Exhibit 2.1
AMENDED AGREEMENT
CONCERNING THE EXCHANGE OF STOCK
BETWEEN
HARVARD FINANCIAL SERVICES CORP.
AND
SHAREHOLDERS OF
E*MACHINERY, INC.
1 EXCHANGE OF SECURITIES................................................1
1.1 Exchange of Shares...........................................1
1.2 Exemption from Registration..................................1
1.3 Non-taxable Transaction......................................2
2 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS ...................2
2.1 Organization.................................................2
2.2 Capital Stock................................................2
2.3 Subsidiaries.................................................2
2.4 Directors and Officers.......................................2
2.5 Financial Statements.........................................2
2.6 Absence of Changes...........................................2
2.7 Absence of Undisclosed Liabilities...........................3
2.8 Tax Returns..................................................3
2.9 Patents, Trade Names and Rights..............................3
2.10 Compliance with Laws.........................................3
2.11 Litigation...................................................3
2.12 Authority....................................................3
2.13 Ability to Carry Out Obligations.............................3
2.14 Full Disclosure..............................................4
2.15 Assets.......................................................4
2.16 Material Contracts...........................................4
3 REPRESENTATIONS AND WARRANTIES OF HARVARD.............................5
3.1 Organization.................................................5
3.1.1 Name Change Prior to Closing.
3.2 HARVARD Stock................................................5
3.3 Subsidiaries.................................................5
3.4 Directors and Officers.......................................5
3.5 Patents, Trade Names and Rights..............................5
3.6 Compliance with Laws.........................................5
3.7 Litigation...................................................6
3.8 Authority....................................................6
3.9 Ability to Carry Out Obligations.............................6
3.10 Full Disclosure..............................................6
3.11 Assets.......................................................6
4 COVENANTS....................................................7
4.1 Investigative Rights.........................................7
4.2 Conduct of Business..........................................7
5 CLOSING......................................................7
5.1 Closing......................................................7
5.2 Deliveries at Closing........................................7
5.2.1 Shareholders' Deliveries at Closing..........................7
5.2.2 HARVARD Deliveries at Closing...............................8
6 CONDITIONS TO OBLIGATIONS TO CLOSE...........................8
6.1 Conditions to Obligations of Shareholders to Close...........8
6.2 Conditions to Obligations of HARVARD.........................8
7 INDEMNIFICATION..............................................8
7.1 Indemnification..............................................8
7.2 Indemnification..............................................8
7.3 Notice and Opportunity to Defend.............................9
8 MISCELLANEOUS...............................................10
8.1 Costs.......................................................10
8.2 Additional Documentation....................................10
8.3 Captions and Headings.......................................10
8.4 No Oral Change..............................................10
8.5 Non-Waiver..................................................10
8.6 Time of Essence.............................................10
8.7 Choice of Law...............................................10
8.8 Counterparts and/or Facsimile Signature.....................10
8.9 Notices.....................................................10
8.10 Binding Effect..............................................11
8.11 Mutual Cooperation..........................................11
8.12 Brokers.....................................................11
8.13 Survival of Representations and Warranties..................11
SCHEDULE A - LIST OF E*MACHINERY SHAREHOLDERS.................................15
EXHIBIT 1.2 - INVESTMENT LETTER...............................................16
EXHIBIT 2.3 - SUBSIDIARIES OF E*MACHINERY, INC................................18
EXHIBIT 2.4 - E*MACHINERY, INC. PRIVATE PLACEMENT MEMORANDUM
DATED DECEMBER 7, 1999........................................................19
EXHIBIT 2.5 - FINANCIAL STATEMENTS............................................20
EXHIBIT 2.15.4 - DOMAIN NAMES ................................................21
EXHIBIT 2.16(a) & (b) - MATERIAL CONTRACTS OF E*MACHINERY ....................22
EXHIBIT 3.3 - SUBSIDIARIES OF HARVARD FINANCIAL SERVICES CORP.................23
AMENDED AGREEMENT
THIS AMENDED AGREEMENT made this 6th day of March, 2000 by and between
E*XXXXXXXXX.XXX, INC. (formerly Harvard Financial Services Corp.), a Delaware
Corporation ("HARVARD"); and THE UNDERSIGNED SHAREHOLDERS ("Shareholders")
owners of 100% of the stock of E*MACHINERY, INC., a Texas Corporation
("E*MACHINERY").
WHEREAS, Shareholders hold all of the issued and outstanding common stock
of E*MACHINERY; and
WHEREAS, HARVARD, a public company, desires to exchange shares of its
common stock for all of the issued and outstanding common stock of E*MACHINERY
held by the Shareholders, thereby making E*MACHINERY a wholly owned subsidiary
of HARVARD; and
WHEREAS, Shareholders desire to exchange all of the issued and outstanding
common stock of E*MACHINERY for 9,435,000 shares of the common stock of HARVARD,
all as more fully set forth herein below; and
WHEREAS, the Board of Directors of HARVARD has authorized its proper
corporate officers to effect the transactions contemplated herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree to the following terms
and conditions:
1 EXCHANGE OF SECURITIES
1.1 Exchange of Shares. Subject to all the terms and conditions of this
Agreement, HARVARD will deliver to Shareholders 9,435,000(1) shares of
previously authorized but unissued unregistered shares of HARVARD $0.0001 par
value common stock ("HARVARD Shares"), in exchange for all of the issued and
outstanding shares of E*MACHINERY $0.0001 par value common stock owned by
E*MACHINERY Shareholders.
1.2 Exemption from Registration. The parties hereto intend that the HARVARD
Shares to be exchanged shall be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), pursuant to Section 4(2) of the
Act and the rules and regulations promulgated thereunder and exempt from the
registration requirements of the applicable states. In furtherance thereof,
Shareholders will execute and deliver to HARVARD on the closing date, investment
letters suitable to HARVARD counsel, in form substantially as per Exhibit 1.2
attached hereto.
1.3 Non-taxable Transaction. The parties intend to effect this transaction
as a non-taxable reorganization pursuant to Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
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1 To be increased one share for each $.40 invested in E*MACHINERY's Private
Placement Memorandum dated March 6, 2000 prior to Closing.
2 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Shareholders hereby represent and warrant to HARVARD that:
2.1 Organization. E*MACHINERY is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas.
2.2 Capital Stock. The authorized capital stock of E*MACHINERY consists
solely of 50,000,000 shares of $.0001 par value common stock. 9,435,000 shares
of common stock are currently issued and outstanding all of which are owned by
Shareholders. All of the issued and outstanding shares of E*MACHINERY are duly
and validly issued, fully paid and nonassessable. There are no outstanding
subscriptions, options, rights, warrants, debentures, instruments, convertible
securities or other agreements or commitments obligating E*MACHINERY to issue or
to transfer from treasury any additional shares of its capital stock of any
class except for its ongoing Private Placement dated March 6, 2000 as set forth
in Exhibit 2.4(a).
2.3 Subsidiaries. E*MACHINERY does not have any subsidiaries other than
those listed on Exhibit 2.3, or own any interest in any other enterprise.
2.4 Directors and Officers. Exhibit 2.4(a) hereto contains the names and
titles of all directors and officers of E*MACHINERY as of March 6, 2000.
2.5 Financial Statements. Exhibit 2.5 hereto consists of the unaudited
financial statements of E*MACHINERY as of December 1, 1999 and Exhibit 2.5(b)
consists of the unaudited financial statements of E*MACHINERY as of February 29,
2000. The financial statements have been prepared in accordance with generally
accepted accounting principles on an accrual basis and practices consistently
followed by E*MACHINERY throughout the periods indicated, and fairly present the
financial position of E*MACHINERY as of the dates of the balance sheets included
in the financial statements and the results of operations for the periods
indicated. The financial statements are required to be audited and E*MACHINERY
agrees to do so within sixty (60) days after Closing.
2.6 Absence of Changes. Since the date of E*MACHINERY's financial
statements included in Exhibit 2.5(a), there has not been any change in the
financial condition or operations of E*MACHINERY, except for changes in the
ordinary course of business, which changes have not, in the aggregate, been
materially adverse except for funds for investment as per its ongoing Private
Placement as set forth in Exhibit 2.4(a).
2.7 Absence of Undisclosed Liabilities. As of the date of E*MACHINERY's
most recent balance sheet included in Exhibit 2.5(a), E*MACHINERY did not have
any material debt, liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, that is not
reflected in such balance sheet. There shall be no material change in the
balance sheet at the time of Closing.
2.8 Tax Returns. Within the times and in the manner prescribed by law,
E*MACHINERY has filed all federal, state and local tax returns required by law
and has paid all taxes, assessments and penalties due and payable. The
provisions for taxes, if any reflected in the Exhibits are adequate for the
periods indicated. There are no present disputes as to taxes of any nature
payable by E*MACHINERY.
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2.9 Patents, Trade Names and Rights. E*MACHINERY owns and holds all
necessary patents, franchise rights, trademarks, service marks, trade names,
inventions, processes, know-how, trade secrets, copyrights, licenses, domain
names, websites and other rights necessary to its business as now conducted or
proposed to be conducted. E*MACHINERY is not infringing upon or otherwise acting
adversely to the right or claimed right of any person with respect to any of the
foregoing.
2.10 Compliance with Laws. E*MACHINERY has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning or other law,
ordinance or regulation) affecting its properties or the operation of its
business.
2.11 Litigation. E*MACHINERY is not a defendant to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation which is pending or, to the best knowledge of the Shareholders,
threatened against or affecting E*MACHINERY or its business, assets or financial
condition. E*MACHINERY is not in default with respect to any order, writ,
injunction or decree of any federal, state, local or foreign court, department,
agency or instrumentality applicable to it. E*MACHINERY is not engaged in any
material lawsuits to recover monies due it.
2.12 Authority. The Board of Directors of E*MACHINERY has authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein, and E*MACHINERY has full power and authority to execute,
deliver and perform this Agreement, and this Agreement is a legal, valid and
binding obligation of the Shareholders and is enforceable in accordance with its
terms and conditions.
2.13 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by Shareholders and the performance by Shareholders of their
obligations hereunder in the time and manner contemplated will not cause,
constitute or conflict with or result in (a) any breach or violation of any of
the provisions of or constitute a default under any license, indenture,
mortgage, instrument, article of incorporation, bylaw, or other agreement or
instrument to which E*MACHINERY is a party, or by which it may be bound, nor
will any consents or authorizations of any party to the Shareholders'
performance of their obligations hereunder be required; (b) an event that would
permit any party to any agreement or instrument to terminate it or to accelerate
the maturity of any indebtedness or other obligation of E*MACHINERY; or (c) an
event that would result in the creation or imposition of any lien, charge or
encumbrance on any asset of E*MACHINERY.
2.14 Full Disclosure. None of the representations and warranties made by
E*MACHINERY and/or its Shareholders herein or in any exhibit, certificate or
Private Placement Memorandum dated December 7, 1999 (contained herein as Exhibit
2.4)and March 6, 2000 (contained herein as Exhibit 2.4(a)) furnished or to be
furnished by Shareholders, or on their behalf, contain or will contain any
untrue statement of material fact or omit any material fact the omission of
which would be misleading and as such, at the time of Closing, the statements
contained therein shall be accurate and true with no material changes.
2.15 Assets.
2.15.1 E*MACHINERY has good and marketable title to all of its property,
free and clear of all liens, claims and encumbrances, except as otherwise
indicated on Exhibit 2.5. At the time of signing this Agreement and at Closing,
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2.15.2 E*MACHINERY warrants that it will have a minimum of $700,000 in its
bank account, $200,000 of which to be used to settle all HARVARD debt at Closing
and will have a minimum of an additional $1,000,000 in cash from its Private
Placement dated March 6, 2000, if successfully raised prior to Closing.
2.15.3 Purposely omitted.
2.15.4 E*MACHINERY warrants and represents that at the time of Closing, it
will own domain names as set forth on Exhibit 2.15.4.
2.16 Material Contracts. Material contracts of E*MACHINERY are set forth in
Exhibit 2.16. E*MACHINERY hereby warrants and represents that there are no
outstanding management contracts other than those of the President and Executive
Vice President, copies of which are attached hereto as Exhibits 2.16(a) and
2.16(b).
2.17 Office Location. E*MACHINERY hereby agrees to establish a corporate
office in Medford, New Jersey to handle the daily corporate operations of the
public company, financial operations, public relations and banking functions in
addition to an operational office located in Texas.
2.18 Registration Rights. If E*MACHINERY is successfully acquired by
HARVARD, because of the acquisition, HARVARD would be obligated to file a
Registration Statement under form S-3 or SB-2 within 90 days after Closing to
register solely the 2,500,000 shares of common stock sold in the March 6, 2000
Private Placement Memorandum of E*MACHINERY. Thereafter, HARVARD agrees to use
its best efforts to effectuate the effectiveness of such a Registration
Statement. In addition, if necessary, HARVARD shall give unlimited piggyback
registration rights.
3 REPRESENTATIONS AND WARRANTIES OF HARVARD
HARVARD represents and warrants to Shareholders that:
3.1 Organization. HARVARD is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.
3.1.1 Name Change Prior to Closing. As a prerequisite to Closing, HARVARD
hereby agrees to amend its Articles of Incorporation to change its name to
"E*XXXXXXXXX.XXX, INC." or other mutually agreed upon name that is available
prior to Closing. In addition, HARVARD hereby agrees to obtain a new trading
symbol of "EMAC" or other agreed upon symbol that is available on the NASD OTC
Bulletin Board as well as a new CUSIP No. for its common stock.
3.2 HARVARD Stock. The authorized capital stock of HARVARD consists of
60,000,000 shares of common stock, par value $0.0001 of which 12,000,000
pre-split shares of common stock will be issued and outstanding prior to
Closing. HARVARD agrees to effectuate a one for ten reverse stock split prior to
Closing. After the one for ten reverse stock split which took place on February
9, 2000, HARVARD has 1,200,000 post split shares of common stock outstanding.
All of the issued and outstanding shares are duly and validly issued, fully
paid and nonassessable. There are no outstanding subscriptions, options, rights,
debentures, instru ments, convertible securities or other agreements or
commitments obligation HARVARD to issue or to transfer from treasury any
additional shares of its HARVARD stock of any class, other than those listed in
HARVARD's 1934 Act filings with the Securities and Exchange Commission.
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3.3 Subsidiaries. The subsidiaries owned by HARVARD are set forth in
Exhibit 3.3.
3.4 Directors and Officers. The names and titles of all directors and
officers of HARVARD are as set forth in Form 10-K for the fiscal year ended
December 31, 1998 as on file with the Securities and Exchange Commission. At
Closing, all of the officers and directors of HARVARD will resign in favor of
the officers and directors of E*MACHINERY.
3.5 Patents, Trade Names and Rights. To the best of its knowledge HARVARD
owns and holds all necessary patents, franchise rights, trademarks, service
marks, trade names, inventions, processes, know-how, trade secrets, copyrights,
licenses and other rights necessary to its business as now conducted or proposed
to be conducted. HARVARD is not infringing upon or otherwise acting adversely to
the right or claimed right of any person with respect to any of the foregoing.
3.6 Compliance with Laws. HARVARD has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning or other law,
ordinance or regulation and all federal and state securities laws (including,
without limitation, the Securities Act of 1933 and the Securities Exchange Act
of 1934) and all material respects NASDAQ rules) affecting its properties or the
operation of its business.
3.7 Litigation. HARVARD is not a party to any material suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation which is pending or, to the best knowledge of HARVARD threatened
against or affecting HARVARD or its business, assets or financial condition
except for suits as described in its 1934 Act filings. HARVARD is not in default
with respect to any order, writ, injunction or decree of any federal, state,
local or foreign court, department, agency or instrumentality applicable to it.
3.8 Authority. The Board of Directors of HARVARD has authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein, and HARVARD has full power and authority to execute,
deliver and perform this Agreement, and this Agreement is a legal, valid and
binding obligation of HARVARD enforceable in accordance with its terms, subject
only to the ratification by the Shareholders of HARVARD at the next annual
meeting.
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3.9 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by HARVARD and the performance by the HARVARD of the obligations
hereunder in the time and manner contemplated will not cause, constitute or
conflict with or result in (a) any breach or violation of any of the provisions
of or constitute a default under any license, indenture, mortgage, instrument,
article of incorporation, bylaw, or other agreement or instrument to which
HARVARD is a party, or by which it may be bound, nor will any consents or
authorizations of any party to HARVARD's performance of its obligation
hereunder; (b) an event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of HARVARD; or (c) an event that would result in the creation
or imposition of any lien, charge or encumbrance on any asset of HARVARD.
3.10 Full Disclosure. None of the representations and warranties made by
HARVARD herein or in any exhibit, certificate or memorandum furnished or to be
furnished by HARVARD or on its behalf, contains or will contain any untrue
statement of material fact or omit any material fact the omission of which would
be misleading.
3.11 Assets. HARVARD has good and marketable title to all of its property,
free and clear of all liens, claims and encumbrances, except as otherwise
indicated in its 1934 Act filings.
3.12 Filings with the SEC. HARVARD has made all filings with the SEC that
it has been required to make under the Securities Act and the Securities
Exchange Act of 1934 (the "Exchange Act")(collectively, the "Public Reports").
Each of the Public Reports has complied with the Securities Act and the Exchange
Act in all material respects. None of the Public Reports, as of their respective
dates, contained no untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, false or misleading. HARVARD
has delivered to Shareholders a correct and complete copy of each Public Report
(together with all claims and schedules thereto and as amended to date).
3.13 No debt at Closing. At such Closing utilizing $200,000 of
E*MACHINERY's cash shall settle all of HARVARD's outstanding debt.
4 COVENANTS RELATING TO THE PERIOD PRIOR TO CLOSING
4.1 Investigative Rights. From the date of this Agreement until the Closing
Date, each party shall provide to the other party, and such other party's
counsel, accountants, auditors and other authorized representatives, full access
during normal business hours and upon reasonable advance written notice to all
of each party's properties, books, contracts, commitments and records for the
purpose of examining the same. Each party shall furnish the other party with all
information concerning each party's affairs as the other party may reasonably
request.
4.2 Conduct of Business. Prior to Closing, Shareholders represent that
E*MACHINERY shall conduct its business in the normal course. E*MACHINERY shall
not amend its Articles of Incorporation or Bylaws (except as may be described in
this Agreement), declare dividends, redeem or sell stock or other securities,
incur additional or newly-funded liabilities, acquire or dispose of fixed
assets, change employment terms, enter into any material or long-term contract,
guarantee obligations of any third party, settle or discharge any balance sheet
receivable for less than its stated amount, pay more on any liability than its
stated amount, or enter into any other transaction without the prior approval of
HARVARD, not to be unreasonably withheld.
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5 CLOSING
5.1 Closing. The closing of this transaction shall be held at the offices
of HARVARD, 0000 Xxxxxxx Xxxxx, Xxxxx 70 & Hartford Road, Medford, New Jersey,
on March 27, 2000 at HARVARD's Shareholder's Meeting if a majority of HARVARD's
shareholders vote in favor of this acquisition or at such other place and time
as is mutually agreeable to the parties, or by FAX and Federal Express.
5.2 Deliveries at Closing.
5.2.1 Shareholders' Deliveries at Closing. At the Closing, the Shareholders
shall deliver the following items:
5.2.1.1 certificates representing all of the shares of E*MACHINERY stock
held by the Shareholders, along with a stock power or stock powers duly executed
by the Shareholders in blank;
5.2.1.2 an investment letter in the form of Exhibit 1.2 hereof, duly
executed by the Shareholders;
5.2.2 HARVARD Deliveries at Closing. At the Closing, HARVARD shall deliver
the following items:
5.2.2.1 either (A) certificates representing the HARVARD Shares, duly
issued to the Shareholders as listed on Schedule A attached hereto, or (B) a
copy of a letter from HARVARD to its transfer agent instructing such transfer
agent to issue the certificates representing the HARVARD Shares to the
Shareholders as listed on Schedule A.
5.2.2.2 resignations of HARVARD Officers and Directors and a resolution
appointing E*MACHINERY's designated Officers and Directors.
6 CONDITIONS TO OBLIGATIONS TO CLOSE
6.1 Conditions to Obligations of Shareholders to Close. The obligations of
the Shareholders to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction of the conditions that the representations
and warranties of HARVARD shall be true in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing date, that HARVARD shall have performed and complied in all material
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respects with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
6.2 Conditions to Obligations of HARVARD. The obligations of HARVARD to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction of the conditions that the representations and warranties of
the Shareholders shall be true in all material respects on and as of the Closing
Date with the same force and effect as though made on and as of the Closing
Date, that the Shareholders shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date; and finally
that this transaction be voted upon and approved by a majority of HARVARD's
shareholders.
7 INDEMNIFICATION
7.1 Indemnification. Shareholders agree to indemnify, defend and hold the
HARVARD shareholders, HARVARD, its officers and directors, harmless against and
in respect of any and all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries and deficiencies, including interest, penalties
and reasonable attorney fees that it shall incur or suffer, which arise out of,
result or relate to any breach of, or failure by E*MACHINERY Shareholders to
perform any of their material representations, warranties, covenants or
agreements in this Agreement or in any schedule, certificate, exhibit or other
instrument furnished or to be furnished by Shareholders under this Agreement.
7.2 Indemnification. HARVARD agrees to indemnify, defend and hold
Shareholders harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorney fees, that
it shall incur or suffer, which arise out of, result or relate to any breach of,
or failure by HARVARD to perform any of its material representations,
warranties, covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument furnished or to be furnished by HARVARD
under this Agreement.
7.3 Notice and Opportunity to Defend. If there occurs an event which any
Party asserts is an indemnifiable event, the Party seeking indemnification shall
notify the Party obligated to provide indemnification (the "Indemnifying Party")
promptly. If such event involves (i) any claim or (ii) the commencement of any
action or proceeding by a third person, the Party seeking indemnification will
give such Indemnifying Party written notice of such claim or the commencement of
such action or proceeding. Such notice shall be a condition precedent to any
liability of the Indemnifying Party hereunder. Such Indemnifying Party shall
have a period of thirty (30) days within which to respond thereto. If such
Indemnifying Party does not respond within such thirty (30) days period, such
Indemnifying Party shall be obligated to compromise or defend, at its own
expense and by counsel chosen by the Indemnifying Party shall provide reasonably
satisfactory to the Party seeking indemnity, such matter and the Indemnifying
Party shall provide the Party seeking indemnification with such assurances as
may be reasonably required by the latter to assure that the Indemnifying Party
will assume, and be responsible for, the entire liability issue. If such
Indemnifying Party does not respond within such thirty (30) day period and
rejects responsibility for such matter in whole or in part, the Party seeking
indemnification shall be free to pursue, without prejudice to any of its rights
hereunder, such remedies as may be available to such Party under applicable law.
The Party seeking indemnification agrees to cooperate fully with the
Indemnifying Party and its counsel in the defense against any such asserted
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liability. In any event, the Party seeking indemnification shall have the right
to participate at its own expense in the defense of such asserted liability. Any
compromise of such asserted liability by the Indemnifying Party shall require
the prior written consent of the Party seeking indemnification. If, however, the
Party seeking indemnification refuses its consent to a bona fide offer of
settlement which the Indemnifying Party wishes to accept, the Party seeking
indemnification may continue to pursue such matter, free of any participation by
the Indemnifying Party, at the sole expense of the Party seeking
indemnification. In such event, the obligation of the Indemnifying Party to the
Party seeking indemnification shall be equal to the lesser of (i) the amount of
the offer of settlement which the Party seeking indemnification refused to
accept plus the costs and expenses of such Party prior to the date the
Indemnifying Party notifies the Party seeking indemnification of the offer of
settlement and (ii) the actual out-of-pocket amount the Party seeking
indemnification is obligated to pay as a result of such Party's continuing to
pursue such an offer. An Indemnifying Party shall be entitled to recover from
the Party seeking indemnification any additional expenses incurred by such
Indemnifying Party as a result of the decision of the Party seeking
indemnification to pursue such matter.
8 MISCELLANEOUS
8.1 Costs. Each party shall bear its own costs associated with this
Agreement, the closing of this Agreement, and all ancillary or related measures,
including without limitation, costs of attorneys fees, accountants fees, filing
fees, or other costs or expenses, without right or recourse from the other.
8.2 Additional Documentation. The parties acknowledge that further
agreements and documents, in addition to the Exhibits appended hereto, may be
required in order to effect the transactions contemplated hereunder. Each party
agrees to provide and execute such other and further agreements or documentation
as, in the opinions of respective counsel, are reasonably necessary to effect
the transactions contemplated hereunder and to maintain regulatory and legal
compliance.
8.3 Captions and Headings. The article and paragraph headings throughout
this Agreement are for convenience and reference only and shall not define,
limit or add to the meaning of any provision of this Agreement.
8.4 No Oral Change. This Agreement and any provision hereof may not be
waived, changed, modified or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such waiver, change,
modification or discharge is sought.
8.5 Non-Waiver. The failure of any party to insist in any one or more cases
upon the performance of any of the provisions, covenants or conditions of this
Agreement or to exercise any option herein contained shall not be construed as
a
waiver or relinquishment for the future of any such provisions, covenants or
conditions. No waiver by any party of one breach by another party shall be
construed as a waiver with respect to any subsequent breach.
