Exhibit 99.1
COMMON STOCK PURCHASE AGREEMENT
This AGREEMENT, entered into as of the 26th day of February, 2004(the
"Agreement"), by and among the sellers listed on SCHEDULE 1.1 annexed hereto
(collectively referred hereto as the "Sellers"), the purchaser listed on
SCHEDULE 1.1 annexed hereto (the "Purchaser") and Treasure Mountain Holdings,
Inc., a Nevada corporation ("Treasure Mountain" or the "Company").
WHEREAS, the Sellers collectively own an aggregate of 3,239,570 shares of
common stock, par value $.001 per share (the "Common Stock"), of the Company,
representing approximately 95% of the issued and outstanding shares of Common
Stock of Treasure Mountain; and
WHEREAS, the Purchaser desires to purchase from the Sellers, and the
Sellers desire to sell to the Purchaser an aggregate of 2,781,640 shares of the
Company's Common Stock (the "Shares") in the amounts set forth in SCHEDULE 1.1
hereto, and upon the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Purchasers and the Sellers hereby agree as follows:
ARTICLE 1
SALE OF THE SHARES
Section 1.1 SALE OF THE SHARES. Subject to the terms and conditions
hereof, each Seller hereby agrees severally and not jointly to sell, transfer
and assign to the Purchaser, and the Purchaser hereby agrees to purchase from
the Sellers, the Shares, for an aggregate purchase price of $270,000 (the
"Purchase Price"), in the amounts and for the consideration set forth opposite
each Purchaser's name on SCHEDULE 1.1 hereto. Certain capitalized terms used
herein are defined in Section 9.12 hereof.
ARTICLE 2
CLOSING AND DELIVERY
Section 2.1 CLOSING DATE. Upon the terms and subject to the conditions set
forth herein, the consummation of the purchase and sale of the Shares (the
"Closing") shall be held at such a date (the "Closing Date") and time as
determined at the mutual discretion of the Sellers and the Purchaser; PROVIDED,
HOWEVER, that the Closing shall occur no later than 30 days after the conditions
precedent contained in Article 7 herein have been satisfied (which the parties
hereto agree shall not be later than February 29, 2004). The Closing shall take
place at the offices of Xxxxxxx Xxxxxxxxx LLP, located at 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000, or by the exchange of documents and instruments
by mail, courier, telecopy and wire transfer to the extent mutually acceptable
to the parties hereto.
Section 2.2 DELIVERY AT CLOSING. At the Closing:
(a) each of the Sellers shall deliver to each of the Purchasers stock
certificates representing the number of shares that the Purchaser is purchasing
hereunder, duly endorsed for transfer to the Purchaser, in the amounts set forth
on SCHEDULE 1.1 hereto, or, accompanied by stock powers or other instruments of
transfer duly executed to the Purchaser, and with all requisite documentary or
transfer tax stamps affixed; and
(b) the Purchaser shall transfer the Purchase Price to Sellers in the form
of certified bank checks or wire transfers pursuant to the instructions on
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SCHEDULE 1.1 hereto, in the amounts and in the names as set forth on SCHEDULE
1.1 hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY
Except as set forth under the corresponding section of the disclosure
schedules (the "DISCLOSURE SCHEDULES") attached hereto as EXHIBIT A, which
Disclosure Schedules shall be deemed a part hereof, each Seller and the Company,
hereby jointly and severally represent and warrant to the Purchaser that:
Section 3.1 EXISTENCE AND POWER. Treasure Mountain is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted. Treasure Mountain has heretofore delivered to the
Purchaser true and complete copies of the Articles of Incorporation, as amended,
and By-laws, each as currently in effect.
