THIS DEFINITIVE AGREEMENT AND SHARE ACQUISITION, (this "Agreement"),
dated March 9, 2001, ("Closing Date"), defines the principal terms of a
corporate acquisition between and among:
A. Purchaser: THE THEME FACTORY, INC., a Nevada Corporation, (herein
referred to as "TMFT"), located at 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx, Xxxx 00000;
which as a prior precedent condition to the Closing shall have completed the
acquisition of AQUAPURE INTERNATIONAL, INC., a Nevada corporation, (herein
referred to as "API"), located at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx, XX 00000,
by acquiring all of the issued and outstanding shares of API from the API
Shareholders ("API SHAREHOLDERS");
And
B. Seller: WATER STAR BOTTLING, Inc., a Wyoming Corporation, (herein
referred to as "WBI", located at in x/x XX Xxx 0000, Xxxx, XX 00000; which
owns eighty-five percent of its subsidiary GEYSER PRODUCTS, LLC, a Delaware
Limited Liability Company, (herein referred to as "GPL"), located at 000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx, XX 00000; and certain shareholders of WBI,
as listed on Exhibit A, (herein referred to as "SELLING SHAREHOLDERS").
W I T N E S S E T H:
In this Agreement, the above (A) and (B) (collectively referred to as
the "Parties," and each separately as a "Party") seek to memorialize a
definitive legally binding agreement ("Definitive Agreement") providing for a
reverse acquisition.
RECITALS:
WHEREAS, as of the Closing Date, WBI had 1,000,000 shares of Common
Stock authorized, of which 85,000 shares are presently issued and outstanding
as of the date hereof on a fully diluted basis; the 85,000 shares of WBI
issued and outstanding representing all of the shares of WBI in this
Agreement, and are held by the Selling Shareholders of WBI, as set forth on
Exhibit A attached hereto;
WHEREAS, prior to the Closing Date, a former minority shareholder of
WBI, RDV Beverage, L.L.C., ("Former Minority Shareholder") had caused all of
the common stock of WBI it had held to be transferred back to WBI; such stock
having previously represented 15,000 shares of WBI's common stock or fifteen
percent (15%) of the prior issued and outstanding shares of WBI. The Former
Minority Shareholder had authorized WBI to cancel said shares of WBI ("WBI
Canceled Stock"), in exchange for the amount of $37,500.00 (plus the increase
or less the decrease in the net book value per share of 15% of the common
stock of WBI, between January 01, 1996 and December 31, 2001), to be added to
the amount that WBI's subsidiary GPL is obligated to repay the Former Minority
Shareholder at the time of repayment of a 'Put and Call' option held by said
Former minority Shareholder, ("GPL Put/Call Option"), as defined in its
entirety and set forth in the following agreements: (a) Section 3.1 of an
'Operating Agreement Of Geyser Products, L.L.C.', dated February 16, 1996
between the Selling Shareholders, GPL and the Former Minority Shareholder; and
such agreement amended by (b) a 'Consent, Cancellation of Shares, Termination
Of Investment Agreement And Amendment Of Operating Agreement ', agreed upon by
the Selling Shareholders, WBI, GPL and the Former Minority Shareholder,
("Consent Agreement"), as of the 14th day of February, 2001. The above
agreements are attached under Exhibit N.
WHEREAS, prior to Closing the Selling Shareholders owned eighty five
(85%) of GPL, but had assigned their beneficially owned interests in GPL to
WBI as contributed capital. Prior to the Closing Date, WBI had acquired and
currently owns eighty-five percent of the member units of GPL, and GPL is an
85% owned subsidiary of WBI ("WBI Group"); and, RDV owns the remaining 15% of
the member units of GPL as a minority member. WBI and RDV, majority and
minority member unit holders respectively, have both agreed to be bound by the
terms of the 'Amendment To Operating Agreement'.
WHEREAS, the Boards of Directors of each of TMFT and WBI Group have
determined that it is in the best interests of the companies and their
respective shareholders to consummate the transactions and reorganization
contemplated herein in which, subject to the terms and conditions of this
Agreement, TMFT will acquire WBI Group as a wholly owned subsidiary and the
Selling Shareholders will acquire stock of TMFT.
WHEREAS, TMFT is a publicly held and traded company with access to the
public securities and capital markets; and its contemplated subsidiary API,
along with the API Shareholders, have marketing expertise, business contacts
and networks and access to distribution channels, which they believe, will
make the products of WBI more widely known and accessible to large retail
markets;
WHEREAS, WBI with GPL have facilities for and expertise in the bottling
and distribution of spring water and other beverage products;
WHEREAS, as a prior condition to the closing of this Agreement, TMFT
shall have acquired all of the issued and outstanding shares of API, in
exchange for issuing 9,000,000 shares of TMFT common stock to the API
Shareholders.
WHEREAS, as of the Closing Date, TMFT had 25,000,000 shares authorized,
of which 1,418,831 shares were issued and outstanding on a fully diluted
basis, held by 96 Shareholders, as listed on Exhibit B with the percentage
owned by each respectively,
WHEREAS, subject to the terms and conditions of this Agreement, TMFT
desires to acquire one hundred (100%) percent of the issued and outstanding
Common Stock of WBI, (the "WBI Shares"), making WBI Group a subsidiary of
TMFT;
WHEREAS, for Federal income tax purposes, the parties intend that the
transactions contemplated in this Agreement qualify as a non-taxable
reorganization under Section 368 (a)(1) (B) of the Internal Revenue Code of
1986, as amended (the" Code"), and qualify under a purchase method of
accounting; however, such method of accounting herein contemplated may be
changed or modified, without consent or approval of either party, in order to
complete a duly qualified tax-free exchange of the shares held by the Selling
Shareholders solely for shares of TMFT;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto (the "Parties") agree as follows
ARTICLE I: ACQUISITION
1.1 Acquisition.
Subject to the terms and conditions set forth in this Agreement, at the
Closing (as defined herein) one hundred percent (100%) of the presently
outstanding shares of common stock of WBI held by the Selling Shareholders
shall be exchanged solely with TMFT for Seven Million Six Hundred and Fifty
Thousand (7,650,000) shares of newly issued TMFT common voting stock ("TMFT
shares"). The parties intend that the transaction shall qualify as a tax-free
acquisition and corporate reorganization under Section 368 (a) (1) (B) and/or
other related or other applicable sections there under.
The Parties agree that the Selling Shareholders shall collectively
transfer their WBI Shares to TMFT in exchange for Seven Million Six Hundred
and Fifty Thousand (7,650,000) shares of TMFT common stock, and each Selling
Shareholder shall receive the number of TMFT shares that corresponds to that
Selling Shareholder's percentage ownership of the WBI Shares set forth on
Exhibit A. Notwithstanding anything to the contrary, however, Mr. C. Xxxxxxx
Xxxxx ("Xx. Xxxxx") and the shareholders of API shall be subject to the
earn-in procedure set forth in Section 6.11 hereof.
Selling Shareholders represent and warrant that they will hold such
shares of TMFT common stock for investment purposes and not for public
distribution and further agree that such shares will be restricted according
to Rule 144 of the Securities Act of 1933, as amended.
TMFT further desires to provide for the continuing operation of the
business of WBI and, to that end, wishes to (a) retain WBI Group as subsidiary
of TMFT; and, (b) obtain certain employment and non-compete agreements with
WBI Group and Mr. C. Xxxxxxx Xxxxx as set forth in section 7.4 hereof.
1.2 Closing Time.
Subject to terms and conditions of this Agreement as provided in Article
VIII below, the closing of the exchange of the WBI Common Stock (the
"Closing") shall take place at Boca Raton, Florida, on the ____ of February,
2001 on or before 5:00 P.M Eastern Standard Time (EST), or such other place,
time and date as TMFT and WBI may mutually agree upon in writing ("Closing
Time").
1.3 Upon Closing.
The Selling Shareholders shall transfer and assign all right, title and
interest in the WBI shares, free and clear of any and all liens, claims,
options, charges and encumbrances whatsoever. TMFT shall transfer and deliver
to each Selling Shareholder the number of TMFT Shares that corresponds with
that Selling Shareholder's percentage of WBI Shares set forth on Exhibit A.
The Parties agree that the execution and delivery of the documents described
on Exhibit C shall be a condition of the Closing.
ARTICLE II: Representations and Warranties
Of WBI, 85% held subsidiary GPL, and Selling Shareholders
WBI, subsidiary GPL, and the Selling Shareholders (the "Entire WBI
Group") each represent and warrant to TMFT as follows:
2.1 Organization and Standing.
WBI is a duly organized and validly existing corporation, in good
standing under the laws of the State of Wyoming. WBI has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted, and duly qualified to do business and
in good standing as a foreign corporation in each jurisdiction in which the
property owned, operated or leased by it or the nature of the business
conducted by it makes such qualification necessary. GPL is in good standing
in the state of its organization Delaware, duly foreign qualified to do
business in the State of Arizona and, for the purpose of conducting GPL's
business, has paid a business transaction fee in the states of California and
New York and a "Replacement Tax" in the state of Illinois.
2.2 Capitalization.
As of the Closing Date, all of the WBI shares have been validly issued
and are fully paid and non-assessable; there is no right of first refusal
option or other restriction on transfer applicable to any shares of any
securities of WBI; Eighty-five percent (85%) of GPL has been conveyed by
contribution and transference to WBI by the Selling Shareholders to be a
subsidiary of WBI. The GPL Transferred Units are fully paid and
non-assessable; and subject to GPL's Operating Agreement there is no right of
first refusal, option or other restriction on transfer applicable to their
units of GPL. WBI has the right to acquire the remaining fifteen percent (15%)
of GPL that has not been presently transferred to WBI in accordance with the
GPL Put/Call Option, listed on Exhibit N.
WBI Group has made available to TMFT complete and accurate copies of
its:
(a) Articles of Incorporation and Bylaws, each as amended through the
date hereof; and Minutes of all of its directors' and
shareholders' meetings through the date hereof;
(b) GPL's Operating Agreement
2.3 Rights to Acquire.
Except as previously disclosed to TMFT, and except for the GPL Put/Call
Option, as attached on Exhibit N:
(a) WBI Group does not have outstanding any preemptive or subscription
rights, options, warrants, rights to convert, capital stock
equivalents or other rights to purchase or otherwise acquire, now
or in the future, any of its capital stock or other securities.
(b) WBI Group does not have outstanding any stock appreciation rights
or other rights granting to any person the right to be paid money
or other property based on the value of securities of WBI or GPL.
(c) There are no other agreements, restrictions or understandings to
which WBI Group or any Selling Shareholder is a party with respect
to the sale, transfer or voting of any shares of the WBI Shares.
2.4 Subsidiaries.
Except for its 85% owned subsidiary GPL, and its ten (10%) interest in
Tenupah, LLC, a Wyoming Limited Liability Company, WBI does not own or
control, directly or indirectly, any interest or investment (whether equity or
debt) in any other corporation, partnership, business, trust or other entity.