8.6 Time of Essence. Time is of the essence of this Agreement and of each
and every provision.
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8.7 Choice of Law. This Agreement and its application shall be governed by
the laws of the State of New Jersey.
8.8 Counterparts and/or Facsimile Signature. This Agreement may be executed
in any number of counterparts, including counterparts transmitted by telecopier
or FAX, any one of which shall constitute an original of this Agreement. When
counterparts of facsimile copies have been executed by all parties, they shall
have the same effect as if the signatures to each counterpart or copy were upon
the same document and copies of such documents shall be deemed valid as
originals. The parties agree that all such signatures may be transferred to a
single document upon the request of any party.
8.9 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
If to HARVARD. to it at:
Xxxxx Xxxxxx, President
0000 Xxxxxxx Xxxxx
Xxxxx 70 & Hartford Road
Medford, New Jersey 08055
If to Shareholders, to them at:
E*MACHINERY, INC.
0000 Xxxxxxx Xxxxx
Xxxxx 70 & Hartford Road
Medford, New Jersey 08055
8.10 Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives, successors and assigns of each of
the parties to this Agreement.
8.11 Mutual Cooperation. The parties hereto shall cooperate with each other
to achieve the purpose of this Agreement and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
8.12 Brokers. The parties hereto represent that no other broker has brought
about this Agreement, and no other finder's fee has been paid or is payable by
either party. Each party hereto shall indemnify and hold the other harmless
against any and all claims, losses, liabilities or expenses which may be
asserted against it as a result of its dealings, arrangements or agreements with
any other broker.
8.13 Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
or in any instrument, certificate, opinion or other writing provided for herein
shall survive the Closing.
10
AGREED AND ACCEPTED as of the date first above written.
E*XXXXXXXXX.XXX, INC.
By:
-------------------------------
Xxxxx Xxxxxx, President
ATTEST:
-------------------------
Xxxxx XxXxxxxx
Corporate Secretary
(Corporate Seal)
SHAREHOLDERS OF E*MACHINERY, INC. WHO WILL WARRANT THE
REPRESENTATIONS HEREIN:
__________________________
Xxxxxx X. X'Xxxx III
__________________________
Xxxxxx X. Xxxxxxxx
11
NON-WARRANTING SHAREHOLDER SIGNATURE PAGE
NON-WARRANTING E*MACHINERY SHAREHOLDER SIGNATURE PAGE for Agreement Concerning
the Exchange of Stock between E*XXXXXXXXX.XXX, INC. (formerly HARVARD FINANCIAL
SERVICES CORP.) and the Shareholders of E*MACHINERY, INC.
The undersigned shareholders of E*MACHINERY, INC. execute this Agreement solely
for the purpose of affirming the following and for no other purpose.
Delivery of E*MACHINERY Stock
Each E*MACHINERY Shareholder signing hereto hereby agrees to sell, assign,
transfer and deliver and does hereby sell, assign, transfer and deliver to
HARVARD, and HARVARD agrees to acquire and accept from each E*MACHINERY
Shareholder, upon the terms and conditions set forth in this Agreement,
complete, absolute and unencumbered right, title and interest in and to the
E*MACHINERY Shares held by each E*MACHINERY Shareholder.
Consideration.
The entire consideration to be paid to E*MACHINERY Shareholders in exchange
for the transfer, assignment and deliver of the E*MACHINERY Shares is common
shares of the authorized but unissued HARVARD stock of HARVARD as allocated on
Schedule A to each shareholder.
Exchange of Shares
At the Closing Date as defined in this Agreement, HARVARD shall deliver to
E*MACHINERY Shareholders, in accordance with Schedule A, the proper number of
shares of the authorized but unissued HARVARD stock of HARVARD (the "HARVARD
Shares"). The exchange of shares contemplated by this Agreement is intended to
result in a tax-free reorganization within the meaning of Section 368(a)(1)(B)
of the Code. The E*MACHINERY Shareholders agree to assist HARVARD in adopting
and filing any documentation necessary to comply with the Code in order to
preserve the tax-free treatment of the within exchange of shares.
Investment Representation.
The Shares being acquired by E*MACHINERY Shareholders hereunder are being
acquired for investment purposes only and not with a view towards resale or
redistribution and no person or entity has any beneficial interest in such
shares except the E*MACHINERY Shareholders. The Shares being acquired have not
been registered under the Securities Act of 1933 as amended (the "Securities
Act") and E*MACHINERY Shareholders acknowledge and agree that they may not sell,
offer, transfer, hypothecate or convey such shares except pursuant to a
registration statement pursuant to the Securities Act or an exemption therefrom.
Such shares shall be issued with the following legend and shall be subject to a
stock transfer order delivered by the Company to the transfer agent, such legend
to be as follows:
The shares represented by this certificate have not been
registered with the Securities and Exchange Commission under
the Securities Act of 1933, as amended. The shares have been
acquired for investment and may not be sold, transferred,
assigned, pledged or hypothecated in the absence of an
effective registration for these shares under such Act or an
opinion of the Company's counsel that such registration is not
required under said Act.
------------------------------------
------------------------------------
SCHEDULE A
LIST OF E*MACHINERY SHAREHOLDERS AS OF MARCH 6, 2000
Number of
Shareholder Name E*MACHINERY Shares
------------------ ------------------
Xxxxxx X. X'Xxxx, III 4,000,000
Xxxxxx X. Xxxxxxxx 2,000,000
Xxxxxxx X. Xxxxx 2,000,000
Xxxxx X. XxXxxxxx 400,000
Xxxxxxx X. Xxxx 200,000
Xxxxxx X. Xxxxxxx 75,000
Xxxxxxx X. O'Xxxx Xxxxxxx 125,000
Xxxxx X. Xxxxx and Xxxxxxxxx X. Xxxxx 250,000
Xxxxx X. Xxxxxxxxx 50,000
Xxxxxxx Xxxxx and Xxxx Xxxxx 100,000
The Xxxxxx X. Xxxx Family Limited Partnership 100,000
Xxxxxxx X. Xxxx 10,000
Xxxxxxx X. Xxxx 30,000
Xxxxxx X. Xxxx and Xxxxxxxx X. Xxxx 10,000
Xxxxxx X. Xxxx XX 10,000
Xxx X. and Xxxxx Xxxxxxx 50,000
Xxxxxx X. Xxxxxxx 25,000
---------
9,435,000
=========
EXHIBIT 1.2
INVESTMENT LETTER
HARVARD FINANCIAL SERVICES CORP.
Re: INVESTMENT LETTER
Gentlemen:
The undersigned having acquired by a stock-for-stock exchange a certain
amount of the total 9,435,000(1) restricted shares of common stock of HARVARD
FINANCIAL SERVICES CORP., a Delaware corporation (the "Company"), par value
$.0001 per share (the "Securities"), hereby represents to the Company that:
1. The Securities which are being acquired by the undersigned are being
acquired for the undersigned's own account and for investment and not with a
view to the public resale or distribution thereof.
2. The undersigned will not sell, transfer or otherwise dispose of the
Securities unless, in the opinion of the Company's counsel, such disposition
conforms with applicable securities laws requirements.
3. The undersigned is aware that the Securities are "restricted securities"
as that term is defined in Rule 144 (the "Rule") promulgated under the
Securities Act of 1933, as amended (the "Act").
The undersigned acknowledges that the undersigned has had an opportunity to
ask questions of and receive answers from duly designated representatives of the
Company concerning the finances of the Company and the proposed business plan of
the Company.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
- --------
1 To be increased one share for each $.40 invested in E*MACHINERY's Private
Placement dated March 6, 2000 prior to Closing.
HARVARD FINANCIAL SERVICES CORP. Page 2
Investment Letter
- --------------------------------------------------------------------
The undersigned further acknowledges that the undersigned is fully aware of
the applicable limitations on the resale of the Securities. These restrictions
for the most part are set forth in Rule 144 (the "Rule"). The Rule permits sales
of "restricted securities" upon compliance with the requirements of such Rule.
If and when the Rule is available to the undersigned, the undersigned may make
only sales of the Securities in accordance with the terms and conditions of the
rule (which may limit the amount of Securities that may be sold).
By reason of the undersigned's knowledge and experience in financial and
business matters in general, and investments in particular, the undersigned is
capable of evaluating the merits and risks of an investment by the undersigned
in the Securities.
The undersigned is capable of bearing the economic risks of an investment
in the Securities. The undersigned fully understands the speculative nature of
the Securities and the possibility of loss.
The undersigned's present financial condition is such that the undersigned
is under no present or contemplated future need to dispose of any portion of the
Securities to satisfy any existing or contemplated undertaking, need, or
indebtedness.
Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor, shall bear a
restrictive legend.
The undersigned further agrees that the Company shall have the right to
issue stop-transfer instructions to its transfer agent until such time as sale
is permitted under Security Laws and acknowledges that the Company has informed
the undersigned of its intention to issue such instructions.
Very truly yours,
----------------------------
(L.S.)
Undersigned
Date:
-----------------------
Address
-----------------------
-----------------------
Social Security Number
EXHIBIT 2.3
SUBSIDIARIES OF E*MACHINERY, INC.
U.S. Machinery Corp.
EXHIBIT 2.4
E*MACHINERY, INC.
PRIVATE PLACEMENT MEMORANDUM
DATED DECEMBER 7, 1999
CONFIDENTIAL OFFERING MEMORANDUM
DATED: DECEMBER 7, 1999
E*MACHINERY, INC. ("E*MACHINERY")
(A Texas Corporation)
2,500,000 SHARES
COMMON STOCK
AT $1.00 PER SHARE
($2,500,000)
Placement
Price to Discounts and Proceeds to the
Public Commissions Company1
Total Minimum $1.00 -- $200,000
200,000 Shares
Total Maximum $1.00 -- $2,500,000
2,500,000 Shares
1 Before the deduction of expenses of this Offering, including, but not
limited to, legal, accounting, consulting and printing expenses, which are
estimated to be approximately $50,000 ($15,000 for the minimum).
TABLE OF CONTENTS
STATE NOTICE REQUIREMENTS...................................................7
TERMS OF THE OFFERING......................................................10
THE OFFERING...............................................................11
RISK FACTORS...............................................................12
THE COMPANY................................................................17
PROJECTED PROFIT CENTERS OF E*MACHINERY, INC...............................26
BALANCE SHEET..............................................................28
USE OF PROCEEDS1...........................................................29
MANAGEMENT.................................................................30
PRINCIPAL STOCKHOLDERS.....................................................30
DESCRIPTION OF SECURITIES..................................................31
SUITABILITY STANDARDS......................................................31
RESTRICTIONS ON TRANSFER...................................................32
METHOD OF SALE OF SHARES...................................................32
EXHIBIT "A" - SUBSCRIPTION AGREEMENT ......................................34
Dated: December 7, 1999
PRIVATE PLACEMENT MEMORANDUM
E*MACHINERY, INC.
A MAXIMUM OF 2,500,000 SHARES OF COMMON STOCK
E*Machinery, Inc. (the "Company") is a corporation organized under the laws
of the state of Texas. This Offering of a minimum of 200,000 Shares ($200,000)
and a maximum of 2,500,000 Shares ($2,500,000) is being made pursuant to
Regulation D, Rule 506 or rule 4(2) of the Securities Act of 1933, as amended
(the "Act"), on a best efforts basis. The minimum sale of 200,000 Shares must be
accepted by the Company before a closing may occur. The Company intends to
accept only subscriptions for a minimum of $50,000 or more per person; however,
the Company reserves the right to accept subscriptions for less than $50,000.
All checks are to be made out of "Levy & Levy, P.A., Attorney Trust Account."
Unless 150,000 shares are sold by December 15, 1999 or a 30 day extension) from
the date of the offering, all funds in the Trust account will be promptly
returned to the subscribers in full without deduction or interest. If the
minimum is closed, the Offering will remain open until (1) the 2,500,000 shares
are sold, or (2) March 31,2000. The Company reserves the right to accept or
reject subscriptions from any individual or entity at any time prior to Closing.
No person is authorized to give any information or to make any
representations not contained in this Memorandum, and, if given or made, any
information or representation not contained herein must not be relied upon as
having been authorized by or on behalf of the Company. Neither delivery of this
Memorandum nor any sale of the Shares shall at any time imply that the
information contained herein is correct at any time subsequent to this date.
This Memorandum does not contain all of the information that would normally
appear in a prospectus for an offering registered under the Securities Act or
that may be necessary to make an informed investment decision regarding an
investment in the Shares. The Company will furnish additional information to
interested offerees upon request. Purchasers of the Shares will be required to
acknowledge at the time of purchase that they have requested and received all
information necessary to make an informed decision to Purchase the Shares.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR WITH ANY STATE OR REGULATORY AGENCY UNDER ANY SECURITIES
LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION PROVIDED IN SUCH
LAWS AND THE RULES AND REGULATIONS THEREUNDER, AND MAY NOT BE RESOLD OR
TRANSFERRED IN THE ABSENCE OF THE SATISFACTION OF CERTAIN CONDITIONS, INCLUDING
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH LAWS OR AN OPINION OF COUNSEL OF
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
Proceeds to the
Shares Offered Proceeds Commissions Company (1)
----------------------------------------------------------------------------
Minimum 200,000 Shares
at $1.00. per share $ 200,000 $ 0 $ 200,000
Maximum 2,500,000 Shares
at $1.00 per share $2,500,000 $ 0 $ 2,500,000
(1) Prior to deducting expenses of the Offering, estimated to be approximately
$50,000 ($15,000 minimum). Such expenses include professional and other
fees incurred by the Company. Such expenses will be payable from the net
proceeds of the Offering.
See "RISK FACTORS" for a discussion of various considerations that should
be considered by prospective investors.
The Offering will terminate upon the sale of 2,500,000 Shares maximum or
200,000 Shares minimum if not sold by March 31, 2000 or December 15, 1999
respectively The proceeds of the Offering are contemplated to be expended within
six months of receipt by the Company.
THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM OFFERS THE COMMON STOCK ONLY TO
INVESTORS WHO QUALIFY AS "INSTITUTIONAL INVESTORS" PROVIDED, HOWEVER, THAT
SHARES MAY BE OFFERED AND SOLD TO "ACCREDITED INVESTORS" AND A LIMITED NUMBER OF
"NON-ACREDITED INVESTORS" (AS SUCH TERMS ARE DEFINED IN THE SECURITIES ACT OF
1933, AS AMENDED) AT THE WRITTEN CONSENT OF THE COMPANY. ALL INVESTORS MUST MEET
CERTAIN SUITABILITY STANDARDS ESTABLISHED BY THE COMPANY, SUBJECT TO THE
COMPANY'S RIGHT TO REJECT SUBSCRIPTIONS, IN WHOLE OR IN PART. THE MINIMUM
SUBSCRIPTION WILL BE FOR $50,000, UNLESS OTHERWISE APPROVED BY THE COMPANY.
THE SHARES OFFERED HEREBY WILL BE SOLD SUBJECT TO THE PROVISIONS OF A
SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") CONTAINING CERTAIN
REPRESENTATIONS, WARRANTIES, TERMS AND CONDITIONS. ANY INVESTMENT IN THE SHARES
OFFERED HEREBY SHOULD BE MADE ONLY AFTER A COMPLETE AND THOROUGH REVIEW OF THE
PROVISIONS OF THE SUBSCRIPTION AGREEMENT. THE COMPANY RESERVES THE RIGHT IN ITS
DISCRETION TO ACCEPT OR REJECT, IN WHOLE OR PART, ANY PROPOSED INVESTMENT IN THE
SHARES.
THE SHARES AND THIS OFFERING HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AGENCY, NOR HAS SUCH
COMMISSION OR ANY SUCH AGENCY PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
THESE SECURITIES ARE HIGHLY SPECULATIVE AND SHOULD ONLY BE PURCHASED BY
PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE
PURCHASERS SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER
"RISK FACTORS" BEFORE PURCHASING SUCH SECURITIES.
THE SECURITIES DESCRIBED HEREIN ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND APPLICABLE STATE
SECURITIES LAWS RELATING TO TRANSACTIONS NOT INVOLVING A PUBLIC
OFFERING OR SOLICITATION, SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF
INVESTORS TO WHOM THE OFFERING IS MADE AND RESTRICT SUBSEQUENT TRANSFER OF THE
SECURITIES DESCRIBED HEREIN.
THE SECURITIES DESCRIBED HEREIN ARE RESTRICTED WITH RESPECT TO TRANSFERABILITY
AND RESALE. SUCH SECURITIES MAY NOT BE RESOLD OR OTHERWISE DISPOSED OF BY AN
INVESTOR UNLESS, IN THE OPINION OF COUNSEL OF THE COMPANY, REGISTRATION UNDER
THE SECURITIES ACT, OR APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED OR
COMPLIANCE IS MADE WITH SUCH REGISTRATION REQUIREMENTS.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION WHERE, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. EXCEPT AS OTHERWISE INDICATED HEREIN, THIS MEMORANDUM SPEAKS AS OF
THE DATE HEREOF. NEITHER THE DELIVERY OF THIS MEMORANDUM NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF.
THIS MEMORANDUM IS SUBMITTED IN CONNECTION WITH THE OFFERING OF THE SECURITIES
DESCRIBED HEREIN AND MAY NOT BE REPRODUCED OR USED FOR ANY OTHER PURPOSE. BY
ACCEPTING DELIVERY OF THIS MEMORANDUM, EACH POTENTIAL INVESTOR AGREES THAT HE,
SHE OR IT WILL NOT DIVULGE THE CONTENTS HEREOF TO ANY PERSON OR ENTITY AND WILL
RETURN IT (WITH ALL RELATED DOCUMENTS OR MATERIALS) TO THE COMPANY UPON REQUEST
IF SUCH INVESTOR DOES NOT AGREE TO PURCHASE ANY OF THE SECURITIES. ANY
REPRODUCTION OR DISTRIBUTION OF THIS DOCUMENT WITHOUT THE PRIOR WRITTEN CONSENT
OF THE COMPANY IS PROHIBITED.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS
LEGAL, TAX OR ACCOUNTING ADVICE, BUT SHOULD CONSULT THEIR LEGAL COUNSEL,
ACCOUNTANTS AND BUSINESS ADVISORS ABOUT LEGAL, TAX AND ACCOUNTING MATTERS
CONCERNING AN INVESTMENT IN THE SECURITIES DESCRIBED HEREIN.
CERTAIN PROVISIONS OF VARIOUS DOCUMENTS AND RECORDS ARE BRIEFLY SUMMARIZED IN
THIS MEMORANDUM. SUCH SUMMARIES ARE NOT AND DO NOT PURPORT TO BE COMPLETE AND
REFERENCE MUST BE MADE DIRECTLY TO SUCH DOCUMENTS AND RECORDS FOR COMPLETE
INFORMATION CONCERNING THE RIGHTS AND OBLIGATIONS OF THE PARTIES. COPIES OF SUCH
DOCUMENTS ARE INCLUDED HEREWITH OR ARE AVAILABLE UPON REQUEST FROM THE COMPANY.
PROSPECTIVE INVESTORS ARE URGED TO READ THIS MEMORANDUM CAREFULLY. ALL
PROSPECTIVE INVESTORS WILL HAVE AN OPPORTUNITY TO TALK WITH REPRESENTATIVES OF
THE COMPANY TO VERIFY ANY OF THE INFORMATION INCLUDED HEREIN AND TO OBTAIN
ADDITIONAL INFORMATION REGARDING THE COMPANY. THIS MEMORANDUM CONTAINS SUMMARIES
OF CERTAIN DOCUMENTS. COPIES OF ALL MATERIAL DOCUMENTS, CONTRACTS AND FINANCIAL
STATEMENTS RELATING TO THE COMPANY WILL BE MADE AVAILABLE TO PROSPECTIVE
INVESTORS FOR INSPECTION DURING NORMAL BUSINESS HOURS UPON REQUEST TO THE
COMPANY. THE DELIVERY OF THIS MEMORANDUM, ATTACHMENTS OR OTHER MATERIALS AT ANY
TIME DOES NOT
IMPLY THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION CONTAINED HEREIN OR
THEREIN SINCE THE DATE HEREOF OR THEREOF.
ANY REPRODUCTION OR DISTRIBUTION OF THIS MEMORANDUM, IN WHOLE OR IN PART, OR THE
DIVULGENCE OF ANY OF ITS CONTENTS WITHOUT THE PRIOR WRITTEN PERMISSION OF THE
COMPANY IS PROHIBITED. THIS MEMORANDUM IS FURNISHED FOR THE SOLE USE OF THE
OFFEREE AND FOR THE SOLE PURPOSE OF PROVIDING INFORMATION REGARDING THE
SECURITIES OFFERED HEREBY. NO OTHER USE OF THIS INFORMATION IS AUTHORIZED. THE
DELIVERY OF THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THE SECURITIES OFFERED HEREBY NOR AN OFFER TO ANY PERSON IN ANY
JURISDICTION IN WHICH AN OFFER WOULD BE UNLAWFUL. THE OFFEREE, BY ACCEPTING
DELIVERY OF THIS MEMORANDUM AND ANY OTHER MATERIALS DELIVERED IN CONNECTION WITH
THIS MEMORANDUM, AGREES NOT TO COPY THIS MEMORANDUM AND SUCH OTHER MATERIALS AND
TO RETURN IT TOGETHER WILL ALL ATTACHMENTS AND EXHIBITS, TO THE COMPANY IF THE
OFFEREE DOES NOT PURCHASE ANY OF THE SECURITIES.
EXCEPT AS HEREIN DISCUSSED, NO PERSON HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION CONCERNING THE COMPANY OTHER THAN
THOSE CONTAINED IN THIS MEMORANDUM IN CONNECTION WITH THE OFFERING DESCRIBED
HEREIN AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. IN MAKING AN INVESTMENT
DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE
TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
ANY ESTIMATES OR FORECASTS AS TO EVENTS THAT OCCUR IN THE FUTURE ARE BASED UPON
THE BEST JUDGMENT OF THE COMPANY'S MANAGEMENT AS OF THE DATE OF THIS MEMORANDUM.
WHETHER SUCH ESTIMATES OR FORECASTS MAY BE ACHIEVED WILL DEPEND UPON THE COMPANY
ACHIEVING ITS OVERALL BUSINESS OBJECTIVES AND THE AVAILABILITY OF FUNDS
INCLUDING FUNDS FROM THE SALE OF THE SECURITIES OFFERED HEREBY. THERE IS NO
GUARANTEE THAT ANY OF THESE FORECASTS WILL BE ATTAINED. ACTUAL RESULTS WILL VARY
FROM THE FORECASTS AND SUCH VARIATIONS MAY BE MATERIAL.
THE COMPANY MAY ACCEPT OR REJECT ANY OFFER TO PURCHASE THE SECURITIES DESCRIBED
HEREIN, IN WHOLE OR IN PART, FOR ANY REASON, AND THE COMPANY MAY WITHDRAW OR
CANCEL THE OFFERING WITHOUT NOTICE. AFFILIATES OF THE COMPANY MAY ACQUIRE
SECURITIES IN THIS OFFERING.
THE COMPANY RESERVES THE RIGHT TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN
THE AMOUNT OF SHARES SUCH INVESTOR DESIRES TO PURCHASE.
THE COMPLETION OF EACH PURCHASE AND SALE OF THE SHARES WILL BE AT A PLACE AND
TIME SPECIFIED BY THE COMPANY AND IN ACCORDANCE WITH THE PROVISIONS IN THE FORM
OF THE SUBSCRIPTION AGREEMENT.
STATE NOTICE REQUIREMENTS
NOTICE TO NEW JERSEY RESIDENTS
THIS CONFIDENTIAL OFFERING MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE
NEW JERSEY BUREAU OF SECURITIES PRIOR TO ITS ISSUANCE AND USE. THE BUREAU OF
SECURITIES OF THE STATE OF NEW JERSEY HAS NOT PASSED ON OR ENDORSED THE MERITS
OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NEW YORK RESIDENTS
THIS PRIVATE OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY
GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE
OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATIONS TO THE CONTRARY IS UNLAWFUL.
NOTICE TO FLORIDA RESIDENTS
IF SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA, THE FOLLOWING PROVISIONS
WILL APPLY:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES ACT IN
RELIANCE UPON EXEMPTION PROVISIONS CONTAINED THEREIN. ss.517.061(11)(A)(5) OF
THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT (THE "FLORIDA act") PROVIDES
THAT ANY PURCHASER OR SECURITIES IN FLORIDA WHICH ARE EXEMPTED FROM REGISTRATION
UNDER ss.517.061(11) OF THE FLORIDA ACT MAY WITHDRAW HIS SUBSCRIPTION AGREEMENT
AND RECEIVE A FULL REFUND OF ALL MONIES PAID, WITHIN THREE BUSINESS DAYS AFTER
HE TENDERS CONSIDERATION FOR SUCH SECURITIES. THEREFORE, ANY FLORIDA RESIDENT
WHO PURCHASES SECURITIES IS ENTITLED TO EXERCISE THE FOREGOING STATUTORY
RESCISSION RIGHT WITHIN THREE BUSINESS DAYS AFTER TENDERING CONSIDERATION FOR
THE SECURITIES BY TELEPHONE, TELEGRAM, OR LETTER NOTICE TO THE PRESIDENT AT THE
ADDRESS OR TELEPHONE NUMBER SET FORTH ON THE COVER PAGE HEREOF. ANY TELEGRAM OR
LETTER SHOULD BE SENT OR POSTMARKED PRIOR TO THE END OF THE THIRD BUSINESS DAY.