Section 3.2 AUTHORIZATION; NO AGREEMENTS. The execution, delivery and
performance by Sellers of this Agreement, the performance of their obligations
hereunder, and the consummation of the transactions contemplated hereby are
within the Sellers' powers. This Agreement has been duly and validly executed
and delivered by each of the Sellers and is a legal, valid and binding
obligation of each of the Sellers, enforceable against them in accordance with
its terms. The execution, delivery and performance by the Sellers of this
Agreement do not violate any contractual restriction contained in any agreement
which binds or affects or purports to bind or affect any of the Sellers. The
Sellers are not parties to any agreement, written or oral, creating rights in
respect of any of such Shares in any third party or relating to the voting of
the Shares. Sellers are the lawful owners of the Shares, free and clear of all
security interest, liens, encumbrances, equities and other charges. Sellers
represent that they do not beneficially own any other shares of Common Stock
other than (i) those Shares being sold hereby and (ii) an aggregate of 457,930
shares of Common Stock. Sellers further represent that they do not beneficially
own any options or warrants or other rights to purchase shares of Common Stock.
There are no outstanding or authorized options, warrants, rights, calls,
commitments, conversion rights, rights of exchange or other agreements of any
character, contingent or otherwise, providing for the purchase, issuance or sale
of any of the Shares, or any arrangements that require or permit any of the
Shares to be voted by or at the discretion of anyone other than the Sellers, and
there are no restrictions of any kind on the transfer of any of the Shares other
than (a) restrictions on transfer imposed by the Securities Act of 1933, as
amended (the "Securities Act"), (b) restrictions on transfer imposed by
applicable state securities or "Blue Sky" laws and (c) or as set forth by
footnote to Schedule 1.1. Each Seller acquired its respective shares of Common
Stock on such date as set forth in Schedule 1.1 attached hereto.
Section 3.3 CAPITALIZATION.
(a) The number of shares and type of all authorized, issued and
outstanding capital stock of the Company is set forth in the Disclosure
Schedules attached hereto. All of the issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid and nonassesasable. All of the issued and outstanding shares of capital
stock of the Company have been offered, issued and sold by the Company in
compliance with all applicable federal and state securities laws. No securities
of the Company are entitled to preemptive or similar rights, and no Person (as
defined in Section 9.12 herein) has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated hereby. Except as a result of the purchase and sale of
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the Shares, there are no outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.
The issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any Person (other than the
Purchaser) and shall not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under such
securities.
(b) There are no outstanding obligations, contingent or otherwise, of
Treasure Mountain to redeem, purchase or otherwise acquire any capital stock or
other securities of Treasure Mountain.
(c) There are no shareholder agreements, voting trusts or other agreements
or understandings to which Treasure Mountain or any Seller is a party or by
which it is bound relating to the voting of any shares of the capital stock of
Treasure Mountain.
(d) The Shares shall be duly authorized for issuance, when delivered in
accordance with the terms of this Agreement, and shall be validly issued, fully
paid and non-assessable and the transfer thereof shall not be subject to any
preemptive or other similar right.
Section 3.4 SUBSIDIARIES. Treasure Mountain has no subsidiaries and does
not own or control, directly or indirectly, any shares of capital stock of any
other corporation or any interest in any partnership, limited liability company,
joint venture or other non-corporate business enterprise.
Section 3.5 FINANCIAL STATEMENTS.
(a) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed all reports
required to be filed by it under the Securities Act and the Securities Exchange
Act (the "Exchange Act") of 1934, as amended, including pursuant to Section
13(a) or 15(d) thereof, since May 2001 (the foregoing materials being
collectively referred to herein as the "SEC Reports") on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. The Sellers have
identified and made available to the Purchaser a copy of all SEC Reports filed
within the 10 days preceding the date hereof. As of their respective dates, the
SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Securities and Exchange Commission (the "Commission") promulgated thereunder,
and none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
("GAAP"), except as may be otherwise specified in such financial statements or
the notes thereto, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
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(b) Except as set forth in its Form 10-QSB for the period ended September
30, 2003, Treasure Mountain has not been engaged in any other business activity
since at least January 1, 1998.
