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EXHIBIT 1
SHARE EXCHANGE AGREEMENT
AMONG
XXXXXX XXXXX,
XXXX XXXXX,
THE NIFCO FAMILY TRUST,
NIFCO INVESTMENTS LTD.
AND
XXXXXXXXXXXX.XXX, INC.
DECEMBER 11, 1998
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TABLE OF CONTENTS
ARTICLE I - SHARE EXCHANGE...................................................1
Section 1.1 Share Exchange.............................................1
Section 1.2 Closing....................................................1
Section 1.3 Transactions at the Closing................................1
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................2
Section 2.1 Organization, Standing and Qualification...................2
Section 2.2 Capitalization.............................................2
Section 2.3 Validity of Stock..........................................2
Section 2.4 Subsidiaries...............................................3
Section 2.5 Financial Statements.......................................3
Section 2.6 No Material Changes........................................3
Section 2.7 Business, Operations and Properties........................3
Section 2.8 Authorization; Approvals...................................3
Section 2.9 No Conflict with Other Instruments.........................4
Section 2.10 Compliance with Law and Other Instruments..................4
Section 2.11 Taxes......................................................4
Section 2.12 Contracts and Promissory Notes.............................4
Section 2.13 Litigation.................................................4
Section 2.14 Fees and Commissions.......................................4
Section 2.15 Interested Party Transactions..............................5
Section 2.16 ERISA......................................................5
Section 2.17 Environmental and Safety Laws..............................5
Section 2.18 SEC Reports................................................5
Section 2.19 Full Disclosure............................................5
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF NIFCO........................5
Section 3.1 Organization, Standing and Qualification...................5
Section 3.2 Capitalization.............................................6
Section 3.3 Subsidiaries...............................................6
Section 3.4 Permits....................................................6
Section 3.5 No Conflict with Other Instruments.........................6
Section 3.6 Compliance with Law and Other Instruments..................7
Section 3.7 Taxes......................................................7
Section 3.8 Intangible Assets..........................................7
Section 3.9 Litigation.................................................7
Section 3.10 Contracts and Promissory Notes.............................7
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ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE
EXCHANGING SHAREHOLDERS..................................................7
Section 4.1 Ownership of Nifco Shares..................................7
Section 4.2 Investment Representations.................................8
Section 4.3 Fees and Commissions.......................................8
Section 4.4 Authorization; Approvals...................................8
ARTICLE V - COVENANTS OF THE COMPANY.........................................8
Section 5.1 Confidentiality............................................8
Section 5.2 The Company's Filing Obligations...........................8
Section 5.3 Removal of Legend on Certificates Representing the Company
Shares.....................................................9
Section 5.4 Officers and Directors.....................................9
Section 5.5 Access to Information......................................9
Section 5.6 Cooperation................................................9
Section 5.7 No New Agreements..........................................9
Section 5.8 Compensation...............................................9
Section 5.9 Indebtedness...............................................9
Section 5.10 No Securities Issued.......................................9
Section 5.11 Repurchase; Dividends.....................................10
ARTICLE VI - COVENANTS OF THE EXCHANGING SHAREHOLDERS.......................10
Section 6.1 Restrictions on Transfer..................................10
Section 6.2 Transfer Instructions.....................................10
Section 6.3 Cooperation...............................................10
ARTICLE VII - CONDITIONS TO THE CLOSING OF THE COMPANY......................10
ARTICLE VIII - CONDITIONS TO THE CLOSING OF THE EXCHANGING
SHAREHOLDERS............................................................11
ARTICLE IX - SURVIVAL OF REPRESENTATIONS AND WARRANTIES
AND INDEMNIFICATION.....................................................13
Section 9.1 Survival of Representations and Warranties................13
Section 9.2 Obligations of the Company................................13
Section 9.3 Obligations of Nifco......................................13
Section 9.4 Notice of Loss or Asserted Liability......................14
Section 9.5 Opportunity to Contest....................................14
ARTICLE X - TERMINATION.....................................................14
Section 10.1 Termination of Agreement..................................14
Section 10.2 Termination of Obligations................................15
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ARTICLE XI - MISCELLANEOUS...................................................15
Section 11.1 Entire Agreement...........................................15
Section 11.2 Survival of Representations and Warranties.................15
Section 11.3 Notices....................................................15
Section 11.4 Amendments.................................................17
Section 11.5 Waiver and Consent.........................................17
Section 11.6 Successors and Assigns.....................................17
Section 11.7 Rights of the Company......................................17
Section 11.8 Execution and Counterparts.................................17
Section 11.9 No Third Party Beneficiaries...............................17
Section 11.10 Severability...............................................17
Section 11.11 Governing Law..............................................17
SCHEDULES
Schedule 2.12 - Contracts and Promissory Notes of the Company
Schedule 3.10 - Contracts and Promissory Notes of Nifco
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SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT, dated as of December 11, 1998, among
XXXXXX XXXXX and XXXX XXXXX, residents of Xxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxx, and the NIFCO FAMILY TRUST, a British Columbia, Canada trust
(collectively, the "Exchanging Shareholders"), NIFCO INVESTMENTS LTD., a British
Columbia corporation ("Nifco"), and XXXXXXXXXXXX.XXX, INC., a Colorado
corporation formerly known as Innovest Capital Sources Corporation (the
"Company").
