SHARE EXCHANGE AGREEMENT
This agreement is made and entered as of August 15,1999 by and
between USA GROWTH, INC. ("USAG") a publicly traded Delaware
Corporation with it's principal place of business located at 000
Xxxx 000 Xxxxxx, Xxx Xxxx, Xxx Xxxx and TRI STAR DIVERSIFIED
VENTURES, LLC ( Xxxxxxx Xxxxx, CEO), Xxxx Xxxxxxxx, Xxxx Xxxxx,
(collectively hereinafter "WSN SHAREHOLDERS").
RECITALS
WHEREAS, "USAG" is a publicly traded Delaware Corporation with
capital stock of One Hundred Million (100,000,000) shares of
common stock ( the USAG "Common Stock") authorized of which
13,500,000 shares are issued and outstanding as of the signing of
this agreement and 8,000,000 in "Class A " warrants and is
conducting a exchange of the USAG common stock;
WHEREAS, WORLD SHOPPING NETWORK, INC. (hereinafter "WSN") is a
privately held Wyoming corporation with its principal place of
business in California with authorized capital stock of five
hundred million (500,000,000) shares of Common Stock, $0 par
value per share, of the which four million five hundred forty
three thousand four hundred and two (4,543,402) shares were
issued and outstanding as of June 1,1999 (the "WSN Common
Stock");
WHEREAS, WSN Shareholders are desirous of exchanging their shares
of WSN Common Stock as majority shareholders, in the following
amounts: Tri Star Diversified Ventures, LLC (1,800,000), Xxxx
Xxxxx (500,000) and Xxxx Xxxxxxxx (365,000) for shares of USAG
upon the terms and conditions and for the consideration
hereinafter set forth; and
WHEREAS, it is the intention of USAG and the WSN Shareholders
that the transactions contemplated hereby constitute a tax-free
"reorganization" as defined in Section 000.xx.xx of the Internal
Revenue Code of 1986, as amended and that all the terms and
provisions of this Agreement be interpreted, construed and
enforced to effectuate this intent.
Definitions
"Act" means the Securities Act of 1933, as amended.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Act of 1934.
"Balance Sheet" has the meaning of financial statement set forth
in Section 4.8 and 5.7 below.
"Closing" has the meaning set forth in Section 3.1 below.
"Closing Documents" has the meaning set forth in Section 2.2 and
2.3 below.
"Closing Date" has the meaning set forth in Section 3.1 below.
"Code," means the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated thereunder.
"Conversion Ratio" has the meaning set forth in Section 2.1
below.
"GAAP" means United States generally accepted accounting
principals as in effect from time to time and consistently
applied.
"Independent Public Accountant" has the meaning set forth in
Section 4.8 and 5.7 below.
"IRS" means the Internal Revenue Service.
"Intellectual Property" means any patent, trade name, trademark,
copyright, trade secret or other intangible asset.
"Knowledge" means actual knowledge after reasonable
investigation.
"Ordinary Course of Business" means the ordinary course of
business consistent with past customs and practice (including
with respect to quantity and frequency).
"Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a
trust, and a joint venture.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Security Interest" means any mortgage; pledge, lien,
encumbrance, charge, or other security interest whatsoever.
"USAG" has the meaning set forth in the recitals above.
"USAG Shares" means any share of common stock, $.001 par value
per share, of USAG.
"USAG Shareholders" means any Person whom or which holds any USAG
Share.
"USAG Warrants" shall mean an aggregate of 16,000,000 warrants of
USAG consisting of one (1) 8,000,000 Class A Warrants,
exercisable at $.17 per warrant to purchase one (1) USAG Share
and one (1) Class B Warrant, (ii) 8,000,000 Class B warrants,
exercisable at $.25 per warrant to purchase one (1) USAG Share.
"WSN" has the meaning set forth in the recitals above.
"WSN Shares" shall mean the shares of World Shopping Network Inc.
Common Stock.
"WSN Shareholders" shall have for the purposes of this agreement,
the following individuals and entities: Tri Star Diversified
Ventures, LLC, Xxxx Xxxxxxxx, and Xxxx Xxxxx.
