Exhibit 2.1
CONTRIBUTION AGREEMENT
This Contribution Agreement ("Agreement") is entered into effective as of
the 1st day of February, 2001, between EnerGCorp., Inc., a Florida corporation
("Parent") and American Home Capital Corporation ("American"), and is intended
to constitute a capital contribution within the meaning of Section 351 of the
Internal Revenue Code of 1986, as amended.
1. AGREEMENT TO MAKE CONTRIBUTION: Parent owns 100% of the issued and
outstanding shares of Swiss Asset Management, Inc. (the "SAMI Stock"), which
consists of one thousand (1,000) shares of common stock, no par value. Parent
agrees to contribute the SAMI Stock to American concurrently with the issuance
to Parent of the Stock referenced in Section 2 hereof. At the date of the
contribution of SAMI Stock to American, Parent agrees that the net book value
(as determined in accordance with generally accepted accounting principals) of
SAMI shall be at least Fifteen Million Dollars ($15,000,000) and, in the event
SAMI's net book value is less than Fifteen Million Dollars ($15,000,000), Parent
shall, at Parent's election made in Parent's sole and absolute discretion,
either (i) make additional contributions of capital to SAMI in an amount equal
to the difference between SAMI's actual net book value and Fifteen Million
Dollars ($15,000,000) (the "Book Value Shortfall") for the purposes of funding
additional loans to be extended by SAMI or (ii) purchase shares of American's
unissued common stock at a price of $9.00 per share in the amount of the Book
Value Shortfall, which purchase price shall be paid to American to be used in
funding additional loans to be extended by SAMI or for such other purpose as
American's board of directors determines. In addition, after consummation of the
transactions contemplated hereby, Parent agrees to ensure by such means as it
deems appropriate that American is able to fulfill the following obligations as
they become due (provided that such agreement shall not be deemed a waiver of
any defense otherwise available to American against the enforcement of such
obligations): $405,000 obligation to the Humber family; $85,000 obligation to
Why USA Financial Group; and $70,000 obligation for Employee CSV Insurance.
2. ISSUANCE OF STOCK: In consideration of the capital contribution
referenced in Section 1 hereof, American shall issue to Parent 1,695,654 shares
of American's authorized but unissued no par value common stock valued in
connection with the capital contribution referenced in Section 1 hereof, at
$9.00 per share (the "Stock"), and a warrant to acquire up to an additional
500,000 shares of American's authorized but unissued common capital stock at a
price of $10.00 per share, such warrants to be exercisable at any time for a
period of thirty (30) months from the date hereof (the "Warrant"). The Warrant
will be in the form of Exhibit A.
3. CLOSING: The closing of the transactions referenced in Sections 1 and 2
hereof (the "Closing") shall take place at Parent's offices located at 0000 Xxxx
00xx Xxxxx, Tempe Arizona, on or before March 12, 2001 or such earlier or later
date as the parties may mutually agree. If at the Closing all of the terms,
provisions and conditions herein required to have been satisfied by such date
have been duly and fully satisfied, the transactions contemplated hereby shall
be completed as follows:
(a) American shall deliver to Parent the certificates evidencing the
Stock and the Warrant; and
(b) Parent shall deliver to American the certificates evidencing the
SAMI Stock, duly endorsed for transfer, or, in the alternative, with stock
powers affixed thereto in proper form for transfer, and any necessary stock
transfer stamps shall be affixed in the manner provided by law.
4. EXEMPTION FROM REGISTRATION. The parties intend that the issuance of the
Stock and the contribution of the SAMI Stock shall be exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
pursuant to Section 4(2) of the Act and the rules and regulations promulgated
thereunder. The parties similarly understand that the issuance of the Stock will
not be registered or qualified with, or reviewed by, any state securities
administrator in reliance on similar exemptions. Accordingly, American and
Parent understand that the Stock and the SAMI Stock will constitute restricted
securities that must be held indefinitely unless the sale thereof is registered
under the Act and applicable state law, or exemptions from such registrations
are available. Parent and American understand and agree that the Stock and the
SAMI Stock will bear the following legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or under any other
applicable federal or state laws or regulations, and may not be
transferred unless a registration statement is in effect thereunder
covering the shares, or the shares are exempt from such registration
requirements.
5. AMERICAN'S REPRESENTATIONS AND WARRANTIES: American (which term shall
include American and each of its subsidiaries) represents and warrants to Parent
as follows:
(a) ORGANIZATION AND STANDING OF AMERICAN: American is a corporation
duly organized, validly existing and in good standing under the laws of Nevada,
has all necessary corporate power and authority to own its property and conduct
its business as now conducted, and is duly qualified to transact business and is
in good standing in each state where its business requires qualification. The
copy of American's Articles of Incorporation and all amendments thereto to date
and the copy of American's Bylaws as amended to date, certified by American's
secretary, which have been delivered to Parent are complete and correct as at
the date of this Agreement.
(b) SUBSIDIARIES AND AFFILIATES: American has no subsidiaries or
affiliates, except (i) Metro Realty & Investments, Metro Marketing & Sales, Inc.
and Metro Financial, Inc., all of which were disposed of on or before January 1,
2001; (ii) MCCA, Inc. and TCS Financial, both of which were disposed of in a
transaction dated as of December 28, 2000, for an amount of cash and promissory
notes in an amount, in the aggregate, of at least one hundred thousand dollars
($100,000.00); and (iii) TCS Real Estate Services, Inc., TCS Mortgage, Inc. and
TCS Insurance Services, Inc.
