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EXHIBIT 8(a)
REORGANIZATION PLAN AND AGREEMENT
A PLAN AND AGREEMENT dated as of May 26, 1999 by and among Innovation
International, Inc., a Delaware corporation ("INNO"), Austin Asset Management
Corporation, a Nevada corporation organized by INNO ("AUSTIN"), Austin Funding
Corporation, a Texas corporation ("AFC"), and the eleven (11) individual owners
of AFC executing this Agreement whose names are listed on Schedule I annexed
hereto ("the Owners").
WITNESSETH:
WHEREAS: INNO is owned by more than 460 shareholders residing in 26
States (the "Shareholders"); and AUSTIN is owned by INNO; and 100% of the stock
of AFC is held by the OWNERS; and
WHEREAS, the Board of Directors of INNO has declared a stock
dividend-in-kind, equal to 1,600,000 shares of the Common Stock of AUSTIN,
payable directly to the Shareholders and subject to their acceptance or return
as described elsewhere herein, resulting in the severance and termination of
INNO's control over AUSTIN; and
WHEREAS, the Board of Directors of AUSTIN has approved a plan to
acquire 100% of the stock of AFC, and the OWNERS wish to transfer the same to
AUSTIN as provided herein, in exchange for the Consideration and Contingent
Consideration described herein, and subject to the condition that AUSTIN be
severed from INNO; and
NOW, THEREFORE, in consideration of the foregoing and the mutual premises herein
set forth, and subject to the terms and conditions hereof, the parties agree as
follows:
1. ACQUISITION OF AFC BY AUSTIN. Prior to the Closing Date defined herein, INNO
shall distribute or cause AUSTIN to distribute 1,600,000 shares of the $.001
par value Common Stock of AUSTIN to the Shareholders in the ratio of One (1)
AUSTIN share for each Twenty-five (25) INNO shares owned, said distribution to
be done as a Stock Dividend-in-Kind. On the Closing Date, AUSTIN shall issue
and deliver to the OWNERS the consideration described below in exchange for
100% of the stock in AFC owned by them; and then AFC shall become a wholly
owned subsidiary of AUSTIN.
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2. CONSIDERATION. In consideration of the acquisition of AFC, AUSTIN shall
issue and deliver an aggregate of nineteen million, seven hundred, thirty three
thousand, three hundred, thirty-three (19,733,333) shares of its common stock
to be allocated to the OWNERS in the same proportion as their holdings in AFC
are described in Schedule I hereto.
3. CONTINGENT CONSIDERATION. At any time within 5 calendar years following the
closing date, if the audited consolidated Pretax Income of AUSTIN shall have
reflected a 25% compound internal growth rate without giving effect to the
earnings of acquired businesses, for any three consecutive years, then AUSTIN
shall issue and deliver an additional two million, five hundred thousand
(2,500,000) shares of its common stock to be allocated to the OWNERS in the
same proportion as their holdings in AFC are described in Schedule I hereto.
Nothing contained in this Agreement shall be deemed to prohibit any of the
OWNERS from partially or wholly assigning their rights to receive the
Contingent Consideration described herein to any one or more employees or
agents of AFC or AUSTIN.
4. THE CLOSING. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place on June 22, 1999 at a place determined and
agreed by AUSTIN and the OWNERS.
5. REPRESENTATIONS OF AFC AND THE OWNERS. AFC and the OWNERS identified herein
jointly and severally represent and warrant to INNO and AUSTIN as follows:
(a) Organization. AFC is duly organized and validly exists as a business
corporation under the laws of the State of Texas. AFC has no subsidiaries. AFC
has the legal power and authority to own, operate and lease its properties and
assets and to carry on its business as now conducted, and is duly qualified to
do business wherever the nature and location of its business and assets require
such qualification.
(b) Authorization and Capital Stock. AFC has the legal power, authority and
capacity to enter into, execute, deliver and perform its obligations under this
Agreement. This Agreement constitutes the valid and binding agreement of AFC,
enforceable in accordance with its terms
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(subject to applicable bankruptcy, insolvency and other rights affecting the
enforceability of creditors' rights generally and the discretion of the courts
in granting equitable remedies). The authorized capital stock of AFC consists
of One Million (1,000,000) shares of $.01 par value Common Stock and One
Million (1,000,000) shares of $.01 par value Preferred Stock of which 943,413
Common Shares and no Preferred Shares are validly issued, fully paid,
non-assessable and outstanding. There are no other securities, subscriptive
rights or rights, warrants, options, contracts, understandings or commitments
providing for issuance of, or granting rights to acquire any capital stock of
AFC or securities convertible into or exchangeable for capital stock of AFC.
