SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is made this 31st day of March 2000, by and
between Xxxxxxx xxXxx Corporation, a Colorado corporation ("KBDD"), and YGCD
Assets, Inc., a Colorado corporation ("YGCD").
WHEREAS, KBDD desires to acquire all of the issued and outstanding shares
of common stock of YGCD in exchange for an aggregate of 12,500,439 shares of
the common stock of KBDD (the "Common Stock") (the "Exchange Offer"); and
WHEREAS, YGCD desires to assist KBDD in a business combination which will
result, if all YGCD's shareholders desire to participate, in the shareholders
of YGCD owning approximately 96% of the then issued and outstanding shares of
KBDD's Common Stock, and KBDD holding 100% of the issued and outstanding
shares of YGCD's common stock; and
WHEREAS, the voluntary share exchange contemplated hereby will result in
the YGCD shareholders tendering all of the outstanding common stock of YGCD to
KBDD in exchange solely for the Common Stock and no other consideration, which
the parties hereto intend to treat as a reorganization under Internal Revenue
Code Section 368(a)(1)(B).
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 Issuance of Shares. Subject to all of the terms and conditions of
this Agreement, KBDD agrees to offer one share of Common Stock for each share
of YGCD common stock issued and outstanding, or a total of 12,500,439 shares
of KBDD Common Stock. The Common Stock will be issued directly to the
shareholders of YGCD which accept the Exchange Offer. Schedule 1, which is
attached hereto and incorporated herein by reference, is a complete list of
the shareholders of YGCD which sets forth the number of shares each person
owns in YGCD and the number of shares they will be offered in KBDD.
1.2 Exemption from Registration. The parties hereto intend that the
Common Stock to be issued by KBDD to YGCD shareholders shall be exempt from
the registration requirements of the Securities Act of 1933, as amended (the
"Act"), pursuant to Sections 4(2) and 4(6) of the Act and the rules and
regulations promulgated thereunder.
1.3 Investment Intent. Prior to the consummation of the Exchange Offer,
the shareholders of YGCD accepting the Exchange Offer shall execute Letters of
Acceptance or such other documents containing, among other things,
representations and warranties relating to investment intent and investor
status, restrictions on transferability and restrictive legends such that the
counsel for both KBDD and YGCD shall be satisfied that the offer and sale of
KBDD shares as contemplated by this Agreement shall be exempt from the
registration requirements of the Act and any applicable state blue sky laws.
1.4 Warrants to Purchase YGCD Common Stock. On the Closing, each
warrant granted by YGCD to purchase shares of YGCD's common stock which is
outstanding and unexercised immediately prior to the Closing shall be assumed
by KBDD and converted into a warrant to purchase shares of KBDD in the same
number and at the same exercise price as was in effect immediately prior to
the Closing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF YGCD
Except as disclosed in Schedule 2 which is attached hereto and
incorporated herein by reference, YGCD hereby represents and warrants to KBDD
that:
2.1 Organization. YGCD is a corporation duly organized, validly
existing, and in good standing under the laws of Colorado, has all necessary
corporate powers to own its properties and to carry on its business as now
owned and operated by it, and is duly qualified to do business and is in good
standing in each of the jurisdictions where its business requires
qualification.
2.2 Capital. The authorized capital stock of YGCD consists of
50,000,000 shares of common stock, no par value, of which 10,900,439 are
currently issued and outstanding. All of the issued and outstanding shares of
common stock of YGCD are duly authorized, validly issued, fully paid, and
nonassessable. Prior to the Closing, YGCD plans to issue 1,600,000 shares in
connection with a private placement which is expected to raise $3,200,000 in
gross proceeds. Other than the foregoing, the obligations to issue warrants
to CCRI to purchase up to 240,000 shares of Common Stock, and the agreement to
issue 100,000 options out of KBDD after the Closing, there are no outstanding
subscriptions, options, rights, warrants, debentures, instruments, convertible
securities, or other agreements or commitments obligating YGCD to issue or to
transfer from treasury any additional shares of its capital stock of any
class.
2.3 Subsidiaries. YGCD does not have any subsidiaries or own any
interest in any other enterprise (whether or not such enterprise is a
corporation).
