SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is made this 17th day of August 2000, by
and between Makepeace Capital Corp., a Texas corporation ("MKPC"), and
NetSalon Corporation, a Delaware corporation ("NetSalon").
WHEREAS, MKPC desires to acquire all of the issued and outstanding shares
of common stock of NetSalon in exchange for an aggregate of approximately
32,000,000 shares of the common stock of MKPC (the "Common Stock") (the
"Exchange Offer"); and
WHEREAS, NetSalon desires to assist MKPC in a business combination which
will result, if all NetSalon's shareholders desire to participate, in the
shareholders of NetSalon owning approximately 80% of the then issued and
outstanding shares of MKPC's Common Stock, and MKPC holding 100% of the issued
and outstanding shares of NetSalon's common stock; and
WHEREAS, the voluntary share exchange contemplated hereby will result in
the NetSalon shareholders tendering all of the outstanding common stock of
NetSalon to MKPC in exchange solely for the Common Stock and no other
consideration, which the parties hereto intend to treat as a tax-free
reorganization under Internal Revenue Code Section 368(a)(1)(B).
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 Issuance of Shares. Subject to all of the terms and conditions
of this Agreement, MKPC agrees to offer two shares of Common Stock for each
share of NetSalon common stock issued and outstanding, or a total of
approximately 32,000,000 shares of MKPC Common Stock. The Common Stock will
be issued directly to the shareholders of NetSalon which accept the Exchange
Offer, and such shares shall be issued at a closing (the "Closing") to be held
as soon as possible after the conditions precedent set forth in Articles 5 and
6 hereof have been satisfied (the "Closing Date"). Schedule 1, which is
attached hereto and incorporated herein by reference, is a complete list of
the shareholders of NetSalon which sets forth the number of shares each person
owns in NetSalon and the number of shares they will be offered in MKPC.
1.2 Exemption from Registration. The parties hereto intend that the
Common Stock to be issued by MKPC to NetSalon shareholders shall be exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), pursuant to Sections 4(2) and 4(6) of the Act and the rules and
regulations promulgated thereunder.
1.3 Investment Intent. Prior to the consummation of the Exchange
Offer, the shareholders of NetSalon accepting the Exchange Offer shall execute
Letters of Acceptance or such other documents containing, among other things,
representations and warranties relating to investment intent and investor
status, restrictions on transferability and restrictive legends such that the
counsel for both MKPC and NetSalon shall be satisfied that the offer and
exchange of MKPC shares as contemplated by this Agreement shall be exempt from
the registration requirements of the Act and any applicable state blue sky
laws.
1.4 Other Shares to be Issued. On the Closing, MKPC shall also issue
a total of 5,100,396 shares of MKPC common stock to the persons and in the
amounts set forth in paragraphs 7.4 through 7.7 below. Such persons shall
execute investment letters containing representations and warranties relating
to investment intent, restrictions on transferability and restrictive legends.
In addition MKPC shall issue 2,000,000 shares to the investor who is investing
$650,000 in MKPC on the Closing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF NETSALON
Except as disclosed in Schedule 2 which is attached hereto and
incorporated herein by reference, NetSalon hereby represents and warrant to
MKPC that:
2.1 Organization. NetSalon is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware, has all necessary
corporate powers to own its properties and to carry on its business as now
owned and operated by it, and is duly qualified to do business and is in good
standing in each of the jurisdictions where its business requires
qualification.
2.2 Capital. The authorized capital stock of NetSalon consists of
20,000,000 shares of common stock, $.01 par value, of which 16,000,000 are
currently issued and outstanding. All of the issued and outstanding shares of
common stock of NetSalon are duly authorized, validly issued, fully paid, and
nonassessable. There are no outstanding subscriptions, options, rights,
warrants, debentures, instruments, convertible securities, or other agreements
or commitments obligating NetSalon to issue or to transfer from treasury any
additional shares of its capital stock of any class.
2.3 Subsidiaries. NetSalon does not have any subsidiaries or own any
interest in any other enterprise (whether or not such enterprise is a
corporation).
2.4 Directors and Officers. Schedule 2 contains the names and titles
of all directors and officers of NetSalon as of the date of this Agreement.
