EXCHANGE AGREEMENT
Between
WEB VIEWS CORPORATION
and
CASCADE MOUNTAIN MINING CORP.
Dated June 6, 2003
TABLE OF CONTENTS
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF CASCADE MINING
1.01 Organization 4
1.02 Capitalization 4
1.03 Subsidiaries and Predecessor Corporations 5
1.04 Financial Statements 5
1.05 Information 5
1.06 Options and Warrants 5
1.07 Absence of Certain Changes or Events 5
1.08 Title and Related Matters 6
1.09 Litigation and Proceedings 6
1.10 Contracts 6
1.11 Material Contract Defaults 7
1.12 No Conflict With Other Instruments 7
1.13 Governmental Authorizations 7
1.14 Compliance With Laws and Regulations 7
1.15 Approval of Agreement 7
1.16 Material Transactions or Affiliations 7
1.17 Cascade Mining Schedules 8
1.18 Valid Obligation 8
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF WEB VIEWS
2.01 Organization 9
2.02 Capitalization 9
2.03 Subsidiaries and Predecessor Corporations 9
2.04 Financial Statements 9
2.05 Information 10
2.06 Options and Warrants 10
2.07 Absence of Certain Changes or Events 10
2.08 Title and Related Matters 11
2.09 Litigation and Proceedings 11
2.10 Contracts 11
2.11 Material Contract Defaults 11
2.12 No Conflict With Other Instruments 12
2.13 Governmental Authorizations 12
2.14 Compliance With Laws and Regulations 12
2.15 Approval of Agreement 12
2.16 Continuity of Business Enterprises 12
2.17 Material Transactions or Affiliations 12
2.18 Princeton Ventures Schedules 12
2.19 Valid Obligation 13
2.20 Liabilities
2.21 Quotation on the OTC Bulletin Board
2.22 Approval of the Exchange by the Company's Shareholders
2.23 Director Approval
ARTICLE III PLAN OF EXCHANGE
3.01 The Exchange 13
3.02 Tradability of Shares
3.03 Anti-Dilution 14
3.04 Closing 14
3.05 Closing Events 14
3.06 Termination 14
ARTICLE IV SPECIAL COVENANTS
4.01 Access to Properties and Records 15
4.02 Delivery of Books and Records 15
4.03 Third Party Consents and Certificates 16
4.04 Consent of Cascade Mountain Shareholders 16
4.05 Designation of Directors and Officers 16
4.06 Exclusive Dealing Rights 16
4.07 Actions Prior to Closing 16
4.08 Indemnification 17
4.09 Limitation of Subsequent Corporate Actions 18
4.10 Indemnification of Subsequent Corporate Actions 18
4.11 Name Change 18
4.12 Audited Financial Statements 18
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF WEB VIEWS
5.01 Accuracy of Representations and Performance of Covenants 18
5.02 Officer's Certificates 18
5.03 No Material Adverse Change 18
5.04 Approval by Web Views Shareholders 19
5.05 No Governmental Prohibitions 19
5.06 Consents 19
5.07 Other Items 19
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF CASCADE MOUNTAIN AND THE
CASCADE MOUNTAIN SHAREHOLDERS
6.01 Accuracy of Representations and Performance of Covenants 19
6.02 Officer's Certificate 19
6.03 No Material Adverse Change 20
6.04 No Governmental Prohibition 20
6.05 Consents 20
6.06 Other Items 20
ARTICLE VII MISCELLANEOUS
7.01 No Bankruptcy and No Criminal Convictions 20
7.02 Brokers 20
7.03 Governing Law 21
7.04 Notices 21
7.05 Attorney's Fees 21
7.06 Confidentiality 21
7.07 Public Announcements and Filings 21
7.08 Schedules; Knowledge 21
7.09 Third Party Beneficiaries 22
7.10 Expenses 22
7.11 Entire Agreement 22
7.12 Survival; Termination 22
7.13 Counterparts 22
7.14 Amendment or Waiver 22
7.15 Best Efforts 22
7.16 Faxed Copies 22
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement") is entered
into as of this 6th day of June, 2003 by and between WEB VIEWS CORPORATION, a
Nevada corporation (hereinafter referred to as the "Company") and CASCADE
MOUTAIN MINING CORP., a Nevada corporation (hereinafter referred to as "Cascade
Mountain"), upon the following premises:
Premises
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WHEREAS, the Company is a publicly held corporation organized under the
laws of the State of Nevada;
WHEREAS, Cascade Mountain is a privately held corporation organized under
the laws of the State of Nevada;
WHEREAS, management of the constituent corporations have determined that it
is in the best interest of the parties that the Company acquire 100% of the
issued and outstanding securities of Cascade Mountain in exchange for the
issuance of certain shares of the Company (the "Exchange") and Cascade Mountain
agrees to use its best efforts to cause its shareholders (the " Cascade Mountain
Shareholders") to exchange their securities of Cascade Mountain on the terms
described herein; and
WHEREAS, the Company and Cascade Mountain desire to set forth the terms of
the Exchange, which is intended to constitute a tax-free reorganization pursuant
to the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986.