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(c) CAPITALIZATION: American's authorized capital stock consists of
Ten million (10,000,000) shares of one tenth cent ($0.001) par value common
stock of which One Million Three Hundred Thirty Two Thousand, Seven Hundred
Fifty-Six (1,332,756) shares and no more are issued and outstanding, One Hundred
Thousand (100,000) shares of no par value preferred stock of which no shares are
issued and outstanding, warrants for Five Hundred Twelve Thousand Nine Hundred
Twenty-Nine (512,929) shares and options for Two Hundred Three Thousand Five
Hundred (203,500) shares, all as set forth on Schedule 5(c). All such issued
shares have been validly issued and are fully paid and non-assessable, and all
such warrants and options have been issued in compliance with all applicable
securities laws and, when the consideration for the shares to be issued pursuant
to such warrants and options has been paid, such shares will be validly issued,
fully paid and non-assessable. Except as set forth on Schedule 5(c) and as
contemplated hereby, as of the Closing, American will have no obligation to
issue any shares, nor will any share then be reserved for issuance, upon
exercise or conversion of any outstanding options, warrants, convertible
securities, or other securities, or otherwise. When issued to Parent in exchange
for the capital contribution referenced in Section 1, the Stock will be duly and
validly issued, fully paid and nonassessable, and will not have been issued in
violation of any preemptive or other rights of any person.
(d) FINANCIAL STATEMENTS: American has delivered, or will deliver, to
Parent copies of the following financial statements, all of which are, or when
delivered will be, true and complete and have been, or will be, prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods indicated:
(i) A balance sheet as of the close of the fiscal year concluding
immediately prior to date of execution of this Agreement, which presents a true
and complete statement, as of its date, of American's financial condition and of
its assets and liabilities (whether accrued, absolute, contingent or otherwise);
(ii) A statement of income (which includes, but is not limited
to, all taxable income of every nature) and of retained earnings, if any, for
the fiscal year ended concluding immediately prior to the date of execution of
this Agreement, which accurately presents the results of American's operations
for the period indicated.
(e) AUTHORITY: American's Board of Directors has authorized the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby. This Agreement constitutes a legal, valid
and binding obligation of American and is enforceable in accordance with its
terms. No action on the part of the shareholders of American is required for the
consummation of the transactions contemplated hereby.
(f) ABSENCE OF UNDISCLOSED LIABILITIES: Except as and to the extent
reflected or reserved against in American's balance sheet for its most recent
fiscal year, American, as of the date of such balance sheet, had no liabilities
of any nature, whether accrued, absolute, contingent or otherwise, including,
but not limited to, tax liabilities due or to become due in respect of or
measured by American's income for any period ending on or prior to the close of
such fiscal year, or arising out of transactions entered into, or any stated
facts existing, prior thereto.
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(g) ABSENCE OF CERTAIN CHANGES: Since the date thereof and except as
reflected by the financial statements herein referred to, there has not been:
(i) Any material adverse change in American's financial
condition, assets, liabilities or business, other than changes in the ordinary
course of business or other than changes specifically provided for by the terms
of this Agreement;
(ii) Any damage, destruction or capital loss, whether or not
covered by insurance, materially and adversely affecting American's properties,
business or prospects;
(iii) Any declaration, setting aside or payment of any dividend
or other distribution in respect of American's capital stock, or any direct or
indirect redemption, purchase or other acquisition of any such stock, except as
specifically provided for by the terms of this Agreement;
(iv) Any increase in the compensation payable or to become
payable by American to any of its officers, employees or agents, or any bonus
payment or arrangement made to or with any of them except for increases effected
in accordance with Company's established policy of periodic wage and salary
review and of sporadic increases to retain personnel, all of which are reflected
in American's payroll records;
(v) Any labor trouble, or any event or condition of any
character, materially and adversely affecting American's business or prospects
(other than matters affecting economic or business conditions in general).
(h) TAXES: American has filed before delinquent all federal, state and
local tax returns that are required to be filed and has fully paid or adequately
reserved all income, profits, franchise, sales, use, occupation, property,
excise and other taxes payable pursuant to such returns, to assessments made or
otherwise. No claims for deficiencies on any such returns or other tax reports
are pending or, to American's knowledge, threatened against American. No
assessment has been proposed with respect to any tax return filed by or with
respect to American. There is no presently outstanding waiver by American of the
statute of limitations pertaining to any taxes payable by it.
(i) TITLE TO PROPERTIES, LIENS AND ENCUMBRANCES: American has good and
marketable title to all its properties and assets, real and personal, tangible
and intangible including those reflected in its aforesaid balance sheet (except
as since sold or otherwise disposed of in the ordinary course of business) and
those consisting of intellectual property rights, subject to no mortgage,
pledge, lien, claim, encumbrance, license or charge except for liens shown on
such balance sheet as securing specific liabilities set forth therein (with
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respect to which no default exists), except for the lien of current state and
local property taxes not in default. No person, including any officer or
director of American owns, directly or indirectly, in whole or in part, any
patents, patent applications, trademarks, trademark registrations or
applications therefor, trade names, copyrights, or copyright registrations or
applications therefor which American is presently using or the use of which is
necessary in connection with the performance of any material contract, proposal
or letter of intent to which American is a party.
(j) CONTRACTS: Schedule 5(j) correctly sets forth all of the
indentures, mortgages, security agreements, chattel mortgages, conditional sales
agreements, insurance policies, pension, retirement, bonus, group insurance,
welfare, employee stock option, employee stock purchase or other similar plans,
contracts, written proposals and letters of intent to which American is a party,
and all material amendments thereof. No default or claimed default exists and no
event has occurred which after the passage of time or the giving of notice would
constitute a default in any obligation on American's part or, to American's
knowledge, on the part of any other party to be performed under any agreement or
other instrument referred to in Schedule 5(j) except as set forth in Schedule
5(j). There are no employment contracts or agreements, or understandings of any
kind or nature which give rise to a claim of a right to employment or special
benefits or compensation between American and any person, including without
limitation, its officers, directors, shareholders and employees. Except as set
forth in Schedule 5(j), American does not maintain any employee bonus, pension,
profit-sharing, stock option, incentive, deferred compensation, hospitalization,
medical, insurance or other employee benefit plan.
