Exhibit 2.3
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DEFINITIVE AGREEMENT
AMONG
DeBAUX HOLDINGS, L.L.C.,
WATER STAR BOTTLING, INC.
AND
AMERICAN CAREER CENTERS, INC.
DATED AS OF JANUARY 18, 2002
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THIS DEFINITIVE AGREEMENT (the Agreement) is made and entered into this 18th
day of January, 2002, by and among AMERICAN CAREER CENTERS, INC., a Nevada
corporation (hereinafter referred to as "ACCI"), DeBAUX HOLDINGS, L.L.C., an
Arizona limited liability company (hereinafter referred to as "DeBaux") and
WATER STAR BOTTLING, INC., a Wyoming corporation (hereinafter referred to as
"WSBI").
WITNESSETH
WHEREAS, ACCI is a public company whose stock is traded on the NASDAQ
bulletin board under the symbol "ACCI" and at the present time is not
conducting any business activities;
WHEREAS, Water Star Bottling, Inc., is a privately held Wyoming
corporation (hereinafter referred to as "WSBI") that bottles and distributes
water though out the United States, controls a unique water source and has
recognized branded products;
WHEREAS, DeBaux owns all of the issued and outstanding capital stock of
WSBI;
WHEREAS, ACCI has authorized 100,000,000 shares of common stock, has
authorized 20,000,000 shares of preferred stock with attributes that may be
assigned to it in by the Board of Directors of ACCI, has issued 37,787,070
shares of common stock and has issued no shares of preferred stock;
WHEREAS, WSBI has authorized shares of 1,000,000 common stock, has
issued and outstanding 85,000 shares of its common stock, and has unissued
915,000 authorized shares of common stock;
WHEREAS, WSBI desires to be acquired by ACCI by ACCI acquiring 82,820
shares of the authorized and outstanding stock of WSBI and ACCI desires to
issue 48,000,000 shares of its common stock (hereinafter referred to as the
"Common Stock") and 4,000,000 shares of preferred stock convertible into common
stock with each share of preferred stock being convertible into 30 shares of
common stock and with voting rights of 30 votes for each share of preferred
stock with the attributes described in Exhibit A attached hereto and by this
reference made a part hereof as if set forth in full herein (the "Preferred
Stock") in exchange for the issued and outstanding shares of WSBI on the terms
and conditions contained herein, subject to satisfaction of those certain
conditions to closing hereinafter set forth;
WHEREAS, WSBI currently owns 85% of the member units of Geyser
Products, L.L.C., a Delaware limited liability company (hereinafter referred to
as "GPL"), and GPL is an 85% owned subsidiary of WSBI (hereinafter WSBI and GPL
collectively are hereinafter referred to as the "WSBI Organization");
WHEREAS, the Boards of Directors of each of ACCI and WSBI have
determined that it is in the best interests of both companies and their
respective shareholders to consummate the transactions and reorganization
contemplated herein in which, subject to the terms and conditions of this
Agreement, ACCI will acquire 82,820 shares of WSBI's common stock from DeBaux
and DeBaux will acquire stock of ACCI;
WHEREAS, subject to the terms and conditions of this Agreement, ACCI
desires to acquire 97.50% percent of the shares of WSBI owned by DeBaux, making
the WSBI a majority owned subsidiary of ACCI; and DeBaux desires to make a tax-
free exchange of its shares of WSBI solely for shares of ACCI, wherein WSBI
will remain a majority owned subsidiary of ACCI; and
WHEREAS, for Federal income tax purposes, the parties intend that the
transactions and reorganization contemplated in this Agreement qualify as a
non-taxable reorganization under Section 368 (a)(1) (B) of the Internal Revenue
Code of 1986, as amended (hereinafter referred to as the "Code"), and qualify
under a purchase method of accounting; however, such method of accounting
herein contemplated may be changed or modified, without consent or approval of
either party, in order to complete a duly qualified tax-free exchange of the
shares held by DeBaux solely for shares of ACCI.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows.
ARTICLE I: Acquisition
1.1. Acquisition.
Subject to the terms and conditions set forth in this Agreement, at the
Closing (as defined herein) 82,820 shares of the shares of capital stock of
WSBI held by DeBaux shall be exchanged solely for the Common Stock (being
48,000,000 shares) and the Preferred Stock (being 4,000,000 shares) of ACCI,
and the parties intend that the transaction shall qualify as a tax-free
acquisition and corporate reorganization under Section 368 (a) (1) (B) and/or
other related or other applicable sections of the Code there under. WSBI
hereby agrees to, and hereby does, indemnify and hold harmless DeBaux from any
and all tax consequences if the transaction shall at any time fail to qualify
as a tax-free acquisition and corporate reorganization.
Subject to the terms and conditions set forth in this Agreement, at the
Closing DeBaux shall own 100% of the issued and outstanding stock of WSBI
(being 85,000 shares) of which 82,820 shares shall be exchanged solely with
ACCI for the Common Stock (being 48,000,000 shares) and the Preferred Stock
(being 4,000,000 shares) and that the transaction shall qualify as a tax-free
acquisition and corporate reorganization under Section 368 (a) (1) (B) and/or
related or other applicable sections of the Code thereunder.
DeBaux represents and warrants that it will hold such shares of
Preferred Stock and the shares of Common Stock for investment purposes and not
for public distribution and further agrees that such shares will be restricted
according to Rule 144 of the Securities Act of 1933, as amended.
At the Closing, DeBaux shall own and hold no less than 81.0% of the
equity of ACCI before the issuance of the shares for the first Five Hundred
Thousand Dollars ($500,000.00) in new equity to be raised by ACCI in addition
to the new equity to be raised by ACCI as set forth in Section 5.4 hereof and
no less than 76.68% after the issuance of the shares for the first Five Hundred
Thousand Dollars ($500,000.00) of new equity raised by ACCI.
ACCI further desires to provide for the continuing operation of the
business of WSBI and, to that end, wishes to retain WSBI as a majority owned
subsidiary of ACCI.
1.2 Closing Time.
Subject to terms and conditions of this Agreement as provided in
Article VIII below, the closing of the exchange of 82,820 shares of the WSBI
common stock owned by DeBaux for the ACCI Common Stock and Preferred Stock
(herein referred to as the "Closing") shall take place at Mesa, Arizona, on or
before the ____ of February, 2002 at 5:00 P.M. Mountain Standard Time (EST), or
such other place, time and date as ACCI and WSBI may mutually agree upon in
writing (herein referred to as "Closing Time").
1.3 Upon Closing.
DeBaux will transfer and assign all right, title and interest in 82,820
shares of its WSBI common stock, free and clear of any and all liens, claims,
options, charges and encumbrances whatsoever. In exchange, ACCI will transfer
and deliver to DeBaux the ACCI Preferred Stock and Common Stock.
ARTICLE II: Representations and Warranties of WSBI and DeBaux.
WSBI and DeBaux each represent and warrant to ACCI as follows:
2.1 Organization and Standing.
WSBI is a duly organized and validly existing corporation, in good
standing under the laws of the State of Wyoming. WSBI has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted, and duly qualified to do business and
in good standing as a foreign corporation in each jurisdiction in which the
property owned, operated or leased by it or the nature of the business
conducted by it makes such qualification necessary. GPL is in good standing in
the state of its organization, Delaware, is duly foreign qualified to do
business in the State of Arizona and, for the purpose of conducting GPL's
business, has paid a business transaction fee in the state of New York and a
"Replacement Tax" in the state of Illinois.
2.2 Capitalization.
As of the Closing Date, all of the WSBI shares have been validly issued
and are fully paid and non-assessable; there is no right of first refusal
option or other restriction on transfer applicable to any shares of any
securities of WSBI exclusive of the 2,180 shares of WSBI common stock pledged
by DeBaux as collateral for the loan of Two Hundred Fifty Thousand Dollars
($250,000.00) from ACCI to WSBI in accordance with the provisions of Section
5.3 hereof. The GPL membership units held by WSBI are fully paid and non-
assessable; and subject to GPL's Operating Agreement there is no right of first
refusal, option or other restriction on transfer applicable to its membership
units of GPL. WSBI has the right to acquire the remaining fifteen percent (15%)
of GPL that has not been presently transferred to WSBI in accordance with the
GPL Put/Call Option by and between GPL and RDV Beverage, L.L.C. a Delaware
limited liability company, dated February 16, 1996 (hereinafter referred to as
the "GPL Put/Call Option"), which agreement has been disclosed and made
available to ACCI.
WSBI Organization has made available to ACCI complete and accurate copies of
its:
(a) Articles of Incorporation and Bylaws, each as amended through
the date hereof; and Minutes of all of its directors' and
shareholders' meetings through the date hereof; and
(b) GPL's Operating Agreement.
2.3 Rights to Acquire.
Except as previously disclosed to ACCI, and except for the GPL Put/Call
Option:
(a) WSBI Organization does not have outstanding any preemptive or
subscription rights, options, warrants, rights to convert,
capital stock equivalents or other rights to purchase or
otherwise acquire, now or in the future, any of its capital
stock or other securities.
(b) WSBI Organization does not have outstanding any stock
appreciation rights or other rights granting to any person the
right to be paid money or other property based on the value of
securities of WSBI or GPL.
(c) With the exception of the agreement between DeBaux and Xxxxx
Xxxxxxx which has been disclosed to ACCI and the pledge of
stock to secure the loan from ACCI to WSBI in accordance with
the provisions of Section 5.3 hereof, there are no other
agreements, restrictions or understandings to which WSBI
Organization or DeBaux is a party with respect to the sale,
transfer or voting of any shares of WSBI capital stock.
2.4 Subsidiaries.
Except for its 85% owned subsidiary GPL, and its ten (10%) interest in
Tenupah, LLC, a Wyoming limited liability company, WSBI does not own or
control, directly or indirectly, any interest or investment (whether equity or
debt) in any other corporation, partnership, business, trust or other entity.
2.5 Authority.
(a) WSBI has full corporate power and authority to execute, deliver
and perform its obligations under this Agreement and all corporate action of
WSBI necessary for such execution, delivery and performance has been duly
taken. Complete and correct copies, certified by the Secretary or Assistant
Secretary of WSBI, of the resolutions adopted by the Board of Directors,
authorizing and ratifying the execution and delivery of this Agreement and the
consummation of the transactions contemplated herein, will be delivered upon
Closing; DeBaux has full power and authority to execute, deliver and perform
its obligations under this Agreement, and all action for such execution,
delivery and performance has been duly taken.