WHEREAS, the Company desires to acquire from the Exchanging
Shareholders all of the outstanding capital stock of Nifco in exchange for a
total of 6,000,000 shares (the "Company Shares") of the Company's Common Stock,
no par value (the "Company Common Stock"), on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements hereinafter contained and for other good and valuable consideration,
the Exchanging Shareholders and the Company hereby agree as follows:
ARTICLE I - SHARE EXCHANGE
Section 1.1 Share Exchange. Subject to the terms and provisions of this
Agreement, at the Closing (as hereinafter defined), the Company shall acquire
from the Exchanging Shareholders an aggregate of 1,076,101 shares (the "Nifco
Shares") of Nifco's Common Stock, no par value (the "Nifco Common Stock"), which
represent all of the issued and outstanding capital stock of Nifco, in exchange
for 6,000,000 shares of the Company Common Stock, as follows:
NO. OF NO. OF
SELLING SHAREHOLDER NIFCO SHARES COMPANY SHARES
------------------- ------------ --------------
Xxxxxx Xxxxx 538,601 3,003,070
Xxxx Xxxxx 536,500 2,991,355
Nifco Family Trust 1,000 5,575
Section 1.2 Closing. The share exchange pursuant to Section 1.1 hereof
(the "Closing") shall take place at the offices of Xxxxxx and Company, 000
Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, or at such other place as
may be agreed upon by the Exchanging Shareholders and the Company, at 10:00
a.m., local time, on December 11, 1998 or at such other time and date as may be
agreed upon by the Exchanging Shareholders and the Company (the "Closing Date").
Section 1.3 Transactions at the Closing. At the Closing, the Exchanging
Shareholders shall deliver to the Company certificates representing the Nifco
Shares, duly endorsed, with signatures guaranteed by member firms of the New
York Stock Exchange, against delivery by the Company to the Exchanging
Shareholders of certificates representing the Company Shares, duly registered in
the names of the Exchanging Shareholders, in the amounts set forth in Section
1.1
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hereof, and bearing the restrictive legend set forth in Section 6.1 hereof. At
the Closing, the Company shall own beneficially and of record all of the issued
and outstanding capital stock of Nifco, and the Exchanging Shareholders shall
own approximately ninety percent (90%) of the issued and outstanding shares of
the Company Common Stock, assuming the closing of the private placements
described in Section 5.12 hereof.
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Exchanging Shareholders
that:
Section 2.1 Organization, Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado and has all requisite corporate power and authority to
own, lease and operate its property and assets and to conduct its business as
presently conducted and as proposed to be conducted by it. The Company has all
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and to carry out the transactions contemplated
hereby. The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the failure to so qualify
would have a material adverse effect on its assets, properties, condition
(financial or otherwise), operating results or business. Complete and correct
copies of the Articles of Incorporation and Bylaws of the Company have been
delivered to the Exchanging Shareholders.
Section 2.2 Capitalization. On the Closing Date, the authorized capital
stock of the Company shall consist of 50,000,000 shares of Common Stock, no par
value, of which 683,645 shares are issued and outstanding, after giving effect
to the reverse stock split described in Section 8.1(g) hereof. There are no
shares reserved for issuance pursuant to outstanding options, warrants,
debentures and preferred stock as of the date hereof. The outstanding shares of
Company Common Stock are duly authorized and validly issued, fully paid and
nonassessable. Holders of shares of the Company's capital stock have no
preemptive rights or rights of first refusal. There are (i) no outstanding
warrants, options, convertible securities or rights to subscribe for or purchase
any capital stock or other securities of the Company, (ii) no existing rights of
security holders to require the Company to register any securities of the
Company or to participate with the Company in any registration by the Company of
its securities, (iii) to the best knowledge of the Company, no agreements among
stockholders providing for the purchase or sale of the Company's capital stock,
and (iv) no obligations (contingent or otherwise) of the Company to purchase,
redeem or otherwise acquire any shares of its capital stock or any interest
therein or to pay any dividend or make any other distribution in respect
thereof.
Section 2.3 Validity of Stock. The Company Common Stock, when issued,
sold and delivered in accordance with the terms of this Agreement and in the
private placements described in Section 5.12 hereof, will be duly authorized and
validly issued, fully paid and nonassessable, and will be free of restrictions
on transfer, other than restrictions on transfer under applicable state and
federal securities laws, and not subject to preemptive rights.
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Section 2.4 Subsidiaries. The Company (i) does not own or control,
directly or indirectly, any corporation, partnership, association or business
entity, and (ii) is not a participant in any joint venture or partnership.
Section 2.5 Financial Statements. The Company has furnished the
Exchanging Shareholders with the Company's (i) audited financial statements as
of December 31, 1997 and for the two (2) years then ended and (ii) unaudited
financial statements for the nine (9) months ended September 30, 1998
(collectively, the "Financial Statements"). The Financial Statements are
included in the SEC Filings (as hereinafter defined). The Financial Statements
are true and correct in all material respects, are in accordance with the books
and records of the Company and have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied, and fairly and
accurately present in all material respects the financial position of the
Company as of such date and the results of its operations for the period then
ended. The Company has no material liabilities, debts or obligations, whether
accrued, absolute or contingent, other than liabilities reflected or reserved
for in the Balance Sheet or disclosed in the notes to the Financial Statements.
The Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
Section 2.6 No Material Changes. Subsequent to the dates of the SEC
Filings, there has been no material adverse change or any fact known to the
Company and not disclosed in writing to the Exchanging Shareholders that could
reasonably be expected to result in a material adverse change in the business or
financial condition of the Company, and, except as disclosed in the SEC Filings,
there is no litigation or governmental proceeding to which the Company is a
party or to which any property of the Company is subject or that is pending or,
to the knowledge of the Company, contemplated against the Company that the
Company reasonably expects to result in any material adverse change in the
business or financial condition of the Company.
Section 2.7 Business, Operations and Properties. The Company has had no
business, operations or properties since its emergence from bankruptcy on April
12, 1996.
Section 2.8 Authorization; Approvals. All corporate action on the part
of the Company and its stockholders necessary for the authorization, execution,
delivery and performance of all its obligations under this Agreement and for the
authorization, issuance and delivery of the Company Shares being exchanged under
this Agreement has been or will be taken prior to the Closing. This Agreement,
when executed and delivered by or on behalf of the Company, shall constitute the
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms. The Company has obtained or will obtain prior to the
Closing Date all necessary consents, authorizations, approvals and orders, and
has made all registrations, qualifications, designations, declarations or
filings with all federal, state or other relevant governmental authorities
required on the part of the Company in connection with the consummation of the
transactions contemplated by this Agreement, except for such filings as may be
required to be made after the Closing in order to comply with the requirements
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state laws.
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Section 2.9 No Conflict with Other Instruments. The execution, delivery
and performance of this Agreement will not result in any violation of, be in
conflict with, or constitute, with or without the passage of time or giving of
notice or both, a default under any terms or provisions of (i) the Articles of
Incorporation or Bylaws of the Company; (ii) any judgment, decree or order of
any court or government agency or body having jurisdiction over the Company or
its properties; (iii) any agreement, contract, understanding, indenture or other
instrument to which the Company is a party or by which it is bound, the effect
of which would have a material adverse effect on the assets, properties,
condition (financial or otherwise), operating results or business of the
Company; or (iv) any statute, rule or governmental regulation applicable to the
Company.
Section 2.10 Compliance with Law and Other Instruments. The Company is
not in violation in any material respect of any provision of (i) its Articles of
Incorporation or its Bylaws, or (ii) any judgment, decree, order, statute, rule
or governmental regulation applicable to it, the violation of which would
materially and adversely affect the assets, properties, condition (financial or
otherwise), operating results or business of the Company. The Company is not in
material violation or material default in any material respect of any provision
of any mortgage, indenture, agreement, instrument or contract to which it is a
party or by which it is bound.
Section 2.11 Taxes. The Company has accurately and timely filed all
federal income tax returns and all state and municipal tax returns that are
required to be filed by it and has paid or made adequate provision for the
payment of all amounts due pursuant to such returns. The federal income tax
returns of the Company have not been audited by the Internal Revenue Service,
and there are no waivers in effect of the applicable statute of limitations for
any period. No deficiency assessment or proposed adjustment of federal income
taxes or state or municipal taxes of the Company is pending, and the Company has
no knowledge of any proposed liability for any tax to be imposed.
Section 2.12 Contracts and Promissory Notes. Except as set forth on
Schedule 2.12, the Company is not a party to any contract, lease, mortgage,
notes, obligations or commitments. Except as set forth on Schedule 2.12, the
Company has no employment or consulting contracts, deferred compensation
agreements or bonus, incentive, profit-sharing or pension plans.
Section 2.13 Litigation. There is no action, proceeding or governmental
inquiry or investigation pending or, to the best knowledge of the Company,
threatened against the Company or any of its officers, directors or employees
(in their capacity as such) or any of the Company's assets or properties before
any court, arbitration board or tribunal or administrative or other governmental
agency. The Company is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or governmental agency or
instrumentality. There is no action, suit or proceeding by the Company currently
pending.
Section 2.14 Fees and Commissions. Neither the Company nor the
Exchanging Shareholders nor their affiliates shall be liable for any fees
payable to any finder, broker, agent, financial advisor or other intermediary
(collectively "Intermediary") in connection with the transactions contemplated
by this Agreement.
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Section 2.15 Interested Party Transactions. Except as disclosed in its
SEC Filings, no executive officer or director of the Company or holder of more
than five percent (5%) of the capital stock of the Company or, to the best of
the Company's knowledge, any "affiliate" or "associate" (as these terms are
defined in Rule 405 promulgated under the Securities Act) of any such person or
entity or the Company has or has had, either directly or indirectly, (a) an
interest in any person or entity which (i) furnishes or sells services or
products which are furnished or sold or are proposed to be furnished or sold by
the Company, or (ii) purchases from or sells or furnishes to the Company any
goods or services, or (b) a beneficial interest in any material contract or
agreement to which the Company is a party or by which it may be bound or
affected. Except as disclosed in its SEC Filings, there are no existing material
arrangements or proposed material transactions between the Company and any
officer, director or holder of more than five percent (5%) of the capital stock
of the Company, or, to the best of the Company's knowledge, any affiliate or
associate of any such person.
Section 2.16 ERISA. The Company does not maintain, sponsor, or
contribute to any program or arrangement that is an "employee pension benefit
plan," an "employee welfare benefit plan," or a "multi-employer plan", as those
terms are defined in Sections 3(2), 3(l), and 3(37) of the Employee Retirement
Income Security Act of 1974, as amended.
Section 2.17 Environmental and Safety Laws. To the best knowledge of
the Company, the Company is not in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, and no
material expenditures are or will be required in order to comply with any such
existing statute, law or regulation.