2.4 Directors and Officers. Schedule 2 contains the names and titles of
all directors and officers of YGCD as of the date of this Agreement.
2.5 Financial Statements. YGCD has delivered to KBDD unaudited balance
sheets and statements of operations for the period ended March 31, 2000 (the
"Financial Statements"). The Financial Statements are complete and correct
in all material respects and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated. The Financial Statements accurately set out and describe
the financial condition of YGCD as of March 31, 2000. YGCD's financial
statements will be able to be audited in accordance with Regulation S-B
adopted under the Act.
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2.6 Absence of Changes. Since March 31, 2000, except for changes in
the ordinary course of business which have not in the aggregate been
materially adverse, to the best of YGCD's knowledge, YGCD has conducted its
business only in the ordinary course and has not experienced or suffered any
material adverse change in the condition (financial or otherwise), results of
operations, properties, business or prospects of YGCD or waived or surrendered
any claim or right of material value.
2.7 Absence of Undisclosed Liabilities. Neither YGCD nor any of its
properties or assets are subject to any material liabilities or obligations of
any nature, whether absolute, accrued, contingent or otherwise and whether due
or to become due, that are not reflected in the financial statements presented
to KBDD or have otherwise been disclosed in Schedule 2.
2.8 Tax Returns. Within the times and in the manner prescribed by
law, YGCD has filed all federal, state and local tax returns required by law,
or has filed extensions which have not yet expired, and has paid all taxes,
assessments and penalties due and payable.
2.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, KBDD
and/or its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of YGCD. YGCD shall make
available to KBDD and/or its attorneys all books and records of YGCD.
2.10 Trade Names and Rights. Other than as set forth on Schedule 2,
YGCD does not use any trademark, service xxxx, trade name, or copyright in its
business, or own any trademarks, trademark registrations or applications,
trade names, service marks, copyrights, copyright registrations or
applications.
2.11 Compliance with Laws. To the best of YGCD's knowledge, YGCD has
complied with, and is not in violation of, applicable federal, state or local
statutes, laws and regulations (including, without limitation, any applicable
building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business, except for matters which would
not have a material affect on YGCD or its properties.
2.12 Litigation. YGCD is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation pending or, to the best knowledge of YGCD, threatened against or
affecting YGCD or its business, assets or financial condition, except for
matters which would not have a material affect on YGCD or its properties.
YGCD is not in default with respect to any order, writ, injunction or decree
of any federal, state, local or foreign court, department, agency or
instrumentality applicable to it.
2.13 Authority. YGCD has full corporate power and authority to enter
into this Agreement. The board of directors of YGCD has taken all action
required to authorize the execution and delivery of this Agreement by or on
behalf of YGCD and the performance of the obligations of YGCD under this
Agreement. No other corporate proceedings on the part of YGCD are necessary
to authorize the execution and delivery of this Agreement by YGCD in the
performance of its obligations under this Agreement. This Agreement is, when
executed and delivered by YGCD, and will be a valid and binding agreement of
YGCD, enforceable against YGCD in accordance with its terms, except as such
enforceability may be limited by general principles of equity, bankruptcy,
insolvency, moratorium and similar laws relating to creditors' rights
generally.
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2.14 Ability to Carry Out Obligations. Neither the execution and
delivery of this Agreement, the performance by YGCD of its obligations under
this Agreement, nor the consummation of the transactions contemplated under
this Agreement will to the best of YGCD's knowledge: (a) materially violate
any provision of YGCD's articles of incorporation or bylaws; (b) with or
without the giving of notice or the passage of time, or both, violate, or be
in conflict with, or constitute a material default under, or cause or permit
the termination or the acceleration of the maturity of, any debt, contract,
agreement or obligation of YGCD, or require the payment of any prepayment or
other penalties; (c) require notice to, or the consent of, any party to any
agreement or commitment, lease or license, to which YGCD is bound; (d) result
in the creation or imposition of any security interest, lien, or other
encumbrance upon any material property or assets of YGCD; or (e) violate any
material statute or law or any judgment, decree, order, regulation or rule of
any court or governmental authority to which YGCD is bound or subject.