(c) Since the date of the filing of its quarterly report on From 10-QSB
for the period ended September 30, 2003, except as specifically disclosed in the
SEC Reports: (i) there has been no event, occurrence or development that has had
or that could result in a Material Adverse Effect (as defined in Section 9.12
herein); (ii) the Company has not incurred any liabilities (contingent or
otherwise) or amended of any material term of any outstanding security; (iii)
the Company has not altered its method of accounting or the identity of its
auditors; (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock; (v) the
Company has not issued any equity securities to any officer, director or
Affiliate (as defined in Section 9.12 herein) of the Company, any creation or
other incurrence by Treasure Mountain of any lien on any material asset; (vi)
the Company has not made any loan, advance or capital contributions to or
investment in any Person; (vii) the Company has not entered into any transaction
or commitment made, or any contract or agreement entered into, by Treasure
Mountain relating to its business or any of its assets (including the
acquisition or disposition of any assets) or any relinquishment by Treasure
Mountain of any contract or other right; (viii) the Company has not granted any
severance or termination pay to any current or former director, officer or
employee of Treasure Mountain, or increased the benefits payable under any
existing severance or termination pay policies or employment agreements or
entered into any employment, deferred compensation or other similar agreement
(or any amendment to any such existing agreement) with any current or former
director, officer or employee of Treasure Mountain; (ix) the Company has not
established, adopted or amended (except as required by applicable law) any
collective bargaining, bonus, profit sharing, thrift, pension, retirement,
deferred compensation, compensation, stock option, restricted stock or other
benefit plan or arrangement covering any current or former director, officer or
employee of Treasure Mountain; (x) increased the compensation, bonus or other
benefits payable or otherwise made available to any current or former director,
officer or employee of Treasure Mountain; (xi) the Company has not made any tax
election or any settlement or compromise of any tax liability, in either case
that is material to Treasure Mountain; or (xii) entered into any transaction by
the Company not in the ordinary course of business.
Section 3.6 NO LIABILITIES OR DEBTS. As of the date hereof, there are no
liabilities or debts of Treasure Mountain of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability or debt.
Section 3.7 LITIGATION. There is no action, suit, investigation, audit or
proceeding pending against, or to the best knowledge of Treasure Mountain
threatened against or affecting, Treasure Mountain or any of its assets or
properties before any court or arbitrator or any governmental body, agency or
official. The Company is not subject to any outstanding judgment, order or
decree. Neither the Company, nor any officer, key employee or 5% stockholder of
the Company in his, her or its capacity as such, is in default with respect to
any order, writ, injunction, decree, ruling or decision of any court,
commission, board or any other government agency. The Commission has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the Exchange Act or the Securities Act.
Section 3.8 TAXES. (a) Treasure Mountain has (i) duly filed with the
appropriate taxing authorities all tax returns required to be filed by or with
respect to its business, or are properly on extension and all such duly filed
tax returns are true, correct and complete in all material respects, and (ii)
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paid in full or made adequate provisions for on its balance sheet (in accordance
with GAAP) all Taxes (as defined in Section 9.12 herein) shown to be due on such
tax returns. There are no liens for Taxes upon the assets of Treasure Mountain
except for statutory liens for current Taxes not yet due and payable or which
may thereafter be paid without penalty or are being contested in good faith.
Treasure Mountain has not received any notice of audit, is not undergoing any
audit of its tax returns, or has received any notice of deficiency or assessment
from any taxing authority with respect to liability for Taxes of its business
which has not been fully paid or finally settled. There have been no waivers of
statutes of limitations by Treasure Mountain with respect to any tax returns.
Treasure Mountain has not filed a request with the Internal Revenue Service for
changes in accounting methods within the last three years which change would
effect the accounting for tax purposes, directly or indirectly, of its business.
Treasure Mountain has not executed an extension or waiver of any statute of
limitations on the assessment or collection of any Taxes due (excluding such
statutes that relate to years currently under examination by the Internal
Revenue Service or other applicable taxing authorities) that is currently in
effect.
Section 3.9 INTERNAL ACCOUNTING CONTROLS; XXXXXXXX-XXXXX ACT OF 2002. The
Company is in compliance with the requirements of the Xxxxxxxx-Xxxxx Act of 2002
applicable to it as of the date hereof. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosures controls and procedures to ensure that material information relating
to the Company, is made known to the certifying officers by others within those
entities, particularly during the period in which the Company's Form 10-KSB or
10-QSB, as the case may be, is being prepared. The Company's certifying officers
have evaluated the effectiveness of the Company's controls and procedures as of
the date of its most recently filed periodic report (such date, the "Evaluation
Date"). The Company presented in its most recently filed periodic report the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date.