2.5 Authority.
(a) WBI has full corporate power and authority to execute, deliver and
perform its obligations under this Agreement and all corporate action of WBI
necessary for such execution, delivery and performance has been duly taken.
Complete and correct copies, certified by the Secretary or Assistant Secretary
of WBI, of the resolutions adopted by the Board of Directors, authorizing and
ratifying the execution and delivery of this Agreement and the consummation of
the transactions contemplated herein, will be delivered upon Closing; the
Selling Shareholders have full power and authority to execute, deliver and
perform their obligations under this Agreement, and all action for such
execution, delivery and performance has been duly taken.
(b) Except as previously disclosed to TMFT, to the knowledge of the WBI
Group, the execution and delivery by WBI, the Selling Shareholders, and each
of the Selling Shareholders of this Agreement and the performance of the
transactions contemplated by this Agreement will not result in any conflict
with, breach or violation of or default, termination or forfeiture under (or
upon the giving of notice or the lapse of time, or both, result in any
conflict with, breach or violation of or default, termination or forfeiture
under) any terms or provisions of WBI's Articles of Incorporation or Bylaws,
each as amended through the date hereof, or GPL Operating Agreement, or any
statute, rule, regulation, judicial or governmental decree, order or judgment,
agreement, lease or other instrument to which WBI, GPL, or any Selling
Shareholder is a party or to which any of its or their assets is subject and
which individually or in the aggregate is material to WBI, GPL or any Selling
Shareholder.
(c) No consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or
any other governmental body is required for the consummation by WBI or GPL of
the transactions contemplated by this Agreement.
(d) Upon due execution and delivery by the parties hereto, this
Agreement and the agreements related hereto would each be a legal, valid and
binding obligation of WBI , GPL , and the Selling Shareholders. Such
Agreement will be enforceable against WBI and the Selling Shareholders in
accordance with their terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally.
2.6 Financial Statements.
WBI and GPL have each made available to TMFT, a balance sheet, income
statement and statement of cash flows dated as of the period ended December
31, 2000, (the "WBI Group Unconsolidated Financials"). The WBI Group
Unconsolidated Financials were prepared on a tax accounting basis, but WBI and
GPL have previously provided certain adjusting entries to the independent
auditors engaged to audit the WBI Group Unconsolidated Financials in
connection with the preparation of this Agreement to bring the WBI Group
Unconsolidated Financials into conformance with generally accepted accounting
principles ("GAAP").
2.7 Material Changes.
Since the 31st day of December, 2000, there has not been with respect to
WBI Group:
(a) Any material adverse change in its financial condition from that
shown on the WBI Group Unconsolidated Financials; or
(b) Any dividends or other disbursements by WBI or its subsidiary GPL;
(c) Any damage or loss, whether covered by insurance or not,
materially and adversely affecting its business, property, assets
or prospects; or
(d) Any other event or condition materially and adversely affecting
its results of operations or business or financial condition or
prospects taken as a whole or any event which could have such an
effect.
2.8 Accounts Receivable.
(a) All accounts receivable reflected on the WBI Group Unconsolidated
Financials are bona fide, arise from valid sales in the ordinary course of
business in the aggregate amount thereof and are collectible in full, except
to the extent of the reserve therefore on such financials. Exhibit D contains
a complete and accurate report showing all accounts receivable of WBI
outstanding as of the date of the WBI Group Unconsolidated Financials,
together with an accurate aging of such accounts.
(b) Except as disclosed in Exhibit D, none of WBI's or GPL's accounts
receivable are subject to any lien or claim of offset, setoff or counterclaim
and neither WBI,GPL nor any Selling Shareholder has any knowledge of any
facts or circumstances that would give rise to any such lien or claim. Except
as disclosed on Exhibit D, there are no accounts receivable which are
contingent upon the performance by WBI or GPL of future services. WBI's and
GPL's backlog as represented by released, valid purchase orders received in
the ordinary course of business which by their terms were noncancellable, has
all been shipped as of the date of this Agreement.
2.9 No Undisclosed Liabilities.
Except for certain directors fees and guaranteed payments payable by WBI
Group has no debts, liabilities or claims against it, contingent or otherwise,
which would be of a nature required to be reflected in a balance sheet
prepared in accordance with generally accepted accounting principles which are
material individually or in the aggregate and which are not shown or fully
provided for on the WBI Group Unconsolidated Financials, except debts,
liabilities and claims incurred in the ordinary course of business since the
date of the WBI Group Unconsolidated Financials which are not material in the
aggregate. All products and services provided to customers by WBI have
complied in all material respects with all requirements binding upon WBI,
whether by law, regulation, agreement or otherwise. Except for the Put/Call
Option GPL has no debts, liabilities or claims against it, contingent or
otherwise, which would be of a nature required to be reflected in a balance
sheet prepared in accordance with GAAP which are material individually or in
the aggregate and which are not shown or fully provided for on the GPL
Financials, except debts, liabilities and claims incurred in the ordinary
course of business since the date of the GPL Financials which are not material
in the aggregate. To the knowledge of GPL, all products and services provided
to customers by GPL have complied in all material respects with all
requirements binding upon GPL, whether by law, regulation, agreement or
otherwise.
2.10 Taxes.
(a) To the knowledge of the WBI Group,
(i) All federal, state, local and foreign tax returns and
reports required to be filed to date, and which are properly
open for examination under applicable statutes of
limitation, with respect to the operations of WBI Group have
been accurately prepared and duly filed, and all taxes shown
as payable on such returns and reports have been paid when
due, including, without limitation income, withholding,
payroll, sales and use, and real and personal property
taxes; and
(ii) WBI Group has not executed or filed with any taxing
authority any agreement extending the period for
assessment or collection of any tax to a date subsequent to the
date hereof; and
(iii) No issue has been raised by any federal, state, local or
foreign taxing authority in connection with an audit or
examination of the tax returns, business or properties of
WBI Group that has not been settled or resolved; and
(iv) There is no pending claim, asserted deficiency or assessment
for additional taxes that has not been paid, nor is there
any basis for the assertion of any such claim, deficiency or
assessment; and
(v) No material special charges, penalties or fines have ever
been asserted against WBI Group with respect to payment of
or failure to pay any taxes; and
(vi) The provision for taxes shown on the WBI Group
Unconsolidated Financials is sufficient for payment of all
unpaid federal, state, local and foreign taxes (whether
asserted or unasserted) incurred by WBI through such date.
(b) WBI has not filed any consent to the application of Section 341(f)
of the Internal Revenue Code of 1986, as amended (the "Code"), or been subject
to any actual or deemed election under Section 338 of the Code.
2.11 Tangible Assets and Inventories.
(a) Except as disclosed on Exhibit E attached hereto, to the knowledge
of the WBI Group, WBI Group has good and marketable title to, valid leasehold
interests in or other valid right to use all of the material assets used in
its operations or necessary for the conduct of its business, free and clear of
any material mortgages, pledges, security interests, licenses, encumbrances,
restrictions or adverse claims, except for the lien of taxes not yet due and
payable. Exhibit E contains a description and the location of any such
material assets that are not in the possession of WBI Group or that are
located other than on WBI premises in Afton, Wyoming and/or GPL premises in
Mesa, Arizona.
(b) To the knowledge of the WBI Group;
(i) All of WBI's and GPL's material assets are in good operating
condition, normal wear and tear excepted, and are adequate
and suitable for the purposes for which they are presently
being used; and
(ii) All obsolete or unusable inventory (including raw materials,
other than canned goods, dry mix ingredients and frozen
products used in the production of WBI's and GPL's products
that WBI or GPL does not reasonably expect to sell within
six months of the date of this Agreement), has been
appropriately reserved against or written down or written
off and is reflected in the WBI Group Unconsolidated
Financials as adjusted by the entries WBI or GPL
respectively, has previously given to the independent
auditors engaged to audit the WBI Financial Statements in
connection with the preparation of the Agreement; and
(iii) All items of equipment, machinery or other tangible assets
of WBI and GPL that are currently being used in its business
are reflected in the WBI Group Unconsolidated Financials as
adjusted by the entries WBI has previously given to the
independent auditors engaged to audit the WBI Financial
Statements in connection with the preparation of the
Agreement.
(c) Except as disclosed on Exhibit E, to the knowledge of the WBI Group
there has not occurred, except for those items listed on the attached Exhibit
E since the date of the WBI Group Unconsolidated Financials, any transfer of
title other than in the ordinary course of business, any abandonment, any
material pilferage or any material loss with respect to any material property,
plant or equipment of WBI or GPL.
2.12 Real Property.
Exhibit F identifies all real property leased by the WBI Group. The WBI
Group has made available to TMFT copies of the written lease agreements with
respect thereto. To the knowledge of the WBI Group;
(i) The facilities of WBI Group do not encroach on the property
of others and conform in all material respects with all
applicable ordinances, regulations and zoning laws; and
(ii) And all real property used in the operations of WBI Group is
in as good repair, reasonable wear and tear excepted, as at
the commencement of the lease by WBI Group of such real
property.
2.13 Environmental Matters.
To the knowledge of the WBI Group:
(i) WBI Group has complied in all material respects with the
Safe Drinking Water and Toxic Enforcement Act of 1986; and
(ii) WBI Group has complied in all material respects with any and
all other applicable statutes, rules and regulations in
effect (and, to the knowledge of Shareholders or WBI Group
any proposed statutes, rules and regulations) regarding the
environment including, without limitation, statutes, rules
and regulations regarding the production, handling,
treatment and disposal of toxic chemicals and hazardous
waste.
2.14 Health and Safety Matters.
To the knowledge of the WBI Group,
(i) WBI Group has complied in all material respects with any and
all applicable health and safety statutes, rules and
regulations of state, local and federal authorities in
effect (and, to the knowledge of Shareholders or WBI Group
any proposed statutes, rules and regulations) regarding the
production or distribution of any WBI Group product; and
(ii) WBI Group has not violated any such statute, ordinance,
rule, regulation or order of any agency or court, including
the Food and Drug Administration, in any respect material to
the conduct of its business and has not received any notice
of any such violation from any agency of the type referred
to herein.
2.15 Insurance.
Exhibit G identifies all policies of insurance now in effect covering
the assets, properties and business of WBI Group and all products liability
and life insurance policies maintained by WBI Group. WBI Group has made
available a true and accurate copy of each of the policies listed on Exhibit G
to TMFT. To the knowledge of the WBI Group, WBI or GPL has done nothing by
way of action or inaction that might invalidate any of such policies in whole
or in part.