2.15 Full Disclosure. None of the representations and warranties
made by YGCD herein, or in any schedule, exhibit or certificate furnished or
to be furnished in connection with this Agreement by YGCD, or on its behalf,
contains or will contain any untrue statement of material fact or omits or
will omit any material fact required to make any representation or warranty
not misleading.
2.16 Assets. YGCD has good and marketable title to all of its
tangible properties and such tangible properties are not subject to any
material liens or encumbrances.
2.17 Material Contracts and Obligations. Attached hereto on Schedule
2.17 is a list of all agreements, contracts, indebtedness, liabilities and
other obligations to which YGCD is a party or by which it is bound that are
material to the conduct and operations of its business and properties, which
provide for payments to or by YGCD in excess of $5,000; or which involve
transactions or proposed transactions between YGCD and its officers,
directors, affiliates or any affiliate thereof. Copies of such agreements and
contracts and documentation evidencing such liabilities and other obligations
have been made available for inspection by KBDD and its counsel. All of such
agreements and contracts are valid, binding and in full force and effect in
all material respects, assuming due execution by the other parties to such
agreements and contracts.
2.18 Consents and Approvals. No consent, approval or authorization
of, or declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by YGCD in connection
with: (a) the execution and delivery by YGCD of this Agreement; (b) the
performance by YGCD of its obligations under this Agreement; or (c) the
consummation by YGCD of the transactions contemplated under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF KBDD
Except as disclosed in Schedule 3 which is attached hereto and
incorporated herein by reference, KBDD represents and warrants to YGCD that:
3.1 Organization. KBDD is a corporation duly organized, valid
existing, and in good standing under the laws of Colorado, has all necessary
corporate powers to own properties and to carry on business, and it is not now
conducting any business, except to the extent to which the effecting of the
transaction contemplated by this Agreement constitutes doing business.
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3.2 Capitalization. The authorized capital stock of KBDD consists of
100,000,000 shares of no par value Common Stock of which 2,916,681 shares of
Common Stock are currently issued and outstanding. All of the issued and
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and nonassessable. There are no outstanding subscriptions, options,
rights, warrants, convertible securities, or other agreements or commitments
obligating KBDD to issue or to transfer from treasury any additional shares of
its capital stock of any class.
3.3 Subsidiaries. KBDD does not presently have any subsidiaries or
own any interest in any other enterprise (whether or not such enterprise is a
corporation).
3.4 Directors and Officers. Schedule 3 contains the names and titles
of all directors and officers of KBDD as of the date of this Agreement.
3.5 Financial Statements. KBDD has delivered to YGCD its audited
balance sheet and statements of operations and cash flows as of and for the
period ended December 31, 1999 (the "Financial Statements"). The Financial
Statements are complete and correct in all material respects and have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods indicated. The Financial
Statements accurately set out and describe the financial condition and
operating results of the Company as of the dates, and for the periods,
indicated therein.
3.6 Absence of Changes. Since December 31, 1999, except for direct
expenses incurred by KBDD in connection with this Agreement and the
transactions contemplated hereby, and except for changes in the ordinary
course of business which have not in the aggregate been materially adverse, to
the best of KBDD's knowledge, KBDD has not experienced or suffered any
material adverse change in its condition (financial or otherwise), results of
operations, properties, business or prospects or waived or surrendered any
claim or right of material value.
3.7 Absence of Undisclosed Liabilities. Except for direct expenses
incurred by KBDD in connection with this Agreement and the transactions
contemplated hereby, neither KBDD nor any of its properties or assets are
subject to any liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise and whether due or to become due, that are
not reflected in the financial statements presented to YGCD.
3.8 Tax Returns. Within the times and in the manner prescribed by
law, KBDD has filed all federal, state and local tax returns required by law
and has paid all taxes, assessments and penalties due and payable.
3.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, YGCD
shall have the opportunity to meet with KBDD's accountants and attorneys to
discuss the financial condition of KBDD. KBDD shall make available to YGCD
all books and records of KBDD.
3.10 Trade Names and Rights. KBDD does not use any trademark,
service xxxx, trade name, or copyright in its business, or own any trademarks,
trademark registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications.
