Exhibit EX 2.1 Agreement For Exchange of Stock
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
Agreement made this 8th day of September 2001, by and between Transpor
-tation Safety Lights, Inc. (Nasdaq OTC-BB: TSFL) a Nevada corporation (the
Issuer) and World Quest, Inc., a Nevada corporation (the Company),which owns
all of the issued and outstanding shares of American Senior Golf Associa-
tion, Inc., a Delaware corporation (ASGA).
In consideration of the mutual promises, covenants, and representa-
tions contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. TERMS.
Subject to the terms and conditions of this Agreement, the Issuer
agrees:
i. that the total common shares issued and outstanding of the
Issuer at Closing shall be Twenty Million (20,000,000) shares
following the Exchange.
ii. that the Issuer will transfer to Company, Sixteen Million
Three Hundred Twenty-One Thousand Seven Hundred Fifty (16,321,750)
newly issued shares of restricted common stock of Issuer, $0.001 par
value, (the Shares), in exchange for 100 percent of the issued and out-
standing shares of ASGA, such that ASGA shall become a wholly owned
subsidiary of the Issuer.
iii. that the Issuer will register Two Million (2,000,000) shares
within thirty days (30) of closing.
2. REPRESENTATIONS AND WARRANTIES. Issuer represents and warrants to
Company the following:
i. Organization. Issuer is a corporation duly organized, validly exist-
ing, and in good standing under the laws of Nevada, and has all
necessary corporate powers to own properties and carry on a
business, and is duly qualified to do business and is in good stand-
ing in Nevada. All actions taken by the Incorporators, directors and
shareholders of Issuer have been valid and in accordance with the laws
of the State of Nevada.
ii. Capital. The authorized capital stock of Issuer consists of
Twenty Million (20,000,000) shares of common stock, $0.001 par
value of which Three Million Six Hundred Seventy-Eight Thousand
Two Hundred and Fifty (3,678,250) Shares are issued and out-
standing, and Five Million Shares (5,000,000) of preferred stock none
of which is issued and outstanding. All outstanding shares are fully
paid and non-assessable, free of pre-emptive rights. At the
Closing, there will be no outstanding subscriptions, options,
rights, warrants, convertible securities, or other agreements or com-
mitments obligating Issuer to issue or to transfer from treasury any
additional shares of its capital stock. Issuer shall amend its by-
laws to increase the authorized capital stock of Issuer to Thirty
Million (30,000,000) shares of common stock at $0.001 par value.
iii. SEC Reports. Issuer has filed all required forms, reports, state-
ments, schedules and other documents with the Securities and
Exchange Commission (SEC) since January 1, 2001 (collectively,
the Issuer SEC Reports). The financial statements, including all
related notes and schedules, contained in the Issuer SEC Reports
(or incorporated by reference therein) fairly present the
consolidated financial position of Issuer as at the respective dates
thereof and the consolidated results of operations and cash flows
of Issuer for the periods indicated in accordance with generally
accepted accounting principles (GAAP) applied on a consistent
basis throughout the periods involved (except for changes in
accounting principles disclosed in the notes thereto) and subject in
the case of interim financial statements to normal year-end adjust-
ments and the absence of notes. For purposes of this Agreement, the
balance sheet of Issuer as of March 31, 2001, is referred to as the
Issuer Balance Sheet and the date thereof is referred to as the
Issuer Balance Sheet Date.
iv. Absence of Changes. Since the Issuer Balance Sheet Date, there has
not been any change in the financial condition or operations of Issue,
except changes in the ordinary course of business, which changes have
not in the aggregate been materially adverse to Issuer.
v. Liabilities. Issuer does not have any debt, liability, or obliga-
tion of any nature, whether accrued, absolute, contingent, or other-
wise, and whether due or to become due, that is not reflected on the
Issuers Balance Sheet. Issuer is not aware of any pending,
threatened, or asserted claims, lawsuits or contingencies involv-
ing Issuer or its common stock. There is no dispute of any kind be-
tween Issuer and any third party, and no such dispute will exist at
Closing.
vi. Ability to Carry Out Obligations. Issuer has the right, power, and
authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by Issuer and
the performance by Issuer of its obligations hereunder will not cause,
constitute, or conflict with or result in (a) any breach or violation
or any of the provisions of or constitute a default under any
license, indenture, mortgage, charter, instrument, articles of
incorporation, bylaw, or other agreement or instrument to which
Issuer is a party, or by which it may be bound, nor will any
consents or authorizations of any party other than those hereto be
required, (b) an event that would cause Issuer to be liable to any
party, or (c) an event that would result in the creation or imposi-
tion of any lien, charge, encumbrance on any asset of Issuer.
vii. Full Disclosure. None of the representations and warranties made
by the Issuer in this Agreement, contains any untrue statement of a
material fact, or omit any material fact the omission of which would
be misleading.
viii. Contract and Leases. Issuer is currently carrying on its
business and is a party to contracts, agreements, or lease. No
person holds a power of attorney from Issuer.
ix. Compliance with Laws. Issuer has complied with all federal, state,
and local statutes, laws, and regulations pertaining to Issuer.