Since the Evaluation Date, there have been no significant changes in the
Company's internal controls (as such term is defined in Item 307(b) of
Regulation S-K under the Exchange Act) or, to the Company's knowledge, in other
factors that could significantly affect the Company's internal controls.
Section 3.10 SOLVENCY; INDEBTEDNESS. Based on the financial condition of
the Company as of the Closing Date: (i) the fair saleable value of the Company's
assets exceeds the amount that will be required to be paid on or in respect of
the Company's existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company's assets do not constitute
unreasonably small capital to carry on its business for the current fiscal year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts are
required to be paid. The Company does not intend to incur debts beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt). The Company has no
knowledge of any facts or circumstances which lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or reorganization
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laws of any jurisdiction within one (1) year from the Closing Date. The SEC
Reports set forth as of the dates thereof all outstanding secured and unsecured
Indebtedness of the Company, or for which the Company has commitments. For the
purposes of this Agreement, "INDEBTEDNESS" shall mean (a) any liabilities for
borrowed money or amounts owed in excess of $50,000 (other than trade accounts
payable incurred in the ordinary course of business), (b) all guaranties,
endorsements and other contingent obligations, whether or not the same are or
should be reflected in the Company's balance sheet or the notes thereto, except
guaranties by endorsement of negotiable instruments for deposit or collection in
the ordinary course of business, and (c) the present value of any lease payments
in excess of $50,000 due under leases required to be capitalized in accordance
with GAAP. The Company is not in default with respect to any Indebtedness. At
the Closing, there will be no outstanding liabilities, obligations or
indebtedness of the Company whatsoever.
Section 3.11 NO BROKERS. No brokerage or finder's fees or commissions are
or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement, and the Company
has not taken any action that would cause any Purchaser to be liable for any
such fees or commissions. The Company agrees that the Purchaser shall have no
obligation with respect to any fees or with respect to any claims made by or on
behalf of any Person for fees of the type contemplated by this Section with the
transactions contemplated by this Agreement.
Section 3.12 DISCLOSURE. The Company and each Seller confirms that neither
it nor any other Person acting on its behalf has provided any of the Purchaser
or its agents or counsel with any information that constitutes or might
constitute material, nonpublic information. The Company and each Seller
understand and confirm that the Purchaser will rely on the foregoing
representations in effecting transactions in securities of the Company. All
disclosure provided to the Purchaser regarding the Company, its business and the
transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, furnished by or on behalf of the Company with respect to the
representations and warranties made herein are true and correct with respect to
such representations and warranties and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Company and each Seller acknowledge and agree that the
Purchaser has not made, nor is the Purchaser making any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth herein.
Section 3.13 NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS. There are no
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the accountants and lawyers formerly or presently
employed by the Company and the Company is current with respect to any fees owed
to its accountants and lawyers.
Section 3.14 NO CONFLICTS. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby do not and will not: (i)
conflict with or violate any provision of the Company's Certificate or Articles
of Incorporation, By-laws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding to
which the Company is a party or by which any property or asset of the Company is
bound or affected, or (iii) result, in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
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governmental authority to which the Company is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not, individually or in the aggregate, have or result in a
Material Adverse Effect.
Section 3.15 FILINGS, CONSENTS AND APPROVALS. Neither the Sellers, nor the
Company is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance of this Agreement.
Section 3.16 COMPLIANCE. The Company: (i) is not in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company
under), nor has the Company received notice of a claim that it is in default
under or that it is in violation of, any indenture, loan or credit agreement or
any other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has been
waived), (ii) is not in violation of any order of any court, arbitrator or
governmental body, or (iii) is not and has not been in violation of any statute,
rule or regulation of any governmental authority, except in each case as could
not, individually or in the aggregate, have or result in a Material Adverse
Effect.