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3.11 Compliance with Laws. To the best of KBDD's knowledge, KBDD has
complied with, and is not in violation of, applicable federal, state or local
statutes, laws and regulations (including, without limitation, the Securities
Act of 1933 (as amended) and the Securities Exchange Act of 1934 (as amended)
and any applicable building, zoning, or other law, ordinance, or regulation)
affecting its SEC reports, its properties or the operation of its business or
with which it is otherwise required to comply.
3.12 Litigation. KBDD is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or governmental
investigation pending or, to the best knowledge of KBDD, threatened against or
affecting KBDD or its business, assets, or financial condition. KBDD is not
in default with respect to any order, writ, injunction, or decree of any
federal, state, local, or foreign court, department agency, or
instrumentality. KBDD is not engaged in any legal action to recover moneys
due to it.
3.13 Bulletin Board Listing. KBDD's Common Stock is currently listed
for trading on the OTC Bulletin Board under the symbol KBDD, and KBDD is not
aware of steps being taken by the NASD to cause the Common Stock to be
delisted.
3.14 No Pending Investigation. KBDD is not aware of any pending
investigations or legal proceedings by the SEC, any state securities
regulatory agency, or any other governmental agency regarding KBDD or any
officers or directors of KBDD.
3.15 Authority. KBDD has full corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement. The Board of Directors of KBDD has taken all action required to
authorize the execution and delivery of this Agreement by or on behalf of
KBDD, the performance of the obligations of KBDD under this Agreement and the
consummation by KBDD of the transactions contemplated under this Agreement.
Other than the shareholders meeting described in paragraph 6.9 below, no other
corporate proceedings on the part of KBDD are necessary to authorize the
execution and delivery of this Agreement by KBDD and the performance of its
obligations under this Agreement. This Agreement is, and when executed and
delivered by KBDD, will be a valid and binding agreement of KBDD, enforceable
against KBDD in accordance with its terms, except as such enforceability may
be limited by general principles of equity, bankruptcy, insolvency, moratorium
and similar laws relating to creditors rights generally.
3.16 Ability to Carry Out Obligations. Neither the execution and
delivery of this Agreement, the performance by KBDD of its obligations under
this Agreement, nor the consummation of the transactions contemplated under
this Agreement will, to the best of KBDD's knowledge: (a) violate any
provision of KBDD's articles of incorporation or bylaws; (b) with or without
the giving of notice or the passage of time, or both, violate, or be in
conflict with, or constitute a default under, or cause or permit the
termination or the acceleration of the maturity of, any debt, contract,
agreement or obligation of KBDD, or require the payment of any prepayment or
other penalties; (c) require notice to, or the consent of, any party to any
agreement or commitment, lease or license, to which KBDD is bound; (d) result
in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of KBDD; or (e) violate any statute or
law or any judgment, decree, order, regulation or rule of any court or
governmental authority to which KBDD is bound or subject.
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3.17 Validity of KBDD Shares. The shares of KBDD Common Stock to be
delivered pursuant to this Agreement, when issued in accordance with the
provisions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable.
3.18 Full Disclosure. None of the representations and warranties
made by KBDD herein in any filing with the SEC, or in any exhibit, certificate
or memorandum furnished or to be furnished by KBDD, or on its behalf, contains
or will contain any untrue statement of material fact, or omit any material
fact the omission of which would be misleading.
3.19 Assets. KBDD has good and marketable title to all of its
tangible properties and such tangible properties are not subject to any liens
or encumbrances.
3.20 Material Contracts and Obligations. Attached hereto on Schedule
3 is a list of all agreements, contracts, indebtedness, liabilities and other
obligations to which KBDD is a party or by which it is bound that are material
to the conduct and operations of its business and properties, which provide
for payments to or by KBDD in excess of $5,000; or which involve transactions
or proposed transactions between KBDD and its officers, directors, affiliates
or any affiliate thereof. Copies of such agreements and contracts and
documentation evidencing such liabilities and other obligations have been made
available for inspection by YGCD and its counsel. All of such agreements and
contracts are valid, binding and in full force and effect in all material
respects, assuming due execution by the other parties to such agreements and
contracts.