NOW THEREFORE, in consideration of the following, the parties
agree as follows:
Article 1
EXCHANGE
1.1 Exchange of Stock. At the closing date, in accordance with
the provisions of this agreement and applicable law, WSN
Shareholders shall transfer and USAG shall acquire 2,665,000
Shares of WSN Common Stock, which constitutes all of the WSN
Common Stock owned by the WSN Shareholders" (the "Purchased
Shares") herein.
Article 2
CONSIDERATION
2.1 Exchange. WSN Shareholders and USAG agree that all of the
WSN shares owned by WSN Shareholders shall be exchanged with USAG
for USAG shares for Common Stock of WSN on a 30:1 ratio, (30 USAG
shares for 1 share of WSN). Such stock shall be issued in
certificates of such denominations, amounts as may be requested
by Shareholders, as follows:
WSN SHAREHOLDER WSN Common Stock for USAG Common Stock
Tri Star Diversified
Ventures 1,800,000 54,000,000
Xxxx Xxxxxxxx 365,000 10,950,000
Xxxx Xxxxx 500,000 15,000,000
2.2 Investment Intent Each of the WSN Shareholders represents
and warrants that they are acquiring USAG Common Stock for
investment purposes only and not with a view towards resale or
redistribution in violation of state and federal securities laws.
Each WSN Shareholder agrees to deliver to USAG at the closing, a
letter setting forth an agreement that said shares are being
acquired for investment purposes only and will not be sold except
in compliance with the Securities Act of 1933, as amended, and
the Rules and Regulations promulgated thereunder.
Each of the certificates representing shares of USAG issued to
WSN Shareholders as provided for herein shall bear substantially
the following legend:
The securities represented by this Certificate have not been
registered under the Securities Act of 1933 (the "Act") and are
"restricted securities" as that term is defined in Rule 144 under
the Act. The securities may not be offered for sale, sold or
otherwise transferred except pursuant to an effective regist-
ration statement under the Act or pursuant to an exemption from
registration under the Act, the availability of which is to the
satisfaction of the Corporation.
2.3 Delivery. At said closing, WSN Shareholders shall deliver
certificates for the Purchased Stock, duly endorsed in negotiable
form, with signatures guaranteed, free and clear from all claims
and encumbrances.
Article 3
THE CLOSING
3.1 The Closing. The closing of the transactions provided for
herein (the "Closing") shall take place at the offices of WSN on
a date to be mutually agreed upon by the parties, which date
shall be on or before June, 1999 or at such other time and place
as the parties shall mutually agree.
Article 4
REPRESENTATIONS AND WARRANTIES OF WSN SHAREHOLDERS
As an inducement to USAG to enter into this Agreement and to
consummate the transactions contemplated herein, and with
knowledge that USAG will rely therein, WSN Shareholders represent
and warrant as follows to USAG and the individuals representing
it:
4.1 Organization. WSN is a corporation duly organized, validly
existing and in good standing under he laws of Wyoming, is duly
qualified to transact business as a foreign corporation and is in
good standing in each jurisdiction in which its failure to be so
qualified and in good standing would have a materially adverse
effect on its financial condition or business and it has the
corporate power and authority to own, lease or operate its
properties and to carry on its business as now conducted.
4.2 Capital Structure. The authorized capital of WSN is as set
forth in the Recitals above. WSN and WSN Shareholders represent
and warrant, both severally and jointly that all of the
outstanding shares of "WSN Shareholders" stock are validly
issued, fully paid and non-assessable and were issued in
transactions that were either exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act"), or
were properly registered thereunder. There are no existing
options, warrants, calls, preemptive rights or commitments of any
kind relating to the capital stock of WSN and the stock of WSN
Shareholders.
4.3 Articles of Incorporation, Bylaws and Minutes. WSN
Shareholders have caused WSN to deliver to USAG a true and
complete copies of its (i) Articles of Incorporation (certified
by the Secretary of State of Wyoming), (ii) Bylaws (certified by
its corporate secretary) as in effect on the date hereof, and
(iii) minutes of all meetings of its Board of Directors and
Shareholders.
