Exhibit 10.1
REORGANIZATION AGREEMENT
This Reorganization Agreement (hereinafter the "Agreement") is made and
entered into as of July 27, 2004, by and among Explorations Group , Inc., a
Delaware corporation (hereinafter "Explorations"), Parking Pro, Inc., a New York
corporation ("Parking Pro ") and the stockholders of Parking Pro identified in
Exhibit A hereto (collectively, the "Stockholders"). The Stockholders are all
the stockholders of Parking Pro.
AGREEMENT
In consideration of the terms hereof, the parties hereto agree as
follows:
ARTICLE I - PURCHASE AND SALE OF STOCK
1.1 Transfer of Stock
Subject to the terms and conditions hereof, on the Closing Date (as
defined below), the Stockholders shall sell, convey, transfer, assign and
deliver to Explorations, and Explorations shall purchase from the Stockholders,
all of the issued and outstanding common shares of Parking Pro, par value $0.001
(the "Parking Pro Stock").
1.2 The Closing
The closing of this Agreement (the "Closing") shall occur on such date
as all conditions precedent to closing have been satisfied by the respective
parties on or about July 31, 2004 (the "Closing Date") or such other time or
location as the parties hereto shall agree.
1.3 Deliveries at the Closing
On the Closing Date in order to effectuate the transfer of the Stock:
(a) The Stockholders shall deliver to Explorations certificates
representing all of the Parking Pro Stock, free and clear of any claim, lien,
pledge, option, charge, easement, security interest, right-of-way, encumbrance,
restriction on sale or transfer, preemptive right or option or any other right
of any third party of any nature whatsoever ("Encumbrance"), duly endorsed in
blank for transfer or accompanied by stock powers duly executed in blank.
(b) Explorations shall deliver the consideration of the Purchase Price
as set forth in Section 1.4 below.
1
(c) Parking Pro, the Stockholders and Explorations shall each deliver
all documents, certificates, agreements and instruments required to be delivered
pursuant to Articles IV and V; and
(d) All instruments and documents executed and delivered to any party
pursuant hereto shall be in a form and substance, and shall be executed in a
manner, reasonably satisfactory to the receiving party.
1.4 Purchase Price
Subject to the terms and conditions of this Agreement, the total
purchase price for the Parking Pro Stock (the "Purchase Price") shall be
1,500,000 shares of Explorations common stock, $.01 par value and 60,000 Class B
Voting Convertible Preferred, $.01 par value (collectively, the "Consideration
Shares"), provided that, 60,000 of the Preferred B Shares and the Common Shares
issued upon conversion of the Class B Voting Convertible Preferred shall be
subject to restrictions and cancellation as set forth below (the "Restricted
Shares"). The Consideration Shares will be allocated among the Stockholders in
proportion to their holdings of Parking Pro immediately prior to the Closing.
1.5 Restricted Shares
Upon the acquisition by Parking Pro of interests in other public
parking facilities (a "Facility") either owned or operated by affiliates of
ParkingPro or third parties (a "Facility Acquisition"), for which it acquires
leases and/or management contracts, all restrictions and cancellation provisions
on six (6) Restricted Shares shall be removed (except for standard Rule 144
legends) for each one hundred ($100.00) dollar in annualized EBITDA acquired by
Parking Pro as a result of such Facility Acquisition, which shall be determined
by the December 31, 2003 audited financials for each such Facility. The
Restricted Shares shall bear a legend stating such restrictions. The
restrictions shall be removed from the Restricted Shares held by the holders of
the Restricted Shares on a pro rata basis. In the event that on February 15,
2005 any Restricted Shares remain, all such remaining Restricted Shares shall be
deemed cancelled. Notwithstanding anything to the contrary contained herein, no
additional shares of Explorations common stock will be issued upon any Facility
Acquisition.
1.6 Purchase Price Adjustment
In the event that the aggregate earnings before interest, taxes,
depreciation and amortization("EBITDA") of Parking Pro's subsidiaries for the
year ended December 31, 2003, shall be more than five percent (5%) lower than
$150,000.00 or the EBIDTA for the three months ended March 31, 2004 (the "EBITDA
Target") shall be more than five percent (5%) lower than $102,411.75, the
Purchase Price shall be reduced in an amount equal to the percentage that the
EBITDA shall be less than EBITDA Target with such reduction being applied to the
first of the Consideration Shares to be issued. The reduction of the Purchase
Price shall be Explorations' sole remedy in connection with any failure of
Parking Pro to comply with the representations set forth in Section 2.7 below.
