EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of this
16th day of April 2004 ("Effective Date"), by and among netGuru, Inc., a
Delaware corporation ("Seller") and Xxxxxx Xxxxxx, an individual ("Buyer").
RECITALS
A. Seller owns, in the aggregate, all of the issued and outstanding
shares (the "Shares") of capital stock of e-Destinations, Inc., a California
corporation (the "Company").
B. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, the Shares on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties to this Agreement agree as follows:
1. PURCHASE TERMS
1.1 PURCHASE AND SALE. Subject to the terms and conditions set
forth herein, at the Closing (as defined in Section 5.1 below), Seller shall
transfer, convey, assign and deliver the Shares to Buyer, and Buyer shall
acquire, purchase and accept the Shares from Seller and assume all assets and
liabilities of the Company.
1.2 PURCHASE PRICE. The aggregate purchase price for the
Shares shall be US$165,000.00 (the "Purchase Price"). Buyer shall pay Seller the
Purchase Price on or before the Effective Date via cashier's check or electronic
wire transfer.
1.3 RELEASE OF EMIRATES LETTER OF CREDIT. Within thirty (30)
days from the Effective Date, Buyer shall cause the release of Seller's
US$100,000.00 letter of credit placed with Emirates Airlines (the "LC") and have
the LC funds returned to Seller.
1.4 REPLACEMENT OF ARC BOND AND GENERAL RELEASE. Within thirty
(30) days from the Effective Date, Buyer shall replace the US$70,000.00 bond
placed with the Airlines Reporting Corporation ("ARC") and cause the return of
the bonded funds to Vinod Bhindi, Xxxxxxx Bhindi and Jayent Bhindi (collectively
"Bhindi"). Buyer shall further obtain a general release of all claims from
Bhindi in favor of Seller absolving Seller of any obligation or liability
pursuant to the Stock Purchase Agreement dated January 31, 2000 and Lease
Agreement (including Seller's tenure as a month-to-month tenant subsequent to
the lease term expiration) entered into between Bhindi and Seller in the form
attached hereto as Exhibit II. Buyer agrees to indemnify Seller against any
claims asserted by Bhindi against Seller pertaining to the subject matter hereof
after the Closing Date.
1.5 EXCLUDED ASSETS FROM PURCHASE AND SALE. Buyer acknowledges
that the Internet portal (XXX.XXXXXXXXXXXXX.XXX) hosting the Company's offered
travel services and all intellectual property technology thereto, including, but
not limited to, all source code, content, names, trade names, domain names and
registrations, marks, logos, copyrights, trademarks, patents and URL's
(collectively the "IP") are excluded assets from the purchase and sale of the
Shares of the Company and Buyer expressly disclaims any right, title or interest
in the IP. Buyer further acknowledges that Seller shall retain all right, title
and interest in the Company's accounts receivable up through and including
December 31, 2003 and that Seller shall have the exclusive right to pursue
collections on any such accounts within its sole discretion. If Buyer receives
any funds from the Company's accounts receivable prior to January 1, 2004, Buyer
agrees to notify Seller within 24 hours of receipt of said funds and agrees to
remit the received funds to Seller by the following business day.
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2. REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller represents and warrants to Buyer as set forth below. In
this Agreement, any reference to any event, change or effect being "material"
with respect to any entity or group of entities means any material event, change
or effect related to the condition (financial or otherwise), properties, assets,
liabilities, businesses, operations, results of operations or prospects of such
entity or group of entities taken as a whole. In this Agreement, the term
"Material Adverse Effect" used in connection with a party or any of that party's
subsidiaries means any event, change or effect that is materially adverse to the
condition (financial or otherwise), properties, assets, liabilities, businesses,
operations, results of operations or prospects of that party and its
subsidiaries, taken as a whole; PROVIDED, HOWEVER, that a Material Adverse
Effect shall not include any adverse effect resulting from general economic
conditions or conditions affecting the engineering software market.
2.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of California, has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes qualification necessary, other than
in jurisdictions where the failure to qualify would not have a Material Adverse
Effect. The Seller has made available to Buyer or its counsel complete and
correct copies of the articles of incorporation and bylaws of the Company, as
amended to the date of this Agreement, and copies of all minutes of meetings and
actions by written consent of shareholders, directors and board committees of
the Company.