(c) Assets and Business. Except as described in any schedule and/or exhibit
hereto and in the financial statements, AFC owns, free and clear of all other
mortgages, claims, charges, liens, encumbrances restrictions, options, pledges,
calls or commitments of any character and any security interest whatsoever, and
holds good and marketable title to all of the assets and rights currently used
in the conduct of its business. There are no existing agreements, warrants or
rights providing for the sale of any assets, properties, rights or for the
business of AFC except for sales in the ordinary course of business.
(d) Licenses. If any licenses from which no exemption is applicable or has been
obtained, are necessary, AFC holds all licenses necessary to the conduct of its
business, all of which have been duly and validly obtained, are enforceable and
are in full force and effect as of the date hereof AFC is not in default under
any of such licenses and has not committed or omitted an act which would
constitute default or which would be grounds for license revocation or
suspension. Neither this Agreement nor its consummation will result in the
forfeiture, revocation, impairment or suspension of such licenses.
(e) Financial Statements. AFC has delivered to INNO true, correct and complete
financial statements of AFC (copies of which are annexed hereto as Exhibit 3)
as of 12/31/98 which have not been independently audited. The financial
statements appearing as Exhibit 3 are materially correct and complete and have
been prepared in accordance with generally accepted accounting principles
consistently applied. Financial statements for the year ending December 31,
1998 and any prior years during which AFC was in existence will be obtained and
provided hereunder in
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audited form, from an independent auditing firm of standing up to the
requirements of the SEC and NASD for the level of public reporting selected by
AUSTIN and AFC after the closing. The year ending December 31, 1998 and all
subsequent years will be audited and certified by such qualified auditors and
will include the combination or consolidation of the accounts of AFC and
AUSTIN.
(f) Public and Regulatory Information. AFC and the OWNERS shall prepare or
obtain and deliver to AUSTIN all financial and other information required to be
included in the reports which AUSTIN must file in support of the trading of its
common stock in the Over The Counter markets, or as may be required by the SEC
in connection with the issuance and/or trading of its securities, or by the
NASD or any Broker Dealer organization making a market or proposing to make a
market in the securities of AUSTIN, all of which shall be prepared and filed in
a timely manner. The preparation and provision of all financial statements
described above in sub-paragraph (e) are included, without limiting the
generality hereof, in this sub-paragraph (f).
(g) Information. All written material furnished or to be furnished by AFC and
the OWNERS does not and will not contain any statement which is false or
misleading with respect to any material fact, and does not and will not omit to
state any material fact, the omission of which makes the statements therein
false or misleading.
(h) Taxes. AFC has duly filed all tax returns and reports (or extensions for
filing such returns and reports) related to its business required to be filed
and has duly paid all taxes and other governmental charges ("Taxes") upon AFC's
properties, assets, income, franchises, licenses, stock issuances or transfers
or sales related to its business. There are no unpaid taxes which are a lien on
AFC's properties and assets, except liens for Taxes not yet due and payable.
There is not pending or known any proposed assessment by any taxing authority
for additional Taxes applicable to AFC. AFC has not adopted a plan of
liquidation under any tax code, or entered into any contract to merge or
consolidate with or sell all or any substantial part of its assets to any other
firm or corporation.
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(i) No Adverse Change. Except as set forth on Schedule 3i annexed hereto, and
to the best knowledge of the OWNERS after due inquiry, since December 31, 1998,
there has not been (i) any material adverse change in the financial condition
of AFC or in its operations, business, prospects, properties or assets, (ii)
any past or prospective loss of its business, or any notice from any customer
that it is planning or considering a material change in its patronage, (iii)
any mortgage, pledge, lien or encumbrance or other security interest made or
incurred on any of AFC's assets, other than liens for Taxes not yet due and
payable, (iv) any sale, transfer or other disposition of AFC's properties or
assets other than arising in the ordinary course of business, (v) any loan,
borrowing or guaranty obligating AFC other than arising in the ordinary course
of business, or (vi) any other event or condition of any character which has
materially and adversely affected or does materially and adversely affect AFC's
assets or impede its business.
