AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made
this 30th day of June, 2000, by and between EMC Energies, Inc., a publicy-
held, fully reporting corporation incorporated in Nevada ("EMC"); Metwood,
Inc., a Virginia corporation ("Metwood"); and the persons listed in Exhibit
A-1 hereof who are the owners of record of all the issued and outstanding
stock of Metwood who execute and deliver the Agreement ("Metwood
Stockholders"), based on the following:
Recitals
EMC wishes to acquire all the issued and outstanding stock of Metwood
in exchange for stock of EMC in a transaction intended to qualify as a tax-
free exchange pursuant to section 368(a)(1)(B) of the Internal Revenue Code
of 1986, as amended. When referred to in this Agreement, unless the contents
otherwise require, "EMC " shall refer to the publicly-held, reporting
corporation to be disclosed and agreed to by the parties. The parties intend
for this Agreement to represent the terms and conditions of such tax-free
reorganization, which Agreement the parties hereby adopt. However, neither
party is seeking tax counsel or legal or accounting opinions on whether the
transaction qualifies for tax free treatment.
Agreement
Based on the stated premises, which are incorporated herein by
reference, and for and in consideration of the mutual covenants and
agreements hereinafter set forth, the mutual benefits to the parties to be
derived herefrom, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Shares. On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date (as defined in
Section 1.05 hereof), the Metwood Stockholders shall assign, transfer, and
deliver to EMC , free and clear of all liens, pledges, encumbrances, charges,
restrictions, or claims of any kind, nature, or description, all issued and
outstanding shares of common stock of Metwood (the "Metwood Shares") held by
Metwood Stockholders which shares shall represent all issued and outstanding
shares of Metwood common stock, and EMC agrees to acquire such shares on
such date by issuing and delivering in exchange therefor an aggregate of
10,000,000 restricted shares of EMC common stock, par value $0.001 per
share, (the "EMC Common Stock"). Such shares of EMC Common Stock shall be
issued pro rata based on the number of Metwood Shares held and as set forth
opposite the Metwood Stockholder's respective names in Exhibit A-1. All
shares of EMC Common Stock to be issued and delivered pursuant to this
Agreement shall be appropriately adjusted to take into account any stock
split, stock dividend, reverse stock split, recapitalization, or similar
change in the EMC Common Stock which may occur between the date of the
execution of this Agreement and the Closing Date except for the Reverse Stock
Split set forth in Section 4.02.
(a) Additional Shares. There shall be issued: (i) 500,000 restricted
shares of EMC Common Stock to Pacific Management Services, Inc.,
for services rendered to EMC and Metwood; (ii) a total of 400,000
restricted shares of EMC Common Stock pursuant to: Xxxxx Xxxxx
(100,000 shares); Xxxx Xxxxx (100,000 shares); Xxx Xxxxxxx (100,000
shares); and Xxxx Xxxxxx, Jr. (100,000 shares) for costs advanced
by them to EMC and/or Metwood and other valuable services rendered
for EMC and Metwood; (iii) 100,000 shares of EMC Common Stock
registered under Form S-8, issued to Xxxxxxx X. Xxxxxxxx for legal
services rendered in connection with the preparation and filing of
SEC reports and related research and legal services for the Company
not related to a capital raising transaction or to this Agreement
and Plan of Reorganization.
(b) Registration of Shares. All shares set forth in Section 1.01(a)
(i) and (ii) shall have rights of registration, and Metwood agrees to
register said shares, pursuant to the Registration Rights Agreement
attached hereto. In addition, any shares issued prior to this
reorganization during any period of time that EMC may be deemed to
have been a blank check company shall have rights of registration,
and Metwood agrees to register said shares, pursuant to the
Registration Rights Agreement attached hereto.
1.02 Delivery of Certificates by Metwood Stockholders. The transfer of
Metwood shares by the Metwood Stockholders shall be effected by the delivery
to EMC at the Closing (as set forth in Section 1.05 hereof) of certificates
representing the transferred shares 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 Metwood Stockholders' expense.
1.03 Operation as Wholly-Owned Subsidiary. After giving effect to the
transaction contemplated hereby, EMC will own all the issued and outstanding
shares of Metwood and Metwood will be a wholly-owned subsidiary of EMC
operating under the name Metwood, Inc. or such other name selected by the
shareholders and management of Metwood.
1.04 Further Assurances. At the Closing and from time to time
thereafter, the Metwood Stockholders shall execute such additional
instruments and take such other action as EMC may reasonably request,
without undue cost to the Metwood Stockholders in order to more effectively
sell, transfer, and assign clear title and ownership in the Metwood Shares to
EMC .
1.05 Closing and Parties. The Closing contemplated hereby shall be held
at a mutually agreed upon time and place on or before June 30, 2000 or on
another date to be agreed to in writing by the parties (the "Closing Date').
The Agreement may be closed at any time following approval by a majority of
the shareholders of EMC Common Stock as set forth in Section 4.01 hereof and
the Metwood Stockholders as set forth in Section 5.02. The Closing may be
accomplished by wire, express mail, overnight courier, conference telephone
call or as otherwise agreed to by the respective parties or their duly
authorized representatives.
