EXHIBIT 22.2
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (hereinafter the "Agreement") is made and
entered into as of _____ May, 2003, by and among Klinair Environmental
Technologies Limited, a Cayman Islands corporation (hereinafter "KETLF"), GSI
Securitization Inc, a New Jersey corporation ("GSI") and the stockholders of GSI
identified in Exhibit A hereto (collectively, the "Stockholders"). The
Stockholders are all the stockholders of GSI.
AGREEMENT
In consideration of the terms hereof, the parties hereto agree as follows:
ARTICLE I - PURCHASE AND SALE OF STOCK
1.1 Transfer of Stock
Subject to the terms and conditions hereof, on the Closing Date (as defined
below), the Stockholders shall sell, convey, transfer, assign and deliver to
KETLF, and KETLF shall purchase from the Stockholders, all of the issued and
outstanding common shares of GSI (the "GSI Stock").
1.2 The Closing
The closing of this Agreement (the "Closing") shall occur on May ___, 2003
(the "Closing Date") at 10:00 a.m. local time at the offices of Corporate
Services Group, LLC., or such other time or location as the parties hereto shall
agree.
1.3 Deliveries at the Closing
On the Closing Date in order to effectuate the transfer of the Stock:
(a) The Stockholders shall deliver to KETLF certificates representing all
of the GSI Stock, free and clear of any claim, lien, pledge, option, charge,
easement, security interest, right-of-way, encumbrance, restriction on sale or
transfer, preemptive right or option or any other right of any third party of
any nature whatsoever ("Encumbrance"), duly endorsed in blank for transfer or
accompanied by stock powers duly executed in blank.
(b) KETLF shall deliver the consideration of the Purchase Price as set
forth in Section 1.4 below.
(c) GSI, the Stockholders and KETLF shall each deliver all documents,
certificates, agreements and instruments required to be delivered pursuant to
Articles IV and V; and
(d) All instruments and documents executed and delivered to any party
pursuant hereto shall be in a form and substance, and shall be executed in a
manner, reasonably satisfactory to the receiving party.
1.4 Purchase Price
Subject to the terms and conditions of this Agreement, the total purchase
price for the GSI Stock (the "Purchase Price") shall be 54,000,000 shares of
KETLF common stock, $.001 par value (the "KETLF Stock"), and 9,000,000 preferred
non-convertible voting shares to be issued to Xxxxxxx Xxxxxx to retain his
services as President and CEO of KETLF for a minimum period of 5 years.
1.5 No Fractional Securities
No certificates or scrip representing fractional KETLF Stock shall be
issued pursuant to this Article I and no KETLF dividend, stock split or interest
shall relate to any fractional security, and such fractional interests shall be
rounded upwards to the next whole number of shares.
1.6 Assistance in Consummation of the Purchase and Sale of Stock
The Stockholders, KETLF and GSI shall provide all reasonable assistance to,
and shall cooperate with, each other to bring about the consummation of the
purchase and sale of the Stock and the other transactions contemplated herein as
soon as possible in accordance with the terms and conditions of this Agreement.
The Corporate Members of KETLF agree to hold an Extraordinary General
Shareholder Meeting, "EGM", as soon as practical.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
OF GSI AND THE STOCKHOLDERS
GSI and the Stockholders jointly and severally represent and warrant to
KETLF, as of the date of this Agreement and as of the Closing, all as follows in
this Article II:
2.1 Good Title
Each of the Stockholders is the sole and registered owner of that number of
shares of the Stock set forth opposite such Stockholder's name on Exhibit A with
good title thereto, free and clear of any Encumbrance.
2.2 Organization, Good Standing
GSI is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of New Jersey, and has all requisite
corporate power and authority to own, operate and lease its properties and
assets and to carry on its business as now conducted.
2.3 Authorization
GSI has the full corporate power and authority and the Stockholders have
full power, right and authority to enter into this Agreement and each of the
documents to which it or he is a party (collectively, the "Operative
Documents"), and to carry out the transactions contemplated hereby and thereby.
This Agreement has been, and each Operative Document to which GSI or the
Stockholders are a party will be, on the Closing Date, duty executed and
delivered by each of GSI and the Stockholders, as applicable, and this Agreement
is, and each Operative Document to which GSI or the Stockholders are a party
will be, on the Closing Date, a legal, valid and binding obligation of each of
GSI and the Stockholders, as applicable, enforceable against each of them in
accordance with the respective terms of this Agreement and each such Operative
Document.
2.4 Authorized Capitalization
GSI's authorized capital stock consists solely of 20,000,000 common shares
of which 4,790,800 shares are issued and outstanding on the date of this
Agreement and entirely held by the Stockholders. All issued and outstanding
shares of GSI Stock are duly authorized, validly issued, fully paid and
non-assessable. There are no outstanding or authorized subscriptions, options,
warrants, calls, rights, commitments or other agreements of any character which
obligate or may obligate GSI to issue any additional shares of any of its
capital stock or any securities convertible into or evidencing the right to
subscribe for any shares of any such capital stock. There are no voting trusts
or other agreements or understandings with respect to the capital stock of GSI
to which GSI or the Stockholders are a party or by which GSI or the Stockholders
are bound.
2.5 Subsidiaries and Affiliates
GSI has no Subsidiaries. As used in this Agreement, "Subsidiary," when used
in reference to any Person (as defined in Section 2.6 of this Agreement), shall
mean any corporation of which outstanding securities having ordinary voting
power to elect a majority of the Board of Directors of such corporation are
owned directly or indirectly by such Person. GSI does not own, directly or
indirectly, any ownership, equity, profits or voting interest in, or otherwise
control, any corporation, partnership, joint venture or other entity, and has no
agreement or commitment to purchase any such interest.