A LETTER SHOULD BE MAILED BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE
ITS RECEIPT AND TO EVIDENCE THE TIME OF MAILING. ANY ORAL REQUESTS SHOULD BE
CONFIRMED IN WRITING.
NOTICE TO TEXAS RESIDENTS
IF SALES ARE MADE TO MORE THAN FIFTEEN OR MORE PERSONS IN TEXAS, TEXAS
REGISTRATION MAY BE REQUIRED.
AVAILABLE INFORMATION
The information set forth herein should be read together with, and is
qualified in its entirety by reference to the information contained in, the
exhibits hereto. Prospective investors should read the exhibits hereto,
including financial statements, in their entirety. To the extent that such
information is not consistent with the information set forth herein, the
information herein will be deemed superseded by the information contained in
such exhibits.
CONFIDENTIALITY
The information contained in this Memorandum is confidential and
proprietary to the Company and is being submitted to prospective investors
solely for such investors' confidential use with the express understanding that,
without the prior written permission of the Company, such prospective investors
will not release this document or discuss the information contained herein or
make reproductions of or otherwise use this Memorandum for any purpose other
than evaluating a potential investment in the securities described herein. This
Memorandum contains certain financial and other information (incorporated by
reference or otherwise) concerning the Company which is material non-public
information and should be treated as confidential. Receipt and acceptance of
this Memorandum constitutes the recipient's acknowledgment that the information
contained herein will be maintained in strict confidence by the recipient and
will not be disclosed to any third parties.
A prospective investor, by accepting delivery of this Memorandum, further
agrees to promptly return to the Company this Memorandum and any other documents
or information furnished if the prospective investor elects not to purchase any
of the securities described herein or upon request of the Company.
INDEPENDENT EVALUATION
This Memorandum does not purport to be all-inclusive or to contain all of
the information that a prospective investor may desire in evaluating an
investment in the securities of the Company. Prior to the consummation of the
offer and sale of any of the securities described herein, the Company will
afford prospective investors an opportunity to ask questions of and receive
answers from the Company concerning the terms and conditions of the securities
described herein, the Company or other relevant matters and to obtain additional
information to the extent the Company possesses such information or can acquire
it without reasonable effort or expense. Any such questions should be directed
to Xxxxxx X. X'Xxxx III, President and Chief Executive Officer, or Xxxxx X.
XxXxxxxx, Secretary of E*Machinery, Inc., at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxx
Xxxxxx 00000, (000) 000-0000 or by facsimile at (000) 000-0000. No person or
entity has been authorized to give any information or to make representations
about the Company or the Offering and, if given or made, any such information or
representation by any other person or entity must not be relied upon as having
been authorized by the Company. Each prospective investor must conduct and rely
on his own evaluation of the Company and the terms of the Offering (including
the merits and risks involved) in making an investment decision with respect to
the securities described herein. Investment in the Shares involves a high degree
of risk. See "RISK FACTORS."
TERMS OF THE OFFERING
GENERAL
200,000 shares of Common Stock, $.0001 par value per share ("Shares") are
being offered to "Institutional Investors"; provided, however, that offers and
sales may be made to "Accredited Investors" and a limited number of
"Non-Accredited Investors" as those terms are defined in
Regulation D and Rule 501 promulgated under the Securities Act of 1933, as
amended (the "Securities Act") upon the written consent of the Company at a
price of $1.00 per share. Any funds from the sale of additional shares sold up
to the maximum of 2,500,000 shares will not be held in escrow but delivered to
the Company. This Offering will remain open until March 31, 2000 (minimum until
December 15, 1999). The Company reserves the right to reject any subscription,
to accept one subscription over another, and to allocate available Shares among
subscribers as it deems appropriate.
SUBSCRIPTION PAYMENTS
The purchase price of the Shares subscribed for must be paid for by cash,
check or wire transfer. All checks are to be made out to "Levy & Levy, P.A.
Attorney Trust Account." The minimum investment per investor is 50,000 shares,
although the Company may, in its discretion, accept subscriptions for lesser
amounts.
RESTRICTIONS ON TRANSFERABILITY
The securities described herein are: (i) not registered under the
Securities Act or the securities laws of any state; and (ii) are being offered
and sold in reliance upon exemptions from the registration provisions of federal
and state securities laws. Investors purchasing such securities will, therefore,
not be able to resell or otherwise transfer such securities in the absence of
registration under the Securities Act or unless an exemption from the
registration requirements thereof is made available. Additionally, all
applicable state laws requiring registration or qualification must also be
satisfied before any resale or transfer of the securities is permitted.
INVESTOR SUITABILITY STANDARDS
The Shares will only be sold to "Institutional Investors" provided,
however, that Shares may be sold to "Accredited Investors" and a limited number
of "Non-Accredited Investors" within the meaning prescribed by Regulation D and
Rule 501 promulgated under the Securities Act upon the written consent of the
Company.
Each investor will be required to represent that the investment is suitable
for him, that he is purchasing the Shares for investment and not with a view to
a distribution or resale, and that he is purchasing the Shares for his own
account and not for the account of others. The Company may require additional
information with respect to any subscriber. Subscription information will be
used by the Company to determine whether or not to accept subscriptions and will
be kept confidential and not disclosed except to counsel and, if required, to
governmental and regulatory authorities. the Company reserves the right, in its
sole discretion, to reject any subscription or to accept one subscription over
another.
PLAN OF DISTRIBUTION
The Company is offering the securities described herein on a "best efforts"
basis. If the Company is not successful in obtaining subscriptions for the
minimum amount offered hereby, all funds in the Trust account will be promptly
returned to the subscribers in full without deduction or interest. The Company
reserves the right to accept or reject subscriptions from any individual or
entity at any time prior to Closing.
FURTHER INFORMATION
At their request, prospective investors will have the opportunity to meet
with and ask questions of the Officers and Directors of the Company concerning
the Company, its operations and prospects and the terms and conditions of the
Offering. The Company will provide prospective investors with such further
information as they may reasonably request to supplement the information
contained in this Memorandum. Prospective investors are urged to avail
themselves of this opportunity. All such additional information is considered
confidential and proprietary information of the Company and is subject to the
confidentiality restrictions applicable to the Memorandum. See "INDEPENDENT
EVALUATION".
THE OFFERING
Securities Offered: The Company is offering a maximum of 2,500,000
shares of its Common Stock, $.0001 par value per
share (the "Shares") to Institutional Investors
(as well as to "Accredited Investors" and a
limited number of "Non-accredited Investors" as
permitted by this Memorandum) pursuant to this
Private Placement Memorandum (this "Memorandum").
Minimum Purchase: Unless otherwise agreed to by the Company, the
minimum purchase by each prospective investor is
50,000 Shares.
Capital Stock Outstanding
Prior to Offering: Approximately 8,600,000 shares of Common
Stock as of December 7, 1999. Upon completion of
the maximum Offering, the Company will have
11,100,000 shares of Common Stock issued and
outstanding.
Voting Rights: Each share of Common Stock has one vote.
Risk Factors: An investment in the Shares involves a high degree
of risk and should only be undertaken by investors
able to lose their entire investment. Prospective
investors should review carefully and consider
the factors described under "RISK FACTORS".
Use of Proceeds: All of the net proceeds to the Company will be used
for repayment of debt, general corporate purposes
and for working capital. If the Offering is fully
subscribed, the Company expects to use the entire
proceeds from the Offering within six months from
the date of this Memorandum.
RISK FACTORS
Purchase of the securities offered hereby involves a high degree of risk
and must be considered a speculative investment. An investment in the securities
is suitable only for persons of adequate means, who have no need for liquidity
in their investment, who can afford the loss of their entire investment and who
are "Institutional Investors " or who meet the accredited investor requirements
of Regulation D promulgated under the Securities Act or a limited number of
non-accredited investors. Prospective investors should, prior to any purchase of
the Shares, carefully
consider the following risk factors, as well as the other information contained
in this Memorandum, attached hereto as Exhibits and incorporated by reference
herein.
1. OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT.
We were incorporated in November 1999. Accordingly, we have a limited
operating history upon which to evaluate our operations and future prospects. In
addition, our revenue model is evolving and relies substantially upon the growth
of e-commerce spending on the Internet and our ability to become a full-service
Internet company. As an early stage company in a new and rapidly evolving
market, we face risks and uncertainties relating to our ability to successfully
implement our business plan, which are described in more detail below. We may
not successfully address these risks.
2. WE HAVE NOT BEEN PROFITABLE AND MAY NOT BECOME PROFITABLE, IN WHICH EVENT OUR
BUSINESS WOULD BE ADVERSELY AFFECTED.
To date, we have not been profitable. We may never be profitable, or, if we
become profitable, we may be unable to sustain profitability. We expect to
continue to incur losses for the foreseeable future because we expect to
continue to spend significant resources to expand our business.
3. IF THE DEMAND FOR WORLDWIDE PURCHASE AND SUPPORT SERVICES FOR THE HEAVY
EQUIPMENT INDUSTRY DECREASES, OUR BUSINESS WILL BE HARMED.
Our success depends in part on the increased acceptance of online business
to business e- commerce, for such services has only recently begun to develop
and is evolving rapidly. The market for our services may not grow and any growth
may not be sustained.
4. OUR SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT VISITORS TO E*XXXXXXXXX.XXX
WEBSITE.
Our future success depends upon our ability to continue to attract and
retain visitors, members, advertisers, licensees and other service related
suppliers such as banks and insurance companies. If we are unable to attract
these visitors, the effectiveness of our business, results of operations and
financial condition would be materially adversely affected.
5. WE MAY FACE SIGNIFICANT COMPETITION.
The market for Internet services is intensely competitive. We expect
competition in our market to continue to intensify as a result of increasing
market size, greater visibility of the market opportunity for Internet services
and minimal barriers to entry. Industry consolidation may also increase
competition. We compete with many types of companies, including both online and
offline companies, search engine and other Internet portal companies, a variety
of Internet-based advertising networks and other companies that facilitate the
marketing of products and services on the Internet. Many of our existing
competitors, as well as a number of potential new competitors, have longer
operating histories, greater name recognition, larger client bases and
significantly greater financial, technical and marketing resources than we do.
This may allow them to compete more effectively and be more responsive to
industry and technological change than us. We may not be able to compete
successfully and competitive pressures may reduce our revenues and result in
increased losses or reduced profits.
6. OUR BUSINESS MAY SUFFER IF WE ARE UNABLE TO RETAIN KEY PERSONNEL.
Our future success is substantially dependent upon the continued service of
our founders, Xxxxxx X. X'Xxxx, III, Chief Executive officer, and Xxxxxx X.
Xxxxxxxx, Vice President, and other executive officers. The loss of the services
of any of our executive officers could have a material adverse affect on our
business. We do not currently have "key person" life insurance policies on any
of our employees. We have employment agreements only with the founders.
Competition for senior management is intense, and we may not be successful in
attracting and retaining key personnel.
7. THE INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, AND ANY
INFRINGEMENT ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, COULD ADVERSELY
AFFECT OUR BUSINESS.
Third parties may infringe or misappropriate our patents, trademarks or
other intellectual property rights, which could have a material adverse effect
on our business, results of operations or financial condition. The actions we
take to protect our trademarks and other proprietary rights may not be adequate.
In addition, the validity, enforceability and scope of protection of proprietary
rights in Internet-related industries is uncertain and still evolving.
Third parties may assert infringement claims against us. Any claims and any
resulting litigation, should they occur, could subject us to significant
liability for damages. In addition, even if we prevail, litigation could be
time-consuming and expensive to defend, and could result in the diversion of our
time and attention. Any claims from third parties may also result in limitations
on our ability to use the intellectual property subject to these claims unless
we are able to enter into contractual arrangements with the third parties making
these claims, which arrangements may not be available on commercially reasonable
terms.
8. PRIVACY AND SECURITY CONCERNS MAY CAUSE CUSTOMERS NOT TO PARTICIPATE IN
OUR PORTAL/WEBSITE WHICH WOULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS.
An important feature of the services we provide our clients is our ability
to develop and maintain a data base and other information about customers
participating in our portal. Privacy and other security concerns may cause
customers to resist providing us with business and personal data, which would
reduce the value of our services. Moreover, privacy and security concerns may
inhibit customer acceptance of the Internet as a means of commerce. If privacy
and other security concerns of customers are not adequately addressed, our
business would be materially adversely affected.
9. OUR GROWTH WILL DEPEND ON THE GROWTH OF INTERNET USAGE.
We depend on continued growth in the use of the Internet by businesses and
customers. If electronic commerce does not grow or grows more slowly than
expected, the use of the Internet by businesses may decline or grow more slowly
than anticipated. Even if Internet usage grows, the Internet infrastructure may
not be able to support the demands placed on it and its performance or
reliability may decline.
10. WE MAY BE UNABLE TO RESPOND TO TECHNOLOGICAL CHANGE EFFECTIVELY.
Our industry is characterized by rapid technological change, frequent new
service introductions, changing consumer demands and evolving industry standards
and practices. Our inability to anticipate and effectively respond to these
changes on a timely basis would materially adversely affect our business,
results of operations and financial condition. Our future success will depend,
in part on our ability to cost-effectively adapt to rapidly changing
technologies, to enhance existing services and to develop and introduce a
variety of new services to address changing demands of customers and our clients
on a timely basis.
11. THE FAILURE OF OUR COMPUTER OR COMMUNICATIONS SYSTEMS MAY ADVERSELY
AFFECT OUR BUSINESS.
Our business depends on the efficient and uninterrupted operation of our
computer and communications systems. Any system failure, including network,
software or hardware failure, that causes an interruption in our service or
decreases the responsiveness of our portal or website could materially adversely
affect our business.
12. LAWS AND REGULATIONS PERTAINING TO THE INTERNET MAY ADVERSELY AFFECT OUR
BUSINESS
There are an increasing number of laws and regulations pertaining to the
Internet. These laws and/or regulations may relate to liability for information
retrieved from or transmitted over the Internet, online content regulation, user
privacy, taxation and the quality of products and services. Moreover, the
applicability to the Internet of existing laws governing intellectual property
ownership and infringement, copyright, trademark, trade secret, obscenity,
libel, employment, personal privacy and other issues is uncertain and
developing. Any new law or regulation pertaining to the Internet, or the
application or interpretation of existing laws, could decrease the demand for
our services, increase our cost of doing business or otherwise have a material
adverse effect on our business, results of operations and financial condition.
13. ARBITRARY DETERMINATION OF OFFERING PRICE
The offering price of the Shares was arbitrarily determined by the Company
and does not necessarily bear any relationship to the Company's asset value, net
worth or other established criteria of value.
14. LESS THAN MAXIMUM OFFERING
The Company intends to utilize any proceeds proportionately as set forth in
Use of Proceeds, as soon as the minimum proceeds are received. However, if less
than the full offering is sold, the investor has increased risk because
e*machinery would not have the use of the full offering proceeds as set forth
herein.
15. DEPENDENCE UPON OFFERING
The Company has limited working capital and is wholly dependent upon the
proceeds to be realized from this offering to fulfill its business operations.
16. VOTING CONTROL BY MANAGEMENT; POTENTIAL ANTI-TAKEOVER EFFECT
After giving effect to this offering Management will beneficially own over
50% of the outstanding shares. Accordingly, they may, by themselves, have
sufficient shares to be able to approve major corporate transactions including
amending the Certificate of Incorporation of the Company, the sale of
substantially all of the Company's assets, the election of all of the directors
of the Company and to control the Company's change in control of the Company and
may adversely affect at the rights of the shareholders of the Company. In
addition, the Company is subject to a State of Texas statute regulating business
combinations which may also hinder or delay a change or control.
THE COMPANY
We believe that throughout the world, businesses are seeking industry focused or
specific portals. Customized portals will soon be a consumer expectation of
business to business Internet users. In brief: Access to the Internet and the
company Intranet will come through web sites, networks, and customized software
designed to serve up information relevant to the company and to the industry of
which it is a part.
It is our intention therefore to design, host, manage , maintain, and constantly
update a vertically integrated portal that will not only provide interplay
between the major manufacturers, distributors, and providers of supportive goods
and services to the heavy equipment industry, but will also provide our members,
licensees, and business partners access to their own company wide intranets, and
other destinations on the web.
We do not know of any company or web page on the Internet that offers the scope
of what we can create, namely that focuses on a specific, and entire industry.
E*machinery can be the pivot and entry point for immediate, coordinated
transactions of virtually any kind on a daily basis anywhere in the world for
every aspect of the heavy equipment industry.
e*machinery is the fruit of many years of creative energy by founders Xxxxxx X.
X'Xxxx III and Xxxxxx X. Xxxxxxxx. e*machinery is a system whose components were
specifically crafted to benefit both buyers and sellers of heavy machinery, as
well as the banks, leasing companies, insurance companies and other industries
associated with heavy machinery worldwide.
Xxxxxx X. X'Xxxx III has built strong working relationships with equipment
buyers and financial institutions to assist his family of customers in acquiring
the necessary machinery to complete their projects. Working the International
markets both as an independent businessman and later as Vice President-Chief
Operating Officer and Director of International Sales for Hoss Equipment
Company, has given Xx. X'Xxxx a broad knowledge of the heavy equipment market.
Xx. X'Xxxx is experienced in both sales and management with one of the United
States' most profitable Caterpillar dealerships as well as many years in the
construction and mining machinery business, developing the rebuilding and
marketing of major brands of construction and mining machinery such as Komatsu,
Hitachi and VME.
Xx. X'Xxxx'x bilingual talents will give e*machinery a head start in the vast
Latin American marketplace based on his strong personal and business
relationships with contractors and mining companies, suppliers, end users and
government agencies.
Making customer satisfaction the primary focus helped to develop the e*machinery
formula which stands to change the way construction and mining machinery is
bought and sold in the future. This formula consists of bridging the customer to
a multifaceted web based portal specializing in business to business e-commerce
in the construction and mining industry, and then offering both buyers and
sellers access to pivotal support services.
Companies that sell construction and mining machinery will benefit from the
following services:
o Photos and basic descriptions placed in the Internet for viewing by
our buying members 24hours a day / 365 days a year.
o An informative web page for their company
o E-mail links to specified personnel within their company
o e*machinery's advertising ultimately increases traffic to the site
which increases a seller's potential exposure.
o Sellers receive the e*machinery Hit List which gives them the contact
information of potential buyers looking for specific machines. This
service sends information via e-mail on a daily basis in order to
assist the seller with a warm lead.
Buyers of construction and mining machinery will benefit from the following
services:
o Access to news and information from the e*machinery web site 24 hours
a day / 365 days a year to include all major manufactures and dealers
worldwide.
o Access to updated machinery listings, including photos
o Buyers can receive listings of specific available machines via e-mail
or fax on a daily basis.
o Domestic and foreign financial services.
o Immediate reaction time and trained professionals.
Hard copy advertisers provide exposure to limited number of subscribers, and
information is usually a minimum of 3 weeks old before it reaches the
prospective buyer.
e*machinery will be updated daily and reach around the globe, 24 hours a day /
365 days a year.
e*machinery will be designed to show all inventory available, updated on a daily
basis. Unlimited specifications and photographs will be available at the click
of a mouse. Buyers historically must spend hours digging through pages of ads
unrelated to their search.
e*machinery will focus the buyers' search to the machines they want to see.
Sharp declines in market trends can happen overnight and hard copy advertisers
will usually have to wait a minimum of 3 weeks to react to these sharp declines.
Which may lead to money lost.
e*machinery will alert its members immediately to market trends.
Today, companies are pouring millions of dollars into web based advertising and
promotion. e*machinery will provide a full-stop shopping portal for the
construction and mining machinery industry. e*xxxxxxxxx.xxx, our web site, will
xxxxxx business to business e-commerce for construction and mining machinery.
e*xxxxxxxxx.xxx, our portal's web site address, will bridge the gap that has
separated construction and mining machinery buyers and sellers for years. By
harnessing the power of the World Wide Web, e*machinery will provide its members
with the finest customer service and value. Increasing profits through decreased
advertising costs for sellers and decreasing acquisition costs through time
savings for buyers, e*machinery is the model of the future for construction and
mining machinery. It will be the entry point on the web for all those interested
in any aspect of the heavy machinery industry.
E*MACHINERY'S RELATIONSHIP WITH CANTERBURY INFORMATION TECHNOLOGY, INC.
In order to design, develop, host, maintain and evolve its Internet based
portal, e*machinery has been working with Canterbury Information Technology,
Inc., a Nasdaq National Market company (CITI) since last July.
The Canterbury Companies have historically provided a variety of computer and
management training programs and technology consulting services which are
marketed to Fortune 1000 companies. CALC/Canterbury Corp. offers computer
software training and is a Microsoft Solutions Provider and Certified Technical
Education Center. CALC/Canterbury Corp. also offers training for Lotus, Apple,
SBT and Corel. USC/Canterbury Corp. is a premier value added reseller of
hardware and software and also provides training and network design.
MSI/Canterbury Corp. offers sales and management training and consulting to
corporations nationwide. ATM/Canterbury Corp., is a software consulting and
development company that created MasterTrak, a records management software
tracking program; and EasyImage, which allows a document to be automatically
scanned, indexed and linked through a network to desktop PCS.
The Internet addresses for the Canterbury Companies are:
o Corporate - xxx.xxxxxxxxxxxxxx.xxx.
o CALC/Canterbury Corp. - xxx.xxxx.xxx
o USC/Canterbury Corp. - xxx.xxxxxxxxxx.xxx
o ATM/Canterbury Corp. - xxx.xxxxxx.xxx; and
o MSI/Canterbury Corp. - xxx.xxxxxxxx.xxx.
CALC/Canterbury Corp. is a Microsoft Technical Education Center as well as a
Microsoft Authorized Testing Center, as well as an Authorized Education Center
for Lotus and others. CALC is also a corporate computer consulting company. CALC
Web University, a division of CALC, is now offering its first course online on
its own web site for distribution worldwide.
ATM/Canterbury Corp. through its MasterTrak and EasyImage applications can scan
and access over PC's anywhere in the world file room documents or physical
inventory ranging from parts to huge machines.
Both of these Canterbury Information Technology, Inc. subsidiaries have been
working since July with e*machinery and will continue to do so in order to
provide state of the art Internet based products and services both for
e*machinery's portal, and for any members, licensees or customers of
e*machinery.
Because of its strong belief in the e*machinery concept and its trust in the
management of e*machinery Canterbury has agreed:
o to permit its President and Executive Vice President to sit on
e*machinery's Board of Directors
o to accept payment for a substantial part of its technology services in
e*machinery's common stock if and when e*machinery is a public company
o to permit its President and Executive Vice President to work with
e*machinery in the areas of finance, accounting and corporate
administration.
o to permit both Canterbury's President and Executive Vice President to
be significant stockholders in e*machinery.
COMPETITION
Although the Company believes that no existing Internet portal is currently
offering the depth of products and services for any specific industry that
e*machinery, inc. expects to offer for the heavy machinery industry, there is
potential competition both on and off the Internet at this time.
Potential Competitors would include:
Verticalnet
Netgateway
Yahoo
Ariba
American Online
Stores
Machinery Trader
Point2
Global Sourcing Network
GUIA
Centrack
xxxxx.xxx
My Little Salesman
Equipment Central
Tradeyard
U.S. MACHINERY CORP.
Custom Rebuilt & Certified Rebuilt Machinery Program
Global Marketing Alliances
The strength of e*xxxxxxxxx.xxx will be grounded in business relationships
established around the world. Unlike other web based machinery sites who attempt
to sell machines by simply showing listings and pictures on a computer screen,
people sell machines on e*xxxxxxxxx.xxx With over 20 years of combined
experience in the industry, including working for Caterpillar dealers and
independent used equipment companies, e*xxxxxxxxx.xxx knows the heavy machinery
business. Key international relationships have been built in Japan, Canada,
China, Great Britain, Latin America and the Middle East. Through many of these
relationships, e*xxxxxxxxx.xxx will quickly have a presence (in their native
language) throughout the world.
Another advantage that e*xxxxxxxxx.xxx has in the international market is the
strong relationship that has been built by its founders with the United States
Export-Import Bank. This relationship should put e*xxxxxxxxx.xxx ahead of
individual companies in working on government guaranteed loans for export of
heavy machinery.
Custom Rebuilt Machinery
U.S. Machinery Corp. (USMC) is a separate division of e*machinery, inc. that is
focused on the rebuilding and marketing of construction and mining machinery.
Utilizing relationships with Caterpillar dealers, USMC can offer like new
machinery with a warranty at a fraction of the cost of new. This is a tremendous
advantage for contractors and mining companies. They can upgrade their fleets at
a lower cost without the risk of buying used machines without a warranty. The
following pages give more information regarding rebuilding, refurbishing and
U.S. manufactured construction and mining machinery.
U.S. Machinery Corp.
Existing working relationship with local Caterpillar Dealer
Cooperation from U.S. Financial Institution to work with U.S.M.C. in Mexico.
U.S. Machinery Corporation has established good working relationship with the
U.S. Export Import Bank.
Experienced in rebuilding and marketing rebuilt machinery
Strength of U.S. Machinery Corp.