2.16 Purchase, Sale and Other Agreements.
(a) Except as disclosed to TMFT, WBI Group states that neither WBI nor
GPL is a party or subject to any non-disclosed oral or written Agreement for
the:
(i) Purchase of inventory, supplies, equipment or other real or
personal property, or the procurement of services; or
(ii) Joint venture, partnership or other contract or arrangement
involving the sharing of profits; or
(iii) Except for the GPL Put/Call Option , any agreement relating
to the purchase or acquisition, by merger or otherwise, of a
significant portion of the business, assets or securities of
WBI Group by any other person or of any other person by WBI
Group; or
(iv) Agreement containing a covenant or covenants which purport
to limit the ability or right of WBI Group or any
Shareholders to engage in any lawful business activity or
compete with any person or entity; or
(v) Agreements presently in effect pursuant to which WBI Group
has appointed any organization or person to act as its
distributor or sales agent or pursuant to which WBI Group
has been appointed a distributor or sales agent by any third
party; or
(vi) Material contract or agreement not otherwise described in
this Agreement that is not terminable by and without penalty
to WBI Group.
(b) To the knowledge of the WBI Group:
(i) A complete and accurate copy of each written agreement and
other document identified has been made available to TMFT;
and
(ii) Each agreement or arrangement identified is, except to the
extent fully performed at the date hereof, in full force and
effect and valid and binding in accordance with its terms in
all material respects except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and subject
to general equity principles and to limitations on availability
of equitable relief, (including specific performance). To the
knowledge of the WBI Group, no party to any such contract,
agreement or arrangement is in material default under, or
intends to cancel, withdraw, modify or amend, any such
contract, agreement or arrangement.
2.17 Intellectual Property.
(a) To the knowledge of the WBI Group, the WBI Group holds in full force
and effect all licenses, permits or other authorizations necessary for the
sale of its products and the conduct of its business as currently conducted.
(b) As listed on Exhibit H, to the knowledge of the WBI Group, WBI Group
owns all of the:
(i) rights, title and interest in and to any and all of the
recipes, formulas, trade secrets, trademarks, trade names,
patents, copyrights, inventions and discoveries being used by,
owned or licensed by the WBI Group; and
(ii) recipes, formulas, trade secrets, trademarks, trade names,
patents, copyrights, inventions and discoveries, including any
and all recipes, formulas or inventions in process (whether or
not reduced to practice) or any patent or trademark
applications filed by WBI Group, shall be conveyed at closing.
(c) To the knowledge of the WBI Group, except as disclosed on Exhibit H,
WBI Group and Selling Shareholders are not making use of any patentable or
unpatentable invention or any confidential information in which any present or
past employee of WBI Group has or has claimed an interest and WBI Group and
Selling Shareholders are not aware of facts that could reasonably be expected
to give rise to such a claim.
(d) To the knowledge of the WBI Group:
(i) WBI Group possesses all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, copyrights
and other proprietary rights necessary to conduct its business
as now being conducted and as planned to be conducted, the lack
of which could materially and adversely affect its operations,
condition or prospects, financial or otherwise, as listed on
Exhibit H; and
(ii) There is no conflict with or infringement upon any valid
rights of others and WBI Group has not received any notice of
infringement upon or conflict with the asserted rights of
others.
2.18 Employees and Consultants.
(a) Exhibit I identifies all currently effective consulting and
employment agreements and other material agreements, either oral or written,
with individual consultants or employees to which WBI Group is a party.
Complete and accurate copies of all such written agreements and summaries of
all oral agreements have been made available to TMFT. Also shown on Exhibit I
are the name of each officer, employee and agent of WBI Group and each such
person's present rate of regular compensation and bonus payments related to
the most recent fiscal year. Except for the Officers and Directors of WBI
Group, as agreed upon in this Agreement, no other officer, manager or key
employee of WBI Group has notified WBI Group of an intention to terminate
employment or to seek a material change in his terms of employment. Except as
to be agreed upon by TMFT, no employee of WBI Group has accrued more than
three (3) weeks of paid vacation. WBI Group agrees that at the closing all
such consulting and employment agreements, bonus plans, employee stock option
plans and/or other agreements between WBI or GPL and Officers, Directors,
Consultants or Employees shall be void and null.
(b) Except as specifically disclosed on Exhibit J, WBI Group is not a
party to any other pension, retirement, profit sharing, savings, bonus,
incentive, deferred compensation, group health insurance or group life
insurance plan or obligation, employee welfare benefit plan, or collective
bargaining agreement or other agreement, written or oral, with any trade or
labor union, employees' association or similar organization. With respect to
each plan described on Exhibit J, WBI Group has furnished to TMFT complete and
accurate copies of the plan, the Internal Revenue Service determination
letter, if any, all plan applications and amendments, the most recent plan
actuarial reports and all reports of or regarding such plan required by the
Employee Retirement Income Security Act of 1974, as amended, and any
regulations issued hereunder ("ERISA"). With respect to each plan, if any,
which is subject to ERISA, WBI Group has properly prepared and timely filed
all governmental reports and has properly and timely posted or distributed all
notices and reports to employees required to be filed, posted or distributed
with respect to such plan. No prohibited transaction has occurred with respect
to any such plan that is subject to ERISA, nor is there any pending assertion
of the occurrence of any such transaction. WBI and GPL agree that TMFT shall
upon the closing of this Agreement have sole discretion of whether to retain
or change said agreements mentioned in this Agreement.
(c) WBI Group has delivered to counsel for TMFT:
(i) All documentation received by WBI or GPL relating to union
activities, including but not limited to, correspondence or
orders from the National Labor Relations Board and any state
labor relations agencies or organizations, and
(ii) All documentation relating to union activity and labor
practices at WBI or GPL given by WBI or GPL to its employees.
There are currently no agreements with any unions and no
strikes or labor disputes pending or threatened by any of the
employees of WBI or GPL.
(d) To the knowledge of the WBI Group,
(i) WBI and GPL has complied in all material respects with all
applicable laws or regulations relating to the employment of
labor; and
(ii) WBI and GPL have withheld all amounts required by law or
agreement to be withheld from its employees for the payment of
any tax or contribution.
(e) Except as set forth on Exhibit I, there are no currently outstanding
loans from WBI or GPL to any officer, director or employee of WBI Group and no
commitments to lend any money or other property to any such person.
(f) To the knowledge of the WBI Group,
(i) No employee is obligated under any agreement or judgment
that would conflict with such employee's obligation to use his
best efforts to promote the interests of WBI or GPL or would
conflict with WBI's or GPL's business as conducted or proposed
to be conducted; and
(ii) No employee of WBI or GPL is in violation of the terms of
any employment agreement or any other agreement relating to
such employee's relationship with any previous employer and no
litigation is pending or threatened with regard thereto.
2.19 Bank Accounts.
Exhibit K identifies all bank accounts used in connection with the
operations of WBI and GPL whether or not such accounts are held in the name of
WBI or GPL, lists the respective signatories therefore and lists the names of
all persons holding a power of attorney from WBI or GPL and a summary
statement of the terms thereof
2.20 Borrowings and Guarantees.
Exhibit K identifies all agreements and undertakings pursuant to which
WBI or GPL is borrowing or is entitled to borrow any money, is lending or has
committed itself to lend any money, or is a guarantor or surety with respect
to the obligations of any person. Complete and accurate copies of all such
written agreements have been delivered to TMFT.
2.21 Compliance with Laws.
To the knowledge of the WBI Group, the present conduct of the business of
WBI or GPL does not violate any law, ordinance, regulation, judgment, order,
decree or rule of any court, arbitrator or governmental agency or entity in
any respect material to the conduct of its business and, there are no laws,
ordinances or regulations proposed, and legal or administrative proceedings or
investigations pending or threatened, which, if enacted or determined
adversely to WBI Group, could reasonably be expected to result, individually
or in the aggregate, in any material adverse change in WBI Group's business,
prospects or financial condition..
2.22 Customers.
Except as disclosed on Exhibit M, to the knowledge of WBI Group, WBI
Group is not aware and has no reason to believe that any of the customers,
distributors or brokers or retailers has reduced materially or terminated, or
intends to reduce materially or to terminate, the amount of its business with
WBI Group or their distributors or brokers, as applicable.
2.23 Absence of Litigation:
Except as disclosed on Exhibit L attached hereto neither WBI Group, nor
any officer or director of WBI Group nor any Selling Shareholder is engaged
in, or has received any threat of, any litigation, arbitration, investigation
or other proceeding relating to WBI Group or its employee benefit plans,
property, business assets, licenses, permits or goodwill, or against or
affecting the transactions contemplated by this Agreement, nor, to the
knowledge of the WBI Group, is there any basis therefore.
2.24 Transactions.
WBI Group has made available to TMFT a true and complete list of all
material contracts now in effect between WBI Group and any person who now is
or at any time since inception has been an officer, director or controlling
shareholder of WBI Group, other than salary and incentive compensation
arrangements of a customary nature entered into in the ordinary course of
business; and WBI Group has made available to TMFT a true and complete list of
all equipment or other property, real or personal, tangible or intangible,
including, but without limitation, any item of intellectual property, used in
connection with or pertaining to the business of WBI Group.
2.25 Accuracy of Documents
The copies of all instruments, agreements, other documents and written
information delivered to TMFT by WBI Group, any Selling Shareholder, or any of
their representatives are and will be true and correct copies as of the date
of delivery thereof. No representations or warranties made by WBI Group or any
Shareholders in this Agreement nor any document, written information
statement, financial statement, certificate or exhibit prepared and furnished
or to be prepared and furnished by WBI Group or any WBI Shareholders, or their
representatives, to TMFT pursuant hereto or in connection with the
transactions contemplated hereby, taken as a whole, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading. There is no event, fact or condition which, to the
knowledge and belief of the WBI Group, materially and adversely affects the
business, assets, financial condition or prospects of WBI Group, or which
could reasonably be expected to do so, which has not been set forth in this
Agreement or the Exhibits hereto.
2.26 Title to WBI Shares and GPL Transferred Units.
Each Selling Shareholder has good, valid and marketable title to the WBI
shares listed in opposite his or her respective name on Exhibit A attached
hereto, free and clear of any and all liens, claims, options, charges and
encumbrances whatsoever. WBI has good, valid and marketable title to their GPL
Units, as listed on Exhibit A, free and clear of any and all liens, claims,
options, charges and encumbrances.
2.27 Authority of Shareholders.
Each Selling Shareholder has the absolute and unrestricted right, power
and authority to sell, assign, transfer and deliver the WBI shares listed
opposite his or her respective name on Exhibit A attached hereto, to execute
this Agreement and the agreements related hereto, to make the representations,
warranties and agreements contained herein and in the related agreements and
to perform his or her obligations hereunder and under the agreements related
hereto. Subject to the terms of the Operating agreement, WBI has the absolute
and unrestricted right, power and authority to sell, assign, transfer and
deliver 85% of the GPL Units.
2.28 Representations of WBI's Shareholders
Each Selling Shareholder hereby represents and warrants to TMFT as of
the date hereof that, to his or her knowledge, the representations and
warranties of WBI and each other Selling Shareholder set forth herein are true
and correct.