(b) Except as previously disclosed to ACCI, to the knowledge of
WSBI Organization, the execution and delivery by WSBI and DeBaux of this
Agreement and the performance of the transactions contemplated by this
Agreement will not result in any conflict with, breach or violation of or
default, termination or forfeiture under (or upon the giving of notice or the
lapse of time, or both, result in any conflict with, breach or violation of or
default, termination or forfeiture under) any terms or provisions of WSBI's
Articles of Incorporation or Bylaws, each as amended through the date hereof,
or GPL's Operating Agreement, or any statute, rule, regulation, judicial or
governmental decree, order or judgment, agreement, lease or other instrument to
which WSBI, GPL or DeBaux is a party or to which any of its or their assets is
subject and which individually or in the aggregate is material to WSBI, GPL or
DeBaux.
(c) No consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or any
other Governmental Body (as hereinafter defined) is required for the
consummation by WSBI or GPL of the transactions contemplated by this Agreement.
(d) Upon due execution and delivery by the parties hereto, this
Agreement and the agreements related hereto would each be a legal, valid and
binding obligation of WSBI, GPL and DeBaux. This Agreement will be enforceable
against WSBI and DeBaux in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally.
2.6 Financial Statements.
WSBI and GPL have each made available to ACCI, a balance sheet, income
statement and statement of cash flows dated as of the period ended October 31,
2001 (hereinafter referred to as the "WSBI Organization Unconsolidated
Financials") and the books and records of WSBI Organization through the date of
this Agreement. The WSBI Organization Unconsolidated Financials were prepared
on a tax accounting basis, but WSBI and GPL have previously provided certain
adjusting entries to the independent auditors engaged to audit the WSBI
Organization Unconsolidated Financials in connection with the acquisition of
March 2000 which was rescinded in September of 2001 to bring the WSBI
Organization Unconsolidated Financials into conformance with generally accepted
accounting principles (hereinafter referred to as "GAAP"). WSBI shall supply
to ACCI an aging of WSBI Organization's accounts payable as of November 30,
2001.
2.7 Material Changes.
Since the 31st day of October, 2001, there has not been with respect to
WSBI Organization:
(a) Any material adverse change in its financial condition from
that shown on the WSBI Organization Unconsolidated Financials
which has not been disclosed to ACCI in writing; or
(b) Any dividends or other disbursements by WSBI or its subsidiary
GPL;
(c) Any damage or loss, whether covered by insurance or not,
materially and adversely affecting its business, property,
assets or prospects; or
(d) Any other event or condition materially and adversely affecting
its results of operations or business or financial condition or
prospects taken as a whole or any event which could have such
an effect.
From March 1, 2001 through August 31, 2001, there were adverse changes
in the financial condition of WSBI Organization which may be material when
compared to the WSBI Organization unconsolidated financial statements for the
period ended December 31, 2000, which may be material and which are the result
of the rescinded acquisition of WSBI by The Theme Factory, Inc., a public
company in March of 2001. The effects of The Theme Factory, Inc.'s failure to
provide the funding committed to impacted WSBI Organization's ability to pay
for the expansion of its business which was undertaken immediately following
such acquisition.
2.8 Accounts Receivable.
(a) All accounts receivable reflected on the WSBI Organization
Unconsolidated Financials are bona fide and arise from valid sales in the
ordinary course of business.
(b) Other than WSBI Organization's accounts receivable financing
and distributor promotional credits, none of WSBI's or GPL's accounts
receivable are subject to any lien or claim of offset, setoff or counterclaim
and neither WSBI, GPL nor DeBaux has any knowledge of any facts or
circumstances that would give rise to any such lien or claim. There are no
accounts receivable which are contingent upon the performance by WSBI or GPL of
future services.
2.9 No Undisclosed Liabilities.
Except for certain directors fees, deferred officers salaries and
guaranteed payments payable by WSBI Organization, WSBI has no debts,
liabilities or claims against it, contingent or otherwise, which would be of a
nature required to be reflected in a balance sheet prepared in accordance with
generally accepted accounting principles which are material individually or in
the aggregate and which are not shown or fully provided for in the WSBI
Organization financial records, except debts, liabilities and claims incurred
in the ordinary course of business since the date of the WSBI Organization
Unconsolidated Financials which are not material in the aggregate. All products
and services provided to customers by WSBI Organization have complied in all
material respects with all requirements binding upon WSBI, whether by law,
regulation, agreement or otherwise. Except for the GPL Put/Call Option, GPL has
no debts, liabilities or claims against it, contingent or otherwise, which
would be of a nature required to be reflected in a balance sheet prepared in
accordance with GAAP which are material individually or in the aggregate and
which are not shown or fully provided for on the GPL financials for the period
ending October 31, 2001, except debts, liabilities and claims incurred in the
ordinary course of business since the date of the GPL financials which are not
material in the aggregate. To the knowledge of GPL, all products and services
provided to customers by GPL have complied in all material respects with all
requirements binding upon GPL, whether by law, regulation, agreement or
otherwise.
2.10 Taxes.
(a) To the knowledge of WSBI Organization,
(i) All federal, state, local and foreign tax returns and
reports required to be filed to date, and which are
properly open for examination under applicable statutes
of limitation, with respect to the operations of WSBI
Organization have been accurately prepared and duly
filed, and all taxes shown as payable on such returns
and reports have been paid when due, including, without
limitation income, withholding, payroll, sales and use,
and real and personal property taxes; and
(ii) WSBI Organization has not executed or filed with any
taxing authority any agreement extending the period for
assessment or collection of any tax to a date
subsequent to the date hereof; and
(iii) No issue has been raised by any federal, state, local
or foreign taxing authority in connection with an audit
or examination of the tax returns, business or
properties of WSBI Organization that has not been
settled or resolved; and
(iv) There is no pending claim, asserted deficiency or
assessment for additional taxes that has not been paid,
nor is there any basis for the assertion of any such
claim, deficiency or assessment; and
(v) No material special charges, penalties or fines have
ever been asserted against WSBI Organization with
respect to payment of or failure to pay any taxes; and
(vi) The provision for taxes shown on the WSBI Organization
Unconsolidated Financials is sufficient for payment of
all unpaid federal, state, local and foreign taxes
(whether asserted or unasserted) incurred by WSBI
through such date.
(b) WSBI has not filed any consent to the application of Section
341(f) of the Code, or been subject to any actual or deemed election under
Section 338 of the Code.
2.11 Tangible Assets and Inventories.
(a) Except as disclosed on Exhibit B attached hereto, to the
knowledge of WSBI Organization, WSBI Organization has good and marketable title
to, valid leasehold interests in or other valid right to use all of the
material assets used in its operations or necessary for the conduct of its
business, free and clear of any material mortgages, pledges, security
interests, licenses, encumbrances, restrictions or adverse claims, except for
the lien of taxes not yet due and payable. Exhibit C contains a description and
the location of any such material assets that are not in the possession of WSBI
Organization or that are located other than on WSBI premises in Afton, Wyoming
and/or GPL premises in Mesa, Arizona.
(b) To the knowledge of WSBI Organization;
(i) All of WSBI's and GPL's material assets are in good
operating condition, normal wear and tear excepted, and
are adequate and suitable for the purposes for which
they are presently being used; and
(ii) All obsolete or unusable inventory (including raw
materials, other than canned goods, dry mix ingredients
and frozen products used in the production of WSBI's
and GPL's products that WSBI or GPL does not reasonably
expect to sell within six months of the date of this
Agreement) has been appropriately reserved against or
written down or written off and is reflected in the
WSBI Organization Unconsolidated Financials as adjusted
by the entries WSBI or GPL respectively; and
(iii) All items of equipment, machinery or other tangible
assets of WSBI and GPL that are currently being used in
its business are reflected in the WSBI Organization
Unconsolidated Financials.
(c) To the knowledge of WSBI Organization, there has not occurred
since the date of the WSBI Organization Unconsolidated Financials any transfer
of title other than in the ordinary course of business, any abandonment, any
material pilferage or any material loss with respect to any material property,
plant or equipment of WSBI or GPL.
2.12 Real Property.
Exhibit B identifies all real property leased by WSBI Organization.
WSBI Organization has made available to ACCI copies of the written lease
agreements with respect thereto. To the knowledge of WSBI Organization, all
real property used in the operations of WSBI Organization is in as good repair,
reasonable wear and tear excepted, as at the commencement of the lease by WSBI
Organization of such real property.
2.13 Environmental Matters.
To the knowledge of WSBI Organization;
(i) WSBI Organization has complied in all material respects
with the Safe Drinking Water and Toxic Enforcement Act
of 1986; and
(ii) WSBI Organization has complied in all material respects
with any and all other applicable statutes, rules and
regulations in effect (and, to the knowledge of DeBaux
or WSBI Organization any proposed statutes, rules and
regulations) regarding the environment including,
without limitation, statutes, rules and regulations
regarding the production, handling, treatment and
disposal of toxic chemicals and hazardous waste.
2.14 Health and Safety Matters.
To the knowledge of WSBI Organization;
(i) WSBI Organization has complied in all material respects
with any and all applicable health and safety statutes,
rules and regulations of state, local and federal
authorities in effect (and, to the knowledge of DeBaux
or WSBI Organization any proposed statutes, rules and
regulations) regarding the production or distribution
of any WSBI Organization product; and
(ii) WSBI Organization has not violated any such statute,
ordinance, rule, regulation or order of any agency or
court, including the Food and Drug Administration, in
any respect material to the conduct of its business and
has not received any notice of any such violation from
any agency of the type referred to herein.
2.15 Insurance.
Exhibit D identifies all policies of insurance now in effect covering
the assets, properties and business of WSBI Organization and all products
liability and life insurance policies maintained by WSBI Organization. WSBI
Organization has made available a true and accurate copy of each of the
policies listed on Exhibit D to ACCI. To the knowledge of WSBI Organization,
WSBI or GPL has done nothing by way of action or inaction that might invalidate
any of such policies in whole or in part.
2.16 Purchase, Sale and Other Agreements.
(a) Except as disclosed to ACCI and as transpires in the normal
course of business, WSBI Organization states that neither WSBI nor GPL is a
party or subject to any non-disclosed oral or written Agreement for the:
(i) Purchase of inventory, supplies, equipment or other
real or personal property, or the procurement of
services; or
(ii) Joint venture, partnership or other contract or
arrangement involving the sharing of profits; or
(iii) Except for the GPL Put/Call Option, any agreement
relating to the purchase or acquisition, by merger or
otherwise, of a significant portion of the business,
assets or securities of WSBI Organization by any other
person or of any other person by WSBI Organization; or
(iv) Agreement containing a covenant or covenants which
purport to limit the ability or right of WSBI
Organization or DeBaux to engage in any lawful business
activity or compete with any Person; or
(v) Agreements presently in effect pursuant to which WSBI
Organization has appointed any organization or person
to act as its distributor or sales agent or pursuant to
which WSBI Organization has been appointed a
distributor or sales agent by any third party; or
(vi) Material contract or agreement not otherwise described
in this Agreement that is not terminable by and without
penalty to WSBI Organization.
