Exhibit 2
AGREEMENT
This Agreement entered into this 5th day of February 2001 by and between
Xxxxxx Xxxxxx (Xxxxxx), Accord Advanced Technologies, Inc. a Nevada Corporation
(XXXX), National Capital Corp. of DE the owner of 100% of the membership
interest of STEP, LLC, a privately held engineering firm (NCC) and Return on
Equity Group, Inc., a private merchant bank (XXX).
WHEREAS, the above-identified parties are desirous of entering into a
definitive agreement wherein a merger will occur between the entities herein
described under the following conditions.
1. Xxxxxx will exchange his approximately sixty (60%) percent stock
ownership (i.e., approximately 26 million shares) in XXXX to NCC, thereby
providing control of XXXX to NCC. In exchange for this transfer of stock by
Xxxxxx, Xxxxxx shall receive from NCC the following:
(A) 6.6% of NCC stock upon the exchange herein provided;
(B) 6% of XXXX stock upon completion of the proposed merger transaction,
subject to further possible dilution; and
(C) Xxxxxx will be offered a reasonable Employment Agreement from the
public entity.
2. Said transfer by Xxxxxx pursuant to paragraph (1) is subject to the
conditions set forth in paragraph (3). Accordingly, the Xxxxxx stock shall be
placed in escrow with Xxxxxxx Xxxxx Esq. and endorsed in blank with instructions
to Xx. Xxxxx to endorse them to XXX'x assignees or return same to Xx. Xxxxxx if
XXX is not able to satisfy the terms and conditions of paragraph (3) below.
3. This proposed transaction between Xxxxxx and XXXX on the one hand and
NCC on the other hand is subject to NCC or its representatives negotiating an
acceptable transaction with the primary outstanding obligations of XXXX, i.e.,
Gem Management (a judgment creditor in the amount of $280,000.00) and NIR (a
lender with certain convertible debenture rights in the amount of $500,000.00.
It is understood and agreed that NCC will have 30 days from execution hereof to
have signed agreements with the within claimant and judgment creditor resolving
these claims to the parties' satisfaction. Upon the execution of this Agreement,
Xxxxxx shall resign from the Board of Directors of XXXX whereupon two directors
selected by NCC will be appointed to the Board of XXXX, thus, the Board will be
composed of three members, Xxxx Xxxxx, Esq., remaining as the third member of
said Board. In the event that NCC is not able to resolve the Gem Management and
NIR obligations to its satisfaction within said thirty (30) day period unless
extended by mutual agreement of the parties, the two NCC Board members shall
resign, Xxxxxx shall be reinstated to the Board and the escrowed stock shall be
returned to Xxxxxx.
4. After the Xxxxxx stock is placed in escrow, the second step in the
transaction will be that XXXX exchanges for one hundred (100%) percent of the
issued and outstanding stock of NCC sufficient newly issued shares to NCC
principals so that said principals will own ninety (90%) percent of the merged
entity. Upon the merger, the Certificate of Incorporation will be amended to
change the name of the entity to National Capital Corp. or such other similar
name as the Secretary of State of Delaware is able to provide and to amend the
capitalization of the entity. In addition, there should be an eight-to-one
reverse stock split, all of which will be pursuant to a Notice of Proxy to all
XXXX shareholders. The Board of Directors shall request the shareholders to take
such other actions to be offered in the proxy as is required to provide XXXX
with an additional 25% of its authorized common shares that will be registered
in order to aid XXXX in acquiring other companies and creating a market.
Moreover, AVTI's Board of Directors shall request the shareholders, in said
notice of proxy, to raise the par value of the preferred stock to $5/share for
its 3 million shares authorized and have an appropriate coupon attached thereto.
Pursuant to this transaction, AVTI's subsidiary which is presently in bankruptcy
will be overseen by Xxxxxx and XXXX in order to comply with any fiduciary
obligations he or it may have to said subsidiary.
5. Based upon Xxxx Xxxxx'x assistance in this transaction on behalf of
XXXX, NCC shall, upon the exchange of stock contemplated by paragraph (4) above,
issue one (1%) percent of the issued and outstanding shares calculated after the
issuance of the newly issued XXXX stock to Xxxx Xxxxx, Esq., but prior to the
reverse. In addition, Xxxx Xxxxx, Esq. will be offered an Employment Agreement
from the new merged entity.
6. An agent, on behalf of XXX in June, 2000, XXX incorporated NCC, a
holding company to be used as the vehicle to accomplish acquisitions for
companies in different industries. On or about October 31, 2000, with an
effective date of the transaction of September 3, 2000, NCC acquired STEP from
100% of its membership interest holders, including Xx. Xxxx XxXxxxx and Mr.
Xxxxxxx Xxxxxx. STEP is an engineering project management staffing company
focusing on petrochemical, gas pipelines and other related industry services. At
NCC's sole option, subsequent to the second step in the proposed merger
transaction, NCC may merge Xxxxxxx-Xxxxx, Inc. into NCC maintaining this
business as a wholly owned subsidiary of NCC.
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7. On December 27, 2000, NCC paid the STEP membership interest for
conveying their membership interest to NCC with approximately 49% of its NCC
common shares.
8. XXX has spoken to Mr. Xxxxxxx Xxxxxx, CEO and President of STEP and
informed him of XXXX. XXXX, through its subsidiary, is currently engaged in the
design, remanufacture and sale of customized electronic components and
subsystems. In order to complete the proposed merger transaction, XXXX as a
public reporting company will require inspection of STEP and NCC books, records,
and operations. Accordingly, NCC will provide its first year of operation or a
portion thereof by a certified audited financial statement and STEP will provide
two years certified audited financial statements for the fiscal years ending
1999 and 2000. Xxxxxxx Xxxxxx represents that said audited statements should be
completed within 60 days from the execution hereof.
9. XXXX and Xxxxxx represent that all forms required to be submitted to the
SEC have been filed in order to insure XXXX continues to comply with the
Securities and Exchange of 1934, as amended.
10. XXXX further represents that other than those matters disclosed in its
filings, there are no other litigation pending again XXXX or undisclosed
liabilities.
11. NCC represents that that it acquired STEP, an engineering, operations,
maintenance and staffing corporation operating throughout the world with 1,500
employees, $600 million backlog and projects EBIT for the fifteen (15) months
ending December 31, 2001 at $12 million. Furthermore, NCC represents that the
audit of STEP will not materially differ from said representation. However, in
the event that the projected EBIT is less than said 12 million, the parties
agree that NCC's or its assignee's interest in XXXX, i.e., ninety (90%) percent
based upon paragraph 4 above, shall be reduced by the same percentage that the
audited EBIT figure of STEP is less than 12 million. By way of example, in the
event the EBIT of STEP is 10 million rather than 12 million, the ninety (90%)
percent interest of the NCC shareholders in XXXX shall be reduced by a factor of
16.8% of the total which equals retention of 74.88% of XXXX.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
Xxxxxx Xxxxxx, Individually Accord Advanced Technologies, Inc.
/s/ Xxxxxx Xxxxxx By /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx Xxxxxx Xxxxxx Its President
National Capital Corp. of Delaware
By /s/ X. Xxxxxxxxxx
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X. Xxxxxxxxxx
Its Secretary/Treasurer
Return on Equity Group, Inc.
By /s/ X. Xxxxxx
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X. Xxxxxx
Its President
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