Exhibit 2.1
USM TECHNOLOGIES HOLDING
CAPITAL STOCK EXCHANGE AGREEMENT
THIS AGREEMENT is made this 19th day of September, 2002, by and between US
MICROBICS, INC., a Colorado corporation, and USM CAPITAL GROUP, INC., a Nevada
corporation (collectively, the "Sellers") and MAJESTIC SAFE-T-PRODUCTS, LTD., a
Maryland corporation (the "Purchaser").
WHEREAS, the Sellers are the owners of 5,000,000 shares of the common
stock, par value $0.001 per share (the "Company Stock") of USM TECHNOLOGIES
HOLDING, a Nevada corporation (the "Company"); and
WHEREAS, the Sellers and the Purchaser desire to exchange shares of the
Company Stock and the Purchaser's Stock as hereinafter provided;
NOW, THEREFORE, in consideration of the foregoing and the following
mutual covenants and agreements, the Sellers and the Purchaser agree as follows:
1. Exchange of Stock. Upon the terms and conditions set forth in this Agreement,
the Sellers shall exchange, sell, assign, and transfer to the Purchaser at the
closing of this Agreement (the "Closing"), free and clear of all liens and
encumbrances, and the Purchaser, upon the basis of the covenants, warranties and
representations of the Sellers set forth herein, shall accept from the Sellers
at the Closing all 5,000,000 shares of the Company Stock owned by the Sellers.
Subject to the terms of this Agreement and in reliance on the representations
and warranties of the Sellers, and in full consideration therefor, the Purchaser
shall deliver to the Sellers, in exchange, at the Closing 15,000,000 shares of
the Purchaser's common stock, par value $0.001 per share (the "Purchaser's
Stock"). The Purchaser's Stock shall be delivered 6,000,000 shares to US
Microbics, Inc. and 9,000,000 shares to USM Capital Group, Inc.
2. Tax Treatment. The exchange described herein is intended to comply with all
of the provisions of Section 351 of the Internal Revenue Code of 1986, as
amended, and all applicable regulations thereunder. In order to ensure
compliance with said provisions, the parties agree to take whatever steps may be
necessary, including, but not limited to, the amendment of this Agreement.
3. Registration Rights. It is contemplated by the parties that certain of the
shares of the Purchaser's Stock will be spun-off to the stockholders of US
Microbics, Inc. pursuant to a registration statement on Form SB-2 (the
"Registration Statement") to be filed by the Purchaser under the Securities Act
of 1933, as amended, as soon as is reasonably possible after the Closing, with
such shares being freely tradable. The Purchaser hereby undertakes that it will
file the Registration Statement as promptly as possible following the Closing.
The Sellers agree to reasonably cooperate in furnishing all required information
reasonably requested by the Purchaser in connection with the preparation and
filing of the Registration Statement.
4. Representations and Warranties of the Sellers. Where a representation
contained in this Agreement is qualified by the phrase "to the best of the
Sellers' knowledge" (or words of similar import), such expression means that,
after having conducted a due diligence review, the Sellers believe the statement
to be true, accurate, and complete in all material respects. Knowledge shall not
be imputed nor shall it include any matters which such person should have known
or should have been reasonably expected to have known. The Sellers represent and
warrant as follows:
(a) Power and Authority. The Sellers have full power and authority to execute,
deliver, and perform this Agreement and all other agreements, certificates or
documents to be delivered in connection herewith, including, without limitation,
the other agreements, certificates and documents contemplated hereby
(collectively the "Other Agreements").
(b) Binding Effect. Upon execution and delivery by the Sellers, this Agreement
and the Other Agreements shall be and constitute the valid, binding and legal
obligations of the Sellers, enforceable against the Sellers in accordance with
the terms hereof and thereof, except as the enforceability hereof or thereof may
be subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally, and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(c) Effect. Neither the execution and delivery of this Agreement or the Other
Agreements nor full performance by the Sellers of their obligations hereunder or
thereunder will violate or breach, or otherwise constitute or give rise to a
default under, the terms or provisions of the Articles of Incorporation or
Bylaws of the Company or, subject to obtaining any and all necessary consents,
of any contract, commitment or other obligation of the Company or necessary for
the operation of the Company's business (the "Business") following the Closing
or any other material contract, commitment, or other obligation to which the
Company is a party, or create or result in the creation of any encumbrance on
any of the property of the Company.
