than sales in the ordinary course of its business; (vi)
made any accrual or arrangement for payment of bonuses or special
compensation of any kind or any severance or termination pay to any present
or former officer, director or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers,
directors or any of its salaried employees whose monthly compensation
exceeds Three Thousand Dollars ($3,000); (viii) made any increase in any
profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made
to, for, or with its officers, directors, managers or employees; or (ix)
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sold or agreed to sell any Units to any person, save and except the offers
and sales of Units in Young's current Private Placement Memorandum.
(c) Young has not (i) borrowed or agreed to borrow any funds or incurred, or
become subject to, any material obligation or liability (absolute or
contingent) except as disclosed herein and except liabilities incurred in
the ordinary course of business; (ii) paid or agreed to pay any material
obligations or liability (absolute or contingent) other than current
liabilities, and current liabilities incurred in the ordinary course of
business and professional and other fees and expenses in connection with
the preparation of this Agreement and the consummation of the transactions
contemplated hereby; (iii) sold or transferred, or agreed to sell or
transfer, any of its assets, properties or rights (except assets,
properties, or rights not used or useful in its business which, in the
aggregate have a value of less than Five Thousand Dollars ($5,000), or
canceled, or agreed to cancel, any debts or claims (except debts or claims
which in the aggregate are of a value of less than One Thousand Dollars
($1,000); or (iv) made or permitted any amendment or termination of any
contract, agreement or license to which Young is a party if such amendment
or termination is material, considering the business of Young, otherwise
than in the ordinary course of business; and
(d) To the best knowledge of the Young Members and the Majority Members, Young
has not become subject to any law or regulation which materially and
adversely affects, or in the future may adversely affect, the business,
operations, properties, assets or condition of Young.
Section 1.08 YOUNG AND RELATED MATTERS. No third party has any right to,
and Young has not received any notice of infringement of or conflict with
asserted rights of others with respect to any product, technology, data, trade
secrets, know-how, proprietary assets or techniques, trademarks, service marks,
trade names or copyrights which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a materially
adverse effect on the proposed business, operations, financial condition, income
or business prospects of Young or any material portion of its properties,
assets, or rights.
Section 1.09 LITIGATION AND PROCEEDINGS. There are no actions, suits
or proceedings pending or threatened by or against Young or its properties, at
law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind. The
Majority Members do not have any knowledge of any material default with respect
to any judgment, order, injunction, decree, award, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default.
Section 1.10 CONTRACTS.
(a) There are no material contracts, agreements, franchises, license
agreements, debt instruments or other commitments to which Young is a party
or by which any of its assets, products, technology or properties are bound
other than those incurred in the ordinary course of business (as used in
this Agreement, a "material" contract, agreement, franchise, license
agreement, debt instrument or commitment is one which (i) will remain in
effect for more than three (3) months after the date of this Agreement and
(ii) involves aggregate obligations of at least Five Thousand Dollars
($5,000), unless otherwise disclosed pursuant to this Agreement);
(b) All contracts, agreements, franchises, license agreements, and other
commitments, if any, to which Young is a party and which are material to
the operations or proposed operations of Young taken as a whole are valid
and enforceable by Young in all material respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors, generally;
(c) Young is not a party to or bound by, and the properties of Young are not
subject to, any contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment, order, writ,
injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets or condition of Young; and
(d) Except as included or described in the Young Schedules, Young is not a
party to any oral or written (i) contract for the employment of any officer
or employee which is not terminable on thirty (30) days or less notice;
(ii) profit sharing, bonus, deferred compensation, stock option, severance
pay, pension benefit or retirement plan; (iii) agreement, contract or
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indenture relating to the borrowing of money; (iv) guaranty of any
obligation, other than one on which Young is a primary obligor, for the
borrowing of money or otherwise, excluding endorsements made for collection
and other guaranties of obligations which, in the aggregate do not exceed
more than one (1) year or providing for payments in excess of One Thousand
Dollars ($1,000) in the aggregate; (v) collective bargaining agreement; or
(vi) agreement with any present or former employee, member, officer,
manager or director of Young.
Section 1.11 MATERIAL CONTRACT DEFAULTS. Young is not in default in any
material respect under the terms of any outstanding material contract,
agreement, lease or other commitment which is material to the business,
operations, properties, assets or condition of Young, and there is no event of
default in any material respect under any such contract, agreement, lease or
other commitment in respect of which Young has not taken adequate steps to
prevent such a default from occurring.
Section 1.12 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust or other material contract,
agreement, or instrument to which Young is a party or to which any of its
properties or operations are subject as of the date of this Agreement and/or as
of the Closing Date.
Section 1.13 GOVERNMENTAL AUTHORIZATIONS. Except as set forth in the Young
Schedules, Young has all licenses, franchises, permits and other governmental
authorizations that are legally required to enable it to conduct its business in
all material respects as conducted on the date hereof. Except for compliance
with federal, provincial and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by Young, the Majority
Members and the Young Members of this Agreement and the consummation by Young
and the Young Members of the transactions contemplated hereby.
Section 1.14 COMPLIANCE WITH LAWS AND REGULATIONS. Except as set forth in
the Young Schedules, to the best of the knowledge of the Young Members and the
Majority Members, Young has complied with all applicable statutes and
regulations of any federal, provincial, state, or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets, or condition of
Young or except to the extent that noncompliance would not result in the
occurrence of any material liability for Young.
Section 1.15 APPROVAL OF AGREEMENT. The Directors or Managers of Young have
authorized the execution and delivery of this Agreement by Young and approved
this Agreement and the transactions contemplated hereby, and agree to recommend
to the Young Members that they execute this Agreement when it is presented to
them.
Section 1.16 MATERIAL TRANSACTIONS OR AFFILIATIONS. Set forth in the Young
Schedules is a description, if applicable, of every contract, agreement or
arrangement between Young and any predecessor and any person who was at the time
of such contract, agreement or arrangement an officer, director, or person
owning of record, or known by any Young Member to own beneficially, five percent
(5%) or more of the issued and outstanding Units of Young and which is to be
performed in whole or in part after the date hereof. There are no commitments by
Young, whether written or oral, to lend any funds, or to borrow any money from,
or enter into any other transaction with, any such affiliated person.