1.06 Closing Events.
(a) EMC Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article IV, EMC shall deliver to Metwood at
Closing all the following:
(i) A certificate of good standing from the Department of
Commerce of the State of Nevada, issued as of a date within ten
days prior to the Closing Date, certifying that EMC is in good
standing as a corporation in the State of Nevada;
(ii) A certificate of merger from the secretary of State of
Nevada certifying that EMC has changed its domicile to Nevada;
(iii) Incumbency and specimen signature certificates dated
the Closing Date with respect to the officers of EMC executing
this Agreement and any other document delivered pursuant hereto on
behalf of EMC ;
(iv) Copies of the resolutions/consents of EMC 's board of
directors and shareholder minutes or consents authorizing the execution
and performance of this Agreement and the contemplated transactions,
certified by the secretary or an assistant secretary of EMC as of the
Closing Date;
(v) The certificate contemplated by Section 4.03, duly executed by
the chief executive officer of EMC ;
(vi) The certificate contemplated by Section 4.04, dated the
Closing Date, signed by the chief executive officer of EMC ;
(vii) Certificates for 10,000,000 shares of EMC Common Stock in the
names of the Metwood Stockholders and in the amounts set forth in
Exhibit "A-1"; and
In addition to the above deliveries, EMC shall take all steps and
actions as Metwood and Metwood Stockholders may reasonably request or as
may otherwise be reasonably necessary to consummate the transactions
contemplated hereby.
(b) Metwood Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Article V, Metwood and/or Metwood Stockholder's shall deliver to
EMC at Closing all the following:
(i) A certificate of good standing from the Department of Commerce of
the State of Virginia, issued as of a date within ten days prior to the
Closing Date certifying that Metwood is in good standing as a
corporation in the State of Virginia;
(ii) Incumbency and specimen signature certificates dated the Closing
Date with respect to the officers of Metwood executing this Agreement
and any other document delivered pursuant hereto on behalf of Metwood;
(iii) Copies of resolutions/consents of the board of directors and
of the stockholders of Metwood authorizing the execution and performance
of this Agreement and the contemplated transactions, certified by the
secretary or an assistant secretary of Metwood as of the Closing Date;
(iv) The certificate contemplated by Section 5.03, executed by the
chief operating officer of Metwood; and
(v) The certificate contemplated by Section 5.04, dated the Closing
Date, signed by the chief operating officer of Metwood.
In addition to the above deliveries, Metwood shall take all steps and
actions as EMC may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF EMC
As an inducement to, and to obtain the reliance of Metwood, EMC represents
and warrants as follows:
2.01 Organization.
(a) EMC is, and will be on the Closing, a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada
and has the corporate power and is and will be 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 and
to carry on its business in all material respects as it is now being
conducted, and there are no other jurisdictions in which it is not so
qualified in which the character and location of the assets owned by it or
the nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operations, properties, assets or condition. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of EMC 's articles of incorporation or bylaws, or other
agreement to which it is a party or by which it is bound.
2.02 Approval of Agreement. EMC has full power, authority, and legal right
and have taken, or will take, all action required by law, its articles of
incorporation, bylaws, and otherwise to execute and deliver this Agreement
and to consummate the transactions herein contemplated. The board of
directors of EMC has authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the EMC shareholders and compliance with state
and federal corporate and securities laws.
2.03 Capitalization. The authorized capitalization of EMC consists of
100,000,000 shares of common stock, $0.001 par value, of which 437,146 shares
shall be issued and outstanding post-split, prior to issuance of shares as
set forth in Section 1.01 of this Agreement. All issued and outstanding
shares of EMC are legally issued, fully paid, and nonassessable and not
issued in violation of the preemptive or other right of any person. There
are no dividends or other amounts due or payable with respect to any of the
shares of capital stock of EMC
2.04 Financial Statements.
(a) Included in Schedule 2.04 are the audited balance sheet of EMC as of
June 30, 1999, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the fiscal years ended June 30, 1999, and 1998,
including the notes thereto, and the accompanying report of Xxxxx X. Xxxxxxx,
PC; independent certified public accountant.
(b) The financial statements of EMC delivered pursuant to Section 2.04(a)
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved as explained
in the notes to such financial statements. The EMC financial statements
present fairly, in all material respects, as of their respective dates, the
financial position of EMC . EMC did not have, as of the date of any such
financial statements, except as and to the extent reflected or reserved
against therein, any liabilities or obligations (absolute or contingent)
which should be reflected therein in accordance with generally accepted
accounting principles, and all assets reflected therein presently fairly the
assets of EMC in accordance with generally accepted accounting principles.
(c) EMC has filed or will file as the Closing Date its tax returns required
to be filed for its two most recent fiscal years. All such returns and
reports are accurate and correct in all material respect. EMC has no
material liabilities with respect to the payment of any federal, state,
county, local, or other taxes (including any deficiencies, interest, or
penalties) accrued for or applicable to the period ended on the date of the
most recent balance sheet of EMC , except to the extent reflected on such
balance sheet and all such dates and years and periods prior thereto and for
which EMC may at said date have been liable in its own right or as
transferee of the assets of, or as successor to, any other corporation or
entity, except for taxes accrued but not yet due and payable, and to the best
knowledge of EMC , no deficiency assessment or proposed adjustment of any
such tax return is pending, proposed or contemplated. To the best knowledge
of EMC , none of such income tax returns has been examined or is currently
being examined by the Internal Revenue Service and no deficiency assessment
or proposed adjustment of any such return is pending, proposed or
contemplated. EMC has not made any election pursuant to the provisions of
any applicable tax laws (other than elections that relate solely to methods
of accounting, depreciation, or amortization) that would have a material
adverse affect on EMC , its financial condition, its business as presently
conducted or proposed to be conducted, or any of its respective properties or
material assets. There are no outstanding agreements or waivers extending
the statutory period of limitation applicable to any tax return of EMC .
2.05 Outstanding Warrants and Options. At closing, EMC will have no
existing warrants or options, calls or commitments of any nature relating to
the authorized and unissued EMC Common Stock.
2.06 Information. The information concerning EMC set forth in this Agreement
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. EMC shall cause the schedules delivered by it
pursuant hereto and the instruments delivered to Metwood hereunder to be
updated after the date hereof up to and including the Closing Date.