2.5 Financial Statements. NetSalon has delivered to MKPC unaudited
balance sheets and statements of operations for the year ended December 31,
1999 and 1998, and an unaudited balance sheet and statement of operations for
the period ended May 31, 2000 (the "Financial Statements"). The Financial
Statements are complete and correct in all material respects. The Financial
Statements accurately set out and describe the financial condition of NetSalon
as of May 31, 2000.
2.6 Absence of Changes. Since May 31, 2000, except for changes in
the ordinary course of business which have not in the aggregate been
materially adverse, to the best of NetSalon's knowledge, NetSalon has
conducted its business only in the ordinary course and has not experienced or
suffered any material adverse change in the condition (financial or
otherwise), results of operations, properties, business or prospects of
NetSalon or waived or surrendered any claim or right of material value.
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2.7 Absence of Undisclosed Liabilities. Neither NetSalon nor any of
its properties or assets are subject to any material liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise
and whether due or to become due, that are not reflected in the financial
statements presented to MKPC or have otherwise been disclosed in Schedule 2.
2.8 Tax Returns. Within the times and in the manner prescribed by
law, NetSalon has filed all federal, state and local tax returns required by
law, or has filed extensions which have not yet expired, and has paid all
taxes, assessments and penalties due and payable.
2.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, MKPC
and/or its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of NetSalon and NetSalon shall
make available to MKPC and/or its attorneys all books and records of NetSalon.
2.10 Trade Names and Rights. NetSalon does not use any trademark,
service xxxx, trade name, or copyright in its business, or own any trademarks,
trademark registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications.
2.11 Compliance with Laws. To the best of NetSalon's knowledge,
NetSalon has complied with, and is not in violation of, applicable federal,
state or local statutes, laws and regulations (including, without limitation,
any applicable building, zoning or other law, ordinance or regulation)
affecting its properties or the operation of its business, except for matters
which would not have a material affect on NetSalon or its properties.
2.12 Litigation. NetSalon is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation pending or, to the best knowledge of NetSalon, threatened
against or affecting NetSalon or its business, assets or financial condition,
except for matters which would not have a material affect on NetSalon or its
properties. NetSalon is not in default with respect to any order, writ,
injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality applicable to it.
2.13 Authority. NetSalon has full corporate power and authority to
enter into this Agreement. The board of directors of NetSalon has taken all
action required to authorize the execution and delivery of this Agreement by
or on behalf of NetSalon and the performance of the obligations of NetSalon
under this Agreement. No other corporate proceedings on the part of NetSalon
are necessary to authorize the execution and delivery of this Agreement by
NetSalon in the performance of its obligations under this Agreement. This
Agreement is, when executed and delivered by NetSalon, and will be a valid and
binding agreement of NetSalon, enforceable against NetSalon in accordance with
its terms, except as such enforceability may be limited by general principles
of equity, bankruptcy, insolvency, moratorium and similar laws relating to
creditors' rights generally.
2.14 Ability to Carry Out Obligations. Neither the execution and
delivery of this Agreement, the performance by NetSalon of its obligations
under this Agreement, nor the consummation of the transactions contemplated
under this Agreement will to the best of NetSalon's knowledge: (a) materially
violate any provision of NetSalon's articles of incorporation or bylaws; (b)
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with or without the giving of notice or the passage of time, or both, violate,
or be in conflict with, or constitute a material default under, or cause or
permit the termination or the acceleration of the maturity of, any debt,
contract, agreement or obligation of NetSalon, or require the payment of any
prepayment or other penalties; (c) require notice to, or the consent of, any
party to any agreement or commitment, lease or license, to which NetSalon is
bound; (d) result in the creation or imposition of any security interest,
lien, or other encumbrance upon any material property or assets of NetSalon;
or (e) violate any material statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority to which NetSalon is
bound or subject.
2.15 Full Disclosure. None of the representations and warranties
made by NetSalon herein, or in any schedule, exhibit or certificate furnished
or to be furnished in connection with this Agreement by NetSalon, or on its
behalf, contains or will contain any untrue statement of material fact or
omits or will omit any material fact required to make any representation or
warranty not misleading.
2.16 Assets. NetSalon has good and marketable title to all of its
tangible properties and such tangible properties are not subject to any
material liens or encumbrances.
