EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT
This Agreement dated April 9, 2003 is entered into by and between
XXXX-XXXXXX, INC., a corporation organized under the laws of the
State of Nevada ("BHUS"), and SILHOUETTE MEDIA GROUP INC., a
corporation organized under the laws of the Province of Ontario,
Canada ("SMG"), and the owners of the capital stock of SMG listed
on Exhibit A of this Agreement, who execute and become a party to
this Agreement.
WHEREAS, BHUS desires to acquire up to 40% of the issued and
outstanding stock of SMG listed on Exhibit B in consideration for
common stock in BHUS.
WHEREAS, the SMG Shareholders wish to exchange their respective
stock ownership interest for the common stock of BHUS.
NOW, THEREFORE, in consideration on the foregoing and the mutual
representations, warrants, covenants and agreements hereinafter
set forth and the mutual benefits to the parties to be derived
herefrom, the parties agree as follows:
1. Exchange of Shares
1.1 Tender and Exchange.
a. Subject to the terms and conditions of this
Agreement, at the Closing to be held as provided
in Section 2, BHUS shall tender the BHUS Shares
(defined below) to SMG on behalf of the SMG
Shareholders.
b. SMG shall receive the BHUS Shares from BHUS on
behalf of its respective Shareholders, free and
clear of all encumbrances other than restrictions
imposed by Federal and State securities laws.
1.2 Transaction. At the Closing, BHUS will tender
__6,000,000 (Six Million) shares of its common stock
(the "BHUS Shares"), valued at $0.03 USD (Three Cents
USD)_ per share, in exchange for _4,000 (Four
Thousand)_ outstanding shares of capital stock of SMG
(the "SMG Shares"). The BHUS Shares shall be issued
and delivered to the SMG Shareholders as set forth in
Exhibit A hereto.
2. The Closing.
2.1 Place and Time. The closing of the instant transaction
(the "Closing") shall take place at _The offices of
Sopov & Company located at 00 Xxxxxxx Xx., Xxxxxxx,
Xxxxxxx, Xxxxxx, no later than the close of business on
_April 18, 2003, or at such other place, date and time
as the parties may agree in writing.
2.2 Deliveries by SMG. At the Closing, SMG and the SMG
Shareholders shall deliver the following to BHUS:
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a. Certificates representing the SMG Shares
registered in the name of BHUS (without any legend
or other reference to any Encumbrance) other than
those required by federal and or state securities
law.
b. The documents contemplated by Section 3.
c. All other documents, instruments and writings
required by this Agreement to be delivered by SMG
at the Closing and any other documents or records
relating to SMG's business reasonably requested by
BHUS in connection with this Agreement.
2.3 Deliveries by BHUS. At the Closing, BHUS shall deliver
the following to SMG:
a. The BHUS Shares as contemplated by Section 1, in
the form specified in Exhibit A.
b. The documents contemplated by Section 4.
c. All other documents, instruments and writings
required by this Agreement to be delivered by BHUS
at the Closing and any other documents or records
relating to BHUS's business reasonably requested
by SMG in connection with this Agreement.
3. Conditions to BHUS's Obligations.
The obligations of BHUS to effect the Closing shall be
subject to the satisfaction at or prior to the Closing of
the following conditions, any one or more of which may be
waived by BHUS:
3.1 No Injunction. There shall not be in effect any
injunction, order or decree of a court of competent
jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that
prohibits BHUS's acquisition of the SMG Shares or
BHUS's receipt of SMG Shares or that will require any
divestiture as a result of BHUS's acquisition of the
SMG Shares or that will require all or any part of the
business of SMG to be held separate and no litigation
or proceedings seeking the issuance of such an
injunction, order or decree or seeking to impose
substantial penalties on BHUS or SMG if this Agreement
is consummated shall be pending.
3.2 Representations, Warranties and Agreements. The
representations and warranties of SMG set forth in this
Agreement shall be true and complete in all material
respects as of the Closing Date as though made at such
time, (b) SMG shall have performed, and complied in all
material respects with the agreements contained in this
Agreement required to be performed and complied with by
it at or prior to the Closing and (c) SMG shall have
received a certificate to that effect signed by an
authorized representative of SMG.
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3.3 Regulatory Approvals. All licenses, authorizations,
consents, orders and regulatory approvals of
Governmental Bodies necessary for the consummation of
BHUS's acquisition of the SMG Shares shall have been
obtained and shall be in full force and effect.
3.4 Shareholder Approval. Shareholders holding a minimum of
ninety percent (90%) of the common stock of SMG shall
have approved of and signed this Agreement.
4. Conditions to SMG and the SMG Shareholders' Obligations.
The obligations of SMG and the SMG Shareholders to effect
the Closing shall be subject to the satisfaction at or prior
to the Closing of the following conditions, any one or more
of which may be waived by SMG:
4.1 No Injunction. There shall not be in effect any
injunction, order or decree of a court of competent
jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that
prohibits BHUS's acquisition of the SMG Shares or SMG's
receipt of the BHUS Shares or that will require any
divestiture as a result of BHUS's acquisition of the
Shares or SMG's acquisition of the BHUS Shares or that
will require all or any part of the business of BHUS or
SMG to be held separate and no litigation or
proceedings seeking the issuance of such an injunction,
order or decree or seeking to impose substantial
penalties on BHUS or SMG if this Agreement is
consummated shall be pending.
4.2 Representations, Warranties and Agreements. The
representations and warranties of BHUS set forth in
this Agreement shall be true and complete in all
material respects as of the Closing Date as though made
at such time, (b) BHUS shall have performed and
complied in all material respects with the agreements
contained in this Agreement required to be performed
and complied with by it at or prior to the Closing and
(c) SMG shall have received a certificate to that
effect signed by an authorized representative of BHUS.
4.3 Regulatory Approvals. All licenses, authorizations,
consents, orders and regulatory approvals of
Governmental Bodies necessary for the consummation of
BHUS's acquisition of the SMG Shares and SMG's
acquisition of the BHUS Shares shall have been obtained
and shall be in full force and effect.
5. Representations and Warranties of SMG
SMG (and, with respect to Section 5.4, each of the SMG
Shareholders with respect to that shareholder's shares only)
represents and warrants to BHUS that, to the knowledge of
SMG (which limitation shall not apply to Section 5.3) and
except as otherwise disclosed by SMG:
5.1 Organization of SMG; Authorization. SMG is a
corporation duly organized, validly existing and in
good standing under the laws of The Province of
Ontario, Canada with full corporate power and authority
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to execute and deliver this Agreement and to perform
its obligations hereunder. The execution, delivery and
performance of this Agreement have been duly authorized
by all necessary corporate action of SMG and this
Agreement constitutes a valid and binding obligation of
SMG; enforceable against it in accordance with its
terms.