Section 2.18 SEC Reports. Since April 12, 1996, the Company has filed
all periodic reports with the Securities and Exchange Commission (the "SEC")
that it has been required to file (the "SEC Filings"), all of which have
complied in all material respects with all applicable requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). As of their respective dates, each of the SEC Filings,
including, without limitation, any financial statements or schedules included
therein, did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 2.19 Full Disclosure. The representations and warranties of the
Company do not contain or will contain, as of the date hereof and the Closing
Date, any untrue statement of a material fact or omits or will omit to state any
material fact necessary to keep the statements contained herein from being
misleading.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF NIFCO
Nifco represents and warrants to the Company that:
Section 3.1 Organization, Standing and Qualification. Nifco is a
corporation duly organized, validly existing and in good standing under the laws
of the Province of British Columbia, Canada and has all requisite corporate
power and authority to own, lease and operate its property and
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assets and to conduct its business as presently conducted and as proposed to be
conducted by it. Nifco has all requisite corporate power and authority to enter
into and perform its obligations under this Agreement and to carry out the
transactions contemplated hereby. Nifco is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on its assets,
properties, condition (financial or otherwise), operating results or business.
Complete and correct copies of the Articles of Incorporation and Bylaws of Nifco
have been delivered to the Company.
Section 3.2 Capitalization. On the Closing Date, the authorized capital
stock of Nifco shall consist of (a) 1,000,000 shares of preferred stock, $.01
par value, of which no shares are issued or outstanding prior to the Closing
Date and (b) 10,000,000 shares of common stock, no par value, of which 1,076,101
shares are issued and outstanding, and no shares are reserved for issuance
pursuant to outstanding options, warrants, debentures and preferred stock as of
the date hereof. The outstanding shares of Nifco Common Stock are duly
authorized and validly issued, fully paid and nonassessable. Holders of shares
of Nifco's capital stock have no preemptive rights or rights of first refusal.
There are (i) no outstanding warrants, options, convertible securities or rights
to subscribe for or purchase any capital stock or other securities of the
Company, (ii) no existing rights of security holders to require Nifco to
register any securities of Nifco or to participate with Nifco in any
registration by Nifco of its securities, (iii) to the best knowledge of the
Exchanging Shareholders, no agreements among stockholders providing for the
purchase or sale of Nifco's capital stock, and (iv) no obligations (contingent
or otherwise) of Nifco to purchase, redeem or otherwise acquire any shares of
its capital stock or any interest therein or to pay any dividend or make any
other distribution in respect thereof.
Section 3.3 Subsidiaries. Nifco owns all of the issued and outstanding
capital stock of Nifco Synergy Ltd., Intelli Trade Inc. and Origin Software
Corporation ("Origin"). Nifco (i) does not own or control, directly or
indirectly, any other corporation, partnership, association or business entity,
and (ii) is not a participant in any joint venture or partnership.
Section 3.4 Permits. Nifco has all franchises, permits, licenses and
any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
assets, properties, condition (financial or otherwise), operating results or
business of Nifco. Nifco is not in default in any material respect under any of
such franchises, permits, licenses or other similar authority.
Section 3.5 No Conflict with Other Instruments. The execution, delivery
and performance of this Agreement will not result in any violation of, be in
conflict with, or constitute, with or without the passage of time or giving of
notice or both, a default under any terms or provisions of (i) the Articles of
Incorporation or Bylaws of Nifco; (ii) any judgment, decree or order of any
court or government agency or body having jurisdiction over Nifco or its
properties; (iii) any agreement, contract, understanding, indenture or other
instrument to which Nifco is a party or by which it is bound, the effect of
which would have a material adverse effect on the assets, properties, condition
(financial or otherwise), operating results or business of Nifco; or (iv) any
statute, rule or governmental regulation applicable to Nifco.
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Section 3.6 Compliance with Law and Other Instruments. Nifco is not in
violation in any material respect of any provision of (i) its Articles of
Incorporation or its Bylaws, or (ii) any judgment, decree, order, statute, rule
or governmental regulation applicable to it, the violation of which would
materially and adversely affect the assets, properties, condition (financial or
otherwise), operating results or business of Nifco. Nifco is not in material
violation or material default in any material respect of any provision of any
mortgage, indenture, agreement, instrument or contract to which it is a party or
by which it is bound.
Section 3.7 Taxes. Nifco has accurately and timely filed all Canadian
income tax returns and all provincial and municipal tax returns that are
required to be filed by it and has paid or made adequate provision for the
payment of all amounts due pursuant to such returns. The federal income tax
returns of Nifco have not been audited by Revenue Canada, and there are no
waivers in effect of the applicable statute of limitations for any period. No
deficiency assessment or proposed adjustment of federal income taxes or state or
municipal taxes of Nifco is pending and Nifco has no knowledge of any proposed
liability for any tax to be imposed.
Section 3.8 Intangible Assets. Nifco and its subsidiaries own or have
the unrestricted right to use, free and clear of all liens, claims and
restrictions, all trademarks, service marks, trade names, copyrights and trade
secrets used in the conduct of its business, without infringing upon the right
of any person. All licenses to which Nifco or one of its subsidiaries is a party
are valid and binding and in full force and effect as of the date hereof.
Section 3.9 Litigation. There is no action, proceeding or governmental
inquiry or investigation pending or, to the best knowledge of the Exchanging
Shareholders, threatened against Nifco or any of its officers, directors or
employees (in their capacity as such) or any of Nifco's assets or properties
before any court, arbitration board or tribunal or administrative or other
governmental agency. Nifco is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or governmental agency
or instrumentality. There is no action, suit or proceeding by Nifco currently
pending.