(b) To the knowledge of WSBI Organization:
(i) A complete and accurate copy of each written agreement
and other document identified has been made available
to ACCI; and
(ii) Each agreement or arrangement identified is, except to
the extent fully performed at the date hereof, in full
force and effect and valid and binding in accordance
with its terms in all material respects except as may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally and subject to general
equity principles and to limitations on availability of
equitable relief, (including specific performance). To
the knowledge of WSBI Organization, no party to any
such contract, agreement or arrangement is in material
default under, or intends to cancel, withdraw, modify
or amend, any such contract, agreement or arrangement.
2.17 Intellectual Property.
(a) To the knowledge of WSBI Organization, WSBI Organization holds
in full force and effect all licenses, permits or other authorizations
necessary for the sale of its products and the conduct of its business as
currently conducted.
(b) As listed on Exhibit E, to the knowledge of WSBI Organization,
WSBI Organization owns all of the:
(i) rights, title and interest in and to any and all of the
recipes, formulas, trade secrets, trademarks, trade
names, patents, copyrights, inventions and discoveries
being used by, owned or licensed by WSBI Organization
with the exception of the patent known as "Product
Sales Enhancing Internet Game System" owned by Ayecon
Entertainment, L.L.C. and licensed to GPL; and
(ii) recipes, formulas, trade secrets, trademarks, trade
names, patents, copyrights, inventions and discoveries,
including any and all recipes, formulas or inventions
in process (whether or not reduced to practice) or any
patent or trademark applications filed by WSBI
Organization, shall be conveyed at closing.
(c) To the knowledge of WSBI Organization, except as disclosed on
Exhibit E and with the exception of the patent known as "Product Sales
Enhancing Internet Game System" owned by Ayecon Entertainment, L.L.C. and
licensed to GPL, WSBI Organization and DeBaux are not making use of any
patentable or unpatentable invention or any confidential information in which
any present or past employee of WSBI Organization has or has claimed an
interest and WSBI Organization and DeBaux are not aware of facts that could
reasonably be expected to give rise to such a claim.
(d) To the knowledge of WSBI Organization:
(i) WSBI Organization possesses all patents, patent rights,
trademarks, trademark rights, trade names, trade name
rights, copyrights and other proprietary rights
necessary to conduct its business as now being
conducted and as planned to be conducted, the lack of
which could materially and adversely affect its
operations, condition or prospects, financial or
otherwise, as listed on Exhibit E; and
(ii) There is no conflict with or infringement upon any
valid rights of others and WSBI Organization has not
received any notice of infringement upon or conflict
with the asserted rights of others.
2.18 Employees and Consultants.
(a) WSBI has provided to ACCI copies of all currently effective
consulting and employment agreements and other material agreements, either oral
or written, with individual consultants or employees to which WSBI Organization
is a party. Complete and accurate copies of all such written agreements and
summaries of all oral agreements have been made available to ACCI. Except for
the officers and directors of WSBI Organization, as agreed upon in this
Agreement, no other officer, manager or key employee of WSBI Organization has
notified WSBI Organization of an intention to terminate employment or to seek a
material change in his terms of employment. Except as to be agreed upon by
ACCI, no employee of WSBI Organization has accrued more than three (3) weeks of
paid vacation.
(b) Except as disclosed to ACCI, WSBI Organization is not a party
to any other pension, retirement, profit sharing, savings, bonus, incentive,
deferred compensation, group health insurance or group life insurance plan or
obligation, employee welfare benefit plan, or collective bargaining agreement
or other agreement, written or oral, with any trade or labor union, employees'
association or similar organization. WSBI Organization has furnished to ACCI
complete and accurate copies of the plan, the Internal Revenue Service
determination letter, if any, all plan applications and amendments, the most
recent plan actuarial reports and all reports of or regarding such plan
required by ERISA (as hereinafter defined). With respect to each plan, if any,
which is subject to ERISA, WSBI Organization has properly prepared and timely
filed all governmental reports and has properly and timely posted or
distributed all notices and reports to employees required to be filed, posted
or distributed with respect to such plan. No prohibited transaction has
occurred with respect to any such plan that is subject to ERISA, nor is there
any pending assertion of the occurrence of any such transaction. WSBI and GPL
agree that ACCI shall upon the closing of this Agreement have sole discretion
of whether to retain or change said agreements mentioned in this Agreement.
(c) WSBI Organization made available to ACCI;
(i) All documentation received by WSBI or GPL relating to
union activities, including but not limited to,
correspondence or orders from the National Labor
Relations Board and any state labor relations agencies or
organizations, and
(ii) All documentation relating to union activity and labor
practices at WSBI or GPL given by WSBI or GPL to its
employees. There are currently no agreements with any
unions and no strikes or labor disputes pending or
threatened by any of the employees of WSBI or GPL.
(d) To the knowledge of WSBI Organization;
(i) WSBI and GPL have complied in all material respects with
all applicable laws or regulations relating to the
employment of labor; and
(ii) WSBI and GPL have withheld all amounts required by law or
agreement to be withheld from its employees for the
payment of any tax or contribution.
(e) There are no currently outstanding loans from WSBI or GPL to
any officer, director or employee of WSBI Organization and no commitments to
lend any money or other property to any such person.
(f) To the knowledge of WSBI Organization;
(i) No employee is obligated under any agreement or judgment
that would conflict with such employee's obligation to
use his best efforts to promote the interests of WSBI or
GPL or would conflict with WSBI's or GPL's business as
conducted or proposed to be conducted; and
(ii) No employee of WSBI or GPL is in violation of the terms
of any employment agreement or any other agreement
relating to such employee's relationship with any
previous employer and no litigation is pending or
threatened with regard thereto.
2.19 Bank Accounts.
WSBI Organization has provided ACCI with the identity of all bank
accounts used in connection with the operations of WSBI and GPL whether or not
such accounts are held in the name of WSBI or GPL.
2.20 Borrowings and Guarantees.
Exhibit F identifies all agreements and undertakings pursuant to which
WSBI or GPL is borrowing or is entitled to borrow any money, is lending or has
committed itself to lend any money, or is a guarantor or surety with respect to
the obligations of any person. Complete and accurate copies of all such
written agreements have been delivered to ACCI.
2.21 Compliance with Laws.
To the knowledge of WSBI Organization, the present conduct of the
business of WSBI or GPL does not violate any law, ordinance, regulation,
judgment, order, decree or rule of any court, arbitrator or governmental agency
or entity in any respect material to the conduct of its business and, there are
no laws, ordinances or regulations proposed, and legal or administrative
proceedings or investigations pending or threatened, which, if enacted or
determined adversely to WSBI Organization, could reasonably be expected to
result, individually or in the aggregate, in any material adverse change in
WSBI Organization's business, prospects or financial condition.
2.22 Absence of Litigation.
Except as previously disclosed to ACCI, neither WSBI Organization, nor
any officer or director of WSBI Organization nor DeBaux is engaged in, or has
received any threat of, any litigation, arbitration, investigation or other
proceeding relating to WSBI Organization or its employee benefit plans,
property, business assets, licenses, permits or goodwill, or against or
affecting the transactions contemplated by this Agreement, nor, to the
knowledge of WSBI Organization, is there any basis therefore.
2.23 Transactions.
WSBI Organization has made available to ACCI a true and complete list
of all material contracts now in effect between WSBI Organization and any
person who now is an officer, director or controlling shareholder of WSBI
Organization, other than salary and incentive compensation arrangements of a
customary nature entered into in the ordinary course of business; and WSBI
Organization has made available to ACCI a true and complete list of all
equipment or other property, real or personal, tangible or intangible,
including, but without limitation, any item of intellectual property, used in
connection with or pertaining to the business of WSBI Organization.
2.24 Accuracy of Documents.
The copies of all instruments, agreements, other documents and written
information delivered to ACCI by WSBI Organization or any of its
representatives are and will be true and correct copies as of the date of
delivery thereof. No representations or warranties made by WSBI Organization
in this Agreement nor any document, written information statement, financial
statement, certificate or exhibit prepared and furnished or to be prepared and
furnished by WSBI Organization, or its representatives, to ACCI pursuant hereto
or in connection with the transactions contemplated hereby, taken as a whole,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the statements or facts
contained herein or therein not misleading. There is no event, fact or
condition which, to the knowledge and belief of WSBI Organization, materially
and adversely affects the business, assets, financial condition or prospects of
WSBI Organization, or which could reasonably be expected to do so, which has
not been set forth in this Agreement or the Exhibits hereto.
2.25 Title to DeBaux WSBI shares of common stock.
DeBaux has good, valid and marketable title to the WSBI shares listed
on Exhibit G attached hereto, free and clear of any and all liens, claims,
options, charges and encumbrances whatsoever. WSBI has good, valid and
marketable title to its GPL membership units, as listed on Exhibit G, free and
clear of any and all liens, claims, options, charges and encumbrances.
2.26 Authority of DeBaux.
DeBaux has the absolute and unrestricted right, power and authority to
sell, assign, transfer, pledge and deliver its WSBI shares listed on Exhibit G
attached hereto, to execute this Agreement and the agreements related hereto,
to make the representations, warranties and agreements contained herein and in
the related agreements and to perform its obligations hereunder and under the
agreements related hereto. Subject to the terms of the Operating Agreement,
WSBI has the absolute and unrestricted right, power and authority to sell,
assign, transfer and deliver 85% of the GPL membership units.
ARTICLE III: Representations And Warranties Of ACCI
ACCI represents, warrants and covenants to WSBI and DeBaux as follows:
3.1 Organization and Standing.
ACCI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has all requisite corporate
power and authority to own, operate and lease its properties and carry on its
business as now conducted. ACCI is a fully reporting public company pursuant to
section 12 (g) of the Exchange Act of 1934, as amended. The voting common
stock currently trades on the NASD Over The Counter (OTC) Electronic Bulletin
Board under the symbol [OTC BB: ACCI]. The authorized capital stock of ACCI
consists of: 100,000,000 shares of voting common stock, ($.001 par value per
share), and the Board has authorized 20,000,000 of Preferred Stock the terms of
which may be set by the Board of Directors, however no amendment has been filed
with the Secretary of State of Nevada to specify the rights of the Preferred
Stock. ACCI has currently 37,787,070 shares of common stock issued and
outstanding and has issued no preferred stock. There are a total of 2,250,000
warrants outstanding. The warrants were issued in three (3) series, Series A
750,000 warrants that entitle the holder to purchase 750,000 shares of common
stock for a period of two (2) years at a price of $0.125 per share; Series B
750,000 warrants that entitle the holder to purchase 750,000 shares of common
stock for a period of two (2) years at a price of $0.167 per share; and Series
C 750,000 warrants that entitle the holder to purchase 750,000 shares of common
stock for a period of two (2) years at a price of $0.208 per share. The Series
A, B and C warrants have anti-dilution clauses that provide that in the case of
a recapitalization that effects a roll back of the number of shares outstanding
or in the form of a reverse split or an increase in the number of shares by a
stock split, the number of shares that the warrant holder will be able to
purchase if there is a reverse split will be the number of shares pre-reverse
split that could be acquired and the purchase price per share will be equal to
the produce of the original exercise price per share multiplied by the multiple
of the roll back or reverse stock split and if there is an increase in shares
outstanding by a stock split the number of shares will be equal to the number
of shares that could be purchased originally multiplied by the multiple of the
increase in shares outstanding and in such event there will be no adjustment in
the purchase price per share. ACCI has a stock option plan and has granted
certain options as listed in Schedule "H" , has no other obligations to issue
shares of its common stock or preferred stock and has no other securities
outstanding that are convertible into its common stock. ACCI's common stock is
the only publicly listed security.