(j) Insurance. AFC maintains fully paid-up transferable insurance policies or
bonds which provide insurance coverage in normal and customary amounts with
respect to the risks normally insured against by companies similarly situated,
including general and public liability insurance.
(k) Litigation. Except as disclosed in any schedule or exhibit hereto, there
is no legal, administrative, arbitration or other proceeding or claim,
governmental or administrative investigation or inquiry pending or threatened
against or involving AFC or AFC's properties, assets, business or financial
condition, or which questions AFC's ability to carry out its obligations
hereunder, or which challenges the acquisition of AFC by AUSTIN or the exchange
of securities contemplated hereby.
(1) Authority. On or before the closing date, AFC will have taken all necessary
legal action to approve the execution and delivery of this Agreement and the
performance of its obligations hereunder and all transactions contemplated
hereby will have been duly authorized by all requisite corporate action on the
part of the Directors and OWNERS of AFC, and AFC and no further authorization,
approval or consent is necessary. Neither the Directors nor any other present
OWNERS of AFC will have any appraisal or other dissenters' rights respecting
the transactions contemplated hereby.
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(m) Compliance with Other Instruments, Etc. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will conflict with or result in violation of or constitute a default under and
is not prohibited by the Articles of Incorporation or By-Laws of AFC, the
provisions of any agreement, mortgage, indenture, franchise, license, permit,
or other consent, approval authorization, lease or other instrument, judgement,
decree, order, law or regulation by which AFC is bound or by which AFC's
business or assets may be affected.
(n) Governmental and Other Consents, Etc. No consent, approval or authorization
of or declaration or filing with any governmental authority or other person or
entity, domestic or foreign, on the part of AFC is required in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(o) Compliance with Law, Etc. AFC has complied with and is not in default in
any respect under any law, ordinance, requirement, regulation, judgement,
decree or order applicable to it or its business or properties and AFC has not
received notice of any claimed default with respect to any of the foregoing.
(p) Adverse Agreements, Etc. Except as set forth on any Schedule or exhibit
hereto, neither AFC nor the OWNERS is a party to any agreement or instrument or
subject to any charter or other corporate restriction which materially and
adversely affects AFC's or the OWNERS' obligations hereunder.
(q) Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been conducted without the intervention of any other
person or entity, and in such a manner so as not to give rise to any valid
claim against INNO, AUSTIN or AFC for a finder's or brokerage fee or like
payment.
(r) Restricted Securities. The AUSTIN common stock to be issued hereunder, upon
issuance and transfer to the OWNERS, will not have been "registered" and
therefore will be "restricted securities", as those terms are used under the
Securities Act of 1933, as amended (the "1933 Act"), and the rules and
regulations thereunder. By execution of this Agreement, each OWNER
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agrees, represents and warrants that his acquisition of the AUSTIN Shares
hereunder is for investment only, for his own account (both of record and
beneficially) and not with a view to "distribution" as that term is used under
the 1933 Act. The AUSTIN shares to be issued hereunder may bear a legend
substantially as follows: "THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
ANY STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED UNLESS THE CORPORATION
RECEIVES AN OPINION OF COUNSEL, AT THE REQUEST OF THE PRESIDENT, SATISFACTORY
TO THE CORPORATION AND ITS COUNSEL, THAT SUCH TRANSFER OR OTHER DISPOSITION CAN
BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ALL
APPLICABLE FEDERAL AND STATE SECURITIES LAWS. BY ACQUIRING THE SHARES OF STOCK
REPRESENTED BY THIS CERTIFICATE, EACH STOCKHOLDER REPRESENTS THAT HE HAS
ACQUIRED SUCH SHARES OF STOCK FOR INVESTMENT AND THAT HE WILL NOT SELL OR
OTHERWISE DISPOSE OF THE SHARES OF STOCK WITHOUT REGISTRATION OR OTHER
COMPLIANCE WITH THE AFORESAID ACT AND RULES AND REGULATIONS THEREUNDER."