ARTICLE III: Representations And Warranties Of TMFT
TMFT represents, warrants and covenants to WBI Group and Selling
Shareholders as follows:
3.1 Organization and Standing.
TMFT is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has all requisite corporate
power and authority to own, operate and lease its properties and carry on its
business as now conducted. TMFT is a fully reporting public company pursuant
to section 15 (d) of the Exchange Act of 1934, as amended. The voting common
stock currently trades on the NASDAQ Over The Counter (OTC) Electronic
Bulletin Board under the symbol [OTC BB: TMFT]. The authorized capital stock
of TMFT consists of: 25,000,000 shares of voting common stock, $.001 par
value per share, and no shares of preferred stock. TMFT has currently
1,418,831 shares of common stock issued and outstanding held by approximately
96 shareholders of record, and has issued no preferred stock. TMFT has issued
no options to acquire common shares, has no other obligations to issue shares
of its common stock and has no other securities outstanding that are
convertible into its common stock. TMFT's only publicly listed security is
such voting common stock.
3.2 Authority:
(a) TMFT has full corporate power and authority to execute, deliver and
perform its obligations under this Agreement, and all corporate action
necessary for such execution, delivery and performance hereof and thereof by
TMFT has been duly taken. Complete and correct copies, certified by the
Secretary or Assistant Secretary of TMFT, of the resolutions adopted by the
Board of Directors, authorizing and ratifying the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein;
(b) Subject to TMFT obtaining all necessary consents, which consents
have been obtained or will be obtained on or prior to the Closing Date, the
execution and delivery by TMFT of this Agreement and the agreements related
hereto do not, and the performance and consummation of the transactions
contemplated by this Agreement and the agreements related hereto will not,
result in any conflict with, breach or violation of or default, termination or
forfeiture under (or upon the giving of notice or the lapse of time, or both,
result in any conflict with, breach or violation of or default, termination or
forfeiture under) any terms or provisions of its Certificate of Incorporation
or Bylaws, each as amended through the date hereof, or any statute, rule,
regulation, judicial or governmental decree, order or judgment, agreement,
lease or other instrument to which TMFT is a party or to which any of the
assets of TMFT is subject and which individually or in the aggregate is
material to TMFT.
(c) Each consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or
any other governmental body which is required for the consummation by TMFT of
the transactions contemplated by this Agreement has been obtained or will be
obtained prior to or upon the Closing.
(d) Upon due execution and delivery by the parties hereto, this
Agreement and the agreements related hereto will each be legal, valid and
binding obligations of TMFT, enforceable against TMFT in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally. Except for the actions and filings with the State of Nevada, the
Securities & Exchange Commission and the Nasdaq OTC Bulletin Board, hereof, no
consent, approval or authorization of, exemption or other action by notice
or declaration, filing or registration with, any third party or governmental
agency is required to be obtained, made or given by TMFT in connection with
the execution, delivery and performance of this Agreement or the
consummation by TMFT of the transactions contemplated by this Agreement.
3.3 Absence of Litigation
Neither TMFT nor any officer or director of TMFT is engaged in, or has
received any threat of any litigation, arbitration, investigation or other
proceeding related to or affecting the transactions contemplated by this
Agreement, nor to the knowledge of TMFT, is there any basis therefore
3.4 Accuracy of Documents and Information.
The copies of all instruments, agreements, other documents and written
information delivered to WBI Group or any Selling Shareholders by TMFT, or any
of their representatives are and will be true and correct copies as of the
date of delivery thereof. No representations or warranties made by TMFT in
this Agreement nor any document, written information statement, financial
statement, certificate or exhibit prepared and furnished or to be prepared and
furnished by TMFT, or their representatives, to WBI Group or any Selling
Shareholders pursuant hereto or in connection with the transactions
contemplated hereby, taken as a whole, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements or facts contained herein or therein not
misleading.
3.5 Financial Statements.
The following financial statements of TMFT have been furnished to WBI
Group and the Selling Shareholders; audited financial statements of TMFT
accompanied by a report of its independent certified public accountants
containing audited balance sheets of TMFT for the period ending April 30,
1998, 1999 and 2000, available on Form 10-KSB on Xxxxx; (b) un-audited
financial statements of TMFT containing balance sheets and statements of
operations for the most recent quarter ended October 31, 2000 available on
Form 10-QSB on Xxxxx.
To the knowledge of TMFT, such financial statements, together with and
subject to the disclosures s thereto,
(i) Are in accordance with the books and records of TMFT; and
(ii) Present fairly and accurately the financial condition of
TMFT as of the dates of the balance sheets; and
(iii) Present fairly and accurately the results of operations for
the periods covered by such statements; and
(iv) Have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis; and
(v) Include all adjustments (consisting of only normal recurring
accruals) which are necessary for a fair presentation of the
financial condition of TMFT, and of the results of
operations of TMFT for the periods covered by such
statements; and
(vi) Fully comply with all requirements of Regulation SK and all
applicable securities laws.
3.6 Books and Records:
From the date of this Agreement to the Closing, TMFT will:
(1) Provide to WBI Group and the Selling Shareholders or their
respective representatives any and all relevant documents
regarding securities filings, broker dealer due diligence
packages, offering memorandums, and copies of Form D; and
(2) Give to WBI Group and the Selling Shareholders, or their
respective representatives, full access during normal
business hours to all of its offices, books, records,
contracts, stock certificate books, stock certificates,
transfer Ledgers, minutes books and other corporate
documents ("Corporate Records") and properties so that
Selling Shareholders may inspect and audit them; and
(3) Furnish such information concerning the properties and
affairs of TMFT as the Selling Shareholders may reasonably
request. TMFT represents and warrants that all of TMFT's
Corporate Records are true, correct and complete and
constitute all of its Corporate Records, thereof and, the
minute books of TMFT reflect all material actions taken and
authorizations given by the Board of Directors of TMFT or
any committee thereof and all material actions taken and
authorization given by the WBI Shareholders of TMFT.
3.7 Confidentiality:
TMFT and its representatives will keep confidential any information that
they obtain from the Selling Shareholders or from WBI Group concerning the
properties, assets and business of WBI. If the transactions contemplated by
this Agreement are not consummated by March 15, 2001 TMFT will return to WBI
Group either return all written matter with respect to WBI obtained by TMFT in
connection with the negotiation or consummation of this Agreement, or destroy
such confidential information, and attest to that fact.
3.8 Investment Intent:
TMFT is acquiring the WBI Group shares for investment and not with a
view to the sale or distribution thereof, and TMFT has no commitment or
present intention to liquidate WBI or GPL or to sell or otherwise dispose of
shares of its stock.
3.9 Environmental Matters.
TMFT represents and warrants:
(a) TMFT has at all times been in compliance with all applicable
federal, state and local environmental laws; and
(b) TMFT has not been required to obtain any licenses or permits
required under environmental laws for the operation of its business; and
(c) No hazardous substances (as defined in applicable federal, state and
local environmental laws and regulations) have been generated, transported,
stored, treated, recycled, disposed of or otherwise handled in any way in the
operation of the TMFT's business, except in compliance with all applicable
Environmental laws. There are no locations now owned or operated by TMFT where
hazardous substances have been generated, transported, stored, treated,
recycled, disposed of or otherwise handled, except in compliance with all
applicable environmental laws. There is no past or ongoing release or threat
of release of hazardous substances from any of the properties currently owned
or operated by TMFT or any of its affiliates or, to the knowledge of TMFT,
from any properties formerly owned or operated by TMFT or any of its
affiliates. TMFT has not treated, stored for more than 90 days, or disposed
of any hazardous waste; as such term is used within the meaning of federal,
state or local law, except in compliance with all applicable environmental
laws; and
(d) TMFT has not received any written notice from any governmental
authority, regulatory agency or other person advising that TMFT is potentially
responsible for costs associated with any release or threatened release of
hazardous substances or potentially liable for any violation of any
environmental law. No pending or, to the knowledge of TMFT, threatened
order, litigation, settlement or citation with respect to hazardous substances
exists with respect to or in connection with the operation of the business.
There has been no environmental investigation conducted by any governmental
authority or regulatory agency with respect to the operation of its business;
and
(e) No underground storage tanks are or, to the knowledge of TMFT, ever
were located on any properties currently or previously owned or leased by
TMFT. To the knowledge of TMFT, no PCBs or asbestos-containing materials are
located on, contained in or otherwise form a part of any of the assets or
properties of TMFT.
3.10 Rights to Acquire.
(a) TMFT does not have outstanding any preemptive or subscription
rights, options, warrants, rights to convert, capital stock equivalents or
other rights to purchase or otherwise acquire, now or in the future, any of
its capital stock or other securities;
(b) TMFT does not have outstanding any stock appreciation rights or
other rights granting to any person the right to be paid money or other
property based on the value of securities of TMFT.
(c) Except as mentioned in this Agreement by TMFT, there are no
agreements, restrictions or understandings to which TMFT is a party with
respect to the sale, transfer or voting of any shares of the TMFT Shares.
3.11 Subsidiaries.
TMFT does not own or control, directly or indirectly, any interest or
investment (whether equity or debt) in any other corporation, partnership,
business, trust or other entity.
3.12 Material Changes.
Since the fiscal quarter ending October 31, 2000 as filed with the
S.E.C. on December 15, 2000 on Form 10-QSB, there has not been with respect to
TMFT Group:
(e) Any material adverse change in its financial condition from that
shown on the TMFT Financials; or
(f) Any damage or loss, whether covered by insurance or not, materially
and adversely affecting its business, property, assets or prospects; or
(g) Any other event or condition materially and adversely affecting its
results of operations or business or financial condition or prospects taken as
a whole or any event which could have such an effect.
3.13 No Undisclosed Liabilities.
TMFT has no debts, liabilities or claims against it, contingent or
otherwise, which would be of a nature required to be reflected in a balance
sheet prepared in accordance with generally accepted accounting principles
which are material individually or in the aggregate and which are not shown or
fully provided for on the TMFT Financials, except debts, liabilities and
claims incurred in the ordinary course of business since the date of the TMFT
Financials which are not material in the aggregate. The applicable reserves
reflected on the TMFT Financials are sufficient for payment of all claims,
asserted and unasserted, of customers to which TMFT has sold products or
provided services through such date. All products and services provided to
customers by TMFT have complied in all material respects with all requirements
binding upon TMFT, whether by law, regulation, agreement or otherwise.
3.14 Taxes.
(g) To the knowledge of TMFT:
(i) All federal, state, local and foreign tax returns and
reports required to be filed to date, and which are properly
open for examination under applicable statutes of
limitation, with respect to the operations of TMFT has been
accurately prepared and duly filed, and all taxes shown as
payable on such returns and reports have been paid when due,
including, without limitation income, withholding, payroll,
sales and use, and real and personal property taxes; and
(ii) TMFT has not executed or filed with any taxing authority any
agreement extending the period for assessment or collection
of any tax to a date subsequent to the date hereof; and
(iii) No issue has been raised by any federal, state, local or
foreign taxing authority in connection with an audit or
examination of the tax returns, business or properties of
TMFT that has not been settled or resolved; and
(iv) There is no pending claim, asserted deficiency or assessment
for additional taxes that has not been paid, nor is there
any basis for the assertion of any such claim, deficiency or
assessment; and
(v) No material special charges, penalties or fines have ever
been asserted against TMFT with respect to payment of or
failure to pay any taxes; and
(vi) The provision for taxes shown on the TMFT Financials is
sufficient for payment of all unpaid federal, state, local
and foreign taxes (whether asserted or unasserted) incurred
by TMFT through such date.