3.21 Consents and Approvals. No consent, approval or authorization
of, or declaration, filing or registration with, any governmental or
regulatory authority is required to be made or obtained by KBDD in connection
with: (a) the execution and delivery by KBDD of its obligations under this
Agreement; (b) the performance by KBDD of its obligations under this
Agreement; or (c) the consummation by KBDD of the transactions contemplated by
this Agreement.
3.22 Real Property. KBDD does not own, use or claim any interest in
any real property, including without limitation any license, leasehold or any
similar interest in real property.
ARTICLE 4
COVENANTS
4.1 Investigative Rights. From the date of this Agreement until the
Closing Date, each party shall provide to the other party, and such other
party's counsels, accountants, auditors, and other authorized representatives,
full access during normal business hours and upon reasonable advance written
notice to all of each party's properties, books, contracts, commitments, and
records for the purpose of examining the same. Each party shall furnish the
other party with all information concerning each party's affairs as the other
party may reasonably request. If the transaction contemplated hereby is not
completed, all documents received by each party and/or its attorneys and
accountants, auditors or other authorized representatives shall be returned to
the other party who provided same upon request. The parties hereto, their
directors, employees, agents and representatives shall not disclose any of the
information described above unless such information is already disclosed to
the public, without the prior written consent of the party to which the
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confidential information pertains. Each party shall take such steps as are
necessary to prevent disclosure of such information to unauthorized third
parties.
4.2 Conduct of Business. Prior to the Closing, KBDD and YGCD shall
each conduct its business in the normal course, and shall not sell, pledge, or
assign any assets, without the prior written approval of the other party,
except in the regular course of business or as contemplated in previously
disclosed contractual obligations. Neither KBDD nor YGCD shall amend its
Articles of Incorporation or Bylaws, declare dividends, redeem or sell stock
or other securities, incur additional or newly-funded liabilities, acquire or
dispose of fixed assets, change employment terms, enter into any material or
long-term contract, guarantee obligations of any third party, settle or
discharge any balance sheet receivable for less than its stated amount, pay
more on any liability than its stated amount, or enter into any other
transaction other than in the regular course of business except as otherwise
contemplated herein.
ARTICLE 5
CONDITIONS PRECEDENT TO KBDD'S PERFORMANCE
5.1 Conditions. The obligations of KBDD hereunder shall be subject
to the satisfaction, at or before the Closing, of all the conditions set forth
in this Article 5. KBDD may waive any or all of these conditions in whole or
in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by KBDD of any other condition of or any
of KBDD's other rights or remedies, at law or in equity, if YGCD shall be in
default of any of their representations, warranties, or covenants under this
Agreement.
5.2 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by YGCD in this Agreement
or in any written statement that shall be delivered to KBDD by YGCD under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
5.3 Performance. YGCD shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to
be performed or complied with by it, on or before the Closing Date.
5.4 YGCD Funding. Prior to Closing, YGCD will have completed a
private offering in which it has raised approximately $3,200,000 in gross
proceeds by selling 1,600,000 shares of YGCD common stock.
5.5 Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against YGCD on or before the Closing Date.
5.6 Officer's Certificate. YGCD shall have delivered to KBDD a
certificate, dated the Closing Date, and signed by the Chief Executive Officer
of YGCD, certifying that each of the conditions specified in Sections 5.2
through 5.5 hereof have been fulfilled.
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ARTICLE 6
CONDITIONS PRECEDENT TO YGCD'S PERFORMANCE
6.1 Conditions. YGCD's obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in
this Article 6. YGCD may waive any or all of these conditions in whole or in
part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by YGCD of any other condition of or any
of YGCD's rights or remedies, at law or in equity, if KBDD shall be in default
of any of its representations, warranties, or covenants under this Agreement.
6.2 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by KBDD in this Agreement
or in any written statement that shall be delivered to YGCD by KBDD under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
6.3 Performance. KBDD shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to
be performed or complied with by them, on or before the Closing Date.
6.4 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against KBDD on or before the Closing Date.