2.2 CAPITAL STRUCTURE.
2.2.1 STOCK. The authorized capital stock of the
Company consists of 10,000 shares of common stock ("Common Stock") and no shares
of preferred stock. At the close of business on April 16, 2004, 10,000 shares of
Common Stock were issued and outstanding. All outstanding shares of Common Stock
are validly issued, fully paid and non-assessable and not subject to preemptive
rights.
2.3 AUTHORITY.
2.3.1 CORPORATE ACTION. Seller has all requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller and this Agreement is
the valid and binding obligation of Seller, enforceable in accordance with its
terms, except that such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) general equitable
principles.
2.3.2 SELLER'S AUTHORITY. Seller has full power and
capacity to enter into this Agreement. This Agreement has been duly executed and
delivered by Seller and this Agreement is the valid and binding obligation of
Seller, enforceable in accordance with its terms, except that enforceability may
be subject to (i) bankruptcy, insolvency, reorganization or other similar laws
affecting or relating to enforcement of creditors' rights generally and (ii)
general equitable principles. 1.1.1
2.3.3 NO CONFLICT. Neither the execution, delivery
and performance of this Agreement, nor the consummation of the transactions
contemplated hereby nor compliance with the provisions hereof will conflict
with, or result in any violations of, or cause a default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation contained in, or the
loss of any material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the material properties or
assets of Seller under, any term, condition or provision of (x) the articles of
incorporation or bylaws of Seller or (y) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other material agreement, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Seller or its
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properties or assets, other than any such conflicts, violations, defaults,
losses, liens, security interests, charges, or encumbrances which, individually
or in the aggregate, would not have a Material Adverse Effect.
2.3.4 GOVERNMENTAL CONSENTS. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (each a "Governmental Entity"), is required
to be obtained by Seller in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
2.4 FINANCIAL STATEMENTS. The Seller has furnished to Buyer
copies of: (a) the unaudited compiled balance sheets of the Company for the
periods ending March 31, 2001 and March 31, 2002 and March 31, 2003, and the
related statements of income for the periods then ended attached hereto as
Exhibit I. All financial statements referred to in this Section 2.4 (the
"Financial Statements") are complete and correct, have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the respective periods, and fairly present the financial condition
of the Company as at the respective dates thereof and the results of operation
of the Company for the respective periods covered by the statements of income.
The Company does not have any material obligations or liabilities, contingent or
otherwise, not fully disclosed by Financial Statements.
2.5 COMPLIANCE WITH APPLICABLE LAWS. The business of the
Company is not being conducted in violation of any law, ordinance, regulation,
rule or order of any Governmental Entity where the violation would have a
Material Adverse Effect. The Seller has not been notified by any Governmental
Entity that any investigation or review with respect to the Company is pending
or threatened, nor has any Governmental Entity notified the Seller of its
intention to conduct an investigation or review. The Company has all permits,
licenses and franchises from Governmental Entities required to conduct its
business as now being conducted, except for those whose absence would not have a
Material Adverse Effect.
2.6 INSURANCE. The Seller maintains and at all times and has
maintained fire and casualty and general liability insurance that the Seller
believes to be reasonably prudent for its business. The Seller has delivered or
made available to Buyer complete and correct copies of all such policies,
together with all riders and amendments thereto. These policies are in full
force and effect, and all premiums due thereon have been paid. The Seller has
complied in all material respects with the terms and provisions of the policies.
2.7 LITIGATION. There is no suit, action, arbitration, demand,
claim or proceeding pending or, to the best knowledge of the Seller, threatened
against the Company, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against the Company
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
2.8 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed
hereunder, (i) the Seller did not have any liabilities or obligations of any
nature (matured or unmatured, fixed or contingent) which were material to the
Seller, taken as a whole, and were not provided for in the consolidated balance
sheet of the Seller and (ii) all reserves established by the Seller and set
forth in the Balance Sheet were reasonably adequate.
2.9 NO DEFAULTS. The Seller is not in default under, and there
exists no event, condition or occurrence which, after notice or lapse of time,
or both, would constitute a default by the Seller under, any contract or
agreement to which the Seller is a party and which would, if terminated or
modified, have a Material Adverse Effect.
2.10 PERSONAL PROPERTY. The Seller has good title, free and
clear of all title defects, objections and liens, including conditional sales
contracts, collateral security arrangements and other title or
interest-retaining arrangements, to all of its machinery, equipment, furniture,
inventory and other personal property. All personal property used in the
business of the Company is in good operating condition. All of the leases to
personal property utilized in the business of the Seller are valid and
enforceable against the Seller and are not in default by the Seller, or, to the
knowledge of the Seller or Seller, are any of the other parties thereto in
default thereof.