(d) No Consents. No consent, approval or authorization of, or registration,
declaration or filing with any third party, including, but not limited to, any
governmental department, agency, commission or other instrumentality, will,
except such consents, if any, delivered or obtained on or prior to the Closing,
be obtained or made by the Sellers prior to the Closing to authorize the
execution, delivery and performance by the Sellers of this Agreement or the
Other Agreements.
(e) Stock Ownership. The Sellers have good, absolute, and marketable title to
5,000,000 shares of the Company Stock, which constitute all of the issued and
outstanding shares of the capital stock of the Company. The Sellers have the
complete and unrestricted right, power and authority to sell, transfer and
assign the Company Stock pursuant to this Agreement. The delivery of the Company
Stock to the Purchaser as herein contemplated will vest in the Purchaser good,
absolute and marketable title to all of the issued and outstanding shares of the
Company Stock, free and clear of all liens, claims, encumbrances, and
restrictions of every kind, except those restrictions imposed by applicable
securities laws.
(f) Organization and Standing of the Company. The Company is a duly organized
and validly existing Nevada corporation in good standing, with all requisite
corporate power and authority to carry on the Business as presently conducted.
The Company has not qualified to do business in any other jurisdiction.
(g) No Subsidiaries. The Company has no subsidiaries.
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(h) Capitalization. The Company is authorized by its Articles of Incorporation
to issue 50,000,000 shares of the Company Stock, 5,000,000 shares of which are
duly and validly issued and outstanding, fully paid, and non-assessable. The
Company is also authorized to issue 25,000,000 shares of preferred stock, par
value $0.001 per share, of which none have been issued. There are no outstanding
options, contracts, commitments, warrants, preemptive rights, agreements or any
rights of any character affecting or relating in any manner to the issuance of
the Company Stock or other securities or entitling anyone to acquire the Company
Stock or other securities of the Company.
(i) Assets and Liabilities. The Company is newly formed and does not
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have any assets or liabilities, or pending or threatened claims.
(j) The Sellers' Representations and Warranties True and Complete. All
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representations and warranties of the Sellers in this Agreement and the Other
Agreements are true, accurate and complete in all material respects as of the
Closing.
(k) No Knowledge of the Purchaser's Default. The Sellers have no knowledge that
any of the Purchaser's representations and warranties contained in this
Agreement or the Other Agreements are untrue, inaccurate or incomplete or that
the Purchaser is in default under any term or provision of this Agreement or the
Other Agreements.
(l) No Untrue Statements. No representation or warranty by the Sellers in this
Agreement or in any writing furnished or to be furnished pursuant hereto,
contains or will contain any untrue statement of a material fact, or omits, or
will omit to state any material fact required to make the statements herein or
therein contained not misleading.
(m) Reliance. The foregoing representations and warranties are made by
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the Sellers with the knowledge and expectation that the Purchaser is placing
complete reliance thereon.
5. Representations and Warranties of the Purchaser. Where a representation
contained in this Agreement is qualified by the phrase "to the best of the
Purchaser's knowledge" (or words of similar import), such expression means that,
after having conducted a due diligence review, the Purchaser believes the
statement to be true, accurate, and complete in all material respects. Knowledge
shall not be imputed nor shall it include any matters which such person should
have known or should have been reasonably expected to have known. The Purchaser
hereby represents and warrants to the Sellers as follows:
(a) Power and Authority. The Purchaser has full corporate power and
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authority to execute, deliver and perform this Agreement and the Other
Agreements.
(b) Authorization. The execution, delivery and performance of this Agreement and
the Other Agreements by the Purchaser have been duly authorized by all requisite
corporate action.
(c) Binding Effect. Upon execution and delivery by the Purchaser, this Agreement
and the Other Agreements shall be and constitute the valid, binding and legal
obligations of the Purchaser enforceable against the Purchaser in accordance
with the terms hereof and thereof, except as the enforceability hereof and
thereof may be subject to the effect of (i) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally, and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(d) No Default. Neither the execution and delivery of this Agreement or the
Other Agreements nor full performance by the Purchaser of its obligations
hereunder or thereunder will violate or breach, or otherwise constitute or give
rise to a default under, the terms or provisions of the Articles of
Incorporation or Bylaws of the Purchaser or, subject to obtaining any and all
necessary consents, of any contract, commitment or other obligation of the
Purchaser or necessary for the operation of the Purchaser's business following
the Closing or any other material contract, commitment, or other obligation to
which the Purchaser is a party, or create or result in the creation of any
encumbrance on any of the Purchaser's assets.