Section 1.17 THE YOUNG SCHEDULES. Young will deliver to the Company the
following schedules, if such schedules are applicable to the business of Young,
which are collectively referred to as the "Young Schedules" and which consist of
separate schedules dated as of the date of execution of this Agreement, all
certified by the principal executive officer of Young as complete, true and
correct as of the date of this Agreement in all material respects, which
schedules shall be delivered within five days following the execution of this
Agreement:
(a) a schedule containing complete and correct copies of the Articles of
Organization, Operating Agreement and amendments thereto in effect as of
the date of this Agreement;
(b) a schedule containing any Corporate Resolutions of the Members of Young;
(c) a schedule containing Minutes of meetings of the Board of Directors or
Board of Managers of Young;
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(d) a schedule containing a list indicating the name and address of each Member
of Young together with the number of Units owned by him, her or it;
(e) a schedule listing any and all federal, provincial, state and local tax
identification numbers of Young and containing complete and correct copies
of all federal, provincial, state and local tax returns filed by Young;
(f) a schedule setting forth any other information, together with any required
copies of documents, required to be disclosed by Young. Any fact known to
be, or to the best knowledge of the Young Members and the Majority Members
or after reasonable investigation, reasonably believed to be, contrary to
any of the representations, covenants, and warranties made in Article I are
required to be disclosed in the Young Schedules pursuant to this Section
1.17(f); and
(g) a schedule of any and all limitations or qualifications or exceptions to
the representations, covenants and warranties of Young and the Young
Members and Majority Members contained in Article 1 of this Agreement, if
any.
The Majority Members shall cause the Young Schedules and the instruments
and data delivered to the Company hereunder to be promptly updated after the
date hereof up to and including the Closing Date.
Section 1.18 VALID OBLIGATION. This Agreement and all agreements and other
documents executed by Young and Young Members in connection herewith constitute
the valid and binding obligation of the Young and Young Members, enforceable in
accordance with its or their terms, except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought.
Section 1.19 ACQUISITION OF THE COMPANY SHARES BY THE YOUNG MEMBERS. The
Young Members are acquiring the Shares (as defined in Section 3.01) for their
own account without the participation of any other person and with the intent of
holding the Shares for investment and without the intent of participating,
directly or indirectly, in a distribution of the Shares, or any portion thereof,
and not with a view to, or for resale in connection with, any distribution of
the Shares, or any portion thereof. The Young Members have read, understood and
consulted with their legal counsel regarding the limitations and requirements of
Section 5 of the Securities Act of 1933, as amended ("1933 Act"). The Young
Members will offer, sell, pledge, convey or otherwise transfer the Shares, or
any portion thereof, only if: (i) pursuant to an effective registration
statement under the 1933 Act and any and all applicable state securities or Blue
Sky laws or in a transaction which is otherwise in compliance with the 1933 Act
and such laws; or (ii) pursuant to a valid exemption from registration.
Section 1.20 EXEMPTION FROM REGISTRATION. The transactions contemplated
hereby meet an exemption from registration pursuant to Section 4(2) of the 1933
Act or Rule 506 of Regulation D promulgated under the 1933 Act.
Section 1.21. REPRESENTATIONS, ACKNOWLEDGEMENTS AND WARRANTIES OF THE YOUNG
MEMBERS. The Young Members represent, acknowledge and warrant the following to
the Company, except as set forth on the Young Schedules, which shall contain any
exceptions or qualifications to the representations and warranties are set forth
below and agree that such representations, acknowledgements and warranties shall
be automatically reconfirmed on the Closing Date:
(a) Each Young Member recognizes that the Shares have not been registered under
the 1933 Act, nor under the securities laws of any state and, therefore,
cannot be resold unless the resale of the Shares is registered under the
1933 Act or unless an exemption from registration is available. Each Young
Member may not sell the Shares without registering them under the 1933 Act
and any applicable state securities laws unless exemptions from such
registration requirements are available with respect to any such sale;
(b) Each Young Member understands that neither Young nor the Company nor any
other person has offered or extended registration rights covering the
Shares;
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(b) Each Young Member is acquiring the Shares for his, her or its own account
for long-term investment and not with a view toward resale,
fractionalization or division, or distribution thereof, and it does not
presently have any reason to anticipate any change in its circumstances,
financial or otherwise, or particular occasion or event which would
necessitate or require the sale or distribution of the Shares. No one other
than the Young Member will have any beneficial interest in said securities.
Each Young Member agrees to set forth the terms of its ownership, record
address and Social Security number or tax identification number, if
applicable, on the Type of Ownership Form, attached hereto as Exhibit A;
(c) Each Young Member acknowledges that he, she or it:
(i). is a "sophisticated investor," and
(ii).has had an opportunity to and, in fact, has thoroughly reviewed the
Company's periodic reports on Form 10-K and 10-Q filings, Current
Report filings on Form 8-K and the audited and unaudited financial
statements, risk factors, results of operations and related business
disclosures described therein at xxxx://xxx.xxx.xxx; has had a
reasonable opportunity to ask questions of and receive answers from
and to request additional relevant information from a person or
persons acting on behalf of the Company regarding such information;
and has no pending questions as of the date of this Agreement or as of
the Closing Date;
(d) Each Young Membder has such knowledge and experience in financial and
business matters such that the Young Member is capable of evaluating the
merits and risks of an investment in the Shares and of making an informed
investment decision and does not require a representative in evaluating the
merits and risks of an investment in the Shares;
(e) Each Young Member recognizes that an investment in the Company is a
speculative venture and that the total amount of consideration tendered in
connection with the exchange offer is placed at the risk of the business
and may be completely lost, and that the ownership of the Shares as an
investment involves special risks;
(f) Each Young Member realizes that the Shares cannot readily be sold as they
will be restricted securities and, therefore, the Shares must not be
accepted in the exchange offer unless such Young Member has liquid assets
sufficient to assure that the ownership of the Shares will cause no undue
financial difficulties and such Young Member can provide for current needs
and possible personal contingencies;
(g) Each Young Member confirms and represents that it is able (i) to bear the
economic risk of its investment, (ii) to hold the Shares for an indefinite
period of time and (iii) to afford a complete loss of his, her or its
investment. Each Young Member also represents that it has (i) adequate
means of providing for its current needs and possible personal
contingencies and (ii) has no need for liquidity in this particular
investment;
(h) All information which each Young Member has provided to the Company
concerning such Young Member's financial position and knowledge of
financial and business matters is correct and complete as of the date
hereof, and if there should be any material change in such information
prior to the Closing Date, such Young Member shall immediately provide the
Company with such information; and
(i) Each Young Member has carefully considered and has, to the extent it
believes such discussion necessary, discussed with its professional, legal,
tax and financial advisors, the suitability of an investment in the Shares
for its particular tax and financial situation and its advisers, if such
advisors were deemed necessary, have determined that the Shares are a
suitable investment for him, her, or it.