U.S. Machinery Corporation's Custom Rebuild Program is the answer to having
quality machinery with a warranty. Often these machines can be purchased for
half the cost of new.
We use only genuine Caterpillar parts on our custom rebuild program machines.
Once rebuilt, the machines are processed through a state-of-the-art blast and
paint facility which provides factory quality painting.
Warranty Options Available
1 year/2000 hour powertrain
2 year/10,000 hour powertrain
Customer Rebuilt/Certified Rebuild
1.The type of machinery we offer in this program will include:
Wheel loaders, dozers, excavators, wheel dozers, scrapers, motorgraders and
end dump trucks.
2. The specific models of machinery primarily offered are:
Wheel loaders
992C & D
988F
980F
966F
Dozers - Track Type Tractors
D11N
D10N
D9N
D8N
Pipelayers
594
583
572
Excavators
245B/375L
235D/350L
Wheel Dozers
992/690
B34B
824B
Scapers/Motor Scrapers
657E/651E
637E/631E/633E
F. Motor Graders
16G
14G
140G
G. End Dump Trucks
5. 785B
6. 777B&C
7. 773B
8. 769C
Core Criteria
A. Not over 25,000 total frame hours
B. No pitting or corrosion
C. Not over 7 years old (Custom Rebuild)
D. Not over 10 years old (Certified Rebuild)
E. Preferably U.S. serial numbered units
F. Within Core pricing sheet
G. No major plating or breaks in frames (chassis or frame)
*All cores should be thoroughly inspected so that rebuild pricing can be
determined at time of acquisition.
How will e*xxxxxxxxx.xxx's "Intranationalnet"(TM) work?
All machinery that I listed within the "vortal" will be assigned a stock number
through the inventory training system, designed by MasterTrak. This information
will be connected to a common database that will be controlled by the technical
staff at CALC/Canterbury, a wholly owned subsidiary of Canterbury Information
Technology, Inc., a National Market Nasdaq public company in Medford, NJ.
CALC/Canterbury's President Xxxx Xxxxxx will direct all "Vortal" development and
work closely with ATM/Canterbury President Xxxx XxXxxxxx in developing the
MasterTrak software to be tailored to e*xxxxxxxxx.xxx's "Vortal" database that
will drive the Intranationalnet (TM) on the World Wide Web.
Licensing Agreements:
e*machinery, inc. has commenced qualifying Construction & Mining Machinery sales
companies around the world so that licensing agreements can be in place and
executed no later than the end of the first quarter 2000, of which there is no
assurance. One of the most important goals is to have a world wide sales force
that shares each others inventories to immediately satisfy a customer's needs.
This multifaceted sales force must qualify through criteria determined by the
management of e*machinery, inc. as follows:
1. Be well known in their area of the Industry with excellent customer
relations and reputation.
2. Have a substantial inventory of quality Construction and Mining Machinery
dedicated to their niche of the Industry.
3. Ability to supply parts & service and product support to their customer
base and/or have relationships to subcontract.
4. Provide Guarantees/Warranties specifically tailored to their customers'
needs.
5. Sign a quality assurance contract with e*xxxxxxxxx.xxx to insure our
customers that they can purchase Construction & Mining Machinery with
confidence.
6. Ability to help qualified customers obtain financing or lease options in
their designated areas or territories.
7. Ability to secure Sea, Air or Land transportation that makes sense for
their area of territory with respect to the customer's purchases.
8. Ability to perform or contract a qualified technical analysis of
Construction & Mining Machinery and stand behind their reports.
9. Ability to perform or contract a qualified appraisal of one or a whole
fleet of Construction & Mining Machinery in their niche of the market.
10. Ability to perform or contract qualified residual values based on market
value and condition reports of Construction & Mining Machinery, in their
niche of the market.
11. Be able to provide text and speak to their area or territories.
12. Help implement the education of our customers with industry related cases
given by e*xxxxxxxxx.xxx over the Internet, through CALC/Canterbury.
By the end of 2001 we hope to have e*xxxxxxxxx.xxx working on all Continents to
include 36 countries and in 16 languages.
Major Manufacturer:
The "Vortal" will be designed to work with Major Manufacturers throughout the
world. One of the main objectives for e*xxxxxxxxx.xxx is to expose the assets &
services of these Major Manufacturer's and their Dealer/Distribution Sources. We
must vertically integrate their existing web sites, interactively and three
dimensionally so that they will gain greater exposure to prospective buyers by
being one of the elite clients of the industry focused "Vortal" e*xxxxxxxxx.xxx.
Independent Dealers/leasing and rental agencies.
The major manufacturers of Construction & Mining Machinery have a stranglehold
in the market for new sales but there exists a huge multi-billion dollar
worldwide market for rebuilt and used Construction & Mining Machinery. Rental
companies, used equipment dealers, leasing agencies should be very interested in
joining our vortal.
These companies should benefit greatly by being part of the clientele of
e*xxxxxxxxx.xxx. The international exposure should take these companies to new
revenue heights. Also having their inventory on our Intranationalnet (TM) will
be adding a multifaceted, multilingual sales force to their current sales force.
Membership has its privileges and its costs. A small commission is proposed to
be deducted from each sale that is executed through the e*xxxxxxxxx.xxx family.
A percentage will stay with e*xxxxxxxxx.xxx and the rest will go to the licensed
sales organization. Through MasterTrak we will know who does what and when,
Through MasterTrak, a wholly owned subsidiary of Canterbury Information
Technology, Inc., the tracking of that information is virtually limitless and
the access of that database should be effortless.
The e*xxxxxxxxx.xxx site map will provide quick access to important sites within
our industry. The Site Map will include manufacturers, financial institutions,
transportation companies and government agencies that are an integral part of
the global machinery market. Up to the minute construction and mining news
should be available 24 hours a day by clicking the link at the top of the page.
This will provide members insight into the industry at the click of a mouse.
The full version of e*xxxxxxxxx.xxx will bring up to the minute auction results,
bid letting and other information to draw visitors to the site again and again.
Large photos and descriptions will highlight the machinery information that we
make available to our visitors. It is enough information to get them to call and
request more, giving a sales staff an opportunity to talk to a warm lead every
time.
The e*xxxxxxxxx.xxx navigational bar stays at the top of the screen during the
entire visit at the site. This makes it easy to jump from one section to another
without numerous steps.
LEGAL PROCEEDINGS
None.
SIGNIFICANT INFORMATION
Potential investors are urged to review as part of this Memorandum the documents
concerning Financial Statements, management of the Company, biographies,
employment contracts, compensation, principal shareholders and other important
investment information.
Profit Centers of
e*machinery, inc.
LICENSING AGREEMENTS
Major Manufacturers of Construction and Mining Machinery
International Agencies and Trading Companies
Domestic Agencies and Trading Companies
ANNUAL MEMBERSHIP FEES FROM CUSTOMER BASE
Manufacturers of Machinery
Distributors/Dealers of New and Used Construction and Mining Machinery
Rental/Leasing Companies
Transportation Companies
Lending Institutions
Import-export Banks (Worldwide)
Software Companies
CONSULTING
Appraisal of Construction * Mining Machinery
Needs Analysis
Dealers/Distributors
Rental/Leasing Companies
Contractors
Acquisitions of machinery for specific customers
Educational & Research Reports
AS AGENT FOR DEALERS/DISTRIBUTORS/TRADING COMPANIES
ADVERTISING REVENUE
Manufacturers of Construction and Mining Machinery
Retailers of Rebuilt and Refurbished Machinery
Banks
Leasing Companies
Insurance Companies
Retail Dealerships
Educational Providers
Other Non-related Advertisers
U.S. Machinery Corp.
BALANCE SHEETBALANCE SHEET
DECEMBER 1, 1999
Cash $1,000
Developed software (1) 515,000
---------
Total Assets $516,000
=========
Accounts payable & accrued expenses $585,000
Stockholders equity (69,000)
---------
Total liabilities & Equity $516,000
=========
1 This figure may not be a capital item according to GAAP, and may therefore
be reduced in part or in whole in the future. This capitalized expense is
for the initial design of the e*xxxxxxxxx.xxx's web site.
USE OF PROCEEDS1
Hardware/software for Web site and Web site development $875,000
Telephone/communications hardware/software 50,000
Initial Printing (marketing brochures and office forms) 65,000
Legal 50,000
Texas office set up - security deposits, furniture, computers
and other office equipment 85,000
New Jersey office set up - security deposits, computers,
and other office equipment 35,000
Public company stock purchase 200,000
Working capital requirements 1,140,000
----------
Total Usage $2,500,000
==========
1 To the extent that the maximum $2,500,000 has not been raised, working capital
shall first be reduced to $250,000 and the other uses set forth above would then
be proportionately reduced.
MANAGEMENT
OFFICERS
Xxxxxx X. X'Xxxx, III President, Chief Executive Officer
Xxxxxx X. Xxxxxxxx Vice President, Treasurer
Xxxxx X. XxXxxxxx Secretary
DIRECTORS
Xxxxxx X. X'Xxxx, III
Xxxxxx X. Xxxxxxxx
Xxxxx X. XxXxxxxx
Xxxxxxx X. Xxxxx
XXXXXX X. X'XXXX, III has been the President, Chief Executive Officer and
a
Director of E*Machinery, Inc. since its inception. From 1992 through the
inception of E*Machinery, Inc. in 1999, Xx. X'Xxxx was employed in various
capacities by Hoss Equipment Company, one of the largest used equipment dealers
in the United States. From 1998 through 1999, he was Vice President, Chief
Operating Officer and International Sales Director; in 1997, he was Vice
President of Sales, both domestic and international; and from 1992 through 1996,
he was International Sales Director. From 1990 through 1991, he was a consultant
with Industrial Metals Company and Liberty Iron & Metals to dismantle and
re-sell the major assets of Lafarge Corporation cement processing plant located
in Fort Worth, Texas. From 1986 through 1990, he traveled extensively throughout
Latin America, as well as Mexico, employed by three (3) major dealers of
Caterpillar equipment. He also, during this period, was a consultant for five
(5) construction companies in Mexico with regard to the utilization of heavy
construction machinery. From 1980 through 1985, he was employed by Xxxx
Equipment Company, Inc., a North Texas and Oklahoma Caterpillar dealership. Xx.
X'Xxxx filed a personal bankruptcy petition in February 1999 as a precautionary
measure against an individual alleged creditor. The validity and enforceability
of such debt is presently being vigorously litigated.
XXXXXX X. XXXXXXXX has been a Director of E*Machinery, Inc. since its
inception and will be Vice President and Treasurer of the company as of early
February, 2000. From 1994 to date, Xx. Xxxxxxxx is Marketing Director of
International Sales for Hoss Equipment Company. In 1994, he worked for Xxxxx
Xxxxxx Machinery Company as Advertising and Marketing Director. From 1993
through early 1994, he was Sales and Customer Service Director for Dalworth
Corporate Cleaning Company. From 1990 through 1993, he was employed as General
Manager of the retail division for Parkway Paging Company. From 1987 through
1989, he was the Municipal Court Police Liaison for the City of Grand Prairie,
Texas. From 1983 through 1986, Xx. Xxxxxxxx attended the Xxxxxxx X. Xxxxx
College of Business at the
University of Oklahoma, as well as received a degree in Advertising from the
X.X. Xxxxxxx School of Journalism and Mass Communications, also at the
University of Oklahoma.
XXXXX X. XXXXXXXX, CPA, has been Secretary and a Director of E*Machinery,
Inc. since its inception. Xx. XxXxxxxx is also the Chief Operating Officer,
Executive Vice President and a Director of Canterbury Information Technology,
Inc., a public company listed on National Market NASDAQ, and has been with the
company since 1987. He is a graduate of the University of Delaware (B.S.
Accounting, 1980) and has been a Certified Public Accountant since 1982. From
1980 through 1983, he was an Auditor with the public accounting firm of Coopers
and Xxxxxxx in Philadelphia. From 1984 through 1986, Xx. XxXxxxxx was employed
as a Controller for a New Jersey-based division of Allied Signal, Inc.
XXXXXXX X. XXXXX has been a Director of E*Machinery, Inc. since its
inception. Xx. Xxxxx is the President and Chairman of the Board of Directors of
Canterbury Information Technology, Inc., a NASDAQ National Market public company
that focuses on training and information technology. Xx. Xxxxx was a founder of
the company. He graduated from the Xxxxxxx School of the University of
Pennsylvania (B.S. Economics and Accounting) in 1962. From 1968 through 1981, he
had been President and majority stockholder of Brown, Bailey and Xxxxx, Inc., a
mergers and acquisitions consulting firm that completed more than twenty (20)
transactions. In addition, Xx. Xxxxx has been retained in the past by various
small- to medium-sized public companies in the capacity of an independent
financial consultant.
PRINCIPAL STOCKHOLDERS
NUMBER OF SHARES
NAME OF COMMON STOCK
---- ----------------
Xxxxxx X. X'Xxxx, III 4,000,000
Xxxxxx X. Xxxxxxxx 2,000,000
Xxxxxxx X. Xxxxx 2,000,000
Xxxxx X. XxXxxxxx 400,000
Xxxxxxx X. Xxxx, Esq. 200,000
----------
8,600,000
==========
DESCRIPTION OF SECURITIES
Common Stock
Holders of shares of Common Stock of the Company are entitled to cast one
vote for each share held at all shareholders meetings for all purposes,
including the election of directors, and to share equally on a per share basis
in such dividends as may be declared by the Board of Directors out of funds
legally available therefor. Upon liquidation or dissolution, each outstanding
share of Common Stock will be entitled to share equally in the assets of the
Company legally available for distribution to shareholders after the payment of
all debts and other liabilities. Shares of Common Stock are not redeemable, have
no conversion rights and carry no preemptive or other rights to subscribe to or
purchase additional shares in the event of a subsequent offering. All
outstanding shares of Common Stock are, and the shares offered hereby will be
when issued, fully paid and non-assessable.
Non-Cumulative Voting
The Common Stock does not have cumulative voting rights which means that
the holders of more than fifty percent of the Common Stock voting for election
of directors can elect one hundred percent of the directors of the Company if
they choose to do so.
Dividends
There are no limitations or restrictions upon the right of the Board of
Directors to declare dividends out of any funds legally available therefor. It
is not anticipated that any dividends will be paid in the foreseeable future.
The Board of Directors may follow a policy of retaining earnings to finance the
future growth of the Company. Accordingly, future dividends, if any, will depend
upon, among other considerations, the Company's need for working capital and its
financial condition at the time.
SUITABILITY STANDARDS
INVESTMENT IN THE SECURITIES INVOLVES A HIGH DEGREE OF RISK AND IS SUITABLE ONLY
FOR PERSONS OF SUBSTANTIAL FINANCIAL RESOURCES WHO HAVE NO NEED FOR LIQUIDITY IN
THEIR INVESTMENT. See "RISK FACTORS".
The Securities lack liquidity as compared with other securities since the
Securities will be restricted by the Subscription Agreement and applicable
federal and state securities laws.
The Securities will be offered or sold only to a subscriber whom the Issuer
believes, based on reasonable grounds after reasonable inquiry, is an
"accredited investor" or to a limited number of "non-accredited investor"
pursuant to Regulation D or Rule 4(2) of the Securities Act of 1933, as amended
("Act"). An "accredited investor" as defined in Regulation D [Rule 501 (a) under
the Securities Act of 1933 (17 C.F.R. Sec. 230.501 (a)] is, among other things,
a natural person whose net worth exceeds $1,000,000 or a natural person who has
had an individual income in
excess of $200,000 in each of the most recent two years and who expects an
income in excess of $200,000 in the current year.
Subscribers' representations will be reviewed to determine the suitability of
prospective purchasers, and the Issuer will have the right to refuse a
subscription for the Securities for any reason in its sole discretion.
Subscriptions will not necessarily be accepted in the order in which received.
RESTRICTIONS ON TRANSFER
The Securities offered hereby are restricted securities as that term is defined
in the Securities Act of 1933 as amended.
Investment in the Securities offered may be made by persons who do so for
investment purposes only and without a view to resale or further distribution.
This Confidential Offering Memorandum and the Subscription Agreement provides
that no sale will be approved in the absence of a effective registration or an
opinion of counsel satisfactory to the Company that such transfer qualifies for
an exemption. The purchaser of the securities offered hereby agrees to the
placement of a legend on the certificates restricting transferability and
additionally agrees not to sell the securities purchased unless the Securities
are subsequently registered.
The Company has agreed to indemnify its officers, Directors and agents against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
METHOD OF SALE OF SHARES
The offering of Shares will be conducted in reliance upon exemptions from
registration requirements contained in Section 4(2) and Rule 506 of Regulation
D
under the Securities Act of 1933, as amended (the "Securities Act") and pursuant
to the relevant state "blue sky" laws for transactions not involving a public
offering. Accordingly, offers and sales of the Shares will only be made to
prospective Investors who satisfy, in the sole judgment of the Company, all of
the following suitability standards:
1. Each Investor must be an "accredited investor" (or a limited number of
"non-accredited investors") as such terms are defined in Rule 501(a) of
Regulation D under the Securities Act.
2. Each Investor must confirm and represent that the Shares to be purchased
are being acquired for investment and not with a view to distribution.
Before closing any sale of Shares to an Investor, a Subscription Agreement
in the form of Exhibit A hereto, must be executed by such Investor and delivered
to the Company, along with
a check, payable to "Levy & Levy, P.A. Attorney Trust Account" in an amount
equal to the purchase price of the Shares being so purchased.
Each prospective Investor should obtain the advice of his attorney, tax
consultant, and business advisor with respect to the legal, tax and business
aspects of the investment prior to subscribing for these securities.
The Company may in its sole discretion accept or reject any potential
Investor's subscription in whole or in part, irrespective of whether such
Investor meets the minimum suitability standards for investing in the Offering.
The Company is under no obligation to accept a potential Investor's subscription
unless and until the Company accepts such Subscription Agreement at the Closing
(as defined in the Subscription Agreement).
This Offering will terminate on the earlier of the date of receipt by the
Company of good funds and executed Subscription Agreements acceptable to the
Company for all of the Shares, or December 15, 1999 if the minimum 200,000
shares have not been sold (which can be extended 30 days), whereupon a Closing
will be held at the offices of Levy & Levy, P.A., Plaza 1000, Suite 000, Xxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxxxx, 00000, upon receipt of good funds from the
Investor and upon acceptance of the subscription by the Company and delivery of
Closing stock certificates. At such Closing, the Company will cause to be
delivered to Investors whose Subscription Agreements and funds have been
accepted by the Company stock certificates duly issued and authorized by the
Company which represent the number of shares which the Company has agreed to
sell to such Investors. Thereafter multiple closings may occur up to the maximum
shares to be sold until March 31, 2000.
EXHIBIT "A"
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT
$1.00 PER SHARE
e*machinery, inc.
Gentlemen:
The undersigned acknowledges that he or she has received and reviewed a
copy of the Confidential Offering Memorandum dated December 7, 1999, of
e*machinery, inc., a Texas Corporation, (the "Company"), including the exhibits
appended thereto; (the Confidential Offering Memorandum, together with the
exhibits thereto, is referred to herein as the "Memorandum"). The Memorandum
relates to the private placement of 2,500,000 shares of common stock (the
"Shares") of the Company being offered herewith. The Company is offering the
Shares on the terms and in the manner described in the Memorandum.
It is understood that, upon the acceptance by the Company of the
undersigned's offer to purchase the number of Shares set forth herein, the
undersigned will receive a copy of this executed Subscription Agreement executed
on behalf of the Company.
1. Subscription. Subject to the terms and conditions hereof, the
undersigned hereby irrevocably subscribes for and agrees to purchase Shares.
Except as provided immediately below, the undersigned tenders herewith a check
(the "Check") in an amount of $ , payable to the order of "Levy & Levy, P.A.
Attorney Trust Account". At the sole discretion of the Company, the Company may
allow less than $50,000 of shares to be purchased by an individual investor.
The Check and this Subscription Agreement that is Exhibit A to the
Memorandum should be delivered to Levy & Levy, Plaza 1000, Suite 000, Xxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxxxx, 00000. After the minimum of 200,000 shares
($200,000) have been sold prior to the termination date, a Closing shall occur
upon receipt of good funds and acceptance of the undersigned's offer to purchase
the number of Shares set forth herein (the date on which the undersigned's offer
to purchase shares is accepted being the "Closing Date"). The Company must also
deliver stock certificates at the Closing. If this subscription is rejected by
the Company, the proceeds in an amount equal to the amount tendered by the
investor shall be promptly returned in full to the undersigned, without
interest, and this Agreement shall be rendered by the Company null and void and
of no further force or effect. Thereafter, multiple Closings may occur up to the
maximum shares to be sold prior to March 31, 2000.
2. Acceptance of Subscription. The undersigned understands and agrees that
this subscription is made subject to the following terms and conditions:
(a) The Company shall have the right to reject this subscription, in whole
or in part; and
(b) The Company shall have no obligation to accept subscriptions for Shares
in the order received.
3. Representations and Warranties of the Undersigned.
The undersigned understands that the Shares are being offered and sold pursuant
to the exemption from registration provided for in Section 4(2) of the
Securities Act of 1933, as amended, (the "Act"), and Rule 506 of Regulation D
promulgated thereunder. The undersigned further understands that he is
purchasing the Shares without being furnished any offering literature or
prospectus other than the Memorandum, that no documents relating to this private
placement as such have been filed with or reviewed by the Securities and
Exchange Commission or by any administrative agency charged with the
administration of the securities laws of any state. All documents, records and
books pertaining to this investment have been made available to the undersigned
and his representatives, including without limitation his attorney and/or his
accountant, and that the books and records of the Company will be available upon
reasonable notice for inspection by investors during reasonable business hours
at its principal place of business. In addition the undersigned hereby
represents and warrants as follows:
(a) The undersigned (X) if an individual (I) is a citizen of the United
States, and at least 21 years of age, and (ii) is a bonafide permanent
resident of and is domiciled in the State set forth on the signature
page hereof and has no present intention of becoming a resident of any
other State or jurisdiction, or (Y) if a partnership, trust,
corporation or other entity, has a principal place of business and is
domiciled in the State as set forth on the signature page thereof and
has no present intention of changing its principal place of business
or its domicile to any other state or jurisdiction;
(b) The undersigned has read and fully considered the section in the
Memorandumentitled "Risk Factors" and understands that shares are
extremely speculative investments with a high degree of risk of loss,
and there will be no public market for the Shares and it may not be
possible to liquidate an investment in the Shares; Common stock has
not been registered under the Act or State Securities Laws and may not
be sold until such Common Stock is registered under the Act or an
exemption from such registration is available.
(c) The undersigned is able (I) to bear the economic risk of this
investment, (ii) to hold the Shares indefinitely, and (iii) presently
to afford a complete loss of this investment; the undersigned has
adequate means of providing for current needs and personal
contingencies, and has no need for liquidity in this investment;
(d) The undersigned has such knowledge and experience in financial and
business matters that he/she is capable of evaluating the merits and
risks of an investment in the Shares and of making informed investment
decision;
(e) The undersigned confirms that, in making his decision to purchase the
Shares, he/she has relied solely upon independent investigations made
by him/her and/or by his/her representatives, including his own
professional tax and other advisors, and that he and such
representatives and advisors have been given the opportunity to ask
questions of, and to receive answers from, officers of the Company and
Counsel to the Company concerning the terms and conditions of this
offering, and to obtain any additional information, to the extent such
persons possess such information or can acquire it without
unreasonable effort or expense, necessary to verify the accuracy of
the information set forth in the Memorandum;
(f) The Shares hereby subscribed for are being acquired by the undersigned
in good faith solely for his/her own personal account, for investment
purposes only, and are not being purchased for resale, resyndication,
distribution, subdivision or fractionalization thereof; the
undersigned has no contract or arrangement with any person to sell,
transfer or pledge to any person the Shares or any part thereof, any
interest therein or any rights thereto; the undersigned has no present
plans to enter into any such contract or arrangement; and he/her
understands that as a result he/she must bear the economic risk of the
investment for an indefinite period of time because the Shares have
not been registered under the Act and, therefore, cannot be sold
unless they are subsequently registered under the Act or an exemption
from such registration under the Act is available.
(g) The undersigned consents to the placement of a legend, until the
common shares are registered, on the stock certificates evidencing the
Shares being purchased, which legend shall be in a form substantially
as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE SALE OR OTHER DISPOSITION
OF THE SHARES IS PROHIBITED UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL
THAT SUCH SALE OR OTHER DISPOSITION CAN BE MADE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933. BY ACQUIRING THE
SHARES REPRESENTED HEREBY THE HOLDER REPRESENTS THAT HE HAS
ACQUIRED SUCH SHARES FOR INVESTMENT AND THAT HE WILL NOT SELL OR
OTHERWISE DISPOSE OF THESE SHARES WITHOUT REGISTRATION OR OTHER
COMPLIANCE WITH THE AFORESAID ACT AND THE RULES AND REGULATIONS
THEREUNDER.";
(h) FOR PARTNERSHIPS, CORPORATIONS, TRUSTS, OR OTHER ENTITIES ONLY: If the
undersigned is a partnership, corporation, trust or other entity;
(i) The undersigned has enclosed with this Agreement appropriate
evidence of the authority of the individual executing this
Agreement to act on its behalf (i.e., if a trust, a copy of the
trust agreement; if a corporation, a certified corporation
resolution authorizing the signature and a copy of the articles
of incorporation; or if a partnership, a copy of the partnership
agreement),
(ii) The undersigned represents and warrants that it was not organized
or reorganized for the specific purpose of acquiring Shares, and
(iii) The undersigned has the full power and authority to execute this
Subscription Agreement on behalf of such entity and to make the
representations and warranties made herein on its behalf and this
investment in the Company has been affirmatively authorized by
the governing board of such entity and is not prohibited by the
governing documents of the entity; and
(iv) The undersigned represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D under the
Act.