(b) TMFT has not filed any consent to the application of Section 341(f)
of the Internal Revenue Code of 1986, as amended (the "Code"), or been subject
to any actual or deemed election under Section 338 of the Code.
3.15 Insurance.
Exhibit O identifies all policies of insurance now in effect covering
the assets, properties and business of TMFT and all products liability and
life insurance policies maintained by TMFT. TMFT has made available to WBI
Group a true and accurate copy of each of the policies listed on Exhibit O to
WBI. To the knowledge of the TMFT, TMFT or has done nothing by way of action
or inaction that might invalidate any of such policies in whole or in part.
3.16 Purchase, Sale and Other Agreements
To the knowledge of TMFT, TMFT states that it is not a party or subject
to any non-disclosed oral or written Agreement relating to the purchase or
acquisition, by merger or otherwise, of a significant portion of the business,
assets or securities of TMFT by any other person or of any other person by
TMFT; nor does TMFT have any material contracts nor agreements not otherwise
described in this Agreement.
3.17 Intellectual Property.
To the knowledge of TMFT, TMFT neither holds nor owns any rights, title
and interest in and to any recipes, formulas, trade secrets, trademarks, trade
names, patents, copyrights, nor inventions. To the knowledge of TMFT, TMFT
and Xx. Xxxxx Xxxxxxx are not making use of any patentable or unpatentable
invention or any confidential information in which any present or past
employee of TMFT has or has claimed an interest; and TMFT nor Xx. Xxxxxxx is
not aware of facts that could reasonably be expected to give rise to such a
claim.
3.18 Employees and Consultants.
(a) Exhibit Q identifies all currently effective consulting and
employment agreements and other material agreements; either oral or written,
with individual consultants or employees to which TMFT is a party. Complete
and accurate copies of all such written agreements and summaries of all oral
agreements have been made available to WBI Group. Also shown on Exhibit Q are
the name of each officer, employee and agent of TMFT and each such person's
present rate of regular compensation and bonus payments related to the most
recent fiscal year. Except for the Officers and Directors of TMFT, as agreed
upon in this Agreement, no other officer, manager or key employee of TMFT has
notified TMFT of an intention to terminate employment or to seek a material
change in his terms of employment. Except as to be agreed upon by TMFT, no
employee of TMFT has accrued more than three (3) weeks of paid vacation. TMFT
agrees that at the closing all such consulting and employment agreements,
bonus plans, employee stock option plans and/or other agreements between TMFT
and Officers, Directors, Consultants or Employees shall be void and null.
(b) Except as specifically disclosed on Exhibit R TMFT is not a party
to any other pension, retirement, profit sharing, savings, bonus, incentive,
deferred compensation, group health insurance or group life insurance plan or
obligation, employee welfare benefit plan, or collective bargaining agreement
or other agreement, written or oral, with any trade or labor union, employees'
association or similar organization. With respect to each plan described on
Exhibit R, TMFT has furnished to WBI complete and accurate copies of the
plan, the Internal Revenue Service determination letter, if any, all plan
applications and amendments, the most recent plan actuarial reports and all
reports of or regarding such plan required by the Employee Retirement Income
Security Act of 1974, as amended, and any regulations issued hereunder
("ERISA"). With respect to each plan, if any, which is subject to ERISA, TMFT
has properly prepared and timely filed all governmental reports and has
properly and timely posted or distributed all notices and reports to employees
required to be filed, posted or distributed with respect to such plan. No
prohibited transaction has occurred with respect to any such plan that is
subject to ERISA, nor is there any pending assertion of the occurrence of any
such transaction.
(c) TMFT has delivered to counsel for WBI:
(i) All documentation received by TMFT relating to union
activities, including but not limited to, correspondence or
orders from the National Labor Relations Board and any state
labor relations agencies or organizations, and
(ii) All documentation relating to union activity and labor
practices at TMFT given by TMFT or to its employees. There
are currently no agreements with any unions and no strikes
or labor disputes pending or threatened by any of the
employees of TMFT.
(d) To the knowledge of TMFT,
(i) TMFT has complied in all material respects with all
applicable laws or regulations relating to the employment of
labor; and
(i) TMFT has withheld all amounts required by law or agreement
to be withheld from its employees for the payment of any tax
or contribution.
(e) Except as set forth on Exhibit Q, there are no currently
outstanding loans from TMFT to any officer, director or employee of TMFT
Group and no commitments to lend any money or other property to any such
person.
(f) To the knowledge of the TMFT,
(i) No employee is obligated under any agreement or judgment
that would conflict with such employee's obligation to use
his best efforts to promote the interests of TMFT would
conflict with TMFT's business as conducted or proposed to be
conducted; and
(iii) No employee of TMFT is in violation of the terms of any
employment agreement or any other agreement relating to such
employee's relationship with any previous employer and no
litigation is pending or threatened with regard thereto.
3.19 Bank Accounts.
Exhibit S identifies all bank accounts used in connection with the
operations of TMFT and whether or not such accounts are held in the name of
TMFT or, lists the respective signatories therefore and lists the names of all
persons holding a power of attorney from TMFT or and a summary statement of
the terms thereof
3.20 Borrowings and Guarantees.
Exhibit S identifies all agreements and undertakings pursuant to which
TMFT or is borrowing or is entitled to borrow any money, is lending or has
committed itself to lend any money, or is a guarantor or surety with respect
to the obligations of any person. Complete and accurate copies of all such
written agreements have been delivered to WBI.
3.21 Compliance with Laws.
To the knowledge of TMFT, the present conduct of the business of TMFT
does not violate any law, ordinance, regulation, judgment, order, decree or
rule of any court, arbitrator or governmental agency or entity in any respect
material to the conduct of its business and, there are no laws, ordinances or
regulations proposed, and legal or administrative proceedings or
investigations pending or threatened, which, if enacted or determined
adversely to TMFT, could reasonably be expected to result, individually or in
the aggregate, in any material adverse change in TMFT's business, prospects
or financial condition.
3.22 Transactions.
TMFT has made available to WBI Group a true and complete list of all
material contracts now in effect between TMFT and any person who now is or at
any time since inception has been an officer, director or controlling
shareholder of TMFT, other than salary and incentive compensation arrangements
of a customary nature entered into in the ordinary course of business; and
TMFT has made available to WBI Group a true and complete list of all equipment
or other property, real or personal, tangible or intangible, including, but
without limitation, any item of intellectual property, used in connection with
or pertaining to the business of TMFT .
ARTICLE IV: Covenants Of WBI Group And Selling Shareholders
4.1 Maintenance of Business.
WBI Group and the Selling Shareholders will use their best efforts to
carry on and preserve the business, goodwill and relationships of WBI Group
with customers, suppliers, officers, employees, agents and others in
substantially the same manner as they have prior to the date hereof. Subject
to any directions from TMFT, WBI Group and the Selling Shareholders will use
their best efforts to keep and maintain the existing favorable business
relationship with each of such customers, suppliers and officers, employees
and agents. If WBI Group or such any Selling Shareholder becomes aware of
deterioration in a relationship with any customer, supplier or officer,
employee or agent, WBI Group such Selling Shareholder will promptly bring
such information to the attention of TMFT and will exert its best efforts to
restore such relationship.
4.2 Absence of Certain Changes.
Prior to the Closing, including 90 days prior to this Agreement, except
for the GPL Put/Call Option, and except as expressly permitted or
contemplated hereby, neither WBI Group nor any Selling Shareholder has caused
WBI Group or will, without TMFT's prior express written consent, cause WBI
Group to:
(i) Incur any additional indebtedness for money borrowed, or
guarantee any indebtedness or obligation of any other party;
or
(ii) Set aside or pay any dividend or distribution of assets to,
or repurchase any of its stock from, any of its
Shareholders; or
(iii) Issue any capital stock or securities convertible into
capital stock or grant or issue any options, warrants or
rights to subscribe for its capital stock or securities
convertible into its capital stock; or
(iv) Enter into, amend or terminate any employment agreement or
any agreement or arrangement which, if in effect on the date
hereof, would be required to be disclosed; or
(v) Extraordinarily increase the compensation payable or to
become payable by WBI Group to any of its officers,
employees or agents above the amount payable, or adopt or
amend any employee benefit plan or arrangement; or
(vi) Acquire or dispose of any material properties or assets used
in its business except the '7-up' litigation, which has been
assigned away from the Parties to a third party, as
disclosed on Exhibit L; or
(vii) Waive any statute of limitations so as to extend any tax or
other liability of WBI Group; or
(viii) Permit any material change in the nature of the business of
WBI Group or the manner in which the WBI Group books and
records are maintained; or
(ix) Create or suffer to be imposed any lien, mortgage, security
interest or other charge on or against its properties or
assets, except for purchase money security interests
incurred in the ordinary course of business; or
(x) Enter into, amend or terminate any lease of real or personal
property; or
(xi) Amend its Articles of Incorporation or Bylaws; or
(xii) Engage in any activities or transactions outside the
ordinary course of its business as conducted at the date
hereof.
4.3 Maintenance of Condition.
Prior to the Closing, including 90 days prior to this Agreement, except
for the GPL Put/Call Option, and except as expressly permitted or contemplated
hereby, neither the WBI Group nor Selling Shareholders will, without TMFT's
prior express written consent:
(i) Enter into any agreement, restriction or understanding with
respect to the sale, transfer or voting of any shares of the
WBI shares or GPL Units; or
(ii) Permit any change in the good, valid and marketable title to
his or her WBI Shares or GPL Units, including the imposition
any lien, charge or encumbrance on such stock; or
(iii) Impair his or her right, power and authority to sell,
assign, transfer and deliver the WBI Shares or GPL Units, to
execute this Agreement and the agreements related hereto, to
make the representations, warranties and agreements
contained herein and in the related agreements and to
perform his or her obligations hereunder and under the
agreements related hereto; or
(iv) Be obligated under any agreement or judgment that would
conflict with such Selling Shareholder's obligations under
the proposed Employment Agreement or Non-competition
Agreement attached, as applicable; or
(v) Enter into any agreement containing a covenant or covenants
that purport to limit the ability or right of any Selling
Shareholder to engage in any lawful business activity.
4.4 Access to Information
At all times throughout the period prior to the Closing, WBI Group will
give TMFT and its accountants, legal counsel and other representatives
reasonable access, during normal business hours, to all of the properties,
books, contracts, commitments and records relating to the business, assets and
liabilities of WBI Group, and will furnish TMFT, its accountants, legal
counsel and other representatives during such period all such information
concerning its affairs as TMFT may reasonably request; provided, however, that
any furnishing of such information pursuant hereto or any investigation by
TMFT shall not affect TMFT's right to rely on the representations, warranties
and covenants made by WBI Group in this Agreement.