Each Young Member has not become aware of and has not been offered the
Shares by any form of general solicitation or advertising, including, but not
limited to, advertisements, articles, notices or other communications published
in any newspaper, magazine or other similar media or television or radio
broadcast or any seminar or meeting where, to such Young Member's knowledge,
those individuals that have attended have been invited by any such or similar
means of general solicitation or advertising.
Section 1.22. XXXXXXX XXXXXXX. Each Young Member certifies and confirms
that it has not personally, nor through any third parties, purchased, nor caused
to be purchased in the public marketplace any publicly-traded shares of the
Company. Each Young Member further certifies and confirms that it has not
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communicated the nature of the transactions contemplated herein, is not aware of
any disclosure of non-public information regarding the Company or the
transactions contemplated herein and is not a party to any xxxxxxx xxxxxxx in
the Company's securities. Each Young Member further certifies and confirms that
it has not "tipped" any related parties nor third parties regarding the
transactions contemplated herein and/or advised any parties to purchase or sell
shares of the Company's securities in the marketplace.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE COMPANY
As an inducement to, and to obtain the reliance of the Young Members,
except as set forth in the Company Schedules (as hereinafter defined), the
Company represents and warrants as follows:
Section 2.01 ORGANIZATION. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada and has the
corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets, to carry on its business in
all material respects as it is now being conducted and as contemplated after the
closing of this transaction, and except where failure to be so qualified would
not have a material adverse effect on its business, there is no jurisdiction in
which it is not qualified in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. Included in the Company Schedules are complete and correct copies
of the Articles of Incorporation and Bylaws (or similar organizational
documents) of the Company as in effect on the date hereof. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the Company's Articles of
Incorporation or Bylaws (or similar organizational documents). The Company has
taken all action required by law, its Articles of Incorporation, its Bylaws (or
similar organizational documents), or otherwise to authorize the execution and
delivery of this Agreement, and the Company has full power, authority, and legal
right and has taken all action required by law, its Articles of Incorporation,
Bylaws, (or similar organizational documents) or otherwise to consummate the
transactions herein contemplated.
Section 2.02 CAPITALIZATION. The Company is authorized to issue 150,000,000
shares of Common Stock and has 15,325,000 shares of Common Stock outstanding as
of the date of this Agreement and shall not issue any additional shares of
Common Stock prior to Closing without the prior written consent of the Majority
Members. All issued and outstanding shares are legally issued, fully paid and
non-assessable and were not issued in violation of the preemptive or other
rights of any person. The Company has filed a Certificate of Amendment to its
Articles of Incorporation with the Secretary of State of the State of Nevada for
the purpose of increasing its authorized capital to 500,000,000 shares of Common
Stock and to forward split the 15,325,000 shares of Common Stock currently
outstanding on a basis of 10 shares for one share. The Certificate of Amendment
will be effective on September 19, 2011 and prior to the Closing.
Section 2.03 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. The Company does
not have any predecessor corporation(s) or subsidiary(ies) and does not own,
beneficially or of record, any shares of any other corporation, other than its
inactive subsidiary, Datamill Media Sub Corp.
Section 2.04 FINANCIAL STATEMENTS.
(a) The Company has no liabilities with respect to the payment of any federal,
state, county, local or other taxes (including any deficiencies, interest
or penalties), except for taxes accrued but not yet due and payable.
(b) The books and records, financial and otherwise, of the Company are in all
material respects complete and correct and have been maintained in
accordance with good business and accounting practices. All financial
statements are audited through December 31, 2010.
Section 2.05 INFORMATION. The information concerning the Company set forth
in this Agreement and the Company Schedules is complete and accurate in all
material respects and does not contain any untrue statements of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading. In addition,
the Company has fully disclosed in writing to Young and the Young Members
(through this Agreement, the Company's SEC XXXXX filings or the Company
Schedules) all information, relating to matters involving the Company or its
assets or its present or past operations or activities which (i) indicated or
may indicate, in the aggregate, the existence of a greater than Five Thousand
Dollars ($5,000) liability or diminution in value, (ii) have led or may lead to
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a competitive disadvantage on the part of the Company or (iii) either alone or
in aggregation with other information covered by this Section, otherwise have
led or may lead to a material adverse effect on the transactions contemplated
herein or on the Company, its assets or its operations or activities as
presently conducted or as contemplated to be conducted after the Closing Date,
including, but not limited to, information relating to governmental, employee,
environmental, litigation and securities matters and transactions with
affiliates.
Section 2.06 CONVERTIBLE SECURITIES, OPTIONS OR WARRANTS. There are no
existing convertible securities, options, warrants, calls or commitments of any
character relating to the authorized and unissued stock of the Company.
Section 2.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Company Schedules,, set forth in the Company's XXXXX filings, or provided in
writing to Young, since the date of the Company's June 30, 2011 balance sheet
for the Company as otherwise set forth in the Company Schedules:
(a) There has not been (i) any material adverse change in the business,
operations, properties, assets or condition of the Company or (ii) any
damage, destruction or loss to the Company (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets or condition of the Company;
(b) The Company has not and will not (i) amend its Articles of Incorporation or
Bylaws (or similar organizational documents) except to complete the
performance of the Company as set forth herein; (ii) declare or make, or
agree to declare or make any payment of dividends or distributions of any
assets of any kind whatsoever to stockholders or purchase or redeem, or
agree to purchase or redeem, any of its capital stock; (iii) waive any
rights of value which in the aggregate are outside of the ordinary course
of business or material considering the business of the Company; (iv) make
any material change in its method of management, operation, or accounting;
(v) enter into any transaction or agreement other than in the ordinary
course of business; (vi) make any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any severance or termination
pay to any present or former officer or employee; (vii) increase the rate
of compensation payable or to become payable by it to any of its officers
or directors or any of its salaried employees whose monthly compensation
exceeds Three Thousand Dollars ($3,000); or (viii) make any increase in any
profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement, made
to, for or with its officers, directors, or employees; and
(c) The Company has not become subject to any law or regulation which
materially and adversely affects, or in the future, may adversely affect,
the business, operations, properties, assets or condition of the Company.