4.4 Books and Records. The corporate minute books, stock
certificate books, stock registers and other corporate records of
WSN are correct and complete in all material respects, and the
signatures appearing on all documents contained therein are the
true signatures of the person purporting to have signed the same.
All actions reflected in said books and records were duly and
validly taken in compliance with the laws of Wyoming, WSN does
not have any of its record, systems, controls, data or
information recorded, stored, maintained, operated or otherwise
wholly or partially dependent upon or held by any means,
including any electronic, mechanical or photographic process,
whether computerized or not, which, including all means of access
thereto and therefrom, are not under the exclusive ownership and
direct control of WSN Shareholders.
4.5 Title to WSN Common Stock. WSN Shareholders have full power
and authority to transfer and convey, free and clear of all
liens, encumbrances, restrictions and claims of every kind, the
WSN Common Stock to USAG as contemplated by the Agreement.
4.6 Authority. WSN Shareholders have full power and authority
to execute and deliver the Agreement and the other Closing
Documents and to carry out the transactions contemplated hereby
and WSN Shareholders have taken all requisite corporate action to
authorize the execution, delivery and performance of the Closing
Documents. The Closing Documents, when executed, will be valid
and binding agreements of WSN Shareholders enforceable in
accordance with the terms thereof. No consent, authorization or
approval of, or declaration, filing or registration with, any
governmental or regulatory authority or any consent,
authorization or approval of any other third party is required to
enable WSN Shareholders to enter into and perform any of its
obligations under the Closing Documents, and neither the
execution and delivery of the closing documents nor the
consummation of the transactions contemplated thereby will:
(i) Violate the Articles of Incorporation or Bylaws or constitute a
breach of any evidence of indebtedness or agreement to which WSN
Shareholders are a party or by which it is bound;
ii. Cause a default under any mortgage or deed of trust or other
lien, charge or encumbrance to which the WSN Shareholders or WSN are
subject or under any contract to which WSN Shareholders are a party
or permit the termination of any such contract by another person;
iii. Result in the creation or imposition of any security interest,
lien, charge or other encumbrance upon the property or assets of WSN
Shareholders or WSN under any agreement or commitment to which the WSN
Shareholders or WSN are bound;
iv. Accelerate, or constitute an event, entitling, or which would,
on notice or lapse of time or both, entitle the holder of any
indebtedness of WSN Shareholders or WSN to accelerate the maturity
of any such indebtedness;
v. Conflict with or result in the breach of any writ, injunction or
decree of any court or governmental instrumentality; or
vi. Violate any statute, law or regulation of any jurisdiction as
such statute, law or regulation relates to WSN Shareholders or WSN or
the securities, properties or business of WSN Shareholdersor WSN.
4.7 Financial Statement. WSN Shareholders have furnished, or
will prior to the Closing Date furnish USAG with the following
financial statements:
i. True and complete copies of the balance sheets, related
statements of operations and retained earning and related
statements of shareholders' deficiency cash flows of WSN as of
and for the year ended June 30, 1998, prepared in accordance with
generally accepted accounting principles ("GAAP") and audited by
WSN's independent public accountants; and
ii. True and complete copies of the unaudited balance sheet as
of March 31, 1999 and related statements of operations and
retained earnings and related statements of cash flows of WSN as
of March 31, 1999.
Hereinafter, the financial statements referred to in subsections
(i) and (ii), together with the footnotes and supporting
schedules thereto, are referred to as the "WSN Financial
Statements." The audited WSN Financial statements, including the
footnotes thereto, have been prepared by WSN in accordance with
GAAP and present fairly the financial condition of WSN at the
dates thereof and reflect all material claims against, and all
material debts and liabilities of, WSN, fixed or contingent, as
at the dates thereof and the statements of income and retained
earnings which are a part of the audited WSN Financial Statements
present fairly the results of the operations of WSN and cash
flows for the periods indicated, the WSN Financial statements and
the Exhibits and Schedules hereto. WSN Shareholders shall make
available to USAG and WSN's independent public accountants, its
work papers and those of its independent public accountants
related to the WSN Financial Statements.