3.2 Authority.
(a) ACCI has full corporate power and authority to execute, deliver and
perform its obligations under this Agreement, and all corporate action
necessary for such execution, delivery and performance hereof and thereof by
ACCI has been duly taken. Complete and correct copies, certified by the
Secretary or Assistant Secretary of ACCI, of the resolutions adopted by the
Board of Directors, authorizing and ratifying the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein,
(b) Subject to ACCI obtaining all necessary consents, which consents have
been obtained or will be obtained on or prior to the Closing Date, the
execution and delivery by ACCI of this Agreement and the agreements related
hereto do not, and the performance and consummation of the transactions
contemplated by this Agreement and the agreements related hereto will not,
result in any conflict with, breach or violation of or default, termination or
forfeiture under (or upon the giving of notice or the lapse of time, or both,
result in any conflict with, breach or violation of or default, termination or
forfeiture under) any terms or provisions of its Certificate of Incorporation
or Bylaws, each as amended through the date hereof, or any statute, rule,
regulation, judicial or governmental decree, order or judgment, agreement,
lease or other instrument to which ACCI is a party or to which any of the
assets of ACCI is subject and which individually or in the aggregate is
material to ACCI.
(c) Each consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or any
other Governmental Body which is required for the consummation by ACCI of the
transactions contemplated by this Agreement has been obtained or will be
obtained prior to or upon the Closing.
(d) Upon due execution and delivery by the parties hereto, this Agreement
and the agreements related hereto will each be legal, valid and binding
obligations of ACCI, enforceable against ACCI in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally. Except for
the actions and filings with the State of Nevada, the Securities and Exchange
Commission and the NASDAQ OTC Bulletin Board, hereof, no consent, approval or
authorization of, exemption or other action by notice or declaration, filing or
registration with, any third party or governmental agency is required to be
obtained, made or given by ACCI in connection with the execution, delivery and
performance of this Agreement or the consummation by ACCI of the transactions
contemplated by this Agreement.
3.3 Absence of Litigation.
Neither ACCI nor any officer or director of ACCI is engaged in, or has
received any threat of any litigation, arbitration, investigation or other
proceeding related to or affecting the transactions contemplated by this
Agreement, nor to the knowledge of ACCI, is there any basis therefore. There
is no litigation, arbitration, action or proceeding pending, or to the
knowledge of ACCI, threatened, against or relating to ACCI, its properties, its
business, its subsidiaries, their respective officers and directors.
3.4 No Liabilities.
ACCI will have on the Closing Date no liabilities of any kind or nature
whatsoever, whether accrued, absolute, contingent or otherwise, including,
without limitation, tax liabilities and interest due or to become due other
than a non-recourse promissory note payable to Xxxxxxxx, August & Xxxxxxxxx LLP
in the amount of Eighty Eight Thousand Four Hundred Nine and 51/100 Dollars
($88,409.51) guaranteed by Arcadia Resources, Inc.
3.5 No Current Business Operations.
Neither ACCI nor it subsidiaries have any present business operations
or any material liabilities or obligations of any nature and shall have no
liabilities or obligations of any kind or nature whatsoever at time of Closing
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due.
3.6 Securities Compliance and Listings.
ACCI is a full-reporting Nevada Corporation currently traded on the
NASD Electronic Bulletin Board (under the symbol: "ACCI"). ACCI is in full
compliance with federal and state securities and corporate laws. All
outstanding shares of common stock of ACCI have been duly authorized and are
validly issued, fully paid, and non-assessable and free of preemptive rights,
and there are no registration rights existing or granted to any holders of
restricted common stock of ACCI.
3.7 Compliance With Reporting Requirements.
ACCI represents, warrants and agrees that, as of the date of Closing,
ACCI will have filed all forms, reports and documents with the S.E.C. required
to be filed by it pursuant to the Securities Act and the Exchange Act,
including, without limitation, all reporting requirements of the Exchange Act
and the Form 10-KSB for the calendar year ended December 31, 2001. The reports
filed with the S.E.C., to ACCI's knowledge, did not contain, as of their
respective dates, any untrue statement of a material fact or omit to state any
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.
3.8 Title to Property.
ACCI has all requisite corporate power and authority to own its
properties and assets and has good and marketable title to all properties and
assets, real and personal, reflected in the Balance Sheet of ACCI, and the
properties and assets of ACCI are subject to no mortgage, pledge, lien or
encumbrances, except for liens shown therein, with respect to which no default
exists.
3.9 Accuracy of Documents and Information.
The copies of all instruments, agreements, other documents and written
information delivered to WSBI or any of ACCI's shareholders by ACCI, or any of
their representatives are and will be true and correct copies as of the date of
delivery thereof. No representations or warranties made by ACCI in this
Agreement nor any document, written information statement, financial statement,
certificate or exhibit prepared and furnished or to be prepared and furnished
by ACCI, or their representatives, to WSBI or DeBaux hereto or in connection
with the transactions contemplated hereby or to any of ACCI's shareholders or
to any person from whom a solicitation to purchase shares of common stock of
ACCI was made, taken as a whole, contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make the statements or facts contained herein or therein not misleading.
3.10 Financial Statements.
ACCI shall have furnished WSBI and DeBaux financial statements and
balance sheets for the period ending December 31, 2000 accompanied by a report
of its independent certified public accountants; and the financial information
necessary to prepare reviewed balance sheets and statements of operations for
the most recent quarters of March 31, 2001, June 30, 2001 and September 30,
2001 as required by the Securities and Exchange Commission on Form 10-QSB. To
the knowledge of ACCI, such financial statements, together with and subject to
the disclosures and notes thereto,
(a) Are in accordance with the books and records of ACCI;
(b) Present fairly and accurately the financial condition of ACCI as of the
dates of the balance sheets;
(c) Present fairly and accurately the results of operations for the periods
covered by such statements;
(d) Have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis;
(e) Include all adjustments (consisting of only normal recurring accruals)
which are necessary for a fair presentation of the financial condition
of ACCI, and of the results of operations of ACCI for the periods
covered by such statements; and
(f) Fully comply with all requirements of Regulation SB and/or SK K and all
applicable securities laws.
3.11 Books and Records:
From the date of this Agreement to the Closing, ACCI will:
(a) Provide to WSBI and DeBaux or their respective representatives any and
all relevant documents regarding securities filings, broker dealer due
diligence packages, offering memorandums, and copies of Form D;
(b) Give to WSBI and DeBaux, or their respective representatives, full
access during normal business hours to all of its offices, books,
records, contracts, stock certificate books, stock certificates,
transfer Ledgers, minutes books and other corporate documents
(hereinafter referred to as "ACCI's Corporate Records") and properties
so that WSBI Organization and DeBaux may inspect and audit them;
(c) Furnish such information concerning the properties and affairs of ACCI
as WSBI Organization and DeBaux may reasonably request. ACCI
represents and warrants that all of ACCI's Corporate Records are true,
correct and complete and constitute all of ACCI's Corporate Records,
thereof and, the minute books of ACCI reflect all material actions
taken and authorizations given by the Board of Directors of ACCI or any
committee thereof and all material actions taken and authorization
given by the shareholders of ACCI.
3.12 Tax Returns.
ACCI has filed (or has obtained extensions for filing) all income,
excise, sales, corporate franchise, property, payroll and other tax returns or
reports required to be filed by it, as of the date hereof by the United States
of America, any state or other political subdivision thereof or any foreign
country and has paid all taxes or assessments relating to the time periods
covered by such returns or reports. ACCI does not, directly or indirectly, owe
any federal, foreign, state or local taxes for or applicable to all periods
ended on or prior to the date of this Agreement. ACCI has no tax liability or
obligation of any kind or nature whatsoever for income or employee withholdings
or employment contributions and interest and penalties thereon or for property
taxes which may be owed by its subsidiaries to federal, state and local taxing
authorities. There are no present audits or disputes with any federal,
foreign, state or local taxing authority as to taxes of any nature payable by
ACCI or its subsidiaries.
3.13 Environmental Matters.
ACCI represents and warrants:
(a) ACCI represents and warrants it is and has at all times been in
compliance with all applicable federal state and local environmental laws.
(b) ACCI has not been required to obtain any licenses or permits required
under environmental laws for the operation of its business.
(c) No hazardous substances (as defined in applicable federal, state and
local environmental laws and regulations) have been generated, transported,
stored, treated, recycled, disposed of or otherwise handled in any way in the
operation of the ACCI's business, except in compliance with all applicable
Environmental laws. There are no locations now owned or operated by ACCI where
hazardous substances have been generated, transported, stored, treated,
recycled, disposed of or otherwise handled, except in compliance with all
applicable environmental laws. There is no past or ongoing release or threat
of release of hazardous substances from any of the properties currently owned
or operated by ACCI or any of its affiliates or subsidiaries or, to the
knowledge of ACCI, from any properties formerly owned or operated by ACCI or
any of its affiliates or subsidiaries. ACCI has not treated, stored for more
than 90 days, or disposed of any hazardous waste; as such term is used within
the meaning of federal state or local law, except in compliance with all
applicable environmental laws.
(d) ACCI has not received any written notice from any governmental
authority, regulatory agency or other person advising that ACCI or its
affiliates or subsidiaries is potentially responsible for costs associated with
any release or threatened release of hazardous substances or potentially liable
for any violation of any environmental law. No pending or, to the knowledge
of ACCI, threatened order, litigation, settlement or citation with respect to
hazardous substances exists with respect to or in connection with the operation
of their respective businesses. There has been no environmental investigation
conducted by any governmental authority or regulatory agency with respect to
the operation of their respective businesses.
(e) No underground storage tanks are or, to the knowledge of ACCI, ever
were located on any properties currently or previously owned or leased by ACCI
or its affiliates or subsidiaries. To the knowledge of ACCI, no PCBs or
asbestos-containing materials are located on, contained in or otherwise form a
part of any of the assets or properties of ACCI or its affiliates or
subsidiaries.