The foregoing representations and warranties and undertakings, are made by
the undersigned with the intent that they be relied upon in determining his
suitability as a purchaser of the Shares and the undersigned hereby agrees that
such representations and warranties shall survive his purchase of the Shares. By
executing this Agreement, the undersigned represents that he has read and
acknowledged each of the representations set forth above.
If more than one person is signing this Agreement, each representation and
warranty and undertaking made herein shall be a joint and several
representation, warranty or undertaking of each such person.
4. Representations and Warranties of the Company.
(a) The Company has been duly and validly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Texas. The Company has all requisite power and authority, and all necessary
authorizations, approvals and orders required as of the date hereof to own
its properties and conduct its business as described in the Memorandum and to
enter into this Subscription Agreement and to be bound by the provisions and
conditions hereof.
(b) All corporate action required to be taken by the Company prior to all
the issuance and sale of the Shares has been, or prior to the Closing of the
sale of the Shares, will have been taken; the Shares will conform to the
descriptions thereof in the Memorandum; and the Shares, when issued and sold in
accordance with the Memorandum for the consideration expressed therein shall be
duly and validly issued, and, in the case of the Common Stock, fully paid and
nonassessable and free of preemptive rights. The Shares have been duly and
validly authorized by proper corporate authority.
5. Transferability. The undersigned agrees not to transfer or assign this
Agreement, or any portion of his interest herein, and further agrees that the
assignment and transfer of the Shares acquired pursuant hereto shall be made
only in accordance with all applicable laws.
6. Revocation. The undersigned agrees that he may not cancel, terminate or
revoke this Agreement or any agreement of the undersigned made hereunder and
that this Agreement shall survive the death or disability of the undersigned and
shall be binding upon the undersigned's heirs, executors, administrators,
successors and assigns.
7. No Waiver. Notwithstanding any of the representations, warranties,
acknowledgments or agreements made herein by the undersigned, the undersigned
does not hereby or in any other manner waive any rights granted to him under
Federal or state securities laws.
8. Miscellaneous.
(a) All notices or other communications given or made hereunder shall be in
writing and shall be delivered or mailed by registered or certified mail, return
receipt requested, postage prepaid, to the undersigned at the address set forth
below or to the Company at the address set forth above.
(b) This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey.
9. Waiver of Suitability Standards. The Company reserves the right to
review the suitability of any person (or entity) as the Company deems
appropriate under applicable law.
10. Continuing Effect of Representations, Warranties and Acknowledgments.
The undersigned represents that representations and warranties contained in
Section 3 hereof of the undersigned and the Company represents that the
representations of the Company contained in Section 4 hereof are true and
accurate as of the date of this Subscription Agreement and shall be true and
accurate as of the Closing Date and shall survive the Closing. If, in any
respect, such representations, warranties and acknowledgments shall not be true
and accurate prior to the Closing Date, the undersigned, or the Company, as the
case may be, shall give immediate written notice of such fact to the Company, in
the case of representations, warranties and acknowledgments of the undersigned
in the case of the representations, warranties and acknowledgments of the
Company, as applicable, specifying which representations, warranties and
acknowledgments are not true and accurate and the reasons therefor.
11. Indemnification. The undersigned acknowledges that he understands the
meaning and legal consequences of the representations and warranties contained
in Section 3 hereof, and he hereby agrees to indemnify and hold harmless the
Company and its officers and directors from and against any and all loss, damage
or liability (including costs and reasonable attorney fees) due to or arising
out of a breach of any representation, warranty or acknowledgment of the
undersigned contained in this Subscription Agreement.
It is understood that all documents, records and books pertaining to this
investment have been made available to the undersigned and his attorney and/or
accountant and that the books and records of the Company will be available upon
reasonable notice for inspection by investors during reasonable business hours
at its principal place of business.
IN WITNESS WHEREOF, the undersigned has hereby executed this Agreement this
_________ day of 1999 (2000).
- ---------------------------------- ------------------------
Name of Subscriber (Print Name) Authorized Signature of
Subscriber
- --------------------------
- --------------------------
Address
- ---------------------------------- ------------------------
Name of Co-subscriber (Print Name) Authorized Signature of
Co-subscriber
- --------------------------
- --------------------------
Address
AGREED TO AND ACCEPTED BY:
E*MACHINERY, INC.
By:
--------------------------
Xxxxxx X. X'Xxxx, III
President and Chief Executive Officer
Dated:
--------------------------
EXHIBIT 2.4(a)
E*MACHINERY, INC.
PRIVATE PLACEMENT MEMORANDUM
DATED MARCH 6, 2000
CONFIDENTIAL OFFERING MEMORANDUM
DATED: MARCH 6, 2000
E*MACHINERY, INC. ("E*MACHINERY")
(A Texas Corporation)
2,500,000 SHARES
COMMON STOCK
AT $.40 PER SHARE
($1,000,000)
Placement
Price to Discounts and Proceeds to the
Public Commissions Company1
Total Minimum $.40 -- $1,000,000
2,500,000 Shares
1 Before the deduction of expenses of this Offering, including, but not
limited to, legal, accounting, consulting and printing expenses, which are
estimated to be approximately $50,000.
TABLE OF CONTENTS
STATE NOTICE REQUIREMENTS...................................................7
TERMS OF THE OFFERING......................................................10
THE OFFERING...............................................................11
RISK FACTORS...............................................................12
THE COMPANY................................................................17
PROJECTED PROFIT CENTERS OF E*MACHINERY, INC...............................26
BALANCE SHEET..............................................................28
USE OF PROCEEDS............................................................29
MANAGEMENT.................................................................30
PRINCIPAL STOCKHOLDERS.....................................................30
DESCRIPTION OF SECURITIES..................................................31
SUITABILITY STANDARDS......................................................31
RESTRICTIONS ON TRANSFER...................................................32
METHOD OF SALE OF SHARES...................................................32
EXHIBIT "A" - SUBSCRIPTION AGREEMENT ......................................34
Dated: March 6, 2000
PRIVATE PLACEMENT MEMORANDUM
E*MACHINERY, INC.
A MAXIMUM OF 2,500,000 SHARES OF COMMON STOCK
E*Machinery, Inc. (the "Company") is a corporation organized under the laws
of the state of Texas. This Offering of 2,500,000 Shares ($1,000,000) is being
made pursuant to Regulation D, Rule 506 or rule 4(2) of the Securities Act of
1933, as amended (the "Act"), on a best efforts "all or none" basis. The sale of
2,500,000 Shares must be accepted by the Company before a closing may occur. The
Company intends to accept only subscriptions for a minimum of 500,000 or more
per person; however, the Company reserves the right to accept subscriptions for
less than 500,000. All checks are to be made out of "Levy & Levy, P.A.,
Attorney Trust Account." Unless 2,500,000 shares are sold by March 23, 2000
all funds in the Trust account will be promptly returned to the subscribers in
full without duction or interest. The Company reserves the right to accept or
reject subscriptions from any individual or entity at any time prior to Closing.
No person is authorized to give any information or to make any
representations not contained in this Memorandum, and, if given or made, any
information or representation not contained herein must not be relied upon as
having been authorized by or on behalf of the Company. Neither delivery of this
Memorandum nor any sale of the Shares shall at any time imply that the
information contained herein is correct at any time subsequent to this date.
This Memorandum does not contain all of the information that would normally
appear in a prospectus for an offering registered under the Securities Act or
that may be necessary to make an informed investment decision regarding an
investment in the Shares. The Company will furnish additional information to
interested offerees upon request. Purchasers of the Shares will be required to
acknowledge at the time of purchase that they have requested and received all
information necessary to make an informed decision to Purchase the Shares.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR WITH ANY STATE OR REGULATORY AGENCY UNDER ANY SECURITIES
LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION PROVIDED IN SUCH
LAWS AND THE RULES AND REGULATIONS THEREUNDER, AND MAY NOT BE RESOLD OR
TRANSFERRED IN THE ABSENCE OF THE SATISFACTION OF CERTAIN CONDITIONS, INCLUDING
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH LAWS OR AN OPINION OF COUNSEL OF
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
Proceeds to the
Shares Offered Proceeds Commissions Company (1)
-------------------------------------------------------------------------------
2,500,000 Shares
at $.40 per share $1,000,000 $ 0 $1,000,000
(1) Prior to deducting expenses of the Offering, estimated to be
approximately
$50,000. Such expenses include professional and other fees incurred
by the
Company. Such expenses will be payable from the net proceeds of the
Offering.
See "RISK FACTORS" for a discussion of various considerations that should
be considered by prospective investors.
The Offering will terminate upon the sale of 2,500,000 Shares if not sold
by March 23, 2000.
THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM OFFERS THE COMMON STOCK ONLY TO
INVESTORS WHO QUALIFY AS "INSTITUTIONAL INVESTORS" PROVIDED, HOWEVER, THAT
SHARES MAY BE OFFERED AND SOLD TO "ACCREDITED INVESTORS" AND A LIMITED NUMBER OF
"NON-ACREDITED INVESTORS" (AS SUCH TERMS ARE DEFINED IN THE SECURITIES ACT OF
1933, AS AMENDED) AT THE WRITTEN CONSENT OF THE COMPANY. ALL INVESTORS MUST MEET
CERTAIN SUITABILITY STANDARDS ESTABLISHED BY THE COMPANY, SUBJECT TO THE
COMPANY'S RIGHT TO REJECT SUBSCRIPTIONS, IN WHOLE OR IN PART. THE MINIMUM
SUBSCRIPTION WILL BE FOR 500,000 SHARES UNLESS OTHERWISE APPROVED BY THE
COMPANY.
THE SHARES OFFERED HEREBY WILL BE SOLD SUBJECT TO THE PROVISIONS OF A
SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") CONTAINING CERTAIN
REPRESENTATIONS, WARRANTIES, TERMS AND CONDITIONS. ANY INVESTMENT IN THE SHARES
OFFERED HEREBY SHOULD BE MADE ONLY AFTER A COMPLETE AND THOROUGH REVIEW OF THE
PROVISIONS OF THE SUBSCRIPTION AGREEMENT. THE COMPANY RESERVES THE RIGHT IN ITS
DISCRETION TO ACCEPT OR REJECT, IN WHOLE OR PART, ANY PROPOSED INVESTMENT IN THE
SHARES.
THE SHARES AND THIS OFFERING HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY AGENCY, NOR HAS SUCH
COMMISSION OR ANY SUCH AGENCY PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
THESE SECURITIES ARE HIGHLY SPECULATIVE AND SHOULD ONLY BE PURCHASED BY
PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE
PURCHASERS SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER
"RISK FACTORS" BEFORE PURCHASING SUCH SECURITIES.
THE SECURITIES DESCRIBED HEREIN ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND APPLICABLE STATE
SECURITIES LAWS RELATING TO TRANSACTIONS NOT INVOLVING A PUBLIC
OFFERING OR SOLICITATION, SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF
INVESTORS TO WHOM THE OFFERING IS MADE AND RESTRICT SUBSEQUENT TRANSFER OF THE
SECURITIES DESCRIBED HEREIN.
THE SECURITIES DESCRIBED HEREIN ARE RESTRICTED WITH RESPECT TO TRANSFERABILITY
AND RESALE. SUCH SECURITIES MAY NOT BE RESOLD OR OTHERWISE DISPOSED OF BY AN
INVESTOR UNLESS, IN THE OPINION OF COUNSEL OF THE COMPANY, REGISTRATION UNDER
THE SECURITIES ACT, OR APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED OR
COMPLIANCE IS MADE WITH SUCH REGISTRATION REQUIREMENTS.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION WHERE, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. EXCEPT AS OTHERWISE INDICATED HEREIN, THIS MEMORANDUM SPEAKS AS OF
THE DATE HEREOF. NEITHER THE DELIVERY OF THIS MEMORANDUM NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF.
THIS MEMORANDUM IS SUBMITTED IN CONNECTION WITH THE OFFERING OF THE SECURITIES
DESCRIBED HEREIN AND MAY NOT BE REPRODUCED OR USED FOR ANY OTHER PURPOSE. BY
ACCEPTING DELIVERY OF THIS MEMORANDUM, EACH POTENTIAL INVESTOR AGREES THAT HE,
SHE OR IT WILL NOT DIVULGE THE CONTENTS HEREOF TO ANY PERSON OR ENTITY AND WILL
RETURN IT (WITH ALL RELATED DOCUMENTS OR MATERIALS) TO THE COMPANY UPON REQUEST
IF SUCH INVESTOR DOES NOT AGREE TO PURCHASE ANY OF THE SECURITIES. ANY
REPRODUCTION OR DISTRIBUTION OF THIS DOCUMENT WITHOUT THE PRIOR WRITTEN CONSENT
OF THE COMPANY IS PROHIBITED.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS
LEGAL, TAX OR ACCOUNTING ADVICE, BUT SHOULD CONSULT THEIR LEGAL COUNSEL,
ACCOUNTANTS AND BUSINESS ADVISORS ABOUT LEGAL, TAX AND ACCOUNTING MATTERS
CONCERNING AN INVESTMENT IN THE SECURITIES DESCRIBED HEREIN.
CERTAIN PROVISIONS OF VARIOUS DOCUMENTS AND RECORDS ARE BRIEFLY SUMMARIZED IN
THIS MEMORANDUM. SUCH SUMMARIES ARE NOT AND DO NOT PURPORT TO BE COMPLETE AND
REFERENCE MUST BE MADE DIRECTLY TO SUCH DOCUMENTS AND RECORDS FOR COMPLETE
INFORMATION CONCERNING THE RIGHTS AND OBLIGATIONS OF THE PARTIES. COPIES OF SUCH
DOCUMENTS ARE INCLUDED HEREWITH OR ARE AVAILABLE UPON REQUEST FROM THE COMPANY.
PROSPECTIVE INVESTORS ARE URGED TO READ THIS MEMORANDUM CAREFULLY. ALL
PROSPECTIVE INVESTORS WILL HAVE AN OPPORTUNITY TO TALK WITH REPRESENTATIVES OF
THE COMPANY TO VERIFY ANY OF THE INFORMATION INCLUDED HEREIN AND TO OBTAIN
ADDITIONAL INFORMATION REGARDING THE COMPANY. THIS MEMORANDUM CONTAINS SUMMARIES
OF CERTAIN DOCUMENTS. COPIES OF ALL MATERIAL DOCUMENTS, CONTRACTS AND FINANCIAL
STATEMENTS RELATING TO THE COMPANY WILL BE MADE AVAILABLE TO PROSPECTIVE
INVESTORS FOR INSPECTION DURING NORMAL BUSINESS HOURS UPON REQUEST TO THE
COMPANY. THE DELIVERY OF THIS MEMORANDUM, ATTACHMENTS OR OTHER MATERIALS AT ANY
TIME DOES NOT
IMPLY THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION CONTAINED HEREIN OR
THEREIN SINCE THE DATE HEREOF OR THEREOF.
ANY REPRODUCTION OR DISTRIBUTION OF THIS MEMORANDUM, IN WHOLE OR IN PART, OR THE
DIVULGENCE OF ANY OF ITS CONTENTS WITHOUT THE PRIOR WRITTEN PERMISSION OF THE
COMPANY IS PROHIBITED. THIS MEMORANDUM IS FURNISHED FOR THE SOLE USE OF THE
OFFEREE AND FOR THE SOLE PURPOSE OF PROVIDING INFORMATION REGARDING THE
SECURITIES OFFERED HEREBY. NO OTHER USE OF THIS INFORMATION IS AUTHORIZED. THE
DELIVERY OF THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THE SECURITIES OFFERED HEREBY NOR AN OFFER TO ANY PERSON IN ANY
JURISDICTION IN WHICH AN OFFER WOULD BE UNLAWFUL. THE OFFEREE, BY ACCEPTING
DELIVERY OF THIS MEMORANDUM AND ANY OTHER MATERIALS DELIVERED IN CONNECTION WITH
THIS MEMORANDUM, AGREES NOT TO COPY THIS MEMORANDUM AND SUCH OTHER MATERIALS AND
TO RETURN IT TOGETHER WILL ALL ATTACHMENTS AND EXHIBITS, TO THE COMPANY IF THE
OFFEREE DOES NOT PURCHASE ANY OF THE SECURITIES.
EXCEPT AS HEREIN DISCUSSED, NO PERSON HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION CONCERNING THE COMPANY OTHER THAN
THOSE CONTAINED IN THIS MEMORANDUM IN CONNECTION WITH THE OFFERING DESCRIBED
HEREIN AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. IN MAKING AN INVESTMENT
DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE
TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
ANY ESTIMATES OR FORECASTS AS TO EVENTS THAT OCCUR IN THE FUTURE ARE BASED UPON
THE BEST JUDGMENT OF THE COMPANY'S MANAGEMENT AS OF THE DATE OF THIS MEMORANDUM.
WHETHER SUCH ESTIMATES OR FORECASTS MAY BE ACHIEVED WILL DEPEND UPON THE COMPANY
ACHIEVING ITS OVERALL BUSINESS OBJECTIVES AND THE AVAILABILITY OF FUNDS
INCLUDING FUNDS FROM THE SALE OF THE SECURITIES OFFERED HEREBY. THERE IS NO
GUARANTEE THAT ANY OF THESE FORECASTS WILL BE ATTAINED. ACTUAL RESULTS WILL VARY
FROM THE FORECASTS AND SUCH VARIATIONS MAY BE MATERIAL.
THE COMPANY MAY ACCEPT OR REJECT ANY OFFER TO PURCHASE THE SECURITIES DESCRIBED
HEREIN, IN WHOLE OR IN PART, FOR ANY REASON, AND THE COMPANY MAY WITHDRAW OR
CANCEL THE OFFERING WITHOUT NOTICE. AFFILIATES OF THE COMPANY MAY ACQUIRE
SECURITIES IN THIS OFFERING.
THE COMPANY RESERVES THE RIGHT TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN
THE AMOUNT OF SHARES SUCH INVESTOR DESIRES TO PURCHASE.
THE COMPLETION OF EACH PURCHASE AND SALE OF THE SHARES WILL BE AT A PLACE AND
TIME SPECIFIED BY THE COMPANY AND IN ACCORDANCE WITH THE PROVISIONS IN THE FORM
OF THE SUBSCRIPTION AGREEMENT.
STATE NOTICE REQUIREMENTS
NOTICE TO NEW JERSEY RESIDENTS
THIS CONFIDENTIAL OFFERING MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE
NEW JERSEY BUREAU OF SECURITIES PRIOR TO ITS ISSUANCE AND USE. THE BUREAU OF
SECURITIES OF THE STATE OF NEW JERSEY HAS NOT PASSED ON OR ENDORSED THE MERITS
OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO NEW YORK RESIDENTS
THIS PRIVATE OFFERING MEMORANDUM HAS NOT BEEN REVIEWED BY THE ATTORNEY
GENERAL PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE
OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATIONS TO THE CONTRARY IS UNLAWFUL.
NOTICE TO FLORIDA RESIDENTS
IF SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA, THE FOLLOWING PROVISIONS
WILL APPLY:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES ACT IN
RELIANCE UPON EXEMPTION PROVISIONS CONTAINED THEREIN. ss.517.061(11)(A)(5) OF
THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT (THE "FLORIDA act") PROVIDES
THAT ANY PURCHASER OR SECURITIES IN FLORIDA WHICH ARE EXEMPTED FROM REGISTRATION
UNDER ss.517.061(11) OF THE FLORIDA ACT MAY WITHDRAW HIS SUBSCRIPTION AGREEMENT
AND RECEIVE A FULL REFUND OF ALL MONIES PAID, WITHIN THREE BUSINESS DAYS AFTER
HE TENDERS CONSIDERATION FOR SUCH SECURITIES. THEREFORE, ANY FLORIDA RESIDENT
WHO PURCHASES SECURITIES IS ENTITLED TO EXERCISE THE FOREGOING STATUTORY
RESCISSION RIGHT WITHIN THREE BUSINESS DAYS AFTER TENDERING CONSIDERATION FOR
THE SECURITIES BY TELEPHONE, TELEGRAM, OR LETTER NOTICE TO THE PRESIDENT AT THE
ADDRESS OR TELEPHONE NUMBER SET FORTH ON THE COVER PAGE HEREOF. ANY TELEGRAM OR
LETTER SHOULD BE SENT OR POSTMARKED PRIOR TO THE END OF THE THIRD BUSINESS DAY.
A LETTER SHOULD BE MAILED BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE
ITS RECEIPT AND TO EVIDENCE THE TIME OF MAILING. ANY ORAL REQUESTS SHOULD BE
CONFIRMED IN WRITING.
AVAILABLE INFORMATION
The information set forth herein should be read together with, and is
qualified in its entirety by reference to the information contained in, the
exhibits hereto. Prospective investors should read the exhibits hereto,
including financial statements, in their entirety. To the extent that such
information is not consistent with the information set forth herein, the
information herein will be deemed superseded by the information contained in
such exhibits.
CONFIDENTIALITY
The information contained in this Memorandum is confidential and
proprietary to the Company and is being submitted to prospective investors
solely for such investors' confidential use with the express understanding that,
without the prior written permission of the Company, such prospective investors
will not release this document or discuss the information contained herein or
make reproductions of or otherwise use this Memorandum for any purpose other
than evaluating a potential investment in the securities described herein. This
Memorandum contains certain financial and other information (incorporated by
reference or otherwise) concerning the Company which is material non-public
information and should be treated as confidential. Receipt and acceptance of
this Memorandum constitutes the recipient's acknowledgment that the information
contained herein will be maintained in strict confidence by the recipient and
will not be disclosed to any third parties.
A prospective investor, by accepting delivery of this Memorandum, further
agrees to promptly return to the Company this Memorandum and any other documents
or information furnished if the prospective investor elects not to purchase any
of the securities described herein or upon request of the Company.
INDEPENDENT EVALUATION
This Memorandum does not purport to be all-inclusive or to contain all of
the information that a prospective investor may desire in evaluating an
investment in the securities of the Company. Prior to the consummation of the
offer and sale of any of the securities described herein, the Company will
afford prospective investors an opportunity to ask questions of and receive
answers from the Company concerning the terms and conditions of the securities
described herein, the Company or other relevant matters and to obtain additional
information to the extent the Company possesses such information or can acquire
it without reasonable effort or expense. Any such questions should be directed
to Xxxxxx X. X'Xxxx III, President and Chief Executive Officer, or Xxxxx X.
XxXxxxxx, Secretary of E*Machinery, Inc., at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxx
Xxxxxx 00000, (000) 000-0000 or by facsimile at (000) 000-0000. No person or
entity has been authorized to give any information or to make representations
about the Company or the Offering and, if given or made, any such information or
representation by any other person or entity must not be relied upon as having
been authorized by the Company. Each prospective investor must conduct and rely
on his own evaluation of the Company and the terms of the Offering (including
the merits and risks involved) in making an investment decision with respect to
the securities described herein. Investment in the Shares involves a high degree
of risk. See "RISK FACTORS."
TERMS OF THE OFFERING
GENERAL
2,500,000 shares of Common Stock, $.0001 par value per share ("Shares") are
being offered to "Institutional Investors"; provided, however, that offers and
sales may be made to "Accredited Investors" and a limited number of
"Non-Accredited Investors" as those terms are defined in
Regulation D and Rule 501 promulgated under the Securities Act of 1933, as
amended (the "Securities Act") upon the written consent of the Company at a
price of $.40 per share on a best efforts "all or none" basis. This Offering
will remain open until March 23, 2000. The Company reserves the right to reject
any subscription, to accept one subscription over another, and to allocate
available Shares among subscribers as it deems appropriate.
SUBSCRIPTION PAYMENTS
The purchase price of the Shares subscribed for must be paid for by cash,
check or wire transfer. All checks are to be made out to "Levy & Levy, P.A.
Attorney Trust Account." The minimum investment per investor is 500,000 shares
($200,000), although the Company may, in its discretion, accept subscriptions
for lesser amounts.
RESTRICTIONS ON TRANSFERABILITY
The securities described herein are: (i) not registered under the
Securities Act or the securities laws of any state; and (ii) are being offered
and sold in reliance upon exemptions from the registration provisions of federal
and state securities laws. Investors purchasing such securities will, therefore,
not be able to resell or otherwise transfer such securities in the absence of
registration under the Securities Act or unless an exemption from the
registration requirements thereof is made available. Additionally, all
applicable state laws requiring registration or qualification must also be
satisfied before any resale or transfer of the securities is permitted.
INVESTOR SUITABILITY STANDARDS
The Shares will only be sold to "Institutional Investors" provided,
however, that Shares may be sold to "Accredited Investors" and a limited number
of "Non-Accredited Investors" within the meaning prescribed by Regulation D and
Rule 501 promulgated under the Securities Act upon the written consent of the
Company.