Agreement
---------
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF CASCADE MOUNTAIN
As an inducement to, and to obtain the reliance of the Company, except as
set forth on the Cascade Mountain Schedules (as hereinafter defined), Cascade
Mountain represents and warrants as follows:
Section 1.01 Organization. Cascade Mountain is a corporation duly
------------
organized, validly existing, and in good standing under the laws of the State of
Nevada and has the corporate power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances, and
orders of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being conducted,
including qualification to do business as a foreign corporation in the states or
countries in which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualification, except where
failure to be so qualified would not have a material adverse effect on its
business. Included in the Cascade Mountain Schedules are complete and correct
copies of the articles of incorporation, and bylaws of Cascade Mountain as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Cascade Mountain's articles of incorporation or bylaws.
Cascade Mountain has taken all actions required by law, its articles of
incorporation, or otherwise to authorize the execution and delivery of this
Agreement. Cascade Mountain has full power, authority, and legal right and has
taken all action required by law, its articles of incorporation, and otherwise
to consummate the transactions herein contemplated.
Section 1.02 Capitalization. The authorized capitalization of Cascade
--------------
Mountain consists of 225,000,000 shares, consisting of 200,000,000 shares of
common stock, $.001 par value per share, of which 700,000 shares are currently
issued and outstanding, and 25,000,000 shares of preferred stock, $.001 par
value per share of which no shares are currently issued and outstanding. All
issued and outstanding shares are legally issued, fully paid, and non-assessable
and not issued in violation of the preemptive or other rights of any person.
Section 1.03 Subsidiaries and Predecessor Corporations. Cascade
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Mountain does not have any predecessor corporation(s) or subsidiaries, and does
not own, beneficially or of record, any shares of any other corporation, except
as disclosed in Schedule 1.03. For purposes hereinafter, the term "Cascade
--------------
Mountain" also includes those subsidiaries, if any, set forth on Schedule 1.03.
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Section 1.04 Financial Statements.
--------------------
(a) Cascade Mountain has no liabilities with respect to the payment of
any federal, state, county, local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and payable.
(b) Cascade Mountain has filed all state, federal or local income
and/or franchise tax returns required to be filed by it from inception to the
date hereof. Each of such income tax returns reflects the taxes due for the
period covered thereby, except for amounts which, in the aggregate, are
immaterial.
(c) The books and records, financial and otherwise, of Cascade Mountain
are in all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(d) Except as set forth in the Cascade Mountain Schedules or the
financial statements of Cascade Mountain or the notes thereto, Cascade Mountain
has no material liabilities, direct or indirect, matured or unmatured,
contingent or otherwise.
Section 1.05 Information. The information concerning Cascade Mountain
-----------
set forth in this Agreement and in the Cascade Mountain Schedules is complete
and accurate in all material respects and does not contain any untrue statement
of a material fact or omit to state a material fact required to make the
statements made, in light of the circumstances under which they were made, not
misleading. In addition, Cascade Mountain has fully disclosed in writing to the
Company (through this Agreement or the Cascade Mountain Schedules) all
information relating to matters involving Cascade Mountain or its assets or its
present or past operations or activities which (i) indicated or may indicate, in
the aggregate, the existence of a greater than $25,000 liability or diminution
in value, (ii) have led or may lead to a competitive disadvantage on the part of
Cascade Mountain or (iii) either alone or in aggregation with other information
covered by this Section, otherwise have led or may lead to a material adverse
effect on the transactions contemplated herein or on Cascade Mountain, its
assets, or its operations or activities as presently conducted or as
contemplated to be conducted after the Closing Date, including, but not limited
to, information relating to governmental, employee, environmental, litigation
and securities matters and transactions with affiliates.
Section 1.06 Options or Warrants. There are no existing options,
---------------------
warrants, calls, or commitments of Cascade Mountain of any character relating to
the authorized and unissued Cascade Mountain common stock, except options,
warrants, calls or commitments, if any, to which Cascade Mountain is not a party
and by which it is not bound.