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2.11 CANCELLATION OF RELATED PARTY DEBT. Subject to the terms
of this Agreement, all inter-company payables and related party or shareholder
debt shall be cancelled as of the Closing Date, excluding payroll and payroll
processing fees incurred by Seller on behalf of Buyer prior to Closing in the
sum of $7,056.24 which Buyer agrees to pay to Seller forthwith.
3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to the Seller that:
3.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER.
Buyer has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes
qualification necessary, other than in jurisdictions where the failure to
qualify would not have a Material Adverse Effect.
3.1.1 GOVERNMENTAL CONSENTS. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained by Buyer in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
3.2 DISCLOSURE. No representation or warranty made by Buyer in
this Agreement, nor any document, written information, written statement,
financial statement, certificate or exhibits prepared and furnished or to be
prepared and furnished by Buyer or its representatives pursuant hereto or in
connection with the transactions contemplated hereby, when taken together,
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements or facts contained herein.
4. INDEMNIFICATION OF THE PARTIES.
4.1 INDEMNIFICATION BY SELLER. Seller shall indemnify, defend,
protect and hold harmless Buyer, each of their respective successors and assigns
and each of their respective directors, officers, employees, agents and
affiliates (each an "Buyer's Indemnified Party"), at all times from and after
the date of this Agreement against all losses, claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, costs and expenses ("Losses")
(including specifically, but without limitation, reasonable attorneys' fees and
expenses of investigation ("Legal Expenses") based upon, resulting from or
arising out of (i) any inaccuracy or breach of any representation, or warranty
of the Seller or Seller contained in or made in connection with this Agreement,
and (ii) the breach by the Seller or Seller of, or the failure by the Seller or
Seller to observe, any of their respective covenants or other agreements
contained in or made in connection with this Agreement.
4.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend,
protect and hold harmless Seller, each of its respective successors and assigns
and each of their respective directors, officers, employees, agents and
affiliates (each an "Seller's Indemnified Party"), at all times from and after
the date of this Agreement against all losses, claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, costs and expenses ("Losses")
(including specifically, but without limitation, reasonable attorneys' fees and
expenses of investigation ("Legal Expenses")) based upon, resulting from or
arising out of (i) any inaccuracy or breach of any representation, or warranty
of the Buyer contained in or made in connection with this Agreement, and (ii)
the breach by the Buyer of, or the failure by the Buyer to observe, any of their
respective covenants or other agreements contained in or made in connection with
this Agreement.
4.3 ADJUSTMENTS TO INDEMNIFICATION PAYMENTS. Any payment made
to any Buyer Indemnified Party or any Seller Indemnified Party (each, an
"indemnified party") pursuant to this Section 4 in respect of any claim will be
net of any insurance proceeds realized by and paid to the indemnified party in
respect of any such claim. The indemnified party will use its reasonable efforts
to make insurance claims relating to any claim for which it is seeking
indemnification pursuant to this Section 4; PROVIDED, HOWEVER, that the
indemnified party will not be obligated to make such an insurance claim if the
indemnified party in its reasonable judgment believes the cost of pursuing such
an insurance claim, together with any corresponding increase in insurance
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premiums or other chargebacks to the indemnified party, would exceed the value
of the claim for which the indemnified party is seeking indemnification.