Each investor will be required to represent that the investment is suitable
for him, that he is purchasing the Shares for investment and not with a view to
a distribution or resale, and that he is purchasing the Shares for his own
account and not for the account of others. The Company may require additional
information with respect to any subscriber. Subscription information will be
used by the Company to determine whether or not to accept subscriptions and will
be kept confidential and not disclosed except to counsel and, if required, to
governmental and regulatory authorities. the Company reserves the right, in its
sole discretion, to reject any subscription or to accept one subscription over
another.
PLAN OF DISTRIBUTION
The Company is offering the securities described herein on a "best efforts"
basis. If the Company is not successful in obtaining subscriptions for the
amount offered hereby, all funds in the Trust account will be promptly
returned to the subscribers in full without deduction or interest. The Company
reserves the right to accept or reject subscriptions from any individual or
entity at any time prior to Closing.
FURTHER INFORMATION
At their request, prospective investors will have the opportunity to meet
with and ask questions of the Officers and Directors of the Company concerning
the Company, its operations and prospects and the terms and conditions of the
Offering. The Company will provide prospective investors with such further
information as they may reasonably request to supplement the information
contained in this Memorandum. Prospective investors are urged to avail
themselves of this opportunity. All such additional information is considered
confidential and proprietary information of the Company and is subject to the
confidentiality restrictions applicable to the Memorandum. See "INDEPENDENT
EVALUATION".
THE OFFERING
Securities Offered: The Company is offering 2,500,000 shares of
its Common Stock, $.0001 par value per
share (the "Shares") to Institutional Investors (as
well as to "Accredited Investors" and a limited
number of "Non-accredited Investors" as permitted
by this Memorandum) pursuant to this Private
Placement Memorandum (this "Memorandum").
Minimum Purchase: Unless otherwise agreed to by the Company, the
minimum purchase by each prospective investor is
500,000 Shares.
Capital Stock Outstanding
Prior to Offering: Approximately 9,435,000 shares of Common
Stock as of March 6, 2000. Upon completion of the
Offering, the Company will have 11,935,000 shares
of Common Stock issued and outstanding prior to the
acquisition, if any, by e*xxxxxxxxx.xxx, inc.
Voting Rights: Each share of Common Stock has one vote.
Risk Factors: An investment in the Shares involves a high degree
of risk and should only be undertaken by
investors able to lose their entire investment.
Prospective investors should review carefully and
consider the factors described under "RISK
FACTORS".
Use of Proceeds: All of the net proceeds to the Company will be used
for general corporate purposes and for working
capital.
Registration Rights: If the Company is successfully acquired by
e*xxxxxxxxx.xxx, inc., then the Company and because
of the acquisition, e*xxxxxxxxx.xxx, inc., would
be obligated to file a Registration Statement on
Form S-3 or Form SB-2 within ninety days after
Closing to register solely the 2,500,000 shares
being sold herewith. Thereafter, the Company will
use its best efforts to effectuate the
effectiveness of such a Registration Statement.
In addition, if necessary, the Company shall give
unlimited piggyback registration rights.
RISK FACTORS
Purchase of the securities offered hereby involves a high degree of risk
and must be considered a speculative investment. An investment in the securities
is suitable only for persons of adequate means, who have no need for liquidity
in their investment, who can afford the loss of their entire investment and who
are "Institutional Investors " or who meet the accredited investor requirements
of Regulation D promulgated under the Securities Act or a limited number of
non-accredited investors. Prospective investors should, prior to any purchase of
the Shares, carefully consider the following risk factors, as well as the other
information contained in this Memorandum, attached hereto as Exhibits and
incorporated by reference herein.
1. OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT.
We were incorporated in November 1999. Accordingly, we have a limited
operating history upon which to evaluate our operations and future prospects. In
addition, our revenue model is evolving and relies substantially upon the growth
of e-commerce spending on the Internet and our ability to become a full-service
Internet company. As an early stage company in a new and rapidly evolving
market, we face risks and uncertainties relating to our ability to successfully
implement our business plan, which are described in more detail below. We may
not successfully address these risks.
2. WE HAVE NOT BEEN PROFITABLE AND MAY NOT BECOME PROFITABLE, IN WHICH EVENT OUR
BUSINESS WOULD BE ADVERSELY AFFECTED.
To date, we have not been profitable. We may never be profitable, or, if we
become profitable, we may be unable to sustain profitability. We expect to
continue to incur losses for the foreseeable future because we expect to
continue to spend significant resources to expand our business.
3. IF THE DEMAND FOR WORLDWIDE PURCHASE AND SUPPORT SERVICES FOR THE HEAVY
EQUIPMENT INDUSTRY DECREASES, OUR BUSINESS WILL BE HARMED.
Our success depends in part on the increased acceptance of online business
to business e- commerce, for such services has only recently begun to develop
and is evolving rapidly. The market for our services may not grow and any growth
may not be sustained.
4. OUR SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT VISITORS TO E*XXXXXXXXX.XXX
WEBSITE.
Our future success depends upon our ability to continue to attract and
retain visitors, members, advertisers, licensees and other service related
suppliers such as banks and insurance companies. If we are unable to attract
these visitors, the effectiveness of our business, results of operations and
financial condition would be materially adversely affected.
5. WE MAY FACE SIGNIFICANT COMPETITION.
The market for Internet services is intensely competitive. We expect
competition in our market to continue to intensify as a result of increasing
market size, greater visibility of the market opportunity for Internet services
and minimal barriers to entry. Industry consolidation may also increase
competition. We compete with many types of companies, including both online and
offline companies, search engine and other Internet portal companies, a variety
of Internet-based advertising networks and other companies that facilitate the
marketing of products and services on the Internet. Many of our existing
competitors, as well as a number of potential new competitors, have longer
operating histories, greater name recognition, larger client bases and
significantly greater financial, technical and marketing resources than we do.
This may allow them to compete more effectively and be more responsive to
industry and technological change than us. We may not be able to compete
successfully and competitive pressures may reduce our revenues and result in
increased losses or reduced profits.
6. OUR BUSINESS MAY SUFFER IF WE ARE UNABLE TO RETAIN KEY PERSONNEL.
Our future success is substantially dependent upon the continued service of
our founders, Xxxxxx X. X'Xxxx, III, Chief Executive officer, and Xxxxxx X.
Xxxxxxxx, Vice President, and other executive officers. The loss of the services
of any of our executive officers could have a material adverse affect on our
business. We do not currently have "key person" life insurance policies on any
of our employees. We have employment agreements only with the founders.
Competition for senior management is intense, and we may not be successful in
attracting and retaining key personnel.
7. THE INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, AND ANY
INFRINGEMENT ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, COULD ADVERSELY
AFFECT OUR BUSINESS.
Third parties may infringe or misappropriate our patents, trademarks or
other intellectual property rights, which could have a material adverse effect
on our business, results of operations or financial condition. The actions we
take to protect our trademarks and other proprietary rights may not be adequate.
In addition, the validity, enforceability and scope of protection of proprietary
rights in Internet-related industries is uncertain and still evolving.
Third parties may assert infringement claims against us. Any claims and any
resulting litigation, should they occur, could subject us to significant
liability for damages. In addition, even if we prevail, litigation could be
time-consuming and expensive to defend, and could result in the diversion of our
time and attention. Any claims from third parties may also result in limitations
on our ability to use the intellectual property subject to these claims unless
we are able to enter into contractual arrangements with the third parties making
these claims, which arrangements may not be available on commercially reasonable
terms.
8. PRIVACY AND SECURITY CONCERNS MAY CAUSE CUSTOMERS NOT TO PARTICIPATE IN
OUR PORTAL/WEBSITE WHICH WOULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS.
An important feature of the services we provide our clients is our ability
to develop and maintain a data base and other information about customers
participating in our portal. Privacy and other security concerns may cause
customers to resist providing us with business and personal data, which would
reduce the value of our services. Moreover, privacy and security concerns may
inhibit customer acceptance of the Internet as a means of commerce. If privacy
and other security concerns of customers are not adequately addressed, our
business would be materially adversely affected.
9. OUR GROWTH WILL DEPEND ON THE GROWTH OF INTERNET USAGE.
We depend on continued growth in the use of the Internet by businesses and
customers. If electronic commerce does not grow or grows more slowly than
expected, the use of the Internet by businesses may decline or grow more slowly
than anticipated. Even if Internet usage grows, the Internet infrastructure may
not be able to support the demands placed on it and its performance or
reliability may decline.
10. WE MAY BE UNABLE TO RESPOND TO TECHNOLOGICAL CHANGE EFFECTIVELY.
Our industry is characterized by rapid technological change, frequent new
service introductions, changing consumer demands and evolving industry standards
and practices. Our inability to anticipate and effectively respond to these
changes on a timely basis would materially adversely affect our business,
results of operations and financial condition. Our future success will depend,
in part on our ability to cost-effectively adapt to rapidly changing
technologies, to enhance existing services and to develop and introduce a
variety of new services to address changing demands of customers and our clients
on a timely basis.
11. THE FAILURE OF OUR COMPUTER OR COMMUNICATIONS SYSTEMS MAY ADVERSELY
AFFECT OUR BUSINESS.
Our business depends on the efficient and uninterrupted operation of our
computer and communications systems. Any system failure, including network,
software or hardware failure, that causes an interruption in our service or
decreases the responsiveness of our portal or website could materially adversely
affect our business.
12. LAWS AND REGULATIONS PERTAINING TO THE INTERNET MAY ADVERSELY AFFECT OUR
BUSINESS
There are an increasing number of laws and regulations pertaining to the
Internet. These laws and/or regulations may relate to liability for information
retrieved from or transmitted over the Internet, online content regulation, user
privacy, taxation and the quality of products and services. Moreover, the
applicability to the Internet of existing laws governing intellectual property
ownership and infringement, copyright, trademark, trade secret, obscenity,
libel, employment, personal privacy and other issues is uncertain and
developing. Any new law or regulation pertaining to the Internet, or the
application or interpretation of existing laws, could decrease the demand for
our services, increase our cost of doing business or otherwise have a material
adverse effect on our business, results of operations and financial condition.
13. ARBITRARY DETERMINATION OF OFFERING PRICE
The offering price of the Shares was arbitrarily determined by the Company
and does not necessarily bear any relationship to the Company's asset value, net
worth or other established criteria of value.
14. DEPENDENCE UPON OFFERING
The Company has limited working capital and may be dependent upon the
proceeds to be realized from this offering to fulfill its business operations.
15. VOTING CONTROL BY MANAGEMENT; POTENTIAL ANTI-TAKEOVER EFFECT
After giving effect to this offering Management will beneficially own over
50% of the outstanding shares. Accordingly, they may, by themselves, have
sufficient shares to be able to approve major corporate transactions including
amending the Certificate of Incorporation of the Company, the sale of
substantially all of the Company's assets, the election of all of the directors
of the Company and to control the Company's change in control of the Company and
may adversely affect at the rights of the shareholders of the Company. In
addition, the Company is subject to a State of Texas statute regulating business
combinations which may also hinder or delay a change or control.
THE COMPANY
We believe that throughout the world, businesses are seeking industry focused or
specific portals. Customized portals will soon be a consumer expectation of
business to business Internet users. In brief: Access to the Internet and the
company Intranet will come through web sites, networks, and customized software
designed to serve up information relevant to the company and to the industry of
which it is a part.
It is our intention therefore to design, host, manage , maintain, and constantly
update a vertically integrated portal that will not only provide interplay
between the major manufacturers, distributors, and providers of supportive goods
and services to the heavy equipment industry, but will also provide our members,
licensees, and business partners access to their own company wide intranets, and
other destinations on the web.
We do not know of any company or web page on the Internet that offers the scope
of what we can create, namely that focuses on a specific, and entire industry.
E*machinery can be the pivot and entry point for immediate, coordinated
transactions of virtually any kind on a daily basis anywhere in the world for
every aspect of the heavy equipment industry.
e*machinery is the fruit of many years of creative energy by founders Xxxxxx X.
X'Xxxx III and Xxxxxx X. Xxxxxxxx. e*machinery is a system whose components were
specifically crafted to benefit both buyers and sellers of heavy machinery, as
well as the banks, leasing companies, insurance companies and other industries
associated with heavy machinery worldwide.
Xxxxxx X. X'Xxxx III has built strong working relationships with equipment
buyers and financial institutions to assist his family of customers in acquiring
the necessary machinery to complete their projects. Working the International
markets both as an independent businessman and later as Vice President-Chief
Operating Officer and Director of International Sales for Hoss Equipment
Company, has given Xx. X'Xxxx a broad knowledge of the heavy equipment market.
Xx. X'Xxxx is experienced in both sales and management with one of the United
States' most profitable Caterpillar dealerships as well as many years in the
construction and mining machinery business, developing the rebuilding and
marketing of major brands of construction and mining machinery such as Komatsu,
Hitachi and VME.
Xx. X'Xxxx'x bilingual talents will give e*machinery a head start in the vast
Latin American marketplace based on his strong personal and business
relationships with contractors and mining companies, suppliers, end users and
government agencies.
Making customer satisfaction the primary focus helped to develop the e*machinery
formula which stands to change the way construction and mining machinery is
bought and sold in the future. This formula consists of bridging the customer to
a multifaceted web based portal specializing in business to business e-commerce
in the construction and mining industry, and then offering both buyers and
sellers access to pivotal support services.
Companies that sell construction and mining machinery will benefit from the
following services:
o Photos and basic descriptions placed in the Internet for viewing by
our buying members 24hours a day / 365 days a year.
o An informative web page for their company
o E-mail links to specified personnel within their company
o e*machinery's advertising ultimately increases traffic to the site
which increases a seller's potential exposure.
o Sellers receive the e*machinery Hit List which gives them the contact
information of potential buyers looking for specific machines. This
service sends information via e-mail on a daily basis in order to
assist the seller with a warm lead.
Buyers of construction and mining machinery will benefit from the following
services:
o Access to news and information from the e*machinery web site 24 hours
a day / 365 days a year to include all major manufactures and dealers
worldwide.
o Access to updated machinery listings, including photos
o Buyers can receive listings of specific available machines via e-mail
or fax on a daily basis.
o Domestic and foreign financial services.
o Immediate reaction time and trained professionals.
Hard copy advertisers provide exposure to limited number of subscribers, and
information is usually a minimum of 3 weeks old before it reaches the
prospective buyer.
e*machinery will be updated daily and reach around the globe, 24 hours a day /
365 days a year.
e*machinery will be designed to show all inventory available, updated on a daily
basis. Unlimited specifications and photographs will be available at the click
of a mouse. Buyers historically must spend hours digging through pages of ads
unrelated to their search.
e*machinery will focus the buyers' search to the machines they want to see.
Sharp declines in market trends can happen overnight and hard copy advertisers
will usually have to wait a minimum of 3 weeks to react to these sharp declines.
Which may lead to money lost.
e*machinery will alert its members immediately to market trends.
Today, companies are pouring millions of dollars into web based advertising and
promotion. e*machinery will provide a full-stop shopping portal for the
construction and mining machinery industry. e*xxxxxxxxx.xxx, our web site, will
xxxxxx business to business e-commerce for construction and mining machinery.
e*xxxxxxxxx.xxx, our portal's web site address, will bridge the gap that has
separated construction and mining machinery buyers and sellers for years. By
harnessing the power of the World Wide Web, e*machinery will provide its members
with the finest customer service and value. Increasing profits through decreased
advertising costs for sellers and decreasing acquisition costs through time
savings for buyers, e*machinery is the model of the future for construction and
mining machinery. It will be the entry point on the web for all those interested
in any aspect of the heavy machinery industry.
E*MACHINERY'S RELATIONSHIP WITH CANTERBURY INFORMATION TECHNOLOGY, INC.
In order to design, develop, host, maintain and evolve its Internet based
portal, e*machinery has been working with Canterbury Information Technology,
Inc., a Nasdaq National Market company (CITI) since last July.
The Canterbury Companies have historically provided a variety of computer and
management training programs and technology consulting services which are
marketed to Fortune 1000 companies. CALC/Canterbury Corp. offers computer
software training and is a Microsoft Solutions Provider and Certified Technical
Education Center. CALC/Canterbury Corp. also offers training for Lotus, Apple,
SBT and Corel. USC/Canterbury Corp. is a premier value added reseller of
hardware and software and also provides training and network design.
MSI/Canterbury Corp. offers sales and management training and consulting to
corporations nationwide. ATM/Canterbury Corp., is a software consulting and
development company that created MasterTrak, a records management software
tracking program; and EasyImage, which allows a document to be automatically
scanned, indexed and linked through a network to desktop PCS.
The Internet addresses for the Canterbury Companies are:
o Corporate - xxx.xxxxxxxxxxxxxx.xxx.
o CALC/Canterbury Corp. - xxx.xxxx.xxx
o USC/Canterbury Corp. - xxx.xxxxxxxxxx.xxx
o ATM/Canterbury Corp. - xxx.xxxxxx.xxx; and
o MSI/Canterbury Corp. - xxx.xxxxxxxx.xxx.
CALC/Canterbury Corp. is a Microsoft Technical Education Center as well as a
Microsoft Authorized Testing Center, as well as an Authorized Education Center
for Lotus and others. CALC is also a corporate computer consulting company. CALC
Web University, a division of CALC, is now offering its first course online on
its own web site for distribution worldwide.
ATM/Canterbury Corp. through its MasterTrak and EasyImage applications can scan
and access over PC's anywhere in the world file room documents or physical
inventory ranging from parts to huge machines.
Both of these Canterbury Information Technology, Inc. subsidiaries have been
working since July with e*machinery and will continue to do so in order to
provide state of the art Internet based products and services both for
e*machinery's portal, and for any members, licensees or customers of
e*machinery.
Because of its strong belief in the e*machinery concept and its trust in the
management of e*machinery Canterbury has agreed:
o to permit its President and Executive Vice President to sit on
e*machinery's Board of Directors
o to accept payment for a substantial part of its technology services in
e*machinery's common stock if and when e*machinery is a public company
o to permit its President and Executive Vice President to work with
e*machinery in the areas of finance, accounting and corporate
administration.
o to permit both Canterbury's President and Executive Vice President to
be significant stockholders in e*machinery.
COMPETITION
Although the Company believes that no existing Internet portal is currently
offering the depth of products and services for any specific industry that
e*machinery, inc. expects to offer for the heavy machinery industry, there is
potential competition both on and off the Internet at this time.
Potential Competitors would include:
Verticalnet
Netgateway
Yahoo
Ariba
American Online
Stores
Machinery Trader
Point2
Global Sourcing Network
GUIA
Centrack
xxxxx.xxx
My Little Salesman
Equipment Central
Tradeyard
Iron Planet
Xxxxxxx.xxx
Xxxxxxxx.xxx
Online Asset Exchange
U.S. MACHINERY CORP.
Custom Rebuilt & Certified Rebuilt Machinery Program
Global Marketing Alliances
The strength of e*xxxxxxxxx.xxx will be grounded in business relationships
established around the world. Unlike other web based machinery sites who attempt
to sell machines by simply showing listings and pictures on a computer screen,
people sell machines on e*xxxxxxxxx.xxx With over 20 years of combined
experience in the industry, including working for Caterpillar dealers and
independent used equipment companies, e*xxxxxxxxx.xxx knows the heavy machinery
business. Key international relationships have been built in Japan, Canada,
China, Great Britain, Latin America and the Middle East. Through many of these
relationships, e*xxxxxxxxx.xxx will quickly have a presence (in their native
language) throughout the world.
Another advantage that e*xxxxxxxxx.xxx has in the international market is the
strong relationship that has been built by its founders with the United States
Export-Import Bank. This relationship should put e*xxxxxxxxx.xxx ahead of
individual companies in working on government guaranteed loans for export of
heavy machinery.
Custom Rebuilt Machinery
U.S. Machinery Corp. (USMC) is a separate division of e*machinery, inc. that is
focused on the rebuilding and marketing of construction and mining machinery.
Utilizing relationships with Caterpillar dealers, USMC can offer like new
machinery with a warranty at a fraction of the cost of new. This is a tremendous
advantage for contractors and mining companies. They can upgrade their fleets at
a lower cost without the risk of buying used machines without a warranty. The
following pages give more information regarding rebuilding, refurbishing and
U.S. manufactured construction and mining machinery.
U.S. Machinery Corp.
Existing working relationship with local Caterpillar Dealer
Cooperation from U.S. Financial Institution to work with U.S.M.C. in Mexico.
U.S. Machinery Corporation has established good working relationship with the
U.S. Export Import Bank.
Experienced in rebuilding and marketing rebuilt machinery
Strength of U.S. Machinery Corp.
U.S. Machinery Corporation's Custom Rebuild Program is the answer to having
quality machinery with a warranty. Often these machines can be purchased for
half the cost of new.
We use only genuine Caterpillar parts on our custom rebuild program machines.
Once rebuilt, the machines are processed through a state-of-the-art blast and
paint facility which provides factory quality painting.
Warranty Options Available
1 year/2000 hour powertrain
2 year/10,000 hour powertrain
Customer Rebuilt/Certified Rebuild
1.The type of machinery we offer in this program will include:
Wheel loaders, dozers, excavators, wheel dozers, scrapers, motorgraders and
end dump trucks.
2. The specific models of machinery primarily offered are:
Wheel loaders
992C & D
988F
980F
966F
Dozers - Track Type Tractors
D11N
D10N
D9N
D8N
Pipelayers
594
583
572
Excavators
245B/375L
235D/350L
Wheel Dozers
992/690
B34B
824B
Scapers/Motor Scrapers
657E/651E
637E/631E/633E
F. Motor Graders
16G
14G
140G
G. End Dump Trucks
5. 785B
6. 777B&C
7. 773B
8. 769C
Core Criteria
A. Not over 25,000 total frame hours
B. No pitting or corrosion
C. Not over 7 years old (Custom Rebuild)
D. Not over 10 years old (Certified Rebuild)
E. Preferably U.S. serial numbered units
F. Within Core pricing sheet
G. No major plating or breaks in frames (chassis or frame)
*All cores should be thoroughly inspected so that rebuild pricing can be
determined at time of acquisition.
How will e*xxxxxxxxx.xxx's "Intranationalnet"(TM) work?
All machinery that I listed within the "vortal" will be assigned a stock number
through the inventory training system, designed by MasterTrak. This information
will be connected to a common database that will be controlled by the technical
staff at CALC/Canterbury, a wholly owned subsidiary of Canterbury Information
Technology, Inc., a National Market Nasdaq public company in Medford, NJ.
CALC/Canterbury's President Xxxx Xxxxxx will direct all "Vortal" development and
work closely with ATM/Canterbury President Xxxx XxXxxxxx in developing the
MasterTrak software to be tailored to e*xxxxxxxxx.xxx's "Vortal" database that
will drive the Intranationalnet (TM) on the World Wide Web.
Licensing Agreements:
e*machinery, inc. has commenced qualifying Construction & Mining Machinery sales
companies around the world so that licensing agreements can be in place and
executed no later than the end of the first quarter 2000, of which there is no
assurance. One of the most important goals is to have a world wide sales force
that shares each others inventories to immediately satisfy a customer's needs.
This multifaceted sales force must qualify through criteria determined by the
management of e*machinery, inc. as follows:
1. Be well known in their area of the Industry with excellent customer
relations and reputation.
2. Have a substantial inventory of quality Construction and Mining Machinery
dedicated to their niche of the Industry.
3. Ability to supply parts & service and product support to their customer
base and/or have relationships to subcontract.
4. Provide Guarantees/Warranties specifically tailored to their customers'
needs.
5. Sign a quality assurance contract with e*xxxxxxxxx.xxx to insure our
customers that they can purchase Construction & Mining Machinery with
confidence.
6. Ability to help qualified customers obtain financing or lease options in
their designated areas or territories.
7. Ability to secure Sea, Air or Land transportation that makes sense for
their area of territory with respect to the customer's purchases.
8. Ability to perform or contract a qualified technical analysis of
Construction & Mining Machinery and stand behind their reports.
9. Ability to perform or contract a qualified appraisal of one or a whole
fleet of Construction & Mining Machinery in their niche of the market.
10. Ability to perform or contract qualified residual values based on market
value and condition reports of Construction & Mining Machinery, in their
niche of the market.
11. Be able to provide text and speak to their area or territories.
12. Help implement the education of our customers with industry related cases
given by e*xxxxxxxxx.xxx over the Internet, through CALC/Canterbury.
By the end of 2001 we hope to have e*xxxxxxxxx.xxx working on all Continents to
include 36 countries and in 16 languages.
Major Manufacturer:
The "Vortal" will be designed to work with Major Manufacturers throughout the
world. One of the main objectives for e*xxxxxxxxx.xxx is to expose the assets &
services of these Major Manufacturer's and their Dealer/Distribution Sources. We
must vertically integrate their existing web sites, interactively and three
dimensionally so that they will gain greater exposure to prospective buyers by
being one of the elite clients of the industry focused "Vortal" e*xxxxxxxxx.xxx.
Independent Dealers/leasing and rental agencies.
The major manufacturers of Construction & Mining Machinery have a stranglehold
in the market for new sales but there exists a huge multi-billion dollar
worldwide market for rebuilt and used Construction & Mining Machinery. Rental
companies, used equipment dealers, leasing agencies should be very interested in
joining our vortal.
