STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (the Agreement), made and entered into this 25th
day of June, 2002 by and among Copper Corp., a Colorado corporation (COPPER or
the Corporation), and the stockholders of American Real Estate Investors, Inc. a
Nevada corporation (AMERICAN) listed on Exhibit A, who are all of the
stockholders of AMERICAN (the Stockholders) represented by Xxxxx X. Xxxxxxx,
acting on behalf of the Stockholders through Power of Attorney.
WHEREAS, COPPER desires to acquire 100% of the outstanding stock of AMERICAN in
exchange for 1,300,000 shares of common stock, no par value of COPPER; and
WHEREAS, the Stockholders collectively own 100% of the outstanding stock of
AMERICAN; and
WHEREAS, the Stockholders desire to exchange their stock in AMERICAN for a total
amount of 1,300,000 shares of common stock of COPPER; and
WHEREAS, COPPER and the Stockholders agree that it is in the best interest of
COPPER and the Stockholders to enter into this Agreement on the terms and
conditions set forth below; and
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements and the respective representations and warranties herein contained,
and on the terms and subject to the conditions herein set forth, the parties
hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
EXCHANGE OF SHARES
Section 1.1 AMERICAN Stock. Contemporaneously with the execution of this
Agreement, the Stockholders shall transfer, convey and deliver to COPPER
1,000,000 shares of stock of AMERICAN (AMERICAN Stock), which represents 100% of
the outstanding shares of stock of AMERICAN, and shall deliver to COPPER stock
certificates representing such stock, duly transferred and nominated in favor of
COPPER or accompanied by duly executed stock powers in form and substance
satisfactory to COPPER. The transaction by which such transfer shall take place
is hereinafter referred to as the Exchange.
Section 1.2 COPPER Common Stock. Contemporaneously with the execution of this
Agreement, and in exchange for the AMERICAN Stock transferred to COPPER by the
Stockholders, COPPER shall deliver to the Stockholders a total of 1,300,000
shares of common stock of COPPER (COPPER Common Stock), and shall deliver to the
Stockholders stock certificates representing such stock, all with restricted
legend, in such amounts and to the Stockholders as set forth in Exhibit A.
ARTICLE II
THE CLOSING
The Closing of the transactions contemplated by this Agreement (the Closing)
shall take place at 10:00 a.m. on June 17, 2002 (the Closing Date), at the
offices of (attorney for AMERICAN, Xxxxx Law Firm, 00000 Xxxxx Xxxxx Xxxxxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 or at such other time and place as agreed
upon among the parties hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
Each of the Stockholders hereby severally represent and warrant to COPPER as
follows:
Section 3.1 Ownership of the AMERICAN Stock. The Stockholder owns, beneficially
and of record, that number of shares of AMERICAN Stock set forth opposite the
Stockholder's name on Exhibit A hereto. The shares of AMERICAN stock are owned
by such Stockholder free and clear of any liens, claims, equities, charges,
options, rights of first refusal, or encumbrances. The Stockholder has the
unrestricted right and power to transfer, convey and deliver full ownership of
such shares without the consent or agreement of any other person and without any
designation, declaration or filing with any governmental authority and upon the
transfer of such shares to COPPER as contemplated herein, COPPER will receive
good and valid title thereto, free and clear of any liens, claims, equities,
charges, options, rights of first refusal, encumbrances or other restrictions
(except those imposed by applicable securities laws).
Section 3.2 Authorization. Each of the Stockholders is a person of full age of
majority, with full power, capacity, and authority to enter into this Agreement
and perform the obligations contemplated hereby by and for himself and his
spouse. All action on the part of the Stockholders necessary for the
authorization, execution, delivery and performance of this Agreement by the
Stockholders has been taken and will be taken prior to Closing. This Agreement,
when duly executed and delivered in accordance with its terms, will constitute
legal, valid, and binding obligations of the Stockholders enforceable against
the Stockholders in accordance with its terms, except as may be limited by
bankruptcy, insolvency, and other similar laws affecting creditors' rights
generally or by general equitable principles.
Section 3.3 Pending Claims. There is no claim, suit, action or proceeding,
whether judicial, administrative or otherwise, pending or, to the best of the
Stockholders' knowledge, threatened with respect to the transfer to COPPER of
the AMERICAN Stock owned by the Stockholders or the performance of this
Agreement by the Stockholders.
Section 3.4 Litigation. No litigation is pending, or, to Stockholders'
knowledge, threatened, against the Stockholders, which seeks to restrain or
enjoin the execution and delivery of this Agreement or any of the documents
referred to herein or the consummation of any of the transactions contemplated
hereby or thereby.