2.17 Material Contracts and Obligations. Attached hereto on Schedule
2 is a list of all agreements, contracts, indebtedness, liabilities and other
obligations to which NetSalon is a party or by which its is bound that are
material to the conduct and operation of its business and properties, which
provide for payments to or by NetSalon in excess of $25,000; or which involve
transactions or proposed transactions between NetSalon and its officers,
directors, affiliates or any affiliate thereof. Copies of such agreements and
contracts and documentation evidencing such liabilities and other obligations
have been made available for inspection by MKPC and its counsel. All of such
agreements and contracts are valid, binding and in full force and effect in
all material respects, assuming due execution by the other parties to such
agreements and contracts.
2.18 Consents and Approvals. No consent, approval or authorization
of, or declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by NetSalon in
connection with: (a) the execution and delivery by NetSalon of this Agreement;
(b) the performance by NetSalon of its obligations under this Agreement; or
(c) the consummation by NetSalon of the transactions contemplated under this
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MKPC
Except as disclosed in Schedule 3 which is attached hereto and
incorporated herein by reference, MKPC represents and warrants to NetSalon
that:
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3.1 Organization. MKPC is a corporation duly organized, valid
existing, and in good standing under the laws of Texas, has all necessary
corporate powers to own properties and to carry on business, and it is not now
conducting any business, except to the extent to which the effecting of the
transaction contemplated by this Agreement constitutes doing business.
3.2 Capitalization. The authorized capital stock of MKPC consists of
100,000,000 shares of $.001 par value Common Stock of which 3,857,500 shares
of Common Stock are currently issued and outstanding and 20,000,000 shares of
$.001 par value preferred stock of which no shares are currently issued and
outstanding. All of the issued and outstanding shares of Common Stock are
duly authorized, validly issued, fully paid and nonassessable. There are no
outstanding subscriptions, options, rights, warrants, convertible securities,
or other agreements or commitments obligating MKPC to issue or to transfer
from treasury any additional shares of its capital stock of any class. At the
Closing, Gencorp Enterprises, Inc. will surrender 2,912,896 of its shares for
cancellation so that there will be 944,604 shares outstanding.
3.3 Subsidiaries. MKPC does not presently have any subsidiaries or
own any interest in any other enterprise (whether or not such enterprise is a
corporation).
3.4 Directors and Officers. Schedule 3 contains the names and titles
of all directors and officers of MKPC as of the date of this Agreement.
3.5 Financial Statements. MKPC has delivered to NetSalon its audited
balance sheet and statements of operations and cash flows as of and for the
year ended June 30, 1999 and 2000 (the "Financial Statements"). The Financial
Statements are complete and correct in all material respects and have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods indicated. The Financial
Statements accurately set out and describe the financial condition and
operating results of MKPC as of the dates, and for the periods, indicated
therein.
3.6 Absence of Changes. Since June 30, 2000, except for direct
expenses incurred by MKPC in connection with this Agreement and the
transactions contemplated hereby, and except for changes in the ordinary
course of business which have not in the aggregate been materially adverse, to
the best of MKPC's knowledge, MKPC has not experienced or suffered any
material adverse change in its condition (financial or otherwise), results of
operations, properties, business or prospects or waived or surrendered any
claim or right of material value.
3.7 Absence of Undisclosed Liabilities. Except for direct expenses
incurred by MKPC in connection with this Agreement and the transactions
contemplated hereby, neither MKPC nor any of its properties or assets are
subject to any liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise and whether due or to become due, that are
not reflected in the financial statements presented to NetSalon.
3.8 Tax Returns. Within the times and in the manner prescribed by
law, MKPC has filed all federal, state and local tax returns required by law
and has paid all taxes, assessments and penalties due and payable.
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3.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein,
NetSalon shall have the opportunity to meet with MKPC's accountants and
attorneys to discuss the financial condition of MKPC. MKPC shall make
available to NetSalon all books and records of MKPC.
3.10 Trade Names and Rights. MKPC does not use any trademark,
service xxxx, trade name, or copyright in its business, or own any trademarks,
trademark registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications.
