AGREEMENT AND PLAN OF REORGANIZATION
by and among
Champion Ventures, Inc.
a Nevada corporation
and
Internet Golf Association, Inc., a Nevada corporation
effective as of May 7, 1999
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, is made and
entered into this 7th day of May 1999, by and between Champion
Ventures, Inc., a Nevada corporation ("Champion Ventures") and
Internet Golf Association, Inc., a Nevada corporation ("IGA"), and
certain shareholders of IGA listed on the attached Schedule I ("IGA
Shareholders"), and specifically incorporated herein by reference
(IGA and IGA Shareholders shall be hereinafter jointly referred to
as "IGA Parties").
PREMISES
A. This Agreement provides for the reorganization of
IGA with and into Champion Ventures, with IGA becoming a
wholly-owned subsidiary of Champion Ventures, and in connection
therewith, the exchange of the outstanding common stock of IGA into
shares of common voting stock of Champion Ventures, all for the
purpose of effecting a tax-free reorganization pursuant to sections
354 and 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended ("IRC"). On the terms and conditions set forth herein, the
parties hereby adopt the Plan of Reorganization embodied in this
Agreement.
B. The boards of directors of IGA and Champion
Ventures have determined, subject to the terms and conditions set
forth in this Agreement, that the exchange contemplated hereby, as a
result of which IGA would become a wholly owned subsidiary of
Champion Ventures is desirable and in the best interests of their
stockholders. This Agreement is being entered into for the purpose
of setting forth the terms and conditions of the proposed exchange.
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter set
forth and the mutual benefits to the parties to be derived herefrom,
it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
IGA AND IGA SHAREHOLDERS
IGA and each of IGA Shareholders, individually and neither
jointly nor severally, represents and warrants to Champion Ventures,
except as disclosed in this Agreement or in the case of any
representation qualified by its terms to a particular Schedule, as
hereinafter defined, of IGA attached hereto, that the statements
made in this Article I will be correct and complete at the Effective
Date, as hereinafter defined, provided, however, if there is no
Effective Date, then no party shall be liable for any inaccuracy.
SECTION 1.1 SHAREHOLDERS. Each of the IGA Shareholders is
the owner of all of the issued and outstanding shares of the capital
stock of IGA attributed to such Shareholder on Schedule I; each IGA
Shareholder has full legal title to all IGA Shares described in
Schedule I as being owned by such IGA Shareholder free from any and
all claims, liens or other encumbrances. IGA Shareholders have
unqualified right to sell, transfer, and dispose of their respective
IGA Shares subject to the laws of bankruptcy, insolvency and general
creditors' rights. Each IGA Shareholder represents and warrants
that, in regards to such IGA Shareholder's shares of IGA, such IGA
Shareholder has full right and authority to execute this Agreement
and to transfer his shares of IGA to Champion Ventures.
SECTION 1.2 ORGANIZATION. IGA is a corporation duly
organized, validly existing, and in good standing under the laws of
Nevada and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all
of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets owned
by it or the nature of the business transacted by it requires
qualification. IGA has previously provided to Champion Ventures
true complete and correct copies of the articles of incorporation,
bylaws and amendments thereto of IGA as in effect on the date
hereof. The execution and delivery of this Agreement does not and
the consummation of the transactions contemplated by this Agreement
in accordance with the terms hereof will not violate any provision
of IGA's articles of incorporation or bylaws. IGA has full power,
authority and legal right and has taken all action required by law,
its articles of incorporation, its bylaws or otherwise to authorize
the execution and delivery of this Agreement.
SECTION 1.3 CAPITALIZATION. The authorized capitalization
of IGA consists of 20,000,000 Common Shares, $0.001 par value per
share (the "IGA Common Shares") and 2,000,000 Preferred Shares,
$0.001 par value per share (the "IGA Preferred Shares"). As of the
date of this Agreement, 8,100,000 of the authorized common shares
are issued and outstanding and no shares of the IGA Preferred Shares
are issued and outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in
violation of the preemptive or other rights of any person. IGA has
no other securities, warrants or options authorized or issued.
SECTION 1.4 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. IGA
does not have any subsidiaries and does not own, beneficially or of
record, any shares of any other corporation.
SECTION 1.5 FINANCIAL INFORMATION.
(a) IGA has no liabilities with respect to the
payment of any federal, state, county, local or other taxes
(including any deficiencies, interest or penalties), except for
taxes accrued but not yet due and payable;
(b) IGA has filed all state, federal and local income
tax returns required to be filed by it from inception to the date
hereof, if any;
(c) The books and records, financial and others, of
IGA are in all material respects complete and correct and have been
maintained in accordance with good business accounting practices and
in accordance with generally accepted accounting principals,
consistently applied. Subsequent to the Closing, IGA will obtain a
combined audit with Champion Ventures which will comply with
generally accepted accounting principals and be prepared in
accordance with Item 310 of Regulation S-B; and
(e) Except as and to the extent disclosed herein and
the IGA Due Diligence, IGA has no material contingent liabilities,
direct or indirect, matured or unmatured.
SECTION 1.6 INFORMATION. THE INFORMATION CONCERNING IGA
SET FORTH IN THIS AGREEMENT AND IN THE IGA DUE DILIGENCE TO THE BEST
OF IGA'S KNOWLEDGE, IS COMPLETE AND ACCURATE IN ALL MATERIAL
RESPECTS AND DOES NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL
FACT OR OMIT TO STATE A MATERIAL FACT REQUIRED TO MAKE THE
STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING.
SECTION 1.7 OPTIONS AND WARRANTS. THERE ARE NO EXISTING
OPTIONS, WARRANTS, CALLS OR COMMITMENTS OF ANY CHARACTER TO WHICH
IGA IS A PARTY AND BY WHICH IT IS BOUND.
SECTION 1.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except
as set forth in this Agreement, the IGA Due Diligence, or as
otherwise disclosed to Champion Ventures, since March 31, 1999:
(a) there has not been: (i) any material adverse
change in the business, operations, properties, assets or condition
of IGA; or (ii) any damage, destruction or loss to IGA (whether or
not covered by insurance) materially and adversely affecting the
business, operations, properties, assets or condition of IGA;
(b) IGA has not: (i) amended its articles of
incorporation or bylaws; (ii) declared or made, or agreed to declare
or make, any payment of dividends or distributions of any assets of
any kind whatsoever to stockholders or purchased or redeemed or
agreed to purchase or redeem any of its capital stock; (iii) waived
any rights of value which in the aggregate are extraordinary or
material considering the business of IGA; (iv) made any material
change in its method of management, operation or accounting other
than in its ordinary course of business; (v) entered into any other
material transaction; (vi) made any accrual or arrangement for or
payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer or
employee; (vii) increased the rate of compensation; or (viii) made
any increase in any profit sharing, bonus, deferred compensation,
insurance, pension, retirement or other employee benefit plan,
payment or arrangement made to, for, or with its officers, directors
or employees.
(c) IGA has not: (i) granted or agreed to grant any
options, warrants or other rights for its stocks, bonds or other
corporate securities calling for the issuance thereof; (ii) borrowed
or agreed to borrow any funds or incurred or become subject to, any
material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid
any material obligation or liability (absolute or contingent) other
than current liabilities reflected in or shown on the most recent
IGA balance sheet and current liabilities incurred since that date
in the ordinary course of business; (iv) sold or transferred, or
agreed to sell or transfer, any of its assets, properties or rights
(except assets, properties or rights not used or useful in its
business which, in the aggregate have a value of less than $10,000);
(v) made or permitted any amendment or termination of any contract,
agreement or license to which it is a party if such amendment or
termination is material, considering the business of IGA; or (vi)
issued, delivered or agreed to issue or deliver any stock, bonds or
other corporate securities, including debentures (whether authorized
and unissued or held as treasury stock); and
(d) to the best knowledge of IGA, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business,
operations, properties, assets or condition of IGA.
