EXHIBIT 2
MERGER AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN AND AMONG
BURRARD CAPITAL, INC.,
A NEVADA CORPORATION;
ESSENTIALLY YOURS INDUSTRIES, INC.,
A NEVADA CORPORATION; AND
XXX XXXXXXXX
This Merger Agreement and Plan of Reorganization is made and entered in
duplicate effective the 30th day of June, 2002, by and among Essentially Yours
Industries, Inc., a Nevada corporation ("EYI"); Burrard Capital, Inc., a Nevada
corporation ("Company"); and Xxx Xxxxxxxx, and provides for EYI to merge with
and into the Company, for the Company to be the surviving corporation, and for
Xxx Xxxxxxxx, the sole stockholder of EYI, by such merger, to become a
stockholder of the Company.
RECITALS
A. The Company and EYI desire to combine their respective businesses, on
the terms and subject to the conditions specified in this Agreement.
B. The Company believes that it is desirable and in the best interests of
the Company and its shareholders that its business be combined with that of EYI,
on the terms and subject to the conditions specified in this Agreement.
C. EYI believes that it is desirable and in the best interests of EYI and
its shareholders that its business be combined with that of the Company, on the
terms and subject to the conditions specified in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT SHALL BE
DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL COVENANTS,
PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES SPECIFIED IN
THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED
LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE, REPRESENT
AND WARRANT AS FOLLOWS:
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ARTICLE I
DEFINITIONS
As used in this Agreement, in addition to terms defined elsewhere in this
Agreement, the terms specified below in this Article I shall have the
definitions and meanings specified immediately after those terms, unless a
different and common meaning of the term is clearly indicated by the context,
and variants and derivatives of the following terms shall have correlative
meanings. To the extent that certain of the definitions and meanings specified
below suggest, indicate, or express agreements between or among parties to this
Agreement, or specify representations or warranties or covenants of a party, the
parties agree to the same, by execution of this Agreement. The parties to this
Agreement agree that the agreements, representations, warranties, and covenants
expressed in any part or provision of this Agreement shall, for all purposes of
this Agreement, be treated in the same manner as other such agreements,
representations, warranties, and covenants specified elsewhere in this
Agreement, and the article or section of this Agreement within which such an
agreement, representation, warranty, or covenant is specified shall have no
separate meaning or effect on the same.
1.1 "ACCUMULATED FUNDING DEFICIENCY". An "accumulated funding deficiency" as
defined by the provisions of Section 302(a)(2) of ERISA or Section 412(a)(2) of
the Code, or, in either case, successor provisions to such provisions adopted by
amendments to ERISA or the Code, as the case may be, and including, in each
case, other provisions of ERISA, the Code or other law, and regulations adopted
pursuant to ERISA or the Code or such other law, modifying, amending,
interpreting or otherwise affecting the application of such provisions, either
in general or as applied to the nature or circumstances of a particular person
that is a party to, or is affected by, or is involved in, the Transaction and
with respect to which person the use of the term in this Agreement, or in the
particular provision of this Agreement, is relevant.
1.2 "AFFILIATE". When used with respect to a person, an "Affiliate" of that
person is a person Controlling, Controlled by, or under common Control with that
person.
1.3 "AGREEMENT". This Merger Agreement and Plan of Reorganization, including any
schedules and exhibits and all other documents specifically referred to in this
Agreement that have been or are to be delivered by a party to this Agreement to
another such party in connection with the Transaction or this Agreement, and
including all duly adopted amendments, modifications, and supplements to or of
this Agreement and such schedules, exhibits, and other documents.
1.4 "AUDITED FINANCIAL STATEMENTS". The balance sheet, income statement,
statement of stockholders' equity, and statement of cash flows or, in each
instance, equivalent statements of the Company or EYI, as the case may be, as
commonly
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provided to shareholders, as at June 30, 2002, and for the immediate preceding
fiscal year, as appropriate, as reported on by the Auditors.
1.5 "AUDITORS". Independent certified public accountants currently being
retained by the Company or by EYI, as the case may be, for the purpose of
auditing the financial statements of the Company or EYI, as the case may be.
1.6 "BUSINESS DAY". Any day that is not a Saturday, Sunday, or a day on which
banks in Carson City, Nevada are authorized to close.
1.7 "CLOSING". The completion of the Transaction, to occur as contemplated by
the provisions of Article II of this Agreement.
1.8 "CLOSING DATE". The date on which the Closing effectively occurs, which
shall be June 30, 2002, unless otherwise agreed by the parties to this
Agreement, but shall not in any event be prior to satisfaction or waiver of the
conditions to Closing specified by the provisions of Article VII of this
Agreement.
1.9 "CLOSING TIME". The time at which the Closing effectively occurs. All events
that are to occur at the Closing Time shall, for all purposes, be deemed to
occur simultaneously, except to the extent, if at all, that a specific order of
occurrence is otherwise described.
1.10 "CODE". The Internal Revenue Code of 1986, as amended and in effect at
the time of execution of this Agreement.
1.11 "COMPANY". Burrard Capital, Inc., a Nevada corporation.
1.12 "COMPANY BALANCE SHEET". The most recent balance sheet included in the
Audited Financial Statements of the Company.
1.13 "COMPANY DISCLOSURE DOCUMENT". The document delivered by the Company to
EYI specifying certain disclosures regarding the Company.
1.14 "COMPANY FACILITIES". All warehouses, stores, plants, production
facilities, manufacturing facilities, processing facilities, fixtures, and
improvements owned or leased by the Company or otherwise used by the Company in
connection with the operation of its business or leased or subleased by the
Company to others persons.
1.15 "COMPLETE WITHDRAWAL". A "complete withdrawal" from a Multiemployer Plan
as defined by the provisions of Section 4203 of ERISA or successor
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provisions to such provision adopted by amendments to ERISA and including other
provisions of ERISA or of other law and regulations adopted pursuant to ERISA or
such other law, modifying, amending, interpreting or otherwise affecting the
application of such provision, either in general or as applied to the nature or
circumstances of a particular person that is a party to, or is affected by, or
is involved in, the Transaction and with respect to which person the use of the
term in this Agreement, or in the particular provision of this Agreement, is
relevant.
1.16 "CONSIDERATION". Twelve million (12,000,000) shares of the Company's
$.001 par value common stock.
1.17 "CONTROL". Generally, the power to direct the management or affairs of
an person.
1.18 "ERISA". The Employee Retirement Income Security Act of 1974, as amended
and in effect at the time of execution of this Agreement.
1.19 "EYI FACILITIES". All warehouses, stores, plants, production facilities,
manufacturing facilities, processing facilities, fixtures, and improvements
owned or leased by EYI or otherwise used by EYI in connection with the operation
of its business or leased or subleased by EYI to other persons.
1.20 "EYI". Essentially Yours Industries, Inc., a Nevada corporation.
1.21 "EYI BALANCE SHEET". The most recent balance sheet included in the Audited
Financial Statements of EYI.
1.22 "EYI DISCLOSURE DOCUMENT". The document delivered by EYI to the Company
specifying certain disclosures regarding EYI.
1.23 "EXCHANGE ACT". The Securities Exchange Act of 1934, as amended to the date
as which any reference thereto is relevant pursuant to this Agreement, including
any substitute or replacement statue adopted in place or lieu thereof.
1.24 "GAAP". Generally Accepted Accounting Principles, as in effect on the date
of any statement, report or determination that purports to be, or is required to
be, prepared or made in accordance with GAAP. All references in this Agreement
to financial statements prepared in accordance with GAAP shall be defined and
mean
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in accordance with GAAP consistently applied during the periods to which
reference is made.
1.25 "HSR". The Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as
amended.
1.26 "INVENTORIES". The stock of raw materials, work-in-process and finished
goods, including, but not limited to, finished goods purchased for resale, held
for manufacturing, assembly, processing, repairing, finishing, sale, or resale
to other persons, from time to time in the ordinary course of the business in
the form in which such inventories then are held or after manufacturing,
assembling, finishing, processing, incorporating with other goods or items,
refining, repairing, or similar processes.
1.27 "IRS". The Internal Revenue Service.
1.28 "LIABILITIES". At any point in time ("Determination Time"), the obligations
of a person, whether known or unknown, contingent or absolute, recorded on such
person's books or not, arising or resulting in any way from facts, events,
agreements, obligations or occurrences that existed or transpired at a prior
point in time, or resulted from the passage of time to the Determination Time,
but not including obligations accruing or payable after the Determination Time
to the extent (but only to the extent) that such obligations (i) result from
previously existing agreements for services, benefits, or other considerations,
and (ii) accrue or become payable with respect to services, benefits, or other
considerations received by the person after the Determination Time.
1.29 "MERGER". The merger of EYI with and into the Company, as provided in
this Agreement.
1.30 "MULTIEMPLOYER PLAN". A "multiemployer plan," as defined by the provisions
of Section 3(37) of ERISA or Section 414(f) of the Code, or, in either case,
successor provisions to such provisions adopted by amendments to ERISA or the
Code, as the case may be, and including, in each case, other provisions of
ERISA, the Code or other law, and regulations adopted pursuant to ERISA or the
Code or such other law, modifying, amending, interpreting, or otherwise
affecting the application of such provisions, either in general or as applied to
the nature or circumstances of a particular person that is a party to, or is
affected by, or is involved in, the Transaction and with respect to which person
the use of the term in this Agreement, or in the particular provision of this
Agreement, is relevant.