2
1.7 Assistance in Consummation of the Purchase and Sale of Stock
The Stockholders, Parking Pro and Explorations shall provide all
reasonable assistance to, and shall cooperate with, each other to bring about
the consummation of the purchase and sale of the Parking Pro Stock and the other
transactions contemplated herein as soon as possible in accordance with the
terms and conditions of this Agreement.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
OF PARKING PRO AND THE STOCKHOLDERS
Parking Pro and the Stockholders jointly and severally represent and
warrant to Explorations, as of the date of this Agreement and as of the Closing,
all as follows in this Article II:
2.1 Good Title
Each of the Stockholders is the sole and registered owner of that
number of shares of the Stock set forth opposite such Stockholder's name on
Exhibit A with good title thereto, free and clear of any Encumbrance.
2.2 Organization, Good Standing
Parking Pro is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of New York, and has all requisite
corporate power and authority to own, operate and lease its properties and
assets and to carry on its business as now conducted.
2.3 Authorization
Parking Pro has the full corporate power and authority and the
Stockholders have full power, right and authority to enter into this Agreement
and each of the documents to which it or he is a party (collectively, the
"Operative Documents"), and to carry out the transactions contemplated hereby
and thereby. This Agreement has been, and each Operative Document to which
Parking Pro or the Stockholders are a party will be, on the Closing Date, duty
executed and delivered by each of Parking Pro and the Stockholders, as
applicable, and this Agreement is, and each Operative Document to which Parking
Pro or the Stockholders are a party will be, on the Closing Date, a legal, valid
and binding obligation of each of Parking Pro and the Stockholders, as
applicable, enforceable against each of them in accordance with their respective
terms of this Agreement and each such Operative Document.
3
2.4 Authorized Capitalization
Parking Pro's authorized capital stock consists solely of common shares
of which 3,000 shares are issued and outstanding on the date of this Agreement
and entirely held by the Stockholders. All issued and outstanding shares of
Parking Pro Stock are duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding or authorized subscriptions, options,
warrants, calls, rights, commitments or other agreements of any character which
obligate or may obligate Parking Pro to issue any additional shares of any of
its capital stock or any securities convertible into or evidencing the right to
subscribe for any shares of any such capital stock. There are no voting trusts
or other agreements or understandings with respect to the capital stock of
Parking Pro to which Parking Pro or the Stockholders are a party or by which
Parking Pro or the Stockholders are bound. As of the Closing, ParkingPro will
have no outstanding related party loans.
2.5 Subsidiaries and Affiliates
Parking Pro has no subsidiaries except Big Schem Corp., Chiefs
Management Corp. and NYC Parking Services Corp., all of which are New York
corporations (the "Subsidiaries"). As used in this Agreement, "Subsidiary," when
used in reference to any Person (as defined in Section 2.6 of this Agreement),
shall mean any corporation of which outstanding securities having ordinary
voting power to elect a majority of the Board of Directors of such corporation
are owned directly or indirectly by such Person. Parking Pro does not own,
directly or indirectly, any ownership, equity, profits or voting interest in, or
otherwise control, any corporation, partnership, joint venture or other entity,
and has no agreement or commitment to purchase any such interest.
2.6 No Approvals or Notices Required; No Conflicts With
Instruments
The execution, delivery and performance of this Agreement and the
Operative Documents by Parking Pro and the Stockholders and the consummation of
the transactions contemplated hereby and thereby by Parking Pro and the
Stockholders will not (a) constitute a violation (with or without the giving of
notice or lapse of time, or both) of any provision of law or any judgment,
decree, order, regulation or rule of any court or other governmental authority
applicable to Parking Pro or the Stockholders, (b) require any consent, approval
or authorization of, or declaration, filing or registration with, any person,
corporation, partnership, joint venture, association, organization, other entity
or governmental or regulatory authority (a "Person") except for compliance with
applicable securities laws (the consent of all such Persons to be duly obtained
by Parking Pro and the Stockholders at or prior to the Closing), (c) result in a
material default (with or without the giving of notice or lapse of time, or
both) under, acceleration or termination of, or the creation in any party of the
right to accelerate, terminate, modify or cancel, any agreement, lease, note or
other restriction, encumbrance, obligation or liability to which Parking Pro or
the Stockholders is a party or by which either of them is bound or to which any
of their assets are subject, (d) result in the creation of any lien or
encumbrance upon the assets of Parking Pro or upon the Parking Pro Stock, (e)
conflict with or result in a breach of or
4
constitute a default under any provision of the Articles of Incorporation or
By-Laws of Parking Pro, or (f) invalidate or adversely affect any permit,
license, authorization or status used in the conduct of the business of Parking
Pro.