6. REPRESENTATIONS AND WARRANTIES OF INNO AND AUSTIN. INNO and AUSTIN represent
and warrant to the OWNERS as follows:
(a) Organization; Good Standing. INNO and AUSTIN are duly organized, validly
existing and in good standing under the laws of their respective States of
incorporation with all requisite corporate power and authority to own, operate
and lease its respective properties and assets and to carry on its business as
now or to be conducted, and is and will be duly qualified to do business
wherever the nature and location of its businesses and assets requires such
qualification.
(b) Authority. INNO and AUSTIN have taken and will have taken, prior to the
closing date, all necessary corporate action to approve the execution, delivery
and performance of this Agreement and the transactions contemplated hereunder.
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(c) Capitalization. (i) The authorized capital of INNO consists of one hundred
million (100,000,000) shares of common stock of which forty million
(40,000,000) shares are validly issued, fully paid, non-assessable and
outstanding. (ii) The authorized capital of AUSTIN consists of one hundred
million (100,000,000) shares of common stock of which 1,600,000 will have been
issued prior to the Closing Date, and twenty million (20,000,000) shares of
Preferred stock of which none will have been issued prior to the closing date.
(iii) except as set forth in this Agreement, there are and will be on the
Closing Date, no existing agreements, warrants, options, subscription rights or
other contracts or rights providing for the sale or issuance of securities of
AUSTIN.
(d) Assets and Business. INNO and AUSTIN respectively engage in no business
except as characterized by the purposes of this Agreement. Neither INNO nor
AUSTIN own any material assets or properties. There are no existing agreements,
warrants or rights currently used or useful in the conduct of the business of
either INNO or AUSTIN.
(e) Licenses. Neither INNO nor AUSTIN holds any licenses.
(f) Financial Statements. (i) During the seven (7) years preceding the date of
this Agreement, no audited or unaudited financial statement has been prepared
on INNO. INNO has no material assets and no material liabilities. INNO has not
engaged in any business during the period since 1991. (ii) AUSTIN was
incorporated on April 29, 1999. AUSTIN has never prepared a financial
statement. On the Closing Date, AUSTIN will have no liabilities and no assets
with the exception of "Organization Costs" in an amount less than two thousand
dollars ($2,000.00).
(g) Public and Regulatory Information. INNO shall use its best efforts to
supply information to the OWNERS and AUSTIN and AFC for inclusion in any
reports required to be filed by AUSTIN in support of the trading of its common
stock in the Over The Counter markets, or as may be required by the SEC in
connection with the issuance and/or trading of its securities, or by the NASD
or any Broker Dealer organization making a market or proposing to make a market
in the securities of AUSTIN. Nothing contained herein shall function to
obligate INNO to obtain
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and/or supply audited financial information or other information which INNO
cannot practicably obtain.
(h) Information. All written material furnished or to be furnished by INNO and
AUSTIN does not and will not contain any statement which is false or misleading
with respect to any material fact, and does not and will not omit to state any
material fact, the omission of which makes the statements therein false or
misleading.
(i) Taxes. INNO has not since 1991 filed federal, state, local or foreign tax
returns and reports (or extensions for filing such returns and reports) related
to its business. INNO believes that no such returns were required to be filed
between 1991 and the Closing Date. There are no unpaid taxes which are a lien
on INNO's properties and assets, except liens for Taxes not yet due and
payable. There is not pending or known any proposed assessment by any taxing
authority for additional Taxes applicable to INNO.
(j) Insurance. Neither INNO nor AUSTIN maintains any insurance policies or
bonds with respect to the risks normally insured against by companies similarly
situated, including general and public liability insurance.
(k) Litigation. There is no legal, administrative, arbitration or other
proceeding or claim, governmental or administrative investigation or inquiry
pending or threatened against or involving INNO or AUSTIN, their properties,
assets, business or financial condition, or which questions the ability of INNO
or AUSTIN to carry out its obligations hereunder, or which challenges the
acquisition of AFC by AUSTIN or the exchange of securities contemplated hereby.
(1) Authority. On or before the closing date, INNO and AUSTIN will have taken
all necessary legal action to approve the execution and delivery of this
Agreement and the performance of its obligations hereunder and all transactions
contemplated hereby will have been duly authorized by all requisite corporate
action on the part of the Directors of INNO and AUSTIN, and INNO and AUSTIN,
and no further authorization, approval or consent is necessary.