3.14 Depositories.
ACCI shall make available to WSBI a complete list of the name, location
and account numbers of each bank, trust company, securities broker or other
financial institution in which ACCI has an account, deposits, safe deposit box,
lock box or other assets on hand and the names of all authorized persons with
respect thereto.
3.15 Structure of Transaction.
The transaction between WSBI and ACCI is a stock-for-stock acquisition,
and not a statutory merger. The current shareholders of ACCI will not be
entitled to dissenters or appraisal rights under the corporate laws of Nevada.
3.16 Benefit Plans of ACCI.
Other than ACCI's employee stock option plan, ACCI is not a party to
(i) any 'employee benefit plan' within the meaning of Section 3(3) of ERISA,
(ii) any profit sharing, pension, defined compensation, bonus, stock option,
stock purchase, disability, severance, health, welfare or incentive plan or
agreement or (iii) any written or unwritten plan or policy providing for
'fringe benefits' to its employees, including but not limited to vacation, paid
holidays, personal leave, employee discount, educational benefit or similar
programs (individually a "Plan" and collectively the "Plans").
3.17 Confidentiality.
ACCI and its representatives will keep confidential any information
that they obtain from DeBaux or from WSBI concerning the properties, assets and
business of WSBI Organization. If the transactions contemplated by this
Agreement are not consummated by February 19, 2002 ACCI will return to WSBI all
written matter with respect to WSBI obtained by ACCI in connection with the
negotiation or consummation of this Agreement.
3.18 Investment Intent.
ACCI is acquiring WSBI shares transferred to it under this Agreement
for investment and not with a view to the sale or distribution thereof, and
ACCI has no commitment or present intention to liquidate WSBI or to sell or
otherwise dispose of shares of its stock.
3.19 Subsidiaries.
Except for its 100% owned subsidiaries Tunlaw Capital Corp. and Alpha
Computer Solutions, Inc., ACCI does not own or control, directly or indirectly,
any interest or investment (whether equity or debt) in any other corporation,
partnership, business, trust or other entity. Each of ACCI's subsidiaries is
in good standing and is duly and legally authorized to transact business in
their states of organization. The present officers and directors of such
subsidiaries shall remain as the officers and directors of the subsidiary
without compensation or reimbursement of any kind or nature whatsoever for a
period of two years from the Closing, unless ACCI requests such Persons
subsequent to the Closing to resign.
ARTICLE IV: Covenants of WSBI and DeBaux
4.1 Maintenance of Business.
WSBI will use its best efforts to carry on and preserve the business,
goodwill and relationships of WSBI Organization with customers, suppliers,
officers, employees, agents and others in substantially the same manner as they
have prior to the date hereof. Subject to any directions from ACCI, WSBI will
use its best efforts to keep and maintain the existing favorable business
relationship with each of such customers, suppliers and officers, employees and
agents. If WSBI Organization or DeBaux becomes aware of deterioration in a
relationship with any customer, supplier or officer, employee or agent, WSBI or
DeBaux will promptly bring such information to the attention of ACCI and will
exert their best efforts to restore such relationship.
4.2 Absence of Certain Changes.
Prior to the Closing, except as expressly permitted or contemplated
hereby, neither WSBI nor DeBaux will, without ACCI's prior express written
consent, cause WSBI to:
(a) Incur any additional indebtedness for money borrowed, or guarantee any
indebtedness or obligation of any other party other than in the normal
course of business;
(b) Set aside or pay any dividend or distribution of assets to, or
repurchase any of its stock from, any of its shareholders,
(c) Issue any capital stock or securities convertible into capital stock or
grant or issue any options, warrants or rights to subscribe for its
capital stock or securities convertible into its capital stock;
(d) Enter into, amend or terminate any employment agreement or any
agreement or arrangement which, if in effect on the date hereof, would
be required to be disclosed;
(e) Extraordinarily increase the compensation payable or to become payable
by WSBI to any of its officers, employees or agents above the amount
payable, or adopt or amend any employee benefit plan or arrangement;
(f) Acquire or dispose of any material properties or assets used in its
business;
(g) Waive any statute of limitations so as to extend any tax or other
liability of WSBI;
(h) Permit any material change in the nature of the business of WSBI or the
manner in which the WSBI books and records are maintained;
(i) Create or suffer to be imposed any lien, mortgage, security interest or
other charge on or against its properties or assets, except for
purchase money security interests incurred in the ordinary course of
business;
(j) Enter into, amend or terminate any lease of real or personal property;
(k) Amend its Articles of Incorporation or Bylaws; or
(l) Engage in any activities or transactions outside the ordinary course of
its business as conducted at the date hereof.
4.3 Maintenance of Condition.
Prior to the Closing, except as expressly permitted or contemplated
hereby, DeBaux will not, without ACCI's prior express written consent:
(a) Enter into any agreement, restriction or understanding with respect to
the sale, transfer or voting of any shares of WSBI Capital Stock other
than the pledge agreement provided for in Section 5.3 hereof;
(b) Permit any change in the good, valid and marketable title to its WSBI
capital stock, including the imposition any lien, charge or encumbrance
on such stock;
(c) Impair its right, power and authority to sell, assign, transfer and
deliver the WSBI capital stock, to execute this Agreement and the
agreements related hereto, to make the representations, warranties and
agreements contained herein and in the related agreements and to
perform its obligations hereunder and under the agreements related
hereto;
(d) Be obligated under any agreement or judgment that would conflict with
its obligations under this Agreement; or
(e) Enter into any agreement containing a covenant or covenants that
purport to limit the ability or right of DeBaux to engage in any lawful
business activity.
4.4 Access to Information.
At all times throughout the period prior to the Closing, WSBI will give
ACCI and its accountants, legal counsel and other representatives reasonable
access, during normal business hours, to all of the properties, books,
contracts, commitments and records relating to the business, assets and
liabilities of WSBI, and will furnish ACCI, its accountants, legal counsel and
other representatives during such period all such information concerning its
affairs as ACCI may reasonably request; provided, however, that any furnishing
of such information pursuant hereto or any investigation by ACCI shall not
affect ACCI's right to rely on the representations, warranties and covenants
made by WSBI in this Agreement.
4.5 Compliance with Obligations.
Prior to the Closing, WSBI shall comply with:
(a) All applicable federal, state, local and foreign laws, rules and
regulations;
(b) All material agreements and obligations, including Articles of
Incorporation and Bylaws, by which it, its properties or its assets may
be bound; and
(c) All decrees, orders, writs, injunctions, judgments, statutes, rules and
regulations applicable to WSBI, its properties or assets, which, if
enforced individually or in the aggregate, would have a material
adverse effect on WSBI.
4.6 Necessary Consents.
Prior to the Closing, WSBI and DeBaux will use their best efforts to obtain
such written consents and take such other actions as may be necessary or
appropriate to allow the consummation of the transactions contemplated hereby
and to allow the continuation of WSBI's business after the Closing as conducted
and as proposed to be conducted at the date hereof; provided, however, no
consent shall be requested of or obtained from the Town of Afton, a Wyoming
municipality, based on the advice of WSBI's counsel that no such consent is
necessary or required.
4.7 Notification.
WSBI will give prompt notice to ACCI of:
(a) Any notice of default received by WSBI subsequent to the date of this
Agreement under any material instrument or material agreement to which
WSBI is a party or by which it is bound, which default could, if not
remedied, result in any material adverse change in the financial
condition, business or prospects of WSBI, taken as a whole, or which
would render incorrect in any material respect any representation made
herein; and
(b) Any suit, action, proceeding or investigation instituted or, to the
knowledge of WSBI or DeBaux, threatened against or affecting WSBI or
concerning any claim of ownership of or rights with respect to any WSBI
capital stock subsequent to the date of this Agreement and prior to the
Closing which, if adversely determined, could result in any material
adverse change in the financial condition, business or prospects of
WSBI, taken as a whole, or which would render incorrect any
representation made herein.
4.8 Good Faith.
From the date hereof until the termination of this Agreement, neither
WSBI, DeBaux nor any of their officers or directors will initiate discussions,
or authorize any Person to initiate discussions on their behalf, with any other
party, concerning the possible disposition of WSBI's business, assets or
capital stock; provided, however, ACCI agrees that WSBI may continue pursing
its pending discussions with the Bio-Aquatic Group and its associates and each
other Person with WSBI has been in discussions with prior to January 4, 2002.
ARTICLE V: Covenants of ACCI
5.1 Investment Representation.
ACCI hereby represents, warrants and agrees that it is acquiring the
WSBI Capital Stock solely for purposes of investment and not with a view to any
public distribution thereof. ACCI will deliver to WSBI at the Closing an
investment representation, in form and substance to the reasonable satisfaction
of WSBI and DeBaux and their counsel.
5.2 Documents.
ACCI agrees to deliver unto WSBI at the Closing, duly certified as of
the Closing Date by the Secretary or any Assistant Secretary of ACCI, copies of
resolutions duly adopted by ACCI's Board of Directors, authorizing the
execution, delivery and performance of this Agreement and all agreements
related hereto. Such resolutions and certification shall be in form and
substance to the reasonable satisfaction of WSBI, DeBaux and their counsel.
5.3 Loan to WSBI.
On or prior to January 28, 2002, ACCI shall lend to WSBI Two Hundred
Fifty Thousand Dollars ($250,000.00), which loan shall be evidenced by a loan
and security agreement and secured by DeBaux's pledge of 2,180 shares of WSBI
common stock as collateral for the repayment of the loan. The pledged stock
will be fully paid and be non-assessable when issued. The loan will be due and
payable on January 28, 2003 and shall bear interest at the rate of five percent
(5%) per annum. The loan will be advanced in increments of not less than
Twenty Five Thousand Dollars ($25,000.00) per advance and the first advance
shall be on or before January 18, 2002 in an amount not less than Seventy Five
Thousand Dollars ($75,000.00). WSBI shall have the option to repay the loan by
requiring ACCI to take the pledged shares as payment in full of principal and
interest.
5.4 Requirement to Raise Additional Capital.
ACCI represent, warrants, covenants and agrees that that it has signed
a letter of intent with Camden Securities, a NASD Broker/Dealer to complete a
private placement of ACCI's common stock to raise at least One Million Seven
Hundred Fifty Thousand Dollars ($1,750,000.00) net of commissions, fees, costs
and expenses (including without limitation legal fees). The placement will be
for no more than 17% of the then outstanding equity of ACCI on a fully diluted
basis for all outstanding common stock as if the Preferred Stock had all been
converted to common stock. It is anticipated that the placement shall be at
least 70% completed within one hundred twenty days of January 15, 2002. In
addition to the foregoing placement, a net to ACCI of Five Hundred Thousand
Dollars ($500,000.00) shall have first been raised by ACCI or Camden Securities
on or prior to the Closing for not more than 5.51% of the then outstanding
equity of ACCI immediately following the issuance of the Preferred Stock and
Common Stock to DeBaux, and ACCI shall have at least Two Hundred Fifty Thousand
Dollars ($250,000.00) in its bank account at Closing. It is contemplated that
Camden Securities will place the common stock on a best efforts basis with
accredited investors. There shall be no minimum in the offering and all funds
shall be released to ACCI as they are raised from the accredited investors.