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1.31 "PARTIAL WITHDRAWAL". A "partial withdrawal" from a Multiemployer Plan, as
defined in Section 4205 of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting or otherwise affecting the application of such
provision, either in general or as applied to the nature or circumstances of a
particular person that is a party to, or is affected by, or is involved in, the
Transaction and with respect to which person the use of the term in this
Agreement, or in the particular provision of this Agreement, is relevant.
1.32 "PAYABLES". Liabilities of the Company or EYI, as the case may be,
resulting from the borrowing of money or the incurring of obligations for
merchandise or goods purchased.
1.33 "PLAN TERMINATION". A termination of a Pension Plan, whether partial or
complete, within the meaning of Title IV of ERISA.
1.34 "PBGC". The Pension Benefit Guaranty Corporation.
1.35 "PENSION PLAN". A "pension plan" or "employee pension benefit plan," as
defined in Section 3(2) of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting, or otherwise affecting the application of
such provision, either in general or as applied to the nature or circumstances
of a particular person that is a party to, or is affected by or is involved in
the Transaction and with respect to which person the use of the term in this
Agreement, or in the particular provision of this Agreement, is relevant.
1.36 "PROHIBITED TRANSACTION". A "prohibited transaction," as defined in Section
406 of ERISA or Section 4975(c) of the Code, or, in either case, successor
provisions to such provisions adopted by amendments to ERISA or the Code, as the
case may be, and including, in each case, other provisions of ERISA, of the Code
or of other law, and regulations adopted pursuant to ERISA or the Code or such
other law, modifying, amending, interpreting, or otherwise affecting the
application of such provisions, either in general or as applied to the nature or
circumstances of a particular person that is a party to, or is affected by or is
involved in the Transaction and with respect to which person the use of the term
in this Agreement, or in the particular provision of this Agreement, is
relevant.
1.37 "PROPRIETARY RIGHTS". Trade secrets, copyrights, patents, trademarks,
service marks, customer lists, and all similar types of intangible property
developed,
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created or owned by the person claiming ownership, proprietary or similar, or
used by such person in connection with its business, whether or not the same are
entitled to legal protection.
1.38 "RECEIVABLES". Accounts receivable, notes receivable, and other obligations
appearing as assets on the books of the Company or EYI, respectively, and
customarily presented as assets in balance sheets prepared in accordance with
GAAP.
1.39 "REPORTABLE EVENT". A "reportable event," as defined in Section 4043(b) of
ERISA or successor provisions to such provision adopted by amendments to ERISA
and including other provisions of ERISA or of other law, and regulations adopted
pursuant to ERISA or such other law, modifying, amending, interpreting, or
otherwise affecting the application of such provision, either in general or as
applied to the nature or circumstances of a particular person that is a party
to, or is affected by or is involved in the Transaction and with respect to
which person the use of the term in this Agreement, or in the particular
provision of this Agreement, is relevant.
1.40 "SEC". The Securities and Exchange Commission.
1.41 "SECURITIES ACT". The Securities Act of 1933, as amended to the date as of
which any reference thereto is relevant pursuant to this Agreement, including
any substitute or replacement statute adopted in place or lieu thereof.
1.42 "TRANSACTION". The Merger and the related transactions contemplated by
this Agreement.
1.43 "WELFARE PLAN". A "welfare plan" or an "employee welfare benefit plan"
defined in Section 3(1) of ERISA or successor provisions to such provision
adopted by amendments to ERISA and including other provisions of ERISA or of
other law, and regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting, or otherwise affecting the application of
such provision, either in general or as applied to the nature or circumstances
of a particular person that is a party to, or is affected by or is involved in
the Transaction and with respect to which person the use of the term in this
Agreement, or in the particular provision of this Agreement, is relevant.
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ARTICLE II
THE TRANSACTION
2.1 THE TRANSACTION. On the Closing Date, and at the Closing Time, subject in
all instances to each of the terms, conditions, provisions and limitations
specified in this Agreement, EYI will merge with and into the Company, by the
filing with the Secretary of the State of Nevada a Certificate of Merger, and
such other documents as may be required by applicable law to effectuate the
Merger, (i) each share of common stock of EYI outstanding prior to the
Transaction will, by occurrence of the Merger and with no further action on the
part of the holder thereof, be transformed and converted into the right to
receive, upon surrender of the certificate for such share of common stock of
EYI, that shareholder's pro rata share of the Consideration, without interest or
any similar payment thereon or with respect thereto; (ii) as soon as possible
after the consummation of the Merger, Xxx Xxxxxxxx shall be appointed as
President and a director of the Company, Xxxxx XxXxxx shall be appointed as a
director and the Secretary of the Company, Xxxx X'Xxxxx shall be appointed as a
director of the Company, and Xxxxxx Xxxxx shall be appointed as a director of
the Company, and after their appointment as such, the sole director of the
Company prior to the consummation of the Merger shall resign as such; (iii) the
Company, as the surviving entity of the Merger; shall be the owner of all of the
business, assets, rights and other attributes theretofore held by EYI; and (v)
the name of the Company shall thereafter be changed to Essentially Yours
Industries, Inc. as soon as practicable after the Closing.
2.2 DELIVERY OF CONSIDERATION. Pursuant to the Transaction, each holder of
shares of common stock of EYI immediately prior to the Merger shall be entitled
to receive, from and after the effectiveness of the Merger, in respect of each
share of common stock of EYI issued and outstanding immediately prior to the
Transaction owned by such holder (and upon surrender of the certificate(s)
therefore, duly endorsed and in all respects in proper form for transfer), such
shareholder's pro rata share of the Consideration.
2.3 CLOSING. The Closing of the Transaction shall be presumed for all purposes
to occur on June 30, 2002 at the offices of EYI at 4:00 P.M., Pacific Time, or
at such other place and time as EYI and the Company may agree upon, on the
Closing Date.
2.4 PARTIES TO THE AGREEMENT AND TRANSACTION. To the extent that any provision
of this Agreement contemplates the agreement by the Company, such provision
shall mean the Company as it exists prior to the consummation of the Merger. If,
after such consummation, such a provision requires amendment, modification,
interpretation, etc., the same may be accomplished by (and only by) a majority
in interest of the Company's shareholders at the execution date of this
Agreement and those EYI shareholders receiving the Consideration as a result of
the Transaction, and not by the Company.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EYI
EYI hereby represents and warrants to the Company the following:
3.1 ORGANIZATION AND QUALIFICATION. EYI is a corporation duly organized, validly
existing, and in good standing pursuant to the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to conduct
business as that business is now being conducted. EYI is, or will prior to the
Closing be, duly qualified as a foreign corporation to do business, and in good
standing, in each jurisdiction where the character of the properties owned or
leased by EYI, or the nature of its activities, is such that qualification as a
foreign corporation in that jurisdiction is required by law.
3.2 CAPITALIZATION. The authorized capital stock of EYI consists of twenty-five
thousand (25,000) shares of common stock, $1.00 par value. There is no other
capital stock authorized for issuance. As of the date of this Agreement, one (1)
share of EYI's common stock were validly issued and outstanding, fully paid, and
nonassessable. As of the date of this Agreement, EYI had not issued any
preferred stock; no shares of its common stock were held in EYI's treasury, and
no shares were reserved for issuance, nor were there outstanding any options,
warrants, convertible instruments or other rights, agreements or commitments to
acquire common stock or preferred stock of EYI, except as fully and completely
described on the EYI Disclosure Document. Since the date of the EYI Balance
Sheet, no shares of EYI's capital stock, or options, warrants, or other rights,
agreements or commitments (contingent or otherwise) obligating EYI to issue
shares of capital stock, have been executed or issued.
3.3 AUTHORITY RELATIVE TO THIS AGREEMENT. EYI has the requisite corporate power
and authority to enter into this Agreement and to carry out and perform its
obligations created by this Agreement. The execution and delivery of this
Agreement and the consummation of the Transaction have been duly authorized and
approved by the requisite corporate authority of EYI and no other corporate
proceedings on the part of EYI are necessary to approve and adopt this Agreement
or to approve the consummation of the Transaction. This Agreement has been duly
and validly executed and delivered by EYI and constitutes a valid and binding
obligation of EYI, enforceable in accordance with its terms.
3.4 ABSENCE OF BREACH; NO CONSENTS. Except as specified in the EYI
Disclosure Document, the execution, delivery and the performance by EYI of
its obligations created by this Agreement, do not (i) conflict with or result
in a breach of any of
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the provisions of the Articles of Incorporation or Bylaws of EYI; (ii)
contravene any law, ordinance, rule, or regulation of any state or political
subdivision of either or of the United States (except for the HSR Act and
compliance with regulatory or licensing laws all of which, to the extent
applicable to EYI (and to the extent within the control of EYI), will be
satisfied in all material respects prior to the Closing), or of any applicable
foreign jurisdiction, or contravene any order, writ, judgment, injunction,
decree, determination, or award of any court or other authority having
jurisdiction, or cause the suspension or revocation of any authorization,
consent, approval, or license, presently in effect, which affects or obligated,
EYI or any of its material properties, except in any such case where such
contravention will not have a material adverse effect on the business, condition
(financial or otherwise), operations or prospects of EYI, and will not have a
material adverse effect on the validity of this Agreement or on the validity of
the consummation the Transaction; (iii) conflict with or result in a material
breach of or default pursuant to any material indenture or loan or credit
agreement or any other material agreement or instrument to which EYI is a party
or by which it may be affected or obligated; (iv) require the authorization,
consent, approval, or license of any third party; or (v) constitute any reason
for the loss or suspension of any permits, licenses, or other authorizations
used in the business of EYI.