Section 2.08 TITLE AND RELATED MATTERS. The Company has good and marketable
title to all of its properties, inventory, interest in properties and assets,
which are reflected in the most recent Company balance sheet or acquired after
that date (except properties, inventory, interest in properties and assets sold
or otherwise disposed of since such date in the ordinary course of business),
free and clear of all liens, pledges, charges or encumbrances, except (a)
statutory liens or claims not yet delinquent; and (b) as described in the
Company Schedules or XXXXX filings. Except as set forth in the Company Schedules
or XXXXX filings, the Company owns, free and clear of any liens, claims,
encumbrances, royalty interests, or other restrictions or limitations of any
nature whatsoever, any and all of its assets. Except as set forth in the Company
Schedules or XXXXX filings, no third party has any right to, and the Company has
not received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
proprietary techniques, trademarks, service marks, trade names or copyrights
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a materially adverse effect on the
business, operations, financial condition, income or business prospects of the
Company or any material portion of its properties, assets, or rights.
Section 2.09 LITIGATION AND PROCEEDINGS. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of the Company after
reasonable investigation, threatened by or against the Company or affecting the
Company or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. The Company has no knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality or
any circumstance which after reasonable investigation would result in the
discovery of such default.
8
Section 2.10 CONTRACTS. Except as otherwise set forth in the Company
Schedules or the XXXXX filings:
(a) The Company is not a party to, and its assets, products, technology and
properties are not bound by, any material contract, franchise, license
agreement, agreement, debt instrument or other commitments whether such
agreement is in writing or oral;
(b) All contracts, agreements, franchises, license agreements and other
commitments to which the Company is a party or by which its properties are
bound and which are material to the operations of the Company taken as a
whole are valid and enforceable by the Company in all respects, except as
limited by bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally;
(c) The Company is not a party to or bound by, and the properties of the
Company are not subject to any contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, the business operations, properties, assets, or condition of the
Company; and
(d) Except as included or described in the Company Schedules, XXXXX filings or
reflected in the most recent Company balance sheet, the Company is not a
party to any oral or written (i) contract for the employment of any officer
or employee which is not terminable on thirty (30) days, or less notice;
(ii) profit sharing, bonus, deferred compensation, stock option, severance
pay, pension benefit or retirement plan, (iii) agreement, contract, or
indenture relating to the borrowing of money, (iv) guaranty of any
obligation, other than one on which the Company is a primary obligor all of
which are reflected in the Company balance sheet, for the borrowing of
money or otherwise, excluding endorsements made for collection and other
guaranties of obligations which, in the aggregate do not exceed more than
one year or providing for payments in excess of Ten Thousand Dollars
($10,000) in the aggregate; (v) collective bargaining agreement; or (vi)
agreement with any present or former employee, officer or director of the
Company.
Section 2.11 MATERIAL CONTRACT DEFAULTS. The Company is not in default in
any respect under the terms of any outstanding contract, agreement, lease or
other commitment which is material to the business, operations, properties,
assets or condition of the Company and there is no event of default in any
material respect under any such contract, agreement, lease or other commitment
in respect of which the Company has not taken adequate steps to prevent such a
default from occurring.
Section 2.12 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust or other material agreement or instrument to which the
Company is a party or to which any of its assets or operations are subject.
Section 2.13 GOVERNMENTAL AUTHORIZATIONS. The Company has all licenses,
franchises, permits and other governmental authorizations that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal,
provincial and state securities or corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby (excluding
authorizations, approvals and/or consents relating to the acquisition by the
Company of Young, which the Company makes no representations in connection
with).
Section 2.14 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of its
knowledge, the Company has complied with all applicable statutes and regulations
of any federal, provincial, state or other applicable governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
the Company or except to the extent that noncompliance would not result in the
occurrence of any material liability. This compliance includes, but is not
limited to, the filing of all reports, filings and schedules to date with
federal, provincial and state securities authorities.
9
Section 2.15 APPROVAL OF AGREEMENT. The Board of Directors of the Company
has authorized the execution and delivery of this Agreement by the Company and
approve this Agreement and the transactions contemplated hereby prior to the
Closing Date and agrees to recommend approval of this Agreement by all of the
Company's shareholders.
Section 2.16 MATERIAL TRANSACTIONS OR AFFILIATIONS. Except as disclosed
herein, in the XXXXX filings or in the Company Schedules, there exists no
contract, agreement or arrangement between the Company and any predecessor and
any person who was at the time of such contract, agreement or arrangement an
officer, director, or person owning of record or known by the Company to own
beneficially, five percent (5%) or more of the issued and outstanding Common
Stock of the Company and which is to be performed in whole or in part after the
date hereof or was entered into not more than three years prior to the date
hereof. Neither any officer, director, nor five percent (5%) shareholder of the
Company has, or has had since inception of the Company, any known interest,
direct or indirect, in any such transaction with the Company which was material
to the business of the Company. The Company has no commitment, whether written
or oral, to lend any funds to, borrow any money from, or enter into any other
transaction with, any such affiliated person.
Section 2.17 THE COMPANY SCHEDULES. No later than five (5) days from the
execution of this Agreement, the Company will deliver to Young the following
schedules, which are collectively referred to as the "Company Schedules" and
which consist of separate schedules, which are dated the date of this Agreement,
all certified by the chief executive officer of the Company to be complete, true
and accurate in all material respects as of the date of this Agreement:
(a) a certified list from the Company's President or Transfer Agent (if it has
one) setting forth the name and address of each shareholder of the Company
together with the number of shares owned by him, her or it;
(b) a schedule listing any and all federal, provincial, state and local tax
identification numbers of the Company and containing complete and correct
copies of all federal, provincial, state and local tax returns filed by the
Company;
(c) a schedule containing complete, correct and file stamped copies of the
Bylaws, Articles of Incorporation or similar organizational documents, and
all amendments thereto, of the Company in effect as of the date of this
Agreement; and
(d) a schedule setting forth any other information, together with any required
copies of documents, required to be disclosed by the Company. Any fact
known to be, or to the best knowledge of the Company after reasonable
investigation, reasonably believed to be, contrary to the representations,
covenants, and warranties made in Article II are required to be disclosed
in the Company Schedules pursuant to this Section 2.17(d).
The Company shall cause the Company Schedules and the instruments and data
delivered to Young and the Young Members hereunder to be promptly updated after
the date hereof up to and including the Closing Date to include any material
changes in such information not otherwise provided to Young and the Young
Members in writing.