Section 3.5 Disclosure. No representation or warranty of the Stockholders
contained in this Agreement (including any exhibits hereto) contains any untrue
statement or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF COPPER
COPPER hereby represents and warrants to the Stockholders as follows:
Section 4.1 Organization and Capitalization. COPPER is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado, with full power and authority and all necessary governmental and
regulatory licenses, permits and authorizations to carry on the businesses in
which it is engaged, to own the properties that it owns currently and will own
at the Closing. COPPER is qualified as a foreign corporation and is in good
standing in each jurisdiction in which the failure to qualify would have a
material adverse effect on the business, properties or condition (financial or
otherwise) of COPPER. COPPER does not have any subsidiaries or any other
investments or ownership interest in any corporation, partnership, joint venture
or other business enterprise, except as set forth in Exhibit 4.1. The authorized
capital stock of COPPER consists of 20,000,000 shares of common stock, no par
value, of which, immediately prior to the Closing, 1,230,000 shares of common
stock are validly issued and outstanding. There are no shares of preferred stock
authorized, issued or outstanding. All of such issued and outstanding shares of
common stock of COPPER have been duly authorized are validly issued and are
fully paid and non- assessable. None of the shares were issued in violation of
any preemptive rights. There are no existing warrants, options, rights of first
refusal, conversion rights, calls, commitments or other agreements of any
character pursuant to which COPPER is or may become obligated to issue any of
its stock or securities. COPPER has no obligation to repurchase, reacquire or
redeem any of its outstanding capital stock.
Section 4.2 Authorization. COPPER is a corporation with full power, capacity,
and authority to enter into this Agreement and perform the obligations
contemplated hereby by and for itself. All action on the part of COPPER
necessary for the authorization, execution, delivery and performance of this
Agreement by COPPER has been taken or will be taken prior to Closing. This
Agreement, when duly executed and delivered in accordance with its terms, will
constitute legal, valid, and binding obligations of COPPER enforceable against
COPPER in accordance with its terms, except as may be limited by bankruptcy,
insolvency, and other similar laws affecting creditors' rights generally or by
general equitable principles.
Section 4.3 No Breaches or Defaults. The execution, delivery, and performance of
this Agreement by COPPER does not: (i) conflict with, violate, or constitute a
breach of or a default under, (ii) result in the creation or imposition of any
lien, claim, or encumbrance of any kind upon the COPPER Common Stock, or (iii)
require any authorization, consent, approval, exemption, or other action by or
note to or filing with any third party or Governmental Authority under any
provision of: (a) any applicable Legal Requirement, or (b) any credit or loan
agreement, promissory note, or any other agreement or instrument to which COPPER
is a party or by which the COPPER Common Stock may be bound or affected. For
purposes of this Agreement, Governmental Authority means any foreign
governmental authority, the United States of America, any state of the United
States, and any political subdivision of any of the foregoing, and any agency,
department, commission, board, bureau, court, or similar entity, having
jurisdiction over the parties hereto or their respective assets or properties.
For purposes of this Agreement, Legal Requirement means any law, statute,
ordinance, writ, injunction, decree, requirement, order, judgment, rule, or
regulation (or interpretation of any of the foregoing) of, and the terms of any
license or permit issued by, any Governmental Authority.
Section 4.4 Pending Claims. There is no claim, suit, action or proceeding,
whether judicial, administrative or otherwise, pending or, to the best of COPPER
knowledge, threatened with respect to the transfer to the Stockholders of the
COPPER Common Stock or the performance of this Agreement by COPPER.
Section 4.5 Consents. No permit, consent, approval or authorization of, or
designation, declaration or filing with, any Governmental Authority or any other
person or entity is required on the part of COPPER in connection with the
execution and delivery by COPPER of this Agreement or the consummation and
performance of the transactions contemplated hereby.