5.2 Capitalization. The authorized capital stock of SMG
consists of unlimited common and preferred stock. As
of the date hereof, _10,000 (Ten Thousand) common
shares of such shares of SMG were issued and
outstanding. No shares have been registered under
United States state or federal securities laws. As of
the Closing Date, all of the issued and outstanding
shares of capital stock of SMG are validly issued,
fully paid and nonassessable.
5.3 No Conflict as to SMG. Neither the execution and
delivery of this Agreement nor the consummation of the
sale of the SMG Shares to BHUS will (a) violate any
provision of the certificate of incorporation or by-
laws of SMG or (b) violate, be in conflict with, or
constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default)
under any agreement to which SMG is a party or (c)
violate any statute or law or any judgment, decree,
order, regulation or rule of any court or other
Governmental Body applicable to SMG.
5.4 Ownership of SMG Shares. The delivery of certificates
to BHUS provided in Section 2.2 and the delivery of
certificates to SMG as provided in Section 2.3 will
result in BHUS's immediate acquisition of record and
beneficial ownership of up to _4,000 (Four Thousand)
SMG Shares, free and clear of all Encumbrances subject
to applicable securities laws.
5.5 No Conflict as to SMG. Neither the execution and
delivery of this Agreement nor the consummation of the
acquisition of the SMG Shares to BHUS will (a) violate
any provision of the articles of incorporation or by-
laws (or other governing instrument) of SMG or (b)
violate, or be in conflict with, or constitute a
default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or
result in the termination, of, or accelerate the
performance required by, or excuse performance by any
Person of its obligations under, or cause the
acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of
any Encumbrance upon any property or assets of SMG
under, any material agreement or commitment to which
SMG is a party or by which any of its property or
assets is bound, or to which any of the property or
assets of SMG is subject, or (c) violate any statute or
law or any judgment, decree, order, regulation or rule
of any court or other Governmental Body applicable to
SMG except, in the case of violations, conflicts,
defaults, terminations, accelerations or Encumbrances
described in clause (b) of this Section 5.5, for such
matters which are not likely to have a material adverse
effect on the business or financial condition of SMG.
5.6 Consent and Approvals of Governmental Authorities.
Except with respect to applicable securities laws, no
consent, approval or authorization of, or declaration,
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filing or registration with, any Governmental Body is
required to be made or obtained by SMG or BHUS in
connection with the execution, delivery and performance
of this Agreement by SMG or the consummation of the
acquisition of the SMG Shares to BHUS.
5.7 Other Consents. No consent of any Person is required to
be obtained by SMG or BHUS prior to the execution,
delivery and performance of this Agreement or the
consummation of the acquisition of the SMG Shares to
BHUS, including, but not limited to, consents from
parties to leases or other agreements or commitments,
except for any consent which the failure to obtain
would not be likely to have a material adverse effect
on the business and financial condition of SMG or BHUS.
5.8 Financial Statements. SMG has delivered to BHUS balance
sheets of SMG as at the recent and practicable period
ended, and statements of income and changes in
financial position for the period then ended. Such SMG
Financial Statements and notes fairly present the
financial condition and results of operations of SMG as
at the respective dates thereof and for the periods
therein.
5.9 Title to Properties. SMG owns all the material
properties and assets that they purport to own (real,
personal and mixed, tangible and intangible),
including, without limitation, all the material
properties and assets reflected in the SMG Financial
Statements (except for property sold since the date of
the SMG Financial Statements in the ordinary course of
business or leased under capitalized leases), and all
the material properties and assets purchased or
otherwise acquired by SMG since the date of the SMG
Financial Statements. All properties and assets
reflected in the SMG Financial Statements are free and
clear of all material Encumbrances and are not, in the
case of real property, subject to any material rights
of way, building use restrictions, exceptions,
variances, reservations or limitations of any nature
whatsoever except, with respect to all such properties
and assets, (a) mortgages or security interests shown
on the SMG Financial Statements as securing specified
liabilities or obligations, with respect to which no
default (or event which, with notice or lapse of time
or both, would constitute a default) exists, (b)
mortgages or security interests incurred in connection
with the purchase of property or assets after the date
of the SMG Financial Statements (such mortgages and
security interests being limited to the property or
assets so acquired), with respect to which no default
(or event which, with notice or lapse of time or both,
would constitute a default) exists, (c) as to real
property, (i) imperfections of title, if any, none of
which materially detracts from the value or impairs the
use of the property subject thereto, or impairs the
operations of SMG and (ii) zoning laws that do not
impair the present or anticipated use of the property
subject thereto, and (d) liens for current taxes not
yet due. The properties and assets of SMG include all
rights, properties and other assets necessary to permit
SMG to conduct SMG's business in all material respects
in the same manner as it is conducted on the date of
this Agreement.
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5.10 Buildings, Plants and Equipment. The buildings, plants,
structures and material items of equipment and other
personal property owned or leased by SMG are, in all
respects material to the business or financial
condition of SMG, in good operating condition and
repair (ordinary wear and tear excepted) and are
adequate in all such respects for the purposes for
which they are being used. SMG has not received
notification that it is in violation of any applicable
building, zoning, anti-pollution, health, safety or
other law, ordinance or regulation in respect of its
buildings, plants or structures or their operations,
which violation is likely to have a material adverse
effect on the business or financial condition of SMG,
taken as a whole or which would require a payment by
SMG or BHUS in excess of $2,000 in the aggregate, and
which has not been cured.
5.11 No Condemnation or Expropriation. Neither the whole nor
any portion of the property or leaseholds owned or held
by SMG is subject to any governmental decree or order
to be sold or is being condemned, expropriated or
otherwise taken by any Governmental Body or other
Person with or without payment of compensation
therefore, which action is likely to have a material
adverse effect on the business or financial condition
of BHUS, taken as a whole.
5.12 Litigation. There is no action, suit, inquiry,
proceeding or investigation by or before any court or
Governmental Body pending or threatened in writing
against or involving SMG which is likely to have a
material adverse effect on the business or financial
condition of SMG and BHUS, or which would require a
payment by SMG in excess of US$2,000 in the aggregate
or which questions or challenges the validity of this
Agreement. SMG is not subject to any judgment, order or
decree that is likely to have a material adverse effect
on the business or financial condition of SMG or BHUS,
or which would require a payment by SMG in excess of
US$2,000 in the aggregate.