(e) No Consents. No consent, approval or authorization of, or registration,
declaration or filing with any third party, including, but not limited to, any
governmental department, agency, commission or other instrumentality, will,
except such consents, if any, delivered or obtained on or prior to the Closing,
be obtained or made by the Purchaser prior to the Closing to authorize the
execution, delivery and performance by the Purchaser of this Agreement or the
Other Agreements.
(f) Organization and Standing of the Purchaser. The Purchaser is a duly
organized and validly existing Maryland corporation in good standing, with all
requisite corporate power and authority to carry on its business as presently
conducted. The Purchaser has not qualified to do business in any other
jurisdiction.
(g) The Purchaser's Representations and Warranties True and Complete.
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All representations and warranties of the Purchaser in this Agreement and the
Other Agreements are true, accurate and complete in all material respects as of
the Closing.
(h) No Knowledge of the Sellers' Default. The Purchaser has no knowledge that
any of the Sellers' representations and warranties contained in this Agreement
or the Other Agreements are untrue, inaccurate or incomplete in any respect or
that the Sellers are in default under any term or provision of this Agreement or
the Other Agreements.
(i) No Untrue Statements. No representation or warranty by the Purchaser in this
Agreement or in any writing furnished or to be furnished pursuant hereto,
contains or will contain any untrue statement of a material fact, or omits, or
will omit to state any material fact required to make the statements herein or
therein contained not misleading.
(j) Reliance. The foregoing representations and warranties are made by
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the Purchaser with the knowledge and expectation that the Sellers are placing
complete reliance thereon.
6. Actions of the Company Pending the Closing. The Sellers agree
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that from the date hereof through the Closing:
(a) Operations. The Sellers will use their best efforts to cause the Company to
(i) be operated in keeping with its customary practices and in compliance with
all applicable laws, rules and regulations; (ii) continue to replenish its
inventory in a normal and customary manner consistent with its practices; (iii)
use its best efforts to maintain the relationships of its suppliers, customers
and those having business relations with it; and (iv) not engage in any
transaction or make any commitment or expenditure other than those which are in
the usual and ordinary course of business.
(b) No Change in Corporate Charter. No change will be made in the
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Articles of Incorporation or Bylaws of the Company, except as may be first
approved in writing by the Purchaser.
(c) No Change in Stock. No change will be made in the authorized or issued
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capital stock of the Company.
(d) No Default. The Company shall timely pay and/or not suffer any
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default with respect to any of its contracts, commitments or obligations. The
Company shall also continue to pay as they become due all accounts payable of
the Company.
(e) No Contracts. No contract or commitment will be entered into by or on
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behalf of the Company.
(f) No Liabilities. The Company shall not issue or sell any of the
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Company Stock, bonds, notes, or other corporate securities, or incur any
obligation or liability, except as may be first approved in writing by the
Purchaser.
(g) Compliance. The Sellers shall cause the Company and its officers
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and employees to comply with all applicable provisions of this Agreement.
7. Conditions Precedent to Obligations of the Purchaser. All
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obligations of the Purchaser under this Agreement are subject to the
fulfillment, prior to or at the Closing, of the following conditions which must
be satisfied as herein specified:
(a) Representations and Warranties True at Closing. The representations and
warranties of the Sellers herein shall be deemed to have been made again on the
Closing Date, and then be true and correct, subject to any changes contemplated
by this Agreement. The Sellers shall have performed all of the obligations to be
performed by them hereunder on or prior to the Closing Date.
(b) Resignations of Directors and Officers. The Sellers shall have
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delivered to the Purchaser at the Closing the written resignations of all of the
directors and officers of the Company.
(c) Execution and Delivery of Documents. On or before the Closing Date, the
Sellers shall have executed and delivered to the Purchaser all the items listed
in Paragraph 13 hereof.