4.5 Prior to the Closing
WBI Group shall continue to maintain properties of WBI Group that are
material to its business operations, prospects or financial condition, and to
maintain its tangible assets as they have heretofore been maintained by WBI
Group in the ordinary course of business.
4.6 Compliance with Obligations.
Prior to the Closing, WBI Group shall comply with: (a) All applicable
federal, state, local and foreign laws, rules and regulations; and
(b) All material agreements and obligations, including Articles of
Incorporation and Bylaws, by which it, its properties or its assets may be
bound; and
(c) All decrees, orders, writs, injunctions, judgments, statutes, rules
and regulations applicable to WBI Group, its properties or assets, which, if
enforced individually or in the aggregate, would have a material adverse
effect on WBI Group.
4.7 Necessary Consents.
Prior to the Closing, WBI Group and each Selling Shareholders will use
their best efforts to obtain such written consents and take such other actions
as may be necessary or appropriate to allow the consummation of the
transactions contemplated hereby and to allow the continuation of WBI's and
GPL's business after the Closing as conducted and as proposed to be conducted
at the date hereof.
4.8 Notification
WBI Group will give prompt notice to TMFT of:
(a) Any notice of default received by WBI Group subsequent to the date
of this Agreement under any material instrument or material agreement to which
WBI Group is a party or by which it is bound, which default could, if not
remedied, result in any material adverse change in the financial condition,
business or prospects of WBI Group, taken as a whole, or which would render
incorrect in any material respect any representation made herein, and
(b) Any suit, action, proceeding or investigation instituted or, to the
knowledge of WBI Group or any Selling Shareholders, threatened against or
affecting WBI Group or concerning any claim of ownership of or rights with
respect to any WBI Shares subsequent to the date of this Agreement and prior
to the Closing which, if adversely determined, could result in any material
adverse change in the financial condition, business or prospects of WBI Group,
taken as a whole, or which would render incorrect any representation made
herein.
4.9 Good Faith
From the date hereof until the termination of this Agreement, neither
WBI Group, any Selling Shareholders nor any of its officers or directors will
initiate discussions or negotiate, or authorize any person or entity to
discuss or negotiate on its behalf, with any other party, or entertain or
consider (except to the extent required by their respective fiduciary duties)
any inquiries or proposals received from any other party, concerning the
possible disposition of WBI Group's business, assets or capital stock.
ARTICLE V: Covenants Of TMFT
5.1 Investment Representation.
TMFT hereby represents, warrants and agrees that it is acquiring the WBI
Shares solely for purposes of investment and not with a view to any public
distribution thereof. TMFT will deliver to WBI at the Closing an investment
representation, in form and substance to the reasonable satisfaction of
Selling Shareholders and their counsel.
5.2 Documents.
TMFT agrees to deliver unto Selling Shareholders at the Closing, duly
certified as of the Closing Date by the Secretary or any Assistant Secretary
of TMFT, copies of resolutions duly adopted by TMFT 's Board of Directors,
authorizing the execution, delivery and performance of this Agreement and all
agreements related hereto. Such resolutions and certification shall be in form
and substance to the reasonable satisfaction of Selling Shareholders and their
counsel.
ARTICLE VI: Conditions To Obligations Of TMFT
The obligations of TMFT to consummate the transactions contemplated
hereby are, at TMFT's election, subject to satisfaction or waiver of the
following conditions:
6.1 Consents and Approvals.
WBI Group shall have obtained all consents and approvals of third
parties (including governmental authorities) required of WBI Group and TMFT to
consummate the transactions contemplated by this Agreement.
6.2 Representations:
All representations and warranties made herein by WBI Group and/or the
Selling Shareholders shall be true in all material respects as of the date
made and as of the Closing, except to the extent such representations and
warranties are rendered untrue by the performance by WBI Group, or any Selling
Shareholder of obligations and agreements undertaken by them to be performed
at or prior to the Closing as set forth in this Agreement. WBI Group and each
Selling Shareholder shall have performed all obligations and agreements
undertaken by it herein to be performed at or prior to the Closing.
6.3 Certificate.
TMFT shall have received at the Closing a certificate, dated as of the
Closing and executed by WBI's President and each Selling Shareholder, to the
effect that the conditions set forth in Article VI have been satisfied. If any
representation or warranty made herein is not true as of the Closing, such
certificate shall identify such representation or warranty expressly and shall
indicate in reasonable detail the nature of all exceptions thereto not
previously disclosed in the Schedule of Exceptions. If TMFT thereafter elects
to consummate the transactions contemplated hereby, Selling Shareholders shall
not be liable for indemnification for any Damages resulting solely from the
facts described in such certificate.
6.4 Opinion of Counsel.
TMFT shall have received at the Closing the opinion of counsel to WBI
Group and the Selling Shareholders, in form and substance satisfactory to
TMFT and its counsel, to the effect that:
(a) WBI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Wyoming, has all requisite corporate
power and authority to own, operate and lease its properties and to carry on
its business as now conducted and is duly qualified to do business and to
counsel's actual knowledge is in good standing as a foreign corporation in
each jurisdiction in which the nature of its business or the ownership of its
properties makes such qualification necessary; GPL is a Limited Liability
Company duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as now
conducted and is duly foreign qualified to do business in the state of Arizona
and for the purpose of conducting GPL's business, has paid a business
transaction fee in the states of California and New York and a "Replacement
Tax" in the state of Illinois.
(b) All outstanding shares of such stock held by the Selling
Shareholders are held of record and beneficially as set forth on Exhibit A
All outstanding shares of WBI capital stock have been validly issued, are
fully paid and nonassessable, and have been issued in full compliance with all
applicable federal and state securities laws (provided such counsel need not
express any opinion with respect to the anti-fraud provisions of such
securities laws). The GPL transferred units are held by WBI Group are held of
record and beneficially as set forth on Exhibit A. All of the GPL
Transferred units have been validly issued, are fully paid and nonassessable,
and have been issued in full compliance with all applicable federal and state
securities laws (provided such counsel need not express any opinion with
respect to the anti-fraud provisions of such securities laws).
(c) To such counsel's actual knowledge, no right of first refusal option
or other restriction is applicable to the WBI Shares. To such counsel's actual
knowledge, WBI does not have outstanding any preemptive or subscription
rights, options, warrants, rights to convert, capital stock equivalents, stock
appreciation rights or other rights to purchase or otherwise acquire any of
its capital stock or other securities, or to be paid any amount based on the
value of any such securities. To such counsel's actual knowledge, except for
the GPL Put/Call Option, no other right of first refusal option or other
restriction is applicable to the. To such counsel's actual knowledge, the do
not have any preemptive or subscription rights, options, warrants, rights to
convert, capital stock equivalents, stock appreciation rights or other rights
to purchase or otherwise acquire any of its capital stock or other securities,
or to be paid any amount based on the value of any such securities. However,
GPL may acquire the remaining 15% of GPL or the GPL Un-transferred Units,
voluntarily or involuntarily, according to the GPL Put/Call Option.
(d) WBI Group has full corporate power and authority to execute and
deliver, and to perform its obligations under this Agreement. WBI Group has
taken all requisite corporate action to approve and adopt this Agreement and
the performance by WBI Group of its obligations hereunder. This Agreement has
been duly and validly executed and delivered by WBI constitutes a legal, valid
and binding obligations of WBI, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors' rights generally and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance.
(e) To such counsel's actual knowledge, except as previously disclosed
by WBI, the execution and delivery of this Agreement and the Related
Agreements by WBI Group, and the performance and consummation by WBI Group of
the transactions contemplated by this Agreement and Related Agreements, do not
result in any conflict with, breach or violation of or default, termination,
forfeiture or lien under (or upon the failure to give notice or the lapse of
time, or both, result in any conflict with, breach or violation of or default,
termination, forfeiture or lien under) any terms or provisions of WBI Group's
Articles of Incorporation or Bylaws, GPL Operating Agreement, or any statute,
rule, regulation, judicial or governmental decree, order or judgment, or to
the best of such counsel' s actual knowledge, any material agreement, lease or
other instrument to which WBI Group or any Selling Shareholders is a party or
to which it or any of WBI's assets are subject.
(f) Assuming TMFT is a bona fide purchaser within the meaning of 8 of
the Uniform Commercial Code, to such counsel's actual knowledge the transfer
and assignment in accordance with this Agreement by or on behalf of each
Selling Shareholder to TMFT of the WBI Shares and GPL Transferred Units to be
purchased from such Selling Shareholders, against the payment provided by this
Agreement, will transfer good, absolute, valid and marketable title thereto,
free and clear of any and all liens, claims, options, charges and encumbrances
whatsoever.
(g) Except for the consent required by the City of Afton, Wyoming, to
which WBI Group has previously represented and warranted that such consent had
been granted on the 11th day of January, 2000 as displayed on Exhibit T to
such counsel's actual knowledge, there is no consent, approval, authorization,
order, registration, qualification or filing of or with any court or any
regulatory authority or other governmental body required for the consummation
by WBI Group and WBI Shareholders of the transactions contemplated by this
Agreement which has not been obtained.
(h) To such counsel's actual knowledge, except as disclosed on Exhibit L
there is no suit, arbitration or legal, administrative or other proceeding or
governmental investigation pending or threatened to which WBI Group or any
Selling Shareholder is a party.
(i) To such counsel's actual knowledge, , attached hereto, there is no
outstanding judicial or administrative order, ruling, decree, judgment or
stipulation to which WBI Group or any Shareholders is a party or is subject
materially adversely affecting or threatening WBI or its business or financial
condition.
6.5 Delivery of the WBI Shares.
TMFT shall have received at the Closing certificates representing all of
the WBI Shares are duly endorsed to TMFT or accompanied by stock powers duly
executed in blank (with signatures guaranteed by any national bank or trust
company) and otherwise in form acceptable for transfer on the books of WBI or
GPL, duly endorsed to TMFT.
6.6 Good Standing Certificate.
TMFT shall have received within 60 days of Closing, a Status Certificate
from WBI, issued by the Secretary of State of the State of Wyoming and a good
standing certificate from any other state in which WBI and GPL is qualified to
do business, dated as of the date hereof, including the states of Delaware and
Arizona in which GPL conducts business.
6.7 Resignations.
Except for Mr. Xxxxxxx Xxxxx, who shall continue as an officer and
director of TMFT, each of the senior officers and directors of WBI immediately
prior to the Closing shall have resigned, effective as of the Closing, as
officers and directors of WBI; this section to have no effect on WBI's hired
employees
6.8 No Material Adverse Change.
During the period from the date of this Agreement to the Closing Date,
there shall not have been any material adverse change in the condition
(financial or other), liabilities, business or prospects of WBI Group and
Selling Shareholders shall not have sustained any material uninsured loss or
damage to its assets that could materially and adversely affect its ability to
conduct its business.