3.5 FINANCIAL STATEMENTS. EYI has heretofore delivered to the Company the
following:
1. Audited Financial Statements of EYI; and
2. The EYI Disclosure Document.
All of the historical financial statements contained in such documents were
prepared from the books and records of EYI. The Audited Financial Statements of
EYI were prepared in accordance with GAAP, and fairly and accurately present the
financial situation and condition of the EYI as at the dates and for the periods
indicated. Without limited the foregoing, at the date of the EYI Balance Sheet,
the EYI owned each of the assets included in preparation of the EYI Balance
Sheet, and the valuation of such assets in the EYI Balance Sheet is not more
than their fair saleable value (on an item-by-item basis) at that date; and EYI
had no Liabilities, other than those specified in the EYI Balance Sheet, nor any
Liabilities in amounts in excess of the amounts included for them in the EYI
Balance Sheet. From the date of this Agreement through the Closing Date EYI will
continue to prepare financial statements on the same basis that it has done so
in the past, will promptly deliver the same to EYI, and the foregoing
representations will be applicable to each financial statement so prepared and
delivered.
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3.6 NO UNDISCLOSED LIABILITIES. EYI has no Liabilities which are not adequately
presented or reserved against on the face of the EYI Balance Sheet, except
Liabilities incurred since the date of the EYI Balance Sheet in the ordinary
course of business and consistent with past practice. Without limiting the
foregoing, (a) there are no unpaid leasehold improvements at any of EYI's
Facilities or locations for which EYI is or will be responsible, and (b) there
are no deferred rents due to lessors at or with respect to any of such EYI's
Facilities or locations.
3.7 NO MATERIAL ADVERSE CHANGE, ETC. Since the date of the EYI Balance Sheet,
other than as contemplated or caused by this Agreement, there has not been (i)
any material adverse change in the business, condition (financial or otherwise),
operations, or prospects of EYI; (ii) any damage, destruction, or loss, whether
covered by insurance or not, having a material adverse effect on the business,
condition (financial or otherwise), operations or prospects of EYI; (iii) any
entry into or termination of any material commitment, contract, agreement, or
transaction (including, without limitation, any material borrowing or capital
expenditure or sale or other disposition of any material asset or assets) of or
involving EYI, other than this Agreement and agreements executed in the ordinary
course of business; (iv) any redemption, repurchase, or other acquisition for
value of its capital stock by EYI, or any issuance of capital stock of EYI or of
securities convertible into or rights to acquire any such capital stock or any
dividend or distribution declared, set aside, or paid on capital stock of EYI;
(v) any transfer of or right granted pursuant to any material lease, license,
agreement, patent, trademark, trade name, or copyright of EYI; (vi) any sale or
other disposition of any asset of EYI, or any mortgage, pledge, or imposition of
any lien or other encumbrance on any asset of EYI, other than in the ordinary
course of business, or any agreement relating to any of the foregoing; of (vii)
any default or breach by EYI in any material respect pursuant to any contract,
license or permit. Since the date of the EYI Balance Sheet, EYI has conducted
its business only in the ordinary and usual course, and, without limiting the
foregoing, no changes have been made in (i) executive compensation amounts, (ii)
the manner in which other employees of EYI are compensated, (iii) supplemental
benefits provided to any such executives or other employees, or (d) inventory
amounts in relation to sales amounts, except, in any such case, in the ordinary
course of business and, in any event, without material adverse effect on the
business, condition (financial or otherwise), operations, or prospects of EYI.
3.8 TAXES. EYI has properly filed or caused to be filed all federal, state,
local, and foreign income and other tax returns, reports, and declarations that
are required by applicable law to be filed by EYI and has paid, or made full and
adequate provision for the payment of, all federal, state, local, and foreign
income and other
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taxes properly due for the periods contemplated by such returns, reports, and
declarations.
3.9 LITIGATION. No investigation or review by any governmental entity with
respect to EYI is pending or threatened (other than inspections and reviews
customarily made of businesses such as those similar to that EYI), nor has any
governmental entity indicated to EYI an intention to conduct any such
investigation or review. There is no action, litigation or proceeding pending or
threatened against or affecting EYI at law or in equity, or before any federal,
state, municipal, or other governmental department, commission, board, bureau,
agency, or instrumentality.
3.10 EMPLOYEES, ETC. There are no collective bargaining, bonus, profit sharing,
compensation, or other plans, agreements, trusts, funds, or arrangements
maintained by EYI for the benefit of directors, officers or employees of, and
there are no employment, consulting, severance, or indemnification arrangements,
agreements, or understandings between EYI, on the one hand, and any current or
former directors, officers or other employees (or Affiliates thereof) of on the
other hand. EYI is not, and following the Closing will not be, obligated by any
express or implied contract or agreement to employ, directly or as consultant or
otherwise, any person for any specific period of time or until any specific age.
3.11 COMPLIANCE WITH LAWS. EYI is in compliance with all, and has received no
notice of any violation of any, laws or regulations applicable to its
operations, including, without limitation, the laws and regulations relevant to
the use or utilization of premises, or with respect to which compliance is a
condition of engaging in any aspect of the business of EYI, and EYI has all
permits, licenses, zoning rights, and other governmental authorizations
necessary to conduct its business as presently conducted.
3.12 OWNERSHIP OF PERSONAL PROPERTY. EYI has good, marketable, and insurable
title, or valid, effective, and continuing leasehold rights in the case of
leased property, to all personal property owned or leased by EYI or used by it
in the conduct of its business in such a manner as to create the appearance or
reasonable expectation that such property is owned or leased by EYI, free and
clear of all liens, claims, encumbrances, and charges, except liens for taxes
not yet due and minor imperfections of title and encumbrances, if any, which
singularly and in the aggregate are not substantial in amount and do not
materially detract from the value of the property subject thereto or materially
impair the use thereof. EYI does not know of any potential action by any person
and no proceedings with respect thereto have been instituted of which EYI has
notice that would materially affect the EYI's ability to use and to utilize such
personal property in its business.
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EYI has received no notices from any mortgagee regarding any properties leased
by EYI.
3.13 PROPRIETARY RIGHTS. EYI possesses full and complete ownership of, or
adequate and enforceable long-term licenses or other rights to use (without
payment), all of its Proprietary Rights; EYI has not received any notice of
conflict which asserts the rights of any other person with respect thereto; and
EYI has in all material respects performed all of the obligations required to be
performed by it and is not in default in any material respect, pursuant to any
agreement relating to any such Proprietary Right.
3.14 SUBSIDIARIES, ETC. EYI owns directly and beneficially one hundred percent
(100%) of Halo Distribution LLC, a Kentucky limited liability company, and EYI
owns all of the issued and outstanding capital stock of 642706 BC Ltd., a
British Columbia corporation.
3.15 TRADE NAMES. The EYI Disclosure Document specifies each trade name,
fictitious business name, or other similar name pursuant to which EYI has
conducted any part of EYI's business or in which EYI has utilized any of EYI's
assets during the ten (10) years preceding the date of this Agreement.
3.16 EMPLOYEE BENEFIT PLANS. EYI has no Pension Plan, Welfare Plan or
Multiemployer Plan.
3.17 FACILITIES. EYI's Facilities are (as to physical plant and structure)
structurally sound and none of EYI's Facilities, nor any of the vehicles or
other equipment used by EYI in connection with its business, has any material
defects, and all of them are in all material respects in good operating
condition and repair and are adequate for the uses to which they are utilized;
none of EYI's Facilities, vehicles or other equipment is in need of maintenance
or repairs except for ordinary, routine maintenance and repairs which are not
material in nature or cost. EYI is not in breach, violation or default of any
lease affecting EYI s assets with respect to, or as a result of, which the other
party (whether lessor, lessee, sublessor, or sublessee) thereto has the right to
terminate the same, and EYI has not received notice of any claim or assertion
that EYI is or may be in any such breach, violation or default.
3.18 ACCOUNTS RECEIVABLE. All accounts receivable of EYI, whether or not
specified in the EYI Balance Sheet, represent transactions in the ordinary
course of business, and are current and collectible net of any reserves
specified on the EYI Balance Sheet (which reserves are adequate and were
calculated consistent with past practice).
13
3.19 INVENTORIES. All Inventories of EYI, whether or not specified in the EYI
Balance Sheet, are of a quality and quantity usable and saleable in the ordinary
course of business, except for obsolete items and items of below-standard
quality, all of which, in the aggregate, are immaterial in amount. Items
included in such Inventories are presented on the books and records of the EYI,
and are valued on the EYI Balance Sheet, at the lower of cost or market and, in
any event, at not greater than their net realizable value, on an item by item
basis, after appropriate deduction for costs of completion, marketing costs,
transportation expense, and allocation of overhead.
3.20 CONTRACTS. The EYI Disclosure Document specifies all contracts, agreements,
or understandings, whether express or implied, written or verbal, to which EYI
is a party. The EYI Disclosure Document also specifies a brief summary of each
such contract, agreement or understanding identified therein. Without in any
respect limiting the foregoing, the EYI Disclosure Document specifies a
description of all leases of properties by EYI, including all amendments,
supplements, extensions and modification thereof, identifying, inter alia, the
date each such document was executed and its effective period. EYI is not a
party to any executory contract to sell or transfer any part of any leasehold
interest of EYI. True and accurate copies of all leases, and of all amendments,
supplements, extensions, modifications thereof, have heretofore been delivered
to the Company by EYI.
3.21 ACCOUNTS PAYABLE. The accounts payable specified on the EYI Balance Sheet
do, and those specified on the books and records of EYI at the time of the
Closing will, specify all amounts owed by EYI in respect of trade accounts due
and other Payables, and the actual Liabilities of EYI in respect of such
obligations was not, and will not be, on any of such dates, in excess of the
amounts so specified on the books and records of EYI, as the case may be.