4.8 No Undisclosed Liabilities. WSN does not have any material
liability or obligation, absolute or contingent, including
without limitation, liabilities for federal, state, local or
foreign taxes which (i) is not reflected on the WSN Financial
Statements, or (ii) has arisen since March 31, 1999, and which is
materially adverse to the business, assets or operations of WSN,
or (iii) is not referred to elsewhere in this Agreement or the
Schedules hereto.
4.9 Title of Assets; Permitted Encumbrances. WSN has good and
indefeasible title, or valid leasehold rights in the case of
leased assets, to all of it's assets reflected on the WSN
Financial Statements and all of the assets thereafter acquired by
it (except to the extent that such assets have thereafter been
disposed of in the ordinary course of business or otherwise in
accordance with this Agreement), subject to no mortgages, liens,
security interests or encumbrances, except:
i. minor defects in title and encumbrances, none of which,
individually or in the aggregate, materially interferes with the use
or value of such property;
ii. liens and security interests under operating agreements for
amounts not yet delinquent or which are being contested in good
faith;
iii. liens for fees, taxes, levies, imposts, duties or other
governmental charges of any kind which are not yet delinquent or are
being contested in good faith by appropriate proceedings; and
iv. liens created in the ordinary course of business in connection
with the leasing or financing of office, computer and related
equipment and supplies.
4.10 Condition of Property. All of the tangible personal
property of WSN is, in accordance with industry standards, in
operating condition and repair, reasonable wear and tear excepted
except for such property the condition of which does not
materially adversely affect the business of WSN.
4.11 Insurance. Set forth in Schedule A, is a list of all
insurance policies carried by WSN (showing as to each policy, the
carrier, policy number, coverage limits, expiration dates, and a
general description of the type of coverage provided) and such
policies are in full force and effect and the premiums due and
owing therefore have been paid in full and will be so paid to the
Closing Date.
4.12 Patents and Trademarks. WSN owns or possesses adequate and
enforceable licenses or other rights to use all patents,
trademarks, trade names and copyrights now used in the conduct of
its business.
4.13 Conduct of Business. Since June 1, 1999, there has not
occurred any of the following events, other than changes in the
ordinary course of business, none of which has had a material
adverse effect on such business, operations or financial
condition of WSN:
i Any change in the business, operations or financial condition or
the manner of conducting the business of WSN;
ii Any damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting the business operations
of financial condition of WSN;
iii Any authorization or issuance of any shares of capital stock of
WSN;
iv Any declaration, setting aside or payment of dividends or other
distribution in respect of the capital stock of WSN;
v Any direct or indirect redemption, purchase or other acquisition
of any shares of capital stock of WSN;
vi Any increase in the compensation by WSN of its directors, officers
or employees over their compensation as disclosed in the WSN Financial
Statements;
vii Any employment agreement for a fixed term or any deferred
compensation agreement entered into between WSN and any of its
directors, officers or other employees or consultants;
viii Any amendment or termination by WSN of any material contract
agreement, license, or other agreement other than in the ordinary
course of business; or
ix Any indebtedness incurred WSN or any commitment to borrow money
entered into by WSN.
4.14 Litigation. There is no action, suit or proceeding pending
before any court, administrative agency or other governmental
body or arbitrator, or threatened against WSN. WSN is not a party
or subject to, or bound by, any injunction, judgement, order or
decree, whether or not still subject to appeal, of any court,
administrative agency or other governmental body or arbitrator.
4.15 Tax Matters. WSN has paid all federal, state, county,
local, foreign and othertaxes, including, without limitation, income
taxes, estimated taxes, excise taxes, sales taxes, use taxes, gross
receipts taxes, franchise taxes, employment and payroll related taxes,
property taxes and import duties, whether or not measured in
whole or in part by net income (individually, a "Tax" and
collectively, the "Taxes"), and all deficiencies or other
additions to any Tax, interest and penalties owed by it in
connection with any Tax required to be paid by it relating to WSN
or any of its assets or business through the date hereof. WSN
shall have paid timely, prior to the Closing Date, all Taxes
relating to it or its business or assets, including additions,
interest, penalties and estimated payments, required to be paid
by it under applicable law after the date hereof.