SECTION 1.9 TITLE AND RELATED MATTERS. IGA has good and
marketable title to and is the sole and exclusive owner of all of
its properties, inventory, interests in properties and assets, real
and personal including technical information, copyrights,
trademarks, service marks and tradenames (except with respect to
certain rights retained by Access Software with respect to IGA's
rights to utilize the Links Pro Golf software) (collectively, the
"Assets") (except properties, interests in properties and assets
sold or otherwise disposed of in the ordinary course of business),
free and clear of all liens, pledges, charges or encumbrances
except: (a) statutory liens or claims not yet delinquent; and (b)
such imperfections of title and easements as do not and will not,
materially detract from or interfere with the present or proposed
use of the properties subject thereto or affected thereby or
otherwise materially impair present business operations on such
properties. Except as set forth in the foregoing, IGA owns free and
clear of any liens, claims, encumbrances, royalty interests or other
restrictions or limitations of any nature whatsoever, any and all
products it is currently manufacturing, including the underlying
technology and data, and all procedures, techniques, marketing
plans, business plans, methods of management or other information
utilized in connection with IGA's business. Except with respect to
Access Software, no third party has any right to, and IGA has not
received any notice of infringement of or conflict with asserted
rights of others with respect to any product, technology, data,
trade secrets, know-how, proprietary techniques, trademarks, service
marks, trade names or copyrights which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
have a materially adverse affect on the business, operations,
financial conditions or income of IGA or any material portion of its
properties, assets or rights.
SECTION 1.10 LITIGATION AND PROCEEDINGS. To the best of
IGA's knowledge and belief, there are no actions, suits, proceedings
or investigations pending or threatened by or against IGA or
affecting IGA or its properties, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or
foreign or before any arbitrator of any kind that would have a
material adverse affect on the business, operations, financial
condition or income of IGA. IGA does not have any knowledge of any
default on its part with respect to any judgment, order, writ,
injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in
the discovery of such a default.
SECTION 1.11 CONTRACTS.
(a) IGA is not a party to any oral or written: (i)
contract for the employment of any officer or employee which is not
terminable on thirty (30) days or less notice; (ii) profit sharing,
bonus, deferred compensation, stock option, severance pay, pension
benefit or retirement plan, agreement or arrangement covered by
Title IV of the Employee Retirement Income Security Act, as amended;
(iii) agreement, contract or indenture relating to the borrowing of
money; (iv) guaranty of any obligation, other than one on which IGA
is a primary obligor, for collection and other guaranties of
obligations, which, in the aggregate do not exceed more than one
year or providing for payments in excess of $10,000 in the
aggregate; (v) consulting or other similar contracts with an
unexpired term of more than one year or providing for payments in
excess of $10,000 in the aggregate; (vi) collective bargaining
agreements; (vii) agreement with any present or former officer or
director of IGA; or (viii) contract, agreement or other commitment
involving payments by it of more than $10,000 in the aggregate; and
(b) To IGA's knowledge, all contracts, agreements,
franchises, license agreements and other commitments to which IGA is
a party or by which its properties are bound and which are material
to the operations of IGA taken as a whole, are valid and enforceable
by IGA in all respects, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors
generally.
SECTION 1.12 MATERIAL CONTRACT DEFAULTS. To the best of
IGA's knowledge and belief, IGA is not in default in any material
respect under the terms of any outstanding contract, agreement,
lease or other commitment which is material to the business,
operations, properties, assets or condition of IGA, and there is no
event of default in any material respect under any such contract,
agreement, lease or other commitment in respect of which IGA has not
taken adequate steps to prevent such a default from occurring.
SECTION 1.13 NO CONFLICT WITH OTHER INSTRUMENTS. The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any
term or provision of, or constitute an event of default under, any
material indenture, mortgage, deed of trust or other material
contract, agreement or instrument to which IGA is a party or to
which any of its properties or operations are subject.
SECTION 1.14 GOVERNMENTAL AUTHORIZATIONS. To the best of
IGA's knowledge IGA has all licenses (including without limitation
the Access Software license), franchises, permits or other
governmental authorizations legally required to enable IGA to
conduct its business in all material respects as conducted on the
date hereof. Except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is
required in connection with the execution and delivery by IGA of
this Agreement and the consummation by IGA of the transactions
contemplated hereby.
SECTION 1.15 COMPLIANCE WITH LAWS AND REGULATIONS. To the
best of IGA's knowledge, IGA has complied with all applicable
statutes and regulations of any federal, state or other governmental
entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations,
properties, assets or condition of IGA or would not result in IGA's
incurring any material liability.
SECTION 1.16 INSURANCE. IGA has no insurable properties
and no insurance policies will be in effect at the Closing Date, as
hereinafter defined.
SECTION 1.17 APPROVAL OF AGREEMENT. The board of
directors of IGA has authorized the execution and delivery of this
Agreement by IGA, has approved the transactions contemplated hereby
and approved the submission of this Agreement and the transactions
contemplated hereby to the stockholders of IGA for their unanimous
approval, which approval has been provided.
SECTION 1.18 MATERIAL TRANSACTIONS OR AFFILIATIONS.
Except as disclosed herein or previously disclosed to Champion
Ventures, there exists no material contract, agreement or
arrangement between IGA and any predecessor and any person who was
at the time of such contract, agreement or arrangement an officer,
director or person owning of record, or known by IGA to own
beneficially, ten percent (10%) or more of the issued and
outstanding IGA Common Shares and which is to be performed in whole
or in part after the date hereof. In all of such transactions, the
amount paid or received, whether in cash, in services or in kind,
has been during the full term thereof, and is required to be during
the unexpired portion of the term thereof, no less favorable to IGA
than terms available from otherwise unrelated parties in arms length
transactions. There are no commitments by IGA, whether written or
oral, to lend any funds to, borrow any money from or enter into any
other material transactions with, any such affiliated person.
SECTION 1.19 LABOR RELATIONS. IGA has never had a work
stoppage resulting from labor problems. To the best knowledge of
IGA, no union or other collective bargaining organization is
organizing or attempting to organize any employee of IGA.
SECTION 1.20 PREVIOUS SALES AND ISSUANCE OF SECURITIES.
Since inception, IGA has issued IGA Common Shares in reliance upon
applicable exemptions from the registration requirements under the
laws of the jurisdiction of Nevada to the shareholders listed on
Schedule I. The shares of IGA Common Stock issued to the IGA
Shareholders are legally issued, fully paid and nonassessable and
are not issued in violation of the preemptive or other rights of any
person.
SECTION 1.21 REORGANIZATION RELATED REPRESENTATIONS.
(a) following the Effective Date, IGA will continue its
historic business or use a significant portion of its historic
business assets in its business;
(b) IGA is not an investment company as defined in
section 368(a)(2)(f)(iii) and (iv) of IRC;
(c) IGA is not under the jurisdiction of a court in a
title 11 or similar case within the meaning of Section 368(a)(3)(A)
of the IRC.