4.4 INDEMNIFICATION PROCEDURES.
(1) Promptly after receipt by an indemnified party of
notice of the commencement of any action, suit or proceeding by a person not a
party to this Agreement in respect of which the indemnified party will seek
indemnification hereunder (a "Third Party Action"), the indemnified party shall
notify the party required to provide indemnification (the "indemnifying party")
in writing, but any failure to so notify the indemnifying party shall not
relieve it from any liability that it may have to the indemnified party, except
to the extent that the indemnifying party is prejudiced by the failure to give
such notice. The indemnifying party shall be entitled to participate in the
defense of such Third Party Action and to assume control of such defense
(including settlement of such Third Party Action) with counsel reasonably
satisfactory to such indemnified party; PROVIDED, HOWEVER, that:
(2) the indemnified party shall be entitled to
participate in the defense of such Third Party Action and to employ counsel at
its own expense (which shall not constitute Legal Expenses for purposes of this
Agreement) to assist in the handling of such Third Party Action;
(3) the indemnifying party shall obtain the prior
written approval of the indemnified party before entering into any settlement of
such Third Party Action or ceasing to defend against such Third Party Action, if
pursuant to or as a result of such settlement or cessation, injunctive or other
equitable relief would be imposed against the indemnified party or the
indemnified party would be adversely affected thereby;
(4) no indemnifying party shall consent to the entry
of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by each claimant or plaintiff to each
indemnified party of a release from all liability in respect of such Third Party
Action; and
(5) the indemnifying party shall not be entitled to
control the defense of any Third Party Action unless the indemnifying party
confirms in writing its assumption of such defense and continues to pursue the
defense reasonably and in good faith. After written notice by the indemnifying
party to the indemnified party of its election to assume control of the defense
of any such Third Party Action in accordance with the foregoing, (i) the
indemnifying party shall not be liable to such indemnified party hereunder for
any Legal Expenses subsequently incurred by such indemnified party attributable
to defending against such Third Party Action, and (ii) as long as the
indemnifying party is reasonably contesting such Third Party Action in good
faith, the indemnified party shall not admit any liability with respect to, or
settle, compromise or discharge the claim underlying, such Third Party Action
without the indemnifying party's prior written consent. If the indemnifying
party does not assume control of the defense of such Third Party Action in
accordance with this Section 4, the indemnified party shall have the right to
defend and/or settle such Third Party Action in such manner as it may deem
appropriate at the cost and expense of the indemnifying party, and the
indemnifying party will promptly reimburse the indemnified party therefore in
accordance with this Section 4. The reimbursement of fees, costs and expenses
required by this Section 4 shall be made by periodic payments during the course
of the investigation or defense, as and when bills are received or expenses
incurred.
(6) If an indemnified party has actual knowledge of
any facts or circumstances other than the commencement of a Third Party Action
which cause in good faith it to believe that it is entitled to indemnification
under this Section 4, then such indemnified party shall promptly give the
indemnifying party notice thereof in writing, but any failure to so notify the
indemnifying party shall not relieve it from any liability that it may have to
the indemnified party except to the extent that the indemnifying party is
prejudiced by the failure to give such notice.
4.5 MANNER OF INDEMNIFICATION. All indemnification under this
Section 4 shall be effected by the payment of cash or delivery of a bank
cashier's check, or by a combination of the foregoing.
5. CLOSING.
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5.1 CLOSING DATE. The closing of the transactions contemplated
by this Agreement ("Closing") will take place on April 16, 2004 ("Closing
Date").
5.2 Deliveries by the Seller at the Closing. At the Closing,
the Seller shall deliver to Buyer:
(1) Certificates representing the total Shares
(10,000), free of liens or encumbrances, accompanied by duly executed stock
powers by Seller in favor of Buyer with all necessary transfer stamps affixed
thereto or other evidence of payment of applicable stock transfer taxes, if any.
On the Closing Date and except as otherwise provided in this Agreement, Buyer
shall acquire all assets and liabilities of the Company, including, but not
limited to, any and all obligations owed to The Sabre Group, Inc., the ARC, rent
for the Company's business premises, employees' payroll and benefits and
applicable taxes, commission payments, premises liability insurance, workers
compensation insurance and any other expenses arising during the ordinary course
of the Company's business operations.
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations, warranties and covenants of the parties
contained in this Agreement will remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the parties to this
Agreement, until three years after the Closing Date, whereupon the
representations, warranties and covenants will expire.
7. MISCELLANEOUS.
7.1 GOVERNING LAW. The internal laws of the State of
California (irrespective of its choice of law principles) will govern the
validity of this Agreement, the construction of its terms and the interpretation
and enforcement of the rights and duties of the parties hereto.
7.2 ASSIGNMENT. Either party may assign its rights but not its
obligations hereunder without the prior written consent of the other party
hereto.
7.3 SEVERABILITY. If any provision of this Agreement, or the
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the interest of the parties hereto. The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the greatest extent possible, the economic,
business and other purpose of the void unenforceable provision.
7.4 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original as regards any party
whose signature appears thereon and all of which together will constitute one
and the same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all the parties reflected hereon as signatories.
7.5 OTHER REMEDIES. Except as otherwise provided herein, any
and all remedies expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law on such party,
and the exercise of any one remedy will not preclude the exercise of any other.
7.6 AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof or default in the performance hereof will
not be deemed to constitute a waiver of any other default or any succeeding
breach or default.