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(m) Compliance with Other Instruments, Etc. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will conflict with or result in violation of or constitute a default under and
is not prohibited by the Articles of Incorporation or By-Laws of INNO or
AUSTIN, the provisions of any agreement, mortgage, indenture, franchise,
license, permit, or other consent, approval authorization, lease or other
instrument, judgement, decree, order, law or regulation by which INNO or AUSTIN
is bound or by which any business or assets may be affected.
(n) Governmental and Other Consents, Etc. No consent, approval or authorization
of or declaration or filing with any governmental authority or other person or
entity, domestic or foreign, on the part of INNO or AUSTIN is required in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(o) Compliance with Law, Etc. INNO and AUSTIN have complied with and are not in
default in any respect under any law, ordinance, requirement, regulation,
judgement, decree or order applicable to them or their business or properties
and neither has received notice of any claimed default with respect to any of
the foregoing.
(p) Adverse Agreements, Etc. Neither INNO nor AUSTIN is a party to any
agreement or instrument or subject to any charter or other corporate
restriction which materially and adversely affects their obligations hereunder.
(q) No Continuing INNO Interest. By execution of this Agreement, INNO and
AUSTIN agree, represent and warrant that after distribution of the AUSTIN
shares described hereinabove in Paragraphs 1 and 2, INNO will thereafter have
no interest in or relationship with AFC, AUSTIN or the OWNERS with respect to
the transactions contemplated hereby.
(r) Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been conducted without the intervention of any other
person or entity, and in such a
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manner so as not to give rise to any valid claim against INNO, AUSTIN or AFC or
the OWNERS or any of them for a finder's or brokerage fee or like payment.
7. CERTAIN COVENANTS OF AFC AND THE OWNERS.
(a) Cause Conditions to be Satisfied. AFC and the OWNERS shall use their best
efforts to cause the transactions contemplated by this Agreement to be
consummated.
(b) Operation in Usual Manner. From and after the execution and delivery of
this Agreement and until the Closing Date, the OWNERS shall cause AFC to
continue to conduct its business in a prudent manner and not to engage in any
activity outside the normal and ordinary course of such business or to incur
any obligations not incurred in the normal and usual course of its business and
consistent with past practice and to take no actions or omit to take any
actions the taking or omitting of which would result in any material adverse
change in the financial condition of AFC or in its operations, business,
prospects, properties or assets or its ability to perform its obligations
hereunder.
(c) Miscellaneous. AFC and the OWNERS agree to call and hold such meeting(s) of
Directors and OWNERS as shall be necessary to consider and approve the
transactions described herein.
8. CERTAIN COVENANTS OF INNO AND AUSTIN,
(a) Cause Conditions to be Satisfied. INNO and AUSTIN shall use their best
efforts to cause the transactions contemplated by this Agreement to be
consummated.
(b) Operation in Usual Manner. From and after the execution and delivery of
this Agreement and until the Closing Date, INNO and AUSTIN shall continue to
conduct business in a prudent manner and not engage in any activity outside the
normal and ordinary course of such business in pursuit of the transactions
contemplated by this Agreement and not incur any obligations not incurred in
the interests of the transactions contemplated hereby and take no actions or
omit to take any actions the taking or omitting of which would result in any
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material adverse change in the financial condition of INNO or AUSTIN or either
of their operations, business, prospects, properties or assets or ability to
perform their respective obligations hereunder.
(c) Miscellaneous. INNO and AUSTIN agree to call and hold such meeting(s) of
Directors as shall be necessary to consider and approve the transactions
described herein.
9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF AFC AND THE OWNERS. All
obligations of AFC and the OWNERS under this Agreement are subject at their
discretion to the fulfillment, at or prior to the Closing Date of each of the
following conditions:
(i) INNO's and AUSTIN's representations and warranties herein contained shall
be true in all material respects on and as of the Closing Date with the same
force and effect as though made on and as of said date;
(ii) INNO and AUSTIN shall have performed in all material respects all its
obligations and agreements and complied with all its covenants contained in
this Agreement to be performed and complied with by INNO and AUSTIN on or prior
to the Closing Date;
(iii) The OWNERS shall have received a certificate executed by the President of
INNO dated the Closing Date, in form and substance satisfactory to the OWNERS,
with respect to the matters specified in Section 9(i) and 9(ii);
(iv) The OWNERS shall have received a certificate executed by the President of
INNO and attaching evidence of Corporate existence and good standing of INNO
and AUSTIN in form and substance satisfactory to OWNERS.