SECTION 1.22 IGA DUE DILIGENCE. Upon execution hereof,
IGA will deliver to Champion Ventures the following documents, which
are collectively referred to as the "IGA Due Diligence" and which
will be true and correct in all material respects:
(a) copies of the articles of incorporation, bylaws
and all minutes of shareholders' and directors' meetings of IGA;
(b) the financial statements of IGA;
(c) a list indicating the name and address of the
stockholders of IGA, together with the number of shares owned by them;
(d) the IGA Business Plan which includes, among other
matters, information concerning all of IGA's material licenses,
permits and other governmental authorizations, requests or
applications therefor, pursuant to which IGA carries on or proposes
to carry on its business (except those which in the aggregate, are
immaterial to the present or proposed business of IGA), as well as a
description of any material adverse change in the business
operations, property, inventory, assets or condition of IGA since
the most recent IGA balance sheet required to be provided pursuant
to Section 1.7; and
IGA shall cause the IGA Due Diligence and the instruments
and data delivered to Champion Ventures hereunder to be updated
after the date hereof up to and including the Closing Date, as
hereinafter defined.
SECTION 1.23 TAXES. IGA has filed all required tax returns,
if any, and as of the date of this Agreement has not taxes owing.
SECTION 1.24 ADDITIONAL INFORMATION AVAILABLE. IGA will
make available to Champion Ventures the opportunity to ask questions
and receive answers concerning acquisition of IGA shares in this
transaction, and to obtain any additional information related
thereto which IGA possesses or can acquire without unreasonable
effort or expense.
SECTION 1.25 LIMITATION ON LIABILITY. Notwithstanding
anything to the contrary contained in this Agreement, IGA shall not
have any liability for any misrepresentation or breach of any
representation or warranty contained in this Article I, if Champion
Ventures has actual knowledge (rather than Knowledge) of such
misrepresentation or breach.
SECTION 1.26 INVESTMENT REPRESENTATIONS.
(a) Each IGA Shareholder represents and warrants that
he, she or it is not now insolvent and will not be
insolvent as a result of the consummation of the
transactions contemplated by this Agreement.
(b) Each IGA Shareholder agrees that he, she or it or
his, her or its representatives have been furnished with
substantially the same kind of information regarding
Champion Ventures and its financial condition, plan of
operation and prospects as would be contained in a
registration statement and included prospectus prepared in
connection with a public offering of the Exchange Shares or
such information has been made freely available by Champion
Ventures. Each IGA Shareholder further agrees that he, she
or it has had an opportunity to ask questions of and
receive answers from Champion Ventures and its financial
condition, plan of operation and prospects and the terms
and conditions of this Agreement and the issuance of the
Exchange Shares.
(c) Each IGA Shareholder represents that he, she or
it, alone or together with advisor(s), if any, has such
knowledge and experience in financial, tax and business
matters as to enable the IGA Shareholder to utilize the
information made available by Champion Ventures to evaluate
the merits and risks of acquiring the Exchange Shares and
to make an informed investment decision with respect thereto.
(d) Each IGA Shareholder acknowledges that he, she or
it was not solicited by any person by any form of general
solicitation or advertising in connection with the
transactions contemplated by this Agreement.
(e) Each IGA Shareholder's decision to enter into
this Agreement is based upon his, her or its own
independent judgment and investigation and not on any
representations and warranties of Champion Ventures or any
officer, director or shareholder of Champion Ventures other
than those expressly state in this Agreement and in the Due
Diligence, Exhibits and documents furnished in connection
hereto.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF CHAMPION VENTURES
As an inducement to, and to obtain the reliance of IGA,
Champion Ventures represents and warrants as follows:
SECTION 2.1 ORGANIZATION. Champion Ventures is a
corporation duly organized, validly existing and in good standing
under the laws of the state of Nevada and has the corporate power
and is duly authorized, qualified, franchised and licensed under all
applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry on
its business in all material respects as it is now being conducted,
including qualification to do business as a foreign corporation in
the states in which the character and location of the assets owned
by it or the nature of the business transacted by it requires
qualification. Champion Ventures has previously furnished to IGA
true, complete and correct copies of the articles of incorporation,
amended articles of incorporation (collectively, hereinafter
referred to as the "articles of incorporation"), bylaws of Champion
Ventures as in effect on the date hereof and a certificate of Good
Standing. The execution and delivery of this Agreement does not and
the consummation of the transactions contemplated by this Agreement
in accordance with the terms hereof will not, violate any provision
of Champion Ventures' articles of incorporation or bylaws. Champion
Ventures has taken all action required by law, its articles of
incorporation, its bylaws or otherwise to authorize the execution
and delivery of this Agreement. Champion Ventures has full power,
authority and legal right and has taken all action required by law,
its articles of incorporation, bylaws or otherwise to consummate the
transactions herein contemplate.
SECTION 2.2 CAPITALIZATION. The authorized capitalization
of Champion Ventures consists of 100,000,000 shares of Common Stock,
par value $.001 per share, of which 1,500,000 shares will be issued
and outstanding at the closing, and 5,000,000 shares of Preferred
Stock, par value $.001 per share, of which no shares are issued and
outstanding. All issued and outstanding shares are legally issued,
fully paid and nonassessable and are not issued in violation of the
preemptive or other rights of any person. Champion Ventures has no
other securities, warrants or options authorized or issued.
SECTION 2.3 SUBSIDIARIES. At the Closing, other than CVI
Systems, Inc., an inactive Nevada corporation, Champion Ventures
shall own no securities or have any interest in any corporation,
partnership, or other form of business organization, including its
current subsidiaries.
SECTION 2.4 FINANCIAL STATEMENTS.
(a) Champion Ventures has previously delivered to IGA
audited consolidated financial statements for the years ended
December 31, 1998 and December 31, 1997, together with the related
footnotes and report thereon of the auditors rendering such reports
(the "Champion Ventures Audited Financial Statements") and the
unaudited consolidated financial statements for the period ended
March 31, 1999 (the "Champion Ventures Unaudited Financial
Statements" and, together with the Champion Ventures Audited
Financial Statements, the "Champion Ventures Financial Statements").
The Champion Ventures Financial Statements are correct and complete
in all respects and fairly present, in accordance with generally
accepted accounting principles ("GAAP"), consistently applied, the
consolidated financial position of Champion Ventures as of such
dates and the results of operations and changes in financial
position for such periods all in accordance with GAAP. The Champion
Ventures Audited Financial Statements comply with the requirements
of Item 310 of Regulation S-B of the Securities and Exchange
Commission and the provisions of the Securities Act of 1933 (the
"1933 Act") and will be suitable in form for inclusion in any
subsequent filing with any state or federal regulatory agency under
the Securities Exchange Act of 1934 (the "1934 Act")
(b) The books and records, financial and others, of
Champion Ventures are in all material respects complete and correct
and have been maintained in accordance with good business accounting
practices;
(c) Champion Ventures has no liabilities with respect
to the payment of any federal, state, county, local or other taxes,
current or accrued (including any deficiencies, interest or penalties).
SECTION 2.5 INFORMATION. The information concerning
Champion Ventures as set forth in this Agreement and in the Champion
Ventures Due Diligence, to the best of Champion Ventures' knowledge,
is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
SECTION 2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since
December 31, 1998:
(a) Champion Ventures has not: (i) amended its
articles of incorporation or bylaws; (ii) waived any rights of value
which in the aggregate are extraordinary or material considering the
business of Champion Ventures; (iii) made any material change in its
method of management, operation or accounting; or (iv) made any
accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any
present or former officer or employee;
(b) Champion Ventures has not: (i) granted or agreed
to grant any options, warrants or other rights for its stocks, bonds
or other corporate securities calling for the issuance thereof,
which option, warrant or other right has not been canceled as of the
Closing Date; (ii) borrowed or agreed to borrow any funds or
incurred or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary
course of business; and
(c) To the best knowledge of Champion Ventures, it
has not become subject to any law or regulation which materially and
adversely affects, or in the future may adversely affect, the
business, operations, properties, assets or condition of Champion
Ventures.