(k) LITIGATION, ETC.: There are no outstanding claims of any kind or
any actions, suits, proceedings, arbitrations or investigations pending or
threatened in any court or before any governmental agency or instrumentality or
arbitration panel or otherwise against, by or affecting American or its
business, prospects or condition (financial or otherwise), or its properties or
assets, or that would prevent the performance of this Agreement or any of the
transactions contemplated hereby, or that declare the same unlawful or cause the
rescission thereof. American has complied with and is not in default in any
respect under (and has not been charged or threatened with, and is not under any
investigation with respect to, any charge concerning any violation of any
provision of) any federal, state or local law, regulation, ordinance, rule or
order (whether executive, judicial, legislative or administrative), or any
order, writ, injunction or decree of any court, agency or instrumentality.
(l) NO BROKERS, ETC.: All negotiations relating to this Agreement and
the transactions contemplated hereby have been conducted directly between
American and Parent or their respective attorneys, without the intervention of
any person and no finder or broker has acted for American in relation to the
transactions covered by this Agreement.
(m) NO CONFLICT: The execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby will not
cause, constitute or conflict with or result in any breach or violation of any
provision of or constitute a default under any license, indenture, mortgage,
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charter, instrument, articles of incorporation, bylaws, or other agreement or
instrument to which American is a party, or by which it or its property may be
bound, nor will any consents or authorizations of any person not a party hereto
be required; an event that would permit any party to any agreement or instrument
to terminate it or to accelerate the maturity of any indebtedness or other
obligation of American; or any event that would result in the creation or
imposition of any lien, charge or encumbrance on any asset of American.
(n) FULL DISCLOSURE: None of American's representations and warranties
in this Agreement or in any exhibit, certificate or other document provided or
delivered to Parent by or on behalf of American in connection herewith, contains
or will contain any untrue statement of material fact, or omit any material fact
the omission of which would be misleading.
6. PARENT'S REPRESENTATIONS AND WARRANTIES:
(a) CORPORATE POWER: Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and has the
corporate power to own its properties and carry on its business as now being
conducted.
(b) CORPORATE AUTHORITY: The execution, delivery and performance of
this Agreement and consummation of the transactions contemplated hereby has been
duly authorized by all necessary corporate action and does not constitute a
violation of the Articles of Incorporation or Bylaws of Parent nor any
understanding or outstanding agreement to which Parent is a party, by which it
is bound, does business or holds property, or any law, order, rule, regulation,
writ, injunction or decree of any court or federal, state or local commission,
board or other administrative agency having jurisdiction over Parent or its
business or property.
(c) SAMI STOCK: Parent is the owner of the SAMI Stock, and has good
and marketable title (legal and beneficial) thereto, free and clear of all
liens, pledges, proxies, voting trusts, encumbrances, security interests,
claims, charges, and restrictions whatsoever. The SAMI Stock has been duly
authorized and validly issued, and is fully paid and nonassessable. No SAMI
Stock was issued in violation of any federal, state or other law pertaining to
the issuance of securities or in violation of any rights, preemptive or
otherwise, of any person.
(d) FINANCIAL STATEMENTS: The financial statements of Parent and SAMI
provided to American (i) are in conformity with Parent's and SAMI's books and
records and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis except as set forth in the report of
auditors, if any, which accompanies them, (ii) are correct and complete in all
material respects and include all adjustments necessary to a fair presentation,
(iii) accurately reflect all of Parent's liabilities and obligations (whether
direct or indirect, accrued, absolute, contingent or otherwise), including
without limitation tax liabilities due or to become due. From the date of the
aforementioned balance sheet to the Closing date, Parent and SAMI has conducted
and will conduct its business so that at the Closing there will have been no
material adverse change in the financial position, net worth or results of
operations of Parent as reflected in the aforementioned financial statements.
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(e) LITIGATION, ETC.: There are no outstanding claims of any kind or
any actions, suits, proceedings, arbitrations or investigations pending or
threatened in any court or before any governmental agency or instrumentality or
arbitration panel or otherwise against, by or affecting Parent or its business,
prospects or condition (financial or otherwise), or its properties or assets, or
that would prevent the performance of this Agreement or any of the transactions
contemplated hereby, or that declare the same unlawful or cause the rescission
thereof. Parent has complied with and is not in default in any respect under
(and has not been charged or threatened with, and is not under any investigation
with respect to, any charge concerning any violation of any provision of) any
federal, state or local law, regulation, ordinance, rule or order (whether
executive, judicial, legislative or administrative), or any order, writ,
injunction or decree of any court, agency or instrumentality.
(f) NO BROKERS, ETC.: All negotiations relating to this Agreement and
the transactions contemplated hereby have been conducted directly between
American and Parent or their respective attorneys, without the intervention of
any person and no finder or broker has acted for Parent in relation to the
transactions covered by this Agreement.
7. NATURE AND SURVIVAL OF REPRESENTATIONS: The representations and
warranties made by Parent and American, and their respective obligations to be
performed under the terms hereof at, prior to, or after the Closing hereunder,
shall not expire with, or be terminated or extinguished by, such closing
notwithstanding any investigations of the facts constituting the basis of the
representations and warranties of another party by any party hereto or anyone on
behalf of any party hereto.