Section 1.07 Absence of Certain Changes or Events. Except as set forth
------------------------------------
in this Agreement or the Cascade Mountain Schedules, since May 31, 2003:
(a) there has not been (i) any material adverse change in the business,
operations, properties, assets, or condition of Cascade Mountain or (ii) any
damage, destruction, or loss to Cascade Mountain (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of Cascade Mountain;
(b) Cascade Mountain has not (i) amended its articles of incorporation
or bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to stockholders
or purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock; (iii) waived any rights of value which in the aggregate are outside of
the ordinary course of business or material considering the business of Cascade
Mountain; (iv) made any material change in its method of management, operation
or accounting; (v) entered into any other material transaction other than sales
in the ordinary course of its business; (vi) made any accrual or arrangement for
payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; (vii) increased
the rate of compensation payable or to become payable by it to any of its
officers or directors or any of its salaried employees whose monthly
compensation exceeds $1,000; or (viii) made any increase in any profit sharing,
bonus, deferred compensation, insurance, pension, retirement, or other employee
benefit plan, payment, or arrangement made to, for, or with its officers,
directors, or employees;
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(c) Cascade Mountain has not (i) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or liability
(absolute or contingent) except as disclosed herein and except liabilities
incurred in the ordinary course of business; (ii) paid or agreed to pay any
material obligations or liability (absolute or contingent) other than current
liabilities, and current liabilities incurred in the ordinary course of business
and professional and other fees and expenses in connection with the preparation
of this Agreement and the consummation of the transactions contemplated hereby;
(iii) sold or transferred, or agreed to sell or transfer, any of its assets,
properties, or rights (except assets, properties, or rights not used or useful
in its business which, in the aggregate have a value of less than $5,000), or
canceled, or agreed to cancel, any debts or claims (except debts or claims which
in the aggregate are of a value of less than $1,000); or (iv) made or permitted
any amendment or termination of any contract, agreement, or license to which it
is a party if such amendment or termination is material, considering the
business of Cascade Mountain; and
(d) To the best knowledge of Cascade Mountain, Cascade Mountain has
not become subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect the business, operations,
properties, assets, or condition of Cascade Mountain.
Section 1.08 Title and Related Matters. Cascade Mountain has good and
-------------------------
marketable title to all of its properties, inventory, interests in properties,
and assets, real and personal, or acquired after that date (except properties,
inventory, interests in properties, and assets sold or otherwise disposed of
since such date in the ordinary course of business) free and clear of all liens,
pledges, charges, or encumbrances except (a) statutory liens or claims not yet
delinquent; (b) such imperfections of title and easements as do not and will not
materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties; and (c) as described in the
Cascade Mountain Schedules. Except as set forth in the Cascade Mountain
Schedules, Cascade Mountain owns, free and clear of any liens, claims,
encumbrances, royalty interests, or other restrictions or limitations of any
nature whatsoever, any and all products it is currently manufacturing, including
the underlying technology and data, and all procedures, techniques, marketing
plans, business plans, methods of management, or other information utilized in
connection with Cascade Mountain's business. Except as set forth in the Cascade
Mountain Schedules, no third party has any right to, and Cascade Mountain has
not received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
propriety techniques, trademarks, service marks, trade names, or copyrights
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a materially adverse effect on the
business, operations, financial condition, income, or business prospects of
Cascade Mountain or any material portion of its properties, assets, or rights.
Section 1.09 Litigation and Proceedings. Except as set forth in the
----------------------------
Cascade Mountain Schedules, there are no actions, suits, proceedings, or
investigations pending or, to the knowledge of Cascade Mountain after reasonable
investigation, threatened by or against Cascade Mountain or affecting Cascade
Mountain or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. Cascade Mountain does not have any knowledge of any
material default on its part with respect to any judgment, order, injunction,
decree, award, rule, or regulation of any court, arbitrator, or governmental
agency or instrumentality or of any circumstances which, after reasonable
investigation, would result in the discovery of such a default.
Section 1.10 Contracts.