Section 3.10 Contracts and Promissory Notes. Except as set forth on
Schedule 3.10, Nifco is not a party to any contract, lease, mortgage, notes,
obligations or commitments, in each case involving aggregate payments by Nifco
or having an aggregate value of more than $25,000. Except as set forth on
Schedule 3.10, Nifco has no employment or consulting contracts, deferred
compensation agreements or bonus, incentive, profit-sharing or pension plans.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE EXCHANGING
SHAREHOLDERS
The Exchanging Shareholders represent and warrant to the Company that:
Section 4.1 Ownership of Nifco Shares. The Exchanging Shareholders own
of record and beneficially all of the Nifco Shares, free and clear of any
adverse claim, lien or encumbrance.
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Section 4.2 Investment Representations. The Exchanging Shareholders are
acquiring the Company Shares for their own accounts, for investment purposes and
not with a view to, or for sale in connection with, any distribution of such
shares.
Section 4.3 Fees and Commissions. Neither the Exchanging Shareholders
nor their affiliates have incurred any fees payable to Intermediaries in
connection with the transactions contemplated by this Agreement.
Section 4.4 Authorization; Approvals. This Agreement, when executed and
delivered by or on behalf of the Exchanging Shareholders, shall constitute the
valid and binding obligation of the Exchanging Shareholders, enforceable against
the Exchanging Shareholders in accordance with its terms. The Exchanging
Shareholders have obtained or will obtain prior to the Closing Date all
necessary consents, authorizations, approvals and orders, and has made all
registrations, qualifications, designations, declarations or filings with all
federal, state or other relevant governmental authorities required on the part
of the Exchanging Shareholders in connection with the consummation of the
transactions contemplated by this Agreement.
ARTICLE V - COVENANTS OF THE COMPANY
The Company hereby covenants and agrees with the Exchanging
Shareholders that:
Section 5.1 Confidentiality. The Company agrees that it will maintain
in confidence and neither disclose to any third party nor make commercial use of
all or any part of any information disclosed by the Exchanging Shareholders in
connection with the transactions contemplated hereunder. With respect to
information disclosed to the Company related to the business and operations of
Nifco, the foregoing obligation of confidentiality shall apply prior to the
Closing of the transactions contemplated by this Agreement, or, if no such
Closing takes place, for a period of five (5) years from the date of this
Agreement.
Section 5.2 The Company's Filing Obligations. With a view to making
available the benefits of certain rules and regulations of the SEC which may at
any time permit the sale of any of the Company Shares which may be restricted as
defined in Rule 144 to the public without registration pursuant to the
Securities Act, the Company agrees to use its best lawful efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 at all times during which the Company is
subject to the reporting requirements of the Exchange Act;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
(c) So long as the Exchanging Shareholders own any of the
Company Shares and such shares are restricted securities as defined in Rule 144,
furnish to the Exchanging Shareholders upon written request a written statement
to the Company as to its compliance with the reporting
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requirements of Rule 144 and with regard to the Securities Act and the Exchange
Act (at all times during which the Company is subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company and such other reports and documents of the Company and other
information in the possession of or reasonably obtainable by the Company as the
Exchanging Shareholders may reasonably request in availing themselves of any
rule or regulation of the SEC allowing the Exchanging Shareholders to sell any
of the Company Shares without registration pursuant to the Securities Act.
Section 5.3 Removal of Legend on Certificates Representing the Company
Shares. The Company shall promptly remove the legend on any certificates
representing the Company Shares once the provisions of the Securities Act are
satisfied, upon the written request of the Exchanging Shareholders. In addition,
the Company shall notify its transfer agent that any stop transfer instructions
with respect to the Company Shares have been rescinded.
Section 5.4 Officers and Directors. Promptly after the Closing, the
Company will take such action as may be necessary to cause the officers and
directors of the Company proposed by the Exchanging Shareholders to be elected
and for all of its incumbent officers and directors to resign, effective as of
the Closing.
Section 5.5 Access to Information. From the date hereof to the Closing
Date, the Company will afford the Exchanging Shareholders reasonable access
during regular business hours to the books and records of the Company and the
opportunity to ask questions of, and to receive answers from, the Company and to
obtain any additional information, written and oral, to the extent the Company
has such information or could have acquired it without unreasonable effort or
expense.
Section 5.6 Cooperation. Prior to the Closing, the Company will
cooperate with the Exchanging Shareholders in taking any and all actions or
executing any and all documents appropriate to consummate the transactions
contemplated by this Agreement.
Section 5.7 No New Agreements. Prior to the Closing, the Company will
not enter into any contracts, agreements, leases, mortgages, instruments or
promissory notes.
Section 5.8 Compensation. Prior to the Closing, the Company will cancel
and terminate any bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance, death benefit or other fringe
benefit plan, and any employment, compensation or consulting agreement or
arrangement.
Section 5.9 Indebtedness. Prior to the Closing, the Company will not
create, incur, assume, guarantee or otherwise become liable with respect to any
indebtedness for money borrowed or voluntarily create, incur, assume or
guarantee any other indebtedness or obligation other than in the ordinary course
of business.
Section 5.10 No Securities Issued. Prior to the Closing, the Company
will not issue any shares of its capital stock or enter into any contract or
grant any option, warrant or right calling for the issuance of any shares and
will not create any securities convertible into any such shares or
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convertible into securities in turn so convertible or enter into any contract or
grant any option, warrant or right calling for the issuance of any such
convertible security.