8. INDEMNIFICATION.
(a) American agrees to indemnify Parent against and in respect of:
(i) any and all loss, liability, cost, expense or damage
resulting from any misrepresentation, breach, non-performance or inaccuracy of
any representation, indemnity, warranty, or any covenant by American made or
contained in this Agreement or in any exhibit, certificate or document executed
and delivered to Purchaser by or on behalf of the American required by this
Agreement or any of the transactions contemplated herein;
(ii) any and all costs, expenses (including settlement payments
made as provided in this Agreement), actions, suits, proceedings, claims,
demands, assessments, judgments, incident to or arising as a result of any
breach, misrepresentation, non-performance or inaccuracy described in subsection
(i) of this subsection;
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(iii) any and all costs, expenses and all other actual damages
incurred by Parent in remedying any breach, misrepresentation, non-performance
or inaccuracy described above, including, by way of illustration and not
limitation, all legal and accounting fees and expenses, other professional
expenses and all filing fees and collection costs incident thereto and all such
fees, costs and expenses incurred in defending claims that, if successfully
prosecuted would have resulted in Damages (as defined herein); and
(iv) any and all deficiencies, underpayments of tax, penalties,
additions to tax, interest payments, payments of any taxes including, without
limitation, income, employment, payroll, F.I.C.A., F.U.T.A., sales, use, trust
fund taxes and tax payments to be withheld, and any and all other costs and
expenses including, without limitation, legal and accounting fees and expenses,
relative to examinations, proposed or final adjustments arising from such
examinations and any assessments relating thereto, contests, claims, suits or
proceedings respecting the determination of loss, liability, cost, expense
and/or damage resulting from deficiencies in federal, state or local taxes, in
respect of or directly or indirectly related to or resulting from the tax
computation for any periods) ended on or prior to the date hereof.
Any and all of the foregoing sometimes herein are referred to collectively as
"Damages."
Parent may recoup any Damages by causing American to issue additional
shares of Stock, at a value of $9.00 per share.
(b) Parent shall indemnify American against and in respect of:
(i) any and all loss, liability, cost, expense or damage
resulting from any misrepresentation, breach, non-performance or inaccuracy of
any representation, indemnity, warranty, or any covenant by Parent made or
contained in this Agreement or in any exhibit, certificate or document executed
and delivered to American by or on behalf of Parent required by this Agreement
or any of the transactions contemplated herein;
(ii) any and all costs, expenses (including settlement payments
made as provided in this Agreement), actions, suits, proceedings, claims,
demands, assessments, judgments, incident to or arising as a result of any
breach, misrepresentation, non-performance or inaccuracy described in subsection
(i) of this subsection;
(iii) any and all costs, expenses and all other actual damages
incurred by American in remedying any breach, misrepresentation, non-performance
or inaccuracy described above, including, by way of illustration and not
limitation, all legal and accounting fees and expenses, other professional
expenses and all filing fees and collection costs incident thereto and all such
fees, costs and expenses incurred in defending claims that, if successfully
prosecuted would have resulted in damages.
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(c) If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any provision of this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorney's fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
9. COVENANTS OF AMERICAN PRIOR TO CLOSING: American (which term includes
American and all of its subsidiaries) covenants and agrees to and with Parent as
follows:
(a) CORPORATE MATTERS. As soon as reasonably practicable after the
execution and delivery of this Agreement and in any event prior to the Closing,
American shall provide Parent with satisfactory evidence that it has (i)
effected a consolidation of its outstanding shares of common stock on a basis of
one (1) share to be issued in replacement of ten (10) shares outstanding on the
date of this Agreement, such that, after the consolidation, the Stock being
issued to Parent pursuant to Section 2 constitutes not less than 94% of the
issued and outstanding shares of American's common stock; (ii) terminated the
warrants held by Northstar Partners by virtue of expiration in accordance with
their terms; (iii) reduced the size of its Board of Directors to five members;
(iv) sold its interest in MCCA, Inc. and TCS Financial, Inc. in a sale that
netted American not less than $100,000 in cash and notes receivable and disposed
of Metro Realty & Investments, Metro Marketing & Sales, Inc. and Metro
Financial, Inc., on terms satisfactory to Parent; and (v) declared (as of a
record date prior to the date on which Parent becomes a shareholder of American,
but after effecting the consolidation referenced above) and paid a dividend to
its shareholders consisting of a warrant to acquire one share of American's
common stock for every one share of common stock then owned, after the effected
consolidation set forth in (a)(i) above, by such shareholder at the time of
exercise, with such warrant to have an exercise price of $10.00 per share and be
exercisable for a period of thirty (30) months from its issuance date. Such
warrant will be in the form of Exhibit A.
(b) INFORMATION AND ACCESS. American will give to Parent and its
counsel, accountants and other representatives, full access during normal
business hours to all the properties, books, contracts, documents and records of
American, and will furnish to Parent all such documents and records and
information with respect to the affairs of American as Parent from time to time
shall reasonably request. Parent agrees that unless and until the Closing has
been consummated hereunder, Parent and its representatives will hold in strict
confidence all data and information so obtained from American, and if the
transactions herein provided for are not consummated, Parent will return to
American all such data as American may reasonably request.
(c) CONDUCT OF BUSINESS. The business of American will be conducted
diligently and only in the ordinary course to the date of Closing; and American
will use its best efforts (without making any commitments on behalf of or which
would be binding upon Parent) to preserve the business organization, to keep
available to Parent the present officers and employees of American and to
preserve for Parent the relationships of American with others having business
relations with it.
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(d) CONTRACTS. Except for contracts with Parent, or by mutual
agreement, no contract or commitment for the sale of products or services by
American in any amount or any amendment or extension of any contract or
commitment for such sale shall be entered into by American after the execution
hereof, except in the ordinary course of business.
(e) COMPENSATION. American will not, without Parent's prior written
consent, increase or decrease any salaries payable or to become payable by
American to any employee, nor will American increase or decrease benefits
payable to any officer or employee under any bonus or pension plan or other
contract or commitment.
(f) SALE OF CAPITAL ASSETS. American will not sell or otherwise
dispose of, other than in the ordinary course of its business, any of its
properties or interests therein without the prior written consent of Parent,
except as otherwise specifically contemplated hereby.
(g) DIVIDENDS. American will not declare or pay any dividend or make
any other distribution on or in respect of any of its capital stock, except as
otherwise specifically contemplated hereby.
(h) CORPORATE FRANCHISES. American will take such action as may be
necessary to maintain, preserve, renew and keep in full force and effect
American's corporate existence, rights, licenses, franchises and permits, will
not amend either its articles of incorporation or its bylaws, and will duly
comply with all laws and regulations applicable to it or to the conduct of its
business.