---------
(a) Except as included or described in the Cascade Mountain Schedules,
there are no "material" contracts, agreements, franchises, license agreements,
debt instruments or other commitments to which Cascade Mountain is a party or by
which it or any of its assets, products, technology, or properties are bound
other than those incurred in the ordinary course of business (as used in this
Agreement, a "material" contract, agreement, franchise, license agreement, debt
instrument or commitment is one which (i) will remain in effect for more than
six (6) months after the date of this Agreement or (ii) involves aggregate
obligations of at least twenty-five thousand dollars ($25,000));
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(b) All contracts, agreements, franchises, license agreements, and
other commitments to which Cascade Mountain is a party or by which its
properties are bound and which are material to the operations of Cascade
Mountain taken as a whole are valid and enforceable by Cascade Mountain in all
respects, except as limited by bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally;
(c) Cascade Mountain is not a party to or bound by, and the properties
of Cascade Mountain are not subject to any contract, agreement, other commitment
or instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, the business operations, properties, assets, or condition of Cascade
Mountain; and
(d) Except as included or described in the Cascade Mountain Schedules,
Cascade Mountain is not a party to any oral or written (i) contract for the
employment of any officer or employee which is not terminable on 30 days, or
less notice; (ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, (iii) agreement, contract, or
indenture relating to the borrowing of money, (iv) guaranty of any obligation,
other than one on which Cascade Mountain is a primary obligor, for the borrowing
of money or otherwise, excluding endorsements made for collection and other
guaranties of obligations which, in the aggregate do not exceed more than one
year or providing for payments in excess of $25,000 in the aggregate; (v)
collective bargaining agreement; or (vi) agreement with any present or former
officer or director of Cascade Mountain.
Section 1.11 Material Contract Defaults. Cascade Mountain is not in
----------------------------
default in any material respect under the terms of any outstanding contract,
agreement, lease, or other commitment which is material to the business,
operations, properties, assets or condition of Cascade Mountain and there is no
event of default in any material respect under any such contract, agreement,
lease, or other commitment in respect of which Cascade Mountain has not taken
adequate steps to prevent such a default from occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
----------------------------------
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which Cascade Mountain is a party or to which any of
its properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the
----------------------------
Cascade Mountain Schedules, Cascade Mountain has all licenses, franchises,
permits, and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities and
corporation laws, as hereinafter provided, no authorization, approval, consent,
or order of, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and delivery by
Cascade Mountain of this Agreement and the consummation by Cascade Mountain of
the transactions contemplated hereby.
Section 1.14 Compliance With Laws and Regulations. Except as set forth
------------------------------------
in the Cascade Mountain Schedules, to the best of its knowledge Cascade Mountain
has complied with all applicable statutes and regulations of any federal, state,
or other governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of Cascade Mountain or except to
the extent that noncompliance would not result in the occurrence of any material
liability for Cascade Mountain.
Section 1.15 Approval of Agreement. The board of directors of Cascade
---------------------
Mountain has authorized the execution and delivery of this Agreement by Cascade
Mountain and has approved this Agreement and the transactions contemplated
hereby, and will recommend to the Cascade Mountain Shareholders that the
Exchange be accepted by them.
Section 1.16 Material Transactions or Affiliations. Set forth in the
--------------------------------------
Cascade Mountain Schedules is a description of every contract, agreement, or
arrangement between Cascade Mountain and any predecessor and any person who was
at the time of such contract, agreement, or arrangement an officer, director, or
person owning of record, or known by Cascade Mountain to own beneficially, 5% or
more of the issued and outstanding common stock of Cascade Mountain and which is
to be performed in whole or in part after the date hereof or which was entered
into not more than three years prior to the date hereof. Except as disclosed in
the Cascade Mountain Schedules or otherwise disclosed herein, no officer,
director, or 5% shareholder of Cascade Mountain has, or has had since inception
of Cascade Mountain, any known interest, direct or indirect, in any transaction
with Cascade Mountain which was material to the business of Cascade Mountain.
There are no commitments by Cascade Mountain, whether written or oral, to lend
any funds, or to borrow any money from, or enter into any other transaction
with, any such affiliated person.
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Section 1.17 Cascade Mountain Schedules. Cascade Mountain has
----------------- ---------
delivered to the Company the following schedules, which are collectively
referred to as the " Cascade Mountain Schedules" and which consist of separate
schedules dated as of the date of execution of this Agreement, all certified by
the chief executive officer of Cascade Mountain as complete, true, and correct
as of the date of this Agreement in all material respects:
(a) a schedule containing complete and correct copies of the articles
of incorporation, and bylaws of Cascade Mountain in effect as of the date
of this Agreement;
(b) a schedule stating that there are no liabilities;
(c) a Schedule 1.17(c) containing a list indicating the name and
address of each shareholder of Cascade Mountain together with the number of
shares owned by him, her or it;
(d) a schedule containing a description of all real property owned by
Cascade Mountain, together with a description of every mortgage, deed of
trust, pledge, lien, agreement, encumbrance, claim, or equity interest of
any nature whatsoever in such real property;
(e) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which
Cascade Mountain carries on or proposes to carry on its business (except
those which, in the aggregate, are immaterial to the present or proposed
business of Cascade Mountain);
(f) a schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of Cascade Mountain since December 31, 2002, required to be
provided pursuant to section 1.07 hereof; and
(g) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Cascade
Mountain Schedules by Sections 1.01 through 1.17.