Camden Securities will recover its fees, costs and expenses (including without
limitation any and all legal fees) on a pro-rata basis from each sale of stock
and shall be paid/reimbursed in the first placement described herein in an
amount equal to the product of the total amount of such fees, costs and
expenses multiplied by a fraction the numerator of which is the amount then
raised from the sale of the stock and the denominator of which is One Million
Seven Hundred Thousand Dollars ($1,750,000.00). The private placement will be
made pursuant to Rule 506 of Regulation D of the Securities and Exchange
Commission. The purchasers of the common stock will be granted a one time
right of registration of the securities at the cost and expense of ACCI, such
registration process to be commenced thirty (30) days from the final closing of
the offering as established by ACC. ACCI acknowledges and understands that its
obligations hereunder, which shall be fully supported and managed by ACCI's
present officers and directors.
5.5 Absence of Certain Changes.
Prior to the Closing, except as expressly permitted or contemplated
hereby, ACCI will not, without WSBI's or DeBaux's prior express written
consent, cause WSBI to:
(a) Incur any additional indebtedness for money borrowed, or guarantee any
indebtedness or obligation of any other party other than in the normal
course of business;
(b) Set aside or pay any dividend or distribution of assets to, or
repurchase any of its stock from, any of its shareholders,
(c) Issue any capital stock or securities convertible into capital stock or
grant or issue any options, warrants or rights to subscribe for its
capital stock or securities convertible into its capital stock other
than the issuance of up to 12,000,000 shares of common stock in the
raising of the additional capital prior to the Closing of Five Hundred
Thousand Dollars ($500,000.00) as provided in Section 5.4 hereof;
(d) Enter into, amend or terminate any employment agreement or any
agreement or arrangement which, if in effect on the date hereof, would
be required to be disclosed;
(e) Extraordinarily increase the compensation payable or to become payable
by ACCI to any of its officers, employees or agents above the amount
payable, or adopt or amend any employee benefit plan or arrangement;
(f) Acquire or dispose of any material properties or assets used in its
business;
(g) Waive any statute of limitations so as to extend any tax or other
liability of ACCI;
(h) Permit any material change in the nature of the business of WSBI or the
manner in which the ACCI books and records are maintained;
(i) Create or suffer to be imposed any lien, mortgage, security interest or
other charge on or against its properties or assets, except for
purchase money security interests incurred in the ordinary course of
business;
(j) Enter into, amend or terminate any lease of real or personal property;
(k) Amend its Articles of Incorporation or Bylaws; or
(l) Engage in any activities or transactions outside the ordinary course of
its business as conducted at the date hereof.
ARTICLE VI: Conditions to Obligations of ACCI
The obligations of ACCI to consummate the transactions contemplated
hereby are, at ACCI's election, subject to satisfaction or waiver of the
following conditions by WSBI:
6.1 Consents and Approvals.
WSBI shall have obtained all consents and approvals of third parties
(including governmental authorities) required of WSBI and ACCI to consummate
the transactions contemplated by this Agreement; provided, however, no consent
or approval shall be sought or obtained from either the Town of Afton, a
Wyoming municipality, based on the advice of WSBI's counsel that no such
consent is necessary or required.
6.2 Representations.
All representations and warranties made herein by WSBI and/or DeBaux
shall be true in all material respects as of the date made and as of the
Closing, except to the extent such representations and warranties are rendered
untrue by the performance by WSBI or DeBaux of obligations and agreements
undertaken by them to be performed at or prior to the Closing as set forth in
this Agreement. WSBI and DeBaux shall have performed all obligations and
agreements undertaken by them herein to be performed at or prior to the
Closing.
6.3 Certificate.
ACCI shall have received at the Closing a certificate, dated as of the
Closing and executed by WSBI's President and DeBaux's President, to the effect
that the conditions set forth in Section 6 have been satisfied. If any
representation or warranty made herein is not true as of the Closing, such
certificate shall identify such representation or warranty expressly and shall
indicate in reasonable detail the nature of all exceptions thereto not
previously disclosed in the Schedule of Exceptions. If ACCI thereafter elects
to consummate the transactions contemplated hereby, DeBaux shall not be liable
for indemnification for any Damages (as hereinafter defined) resulting solely
from the facts described in such certificate.
6.4 Opinion of Counsel.
ACCI shall have received at the Closing the opinion of counsel of WSBI
and DeBaux, in form and substance satisfactory to ACCI and its counsel, to the
effect that:
(a) WSBI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Wyoming, has all requisite corporate
power and authority to own, operate and lease its properties and to carry on
its business as now conducted and is duly qualified to do business and to
counsel's actual knowledge is in good standing as a foreign corporation in each
jurisdiction in which the nature of its business or the ownership of its
properties makes such qualification necessary; GPL is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware, has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as now conducted
and is duly foreign qualified to do business in the state of Arizona and for
the purpose of conducting GPL's business, has paid a business transaction fee
in the state of New York and a "Replacement Tax" in the state of Illinois; and
DeBaux is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Arizona, has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted and is duly qualified to do business in
the state of Arizona.
(b) All outstanding shares of such stock held by DeBaux are held of record
and beneficially as set forth on Exhibit H attached. All outstanding shares of
WSBI capital stock have been validly issued, are fully paid and nonassessable,
and have been issued in full compliance with all applicable federal and state
securities laws.
(c) To such counsel's actual knowledge, no right of first refusal option or
other restriction is applicable to the shares of WSBI common stock held by
DeBaux, with the exception of the agreement between DeBaux and Xxxxx Xxxxxxx
previously disclosed to ACCI. To such counsel's actual knowledge, WSBI does not
have outstanding any preemptive or subscription rights, options, warrants,
rights to convert, capital stock equivalents, stock appreciation rights or
other rights to purchase or otherwise acquire any of its capital stock or other
securities, or to be paid any amount based on the value of any such securities
except as otherwise provided in Section 5.3 hereof. To such counsel's actual
knowledge, except for the GPL Put/Call Option, no other right of first refusal
option or other restriction is applicable to the membership units in GPL. To
such counsel's actual knowledge, no Persons have any preemptive or subscription
rights, options, warrants, rights to convert, capital stock equivalents, stock
appreciation rights or other rights to purchase or otherwise acquire any of
WSBI's capital stock or other securities, or to be paid any amount based on the
value of any such securities. However, GPL may acquire the remaining 15% of
GPL or the GPL un-transferred membership units, voluntarily or involuntarily,
according to the GPL Put/Call Option.
(d) WSBI Organization has full corporate power and authority to execute and
deliver, and to perform its obligations under this Agreement. WSBI
Organization has taken all requisite corporate action to approve and adopt this
Agreement and the performance by WSBI Organization of its obligations
hereunder. This Agreement has been duly and validly executed and delivered by
WSBI and constitutes a legal, valid and binding obligations of WSBI, except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors' rights generally and subject to general equity principles and to
limitations on availability of equitable relief, including specific
performance.
(e) To such counsel's actual knowledge, except as previously disclosed by
WSBI, the execution and delivery of this Agreement by WSBI Organization, and
the performance and consummation by WSBI Organization of the transactions
contemplated by this Agreement, do not result in any conflict with, breach or
violation of or default, termination, forfeiture or lien under (or upon the
failure to give notice or the lapse of time, or both, result in any conflict
with, breach or violation of or default, termination, forfeiture or lien under)
any terms or provisions of WSBI Organization's Articles of Incorporation or
Bylaws, GPL Operating Agreement, or any statute, rule, regulation, judicial or
governmental decree, order or judgment, or to the best of such counsel's actual
knowledge, any material agreement, lease or other instrument to which WSBI
Organization or DeBaux is a party or to which it or any of WSBI's assets are
subject, with the possible exception of the agreement with the Town of Afton, a
Wyoming municipality.
(f) Assuming ACCI is a bona fide purchaser within the meaning of the
Uniform Commercial Code as adopted by the State of Arizona, to such counsel's
actual knowledge the transfer and assignment in accordance with this Agreement
by or on behalf of DeBaux to ACCI of the WSBI shares of common stock owned by
it, against the payment provided by this Agreement, will transfer good,
absolute, valid and marketable title thereto, free and clear of any and all
liens, claims, options, charges and encumbrances whatsoever.
(g) To such counsel's knowledge, there is no consent, approval,
authorization, order, registration, qualification or filing of or with any
court or any regulatory authority or other Governmental Body required for the
consummation by WSBI Organization and DeBaux of the transactions contemplated
by this Agreement which has not been obtained.
(h) To such counsel's actual knowledge, except as previously disclosed to
ACCI, there is no suit, arbitration or legal, administrative or other
proceeding or governmental investigation pending or threatened to which WSBI
Organization or DeBaux is a party.
(i) To such counsel's actual knowledge, except as previously disclosed to
ACCI, there is no outstanding judicial or administrative order, ruling, decree,
judgment or stipulation to which WSBI Organization or DeBaux is a party or is
subject materially adversely affecting or threatening WSBI or its business or
financial condition.
6.5 Delivery of the WSBI Capital Stock.
At the Closing, ACCI shall have received at the Closing certificates
representing all of the WSBI capital stock owned by DeBaux, duly endorsed to
ACCI or accompanied by stock powers duly executed in blank (with signatures
guaranteed by any national bank or trust company) and otherwise in form
acceptable for transfer on the books of WSBI, duly endorsed to ACCI.
6.6 No Material Adverse Change.
During the period from the date of this Agreement to the Closing Date,
there shall not have been any material adverse change in the condition
(financial or other), liabilities, business or prospects of WSBI, and WSBI
shall not have sustained any material uninsured loss or damage to its assets
that could materially and adversely affect its ability to conduct its business.
6.7 No Actions.
Consummation of the transactions contemplated by this Agreement shall
not violate any order, decree or judgment of any court or Governmental Body
having jurisdiction and no action or proceeding shall have been instituted by
any Person or threatened by any governmental agency which, in either such case,
in the good faith judgment of ACCI's Board of Directors (acting upon advice of
its outside counsel) has a reasonable probability of resulting in an order,
judgment or decree restraining, prohibiting or rendering unlawful the
consummation of the transactions contemplated by this Agreement.
6.8 Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions shall be in form and substance to the reasonable satisfaction of
ACCI's counsel, and ACCI shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
6.10 WSBI's Board of Directors.
After Closing, the Board of Directors of WSBI shall remain the same.
6.11 Executive Officers of WSBI.
After the Closing, any persons serving as executive officers of WSBI
prior to the Closing shall will continue in such capacity after the Closing.