2.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement or the schedules hereto, since the date of the most recent EMC
balance sheet described in Section 2.04 and included in the information
referred to in Section 2.06:
(a) There has not been (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or condition of EMC or
(ii) any damage, destruction, or loss to EMC (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or conditions of EMC ;
(b) EMC has not (i) amended its articles of incorporation or bylaws; (ii)
declared or made, or agreed to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to stockholders or
purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of EMC ; (iv) made any
material change in its method of management, operation, or accounting; (v)
entered into any other material transactions; (vi) made 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) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its employees
whose monthly compensation exceeds $1,000; or (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, or employees;
(c) EMC has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate
securities calling for the issuance thereof, (ii) borrowed or agreed to
borrow any funds or incurred, or become subject to, any material
obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid any material
obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent EMC balance sheet
and current liabilities incurred since that date in the ordinary course
of business; (iv) sold or transferred, or agreed to sell or transfer,
any of its material 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 $5,000 or canceled, or agreed to
cancel, any debts or claims (except debts and claims which in the
aggregate are of a value of less dm $5,000); (v) made or permitted any
amendment or termination of any contract, agreement, or license to which
it is a party if such amendment or termination is material, considering
the business of EMC ; or (vi) issued, delivered, or agreed to issue or
deliver any stock, bonds, or other corporate securities including
debentures (whether authorized and unissued or held as treasury stock);
and
(d) To the best knowledge of EMC , it has not become subject to any law or
regulation which materially and adversely affects, or in the future would
be reasonably expected to adversely affect, the business, operations,
properties, assets, or condition of EMC .
2.08 Litigation and Proceedings. There are no material actions, suits, or
administrative or other proceedings pending or, to the knowledge of EMC ,
threatened by or against EMC or adversely affecting EMC 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.
EMC does not have any 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.
2.09 Compliance With Laws and Regulations. EMC has complied with all
applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that
noncompliance (i) could not materially and adversely affect the business,
operations, properties, assets, or condition of EMC or (ii) could not result
in the occurrence of any material liability for EMC . To the best knowledge
of EMC , the consummation of this transaction will comply with all applicable
statutes and regulations, subject to the preparation and filing of any forms
required by state and federal securities laws.
2.10 Material Contract Defaults. EMC is not in default in any material
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 EMC , and there is no event of default or other event
which, with notice or lapse of time or both, would constitute a default in
any material respect under any such contract, agreement, lease, or other
commitment in respect of which EMC has not taken adequate steps to prevent
such a default from occurring.
2.11 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 ten-n or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust, or other
material contract, agreement, or instrument to which EMC is a party or to
which any of its properties or operations are subject.
2.12 Subsidiary. EMC does not own, beneficially or of record, any equity
securities in any other entity. EMC does not have a predecessor as that
term is defined under generally accepted accounting principles or Regulation
S-X promulgated by the Securities and Exchange Commission,
2.13 EMC Schedules. EMC has delivered to Metwood the following schedules,
which are collectively referred to as the "EMC Schedules" and which consist
of the following separate schedules dated as of the date of execution of this
Agreement, all certified by a duly authorized officer of EMC as complete,
true, and accurate:
(a) A schedule including copies of the articles of incorporation and bylaws
of EMC in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of EMC approving this Agreement and the transactions herein
contemplated;
(c) A schedule setting forth a description of any material adverse change in
the business, operations, property, inventory, assets, or condition of EMC
since the most recent EMC balance sheet, required to be provided pursuant to
Section 2.04 hereof,
(d) A schedule setting forth the financial statements required pursuant to
Section 2.04(a) hereof, and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the EMC Schedules
by Sections 2.01 through 2.12.
EMC shall cause the EMC Schedules and the instruments delivered to Metwood
hereunder to be updated after the date hereof up to and including a specified
date not more than three business days prior to the Closing Date. Such
updated EMC Schedules, certified in the same manner as the original EMC
Schedules, shall be delivered prior to and as a condition precedent to the
obligation of Metwood to close.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF METWOOD
As an inducement to, and to obtain the reliance of EMC, Metwood represents
and warrants as follows:
3.01 Organization. Metwood is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Virginia and has the corporate power and is and will be
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 and to carry on its business in all material
respects as it is now being conducted, and there are no other jurisdictions
in which it is not so qualified in which the character and location of the
assets owned by it or the nature of the material business transacted by it
requires qualification, except where failure to do so would not have a
material adverse effect on its business, operations, properties, assets or
condition of Metwood. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of Metwood's
articles of incorporation or bylaws, or other material agreement to which it
is a party or by which it is bound.
3.02 Approval of Agreement. Metwood has full power, authority, and legal
right and has taken, or will take, all action required by law, its articles
of incorporation, bylaws, or otherwise to execute and deliver this Agreement
and to consummate the transactions herein contemplated. The board of
directors of Metwood have authorized and approved the execution, delivery,
and performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the Metwood Stockholders and compliance with state
and federal corporate and securities laws.
3.03 Capitalization. The authorized capitalization of Metwood consists of
10,000,000 shares, consisting of common stock, $.001 par value, of which as
of the date hereof, __________ shares are issued and outstanding to thirty-
six shareholders. All issued and outstanding shares of Metwood are legally
issued, fully paid, and nonassessable and not issued in violation of the
preemptive or other right of any person. There are no dividends or other
amounts due or payable with respect to any of the shares of capital stock of
Metwood.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the unaudited balance sheet (which will be
delivered prior to Closing) of Metwood as of December 31, 1999 and the
related statements of operations, cash flows, and stockholders' equity for
the period from inception to December 31, 1999 including the notes thereto
and representations by the chief operating officer of Metwood to the effect
that such financial statements contain all adjustments (all of which are
normal recurring adjustments) necessary to present fairly the results of
operations and financial position for the periods and as of the dates
indicated.