5.13 Absence of Certain Changes. Since the date of the SMG
Financial Statements, SMG has not;
a. suffered the damage or destruction of any of its
properties or assets (whether or not covered by
insurance) which is materially adverse to the
business or financial condition of SMG, or made
any disposition of any of its material properties
or assets other than in the ordinary course of
business;
b. made any change or amendment in its certificate of
incorporation or by-laws, or other governing
instruments;
c. issued or sold any Equity Securities or other
securities, acquired, directly or indirectly, by
redemption or otherwise, any such Equity
Securities, reclassified, split-up or otherwise
changed any such Equity Security, or granted or
entered into any options, warrants, calls or
commitments of any kind with respect thereto;
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d. organized any new Subsidiary or acquired any
Equity Securities of any Person, or any equity or
ownership interest in any business;
e. borrowed any funds or incurred, or assumed or
become subject to, whether directly or by way of
guarantee or otherwise, any obligation or
liability with respect to any such indebtedness
for borrowed money;
f. paid, discharged or satisfied any material claim,
liability or obligation (absolute, accrued,
contingent or otherwise), other than in the
ordinary course of business;
g. prepaid any material obligation having a maturity
of more than 90 days from the date such obligation
was issued or incurred;
h. canceled any material debts or waived any material
claims or rights, except in the ordinary course of
business;
i. disposed of or permitted to lapse any rights to
the use of any material patent or registered
trademark or copyright or other intellectual
property owned or used by it;
j. granted any general increase in the compensation
of officers or employees (including any such
increase pursuant to any employee benefit plan);
k. purchased or entered into any contract or
commitment to purchase any material quantity of
raw materials or supplies, or sold or entered into
any contract or commitment to sell any material
quantity of property or assets, except (i) normal
contracts or commitments for the purchase of, and
normal purchases of, raw materials or supplies,
made in the ordinary course business, (11) normal
contracts or commitments for the sale of, and
normal sales of, inventory in the ordinary course
of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary
course of business;
l. made any capital expenditures or additions to
property, plant or equipment or acquired any other
property or assets (other than raw materials and
supplies) at a cost in excess of US$25,000 in the
aggregate;
m. written off or been required to write off any
notes or accounts receivable in an aggregate
amount in excess of US$2,000;
n. written down or been required to write down any
inventory in an aggregate amount in excess of
US$2,000;
o. entered into any collective bargaining or union
contract or agreement; or
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p. other than the ordinary course of business,
incurred any liability required by generally
accepted accounting principles to be reflected on
a balance sheet and material to the business or
financial condition of SMG.
5.14 No Material Adverse Change. Since the date of the SMG
Financial Statements, there has not been any material
adverse change in the business or financial condition
of SMG.
5.15 Contracts and Commitments. SMG is not a party to any:
a. Contract or agreement (other than purchase or
sales orders entered into in the ordinary course
of business) involving any liability on the part
of SMG of more than US$25,000 and not cancelable
by SMG (without liability to SMG) within 60 days;
b. Except with respect to the lease on its business
location, lease of personal property involving
annual rental payments in excess of US$25,000 and
not cancelable by SMG (without liability to SMG)
within 90 days;
c. Except with respect to the options referenced
above, employee bonus, stock option or stock
purchase, performance unit, profit sharing,
pension, savings, retirement, health, deferred or
incentive compensation, insurance or other
material employee benefit plan (as defined in
Section 2(3) of ERISA) or program for any of the
employees, former employees or retired employees
of SMG;
d. Commitment, contract or agreement that is
currently expected by the management of SMG to
result in any material loss upon completion or
performance thereof;
e. Contract, agreement or commitment that is material
to the business of SMG, with any officer,
employee, agent, consultant, advisor, salesman,
sales representative, value added reseller,
distributor or dealer; or
f. Employment agreement or other similar agreement
that contains any severance or termination pay,
liabilities or obligations.
All such contracts and agreements are in full force and
effect. Neither SMG nor any of the SMG Shareholders is
in breach of, in violation of, or in default under, any
agreement, instrument, indenture, deed of trust,
commitment, contract or other obligation of any type to
which SMG is a party or is or may be bound that relates
to the business of SMG or to which any of the assets or
properties of is subject, the effect of which breach,
violation or default is likely to materially and
adversely affect the business or financial condition of
SMG. BHUS has not guaranteed or assumed and
specifically does not guarantee or assume any
obligations of SMG.
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5.16 Labor Relations. SMG is not a party to any collective
bargaining agreement. Except for any matter which is
not likely to have a material adverse effect on the
business or financial condition of SMG, (a) SMG is in
compliance with all applicable laws respecting
employment and employment practices, terms and
conditions of employment and wages and hours, and is
not engaged in any unfair labor practice, (b) there is
no unfair labor practice complaint against SMG pending
before the National Labor Relations Board, (c) there is
no labor strike, dispute, slowdown or stoppage actually
pending or threatened against SMG, (d) no
representation question exists respecting the employees
of SMG, (e) SMG has not experienced any strike, work
stoppage or other labor difficulty, and (f) no
collective bargaining agreement relating to employees
of SMG is currently being negotiated.
5.18 Compliance with Law. The operations of SMG have been
conducted in accordance with all applicable laws and
regulations of all Governmental Bodies having
jurisdiction over it, except for violations thereof
which are not likely to have a material adverse effect
on the business or financial condition of SMG, or which
would not require a payment by SMG in excess of
US$2,000 in the aggregate, or which have been cured.
SMG has not received any notification of any asserted
present or past failure by it to comply with any such
applicable laws or regulations. SMG has all material
licenses, permits, orders or approvals from the
Governmental Bodies required for the conduct of its
business, and is not in material violation of any such
licenses, permits, orders and approvals. All such
licenses, permits, orders and approvals are in full
force and effect, and no suspension or cancellation of
any thereof has been threatened.
5.19 Tax Matters.
a. SMG (1) has filed, or prior to the Closing Date
will have filed, all non-consolidated and non-
combined Tax Returns and all consolidated or
combined Tax Returns required to be filed through
the date hereof and have paid any Tax due through
the date hereof with respect to the time periods
covered by such Tax Returns and shall timely pay
any such Taxes required to be paid by it after the
date hereof with respect to such Tax Returns; and
(2) shall prepare and timely file all such Tax
Returns required to be filed after the date hereof
and through the Closing Date and pay all Taxes
required to be paid by it with respect to the
periods covered by such Tax Returns. All such Tax
Returns filed pursuant to clause (2) after the
date hereof shall, in each case, be prepared and
filed in a manner consistent in all material
respects (including elections and accounting
methods and conventions) with such Tax Return most
recently filed in the relevant jurisdiction prior
to the date hereof, except as otherwise required
by law or regulation. Any such Tax Return filed
or required to be filed after the date hereof
shall not reflect any new elections or the
adoption of any new accounting methods or
conventions or other similar items, except to the
extent such particular reflection or adoption is
required to comply with any law or regulation.