3.22 LABOR MATTERS. There are no activities or controversies, including, without
limitation, any labor organizing activities, election petitions or proceedings,
proceedings preparatory thereto, unfair labor practice complaints, labor
strikes, disputes, slowdowns, or work stoppages, pending or, to the best of the
knowledge of EYI, threatened, among EYI and any of its employees.
3.23 INSURANCE. EYI has insurance policies in full and complete force and effect
insuring the assets of EYI and such insurance policies provide for coverages
which are usual and customary in the business of EYI as to amount and scope, and
are adequate to protect the assets of EYI against any reasonably foreseeable
risk of
14
loss. EYI has not within the past three (3) years received any notice of
cancellation of any insurance agreement affecting the assets of EYI.
3.24 ENVIRONMENTAL MATTERS RE: TITLE TO AND UTILIZATION OF REAL PROPERTIES.
Except as disclosed in the EYI Disclosure Document, EYI owns fee, simple,
insured title to all real property owned by EYI and has the unfettered right to
use the same, and EYI is not aware of any claim, notice or threat to the effect
that its right to own and use such property is subject in any way to any
challenge, claim, assertion of rights, proceedings toward condemnation or
confiscation, in whole or in part, or is otherwise subject to challenge. Each
parcel of real property owned or leased by EYI is free of any and all hazardous
wastes, toxic substances or other types of contamination or matters of
environmental concern in connection with any such real property. EYI is not
subject to any Liability resulting from or related to any such wastes,
substances, contaminants or matters of environmental concern, and EYI has
delivered a copy of the report of any and all hazardous wastes, toxic
substances, or other types of contamination or matters of environmental concern,
and EYI is not subject to any Liability resulting from or related to any such
wastes, substances, contaminants, or matters of environmental concern in
connection with any such real property. EYI is not subject to any Liability
resulting from or related to any other wastes, substances, contaminants or
matters of environmental concern.
3.25 FULL DISCLOSURE. The documents, certificates, and other writings furnished
or to be furnished by or on behalf of EYI to the Company pursuant to this
Agreement, including, but not limited to, the EYI Disclosure Document, taken
together in the aggregate, do not and will not contain any untrue statement of a
material fact, or omit to specify any material fact necessary to make the
statements made, considering the circumstances pursuant to which they are made,
not misleading.
3.26 EVALUATION OF RISKS. EYI has such knowledge and experience in business and
financial matters that EYI is capable of evaluating the Company and the proposed
activities thereof, the risks and merits of the Transaction and of making an
informed decision relating thereto; and EYI is not utilizing any other person
regarding the evaluation of those risks and merits.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to EYI as follows:
15
4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized,
validly existing, and in good standing pursuant to the laws of its jurisdiction
of incorporation and has the requisite corporate power and authority to conduct
business as that business is now being conducted. The Company is, or will prior
to the Closing be, duly qualified as a foreign corporation to do business, and
in good standing, in each jurisdiction where the character of the properties
owned or leased by the Company, or the nature of its activities, is such that
qualification as a foreign corporation in that jurisdiction is required by law.
4.2 CAPITALIZATION. The authorized capital stock of the Company consists of
seventy million (70,000,000) shares of common stock, $.001 par value, and ten
million (10,000,000) shares of preferred stock, $.001 par value. There is no
other capital stock authorized for issuance. As of the date of this Agreement,
three million (3,000,000) shares of the Company's common stock were validly
issued and outstanding, fully paid, and nonassessable. As of the date of this
Agreement, the Company had not issued any preferred stock; no shares of its
common stock were held in the Company treasury, and no shares were reserved for
issuance, nor were there outstanding any options, warrants, convertible
instruments or other rights, agreements or commitments to acquire common stock
of the Company, except as fully and completely described on the Company
Disclosure Document. Since the date of the Company Balance Sheet, no shares of
the Company's capital stock, or options, warrants, or other rights, agreements
or commitments (contingent or otherwise) obligating the Company to issue shares
of capital stock, have been executed or issued.
4.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has the requisite
corporate power and authority to enter into this Agreement and to carry out its
obligations created by this Agreement. The execution and delivery of this
Agreement and the consummation of the Transaction have been duly authorized and
approved by the requisite corporate authority of the Company and no other
corporate proceedings on the part of the Company are necessary to approve and
adopt this Agreement or to approve the consummation of the Transaction,
including delivery of the Consideration. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable in accordance with its terms.
4.4 ABSENCE OF BREACH; NO CONSENTS. The execution, delivery, and the performance
by the Company of its obligations created by this Agreement, do not (i) conflict
with or result in a breach of any of the provisions of the Articles of
Incorporation or Bylaws of the Company; (ii) contravene any law, ordinance,
rule, or regulation of any State or political subdivision of either or of the
United States (except for the HSR Act and compliance with regulatory or
licensing laws all of
16
which, to the extent applicable to the Company (and to the extent within the
control of the Company), will be satisfied in all material respects prior to the
Closing), or of any applicable foreign jurisdiction, or contravene any order,
writ, judgment, injunction, decree, determination, or award of any court or
other authority having jurisdiction, or cause the suspension or revocation of
any authorization, consent, approval, or license, presently in effect, which
affects or obligates, the Company or any of its material properties, except in
any such case where such contravention will not have a material adverse effect
on the business, condition (financial or otherwise), operations or prospects of
the Company, and will not have a material adverse effect on the validity of this
Agreement or on the validity of the consummation the Transaction; (iii) conflict
with or result in a material breach of or default pursuant to any material
indenture or loan or credit agreement or any other material agreement or
instrument to which the Company is a party or by which the Company may be
affected or obligated; (iv) require the authorization, consent, approval, or
license of any third party; or (v) constitute any reason for the loss or
suspension of any permits, licenses, or other authorizations used in the
business of the Company.
4.5 FINANCIAL STATEMENTS. The Company has heretofore delivered to EYI the
following:
1. Audited Financial Statements of the Company; and
2. The Company Disclosure Document.
All of the historical financial statements contained in such documents were
prepared from the books and records of the Company. The Audited Financial
Statements of the Company were prepared in accordance with GAAP, and fairly and
accurately present the financial situation and condition of the Company as at
the dates and for the periods indicated. Without limited the foregoing, at the
date of the Company Balance Sheet, the Company owned each of the assets included
in preparation of the Company Balance Sheet, and the valuation of such assets in
the Company Balance Sheet is not more than their fair saleable value (on an
item-by-item basis) at that date; and the Company had no Liabilities, other than
those specified in the Company Balance Sheet, nor any Liabilities in amounts in
excess of the amounts included for them in the Company Balance Sheet. From the
date of this Agreement through the Closing Date the Company will continue to
prepare financial statements on the same basis that it has done so in the past,
will promptly deliver the same to EYI, and the foregoing representations will be
applicable to each financial statement so prepared and delivered.
4.6 NO UNDISCLOSED LIABILITIES. The Company has no Liabilities which are not
adequately presented or reserved against on the Company Balance Sheet, except
17
Liabilities incurred since the date of the Company Balance Sheet in the ordinary
course of business and consistent with past practice. Without limiting the
foregoing, (a) there are no unpaid leasehold improvements at any of the
Company's Facilities or locations for which the Company is or will be
responsible, and (b) there are no deferred rents due to lessors at or with
respect to any of the Company's Facilities or locations.
4.7 NO MATERIAL ADVERSE CHANGE, ETC. Since the date of the Company Balance
Sheet, other than as contemplated or caused by this Agreement, there has not
been (i) any material adverse change in the business, condition (financial or
otherwise), operations, or prospects of the Company; (ii) any damage,
destruction, or loss, whether covered by insurance or not, having a material
adverse effect on the business, condition (financial or otherwise), operations
or prospects of the Company; (iii) any entry into or termination of any material
commitment, contract, agreement, or transaction (including, without limitation,
any material borrowing or capital expenditure or sale or other disposition of
any material asset or assets) of or involving the Company, other than this
Agreement and agreements executed in the ordinary course of business; (iv) any
redemption, repurchase, or other acquisition for value of its capital stock by
the Company, or any issuance of capital stock of the Company or of securities
convertible into or rights to acquire any such capital stock or any dividend or
distribution declared, set aside, or paid on capital stock of the Company; (v)
any transfer of or right granted under any material lease, license, agreement,
patent, trademark, trade name, or copyright of the Company; (vi) any sale or
other disposition of any asset of the Company, or any mortgage, pledge, or
imposition of any lien or other encumbrance on any asset of the Company, other
than in the ordinary course of business, or any agreement relating to any of the
foregoing; of (vii) any default or breach by the Company in any material respect
pursuant to any contract, license or permit. Since the date of the Company
Balance Sheet, the Company has conducted its business only in the ordinary and
usual course, and, without limiting the foregoing, no changes have been made in
(i) executive compensation amounts, (ii) the manner in which other employees of
the Company are compensated, (iii) supplemental benefits provided to any such
executives or other employees, or (d) inventory amounts in relation to sales
amounts, except, in any such case, in the ordinary course of business and, in
any event, without material adverse effect on the business, condition (financial
or otherwise), operations, or prospects of the Company.
4.8 TAXES. The Company has properly filed or caused to be filed all federal,
state, local, and foreign income and other tax returns, reports, and
declarations that are required by applicable law or be filed by it, and has
paid, or made full and adequate provision for the payment of, all federal,
state, local, and foreign income and other taxes properly due for the periods
contemplated by such returns, reports,
18
and declarations, except such taxes, if any, as are adequately reserved against
in the Company Balance Sheet.