2.6 No Approvals or Notices Required; No Conflicts With Instruments
The execution, delivery and performance of this Agreement and the Operative
Documents by GSI and the Stockholders and the consummation of the transactions
contemplated hereby and thereby by GSI and the Stockholders will not (a)
constitute a violation (with or without the giving of notice or lapse of time,
or both) of any provision of law or any judgment, decree, order, regulation or
rule of any court or other governmental authority applicable to GSI or the
Stockholders, (b) require any consent, approval or authorization of, or
declaration, filing or registration with, any person, corporation, partnership,
joint venture, association, organization, other entity or governmental or
regulatory authority (a "Person") except for compliance with applicable
securities laws (the consent of all such Persons to be duly obtained by GSI and
the Stockholders at or prior to the Closing), (c) result in a material default
(with or without the giving of notice or lapse of time, or both) under,
acceleration or termination of, or the creation in any party of the right to
accelerate, terminate, modify or cancel, any agreement, lease, note or other
restriction, encumbrance, obligation or liability to which GSI or the
Stockholders is a party or by which either of them is bound or to which any of
their assets are subject, (d) result in the creation of any lien or encumbrance
upon the assets of GSI or upon the GSI Stock, (e) conflict with or result in a
breach of or constitute a default under any provision of the Articles of
Incorporation or By-Laws of GSI, or (f) invalidate or adversely affect any
permit, license, authorization or status used in the conduct of the business of
GSI.
2.7 No Distribution.
Each of the Shareholders is acquiring the KETLF common stock at the
Closing, subject to the terms hereof and related contemporaneous agreements, for
investment for his or its own account and not with a view to, or for resale in
connection with, any distribution thereof, and that such Shareholder has no
present intention of selling, granting any participation in, or otherwise
distributing the same; provided, however, that the disposition of the
Shareholder's property shall at all times remain in the Shareholder's control.
By executing this Agreement, each Shareholder further represents and warrants
that such Shareholder does not have any contractual obligations, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
KETLF shares.
2.8 Access to Information.
GSI and each Shareholder has had an opportunity to discuss the terms and
conditions of the purchase of the KETLF shares and KETLF's, business, management
and financial affairs with KETLF and its management and has received (or had
made available to it) any financial and business documents requested by him or
it.
2.9 Other Material Information.
Neither this Agreement, nor any agreement, certificate, statement or
document furnished in writing by or on behalf of GSI or the Shareholders to
KETLF in connection herewith or therewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
2.10 Fraudulent Transfer.
The execution of this Agreement by GSI and the Shareholders and the
consummation of the transactions contemplated hereunder by GSI and the GSI
Shareholders will not constitute a fraudulent conveyance under any applicable
statute or common law.
2.11 Legend.
Each certificate representing the shares of KETLF issued to the
Shareholders shall bear a legend in substantially the following form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, or under the securities laws of any
state, and may not be sold, or otherwise transferred, in the absence of such
registration or unless the Corporation has been furnished with an opinion of
counsel satisfactory to the Corporation that such registration is not required."
2.12 Financial Statements.
KETLF has been furnished with complete and correct copies of the following
financial statements of GSI (the "GSI Financial Statements"): (a) the unaudited
consolidated balance sheet of GSI as of December 31, 2002 and the respective
related consolidated statements of income, retained earnings and cash flows for
the twelve-month period then ended, and (b) the unaudited consolidated balance
sheet of GSI as of December 31, 2002 (the "Balance Sheet Date") together with
the related consolidated statements of operations, cash flows and stockholders'
equity for the 12 month period then ended. The Financial Statements have been
prepared in accordance with GAAP consistently applied, except that the financial
statements do not contain the notes or normal year-end adjustments required by
generally accepted accounting principles, and fairly present the financial
condition of GSI and its Subsidiaries at the date thereof and the results of its
operations for the period covered thereby. All the books, records and accounts
of GSI and its Subsidiaries are accurate and complete, are in accordance with
good business practice and all laws, regulations and rules applicable to GSI and
its Subsidiaries and the conduct of their business and accurately present and
reflect all of the transactions described therein.
2.13 Outstanding Debt: Absence of Liabilities.
Neither GSI nor any of its Subsidiaries (i) has any outstanding
indebtedness for borrowed money except as reflected in the GSI Financial
Statements or GSI Financial Schedule and (ii) except as reflected, is a
guarantor or otherwise contingently liable on such indebtedness of any other
Person. Except as set forth in GSI Financial Schedule, neither GIS nor any of
its Subsidiaries has any material liabilities or obligations, contingent or
otherwise, which are not reflected or provided for in the GSI Financial
Statements.
2.14 Changes in Condition.
Since the Balance Sheet Date, there have occurred no event or events that,
individually or in the aggregate, have caused or will cause a material adverse
effect on GSI's or any of its Subsidiaries' operations. Since the Balance Sheet
Date, neither GSI nor any of its Subsidiaries has (a) declared any dividend or
other distribution on any shares of its capital stock, (b) made any payment
(other than compensation to its directors, officers and employees at rates in
effect prior to the Balance Sheet Date or for bonuses accrued in accordance with
normal practice prior to the Balance Sheet Date) to any of its affiliates, (c)
increased the compensation, including bonuses, payable or to be payable to any
of its directors, officers, employees or affiliates, or (d) entered into any
contractual obligation, or entered into or performed any other transaction, not
in the ordinary and usual course of business and consistent with past practice,
other than as specifically contemplated by this Agreement.