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b. All Tax Returns required to be filed by any person
through the date hereof that are required or
permitted to include the income, or reflect the
activities, operations and transactions, of SMG
for any taxable period have been timely filed, and
the income, activities, operations and
transactions of SMG have been properly included
and reflected thereon.
c. SMG has not agreed, or is required, to make any
adjustment (x) under Section 481(a) of the Code by
reason of a change in accounting method or
otherwise, or (y) pursuant to any provision of the
Tax Reform Act of 1986, the Revenue Act of 1987 or
the Technical and Miscellaneous Revenue Act of
1988 (z) pursuant to the Income Tax Act of Canada
R.S.C. as Amened.
d. Neither SMG or any predecessor or Affiliate of SMG
has, at any time, filed a consent under Section
341(f)(1) of the Code, or agreed under Section
341(f)(3) of the Code, to have the provisions of
Section 341(f)(2) of the Code apply to any sale of
its stock.
e. There is no (nor has there been any request for
an) agreement, waiver or consent providing for an
extension of time with respect to the assessment
of any Taxes attributable to SMG or its assets or
operations, and no power of attorney granted by
SMG with respect to any Tax matter is currently in
force.
f. There is no action, suit, proceeding,
investigation, audit, claim, demand, deficiency or
additional assessment in SMG, pending or
threatened against or with respect to any Tax
attributable to SMG or its assets or operations.
g. All amounts required to be withheld as of the
Closing Date for Taxes or otherwise have been
withheld and paid when due to the appropriate
agency or authority.
h. No property of SMG is "tax-exempt use property"
within the meaning of Section 168(h) of the Code,
nor property that SMG will be required to treat as
being owned by another person pursuant to Section
168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986.
i. There have been delivered or made available to
BHUS true and complete copies of all income Tax
Returns and any other Tax Returns requested by
BHUS as may be relevant to SMG or its assets or
operations for any and all periods ending after
December 31, 2002, and for any Tax years which are
subject to audit or investigation by any taxing
authority or entity.
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j. There is no contract, agreement, plan or arrangement,
including but not limited to the provisions of this Agreement,
covering any employee or former employee of SMG that,
individually or collectively, could give rise to the payment of
any amount that would not be deductible pursuant to Section 280G
or 162 of the Code.
5.20 Environmental Matters.
a. At all times prior to the date hereof, SMG has
complied in all material respects with applicable
environmental laws, orders, regulations, rules
and. ordinances relating to the Properties (as
hereinafter defined), the violation of which would
have a material adverse effect on the business or
financial condition of SMG, or which would require
a payment by SMG in excess of US$2,000 in the
aggregate, and which have been duly adopted,
imposed or promulgated by any legislative,
executive, administrative or judicial body or
officer of any Governmental Body.
b. The environmental licenses, permits and
authorizations that are material to the operations
of SMG are in full force and effect.
c. SMG has not released or caused to be released on
or about the properties currently owned or leased
by SMG (the "Properties") any (i) pollutants, (ii)
contaminants, (iii) "Hazardous Substances," as
that term is defined in Section 101(14) of the
Comprehensive Environmental Response Act or the
Environmental Protection Act R.S.C. as, as amended
or (iv) "Regulated Substances," as that term in
defined in Section 9001 of the Resource
Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq. or other applicable Canadian or
Provincial Legislation, as amended, which would be
required to be remediated by any governmental
agency with jurisdiction over the Properties under
the authority of laws, regulations and ordinances
as in effect and currently interpreted on the date
hereof, which remediation would have a material
adverse effect on the business or financial
condition of SMG.
5.21 Absence of Certain Commercial Practices. SMG has not,
directly or indirectly, paid or delivered any fee,
commission or other sum of money or item of property,
however characterized, to any finder, agent, government
official or other party, in the United States or any
other country, which is in any manner related to the
business or operations of SMG, which SMG knows or has
reason to believe to have been illegal under any
federal, state or local laws of the United States or
any other country having jurisdiction; and SMG has not
participated, directly or indirectly, in any boycotts
or other similar practices affecting any of its actual
or potential shareholders in violation of any
applicable law or regulation.
5.22 Borrowing and Guarantees. Except as otherwise
disclosed, SMG (a) does not have any indebtedness for
borrowed money, (b) is not lending or committed to lend
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any money (except for advances to employees in the
ordinary course of business), and (c) is not guarantors
or sureties with respect to the obligations of any
Person.
5.23 Investment Purpose. The SMG Shareholders represent and
warrant that they are receiving the BHUS Shares for
investment purposes and not with an intent to
distribute them.
6. Representations and Warranties of BHUS
BHUS represents and warrants to SMG that, to the knowledge
of BHUS (which limitation shall not apply to Section 6.3),
and except as otherwise disclosed by BHUS:
6.1 Organization of BHUS; Authorization. BHUS is a
corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada
with full corporate power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of
this Agreement have been duly authorized by all
necessary corporate action of BHUS arid this Agreement
constitutes a valid and binding obligation of BHUS,
enforceable against it in accordance with its terms.
6.2 Capitalization. The authorized capital stock of BHUS
consists of __ shares of common stock, $0.001 par
value. As of the date hereof, 52,206,013 (Fifty
Million TwoHundred and Six Thousand and
Thirteen)_shares of such common stock of BHUS are
issued and outstanding. As of the Closing Date, all of
the issued and outstanding shares of common stock of
BHUS are validly issued, fully paid and nonassessable.
6.3 No Conflict as to BHUS. Neither the execution and
delivery of this Agreement nor the consummation of the
sale of the BHUS Shares to SMG will (a) violate any
provision of the certificate of incorporation or by-
laws of BHUS, or (b) violate, be in conflict with, or
constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default)
under any agreement to which BHUS is a party or (c)
violate any statute or law or any judgment, decree,
order, regulation or rule of any court or other
Governmental Body applicable to BHUS.
6.4 Ownership of BHUS Shares. The delivery of certificates
to SMG provided in Section 2.3 will result in SMG
Shareholders' immediate acquisition of record and
beneficial ownership of the BHUS Shares, free and clear
of all encumbrances other than as required by Federal
and State securities laws. Except as disclosed in
BHUS's public SEC filings, there are no outstanding
options, rights, conversion rights, agreements or
commitments of any kind relating to the issuance, sale
or transfer of any Equity Securities or other
securities of BHUS. Nothing in this Agreement shall be
deemed to be a representation or warranty as to the
tradability of any of the BHUS Shares under Federal or
any State's securities laws.