Issuer has complied with all federal and state securities laws in
connection with the issuance, sale, and distribution of its securities.
x. Litigation. Issuer is not (and has not been) a party to any suit,
action, arbitration, or legal, administrative, or other proceeding,
or pending governmental investigation. To the best knowledge of the
Issuer, there is no basis for any such action or proceeding and no
such action or proceeding is threatened against Issuer, and Issuer is
not subject to or in default with respect to any order, writ,
injunction, or decree of any federal, state, local, or foreign court,
department, agency, or instrumentality.
xi. Conduct of Business. From the Issuer Balance Sheet Date to the
Closing, Issuer has conducted its business in the normal course,
and has not (1) sold, pledged, or assigned any assets, other than in
the ordinary course of business; (2) amended its Certificate of
Incorporation or ByLaws; (3)declared dividends; (4) redeemed or sold
stock or other securities; (5) incurred any liabilities, other than
in the ordinary course of business; (6) acquired or disposed of any
assets, other than in the ordinary course of business; (7) entered
into any contract, other than in the ordinary course of business;
(8) guaranteed obligations of any third party; or (9) entered into
any other transaction, other than in the ordinary course of business.
xii. Documents. All minutes, consents, or other documents pertaining to
Issuer to be delivered at closing shall be valid and in accordance with
the laws of the State of Nevada.
xiii. Title. At the Closing, the Issuer Shares to be issued to Company will
be (i) validly issued, fully paid and non-assessable; and (ii) free
and clear of all liens, security interests, pledges, charges, claims,
encumbrances and restrictions of any kind, except as otherwise created
by Company. There is no applicable local, state, or federal law, rule,
regulation, or decree which would, as a result of the issuance of the
Shares to Shareholders, impair, restrict, or delay Companys voting
rights with respect to the Issuer Shares.
xiv. Brokers. Issuer has not retained any broker, investment banker,
or other person entitled to any commission or similar compensa-
tion in connection with this Agreement or the transactions
contemplated by this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY. Company represents and
warrants to Issuer the following, except as otherwise set forth in
the Company Disclosure Schedule (items disclosed in one Section
of such Disclosure Schedule shall apply to all other Sections unless
otherwise specified):
i. Organization. Each of Company and ASGA are corporations duly
organized, validly existing, and in good standing under the laws
of Nevada and Delaware, respectively, and each has all necessary
corporate powers to own properties and carry on a business, and
is duly qualified to do business and is in good standing in the
jurisdictions where qualification is required. All actions taken
by the incorporators, directors, and stockholders of Company and
ASGA have been valid and in accordance with the laws of the State of
Nevada and Delaware, respectively.
ii. Capital. The authorized capital stock of ASGA consists of One
Hundred (100) shares of common stock, $1.00 par value, of which One
Hundred (100) shares are issued and outstanding (the ASGA Shares).
Company is the sole record and beneficial owner of the ASGA
Shares and has sole management and dispositive power over the ASGA
Shares. The ASGA Shares were validly issued and are fully paid, non-
assessable and free of pre-emptive rights. At Closing, there will
be no outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitment obligating ASGA to
issue or to transfer from treasury any additional shares of its capital
stock.
iii. Financial Statements. The balance sheet of ASGA as of December 31,
2000, and June 30, 2001, and the related unaudited statements of
income and retained earnings for the period then ended (the ASGA
Financial Statements), previously delivered to Issuer, have been
prepared in accordance with generally accepted accounting principles
consistently followed by Issuer throughout the periods indicated,
subject to normal year-end adjustments and the absence of notes, and
fairly present the financial position of ASGA as of December 31,
2000, and the results of its operations for the periods indicated.
iv. Absence of Changes. Since June 30, 2001, there has not been any
change in the financial condition or operations or ASGA, except
changes in the ordinary course of business, except for the receipt
of a tentative commitment letter with respect to a Twenty Million
Dollars ($20,000,000) equity line of credit.
v. Liabilities. ASGA does not have any debt, liability, or obligation
of any nature, whether accrued, absolute, contingent, or other-
wise, and whether due or to become due, that is not reflected on the
Financial Statements or otherwise incurred in the ordinary course of
business. Company is not aware of any pending, threatened, or
asserted claims, lawsuits or contingencies involving its capital stock.