(d) Other Matters. All corporate and other proceedings and actions taken in
connection with the transactions contemplated hereby and all certificates,
opinions, agreements, instruments and documents mentioned herein or incident to
any such transaction shall be satisfactory in form and substance to the
Purchaser and its counsel, whose approval shall not be unreasonably withheld.
8. Conditions Precedent to Obligations of the Sellers. All obligations
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of the Sellers under this Agreement are subject to the fulfillment, prior to or
at the Closing, of the following conditions:
(a) Representations and Warranties True at Closing. The representations and
warranties of the Purchaser herein shall be deemed to have been made again on
the Closing Date, and then be true and correct, subject to any changes
contemplated by this Agreement. The Purchaser shall have performed all of the
obligations to be performed by the Purchaser hereunder on or prior to the
Closing Date.
(b) Resolutions. The Sellers' counsel shall have received certified resolutions
of a meeting of the Board of Directors of the Purchaser pursuant to which this
Agreement and the transactions contemplated hereby were duly and validly
approved, adopted and ratified by the Purchaser all in form and content
satisfactory to such counsel, authorizing (i) the execution, delivery and
performance of this Agreement, (ii) such other documents and instruments as
shall be necessary to consummate the transactions contemplated hereby and
thereby, and (iii) all actions to be taken by the Purchaser hereunder.
(c) Other Matters. All corporate and other proceedings and actions taken in
connection with the transactions contemplated hereby and all certificates,
opinions, agreements, instruments and documents mentioned herein or incident to
any such transaction shall be satisfactory in form and substance to the Sellers
and their counsel, whose approval shall not be unreasonably withheld.
9. The Nature and Survival of Representations, Covenants and Warranties. All
statements and facts contained in any memorandum, certificate, instrument, or
other document delivered by or on behalf of the parties hereto for information
or reliance pursuant to this Agreement, shall be deemed representations,
covenants and warranties by the parties hereto under this Agreement. All
representations, covenants and warranties of the parties shall survive the
Closing and all inspections, examinations, or audits on behalf of the parties,
shall expire one year following the Closing Date.
10. Cooperation. The Purchaser and the Sellers will each cooperate with the
other, at the other's request and expense, in furnishing information, testimony,
and other assistance in connection with any actions, proceedings, arrangements,
disputes with other persons or governmental inquiries or investigations
involving the Sellers' or the Purchaser's conduct of the Business or the
transactions contemplated hereby.
11. Further Conveyances and Assurances. After the Closing, the Sellers and the
Purchaser, each, will, without further cost or expense to, or consideration of
any nature from the other, execute and deliver, or cause to be executed and
delivered, to the other, such additional documentation and instruments of
transfer and conveyance, and will take such other and further actions, as the
other may reasonably request as more completely to sell, transfer and assign to
and fully vest in the other ownership of the Company Stock or the Purchaser's
Stock, as the case may be.
12. Closing. The Closing Date of the sale and purchase contemplated hereunder
shall be on or before October 31, 2002, subject to acceleration or postponement
from time to time as the Sellers and the Purchaser mutually agree. The Closing
shall be held at the offices of the Sellers at 2:00 p.m., San Diego, California
time, on the Closing Date unless another hour or place is mutually agreed upon
by the Sellers and the Purchaser.
13. Deliveries at the Closing by the Sellers. At the Closing, the Sellers
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shall deliver to the Purchaser the following:
(a) A certificate representing 5,000,000 shares of the Company Stock,
duly endorsed in favor of the Purchaser.
(b) A certificate executed by the Sellers to the effect that:
(i) All corporate and other proceedings or actions required to be taken by the
Sellers and the Company in connection with the transactions contemplated by this
Agreement have been taken;
(ii) All requisite governmental approvals and authorizations necessary for
consummation by the Sellers of the transactions contemplated hereby have been
duly issued or granted; and
(iii) There has not been issued, and there is not in effect, any injunction or
similar legal order prohibiting or restraining consummation of any of the
transactions herein contemplated, and no legal or governmental action,
proceeding or investigation which might reasonably be expected to result in any
such injunction or order is pending.
(c) The resignations of all of the directors and officers of the Company.
(d) Any other document which may be necessary to carry out the intent of
this Agreement.