(b) The unaudited financial statements delivered pursuant to Section 3.04(a)
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved. The
financial statements of Metwood present fairly, as of their respective dates,
the financial position of Metwood. Metwood did not have, as of the date of
any such balance sheets, except as and to the extent reflected or reserved
against therein, any liabilities or obligations (absolute or contingent)
which should be reflected in any financial statements or the notes thereto
prepared in accordance with generally accepted accounting principles, and all
assets reflected therein present fairly the assets of Metwood, in accordance
with generally accepted accounting principles. The statements of revenue and
expenses and cash flows present fairly the financial position and result of
operations of Metwood as of their respective dates and for the respective
periods covered thereby.
3.05 Outstanding Warrants and Options. Metwood has no issued warrants or
options, calls, or commitments of any nature relating to the authorized and
unissued Metwood Common Stock.
3.06 Information. The information concerning Metwood set forth in this
Agreement and in the schedules delivered by Metwood pursuant hereto 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. Metwood shall cause the schedules delivered by
Metwood pursuant hereto to EMC hereunder to be updated after the date hereof
up to and including the Closing Date.
3.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement since the date of the most recent Metwood balance sheet described
in Section 3.04 and included in the information referred to in Section 3.06:
(a) There has not been (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or condition of Metwood
or (ii) any damage, destruction, or loss to Metwood materially and adversely
affecting the business, operations, properties, assets, or conditions of
Metwood.
(b) Metwood has not (i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make, any payment of dividends
or distributions of any assets of any kind whatsoever to stockholders or
purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock; (iii) waived any rights of value which in the aggregate are
extraordinary and material considering the business of Metwood; (iv) made any
material change in its method of accounting; (v) entered into any other
material transactions other dm those contemplated by this Agreement; (vi)
made any material accrual or material 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; or (vii) made any material
increase in any profit-sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or arrangement
made to, for, or with their officers, directors, or employees;
(c) Metwood has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate
securities calling for the issuance thereof, (ii) borrowed or agreed to
borrow any funds or incurred, or become subject to, any material
obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid any material
obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent Metwood balance
sheet and current liabilities incurred since that date in the ordinary
course of business; (iv) sold or transferred, or agreed to sell or
transfer, any of its material assets, properties, or rights, or agreed
to cancel, any material debts or claims; (v) made or permitted any
amendment or termination of any contract, agreement, or license to which
it is a party if such amendment or termination is material, considering
the business of Metwood; or (vi) issued, delivered, or agreed to issue
or deliver any stock, bonds, or other corporate securities including
debentures (whether authorized and unissued or held as treasury stock);
and
(d) To the best knowledge of Metwood, it has not become subject to any law
or regulation which materially and adversely affects, or in the future would
be reasonably expected to adversely affect, the business, operations,
properties, assets, or condition of Metwood.
3.08 Title and Related Matters. Except as provided herein or disclosed in
the most recent Metwood balance sheet and the notes thereto, Metwood has good
and marketable title to all of its properties, inventory, interests in
properties, technology, whether patented or unpatented, including, but not
limited to the Metwood technology, intellectual property, computer software,
and assets, which are reflected in the most recent Metwood balance sheet or
acquired after that date (except properties, interests in properties, and
assets sold or otherwise disposed of since such date in the ordinary course
of business), free and clear of all mortgages, liens, pledges, charges, or
encumbrances, except (i) statutory liens or claims not yet delinquent; and
(ii) such imperfections of title and easements as do not, and will not,
materially detract from, or interfere with, the present or proposed use of
the properties subject thereto or affected thereby or otherwise materially
impair present business operations on such properties. To the best knowledge
of Metwood, its technology does not infringe on the copyright, patent, trade
secret, know-how, or other proprietary right of any other person or entity
and comprises all such rights necessary to permit the operation of the
business of Metwood as now being conducted or as contemplated.
3.09 Litigation and Proceedings. There are no material actions, suits, or
proceedings pending or, to the knowledge of Metwood, threatened by or against
Metwood or adversely affecting Metwood, at law or in equity, before any court
or other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind. Metwood does not have any 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.
3.10 Material Contract Defaults. Metwood is not in default in any material
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 Metwood, and there is no event of default or other
event which, with notice or lapse of time or both, would constitute a default
in any material respect under any such contract, agreement, lease, or other
commitment in respect of which Metwood has not taken adequate steps to
prevent such a default from occurring.
3.11 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, or constitute an event of
default under, any material indenture, mortgage, deed of trust. or other
material contract, agreement, or instrument to which Metwood is a party or to
which any of its properties or operations are subject.
3.12 Governmental Authorizations. Metwood 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 of this Agreement. Except for compliance with federal 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 Metwood of this Agreement and the consummation by
Metwood of the transactions contemplated hereby.
3.13 Compliance With Laws and Relations. Metwood has complied with all
applicable statutes and regulations of any federal, 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 Metwood or except to the
extent that noncompliance would not result in the occurrence of any material
liability for Metwood. To the best knowledge of Metwood, the consummation of
this transaction will comply with all applicable statutes and regulations,
subject to the preparation and filing of any forms required by state and
federal security laws.
3.14 Subsidiary. Metwood does not own, beneficially or of record, any equity
securities in any other entity. Metwood does not have a predecessor as that
term is defined under generally accepted accounting principles or Regulation
S-X promulgated by the Securities and Exchange Commission.
3.15 Metwood Schedules. Metwood has delivered to EMC the following
schedules, which are collectively referred to as the "Metwood Schedules" and
which consist of the following separate schedules dated as of the date of
execution of this Agreement, and instruments and EMC as of such date, all
certified by the chief executive officer of Metwood as complete, true, and
accurate:
(a) A schedule including copies of the articles of incorporation and bylaws
of Metwood and all amendments thereto in effect as of the date of this
Agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of Metwood approving this Agreement and the transactions herein
contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse change in
the business, operations, property, inventory, assets, or condition of
Metwood since the most recent Metwood balance sheet, required to be provided
pursuant to Section 3.04 hereof,
(d) A schedule setting forth the financial statements required pursuant to
Section 3.04 (a) hereof, and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Metwood
Schedules by Sections 3.01 through 3.14.