16
6.5 No Conflict as to BHUS. Neither the execution and
delivery of this Agreement nor the consummation of the
of the instant agreement will (a) violate any provision
of the certificate of incorporation or by-laws (or
other governing instrument) of BHUS or (b) violate, or
be in conflict with, or constitute a default (or an
event which, with notice or lapse of time or both,
would constitute a default) under, or result in the
termination of, or accelerate the performance required
by, or excuse performance by any Person of any of its
obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any Encumbrance
upon any property or assets of BHUS under, any material
agreement or commitment to which BHUS is a party or by
which any of its property or assets is bound, or to
which any of the property or assets of BHUS is subject,
or (c) violate any statute or law or any judgment,
decree, order, regulation or rule of any court or other
Governmental Body applicable to BHUS except, in the
case of violations, conflicts, defaults, terminations,
accelerations or Encumbrances described in clause (b)
of this Section. 6.5, for such matters which are not
likely to have a material adverse effect on the
business or financial condition of BHUS.
6.6 Consents and Approvals of Governmental Authorities. No
consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Body is
required to be made or obtained by BHUS or SMG in
connection with the execution, delivery and performance
of this Agreement by BHUS or the consummation of the
contemplated transaction.
6.7 Other Consents. No consent of any Person is required to
be obtained by SMG or BHUS to the execution, delivery
and performance of this Agreement or the consummation
of the contemplated transaction including, but not
limited to, consents from parties to leases or other
agreements or commitments, except for any consent which
the failure to obtain would not be likely to have a
material adverse effect on the business and financial
condition of SMG or BHUS.
6.8 Financial Statements. BHUS has delivered to SMG balance
sheets of BHUS as at December 31, 2002, and statements
of income and changes in financial position for the
period then ended. Such BHUS Financial Statements and
notes fairly present the financial condition and
results of operations of BHUS as at the dates thereof
and for the periods therein.
6.9 Title to Properties. BHUS owns all the material
properties and assets that they purport to own (real,
personal and mixed, tangible and intangible),
including, without limitation, all the material
properties and assets reflected in the BHUS Financial
Statements and all the material properties and assets
purchased or otherwise acquired by BHUS since the date
of the BHUS Financial Statements. All properties and
assets reflected in the BHUS Financial Statements are
free and clear of all material Encumbrances and are
not, in the case of real property, subject to any
material rights of way, building use restrictions,
exceptions, variances, reservations or limitations of
any nature whatsoever except, with respect to all such
properties and assets, (a) mortgages or security
interests shown on the BHUS Financial Statements as
17
securing specified liabilities or obligations, with
respect to which no default (or event which, with
notice or lapse of time or both, would constitute a
default) exists, (b) mortgages or security interests
incurred in connection with the purchase of property or
assets after the date of the BHUS Financial Statements
(such mortgages and security interests being limited to
the property or assets so acquired), with respect to
which no default (or event which, with notice or lapse
of time or both, would constitute a default) exists,
(c) as to real property, (i) imperfections of title, if
any, none of which materially detracts from the value
or impairs the use of the property subject thereto, or
impairs the operations of BHUS and (ii) zoning laws
that do not impair the present or anticipated use of
the property subject thereto, and (d) liens for current
taxes not yet due. The properties and assets of BHUS
include all rights, properties and other assets
necessary to permit BHUS to conduct BHUS's business in
all material respects in the same manner as it is
conducted on the date of this Agreement.
6.10 Buildings, Plants and Equipment. The buildings, plants,
structures and material items of equipment and other
personal property owned or leased by BHUS are, in all
respects material to the business or financial
condition of BHUS in good operating condition and
repair (ordinary wear and tear excepted) and are
adequate in all such respects for the purposes for
which they are being used. BHUS has not received
notification that it is in violation of any applicable
building, zoning, anti-pollution, health, safety or
other law, ordinance or regulation in respect of its
buildings, plants or structures or their operations,
which violation is likely to have a material adverse
effect on the business or financial condition of BHUS
or which would require a payment by SMG or BHUS in
excess of US$2,000 in the aggregate, and which has not
been cured.
6.11 No Condemnation or Expropriation. Neither the whole nor
any portion of the property or leaseholds owned or held
by BHUS is subject to any governmental decree or order
to be sold or is being condemned, expropriated or
otherwise taken by any Governmental Body or other
Person with or without payment of compensation
therefore, which action is likely to have a material
adverse effect on the business or financial condition
of SMG.
6.12 Litigation. There is no action, suit, inquiry,
proceeding or investigation by or before any court or
Governmental Body pending or threatened in writing
against or involving BHUS which is likely to have a
material adverse effect on the business or financial
condition of SMG and BHUS or which would require a
payment by BHUS in excess of US$4,500 in the aggregate
or which questions or challenges the validity of this
Agreement. BHUS is not subject to any judgment, order
or decree that is likely to have a material adverse
effect on the business or financial condition of SMG or
BHUS or which would require a payment by BHUS in excess
of US$4,500 in the aggregate.
18
6.13 Absence of Certain Changes. Since the date of the BHUS
Financial Statements, BHUS has not:
a. suffered the damage or destruction of any of its
properties or assets (whether or not covered by
insurance) which is materially adverse to the
business or financial condition of BHUS or made
any disposition of any of its material properties
or assets other than in the ordinary course of
business;
b. made any change or amendment in its certificate of
incorporation or by-laws, or other governing
instruments;
c. organized any new Subsidiary or acquired any
Equity Securities of any Person, or any equity or
ownership interest in any business;
d. paid, discharged or satisfied any material claim,
liability or obligation (absolute, accrued,
contingent or otherwise), other than in the
ordinary course of business;
e. prepaid any material obligation having a maturity
of more than 90 days from the date such obligation
was issued or incurred;
f. canceled any material debts or waived any material
claims or rights, except in the ordinary course of
business;
g. disposed of or permitted to lapse any rights to
the use of any material patent or registered
trademark or copyright or other intellectual
property owned or used by it;
h. granted any general increase in the compensation
of officers or employees (including any such
increase pursuant to any employee benefit plan);
i. purchased or entered into any contract or
commitment to purchase any material quantity of
raw materials or supplies, or sold or entered into
any contract or commitment to sell any material
quantity of property or assets, except (i) normal
contracts or commitments for the purchase of, and
normal purchases of, raw materials or supplies,
made in the ordinary course business, (ii) normal
contracts or commitments for the sale of, and
normal sales of, inventory in the ordinary course
of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary
course of business;
j. made any capital expenditures or additions to
property, plant or equipment or acquired any other
property or assets (other than raw materials and
supplies) at a cost in excess of US$2,000 in the
aggregate;
19
k. written off or been required to write off any
notes or accounts receivable in an aggregate
amount in excess of US$2,000;
l. written down or been required to write down any
inventory in an aggregate amount in excess of
US$2,000;
m. entered into any collective bargaining or union
contract or agreement; or
n. other than the ordinary course of business,
incurred any liability required by generally
accepted accounting principles to be reflected on
a balance sheet and material to the business or
financial condition of BHUS.