4.9 LITIGATION. No material investigation or review by any governmental entity
with respect to the Company is pending or, to the best of the knowledge of the
Company, threatened (other than inspections and reviews customarily made of
businesses such as that of the Company), nor has any governmental entity
indicated to the Company an intention to conduct the same. There is no action,
litigation or proceeding pending or, to the best of the knowledge of the
Company, threatened against or affecting the Company at law or in equity, or
before any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality.
4.10 EMPLOYEES, ETC. There are no collective bargaining, bonus, profit sharing,
compensation, or other plans, agreements, trust, funds, or arrangements
maintained by the Company for the benefit of its directors, officers, or
employees, and there are no employment, consulting, severance, or
indemnification arrangements, agreements, or understandings between the Company,
on the one hand, and any current or former directors, officers, or other
employees (or Affiliates thereof) of the Company, on the other hand. The Company
is not, and following the Closing will not be, obligated by any express or
implied contract or agreement to employ, directly or as a consultant or
otherwise, any person for any specific period of time or until any specific age.
4.11 COMPLIANCE WITH LAWS. The Company is in substantial compliance with all,
and has received no notice of any violation of any, laws or regulations
applicable to its operations, including, without limitation, the use of premises
occupied by it, or with respect to which compliance is a condition of engaging
in any aspect of the business of the Company and has all permits, licenses,
zoning rights, and other governmental authorizations necessary to conduct its
business as presently conducted.
4.12 OWNERSHIP OF PERSONAL PROPERTY. The Company has good, marketable, and
insurable title, or valid, effective, and continuing leasehold rights in the
case of leased property, to all personal property owned or leased by the Company
or used by it in the conduct of its business in such a manner as to create the
appearance or reasonable expectation that such property is owned or leased by
it, free and clear of all liens, claims, encumbrances, and charges, except liens
for taxes not yet due and minor imperfections of title and encumbrances, if any,
which singularly and in the aggregate are not substantial in amount and do not
materially detract from the value of the property subject thereto or materially
impair the use thereof. The Company does not know of any potential action by any
person and no proceedings
19
with respect thereto have been instituted of which the Company has notice that
would materially affect the Company's ability to use and to utilize such
personal property in its business. The Company has received no notices from any
mortgagee regarding any properties leased by the Company.
4.13 PROPRIETARY RIGHTS. The Company possesses full ownership of, or adequate
and enforceable long-term licenses or other rights to use (without payment), all
Proprietary Rights owned by or registered in the name of the Company or used in
the business of the Company; the Company has not received any notice of conflict
which asserts the rights of other persons with respect thereto; and the Company
has in all material respects performed all of the obligations required to be
performed by it and is not in default in any material respect, pursuant to any
agreement relating to any Proprietary Right.
4.14 SUBSIDIARIES, ETC. The Company has no subsidiaries.
4.15 TRADE NAMES. The Company Disclosure Document identifies each trade name,
fictitious business name, or other similar name pursuant to which the Company
has conducted any part of the Company's business or in which the Company has
utilized any of the Company's assets during the ten (10) years preceding the
date of this Agreement.
4.16 EMPLOYEE BENEFIT PLANS. The Company has no Pension Plan, Welfare Plan,
or Multiemployer Plan.
4.17 FACILITIES. The Company Facilities are (as to physical plant and structure)
structurally sound and none of the Company Facilities, nor any of the vehicles
or other equipment used by the Company in connection with its business, has any
material defects and all of them are in all material respects in good operating
condition and repair and are adequate for the uses to which they are utilized;
none of the Company Facilities, vehicles or other equipment is in need of
maintenance or repairs except for ordinary, routine maintenance and repairs
which are not material in nature or cost. The Company is not in breach,
violation, or default of any lease with respect to or as a result of which the
other party (whether lessor, lessee, sublessor, or sublessee) thereto has the
right to terminate the same, and the Company has not received notice of any
claim or assertion that it is or may be in any such breach, violation, or
default.
4.18 ACCOUNTS RECEIVABLE. All accounts receivable of the Company, whether or
not specified in the Company Balance Sheet, represent transactions in the
ordinary course of business, and are current and collectible net of any
reserves specified on
20
the Company Balance Sheet (which reserves are adequate and were calculated
consistent with past practice).
4.19 INVENTORIES. All Inventories of the Company, whether or not specified in
the Company Balance Sheet, are of a quality and quantity usable and saleable in
the ordinary course of business, except for obsolete items and items of
below-standard quality, all of which, in the aggregate, are immaterial in
amount. Items included in such Inventories are carried on the books of the
Company, and are valued on the Company Balance Sheet, at the lower of cost or
market and, in any event, at not greater than their net realizable value, on an
item by item basis, after appropriate deduction for costs of completion,
marketing costs, transportation expense, and allocation of overhead.
4.20 CONTRACTS. The Company Disclosure Document specifies all contracts,
agreements, or understandings, whether express or implied, written or verbal, to
which the Company is a party. The Company Disclosure Document also specifies a
brief summary of each such contract, agreement or understanding identified
therein. Without in any respect limiting the foregoing, the Company Disclosure
Document specifies a description of all leases of properties by the Company,
including all amendments, supplements, extensions and modification thereof,
identifying, inter alia, the date each such document was executed and its
effective period. The Company is not a party to any executory contract to sell
or transfer any part of any leasehold interest of the Company. True and accurate
copies of all leases, and of all amendments, supplements, extensions,
modifications thereof, have heretofore been delivered to EYI by the Company.
4.21 ACCOUNTS PAYABLE. The accounts payable specified on the Company Balance
Sheet do, and those specified on the books of the Company at the time of the
Closing will, specify all amounts owed by the Company in respect of trade
accounts due and other Payables, and the actual Liabilities of the Company in
respect of such obligations was not, and will not be, on any of such dates, in
excess of the amounts so specified on the balance sheets or the books and
records of the Company, as the case may be.
4.22 LABOR MATTERS. There are no activities or controversies, including, without
limitation, any labor organizing activities, election petitions or proceedings,
proceedings preparatory thereto, unfair labor practice complaints, labor
strikes, disputes, slowdowns, or work stoppages, pending or, to the best of the
knowledge of the Company, threatened, among the Company and any of its
employees.
4.23 ENVIRONMENTAL MATTERS RE: TITLE TO AND UTILIZATION OF REAL PROPERTIES.
The Company owns no real property. The Company is not subject to any
Liability
21
resulting from or related to any hazardous wastes, substances, contaminants or
matters of environmental concern.
4.24 FULL DISCLOSURE. The documents, certificates, and other writings furnished
or to be furnished by or on behalf of the Company to EYI pursuant to this
Agreement, including, but not limited to, the Company Disclosure Document, taken
together in the aggregate, do not and will not contain any untrue statement of a
material fact, or omit to specify any material fact necessary to make the
statements made, considering the circumstances pursuant to which they are made,
not misleading.
4.25 EVALUATION OF RISKS. The Company has such knowledge and experience in
business and financial matters that the Company is capable of evaluating EYI and
the activities thereof, the risks and merits of the Transaction and of making an
informed decision relating thereto; and the Company is not utilizing any other
person regarding the evaluation of those risks and merits.
ARTICLES V
COVENANTS OF EYI
5.1 ACCESS AND INFORMATION. EYI shall afford to the Company and to the Company's
accountants, counsel and other representatives reasonable access during normal
business hours throughout the period prior to the Closing to all of EYI's
properties, books, contracts, commitments, records (including, but not limited
to, tax returns), and personnel, and, during such period, EYI shall furnish
promptly to the Company (i) all written communications to its directors or to
its shareholders generally, (ii) internal monthly financial statements when and
as available, and (iii) all other information concerning its business,
properties, and personnel as the Company may request, but no investigation
pursuant to this section shall affect any representations or warranties of EYI,
or the conditions to the obligations of the Company to consummate the
Transaction. In the event of the termination of this Agreement, EYI will, and
will cause its representatives to, deliver to the Company or destroy all
documents, work papers, and other material, and all copies thereof, obtained by
EYI or on its behalf from the Company as a result of this Agreement or in
connection with this Agreement, whether so obtained before or after the
execution of this Agreement, and EYI will hold in confidence all confidential
information, that has been designated as such by the Company in writing or by
appropriate and obvious notation, and will not use any such confidential
information except in connection with the Transaction, until such time as such
information is otherwise publicly available. EYI and its representatives shall
assert their rights pursuant to this Agreement in such manner as to minimize
interference with the business of the Company.
22
5.3 COOPERATION. EYI shall cooperate with the Company and its counsel,
accountants and agents in every way in consummating the Transaction, and in
delivering all documents and instruments deemed reasonably necessary or useful
by counsel to the Company.
5.4 NO SOLICITATION. EYI, and those acting on behalf of any of EYI will not, and
EYI will use its best efforts to cause its officers, employees, agents, and
representatives (including any investment banker), directly or indirectly, not
to solicit, encourage, or initiate any discussions with, or negotiate or
otherwise deal with, or provide any information to, any person other than the
Company and the Company's officers, employees, and agents, concerning any
merger, sale of substantial assets, or similar transaction involving EYI or
division of EYI or any sale of any of its capital stock or division of EYI. EYI
will notify the Company immediately upon receipt of any inquiry, offer or
proposal relating to any of the foregoing. None of the foregoing shall prohibit
EYI providing information to other persons in a manner in keeping with the
ordinary conduct of EYI's business, or providing information to government
authorities.