Metwood shall cause the Metwood Schedules and the instruments delivered to
EMC hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date.
Such updated Metwood Schedules, certified in the same manner as the original
Metwood Schedules, shall be delivered prior to and as a condition precedent
to the obligation of EMC to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF METWOOD
The obligations of Metwood under this Agreement are subject to the
satisfaction of Metwood, at or before the Closing Date, of the following
conditions:
4.01 Shareholder Approval. EMC shall call and hold a meeting of its
shareholders, or obtain the written consent of a majority of its
shareholders, to approve the transactions contemplated by this Agreement
including the acquisition of Metwood through the issuance of EMC Common
Stock for all of the issued and outstanding Metwood Shares; the reverse split
of the issued and outstanding shares of EMC 's Common Stock; the change of
name of EMC to "Metwood, Inc." or such other derivation thereof as may be
agreed to by the board of directors of Metwood.
4.02 Reverse Split. If necessary, EMC shall call and hold a meeting of its
shareholders to approve a reverse split of its issued and outstanding shares
so that at the closing of the reorganization, there will be approximately
437,146 shares of EMC outstanding prior to the issuance of the shares to the
Metwood Shareholders.
4.03 Accuracy of Representations. The representations and Warranties made by
EMC in this Agreement were true when made and shall be true at the Closing
Date with the same force and affect as if such representations and warranties
were made at and as of the Closing Date (except for changes therein permitted
by this Agreement), and EMC shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or
complied with by EMC prior to or at the Closing. Metwood shall be furnished
with certificates, signed by duly authorized officers of EMC and dated the
Closing Date, to the foregoing effect.
4.04 Officer's Certificates. Metwood shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of EMC to the effect that to such officer's best knowledge
no litigation, proceeding, investigation, or inquiry is pending or, to the
best knowledge of EMC threatened, which might result in an action to enjoin
or prevent the consummation of the transactions contemplated by this
Agreement. Furthermore, based on certificates of good standing,
representations of government agencies, and EMC 's own documents and
information, the certificate shall represent, to the best knowledge of the
officer, that:
(a) This Agreement has been duly approved by EMC 's board of directors and
shareholders and has been duly executed and delivered in the name and on
behalf of EMC by its duly authorized officers pursuant to, and in compliance
with, authority granted by the board of directors of EMC pursuant to a
unanimous consent;
(b) There have been no material adverse changes in EMC up to and including
the date of the certificate;
(c) All conditions required by this Agreement have been met, satisfied, or
performed by EMC ;
(d) All authorizations, consents, approvals, registrations, and/or filings
with any governmental body, agency, or court required in connection with the
execution and delivery of the documents by EMC have been obtained and are in
full force and effect or, if not required to have been obtained, will be in
full force and effect by such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or investigation
at law or in equity by any public board or body pending or threatened against
EMC , wherein an unfavorable decision, ruling, or finding could have an
adverse effect on the financial condition of EMC , the operation of EMC , or
the acquisition and reorganization contemplated herein, or any agreement or
instrument by which EMC is bound or in any way contests the existence of EMC
.
4.05 No Material Adverse Change. Prior to the Closing Date, there shall not
have occurred any material adverse change in the financial condition,
business, or operations of EMC , nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any
material adverse change in the financial condition, business, or operations
of EMC .
4.06 Good Standings. Metwood shall have received a certificate of good
standing from the appropriate authority, dated as of the date within five
days prior to the Closing Date, certifying that EMC is in good standing as a
corporation in the State Nevada.
4.07 Other Items. Metwood shall have received such other documents,
certificates, or instruments relating to the transactions contemplated hereby
as Metwood may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF EMC
The obligations of EMC under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
5.01 Shareholder Approval. EMC shall call and hold a meeting of its
shareholders, or obtain through a majority written consent of its
shareholders, whereby the shareholders of EMC authorize and approve this
Agreement and the transactions contemplated hereby. If EMC is unable to
obtain shareholder approval, EMC is under no further obligation to proceed
with the transactions contemplated under this Agreement.
5.02 Metwood Shareholders. Holders of all of the issued and outstanding
Metwood Shares shall agree to this Agreement and the exchange of shares
contemplated by this Agreement.
5.03 Accuracy of Representations. The representations and warranties made by
Metwood and the Metwood Stockholders in this Agreement were true when made
and shall be true at the Closing Date with the same force and affect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), and Metwood shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Metwood prior to or at the
Closing. EMC shall be furnished with a certificate, signed by a duly
authorized officer of Metwood and dated the Closing Date, to the foregoing
effect.
5.04 Officer's Certificates. EMC shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
operating officer of Metwood to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of Metwood,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement.
Furthermore, based on certificates of good standing, representations of
government agencies, and Metwood's own documents, the certificate shall
represent, to the best knowledge of the officer, that:
4. This agreement has been duly approved by Metwood's board of
directors and shareholders and has been duly executed and delivered in
the name and on behalf of Metwood by its duly authorized officers
pursuant to, and in compliance with, authority granted by the board of
directors of Metwood pursuant to a unanimous consent of its board of
directors and a majority vote of its stockholders;
5. Except as provided or permitted herein, there have been no
material adverse changes in Metwood up to and including the date of the
certificate.