Parking Pro has delivered or will deliver to Explorations a true and
complete copy of its audited balance sheet and income statement as of December
31, 2003 which shall reflect the business of the Parking Pro Subsidiaries for
the year ended December 31, 2003 and an unaudited balance sheet and income
statement as of March 31, 2004 (the "Parking Pro Financial Statements"). The
Parking Pro Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and fairly present
the financial position of the Parking Pro Subsidiaries as of the dates thereof
and the results of its operations and changes in financial position for the
periods then ended.
Parking Pro represents to Explorations that the Parking Pro Financial
Statements for the year ended December 31, 2003 will show, at a minimum, the
following:
x. Xxxxx revenues of at least $1,000,000
b. EBITDA of at least $150,000
c. Pre-tax income exceeded $50,000
Parking Pro represents to Explorations that the Parking Pro Financial
Statements for the three month period ended March 31, 2004 will show, at a
minimum, the following:
x. Xxxxx revenues of at least $289,674
b. EBITDA of at least $102,411.75
2.8 Brokers and Finders
Parking Pro has not retained any broker or finder in connection with
the transactions contemplated by this Agreement.
2.9 Investment Representations
(a) Investment. The Stockholders shall receive the Explorations common
stock with no intention of distributing or reselling the Explorations common
stock or any part thereof, or interest therein, in any transaction which would
be in violation of the securities laws of the United States or any state
thereof, without prejudice, however, to the Stockholders' rights at all times to
sell or otherwise dispose of all or any part of the Explorations common stock
under an effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), or under an exemption from such registration
5
requirements available under the Securities Act and applicable state securities
laws.
(b) No Public Market. The Stockholders understand that the Explorations
common stock received or to be received by the Stockholders pursuant to this
Agreement have not been registered under the Securities Act by reason of their
sale in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act pursuant to Section 4(2) thereof, and that
Stockholders will have to hold the Explorations common stock and bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration.
(c) Experience. The Stockholders acknowledge that the Stockholders and
the Stockholders' representatives are experienced in, and capable of, evaluating
the financial condition and prospects of corporations like Explorations. The
Stockholders have had access to the records of Explorations and have had the
opportunity to ask questions concerning Explorations and an investment in the
Explorations common stock.
(d) No Intention to Dispose of Stock. No Stockholder has any current
plan or intention, or is under any binding commitment or contract, to sell,
exchange or otherwise dispose of the Explorations common stock received
hereunder.
2.10 Taxes
Parking Pro has filed all federal, state, county and local income,
excise, property and other tax, governmental and/or related returns, forms, or
reports, which are due or required to be filed by it prior to the date hereof,
except where the failure to do so would have no material adverse impact on
Parking Pro, and has paid or made adequate provision in the Parking Pro
Financial Statements for the payment of all taxes, fees, or assessments which
have or may become due pursuant to such returns or pursuant to any assessments
received. Parking Pro is not delinquent or obligated for any tax, penalty,
interest, delinquency or charge.
Each such tax return or report has been duly filed on a timely basis
and all such returns and reports are correct and complete in all material
respects and fully discloses and does not understate the income, taxes,
expenses, deductions and credits for the period to which it relates. Up to and
including the Closing Date, no claim has been made against Parking Pro by any
authority in a jurisdiction in which it does not file a return that it is or may
be subject to any taxes in that jurisdiction. Parking Pro has not received
notice of any actions, suits, proceedings, investigations or claims pending or
threatened against Parking Pro in respect of any taxes nor are any matters
relating to any taxes under discussion with any governmental authority.
Parking Pro has withheld from each payment made to any of its past or
present employees, officers and directors or to any other person in respect of
whom withholding therefrom is required, the amount of all taxes and other
deductions required to be withheld therefrom and has paid the same to the proper
tax authorities or other receiving officers in all material respects within the
time required under any applicable legislation. Parking Pro
6
has collected all taxes it is required to collect and has remitted all such
taxes it is required to remit to the proper tax authority when required to do so
all.
2.11 Leased Property
All leased real property currently held by ParkingPro are set forth in
Schedule 2.11 (the "Leased Property") and are held pursuant to a valid and
binding lease, the subject leases are currently in good standing and without
defaults, subject to no material zoning restrictions, liens or encumbrance, none
of which impair the use of the leased realty for purposes of conducting the
business of ParkingPro, with all agreements, covenants, instruments or
obligations affecting the leased realty being in good standing, there being no
situations which, with the passage of time, would result in a default or
forfeiture under any agreements, covenants, instruments or obligations affecting
the leased realty; nor is the leased realty subject to any restrictions on
assignment, transfer or sale, including, without limitation, requirements
involving renegotiation of the leased realty's terms.