(i) NONCIRCUMVENTION. American shall, and shall cause its officers and
directors to, take no action (or omit to take any action) that would tend to
delay, hinder, prohibit, circumvent or otherwise cause Parent not to obtain the
benefits contemplated by this Agreement. The parties hereby acknowledge and
agree that Parent would not obtain or realize the benefits intended to be
derived from the transactions contemplated hereby if either (i) Parent's ability
to vote the Stock is restricted or otherwise limited in any respect, or (ii) the
transactions contemplated hereby cannot be conducted on a tax-free basis.
Therefore, the parties agree that Parent shall have the absolute right to
rescind if any of the foregoing events occurs.
10. CONDITIONS PRECEDENT TO PARENT'S OBLIGATIONS: All obligations of Parent
under this Agreement are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions:
(a) AMERICAN'S REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING.
American's representations and warranties contained in this Agreement shall be
true at and as of the Closing as though such representations and warranties were
made at and as of such time.
(b) AMERICAN'S PERFORMANCE. American shall have performed and complied
with all agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
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(c) AMERICAN'S CERTIFICATE. American shall have delivered to Parent
its certificate dated the date of the Closing, certifying the fulfillment of the
conditions specified in paragraphs (a) and (b) of this Section 10.
11. CONDITIONS PRECEDENT TO AMERICAN'S OBLIGATIONS: All of the obligations
of American under this Agreement are subject to the fulfillment, prior to or at
the Closing, of each of the following conditions:
(a) PARENT'S REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Parent's
representations and warranties contained in this Agreement shall be true at and
as of the Closing as though such representations and warranties were made at and
as of such time.
(b) PARENT'S PERFORMANCE. Parent shall have performed and complied
with all agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(c) PARENT'S CERTIFICATE. Parent shall have delivered to American its
certificate dated the date of the Closing, certifying the fulfillment of the
conditions specified in paragraphs (a) and (b) of this Section 11.
12. TERMINATION. In addition to any other remedies such party may have,
either of the parties may terminate this Agreement, without liability upon (a)
the failure of any condition not otherwise waived by the party entitled to
performance, or (b) upon mutual written consent of the parties.
13. FORM OF DOCUMENTS. All instruments, certificates, opinions and other
documents to be delivered under this Agreement by any party to any other must be
in form satisfactory to counsel for the other party.
14. EXPENSES. Each party will pay all costs and expenses of its performance
of and compliance with all agreements and conditions contained in this Agreement
on its part to be performed or complied with.
15. ASSIGNMENT. This Agreement and any rights pursuant thereto are not
assignable without the prior written consent of the other party. Nothing in this
Agreement, expressed or implied, is intended to confer upon any person, other
than the parties hereto, and their permitted successors, heirs or assigns, any
rights or remedies under or by reason of this Agreement.
16. PARTIES IN INTEREST. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
permitted heirs, successors and assigns of Parent and American.
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17. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed, first class, certified mail, postage prepaid, to their
principal corporate address, or at such other address as directed in writing:
To Parent: EnerGCorp., Inc.
0000 X. 00xx Xxxxx
Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
To American: American Home Capital Corporation
00000 Xxxxx Xxxxxxxx Xxxxxxx, Xx. 000
Xxx Xxxxx, XX 00000
18. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. GOVERNING LAW. This Agreement is being executed and delivered and is
intended to be performed in the State of Arizona and shall be construed and
enforced in accordance with the laws of such State.
20. HEADINGS AND EXHIBITS. The section and paragraph headings of this
Agreement are inserted for convenience only and shall not constitute a part
hereof. The Exhibits referred to herein have been or will be identified by the
signatures of the parties hereto and when delivered and attached hereto shall
constitute a part hereof.
21. MISCELLANEOUS. Neither this Agreement nor any provision hereof may be
waived, changed, modified or amended other than in writing signed by the party
against whom enforcement is sought. Time is of the essence of this Agreement and
each provision hereof. This Agreement contains the entire agreement of the
parties with respect to its subject matter and supersedes all prior agreements
and understandings with respect thereto, all of which are merged into this
Agreement. Original signatures transmitted by facsimile communications shall
constitute originals for purposes of valid execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed in its corporate name by its officers
thereunto duly authorized and its corporate seal to be hereunder affixed and
duly attested as of the day and year first above written.
EnerGCorp., Inc., American Home Capital Corporation,
a Florida corporation a Nevada corporation
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------- ------------------------------------
Xxxxx X. Xxxxxx, President Its: President and Director
12
EXHIBIT A
AMERICAN HOME CAPITAL CORPORATION
Common Stock Purchase Warrant
American Home Capital Corporation, a Nevada corporation, (the "Company"),
has granted to EnerGCorp, Inc. or registered assigns, a Warrant (this "Warrant")
for an aggregate of 500,000 shares of Common Stock without par value ("Stock")
of the Company for a price of $10.00 per share (over and above the consideration
paid for this Warrant) or an aggregate of $5,000,000 (the "Total Purchase
Price"), such number of shares and such price per share being subject to
adjustment as described below. This Warrant is issued by the Company and is
accepted by the holder on the following understandings:
1. The number of shares of Stock (or other securities) purchasable under
this Warrant, and the price per share payable therefor (the "Exercise Price"),
are to be adjusted as upon the occurrence of any of the events specified in
Subsections 1.1 and 1.5 below.
1.1. An adjustment is to be made upon:
(a) the issuance by the Company of Stock (exclusive of Stock issuable
pursuant to options and warrants outstanding at the date of this
Warrant or pursuant to options which are subsequently granted and
comprise "qualified stock options" within the meaning of Section
422 of the Internal Revenue Code of 1954, as amended) for a
consideration to it of less than the Exercise Price then in
effect,
(b) any split or reverse split of the Stock, or
(c) the issuance of any security or other instrument carrying
conversion rights or rights to purchase shares of Stock
(exclusive of options which are subsequently granted and comprise
"qualified stock options" as aforesaid) at a price per share less
than the Exercise Price then in effect.