6.9 No Actions
Consummation of the transactions contemplated by this Agreement shall
not violate any order, decree or judgment of any court or governmental body
having jurisdiction and no action or proceeding shall have been instituted by
any person or entity or threatened by any governmental agency which, in either
such case, in the good faith judgment of TMFT's Board of Directors (acting
upon advice of its outside counsel) has a reasonable probability of resulting
in an order, judgment or decree restraining, prohibiting or rendering unlawful
the consummation of the transactions contemplated by this Agreement.
6.10 Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions shall be in form and substance to the reasonable satisfaction of
TMFT's counsel, and TMFT shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
6.11 Earn-in Consideration:
Upon Closing, the Parties agree that Mr. C. Xxxxxxx Xxxxx shall be
solely and specifically subject to the following Earn-In Provision wherein a
total of one million shares of Xx. Xxxxx'x TMFT Stock shall be set aside and
not issued to Xx. Xxxxx ("Xx. Xxxxx'x Earn-in Stock") to Xx. Xxxxx ("Xx.
Xxxxx'x Earn-in Stock") unless:
(a) the annual gross revenue of WBI increases by at least f $500,000 for
year ended December 31, 2001 over the same period for the preceding year, at
which time the Parties agree to release to Xx. Xxxxx 500,000 shares of Xx.
Xxxxx'x Earn-In Stock; and
(b) the annual gross revenue of WBI increases by at least $500,000 for
year ended December 31, 2002 over the same period for the preceding year, at
which time the Parties agree to release to Xx. Xxxxx 500,000 shares of Xx.
Xxxxx'x Earn-In Stock
The above Earn-in Provision is not contingent upon continued employment
of Mr. C. Xxxxxxx Xxxxx; nor shall it result in any taxable event. The
Parties have agreed upon the Earn-in Provision as a means to set-aside or
holdback shares from only one of the Selling Shareholders to ensure that the
Purchaser receives the bona-fide agreed-upon value in the transaction.
ARTICLE VII: Conditions To Obligations Of WBI And WBI Shareholders
The obligations of WBI and WBI Shareholders to consummate the
transactions contemplated hereby are, at WBI's election, subject to
satisfaction or waiver of the following conditions satisfied by TMFT:
7.1 Consents and Approvals.
TMFT shall have obtained all consents and approvals of third parties
(including governmental authorities) required of WBI and TMFT to consummate
the transactions contemplated by this Agreement.
7.2 Representations
All representations and warranties made herein by TMFT shall be true in
all material respects as of the date made and as of the Closing except to the
extent such representations and warranties are rendered untrue by the
performance by TMFT of obligations and agreements undertaken by it to be
performed at or prior to the Closing as set forth in this Agreement. TMFT
shall have performed all obligations and agreements undertaken by it herein to
be performed at or prior to the Closing.
7.3 Opinion of Counsel.
WBI shall have received at the Closing the opinion of Xx. Xxxxxxx X.
Xxxxxxxxxx, Esq., counsel to TMFT, in form and substance satisfactory to WBI
and their counsel, to the effect that:
(a) TMFT is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has full corporate power
and authority to own, operate and lease its properties and to carry on its
business as now conducted;
(b) TMFT has full corporate power and authority to execute and deliver,
and to perform its obligations under this Agreement and the Related
Agreements. TMFT has taken all requisite corporate action to approve and
adopt this Agreement and the Related Agreements, and the performance by TMFT
of its obligations hereunder and hereunder. This Agreement and the Related
Agreements have been duly and validly executed and delivered by TMFT and
constitute legal, valid and binding obligations of TMFT, enforceable against
it in accordance with their terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors rights generally, and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance;
(c) The execution and delivery of this Agreement by TMFT, and the
performance and consummation by TMFT of the transactions contemplated by this
Agreement, does not violate any provision of TMFT's Certificate of
Incorporation or Bylaws, and does not constitute a material default under the
provisions of any material agreement known to counsel to which TMFT is a party
or by which it is bound;
(d) There is no consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or
other governmental body required for the consummation by TMFT of the
transactions contemplated by this Agreement which has not been obtained;
(e) The execution and delivery of this Agreement and the Related
Agreements by TMFT and the performance and consummation by TMFT of the
transactions contemplated by this Agreement and the Related Agreements, does
not result in any conflict with, breach or violation of or default,
termination, forfeiture or lien under (or upon the failure to give notice or
the lapse of time, or both, result in any conflict with, breach or violation
of or default, termination, forfeiture or lien under) any terms or provisions
of TMFT's Certificate of Incorporation or Bylaws, or any statute, rule,
regulation, judicial or governmental decree, order or judgment, or to such
counsel' s knowledge, any material agreement, lease or other instrument to
which TMFT is a party or to which it or any of its assets are subject;
(f) To such counsel's actual knowledge, there is no consent, approval,
authorization, order, registration, qualification or filing of or with any
court or any regulatory authority or other governmental body required for the
consummation by TMFT and TMFT shareholders of the transactions contemplated by
this Agreement which has not been obtained;
(g) To such counsel's actual knowledge, there is no suit, arbitration
or legal, administrative or other proceeding or governmental investigation
pending or threatened to which TMFT or any TMFT shareholder is a party;
(h) To such counsel's actual knowledge, there is no outstanding
judicial or administrative order, ruling, decree, judgment or stipulation to
which TMFT or any TMFT shareholder is a party or is subject materially
adversely affecting or threatening TMFT or its business or financial
condition.
7.4 Board of Directors.
TMFT shall cause its Articles of Incorporation and Corporate By-laws to
be changed to have its Board of Directors (the "Board") consist of seven
members; in connection with this Acquisition, TMFT shall allow one open seat
on its Board of Directors for WBI, and shall agree to appoint Xx. Xxxxxxxxxxx
X. Xxxxx to such Board of Directors at the next Special Meeting called by the
Board.
At the Closing, the newly elected Board of Directors of TMFT shall elect
Xx. Xxxxxxxxxxx X. Xxxxx to serve as the president of its Company; and at the
next Special Meeting called by the newly elected Board of Directors of TMFT,
the Company shall execute an Employment Agreement, with attached
Non-Competition Agreement, for Xx. Xxxxx.
7.5 No Action.
Consummation of the transactions contemplated by this Agreement shall
not violate any order, decree or judgment of any court or governmental body
having jurisdiction and no action or proceeding shall have been instituted by
any person or entity or threatened by any governmental agency which, in either
such case, in the good faith judgment of WBI (acting upon advice of their
outside counsel) has a reasonable probability of resulting in an order,
judgment or decree restraining, prohibiting or rendering unlawful the
consummation of the transactions contemplated by this Agreement.
7.6 Completed Acquisition of API.
As a prior condition precedent to the Closing of this Agreement, TMFT
shall have completed the acquisition of API by acquiring all the issued and
outstanding shares of API from the API Shareholders in exchange for shares of
TMFT; wherein API shall become a wholly owned subsidiary of TMFT.
ARTICLE VIII: Termination
8.1 Termination by Mutual Consent.
At any time prior to the Closing, this Agreement may be terminated by
mutual written consent of TMFT, WBI and Selling Shareholders.
8.2 Termination by TMFT.
TMFT may terminate this Agreement at any time prior to the Closing by
delivery of written notice to WBI or Selling Shareholders if:
(a) There has been a material adverse change since the date of the WBI
Group Unconsolidated Financials in WBI's business, assets, financial condition
or prospects; or
(b) WBI or Selling Shareholders have violated this Agreement in any
material respect; or
(c) Any representation or warranty made by WBI or WBI in this Agreement
is false or inaccurate in any material respect or there is any material
misrepresentation or material omission by WBI or WBI; or (d) Any condition
has not been satisfied (or waived by TMFT) on or prior to the Closing Date; or
(e) The closing has not occurred on or before March 15th, 2001.
8.3 Termination by WBI.
WBI may terminate this Agreement at any time prior to the Closing by
delivery of written notice to TMFT if TMFT has violated this Agreement in any
material respect; any representation or warranty made by TMFT in this
Agreement is false or inaccurate in any material respect or there is any
material misrepresentation or material omission by TMFT; or any condition has
not been satisfied (or waived by WBI) on or prior to the Closing Date; or the
closing has not occurred on or before March 15th, 2001.
ARTICLE IX: Miscellaneous
9.1 Notices.
Any notice given hereunder shall be in writing and shall be deemed
effective upon the earlier of personal delivery (including personal delivery
by telex) or the third business day after mailing by certified or registered
mail, postage prepaid, as follows:
(a) If to TMFT: Xx. Xxxxx Xxxxxxx, President
The Theme Factory, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx, Xxxx 00000
With a copy to:
Xx. Xxxxxxx X. Xxxxxxxxxx, Esq.
Hermes Building, Suite 205
455 East Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
(b) If to WBI Group:
Xx. Xxxxxxxxxxx X. Xxxxx, President
Water Star Bottling, Inc.
And Geyser Products, LLC
XX Xxx 0000
Xxxx, XX 00000
With a copy to:
Xx. Xxxxxxx X. Xxxx, Esq.
Udall, Shumway, Xxxxxxxxxx,
Xxxxx & Xxxxx, P.C.
00 Xxxx Xxxxx Xxxxxx
Xxxx, Xxxxxxx 00000
(c) If to Selling
Shareholders:
Xx. Xxxxxxxxxxx X. and Xxxxx X. Xxxxx
0000 X. Xxxxxxxx Xx.
Xxxx, Xxxxxxx 00000
Or to such other address as any party may have furnished in writing to the
other parties in the manner provided above.
9.2 Entire Agreement.
This Agreement constitutes the final, exclusive and complete
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and discussions with
respect thereto. No variation or modification of this Agreement and no waiver
of any provision or condition hereof, or granting of any consent contemplated
hereby, shall be valid unless in writing and signed by the party against whom
enforcement of any such variation, modification, waiver or consent is sought.
9.3 Confidentiality.
Except for disclosure (if any) required by any law to which any party is
subject, no public announcement regarding the consummation of the transactions
described herein, shall be made without the approval of TMFT and WBI. TMFT,
WBI and WBI Shareholders agree to hold all information regarding the Letter of
Intent and the transactions described herein in confidence until the time of
any such public announcement.
9.4 Limitation on Communication with Other Parties.
WBI and the Selling Shareholders agree to refrain from initiating any contact
or participating in any discussions with any person other than their own
representatives relating to a purchase of the WBI Shares or assets or an
acquisition, merger or reorganization of WBI. Such agreement shall terminate
upon the closing of this Agreement.
9.5 Successors and Assigns.
No party may, without the prior express written consent of each other
party, assign this Agreement in whole or in part. This Agreement shall be
binding upon and inure to the benefit of the respective heirs, personal
representatives, successors and permitted assigns of the parties hereto.