SECTION 2.7 TITLE AND RELATED MATTERS. As of the Closing
Date, Champion Ventures will own no real, personal or intangible
property, other than certain minor leasehold mineral passive,
non-operating interests and a few shares of stock (the "Held
Stock"). On or prior to the Closing, Champion Ventures will
transfer the Held Stock to Xxxx Xxxxxxx in consideration for
cancellation of expense reimbursements due to Xxxx Xxxxxxx
aggregating $4,227.60.
SECTION 2.8 LITIGATION AND PROCEEDINGS. There are no
actions, suits or proceedings pending or, to the best of Champion
Ventures' knowledge and belief, threatened by or against or
affecting Champion Ventures, at law or in equity, before any court
or other governmental agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind that would have a
material adverse effect on the business, operations, financial
condition, income or business prospects of Champion Ventures.
Champion Ventures does not have any knowledge of any default on its
part with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality.
SECTION 2.9 CONTRACTS. On the Closing Date and other than
as provided in the Champion Ventures Financial Statements or the
Champion Ventures Due Diligence:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to which
Champion Ventures is a party or by which it or any of its properties
are bound;
(b) Champion Ventures is not a party to any contract,
agreement, commitment or instrument or subject to any charter or
other corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely affects,
or in the future may (as far as Champion Ventures can now foresee)
materially and adversely affect, the business, operations,
properties, assets or conditions of Champion Ventures; and
(c) Champion Ventures is not a party to any material
oral or written: (i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension, benefit or retirement plan,
agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement,
contract or indenture relating to the borrowing of money; (iv)
guaranty of any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties of
obligations, which, in the aggregate exceeds $1,000; (v) consulting
or other similar contract with an unexpired term of more than one
year or providing for payments in excess of $10,000 in the
aggregate; (vi) collective bargaining agreement; (vii) agreement
with any present or former officer or director of Champion Ventures;
or (viii) contract, agreement, or other commitment involving
payments by it of more than $10,000 in the aggregate.
SECTION 2.10 NO CONFLICT WITH OTHER INSTRUMENTS. The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any
term or provision of, or constitute an event of default under, any
material indenture, mortgage, deed of trust or other material
contract, agreement or instrument to which Champion Ventures is a
party or to which any of its properties or operations are subject.
SECTION 2.11 MATERIAL CONTRACT DEFAULTS. To the best of
Champion Ventures' knowledge and belief, Champion Ventures is not in
default in any material respect under the terms of any outstanding
contract, agreement, lease or other commitment which is material to
the business, operations, properties, assets or condition of
Champion Ventures, and there is no event of default in any material
respect under any such contract, agreement, lease or other
commitment in respect of which Champion Ventures has not taken
adequate steps to prevent such a default from occurring.
SECTION 2.12 GOVERNMENTAL AUTHORIZATIONS. To the best of
Champion Ventures' knowledge, Champion Ventures has all licenses,
franchises, permits and other governmental authorizations that are
legally required to enable it to conduct its business operations in
all material respects as conducted on the date hereof. Except for
compliance with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is
required in connection with the execution and delivery by Champion
Ventures of the transactions contemplated hereby.
SECTION 2.13 COMPLIANCE WITH LAWS AND REGULATIONS. To the
best of Champion Ventures' knowledge and belief, Champion Ventures
has complied with all applicable statutes and regulations of any
federal, state or other governmental entity or agency thereof,
except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or
condition of Champion Ventures or would not result in Champion
Ventures incurring any material liability.
SECTION 2.14 INSURANCE. Champion Ventures has no
insurable properties and no insurance policies will be in effect at
the Closing Date, as hereinafter defined.
SECTION 2.15 APPROVAL OF AGREEMENT. The board of
directors of Champion Ventures has authorized the execution and
delivery of this Agreement by Champion Ventures and has approved the
transactions contemplated hereby. The approval of this Agreement by
Champion Ventures' shareholders is not required.
SECTION 2.16 MATERIAL TRANSACTIONS OR AFFILIATIONS.
Except with respect to certain securities issuable to officers in
connection with heretofore unpaid compensation which shares will be
issued simultaneously with the closing hereof or as otherwise stated
herein or in the Champion Ventures Due Diligence, as of the Closing
Date there will exist no material contract, agreement or arrangement
between Champion Ventures and any person who was at the time of such
contract, agreement or arrangement an officer, director or person
owning of record, or known by Champion Ventures to own beneficially,
ten percent (10%) or more of the issued and outstanding common stock
of Champion Ventures and which is to be performed in whole or in
part after the date hereof. Champion Ventures has no commitment,
whether written or oral, to lend any funds to, borrow any money from
or enter into any other material transactions with, any such
affiliated person.
SECTION 2.17 LABOR RELATIONS. Champion Ventures has never
had a work stoppage resulting from labor problems. Champion
Ventures has no employees other than its officers and directors.
SECTION 2.18 TAXES. (a) Champion Ventures has timely
filed (within the applicable extension periods) with the appropriate
governmental agencies all governmental tax returns, information
returns, tax reports and declarations which are monetary
liabilities. All governmental tax returns, information returns, tax
reports and declarations filed by Champion Ventures for years for
which the statute of limitations has not run (the "Tax Returns") are
correct in all material respects. Champion Ventures has timely paid
(or has collected and paid over in the case of sales, use or similar
taxes) all taxes, additions to tax, penalties, interest,
assessments, deposits, and other governmental charges imposed by law
upon it or any of its properties, tangible or intangible assets,
income, receipts, payrolls, transactions, capital, net worth and
franchises, or upon the sale, use or delivery of any item sold by
the Company. No tax returns have been examined by the Internal
Revenue Service or any other governmental authority. Champion
Ventures (i) is not currently being audited with respect to any tax,
assessment or other governmental charge; (ii) has not received
formal or informal notice from any governmental agency that an audit
or investigation with respect to any tax, assessment or other
governmental charge is to be initiated; (iii) is not formally or
informally discussing material pending ruling requests or other
material tax or assessment issues with the Internal Revenue Service
or any other governmental taxing authority in connection with any
matter concerning any member of Champion Ventures' group; or (iv)
has not been formally or informally notified of any potential tax or
assessment issue which the Internal Revenue Service or any other
governmental taxing authority intends to raise in connection with
any matter concerning any member of Champion Ventures' group.
Champion Ventures has not granted or proposed any waiver of any
statute of limitations with respect to, or any extension of a period
for the assessment or collection of, or any offer in compromise of
any governmental tax. The accruals and reserves for taxes reflected
in the financial statements are adequate to cover substantially all
taxes (including additions to tax, interest, penalties, and other
charges or assessments, if any) which become due and payable or
accruable by reason of the business conducted by Champion Ventures
through the Closing Date herein. Champion Ventures is not now or
has it ever been a corporation which meets the tests of Section
542(b)(2) of the Internal Revenue Code. Champion Ventures has not
participated in, or is required to participate in, for any period
prior to the date of this Agreement the filing of any consolidated
tax return other than (i) as set forth in the Schedule of Taxes, or
(ii) as a member of an affiliated group of which Champion Ventures
is the common parent.