vi. Ability to Carry Out Obligations. Company has the right, power, and
authority to enter into and perform its obligations under this Agree-
ment. The execution and delivery of this Agreement by Company and the
performance by Company of its obligations hereunder will not cause,
constitute, or conflict with or result in (a) any breach of
violation or any of the provisions of or constitute a default under
any license, indenture, mortgage, charter, instrument, articles of
incorporation, bylaw, or other agreement or instrument to which
Company or ASGA is a party, or by which either of them may be bound,
nor will any consents or authorizations of any party other than
those hereto be required; (b) an event that would cause Company or ASGA
to be liable to any party; or (c) an event that would result in the
creation or imposition of any lien, charge, encumbrance on any asset
of Company of ASGA.
vii. Full Disclosure. None of the representations and warranties made by
Company herein contains any untrue statement of a material fact, or
omits any material fact the omission of which would be misleading.
viii. Compliance with Laws. Company has complied with, and is not in
violation of any federal, state, or local statute, law, and/or
regulation pertaining to them. Company has complied with all
federal and state securities laws in connection with the issuance,
sale, and distribution of its securities.
ix. Litigation. Company is not (and has never been) a party to any suit,
action, arbitration, or legal, administrative, or other proceeding,
or pending governmental investigation. To the best knowledge of
Company, there is no basis for any such action or proceeding and no
such action or proceeding is threatened against Company, and
Company is not subject to or in default with respect to any order,
wit, injunction, or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
x. Conduct of Business. From June 30, 2001, to the Closing Date, ASGA
has conducted its business in the normal course, and has not (1)sold,
pledged, or assigned any assets other than in the ordinary course of
business; (2) amended its Certificate of Incorporation or Bylaws;
(3) declared dividends; (4) redeemed or sold stock or other securities;
(5) incurred any liabilities not in the ordinary course of business;
(6) acquired or disposed of any assets other than in the ordinary
course of business; (7) entered into any contract other than in the
ordinary course of business; (8) guaranteed obligations of any
third party; or (9) entered into any other transactions other
than in the ordinary course of business.
xi. Documents. All minutes, consents, or other documents pertaining to
Company and previously delivered by Company to Issuer, are true,
complete, and correct, and are valid and in accordance with
applicable law.
xii. Title. The ASGA Shares to be delivered to Issuer will be, at
closing, free and clear of all liens, security interests, pledges,
charges, claims, encumbrances and restrictions of any kind. None of
the ASGA Shares are subject to any voting trust or agreement. No
person holds or has the right to receive any proxy or similar instru-
ment with respect to the ASGA Shares, except as provided in this
Agreement. ASGA is not a party to any agreement that offers or
grants to any person the right to purchase or acquire any of the ASGA
Shares, except for right under the private equity line which sell of
common stock is at the sole discretion of ASGA. There is no applicable
local, state, or federal law, rule, regulation, or decree which would,
as a result of the transfer of the ASGA Shares to Issuer, impair,
restrict, or delay Issuers voting rights with respect to the ASGA
Shares.
xiii. Counsel. Company represents and warrants that prior to Closing, that
they are represented by independent counsel or have had the opportunity
to retain independent counsel to represent them in this transaction
and that prior to Closing, Counsel for the Company has not
represented either the Issuer or Issuers stockholders in any manner
whatsoever known to the Company.
xiv. Brokers. Company has not retained any broker, investment banker,
or other person entitled to any commission or similar compensation
in connection with this Agreement or the transactions contemplated by
this Agreement.
4. INVESTMENT INTENT.
i. Restricted Shares. Company understands that (A) the Issuer Shares
Company is acquiring from Issuer under this Agreement have not been
registered under the Securities Act of 1933, as amended (the Act)
or the securities laws of any state, based upon an exemption from such
registration requirements pursuant to Section 4(2) of the Act;
(B) the Issuer Shares are and will be restricted securities, as
said term is defined in Rule 144 of the Rules and Regulations
promulgated under the Act; and (C) the Issuer Shares may not be sold
or otherwise transferred unless exemptions from such registration
provisions are available with respect to said resale or transfer
ii. Transferability. Company will not sell or otherwise transfer any of
the Issuer Shares, or any interest therein, unless and until (A) the
Issuer Shares shall have first been registered under the Act and/or
all applicable state securities laws; or (B) Company shall have
first delivered to Issuer a written opinion of counsel, which counsel
and opinion (in form and substance) shall be reasonably satisfactory
to Issuer, to the extent that the proposed sale or transfer is exempt
from the registration provisions of the Act and all applicable state
securities laws.
iii. Investment Intent. Company is purchasing the Issuer Shares for
Investment purposes only, without a view for resale or distribution
thereof.
iv. Legend. Company understands that the certificates representing
the Issuer Shares will bear the following legend:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of in absence
of (i) an effective registration statement for such securities under
said Act or (ii) an opinion of company counsel that such registration
is not required.
v. Disposition of Registered Shares. Company and Issuer agree to the
disposition and allocation of the registered shares referred to in
Paragraph 2(ii) as set forth in a separate agreement between the
parties.