Section 5.11 Repurchase; Dividends. Prior to the Closing, the Company
will not redeem, repurchase or otherwise acquire any capital stock of the
Company or declare or apply any dividend in cash, securities or other property.
ARTICLE VI - COVENANTS OF THE EXCHANGING SHAREHOLDERS
The Exchanging Shareholders hereby covenant and agree with the Company
that:
Section 6.1 Restrictions on Transfer. The Exchanging Shareholders agree
that (a) they will not offer, sell, transfer, give, pledge, hypothecate or
otherwise dispose of the Company Common Stock, unless such offer, sale,
transfer, gift, pledge, hypothecation or other disposition is in compliance with
the Securities Act and applicable state securities laws, and (b) subject to the
obligations of the Company pursuant to Section 6.3 hereof, the certificate(s)
representing the Company Shares shall bear a legend stating in substance:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
ANY APPLICABLE STATE SECURITIES LAWS AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED
IN RULE 144 UNDER THE ACT. NEITHER THE SHARES
NOR ANY INTEREST THEREIN MAY BE OFFERED FOR
SALE, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND SUCH
STATE SECURITIES LAWS OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
Section 6.2 Transfer Instructions. The Exchanging Shareholders agree
that the Company may provide for appropriate transfer instructions to implement
the provisions of Section 6.1 hereof.
Section 6.3 Cooperation. Prior to the Closing, the Exchanging
Shareholders will cooperate with the Company in taking any and all actions or
executing any and all documents appropriate to consummate the transactions
contemplated by this Agreement.
ARTICLE VII - CONDITIONS TO THE CLOSING OF THE COMPANY
Section 7.1 The obligation of the Company on the Closing Date to
exchange the Company Shares for the Nifco Shares shall be subject to each of the
following conditions precedent, any one or more of which may be waived by the
Company:
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(a) Representations and Warranties. The representations and
warranties made by the Exchanging Shareholders herein shall be true and accurate
in all material respects on and as of the Closing Date as if made on the Closing
Date.
(b) Performance. The Exchanging Shareholders shall have
performed and complied with all agreements and conditions contained herein and
other documents incident to the transactions contemplated by this Agreement
required to be performed or complied with by them prior to or at the Closing.
(c) Consents. The Exchanging Shareholders shall have secured
all permits, consents and authorizations that shall be necessary or required
lawfully to consummate the transactions contemplated by this Agreement and to
exchange the Nifco Shares for the Company Shares.
(d) Compliance Certificates. The Exchanging Shareholders shall
have delivered to the Company or its representative at the Closing certificates
to the effect that all conditions specified in Sections 7.1(a) to (c) hereof,
inclusive, have been fulfilled.
(e) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Company, and the Company
shall have received all such counterpart originals or certified or other copies
of such documents as the Company may reasonably request.
ARTICLE VIII - CONDITIONS TO THE CLOSING OF THE EXCHANGING
SHAREHOLDERS
Section 8.1 The obligation of the Exchanging Shareholders on the
Closing Date to exchange the Nifco Shares for the Company Shares shall be
subject to each of the following conditions precedent, any one or more of which
may be waived by the Exchanging Shareholders:
(a) Representations and Warranties. The representations and
warranties made by the Company herein shall be true and accurate in all material
respects on and as of the Closing Date as if made on the Closing Date.
(b) Performance. The Company shall have performed and complied
with all agreements and conditions contained herein and other documents incident
to the transactions contemplated by this Agreement required to be performed or
complied with by it prior to or at the Closing.
(c) Consents. The Company shall have secured all permits,
consents and authorizations that shall be necessary or required lawfully to
consummate the transactions contemplated by this Agreement and to exchange the
Company Shares for the Nifco Shares.
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(d) Compliance Certificates. The Company shall have delivered
to Nifco and the Exchanging Shareholders or their representative at the Closing
certificates to the effect that all conditions specified in Sections 8.1(a) to
(c) hereof, inclusive, have been fulfilled.
(e) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Exchanging Shareholders,
and the Exchanging Shareholders shall have received all such counterpart
originals or certified or other copies of such documents as the Exchanging
Shareholders may reasonably request.
(f) Software Agreement. The agreement among Columbia
Diversified Software Fund Limited Partnership, Nifco Synergy Ltd. and Origin has
been closed.
(g) Reverse Stock Split. The Company shall have effected a
reverse stock split of the Company Common Stock at the ratio of 75 shares to 1
share, provided that no shareholder of the Company will have his or its
ownership reduced to less than 100 shares.
(h) Corporate Name. The corporate name of the Company shall
have been changed to XxxxxXxxxxxx.xxx, Inc.
(i) Due Diligence. The Exchanging Shareholders shall have
concluded to their satisfaction their due diligence investigation of the
Company.
(j) Cancellation of Indebtedness and Agreements. All
indebtedness and agreements of the Company, including, without limitation, the
Promissory Note of the Company to Intrepid International S.A. ("Intrepid") dated
October 15, 1997 in the principal amount of $134,410 shall have been satisfied,
discharged or canceled, all agreements between the Company and Intrepid or its
affiliates shall have been terminated and all accrued compensation or other
amounts payable shall have been waived, and the Company shall have delivered
evidence thereof to the Exchanging Shareholders.