6.14 No Material Adverse Change. Since the date of the BHUS
Financial Statements, there has not been any material
adverse change in the business or financial condition
of BHUS.
6.15 Contracts and Commitments. Except as otherwise
disclosed by BHUS, BHUS is not a party to any:
a. Contract or agreement (other than purchase on
sales orders entered into in the ordinary course
of business) involving any liability on the part
of BHUS of more than US$2,000 and not cancelable
by BHUS (without liability to BHUS) within 60
days;
b. Lease of personal property involving annual rental
payments in excess of US$2,000 and not cancelable
by BHUS (without liability to BHUS) within 90
days;
c. Employee bonus, stock option or stock purchase,
performance unit, profit-sharing, pension,
savings, retirement, health, deferred or incentive
compensation, insurance or other material employee
benefit plan as defined in Section 2(3) of ERISA)
or program for any of the employees, former
employees or retired employees of BHUS;
d. Commitment, contract or agreement that is
currently expected by the management of BHUS to
result in any material loss upon completion or
performance thereof;
e. Contract, agreement or commitment that is material
to the business of BHUS, with any officer,
employee, agent, consultant, advisor, salesman,
sales representative, value added reseller,
distributor or dealer; or
f. Employment agreement or other similar agreement
that contains any severance or termination pay,
liabilities or obligations.
All such contracts and agreements are in full force and
effect. BHUS is not in breach of, in violation of or in
default under, any agreement, instrument, indenture,
20
deed of trust, commitment, contract or other obligation
of any type to which BHUS is a party or is or may be
bound as it relates to the business of BHUS or to which
any of the assets or properties of BHUS is subject, the
effect of which breach, violation or default is likely
to materially and adversity affect the business or
financial condition of BHUS.
6.16 Labor Relations. BHUS is not a party to any collective
bargaining agreement. Except for any matter which is
not likely to have a material adverse effect on the
business or financial condition of BHUS, (a) BHUS is in
compliance with all applicable laws respecting
employment and employment practices, terms and
conditions of employment and wages and hours, and is
not engaged in any unfair labor practice, (b) there is
no unfair labor practice complaint against BHUS pending
before the National Labor Relations Board, (c) there is
no labor strike, dispute, slowdown or stoppage actually
pending or threatened against BHUS, (d) no
representation question exists respecting the employees
of BHUS or any of its Subsidiaries, (e) BHUS has not
experienced any strike, work stoppage or other labor
difficulty, and (f) no collective bargaining agreement
relating to employees of BHUS is currently being
negotiated.
6.17 Employee Benefit Plans. BHUS has no plan that is (1) a
multi-employer plan as defined in Section 3(37) of
ERISA, or (2) a defined benefit plan as defined in
Section 3(35) of ERISA, any listed individual account
pension plan is duly qualified as tax exempt under the
applicable sections of the Code, each listed benefit
plan and related funding arrangement, if any, has been
maintained in all material respects in compliance with
its terms and the provisions of ERISA and the Code, and
the there are no material management incentive plans
nor any material employment contracts or severance
arrangements pertaining to one or more specific
employees.
6.18 Compliance with Law. The operations of BHUS have been
conducted in accordance with all applicable laws and
regulations of all Governmental Bodies having
jurisdiction over them, except for violations thereof
which are not likely to have a material adverse effect
on the business or financial condition of BHUS, or
which would not require a payment by BHUS in excess of
US$2,000 in the aggregate, or which have been cured.
BHUS has not received any notification of any asserted
present or past failure by it to comply with any such
applicable laws or regulations. BHUS has all material
licenses, permits, orders or approvals from the
Governmental Bodies required for the conduct of its
business, and is not in material violation of any such
licenses, permits, orders and approvals. All such
licenses, permits, orders and approvals are in full
force and effect, and no suspension or cancellation of
any thereof has been threatened.
6.19 Tax Matters.
a. BHUS (1) has filed, or prior to the Closing Date
will have filed, all non-consolidated and non-
combined Tax Returns and all consolidated or
21
combined Tax Returns required to be filed through
the date hereof and have paid any Tax due through
the date hereof with respect to the time periods
covered by such Tax Returns and shall timely pay
any such Taxes required to be paid by it after the
date hereof with respect to such Tax Returns; and
(2) shall prepare and timely file all such Tax
Returns required to be filed after the date hereof
and through the Closing Date and pay all Taxes
required to be paid by it with respect to the
periods covered by such Tax Returns. All such Tax
Returns filed pursuant to clause (2) after the
date hereof shall, in each case, be prepared and
filed in a manner consistent in all material
respects (including elections and accounting
methods and conventions) with such Tax Return most
recently filed in the relevant jurisdiction prior
to the date hereof, except as otherwise required
by law or regulation. Any such Tax Return filed
or required to be filed after the date hereof
shall not reflect any new elections or the
adoption of any new accounting methods or
conventions or other similar items, except to the
extent such particular reflection or adoption is
required to comply with any law or regulation.
b. All Tax Returns required to be filed by any person
through the date hereof that are required or
permitted to include the income, or reflect the
activities, operations and transactions, of BHUS
for any taxable period have been timely filed, and
the income, activities, operations and
transactions of BHUS have been properly included
and reflected thereon.
c. BHUS has not agreed, or is required, to make any
adjustment (x) under Section 481(a) of the Code by
reason of a change in accounting method or
otherwise, or (y) pursuant to any provision of the
Tax Reform Act of 1986, the Revenue Act of 1987 or
the Technical and Miscellaneous Revenue Act of
1988.
d. Neither BHUS or any predecessor or Affiliate of
BHUS has, at any time, filed a consent under
Section 341(f)(1) of the Code, or agreed under
Section 341(f)(3) of the Code, to have the
provisions of Section 341(f)(2) of the Code apply
to any sale of its stock.
e. There is no (nor has there been any request for
an) agreement, waiver or consent providing for an
extension of time with respect to the assessment
of any Taxes attributable to BHUS or its assets or
operations, and no power of attorney granted by
BHUS with respect to any Tax matter is currently
in force.
f. There is no action, suit, proceeding,
investigation, audit, claim, demand, deficiency or
additional assessment in BHUS, pending or
threatened against or with respect to any Tax
attributable to BHUS or its assets or operations.