5.5 CONDUCT OF BUSINESS PENDING THE CLOSING OF THE TRANSACTION. EYI covenants
and agrees with the Company that, prior to the consummation of the Transaction
or the termination of this Agreement pursuant to its terms, unless the Company
shall otherwise consent in writing, and except as otherwise contemplated by this
Agreement, EYI will comply with each of the following:
(1) The business of EYI shall be conducted only in the ordinary and usual course
and EYI shall use reasonable efforts to use reasonable efforts to keep intact
its business organization and goodwill, keep available the services of its
officers and employees and maintain good relationships with suppliers, lenders,
creditors, distributors, employees, customers, and other persons having business
or financial relationships with EYI, and EYI shall immediately notify the
Company of any event or occurrence or emergency material to, and not in the
ordinary and usual course of business of, EYI.
(2) EYI shall not sell, lease, mortgage, encumber, or otherwise dispose of or
grant any interest in any of EYI's assets or properties, except for sales,
encumbrances, and other dispositions or grants in the ordinary course of
business and consistent with past practice and except for liens for taxes not
yet due or liens or encumbrances that are not material in amount or effect and
do not impair the use of EYI's property, or as specifically provided for or
permitted in this Agreement.
23
(3) EYI shall not enter into, or terminate, any material contract, agreement,
commitment, or understanding.
(4) EYI will properly and promptly file when due all federal, state, local,
foreign and other tax returns, reports, and declarations required to be filed by
EYI, and will pay, or make full and adequate provisions for the payment of, all
taxes and governmental charges due from or payable by EYI.
(5) EYI will comply with all laws and regulations applicable to EYI and EYI's
operations.
5.6 EXPENSES. Whether or not the Transaction is consummated, all costs and
expenses incurred by EYI in connection with this Agreement and the Transaction
shall be paid by EYI.
5.7 PUBLICITY. Prior to the Closing any written news releases by EYI pertaining
to this Agreement or the Transaction shall be submitted to the Company for
review and approval prior to release by EYI, and shall be released only in a
form approved by the Company; provided, however, that such review and approval
shall not be required of releases by EYI if prior review and approval would
prevent the timely and accurate dissemination of such press release as required
to comply, in the judgment of counsel, with any applicable law, rule or policy.
5.8 UPDATING OF DISCLOSURE DOCUMENT. EYI shall notify the Company of any
changes, additions or events which may cause any change in or addition to the
EYI Disclosure Document, promptly after the occurrence of the same and at the
Closing. No notification made pursuant to this section shall be deemed to cure
any breach of any representation or warranty made in this Agreement, unless the
Company specifically agrees thereto in writing nor shall any such notification
be considered to constitute or result in a waiver by the Company of any
condition set forth in this Agreement.
ARTICLE VI
COVENANTS OF THE COMPANY
6.1 AFFIRMATIVE COVENANTS. From the date hereof through the Closing Date, the
Company will take every action reasonably required of it to satisfy the
conditions to Closing set forth in this Agreement and otherwise to ensure the
prompt and expedient consummation of the Transaction substantially as
contemplated by the provisions of this Agreement, and will exert all reasonable
efforts to cause the Transaction to be consummated, provided in all instances
that the representations and warranties of EYI in this Agreement are and remain
true and accurate and that
24
the covenants and agreements of EYI in this Agreement are performed and that the
conditions to the obligations of the Company set forth in this Agreement are not
incapable of satisfaction and subject, at all times, to the right and ability of
the directors of the Company to satisfy their fiduciary obligations.
6.2 ACCESS AND INFORMATION. The Company shall afford to EYI and to EYI's
accountants, counsel and other representatives reasonable access during normal
business hours throughout the period prior to the Closing to all of its
properties, books, contracts, commitments, records (including, but not limited
to, tax returns), and personnel, and, during such period, the Company shall
furnish promptly to EYI (i) all written communications to its directors or to
its shareholders generally, (ii) internal monthly financial statements when and
as available, and (iii) all other information concerning its business,
properties, and personnel as EYI may request, but no investigation pursuant to
this section shall affect any representations or warranties of the Company, or
the conditions to the obligations of EYI to consummate the Transaction specified
in this Agreement. In the event of the termination of this Agreement, the
Company will, and will cause its representatives to, deliver to EYI or destroy
all documents, work papers, and other material, and all copies thereof, obtained
by the Company or on its behalf from EYI as a result of this Agreement or in
connection with this Agreement, whether so obtained before or after the
execution of this Agreement, and the Company will hold in confidence all
confidential information, that has been designated as such by EYI in writing or
by appropriate and obvious notation, and will not use any such confidential
information except in connection with the Transaction, until such time as such
information is otherwise publicly available. The Company and its representatives
shall assert their rights pursuant to this Agreement in such manner as to
minimize interference with the business of EYI.
6.3 COOPERATION. The Company shall cooperate with EYI and its counsel,
accountants and agents in every way in consummating the Transaction, and in
delivering all documents and instruments deemed reasonably necessary or useful
by counsel to EYI.
6.4 NO SOLICITATION. The Company, and those acting on behalf of any of the
Company will not, and the Company will use its best efforts to cause its
officers, employees, agents, and representatives (including any investment
banker) not, directly or indirectly, to solicit, encourage, or initiate any
discussions with, or negotiate or otherwise deal with, or provide any
information to, any person other than EYI and its officers, employees, and
agents, concerning any merger, sale of substantial assets, or similar
transaction involving the Company or division of the Company or any sale of any
of its capital stock or division of the Company. The Company will notify EYI
immediately upon receipt of any inquiry, offer or
25
proposal relating to any of the foregoing. None of the foregoing shall prohibit
the Company from providing information to others in a manner in keeping with the
ordinary conduct of the Company's business, or providing information to
government authorities.
6.5 CONDUCT OF BUSINESS PENDING THE CLOSING OF THE TRANSACTION. The Company
covenants and agrees with EYI that, prior to the consummation of the Transaction
or the termination of this Agreement pursuant to its terms, unless EYI shall
otherwise consent in writing, and except as otherwise contemplated by this
Agreement, the Company will comply with each of the following:
(1) The business of the Company shall be conducted only in the ordinary and
usual course, it shall use reasonable efforts to use reasonable efforts to keep
intact its business organization and goodwill, keep available the services of
its officers and employees and maintain good relationships with suppliers,
lenders, creditors, distributors, employees, customers, and other persons having
business or financial relationships with the Company and the Company shall
immediately notify EYI of any event or occurrence or emergency material to, and
not in the ordinary and usual course of business of, the Company.
(2) The Company shall not sell, lease, mortgage, encumber, or otherwise dispose
of or grant any interest in any of the Company's assets or properties, except
for sales, encumbrances, and other dispositions or grants in the ordinary course
of business and consistent with past practice and except for liens for taxes not
yet due or liens or encumbrances that are not material in amount or effect and
do not impair the use of the Company's property, or as specifically provided for
or permitted in this Agreement.
(3) The Company shall not enter into, or terminate, any material contract,
agreement, commitment, or understanding.
(4) The Company will properly and promptly file when due all federal, state,
local, foreign and other tax returns, reports, and declarations required to be
filed by the Company, and will pay, or make full and adequate provision for the
payment of, all taxes and governmental charges due from or payable by the
Company.
(5) The Company will comply with all laws and regulations applicable to the
Company and the Company's operations.
6.6 EXPENSES. Whether or not the Transaction in consummated, all costs and
expenses incurred by the Company in connection with this Agreement and the
Transaction shall be paid by the Company.
26
6.7 PUBLICITY. Prior to the Closing, any written news releases by the Company
pertaining to this Agreement or the Transaction shall be submitted to EYI for
review and approval prior to release by the Company, and shall be released only
in a form approved by EYI; provided, however, that (i) such approval shall not
be unreasonably withheld and (ii) such review and approval shall not be required
of releases by the Company, if prior review and approval would prevent the
timely and accurate dissemination of such press release as required to comply,
in the judgment of counsel, with any applicable law, rule, or policy.
6.8 UPDATING OF DISCLOSURE DOCUMENT. The Company shall notify EYI of any
changes, additions, or events, which may cause any change in or addition to the
Company Disclosure Document promptly after the occurrence of the same and again
at the Closing. No such notification made pursuant to this section shall be
deemed to cure any breach of any representation or warranty made in this
Agreement, unless EYI specifically agrees thereto in writing nor shall any such
modification be considered to constitute or result in a waiver by EYI of any
condition specified in this Agreement.
6.9 FORM D; BLUE SKY LAWS. The Company shall file with the SEC a Notice of Sale
on Form D with respect to the Consideration, as required pursuant to Regulation
D. The Company shall take such action as the Company shall reasonably determine
is necessary to obtain an exemption for the Consideration for issuance to Xxx
Xxxxxxxx pursuant to applicable state securities or "Blue Sky" laws.
6.10 TRANSFER RESTRICTIONS. If Xxx Xxxxxxxx should decide to dispose of any of
the Consideration, the Company will inform him that he may do so only pursuant
to an effective registration statement pursuant to the Securities Act (such as
an SB-2) of the Company or pursuant to an available exemption from the
registration requirements of the Securities Act. In connection with any transfer
of any Consideration, other than pursuant to an effective registration statement
filed by the Company, the Company may require the transferor thereof to provide
to the Company a written opinion of counsel, the form and substance of which
opinion shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred securities pursuant
to the Securities Act, which opinion shall be delivered by counsel for the
Company.