SECTION 2.19 CHAMPION VENTURES DUE DILIGENCE. Upon or
prior to execution hereof, Champion Ventures shall deliver to IGA
the following documents, which are collectively referred to as the
"Champion Ventures Due Diligence" which are dated the date of this
Agreement:
(a) complete and correct copies of the articles of
incorporation, bylaws and Certificate of Good Standing of Champion
Ventures as in effect as of the date of this Agreement;
(b) copies of the Champion Ventures Financial
Statements;
(c) the description of any material adverse change in
the business, operations, property, assets, or condition of Champion
Ventures since December 31, 1998 required to be provided pursuant to
Section 2.6; and
(d) any other information, together with any required
copies of documents, required to be disclosed in the Champion
Ventures Due Diligence under this Agreement.
Champion Ventures shall cause the Champion Ventures Due
Diligence and the instruments to be delivered to IGA hereunder to be
updated after the date hereof up to and including the Closing Date.
SECTION 2.20 ADDITIONAL INFORMATION AVAILABLE. Champion
Ventures will make available to each IGA Shareholder the opportunity
to ask questions and receive answers concerning the acquisition of
Champion Ventures Common Stock in the transaction, and to obtain any
additional information which Champion Ventures possesses or can
acquire without unreasonable effort or expense.
SECTION 2.21 LIMITATION ON LIABILITY. Notwithstanding
anything to the contrary contained in this Agreement, Champion
Ventures shall not have any liability for any misrepresentation or
breach of any representation or warranty contained in this Article
II, if IGA or any of the IGA Shareholders has actual knowledge
(rather than Knowledge) of such misrepresentation or breach.
ARTICLE III
EXCHANGE PROCEDURE
SECTION 3.1 DELIVERY OF IGA SECURITIES. On the Closing
Date, the holders of the IGA Common Shares shall deliver to Champion
Ventures (i) certificates or other documents evidencing all of the
issued and outstanding IGA Common Shares, duly endorsed in blank or
with executed stock power attached thereto in transferrable form and
(ii) investment letters, the form of which is attached hereto as
Exhibit "A".
SECTION 3.2 ISSUANCE OF EXCHANGE SHARES. (a) In exchange
for all of the IGA Common Share tendered pursuant to Section 3.1,
Champion Ventures shall instruct its Transfer Agent to issue an
aggregate of 8,500,000 "restricted" Common Shares of Champion
Ventures (the "Exchange Shares") to the IGA shareholders as set
forth on Exhibit 1 and shall cause such shares to be delivered to
IGA for further delivery to the IGA Shareholders. Each share of IGA
shall be exchanged for 1 share of Champion Ventures.
(b) No fractional Exchange Shares shall be issued pursuant
to this Section 3.2. In lieu of such fractional shares, all shares
to be issued shall be rounded up or down to the nearest whole share.
(c) The total of 8,500,000 shares to be issued to the IGA
shareholders by Champion Ventures (the "IGA Shares") are not being
registered under the Securities Act of 1933, as amended (the
"Securities Act") and are to be issued as "restricted securities",
as that term is defined in Rule 144 promulgated under the Act, and
that the certificates representing the IGA Shares will bear a legend
to that effect, substantially in the form set forth in Schedule 3.2,
as follows:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (II) TO THE
EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR
RULE UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION
SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
APPLICABLE STATE LAW IS AVAILABLE.
SECTION 3.3 UNDERTAKINGS.
(a) Upon execution hereof or as soon thereafter as
practical, management of Champion Ventures and IGA shall execute,
acknowledge and deliver (or shall cause to be executed, acknowledged
and delivered) any and all certificates, opinions, financial
statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered, together
with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby, subject only to the
conditions to Closing referenced hereinbelow.
SECTION 3.4 CLOSING. The closing ("Closing") of the
transactions contemplated by this Agreement shall be as of the date
in which all of the shareholders of IGA have approved the terms of
this Agreement ("Closing Date"), all conditions to Closing
referenced in this Agreement have been satisfied or waived by IGA
and all documentation referenced herein is delivered to the
respective party herein, unless a different date is mutually agreed
to in writing by the parties hereto.
SECTION 3.5 TERMINATION.
(a) This Agreement may be terminated by the board of
directors of either Champion Ventures or IGA at any time prior to
the Closing Date if:
(i) there shall be any action or proceeding before any
court or any governmental body which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this
Agreement and which, in the judgment of such board of directors,
made in good faith and based on the advice of its legal counsel,
makes it inadvisable to proceed with the exchange contemplated by
this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required
to consummate such transactions; or
(iii) the conditions described in Article VI below have
not been satisfied in full; or
In the event of termination pursuant to this paragraph (a) of this
Section 3.5, no obligation, right, or liability shall arise
hereunder and each party shall bear all of the expenses incurred by
it in connection with the negotiation, drafting and execution of
this Agreement and the transactions herein contemplated;
(b) This Agreement may be terminated at any time prior to
the Closing Date by action of the board of directors of Champion
Ventures if IGA shall fail to comply in any material respect with
any of its covenants or agreements contained in this Agreement or if
any of the representations or warranties of IGA contained herein
shall be inaccurate in any material respect, which noncompliance or
inaccuracy is not cured after 20 days' written notice thereof is
given to IGA. If this Agreement is terminated pursuant to this
paragraph (b) of this Section 3.5, this Agreement shall be of no
further force or effect and no obligation, right or liability shall
arise hereunder; and
(c) This Agreement may be terminated at any time prior to
the Closing Date by action of the board of directors of IGA if
Champion Ventures shall fail to comply in any material respect with
any of its covenants or agreements contained in this Agreement or if
any of the representations or warranties of Champion Ventures
contained herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days written
notice thereof is given to Champion Ventures. If this Agreement is
terminated pursuant to this paragraph (c) of Section 3.5, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
SECTION 3.6 DIRECTORS OF CHAMPION VENTURES. Upon the
Closing, the present members of Champion Ventures' Board of
Directors shall tender their resignations seriatim so that the
following persons are appointed directors of Champion Ventures in
accordance with procedures set forth in the Champion Ventures
bylaws: Xxxxxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx.
Each director shall hold office until his successor shall have been
duly elected and shall have qualified or until his or her earlier
death, resignation or removal.
SECTION 3.7 OFFICERS OF CHAMPION VENTURES. UPON THE
CLOSING, THE PRESENT OFFICERS OF CHAMPION VENTURES SHALL TENDER
THEIR RESIGNATIONS AND PROVIDE CHAMPION VENTURES WITH APPLICABLE
RELEASES CONCERNING THEIR RESPECTIVE EMPLOYMENT AGREEMENTS.
SIMULTANEOUS THEREWITH, THE FOLLOWING PERSONS SHALL BE ELECTED AS
OFFICERS OF CHAMPION VENTURES IN ACCORDANCE WITH PROCEDURES SET
FORTH IN THE CHAMPION VENTURES BYLAWS:
NAME OFFICE
XXXXXXX X. XXXXXXXXXX PRESIDENT AND CHIEF
EXECUTIVE OFFICER
XXXXXXX X. XXXXXXX CHAIRMAN OF THE BOARD
AND CHIEF FINANCIAL OFFICER
XXXX X. XXXXXX SECRETARY AND CHIEF
OPERATING OFFICER
SECTION 3.8 EFFECTIVE DATE. The parties hereto hereby
agree that the Effective Date of the transaction proposed herein
shall be 11:50 P.M. Eastern Time on May ___, 1999, unless the
parties agree otherwise, in writing.