Cascade Mountain shall cause the Cascade Mountain Schedules and the
instruments and data delivered to the Company hereunder to be promptly updated
after the date hereof up to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by Cascade Mountain.
Cascade Mountain shall have until June 30, 2003 to provide such schedules. If
Cascade Mountain cannot or fails to do so, or if the Company acting reasonably
finds any such schedules or updates provided after the date hereof to be
unacceptable according to the criteria set forth below, the Company may
terminate this Agreement by giving written notice to Cascade Mountain within
five (5) days after the schedules or updates were due to be produced or were
provided. For purposes of the foregoing, the Company may consider a disclosure
in the Cascade Mountain Schedules to be "unacceptable" only if that item would
have a material adverse impact on the financial condition of Cascade Mountain,
taken as a whole.
Section 1.18 Valid Obligation. This Agreement and all agreements and
-----------------
other documents executed by Cascade Mountain in connection herewith constitute
the valid and binding obligation of Cascade Mountain, enforceable in accordance
with its or their terms, except as may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and subject to the qualification that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefor may be brought.
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ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE COMPANY
As an inducement to, and to obtain the reliance of Cascade Mountain and the
Cascade Mountain Shareholders, except as set forth in the Company Schedules (as
hereinafter defined), the Company represents and warrants as follows:
Section 2.01 Organization. The Company is a corporation duly
------------
organized, validly existing, and in good standing under the laws of the State of
Nevada and has the corporate power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances, and
orders of public authorities to own all of its properties and assets, to carry
on its business in all material respects as it is now being conducted, and
except where failure to be so qualified would not have a material adverse effect
on its business, there is no jurisdiction in which it is not qualified in which
the character and location of the assets owned by it or the nature of the
business transacted by it requires qualification. Included in the Company
Schedules are complete and correct copies of the articles of incorporation and
bylaws of the Company as in effect on the date hereof. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the Company's articles of
incorporation or bylaws. The Company has taken all action required by law, its
certificate of incorporation, its bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and the Company has full power,
authority, and legal right and has taken all action required by law, its
articles of incorporation, bylaws, or otherwise to consummate the transactions
herein contemplated.
Section 2.02 Capitalization. The Company's authorized capitalization
--------------
consists of 25,000,000 shares of common stock, par value $.001 per share of
which 2,000,000 shares will be issued and outstanding at the Closing prior to
the issuance of the shares to the Cascade Mountain Shareholders as set forth in
Section 3.01. All issued and outstanding shares are legally issued, fully paid,
and non-assessable and not issued in violation of the preemptive or other rights
of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. The Company
-------------------------------------------
does not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in Schedule 2.03. For purposes hereinafter, the term "Company" also
-------------
includes those subsidiaries, if any, set forth on Schedule 2.03.
--------------
Section 2.04 Financial Statements.
----------------------
(a) Included in the Company Schedules are (i) the audited balance
sheets of the Company and the related statements of operations and cash flows as
of and for the twelve months ended December 31, 2002 and (ii) the unaudited
balance sheets of the Company and the related statements of operations and cash
flows for the three months ended March 31, 2003.
(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved. The Company balance sheets present fairly as of their
respective dates the financial condition of the Company. As of the date of such
balance sheets, except as and to the extent reflected or reserved against
therein, the Company had no liabilities or obligations (absolute or contingent)
which should be reflected in the balance sheets or the notes thereto prepared in
accordance with generally accepted accounting principles, and all assets
reflected therein are properly reported and present fairly the value of the
assets of the Company, in accordance with generally accepted accounting
principles. The statements of operations, stockholders' equity and cash flows
reflect fairly the information required to be set forth therein by generally
accepted accounting principles.
(c) The Company has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and payable.
(d) The books and records, financial and otherwise, of the Company are
in all material aspects complete and correct and have been maintained in
accordance with good business and accounting practices.
9
(e) All of the Company's assets are reflected on its financial
statements, and, except as set forth in the Company Schedules or the financial
statements of the Company or the notes thereto, the Company has no material
liabilities, direct or indirect, matured or unmatured, contingent or otherwise.