2.15 Contractual Obligations.
The Contractual Obligations Schedule contains, together with a reference to
the paragraph pursuant to which each item is being disclosed, a correct and
complete list of all contractual obligations of a material nature of GSI and its
Subsidiaries of the types described below:
a. All collective bargaining agreements, all employment, bonus or
consulting agreements, all pension, profit sharing, deferred
compensation, stock option, stock purchase, retirement, welfare or
incentive plans or agreements, and all plans, agreements or practices
that constitute "fringe benefits" to any of the employees of the GSI
or its Subsidiaries.
b. All Contractual Obligations under which GSI or any Subsidiary is
restricted from carrying on any business, venture or other activities
anywhere in the world.
c. All Contractual Obligations to sell or lease (as lessor) any of the
properties or assets of GSI or any Subsidiary, except in the ordinary
course of business, or to purchase or lease (as lessee) any real
property.
d. All Contractual Obligations pursuant to which GSI or any Subsidiary
guarantees any liability of any Person, or pursuant to which any
Person guarantees any liability of GSI or any Subsidiary.
e. All Contractual Obligations pursuant to which GSI or any Subsidiary
provides goods or services involving payments to GSI or any Subsidiary
of more than $1,000 annually, which Contractual Obligation is not
terminable by GSI or any Subsidiary without penalty upon notice of
thirty (30) days or less.
f. All Contractual Obligations with any affiliate of GSI or any
Subsidiary.
g. Except for this Agreement, all Contractual Obligations providing for
the disposition of the business, assets or shares of GSI or any
Subsidiary or the merger or consolidation or sale or purchase of all
or substantially all of the assets or business of any Person, and any
letters of intent relating to the foregoing.
h. All Contractual Obligations of GSI or any Subsidiary relating to the
borrowing of money or to the mortgaging or pledging of, or otherwise
placing a lien on, any asset of GSI or any Subsidiary (except liens
imposed by operation of law in favor of landlords, suppliers,
mechanics or others who provide services to GSI or any Subsidiary).
All of the contractual obligations of GSI and its Subsidiaries are
enforceable against GSI and its Subsidiaries, as the case may be, and, to GSI's
and the Shareholders' knowledge, the other parties thereto in accordance with
their terms, except that enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws, from time to time in
effect, which affect enforcement of creditors' rights generally. Neither GSI nor
any of its Subsidiaries is in default under nor, to GSI or the Shareholders'
knowledge, are there any liabilities arising from any breach or default by any
Person prior to the date of this Agreement of, any provision of any such
contractual obligation. Upon request by counsel for KETLF, the GSI and the
Shareholders will, prior to Closing, furnish to counsel for KETLF true and
correct copies of all contractual obligations listed in GSI Contractual
Obligations Schedule.
2.16 Insurance.
To GSI's and the Shareholders' knowledge GSI's insurance policies are in
full force and effect, written by reputable insurers licensed to write insurance
in the states in which GSI and its Subsidiaries conduct business, which
insurance contracts provide for coverages which are usual and customary in its
business as to amount and scope. The Insurance Schedule contains a correct and
complete list and description of all insurance policies owned by GSI or any of
its Subsidiaries, correct and complete copies of which have previously been made
available to KETLF. Neither GSI nor any of its Subsidiaries is in default under
any of its insurance policies, nor has GSI or any of its Subsidiaries received
any notice of cancellation or intent to cancel or increase premiums with respect
to present insurance policies. The Insurance Schedule also contains a list of
all pending claims with any insurance company and any instances of a denial of
coverage of GSI or any of its Subsidiaries by any insurance company.
2.17 Transactions with Affiliates.
Other than as set forth in the Affiliates Schedule, no affiliate of GSI or
any Subsidiary is a customer or supplier of, or is party to any contractual
obligation with, GSI or any Subsidiary.
2.18 Conformity With Legal Requirements.
The operations of GSI and its Subsidiaries as now conducted are not in
violation of, nor is GSI or any Subsidiary in default under, any legal
requirements presently in effect or GSI's or any Subsidiary's Charter or Bylaws.
GSI and its Subsidiaries have all franchises, licenses, permits or other
authority presently necessary for the conduct of their businesses as now
conducted.
2.19 Benefit Plans.
GSI currently has no Employee Benefit Plans.
2.20 Employees.
None of the employees of GSI or any Subsidiary is presently represented by
a labor union, and no petition has been filed or proceedings instituted by any
employee or group of employees with any labor relations board seeking
recognition of a bargaining representative. To GSI's and the Shareholders'
knowledge, no employee of GSI or any Subsidiary is in violation of any term of
any contractual obligation with a former employer relating to the right of any
such employee to be employed by the GSI or such Subsidiary because of the nature
of GSI's or such Subsidiary's business or the use of any trade secrets or
proprietary information.
2.21 Taxes.
GSI and each of its Subsidiaries has filed all federal, state and local tax
and information returns which are required to be filed by it and such returns
are true and correct. GSI and each of its Subsidiaries have paid all taxes,
interest and penalties, if any, reflected in such tax returns or otherwise due
and payable by it. GSI has no knowledge of any material additional assessments
or any basis therefor. The charges, accruals and reserves on the balance sheet
of GSI as of the Balance Sheet Date in respect of taxes or other governmental
charges are adequate in amount for the payment of all liabilities for such taxes
or other governmental charges. GSI and its Subsidiaries have withheld or
collected from each payment made to its employees the amount of all taxes
required to be withheld or collected therefrom and has paid over such amounts to
the appropriate taxing authorities. Any deficiencies proposed as a result of any
governmental audits of such tax returns have been paid or settled or are being
contested in good faith, and there are no present disputes as to taxes payable
by GSI or any of its Subsidiaries.
2.22 Litigation.
Except as set forth in the Litigation Schedule, no litigation or proceeding
before, or investigation by, any foreign, federal, state or municipal board or
other governmental or administrative agency or any arbitrator is pending or, to
GSI's or the Shareholders' knowledge, threatened (nor to the GSI's or the
Shareholders' knowledge, does any basis exist therefor) against GSI or any of
its Subsidiaries or, to the GSI's or the Shareholders' knowledge, any officer of
GSI or any Subsidiary, which individually or in the aggregate could result in
any material liability or which may otherwise result in a material adverse
effect, or which seeks rescission of, seeks to enjoin the consummation of, or
which questions the validity of, this Agreement or any other related agreement
or any of the transactions contemplated hereby or thereby.