6.5 Directors of KBDD. Effective on the Closing, KBDD shall have
fixed the size of its Board of Directors at three (3) persons, and such Board
of Directors shall include Xxxx Xxxxxxxxx, Xxxxx Xxxxx and Xxxxx Xxxxxxx. The
current Officers and Directors of KBDD shall have submitted their resignations
as the Officers and Directors of KBDD effective on the Closing of this
transaction.
6.6 Officers of KBDD. Effective on the Closing, KBDD shall have
elected the following new Officers of KBDD:
Xxxxx Xxxxx - President and CEO
Xxxx Xxxxxxx - Secretary
6.7 Completion of Private Offering. YGCD shall have completed a
private placement of 1,600,000 shares of its Common Stock at $2.00 per share
and shall have raised a total of approximately $3,200,000 before commissions
and expenses.
6.8 Form 10-K. Prior to Closing, KBDD shall have filed its Form
10-K for the year ended December 31, 1999.
6.9 Shareholders' Meetings. Prior to the Closing, KBDD will hold a
shareholders' meeting at which the following items must be approved: (1) a
change in the corporation's name to a name designated by YGCD; (2) the
adoption of a stock option plan acceptable to YGCD; and (3) any other matters
which the parties mutually agree are needed to "update" the Articles of
Incorporation of KBDD.
6.10 No Outstanding Debt. On the Closing, all outstanding
liabilities and obligations of KBDD shall have been paid or settled, including
all costs related to this transaction.
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6.11 Officer Certificate. KBDD shall have delivered to YGCD a
certificate, dated the Closing Date and signed by the President of KBDD
certifying that each of the conditions specified in Sections 6.2 through 6.10
have been fulfilled.
ARTICLE 7
CLOSING
7.1 Closing. The Closing of this transaction shall be held at the
offices of Xxxx Xxxxx Xxxxxxxx Xxxxx & Xxxxxx, P.C., 600 Seventeenth Street,
Suite 0000 Xxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, or such other place as shall
be mutually agreed upon, on such date as shall be mutually agreed upon by the
parties, but in no event shall the Closing be later than April 20, 2000. At
the Closing:
7.2 YGCD shall deliver Letters of Acceptance, a comparable document
from the new investors of YGCD, and the certificates representing the shares
of YGCD held by the shareholders of YGCD accepting the Exchange Offer
("Accepting Shareholders") to KBDD.
7.3 Each Accepting Shareholder shall receive a certificate or
certificates representing the number of shares of KBDD Common Stock for which
the shares of YGCD common stock shall have been exchanged.
7.4 KBDD shall deliver an officer's certificate, as described in
Section 6.11 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth in this Agreement on behalf of
KBDD are true and correct as of, or have been fully performed and complied
with by, the Closing Date.
7.5 KBDD shall deliver a signed Consent and/or Minutes of the
Directors of KBDD approving this Agreement and each matter to be approved by
the Directors of KBDD under this Agreement.
7.6 YGCD shall deliver an officer's certificate, as described in
Section 5.6 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth in this Agreement on behalf of
YGCD are true and correct as of, or have been fully performed and complied
with by, the Closing Date.
7.7 YGCD shall deliver a signed Consent or Minutes of the Directors
of YGCD approving this Agreement and each matter to be approved by the
Directors of YGCD under this Agreement.
7.8 YGCD shall deliver the opinion of its counsel, Xxxx Xxxxx
Xxxxxxxx & Xxxxxx, P.C., dated the Closing Date, in form and substance
satisfactory to counsel for KBDD, to the effect that:
(1) YGCD is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado.
(2) YGCD's authorized capital stock is as set forth in Section
2.2 hereof.
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(3) The execution and consummation of this Agreement have been
duly authorized and approved by YGCD's Board of Directors and does not require
the approval and authorization of YGCD's shareholders. Consummation of this
Agreement will not constitute or result in any breach or default of the
character described in Section 2.14 hereof of which counsel has knowledge.
(4) Counsel has no knowledge of any liabilities or obligations
of the type described in Section 2.7 hereof, any litigation, proceeding or
investigation of the type described in Section 2.12 hereof, or any defects, in
title or mortgages, encumbrances or liens of the type described in Section
2.16 hereof.