ARTICLE VII: Conditions to Obligations of WSBI and DeBaux
The obligations of WSBI and DeBaux to consummate the transactions contemplated
hereby are, at WSBI's election, subject to satisfaction or waiver of the
following conditions by ACCI:
7.1 Consents and Approvals.
ACCI shall have obtained all consents and approvals of third parties
(including governmental authorities) required of WSBI and ACCI to consummate
the transactions contemplated by this Agreement. ACCI shall have obtained the
consents and approval of its Board of Directors.
7.2 Representations.
All representations and warranties made herein by ACCI shall be true in
all material respects as of the date made and as of the Closing. ACCI shall
have performed all obligations and agreements undertaken by it herein to be
performed at or prior to the Closing, including without limitation those
contained in Sections 3.7 and 5.3.
7.3 Opinion of Counsel.
WSBI and DeBaux shall have received at the Closing the opinion of
counsel to ACCI, in form and substance satisfactory to WSBI and DeBaux and
their counsel, to the effect that:
(a) ACCI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has full corporate power and
authority to own, operate and lease its properties and to carry on its business
as now conducted;
(b) ACCI has full corporate power and authority to execute and deliver, and
to perform its obligations under this Agreement. ACCI has taken all requisite
corporate action to approve and adopt this Agreement and the performance by
ACCI of its obligations hereunder. This Agreement has been duly and validly
executed and delivered by ACCI and constitutes legal, valid and binding
obligations of ACCI, enforceable against it in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors rights generally, and subject to general equity principles and to
limitations on availability of equitable relief, including specific
performance;
(c) The execution and delivery of this Agreement by ACCI, and the
performance and consummation by ACCI of the transactions contemplated by this
Agreement, does not violate any provision of ACCI's Certificate of
Incorporation or Bylaws, and does not constitute a material default under the
provisions of any material agreement known to counsel to which ACCI is a party
or by which it is bound;
(d) There is no consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or
other Governmental Body required for the consummation by ACCI of the
transactions contemplated by this Agreement which has not been obtained;
(e) The execution and delivery of this Agreement by ACCI and the
performance and consummation by ACCI of the transactions contemplated by this
Agreement, does not result in any conflict with, breach or violation of or
default, termination, forfeiture or lien under (or upon the failure to give
notice or the lapse of time, or both, result in any conflict with, breach or
violation of or default, termination, forfeiture or lien under) any terms or
provisions of ACCI's Certificate of Incorporation or Bylaws, or any statute,
rule, regulation, judicial or governmental decree, order or judgment, or to
such counsel's actual knowledge, any material agreement, lease or other
instrument to which ACCI is a party or to which it or any of its assets are
subject.
(f) All outstanding shares of ACCI's capital stock have been validly issued,
are fully paid and nonassessable and have been issuedin full compliance with
all applicable federal and state securities laws.
(g) No right of first refusal option or other restriction is applicable to
the ACCI capital stock. ACCI does not have outstanding any preemptive or
subscription rights, outstanding options (other than the options issued under
ACCI's employee stock option plan), outstanding warrants (other than the
2,250,000 warrants referred in Section 3.1), rights to convert, capital stock
equivalents, stock appreciation rights or other rights to purchase or otherwise
acquire any of its capital stock or other securities, or to be paid any amount
based on the value of any such securities. No other right of first refusal
option or other restriction is applicable to the shares of ACCI's capital stock
outstanding. No Persons have any preemptive or subscription rights, options,
warrants, rights to convert, capital stock equivalents, stock appreciation
rights or other rights to purchase or otherwise acquire any of ACCI's capital
stock or other securities, or to be paid any amount based on the value of any
such securities.
(h) Assuming DeBaux is a bona fide purchaser within the meaning of the
Uniform Commercial Code as adopted by the State of Arizona, to such counsel's
actual knowledge the transfer and assignment in accordance with this Agreement
by or on behalf of ACCI of the ACCI shares of Preferred Stock and Common Stock
to DeBaux, against the payment provided by this Agreement, will transfer good,
absolute, valid and marketable title thereto, free and clear of any and all
liens, claims, options, charges and encumbrances whatsoever.
(i) ACCI has no obligations of any kind or nature whatsoever owing to any
Governmental Body arising from unpaid income or property taxes and/or wages
paid and/or not paid and payroll taxes withheld and not paid to the appropriate
taxing authority by Alpha Computer Solutions, Inc.
7.4 Election of Board of Directors.
On Closing, the current members of the Board of Directors of ACCI
shall, as their last act of business prior to their resignation, in accordance
with the Nevada General Corporation Law and the Articles of Incorporation and
By-Laws of ACCI, cause the Board of Directors of ACCI to be reconstituted to
have three (3) then present members of the Board of Directors, who shall be the
sole members of the Board of Directors. The current members of the ACCI Board
of Directors with the exception of Xxxxxx Xxxxxxx shall resign their respective
board memberships, and WSBI shall determine the members of the Board of
Directors who shall appointed to fill vacancies on the Board of Directors.
7.5 Executive Officers of ACCI.
Upon Closing, the newly constituted Board of Directors of ACCI shall
call a Special Meeting to elect officers for the corporation. Any persons
presently serving, as executive officers of ACCI shall not continue in such
capacity; and, upon Closing shall tender their resignations in accordance with
the Nevada General Corporation Law.
7.6 Finders and/or Consultants.
With the exception the existing arrangements with consultants to ACCI,
to the knowledge of the parties, neither of them, or any party acting on their
behalf, has incurred any liabilities, either express or implied, to any
"broker" of "finder" or similar person in connection with this Agreement or any
of the transactions contemplated. In this regard, ACCI has issued 3,500,000
shares of its restricted stock to a certain consultant with respect to the
consummation of this transaction.
7.7 ACCI to be Free of all Debts and Obligations.
Upon Closing ACCI shall be free of any and debts or obligations of any
kind or nature, and the reorganized company shall have no outstanding
obligations associated with the transaction other than a non-recourse
promissory note payable to Xxxxxxxx, August & Xxxxxxxxx LLP in the amount of
($88,409.51) guaranteed by Arcadia Resources, Inc. ACCI shall deliver to WSBI
at the Closing the report of its auditors certifying that ACCI has no
outstanding obligations of any kind or nature whatsoever other than a non-
recourse promissory note payable to Xxxxxxxx, August & Xxxxxxxxx in the amount
of Eighty Eight Thousand Four Hundred Nine and 51/100 Dollars ($88,409.51)
guaranteed by Arcadia Resources, Inc.
7.10 No Action.
Consummation of the transactions contemplated by this Agreement shall
not violate any order, decree or judgment of any court or Governmental Body
having jurisdiction and no action or proceeding shall have been instituted by
any Person or threatened by any governmental agency which, in either such case,
in the good faith judgment of WSBI (acting upon advice of their outside
counsel) has a reasonable probability of resulting in an order, judgment or
decree restraining, prohibiting or rendering unlawful the consummation of the
transactions contemplated by this Agreement.
ARTICLE VIII: Termination
8.1 Termination by Mutual Consent.
At any time prior to the Closing, this Agreement may be terminated by
any of ACCI, WSBI or DeBaux. If DeBaux, ACCI or WSBI desire to terminate this
Agreement at any time prior to the Closing, it may do so by delivery of written
notice to the other parties to this Agreement.
ARTICLE IX: Miscellaneous
9.1 Notices.
Any notice given hereunder shall be in writing and shall be deemed effective
upon the earlier of personal delivery (including personal delivery by fax) or
the third business day after mailing by certified or registered mail, postage
prepaid, as follows:
(a) If to ACCI:
Xx. Xxxxxx Xxxxxxx, President
American Career Centers, Inc.
0000 Xxxxxx Xxx Xxx
Xxx Xxxxx, Xxxxxx 00000
(000) 000-0000 (fax)
With a copy to:
Xxxxxxx X. August, Esq.
FELDHAKE, AUGUST & XXXXXXXXX, LLP
Newport Gateway
Tower 2
00000 Xxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
(000) 000-0000 (fax)
(b) If to WSBI:
Xx. Xxxxxxxxxxx Xxxxxxx Xxxxx, President
Water Star Bottling, Inc.
XX Xxx 0000
Xxxx, XX 00000
(000) 000-0000 (fax)
With a copy to:
T. Xxxxxx Xxxxxxx, Xx., Esq.
Law Offices of Xxxxxx X. Xxxxxxx, Xx., P.C.
000 X. Xxxx Xxxxx, Xxx. 0
Xxxx, Xxxxxxx 00000
602) 000-0000 (fax)
(c) If to DeBaux:
Xx. Xxxxxxxxxxx X. Xxxxx
0000 X. Xxxxxxxx Xx.
Xxxx, Xxxxxxx 00000
(d) If to GPL:
Xx. Xxxxx Xxxxxxx, Chief Executive Officer
Geyser Products, L.L.C.
XX Xxx 0000
Xxxx, XX 00000
(000) 000-0000 (fax)
Or to such other address as any party may have furnished in writing to the
other parties in the manner provided above.
9.2 Entire Agreement.
This Agreement together with the agreements between ACCI and the
consultants and between the consultants and DeBaux constitutes the final,
exclusive and complete understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior agreements, understandings and
discussions with respect thereto. No variation or modification of this
Agreement and no waiver of any provision or condition hereof, or granting of
any consent contemplated hereby, shall be valid unless in writing and signed by
the party against whom enforcement of any such variation, modification, waiver
or consent is sought.
9.3 Confidentiality.
Except for disclosure (if any) required by any law to which any party
is subject, no public announcement regarding the consummation of the
transactions described herein, shall be made without the approval of both ACCI
and WSBI. ACCI, WSBI and DeBaux agree to hold all information regarding the
Letter of Intent and the transactions described herein in confidence until the
time of any such public announcement.
9.4 Successors and Assigns.
No party may, without the prior express written consent of each other
party, assign this Agreement in whole or in part. This Agreement shall be
binding upon and inure to the benefit of the respective heirs, personal
representatives, successors and permitted assigns of the parties hereto.
9.5 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Arizona.
9.6 Survival.
The representations and warranties made by the parties hereto in this
Agreement, and their respective obligations to be performed under the terms
hereof at or prior to the Closing hereunder shall terminate and expire three
years after the Closing Date, notwithstanding any investigation of the facts
constituting the basis of the representations and warranties of any party by
any other party hereto.