4.16 No Tax Liens. None of the assets of WSN is subject to any
lien in favor of the united States pursuant to Section 6321 of
the Internal Revenue Code of 1986, as amended (the "Code"), for
nonpayment of federal taxes, or any lien in favor of any state
under any comparable provision of state law.
4.17 Compliance with Laws; Permits. WSN is not in violation of
any applicable order, judgement, injunction, award or decree
relating to its business or assets. WSN is not in violation of
any federal, state, local or foreign law, ordinance or regulation
or any other requirement of any governmental of regulatory body,
court or arbitrator applicable to its business' or assets.
Without limiting the generality of the foregoing, (a) there is
not pending or threatened, any notification of any governmental
authority the WSN is not in compliance with applicable laws and
regulations respecting employment and employment practices,
occupational safety and health laws and regulations, and laws or
regulations relating to the quality of the environment and WSN
knows of no basis therefor, and (b) WSN has not received any such
notification of past violations of such laws or regulations. WSN
holds all licenses, permits, orders and approvals of any federal,
state or local governmental or regulatory bodies (collectively,
"Permits") that are material to or necessary for the conduct of
its business. All Permits are in full force and effect and no
proceeding to revoke or limit any of such Permits is pending or,
to the knowledge of WSN, threatened.
4.18 Contracts and Other Agreements. There have been delivered
to USAG true and complete copies of all of the contracts and
other agreements. All of such contracts and other agreements are
valid and binding xxxx XXX in accordance with their terms, and
WSN is not in default nor has it received a notice of default
under, or with respect to, any such contracts and /or other
agreements. No approval or consent of any person is needed in
order that the contracts and other agreements se forth thereon
will continue in full force and effect following the consummation
of the transactions contemplated by this Agreement. There are no
contracts to which WSN is party or by or to which it or its
assets or properties are bound or subject, including, without
limitation, any (a) contract for the employment of any officer or
individual employee, (b) contract with any union, (c) back loan
or other credit agreement, (d) bonus, deferred compensation,
profit sharing, pension or retirement arrangement, (e)
partnership or joint venture agreement, or (f) other material
contract, agreement or commitment.
4.19 Real Property. WSN owns no direct, indirect, legal,
equitable or beneficial interest in any real property and
possesses no rights to acquire the same.
4.20 Liabilities. Except as forth in this Agreement of any
Schedule hereto, WSN has no direct or indirect Liabilities, other
than Liabilities fully and adequately reflected or reserved
against in the WSN Financial Statements.
4.21 Employee Benefit Plans. WSN does not maintain or contribute
to, and has never maintained or contributed to, any employee
pension benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended.
4.22 Curtailment of Operations. No labor disputes or work
stoppages involving WSN are pending or threatened which, either
singly or in the aggregate, will have a material adverse effect
on the business of WSN. To the knowledge of WSN, no material
customer of or supplier to WSN is involved in, or affected by,
any dispute, arbitration, lawsuit, or administrative proceedings
which could materially adversely affect its business, operations,
properties, assets or condition, financial or otherwise.
4.23 Employee Relations. WSN is not a party to a collective
bargaining agreement and is in compliance with all applicable
federal, state or other laws, domestic or foreign, respecting
employment and employment practices, terms and conditions o
employment (including issues related to independent contractor
status of personnel) and wages and hours, and has not and is not
engaged in any unfair labor practice. There have been no
organization efforts by any trade unions within the last 12 months.
4.24 Restrictive Documents. Except as otherwise disclosed in
this Agreement or any Schedule or Exhibit hereto, WSN is not
subject to, or a party to, any charter, bylaw, mortgage, lien,
lease, license, permit, agreement, contract, instrument, or any
law, rule, ordinance, regulation, order, judgement or decree, or
any other restriction of any kind or character, which would
prevent consummation of the transaction contemplated by this
Agreement, or the continued operation of the business on
substantially the same basis as heretofore operated.
4.25 Relationships. No officer or director of WSN possesses,
directly or indirectly, any financial interest in, or is a
director, officer, shareholder or employee of, any corporation,
firm, association or business organization which is a manufacture
for or client supplier, customer, lessor, lessee, or competitor
or potential competitor of, WSN. WSN is not indebted to any
officer, director or employee of WSN or to any entity in which
any such person has a financial interest.