7.7 EXPENSES. Buyer, on the one hand, and Seller, on the
other, will each bear their own expenses and legal fees incurred with respect to
this Agreement and the transactions contemplated hereby.
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7.8 ATTORNEYS' FEES. Should suit be brought to enforce or
interpret any part of this Agreement, the prevailing party will be entitled to
recover, as an element of the costs of suit and not as damages, reasonable
attorneys' fees to be fixed by the court (including, without limitation, costs,
expenses and fees on any appeal).
7.9 NOTICES. All notices and other communications pursuant to
this Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (at such other address for a party as shall be
specified by like notice):
If to the Seller to: netGuru, Inc.
00000 Xxxx Xxxxx Xxxxxxx
Xxxxx Xxxxx, XX 00000
(000) 000-0000 (fax)
Attn: President
If to the Buyers: Xxxxxx Xxxxxx
00000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
(000) 000-0000 (fax)
All notices and other communications shall be deemed to have
been received (a) in the case of personal delivery, on the date of delivery, (b)
in the case of a telecopy, when the party receiving the copy shall have
confirmed receipt of the communication, (c) in the case of delivery by
nationally-recognized overnight courier, on the business day following dispatch,
and (d) in the case of mailing, on the third business day following such
mailing.
7.10 CONSTRUCTION OF AGREEMENT. This Agreement has been
negotiated by the respective parties hereto and their attorneys and the language
hereof will not be construed for or against either party. A reference to a
Section or an Exhibit will mean a Section in, or Exhibit to, this Agreement
unless otherwise explicitly set forth. The titles and headings herein are for
reference purposes only and will not in any manner limit the construction of
this Agreement which will be considered as a whole.
7.11 NO JOINT VENTURE. Nothing contained in this Agreement
will be deemed or construed as creating a joint venture or partnership between
any of the parties hereto. No party is by virtue of this Agreement authorized as
an agent, employee or legal representative of any other party. No party will
have the power to control the activities and operations of any other. The status
of the parties hereto is, and at all times will continue to be, that of
independent contractors with respect to each other. No party will have any power
or authority to bind or commit any other. No party will hold itself out as
having any authority or relationship in contravention of this Section.
7.12 FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.
7.13 ABSENCE OF THIRD PARTY RIGHTS. No provisions of this
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder or partner of any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
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7.14 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto. The express terms hereof control and
supersede any course of performance or usage of trade inconsistent with any of
the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed by their duly authorized respective officers as of the
date first above written.
netGuru, Inc.
a Delaware corporation
By: /S/ XXXXXXX XXX
------------------------------------
Xxxxxxx Xxx, Chief Operating Officer
/S/ XXXXXX XXXXXX
------------------------------------
Xxxxxx Xxxxxx, an individual
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Exhibit I
Unaudited financial statements for the years ended March 31, 2001, March 31,
2002 and March 31, 2003.
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eDestinations, Inc.
Balance Sheet (unaudited)
(In US$)
At
3/31/2001
---------
Current Assets:
Cash - Bank of America (8714) 213,377
Cash - Bank of America (10736) 38,422
Cash - State Bank of India (0000000) 1,665
Xxxx - Xxxxx Fargo 35
Accounts Receivable 318,012
---------
Total current assets 571,510
Fixed Assets:
Furniture & Fixtures 25,009
- Accumulated depreciation (22,766)
Leasehold Improvements 8,837
- Accumulated depreciation (8,837)
---------
Total fixed assets 2,243
Other Assets:
Deposits 20,000
Letter of Credit-State Bank of India 10,000
Organization costs 1,091
- Accumulated depreciation (1,091)
Net Deposits (114,714)
---------
Total other assets (80,714)
Total assets 493,039
Liabilities and Equity
Current Liabilities:
A/P Operating 35,318
Inter-company payable to parent 461,671
---------
Total current liabilities 496,989
Long-term liabilities --
---------
Total liabilities 496,989
---------
Stockholders' equity
Capital 42,000
Retained earnings-prior year 43,310
Retained earnings-current (89,260)
---------
Total stockholders' equity (3,951)
---------
Total liabilities and equity 493,039
---------
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eDestinations, Inc.