To the knowledge of ParkingPro, the presence of each improvement,
fixture, or piece of equipment on the Leased Property does not violate any law,
including without limitation any zoning, building, safety, health or other law,
and the Leased Property is zoned for the purposes for which such premises are
currently being used.
2.12 Litigation
Parking Pro is not a party to or the subject of any pending litigation,
claims, decrees, orders, stipulations or governmental investigation or
proceeding not reflected in the Parking Pro Financial Statements or otherwise
disclosed herein, and there are no lawsuits, claims, assessments,
investigations, or similar matters, against or affecting Parking Pro, its
management or its properties. Parking Pro has complied in all material respects
with all laws, statutes, ordinances, regulations, rules, decrees or orders
applicable to it.
2.13 Claims and Proceedings
There are no claims, actions, suits, arbitrations, proceedings or
investigations involving, pending or, to the knowledge of Parking Pro,
threatened against Parking Pro before or by any court or governmental or
non-governmental department, commission, board, bureau, agency or
instrumentality, or any other Person, which could question the validity of this
Agreement or which could enjoin, restrain, condition or prohibit any action
taken or to be taken by Explorations pursuant to this Agreement or in connection
with the transactions contemplated hereby and, to the knowledge of Parking Pro,
there is no valid basis for any such claim, action, suit, arbitration,
proceeding or investigation. There are no outstanding or unsatisfied judgments,
orders, decrees, or stipulations by which Parking Pro is bound which involve or
affect the transactions contemplated hereby.
7
ARTICLE III - REPRESENTATIONS AND WARRANTIES
OF EXPLORATIONS
Except as is otherwise described in the applicable Schedules,
Explorations represents and warrants to Explorations and the Stockholders, as of
the date of this Agreement and as of the Closing, all as follows in this Article
III:
3.1 Organization, Good Standing
Explorations is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, respectively, and have
all requisite corporate power and authority to own, operate and lease their
properties and assets and to carry on their businesses as now conducted.
3.2 Authority
Explorations has full corporate power and authority to execute, deliver
and perform this Agreement and the Operative Documents to which either is a
party and to carry out the transactions contemplated hereby and thereby. This
Agreement has been, and each Operative Document to which Explorations is a party
will be, on the Closing Date, duly executed and delivered by Explorations, and
this Agreement is, and each Operative Document to which Explorations is a party
will be, on the Closing Date, a legal, valid and binding obligation
Explorations, enforceable against Explorations in accordance with its terms.
3.3 No Approvals or Notices Required; No Conflicts With
Instruments
The execution, delivery and performance of this Agreement and the
Operative Documents by Explorations, the issuance of the Consideration Shares to
the Stockholders and the consummation of the transactions contemplated hereby
and by the Operative Documents will not (a) constitute a violation (with or
without the giving of notice or lapse of time, or both) of any provision of law
or any judgment, decree, order, regulation or rule of any court or other
governmental authority applicable to Explorations, (b) require any consent,
approval or authorization of, or declaration, filing or registration with, any
Person, (c) result in a default (with or without the giving of notice or lapse
of time, or both) under, acceleration or termination of, or the creation in any
party of the right to accelerate, terminate, modify or cancel, any agreement,
lease, note or other restriction, encumbrance, obligation or liability to which
Explorations is a party or by which either is bound or to which any of their
assets are subject, (d) result in the creation of any material lien or
encumbrance upon the assets of Explorations, the Consideration Stock or the
funds being delivered in connection herewith, (e) conflict with or result in a
breach of or constitute a default under any provision of the charter documents
of Explorations, or (f) invalidate or adversely affect any permit, license,
authorization or status used in the conduct of the business of Explorations.
8
3.4 Authorized Shares
All of the shares of Consideration Shares issuable in exchange for the
Parking Pro Stock in accordance with this Agreement will be, when so issued,
duly authorized, validly issued, fully paid and non-assessable.
3.5 Claims and Proceedings
There are no claims, actions, suits, arbitrations, proceedings or
investigations involving, pending or, to the knowledge of Explorations,
threatened against Explorations before or by any court or governmental or
non-governmental department, commission, board, bureau, agency or
instrumentality, or any other Person, which could question the validity of this
Agreement or which could enjoin, restrain, condition or prohibit any action
taken or to be taken by Explorations pursuant to this Agreement or in connection
with the transactions contemplated hereby (including, without limitation the
purchase of the Parking Pro Stock or the issuance of the Consideration Stock to
the Stockholders), and, to the knowledge of Explorations, there is no valid
basis for any such claim, action, suit, arbitration, proceeding or
investigation. There are no outstanding or unsatisfied judgments, orders,
decrees, or stipulations by which Explorations is bound which involve or affect
the transactions contemplated hereby.