(k) Dissenters' Rights. No shareholders of the Company shall
have exercised any dissenters' rights in connection with the Company's Plan of
Reorganization and Acquisition or this Agreement.
(l) Corporate Documents, Stock Certificates and Stock Transfer
Records. The Company's certified Articles of Incorporation, Bylaws, corporate
minutes, stock certificates and stock transfer records shall have been delivered
to counsel to Xxxxxx Xxxxx.
(m) Registration Rights Agreement. The Company and the
Exchanging Shareholders shall have executed and delivered a Registration Rights
Agreement.
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ARTICLE IX - SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
INDEMNIFICATION
Section 9.1 Survival of Representations and Warranties. All
representations, warranties, covenants, and agreements made or to be performed
by the Company, Nifco or the Exchanging Shareholders pursuant to this Agreement
will survive the execution and delivery hereof and the Closing hereunder, and
will thereafter terminate and expire (a) on the date which is two (2) years
after the Closing, with respect to any "General Claim" (as herein defined) which
has not occurred or arisen on or before such date, and (b) with respect to any
"Tax Claim" (as herein defined), on the later of (i) ninety (90) days after the
date upon which the liability to which any such Tax Claim may relate is barred
by all applicable statutes of limitation, and (ii) ninety (90) days after the
date upon which any claim for refund or credit related to such Tax Claim is
barred by all applicable statutes of limitation. With respect to any
"Environmental Claim," such representations, warranties, covenants and
agreements will survive until ninety (90) days after the date upon which the
liability to which such Environmental Claims is barred by applicable statute of
limitations. As used in this Agreement, the following terms have the following
meanings:
(a) "General Claim" means any claim based upon, arising out of
or otherwise related to any material inaccuracy in any representation
or warranty or any breach of any covenant or agreement made by the
Exchanging Shareholders in or pursuant to this Agreement, other than a
Tax Claim or an Environmental Claim.
(b) "Tax Claim" means any claim based upon, arising out of or
otherwise related to any material inaccuracy in any representation or
warranty or any breach of any covenant or agreement made or to be
performed by the Exchanging Shareholders pursuant to this Agreement and
related to any federal, state, or local taxes of any kind or
description; or any claim related to of any taxes (including interest
and penalties relating thereto) now or hereafter due and relating to
the business, assets, operations, or properties of the Exchanging
Shareholders prior to the Closing.
(c) "Environmental Claim" means any claim based on, arising
out of or otherwise related to environmental matters.
Section 9.2 Obligations of the Company. The Company agrees to
indemnify, defend and hold the Exchanging Shareholders (and each of its
beneficiaries, affiliates and assigns) harmless from and against all losses,
costs, deficiencies, damages, consequential damages (including, but not limited
to, interruptions of business and costs of remedial actions), fines, penalties
and liabilities incurred, and all expenses (including, but not limited to
reasonable attorneys' fees) arising out of or otherwise related to any General
Claim (collectively, "Losses," and individually, a "Loss"), net of any insurance
recovery actually received relating to such Loss.
Section 9.3 Obligations of Nifco. Nifco agrees to indemnify, defend and
hold the Company (and each of its beneficiaries, affiliates and assigns)
harmless from and against all losses, costs, deficiencies, damages,
consequential damages (including, but not limited to, interruptions of business
and costs of remedial actions), fines, penalties and liabilities incurred, and
all expenses
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(including, but not limited to reasonable attorneys' fees) arising out of or
otherwise related to any General Claim (collectively, "Losses," and
individually, a "Loss"), net of any insurance recovery actually received
relating to such Loss.
Section 9.4 Notice of Loss or Asserted Liability. Promptly after (a)
becoming aware of circumstances that have resulted in a Loss for which any
indemnified party (the "Indemnitee") intends to seek indemnification, or (b)
receipt by the Indemnitee of written notice of any demand, claim or
circumstances which, with or without the lapse of time, the giving of notice or
both, would give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an "Asserted
Liability") that may result in a Loss, the Indemnitee will give notice thereof
to any other party (or parties) obligated to provide indemnification (the
"Indemnifying Party").
Section 9.5 Opportunity to Contest. The Indemnifying Party may elect to
compromise or contest, at its own expense and by its own counsel, any Asserted
Liability. If the Indemnifying Party elects to compromise or contest such
Asserted Liability, it will within thirty (30) days after receiving notice of
the claim from Indemnitee (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee in writing of its intent to do so, and the
Indemnitee will cooperate, at the expense of the Indemnifying Party, in the
compromise or contest of such Asserted Liability. If the Indemnifying Party
elects not to compromise or contest the Asserted Liability, fails to so notify
the Indemnitee of its election as herein provided or contests its obligation to
indemnify under this Agreement, the Indemnitee (upon further notice to the
Indemnifying Party) will hereafter have the right to pay, compromise or contest
such Asserted Liability on behalf of and for the account and risk of the
Indemnifying Party, subject to the right of the Indemnifying Party to assume the
compromise or contest of such Asserted Liability at any time before final
settlement or determination thereof. In any event, the Indemnitee and the
Indemnifying Party may participate, at their own expense, in the contest of such
Asserted Liability. If the Indemnifying Party chooses to contest any Asserted
Liability, the Indemnitee will make available to the Indemnifying Party any
books, records or other documents within its control that are necessary or
appropriate for, will make its officers and employees available, on a basis
reasonably consistent with their other duties, in connection with, and will
otherwise cooperate with, such defense.