Section 3.17 TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as
required to be set forth in the SEC Reports, none of the officers or directors
of the Company and, to the knowledge of the Sellers, none of the Affiliates or
employees of the Company is presently a party to any transaction with the
Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
Section 3.18 ASSETS. Except as set forth in the SEC Reports, the Company
has no assets, including, without limitation, goodwill, assets, real property,
tangible personal property, intangible personal property, rights and benefits
under contracts and cash. All Company leases for real or personal property, are
in good standing, valid and effective in accordance with their respective terms,
and there is not under any of such leases, any existing material default or
event of default (or event which with notice or lapse of time, or both, would
constitute a material default). The Company is not a guarantor of any
indebtedness of any other person, firm or corporation. Except as set forth in
the SEC Reports, the Company has not had engaged in any other business
operations since at least January 1, 1998.
Section 3.19 INVESTMENT COMPANY/INVESTMENT ADVISOR. The business of the
Company does not require it to be registered as an investment company or
investment advisor, as such terms are defined under the Investment Company Act
and the Investment Advisors Act of 1940.
Section 3.20 ENVIRONMENTAL MATTERS. The Company has complied with all
applicable Environmental Laws (as defined below) except for violations of
Environmental Laws that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Material Adverse Effect. There is no
pending or threatened civil or criminal litigation, written notice of violation,
formal administrative proceeding, or investigation, inquiry or information
request by any Governmental Entity, relating to any Environmental Law involving
the Company. For purposes of this Agreement, "Environmental Law" shall mean any
federal, state or local law, statute, rule or regulation or the common law
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relating to the environment or occupational health and safety, including any
statute, regulation, administrative decision or order pertaining to: (i)
treatment, storage, disposal, generation and transportation of industrial, toxic
or hazardous materials or substances or solid or hazardous waste; (ii) air,
water and noise pollution; (iii) groundwater and soil contamination; (iv) the
release or threatened release into the environment of industrial, toxic or
hazardous materials or substances, or solid or hazardous waste, including
emissions, discharges, injections, spills, escapes or dumping of pollutants,
contaminants or chemicals; (v) the protection of wild life, marine life and
wetlands, including all endangered and threatened species; (vi) storage tanks,
vessels, containers, abandoned or discarded barrels and other closed
receptacles; (vii) health and safety of employees and other persons; and (viii)
manufacturing, processing, using, distributing, treating, storing, disposing,
transporting or handling of materials regulated under any law as pollutants,
contaminants, toxic or hazardous materials or substances or oil or petroleum
products or solid or hazardous waste. As used above, the terms "release" and
"environment" shall have the meaning set forth in the federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(CERCLA).
Section 3.21 INFORMED DECISION. Each Seller is aware of the Company's
business affairs and financial condition and has reached an informed and
knowledgeable decision to sell its respective portion of the Shares.
Section 3.22 TRADING WITH THE ENEMY ACT; PATRIOT ACT. No sale of the
Company's securities nor the Company's use of the proceeds from such sale has
violated the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto. Without limiting the foregoing, the Company (a) is not a
person whose property or interests in property are blocked pursuant to Section 1
of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)) and (b) does not engage in any dealings or
transactions, or be otherwise associated, with any such person. The Company is
in compliance with the USA Patriot Act of 2001 (signed into law October 26,
2001).
Section 3.23 LISTING ON THE OTCBB. The capital stock of the Company has
been approved for listing on the Over -The-Counter Bulletin Board (the "OTCBB")
and the Company has and continues to satisfy all of the requirements of the
OTCBB for such listing and for the trading of its capital stock thereunder.
ARTICLE 4
REPRESENTATIONS OF THE PURCHASER
The Purchasers represents and warrants to the Sellers, as follows:
Section 4.1 EXECUTION AND DELIVERY. The execution, delivery and
performance by the Purchasers of this Agreement are within the Purchaser's
powers and do not violate any contractual restriction contained in any agreement
which binds or affects or purports to bind or affect the Purchaser.
Section 4.2 BINDING EFFECT. This Agreement, when executed and delivered by
the Purchaser shall be irrevocable and will constitute the legal, valid and
binding obligations of the Purchaser enforceable against the Purchasers in
accordance with its terms, except as may be limited by applicable bankruptcy,
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insolvency, moratorium and other laws of general application affecting
enforcement of creditors' rights generally.