All documents reflecting any actions taken, received or delivered by
the Sellers pursuant to this Paragraph 13 shall be reasonably satisfactory in
form and substance to the Purchaser and the Purchaser's counsel.
14. Deliveries at the Closing by the Purchaser. At the Closing, the
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Purchaser shall deliver to the Sellers the following:
(a) A certificate representing 6,000,000 shares of the Purchaser's Stock, duly
endorsed in favor of US Microbics, Inc.
(b) A certificate representing 9,000,000 shares of the Purchaser's Stock, duly
endorsed in favor of USM Capital Group, Inc.
(c) A certificate executed by an officer of the Purchaser with knowledge of
the facts to the effect that:
(i) All corporate and other proceedings or actions required to be taken by the
Purchaser in connection with the transactions contemplated by this Agreement
have been taken;
(ii) All requisite governmental approvals and authorizations necessary for
consummation by the Purchaser of the transactions contemplated hereby have been
duly issued or granted; and
(iii) There has not been issued, and there is not in effect, any injunction or
similar legal order prohibiting or restraining consummation of any of the
transactions herein contemplated, and no legal or governmental action,
proceeding or investigation which might reasonably be expected to result in any
such injunction or order is pending.
(d) Any other document which may be necessary to carry out the intent of
this Agreement.
All documents reflecting any actions taken, received or delivered by
the Purchaser pursuant to this Paragraph 14 shall be reasonably satisfactory in
form and substance to the Sellers and the Sellers' counsel.
15. Assignment. This Agreement shall be binding upon and inure to the benefit of
the successors of each of the parties hereto, but shall not be assignable by
either party without the prior written consent of the other party, which consent
shall be subject to such party's sole, absolute and unfettered discretion.
16. Notices. All notices, requests, demands, and other communications hereunder
shall be in writing and delivered personally or sent by registered or certified
United States mail, return receipt requested with postage prepaid, by facsimile,
or by e-mail, if to the Sellers, addressed to Xx. Xxxxxx X. Xxxxx at 0000 X
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, telecopier (000) 000-0000, and
e-mail xxx@xxxxxxxxxx.xxx; and if to the Purchaser, addressed to Xx. Xxxxxxx X.
Xxxxxxxxx at 0000 Xxx Xxx Xxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000,
telecopier (000) 000-0000, and e-mail xxxxxxxxxxx@xx.xxx. Any party hereto may
change its address upon 10 days' written notice to any other party hereto.
17. Construction. Words of any gender used in this Agreement shall be
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held and construed to include any other gender, and words in the singular
number shall be held to include the plural, and vice versa, unless the
context requires otherwise.
18. Waiver. No course of dealing on the part of any party hereto or its agents,
or any failure or delay by any such party with respect to exercising any right,
power or privilege of such party under this Agreement or any instrument referred
to herein shall operate as a waiver thereof, and any single or partial exercise
of any such right, power or privilege shall not preclude any later exercise
thereof or any exercise of any other right, power or privilege hereunder or
thereunder.
19. Cumulative Rights. The rights and remedies of any party under
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this Agreement and the instruments executed or to be executed in connection
herewith, or any of it, shall be cumulative and the exercise or partial exercise
of any such right or remedy shall not preclude the exercise of any other right
or remedy.
20. Invalidity. In the event any one or more of the provisions contained in this
Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
21. Time of the Essence. Time is of the essence of this Agreement.
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22. Multiple Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23. Controlling Agreement. In the event of any conflict between the
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terms of this Agreement or any agreement referred to herein, the terms of this
Agreement shall control.
24. Law Governing. This Agreement shall be construed and governed by
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the laws of the State of California, and all obligations hereunder shall be
deemed performable in San Diego County, California.
25. Entire Agreement. This instrument contains the entire understanding
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of the parties and may not be changed orally, but only by an instrument in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought.
IN WITNESS WHEREOF, this Agreement has been executed in multiple
counterparts on the date first written above.
US MICROBICS, INC.
By /s/
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Xxxxxx X. Xxxxx, President
USM CAPITAL GROUP, INC.
By /s/
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Xxxxxx Xxxxx, President
MAJESTIC SAFE-T-PRODUCTS, LTD.
By /s/
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Xxxxxxx X. Xxxxxxxxx, President