Statement of Operations (unaudited)
(In US$)
YTD
Fiscal 2001
-----------
Tickets/Tours revenue 1,248,590
Total Misc. service 63,785
Total Revenue 1,312,376
Cost of sales 930,879
-----------
Gross Profit 381,496
-----------
EXPENSES:
---------
Payroll 175,019
GW amortization 210,433
Depreciation 1,173
Car allowance 8,801
Dues & membership 505
Education/seminars 666
Refreshments 621
Airfare 2,308
Travel-meals 356
Travel-other 3,361
Meals & entertainment 2,058
Advertising 375
Promotional 1,182
Agent's commission 10,125
Accounting fees 2,106
Bank charges 3,078
Bank charges-cc 7,113
Consulting & profess. Fees 825
Printing-outside service 2,705
Postage/courier 9,485
Office equipment 722
Office supplies 750
Software purchases 1,039
Subscriptions/dues 39
Facility rent 16,250
Maintenance/repairs 3,110
Insurance 569
Office moving expense 1,497
Security system 464
Telephone 17,752
Internet 356
Donations given 1,435
Miscellaneous expense 2,453
Penalty 1,123
Licenses and taxes 228
Employee bonus 1,875
Payroll processing fees 1,769
Payroll taxes & FTB 800
Total expenses 517,559
Other exp/(income) (821)
-----------
Pre-tax income/(loss) 135,242)
Tax provision (benefit) (45,982)
-----------
Net income (loss) (89,260)
===========
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eDestinations, Inc.
Balance Sheet (unaudited)
(In US$)
At
3/31/02
---------
Current Assets:
Cash - Bank of America (8714) 242,156
Cash - State Bank of India (0000000) 46,659
Accounts Receivable 333,349
---------
Total current assets 622,165
Fixed Assets:
Furniture & Fixtures 39,509
- Accumulated depreciation (27,753)
Leasehold Improvements 8,837
- Accumulated depreciation (8,837)
---------
Total fixed assets 11,756
Other Assets:
Prepaid Assets
8,560
Deposits 20,000
Letter of Credit-State Bank of India 10,000
Organization costs 1,091
- Accumulated depreciation (1,091)
---------
Total other assets 38,560
---------
Total assets 672,481
---------
Liabilities and Equity
Current Liabilities:
A/P Operating 107,553
Deferred revenue-tickets 2,084
Inter-company payable to parent 788,089
---------
Total current liabilities 897,727
Long-term liabilities --
---------
Total liabilities 897,727
---------
Stockholders' equity
Capital 42,000
Retained earnings-prior year (45,951)
Retained earnings-current (221,295)
---------
Total stockholders' equity (225,246)
---------
Total liabilities and equity 672,481
---------
12
e-Destinations, Inc.
Statement of Operations (unaudited)
(In US$)
YTD
Fiscal 2002
------------
Tickets/Tours revenue 1,948,679
Total Misc. service 1,181
------------
Total Revenue 1 ,979,860
Cost of sales 1,697,629
------------
Gross Profit 282,232
------------
Expenses:
Payroll 193,430
Payroll processing fees 2,646
Car allowance 7,793
Dues & membership 465
Education/seminars 286
Other employee related 138
Refreshments 426
Executive expense 1,026
Airfare 257
Travel-meals 735
Travel-other 3,197
Meals & entertainment 1,045
Advertising 200
Promotional 398
Bank charges 8,927
Bank charges-cc 3,245
Consulting & professional fees 150
Printing-outside service 1,136
Postage/courier 8,609
Office equipment 5
Office supplies 1,733
Maintenance/repairs 1,333
Facility rent 16,050
Property Taxes/ Travel 207
Security system 629
Telephone 20,742
Internet 314
GW amortization 225,156
Donations given 868
Miscellaneous expense 328
Depreciation 4,987
------------
Total expenses 506,461
Other exp/(income) (2,724)
------------
Pre-tax income/(loss) (221,505)
Tax provision (benefit) (210)
------------
Net income (loss) (221,295)
------------
13
e-Destinations, Inc.