2.23 Minute Books.
The minute books of the GSI, which shall have been provided to counsel for
KETLF prior to the Closing if requested, contain a complete record of actions
taken at all meetings of directors and stockholders for the last three fiscal
years and reflect all such actions accurately in all material respects.
2.24 Trade Secrets
GSI has taken all steps that are reasonably required to protect GSI's
rights in confidential information and trade secrets of GSI or GSI's business or
provided by any third party to GSI.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF KETLF
Except as is otherwise described in the applicable Schedules, KETLF
represents and warrants as of the date of this Agreement and as of the Closing,
all as follows in this Article III:
3.1 Organization, Good Standing
KETLF is a corporation duly organized, validly existing and in good
standing under the laws of the Cayman Islands, respectively, and has all
requisite corporate power and authority to own, operate and lease its assets and
to carry on its businesses as now conducted.
3.2 Authority
KETLF has full corporate power and authority to execute, deliver and
perform this Agreement and the Operative Documents subject to the provisions of
Section 3.8 to which it is a party and to carry out the transactions
contemplated hereby and thereby. This Agreement has been, and each Operative
Document to which KETLF is a party will be, on the Closing Date, duly executed
and delivered by KETLF, and this Agreement is, and each Operative Document to
which KETLF is a party will be, on the Closing Date, a legal, valid and binding
obligation KETLF, enforceable against KETLF in accordance with its terms.
3.3 No Approvals or Notices Required; No Conflicts With Instruments
Unless subject to the provisions of Section 3.8, the execution, delivery
and performance of this Agreement and the Operative Documents by KETLF, the
issuance of the KETLF Stock to the Stockholders and the consummation of the
transactions contemplated hereby and by the Operative Documents will not (a)
constitute a violation (with or without the giving of notice or lapse of time,
or both) of any provision of law or any judgment, decree, order, regulation or
rule of any court or other governmental authority applicable to KETLF, (b)
require any consent, approval or authorization of, or declaration, filing or
registration with, any Person, except for compliance with the applicable
securities law, (c) result in a default (with or without the giving of notice or
lapse of time, or both) under, acceleration or termination of, or the creation
in any party of the right to accelerate, terminate, modify or cancel, any
agreement, lease, note or other restriction, encumbrance, obligation or
liability to which KETLF is a party or by which it is bound or to which any of
its assets are subject, (d) result in the creation of any material lien or
encumbrance upon the assets of KETLF, the KETLF Stock or the funds being
delivered in connection herewith, (e) conflict with or result in a breach of or
constitute a default under any provision of the charter documents of KETLF, or
(f) invalidate or adversely affect any permit, license, authorization or status
used in the conduct of the business of KETLF.
3.4 Authorized Shares
All of the shares of KETLF Stock issuable in exchange for the GSI Stock in
accordance with this Agreement will be, when so issued, duly authorized, validly
issued, fully paid and non-assessable upon closing in accordance with Section
3.8.
3.5 Claims and Proceedings
There are no claims, actions, suits, arbitrations, proceedings or
investigations involving, pending or, to the knowledge of KETLF, threatened
against KETLF before or by any court or governmental or non-governmental
department, commission, board, bureau, agency or instrumentality, or any other
Person, which could question the validity of this Agreement or which could
enjoin, restrain, condition or prohibit any action taken or to be taken by KETLF
pursuant to this Agreement or in connection with the transactions contemplated
hereby (including, without limitation the purchase of the GSI Stock or the
issuance of the KETLF Stock to the Stockholders), and, to the knowledge of
KETLF, there is no valid basis for any such claim, action, suit, arbitration,
proceeding or investigation. There are no outstanding or unsatisfied judgments,
orders, decrees, or stipulations by which KETLF is bound which involve or affect
the transactions contemplated hereby.
3.6 Financial Statements
KETLF has delivered to GSI a true and complete copy of its Form 20F for the
year ended December 31, 2001 and an unaudited balance sheet and income statement
for the fiscal year ending December 31, 2002. The KETLF financial statements for
the year ended December 31, 2001 fairly present the financial condition of KETLF
as of the dates thereof and the results of its operations for the periods then
ended. There are no liabilities or obligations either fixed or contingent not
reflected therein. The KETLF Financial Statements for the year ended December
31, 2001 are audited and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and fairly present
the financial position of KETLF as of the dates thereof and the results of its
operations and changes in financial position for the periods then ended.
The unaudited balance sheet and income statement for the year ended
December 31, 2002 are subject to audit adjustments and represent managements
best estimate of a fair presentation. Current management will certify the said
statements as fairly representing the position of KETLF at December 31, 2002,
subject only to audit adjustments, and will further certify that the only
outstanding liabilities are those attached hereto and delivered herewith.
3.7 Taxes
KETLF has filed all federal, state, county and local income, excise,
property and other tax, governmental and/or related returns, forms, or reports,
which are due or required to be filed by it prior to the date hereof, except
where the failure to do so would have no material adverse impact on KETLF, and
has paid or made adequate provision in the KETLF Financial Statements for the
payment of all taxes, fees, or assessments which have or may become due pursuant
to such returns or pursuant to any assessments received. KETLF is not delinquent
or obligated for any tax, penalty, interest, delinquency or charge.