1.2. Upon any occurrence specified in Subsection 1.1(a) or (b) above, the
Exercise Price will be adjusted so as to equal the quotient of
(i) the sum of (a) the product of the number of shares of Stock
outstanding immediately before such occurrence multiplied by the then
effective Exercise Price plus (b) the consideration, if any, which
shall have been received by the Company upon such occurrence, divided
by
(ii) the total number of shares of Stock outstanding immediately after
such occurrence rounded to the nearest full cent;
13
provided, however, that the Exercise Price resulting from any such adjustment
will in no event exceed the Exercise Price which would be in effect but for the
making of such adjustment.
1.3 Any occurrence specified in Subsection 1.1(c) will be deemed to be an
issuance of the maximum number of shares of Stock purchasable upon exercise of
the conversion or other rights contemplated in Subsection 1.1(c), with such
shares to be presumed issued for a consideration equal to the sum of that
received by the Company for the issuance of the security conferring such rights
plus that payable to the Company upon exercise of such rights. The Exercise
Price and number of shares of Stock purchasable under this Warrant will, upon
any occurrence specified in Subsection 1.1(c), be adjusted in the manner stated
in Subsection 1.2. No further adjustment is to be made upon the issuance of
additional shares of Stock at the time of the exercise of the rights
contemplated in Subsection 1.1(c); however, further adjustment will be made upon
expiration of such rights (unexercised) to eliminate adjustments made on account
of the issuance of this Warrant as aforesaid; and in case the additional
consideration payable upon the exercise of any such rights (remaining
exercisable) is increased, or the number of shares deliverable is decreased,
appropriate adjustments will be made to reflect such increase or decrease.
1.4. In computing cash consideration received or to be received by the
Company upon any such issuance, no deduction will be made for any underwriting
or brokerage discounts or commissions. In computing consideration consisting of
something other than cash, the amount of this Warrant will be deemed to be its
value as determined by the Board of Directors of the Company, irrespective of
the accounting treatment of this Warrant. Additional shares of Stock, or
securities convertible into Stock, issuable by way of a stock dividend will be
presumed to have been issued, without consideration to the Company therefor,
immediately before the close of business on the date fixed for the determination
of the stockholders entitled to receive such dividend. Split or combined shares
of Stock resulting from a stock split or reverse split will be presumed to have
been issued at the time the split or reverse split becomes effective. Each
adjustment required pursuant to Subsections 1.2 and 1.3 by any occurrence in
this Warrant contemplated will be deemed made as of the close of business on the
actual or presumed (as above stated) date of issuance of the Stock involved in
such occurrence.
1.5. Upon each such adjustment in the Exercise Price, the number of shares
of Stock purchasable under this Warrant will be adjusted by dividing the Total
Purchase Price by the per share Exercise Price in effect immediately after such
adjustment rounded up to the nearest whole number.
1.6. If the Company consolidates with or merges into any other corporation
or transfers substantially all of its assets to any other corporation, the
surviving or acquiring corporation will execute and deliver to the holder a
supplement to this Warrant providing that the holder has the right to purchase
under this Warrant the kind and amount of securities to which such holder would
be entitled upon such consolidation, merger or transfer were he then to own the
number of shares of Stock of the Company which is purchasable under this Warrant
immediately before such consolidation, merger or transfer. Any such supplement
will provide for adjustments as nearly equivalent as practicable to those
provided for in this Section 1.
14
1.7. Notice of each adjustment or of any consolidation, merger or transfer,
will be mailed to the holder of this Warrant at its address as it then appears
on the Company's books.
1.8. The foregoing provisions of this Section 1 will apply to successive
occurrences requiring adjustment or supplement as above provided.
2. This Warrant is exercisable at any time before the close of business on
its expiration date, as to all, and from time to time during such period as to
any part, of the shares of Stock which the holder is at the time entitled to
purchase.
2.1. To effect any such exercise, the holder must surrender this Warrant,
before its expiration, to the Company at its principal office, with the form of
subscription attached hereto properly executed and with payment in full of the
purchase price for the shares being purchased under this Warrant. Unless a
registration statement pursuant to the Securities Act of 1933, as amended, is in
effect with respect to such shares or unless the necessity for doing so is
waived by the Company upon advice of legal counsel, any such surrender must be
accompanied by the holder's affirmation of his investment intention and intent
to comply with the Rules and Regulations promulgated under such Act, in form
satisfactory to the Company, relative to the Stock being purchased by him.
2.2. As soon as practicable after such surrender, the Company will issue
and deliver at its said office to such holder, or on the holder's written order
(if consistent with his aforementioned investment intention), a certificate or
certificates for the number of shares purchased and, in the case of any partial
exercise of this Warrant, a new Warrant for the balance of the shares of Stock
which remains purchasable under this Warrant. No adjustment is to be made upon
exercise for dividends on shares of Stock issuable pursuant to such exercise.
2.3. Any such exercise will be deemed effected immediately before the close
of business on the date when this Warrant has so been surrendered, and payment
of the purchase price made, to the Company, and at that time the person in whose
name the stock certificate or certificates are issuable as aforesaid will be
deemed to have become the holder of record of the shares evidenced.
3. The Company will at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Stock, the full number of
shares of Stock then issuable upon exercise of this Warrant. All shares of Stock
which may be issued upon such exercise will, when issued, be fully paid and
non-assessable. Pending such exercise, this Warrant confers no right to vote or
consent or to receive notice as a stockholder of the Company, as such, with
respect to any matter whatsoever, or any other rights or privileges as a
stockholder of the Company.
15
4. At least fifteen days before any date on which a holder of Stock of the
Company must appear of record on its books in order to participate tin this
Warrant, the Company will give to the holder of this Warrant written notice of
any proposed distribution of assets of the Company upon its dissolution or
liquidation or of any dividend to be paid other than (i) out of earned surplus
or (ii) by way of a dividend payable in shares of Stock.