3.6 Financial Statements
Explorations has delivered to Parking Pro a true and complete copy of
its Form 10- KSB for the year ended December 31, 2003, Form 10-QSB for the
three-month period ending March 31, 2004 and an unaudited balance sheet as of
June 30, 2004 (the "Explorations Financial Statements"). The Explorations
Financial Statements are complete, accurate and fairly present the financial
condition of Explorations as of the dates thereof and the results of its
operations for the periods then ended. There are no liabilities or obligations
either fixed or contingent not reflected therein. The Explorations Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis and fairly present the financial
position of Explorations as of the dates thereof and the results of its
operations and changes in financial position for the periods then ended.
As of the closing, Explorations liabilities shall not exceed
$150,000.00all of which shall be paid by Explorations at the Closing.
3.7 Taxes
Explorations has filed all federal, state, county and local income,
excise, property and other tax, governmental and/or related returns, forms, or
reports, which are due or required to be filed by it prior to the date hereof,
except where the failure to do so would have no material adverse impact on
Explorations, and has paid or made adequate provision in the Explorations
Financial Statements for the payment of all taxes, fees, or assessments which
have or may become due pursuant to such returns or pursuant to any assessments
received. Explorations is not delinquent or obligated for any tax, penalty,
interest, delinquency or charge.
9
Each such tax return or report has been duly filed on a timely basis
and all such returns and reports are correct and complete in all material
respects and fully discloses and does not understate the income, taxes,
expenses, deductions and credits for the period to which it relates. Up to and
including the Closing Date, no claim has been made against Explorations by any
authority in a jurisdiction in which it does not file a return that it is or may
be subject to any taxes in that jurisdiction. Explorations has not received
notice of any actions, suits, proceedings, investigations or claims pending or
threatened against Explorations in respect of any taxes nor are any matters
relating to any taxes under discussion with any governmental authority.
Explorations has withheld from each payment made to any of its past or
present employees, officers and directors or to any other person in respect of
whom withholding therefrom is required, the amount of all taxes and other
deductions required to be withheld therefrom and has paid the same to the proper
tax authorities or other receiving officers in all material respects within the
time required under any applicable legislation. Explorations has collected all
taxes it is required to collect and has remitted all such taxes it is required
to remit to the proper tax authority when required to do so all.
3.8 Capital Structure
The authorized capital stock of Explorations consists of 10,000,000
shares of common stock, $.01 par value and 1,500,000 shares of preferred stock
and 100,000 shares have been designated Class B Preferred Stock, $.01 par value,
and 500,000 shares have been designated as Class A preferred stock, $.01 par
value. As of the Closing (without giving effect to the payment of the Purchase
Price): (i) no more than 2,212,632 shares of Explorations common stock shall be
issued and outstanding; (ii) no more than 23,536 shares of Class A preferred
stock shall be issued and outstanding; (iii) no shares of Class B Preferred
shall be issued and outstanding; and (iv) no shares of Explorations common stock
were held by Explorations in its treasury. All outstanding shares of capital
stock of Explorations are, and all shares which may be issued will be, when
issued, duly authorized, validly issued, fully paid and non-assessable and not
subject to preemptive rights. Except for the Xxxxxx Family Spendthrift Trust, a
Florida trust ("TFST") convertible Bond (the "TFST Bond") and the Class A
Preferred Stock, there are no issued, reserved for issuance or outstanding
securities of Explorations or any Explorations subsidiary convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of
Explorations, or any warrants, calls, options or other rights to acquire from
Explorations or any Explorations subsidiary.
Explorations does not have any securities, debt instruments, agreements
or obligations of any nature to acquire, directly or indirectly, any shares of
capital stock, or other equity or ownership interest in, any person, firm or
corporation, or its assets.
3.9 OTCBB Listing; SEC Reporting
Explorations common stock is currently cleared for quotation on the OTC
Bulletin
10
Board under the symbol "EXGI" there are no stop orders in effect or contemplated
with respect thereto and no facts exist which may give rise there. Explorations
has filed all reports required to be filed by Explorations pursuant to the
Securities Act of 1934, as amended. Explorations has provided Parking Pro with
copies of, or has made available to Parking Pro, all correspondence between
Explorations and NASDAQ and Explorations and NASD. Explorations has not been
informed, and has no reason to believe, that its common stock will be delisted
or suspended by the NASD. Explorations has fully complied will all applicable
securities laws and regulations and is not in default of any of its obligations
thereunder.