Each such tax return or report has been duly filed on a timely basis and
all such returns and reports are correct and complete in all material respects
and fully discloses and does not understate the income, taxes, expenses,
deductions and credits for the period to which it relates. Up to and including
the Closing Date, no claim has been made against KETLF by any authority in a
jurisdiction in which it does not file a return that it is or may be subject to
any taxes in that jurisdiction. KETLF has not received notice of any actions,
suits, proceedings, investigations or claims pending or threatened against KETLF
in respect of any taxes nor are any matters relating to any taxes under
discussion with any governmental authority.
KETLF has withheld from each payment made to any of its past or present
employees, officers and directors or to any other person in respect of whom
withholding therefrom is required, the amount of all taxes and other deductions
required to be withheld therefrom and has paid the same to the proper tax
authorities or other receiving officers in all material respects within the time
required under any applicable legislation. KETLF has collected all taxes it is
required to collect and has remitted all such taxes it is required to remit to
the proper tax authority when required to do so.
3.8 Capital Structure and Annual General Meeting
The authorized capital stock of KETLF consists of 50,000,000 shares of
common stock, $.001 par value and 10,000,000 shares of preferred stock, $.001
par value. KETLF currently warrants that (i) no shares of preferred stock are
issued and outstanding; and (ii) no shares of KETLF Stock are held by KETLF in
its treasury. All outstanding shares of capital stock of KETLF are, and all
shares which may be issued will be, when issued, duly authorized, validly
issued, fully paid and non-assessable and not subject to preemptive rights.
There are no issued, reserved for issuance or outstanding securities of KETLF or
any KETLF subsidiary convertible into or exchangeable or exercisable for shares
of capital stock or voting securities of KETLF, or any warrants, calls, options
or other rights to acquire common stock from KETLF or any KETLF subsidiary
except for a convertible debenture described in Exhibit B ,and options held by
four persons to purchase a total of 340,000 shares which will be cancelled
before closing.
The directors of KETLF will propose to its Members in an Extraordinary
General Shareholder Meeting for a majority of share approval that (i) the
authorized capital shall be increased to 100,000,000 shares of common stock;
(ii) approximately 6,500,000 shares of KETLF Stock will be issued and
outstanding after a share consolidation of 1 share for 2 shares before the
acquisition of GSI; (iii) KETLF shall issue 54,000,000 restricted common shares
in exchange for all of the outstanding common and preferred shares of GSI (iv) a
new slate of directors will be proposed for approval; (v) the name of the
Company will be changed to GSI; (vi) approval of auditor for December 31, 2002;
(vii) the authorization of an employees' and consultants' benefit package, with
issuance of shares as agreed to by a majority of the Board of Directors; (viii)
the issuance of 9,000,000 preferred voting non-convertible shares to Xxxxxxx
Xxxxxx, President of GSI, insuring his continuation as President of GSI for at
least 5 years.
3.9 OTCBB Listing; SEC Reporting
KETLF common stock is currently approved for quotation on the OTC Bulletin
Board under the symbol "KETLF" there are no stop orders in effect or
contemplated with respect thereto and no facts exist which may give rise
thereto. KETLF has filed all reports required to be filed by KETLF pursuant to
the Securities Exchange Act of 1934, as amended. KETLF has provided GSI with
copies of, or has made available to GSI, all correspondence between KETLF and
NASDAQ and KETLF and NASD. KETLF has not been informed, and has no reason to
believe, that its common stock will be delisted or suspended by the NASD. KETLF
has fully complied will all applicable securities laws and regulations and is
not in default of any of its obligations thereunder.
3.10 Litigation
Except as set forth in Section 7.1 below, KETLF is not a party to or the
subject of any pending litigation, claims, decrees, orders, stipulations or
governmental investigation or proceeding not reflected in the KETLF Financial
Statements or otherwise disclosed herein, and there are no lawsuits, claims,
assessments, investigations, or similar matters, against or affecting KETLF, its
management or its properties. KETLF has complied in all material respects with
all laws, statutes, ordinances, regulations, rules, decrees or orders applicable
to it.
3.11 Absence or Certain Changes or Events
Since December 31, 2002, there have not been any material adverse changes
in the financial condition of KETLF.
3.12 Books and Records
The corporate financial records, minute books, and other documents and
records of KETLF have been made available to GSI prior to the Closing, shall be
delivered to new management of KETLF at Closing and are correct and accurate in
all material respects and reflect all decisions made by the Board of Directors
and the shareholders of KETLF.
3.13 No Violations; No Material Business or Assets
KETLF has not breached, nor is there any pending, or to the knowledge of
management, any threatened claim that KETLF has breached, any of the terms or
conditions of any agreements, contracts or commitments to which it is a party or
by which it or its assets are bound. The execution and performance hereof will
not violate any provisions of applicable law or any agreement to which KETLF is
subject. KETLF has no business operations or material assets and it is not a
party to any material contract or commitment other than appointment documents
with its transfer agent, and it has disclosed to GSI all relationships or
dealings with related parties or affiliates.
3.14 Subscriptions
KETLF does not have any agreements of any nature to acquire, directly or
indirectly, any shares of capital stock, or other equity or ownership interest
in, any person, firm or corporation, or its assets.
3.15 Consents and Approvals
Except for compliance with the applicable securities laws, there is no
requirement to make any filing, give any notice to or obtain any license,
permit, certificate, regulation, authorization, consent or approval of, any
governmental or regulatory authorities as a condition to the lawful consummation
of the transactions contemplated by this Agreement except for the filings,
notifications, consents and approvals described in this Agreement.
3.16 Environmental Issues
KETLF is in compliance in all material respects with applicable Federal,
state and local laws, statutes, regulations, orders, directives and decisions
rendered by any legislature, department, administrative or regulatory agency
("Environmental Laws") relating to the protection of the environment,
occupational health and safety or the use, storage, disposal, transport,
handling, remediation or corrective action of any pollutants, contaminants,
chemicals, deleterious substances or industrial, toxic or hazardous wastes or
substances ("Hazardous Substances").