4.26 No Changes Prior to Closing Date. During the period from
the date of this Agreement to and including the Closing Date,
other than as expressly set forth on one or more of the Schedules
hereto, WSN will not have:
i. Incurred any liability or other obligations of any nature
(whether accrued, absolute, contingent or otherwise) which affects
or may affect its assets or business, except in the ordinary course of
business;
ii. Permitted any of its assets to be subject to any mortgage,
pledge, lien, security interest, encumbrance, restriction or charge
of any kind;
iii. Sold, transferred or otherwise disposed of any of its assets,
except in theordinary course of business;
iv. Made any capital expenditure or commitment therefore in excess
of $5,000;
v. Made any bonus or profit sharing contribution or distribution,
except in the ordinary course of business;
vi. Increased its indebtedness for borrowed money, except current
borrowings form banks in the ordinary course of business, or made any
loan to any person;
vii. Written off as uncollectible any notes or accounts receivable
except writeoffs in the ordinary course of business charge to
applicable reserves, none of which, individually or in the
aggregate, materially and adversely affects its assets or business;
viii. Granted any increase in the rate of wages, salaries, bonuses
or other compensation of any executive employee or other employees of
WSN, except in the ordinary course of business;
ix. Canceled or waived any claims or rights, except in the ordinary
course ofbusiness;
x. Made any change in any method of accounting or auditing practice;
xi. Otherwise conducted its business or entered into any transaction
except in the usual and ordinary manner and in the ordinary course of
business;
xii. Entered into any agreements with any affiliates; or
xiii. Agreed, whether or not in writing, to do any of the
foregoing.
4.27 Disclosure. Neither this Agreement nor any Schedule,
Exhibit or certificate delivered in accordance with the terms
hereof, or any document or statement in writing which has been
supplied by or on behalf of WSN or by any of WSN directors or
officers, material fact, or omits any statement of a material
fact necessary in order to make the statements contained herein
or therein not misleading. There is no fact or circumstance known
to WSN Shareholders which materially and adversely affects or
which may materially and adversely affect its business, prospects
or financial condition or its assets, which has not been set
forth in this Agreement, the Schedules, Exhibits, certificates or
statements furnished in writing to USAG in connection with the
transactions contemplated by this Agreement.
4.28 Broker's or Finder's Fees Except for Havkit Corporation, no
broker, finder or similar intermediary is entitled to fees in
connection with the transactions contemplated by this Agreement
by virtue of any action or agreement of WSN.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF USAG
As an inducement to WSN Shareholders to enter into this Agreement
and to consummate the transactions contemplated herein, and with
knowledge that WSN Shareholders will rely thereon, USAG
represents and warrants as follows to WSN Shareholders and the
individuals representing those parties:
5.1 Organization. USAG is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, is duly qualified to transact business as a foreign
corporation and is in good standing in each jurisdiction in which
its failure to be so qualified and in good standing would have a
materially adverse effect on its financial condition or business
and it has the corporate power and authority to own, lease or
operate its properties and to carry on its business as now
conducted
5.2 Capital Structure. The authorized capital of USAG is as set
forth in the RECITALS above. All of the outstanding shares of
USAG Stock are and will be validly issued, fully paid and
nonassessable and were issued in transactions that were either
exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act'), or were properly registered
thereunder. A list of USAG shareholders of record at August
16, 1999, certified by USAG's transfer agent, is annexed as a
Schedule. There are no existing options, warrants calls,
preemptive rights or commitments of any kind relating to the
capital stock of USAG other than those listed therein.
5.3 Title to USAG Common Stock. USAG has full power and authority
to issue and convey, free and clear of all liens, encumbrances,
restrictions and claims of every kind, the USAG Common Stock
issuable to WSN Shareholders as contemplated by this Agreement
and, when issued, said USAG Common Stock shall be validly issued,
fully paid and nonassessable.
5.4 Authority. USAG has full power and authority to execute and
deliver this Agreement and the other agreements required to be
executed and delivered hereunder and to carry out the
transactions contemplated hereby and USAG has taken all requisite
corporate action to authorize the execution, delivery and
performance.