Section 2.05 Information. The information concerning the Company set
------------
forth in this Agreement and the Company Schedules is complete and accurate in
all material respects and does not contain any untrue statements of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading. In
addition, the Company has fully disclosed in writing to Cascade Mountain
(through this Agreement or the Company Schedules) all information relating to
matters involving the Company or its assets or its present or past operations or
activities which (i) indicated or may indicate, in the aggregate, the existence
of a greater than $5,000 liability or diminution in value, (ii) have led or may
lead to a competitive disadvantage on the part of the Company or (iii) either
alone or in aggregation with other information covered by this Section,
otherwise have led or may lead to a material adverse effect on the transactions
contemplated herein or on the Company, its assets, or its operations or
activities as presently conducted or as contemplated to be conducted after the
Closing Date, including, but not limited to, information relating to
governmental, employee, environmental, litigation and securities matters and
transactions with affiliates.
Section 2.06 Options or Warrants. There are no existing options,
----------------------
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of the Company, other than those disclosed in the Company
Schedules.
Section 2.07 Absence of Certain Changes or Events. Except as disclosed
-------------------------------------
in Exhibit 2.07, or permitted in writing by Cascade Mountain, since the date of
the most recent Company balance sheet:
(a) there has not been (i) any material adverse change in the business,
operations, properties, assets or condition of the Company or (ii) any damage,
destruction or loss to the Company (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties, assets
or condition of the Company;
(b) The Company has not and will not (i) amend its certificate of
incorporation or bylaws except to reflect the name change, affect a forward
stock split, and authorize the issuance of preferred stock; (ii) declare or
make, or agree to declare or make any payment of dividends or distributions of
any assets of any kind whatsoever to stockholders or purchase or redeem, or
agree to purchase or redeem, any of its capital stock; (iii) waive any rights of
value which in the aggregate are outside of the ordinary course of business or
material considering the business of the Company; (iv) make any material change
in its method of management, operation, or accounting; (v) enter into any
transaction or agreement other than in the ordinary course of business; (vi)
make any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or
former officer or employee; (vii) increase the rate of compensation payable or
to become payable by it to any of its officers or directors or any of its
salaried employees whose monthly compensation exceed $1,000; or (viii) make any
increase in any profit sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or arrangement,
made to, for or with its officers, directors, or employees;
(c) The Company has not (i) granted or agreed to grant any options or
warrants; (ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid or agreed to
pay any material obligations or liabilities (absolute or contingent) other than
current liabilities reflected in or shown on the most recent the Company balance
sheet and current liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses in connection with the
preparation of this Agreement and the consummation of the transaction
contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer,
any of its assets, properties, or rights (except assets, properties, or rights
not used or useful in its business which, in the aggregate have a value of less
than $1,000), or canceled, or agreed to cancel, any debts or claims (except
debts or claims which in the aggregate are of a value less than $1,000); and
(v) made or permitted any amendment or termination of any contract, agreement,
or license to which it is a party if such amendment or termination is material,
considering the business of the Company; and
10
(d) to the best knowledge of the Company, it has not become subject to
any law or regulation which materially and adversely affects, or in the future,
may adversely affect, the business, operations, properties, assets or condition
of the Company.
Section 2.08 Title and Related Matters. The Company has good and
-----------------------------
marketable title to all of its properties, inventory, interest in properties,
and assets, real and personal, which are reflected in the most recent Company
balance sheet or acquired after that date (except properties, inventory,
interest in properties, and assets sold or otherwise disposed of since such date
in the ordinary course of business), free and clear of all liens, pledges,
charges, or encumbrances except (a) statutory liens or claims not yet
delinquent; (b) such imperfections of title and easements as do not and will not
materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties; and (c) as described in the
Company Schedules. Except as set forth in the Company Schedules, the Company
owns, free and clear of any liens, claims, encumbrances, royalty interests, or
other restrictions or limitations of any nature whatsoever, any and all products
it is currently manufacturing, including the underlying technology and data, and
all procedures, techniques, marketing plans, business plans, methods of
management, or other information utilized in connection with the Company's
business. Except as set forth in the Company Schedules, no third party has any
right to, and the Company has not received any notice of infringement of or
conflict with asserted rights of others with respect to any product, technology,
data, trade secrets, know-how, proprietary techniques, trademarks, service
marks, trade names, or copyrights which, individually or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
materially adverse effect on the business, operations, financial condition,
income, or business prospects of the Company or any material portion of its
properties, assets, or rights.
Section 2.09 Litigation and Proceedings. There are no actions, suits,
---------------------------
proceedings or investigations pending or, to the knowledge of the Company after
reasonable investigation, threatened by or against the Company or affecting the
Company or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind except as disclosed in Schedule 2.09. The Company has no
-------------
knowledge of any default on its part with respect to any judgment, order, writ,
injunction, decree, award, rule or regulation of any court, arbitrator, or
governmental agency or instrumentality or any circumstance which after
reasonable investigation would result in the discovery of such default.