There shall be imprinted, during such time as is required, of the following
legend on the certificated evidencing and representing the Consideration:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION IN
27
RELIANCE UPON EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 CONDITIONS TO OBLIGATION OF EYI. The obligation of EYI to close and effect
the Transaction shall be subject to the fulfillment at or prior to the Closing
of the following conditions, unless EYI shall waive such fulfillment in writing:
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other regulatory
agencies and other third parties (including lenders, holders of debt securities
and lessors) required to consummate the Transaction.
(2) There shall not be in effect a preliminary or permanent injunction or other
order by any federal or state court, which prohibits the consummation of the
Transaction.
(3) The Company shall have performed in all material respects each of its
agreements and obligations specified in this Agreement and required to be
performed on or prior to the Closing and shall have complied with all material
requirements, rules, and regulations of all regulatory authorities having
jurisdiction relating to the Transaction.
(4) No material adverse change shall, in the judgment of EYI, have taken place
in the business condition (financial or otherwise), operations, or prospects of
the Company since the date of this Agreement other than those, if any, that
result from the changes permitted by this Agreement.
(5) The representations and warranties of the Company set forth in this
Agreement shall be true in all material respects as of the date of this
Agreement and, except in such respects as, in the judgment of EYI, do not
materially and adversely affect
28
the business, condition (financial or otherwise), operations, or prospects of
the Company, as of the Closing, as if made as of the Closing.
7.2 CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the Company to
close and effect the Transaction shall be subject to the fulfillment at or prior
to the Closing of the following conditions, unless the Company shall waive such
fulfillment in writing:
(1) This Agreement and the Transaction shall have received all approvals,
consents, authorizations, and waivers from governmental and other regulatory
agencies and other third parties (including lenders, holders of debt securities
and lessors required by law to consummate the Transaction.
(2) There shall not be in effect a preliminary or permanent injunction or other
order by any federal or state authority, which prohibits the consummation of the
Transaction.
(3) EYI shall have performed in all material respects each of its agreements and
obligations specified in this Agreement and required to be performed on or prior
to the Closing and shall have complied with all material requirements, rules,
and regulations of all regulatory authorities having jurisdiction relating to
the Transaction.
(4) No material adverse change shall, in the judgment of EYI, have taken place
in the business condition (financial or otherwise), operations, or prospects of
EYI since the date of this Agreement other than those, if any, that result from
the changes permitted by this Agreement.
(5) The representations and warranties of EYI set forth in this Agreement shall
be true in all material respects as of the date of this Agreement and, except in
such respects as do not materially and adversely affect the business of EYI, as
of the Closing Date as if made as of the Closing Date.
ARTICLE VIII
SHAREHOLDERS
8.1 MEETING OR WRITTEN CONSENT OF SHAREHOLDERS. Each party hereto agrees that,
as soon as practicable after the execution of this Agreement, it will commence
activities toward convening a meeting of its shareholders to vote upon the
approval by such shareholders of the Transaction; or, in the alternative, if
authorized by that party's charter documents and By-laws, solicit the written
consent of its shareholders to the Transaction.
29
8.2 NON REGISTRATION OF SUBJECT SHARES. Xxx Xxxxxxxx understands and
acknowledges that the Consideration will be issued without registration in a
transaction not involving a public offering and that such transaction is exempt
from registration pursuant to Section 4(2) of the Securities Act and Rule 506 of
Regulation D.
8.3 INVESTMENT REPRESENTATION. Xxx Xxxxxxxx represents, warrants, and confirms
to the Company that he (i) is an accredited investor within the meaning of Rule
501(a) of Regulation D promulgated pursuant to the Securities Act, and such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an acquisition of the Consideration; (ii) is
aware of the restriction regarding resale imposed upon the Consideration because
of the nature of the Transaction; and (iii) will receive and accept at the
Closing the Consideration for investment, and without any intention to sell,
transfer, or otherwise distribute the Consideration acquired by him in any
manner that is in violation of the Securities Act. The certificate evidencing
and representing the Consideration, when delivered to Xxx Xxxxxxxx, may have
appropriate orders restricting transfer placed against them on the records of
the transfer agent for the Company and will have placed upon such certificate
the legend specified by the provisions of Section 6.10 of this Agreement. Xxx
Xxxxxxxx agrees not to attempt any transfer of any of the Consideration without
first complying with the substance of that legend and agrees that satisfaction
of the Company may, if the Company, in its discretion, so requests, depend in
part upon (i) an opinion of counsel acceptable in form and substance to the
Company, (ii) a no-action letter of the SEC, or (iii) equivalent evidence.
ARTICLE IX
TERMINATION
9.1 TERMINATION. This Agreement and the Transaction may be terminated at any
time prior to the Closing, whether before or after any approval by shareholders:
(1) By mutual consent of EYI and the Company; or
(2) By either EYI or the Company, upon written notice to the other, if the
conditions to such party's obligations to consummate the Transaction, in the
case of EYI, as specified in Section 7.1 of this Agreement, or, in the case of
the Company, as provided in Section 7.2 of this Agreement, were not, or cannot
reasonably be, satisfied on the Closing Date, unless the failure of condition is
the
30
result of the material breach of this Agreement by the party seeking to
terminate this Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1. NOTICES. Any notice, direction or instrument required or permitted to be
given pursuant to this Agreement shall be given in writing by (a) telegram,
facsimile transmission or similar method, if confirmed by mail as herein
provided, by mail; (b) if mailed postage prepaid, by certified mail, return
receipt requested; or (iii) hand delivery to any party at the addresses of the
parties specified, below. If given by telegram or facsimile transmission or
similar method or by hand delivery, such notice, direction or instrument shall
be deemed to have been given or made on the day on which it was given, and if
mailed, shall be deemed to have been given or made on the second (2nd) business
day following the day after which it was mailed. Any party may, from time to
time by similar notice, give notice of any change of address, and in such event,
the address of such party shall be deemed to be changed accordingly. The
address, telephone number and facsimile transmission number for the notice of
each party are:
If to the Company: Burrard Capital, Inc.
c/o Xxxxxx Xxxxxxxxx
0000-000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Facsimile: 604.697.0686
If to EYI: Essentially Yours Industries, Inc.
c/o Xxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: 310.268.1128
10.2. RECOVERY OF ENFORCEMENT COSTS. In the event any party shall institute any
action or proceeding to enforce any provision of this Agreement to seek relief
from any violation of this Agreement, or to otherwise obtain any judgment or
order relating to or arising from the subject matter of this Agreement, each
prevailing party shall be entitled to receive from each losing party such
prevailing party's actual attorneys' fees and costs incurred to prosecute or
defend such action or proceeding.
10.3. ASSIGNMENT. No party shall have the right, without the consent of the
other party, to assign, transfer, sell, pledge, hypothecate, delegate, or
otherwise transfer, whether voluntarily, involuntarily or by operation of law,
any of such party's rights
31
or obligations created by the provisions of this Agreement, nor shall the
parties' rights be subject to encumbrance or the claim of creditors. Any such
purported assignment, transfer, or delegation shall be null and void.
10.4. CAPTIONS AND INTERPRETATIONS. Captions of the articles and sections of
this Agreement are for convenience and reference only, and the works specified
therein shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction, or meaning of the provisions of this Agreement.
The language in all parts to this Agreement, in all cases, shall be construed in
accordance with the fair meaning of that language as if prepared by all parties
and not strictly for or against any party. Each party and counsel for such party
have reviewed this Agreement. The rule of construction, which requires a court
to resolve any ambiguities against the drafting party, shall not apply in
interpreting the provisions of this Agreement.
10.5. ENTIRE AGREEMENT. This Agreement and the respective Disclosure Documents
are the final written expression and the complete and exclusive statement of all
the agreements, conditions, promises, representations, warranties and covenants
between the parties with respect to the subject matter of this Agreement, and
this Agreement and the respective Disclosure Documents supersede all prior or
contemporaneous agreements, negotiations, representations, warranties,
covenants, understandings and discussions by and between and among the parties,
their respective representatives, and any other person, with respect to the
subject matter specified in this Agreement. In the event of ambiguity in meaning
or understanding between the provisions of this Agreement proper and the
respective Disclosure Documents, the provisions of this Agreement shall prevail
and control in all instances.
10.6 WAIVER AND MODIFICATION. No modification, supplement or amendment of this
Agreement or of any covenant, representation, warranty, condition, or limitation
specified in this Agreement shall be valid unless the same is made in writing
and duly executed by both parties. No waiver of any covenant, representation,
warranty, condition, or limitation specified in this Agreement shall be valid
unless the same is made in writing and duly executed by the party making the
waiver. No waiver of any provision of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver.
10.7 FURTHER ASSURANCES. The parties shall from time to time sign and deliver
any further instruments and take any further actions as may be necessary to
effectuate the intent and purposes of this Agreement.
32
10.8 DE MINIMIS CLAIMS. No party shall bring any action against any other party
hereto with respect to the subject matter hereof unless the aggregate amount of
all claims so brought in relation to the subject matter of this Agreement
exceeds Fifty Thousand Dollars ($50,000.00) provided, however, that the
foregoing shall not prevent or preclude actions seeking injunctive or other
equitable forms of relief.
10.9 NUMBER AND GENDER. Whenever the singular number is used in this Agreement
and, when required by the context, the same shall include the plural, and vice
versa; the masculine gender shall include the feminine and the neuter genders,
and vice versa, and the word "person" shall include individual, company, sole
proprietorship, corporation, joint venture, association, joint stock company,
fraternal order, cooperative, league, club, society, organization, trust,
estate, governmental agency, political subdivision or authority, firm,
municipality, congregation, partnership, or other form of entity, whether active
or passive.