Balance Sheet (unaudited)
(In US$)
At
03/31/03
-------------
Current Assets:
Cash - Bank of America (8714) 80,638.05
Cash - State Bank of India (0000000) 7,857.99
Accounts Receivable 275,112.81
Inter-company receivable-NGI 100,150.00
-------------
Total current assets 463,758.85
Fixed Assets:
Furniture & Fixtures & software 50,508.53
- Accumulated depreciation (36,383.49)
Leasehold Improvements 8,837.40
- Accumulated depreciation (8,837.40)
-------------
Total fixed assets 14,125.04
-------------
Other Assets:
Employee loan-current 800.00
Travel advance 500.00
Deposits 20,000.00
Letter of Credit-State Bank of India 10,000.00
Organization costs 1,091.00
- Accumulated depreciation (1,091.00)
-------------
Total other assets 31,300.00
-------------
Total assets 509,183.89
-------------
Liabilities and Equity
Current Liabilities:
A/P Operating 38,847.68
Accrued Vacation 11,788.00
Inter-company payable to parent 716,814.49
-------------
Total current liabilities 767,450.17
Long-term liabilities --
Total liabilities 767,450.17
Stockholders' equity
Capital 42,000.00
Retained earnings-prior year (267,245.76)
Retained earnings-current (33,020.52)
-------------
Total stockholders' equity (258,266.28)
-------------
Total liabilities and equity 509,183.89
-------------
14
e-Destinations, Inc.
Statement of Operations (unaudited)
(In US$)
YTD
Fiscal 2003
--------------
Tickets/Tours revenue 1,664,518.40
Total Misc. service 7,943.27
--------------
Total Revenue 1,672,461.67
Cost of sales 1,387,969.59
--------------
Gross Profit 284,492.08
--------------
Expenses
Payroll 176,489.11
Payroll processing fees 8,818.86
Payroll tax expense 21,585.92
Vacation expense 11,788.00
Car allowance 7,507.02
Recruitment-advertising 161.76
Dues & membership 280.00
Refreshments & recreation 501.43
Airfare 316.50
Travel-meals 76.02
Travel-mileage 31.32
Travel-other 745.82
Meals & entertainment 487.88
Advertising 125.00
Promotional 140.00
Accounting fees 6,500.00
Bank charges 1,682.20
Bank charges-cc 9,871.31
Printing-outside service 3,107.54
Postage/courier 17,164.15
Office equipment 512.07
Office supplies 1,186.67
Repairs & maintenance 1,535.64
Facility rent 17,615.00
Facility maintenance 1,770.00
Office moving expense 312.93
Security system 808.65
Telephone 20,626.02
Internet 47.80
Use tax 206.75
Donations given (168.24)
Miscellaneous expense 855.50
Licenses and taxes 25.00
Depreciation 8,630.47
--------------
321,344.10
Total expenses
Other exp/(income) (3,831.50)
--------------
Pre-tax income/(loss) (33,020.52)
Tax provision (benefit) --
--------------
Net income (loss) (33,020.52)
--------------
15
Exhibit II
SETTLEMENT AND GENERAL RELEASE
THIS SETTLEMENT AND GENERAL RELEASE ("Agreement") is made as of this 16th day of
April 2004 ("Effective Date"), between netGuru, Inc.("NGI") on the one hand, and
Bhindi Jewelers, Inc., Vinod Bhindi, Xxxxxxx Bhindi and Jayent Bhindi on the
other hand (collectively "Bhindi"), all of whom may be hereafter be referred to
as the "Parties."
A dispute has arisen concerning the Stock Purchase Agreement entered into
between the Parties on January 31, 2000 and certain interest payments owed for
retention by NGI of Bhindi's bonded funds (the "Interest Dispute") and certain
triple net lease payments allegedly owed to Bhindi by NGI (the "Triple Net
Dispute"). The Parties wish to resolve the Interest Dispute and the Triple Net
Dispute. By entering into this Agreement, neither Party admits any liability to
the other.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and in consideration of the mutual promises, covenants and
conditions herein contained, the Parties agree as follows:
1. CASH SETTLEMENT PAYMENT: Upon execution of this Agreement by all
parties hereto, NGI shall remit payment in the amount of US$5,208.50 for the
Interest Dispute, in cash, payable to Bhindi (collectively the "Payment").
Bhindi acknowledges that the Payment satisfies the Interest Dispute and the
Triple Net Dispute in entirety.
2. MUTUAL RELEASE. Except for the rights and obligations of the Parties
arising from this Agreement, the Parties hereby, for themselves, permitted
successors and assigns, discharge and release one another, their past and
present employees, agents, executors, administrators, trustees, heirs, spouses,
attorneys, partners, insurers, representatives, assigns, predecessors,
successors and related entities and/or subsidiaries, including, release each
other from any and all claims, damages, actions, judgments, obligations,
attorneys' fees, indemnities, subrogations, duties, demands, controversies and
liabilities of every nature at law or in equity, liquidated, or unliquidated,
known or unknown, matured or unmatured, foreseeable or unforeseeable, which they
had or have arising out of any circumstance, thing, or event alleged, or arising
out of the dispute.