Section 4.6 Financial Information. COPPER has delivered to the Stockholders the
audited balance sheets of COPPER dated as of April 30, 2001, together with the
related statements of income, changes in shareholder's equity and cash flow for
the years then ended, including the related notes, all certified by Xxxxxxxxx,
certified public accountant. In addition, COPPER has delivered to the
Stockholders its interim unaudited financial statements as filed with the
Securities and Exchange Commission (SEC) for the three month periods ending
March 31, 2002 (the audited balance sheet and interim financial statements are
collectively referred to as the Financial Statements). Such Financial
Statements, including the related notes, are in accordance with the books and
records of COPPER and fairly present the financial position of COPPER and the
results of operations and changes in financial position of COPPER as of the
dates and for the periods indicated, in each case in conformity with generally
accepted accounting principles applied on a consistent basis. Except as, and to
the extent reflected or reserved against in the Financial Statements, COPPER, as
of the date of the Financial Statements, has no liability or obligation of any
nature, whether absolute, accrued, contingent or otherwise, not fully reflected
or reserved against in the Financial Statements. As of the Closing Date, there
will not have been any material change in the financial condition of COPPER from
that reflected in the latest Financial Statements of COPPER furnished to the
Stockholders pursuant hereto. As of the Closing Date COPPER will have no assets
or liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise, nor will COPPER be a co-maker or guarantor in
connection with any other transaction or matter of any kind.
Section 4.7 Taxes. Except as disclosed in Exhibit 4.7, COPPER has filed all
federal tax returns and reports due or required to be filed, and has paid all
taxes, interest payments and penalties, if any, required to be paid with respect
thereto. COPPER has no taxes due or accruable for any periods ending on or
before the Closing Date to any taxing authority and is not delinquent in the
payment of any tax or governmental charge of any nature.
Section 4.8 Compliance with Laws. COPPER is, and at all times prior to the date
hereof has been, in compliance with all statutes, orders, rules, ordinances and
regulations (including without limitation, statutes, orders, rules, ordinances
and regulations pertaining to zoning, health, safety, environmental and
securities law matters) applicable to it or to the ownership of its assets or
the operation of its businesses and COPPER has no basis to expect, nor has
received, any order or notice of any such violation or claim of violation of any
such statute, order, rule, ordinance or regulation.
Section 4.9 Book and Records. The books of account, minute books, stock record
books and other records of COPPER, all of which have been made available to the
Stockholders, are accurate and complete and have been maintained in accordance
with sound business practices. At the Closing, all of these books and records
will be in the possession of COPPER.
Section 4.10 SEC Reports. COPPER has filed with the SEC all of the reports
required to be filed with the SEC pursuant to Sections 12, 13 and 15 of the
Securities Exchange Act of 1934, as amended. As of their respective dates, such
reports and statements did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
Section 4.11 No Pending Transactions. There are no contracts, agreements,
commitments, understandings or proposed transactions, whether written or oral,
to which COPPER is a party or by which it is bound. Except for the transactions
contemplated by this Agreement, COPPER is not a party to or bound by or the
subject of any agreement, undertaking, commitment or discussions or negotiations
with any person that could result in (i) the sale, merger, consolidation or
recapitalization of COPPER, or (ii) the sale of all or substantially all of the
assets of COPPER.
Section 4.12 Litigation. No litigation is pending, or, to COPPER's knowledge,
threatened, against COPPER, or its assets or properties which seeks to restrain
or enjoin the execution and delivery of this Agreement or any of the documents
referred to herein or the consummation of any of the transactions contemplated
hereby or thereby. There are no judgments or outstanding orders, injunctions,
decrees, stipulations or awards against COPPER or any of its assets or
properties.
Section 4.13 Brokerage Commission. No broker or finder has acted for COPPER in
connection with this Agreement or the transactions contemplated hereby. No
payment will be made in connection with this agreement and any obligation to a
finder or broker will be the sole responsibility of the party under the
agreement.
Section 4.14 Disclosure. No representation or warranty of COPPER contained in
this Agreement (including the exhibits hereto) contains any untrue statement or
omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE V
CLOSING; DELIVERY
Section 5.1(a) Closing Documents of the Stockholders. The obligations of COPPER
to effect the transactions contemplated hereby are subject to the delivery by
the Stockholders at Closing of certificates evidencing their AMERICAN Stock duly
endorsed for transfer by the Stockholders to COPPER as contemplated by this
Agreement, in form and substance satisfactory to counsel for COPPER.
Section 5.1(b) Closing Documents of COPPER. The obligations of the Stockholders
to effect the transactions contemplated hereby are subject to each of the
following conditions:
(i) The Stockholders shall have received an officers and directors
certificate, dated the Closing Date and signed by the officers and
directors of COPPER that the representations and warranties made by COPPER
in Article IV hereof are true and correct on the Closing Date;
(ii) COPPER shall have delivered either (i) certificates evidencing
COPPER's Common Stock, duly executed for issuance by COPPER to the
Stockholders as contemplated by this Agreement in the amounts as set forth
in Exhibit A, or (ii) letter of instructions from a duly authorized officer
of COPPER to N/A (COPPER's transfer agent), instructing the transfer agent
to duly issue stock certificates evidencing the shares of Common Stock of
COPPER to the Stockholders, all as contemplated by this Agreement, in form
and substance satisfactory to counsel for the Stockholders;
(iii) The Board of Directors of COPPER shall have appointed Xxxxx X.