Section 4.3 INVESTMENT PURPOSE. The Purchaser understands that no federal
or state agency has made any finding or determination regarding the fairness of
the Shares for investment, or any recommendation or endorsement of an investment
in the Shares. Thee Purchaser hereby represents that it is purchasing the Shares
for their own account, with the intention of holding the Shares, with no present
intention of dividing or allowing others to participate in this investment or of
reselling or otherwise participating, directly or indirectly, in a distribution
of the Shares, and shall not make any sale, transfer, or pledge thereof without
registration under the Securities Act and any applicable securities laws of any
state unless an exemption from registration is available under those laws.
Section 4.4 INVESTMENT REPRESENTATION. The Purchaser represents that it
has adequate means of providing for its current needs and has no need for
liquidity in this investment in the Shares. Each Purchaser represents that it is
an "Accredited Investor" as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act. The Purchaser has no reason to anticipate any material
change in its financial condition for the foreseeable future. The Purchaser is
financially able to bear the economic risk of this investment, including the
ability to hold the Shares indefinitely or to afford a complete loss of his, her
or its investment in the Shares. The Purchaser represents that the Purchaser's
overall commitment to investments which are not readily marketable is not
disproportionate to the Purchaser's net worth, and the Purchaser's investment in
the Shares will not cause such overall commitment to become excessive.
Section 4.5 NO INTENT TO RESELL. The Purchaser understands that the
statutory basis on which the Shares are being sold to the Purchaser would not be
available if the Purchaser's present intention were to hold the Shares for a
fixed period or until the occurrence of a certain event. The Purchaser realizes
that in the view of the Commission, a purchase now with a present intent to
resell by reason of a foreseeable specific contingency or any anticipated change
in the market value, or in the condition of the Company, or that of the industry
in which the business of the Company is engaged or in connection with a
contemplated liquidation, or settlement of any loan obtained by the Purchaser
for the acquisition of the Shares, and for which such Shares may be pledged as
security or as donations to religious or charitable institutions for the purpose
of securing a deduction on an income tax return, would, in fact, represent a
purchase with an intent inconsistent with the Purchaser's representations and
the Commission would then regard such sale as a sale for which the exemption
from registration is not available.
Section 4.6 INVESTMENT EXPERIENCE. The Purchaser has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Shares.
Section 4.7 OPPORTUNITY TO ASK QUESTIONS. The Purchaser has had a full and
fair opportunity to make inquiries about the terms and conditions of this
Agreement, to discuss the same and all related matters with his own independent
counsel, his own accountants and tax advisers. The Purchasers has been given the
opportunity to ask questions of, and receive answers from Sellers concerning the
terms and conditions of this Agreement and to obtain such additional written
information about Treasure Mountain to the extent that Sellers possesses such
information or can acquire it without unreasonable effort or expense.
Notwithstanding the foregoing, the Purchaser has had the opportunity to conduct
its own independent investigation. The Purchaser acknowledges that it has
received no representations or warranties from the Sellers or Treasure Mountain
in making this investment decision other than as expressly set forth herein.
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Section 4.8 LEGENDS. The Purchaser acknowledges that the certificates for
the securities comprising the Shares which Purchaser will receive will contain
the following legends substantially as follows, but only if such certificates
currently contain such a legend:
"THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY THAT AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS
AVAILABLE."
ARTICLE 5
COVENANTS OF THE COMPANY
Section 5.1 PUBLIC COMPANY STATUS. The Company shall make any and all
necessary filings under the Exchange Act so that it remains a reporting company
under the Exchange Act and its Common Stock continues to be a publicly-traded
security.
Section 5.2 LISTING OF COMMON STOCK. The Company shall cause the Common
Stock of Treasure Mountain to continue to be approved for listing on the OTCBB.
ARTICLE 6
COVENANTS OF THE PARTIES
The parties hereto agree that:
Section 6.1 PUBLIC ANNOUNCEMENTS. The Sellers and the Purchaser shall
consult with each other before issuing any press release or making any public
statement with respect to this Agreement or the transactions contemplated hereby
and, except as may be required by applicable law, will not issue any such press
release or make any such public statement prior to such consultation and without
the consent of the other party.