3. WAIVER OF CIVIL CODE SECTION 1542: The Parties agree to waive the
provisions of Section 1542 and agree that the Parties' releases set forth
hereinabove extend to all claims of every kind, nature and description
whatsoever, known or unknown, suspected or unsuspected this release covers all
claims which the Parties know, as well as those claims that the Parties do not
know or suspect to exist in their favor at the time of executing this release.
Section 1542 states as follows,
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
4. CONFIDENTIALITY: The Parties agree that they will keep all facts
relating to this Agreement and the Interest Dispute and Triple Net Dispute
confidential and will not disclose any portion of this Agreement or any facts
relating to the Interest Dispute and Triple Net Dispute, unless compelled by law
or an order of a Court.
16
5. ENTIRE AGREEMENT. This Agreement contains the sole, complete and
entire agreement and understanding of the Parties concerning the matters
contained herein and may not be altered, modified, or changed in any manner
except by a writing duly executed by the Parties. No Party is relying on any
representations other than those expressly set forth herein. No conditions
precedent to the effectiveness of this Agreement exists, other than as expressly
provided for herein. There are no oral or written collateral agreements. All
prior discussions and negotiations have been and are merged, integrated into and
superseded by this Agreement.
6. NO LIABILITY. The Parties execute this Agreement for the sole
purpose of settling the matters involved in the Interest Dispute and Triple Net
Dispute, and it is expressly understood and agreed, as a condition hereof, that
this Agreement should not constitute nor be construed to be an admission of the
truth or correctness of any claim asserted.
7. REPRESENTATION OF AUTHORITY. Each individual executing this
Agreement on behalf of any Party expressly represents and warrants that he/she
has authority to execute and thereby bind the Party on behalf of which he/she
executes this Agreement to the terms of this Agreement and agrees to indemnify
and hold harmless each other Party from any claim that such authority did not
exist
8. HEADINGS: The headings included in this Agreement are for
convenience only and do not limit, alter, or affect the matters contained in
this Agreement.
9. WAIVER: The delay or failure of a Party to exercise any right, power
or privilege hereunder, or failure to strictly enforce any breach or default
shall not constitute a waiver with respect thereto; and no waiver of any such
right, power, privilege, breach or default on any one occasion shall constitute
a waiver thereof on subsequent occasion unless clear and express notice thereof
in writing is provided.
10. APPLICABLE LAW. This Agreement shall be construed, interpreted and
enforced in accordance with and be governed by the laws of the State of
California. Additionally, the Parties consent to personal jurisdiction
exclusively in the state and federal courts of Los Angeles County, California
with respect to any action, claim or proceeding arising out of this Agreement.
11. ADVICE OF COUNSEL. The Parties represent that prior to the
execution of this Agreement they had the opportunity to seek the benefit of
independent legal counsel of their own selection regarding the substance of this
Agreement.
17
12. COSTS: The Parties to this Agreement agree to bear their own costs
and attorneys' fees in connection with the Interest Dispute and Triple Net
Dispute.
13. COUNTERPARTS: This Agreement may be executed in one or more
counter-parts, all of which together constitute one single document.
14. TELEFACSIMILE SIGNATURES. This Agreement and any documents relating
to it may be executed and transmitted to any other party by facsimile, which
facsimile shall be deemed to be, and utilized in all respects as, an original
wet-inked document.
15. DATE OF EXECUTION. The Parties execute this Agreement on the date
set forth below effective as of the date first above set forth.
SO AGREED:
Bhindi Jewelers, Inc.
DATED: APRIL 16, 2004 By:/s/ VINOD BHINDI
--------------------- -------------------------
Vinod Bhindi,
President
DATED: APRIL 16, 2004 /S/ VINOD BHINDI
--------------------- -------------------------
Vinod Bhindi
DATED: APRIL 16, 2004 /S/ XXXXXXX BHINDI
--------------------- -------------------------
Xxxxxxx Bhindi
DATED: APRIL 16, 2004 /S/ JAYENT BHINDI
--------------------- -------------------------
Jayent Bhindi
netGuru, Inc.
DATED: APRIL 16, 2004 By:/s/ XXXXXXX XXX
--------------------- -------------------------
Xxxxxxx Xxx,
Chief Operating Officer
18