Xxxxxxx, Xxxxxxx Xxxx, and Xxxxxx Xxxxx as new directors of COPPER;
(vi) COPPER shall provide to the Stockholders the written resignations of
all other existing Directors of COPPER; and
(vii)COPPER shall provide to the Stockholders the written legal opinion of
Xxxx X. Xxxxx, as set forth in Exhibit 5.1(b)(viii) dated as of the Closing
Date, in form and substance satisfactory to the Stockholders and its
counsel.
ARTICLE VI
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Section 6.1 Nature of Statements. All statements contained herein, or in any
certificate or other written instrument delivered by or on behalf of COPPER or
the Stockholders pursuant to this Agreement shall be deemed representations and
warranties by COPPER or the Stockholders, as the case may be. No investigation
by any party hereto nor failure by any party hereto, to make any investigation,
shall constitute a waiver of any representation, warranty, covenant, or
agreement of any party hereto, nor relieve such other party of any obligation
with respect to the accuracy or fulfillment thereof.
Section 6.2 Survival of Representations and Warranties. Regardless of any
investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect hereof, all covenants, agreements,
representations, and warranties made hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive Closing and
continue in effect thereafter for the maximum period allowed by law.
ARTICLE VII
INDEMNIFICATION
Section 7.1 Indemnification from the Stockholders. The Stockholders severally
agree to and shall indemnify, defend (with legal counsel reasonably acceptable
to COPPER), and hold COPPER and its officers and directors harmless at all times
after the date of this Agreement, from and against and in respect of, any
liability, claim, deficiency, loss, damage, penalty or injury, and all
reasonable costs and expenses (including reasonable attorneys' fees and costs of
any suit related thereto) suffered or incurred by COPPER arising from (a) any
misrepresentation by, or breach of any covenant or warranty of the Stockholders
contained in this Agreement, or any exhibit, certificate, or other instrument
furnished or to be furnished by the Stockholders hereunder, (b) any
nonfulfillment of any agreement on the part of the Stockholders under this
Agreement, or (c)from any material misrepresentation in or material omission
from, any certificate or other instrument furnished or to be furnished to COPPER
hereunder.
Section 7.2 Indemnification from COPPER. COPPER agrees to and shall indemnify,
defend (with legal counsel reasonably acceptable to the Stockholders) and hold
the Stockholders, their agents, affiliates and assigns harmless at all times
after the date of the Agreement from and against, and in respect of any
liability, claim, deficiency, loss, damage, penalty or injury, and all
reasonable costs and expenses (including reasonably attorneys' fees and costs of
any suit related thereto) suffered or incurred by the Stockholders, arising from
(a) any misrepresentation by, or breach of any covenant or warranty of COPPER
contained in this Agreement or any exhibit, certificate, or other agreement or
instrument furnished or to be furnished by COPPER hereunder, or any claim by a
third party (regardless of whether the claimant is ultimately successful), which
if true, would be such a misrepresentation or breach; (b) any nonfulfillment of
any agreement on the part of COPPER under this Agreement, or from any
misrepresentation in or omission from, any exhibit, certificate or other
agreement or instrument furnished or to be furnished to the Stockholders
hereunder; or (c) any suit, action, proceeding, claim or investigation against
the Stockholders which arises from or which is based upon or pertaining to
COPPER's conduct or operation of the business of the COPPER and any other matter
or state of facts relating to the transactions contemplated herein subsequent to
Closing.