(v) No suit action or other proceeding shall be pending before any court or
governmental agency in which it is sought to restrain or prohibit, or to obtain
damages or other relief in connection with, this Agreement or the consummation
of the transactions contemplated hereby or which might materially and adversely
affect the value of AUSTIN's business and assets.
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10. CONDITIONS PRECEDENT TO INNO'S AND AUSTIN'S OBLIGATIONS. All obligations of
AFC and the OWNERS under this Agreement are subject at their discretion, to the
fulfillment, at or prior to the Closing Date of each of the following
conditions:
(i) AFCs and the OWNERS' representations and warranties herein contained shall
be true in all material respects on and as of the Closing Date with the same
force and effect as though made on and as of said date;
(ii) AFC and the OWNERS shall have performed in all material respects all its
obligations and agreements and complied with all its covenants contained in
this Agreement to be performed and complied with by AFC and the OWNERS on or
prior to the Closing Date;
(iii) INNO shall have received a certificate executed by the President of AFC
and by the OWNERS dated the Closing Date, in form and substance satisfactory to
the President of INNO, with respect to the matters specified in Section 10(i)
and 10(ii);
(iv) INNO shall have received a certificate executed by the President of AFC
and attaching evidence of Corporate existence and good standing of AFC in form
and substance satisfactory to the President of INNO.
(v) No suit action or other proceeding shall be pending before any court or
governmental agency in which it is sought to restrain or prohibit, or to obtain
damages or other relief in connection with, this Agreement or the consummation
of the transactions contemplated hereby or which might materially and adversely
affect the value of AFC's business and assets.
11. SURVIVAL OF CERTAIN PROVISIONS. All of the representations, warranties and
covenants contained in Sections 5,6,7, and 8 of this Agreement shall survive the
Closing Date for a period of two (2) years.
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12. INDEMNIFICATION OF INNO AND AUSTIN.
(a) Notwithstanding the events to take place on the Closing Date, and
regardless of any investigation at any time made by or on behalf of INNO or
AUSTIN or any information that either of them may have, AFC and the OWNERS
agree to fully indemnify, defend, save and hold INNO and AUSTIN harmless in the
event that INNO or AUSTIN shall at any time during the two (2) year period
following the Closing Date, suffer any expense, damage, liability, loss, cost
or deficiency, or shall have asserted against it any claim, demand or suit,
which arises out of or results from, or if INNO or AUSTIN shall pay or become
obligated to pay any sum or incur any expense (including reasonable attorney's
fees) on account of the following: (i) any inaccuracy in any representation or
the breach of any warranty of AFC or the OWNERS hereunder; (ii) any failure of
AFC or the OWNERS duly to perform or observe any term, provision, covenant,
agreement or condition hereunder on the part of AFC or the OWNERS to be
performed or observed; (iii) any material misrepresentation in, or omission
from, any statement, exhibit, certificate, schedule or other document furnished
on or after the date hereof pursuant to this Agreement by AFC or the OWNERS (or
any representative thereof); (iv) any and all claims, demands, suits, actions,
causes of action, proceedings, losses, liabilities, judgements, including but
not limited to, costs and legal and other expenses, incident to any of the
matters otherwise indemnified against by this Section 12 must be asserted by
INNO or AUSTIN no later than the second anniversary of the Closing Date.
(b) The foregoing indemnification is in addition to all of INNO's and AUSTIN's
other rights and remedies under law or in equity for any breach by AFC or the
OWNERS and INNO's and AUSTIN's right of offset for any Consideration or other
sum which INNO or AUSTIN is obligated to pay to the OWNERS is expressly
preserved.