3.11 Compliance with Laws. To the best of MKPC's knowledge, MKPC has
complied with, and is not in violation of, applicable federal, state or local
statutes, laws and regulations (including, without limitation, the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended,
and any applicable building, zoning, or other law, ordinance, or regulation)
affecting its SEC reports, its properties or the operation of its business or
with which it is otherwise required to comply.
3.12 Litigation. MKPC is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or governmental
investigation pending or, to the best knowledge of MKPC, threatened against or
affecting MKPC or its business, assets, or financial condition. MKPC is not
in default with respect to any order, writ, injunction, or decree of any
federal, state, local, or foreign court, department agency, or
instrumentality. MKPC is not engaged in any legal action to recover moneys
due to it.
3.13 Bulletin Board Listing. MKPC's Common Stock is currently listed
for trading on the OTC Bulletin Board under the symbol MKPC, and MKPC is not
aware of steps being taken by the NASD to cause the Common Stock to be
delisted.
3.14 No Pending Investigation. MKPC is not aware of any pending
investigations or legal proceedings by the SEC, any state securities
regulatory agency, or any other governmental agency regarding MKPC or any
officers or directors of MKPC.
3.15 Authority. MKPC has full corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement. The Board of Directors of MKPC has taken all action required to
authorize the execution and delivery of this Agreement by or on behalf of
MKPC, the performance of the obligations of MKPC under this Agreement and the
consummation by MKPC of the transactions contemplated under this Agreement.
No other corporate proceedings on the part of MKPC are necessary to authorize
the execution and delivery of this Agreement by MKPC and the performance of
its obligations under this Agreement. This Agreement is, and when executed
and delivered by MKPC, will be a valid and binding agreement of MKPC,
enforceable against MKPC in accordance with its terms, except as such
enforceability may be limited by general principles of equity, bankruptcy,
insolvency, moratorium and similar laws relating to creditors rights
generally.
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3.16 Ability to Carry Out Obligations. Neither the execution and
delivery of this Agreement, the performance by MKPC of its obligations under
this Agreement, nor the consummation of the transactions contemplated under
this Agreement will, to the best of MKPC's knowledge: (a) violate any
provision of MKPC's articles of incorporation or bylaws; (b) with or without
the giving of notice or the passage of time, or both, violate, or be in
conflict with, or constitute a default under, or cause or permit the
termination or the acceleration of the maturity of, any debt, contract,
agreement or obligation of MKPC, or require the payment of any prepayment or
other penalties; (c) require notice to, or the consent of, any party to any
agreement or commitment, lease or license, to which MKPC is bound; (d) result
in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of MKPC; or (e) violate any statute or
law or any judgment, decree, order, regulation or rule of any court or
governmental authority to which MKPC is bound or subject.
3.17 Validity of MKPC Shares. The shares of MKPC Common Stock to be
delivered pursuant to this Agreement, when issued in accordance with the
provisions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable.
3.18 Full Disclosure. None of the representations and warranties
made by MKPC herein, or in any filing with the SEC, or in any exhibit,
certificate or memorandum furnished or to be furnished by MKPC, or on its
behalf, contains or will contain any untrue statement of material fact, or
omit any material fact the omission of which would be misleading.
3.19 Assets. MKPC has good and marketable title to all of its
tangible properties and such tangible properties are not subject to any liens
or encumbrances. The 200,000 shares of Xxxxxxxxxxx.xxx., Inc. which are owned
by MKPC will be transferred to Gencorp Enterprises, Inc. at the Closing in
consideration for Gencorp Enterprises' agreement to cancel all existing debt
owed to it by MKPC.
3.20 Material Contracts and Obligations. Attached hereto on Schedule
3 is a list of all agreements, contracts, indebtedness, liabilities and other
obligations to which MKPC is a party or by which it is bound that are material
to the conduct and operations of its business and properties, which provide
for payments to or by MKPC in excess of $1,000; or which involve transactions
or proposed transactions between MKPC and its officers, directors, affiliates
or any affiliate thereof. Copies of such agreements and contracts and
documentation evidencing such liabilities and other obligations have been made
available for inspection by NetSalon and its counsel. All of such agreements
and contracts are valid, binding and in full force and effect in all material
respects, assuming due execution by the other parties to such agreements and
contracts.