5. This Warrant is issuable in fully registered form only. Subject to the
effect of any investment representation made by the holder with respect thereto,
this Warrant is transferable by the registered holder of this Warrant in person,
or by its attorney duly authorized in writing, on a register to be maintained by
the Company at its principal office, upon the surrender and cancellation of this
Warrant. Upon any such transfer, a new Warrant of like tenor will be issued to
the transferee in exchange for this Warrant. The address which is shown for any
registered holder on such register may be used by the Company for the giving of
notices and all other proper purposes. The Company may deem and treat the
registered holder as the absolute owner of this Warrant for the purpose of
receiving notices and all other proper purposes, and the Company will not be
affected by any notice to the contrary.
6. The provisions of this Section 6 relate: to the period between the date
of issuance of this Warrant and the later to occur of (i) the expiration of this
Warrant (unexercised) or (ii) the passage of two years after the exercise of
this Warrant; and to the Stock ("Underlying Stock") purchasable or purchased
upon the exercise of this Warrant (the term "holder", when subsequently used in
reference to Underlying Stock remaining purchasable at any given time, means the
holder of this Warrant, and when used in reference to Underlying Stock
theretofore purchased upon exercise of this Warrant, means the holder of such
Underlying Stock). If the Company intends to file at any time during that period
a registration statement under the Securities Act of 1933, as amended (the
"Act") with respect to an offering of any of its securities, which statement is
on a form appropriate for registering an offering of Underlying Stock under the
Act, then, subject to the provisions of Subsection 6.8, the following procedure
will be observed.
6.1. The Company will give the holder written notice, at least thirty days
in advance of the filing date, of its intention to file such registration
statement. If the holder so elects, it may have the Underlying Stock (or the
portion of this Warrant specified by the holder) included in the registration
statement which the Company proposes to file, provided that the holder requests
such inclusion in writing within two weeks after the date of the Company's
aforementioned notice of intention to file. Any such request made by the holder
must include: a description of the transaction proposed by the holder with
respect to the Underlying Stock to which the request pertains; an undertaking by
the holder to furnish to the Company such information as the Company or the
Securities and Exchange Commission may require in connection with the
registration sought by the holder; an agreement to cooperate in the Company's
efforts to cause the registration statement to become effective as soon as
practicable; and confirmation of the holder's obligations described in
Subsection 6.3.
16
6.2. After the filing of a registration statement including Underlying
Stock, the Company will use its best efforts to cause such registration
statement to become effective as soon as practicable. The Company will not be
required to keep any such registration statement effective for more than nine
months after its effective date. The Company will cooperate in reasonable
efforts of the holder to have the Underlying Stock qualified for sale or other
disposition under such blue sky or state securities laws as may be involved in
the holder's aforementioned description of its proposed transaction, but the
Company will not be required to qualify to do business or to file a general
consent to service of process in any state. All of the costs and expenses of any
such registration statement and of any such state qualification, other than
those which would not be incurred if Underlying Stock were not being registered
and qualified, will be borne by the Company, and it will be reimbursed by the
holder for the extra costs and expenses attributable to the Underlying Stock.
6.3. To the extent reasonably requested by the Company or its underwriters,
the holder will cooperate in efforts of such underwriters to maintain an orderly
distribution of all securities (including the Underlying Stock) covered by such
registration statement. In any event, the holder will cause any marketing of
Underlying Stock covered by such registration statement to comply strictly with
the Act, with the Securities Exchange Act of 1934, and with all rules and
regulations promulgated under either of such Acts. The holder will indemnify the
Company and each of its directors and officers against all liabilities to which
it or any such director or officer may become subject, under the Act or
otherwise, by reason of any untrue statement or alleged untrue statement of a
material fact contained in any registration statement covering Underlying Stock
at the request of the holder, or by reason of any omission or alleged omission
to state in any such registration statement a material fact required to be
stated tin this Warrant or necessary to make the statements tin this Warrant not
misleading, but only if, and only to the extent that, such statement or omission
was in reliance upon, in conformity with, and within the scope of the body of,
written information furnished to the Company by the holder specifically for use
in the preparation of such registration statement.
6.4. Conversely, the Company will indemnify the holder against all
liabilities to which the holder may become subject, under the Act or otherwise,
by reason of any untrue statement or alleged untrue statement of a material fact
contained in any registration statement covering Underlying Stock, or by reason
of any omission or alleged omission to state in any such registration statement
a material fact required to be stated tin this Warrant or necessary to make the
statements tin this Warrant not misleading, except to the extent that such
statement or omission is the subject matter of indemnification afforded to the
Company by the holder pursuant to Subsection 6.3.
6.5. For the purposes of Subsection 6.3, each person who may control the
Company within the meaning of the Act will be deemed included in all references
to it. For the purposes of Subsection 6.4, each person who may control the
holder within the meaning of the Act will be deemed included in all references
to the holder. Any reference in Subsections 6.3 and 6.4 to "liabilities" will be
deemed to include losses, claims and damages, joint and several, and legal and
other expense incurred by an indemnified party in connection with investigating
or defending against any such loss, claim, damage or liability or any action
brought in regard thereto. Any reference made in Subsections 6.3 and 6.4 to a
17
"registration statement" will be deemed to relate to the applicable registration
statement as finally amended at the time when it becomes effective, inclusive of
the applicable prospectus as so amended, and to each post-effective amendment or
supplement to such registration statement.
6.6. Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action asserting liability on the part of such
party, such indemnified party will, if a claim in respect of this Warrant is to
be made against the indemnifying party under this Section, notify the
indemnifying party in writing of such commencement (and omission so to notify
the indemnifying party will relieve it from any liability under this Section,
but not from any other liability which it may have to an indemnified party). If
notice of such commencement is given as aforesaid, the indemnifying party will
be entitled to participate in the action and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense of this Warrant, with counsel satisfactory (in a reasonable exercise of
judgment) to the indemnified party, and after notice from the indemnifying party
to the indemnified party of its election to assume such defense, the
indemnifying party will not be liable to the indemnified party under this
Section for any legal or other expense subsequently incurred by the indemnified
party in connection with such defense, other than reasonable costs of
investigation. No such indemnifying party will be liable to any such indemnified
party on account of any settlement of any claim or action effected without the
consent of the indemnifying party.