5. Closing. The closing of the share exchange and the transactions
contemplated by this Agreement (the Closing) shall be simultaneous
with the execution of this Agreement by the parties hereto and the
satisfaction or waiver of the conditions to the consummation of the
transactions set forth herein.
6. Documents to be Delivered at Closing.
i. By Issuer:
(1) Resolutions of the Board of Directors authorizing the issuance of a
certificate or certificates for Sixteen Million (16,000,000)
Issuer Shares, registered in the name of Company in accordance with
this Agreement.
(2) A certificate or certificates for Sixteen Million (16,000,000) Issuer
Shares registered in the name of Company in accordance with this
Agreement.
(3) The resignation of all officers and directors of Issuer.
(4) All of the business and corporate records of Issuer, including but not
limited to correspondence files, bank statements, checkbooks, savings
account books, minutes of stockholder and directors meetings,
financial statements, stockholder listings, stock transfer records,
agreements, and contracts.
(5) Such other resolutions of Issuers stockholders and/or directors
as may reasonably be required by Company.
(6) An Opinion Letter from Issuers Attorney attesting to the validly and
condition of the Issuer.
(7) Such other agreements relating to the transaction as may reasonably be
required by the company.
ii. By Company:
(1) Delivery to the Issuer, certificates evidencing the ASGA Shares, and
such stock powers as are required in order to transfer to Issuer good
and marketable title to the ASGA Shares.
(2) Board of Directors Minutes authorizing the issuance of a certificate
or certificates for One Hundred (100) shares, registered in the name
of Issurer.
(3) Such other resolutions of Company's and ASGA's stockholders and/or
directors as may reasonably be required by Issuer.
(4) Such other agreements relating to the transaction as may reasonably be
required by the Issuer.
7. ARBITRATION. Any controversy or claim arising out of, or relating
to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Elizabeth City, North
Carolina, in accordance with the Commercial Rules of the American
Arbitration Association then existing. The arbitrator assigned shall
have authority and power to decide all arbitratible issues. Judgment
on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy. The prevailing
party in such claim or controversy shall be entitled to recover all
costs and expenses of such claim or controversy, including attorney's
fees from the non-prevailing party.
8. POST-CLOSING AGREEMENTS.
i. Further Assurances. The parties shall execute such further documents
and perform such further acts, as may be necessary to effect the trans-
actions contemplated hereby, on the terms herein contained and other-
wise to comply with the terms of this Agreement, provided,
that, except as contemplated by this Agreement, no party shall be
required to waive any right or incur an obligation in connection
therewith.
ii. Indemnification of Directors and Officers. For at least seven (7)
years after the Closing Date, Issuer shall (a) maintain in effect the
current provisions regarding the indemnification of officers and
directors contained in Issuers Certificate of Incorporation and
Bylaws; provided, however, Issuer may adopt new indemnification
provisions no less favorable than the current provisions as to the
persons who served as directors and officers of Issuer prior to the
Closing Date; and (b) indemnify the persons who served as directors
and officers of Issuer prior to the Closing Date to the fullest extent
to which Issuer is permitted to indemnify such officers and
directors under its Certificate of Incorporation and ByLaws and
applicable law as in effect immediately prior to the Closing Date.
9. Miscellaneous.
i. Captions and Headings. The 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.
ii. No Oral Change. This Agreement and any provision hereof may
not be waived, changed, modified, or discharged orally, but only by
an agreement in writing signed by the party against whom enforcement
of any waiver, change, modification, or discharge is sought.
iii. 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 (1) 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; (2) the acceptance of
performance of any thing 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 (3) no waiver of any party of one breach by another party
shall be construed as a waiver with respect to any subsequent breach.
iv. Time of Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
v. Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vii. 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 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, and by fax, as follows:
Issuer: Transportation Safety Lights, Inc.
Attention: Xxxxxxx Xxxxxx
000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxx, XX 00000
Company: Xxx Xxxx, Chief Executive Officer
World Quest, Inc.
000 X. Xxxxxx Xxxxxxxxx
Xxxxxxxxx Xxxx, XX 00000
vi. 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.
IN WITNESS WHEREOF, the undersigned has executed this Agreement this
11th day of September, 2001.
TRANSPORTATION SAFETY LIGHTS, INC. WORLD QUEST, INC.
By: /s/Xxxxxxx Xxxxxx By: /s/ Xxxxxx Xxxx
Xxxxxxx Xxxxxx Xxxxxx Xxxx
Its President Its Chief Executive Officer