6. All authorizations, consents, approvals, registrations, and/or
filing with any governmental body, agency, or court required in
connection with the execution and delivery of the documents byMetwood
have been obtained and are in full force and effect or, if not required
to have been obtained will be in full force and effect by such time as
may be required; and
(d) There is no material action, suit, proceeding, inquiry, or investigation
at law or in equity by any public board or body pending or threatened against
Metwood, wherein an unfavorable decision, ruling, or finding would have an
adverse affect on the financial condition of Metwood, the operation of
Metwood, or the acquisition and reorganization contemplated herein, or any
material agreement or instrument by which Metwood is bound or would in any
way contest the existence of Metwood.
5.05 No Material Adverse Change. Prior to the Closing Date, there shall not
have occurred any material adverse change in the financial condition,
business or operations of Metwood, nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause of create any
material adverse change in the financial condition, business, or operations
of Metwood. Metwood shall have no more than $100,000 in liabilities
excluding any loans from EMC .
5.06 Good Standing. EMC shall have received a certificate of good standing
from the appropriate authority, dated as of a date with five days prior to
the Closing Date, certifying that Metwood is in good standing as a
corporation in the State of Virginia.
5.07 Ownership Documentation. EMC shall have received documentation
verifying that all rights, title and interest in and to the trade names,
technology, software, intellectual property, manufacturing equipment,
inventory and assets related to the Metwood products and technology shall be
free and clear of any and all liens, encumbrances, royalties and claims prior
to Closing, other than those documents in the schedules or financials
delivered to EMC .
5.08 Other Items. EMC shall have received such further documents
certificates, or instruments relating to the transactions contemplated hereby
as EMC may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of EMC and Metwood
(a) From and after the date of this Agreement until the Closing
Date and except as set forth in the respective schedules to be delivered
by EMC and Metwood pursuant hereto or as permitted or contemplated by
this Agreement, EMC and Metwood will each:
(i) Carry on its business in substantially the same manner as it has
heretofore;
(ii) Maintain in full force and effect insurance comparable 'in amount
and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve it business
organization intact, to retain its key employees, and to maintain Its
relationships with its material suppliers and customers;
(v) Duly and timely file for all taxable periods ending on or prior
to the Closing Date all federal, state, county, and local tax
returns required to be filed by or on behalf of such entity or for
which such entity may be held responsible and shall pay, or cause to
pay, all taxes required to be shown as due and payable on such
returns, as well as all installments of tax due and payable during the
period commencing on the date of this Agreement and ending on the
Closing Date.; and
(vi) Fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement and except as provided herein
until the Closing Date, EMC and Metwood will not:
(i) Make any change in its articles of incorporation or bylaws;
(ii) Enter into or amend any material 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; and
(iii) Enter into any agreement for the sale of Metwood or EMC
securities without the prior approval of the other party.
6.02 Access to Properties and Records. Until the Closing Date, Metwood and
EMC will afford to the other party's officers and authorized representatives
full access to the properties, books, and records of the other party in order
that each party may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of Metwood or EMC
and will furnish the other party with such additional financial and other
information as to the business and properties of Metwood or EMC as each
party shall from time to time reasonably request.
6.03 Indemnification by Metwood. Metwood will indemnify and hold harmless
EMC and its directors and officers, and each person, if any, who controls
EMC within the meaning of the Securities Act, from and against any and all
losses, claims, damages, expenses, liabilities, or actions to which any of
them may become subject under applicable law (including the Securities Act
and the Securities Exchange Act) and will reimburse them for any legal or
other expenses reasonably incurred by them in connection with investigating
or defending any claims or actions, whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or actions
arise out of or are based upon any untrue statement or alleged untrue
statement of material fact contained in any application or statement filed
with a governmental body or arising out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary in order to make the statements therein not misleading,
but only insofar as any such statement or omission was made in reliance upon
and in conformity with information furnished in writing by Metwood expressly
for use therein. The indemnity agreement contained in this Section 6.03
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of EMC and shall survive the consummation
of the transactions contemplated by this Agreement for a period of six
months.
6.04 Indemnification by EMC . EMC will indemnify and hold harmless Metwood,
the Metwood Stockholders, Metwood's directors and officers, and each person,
if any, who controls Metwood within the meaning of the Securities Act, from
and against any and all losses, claims, damages, expenses, liabilities, or
actions to which any of them may become subject under applicable law
(including the Securities Act and the Securities Exchange Act) and will
reimburse them for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any claims or actions, whether or
not resulting in liability, insofar as such losses, claims, damages,
expenses, liabilities, or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
application or statement filed with a governmental body or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon and in conformity with information
furnished in writing by EMC expressly for use therein. The indemnity
agreement contained in this Section 6.04 shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of
Metwood and shall survive the consummation of the transactions contemplated
by this Agreement for a period of six months.
6.05 The Acquisition of EMC Common Stock. EMC and Metwood understand and
agree that the consummation of this Agreement including the issuance of the
EMC Common Stock to Metwood in exchange for the Metwood Shares as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act and applicable state statutes. EMC and Metwood agree that
such transactions shall be consummated in reliance on exemptions from the
registration and prospectus delivery requirements of such statutes that
depend, among other items, on the circumstances under which such securities
are acquired.
(a) In order to provide documentation for reliance upon exemptions from the
registration and prospectus delivery requirements for such transactions, the
signing of this Agreement and the delivery of appropriate separate
representations shall constitute the parties acceptance of, and concurrence
in, the following representations and warranties:
(i) The Metwood Stockholders acknowledge that neither the SEC nor the
securities commission of any state or other federal agency has made any
determination as to the merits of acquiring EMC Common Stock, and that
this transaction involves certain risks.
(ii) The Metwood Stockholders have received and read the Agreement and
understand the risks related to the consummation of the transactions
herein contemplated.
(iii) Metwood Stockholders have such knowledge and experience in
business and financial matters that they are capable of evaluating each
business.