3.21 Consents and Approvals. No consent, approval or authorization
of, or declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by MKPC in connection
with: (a) the execution and delivery by MKPC of its obligations under this
Agreement; (b) the performance by MKPC of its obligations under this
Agreement; or (c) the consummation by MKPC of the transactions contemplated by
this Agreement.
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3.22 Real Property. MKPC does not own, use or claim any interest in
any real property, including without limitation any license, leasehold or any
similar interest in real property.
ARTICLE 4
COVENANTS
4.1 Investigative Rights. From the date of this Agreement until the
Closing Date, each party shall provide to the other party, and such other
party's counsels, accountants, auditors, and other authorized representatives,
full access during normal business hours and upon reasonable advance written
notice to all of each party's properties, books, contracts, commitments, and
records for the purpose of examining the same. Each party shall furnish the
other party with all information concerning each party's affairs as the other
party may reasonably request. If the transaction contemplated hereby is not
completed, all documents received by each party and/or its attorneys and
accountants, auditors or other authorized representatives shall be returned to
the other party who provided same upon request. The parties hereto, their
directors, employees, agents and representatives shall not disclose any of the
information described above unless such information is already disclosed to
the public, without the prior written consent of the party to which the
confidential information pertains. Each party shall take such steps as are
necessary to prevent disclosure of such information to unauthorized third
parties.
4.2 Conduct of Business. Prior to the Closing, MKPC and NetSalon
shall each conduct its business in the normal course, and shall not sell,
pledge, or assign any assets, without the prior written approval of the other
party, except in the regular course of business or as contemplated in
previously disclosed contractual obligations. Neither MKPC nor NetSalon shall
amend its Articles of Incorporation or Bylaws, declare dividends, redeem or
sell stock or other securities, incur additional or newly-funded liabilities,
acquire or dispose of fixed assets, change employment terms, enter into any
material or long-term contract, guarantee obligations of any third party,
settle or discharge any balance sheet receivable for less than its stated
amount, pay more on any liability than its stated amount, or enter into any
other transaction other than in the regular course of business except as
otherwise contemplated herein.
ARTICLE 5
CONDITIONS PRECEDENT TO MKPC'S PERFORMANCE
5.1 Conditions. The obligations of MKPC hereunder shall be subject
to the satisfaction, at or before the Closing, of all the conditions set forth
in this Article 5. MKPC may waive any or all of these conditions in whole or
in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by MKPC of any other condition of or any
of MKPC's other rights or remedies, at law or in equity, if NetSalon shall be
in default of any of their representations, warranties, or covenants under
this Agreement.
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5.2 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by NetSalon in this
Agreement or in any written statement that shall be delivered to MKPC by
NetSalon under this Agreement shall be true and accurate on and as of the
Closing Date as though made at that time.
5.3 Performance. NetSalon shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it, on or before the Closing
Date.
5.4 Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against NetSalon on or before the Closing Date.
5.5 Officer's Certificate. NetSalon shall have delivered to MKPC a
certificate, dated the Closing Date, and signed by the Chief Executive Officer
of NetSalon, certifying that each of the conditions specified in Sections 5.2
through 5.4 hereof have been fulfilled.
ARTICLE 6
CONDITIONS PRECEDENT TO NETSALON'S PERFORMANCE
6.1 Conditions. NetSalon's obligations hereunder shall be subject to
the satisfaction, at or before the Closing, of all the conditions set forth in
this Article 6. NetSalon may waive any or all of these conditions in whole or
in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by NetSalon of any other condition of or
any of NetSalon's rights or remedies, at law or in equity, if MKPC shall be in
default of any of its representations, warranties, or covenants under this
Agreement.
6.2 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by MKPC in this Agreement
or in any written statement that shall be delivered to NetSalon by MKPC under
this Agreement shall be true and accurate on and as of the Closing Date as
though made at that time.
6.3 Performance. MKPC shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to
be performed or complied with by them, on or before the Closing Date.
6.4 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against MKPC on or before the Closing Date.
6.5 Directors of MKPC. Effective on the Closing, MKPC shall have
temporarily set the size of its Board of Directors at four (4) persons, and
such Board of Directors shall include Xxxx Xxxxxx, Xxx X. Xxxxxxx, Xxxxxx
Xxxxxx, and Xxxxxx Xxxxxx. The current Officers and Directors of MKPC shall
have submitted their resignations as the Officers and Directors of MKPC
effective on the Closing of this transaction.