ARTICLE X - TERMINATION
Section 10.1 Termination of Agreement. This Agreement may be
terminated:
(a) Prior to the Closing, by the mutual written consent of
the parties;
(b) At the Closing, by the Exchanging Shareholders in
writing, without liability, if the Company (i) fails to perform in any
material respect any act required on or prior to the Closing, or (ii)
materially breaches any of its representations, warranties or
covenants in this Agreement;
(c) At the Closing, by the Company in writing, without
liability, if the Exchanging Shareholders (i) fails to perform in any
material respect any act required on or
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prior to the Closing, or (ii) materially breaches any of their
representations, warranties or covenants in this Agreement; or
(d) At any time, by any party in writing, without liability,
if any court or governmental or regulatory agency order, writ,
injunction, or decree prohibits or restrains any party from
consummating the transactions contemplated here.
(e) If the Closing does not occur by the Closing Date, by the
Company or the Exchanging Shareholders.
Section 10.2 Termination of Obligations. Termination of this Agreement
pursuant to this Article will terminate all of the parties' obligations.
However, termination pursuant to Sections 10.1(b), (c) or (e) hereof will not
relieve a defaulting or breaching party from any liability to any other party.
Within fifteen (15) days after this Agreement is terminated, each party will,
upon written request from any other party, return all documents and copies
previously delivered to it or made in connection with this Agreement.
ARTICLE XI - MISCELLANEOUS
Section 11.1 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof. No party shall be liable or bound to any other party in
any manner by any warranties, representation, or covenants except as
specifically set forth herein or therein.
Section 11.2 Survival of Representations and Warranties. The
warranties, representations and covenants of the Exchanging Shareholders and the
Company contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing.
Section 11.3 Notices. All notices, requests, demands, consents and
other communications herein shall be in writing and shall be deemed, unless
otherwise specified herein, to have been duly given if personally delivered or
mailed, first-class certified mail, postage prepaid and return receipt requested
or sent by recognized overnight courier service or transmitted by telex or
facsimile, as follows:
(a) If to the Exchanging Shareholders or Nifco:
Xxxxxx Xxxxx
Xxxx Xxxxx
Nifco Family Trust
Nifco Investments Ltd.
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0, Xxxxxx
Telecopy No. (000) 000-0000
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with a copy to (which shall not constitute effective
notice to the Exchanging Shareholders or Nifco):
Xxxxx X. Gorgopa, Esq.
Xxxxxx and Company
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X00 0X0, Xxxxxx
Telecopy No. (000) 000-0000
and
Xxxxxx X. Xxxxxx, Esq.
Xxxxx, Xxxxxx & Xxxxxx LLP
3100 Bank One Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
(b) If to the Company:
XxxxxXxxxxxx.xxx, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxx 00000
Telephone No. (000) 000-0000
with a copy to (which shall not constitute effective
notice to the Company):
Xxxxxxx Xxxxxxx, Esq.
00000 Xxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No. (000) 000-0000
and
Xxxx X. Xxxxxxxxx, Esq.
The Security Centre
000 Xxxxxxxxxxx Xxxxxx, Xx. 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Telecopy No. (000) 000-0000
or such other addresses as each of the parties hereto may provide from time to
time in writing to the party. For purposes of computing the time periods set
forth in this Section, the delivery date shall be deemed to be (i) three (3)
days after the date of mailing, (ii) the date personally delivered or sent
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by telex or facsimile, or (iii) the business day after the date sent by
recognized overnight courier service.
Section 11.4 Amendments. Any term of this Agreement may be amended only
with the written consent of the Exchanging Shareholders and the Company.
Section 11.5 Waiver and Consent. No action taken pursuant to this
Agreement, including any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with
any party hereto or a breach of any representations, warranties, covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach, and no failure by any party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.
Section 11.6 Successors and Assigns. Except as otherwise expressly
provided in this Agreement, all of the terms of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto.
Section 11.7 Rights of the Company. The Company shall have the absolute
right to exercise or refrain from exercising any right or rights that the
Company may have by reason of this Agreement, including the right to consent to
the waiver of any obligation of the Exchanging Shareholders under this Agreement
and to enter into any agreement with the Exchanging Shareholders for the purpose
of modifying this Agreement or any agreement effecting any such modification.
Section 11.8 Execution and Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, and
all of which together shall constitute one instrument.
Section 11.9 No Third Party Beneficiaries. Except as otherwise
provided, this Agreement has been and is made solely for the benefit of and
shall be binding upon the Exchanging Shareholders and the Company, and no other
person shall acquire or have any rights under or by virtue of this Agreement.
Section 11.10 Severability. Any provision of this Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or lack of authorization without invalidating the remaining
provisions hereof or affecting the validity, unenforceability or legality of
such provision in any other jurisdiction.
Section 11.11 GOVERNING LAW. THIS AGREEMENT AND THE LEGAL RELATIONS
AMONG THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE PROVINCE OF BRITISH COLUMBIA, CANADA, WITHOUT REGARD TO ITS
CONFLICTS OF LAW DOCTRINE.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the date first above written.
----------------------------------
Xxxxxx Xxxxx
----------------------------------
Xxxx Xxxxx
NIFCO FAMILY TRUST
By:
----------------------------------
Xxxxxx Xxxxx, Trustee
NIFCO INVESTMENTS LTD.
By:
----------------------------------
Xxxxxx Xxxxx, President
XXXXXXXXXXXX.XXX, INC.
By:
----------------------------------
Xxxxxx X. Xxxx, III, President