10.10 SUCCESSORS AND ASSIGNS. This Agreement and each of its provisions shall
obligate the heirs, executors, administrators, successors, and assigns of each
of the parties. Nothing specified in this section, however, shall be a consent
to the assignment or delegation by any party of such party's respective rights
and obligations created by the provisions of this Agreement.
10.11 THIRD PARTY BENEFICIARIES. Except as expressly specified by the provisions
of this Agreement, this Agreement shall not be construed to confer upon or give
to any person, other than the parties hereto, any right, remedy or claim
pursuant to, or by reason of, this Agreement or of any term or condition of this
Agreement.
10.12 SEVERABILITY. In the event any part of this Agreement, for any reason, is
determined by a court of competent jurisdiction to be invalid, such
determination shall not affect the validity of any remaining portion of this
Agreement, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated. It
is hereby declared the intention of the parties that they would have executed
the remaining portion of this Agreement without including any such part, parts,
or portion, which, for any reason, may be hereafter determined to be invalid.
10.13 GOVERNMENTAL RULES AND REGULATIONS. The Transaction is and shall remain
subject to any and all present and future orders, rules and regulations of any
duly constituted authority having jurisdiction of the Transaction.
10.14 EXECUTION IN COUNTERPARTS. This Agreement may be prepared in multiple
copies and forwarded to each of the parties for execution. All of the signatures
of the parties may be affixed to one copy or to separate copies of this
Agreement and
33
when all such copies are received and signed by all the parties, those copies
shall constitute one agreement, which is not otherwise separable or divisible.
10.15 RESERVATION OF RIGHTS. The failure of any party at any time or times
hereafter to require strict performance by any other party of any of the
warranties, representations, covenants, terms, conditions and provisions
specified in this Agreement shall not waive, affect of diminish any right of
such party failing to require strict performance to demand strict compliance and
performance therewith and with respect to any other provisions, warranties,
terms, and conditions specified in this Agreement. Any waiver of any default
shall not waive or affect any other default, whether prior or subsequent
thereto, and whether the same or of a different type.
10.16 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. All covenants,
representations, and warranties made by each party to this Agreement shall be
deemed made for the purpose of inducing the other party to enter into and
execute this Agreement. The representations, warranties, and covenants specified
in this Agreement shall survive the Closing and shall survive any investigation
by either party whether before or after the execution of this Agreement. The
covenants, representations, and warranties of the Company and EYI are made only
to and for the benefit of the other and shall not create or vest rights in other
persons.
10.17 CONCURRENT REMEDIES. No right or remedy specified in this Agreement
conferred on or reserved to the parties is exclusive of any other right or
remedy specified in this Agreement or by law or equity provided or permitted;
but each such right and remedy shall be cumulative of, and in addition to, every
other right and remedy specified in this Agreement or now or hereafter existing
at law or in equity or by statute or otherwise, and may be enforced concurrently
therewith or from time to time. the termination of this Agreement for any reason
whatsoever shall not prejudice any right or remedy which any party may have,
either at law, in equity, or pursuant to the provisions of this Agreement.
10.18 GOVERNING LAW. All questions concerning the validity, interpretation, or
performance of any of the terms, conditions and provisions of this Agreement or
of any of the rights or obligations of the parties shall be governed by, and
resolved in accordance with, the laws of the State of Nevada, without regard to
conflicts of law principles. Any and all actions or proceedings, at law or in
equity, to enforce or interpret the provisions of this Agreement shall be
litigated in courts having situs within the State of Nevada. No claim, demand,
action, proceeding, litigation, hearing, motion or lawsuit resulting from or
with respect to this Agreement shall be commenced or prosecuted in any
jurisdiction other than the State of Nevada, and any judgment, determination,
finding or conclusion reached or rendered in any
34
other jurisdiction shall be null and void. Each party hereby consents expressly
to the jurisdiction of any local, state or federal court located within the
State of Nevada and consents that any service of process in such action or
proceeding may be made by personal service upon such party wherever such party
may be then located, or by certified or registered mail directed to such party
at such party's last known address.
10.19 FORCE MAJEURE. If any party is rendered unable, completely or partially,
by the occurrence of an event of "force majeure" (hereinafter defined) to
perform such party's obligations created by the provisions of this Agreement,
such party shall give to the other party prompt written notice of the event of
"force majeure" with reasonably complete particulars concerning such event;
thereupon, the obligations of the party giving such notice, so far as those
obligations are affected by the event of "force majeure," shall be suspended
during, but no longer than, the continuance of the event of "force majeure." The
party affected by such event of "force majeure" shall use all reasonable
diligence to resolve, eliminate and terminate the event of "force majeure" as
quickly as practicable. The requirement that an event of "force majeure" shall
be remedied with all reasonable dispatch as hereinabove specified, shall not
require the settlement of strikes, lockouts or other labor difficulties by the
party involved, contrary to such party's wishes, and the resolution of any and
all such difficulties shall be handled entirely within the discretion of the
party concerned. The term "force majeure" as used in this Agreement shall be
defined as and mean any act of God, strike, civil disturbance, lockout or other
industrial disturbance, act of the public enemy, war, blockade, public riot,
earthquake, tornado, hurricane, lightning, fire, public demonstration, storm,
flood, explosion, governmental action, governmental delay, restraint or
inaction, unavailability of equipment, and any other cause or event, whether of
the type enumerated specifically in this section or otherwise, which is not
reasonably within the control of the party claiming such suspension.
10.20 CONSENT TO AGREEMENT. By executing this Agreement, each party, for itself
represents such party has read or caused to be read this Agreement in all
particulars, and consents to the rights, conditions, duties and responsibilities
imposed upon such party as specified in this Agreement. Each party represents,
warrants and covenants that such party executes and delivers this Agreement of
its own free will and with no threat, undue influence, menace, coercion or
duress, whether economic or physical. Moreover, each party represents, warrants,
and covenants that such party executes this Agreement acting on such party's own
independent judgment and upon the advice of such party's counsel.
35
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed on
the date first written above.
Essentially Yours Industries, Inc., Burrard Capital, Inc.,
a Nevada corporation a Nevada corporation
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------- -----------------------------
Its: President Its: President
By: By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------- -----------------------------
Its: Secretary Its: Secretary
/s/ XXX XXXXXXXX
--------------------------------------
Xxx Xxxxxxxx
36
Burrard Capital, Inc.,
a Nevada corporation
Disclosure Document
Regarding that certain Merger Agreement Plan Reorganization between and among
Burrard Capital, Inc., a Nevada corporation ("Company"); EssentiallyYours
Industries, Inc., a Nevada corporation ("EYI"); and Xxx Xxxxxxxx made and
entered into in duplicate effective the 28th day of June, 2002 ("Agreement"),
The Company hereby discloses to EYI the following.
The numbers of the paragraphs specified in this Disclosure Document are intended
to, and shall, correspond with the sections of the Agreement with the same
numbers.
4.15 Nothing to disclose
4.20 Nothing to disclose
The undersigned, Xxxxxx Xxxxxxxxx, is the President and sole director of Burrard
Capital, Inc. hereby declares under penalty of perjury that the information
specified in this Disclosure Document is complete, true, and correct.
Dated as of June 30, 2002
/s/ Xxxxxx Xxxxxxxxx
--------------------------------
Xxxxxx Xxxxxxxxx
1
Essentially Yours Industries, Inc.,
a Nevada corporation
Disclosure Document
Regarding that certain Merger Agreement Plan Reorganization between and among
Burrard Capital, Inc., a Nevada corporation ("Company"); Essentially Yours
Industries, Inc., a Nevada corporation ("EYI"); and Xxx Xxxxxxxx made and
entered into in duplicate effective the 28th day of June, 2002 ("Agreement"),
EYI hereby discloses to the Company the following.
The numbers of the paragraphs specified in this Disclosure Document are intended
to, and shall, correspond with the sections of the Agreement with the same
numbers.
3.2. Nothing to disclose.
3.4. EYI contemplates that there will be a distribution agreement by and
among EYI and Nurti-Diem, Inc.("NDI") and that EYI shall obtain the written
consent of NDI to the Transaction.
3.15 Nothing to disclose.
3.20
1. Distribution Agreement with NDI dated June 30, 2002.
2. Transfer/Assignment Agreement with Essentially Yours Industries
Corp. ("Corp") regarding XXX contracts and other contracts relating
to the sales/marketing activities dated June 30, 2002.
3. A license of intellectual property with Corp dated June 30, 2002.
4. An agency appointment agreement regarding the sale of Corp's
inventory dated June 30, 2002.
5. An Acknowledgment of Adjustments Agreement by and among EYI and Corp
dated June 30, 2002.
6. A Management Services Agreement by and among EYI and Corp dated June
30, 2002.
7. A Management Services Agreement by and among EYI and 642706BC Ltd.
dated June 30, 2002.
8. Client marketing agreement with Source, a division of Premier
Lifestyles International Corporation, dated January 1, 2002.
9. A Oxy-Up license agreement with Evanschung, LLC, dated June 1, 2002.
10. A business premises Lease with HQ International-Nevada for the 12
month-period being June 1, 2002.
11. Software and professional services agreement with the JIA, Inc.
dated June 10, 2002.
3.24 Nothing to disclose
The undersigned, Xxx Xxxxxxxx, and Xxxxx XxXxxx, the President and Secretary,
respectfully, of EYI hereby declare under penalty of perjury that the
information specified in this Disclosure Document is complete, true, and
correct.
1
Dated as of June 30, 2002
/s/ Xxx Xxxxxxxx
-----------------------------
President
/s/ Xxxxx XxXxxx
-----------------------------
Secretary
2