Section 2.18 VALID OBLIGATION. This Agreement and all agreements and other
documents executed by the Company in connection herewith constitute the valid
and binding obligation of the Company, enforceable in accordance with its or
their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
Section 2.19 REPORTING REQUIREMENTS OF THE COMPANY. The Company is subject
to the reporting and filing requirement of the Securities Exchange Act of 1934,
as amended ("Exchange Act"). The Company is not aware of any deficient or
outstanding filings or unresolved Staff comments with the Securities and
Exchange Commission as of the date of this Agreement in connection with any of
its filing requirements.
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ARTICLE III
PLAN OF EXCHANGE
Section 3.01 THE EXCHANGE.
(a) On the terms and subject to the conditions set forth in this Agreement, on
the Closing Date (as defined below), Young and the Young Members shall
accept the Company's offer to exchange the Shares for 100% of the issued
and outstanding Units of Young ("Exchange Offer") described herein and
shall assign, transfer and deliver, free and clear of all liens, pledges,
encumbrances, charges, restrictions or known claims of any kind, nature, or
description, the Units of Young set forth herein, in the aggregate
constituting no less than One Hundred Percent (100%) of the issued and
outstanding Units of Young to the Company at the Closing;
(b) The Company shall accept the Exchange Offer, and shall, on the terms and
conditions set forth in this Agreement, issue the Young Members two (2)
shares of the Company's Common Stock for each Unit of Young owned by the
Young Members at the Closing; provided, however, that the maximum number of
shares that the Company will have to issue to the Young Members will be
175,000,000 shares of Common Stock ("Shares") in consideration for One
Hundred Percent (100%) of the ownership interests of Young.
Section 3.02 CLOSING. The closing ("Closing") of the transaction
contemplated by this Agreement shall occur automatically, and without any
further required action from either Party, upon the satisfaction of the Closing
Conditions (described below) which date shall in no event be later than
September 20, 2011, unless such date is extended in writing by the mutual
consent of all Parties ("Closing Date").
(a) The following "Closing Conditions" shall have occurred, or have been waived
by Young, the Young Members and the Company in writing, prior to the
Closing Date:
(i) This transaction shall have been approved, and Shares delivered in
accordance with Section 3.01. The Board of Directors of the Company
shall have approved the transactions contemplated by this Agreement;
(ii) Young shall have obtained an audit of its operations and pro forma
financial information as required by Form 8-K and Regulation S-X of
the Securities Act of 1933, as amended, in acceptable form and content
to the Company ("Audit ");
(iii)The Company shall have complied with all of the requirements of
Article VI, below; and
(b) At the Closing, the following shall occur:
(i) The Young Members shall surrender the certificates evidencing One
Hundred Percent (100%) of the shares of Young, so as to make the
Company the sole owner thereof;
(ii) Xxxxxxx Xxxxxx shall convey 75,000,000 post forward split shares of
Company Common Stock held in his name back to the Company for
retirement to the Company treasury;
(iii)Young shall supply the Company with Minutes of the Board of Directors
or Board of Managers of Young approving and consenting to this
Agreement and the transactions contemplated herein;
(iv) The Company will issue and deliver Shares in the name of the Young
Members, pro rata with their ownership of Units of Young, in
accordance with this Agreement, and the Young Members shall accept the
Shares without qualification of any kind; and
(v) The Company, Young, the Young Members and the Majority Members shall
execute, acknowledge, and deliver (or shall ensure to be executed,
acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or
11
other instruments required by this Agreement to be so delivered at or
prior to the Closing, together with such other items as may be
reasonably requested by the Parties hereto and their respective legal
counsel in order to effectuate or evidence the transactions
contemplated hereby.
Section 3.03 TRADABILITY OF SHARES. The Shares to be issued to the Young
Members have not been registered under the 1933 Act, nor registered under any
state securities law, and are "restricted securities" as that term is defined in
Rule 144 under the 0000 Xxx. The securities may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration statement
under the 1933 Act or pursuant to an exemption from registration under the 1933
Act. The Shares will bear the following restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED WITHOUT
EITHER: i) REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS, or ii) SUBMISSION TO THE CORPORATION OF
AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION THAT SAID SHARES AND
THE TRANSFER THEREOF ARE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS."
Section 3.04 TERMINATION.
(a) This Agreement may be terminated by either the Board of Directors of the
Company, Young or the Young Members at any time prior to the Closing Date
if:
(i) there shall be any actual or threatened action or proceeding before
any court or any governmental body which shall seek to restrain,
prohibit, or invalidate the transactions contemplated by this
Agreement and which, in the judgment of such Board of Directors, Board
of Managers, members or shareholders, made in good faith and based
upon the advice of its legal counsel, makes it inadvisable to proceed
with the Exchange; or
(ii) any of the transactions contemplated hereby are disapproved by any
regulatory authority whose approval is required to consummate such
transactions (which does not include the Securities and Exchange
Commission) or in the judgment of such Board of Directors, Board of
Managers, members or shareholders, made in good faith and based on the
advice of counsel, there is substantial likelihood that any such
approval will not be obtained or will be obtained only on a condition
or conditions which would be unduly burdensome, making it inadvisable
to proceed with the Exchange.
In the event of termination pursuant to this paragraph, no obligation,
right or liability shall arise hereunder, and each party shall bear all of the
expenses incurred by it in connection with the negotiation, drafting, and
execution of this Agreement and the transactions herein contemplated.
No revenue ruling or opinion of counsel will be sought as to the tax-free
nature of the subject Exchange and such tax treatment is not a condition to
Closing herein.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 ACCESS TO PROPERTIES AND RECORDS. The Company and Young will
each afford to the officers and authorized representatives of the other
reasonable access to the properties, books and records of the Company or Young,
as the case may be, in order that each may have a full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of the other,
and each will furnish the other with such additional financial and operating
data and other information as to the business and properties of the Company or
Young, as the case may be, as the other shall from time to time reasonably
request. Any such investigation and examination shall be conducted at reasonable
times and under reasonable circumstances, and each party hereto shall cooperate
fully therein. No investigation by a party hereto shall, however, diminish or
waive in any way any of the representations, warranties, covenants or agreements
of the other party under this Agreement. In order that each party may
12
investigate as it may wish the business affairs of the other, each party shall
furnish the other during such period with all of such information and copies of
such documents concerning the affairs of it as the other party may reasonably
request, and cause its officers, employees, consultants, agents, accountants,
and attorneys to cooperate fully in connection with such review and examination,
and to make full disclosure to the other parties all material facts affecting
its financial condition, business operations, and the conduct of operations.