Section 7.3 Defense of Claims. If any lawsuit or enforcement action is filed
against any party entitled to the benefit of indemnity hereunder, written notice
thereof shall be given to the indemnifying party as promptly as practicable (and
in any event not less than fifteen (15) days prior to any hearing date or other
date by which action must be taken); provided that the failure of any
indemnified party to give timely notice shall not affect rights to
indemnification hereunder except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, the
indemnifying party shall be entitled, if it so elects, to take control of the
defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense; and such indemnified party shall cooperate in
all reasonable respects, at its cost, risk and expense, with the indemnifying
party and such attorneys in the investigation, trial and defense of such lawsuit
or action and any appeal arising therefrom; provided, however, that the
indemnified party may, at its own cost, participate in such investigation, trial
and defense of such lawsuit or action and any appeal arising therefrom. The
indemnifying party shall not, without the prior written consent of the
indemnified party, effect any settlement of any proceeding in respect of which
any indemnified party is a party and indemnity has been sought hereunder unless
such settlement of a claim, investigation, suit, or other proceeding only
involves a remedy for the payment of money by the indemnifying party and
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
Section 7.4 Default of Indemnification Obligation. If an entity or individual
having an indemnification, defense and hold harmless obligation, as above
provided, shall fail to assume such obligation, then the party or entities or
both, as the case may be, to whom such indemnification, defense and hold
harmless obligation is due shall have the right, but not the obligation, to
assume and maintain such defense (including reasonable counsel fees and costs of
any suit related thereto) and to make any settlement or pay any judgment or
verdict as the individual or entities deem necessary or appropriate in such
individual's or entities' absolute sole discretion and to charge the cost of any
such settlement, payment, expense and costs, including reasonable attorneys'
fees, to the entity or individual that had the obligation to provide such
indemnification, defense and hold harmless obligation and same shall constitute
an additional obligation of the entity or of the individual or both, as the case
may be.
ARTICLE VIII
CONDITIONS SUBSEQUENT
Section 8.1. Registration of shares and Stock Exchange Listing. Following the
Closing and the consummation of the transactions contemplated hereunder, COPPER
will register any of the presently outstanding shares with the Securities and
Exchange Commission. COPPER will cause those shares plus those shares designated
for registration as listed in Exhibit A to be listed with the NASD on the Over
the Counter Bulletin Board.
Section 8.2. Securities and Exchange Filing. Following the Closing appropriate
filings will be made with the Securities and Exchange Commission on Form 8K.
ARTICLE IX
COVENANTS OF STOCKHOLDERS
Section 9.1 Reverse split of Common Stock of COPPER. The Stockholders may take
any action to cause COPPER to effectuate a reverse stock split of its common
stock at its discretion to provide for future issuance of shares to carry out
the business plan of the Company.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices. All notices and other communications provided for herein
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid, or overnight air courier guaranteeing next day delivery:
(a) If to COPPER, to:
COPPER CORP.
00000 X. Xxxxxx Xxxx Xx.
Xxxxxxxx, XX 00000
Xxxxx X. Xxxxxxx, President
With copy to
(b)If to the Stockholders to:
AMERICAN Stockholders at their address reflected on Exhibit A
With a copy to:
(c) If to AMERICAN, to:
All notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; three days after being
deposited in the mail, postage prepaid, sent certified mail, return receipt
requested, if mailed; and the next day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
If a notice or communication is mailed in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it. Any
party hereto may change its address by notifying the other parties as provided
for in this notice provision.
Section 10.2 Waiver. Any waiver of any provision of this Agreement shall be
effective only if in writing, and no waiver of any provision of this Agreement
shall constitute a waiver of any other provision of this Agreement, nor shall
such waiver constitute a waiver of any subsequent breach of such provision.
Section 10.3 Assignment. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective successors and assigns and may
not be assigned unless agreed to in writing by all parties hereto.
Section 10.4 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which shall
be deemed one instrument.
Section 10.5 Section Headings. The section headings contained in this Agreement
are for convenient reference only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 10.6 Entire Agreement. This Agreement, the documents to be executed
hereunder and the exhibits and schedules attached hereto constitute the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties pertaining to the subject matter hereof,
and there are no warranties, representations or other agreements among the
parties in connection with the subject matter hereof except as specifically set
forth herein or in documents delivered pursuant hereto. No supplement,
amendment, alteration, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the parties hereto. All of the
exhibits and schedules referred to in this Agreement are hereby incorporated
into this Agreement by reference and constitute a part of this Agreement.
Section 10.7 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
Section 10.8 Governing Law. This Agreement shall be construed and enforceable
under and in accordance and governed by the laws of the State of Colorado.
Section 10.9 Costs and Expenses. COPPER and the Stockholders shall each pay
their own respective fees and disbursements incurred in connection with this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to
be executed as of the day and year first above written.
COPPER CORP.
By: /s/ Xxxxx X. Xxxxxxx, President
STOCKHOLDERS OF AMERICAN REAL ESTATE INVESTORS, INC.
ALL AMERICAN FINANCIAL MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxx, President
EXHIBIT A
Stockholder Shares of Shares of Shares of
and Address AMERICAN to Exchange Copper to receive Copper to register
ALL AMERICAN
FINANCIAL
MANAGEMENT, INC. _____________ 1,300,000 1,300,000