Section 2.10 Contracts.
----------
(a) The Company is not a party to, and its assets, products, technology
and properties are not bound by, any material contract, franchise, license
agreement, agreement, debt instrument or other commitments whether such
agreement is in writing or oral, except as disclosed in Schedule 2.10.
-------------
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which the Company is a party or by which its properties are
bound and which are material to the operations of the Company taken as a whole
are valid and enforceable by the Company in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) The Company is not a party to or bound by, and the properties of
the Company are not subject to any contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment, order,
writ, injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of the Company; and
(d) Except as included or described in the Company Schedules or
reflected in the most recent Company balance sheet, the Company is not a party
to any oral or written (i) contract for the employment of any officer or
employee which is not terminable on 30 days, or less notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay, pension
benefit or retirement plan, (iii) agreement, contract, or indenture relating to
the borrowing of money, (iv) guaranty of any obligation, other than one on which
the Company is a primary obligor, for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties of obligations
which, in the aggregate do not exceed more than one year or providing for
payments in excess of $25,000 in the aggregate; (v) collective bargaining
agreement; or (vi) agreement with any present or former officer or director of
the Company.
11
Section 2.11 Material Contract Defaults. The Company is not in default
--------------------------
in any material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets or condition of the Company and there is no event of default
in any material respect under any such contract, agreement, lease, or other
commitment in respect of which the Company has not taken adequate steps to
prevent such a default from occurring.
Section 2.12 No Conflict With Other Instruments. The execution of this
-----------------------------------
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or to which any of its assets or operations are subject.
Section 2.13 Governmental Authorizations. The Company has all
-----------------------------
licenses, franchises, permits, and other governmental authorizations, that are
legally required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal
and state securities or corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, of registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
-------------------------------------
knowledge, the Company has complied with all applicable statutes and regulations
of any federal, state, or other applicable governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
the Company or except to the extent that noncompliance would not result in the
occurrence of any material liability. This compliance includes, but is not
limited to, the filing of all reports to date with federal and state securities
authorities.
Section 2.15 Approval of Agreement. The board of directors of the
------------------------
Company has authorized the execution and delivery of this Agreement by the
Company and has approved this Agreement and the transactions contemplated
hereby.
Section 2.16 Continuity of Business Enterprises. The Company has no
-------------------------------------
commitment or present intention to liquidate Cascade Mountain or sell or
otherwise dispose of a material portion of Cascade Mountain's business or assets
following the consummation of the transactions contemplated hereby.
Section 2.17 Material Transactions or Affiliations. Except as
-----------------------------------------
disclosed herein and in the Company Schedules, there exists no contract,
agreement or arrangement between the Company and any predecessor and any person
who was at the time of such contract, agreement or arrangement an officer,
director, or person owning of record or known by the Company to own
beneficially, 5% or more of the issued and outstanding common stock of the
Company and which is to be performed in whole or in part after the date hereof
or was entered into not more than three years prior to the date hereof. Neither
any officer, director, nor 5% shareholder of the Company has, or has had since
inception of the Company, any known interest, direct or indirect, in any such
transaction with the Company which was material to the business of the Company.
The Company has no commitment, whether written or oral, to lend any funds to,
borrow any money from, or enter into any other transaction with, any such
affiliated person.
Section 2.18 The Company Schedules. The Company has delivered to
------------------------
Cascade Mountain the following schedules, which are collectively referred to as
the "Company Schedules" and which consist of separate schedules, which are dated
the date of this Agreement, all certified by the chief executive officer of the
Company to be complete, true, and accurate in all material respects as of the
date of this Agreement:
(a) a schedule containing complete and accurate copies of the
certificate of incorporation and bylaws of the Company as in effect as of the
date of this Agreement;
(b) a schedule containing the financial statements of the Company
identified in paragraph 2.04(a);
(c) a Schedule 2.18(c) containing a list indicating the name and
address of each shareholder of the Company together with the number of shares
owned by him, her or it;
(d) a schedule containing a description of all real property owned by
the Company, together with a description of every mortgage, deed of trust,
pledge, lien, agreement, encumbrance, claim, or equity interest of any nature
whatsoever in such real property;
12
(e) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which the
Company carries on or proposes to carry on its business (except those which, in
the aggregate, are immaterial to the present or proposed business of the
Company);
(f) a schedule listing the accounts receivable and notes and other
obligations receivable of the Company as of December 31, 2002, or thereafter
other than in the ordinary course of business of the Company, indicating the
debtor and amount, and classifying the accounts to show in reasonable detail the
length of time, if any, overdue, and stating the nature and amount of any
refunds, set offs, reimbursements, discounts, or other adjustments which are in
the aggregate material and due to or claimed by such debtor;
(g) a schedule listing the accounts payable and notes and other
obligations payable of the Company as of December 31, 2002, or that arose
thereafter other than in the ordinary course of the business of the Company,
indicating the creditor and amount, classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the nature
and amount of any refunds, set offs, reimbursements, discounts, or other
adjustments, which in the aggregate are material and due to or claimed by the
Company respecting such obligations;
(h) a schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or condition of
the Company since December 31, 2002 required to be provided pursuant to section
2.07 hereof; and
(i) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Company Schedules
by Sections 2.01 through 2.18.