13. INDEMNIFICATION OF AFC AND THE OWNERS.
(a) Notwithstanding the events to take place on the Closing Date, and
regardless of any investigation at any time made by or on behalf of AFC or the
OWNERS or any information that either of them may have, INNO and AUSTIN agree
to fully indemnify, defend, save and hold
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AFC and the OWNERS harmless in the event that AFC or the OWNERS shall at any
time during the two (2) year period following the Closing Date, suffer any
expense, damage, liability, loss, cost or deficiency, or shall have asserted
against it any claim, demand or suit, which arises out of or results from, or
if AFC or the OWNERS shall pay or become obligated to pay any sum or incur any
expense (including reasonable attorney's fees) on account of the following: (i)
any inaccuracy in any representation or the breach of any warranty of INNO or
AUSTIN hereunder; (ii) any failure of INNO or AUSTIN duly to perform or observe
any term, provision, covenant, agreement or condition hereunder on the part of
INNO or AUSTIN to be performed or observed; (iii) any material
misrepresentation in, or omission from, any statement, exhibit, certificate,
schedule or other document furnished on or after the date hereof pursuant to
this Agreement by INNO or AUSTIN (or any representative thereof); (iv) any and
all claims, demands, suits, actions, causes of action, proceedings, losses,
liabilities, judgements, including but not limited to, costs and legal and
other expenses, incident to any of the matters otherwise indemnified against by
this Section 13 must be asserted by AFC or the OWNERS no later than the second
anniversary of the Closing Date.
(b) The foregoing indemnification is in addition to all of AFC's and the
OWNERS' other rights and remedies under law or in equity for any breach by INNO
or AUSTIN and AFC's and the OWNERS right of offset for any Consideration or
other sum which AFC or the OWNERS is obligated to pay to INNO or AUSTIN is
expressly preserved.
14. POST-CLOSING MATTERS. After the Closing Date:
INNO shall cause all present Directors and Officers of AUSTIN to resign;
The OWNERS shall elect a new Board of Directors of AUSTIN in accordance with its
By-laws;
The new Board of AUSTIN shall elect or appoint Officers of AUSTIN.
AUSTIN shall enter into such employment agreements with such of its employees
as its Officers and Board shall decide.
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15. NOTICES. All notices, consents, demands, requests, approvals and other
communications which are required or may be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered or mailed by certified
first class mail, postage prepaid:
(a) If to AFC:
Austin Funding Corporation
000 Xxxxxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
Attention: Xx. Xxxxx X. XxXxxxxx
(b) If to the OWNERS:
The Owners of
Austin Funding Corporation
000 Xxxxxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
C/O: Xx. Xxxxx X. XxXxxxxx,
Owners' Agent
(c) If to INNO and/or AUSTIN:
C/O Xxxxx X. Xxxxxx
000 Xxxx Xxxxxx, Xxxxx 00
Xxxxxxxx, XX 00000
16. ENTIRE AGREEMENT. This Agreement, together with the other writings
delivered in connection therewith, embodies the entire agreement and
understanding of the parties hereto and supersedes any prior agreement and
understanding among all of the same parties.
17. EXPENSES. INNO and AUSTIN, on the one hand and the OWNERS on the other
hand, shall be fully and solely responsible for their respective costs and
expenses in preparing and negotiating this Agreement and consummating the
transactions contemplated hereby.
18. NO WAIVER. No failure to exercise, and no delay in exercising, any right,
power or privilege hereunder shall operate as a waiver thereof. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision. No extension of time of
performance of any obligations or other acts hereunder or under any other
agreement shall be deemed to be an extension of time for performance of any
other obligations or any other acts. The rights and remedies of the parties
under this Agreement,
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any Exhibits, any Schedules and any certificate or document delivered pursuant
to the provisions hereof, are in addition to all other rights and remedies, at
law or equity, that they may have against the others.
19. EXHIBITS AND SCHEDULES. The Exhibits and Schedules to this Agreement
constitute a part hereof as though set forth in full above.
20. SPECIFIC PERFORMANCE. The parties mutually acknowledge that in the event of
a breach or renunciation of this Agreement by any party, or a termination of
this Agreement or a willful failure by any party to perform its obligations
hereunder, the other parties will not have an adequate remedy at law and,
therefore, each of the other parties shall be entitled to injunctive or other
equitable relief, in addition to the other remedies available to them.