(5) The shares of YGCD's Common Stock to be exchanged pursuant
to this Agreement, are duly and validly authorized and issued, and are fully
paid and nonassessable.
7.9 KBDD shall deliver the opinion of its counsel, Xxxxxxx X.
Xxxxxxx, dated the Closing Date, in form and substance satisfactory to counsel
for YGCD, to the effect that:
(1) KBDD is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado, and is duly
qualified to do business and is in good standing in each state where its
business requires qualification.
(2) KBDD's authorized capital stock is as set forth in Section
3.2 hereof.
(3) The execution and consummation of this Agreement have been
duly authorized and approved by KBDD's Board of Directors and consummation of
this Agreement will not constitute or result in any breach or default of the
character described in Section 3.16 hereof of which counsel has knowledge.
(4) Counsel has no knowledge of any litigation, proceeding or
investigation of the type described in Section 3.12 hereof.
(5) The shares of KBDD's Common Stock to be issued pursuant to
this Agreement will be duly and validly authorized and issued, and will be
fully paid and nonassessable.
7.10 Concurrently with the Closing of this transaction, YGCD will
purchase from H. Xxxxxx Xxxxx, 2,400,000 of his personal KBDD shares for
$200,000 in cash. These shares will be cancelled by YGCD immediately after
the Closing.
ARTICLE 8
POST CLOSING
8.1 Current Report on Form 8-K. Within 15 days after the Closing
Date, KBDD will file a Current Report on Form 8-K with the Securities and
Exchange Commission reporting this transaction.
11
ARTICLE 9
MISCELLANEOUS
9.1 Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
9.2 No Oral Change. This Agreement and any provision hereof, may not
be waived, changed, modified, or discharged orally, but it can be changed by
an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, or discharge is sought.
9.3 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to
insist in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future
of any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure, and (iii) no
waiver by any party of one breach by another party shall be construed as a
waiver with respect to any other or subsequent breach.
9.4 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
9.5 Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
9.6 Choice of Law. This Agreement and its application shall be
governed by the laws of the State of Colorado, except to the extent its
conflict of laws provisions would apply the laws of another jurisdiction.
9.7 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party
to whom notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
KBDD:
Xxxxxxx xxXxx Corporation
c/o Xxxxxxx X. Xxxxxxx, Esq.
00000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
(000) 000-0000
YGCD:
YGCD Assets, Inc.
0000 Xxx Xxxx Xxxxx
Xxxxxxxx 000-000
Xxxxxxx, Xxxxxxxx 00000
12
with a copy to:
Xxx X. Xxxxxx
Xxxx Xxxxx Xxxxxxxx & Xxxxxx, P.C.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
9.8 Binding Effect. This Agreement shall inure to and be binding
upon the heirs, executors, personal representatives, successors and assigns of
each of the parties to this Agreement.
9.9 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other
and further documents and take such other and further actions as may be
necessary or convenient to effect the transaction described herein.
9.10 Announcements. KBDD and YGCD will consult and cooperate with
each other as to the timing and content of any announcements of the
transactions contemplated hereby to the general public or to employees,
customers or suppliers.
9.11 Exhibits. As of the execution hereof, the parties hereto have
provided each other with the Exhibits provided for herein above, including any
items referenced therein or required to be attached thereto. Any material
changes to the Exhibits shall be immediately disclosed to the other party.
9.12 Use of Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
AGREED TO AND ACCEPTED as of the date first above written.
XXXXXXX xxXXX CORPORATION YGCD ASSETS, INC.
By:/s/ Xxxxxx X. Xxxxxxx By:/s/ Xxxxx Xxxxx
Xxxxxx X. Xxxxxxx, Xxxxx Xxxxx, President and CEO
Vice President
13
SCHEDULE 1
Number of
Name, Address and Number of Shares Shares of KBDD
Social Security Number of YGCD Common Stock
Xxx Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000 600,000 600,000
Ballersea Capital Inc.