Section 6.2 NOTICES OF CERTAIN EVENTS. In addition to any other notice
required to be given by the terms of this Agreement, each of the parties shall
promptly notify the other party hereto of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with any of the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or regulatory
agency or authority in connection with the transactions contemplated by this
Agreement; and
(c) any actions, suits, claims, investigations or proceedings commenced
or, to its knowledge threatened against, relating to or involving or otherwise
affecting such party that, if pending on the date of this Agreement, would have
10
been required to have been disclosed pursuant to Section 3 or Section 4 (as the
case may be) or that relate to the consummation of the transactions contemplated
by this Agreement.
Section 6.3 ACCESS TO INFORMATION. Following the date hereof, until
consummation of all transactions contemplated hereby, the Sellers shall give to
the Purchaser, its counsel, financial advisers, auditors and other authorized
representatives reasonable access to the offices, properties, books and records,
financial and other data and information as the Purchaser and its
representatives may reasonably request.
ARTICLE 7
CONDITIONS PRECEDENT
Section 7.1 CONDITIONS OF OBLIGATIONS OF THE PURCHASERS. The obligations
of the Purchaser are subject to the satisfaction of the following conditions,
any or all of which may be waived in whole or in part by the Purchaser:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Sellers and the Company set forth in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date.
(b) COMPLIANCE CERTIFICATE. The Chief Executive Officer of Treasure
Mountain shall deliver to the Purchasers at the Closing a certificate
certifying: (i) that there has been no material adverse change in the business,
affairs, prospects, operations, properties, assets or conditions of the company
since the date of this Agreement; (ii) that attached thereto is a true and
complete copy of Treasure Mountain's Articles of Incorporation, as amended, as
in effect at the Closing; and (iii) that attached thereto is a true and complete
copy of its By-laws as in effect at the Closing;
(c) GOOD STANDING CERTIFICATES. The Company shall have furnished the
Purchaser with good standing and existence certificates for Treasure Mountain in
its jurisdiction of incorporation and such other jurisdictions as the Purchaser
reasonably requests.
(d) CERTIFIED LIST OF RECORD HOLDERS. The Purchaser shall have received a
current certified list from the Treasure Mountain's transfer agent of the
holders of record of Treasure Mountain's Common Stock.
(e) BOARD OF DIRECTORS RESOLUTIONS. The Purchaser shall have received
executed resolutions of the Board of Directors of Treasure Mountain approving
the transactions contemplated herein.
(f) PERFORMANCE. The Sellers shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
Section 7.2 CONDITIONS OF OBLIGATIONS OF THE SELLERS. The obligations of
the Sellers to effect the sale of the Shares are subject to each of the
representations and warranties of the Purchaser set forth in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and (except to the extent such representations and warranties speak as
of an earlier date) as of the Closing Date as though made on and as of the
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Closing Date. Such condition may be waived in whole or in part by all of the
Sellers.
ARTICLE 8
TERMINATION
Section 8.1 TERMINATION. This Agreement may be terminated and the purchase
and sale of the Shares may be abandoned at any time prior to the Closing:
(a) by mutual written consent of the parties hereto;
(b) by either the Sellers or the Purchaser if the Closing shall not have
occurred on or before February 29, 2004 (unless the failure to consummate the
transactions by such date shall be due to the action or failure to act of the
party seeking to terminate this Agreement);
(c) by the Purchaser if (i) Sellers shall have failed to comply in any
material respect with any of the covenants or agreements contained in this
Agreement to be complied with or performed by Sellers; or (ii) any
representations and warranties of Sellers and the Company contained in this
Agreement shall not have been true when made or on and as of the Closing Date as
if made on and as of Closing Date (except to the extent it relates to a
particular date); or (iii) they are not satisfied with their due diligence
review of the Sellers and the Company; or
(d) by Sellers if (i) the Purchaser shall have failed to comply in any
material respect with any of the covenants or agreements contained in this
Agreement to be complied with or performed by them; or (ii) any representations
and warranties of the Purchaser contained in this Agreement shall not have been
true when made or on and as of the Closing Date.
