EXHIBIT 2.1
Letter of Intent
October 23, 2003
Reference: Proposed Acquisition of Xxxxx Xxxx Contractors, Inc.
The parties: Fortis Enterprises (hereinafter referred to as "FRTE") and Xxxxx
Xxxx Contractors, Inc. (hereinafter referred to as "XXXX")
This Letter of Intent outlines certain terms, subject to certain conditions set
forth below, pursuant to which Fortis Enterprises (FRTE) and Xxxxx Xxxx
Contractors, Inc. (XXXX) propose to reorganize to effect an acquisition by FRTE
of all of the issued and outstanding equity shares of Xxxxx Xxxx Contractors,
Inc. (the "Xxxxx Xxxx Contractors Shares") in a stock-for-stock exchange for
FRTE equity shares, which is intended to qualify as a tax-free reorganization
under Section 368(a)1(A) of the Internal Revenue Code of 1986. The proposed
transaction (the "Acquisition") is intended to be a "purchase" in accordance
with Generally Accepted Accounting Principles ("GAAP") and regulatory standards
governing such a transaction.
1. The Proposed Acquisition. The terms of the Acquisition are generally
expected to provide as follows:
1.1 The Xxxxx Xxxx Contractors Shares will be acquired by FRTE and Xxxxx
Xxxx Contractors will be merged into FRTE. The terms and conditions
of the transaction will be subject to such adjustments as the
parties may agree in the definitive acquisition agreement (the
"Agreement").
1.2 Upon the closing of the Acquisition, it is intended that FRTE will
have completed the following activities:
1.2.1 The Purchase Price shall be $1,750,000 paid to XXXX. Payment
of said Purchase Price shall be by the delivery by FRTE,
within ten (10) days of the closing date, into escrow of a
number of shares of restricted stock of the FRTE, that equals
the sum of $1,750,000 based on the lowest bid price of the
FRTE's common stock as quoted on the Electronic Bulletin Board
the day prior to closing. In the event the shares delivered to
and sold by the XXXX (after the expiration of applicable
holding periods) pursuant to the terms of this Agreement fail
to gross a total of $1,750,000, FRTE shall within five (5)
business days of notice of this event, and subject to demand
under the terms of this agreement, deliver a sufficient number
of additional shares in order to deliver to XXXX for
distribution any remaining balance of the $1,750,000.
1.2.2 Employment Agreement established with both Xxxx and Xxxx
providing $1,500/week salary for each, as well as 2 weeks of
paid vacation time
1.2.3 Bonus Structure - If monthly sales exceed $150,000, a bonus of
5% of the amount exceeding $150,000 each to both Xxxx and Xxxx
1.2.4 Provide "Key Man" life insurance on both Xxxx and Xxxx
(policies are already in place)
1.2.5 Provide Company owned vehicles or vehicle allowance for both
Mark and Xxxx
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Letter of Intent
2. Expenses. FRTE will be responsible for payment of all of FRTE's expenses
incurred by it and relating to the proposed Acquisition, and Xxxxx Xxxx
Contractors shall be responsible for payment of all Xxxxx Xxxx Contractors
expenses incurred by it and relating to the proposed Acquisition.
3. Subject to Definitive Agreement. Consummation of the Acquisition shall be
subject to the negotiation, execution and delivery of the Agreement. To
that end, the parties hereto shall endeavor, in good faith, to negotiate
the Agreement setting forth all of the terms and conditions of the
contemplated transaction. The Agreement shall include, among other
provisions, representations, warranties, covenants and indemnification, by
both FRTE and Xxxxx Xxxx Contractors, of the type customary in a
stock-for-stock acquisition agreement in which a publicly-held company is
acquiring a privately company. The agreement shall further set forth the
terms of the Acquisition and including, but not limited to, the structure
of the Acquisition and the requirement for the preparation and filing of
all the necessary materials with the SEC if any filings are required. The
Agreement shall also contain, among other things, the following conditions
which must be satisfied before the parties become obligated to effect a
closing of the Acquisition (the "Closing"):
3.1 Approval of the Board of Directors of both FRTE and Xxxxx Xxxx
Contractors.
3.2 Unrestricted due diligence with respect to business and financial
statements of both FRTE and Xxxxx Xxxx Contractors, effected with
the assistance of their respective independent accounting firms and
legal counsel, the results of which examination shall be
satisfactory to each respective party.
3.3 Receipt of all approvals, authorizations and clearances needed from
any governmental and regulatory authority.
3.4 No material adverse change in the regulatory status, conditions,
assets, operations or business of FRTE between the date of the
Agreement and the date of the Closing.
3.5 FRTE having timely filed all reports with the SEC required by
Sections 13 or 15(d) of the Securities and Exchange Act of 1934 (the
'34 Act) in compliance with all current rules and regulations of the
SEC.
3.6 FRTE shall not have received any notices of suspensions with respect
to the trading of its shares of common stock in the public markets
or with respect to any investigation, whether private or public, by
the SEC, NASD, Nasdaq or any other governmental or
quasi-governmental organization.
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Letter of Intent
4. Definitive Agreement. Upon the acceptance of this letter by FRTE and Xxxxx
Xxxx Contractors, the parties will promptly negotiate, in good faith, the
terms of a definitive agreement (the "Definitive Agreement"). The
Definitive Agreement will be in a form customary for transactions of this
type and will include, in addition to those matters specifically set forth
in this letter, customary representations, warranties, indemnities,
covenants and agreements of the FRTE and Xxxxx Xxxx Contractors, customary
conditions of closing and other customary matters.
5. Investigative Due Diligence. Both the execution of the Agreement and the
consummation of the Acquisition shall be contingent upon completion of due
diligence by FRTE and Xxxxx Xxxx Contractors, the results of which shall
be satisfactory to both parties. Each party will permit the other's
accounting, legal and other representatives to conduct an examination of
any and all matters reasonably requested. Each party will also cause to be
made available to the other, such of its officers, directors, employees,
attorneys, accountants, advisors, consultants, and other representatives
as such other party may wish to consult.
6. Public Announcements. Subject to applicable law, any public announcement
relating to this transaction will be mutually agreed upon and jointly made
by the parties.
7. Confidential Information. All parties to this Agreement, including
advisors, associates and consultants, agree to keep confidential any and
all information relating to the parties and the contemplated transaction
described herein, until such information has been released to the public
in the form of a press release.
8. Termination. This letter and the obligations contained herein will be
terminated, with the exception of Paragraphs 2 and 7, unless the letter is
signed and entered into by October 3, 2003 at 5:00pm EST. The parties may
agree to an extension or if unable to agree to terms this letter shall be
without further force or effect.
9. Governing Law. This letter shall be governed and construed in accordance
with the laws of the State of Florida, without regard to laws relating to
conflicts of interest.
It is understood by the parties hereto that this letter of intent is intended to
describe the terms that are the essence of a definitive and binding agreement.
However, until such a definitive agreement is negotiated, executed and delivered
by the parties neither party is committed to consummate the Acquisition.
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Letter of Intent
If the forgoing represents your agreement to the matters addressed herein,
please sign and return to us the duplicate of this letter enclosed herewith.
This letter may be executed in more than one counterpart, all of which taken
together shall constitute one and the same document.
Very truly yours,
FORTIS ENTERPRISES
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, President/CEO
Fortis Enterprises
Accepted and Agreed:
XXXXX XXXX CONTRACTORS, INC.
/s/ Xxxx Xxxx, President
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Xxxxx Xxxx Contractors
/s/ illegible
/s/ illegible