6.7. Any provision in this Warrant contained to the contrary
notwithstanding, the Company will not be required to register any Underlying
Stock which, in the opinion of counsel satisfactory to the holder and to the
Company, may then be sold or otherwise disposed of in the manner contemplated by
the holder without registration of this Warrant under the Act. If the counsel
settled upon for the giving of any such opinion is other than the counsel
initially proposed by the Company, the fees of such other counsel will be paid
by the holder.
6.8. The Company's obligation to give notice of its intention to
register securities under the Act, and the holder's right to include Underlying
Stock in any such registration, will terminate and be of no further force or
effect at such time as any shares of Underlying Stock have, pursuant to this
Section 6, been included at the request of the holder in any registration
statement which has become effective under the Act.
Dated: March ___, 2001. American Home Capital Corporation
By
-------------------------------------
President
Attest:
-----------------------------
Secretary
18
SUBSCRIPTION
To American Home Capital Corporation
As registered holder of the foregoing Warrant, and in accordance with the
provisions of this Warrant, the undersigned irrevocably elects to purchase
shares of Stock now covered by such Warrant at the purchase price therefor in
effect immediately before the close of business on the date when such Warrant,
accompanied by this signed Subscription, is surrendered to the Company as
contemplated in the Warrant, and herewith submits full payment of such purchase
price.
Dated:
-----------------
----------------------------------------
Signature
----------------------------------------
Address
----------------------------------------
19
Schedule 5(c)
SCHEDULE OF CAPITALIZATION
AMERICAN HOME CAPITAL CORPORATION
WARRANTS
--------------------------------------------------------------------------------
Warrant # of Exercise Expiration
Holder Warrants Price Date
--------------------------------------------------------------------------------
Xxxxx, Xxxxxx X. (a) 6,500 $18.80 9/28/03
Northstar Partners (b) 321,429 $ 1.40 2/1/01
Law Investments, Inc. 150,000 $ 1.00 4/1/03
Xxxxxxx X. Xxxxx 35,000 $ 1.00 4/1/01
Xxxxx X. Xxxxxxxxx 9,000 $ 2.50 *
Xxxxx X. Xxxxxxxxx 15,000 $ 0.01 *
Xxxxxxx Xxxxxxxxxx 7,000 $ 2.50 *
Xxxxxxx Xxxxxxxxxx 15,000 $ 0.01 *
Xxxxxxx Xxxxxxx 10,000 $ 2.50 *
Xxxxxxx Xxxxxxx 15,000 $ 0.01 *
Xxxxxxx X. Xxxxx 5,000 $ 2.50 *
Xxxxxxx X. Xxxxx 15,000 $ 0.01 *
--------
603,929
--------
STOCK OPTIONS
--------------------------------------------------------------------------------
Option # of Exercise Expiration
Holder Options Price Date
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx (c) 10,000 $18.60 8/4/03
Xxxxxx X. Xxxxxxx (d) 2,500 $18.60 8/4/03
Xxxxxxx X. Xxxxxx 100,000 $2.625 5/20/09
--------
112,500
--------
----------
(a) Originally issued as TCS Enterprises common stock 65,000 shares @ $1.88
(b) Originally issued as TCS Enterprises common stock 3,214,286 shares @ $0.14
(c) Originally issued as TCS Enterprises common stock 100,000 shares @ $1.86
(d) Originally issued as TCS Enterprises common stock 25,000 shares @ $1.86
* Director's option program was never documented, expiration date not set.
Schedule 5(j)
SCHEDULE OF MATERIAL AGREEMENTS
AMERICAN HOME CAPITAL CORPORATION
* Office Lease - San Diego
TCS Mortgage and Wateridge Industrial Partnership, dtd. 3/25/96
With Tenant Estoppel Certificate, dtd. 9/26/96 (Assigned lease to new
ownership: CarrAmerica Corp)
* Office Lease - Las Vegas
TCS Mortgage and Xxxxxxx, dtd. 6/27/00
* Amended and Restated Warehouse Loan and Security Agreement
TCS Mortgage and The Provident Bank, dtd. 7/12/99
* Servicing Agreement
TCS Mortgage and The Provident Bank, dtd. 6/01/00
* Continuing Unconditional Guaranty
Xxxxxxx X. Xxxxxx and The Provident Bank, dtd. 5/15/00
Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx and The Provident Bank, dtd. 7/19/00
* Equipment Lease Agreement
TCS Mortgage and Scripps Bank, dtd. 1/11/99
* Equipment Lease Agreement
TCS Mortgage and Scripps Bank, dtd. 6/4/99
* Independent Contractor Agreement
American Home Capital Corporation and Xxx Xxxxxxx dated January 14, 2001
* Mutual Settlement Agreement and General Release
American Home Capital Corporation and Xxx Xxxxxxx dated January 18, 2001
Schedule 5(j)
SCHEDULE OF EMPLOYEE BENEFIT PLANS
AMERICAN HOME CAPITAL CORPORATION
* Aetna US Healthcare #452785-037 - HMO (California)
* Aetna US Healthcare #452785-027 - PPO (California)
* Aetna US Healthcare #07486841 - HMO (Nevada)
* Aetna US Healthcare #452785-025 - Group Life Insurance
* Standard Insurance #00-625916 - Long Term Disability
* Principal Financial Group #P 4647-1 - Group Dental Insurance
* TIG Policy #80590750 - Workers Compensation Insurance (California)
* Employers Insurance Co. of Nevada #NWC40033100 - Workers Comp (Nevada)
* TCS Enterprises, Inc. Section 125 / Cafeteria Plan
* TCS Enterprises, Inc. 401(k) Plan Profit Sharing
* Employee Stock Option Plan
* Nonqualified Stock Option Plan