Section 8.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to this Article 8, all further obligations of the parties
under this Agreement shall forthwith be terminated without any further liability
of any party to the other parties. Nothing contained in this Section 8.2 shall
relieve any party from liability for any breach of this Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1 NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing and either delivered personally, telecopied
or sent by certified or registered mail, postage prepaid,
If to the Sellers: Xxxxxx X. Xxxxxx III
c/o Treasure Mountain Holdings, Inc
1390 South 0000 Xxxx Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: 000-000-0000
Xxxx Xxxxxxxx
c/o Treasure Mountain Holdings, Inc
1390 South 0000 Xxxx Xxxxx 000
00
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: 000-000-0000
Xxxxx Xxxxxxxx
0000 Xxxx Xxxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxxxx
Attorney at Law
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Facsimile: 000-000-0000
If to Purchasers: Scimitar Holdings, LLC
c/o Xxxxxxx Xxxxx & Co., Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
Facsimile: 000-000-0000
With a copy to: Xxxxxxx Xxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx
Facsimile: 000-000-0000
If to the Company: Treasure Mountain Holdings, Inc
1390 South 0000 Xxxx Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxx III
Facsimile: 000-000-0000
With a copy to: Xxxxxxx X. Xxxxxxx
Attorney at Law
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Facsimile: 000-000-0000
or such other address or fax number as such party may hereafter specify for the
purpose by notice to the other parties hereto. All such notices, requests and
other communications shall be deemed received on the date delivered personally,
telecopied or, if mailed, five business days after the date of mailing if
received prior to 5 p.m. in the place of receipt and such day is a business day
in the place of receipt. Otherwise, any such notice, request or communication
shall be deemed not to have been received until the next succeeding business day
in the place of receipt.
Section 9.2 AMENDMENTS; NO WAIVERS.
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(a) Any provision of this Agreement with respect to transactions
contemplated hereby may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by the Sellers
and Purchasers; or in the case of a waiver, by the party against whom the waiver
is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 9.3 FEES AND EXPENSES. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
Section 9.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, but any such transfer or
assignment will not relieve the appropriate party of its obligations hereunder.
Section 9.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflicts of law thereof.
Section 9.6 JURISDICTION. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal or state court located in the City of New York, Borough of
Manhattan, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 9.1. shall be deemed
effective service of process on such party.
Section 9.7 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto. No provision of
this Agreement is intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 9.8 ENTIRE AGREEMENT. This Agreement and the Exhibits and
Schedules hereto constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
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Section 9.9 CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
Section 9.10 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any parties. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
Section 9.11 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which they are entitled at law or in equity.
Section 9.12 DEFINITION AND USAGE.
For purposes of this Agreement:
"Affiliate" means, with respect to any Person, any other Person, or
indirectly controlling, controlled by, or under common control with such Person.
"Material Adverse Effect" means any effect or change that is or would be
materially adverse to the business, operations, assets, prospects, condition
(financial or otherwise) or results of operations of an entity and any of its
subsidiaries, taken as a whole.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Taxes" means any and all federal, state, local, foreign or other taxes of
any kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any taxing
authority, including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth, and taxes or other charges in the
nature of excise, withholding, ad valorem or value added.
Section 9.13 SURVIVAL. The representations and warranties herein shall
survive the Closing and delivery of the Shares.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the following individuals has caused this
Agreement to be signed, and each party that is not an individual has caused this
Agreement to be duly executed under seal by its respective authorized officers,
all as of the day and year first above written.
SELLERS:
------------------------------------
Xxxxxx X. Xxxxxx III
479,980 Shares
XXXXXXX LIMITED LIABILITY COMPANY
By:
--------------------------------
Name:
Title:
391,668 Shares
------------------------------------
Xxxx Xxxxxxxx
1,879,992 Shares
------------------------------------
Xxxxx Xxxxxxxx
30,000 Shares
THE COMPANY:
TREASURE MOUNTAIN
HOLDINGS, INC.
By:
--------------------------------
Name:
Title:
[SIGNATURE PAGE CONTINUES]
16
[PURCHASERS' SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
PURCHASER:
SCIMITAR HOLDINGS, LLC
By: Xxxxxxx Xxxxx & Co., Inc., its
Member Manager
By:
---------------------------------
Name:
Title:
17