These companies should benefit greatly by being part of the clientele of
e*xxxxxxxxx.xxx. The international exposure should take these companies to new
revenue heights. Also having their inventory on our Intranationalnet (TM) will
be adding a multifaceted, multilingual sales force to their current sales force.
Membership has its privileges and its costs. A small commission is proposed to
be deducted from each sale that is executed through the e*xxxxxxxxx.xxx family.
A percentage will stay with e*xxxxxxxxx.xxx and the rest will go to the licensed
sales organization. Through MasterTrak we will know who does what and when,
Through MasterTrak, a wholly owned subsidiary of Canterbury Information
Technology, Inc., the tracking of that information is virtually limitless and
the access of that database should be effortless.
The e*xxxxxxxxx.xxx site map will provide quick access to important sites within
our industry. The Site Map will include manufacturers, financial institutions,
transportation companies and government agencies that are an integral part of
the global machinery market. Up to the minute construction and mining news
should be available 24 hours a day by clicking the link at the top of the page.
This will provide members insight into the industry at the click of a mouse.
The full version of e*xxxxxxxxx.xxx will bring up to the minute auction results,
bid letting and other information to draw visitors to the site again and again.
Large photos and descriptions will highlight the machinery information that we
make available to our visitors. It is enough information to get them to call and
request more, giving a sales staff an opportunity to talk to a warm lead every
time.
The e*xxxxxxxxx.xxx navigational bar stays at the top of the screen during the
entire visit at the site. This makes it easy to jump from one section to another
without numerous steps.
LEGAL PROCEEDINGS
None.
SIGNIFICANT INFORMATION
Potential investors are urged to review as part of this Memorandum the documents
concerning Financial Statements, management of the Company, biographies,
employment contracts, compensation, principal shareholders and other important
investment information.
REGISTRATION RIGHTS
If the Company is successfully acquired by e*xxxxxxxxx.xxx, inc., then the
Company and because of the acquisition, e*xxxxxxxxx.xxx, inc., would be
obligated to file a Registration Statement on Form S-3 or Form SB-2 within
ninety days after Closing to register solely the 2,500,000 shares being sold
herewith. Thereafter, the Company will use its best efforts to effectuate the
effectiveness of such a Registration Statement. In addition, if necessary, the
Company shall give unlimited piggyback registration rights.
Profit Centers of
e*machinery, inc.
LICENSING AGREEMENTS
Major Manufacturers of Construction and Mining Machinery
International Agencies and Trading Companies
Domestic Agencies and Trading Companies
ANNUAL MEMBERSHIP FEES FROM CUSTOMER BASE
Manufacturers of Machinery
Distributors/Dealers of New and Used Construction and Mining Machinery
Rental/Leasing Companies
Transportation Companies
Lending Institutions
Import-export Banks (Worldwide)
Software Companies
CONSULTING
Appraisal of Construction * Mining Machinery
Needs Analysis
Dealers/Distributors
Rental/Leasing Companies
Contractors
Acquisitions of machinery for specific customers
Educational & Research Reports
AS AGENT FOR DEALERS/DISTRIBUTORS/TRADING COMPANIES
ADVERTISING REVENUE
Manufacturers of Construction and Mining Machinery
Retailers of Rebuilt and Refurbished Machinery
Banks
Leasing Companies
Insurance Companies
Retail Dealerships
Educational Providers
Other Non-related Advertisers
U.S. Machinery Corp.
E*MACHINERY, INC.
BALANCE SHEET
FEBRUARY 29, 2000
Cash and cash equivalents $ 737,000
Receivable - shareholder 50,000
---------
Total current assets $ 787,000
Developed software costs $ 521,500
---------
Total assets $1,308,500
==========
Accounts payable and accrued expenses 576,857
---------
Total liabilities 576,857
Common stock 943
Additional paid in capital 734,057
Retained earnings (3,357)
---------
Total equity 731,643
---------
Total liabilities and equity $1,308,500
==========
USE OF PROCEEDS
Legal/Accounting $ 50,000
Working capital requirements 950,000
----------
Total Usage $1,000,000
==========
MANAGEMENT
OFFICERS
Xxxxxx X. X'Xxxx, III President, Chief Executive Officer
Xxxxxx X. Xxxxxxxx Vice President, Treasurer
Xxxxx X. XxXxxxxx Secretary
DIRECTORS
Xxxxxx X. X'Xxxx, III
Xxxxxx X. Xxxxxxxx
Xxxxx X. XxXxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxxx
XXXXXX X. X'XXXX, III has been the President, Chief Executive Officer and
a Director of E*Machinery, Inc. since its inception. From 1992 through the
inception of E*Machinery, Inc. in 1999, Xx. X'Xxxx was employed in various
capacities by Hoss Equipment Company, one of the largest used equipment dealers
in the United States. From 1998 through 1999, he was Vice President, Chief
Operating Officer and International Sales Director; in 1997, he was Vice
President of Sales, both domestic and international; and from 1992 through 1996,
he was International Sales Director. From 1990 through 1991, he was a consultant
with Industrial Metals Company and Liberty Iron & Metals to dismantle and
re-sell the major assets of Lafarge Corporation cement processing plant located
in Fort Worth, Texas. From 1986 through 1990, he traveled extensively throughout
Latin America, as well as Mexico, employed by three (3) major dealers of
Caterpillar equipment. He also, during this period, was a consultant for five
(5) construction companies in Mexico with regard to the utilization of heavy
construction machinery. From 1980 through 1985, he was employed by Xxxx
Equipment Company, Inc., a North Texas and Oklahoma Caterpillar dealership. Xx.
X'Xxxx filed a personal bankruptcy petition in February 1999 as a precautionary
measure against an individual alleged creditor. The validity and enforceability
of such debt is presently being vigorously litigated.
XXXXXX X. XXXXXXXX has been a Director of E*Machinery, Inc. since its
inception and will be Vice President and Treasurer of the company as of early
February, 2000. From 1994 to date, Xx. Xxxxxxxx is Marketing Director of
International Sales for Hoss Equipment Company. In 1994, he worked for Xxxxx
Xxxxxx Machinery Company as Advertising and Marketing Director. From 1993
through early 1994, he was Sales and Customer Service Director for Dalworth
Corporate Cleaning Company. From 1990 through 1993, he was employed as General
Manager of the retail division for Parkway Paging Company. From 1987 through
1989, he was the Municipal Court Police Liaison for the City of Grand Prairie,
Texas. From 1983 through 1986, Xx. Xxxxxxxx attended the Xxxxxxx X. Xxxxx
College of Business at the University of Oklahoma, as well as received a degree
in Advertising from the X.X. Xxxxxxx School of Journalism and Mass
Communications, also at the University of Oklahoma.
XXXXX X. XXXXXXXX, CPA, has been Secretary and a Director of E*Machinery,
Inc. since its inception. Xx. XxXxxxxx is also the Chief Operating Officer,
Executive Vice President and a Director of Canterbury Information Technology,
Inc., a public company listed on National Market NASDAQ, and has been with the
company since 1987. He is a graduate of the University of Delaware (B.S.
Accounting, 1980) and has been a Certified Public Accountant since 1982. From
1980 through 1983, he was an Auditor with the public accounting firm of Coopers
and Xxxxxxx in Philadelphia. From 1984 through 1986, Xx. XxXxxxxx was employed
as a Controller for a New Jersey-based division of Allied Signal, Inc.
XXXXXXX X. XXXXX has been a Director of E*Machinery, Inc. since its
inception. Xx. Xxxxx is the President and Chairman of the Board of Directors of
Canterbury Information Technology, Inc., a NASDAQ National Market public company
that focuses on training and information technology. Xx. Xxxxx was a founder of
the company. He graduated from the Xxxxxxx School of the University of
Pennsylvania (B.S. Economics and Accounting) in 1962. From 1968 through 1981, he
had been President and majority stockholder of Brown, Bailey and Xxxxx, Inc., a
mergers and acquisitions consulting firm that completed more than twenty (20)
transactions. In addition, Xx. Xxxxx has been retained in the past by various
small- to medium-sized public companies in the capacity of an independent
financial consultant.
XXXXX X. XXXXXXXXX has been a Director of e*xxxxxxxxx.xxx, inc. since February,
2000. He is the President of an investment counseling firm: XxXxxxxxxx, Xxxxxxx
& Xxxxxxxxx, Inc., that provides management of more than $1 billion of assets.
He is Chairman of three no-load mutual funds; Founder and Principal of
Closed-End Fund Advisors, Inc.; publisher of Xxxxxxxxx'x Closed-End Fund Digest;
author of several books and a regular panelist on "Wall Street Week with Xxxxx
Xxxxxxxx." For more than 12 years Xx. Xxxxxxxxx was Chief Investment Officer for
an insurance holding company with overall responsibility for managing assets of
$800 million. Before that, he was the Research Director of a major stock
brokerage firm. Xx. Xxxxxxxxx has been and is a Director of Canterbury
Information Technology, Inc. since 1995. He is a graduate of the University of
Notre Dame and Harvard University's Graduate School of Business Administration.
PRINCIPAL STOCKHOLDERS
The following is a list of the shares owned by all the officers, directors,
and more than 5% shareholders:
NUMBER OF SHARES
NAME OF COMMON STOCK
---- ----------------
Xxxxxx X. X'Xxxx, III 4,000,000
Xxxxxx X. Xxxxxxxx 2,000,000
Xxxxxxx X. Xxxxx 2,000,000
Xxxxx X. XxXxxxxx 400,000
Xxxxx X. Xxxxxxxxx 50,000
----------
6,450,000
All remaining shareholders total
2,985,000 Shares 2,985,000
----------
Total Shares outstanding as of March 6, 2000 9,435,000
==========
DESCRIPTION OF SECURITIES
Common Stock
Holders of shares of Common Stock of the Company are entitled to cast one
vote for each share held at all shareholders meetings for all purposes,
including the election of directors, and to share equally on a per share basis
in such dividends as may be declared by the Board of Directors out of funds
legally available therefor. Upon liquidation or dissolution, each outstanding
share of Common Stock will be entitled to share equally in the assets of the
Company legally available for distribution to shareholders after the payment of
all debts and other liabilities. Shares of Common Stock are not redeemable, have
no conversion rights and carry no preemptive or other rights to subscribe to or
purchase additional shares in the event of a subsequent offering. All
outstanding shares of Common Stock are, and the shares offered hereby will be
when issued, fully paid and non-assessable.
Non-Cumulative Voting
The Common Stock does not have cumulative voting rights which means that
the holders of more than fifty percent of the Common Stock voting for election
of directors can elect one hundred percent of the directors of the Company if
they choose to do so.
Dividends
There are no limitations or restrictions upon the right of the Board of
Directors to declare dividends out of any funds legally available therefor. It
is not anticipated that any dividends will be paid in the foreseeable future.
The Board of Directors may follow a policy of retaining earnings to finance the
future growth of the Company. Accordingly, future dividends, if any, will depend
upon, among other considerations, the Company's need for working capital and its
financial condition at the time.
SUITABILITY STANDARDS
INVESTMENT IN THE SECURITIES INVOLVES A HIGH DEGREE OF RISK AND IS SUITABLE ONLY
FOR PERSONS OF SUBSTANTIAL FINANCIAL RESOURCES WHO HAVE NO NEED FOR LIQUIDITY IN
THEIR INVESTMENT. See "RISK FACTORS".
The Securities lack liquidity as compared with other securities since the
Securities will be restricted by the Subscription Agreement and applicable
federal and state securities laws.
The Securities will be offered or sold only to a subscriber whom the Issuer
believes, based on reasonable grounds after reasonable inquiry, is an
"accredited investor" or to a limited number of "non-accredited investor"
pursuant to Regulation D or Rule 4(2) of the Securities Act of 1933, as amended
("Act"). An "accredited investor" as defined in Regulation D [Rule 501 (a) under
the Securities Act of 1933 (17 C.F.R. Sec. 230.501 (a)] is, among other things,
a natural person whose net worth exceeds $1,000,000 or a natural person who has
had an individual income in
excess of $200,000 in each of the most recent two years and who expects an
income in excess of $200,000 in the current year.
Subscribers' representations will be reviewed to determine the suitability of
prospective purchasers, and the Issuer will have the right to refuse a
subscription for the Securities for any reason in its sole discretion.
Subscriptions will not necessarily be accepted in the order in which received.
RESTRICTIONS ON TRANSFER
The Securities offered hereby are restricted securities as that term is defined
in the Securities Act of 1933 as amended.
Investment in the Securities offered may be made by persons who do so for
investment purposes only and without a view to resale or further distribution.
This Confidential Offering Memorandum and the Subscription Agreement provides
that no sale will be approved in the absence of a effective registration or an
opinion of counsel satisfactory to the Company that such transfer qualifies for
an exemption. The purchaser of the securities offered hereby agrees to the
placement of a legend on the certificates restricting transferability and
additionally agrees not to sell the securities purchased unless the Securities
are subsequently registered.
The Company has agreed to indemnify its officers, Directors and agents against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
REGISTRATION RIGHTS
If the Company is successfully acquired by e*xxxxxxxxx.xxx, inc., then the
Company and because of the acquisition, e*xxxxxxxxx.xxx, inc.,
would be obligated to file a Registration Statement on Form S-3 or Form SB-2
within ninety days after Closing to register solely the 2,500,000 shares being
sold herewith. Thereafter, the Company will use its best efforts to effectuate
the effectiveness of such a Registration Statement. In addition, if necessary,
the Company shall give unlimited piggyback registration rights.
METHOD OF SALE OF SHARES
The offering of Shares will be conducted in reliance upon exemptions from
registration requirements contained in Section 4(2) and Rule 506 of Regulation
D under the Securities Act of 1933, as amended (the "Securities Act") and
pursuant to the relevant state "blue sky" laws for transactions not involving a
public offering. Accordingly, offers and sales of the Shares will only be made
to prospective Investors who satisfy, in the sole judgment of the Company, all
of the following suitability standards:
1. Each Investor must be an "accredited investor" (or a limited number of
"non-accredited investors") as such terms are defined in Rule 501(a) of
Regulation D under the Securities Act.
2. Each Investor must confirm and represent that the Shares to be purchased
are being acquired for investment and not with a view to distribution.
Before closing any sale of Shares to an Investor, a Subscription Agreement
in the form of Exhibit A hereto, must be executed by such Investor and delivered
to the Company, along with a check, payable to "Levy & Levy, P.A. Attorney Trust
Account" in an amount equal to the purchase price of the Shares being so
purchased.
Each prospective Investor should obtain the advice of his attorney, tax
consultant, and business advisor with respect to the legal, tax and business
aspects of the investment prior to subscribing for these securities.
The Company may in its sole discretion accept or reject any potential
Investor's subscription in whole or in part, irrespective of whether such
Investor meets the minimum suitability standards for investing in the Offering.
The Company is under no obligation to accept a potential Investor's subscription
unless and until the Company accepts such Subscription Agreement at the Closing
(as defined in the Subscription Agreement).
This Offering will terminate on the earlier of the date of receipt by the
Company of good funds and executed Subscription Agreements acceptable to the
Company for all of the Shares, or March 23, 2000 if all of the shares have not
been sold whereupon a Closing will be held at the offices of Levy & Levy, P.A.,
Plaza 1000, Suite 000, Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx, 00000, upon receipt of
good funds from the Investor and upon acceptance of the subscription by the
Company and delivery of Closing stock certificates. At such Closing, the Company
will cause to be delivered to Investors whose Subscription Agreements and funds
have been accepted by the Company stock certificates duly issued and authorized
by the Company which represent the number of shares which the Company has agreed
to sell to such Investors.
EXHIBIT "A"
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT
$.40 PER SHARE
e*machinery, inc.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Gentlemen:
The undersigned acknowledges that he or she has received and reviewed a
copy of the Confidential Offering Memorandum dated March 6, 2000 of
e*machinery, inc., a Texas Corporation, (the "Company"), including the exhibits
appended thereto; (the Confidential Offering Memorandum, together with the
exhibits thereto, is referred to herein as the "Memorandum"). The Memorandum
relates to the private placement of 2,500,000 shares of common stock (the
"Shares") of the Company being offered herewith. The Company is offering the
Shares on the terms and in the manner described in the Memorandum.
It is understood that, upon the acceptance by the Company of the
undersigned's offer to purchase the number of Shares set forth herein, the
undersigned will receive a copy of this executed Subscription Agreement executed
on behalf of the Company.
1. Subscription. Subject to the terms and conditions hereof, the
undersigned hereby irrevocably subscribes for and agrees to purchase Shares.
Except as provided immediately below, the undersigned tenders herewith a check
(the "Check") in an amount of $ , payable to the order of "Levy & Levy, P.A.
Attorney Trust Account". At the sole discretion of the Company, the Company may
allow less than 500,000 of shares to be purchased by an individual investor.
The Check and this Subscription Agreement that is Exhibit A to the
Memorandum should be delivered to Levy & Levy, Plaza 1000, Suite 000, Xxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxxxx, 00000. After all of the 2,500,000 shares
($1,000,000) have been sold prior to the termination date, a Closing shall occur
upon receipt of good funds and acceptance of the undersigned's offer to purchase
the number of Shares set forth herein (the date on which the undersigned's offer
to purchase shares is accepted being the "Closing Date"). The Company must also
deliver stock certificates at the Closing. If this subscription is rejected by
the Company, the proceeds in an amount equal to the amount tendered by the
investor shall be promptly returned in full to the undersigned, without
interest, and this Agreement shall be rendered by the Company null and void and
of no further force or effect.
2. Acceptance of Subscription. The undersigned understands and agrees that
this subscription is made subject to the following terms and conditions:
(a) The Company shall have the right to reject this subscription, in whole
or in part; and
(b) The Company shall have no obligation to accept subscriptions for Shares
in the order received.
3. Representations and Warranties of the Undersigned.
The undersigned understands that the Shares are being offered and sold pursuant
to the exemption from registration provided for in Section 4(2) of the
Securities Act of 1933, as amended, (the "Act"), and Rule 506 of Regulation D
promulgated thereunder. The undersigned further understands that he is
purchasing the Shares without being furnished any offering literature or
prospectus other than the Memorandum, that no documents relating to this private
placement as such have been filed with or reviewed by the Securities and
Exchange Commission or by any administrative agency charged with the
administration of the securities laws of any state. All documents, records and
books pertaining to this investment have been made available to the undersigned
and his representatives, including without limitation his attorney and/or his
accountant, and that the books and records of the Company will be available upon
reasonable notice for inspection by investors during reasonable business hours
at its principal place of business. In addition the undersigned hereby
represents and warrants as follows:
(a) The undersigned (X) if an individual (I) is a citizen of the United
States, and at least 21 years of age, and (ii) is a bonafide permanent
resident of and is domiciled in the State set forth on the signature
page hereof and has no present intention of becoming a resident of any
other State or jurisdiction, or (Y) if a partnership, trust,
corporation or other entity, has a principal place of business and is
domiciled in the State as set forth on the signature page thereof and
has no present intention of changing its principal place of business
or its domicile to any other state or jurisdiction;
(b) The undersigned has read and fully considered the section in the
Memorandumentitled "Risk Factors" and understands that shares are
extremely speculative investments with a high degree of risk of loss,
and there will be no public market for the Shares and it may not be
possible to liquidate an investment in the Shares; Common stock has
not been registered under the Act or State Securities Laws and may not
be sold until such Common Stock is registered under the Act or an
exemption from such registration is available.
(c) The undersigned is able (I) to bear the economic risk of this
investment, (ii) to hold the Shares indefinitely, and (iii) presently
to afford a complete loss of this investment; the undersigned has
adequate means of providing for current needs and personal
contingencies, and has no need for liquidity in this investment;
(d) The undersigned has such knowledge and experience in financial and
business matters that he/she is capable of evaluating the merits and
risks of an investment in the Shares and of making informed investment
decision;
(e) The undersigned confirms that, in making his decision to purchase the
Shares, he/she has relied solely upon independent investigations made
by him/her and/or by his/her representatives, including his own
professional tax and other advisors, and that he and such
representatives and advisors have been given the opportunity to ask
questions of, and to receive answers from, officers of the Company and
Counsel to the Company concerning the terms and conditions of this
offering, and to obtain any additional information, to the extent such
persons possess such information or can acquire it without
unreasonable effort or expense, necessary to verify the accuracy of
the information set forth in the Memorandum;
(f) The Shares hereby subscribed for are being acquired by the undersigned
in good faith solely for his/her own personal account, for investment
purposes only, and are not being purchased for resale, resyndication,
distribution, subdivision or fractionalization thereof; the
undersigned has no contract or arrangement with any person to sell,
transfer or pledge to any person the Shares or any part thereof, any
interest therein or any rights thereto; the undersigned has no present
plans to enter into any such contract or arrangement; and he/her
understands that as a result he/she must bear the economic risk of the
investment for an indefinite period of time because the Shares have
not been registered under the Act and, therefore, cannot be sold
unless they are subsequently registered under the Act or an exemption
from such registration under the Act is available.
(g) The undersigned consents to the placement of a legend, until the
common shares are registered, on the stock certificates evidencing the
Shares being purchased, which legend shall be in a form substantially
as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE SALE OR OTHER DISPOSITION
OF THE SHARES IS PROHIBITED UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL
THAT SUCH SALE OR OTHER DISPOSITION CAN BE MADE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933. BY ACQUIRING THE
SHARES REPRESENTED HEREBY THE HOLDER REPRESENTS THAT HE HAS
ACQUIRED SUCH SHARES FOR INVESTMENT AND THAT HE WILL NOT SELL OR
OTHERWISE DISPOSE OF THESE SHARES WITHOUT REGISTRATION OR OTHER
COMPLIANCE WITH THE AFORESAID ACT AND THE RULES AND REGULATIONS
THEREUNDER.";
(h) FOR PARTNERSHIPS, CORPORATIONS, TRUSTS, OR OTHER ENTITIES ONLY: If the
undersigned is a partnership, corporation, trust or other entity;
(i) The undersigned has enclosed with this Agreement appropriate
evidence of the authority of the individual executing this
Agreement to act on its behalf (i.e., if a trust, a copy of the
trust agreement; if a corporation, a certified corporation
resolution authorizing the signature and a copy of the articles
of incorporation; or if a partnership, a copy of the partnership
agreement),
(ii) The undersigned represents and warrants that it was not organized
or reorganized for the specific purpose of acquiring Shares, and
(iii) The undersigned has the full power and authority to execute this
Subscription Agreement on behalf of such entity and to make the
representations and warranties made herein on its behalf and this
investment in the Company has been affirmatively authorized by
the governing board of such entity and is not prohibited by the
governing documents of the entity; and
(iv) The undersigned represents that he is an "accredited investor,"
as such term is defined in Rule 501 of Regulation D under the
Act.
The foregoing representations and warranties and undertakings, are made by
the undersigned with the intent that they be relied upon in determining his
suitability as a purchaser of the Shares and the undersigned hereby agrees that
such representations and warranties shall survive his purchase of the Shares. By
executing this Agreement, the undersigned represents that he has read and
acknowledged each of the representations set forth above.
If more than one person is signing this Agreement, each representation and
warranty and undertaking made herein shall be a joint and several
representation, warranty or undertaking of each such person.
4. Representations and Warranties of the Company.
(a) The Company has been duly and validly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Texas. The Company has all requisite power and authority, and all necessary
authorizations, approvals and orders required as of the date hereof to own
its properties and conduct its business as described in the Memorandum and to
enter into this Subscription Agreement and to be bound by the provisions and
conditions hereof.
(b) All corporate action required to be taken by the Company prior to all
the issuance and sale of the Shares has been, or prior to the Closing of the
sale of the Shares, will have been taken; the Shares will conform to the
descriptions thereof in the Memorandum; and the Shares, when issued and sold in
accordance with the Memorandum for the consideration expressed therein shall be
duly and validly issued, and, in the case of the Common Stock, fully paid and
nonassessable and free of preemptive rights. The Shares have been duly and
validly authorized by proper corporate authority.
5. Transferability. The undersigned agrees not to transfer or assign this
Agreement, or any portion of his interest herein, and further agrees that the
assignment and transfer of the Shares acquired pursuant hereto shall be made
only in accordance with all applicable laws.
6. Revocation. The undersigned agrees that he may not cancel, terminate or
revoke this Agreement or any agreement of the undersigned made hereunder and
that this Agreement shall survive the death or disability of the undersigned and
shall be binding upon the undersigned's heirs, executors, administrators,
successors and assigns.
7. No Waiver. Notwithstanding any of the representations, warranties,
acknowledgments or agreements made herein by the undersigned, the undersigned
does not hereby or in any other manner waive any rights granted to him under
Federal or state securities laws.
8. Miscellaneous.
(a) All notices or other communications given or made hereunder shall be in
writing and shall be delivered or mailed by registered or certified mail, return
receipt requested, postage prepaid, to the undersigned at the address set forth
below or to the Company at the address set forth above.
(b) This Agreement shall be governed by and construed in accordance with
the laws of the State of New Jersey.
9. Waiver of Suitability Standards. The Company reserves the right to
review the suitability of any person (or entity) as the Company deems
appropriate under applicable law.