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6.6 Officers of MKPC. Effective on the Closing, MKPC shall have
elected the following new Officers of MKPC:
Xxxx Xxxxxx - President
Xxx X. Xxxxxxx - CEO and Secretary
6.7 No Outstanding Debt. On the Closing, all outstanding liabilities
and obligations of MKPC shall have been paid or settled, including all costs
related to this transaction.
6.8 Form 10-KSB. MKPC shall have completed its Form 10-KSB for the
year ended June 30, 2000, and filed the 10-KSB with the SEC.
6.9 Warrants. All outstanding B and C Warrants shall have been
cancelled.
6.10 Officer Certificate. MKPC shall have delivered to NetSalon a
certificate, dated the Closing Date and signed by the President of MKPC,
certifying that each of the conditions specified in Sections 6.2 through 6.9
have been fulfilled.
ARTICLE 7
CLOSING
7.1 Closing. The Closing of this transaction shall be held at the
offices of Xxxx Xxxxx Xxxxxxxx & Xxxxxx, P.C., 600 Seventeenth Street, Suite
0000 Xxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, or such other place as shall be
mutually agreed upon, on such date as shall be mutually agreed upon by the
parties, but in no event shall the Closing be later than August 11, 2000. At
the Closing:
7.2 NetSalon shall deliver Letters of Acceptance and the
certificates representing the shares of NetSalon held by the shareholders of
NetSalon accepting the Exchange Offer ("Accepting Shareholders") to MKPC.
7.3 Each Accepting Shareholder shall receive a certificate or
certificates representing the number of shares of MKPC Common Stock for which
the shares of NetSalon common stock shall have been exchanged.
7.4 MKPC shall deliver a certificate for 400,000 shares of its common
stock to Xxxxx Xxxxxxxx as payment for consultant's/finder's fees.
7.5 NetSalon shall deliver a certificate for 200,000 shares of its
common stock to Hunter Capital LLC as payment for consultant's/finder's fees.
7.6 MKPC shall deliver certificates totaling 2,250,198 shares of its
common stock to Xxxx Xxxxxxxxx, Xxxxx Xxxx and Battersea Capital as payment
for consultant's/finder's fees in connection with this transaction.
7.7 MKPC shall deliver a certificate for 2,250,198 shares of its
common stock to Bridgewater Capital Corporation as payment for consultant's
fees.
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7.8 MKPC shall instruct the transfer agent to issue 2,000,000 shares
to the investor who is investing a total of $650,000 in MKPC on the closing of
this transaction.
7.9 MKPC shall provide to NetSalon copies of all accounting records
for the past five years and all corporate records including articles, bylaws
and minutes of directors and shareholders meetings, except for documents
previously provided by NetSalon or its representatives.
7.10 MKPC shall deliver an officer's certificate, as described in
Section 6.8 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth in this Agreement on behalf of
MKPC are true and correct as of, or have been fully performed and complied
with by, the Closing Date.
7.11 MKPC shall deliver a signed Consent and/or Minutes of the
Directors of MKPC approving this Agreement and each matter to be approved by
the Directors of MKPC under this Agreement.
7.12 NetSalon shall deliver an officer's certificate, as described in
Section 5.5 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth in this Agreement on behalf of
NetSalon are true and correct as of, or have been fully performed and complied
with by, the Closing Date.
7.13 NetSalon shall deliver a signed Consent or Minutes of the
Directors of NetSalon approving this Agreement and each matter to be approved
by the Directors of NetSalon under this Agreement.
7.14 NetSalon shall deliver the opinion of its counsel, Xxxx Xxxxx
Xxxxxxxx & Xxxxxx, P.C., dated the Closing Date, in form and substance
satisfactory to counsel for MKPC, to the effect that:
(1) NetSalon is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(2) NetSalon's authorized capital stock is as set forth in
Section 2.2 hereof.
(3) The execution and consummation of this Agreement have been
duly authorized and approved by NetSalon's Board of Directors and does not
require the approval and authorization of NetSalon's shareholders.
Consummation of this Agreement will not constitute or result in any breach or
default of the character described in Section 2.14 hereof of which counsel has
knowledge.