SECTION 3.9 NAME CHANGE. On or prior to the Closing,
Champion Ventures shall use its best efforts to change its name to
"Internet Golf Association, Inc."
ARTICLE IV
SPECIAL COVENANTS
SECTION 4.1 ACCESS TO PROPERTIES AND RECORDS. Champion
Ventures and IGA will each afford to the officers and authorized
representatives of the other full access to the properties, books
and records of Champion Ventures and IGA, as the case may be, in
order that each may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other
and each will furnish the other with such additional financial and
operating data and other information as to the business and
properties of Champion Ventures and IGA, as the case may be, as the
other shall from time to time prior to Closing reasonably request.
In addition, Champion Ventures shall provide to IGA subsequent to
Closing all information necessary to allow IGA to properly prepare
and file all reports required to be filed pursuant to the Exchange
Act, including all information concerning Champion Ventures'
subsidiaries which existed prior to Closing.
SECTION 4.2 INFORMATION FOR CHAMPION VENTURES PUBLIC
REPORTS. IGA will furnish Champion Ventures with all information
concerning IGA and the IGA Stockholders, including all financial
statements, required for inclusion in any public report to be filed
by Champion Ventures pursuant to the Securities Act, the Exchange
Act, or any other applicable federal or state law. IGA covenants
that all information so furnished to Champion Ventures, including
the financial statements described in Section 1.4, shall be true and
correct in all material respects without omission of any material
fact required to make the information stated not misleading.
Similarly, Champion Ventures will provide all information concerning
its history and operations reasonably requested by IGA.
SECTION 4.3 SPECIAL COVENANTS AND REPRESENTATIONS
REGARDING THE EXCHANGE SHARES TO BE ISSUED IN THE EXCHANGE. The
consummation of this Agreement, including the issuance of the
Exchange Shares to the stockholders of IGA as contemplated hereby,
constitutes the offer and sale of securities under the Securities
Act, and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and
prospectus delivery requirements of such statutes which depend,
inter alia, upon the circumstances under which the IGA stockholders
acquire such securities. In connection with reliance upon
exemptions from the registration and prospectus delivery
requirements for such transactions, at the Closing, IGA shall cause
to be delivered, and the IGA stockholders shall deliver to Champion
Ventures, the investment letters referenced in Section 3.1.
SECTION 4.4 THIRD PARTY CONSENTS. Champion Ventures and
IGA agree to reasonably cooperate with each other in order to obtain
any required third party consents to this Agreement and the
transactions herein contemplated.
SECTION 4.5 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the Champion Ventures or IGA
Due Diligence or as permitted or contemplated by this Agreement, IGA
will each use its best efforts to:
(i) carry on its business in substantially the same
manner as it has heretofore;
(ii) maintain and keep its properties in states of good
repair and condition as at present, except for depreciation due to
ordinary wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now maintained
by it;
(iv) perform in all material respects all of its
obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
(v) maintain and preserve its business organization
intact, to retain its key employees and to maintain its relationship
with its material suppliers and customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by all federal and
state laws and all rules, regulations and orders imposed by federal
or state governmental authorities.
(b) From and after the date of this Agreement until the
Closing Date, neither Champion Ventures nor IGA will, without the
prior consent of the other party:
(i) except as otherwise specifically set forth herein,
make any change in their respective certificates or articles of
incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding
shares of capital stock, except as may otherwise be required by law,
or effect any stock split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment, severance or
similar agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the date hereof to
acquire any shares of its capital stock; or
(v) purchase or redeem any shares of its capital stock,
except as disclosed herein.
SECTION 4.6 REVERSE SPLITS AND CERTAIN RECAPITALIZATIONS
PROHIBITED. IGA and all other parties to this Agreement expressly
agree that, during the one-year period from the date of this
Agreement (the "Period"), Champion shall not effect any "prohibited
recapitalization," defined as any reverse split or combination of
its common shares, or any reorganization, merger, recapitalization
or other action which has the effect of changing any issued and
outstanding common share of Champion into less than one common
share; provided, that the term "prohibited recapitalization" shall
not include any cancellation, partial cancellation or readjustment
of shares issued by Champion in the normal course of business which
relates only to shares issued after the Closing Date. The IGA
Shareholders expressly agree that, during the Period, they will not
vote for or support any prohibited recapitalization nor grant a
proxy or other voting right to a person other than a Protected
Shareholder to vote at any meeting or act by written consent on a
proposal to effect a prohibited recapitalization, and will
affirmatively oppose any attempt to effect a prohibited
recapitalization during the Period unless approved in a manner
permitted by this Agreement.
SECTION 4.7 RIGHT TO ENFORCE PROVISIONS. The provisions
set forth in Section 4.6 are primarily intended for the protection
and benefit of all persons who hold common shares of Champion
Ventures prior to the Closing and their successors (the "Protected
Shareholders"), all of whom are deemed third party beneficiaries of
Section 4.6; and all parties agree that such provisions and the
duration of the Period are reasonable. Any Protected Shareholder
may bring an injunctive action to prevent a prohibited
recapitalization, an action to force IGA to revoke or rescind a
prohibited recapitalization as if it had never been effected, an
action to recover on any damages suffered as a result of the
prohibited recapitalization, or any one or more of such actions, or
may otherwise judicially enforce such provisions. Any shareholder
prevailing in such an action shall be entitled to reimbursement from
IGA for costs and reasonable attorneys' fees incurred in bringing
such action(s). All parties stipulate and agree that, for purposes
of any action brought by a Protected Shareholder to enjoin or
rescind a prohibited recapitalization, a prohibited recapitalization
would work serious economic harm to the Protected Shareholders.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
OF CHAMPION VENTURES
The obligations of Champion Ventures under this Agreement
are subject to the satisfaction, at or before the Closing Date, of
the following conditions:
SECTION 5.1 ACCURACY OF REPRESENTATIONS. The
representations and warranties made by IGA in this Agreement were
true when made and shall be true at the Closing Date with the same
force and effect as if such representations and warranties were made
at the Closing Date (except for changes therein permitted by this
Agreement), and IGA shall have performed or complied with all
covenants and conditions required by this Agreement to be performed
or complied with by IGA prior to or at the Closing. Champion
Ventures shall be furnished with a certificate, signed by a duly
authorized officer of IGA and dated the Closing Date, to the
foregoing effect.
SECTION 5.2 OFFICER'S CERTIFICATE. Champion Ventures
shall have been furnished with a certificate dated the Closing Date
and signed by a duly authorized officer of IGA to the effect that no
litigation, proceeding, investigation or inquiry is pending or, to
the best knowledge of IGA, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement or, to the extent not disclosed in
the IGA Due Diligence, by or against IGA which might result in any
material adverse change in any of the assets, properties, business
or operations of IGA.
SECTION 5.3 NO MATERIAL ADVERSE CHANGE. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations of nor
shall any event have occurred which, with the lapse of time or the
giving of notice, may cause or create any material adverse change in
the financial condition, business or operations of IGA.