22
g. All amounts required to be withheld as of the
Closing Date for Taxes or otherwise have been
withheld and paid when due to the appropriate
agency or authority.
h. No property of BHUS is "tax-exempt use property"
within the meaning of Section 168(h) of the Code,
nor property that BHUS will be required to treat
as being owned by another person pursuant to
Section 168(f)(8) of the Internal Revenue Code of
1954, as amended and in effect immediately prior
to the enactment of the Tax Reform Act of 1986.
i. There have been delivered or made available to SMG
true and complete copies of all income Tax Returns
and any other Tax Returns requested by SMG as may
be relevant to BHUS or its assets or operations
for any and all periods ending after December 31,
2001, and for any Tax years which are subject to
audit or investigation by any taxing authority or
entity.
k. There is no contract, agreement, plan or arrangement,
including but not limited to the provisions of this
Agreement, covering any employee or former employee of
BHUS that, individually or collectively, could give rise
to the payment of any amount that would not be deductible
pursuant to Section 280G or 162 of the Code.
6.20 Environmental Matters.
a. At all times prior to the date hereof, BHUS has
complied in all material respects with applicable
environmental laws, orders, regulations, rules and
ordinances relating to the Properties (as
hereinafter defined), the violation of which would
have a material adverse effect on the business or
financial condition of BHUS or which would require
a payment by BHUS in excess of US$2,000 in the
aggregate, and which have been duly adopted,
imposed or promulgated by any legislative,
executive, administrative or judicial body or
officer of any Governmental Body.
b. The environmental licenses, permits and
authorizations that are material to the operations
of BHUS are in full force and effect.
c. BHUS has not released or caused to be released on
or about the properties currently owned or leased
by BHUS (the "Properties") any (i) pollutants,
(ii) contaminants, (iii) "Hazardous Substances,"
as that term is defined in Section 101(14) of the
Comprehensive Environmental Response Act, as
amended or (iv) "Regulated Substances," as that
term in defined in Section 9001 of the Resource
Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq., as amended, which would be required
to be remediated by any governmental agency with
jurisdiction over the Properties under the
23
authority of laws, regulations and ordinances as
in effect and currently interpreted on the date
hereof, which remediation would have a material
adverse effect on the business or financial
condition of BHUS.
6.21 Absence of Certain Commercial Practices. BHUS has not,
directly or indirectly, paid or delivered any fee,
commission or other sum of money or item of property,
however characterized, to any finder, agent, government
official or other party, in the United States or any
other country, which is in any manner related to the
business or operations of BHUS, which BHUS knows or has
reason to believe to have been illegal under any
federal, state or local laws of the United States or
any other country having jurisdiction; and BHUS has not
participated, directly or indirectly, in any boycotts
or other similar practices affecting any of its actual
or potential shareholders in violation of any
applicable law or regulation.
6.22 Borrowing and Guarantees. Except as otherwise
disclosed by BHUS, BHUS (a) does not have any
indebtedness for borrowed money, (b) is not lending or
committed to lend any money (except for advances to
employees in the ordinary course of business), and (c)
is not a guarantor or Surety with respect to the
obligations of any Person.
6.24 Purchase for Investment. BHUS is obtaining the SMG
Shares solely for its own account for the purpose of
investment and not with a view to, or for sale in
connection with, any distribution of any portion
thereof in violation of any applicable securities law.
6.25 Indemnification. BHUS hereby agrees to indemnify,
defend and hold harmless SMG, its officers, directors,
shareholders, agents, and employees, and their
successors and assigns, against all liabilities,
damages, claims, costs, expenses and losses (including
reasonable attorneys' fees and costs) incurred as a
result of any breach of or failure of BHUS to fulfill
any representation, warranty, covenant or agreement
made by it under this Agreement.
7. Access and Reporting; Filings With Governmental Authorities;
Other Covenants.
7.1 Access between the date of this Agreement and the
Closing Date. Each of SMG and BHUS shall (a) give to
the other and its authorized representatives reasonable
access to all plants, offices, warehouse and other
facilities and properties of SMG or BHUS, as the case
may be, and to its books and records, (b) permit the
other to make inspections thereof, and (c) cause its
officers and its advisors to furnish the other with
such financial and operating data and other information
with respect to the business and properties of such
party and to discuss with such and its authorized
representatives its affairs, all as the other may from
time to time reasonably request.
7.2 Exclusivity. From the date hereof until the earlier of
the Closing or the termination of this Agreement, BHUS
shall not solicit or negotiate or enter into any
agreement with any other Person with respect to or in
24
furtherance of any proposal for a merger or business
combination involving, or acquisition of any interest
in, or (except in the ordinary course of business) sale
of assets by, BHUS, except for the exchange of the BHUS
Shares for the SMG Shares from the SMG Shareholders.
7.3 Regulatory Matters. SMG and BHUS shall (a) file with
applicable regulatory authorities any applications and
related documents required to be filed by them in order
to consummate the contemplated transaction and (b)
cooperate with each other as they may reasonably
request in connection with the foregoing.
7.5 Confidentiality. Prior to the Closing Date (or at any
time if the Closing does not occur) each of SMG and
BHUS shall keep confidential and not disclose to any
Person (other than its employees, attorneys,
accountants and advisors) or use (except in connection
with the transactions contemplated hereby) all non-
public information obtained pursuant to Section 7.1.
Following the Closing, each of SMG and BHUS shall keep
confidential and not disclose to any Person (other than
its employees, attorneys, accountants and advisors) or
use (except in connection. with preparing Tax Returns
and conducting proceeds relating to Taxes) any
nonpublic information relating to the other. This
Section 7.5 shall not be violated by disclosure
pursuant to court order or as otherwise required by
law, on condition that notice of the requirement for
such disclosure is given the other party prior to
making any disclosure and the party subject to such
requirement cooperates as the other may reasonably
request in resisting it. If the Closing does not occur,
each of SMG and BHUS shall return to the other, or
destroy, all information it shall have received from
the other in connection with this Agreement and the
transactions contemplated hereby, together with any
copies or summaries thereof or extracts therefrom. Each
of SMG and BHUS shall use their best efforts to cause
their respective representatives, employees, attorneys,
accountants and advisors to whom information is
disclosed pursuant to Section 7.1 to comply with the
provisions of this Section 7.5.
8. Conduct of BHUS's Business Prior to the Closing.
8.1 Operation in Ordinary Course. Between the date of this
Agreement and the Closing Date, BHUS shall conduct its
business in all material respects in the ordinary
course.