3.10 Litigation
Except for an action by Explorations' Pop Starz subsidiary against Hip
Hop Kidz, Explorations is not a party to or the subject of any pending
litigation, claims, decrees, orders, stipulations or governmental investigation
or proceeding not reflected in the Explorations Financial Statements or
otherwise disclosed herein, and there are no lawsuits, claims, assessments,
investigations, or similar matters, against or affecting Explorations, its
management or its properties. Explorations has complied in all material respects
with all laws, statutes, ordinances, regulations, rules, decrees or orders
applicable to it.
3.11 Books and Records
The corporate financial records, minute books, and other documents and
records of Explorations have been made available to Parking Pro prior to the
Closing, shall be delivered to new management of Explorations at Closing and are
correct and accurate in all material respects and reflect all decisions made by
the Board of Directors and the shareholders of Explorations.
3.12 No Violations; No Material Business or Assets
Explorations has not breached, nor is there any pending, or to the
knowledge of management, any threatened claim that Explorations has breached,
any of the terms or conditions of any agreements, contracts or commitments to
which it is a party or by which it or its assets are is bound. The execution and
performance hereof will not violate any provisions of applicable law or any
agreement to which Explorations is subject. Explorations has no business
operations or material assets and it is not a party to any material contract or
commitment other than appointment documents with its transfer agent, and that it
has disclosed to Parking Pro all relationships or dealings with related parties
or affiliates.
3.13 Subscriptions
Explorations does not have any agreements of any nature to acquire,
directly or indirectly, any shares of capital stock, or other equity or
ownership interest in, any person, firm or corporation, or its assets.
11
3.14 Consents and Approvals
There is no requirement to make any filing, give any notice to or
obtain any license, permit, certificate, regulation, authorization, consent or
approval of, any governmental or regulatory authorities as a condition to the
lawful consummation of the transactions contemplated by this Agreement except
for the filings, notifications, consents and approvals described in this
Agreement.
3.15 Environmental Issues
Explorations is in compliance in all material respects with applicable
Federal, state and local laws, statutes, regulations, orders, directives and
decisions rendered by any legislature, department, administrative or regulatory
agency ("Environmental Laws") relating to the protection of the environment,
occupational health and safety or the use, storage, disposal, transport,
handling, remediation or corrective action of any pollutants, contaminants,
chemicals, deleterious substances or industrial, toxic or hazardous wastes or
substances ("Hazardous Substances").
Explorations has not used or permitted to be used, except in compliance
in all material respects with all Environmental Laws, its office space, to
store, deposit, dispose or of handle any Hazardous Substances.
Explorations has obtained all permits, licenses and other
authorizations which are required in connection with the conduct of its business
under all applicable Environmental Laws.
Explorations has never received any notice of any civil, criminal or
administrative actions, suits, demands, claims, hearings, notices of demand
letters, requests for information, notices of violation, investigations or
proceedings pending or threatened against Explorations in connection with the
conduct of its business relating in any way to any Environmental Laws.
3.16 Subsidiaries and Affiliates
Explorations has no Subsidiaries except Pop Starz, Inc.. Explorations
does not own, directly or indirectly, any ownership, equity, profits or voting
interest in, or otherwise control, any corporation, partnership, joint venture
or other entity, and has no agreement or commitment to purchase any such
interest.
12
3.17 Brokers and Finders
Explorations has not retained any broker or finder in connection with
the transactions contemplated by this Agreement.
3.18 Disclosure
All disclosure information provided by Explorations which was delivered
to Parking Pro by Parking Pro for use in connection with the transaction
described herein is true, complete and accurate in all material respects.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions Precedent to the Obligations of Parking Pro.
All obligations of Parking Pro under this Agreement are subject to the
fulfillment, prior to or as of the Closing and/or the Closing Date, as indicated
below, of each of the following conditions:
(a) The representations and warranties by or on behalf of Explorations
contained in this Agreement or in any certificate or document delivered pursuant
to the provisions hereof shall be true in all material respects at and as of the
Closing Date as though such representations and warranties were made at and as
of such time.
(b) Explorations shall have performed and complied with all covenants,
agreements, and conditions set forth in, and shall have executed and delivered
all documents required by this Agreement to be performed or complied with or
executed and delivered by it prior to or at the Closing.