Section 4.02 DELIVERY OF BOOKS AND RECORDS AND BANK ACCOUNTS. Within five
(5) days following the date of this Agreement and once again at the Closing,
Young shall deliver to the Company copies of the corporate minute books, books
of account, contracts, records, and all other books or documents including the
bank accounts of Young now in the possession of Young or its representatives.
Section 4.03 THIRD PARTY CONSENTS AND CERTIFICATES. The Company and Young
agree to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein contemplated.
Section 4.04 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date and except
as set forth in the Company Schedules or the Young Schedules, or as
permitted or contemplated by this Agreement, the Company and Young,
respectively (subject to paragraph (b) below), shall each:
(i) carry on its business in substantially the same manner as it has
heretofore;
(ii) maintain and keep its properties in states of good repair and
condition as at present, except for depreciation due to ordinary wear
and tear and damage due to casualty;
(iii)maintain in full force and effect insurance comparable in amount and
in scope of coverage to that now maintained by it;
(iv) use good faith efforts to perform in all material respects all of its
obligations under material contracts, leases, and instruments relating
to or affecting its assets, properties, and business;
(v) use its good faith efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all obligations
and duties imposed on it by all federal, provincial and state laws and
all rules, regulations, and orders imposed by federal, provincial or
state governmental authorities.
(b) From and after the date of this Agreement until the Closing Date, neither
the Company nor Young shall:
(i) make any changes in their governing documents, except as otherwise
provided in this Agreement or required by the recapitalization of the
Company as may be necessary to carry out the Exchange Offer;
(ii) take any action described in Section 1.07 in the case of Young, or in
Section 2.07, in the case of the Company (all except as permitted
therein or as disclosed in the applicable party's schedules);
(iii)enter into or amend any contract, agreement, or other instrument of
any of the types described in such party's schedules, except that a
party may enter into or amend any contract, agreement, or other
instrument in the ordinary course of business involving the sale of
goods or services; or
(iv) sell any assets or discontinue any operations, sell any shares of
capital stock (other than as contemplated in this Section 4.04) or
conduct any similar transactions other than in the ordinary course of
business.
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Section 4.05 INDEMNIFICATION.
(a) INDEMNIFICATION OF THE COMPANY. Subject to the terms and conditions of this
Section 4.05(a), Young and the Young Members agree to jointly and
severally, indemnify, defend and hold harmless the Company, its respective
affiliates, its respective present and former directors, officers,
shareholders, employees, attorneys and agents and its respective heirs,
executors, administrators, successors and assigns ("Company Indemnified
Persons"), from and against any and all claims, liabilities and losses
which may be imposed on, incurred by or asserted against any Company
Indemnified Person, arising out of or resulting from, directly or
indirectly:
(i) the inaccuracy of any representation or breach of any material
warranty of Young or the Young Members contained in or made pursuant
to this Agreement which was not disclosed to the Company in writing
prior to the Closing;
(ii) the breach of any material covenant or agreement of Young or the Young
Members contained in this Agreement; or
(iii)any claim to fees or costs for alleged services by a broker, agent,
finder or other person claiming to act in a similar capacity at the
request of Young or the Young Members in connection with this
Agreement;
PROVIDED, HOWEVER, that Young and the Young Members shall not be liable for
any portion of any claims, liabilities or losses resulting from a material
breach by the Company, of any of its obligations under this Agreement or from
the Company's gross negligence, fraud or willful misconduct. The indemnification
provided for in this Section shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
(b) INDEMNIFICATION OF YOUNG. Subject to the terms and conditions of this
Section 4.05(b), from and after the Closing, the Company agrees to
indemnify, defend and hold harmless Young, its respective affiliates, its
respective present and former directors, managers, officers, members,
employees, attorneys and agents and its respective heirs, executors,
administrators, successors and assigns and the Young Members ("Young
Indemnified Persons"), from and against any and all claims, liabilities and
losses which may be imposed on, incurred by or asserted against any Young
Indemnified Person, arising out of or resulting from, directly or
indirectly:
(i) the inaccuracy of any representation or breach of any material
warranty of the Company contained in or made pursuant to this
Agreement which was not disclosed to Young in writing prior to the
Closing;
(ii) the breach of any material covenant or agreement of the Company
contained in this Agreement; or
(iii)any claim to fees or costs for alleged services rendered by a broker,
agent, finder or other person claiming to act in a similar capacity at
the request of the Company in connection with this Agreement;
PROVIDED, HOWEVER, that the Company shall not be liable for any portion of
any claims, liabilities or losses resulting from a material breach by Young or
the Young Members of their obligations under this Agreement or from Young's or
any Young Indemnified Persons' gross negligence, fraud or willful misconduct.
The indemnification provided for in this Section shall survive the Closing and
consummation of the transactions contemplated hereby and termination of this
Agreement.
Section 4.06 INDEMNIFICATION OF SUBSEQUENT CORPORATE ACTIONS. Young
hereby represents and warrants that it will indemnify and hold harmless any
officer, director, controlling shareholder, attorney, agent or representative of
the Company, or any other person affiliated with the Company, from any
decisions, activities or conduct of the Company subsequent to the Closing Date
of the transactions contemplated by this Agreement.
14
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 OWNERSHIP OF YOUNG. Prior to the Closing Date, the Young
Members shall have demonstrated to the Company, with evidence reasonably
satisfactory to the Company, that the Young Members are the owners of One
Hundred Percent (100%) of the outstanding securities of Young.
Section 5.02 ACCURACY OF REPRESENTATIONS AND PERFORMANCE OF COVENANTS. The
representations and warranties made by Young and the Young Members in this
Agreement were true when made and shall be true at the Closing Date with the
same force and effect as if such representations and warranties were made at and
as of the Closing Date (except for changes therein permitted by this Agreement).
Young and the Young Members shall have performed or complied with all covenants
and conditions required by this Agreement to be performed or complied with by
Young or the Young Members prior to or at the Closing. The Company shall be
furnished with a certificate, signed by a duly authorized executive officer of
Young and dated the Closing Date, to the foregoing effect.
Section 5.03 OFFICER'S CERTIFICATE. The Company shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of Young to the effect that no litigation, proceeding, investigation, or
inquiry is pending, or to the best knowledge of Young threatened, which might
result in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement, or, to the extent not disclosed in the Young
Schedules, by or against Young, which might result in any material adverse
change in any of the assets, properties, business, or operations of Young.