(iv) The Metwood Stockholders have been provided with copies of all
materials and information requested by them or their representatives,
including any information requested to verify any information furnished
(to the extent such information is available or can be obtained without
unreasonable effort or expense), and- the parties have been provided the
opportunity for direct communication regarding the transactions
contemplated hereby.
(v) All information which the Metwood Stockholders have provided to EMC
or their representatives concerning their suitability and intent to hold
shares in EMC following the transactions contemplated hereby is
complete, accurate, and correct.
(vi) The Metwood Stockholders have not offered or sold any securities of
EMC or interest in this Agreement and have no present intention of
dividing the EMC Common Stock or Metwood Shares to be received or the
rights under this Agreement with others or of reselling or otherwise
disposing of any portion of such stock or rights, either currently or
after the passage of a fixed or determinable period of time or on the
occurrence or nonoccurrence of any predetermined event or circumstance.
(vii) The Metwood Stockholders understand that the EMC Common Stock
has not been registered, but is being acquired by reason of a specific
exemption under the Securities Act as well as under certain state
statutes for transactions not involving any public offering and that any
disposition of the subject EMC Common Stock may, under certain
circumstances, be inconsistent with this exemption and may make Metwood
or EMC an "underwriter", within the meaning of the Securities Act. It
is understood that the definition of "underwriter" focuses upon the
concept of "distribution" and that any subsequent disposition of the
subject EMC Common Stock can only be effected in transactions which are
not considered distributions. Generally, the term "distribution" is
considered synonymous with "public offering" or any other offer or sale
involving general solicitation or general advertising. Under present
law, in determining whether a distribution occurs when securities are
sold into the public market, under certain circumstances one must
consider the availability of public information regarding the issuer, a
holding period for the securities sufficient to assure that the persons
desiring to sell the securities without registration first bear the
economic risk of their investment, and a limitation on the number of
securities which the stockholder is permitted to sell and on the manner
of sale, thereby reducing the potential impact of the sale on the
trading markets. These criteria are set forth specifically in rule 144
promulgated under the Securities Act, and, after one year after the date
the EMC Common Stock or Metwood Shares is fully paid for, as calculated
in accordance with rule 144(d), sales of securities in reliance upon
rule 144 can only be made in limited amounts in accordance with the
terms and conditions of that rule. After two years from the date the
securities are fully paid for, as calculated in accordance with rule
144(d), they can generally be sold without meeting those conditions,
provided the holder is not (and has not been for the preceding three
months) an affiliate of the issuer.
(viii) The Metwood Stockholders acknowledge that the shares of EMC
Common Stock , must be held and may not be sold, transferred, or
otherwise disposed of for value unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available. EMC is not under any obligation to register the EMC Common
Stock under the Securities Act. If rule 144 is available after one year
and prior to two years following the date the shares are fully paid for,
only routine sales of such EMC Common Stock in limited amounts can be
made in reliance upon rule 144 in accordance with the terms and
conditions of that rule. EMC is not under any obligation to make rule
144 available except as set forth in this Agreement and in the event
rule 144 is not available, compliance with Regulation A or some other
disclosure exemption may be required before Metwood Stockholders can
sell, transfer, or otherwise dispose of such EMC Common Stock without
registration under the Securities Act. Subject to compliance with
federal and state securities laws, EMC ' registrar and transfer agent
will maintain a stop transfer order against the registration of transfer
of the EMC Common Stock held by Metwood Stockholders and the
certificates representing the EMC Common Stock will bear a legend in
substantially the following form so restricting the sale of such
securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT.
(ix) Subject to compliance with federal and state securities laws, EMC
may refuse to register further transfers or resales of the EMC Common
Stock in the absence of compliance with rule 144 unless the Metwood
Stockholders furnish EMC with an opinion of counsel reasonably
acceptable to EMC stating that the transfer is proper. Further, unless
such opinion states that the shares of EMC Common Stock are free of any
restrictions under the Securities Act, EMC may refuse to transfer the
securities to any transferee who does not furnish in writing to EMC the
same representations and agree to the same conditions with respect to
such EMC Common Stock as set forth herein. EMC may also refuse to
transfer the EMC Common Stock if any circumstances are present
reasonably indicating that the transferee's representations are not
accurate.
(b) In connection with the transaction contemplated by this Agreement,
Metwood and EMC shall each file, with the assistance of the other and their
respective legal counsel, such notices. applications, reports, or other
instruments as may be deemed by them to be necessary or appropriate in an
effort to document reliance on such exemptions, and the appropriate
regulatory authority in the states where the Metwood Stockholders reside
unless an exemption requiring no filing is available in such jurisdictions,
all to the extent and in the manner as may be deemed by such parties to be
appropriate.
(c) In order to more fully document reliance on the exemptions as provided
herein, Metwood, the Metwood Stockholders, and EMC shall execute and deliver
to the other, at or prior to the Closing, such further letters of
representation, acknowledgment, suitability, or the like as EMC or Metwood
and their respective counsel may reasonably request in connection with
reliance on exemptions from registration under such securities laws.
(d) The Metwood Stockholders acknowledge that the basis for
relying on exemptions from registration or qualifications are factual,
depending on the conduct of the various parties, and that no legal
opinion or other assurance will be required or given to the effect that
the transactions contemplated hereby are in fact exempt from
registration or qualification.
6.06 EMC Liabilities. Immediately prior to the Closing Date, EMC shall
have no material assets and no liabilities in excess of $5,000, and all
expenses related to this Agreement or otherwise shall have been paid.
6.07 Securities Filings. EMC shall be responsible for the preparation of a
Form 10QSB or 10KSB for December 31, 1999 and its filing with the Securities
and Exchange Commission and Metwood will be responsible for any and all
filings in any jurisdiction where its shareholders reside which would require
a filing with a governmental agency as a result of the transactions
contemplated in this Agreement.