5.5 No Undisclosed Liabilities. USAG does not have any material
liability or obligations, absolute or contingent, including
without limitation, liabilities for federal, state, local or
foreign taxes which (i) is not reflected on the USAG Financial
Statements, or (ii) has arisen since April 30, 1999 and which is
materially adverse to the business, assets or operations of USAG
other than as disclosed on Schedule , or (iii) is not referred to
elsewhere in this Agreement or the Schedules hereto.
5.6 Compliance with Laws; Permits. USAG is not in violation of
any applicable order, judgment, injunction, award or decree
relating to its business or assets. USAG is not in violation of
any federal, state, local or foreign law, ordinance or regulation
or any other requirement of any governmental or regulatory body,
court or arbitrator applicable to its business or assets. Without
limiting the generality of the foregoing, (a) there is no pending
or threatened, any notification of any governmental authority
that USAG is not in compliance with applicable laws and
regulations respecting employment and employment practices,
occupational safety and health laws and regulations and laws or
regulations relating to the quality of the environment and USAG
knows of no basis therefor and (b) USAG has not received any such
notification of past violations of such laws or regulations. USAG
holds all licenses, permits, orders and approvals of any federal,
state or local governmental or regulatory bodies (collectively,
"Permits") that are material to or necessary for the conduct of
its business. All Permits are in full force and effect and no
proceeding to revoke or limit any of such Permits is pending or,
to the knowledge of USAG, threatened.
5.7 Disclosure. Neither this Agreement nor any Schedule, Exhibit
or certificate delivered in accordance with the terms hereof, or
any document or statement in writing which has been supplied by
or on behalf of USAG or by any ofUSAG's directors or officers,
material fact, or omits any statement of a material fact
necessary in order to make the statements contained herein or
therein not misleading. There is no fact or circumstance known to
USAG which materially and adversely affects or which may
materially and adversely affect its business, prospects or
financial condition or its assets, which has not been set forth
in this Agreement, the Schedules, Exhibits, certificates or
statements furnished in writing to WSN and Shareholders in
connection with the transactions contemplated by this Agreement.
5.8 Broker's or Finder's Fees. Except for Havkit Corporation, no
broker, finder or similar intermediary is entitled to fees in
connection with the transactions contemplated by this Agreement
by virtue of any action or agreement of USAG.
Article 6
MISCELLANEOUS
6.1 Approval By Counsel. All actions and proceedings hereunder
and all documents and other papers required to be delivered by
USAG hereunder or in connection with the consummation of the
transactions contemplated hereby, and all other related matters
shall have been reasonably approved by counsel to USAG.
6.2 Litigation. There is no action, suit or proceeding pending
before any court, administration agency or other governmental
body or arbitrator, threatened against USAG . USAG is not a party
or subject to, or bound by, any injunction, judgment, order or
decree, whether or not still subject to approval, of any court,
administrative agency or other governmental body or arbitrator.
6.3 Tax-Free Exchange. The transaction contemplated by this
Agreement shall have been accomplished on a tax-free basis.
6.4 Transfer/Assignment. This agreement is personal to the
Parties herein and shall not be assigned or transferred without
the prior written consent of USAG. This agreement is personal to
USAG and shall not be assigned or transferred without the written
consent ofWSN Shareholders. This agreement shall be binding upon
and inure to the benefit of all of the parties hereto and their
successor and assigns.
6.5 Severability. Nothing contained herein shall be construed to
require the commission of any act contrary to law. Should there
be any conflict between any provisions hereof and any present or
future statute, law, ordinance, regulation, or other
pronouncement having the force of law, the latter shall prevail,
but the provision of this Agreement affected thereby shall be
curtailed and limited only to the extent necessary to bring it
within the requirements of the law, and the remaining provisions
of this agreement shall remain in full force and effect.
6.6 Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the
subject matter hereof and supercedes all prior oral or written
agreements, arrangements, and understandings with respect
thereto. No representation, promise, inducement, statement or
intention has been made by any party hereto that is not embodied
herein, and no party shall be bound by or liable for any alleged
representation, promise, inducement, or statement not so set
forth herein. This agreement is made under and shall be construed
pursuant to the laws of the State of California.