(4) Counsel has no knowledge of any liabilities or obligations
of the type described in Section 2.7 hereof, any litigation, proceeding or
investigation of the type described in Section 2.12 hereof, or any defects, in
title or mortgages, encumbrances or liens of the type described in Section
2.16 hereof.
(5) The shares of NetSalon's Common Stock to be exchanged
pursuant to this Agreement, are duly and validly authorized and issued, and
are fully paid and nonassessable.
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7.15 MKPC shall deliver the opinion of its counsel, Xxxx Xxxxxx,
dated the Closing Date, in form and substance satisfactory to counsel for
NetSalon, to the effect that:
(1) MKPC is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas, and is duly qualified
to do business and is in good standing in each state where its business
requires qualification.
(2) MKPC's authorized capital stock is as set forth in Section
3.2 hereof.
(3) The execution and consummation of this Agreement have been
duly authorized and approved by MKPC's Board of Directors and consummation of
this Agreement will not constitute or result in any breach or default of the
character described in Section 3.16 hereof of which counsel has knowledge.
(4) Counsel has no knowledge of any litigation, proceeding or
investigation of the type described in Section 3.12 hereof.
(5) The shares of MKPC's Common Stock to be issued pursuant to
this Agreement will be duly and validly authorized and issued, and will be
fully paid and nonassessable.
ARTICLE 8
POST CLOSING
8.1 Current Report on Form 8-K. Within 15 days after the Closing
Date, MKPC will file a Current Report on Form 8-K with the Securities and
Exchange Commission reporting this transaction.
8.2 Shareholders Meeting. As soon as possible after the Closing,
NetSalon will call a MKPC shareholders meeting for the purpose of seeking
shareholder approval of a one-for-two reverse stock split, a change of MKPC's
name to NetSalon, and a change of domicile to Delaware.
8.3 Consulting Agreement with Bridgewater Capital Corporation.
NetSalon shall enter into a consulting agreement with Bridgewater Capital
Corporation no later than August 31, 2000.
ARTICLE 9
MISCELLANEOUS
9.1 Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
9.2 No Oral Change. This Agreement and any provision hereof, may not
be waived, changed, modified, or discharged orally, but it can be changed by
an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
12
9.3 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to
insist in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future
of any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure, and (iii) no
waiver by any party of one breach by another party shall be construed as a
waiver with respect to any other or subsequent breach.
9.4 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
9.5 Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
9.6 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party
to whom notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
MKPC:
Makepeace Capital Corp.
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000
NetSalon:
NetSalon Corporation
Suite 134-554
0000 X. X'Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
with a copy to:
Xxx X. Xxxxxx
Xxxx Xxxxx Xxxxxxxx & Xxxxxx, P.C.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
(000) 000-0000
(000) 000-0000 - Fax
13
9.7 Binding Effect. This Agreement shall inure to and be binding
upon the heirs, executors, personal representatives, successors and assigns of
each of the parties to this Agreement.
9.8 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other
and further documents and take such other and further actions as may be
necessary or convenient to effect the transaction described herein.
9.9 Announcements. MKPC and NetSalon will consult and cooperate with
each other as to the timing and content of any announcements of the
transactions contemplated hereby to the general public or to employees,
customers or suppliers.
9.10 Exhibits. As of the execution hereof, the parties hereto have
provided each other with the Exhibits provided for herein above, including any
items referenced therein or required to be attached thereto. Any material
changes to the Exhibits shall be immediately disclosed to the other party.
9.11 Use of Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
AGREED TO AND ACCEPTED as of the date first above written.