(c) On or before the Closing Date, Explorations shall have delivered to
Parking Pro certified copies of resolutions of the board of directors of
Explorations approving and authorizing the execution, delivery and performance
of this Agreement and authorizing all of the necessary and proper action to
enable Explorations to comply with the terms of this Agreement including the
election of Parking Pro's nominee to the Board of Directors of Explorations and
all matters outlined herein.
(d) As of the Closing, Xxxxxxxx Xxxxxx shall have resigned in writing
from all positions as director and officer of Explorations effective upon the
election and appointment of the Parking Pro nominee.
(e) At the Closing, all instruments and documents delivered to Parking
Pro and Parking Pro Stockholders pursuant to the provisions hereof shall be
reasonably satisfactory to legal counsel for Parking Pro.
(f) The shares of restricted Consideration Stock to be issued to the
Parking Pro
13
Stockholders will be duly authorized, validly issued, nonassessable and
fully-paid under Delaware corporation law and will be issued in compliance with
all federal, state and applicable corporation and securities laws.
(g) The TFST Bond has been amended to limit the number of shares of
Explorations common stock issuable upon conversion to be no more than 4,200,000
shares.
(h) Explorations Debt in the amount of at least $129,162 has been
converted into common stock in accordance with the terms of the Private
Placement.
(i) Immediately prior to Closing, Explorations will close on a private
placement (the "Private Placement") of a minimum of $600,000 on terms reasonably
acceptable to Parking Pro.
4.2 Conditions Precedent to the Obligations of Explorations.
All obligations of Explorations under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
(a) The representations and warranties by Parking Pro and the Parking
Pro Stockholders contained in this Agreement or in any certificate or document
delivered pursuant to the provisions hereof shall be true in all material
respects at and as of the Closing as though such representations and warranties
were made at and as of such time.
(b) Parking Pro shall have performed and complied with, in all material
respects, all covenants, agreements, and conditions required by this Agreement
to be performed or complied with prior to or at the Closing;
(c) All material executive officers and directors for ParkingPro will
have entered into Employment Agreements with ParkingPro, on terms reasonably
satisfactory to Explorations.
4.3 Nature and Survival of Representations.
All representations, warranties and covenants made by any party in this
Agreement shall survive the Closing and the consummation of the transactions
contemplated hereby for one year from the Closing. All of the parties hereto are
executing and carrying out the provisions of this Agreement in reliance solely
on the representations, warranties and covenants and agreements contained in
this Agreement and not upon any investigation upon which it might have made or
any representation, warranty, agreement, promise or information, written or
oral, made by the other party or any other person other than as specifically set
forth herein.
14
ARTICLE V
DOCUMENTS DELIVERED AT CLOSING
5.1 Documents at Closing.
At the Closing, the following documents shall be delivered:
(a) Parking Pro will deliver, or will cause to be delivered, to
Explorations the following:
(i) a certificate executed by the President and Secretary of
Parking Pro to the effect that all representations and warranties made by
Parking Pro under this Agreement are true and correct as of the Closing, the
same as though originally given to Explorations on said date;
(ii) a certificate from the jurisdiction of incorporation of
Parking Pro dated at or about the Closing to the effect that Parking Pro is in
good standing under the laws of said jurisdiction;
(iii) such other instruments, documents and certificates, if
any, as are required to be delivered pursuant to the provisions of this
Agreement;
(iv) certified copies of resolutions adopted by the directors
of Parking Pro authorizing this transaction;
(v) an agreement from Pop Starz, Inc, pursuant to which Pop
Starz will reimburse Explorations for all costs and expenses associated with the
spin-off of Pop Starz;
(vi) Parking Pro's certified audit for the periods ended
December 31, 2003 and March 31, 2004;
(vii) All material executive officers and directors for
ParkingPro will have entered into Employment Agreements with ParkingPro, on
terms reasonably satisfactory to Explorations; and
(viii) all other items, the delivery of which is a condition
precedent to the obligations of Parking Pro as set forth herein.
(b) Explorations will deliver or cause to be delivered to Parking Pro:
(i) stock certificates representing the Consideration Shares
to be issued as the Purchase Price;
(ii) a certificate of the President of Explorations, to the
effect that all representations and warranties of Explorations made under this
Agreement are true and correct as of the Closing, the same as though originally
given to Parking Pro on said date;
15
(iii) certified copies of resolutions adopted by Explorations'
board of directors authorizing the transaction contemplated hereunder and all
related matters described herein;
(iv) certificate from the jurisdiction of incorporation of
Explorations dated at or about the Closing Date that Explorations is in good
standing under the laws of said state;
(v) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement;
(vi) resignation of the Xxxxxxxx Xxxxxx as an officer and
director of Explorations and appointment of new officers and directors as
directed by Parking Pro;
(vii) all corporate and financial records of Explorations.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification.