SECTION 5.4 OTHER ITEMS. Champion Ventures shall have
received such further documents, certificates or instruments
relating to the transactions contemplated hereby as Champion
Ventures may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF IGA
The obligations of IGA under this Agreement are subject to
the satisfaction, at or before the Closing Date (unless otherwise
indicated herein), of the following conditions:
SECTION 6.1 ACCURACY OF REPRESENTATIONS. The
representations and warranties made by Champion Ventures in this
Agreement were true when made and shall be true as of the Closing
Date (except for changes therein permitted by this Agreement) with
the same force and effect as if such representations and warranties
were made at and as of the Closing Date, and Champion Ventures shall
have performed and complied with all covenants and conditions
required by this Agreement to be performed or complied with by
Champion Ventures prior to or at the Closing. IGA shall have been
furnished with a certificate, signed by a duly authorized executive
officer of Champion Ventures and dated the Closing Date, to the
foregoing effect.
SECTION 6.2 OFFICER'S CERTIFICATE. IGA shall be furnished
with a certificate dated the Closing Date and signed by a duly
authorized officer of Champion Ventures to the effect that no
litigation, proceeding, investigation or inquiry is pending or, to
the best knowledge of Champion Ventures, threatened, which might
result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or, to the extent not
disclosed in the Champion Ventures Due Diligence, by or against
Champion Ventures which might result in any material adverse change
in any of the assets, properties, business or operations of Champion
Ventures.
SECTION 6.3 NO MATERIAL ADVERSE CHANGE. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations of nor
shall any event have occurred which, with the lapse of time or the
giving of notice, may cause or create any material adverse change in
the financial condition, business or operations of Champion Ventures.
SECTION 6.4 NO LIABILITIES. As of the Closing Date, as
defined herein the Champion Ventures balance sheet and the notes
thereto, shall reflect that Champion Ventures has: (i) no
receivables; (ii) no accounts payable; (iii) except as stated herein
or in the Champion Ventures Due Diligence, no liabilities, whether
absolute, accrued, known or unknown, contingent or otherwise,
whether due or to become due, including, without limitation,
liabilities as guarantor under any guaranty or other governmental
charges. In the event Champion Ventures is bound by or otherwise
liable for any contract, lease or other agreement or any other
liability at the date of Closing, Champion Ventures' existing
"inside" officers and directors shall execute and deliver a binding
Indemnification and Hold Harmless Agreement at Closing relevant to
such obligations.
SECTION 6.5 OTHER ITEMS. IGA shall have received such
further documents, certificates, or instruments relating to the
transactions contemplated hereby as IGA may reasonably request.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 BROKERS AND FINDERS. Except as set forth in
Schedule 7.1, each party hereto hereby represents and warrants that
it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in
the negotiation, execution, or consummation of this Agreement. The
parties each agree to indemnify the other against any claim by any
third person not listed in Schedule 7.1 for any commission,
brokerage or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party
and such third person, whether express or implied from the actions
of the indemnifying party.
SECTION 7.2 LAW. FORUM AND JURISDICTION. This Agreement
shall be construed and interpreted in accordance with the laws of
the State of California.
SECTION 7.3 NOTICES. Any notices or other communications
required or permitted hereunder shall be sufficiently given if
personally delivered to it or sent by registered mail or certified
mail, postage prepaid, or by prepaid telegram addressed as follows:
If to Champion Ventures: Champion Ventures, Inc.
c/x Xxxxxxx & Company
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx Xx.
Facsimile No.: 000-000-0000
If to IGA: Internet Golf Association, Inc.
00000 Xxxx Xxxxx Xxxxxx Xxxxx, Xxxxx X-000
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxx
Facsimile No.: 000-000-0000
With copies to: Law Offices of M. Xxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: M. Xxxxxxx Xxxxxx, Esq.
Facsimile No.: 000-000-0000
or such other addresses as shall be furnished in writing by any
party in the manner for giving notices hereunder, and any such
notice or communication shall be deemed to have been given as of the
date so delivered, mailed, or telegraphed.
SECTION 7.4 ATTORNEYS' FEES. The prevailing party in any
proceeding brought to enforce or interpret any provision of this
Agreement shall be entitled to recover its reasonable attorney's
fees, costs and disbursements incurred in connection with such
proceeding, including but not limited to the costs of experts,
accountants and consultants and all other costs and services
reasonably related to the proceeding, including those incurred in
any bankruptcy or appeal, from the non-prevailing party or parties.
SECTION 7.5 CONFIDENTIALITY. Each party hereto agrees with
the other parties that, unless and until the reorganization
contemplated by this Agreement has been consummated, they and their
representatives will hold in strict confidence all data and
information obtained with respect to another party or any subsidiary
thereof from any representative, officer, director or employee, or
from any books or records or from personal inspection, of such other
party, and shall not use such data or information or disclose the
same to others, except: (i) to the extent such data is a matter of
public knowledge or is required by law to be published; and (ii) to
the extent that such data or information must be used or disclosed
in order to consummate the transactions contemplated by this Agreement.
SECTION 7.6 SCHEDULES; KNOWLEDGE. Each party is presumed to
have full knowledge of all information set forth in the other
party's schedules delivered pursuant to this Agreement.
SECTION 7.7 THIRD PARTY BENEFICIARIES. This contract is
solely between Champion Ventures and IGA and, except for the
Champion Ventures shareholders and the IGA Shareholders or as
otherwise specifically provided herein, no director, officer,
stockholder, employee, agent, independent contractor or any other
person or entity shall be deemed to be a third party beneficiary of
this Agreement.
SECTION 7.8 ENTIRE AGREEMENT. This Agreement represents the
entire agreement between the parties relating to the subject matter
hereof. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof.
There are no other courses of dealing, understandings, agreements,
representations or warranties, written or oral, except as set forth
herein. This Agreement may not be amended or modified, except by a
written agreement signed by all parties hereto.
SECTION 7.9 SURVIVAL; TERMINATION. The representations,
warranties and covenants of the respective parties shall survive the
Closing Date and the consummation of the transactions herein
contemplated for three years.
SECTION 7.10 COUNTERPARTS. This Agreement may be executed
in multiple counterparts, each of which shall be deemed an original
and all of which taken together shall be but a single instrument.
SECTION 7.11 AMENDMENT OR WAIVER. Every right and remedy
provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may be
enforced concurrently herewith, and no waiver by any party of the
performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing
Date, this Agreement may be amended by a writing signed by all
parties hereto, with respect to any of the terms contained herein,
and any term or condition of this Agreement may be waived or the
time for performance hereof may be extended by a writing signed by
the party or parties for whose benefit the provision is intended.
SECTION 7.12 INCORPORATION OF RECITALS. All of the recitals
hereof are incorporated by this reference and are made a part hereof
as though set forth at length herein.
SECTION 7.13 EXPENSES. Each party herein shall bear all of
their respective costs and expenses incurred in connection with the
negotiation of this Agreement and in the consummation of the
transactions provided for herein and the preparation therefor.
SECTION 7.14 HEADINGS; CONTEXT. The headings of the sections
and paragraphs contained in this Agreement are for convenience of
reference only and do not form a part hereof and in no way modify,
interpret or construe the meaning of this Agreement.
SECTION 7.15 BENEFIT. This Agreement shall be binding upon
and shall insure only to the benefit of the parties hereto, and
their permitted assigns hereunder. This Agreement shall not be
assigned by any party without the prior written consent of the other
party.
SECTION 7.16 PUBLIC ANNOUNCEMENTS. Except as may be
required by law, neither party shall make any public announcement or
filing with respect to the transactions provided for herein without
the prior consent of the other party hereto.