MAKEPEACE CAPITAL CORP. NETSALON CORPORATION
By:/s/ Xxxx Xxxxxx By:/s/ Xxxx Xxxxxx
Xxxx Xxxxxx, President Xxxx Xxxxxx, President
14
SCHEDULE 1
Number of Number of
Name and Address Shares of Shares of
and Tax ID Number NetSalon Makepeace
----------------- --------- ---------
Xxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
XXX, XX 00000
SSN: 9,410,250 18,447,925
Xxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 1,000,000 1,960,408
Xxx Xxxxxxx
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000
SSN: 1,683,000 3,300,000
Xxxxxx Xxxxxx 943,500 1,850,000
Xxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxxx
XXX #000
Xxxxx, XX 00000
SSN: 850,000 1,666,667
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxxxxxx Xxxx
Xxxxx, XX 00000
SSN: (JGP)
SSN: (CTP) 255,000 500,000
Xxxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
SSN: 212,500 416,667
Xxxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX
SSN: 212,500 416,667
Xxxxxxx Xxxxx 170,000 333,333
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxx Xxxx,
Xxxxx 000
Xxxx Xxxx Xxxxxxx, XX 00000 170,000 333,333
X. X. Xxxxx
0000 Xxxxxx Xxxxxxxx
Xxxxxx, XX 00000
SSN: 93,500 183,333
Xxxxxx Xxxxxx
000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxx, XX 00000
SSN: 85,000 166,667
Xxxxxx Papasaderis 46,750 91,667
Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
SSN: 42,500 83,333
Xxxx Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
SSN: 17,000 33,333
Xxxxx Xxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
SSN: 8,500 16,667
Xxxx Xxxxx Xxxxxxxx &
Xxxxxx, P.C.
000 00xx Xxxxxx, #0000 X.X.
Xxxxxx, XX 00000 100,000 200,000
Xxxxxxxxxxx X. Xxxxxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
SSN: 76,923 153,846
Xxxx X. Xxxxxxxx
0000 Xxxx, #X
Xxxxx Xxxxxx, XX 00000
SSN: 7,000 14,000
Triad Enterprises, LLC
c/o R. Xxxxx Xxxxxx
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
EIN: 40,000 80,000
Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
SSN: 46,154 92,308
Xxxxx Xxxxx Xxxxxxxx and
Xxxxxx X. Xxxxxxxx
00000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
SSN: 40,000 80,000
Xxxxxx X. Xxxxxxxx
00000 Xxxx Xxxxxxx Xxx., #000
Xxxxxx, XX 00000
SSN: 38,462 76,924
W. Xxxxxx Xxxxxx
0000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
SSN: 40,000 80,000
Xxx X. Xxxxx
0000 Xxxxx Xxxxxxx
Xxxxxxxx, XX 00000 38,462 76,924
Xxxx X. Xxxxxxxx
00000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
SSN: 53,846 107,692
Xxxxxx X. Xxxxxxx
00000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
SSN: 40,000 80,000
Xxxxxxx X. Xxxx
00000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
SSN: 76,923 153,846
Xxxxxx X. Xxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
SSN: 76,923 153,846
Xxx Xxxxx
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
SSN: 153,846 307,692
Total 16,028,539 31,457,078
SCHEDULE 2
NetSalon Corporation
("NetSalon")
2.4 The Officers and Directors of NetSalon are as follows:
Name Position
Xxxx Xxxxxx President and Director
2.12 Litigation:
The only pending litigation is the matter with Xxx Xxxxxxxx related to
his contract dated June 23, 1999, in which Xx. Xxxxxxxx agreed to invest
$400,000 in NetSalon.
2.17 Contracts:
(a) Agreement dated November 19, 1998 between The Synet Corporation
and NetSalon LLC related to the use of the technology, trade name, trade xxxx
and logo "NetSalon."
(b) Contract and Xxxx of Sale effective April 28, 2000, between The
Synet Corporation and NetSalon LLC.
(c) Contract with Xxx Xxxxxxxx dated June 23, 1999 (the basis for the
current litigation).
(d) MSN Internet Access Promotion Agreement dated November 2, 1999,
with The Microsoft Network LLC.
(e) NetSalon LLC Executive Founder Director License Agreement.
(f) Agreement dated March 7, 2000, between Xxxxx Xxxxx (Synet) and
NetSalon.
SCHEDULE 3
Makepeace Capital Corp.
("MKPC")
3.2 Capitalization: MKPC has the following warrants outstanding:
a) 1,475,000 A Warrants exercisable at $5.00 per share;
b) 1,400,000 B Warrants exercisable at $7.50 per share;
c) 1,400,000 C Warrants exercisable at $10.00 per share.
3.4 Directors and Officers of MKPC:
Name Position
X. Xxxx X. Xxxxxx President, Treasurer and Director
Xxxxxx X. Xxxxxxxx Vice President, Secretary and
Director
Xxxxxx X. Fedellech Director
3.20 Material Contracts of MKPC:
None