10. Continuing Effect of Representations, Warranties and Acknowledgments.
The undersigned represents that representations and warranties contained in
Section 3 hereof of the undersigned and the Company represents that the
representations of the Company contained in Section 4 hereof are true and
accurate as of the date of this Subscription Agreement and shall be true and
accurate as of the Closing Date and shall survive the Closing. If, in any
respect, such representations, warranties and acknowledgments shall not be true
and accurate prior to the Closing Date, the undersigned, or the Company, as the
case may be, shall give immediate written notice of such fact to the Company, in
the case of representations, warranties and acknowledgments of the undersigned
in the case of the representations, warranties and acknowledgments of the
Company, as applicable, specifying which representations, warranties and
acknowledgments are not true and accurate and the reasons therefor.
11. Registration Rights. If the Company is successfully acquired by
e*xxxxxxxxx.xxx, inc., then the Company and because of the acquisition,
e*xxxxxxxxx.xxx, inc., would be obligated to file a Registration Statement on
Form S-3 or Form SB-2 within ninety days after Closing to register solely the
2,500,000 shares being sold herewith. Thereafter, the Company will use its best
efforts to effectuate the effectiveness of such a Registration Statement. In
addition, if necessary, the Company shall give unlimited piggyback registration
rights.
12. Indemnification. The undersigned acknowledges that he understands the
meaning and legal consequences of the representations and warranties contained
in Section 3 hereof, and he hereby agrees to indemnify and hold harmless the
Company and its officers and directors from and against any and all loss, damage
or liability (including costs and reasonable attorney fees) due to or arising
out of a breach of any representation, warranty or acknowledgment of the
undersigned contained in this Subscription Agreement.
It is understood that all documents, records and books pertaining to this
investment have been made available to the undersigned and his attorney and/or
accountant and that the books and records of the Company will be available upon
reasonable notice for inspection by investors during reasonable business hours
at its principal place of business.
IN WITNESS WHEREOF, the undersigned has hereby executed this Agreement this
_________ day of 2000.
----------------------------------- ------------------------
Name of Subscriber (Print Name) Authorized Signature of
Subscriber
---------------------------
---------------------------
Address
----------------------------------- ------------------------
Name of Co-subscriber (Print Name) Authorized Signature of
Co-subscriber
---------------------------
---------------------------
Address
AGREED TO AND ACCEPTED BY:
E*MACHINERY, INC.
By:
--------------------------
Xxxxxx X. X'Xxxx, III
President and Chief Executive Officer
Dated:
--------------------------
EXHIBIT 2.5
FINANCIAL STATEMENTS OF E*MACHINERY, INC.
DECEMBER 1, 1999
BALANCE SHEET
DECEMBER 1, 1999
Cash $1,000
Developed software (1) 515,000
--------
Total Assets $516,000
========
Accounts payable & accrued expenses $585,000
Stockholders equity (69,000)
---------
Total liabilities & Equity $516,000
1 This figure may not be a capital item according to GAAP, and may
therefore be reduced in part or in whole in the future. This capitalized
expense is for the initial design of the e*xxxxxxxxx.xxx's web site.
INCOME STATEMENT
DECEMBER 1, 1999
Revenues $ 0
Costs of sales 69,000
--------
Gross Profit (69,000)
Selling and administrative 0
--------
Income before taxes (69,000)
Income taxes 0
Net loss ($69,000)
========
EXHIBIT 2.5(a)
FINANCIAL STATEMENTS OF E*MACHINERY, INC.
FEBRUARY 29, 2000
BALANCE SHEET
FEBRUARY 29, 2000
Cash and cash equivalents $ 737,000
Receivable - shareholder 50,000
---------
Total current assets $ 787,000
Developd software casts $ 521,500
---------
Total assets $1,308,500
==========
Accounts payable and accrued expenses 576,857
---------
Total liabilities 576,857
943
Common stock 734,057
Additional paid in capital (3,357)
---------
Total equity 731,643
---------
Total liabilities and equity $1,308,500
==========
INCOME STATEMENT
FEBRUARY 29, 2000 (1)
Revenues $ 0
Costs of sales 0
--------
Gross Profit 0
Selling and administrative 3,357
--------
Income before taxes (3,357)
Income taxes 0
Net income ($ 3,357)
========
1 The financial statements have been revised to relfect the actual results of
operations through February 29, 2000. Previous financial statements as of
December 1, 1999 were projections based upon estimates at that time. The
Company spent less than projected on the initial development costs for the Web
site.
EXHIBIT 2.15.4
DOMAIN NAMES
XXXXXXXXXX.XXX
XXXXXXXXXXXXXXX.XXX
XXXXXXXXXXXXXXX.XXX
XXXXXXXXXXXXXX.XX
XXXXXXXXXX.XX
EXHIBIT 2.16(a) & (b)
MATERIAL CONTRACTS OF E*MACHINERY
Employment Contract of Xxxxxx X. X'Xxxx, III
Employment Contract of Xxxxxx X. Xxxxxxxx
EMPLOYMENT AGREEMENT entered into as of this ____ day of January, 2000 by and
between, E*MACHINERY, INC. (hereinafter referred to as "EMAC"), a Texas
corporation with offices at 0000 Xxxxxxx Xxxxx, Xxxxx 00 and Xxxxxxxx Xxxx,
Xxxxxxx, Xxx Xxxxxx 00000; and Xxxxxx X. X'Xxxx III, (hereinafter referred to as
"Employee" or "Art"), of 0000 Xxxxxx Xxxxx, Xxxxxx, Xxxxx 00000.
W I T N E S S E T H:
WHEREAS, EMAC desires to employ Art and Art desires to accept employment by
EMAC, in consideration of the mutual promises and undertakings hereinafter
provided, the parties agree as follows:
Employment as President and Chief Executive Officer - EMAC hereby employs Art
and Art hereby accepts employment by EMAC effective at the time of Closing, as
President and Chief Executive Officer of EMAC upon the terms and conditions
hereinafter set forth.
Term
The term of employment of Employee hereunder shall be for a period of five (5)
years commencing at Closing, unless sooner terminated in accordance with the
terms and conditions of this Agreement.
Duties
3.1. Subject to the direction and supervision of the Board of
Directors of EMAC (hereinafter referred to as the "Board") and to
EMAC's By-Laws, the duties of Employee shall include, all duties
and responsibilities normally attributed to the President and
Chief Executive Officer of a company, including:
3.1.1. the general and active management of EMAC's business.
3.1.2. the supervision, organization and control of the day to
day operations of EMAC.
3.1.3. the responsibility for organizing and supervising all
activities of EMAC, including the preparation and
presentation to the Board of EMAC's business plans and
the implementation thereof.
3.1.4. the establishment, presentation and monitoring of EMAC's
operating and capital budgets and projections for Board
review and approval.
3.1.5. such other duties in the ordinary course of business and
which are ethical, and responsibilities as are usually
those of a President and Chief Executive Officer or as
such may be amended or supplemented by the Board.
3.1.6. such other duties that are necessary and preferable for
the successful continuing management of EMAC, including
maintaining profitability.
3.2. In performing his duties hereunder, Employee shall use due
diligence and all of his skills, expertise, knowledge and
contacts for the benefit of EMAC and any of its affiliates.
Employee shall comply with all such instructions as may, from
time to time, be given to him by the Board and shall give the
Board all such explanations, information and assistance as the
Board may require, including such reports as are necessary to
inform the Board of the current status of the business of EMAC
and/or its affiliates.
3.3. Xxxxxx X. X'Xxxx III is a critical and mandatory prerequisite to
this transaction and, thus, shall be required to commit his
complete work effort to the activities of EMAC, nor shall he
invest, advise or be associated with any group competing with or
doing business with EMAC, without the express written permission
of the Board of Directors of EMAC.
4. Annual Salary
As compensation for all of the services performed by Employee in connection with
his employment by EMAC, Employee shall receive as an annual salary, the sum of
two hundred fifty thousand dollars ($250,000) per annum payable in accordance
with EMAC's regular payroll schedule, which payment shall not be less than one
time per month.
4.1. This annual salary is contingent on sufficient money being raised
in conjunction with the Private Placement Memorandum Offering in
force to reasonably afford this annual salary, and if less than
the full amount of that Private Placement is raised, then Art's
compensation and other benefits associated with this contract
will be adjusted to an amount based upon mutual agreement between
Art and the other members of the e*machinery, inc. Board of
Directors.
4.2. Art will also qualify to receive additional compensation after
each yearly audit based upon the following:
a) Stock options
If Art remains employed by EMAC at the end of each business
year, he will receive sixty-six thousand, six hundred
sixty-six (66,666) stock options of e*machinery, inc.
granted at the closing price on whatever public trading
market the common stock of EMAC is traded on the day prior
to the filing of that year's 10-K Report with the Securities
and Exchange Commission; and
If the business plan (net income) of EMAC has been exceeded
by at least fifteen percent (15%) for that year then Art
will be granted an additional receive sixty-six thousand,
six hundred sixty-six (66,666) of such stock options granted
at the closing price on whatever public trading market the
common stock of EMAC is traded on the day prior to the
filing of that year's 10-K Report with the Securities and
Exchange Commission; and
If the business plan (net income) of EMAC has been exceeded
by at least thirty percent (30%) for the year then Art will
be granted an additional receive sixty-six thousand, six
hundred sixty-seven (66,667) of such stock options granted
at the closing on whatever public trading market the common
stock of EMAC is traded on the day prior to the filing of
that year's 10-K Report with the Securities and Exchange
Commission.
b) Cash bonus opportunity:
Art will receive a maximum cash bonus opportunity of two
hundred thousand dollars ($200,000) a year based upon
exceeding budget by ten percent (10%) to fifty percent
(50%) of net income as measured by an audit according to
Generally Accepted Accounting Principles (GAAP).
Business Expenses
Employee is authorized to incur, and EMAC shall pay and reimburse him for, all
reasonable and necessary business expenses incurred in the performance of his
duties hereunder including reasonable expenses for auto, entertainment, travel
and other items in accordance with guidelines adopted by the Board. It is
contemplated that expenses will be charged to a credit card in name of EMAC, but
Employee may also submit requests for reimbursement; in any event, all
Employee-incurred business expenses paid or to be reimbursed shall be sent along
with an expense report to the Secretary of e*machinery, inc., who shall have a
period of one month to pay any such expenses.
Vacation and Benefits
Vacation and Benefits During the employment period, Art shall be entitled to
participate in all of the employee benefit plans, programs and arrangements in
effect during the employment period, subject to and on a basis consistent with
the terms, conditions and overall administration of such plans, programs and
arrangement. During the employment period Art shall be entitled to four (4)
weeks of paid vacation per year subject to a discussion with the Board as to
when these days, will occur. An Employee Handbook will be instituted in order to
delineate guidelines for this and other employee rights and responsibilities.
Covenants
7.1. Employee hereby agrees that employee will not, directly or
indirectly, enter into or engage generally in competition
with EMAC in any competing business of any kind,
either as an individual or as a partner or joint venturer,
as an employee or agent for any person, as an officer,
director, or shareholder of any corporation, or otherwise,
as follows:
7.1.1. During the time that Art is employed by EMAC.
7.1.2. Five (5) years after termination for cause (cause
being defined as commitment of a felony or
employment related malfeasance).
7.1.3. Five (5) years after termination if Art voluntarily
terminates his employment with the EMAC.
7.1.4. Two (2) years after the completion of the term of
this agreement should the employment contract not
be renewed or is mutually terminated.
7.1.5. Three (3) years after termination for disability as
set forth in Section 8.12.
Termination
8.1. Employee's employment hereunder shall terminate upon the
occurrence of any of the following events
8.1.1. the death of the Employee;
8.1.2. if Employee is or shall be unable to discharge
properly his obligations hereunder through illness,
disability or accident for three (3) consecutive
months or for a period aggregating six (6) months
in any continuous twelve (12) months;
8.1.3. if Employee is convicted of a crime of moral
turpitude by a court of competent jurisdiction;
8.1.4. if Employee is convicted of a felony except to the
extent that the charge arises from an act taken at
the Board's direction;
8.1.5. if Employee is grossly negligent or guilty of
willful misconduct in connection with the
performance of his duties, which negligence or
misconduct, if curable, is not cured within
fifteen (15) days (plus an additional 15 days upon
demonstration of good faith efforts that he is
attempting to cure) of a notice of cure by the
Board or the Chairman of the Board.
8.2. All compensation and benefits will cease one month after the month of
termination.
9. Key Person Insurance
Art agrees that as long as he is employed under the Agreement, EMAC may obtain
Key Person life insurance on his life payable to EMAC in an amount deemed
appropriate by the Board of Directors of EMAC. Art represents and warrants that
he has no knowledge of any condition which would prevent such Key Person life
insurance from being obtained at rates for a healthy person of his age.
10. Other Matters
10.1. This agreement is a personal service contract intended to
secure the personal services of Art, and Art hereby agrees
that none of his rights, obligations or duties under this
Agreement shall be assigned, subcontracted or in any way
transferred by him to any other party without prior written
consent of EMAC.
10.2. Art shall be appointed a member of EMAC's Board of Directors.
There shall be no additional compensation for this position.
However, Art will be reimbursed for any travel, food or
lodging expenses, if any, required to attend meetings of the
Board.
11. Miscellaneous
11.1. The Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey.
11.2. All notices, requests, demands or other communications from
either party hereto to the other pursuant to the Agreement
shall be in writing and shall be deemed to have been duly
given when delivered personally, or upon its mailing by
registered or certified mail, return receipt requested,
postage prepaid, at such other party's last known address.
11.3. If any provision of the Agreement is invalidated for any
reason whatsoever, the Agreement shall remain binding between
the parties and in full force and effect except for such
invalidated provision.
11.4. The Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, legal
representatives and assigns.
11.5. Except as waived in writing by a party hereto, no action taken
pursuant to the Agreement or failure to pursue the enforcement
of any right pursuant to the Agreement shall be deemed to
constitute a waiver by such party of compliance with any
covenants or promises contained herein. The waiver by either
party hereto of a breach of any provision of the Agreement
shall not operate or be construed as a waiver of any
subsequent breach.
11.6. The Agreement shall extend to and be binding upon Employee,
his heirs and distributes, and upon EMAC, its successors and
assigns and also any EMAC or affiliated corporation.
11.7. The instrument contains the entire agreement and understanding
of the parties relating to the subject matter hereof, and the
parties hereto have made no agreements, representations or
warranties, oral or written, relating to the subject matter of
the Agreement which are not set forth herein. The Agreement
may be modified, amended, changed or discharged only by a
writing signed by the party against whom enforcement of any
such modification, amendment, change or discharge is sought.
The Agreement supersedes all prior agreements and
understandings, whether written or oral, regarding
Employee's employment by EMAC in any capacity whatsoever.
IN WITNESS WHEREOF, EMAC has caused the Agreement to be executed by its
Board of Directors and Officers hereunto duly authorized and its corporate seal
to be hereto affixed, and Employee has hereunto set his hand and seal, all as of
the day and year first written above.
ATTEST: e*machinery, inc.
- ----------------- --------------------------
By: Xxxxxx Xxxxxxxx,
Vice President, Treasurer
- ----------------- --------------------------
Xxxxx X. XxXxxxxx By: Xxxxxxx X. Xxxxx, Director
Secretary
(Seal)
- ----------------- --------------------------
Xxxxxx X. X'Xxxx III, Employee
EMPLOYMENT AGREEMENT entered into as of this ____ day of January, 2000 by and
between, E*MACHINERY, INC. (hereinafter referred to as "EMAC"), a Texas
corporation with offices at 0000 Xxxxxxx Xxxxx, Xxxxx 00 and Xxxxxxxx Xxxx,
Xxxxxxx, Xxx Xxxxxx 00000; and Xxxxxx X. Xxxxxxxx, (hereinafter referred to as
"Employee" or "Stu"), of 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxx 00000.
W I T N E S S E T H:
WHEREAS, EMAC desires to employ Stu and Stu desires to accept employment by
EMAC, in consideration of the mutual promises and undertakings hereinafter
provided, the parties agree as follows:
Employment as Vice President - EMAC hereby employs Stu and Stu hereby accepts
employment by EMAC effective at the time of Closing, as Vice President of EMAC
upon the terms and conditions hereinafter set forth.
Term
The term of employment of Employee hereunder shall be for a period of five (5)
years commencing at Closing, unless sooner terminated in accordance with the
terms and conditions of this Agreement.
Duties
3.1. Subject to the direction and supervision of the Board of
Directors of EMAC (hereinafter referred to as the "Board") and to
EMAC's By-Laws, the duties of Employee shall include, all duties
and responsibilities normally attributed to the Vice President of
a marketing and technology company, including:
3.1.1. the general and active management of EMAC's marketing.
3.1.2. the general and active management of EMAC's Web site.
3.1.3. the supervision, organization and control of the day to
day operations of EMAC.
3.1.4. such other duties in the ordinary course of business and
which are ethical, and responsibilities as are usually
those of a Vice President or as such may be amended or
supplemented by the Board.
3.1.5. such other duties that are necessary and preferable for
the successful continuing management of EMAC, including
maintaining profitability.
3.2. In performing his duties hereunder, Employee shall use due
diligence and all of his skills, expertise, knowledge and
contacts for the benefit of EMAC and any of its affiliates.
Employee shall comply with all such instructions as may, from
time to time, be given to him by the President and by the Board
of Directors and shall give the Board all such explanations,
information and assistance as the Board may require, including
such reports as are necessary to inform the Board of the current
status of the business of EMAC as it
relates to marketing and the operation, maintenance and evolution
of the EMAC Web site/Portal.
3.3. Xxxxxx X. Xxxxxxxx is a critical and mandatory prerequisite to
this transaction and, thus, shall be required to commit his
complete work effort to the activities of EMAC, nor shall he
invest, advise or be associated with any group competing with or
doing business with EMAC, without the express written permission
of the Board of Directors of EMAC.
4. Annual Salary
As compensation for all of the services performed by Employee in connection with
his employment by EMAC, Employee shall receive as an annual salary, the sum of
one hundred fifty thousand dollars ($150,000) per annum payable in accordance
with EMAC's regular payroll schedule, which payment shall not be less than one
time per month.
4.1. This annual salary is contingent on sufficient money being
raised in conjunction with the Private Placement Memorandum
Offering in force to reasonably afford this annual salary, and
if less than the full amount of that Private Placement is
raised, then Stu's compensation and other benefits associated
with this contract will be adjusted to an amount based upon
mutual agreement between Stu and the other members of the
e*machinery, inc. Board of Directors.
4.2. Stu will also qualify to receive additional compensation after
each yearly audit based upon the following:
a) Stock options
If Stu remains employed by EMAC at the end of each business
year, he will receive thirty-three thousand, three hundred
thirty-three (33,333) stock options of e*machinery, inc.
granted at the closing price on whatever public trading
market the common stock of EMAC is traded on the day prior
to the filing of that year's 10-K Report with the Securities
and Exchange Commission; and
If the business plan (net income) of EMAC has been exceeded
by at least fifteen percent (15%) for that year then Stu
will be granted an additional thirty-three thousand, three
hundred thirty-three (33,333) of such stock options granted
at the closing price on whatever public trading market the
common stock of EMAC is traded on the day prior to the
filing of that year's 10-K Report with the Securities and
Exchange Commission; and
If the business plan (net income) of EMAC has been exceeded
by at least thirty percent (30%) for the year then Stu will
be granted an
additional thirty-three thousand, three hundred thirty-four
(33,334) of such stock options granted at the closing price
on whatever public trading market the common stock of EMAC
is traded on the day prior to the filing of that year's 10-K
Report with the Securities and Exchange Commission.
b) Cash bonus opportunity:
Stu will receive a maximum cash bonus opportunity of one
hundred thousand dollars ($100,000) a year based upon
exceeding budget by ten percent (10%) to fifty percent (50%)
of net income as measured by an audit according to Generally
Accepted Accounting Principles (GAAP).
5. Business Expenses
Employee is authorized to incur, and EMAC shall pay and reimburse him for, all
reasonable and necessary business expenses incurred in the performance of his
duties hereunder including reasonable expenses for auto, entertainment, travel
and other items in accordance with guidelines adopted by the Board. It is
contemplated that expenses will be charged to a credit card in name of EMAC, but
Employee may also submit requests for reimbursement; in any event, all
Employee-incurred business expenses paid or to be reimbursed shall be sent along
with an expense report to the Secretary of e*machinery, inc., who shall have a
period of one month to pay any such expenses.
6. Vacation and Benefits
Vacation and Benefits During the employment period, Stu shall be entitled to
participate in all of the employee benefit plans, programs and arrangements in
effect during the employment period, subject to and on a basis consistent with
the terms, conditions and overall administration of such plans, programs and
arrangement. During the employment period Stu shall be entitled to four (4)
weeks of paid vacation per year subject to a discussion with the Board as to
when these days, will occur. An Employee Handbook will be instituted in order to
delineate guidelines for this and other employee rights and responsibilities.
7. Covenants
7.1. Employee hereby agrees that employee will not, directly or
indirectly, enter into or engage generally in competition with
EMAC in any competing business of any kind, either as an
individual or as a partner or joint venturer, as an employee
or agent for any person, as an officer, director, or
shareholder of any corporation, or otherwise, as follows:
7.1.1. During the time that Stu is employed by EMAC.
7.1.2. Five (5) years after termination for cause (cause
being defined as commitment of a felony or employment
related malfeasance).
7.1.3. Five (5) years after termination if Stu voluntarily
terminates his employment with the EMAC.
7.1.4. Two (2) years after the completion of the term of
this agreement should the employment contract not be
renewed or is mutually terminated.
7.1.5. Three (3) years after termination for disability as
set forth in Section 8.12.
8. Termination
8.1. Employee's employment hereunder shall terminate upon the
occurrence of any of the following events
8.1.1. the death of the Employee;
8.1.2. if Employee is or shall be unable to discharge
properly his obligations hereunder through illness,
disability or accident for three (3) consecutive
months or for a period aggregating six (6) months in
any continuous twelve (12) months;
8.1.3. if Employee is convicted of a crime of moral
turpitude by a court of competent jurisdiction;
8.1.4. if Employee is convicted of a felony except to the
extent that the charge arises from an act taken at
the Board's direction;
8.1.5. if Employee is grossly negligent or guilty of willful
misconduct in connection with the performance of his
duties, which negligence or misconduct, if curable,
is not cured within fifteen (15) days (plus an
additional 15 days upon demonstration of good faith
efforts that he is attempting to cure) of a notice of
cure by the Board or the Chairman of the Board.
8.2. All compensation and benefits will cease one month after the month
of termination.
9. Key Person Insurance
Stu agrees that as long as he is employed under the Agreement, EMAC may obtain
Key Person life insurance on his life payable to EMAC in an amount deemed
appropriate by the Board of Directors of EMAC. Stu represents and warrants that
he has no knowledge of any condition which would prevent such Key Person life
insurance from being obtained at rates for a healthy person of his age.
10. Other Matters
10.1. This agreement is a personal service contract intended to
secure the personal services of Stu, and Stu hereby agrees
that none of his rights, obligations or duties under this
Agreement shall be assigned, subcontracted or in any way
transferred by him to any other party without prior written
consent of EMAC.
10.2. Stu shall be appointed a member of EMAC's Board of Directors.
There shall be no additional compensation for this position.
However, Stu will be reimbursed for any travel, food or
lodging expenses, if any, required to attend meetings of the
Board.
11. Miscellaneous
11.1. The Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey.
11.2. All notices, requests, demands or other communications from
either party hereto to the other pursuant to the Agreement
shall be in writing and shall be deemed to have been duly
given when delivered personally, or upon its mailing by
registered or certified mail, return receipt requested,
postage prepaid, at such other party's last known address.
11.3. If any provision of the Agreement is invalidated for any
reason whatsoever, the Agreement shall remain binding between
the parties and in full force and effect except for such
invalidated provision.
11.4. The Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, legal
representatives and assigns.
11.5. Except as waived in writing by a party hereto, no action taken
pursuant to the Agreement or failure to pursue the enforcement
of any right pursuant to the Agreement shall be deemed to
constitute a waiver by such party of compliance with any
covenants or promises contained herein. The waiver by either
party hereto of a breach of any provision of the Agreement
shall not operate or be construed as a waiver of any
subsequent breach.
11.6. The Agreement shall extend to and be binding upon Employee,
his heirs and distributes, and upon EMAC, its successors and
assigns and also any EMAC or affiliated corporation.
11.7. The instrument contains the entire agreement and understanding
of the parties relating to the subject matter hereof, and the
parties hereto have made no agreements, representations or
warranties, oral or written, relating to the subject matter of
the Agreement which are not set forth herein. The Agreement
may be modified, amended, changed or discharged only by a
writing signed by the party against whom enforcement
of any such modification, amendment, change or discharge is
sought. The Agreement
supersedes all prior agreements and understandings, whether
written or oral, regarding Employee's employment by EMAC in
any capacity whatsoever.
IN WITNESS WHEREOF, EMAC has caused the Agreement to be executed by its
Board of Directors and Officers hereunto duly authorized and its corporate seal
to be hereto affixed, and Employee has hereunto set his hand and seal, all as of
the day and year first written above.
ATTEST: e*machinery, inc.
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By: Xxxxxx X. X'Xxxx, III,
President, Chief Executive
Officer
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Xxxxx X. XxXxxxxx By: Xxxxxxx X. Xxxxx, Director
Secretary
(Seal)
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Xxxxxx X. Xxxxxxxx, Employee
EXHIBIT 3.3
SUBSIDIARIES OF HARVARD FINANCIAL SERVICES CORP.
Harvard Financial Services, Inc.