For a period of one year from the Closing, Explorations agrees to
indemnify and hold harmless Parking Pro and the Parking Pro Shareholders, and
Parking Pro agrees to indemnify and hold harmless Explorations, at all times
after the date of this Agreement against and in respect of any liability, damage
or deficiency, all actions, suits, proceedings, demands, assessments, judgments,
costs and expenses including attorney's fees incident to any of the foregoing,
resulting from any material misrepresentations made by an indemnifying party to
an indemnified party, an indemnifying party's breach of covenant or warranty or
an indemnifying party's nonfulfillment of any agreement hereunder, or from any
material misrepresentation in or omission from any certificate furnished or to
be furnished hereunder.
ARTICLE VII
COVENANTS
7.1 Tax Free Reorganization.
It is intended by the parties that the Reorganization will constitute a
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended, and the parties agree that if modification of the terms of
this Agreement in a non-material manner to attain such qualification is
necessary, they will negotiate in good faith to make such required
modifications.
7.2 Boards, Committees and Officers.
Prior to the Closing, Explorations shall adopt resolutions in form and
substance
16
reasonably acceptable to Parking Pro, establishing, among other things that, the
Board of Directors of Parking Pro and Explorations shall consist of Xxxxxxx
Xxxxx and Xxxx Xxxxx and that the officers of Explorations and Parking Pro from
and after the Closing shall be Xxxxxxx Xxxxx, Xxxx Xxxxxxxxx and Xxxx Xxxxx.
7.3 Pop Starz Spin-Off
Within thirty (30) days after the Closing, Explorations shall spin-off
its stock in Pop Starz Inc. to all Explorations common shareholders, and those
entitled to dividends as if a common shareholder, of record as of the close of
business on the day proceeding the Closing. Upon the spin-off, all liabilities
owed to Explorations by Pop Starz shall be deemed cancelled.
7.4 Conversion of Class A Preferred Stock.
Explorations shall use its best efforts to persuade all current holders
of Class A preferred stock to exercise their conversion rights so that the only
class of Explorations securities outstanding at the Closing is common stock and
agree to a lock-up agreement similar to the leak out provisions of Rule 144.
7.5 Finders Fee. In the event that any broker or finder is entitled to
be paid a fee in connection with the transactions contemplated by this
Agreement, any such fee shall be paid after the Closing and shall not be deemed
to be a liability of the Company prior to the Closing,
7.6 Authorized Common Stock. Parking Pro and the Stockholders
acknowledge that as of the Closing, there will not be a sufficient enough
authorized shares of common stock authorized to convert all of the Class B
Voting Convertible Preferred into common stock.
ARTICLE VIII
MISCELLANEOUS
8.1 Miscellaneous.
(a) Public Announcement. Until the Closing, the Company shall not make
or issue, or cause to be made or issued, any announcement or written statement
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of Parking Pro
except as required by law.
(b) Further Assurances. At any time, and from time to time, after the
Closing Date, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
(c) Waiver. Any failure on the part of any party hereto to comply with
any of its
17
obligations, agreements or conditions hereunder may be waived in writing by the
party to whom such compliance is owed.
(d) Amendment. This Agreement may be amended only in writing as agreed
to by all parties hereto.
(e) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first class registered or certified mail, return receipt requested to
the following addresses:
To Explorations: Explorations Group Inc.;
0000 Xxxxx Xxxxx Xx., Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx, President
Telephone (000) 000-0000, Fax (000) 000-0000
To ParkingPro: ParkingPro, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx, President
Telephone (000) 000-0000 EXT:19
To the Parking Pro Stockholders: Mr. Xxxx Xxxxx
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Telephone ( 000) 000-0000
(f) Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed 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.
(h) Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
(i) Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
(j) Entire Agreement. This Agreement and the attached Exhibits
constitute the entire agreement of the parties covering everything agreed upon
or understood in the transaction. There are no oral promises, conditions,
representations, understandings,
18
interpretations or terms of any kind as conditions or inducements to the
execution hereof.
(k) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
Explorations Group, Inc.
By:______________________________
Title:
Parking Pro, Inc.
By:_______________________________
Title:
The Stockholders
----------------------------------
----------------------------------
19
EXHIBIT A
SHAREHOLDERS
Shares
Beneficially
Owned
------------
Common
Stock
Discount Management LLC 1,500
Signature Management LLC 1,500
Total 3,000
============
20