Section 5.04 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material change in the financial condition,
business, or operations of Young nor shall any event have occurred which, with
the lapse of time or the giving of notice, is determined to be unacceptable by
the Company in its reasonable discretion.
Section 5.05 APPROVAL BY YOUNG. The Exchange shall have been approved, and
Shares delivered in accordance with Section 3.01, by Young and all of the Young
Members. The Board of Directors or Board of Managers of Young shall have
approved the transactions contemplated by this Agreement.
Section 5.06 NO GOVERNMENTAL PROHIBITION. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.07 CONSENTS. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and Young after the Closing Date on the basis as
presently operated shall have been obtained.
Section 5.08 AUDIT. Young shall have obtained an Audit in acceptable form
and content to the Company.
Section 5.09 DIRECTORS. The Directors of Company shall appoint Directors as
designated by Young and resign as Directors of the Company.
Section 5.10 ASSURANCES. Unless otherwise agreed by the parties, Young
will:
(a) not create, allot, issue, acquire, repay or redeem any charter or loan
capital or agree, arrange or undertake to do any of those things or acquire
or agree to acquire, an interest in a corporate body or merge or
consolidate with a corporate body or any other person, enter into any
demerger transaction or participate in any other type of corporate
reconstruction;
(b) operate its business in the usual way so as to maintain that business as a
going concern;
15
(c) not acquire or dispose of, or agree to acquire or dispose of, any revenues,
assets, business or undertaking except in the usual course of its business
or assume or incur, or agree to assume or incur, a liability, obligation or
expense (actual or contingent) except in the usual course of its business;
(d) not declare, pay or make a dividend or distribution;
(e) not pass a shareholders' resolution, other than as set out in this
Agreement;
(f) not create, or agree to create or amend, an encumbrance over any licenses,
property or assets owned by it;
(g) not grant any options or other rights to subscribe for or acquire shares or
other securities in their charter or loan capital;
(h) not act (or omit to act) in a manner which might cause or result in any
license, consent or approval or concession held by it to be amended or
revoked;
(i) not make any material change in the nature or organization of its business;
(j) comply with all of its contractual, statutory and regulatory obligations;
(k) not enter into a long-term, onerous, unusual or material agreement,
arrangement or obligation;
(l) not amend or terminate a material agreement, arrangement or obligation to
which it is a party or terminate any contract or commitment which is not
capable of being terminated without compensation or which is not in the
ordinary course of business;
(m) not enter into, amend or terminate a contract (including a series of
related contracts) involving capital expenditure in excess of $10,000,
except with the agreement of the Company;
(n) not compromise or settle litigation or arbitration proceedings or any
action, demand or dispute or waive a right in relation to litigation or
arbitration proceedings;
(o) not release, discharge or compound any liability or claim;
(p) conduct its business in all material respects in accordance with all
applicable legal and administrative requirements in any jurisdiction; and
(q) cooperate with the Company to allow the Company and its agents access to,
and to take copies of, the books and records of Young including, without
limitation, the statutory books, minute books, leases, licenses, contracts,
details of receivables, intellectual property, supplier lists and customer
lists in the possession or control of each Young.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF
YOUNG AND THE YOUNG MEMBERS
The obligations of Young and the Young Members under this Agreement are
subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section 6.01 ACCURACY OF REPRESENTATIONS AND PERFORMANCE OF COVENANTS. The
representations and warranties made by the Company in this Agreement were true
when made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, the Company shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
the Company and shall have satisfied all conditions set forth herein prior to or
at the Closing. Young shall have been furnished with certificates, signed by
duly authorized executive officers of the Company and dated the Closing Date, to
the foregoing effect.
16
Section 6.02 OFFICER'S CERTIFICATE. Young shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized executive
officer of the Company, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of the Company
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the Company Schedules, by or against the Company, which
might result in any material adverse change in any of the assets, properties or
operations of the Company.
Section 6.03 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any change in the financial condition, business or
operations of the Company nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable by Young
or the Young Members.
Section 6.04 NO GOVERNMENTAL PROHIBITION. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.05 CONSENTS. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and Young after the Closing Date on the basis as
presently operated shall have been obtained.
ARTICLE VII
MISCELLANEOUS
Section 7.01 NO BANKRUPTCY AND NO CRIMINAL CONVICTIONS. None of the Parties
to this Agreement, or their officers, directors or affiliates, promoters,
beneficial shareholders or control persons, nor any predecessor thereof have
been subject to the following (unless otherwise disclosed in the Young Schedules
or Company Schedules):
(a) Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer within the past ten (10)
years;
(b) Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses)
within the past ten (10) years;
(c) Being subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities
within the past ten (10) years; or
(d) Being found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Futures Trading
Commission to have violated a federal, provincial or state securities or
commodities law, and the judgment has not been reversed, suspended, or
vacated within the past ten (10) years.
Section 7.02 GOVERNING LAW AND ARBITRATION. This Agreement shall be
governed by, enforced, and construed under and in accordance with the laws of
the United States of America and, with respect to the matters of state law, with
the laws of the State of Florida without giving effect to principles of
conflicts of law thereunder. All controversies, disputes or claims arising out
of or relating to this Agreement shall be resolved by binding arbitration. The
arbitration shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. All arbitrators shall possess
such experience in, and knowledge of, the subject area of the controversy or
claim so as to qualify as an "expert" with respect to such subject matter. The
governing law for the purposes of any arbitration arising hereunder shall be in
Dade County, Florida. The prevailing party shall be entitled to receive its
reasonable attorney's fees and all costs relating to the arbitration. Any award
rendered by arbitration shall be final and binding on the parties, and judgment
thereon may be entered in any court of competent jurisdiction.
Section 7.03 NOTICES. Any and all notices, requests or other communications
hereunder shall be given in writing and delivered by: (a) regular, overnight or
registered or certified mail (return receipt requested), with first class
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postage prepaid; (b) hand delivery; (c) facsimile transmission; or (d) overnight
courier service, to the parties at the following addresses or facsimile numbers:
If to the Company, to: Datamill Media Corp.