KETLF has not used or permitted to be used, except in compliance in all
material respects with all Environmental Laws, its office space, to store,
deposit, dispose or of handle any Hazardous Substances.
KETLF has obtained all permits, licenses and other authorizations which are
required in connection with the conduct of its business under all applicable
Environmental Laws.
KETLF has never received any notice of any civil, criminal or
administrative actions, suits, demands, claims, hearings, notices of demand
letters, requests for information, notices of violation, investigations or
proceedings pending or threatened against KETLF in connection with the conduct
of its business relating in any way to any Environmental Laws.
3.17 Disclosure
All disclosure information provided by KETLF which was delivered to GSI by
GSI for use in connection with the transaction described herein is true,
complete and accurate in all material respects.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions Precedent to the Obligations of GSI.
All obligations of GSI under this Agreement are subject to the fulfillment,
prior to or as of the Closing and/or the Closing Date, as indicated below, of
each of the following conditions:
(a) The representations and warranties by or on behalf of KETLF contained
in this Agreement or in any certificate or document delivered pursuant to the
provisions hereof shall be true in all material respects at and as of the
Closing Date as though such representations and warranties were made at and as
of such time.
(b) KETLF shall have performed and complied with all covenants, agreements,
and conditions set forth in, and shall have executed and delivered all documents
required by this Agreement to be performed or complied with or executed and
delivered by it prior to or at the Closing.
(c) On or before the Closing Date, KETLF shall have delivered to GSI
certified copies of resolutions of the board of directors of KETLF approving and
authorizing the execution, delivery and performance of this Agreement and
authorizing all of the necessary and proper action to enable KETLF to comply
with the terms of this Agreement including the election of GSI's nominees to the
Board of Directors of KETLF and all matters outlined herein.
(d) As of the Closing, the existing officers and directors of KETLF shall
have resigned in writing from all positions as directors and officers of KETLF
effective upon the election and appointment of the GSI nominees.
(e) At the Closing, all instruments and documents delivered to GSI and GSI
Stockholders pursuant to the provisions hereof shall be reasonably satisfactory
to legal counsel for GSI and GSI will advance KETLF $100,000 at closing for
payables and working capital. The cash advance will be increased by any amount
paid as finders fees.
(f) The shares of restricted KETLF Stock to be issued to the GSI
Stockholders will be duly authorized, validly issued, nonassessable and
fully-paid under Cayman Island corporation law and will be issued in compliance
with all federal, state and applicable corporation and securities laws.
(g) All shares of KETLF preferred stock which may be outstanding before
closing will be retired and/or converted into KETLF common stock prior to the
Closing.
4.2 Conditions Precedent to the Obligations of KETLF.
All obligations of KETLF under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
(a) The representations and warranties by GSI and the GSI Stockholders
contained in this Agreement or in any certificate or document delivered pursuant
to the provisions hereof shall be true in all material respects at and as of the
Closing as though such representations and warranties were made at and as of
such time.
(b) GSI shall have performed and complied with, in all material respects,
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with prior to or at the Closing.
4.3 Nature and Survival of Representations.
All representations, warranties and covenants made by any party in this
Agreement shall survive the Closing and the consummation of the transactions
contemplated hereby for one year from the Closing. All of the parties hereto are
executing and carrying out the provisions of this Agreement in reliance solely
on the representations, warranties and covenants and agreements contained in
this Agreement and not upon any investigation upon which it might have made or
any representation, warranty, agreement, promise or information, written or
oral, made by the other party or any other person other than as specifically set
forth herein.
After the Closing, GSI will become a wholly owned subsidiary of KETLF.
ARTICLE V
DOCUMENTS DELIVERED AT CLOSING
5.1 Documents at Closing.
At the Closing, which shall be subsequent to all conditions in Section 3.8
being approved by a majority of the voting shares of its Members, the following
documents shall be delivered:
(a) GSI will deliver, or will cause to be delivered, to KETLF the
following:
(i) a certificate executed by the President and Secretary of GSI to
the effect that all representations and warranties made by GSI under this
Agreement are true and correct as of the Closing, the same as though originally
given to KETLF on said date;
(ii) a certificate from the jurisdiction of incorporation of GSI dated
at or about the Closing to the effect that GSI is in good standing under the
laws of said jurisdiction;
(iii) such other instruments, documents and certificates, stock
certificates, if any, as are required to be delivered pursuant to the provisions
of this Agreement;
(iv) certified copies of resolutions adopted by the directors of GSI
authorizing this transaction; and
(v) all other items, the delivery of which is a condition precedent to
the obligations of GSI as set forth herein.
(b) KETLF will deliver or cause to be delivered to GSI:
(i) stock certificates representing the KETLF Shares to be issued as
the Purchase Price;
(ii) a representation letter of the President of KETLF, to the effect
that all representations and warranties of KETLF made under this Agreement are
true and correct as of the Closing, the same as though originally given to GSI
on said date;
(iii) certified copies of resolutions adopted by KETLF's board of
directors authorizing the transaction contemplated hereunder and all related
matters described herein;
(iv) certificate from the jurisdiction of incorporation of KETLF dated
at or about the Closing Date that KETLF is in good standing under the laws of
said jurisdiction;
(v) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement;
(vi) resignation of the existing officers and directors of KETLF and
appointment of new officers and directors as directed by GSI;
(vii) all corporate and financial records of KETLF; and
(viii) Representation letter from all board members of KETLF that as
at closing the company assets are comprised of patents as disclosed in its 20F
filing of December 31, 2002 and liabilities or contingent liabilities as
described in Exhibit B.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification.