Attn: J. Xxxx Xxxx
X.X. Xxx 000
Xxxxx Xxxxxx, XX 00000 260,342 260,342
CCRI Corporation
Attn: Xxxxxxx XxXxxxx
0000 Xxxx Xxxxxxxxx Xxxx,
XXX 000
Xxxxxxx, XX 00000 520,684 520,684
Xxxx X. Xxxxxxx
UMI 0000 Xxxxx Xxxxxxxx
Xxxxxx, XX 00000 150,000 150,000
Xxxxx X. Xxxxxxx
UMI 0000 Xxxxx Xxxxxxxx
Xxxxxx, XX 00000 150,000 150,000
Xxxx Xxxxx
00000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000 20,000 20,000
X. Xxxx Consulting Corp.
Attn: Xxxx X. Xxxxx
0000 Xxxxx Xxxxxxxx Xxx, Xx. 000
Xxxxxxxxx, XX 00000 386,780 386,780
Xxxx X. Xxxxxxxx
0000 Xxxx 000xx Xxxxxx
Xxxxxxxx, XX 00000 64,000 64,000
Red Hill Corp., LLC 360,000 360,000
Xxxx Xxxxx Xxxxxxxx & Xxxxxx,
P.C.
x/x Xxx X. Xxxxxx, Xxx.
Xxxxxxxx Xxxxx, Xxxxx 0000 S.T.
000 00xx Xxxxxx
Xxxxxx, XX 00000 50,000 50,000
Xxxxx X. St. Clair
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 50,000 50,000
Xxxx Xxxxxxxxx
0000 Xxxxxxx Xxxxx,
Xxxxx 000-000
Xxxxxxx, XX 00000 6,373,119 6,373,119
Xxxx Xxxxxxxxx
x/x 000 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000 100,000 100,000
Xxxxxxxxx Family Partners, LLC
Attn: L. Xxxxxxx Xxxxxxxxx
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000 390,514 390,514
Xxxxxxx X. Xxxxx
00 Xxx Xxxx
Xxxxxx, XX 00000 25,000 25,000
Xxxxx Xxxxx
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 1,400,000 1,400,000
Investors in overseas
offering 1,600,000 1,600,000
Total 12,500,439 12,500,439
SCHEDULE 2
YGCD ASSETS, INC.
("YGCD")
2.4 The Officers and Directors of YGCD are as follows:
Name Position
Xxxxx Xxxxx President, CEO and Director
Xxxx Xxxxxxx Secretary and Treasurer
Xxxx Xxxxxxxxx Director
Xxxxx Xxxxxxx Director
2.9 Trade Names and Rights:
a) You've Got CD
2.17 Contracts:
1. Finders Fee Agreement with CCRI, dated January 12, 2000.
2. Finders Fee Agreement with Xxxx Xxxxxxxx, dated January 2, 2000.
3. Finders Fee Agreement and Letter of Intent with Xxx Xxxxx, dated
January 22, 2000.
4. Letter Agreement with Catapult PI-IR, LLC, dated October 12, 1999.
5. Agreement for Assignment of Rights with Duplication Systems, Inc.,
dated March 28, 2000.
6. Promissory Note to Duplication Systems, Inc., pursuant to Rights
Assignment Agreement, dated March 28, 2000.
7. Promissory Note to Xxxx Xxxxxxxxx, pursuant to advance on H.
Xxxxxx Xxxxx Share Purchase Agreement and CCRI Agreement, dated
March 6, 2000.
8. Engineering/Consulting Professional Services Agreement with
Nuvation Research Corp., dated October 6, 1999.
9. Employment Agreement with Xxxxx Xxxxx, President and CEO, dated
March 6, 2000.
10. Consulting Agreement with Xxxxx X. Xxxxxxx, Director, dated
March 2, 2000.
11. Consulting Agreement with Xxxx Xxxxxxx, Officer, dated March 2,
2000.
12. Share Purchase Agreement with H. Xxxxxx Xxxxx, dated February 22,
2000.
13. Release and Assignment Agreement with Xxxx Xxxxxxxxx, dated
March 28, 2000.
14. Placement Services Agreement with Staff 21.
SCHEDULE 3
Xxxxxxx xxXxx Corporation
("KBDD")
3.4 Directors and Officers of KBDD:
Name Position
Xxxxxx X. Xxxxxxx Secretary and Director
Xxxxxxxx X. Xxxxx Director
3.20 Material Contracts of KBDD:
None