SECTION 7.17 SEVERABILITY. In the event that any particular
provision or provisions of this Agreement or the other agreements
contained herein shall for any reason hereafter be determined to be
unenforceable, or in violation of any law, governmental order or
regulation, such unenforceability or violation shall not affect the
remaining provisions of such agreements, which shall continue in
full force and effect and be binding upon the respective parties
hereto.
SECTION 7.18 NO STRICT CONSTRUCTION. The language of this
Agreement shall be construed as a whole, according to its fair
meaning and intendment, and not strictly for or against either party
hereto, regardless of who drafted or was principally responsible for
drafting the Agreement or terms or conditions hereof.
SECTION 7.19 EXECUTION KNOWING AND VOLUNTARY. In executing
this Agreement, the parties severally acknowledge and represent that
each: (a) has fully and carefully read and considered this
Agreement; (b) has been or has had the opportunity to be fully
apprized of its attorneys of the legal effect and meaning of this
document and all terms and conditions hereof; and (c) is executing
this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
SECTION 7.20 JOINT PREPARATION. This Agreement is to be
deemed to have been prepared jointly by the parties hereto and any
uncertainty or ambiguity existing herein, if any, shall not be
interpreted against any party, but shall be interpreted according to
the application of the rules of interpretation for arm's length
agreements.
SECTION 7.21 ARBITRATION AND VENUE. Except as set forth in
Section 4.8, any controversy arising out of or relating to this
Agreement subsequent to closing or any modification or extension
thereof, including any claim for damages and/or recission, shall be
settled by arbitration in Orange County, California in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association before one arbitrator. The arbitrator sitting in any
such controversy shall have no power to alter or modify any express
provisions of this Agreement or to render any award which by its
terms effects any such alteration, or modification. The parties
consent to the jurisdiction of the Superior Court of California, and
of the United States District Court for the Central District of
California for all purposes in connection with such arbitration
including the entry of judgment on any award. The parties consent
that any process or notice of motion or other application to either
of said courts, and any paper in connection with arbitration, may be
served by certified mail or the equivalent, return receipt
requested, or by personal service or in such manner as may be
permissible under the rules of the applicable court or arbitration
tribunal, provided a reasonable time for appearance is allowed, The
parties further agree that arbitration proceedings must be
instituted within one year after the claimed breach occurred, and
that such failure to institute arbitration proceedings within such
period shall constitute an absolute bar to the institution of any
proceedings and a waiver of all claims. Each of the parties shall,
subject to the award of the arbitrators, pay an equal share of the
arbitrators' fees except the arbitrators shall have the power to
award recovery of all costs (including the attorneys' fees,
administrative fees, arbitrators' fees and court fees) to the
prevailing party, as determined by the arbitrators. This section
shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the corporate parties hereto have
caused this Agreement to be executed by their respective officers,
hereunto duly authorized, and entered into as of the date first
above written.
CHAMPION VENTURES, INC.
ATTEST:
/s/ Xxxxx Xxxxxxxxxx By: /s/ Xxxx X. Xxxxxxx, Xx.
Secretary or President
Assistant Secretary
ATTEST: INTERNET GOLF ASSOCIATION, INC.
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxx, Secretary Xxxxxxx X. Xxxxxxxxxx, President
IGA SHAREHOLDERS:
/s/ Xxxxxxx X. Xxxxxxxxxx
____________________________
Xxxxxxx X. Xxxxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
____________________________
Xxxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxx
____________________________
Xxxx X. Xxxxxx
Internet Golf Advertising Corp.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Sec/Treas
SCHEDULE I
LIST OF IGA SHAREHOLDERS
List of IGA Shareholders
Name # of IGA Shares # of Champion Ventures
to be Exchanged shares to be Issued
Xxxxxxx X. Xxxxxxxxxx 2,100,000 2,130,070
Xxxxxxx X. Xxxxxxx 1,500,000 1,521,480
Xxxx X. Xxxxxx 1,500,000 1,521,480
Internet Golf Advertising Corp 3,000,000 3,042,960
Bridgewater Capital Corp. 0 253,580
MRC Legal Services Corporation 0 30,430
TOTAL 8,100,000 8,500,000
EXHIBIT "A"
FORM OF INVESTMENT LETTER
INVESTMENT LETTER
May , 1999
Champion Ventures, Inc.
Gentlemen:
The undersigned herewith deposits certificate(s) for shares of
common stock of Internet Golf Association, Inc., ("IGA"), as
described below (endorsed, or having executed stock powers attached)
in acceptance of and subject to the terms and conditions of that
certain Agreement and Plan of Reorganization (the "Agreement"),
between IGA and Champion Ventures, Inc. ("Champion Ventures" or the
"Company"), dated May 4, 1999, receipt of which is hereby
acknowledged, in exchange for shares of Common Stock of Champion
Ventures (the "Exchange Shares"). If any condition precedent to the
Agreement is not satisfied within the relevant time parameters
established in the Agreement (or any extension thereof), the
certificate(s) are to be returned to the undersigned.
The undersigned hereby represents, warrants, covenants and
agrees with you that, in connection with the undersigned's
acceptance of the Exchange Shares and as of the date of this letter:
1. The undersigned is aware that his, her or its
acceptance of the Exchange Shares is irrevocable, absent an
extension of the Expiration Date of any material change to any of
the terms and conditions of the Agreement.
2. The undersigned warrants full authority to deposit all
shares referred to above and that Champion Ventures will acquire a
good and unencumbered title thereto.
3. The undersigned has full power and authority to enter
into this agreement and that this agreement constitutes a valid and
legally binding obligation of the undersigned.
4. By execution hereof, the undersigned hereby confirms
that the Champion Ventures common stock to be received in exchange
for IGA common stock (the "Securities"), will be acquired for
investment for the undersigned's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part
thereof, and that the undersigned has no present intention of
selling, granting any participation in, or otherwise distributing
the same. By execution hereof, the undersigned further represents
the undersigned does not have any contract, undertaking, agreement
or arrangement with any third party, with respect to any of the
Securities.
5. The undersigned understands that the Securities are
being issued pursuant to available exemption thereto and have not
been registered under the Securities Act of 1933, as amended (the
"1933 Act"), or under any state securities laws. The undersigned
understands that no registration statement has been filed with the
United States Securities and Exchange Commission nor with any other
regulatory authority and that, as a result, any benefit which might
normally accrue to a holder such as me by an impartial review of
such a registration statement by the Securities and Exchange
Commission or other regulatory authority will not be forthcoming.
The undersigned understands that he/she/it cannot sell the
Securities unless such sale is registered under the 1933 Act and
applicable state securities laws or exemptions from such
registration become available. In this connection the undersigned
understands that the Company has advised the Transfer Agent for the
Common Shares that the Securities are "restricted securities" under
the 1933 Act and that they may not be transferred by the undersigned
to any person without the prior consent of the Company, which
consent of the Company will require an opinion of my counsel to the
effect that, in the event the Securities are not registered under
the 1933 Act, any transfer as may be proposed by the undersigned
must be entitled to an exemption from the registration provisions of
the 1933 Act. To this end, the undersigned acknowledges that a
restrictive legend will be placed upon the certificate representing
the Securities and that the Transfer Agent has been advised of such
facts.
6. The undersigned represents that it is experienced in
evaluation and investing in securities of companies and acknowledges
that he/she/it is able to fend for itself, can bear the economic
risk of this investment and has such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of the investment in the Securities.
IN WITNESS WHEREOF, the undersigned has duly executed this
Investment Letter as of the date indicated hereon.
Dated: , 1999
Very truly yours,
____________________________
(signature)
____________________________
(print name in full)
____________________________
( address)