9.6 Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Arizona.
9.7 Survival.
The representations and warranties made by the parties hereto in this
Agreement, and their respective obligations to be performed under the terms
hereof at or prior to the Closing hereunder shall terminate and expire one
year after the Closing Date, notwithstanding any investigation of the facts
constituting the basis of the representations and warranties of any party by
any other party hereto.
9.8 Arbitration.
Arbitration shall be the initial means for resolving disputes between
the parties with respect to this Agreement and any agreements related thereto,
and any such arbitration shall take place in the county of Maricopa, in the
state of Arizona. If any party wishes to commence arbitration hereunder, it
shall serve written notice to such effect on the other party or parties hereto
and, within fifteen (15) days thereafter, the parties shall mutually select a
single arbitrator to conduct such arbitration. In the event that the parties
fail to agree on such single person, each of the parties shall choose one (1)
member of three- (3) member panel and those two (Section 2) members shall
select a third. In conducting the arbitration, the arbitrator or arbitration
panel shall apply the Commercial Arbitration Rules of the American Arbitration
Association as modified by any other instructions that the parties may agree
upon at the time, except that each party shall have the right to conduct
discovery in any manner and to any extent authorized by the Federal Rules of
Civil Procedure as interpreted by the federal courts. The arbitrator shall
decide the dispute upon equitable principles and industry usage, as determined
by the arbitrator, but shall not modify the terms of this Agreement. Costs and
expenses, including reasonable attorneys ' fees, incurred with respect to the
arbitration shall be borne by the losing party, unless otherwise determined by
the arbitrator based on a showing of good cause to vary from usual rule
expressed in this sentence. The arbitrator's award shall be final and
unappealable. A judgment upon the award may be entered in any court having
jurisdiction of the parties.
9.9 Confidential.
TMFT and its representatives agree that all information obtained during
its investigation conducted that is not publicly available will be held in
confidence and will be used solely for the purpose of evaluating the TMFT
investment in WBI. In the event the transaction contemplated by this Agreement
does not close, all copies of such information will be returned to WBI, and
such information will continue to be kept in confidence by TMFT and its
representatives, except for such information that is required to be disclosed
by court order or decree or that is otherwise in the public domain.
9.10 Captions and/or Headings:
The Captions and /or Headings in this Agreement are for convenience only
and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
9.11 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall constitute an original copy hereof, but all of
which together shall constitute one agreement.
DEFINITIONS:
"Actual knowledge" - Notwithstanding anything herein to the contrary, a Person
will only be deemed to have actual knowledge if such Person is actually aware
of such fact or other matter, and does not imply or require any independent
investigation.
"Breach"--a "Breach" of a representation, warranty, covenant, obligation, or
other provision of this Agreement or any instrument delivered pursuant to this
Agreement will be deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other provision, or (b) any
claim (by any Person) or other occurrence or circumstance that is or was
inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
"Consent"--any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).
"Contract"--any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"Damages"--any loss, liability, claim, damage (incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-
party claim (collectively, "Damages"), arising, directly or indirectly, from
or in connection with:
(a) Any Breach of any representation or warranty made by any Party in
this Agreement; or
(b) Any Breach by any Party of any covenant or obligation of any Party
in this Agreement; or
(c) Any claim by any Person for finder's fees based upon any agreement
or understanding alleged to have been made by any such Person in connection
with any of the Contemplated Transactions.
"Duty of Care"-Directors occupy a fiduciary relationship to the Corporation,
and must exercise the care of ordinarily prudent and diligent persons in like
positions.
"Earn-In Provision"-Shares agreed to be issued but set aside as unissued in
contemplation of Specific Performance or Act to certain shareholders to earn
such shares or not, per the provisions set forth in Section 6.11.
"Encumbrance"--any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership.
"Environment"--soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins,
and wetlands), ground waters, drinking water supply, stream sediments, ambient
air (including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental, Health, and Safety Liabilities"--any cost, damages, expense,
liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:
(a) Any environmental, health, or safety matters or conditions
(including on-site or off- site contamination, occupational safety and health,
and regulation of chemical substances or products); or
(b) Fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law; or
(c) Financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) Any other compliance, corrective, investigative, or remedial
measures required under Environmental Law or Occupational Safety and Health
Law.
"Environmental Law"--any Legal Requirement that requires or relates to:
(a) Advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances or
materials, violations of discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction, that
could have significant impact on the Environment; or
(b) Preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment; or
(c) Reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated; or
(d) Assuring that products are designed, formulated, packaged, and used
so that they do not present unreasonable risks to human health or the
Environment when used or disposed of; or
(e) Protecting resources, species, or ecological amenities; or
(f) Reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances; or
(g) Cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such clean up or prevention; or
(h) Making responsible parties pay private parties, or groups of them,
for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"ERISA"--the Employee Retirement Income Security Act of 1974 or any successor
law, and regulations and rules issued pursuant to that Act or any successor
law.
"Exchange Act" - the Exchange Act of 1934, as amended.
"Facilities"--any real property, leaseholds, or other interests currently or
formerly owned or operated by any Acquired Company and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated
"GAAP"--generally accepted United States accounting principles, applied on a
basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to.
"Governmental Authorization"--any approval, consent, license, permit, waiver,
or other authorization issued, granted, given, or otherwise made available by
or under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body"-includes any
(a) Nation, state, county, city, town, village, district, or other
jurisdiction of any nature; or
(b) Federal, state, local, municipal, foreign, or other government; or
(c) Governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity
and any court or other tribunal); or
(d) Multi-national organization or body; or
(e) Body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
"Hazardous Activity"--the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release,
storage, transfer, transportation, treatment, or use (including any withdrawal
or other use of groundwater) of Hazardous Materials in, on, under, about, or
from the Facilities or any part thereof into the Environment, and any other
act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Acquired
Companies.
"Hazardous Materials"--any waste or other substance that is listed, defined,
designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and
specifically including petroleum and all derivatives thereof or synthetic
substitutes therefore and asbestos or asbestos-containing materials.
"HSR Act"--the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Intellectual Property Assets" -includes
(i) In the case of WBI Group, the name Geyser Products, LLC and Water
Star Bottling, Inc., all fictional business names, trading names, registered
and unregistered trademarks, service marks, and applications (collectively,
"Marks"); and
(ii) All patents, patent applications, and inventions and discoveries
that may be patentable (collectively, "Patents"); and
(iii) All copyrights in both published works and unpublished works
(collectively, "Copyrights"); and
(iv) All know-how, trade secrets, confidential information, customer
lists, software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, "Trade Secrets"); owned, used, or
licensed by any Acquired Company as licensee or licensor.
"IRC"--the Internal Revenue Code of 1986 or any successor law, and regulations
issued by the IRS pursuant to the Internal Revenue Code or any successor law.
"IRS"--the United States Internal Revenue Service or any successor agency,
and, to the extent relevant, the United States Department of the Treasury.
"Knowledge"--an individual will be deemed to have "Knowledge" of a particular
fact or other matter if:
(a) Such individual is actually aware of such fact or other matter; or,
a prudent individual in similar circumstances should be expected to be aware
of such fact or other matter if he or she had conducted a reasonably thorough
inquiry concerning the existence of such fact or other matter; or
(b) In the case of an officer or director of a corporation, he or she
would be expected to either know or should have known of facts or other
matters material to the corporation, in the course of conducting reasonable
corporate governance in satisfying their Duty of Care to the Corporation; or a
prudent officer or director in similar circumstances should be expected to be
aware of facts or other matters material to the corporation, if he or she had
conducted a reasonably thorough inquiry concerning such fact or other matter.
A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving, or who has
at any time served, as a director, officer, partner, executor, or trustee of
such Person (or in any similar capacity) has, or at any time had or should
have had, knowledge of such fact or other matter.
"Legal Requirement"--any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution,
law, ordinance, principle of common law, regulation, statute, or treaty.
"Occupational Safety and Health Law"--any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational
safety and health hazards, and any program, whether governmental or private
(including those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful working
conditions.
"Order"--any award, decision, injunction, judgment, order, ruling, subpoena,
or verdict entered, issued, made, or rendered by any court, administrative
agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business"--an action taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:
(a) Such action is consistent with the past practices of such Person and
is taken in the ordinary course of the normal day-to-day operations of such
Person; and
(b) Such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority) [and is not required to be specifically authorized by the
parent company (if any) of such Person]; and
(c) Such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by
any Person or group of Persons exercising similar authority), in the ordinary
course of the normal day-to-day operations of other Persons that are in the
same line of business as such Person.
"Organizational Documents"-
(a) The articles or certificate of incorporation and the bylaws of a
corporation;
(b) The partnership agreement and any statement of partnership of a
general partnership;
(c) The limited partnership agreement and the certificate of limited
partnership of a limited partnership;
(d) Any charter or similar document adopted or filed in connection with
the creation, formation, or organization of a Person; and
(e) Any amendment to any of the foregoing.
"Person"--any individual, corporation (including any non-profit corporation),
general or limited partnership, Limited Liability Company, joint venture,
estate, trust, association, organization, labor union, or other entity or
Governmental Body.
"Proceeding"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative,
or informal) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Related Person"--with respect to a particular individual,
(a) Each other member of such individual's Family;
(b) Any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) Any Person in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and
(d) Any Person with respect to which such individual or one or more
members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
"Representative"--with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.
"Securities Act"--the Securities Act of 1933, as amended or any successor law.
"Subsidiary"--with respect to any Person (the "Owner"), any corporation or
other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or
similar governing body, or otherwise having the power to direct the business
and policies of that corporation or other Person (other than securities or
other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more of its
Subsidiaries; when used without reference to a particular Person, "Subsidiary"
means a Subsidiary of the Company.
"Tax Return"--any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection, or payment of any Tax.
FACSIMILE COPY SHALL BE DEEMED AS ORIGINAL
IN WITNESS WHEREOF, the parties hereto have caused this definitive final and
legally binding Agreement to be executed by their respective authorized
officers as of this __ day of February 2001.
The Theme Factory, Inc.:
By: /s/ Xxxxx Xxxxxxx
Name: Xx. Xxxxx Xxxxxxx
Title: President
Water Star Bottling, Inc
By: /s/ Xxxxxxxxxxx X. Xxxxx
Name: Xx. Xxxxxxxxxxx X. Xxxxx
Title: President
Geyser Products, LLC
By: /s/ Xxxxxxxxxxx X. Xxxxx
Name Xx. Xxxxxxxxxxx X. Xxxxx
Title Manager Member
Selling Shareholders:
By: /s/ Xxxxxxxxxxx X. Xxxxx
Name: Xx. Xxxxxxxxxxx X Xxxxx
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
EXHIBIT A
WATER STAR BOTTLING STOCKHOLDERS
Xxxxxxxxxxx X. and Xxxxx X. Xxxxx 6,650,000
0000 X. Xxxxxxxx Xx.
Xxxx, Xxxxxxx 00000