For a period of one year from the Closing, KETLF agrees to indemnify and
hold harmless GSI and the GSI Shareholders, and GSI and the GSI Shareholders
agree to indemnify and hold harmless KETLF, at all times after the date of this
Agreement against and in respect of any liability, damage or deficiency, all
actions, suits, proceedings, demands, assessments, judgments, costs and expenses
including attorney's fees incident to any of the foregoing, resulting from any
material misrepresentations made by an indemnifying party to an indemnified
party, an indemnifying party's breach of covenant or warranty or an indemnifying
party's non-fulfillment of any agreement hereunder, or from any material
misrepresentation in or omission from any certificate furnished or to be
furnished hereunder.
ARTICLE VII
COVENANTS
7.1 Existing Litigation;
There is no litigation or anticipated litigation as against KETLF.
7.2 Boards, Committees and Officers.
Prior to the Closing, KETLF shall adopt resolutions in form and substance
reasonably acceptable to GSI, establishing, among other things, that the Board
of Directors and Officers of KETLF and GSI, from and after the Effective Time
shall be comprised solely of the nominees of GSI.
7.3 Expense Reimbursement
At the Closing, GSI shall pay to Xxxxx Xxxxxx, the sum of $7,500 as
reimbursement of expenses incurred in connection with KETLF and shall issue to
(or arrange for transfer to) Xxxxx Xxxxxx, 50,000 of its restricted shares of
KETLF, said shares to carry piggy-back rights respecting the registration of any
shares by KETLF.
7.4 Changes to Exhibit "A".
Prior to the Closing, GSI shall have the right to make adjustments to
Exhibit "A" hereto reflecting any changes in ownership in GSI prior to the
Closing and/or any shares of KETLF to be issued at Closing to advisors and
consultants to GSI and/or KETLF; provided that, however, the total number of
shares of KETLF issued at Closing shall not exceed the number of shares set
forth in Section 1.4 above.
ARTICLE VIII
MISCELLANEOUS
8.1 Miscellaneous.
(a) Public Announcement. Until the Closing, KETLF shall not make or issue,
or cause to be made or issued, any announcement or written statement concerning
this Agreement or the transactions contemplated hereby for dissemination to the
general public without the prior consent of GSI except as required by law.
(b) Further Assurances. At any time, and from time to time, after the
Closing Date, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
(c) Waiver. Any failure on the part of any party hereto to comply with any
of its obligations, agreements or conditions hereunder may be waived in writing
by the party to whom such compliance is owed.
(d) Amendment. This Agreement may be amended only in writing as agreed to
by all parties hereto.
(e) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first class registered or certified mail, return receipt requested.
(f) Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed 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.
(h) Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey.
(i) Binding Effect. This Agreement shall be binding upon the parties hereto
and inure to the benefit of the parties, their respective heirs, administrators,
executors, successors and assigns.
(j) Entire Agreement. This Agreement and the attached Exhibits constitute
the entire agreement of the parties covering everything agreed upon or
understood in the transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof.
(k) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
8.1 Disclosures
$50,000 in cash, and 240,000 Klinair common shares shall be delivered to
Corporate Services Group, LLC. (CSG) as payment for preparing, or having
prepared all documents, and filing all documents necessary to be filed with the
Securities Exchange Commission. CSG will pay 1/2 of all cash and share amounts
mentioned herein to Xxxxxxx Xxxxxxx, Esq., for services rendered in closing this
matter. No brokerage fees, commissions, or other payments except as disclosed
herein shall be made, and the parties hereto each certify to the other that no
such payments are owed to any third party respecting the closing of this
transaction, except as stated herein.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.
KETLF
By: /s/Xxxxxxx Xxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxx
Title: Director & Chief Executive Officer
GSI
By: /s/Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Xxxxxxx Xxxxxx, for and on behalf of all The Stockholders
EXHIBIT A
STOCKHOLDER NAME
NO: ADDRESS NUMBER OF SHARES
--- ------- ----------------
1 Xxxxxxx Xxxxxx 4,400,000
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxxxxx, XX 00000
2 Xxxxxx X. Von Till 10,500
3,500; 2,000; 1,000; 3,500
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
3 Libero Xxxxx 2,000; 1,000; 500 3,000
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
4 Xxxxxxx X. Xxxxx 1,100
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
5 Xxxx Xxxxx 2,000
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
6 Xxxxx X. Xxxxxx 1,000
00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000, Xxxxxx, XX 00000
7 Xxxxxxx Xxxxxx 1,000
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxx, XX 00000
8 Xx. Xxxxxxxxx X. & Xxxxxxx Xxxxxxx 35,000
25,000; 5,000; 5;000
00 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
10 Dr. H. Xxxxx Xxxxx 7,000
2,000; 5,000
0000 Xxxxx Xxxxxx,
Xxxxxxxx, XX 00000
11 Xx. Xxxxxxx Xxxxxx 4,000