8.2 Business Organization. Between the date of this
Agreement and the Closing Date, BHUS shall (a) preserve
substantially intact the business organization of BHUS;
and (b) preserve in all material respects the present
business relationships and good will of BHUS.
8.3 Corporate Organization. Between the date of this
Agreement and the Closing Date, BHUS shall not cause or
permit any amendment of its certificate of
incorporation or by-laws (or other governing
instrument) and shall not:
25
a. issue, sell or otherwise dispose of any of its
Equity Securities, or create, sell or otherwise
dispose of any options, rights, conversion rights
or other agreements or commitments of any kind
relating to the issuance, sale or disposition of
any of its Equity Securities;
b. create or suffer to be created any Encumbrance
thereon, or create, sell or otherwise dispose of
any options, rights, conversion rights or other
agreements or commitments of any kind relating to
the sale or disposition of any Equity Securities;
c. reclassify, split up or otherwise change any of
its Equity Securities;
d. be party to any merger, consolidation or other
business combination;
e. sell, lease, license or otherwise dispose of any
of its properties or assets (including, but not
limited to rights with respect to patents and
registered trademarks and copyrights or other
proprietary rights), in an amount which is
material to the business or financial condition of
BHUS and its Subsidiaries, taken as a whole,
except in the ordinary course of business; or
f. organize any new Subsidiary or acquire any Equity
Securities of any Person or any equity or
ownership interest in any business.
9. Definitions.
As used in this Agreement, the following terms have the
meanings specified or referred to in this Section 9.
9.1 "Business Day" - Any day that is not a Saturday or
Sunday or a day on which banks located in the City of
Las Vegas are authorized or required to be closed.
9.2 "Code" - The Internal Revenue Code of 1986, as amended.
9.3 "Encumbrances" - any security interest, mortgage, lien,
charge, adverse claim or restriction of any kind,
including, but not limited to, any restriction on the
use, voting, transfer, receipt of income or other
exercise of any attributes of ownership, other than a
restriction on transfer arising under Federal or state
securities laws.
9.4 "Equity Securities" See Rule 3a-11-l under the
Securities Exchange Act of 1934.
9.5 "ERISA"- The Employee Retirement Income Security Act of
1974, as amended.
9.6 "Governmental Body" - Any domestic or foreign national,
state or municipal or other local government or multi-
national body (including, but not limited to, the
European Economic Community), any subdivision, agency,
commissioner authority thereof.
26
9.7 "Knowledge" - Actual knowledge, after reasonable
investigation.
9.8 "Person" - Any individual, corporation, partnership,
joint venture, trust, association, unincorporated
organization, other entity, or Governmental Body.
10. Termination. This Agreement may be terminated before the
Closing occurs only as follows:
a. By written agreement of SMG and BHUS at any time.
b. By BHUS, by notice to SMG at any time, if one or
more of the conditions specified in Section 4 is
not satisfied at the time at which the Closing (as
it may be deferred pursuant to Section 2.1) would
otherwise occur or if satisfaction of such a
condition is or becomes impossible.
c. By SMG, by notice to BHUS at any time, if one or
more of the conditions specified in Section 3 is
not satisfied at the time at which the Closing (as
it may be deferred pursuant to Section 2.1), would
otherwise occur or if satisfaction of such a
condition is or becomes impossible.
11. Previous Agreements. By entering into this Agreement, BHUS
and SMG (and, where applicable, the SMG Shareholders)
specifically acknowledge that any and all representations,
warranties, or provisions in prior agreements between the
parties, whether written or oral, are superceded by the
terms and conditions of this Agreement.
12. Notices. All notices, consents, assignments and other
communications under this Agreement shall be in writing and
shall be deemed to have been duly given when (a) delivered
by hand, (b) sent by telex or facsimile (with receipt
confirmed), provided that a copy is mailed by registered
mail, return receipt requested, or (c) received by the
delivery service (receipt requested), in each case to the
appropriate addresses, telex numbers and facsimile numbers
set forth below (or to such other addresses, telex numbers
and facsimile numbers as a party may designate as to itself
by notice to the other parties),
a. If to BHUS:
Xxxx-Xxxxxx, Inc.
0000 Xxx 0
Xxxxxxxx, XX X0X 0X0
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx, President
With a copy to:
Xxxxxxx & Xxxxxxxx, Ltd.
000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
27
b. If to SMG:
SMG CORP.
000 Xxxxxxxx Xx.
Xxxxx 000X
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
14. Miscellaneous.
14.2 Expenses. Each party shall bear its own expenses
incident to the preparation, negotiation, execution and
delivery of this Agreement and the performance of its
obligations hereunder.
14.3 Captions. The captions in this Agreement are for
convenience of reference only and shall not be given
any effect in the interpretation of this agreement,
14.4 No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence
to that term or any other term of this Agreement. Any
waiver must be in writing.
14.5 Exclusive Agreement; Amendment. This Agreement
supersedes all prior agreements among the parties with
respect to its subject matter with respect thereto and
cannot be changed or terminated orally.
14.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be considered an
original, but all of which together shall constitute
the same instrument.
14.7 Governing Law. This Agreement and (unless otherwise
provided) all amendments hereof and waivers and
consents hereunder shall be governed by the internal
law of the State of Nevada, without regard to the
conflicts of law principles thereof.
14.8 Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties hereto.
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IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto
duly authorized, and entered into as of the date first above
written.
XXXX-XXXXXX, INC. SMG CORP.
By:/s/Xxxxx Xxxxxxx, President By:/s/Xxxxxx Xxxxxxxx, President
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EXHIBIT A
SHARE ISSUANCE
The BHUS Shares shall be issued and delivered in such names and
denominations as follows. Each shareholder listed below shall
sign, in the space next to his/her/its name, to indicate
his/her/its assent to the Agreement. In the case in which the
shareholder is not a natural person, the person signing on behalf
of the shareholders represents and warrants that he/she is duly
authorize to execute this Agreement and, by his/her signature, to
bind the shareholding entity. By signing this and assenting to
this Agreement, the undersigned shareholder acknowledges that
this Agreement shall serve as written consent and approval of the
proposal by the Boards of Directors of XXXX-XXXXXX, INC. and SMG
CORP. of their respective acquisitions pursuant to NRS 92A.120.
Number Number
of SMG of BHUS
Shares Shares to
Shareholder Name Tendered be Issued Signature
Xxxxxx Xxxxxxxx 1174 1,761,000
Seijin Ki 880 1,320,000
Frame Werk GmbH 910 1,365,000
Price Xxxxx & 1036 1,554,000
Partners, Inc.
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