6.08 Sales of Securities Under Rule 144, If Applicable.
(a) EMC will use its best efforts to at all times satisfy the current
public information requirements of rule 144 promulgated under the Securities
Act so that its shareholders can sell restricted securities that have been
held for one year or more or such other restricted period as required by rule
144 as it is from time to time amended.
(b) Upon being informed in writing by any person holding restricted stock of
EMC as of the date of this Agreement that such person intends to sell any
shares under rule 144 promulgated under the Securities Act (including any
rule adopted in substitution or replacement thereof), EMC will certify in
writing to such person that it is in compliance with rule 144 current public
information requirement to enable such person to sell such person's
restricted stock under rule 144, as may be applicable under the
circumstances.
(c) If any certificate representing any such restricted stock is presented
to EMC 's transfer agent for registration or transfer in connection with any
sales theretofore made under rule 144, provided such certificate is duly
endorsed for transfer by the appropriate person(s) or accompanied by a
separate stock power duly executed by the appropriate person(s) in each case
with reasonable assurances that such endorsements are genuine and effective,
and is accompanied by an opinion of counsel satisfactory to EMC and its
counsel that such transfer has complied with the requirements of rule 144, as
the case may be, EMC will promptly instruct its transfer agent to register
such transfer and to issue one or more new certificates representing such
shares to the transferee and, if appropriate under the provisions of rule
144.. As the case may be, free of any stop transfer order or restrictive
legend. The provisions of this Section 6.08 shall survive the Closing and
the consummation of the transactions contemplated by this Agreement for a
period of two years.
(d) The shareholders of EMC as of the date of this Agreement, as well as
those receiving EMC Common Stock pursuant to this Agreement, are intended
third-party beneficiaries of this Section 6.08.
6.09 New Board of Directors and Officers. Upon closing of the transactions
contemplated by this Agreement, the current board of directors and officers
of EMC shall resign and in their place nominees of Metwood shall be
appointed, subject to the approval of the suitability and qualifications of
such nominees.
6.10 EMC Capitalization. For a period of eighteen months from the Closing
Date, EMC will not engage in any reverse split of its issued and outstanding
Common Stock without the prior written approval of the holders of a majority
in interest of the issued and outstanding EMC Common Stock on the date of
this Agreement.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. Except as provided herein, EMC and Metwood agree that there
were no finders or brokers involved in bringing the parties together or who
were instrumental in the negotiation, execution, or consummation of this
Agreement other than those previously disclosed. Further, EMC and Metwood
each agree to indemnify the other against any claim by any third person for
any commission, brokerage, or finder's fee or other payment with respect to
this Agreement or the transactions contemplated hereby based on any alleged
agreement or understanding between such party and such third person, whether
express or implied, from the actions of such party. The covenants set forth
in this section shall survive the Closing Date and the consummation of the
transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation or
warranty is being made by any party to any other regarding the treatment of
this transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding the
treatment of this transaction for federal and state income taxes and on no
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced and
construed under and in accordance with the laws of the State of Nevada.
7.04 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication
confirmed by registered or certified mail, postage prepaid, or if sent by
prepaid overnight courier addressed as follows:
If to EMC., to: If to Metwood, to:
Xxxxxxxx Xxx, President Xxxx Xxxxxxxx, President
EMC Energies, Inc. Metwood, Inc.
0000 X. Xxxxxxxx Xx, Xxx 000 0000 Xxx Xxxxxxx
Xxxx Xxxx Xxxx, XX 00000 Xxxxxxxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered or sent by
facsimile or telecopy transmission or other electronic communication, or one
day after the date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any action or
suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
7.06 Schedules; Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by EMC
or Metwood such reference is to information specifically set forth in such
schedules and clearly marked to identify the section of this Agreement to
which the information relates. Whenever any representation is made to the
"knowledge" of any party, it shall be deemed to be a representation that no
officer or director of such party, after reasonable investigation, has any
knowledge of such matters.
7.07 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged
into this Agreement. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof. There are no
other courses of dealing, understandings, agreements, representations, or
warranties, written or oral, except as set forth herein.
7.08 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 six months from the
Closing Date, unless otherwise provided herein.
7.09 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.
7.10 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 such remedies may be enforced concurrently, 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 be 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 thereof may be
extended by a writing signed by the party or parties for whose benefit the
provision is intended.
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.
EMC Energies, Inc. Metwood, Inc.
a Nevada corporation a Virginia corporation
By: /s/ Xxxxxxxx Xxx By: /s/ Xxxxxx X Xxxxxxxx
Xxxxxxxx Xxx, President Xxxx Xxxxxxxx, President
(Xxxxxx X Xxxxxxxx same as Xxxx
Xxxxxxx)
STATE OF UTAH )
ss.
COUNTY OF SALT LAKE )
On this 18th day of April, 2000, personally appeared before me
Xxxxxxxx Xxx, whose identity is personally known to me and who by me
duly sworn, did say that she is the President of EMC Energies, Inc. and
that said document was signed by her of behalf of said corporations by
authority of their bylaws, and said Xxxxxxxx Xxx acknowledged to me that
said corporation executed the same.
/s/ Justeene Xxxxxxxxxxx
NOTARY PUBLIC
STATE OF VIRGINIA )
ss.
COUNTY OF ROANOKE )
On this 11th day of May, 2000 personally appeared before me Xxxx
Xxxxxxxx, whose identity is personally known to me and who by me duly sworn,
did say that he is the President of Metwood, Inc. and that said document was
signed by him on behalf of said corporation by authority of its bylaws, and
said acknowledged to me that said corporation executed the same.
/s/ Xxxxx X Xxxxx
NOTARY PUBLIC
EXHBIT A-1
Metwood, Inc.
List of Shareholders
Number of Number of EMC
Metwood Shares Shares to be Received
Name of Shareholder Owned in Exchange Signature