Attn: Xxxxxxx Xxxxxx, CEO
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
If to Young, to: Young Aviation, LLC
Attn: Xxxx X. Xxxxx, CEO
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
or at such other address or number as shall be designated by either of the
parties in a notice to the other party given in accordance with this Section.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given: (A) in the case of a notice sent by regular or
registered or certified mail, three business days after it is duly deposited in
the mails; (B) in the case of a notice delivered by hand, when personally
delivered; (C) in the case of a notice sent by facsimile, upon transmission
subject to telephone confirmation of receipt; and (D) in the case of a notice
sent by overnight mail or overnight courier service, the next business day after
such notice is mailed or delivered to such courier, in each case given or
addressed as aforesaid.
Section 7.04 ATTORNEY'S FEES. In the event that either party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the prevailing party shall be reimbursed by the
losing party for all costs, including reasonable attorney's fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
Section 7.05 CONFIDENTIALITY. Each party hereto agrees with the other that,
unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others (which information shall
include the existence of this Agreement and the transactions contemplated
herein), except (i) to the extent such data or information is published, is a
matter of public knowledge (through no fault or action of the Party holding such
information on behalf of the other Party), or is required by a court of
competent jurisdiction to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein. Young
further agrees and consents to the disclosure by the Company of any material
information regarding Young which the Company or its counsel deems necessary for
disclosure in the Company's public filings on XXXXX in connection with the
Company's current or periodic report filings. The Company shall not be required
to obtain the prior consent of Young to publicly disclose such information.
Section 7.06 PUBLICITY. Prior to or after the Closing of the transaction
contemplated herein, any announcement, or press or news release by Young or its
members, employees, officers, directors or agents shall be reviewed and approved
by the Company prior to its release, subject to any requirements of law. The
Company shall be allowed to make any announcements relating to this Agreement or
the transactions contemplated herein, and shall be allowed to file this
Agreement and any exhibits or related agreements as may be required pursuant to
the Company's public reporting obligations with the Securities and Exchange
Commission, subject to prior approval by Young, which approval shall not be
unreasonably withheld. Prior to the Closing and prior to the Closing Date, Young
shall make no announcements relating to this Agreement, the Company or the
transactions contemplated herein without the prior written consent of the
Company, which approval will not be unreasonably withheld.
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Section 7.07 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement and Young and the Young Members are deemed to have
knowledge of the information set forth in the Company's XXXXX filings.
Section 7.08 THIRD PARTY BENEFICIARIES. This contract is strictly between
the Company and Young, and, except as specifically provided, no director,
officer, stockholder, employee, agent, independent contractor or any other
person or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.9 EXPENSES. The Company and Young each hereto agree to pay their
own costs and expenses incurred in negotiating this Agreement including legal,
accounting and professional fees, incurred in connection with the Exchange or
any of the other transactions contemplated hereby, and those costs and expenses
incurred in consummating the transactions described herein.
Section 7.10 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, term sheets, understandings and negotiations,
written or oral, with respect to such subject matter.
Section 7.11 SURVIVAL; TERMINATION. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two (2)
years.
Section 7.12 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.13 AMENDMENT OR WAIVER. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.14 BEST EFFORTS. Subject to the terms and conditions herein
provided, each party shall use its reasonable best efforts to perform or fulfill
all conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective this Agreement and the transactions
contemplated herein.
Section 7.15 REMEDIES. The Parties agree that the covenants and obligations
contained in this Agreement relate to special, unique and extraordinary matters
and that a violation of any of the terms hereof or thereof would cause
irreparable injury in an amount which would be impossible to estimate or
determine and for which any remedy at law would be inadequate. As such, the
Parties agree that if either Party fails or refuses to fulfill any of its
obligations under this Agreement or to make any payment or deliver any
instrument required hereunder or thereunder, then the other Party shall have the
remedy of specific performance, which remedy shall be cumulative and
nonexclusive and shall be in addition to any other rights and remedies otherwise
available under any other contract or at law or in equity and to which such
Party might be entitled.
Section 7.16 CONSTRUCTION. The Parties acknowledge that each of them has
had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement with its legal counsel and that this
Agreement shall be construed as if jointly drafted by the Parties hereto. In
this Agreement, the word "include,: "includes," "including" and "such as" are to
be construed as if they were immediately followed by the words, without
limitation.
Section 7.17 SEVERABILITY. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or other provision
of this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
Section 7.18 HEADINGS; GENDER. The paragraph headings contained in this
Agreement are for convenience only, and shall in no manner be construed as part
of this Agreement. All references in this Agreement as to gender shall be
interpreted in the applicable gender of the Parties.
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Section 7.19 EFFECT OF FACSIMILE AND PHOTOCOPIED SIGNATURES. This Agreement
may be executed in several counterparts, each of which is an original. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts. A copy of this Agreement
signed by one Party and faxed or scanned and emailed to another Party (as a PDF
or similar image file) shall be deemed to have been executed and delivered by
the signing Party as though an original. A photocopy or PDF of this Agreement
shall be effective as an original for all purposes.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
DATAMILL MEDIA CORP.
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Its: President
Printed Name: Xxxxxxx Xxxxxx
YOUNG AVIATION, LLC
By: /s/ Xxxx X. Xxxxx
------------------------------------
Its: President
Printed Name: Xxxx X. Xxxxx
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YOUNG MEMBERS:
(Agreeing to the terms and conditions of the Agreement, including, but not
limited to, the representations set forth in Section 1.2.).
EXHIBIT A
TYPE OF OWNERSHIP FORM
(CHECK ONE):
INDIVIDUAL OWNERSHIP (one signature required)
--------
TRUST (please include name of trust, name of trustee, and date trust
-------- was formed and copy of the Trust Agreement or other authorization)
PARTNERSHIP (please include a copy of the Partnership Agreement
-------- authorizing signature)
CORPORATION (please include a certified corporate resolution
-------- authorizing signature)
------------------------------------------------------------------------
Please print here the exact name (registration)
Such Young Member desires to appear in the records of the Company.
------------------------------------------------------------------------
Please print here the exact address Such Young Member
desires to appear in the records of the Company.
------------------------------------------------------------------------
If interest payments are to be made to an address other
than that shown above (i.e., a brokerage account),
please print here such address and account designation.
SIGNATURE:
By:
----------------------------------------
Printed Name:
------------------------------
If on behalf of Entity:
Entity Name:
---------------------------------------------------------------
Signatories Position with Entity:
-----------------------------------------
Beneficial Owner of Shares Owned by Entity:
--------------------------------
Address:
------------------------------------------------------------------------
Tax Id Number:
-------------------------
Telephone Number: ( )- -
---- ---- --------
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