21. FURTHER ASSURANCES. Each of the parties agrees that at any time, and from
time to time, it shall execute, acknowledge, deliver and perform, or cause to
be executed, acknowledged, delivered and performed, all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney and assurances
as may be necessary or proper to carry out the purposes and intent of this
Agreement, including if necessary, but not by way of limitation, the execution
of one or more Agreements containing the same essential business conditions,
intended in the aggregate to replace the within agreement
22. SEVERABILITY. The parties stipulate that the terms and provisions of this
Agreement are fair and reasonable as at the signing of this Agreement. However,
if notwithstanding that stipulation any one or more of the terms, provisions,
covenants or restrictions of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
23. COUNTERPARTS. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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25. HEADINGS. The descriptive headings of the several paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
INNOVATION INTERNATIONAL, INC.
Attest:
/s/ [ILLEGIBLE] /s/ XXXXX X. XXXXXX
------------------------------- ---------------------------------------
Asst. Secretary Xxxxx X. Xxxxxx, President
AVSTW ASSET MANAGEMENT CORPORATION
Attest:
/s/ [ILLEGIBLE] /s/ XXXXX X. XXXXXX
------------------------------- ---------------------------------------
Secretary Xxxxx X. Xxxxxx, President
AUSTIN FUNDING CORPORATION
/s/ XXXXX X. XXXXXXXX
-------------------------------
Xxxxx X. XxXxxxxx, President
Attest:
/s/ XXXXX X. XXXXXXXX
-------------------------------
Secretary
THE OWNERS (continued on next page)
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OWNERS NAME SIGNATURE WITNESS
----------- --------- -------
Xxxxx X. XxXxxxxx /s/ XXXXX X. XXXXXXXX /s/ XXXXXXX X. XXXXXX
--------------------------- ------------------------
Xxxxxxx X. Xxxxxx /s/ XXXXXXX X. XXXXXX /s/ XXXXX X. XXXXXXXX
--------------------------- ------------------------
Xxxxx X. Xxxxxx /s/ XXXXX X. XXXXXX /s/ XXXXXX X. XXXXXXX
--------------------------- ------------------------
Xxxxxx X. Xxxxx Xx. /s/ XXXXXX X. XXXXX XX. /s/ XXXXX X. XXXXXXXX
--------------------------- ------------------------
Xxxxx X. Xxxxxxxx /s/ XXXXX X. XXXXXXXX /s/ XXXXX X. XXXXXX
--------------------------- ------------------------
Xxx X. Xxxxxxxx /s/ XXX X. XXXXXXXX /s/ XXXXX X. XXXXXXXX
--------------------------- ------------------------
Xxxxxxx XxX. Xxxxxxx /s/ XXXXXXX XXX. XXXXXXX /s/ XXXXX X. XXXXXXXX
--------------------------- ------------------------
Xxxxxxx X. Dell /s/ XXXXXXX X. DELL /s/ XXXXX X. XXXXXXXX
--------------------------- ------------------------
Xxxxxx X. Xxxxxxx /s/ XXXXXX X. XXXXXXX /s/ XXXXXXX X. DELL
--------------------------- ------------------------
Xxxxx X. Xxxxxx /s/ XXXXX X. XXXXXX /s/ XXXXXXX XXX. XXXXXXX
--------------------------- ------------------------
Xxxxxxxx Xxx X. Xxxxxxx /s/ XXXXXXXX XXX X. XXXXXXX /s/ XXX X. XXXXXXXX
--------------------------- ------------------------
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SCHEDULE I
Name Of Selling Number of AFC Number of AUSTIN
Shareholder: Shares to be exchanged Shares to be Issued
---------------- ---------------------- -------------------
Xxxxx X. XxXxxxxx 324,324 6,783,872
Xxxxxxx X. Xxxxxx 162,162 3,391,936
Xxxxx X. Xxxxxx 162,162 3,391,936
Xxxxxx X. Xxxxx, Xx. 108,108 2,261,291
Xxxxx X. Xxxxxxxx 108,108 2,261,291
Xxx X. Xxxxxxxx 25,338 529,994
Xxxxxxx XxX. Xxxxxxx 25,338 529,994
Xxxxxxx X. Dell 12,669 264,997
Xxxxxx X. Xxxxxxx 5,068 106,007
Xxxxx X. Xxxxxx 5,068 106,007
Xxxxxxxx Xxx X. Xxxxxxx 5,068 106,007
---------------------- -------------------
Total Shares 943,413 19,733,333
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