9.7 Arbitration.
Arbitration shall be the initial means for resolving disputes between
the parties with respect to this Agreement and any agreements related thereto,
and any such arbitration shall take place in the county of Arizona, in the
state of Arizona. If any party wishes to commence arbitration hereunder, it
shall serve written notice to such effect on the other party or parties hereto
and, within fifteen (15) days thereafter, the parties shall mutually select a
single arbitrator to conduct such arbitration. In the event that the parties
fail to agree on such single person, each of the parties shall choose one (1)
member of three (3) member panel and those two (2) members shall select a
third. In conducting the arbitration, the arbitrator or arbitration panel shall
apply the Commercial Arbitration Rules of the American Arbitration Association
as modified by any other instructions that the parties may agree upon at the
time, except that each party shall have the right to conduct discovery in any
manner and to any extent authorized by the Federal Rules of Civil Procedure as
interpreted by the federal courts. The arbitrator shall decide the dispute
upon equitable principles and industry usage, as determined by the arbitrator,
but shall not modify the terms of this Agreement. Costs and expenses,
including reasonable attorneys' fees, incurred with respect to the arbitration
shall be borne by the losing party, unless otherwise determined by the
arbitrator based on a showing of good cause to vary from usual rule expressed
in this sentence. The arbitrator's award shall be final and unappealable. A
judgment upon the award may be entered in any court having jurisdiction of the
parties.
9.8 Confidential.
ACCI and its representatives agree that all information obtained during
its investigation conducted that is not publicly available will be held in
confidence and will be used solely for the purpose of evaluating the ACCI
investment in WSBI. In the event the transaction contemplated by this
Agreement does not close, all copies of such information will be returned to
WSBI, and such information will continue to be kept in confidence by ACCI and
its representatives, except for such information that is required to be
disclosed by court order or decree or that is otherwise in the public domain.
9.9 Captions and/or Headings.
The Captions and/or Headings in this Agreement are for convenience only
and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
9.10 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall constitute an original copy thereof, but all of
which together shall constitute one agreement.
9.11 Facsimile Execution.
For the convenience of the parties, this Agreement shall be executed by
facsimile signatures and shall be effective upon delivery of a facsimile signed
copy of this Agreement to each of the parties. A fax transmission of a document
bearing the signature(s) of a party hereto shall be acted upon and be deemed
and treated to be an original document for all purposes. If a fax transmission
is so made, the original of the signed document shall be mailed or placed with
a courier for personal delivery or mailed within three (3) business days of the
fax transmission.
DEFINITIONS:
"Actual Knowledge"--Notwithstanding anything to the contrary, a Person will
only be deemed to have actual knowledge if such Person is actually aware of
such fact or other matter.
"Breach"--a "Breach" of a representation, warranty, covenant, obligation, or
other provision of this Agreement or any instrument delivered pursuant to this
Agreement will be deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other provision, or (b) any
claim (by any Person) or other occurrence or circumstance that is or was
inconsistent with such representation, warranty, covenant, obligation, or other
provision, and the term "Breach" means any such inaccuracy, breach, failure,
claim, occurrence, or circumstance.
"Consent"--any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).
"Contract"--any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"Damages"--any loss, liability, claim, damage (incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising, directly or indirectly, from or in
connection with:
a. Any Breach of any representation or warranty made by any party in this
Agreement; or
b. Any Breach by any party of any covenant or obligation of such Person in
this Agreement; or
c. Any claim by any Person for finder's fees based upon any agreement or
understanding alleged to have been made by any such Person in
connection with any of the contemplated transactions.
"Duty of Care"--Directors occupy a fiduciary relationship to the corporation,
and must exercise the care of ordinarily prudent and diligent persons in like
positions.
"Encumbrance"--any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership.
"Environment"--soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins, and
wetlands), ground waters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental, Health, and Safety Liabilities"--any cost, damages, expense,
liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:
(a) Any environmental, health, or safety matters or conditions (including
on-site or off-site contamination, occupational safety and health, and
regulation of chemical substances or products); or
(b) Fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and
response, investigative, remedial, or inspection costs and expenses
arising under Environmental Law or Occupational Safety and Health Law;
or
(c) Financial responsibility under Environmental Law or Occupational Safety
and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or
response actions ("Cleanup") required by applicable Environmental Law
or Occupational Safety and Health Law (whether or not such Cleanup has
been required or requested by any Governmental Body or any other
Person) and for any natural resource damages; or
(d) Any other compliance, corrective, investigative, or remedial measures
required under Environmental Law or Occupational Safety and Health Law.
"Environmental Law"--any Legal Requirement that requires or relates to:
(a) Advising appropriate authorities, employees, and the public of intended
or actual releases of pollutants or hazardous substances or materials,
violations of discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or
construction, that could have significant impact on the Environment; or
(b) Preventing or reducing to acceptable levels the release of pollutants
or hazardous substances or materials into the Environment; or
(c) Reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated; or
(d) Assuring that products are designed, formulated, packaged, and used so
that they do not present unreasonable risks to human health or the
Environment when used or disposed of; or
(e) Protecting resources, species, or ecological amenities; or
(f) Reducing to acceptable levels the risks inherent in the transportation
of hazardous substances, pollutants, oil, or other potentially harmful
substances; or
(g) Cleaning up pollutants that have been released, preventing the threat
of release, or paying the costs of such clean up or prevention; or
(h) Making responsible parties pay private parties, or groups of them, for
damages done to their health or the Environment, or permitting self-
appointed representatives of the public interest to recover for
injuries done to public assets.
"ERISA"--the Employee Retirement Income Security Act of 1974 or any successor
law, and regulations and rules issued pursuant to that Act or any successor
law.
"Exchange Act"--the Exchange Act of 1934, as amended.
"Facilities"--any real property, leaseholds, or other interests currently or
formerly owned or operated by any Acquired Company and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated.
"GAAP"--generally accepted United States accounting principles, applied on a
basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to.
"Governmental Authorization"--any approval, consent, license, permit, waiver,
or other authorization issued, granted, given, or otherwise made available by
or under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body"-includes any nation, state, county, city, town, village,
district, or other jurisdiction of any nature; or Federal, state, local,
municipal, foreign, or other government; or Governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal); or Multi-national
organization or body; or Body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"Hazardous Activity"--the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, release,
storage, transfer, transportation, treatment, or use (including any withdrawal
or other use of groundwater) of Hazardous Materials in, on, under, about, or
from the Facilities or any part thereof into the Environment, and any other
act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or WSBI
Organization.
"Hazardous Materials"--any waste or other substance that is listed, defined,
designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and
specifically including petroleum and all derivatives thereof or synthetic
substitutes therefore and asbestos or asbestos-containing materials.
"HSR Act"--the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Intellectual Property Assets"--includes
(a) All fictional business names, trading names, registered and
unregistered trademarks, service marks, and applications (collectively,
"Marks"); and
(b) All patents, patent applications, and inventions and discoveries that
may be patentable (collectively, "Patents"); and
(c) All copyrights in both published works and unpublished works
(collectively, "Copyrights"); and
(d) All know-how, trade secrets, confidential information, customer lists,
software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, "Trade Secrets"); owned, used,
or licensed by any Acquired Company as licensee or licensor.
"IRC"--the Internal Revenue Code of 1986 or any successor law, and regulations
issued by the IRS pursuant to the Internal Revenue Code or any successor law.
"IRS"--the United States Internal Revenue Service or any successor agency, and,
to the extent relevant, the United States Department of the Treasury.
"Knowledge"--an individual will be deemed to have "Knowledge" of a particular
fact or other matter if:
(a) Such individual is actually aware of such fact or other matter; or, a
prudent individual in similar circumstances should be expected to be
aware of such fact or other matter if he or she had conducted a
reasonably thorough inquiry concerning the existence of such fact or
other matter; or
(b) In the case of an officer or director of a corporation, he or she would
be expected to either know or should have known of facts or other
matters material to the corporation, in the course of conducting
reasonable corporate governance in satisfying their Duty of Care to the
Corporation; or an officer or director in similar circumstances should
be expected to be aware of facts or other matters material to the
corporation, if he or she had conducted a reasonable inquiry concerning
such fact or other matter. A Person (other than an individual) will be
deemed to have "Knowledge" of a particular fact or other matter if any
individual who is serving, or who has at any time served, as a
director, officer, partner, executor, or trustee of such Person (or in
any similar capacity) has, or at any time had or should have had,
knowledge of such fact or other matter.
"Legal Requirement"--any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"Net Tangible Assets"--Net tangible assets equals Total Assets minus Total
Liabilities minus Goodwill minus Redeemable Securities.
"Occupational Safety and Health Law"--any Legal Requirement designed to provide
safe and healthful working conditions and to reduce occupational safety and
health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order"--any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court, administrative agency,
or other Governmental Body or by any arbitrator.
"Ordinary Course of Business"--an action taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:
(a) Such action is consistent with the past practices of such Person and is
taken in the ordinary course of the normal day-to-day operations of
such Person; and
(b) Such action is not required to be authorized by the board of directors
of such Person (or by any Person or group of Persons exercising similar
authority) [and is not required to be specifically authorized by the
parent company (if any) of such Person]; and
(c) Such action is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by any
Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons
that are in the same line of business as such Person.
"Organizational Documents"--
(a) The articles or certificate of incorporation and the bylaws of a
corporation;
(b) The partnership agreement and any statement of partnership of a general
partnership;
(c) The limited partnership agreement and the certificate of limited
partnership of a limited partnership;
(d) Any charter or similar document adopted or filed in connection with the
creation, formation, or organization of a Person; and
(e) Any amendment to any of the foregoing.
"Person"--any individual, corporation (including any non-profit corporation),
general or limited partnership, Limited Liability Company, joint venture,
estate, trust, association, organization, labor union, or other entity or
Governmental Body.
"Proceeding"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Related Person"--with respect to a particular individual,
(a) Each other member of such individual's family;
(b) Any Person that is directly or indirectly controlled by such individual
or one or more members of such individual's family;
(c) Any Person in which such individual or members of such individual's
family hold (individually or in the aggregate) a material interest; and
(d) Any Person with respect to which such individual or one or more members
of such individual's family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
"Representative"--with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.
"Securities Act"--the Securities Act of 1933, as amended or any successor law.
"Subsidiary"--with respect to any Person (the "Owner"), any corporation or
other Person of which securities or other interests having the power to elect a
majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries; when
used without reference to a particular Person, "Subsidiary" means a Subsidiary
of the Company.
"Tax Return"--any return (including any information return), report, statement,
schedule, notice, form, or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment
of any tax.
FACSIMILE COPY SHALL BE DEEMED AS ORIGINAL
IN WITNESS WHEREOF, the parties hereto have caused this definitive,
final and legally binding Agreement to be executed by their respective
authorized officers as of this 18th day of January, 2002.
AMERICAN CAREER CENTERS, INC.
By: _____/s/________________
Name: Xxxxxx Xxxxxxx
Title: President
WATER STAR BOTTLING, INC.
By: _____/s/________________
Name: Xxxxxxxxxxx X. Xxxxx
Title: President
DeBAUX HOLDING, L.L.C.
By: _____/s/________________
Name: Xxxxxxxxxxx Xxxxxxx Xxxxx
Title: President
GEYSER PRODUCTS, L.L.C.
By: _____/s/________________
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