6.7 Modification. This Agreement may be modified, amended,
superseded, or cancelled, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived,
only by a written instrument executed by both parties to be bound
by an such modification, amendment, suppression, cancellation, or
waiver. The Waiver by either of the parties, express or implied,
of any right under this Agreement or any failure to perform under
this Agreement by the other party, shall not constitute or be
deemed as a waiver of any other right under this Agreement or of
any other failure to perform under this Agreement by the other
party, whether or a similar or dissimilar nature.
6.8 Attorneys Fees. The WSN Shareholders will pay all reasonable
direct and indirect legal fees of USAG in the preparation and
consummation of this purchase agreement, as well as the
subsequent merger of WSN and USAG. In the event of any dispute
arising out of the subject matter of this Agreement, the
prevailing party shall recover, in addition to any other damages
assessed, its' reasonable attorney's fees and costs incurred in
litigating or otherwise settling or resolving such dispute
whether or not an action is brought or prosecuted to judgment.
6.9 Cumulative Remedies. Each and all of the several rights and
remedies provided in this Agreement, or by law or in equity,
shall be cumulative, and no one of them shall be exclusive of any
other right or remedy, and the exercise of any one or such rights
or remedies shall not be deemed a waiver of, or an election to
exercise, any other such right or remedy.
6.10 Counterparts. The agreement may be executed in several
counterparts and when so executed shall constitute one agreement
binding on all the Parties, notwithstanding that all the Parties
are not signatory to the original and same counterpart.
6.11 Post Effective Amendments. (a) It is contemplated by the
Parties herein, after Closing, the new management will arrange
for filing a post effective amendment to permit USAG warrants to
be exercised providing for additional funding for the expansion
of the corporation, as well as the registration of 2.4 Million
recently exercised Underwriter Warrants. (b) It is expressly
agreed that USAG will have no assets or liabilities at the time
of Closing. Any current assets will be transferred prior to
Closing to an affiliated entity and will be for the benefit of
the current shareholders of USAG and not the selling WSN
Shareholders. WSN Shareholders will have no interest in the
affiliated entity.
6.12 Captions. The caption headings contained in this Agreement
are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
6.13 Survival Of Representations And Warranties. All covenants,
agreements, statements, certifications, indemnification's in,
representations and warranties made by the Sellers or the
Purchaser this Agreement or in any document, exhibit, schedule or
certificate furnished pursuant hereto or in connection herewith,
shall survive the Closing, irrespective of any investigation made
by or on behalf of any party, (a) with respect to the
representations and warranties of the Sellers herein contained,
for a period of 3 i/2 years and (b) in all other instances for a
period of 18 months. Any claim made in writing prior to the
expiration of the applicable period and the rights of indemnity
with respect thereto shall survive such expiration until resolved
or judicially determined.
6.14 Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall
be in writing and shall be deemed to have been given when
received, if delivered in persons, or three (3) business days
following the mailing thereof, if mailed by certified first class
mail, postage prepaid, return receipt requested, as follows:
If to USAG
USA GROWTH, INC.
000 Xxxx 000 Xxxxxx
Xxx Xxxx, X.X. 00000
Attn: Xxxxxx Xxxxx,
President
If to WSN
World Shopping Network Inc.
0000 Xxxxxxxxxxx Xxxxx, #X
Xxxxx Xxx,XX. 00000
Attn: Xxxx Xxxxx, Xxxx Xxxxxxxx
If to Tri Star Diversified:
Tri Star Diversified Ventures, LLC
000 Xxxxx Xxxx, 0xx Xxxxx
Xxxxx Xxxx, CA.9262
Attn: Xxxxxxx Xxxxx, CEO
With a copy to
XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxx
Xxx Xxxx. Xxx Xxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Or at such other address or addresses as any party may have
advised in the manner provided in this Section.
U.S.A. Growth Inc.
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx, President
Tri Star Diversified Ventures, L.L.C.
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, CEO
Xxxx Xxxxxxxx
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxx
/s/ Xxxx Xxxxx