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
12 X. Xxxxx 2,000
00 Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
14 Xx. Xxxxxxx Xxxxxxxx 5,000
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
15 Xxxxxx X. Xxxxxxxx 2,000
0000 Xxxxxxxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
16 Xxxxxx X. Xxxxxx 7,000
3,000; 2,000; 2,000
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
17 Xxxxxxxx X. Xxxxxx 7,000
3,000; 2,000; 2;000
000 Xxxx Xxxxxxxx
Xxxxxxxx, XX 00000
18 Xxxx X. Xxxxxx 12,000
8,000; 4,000
0000 Xxxxxxx Xxxxxx
Xxxxx 0xx Xxxxx
Xxxxxxxx, XX 00000
19 Xxxxxx X. Xxxxxx 12,000
8,000; 4,000
(Above)
20 Xxxxxx X. Xxxxxx 8,500
2,000; 3,000; 2,000; 1,500
000 Xxxxxx
Xxx Xxxx, XX 00000
21 Xxxx X. Xxxxxx for Xxxx X. Xxxxxx Trust 1,500
(Note: Above Xxxx X. Xxxxxx)
22 Xxxxxx X. Xxxxxx for Xxxxxx X. Xxxxxx Trust 1,500
(Note: Above Xxxx X. Xxxxxx)
23 Xxxxxx X. Xxxxxxxx 90,000
000 Xxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
24 Xxxxx Xxxxx 1,000
00 Xxxxxxxx Xxxx
Xxxxxxx Xxxx, XX 00000
25 Xxxx & Xxxxx Xxxxxxx 7,000
000 XxXxxx Xxxxx
Xxxxxxxx, XX 00000
26 Xxxx X. Xxxxxx, CPA 1,000
00 Xxxxxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
27 A. Xxxxxx Xxxxxx 3,000
0000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
28 Xxx Xxxxxxxxxx, Ph.D. (Xxxxxx) 3,000
0000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 9410
29 Xx. X. X. Xxxxxxxxx 14,000
5,000; 9;000
00000 Xxxxx Xxxxxxx
Xxxxxxxx, XX 00000
30 Xxxxxx & Xxxxx Xxxxxx 5,000
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
31 Xxxx X. Xxxxxx 1,000
(Above)
32 Xxxx X. Xxxxxx 1,000
(Above)
00 Xxxxxx Xxxxxxxx 000
(Xxxxx)
00 Xxxxxxxx Xxxxxxxx 000
(Xxxxx)
35 Xxxxxxx Xxxxxxxx 300
(Above)
00 Xxxxx Xxxxxx 000
(Xxxxx)
37 Xxxxxx X. Xxxxxx 1,000
000 Xxxxxxxxxxx Xxxxx
Xxx xxxxxx, XX 00000
38 Xxxxxxxxxx Xxxxxx 1,500; 1,000 2,500
000 Xxxxxxxxxxx Xxxxx
Xxx Xxxxxx XX 00000
39 Chew K. Xxxx Xxxx 1,000
0000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
40 Xxxxx Xxxxxxxxxxxxx 1,000
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
00 Xxxxxx Xxxxxxxxx 1,500
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
42 Xxxxxx Xxxxxxxx 1,500
000 Xxxxxxxxxxx
Xxxxxx Xxxx, XX 00000
43 Xxxxxxx Xxxx 1,500
0000 X Xxxxxxx Xxxxxx Xxx 0X
Xxxxxxx, XX 00000
44 Xxxxxxxxx (Xxx) & Xxxxxx Xxxxxxx 800
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
45 Xxxxxxxxxx Xxxxxx 2,000
000 Xxxxxxx
Xxx Xxxxx, XX 00000
46 Xxxxxxx Xxxx, Xx. M.D. 10,200
8,000; 2,200
0000 Xxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
47 Xxxxxx X'Xxxxxx 1,500
00 Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
48 Xx. Xxxxxx Xxxxx 1,000
00000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
00 Xxxxx Xxxxxxxx 1,000
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
50 Xxxxxxxxx X. Xxxxxxx 1,000
00 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
00 Xxxxxx Xxxx xx Xxxxxx Xxxx, Inc. 2,500
Xxxx Xxxxxx - X.X. Xxx 0000
Xxxxxxx, XX 00000
52 Xxxxxx & Colicchio, LLP 1,000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
53 Hunton & Xxxxxxxx 1,000
Att: Xxxxxx Xxxxx, Esq.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
54 Xx. Xxxxxx 1,000; 500 1,500
000 Xxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
55 Xx. Xxxxxx Xxxxxxxxxxx 1,200
0000 Xxxxx Xxxxxxx Xxx.
Xxxxxxx, XX 00000
56 Xxxxxxx Xxxxx 1,000
Xxxx Xxxxxx & Xxxxxxxxx
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
57 Xxxx X. XxXxxxx 1,000
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
58 Xx. Xxxxxx X. Xxxx & 2,000
Xx. Xxxxxx Xxxxxxxx-Xxxx Joint Tenants
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
59 Xx. Xxxx X. Xxxxx & 2,000
Xx. Xxxxxxxx X. Xxxxx Joint Tenants
with Right of Survivorship
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
60 Xxxxxx X. Xxxxx 100,000
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
EXHIBIT B
Xxxxxxx Xxxxxxx has advanced KETLF approximately $23,421 and has not been
reimbursed for those advances. He also is owed $250,000 on a convertible
debenture accruing interest at 10% per annum. At December 31, 2002 the accrued
interest on the debenture was $55,365. On April 3, 2002 the directors of KETLF
extended the maturity date of the debenture to December 31, 2003 and set the
conversion feature to $.20 per share post rollback. Based upon the terms of this
Agreement the conversion feature would be approximately $.10 per share before
the anticipated share consolidation of 1 share for 2.
The unaudited balance sheet of December 31, 2002 estimates accounts payable of
$63,656. Xxxxxxx Xxxxxxx is owed $2,455 of that amount and is included in the
amounts owed to as described above. The remaining $61,200 was owed to seven
individuals for services through December 31, 2002 who have received 1,224,000
restricted common shares for their services. The issuance of those shares have
been included in the capital structure of KETLF described in Section 3.8 of this
Agreement.
Xxxxxx Xxxxxxx C.P.A. is owed $7,500 as of March 31, 2003 for keeping corporate
administrative and accounting services. He estimates that he will require an
additional $7,500 through June 30, 2003 to timely prepare a draft Form 20-F or
Report on Form 10KSB, whichever is appropriate, and financial statements with
notes for the December 31, 2002 audit.
Xxxxx X. Xxxxxxxx C.P.A., P.C. is the current auditor for KETLF. Estimated audit
costs for the December 31, 2002 audit are not included in accounts payable.
Payables which may exist at March 31, 2002 not disclosed in Exhibit B are not
believed to exceed $20,000.