The Company shall cause the Company Schedules and the instruments and data
delivered to Cascade Mountain hereunder to be promptly updated after the date
hereof up to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by the Company. The
Company shall have until June 30, 2003 to provide such schedules. If the
Company cannot or fails to do so, or if Cascade Mountain acting reasonably finds
any such schedules or updates provided after the date hereof to be unacceptable
according to the criteria set forth below, Cascade Mountain may terminate this
Agreement by giving written notice to the Company within five (5) days after the
schedules or updates were due to be produced or were provided. For purposes of
the foregoing, Cascade Mountain may consider a disclosure in the Company
Schedules to be "unacceptable" only if that item would have a material adverse
impact on the financial statements listed in Section 2.04(b), taken as a whole.
Section 2.19 Valid Obligation. This Agreement and all agreements and
-----------------
other documents executed by the Company in connection herewith constitute the
valid and binding obligation of the Company, enforceable in accordance with its
or their terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
Section 2.20 Liabilities. The Company acknowledges that it will have no
-----------
liabilities outstanding on the Closing Date (as defined in Section 3.03).
Section 2.21 Quotation on the OTC Bulletin Board. The Company's common
-----------------------------------
stock is quoted on the OTC Bulletin Board and the Company will retain such
quotation on the OTC Bulletin Board until the Closing of the transactions
contemplated herein.
Section 2.22 Approval of the Exchange by the Company's Shareholders.
--------------------------------------------------------
The transactions contemplated by this Agreement do not require the approval of
the Company's shareholders.
Section 2.23 Director Approval. The Directors of the Company shall
------------------
have approved the Exchange Offer and the transactions contemplated herein.
13
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. On the terms and subject to the conditions
-------------
set forth in this Agreement, on the Closing Date (as defined in Section 3.03),
each Cascade Mountain Shareholder who shall elect to accept the exchange offer
described herein (the "Accepting Shareholders"), shall assign, transfer and
deliver, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature, or description, the number of
shares of common stock of Cascade Mountain set forth on Schedule 1.17(c)
----------------
attached hereto, in the aggregate constituting a minimum of 100% of the issued
and outstanding shares of common stock of Cascade Mountain held by each of such
shareholders; the objective of such Exchange being the acquisition by the
Company of 100% of the issued and outstanding common stock of Cascade Mountain.
In exchange for the transfer of shares of common stock by the Cascade Mountain
Shareholders, the Company shall issue to the Cascade Mountain Shareholders an
aggregate of up to 966,667 shares of common stock of the Company (the "Initial
Shares"), on the basis of 1.38095285714 shares of Company common stock for every
share of Cascade Mountain. At the Closing, each Cascade Mountain Shareholder
shall, on surrender of his certificate or certificates representing such Cascade
Mountain shares to the Company or its registrar or transfer agent, be entitled
to receive a certificate or certificates evidencing his proportionate interest
in the Initial Shares. Upon consummation of the transaction contemplated
herein, assuming participation by all of the Cascade Mountain Shareholders, all
of the shares of capital stock of Cascade Mountain shall be held by the Company.
Section 3.02 Tradability of Shares. The shares of the Company's common
-----------------------
stock to be issued to the Cascade Mountain Shareholders have not been registered
under the 1933 Act, nor registered under any state securities law, and are
"restricted securities" as that term is defined in Rule 144 under the 0000 Xxx.
The securities may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the 1933 Act, or pursuant
to an exemption from registration under the 1933 Act. The shares to be issued
to the Cascade Mountain Shareholders will bear the following restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED WITHOUT EITHER: i)
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, OR ii) SUBMISSION TO THE CORPORATION OF AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION THAT SAID SHARES AND THE TRANSFER THEREOF ARE
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS."
Section 3.03 Anti-Dilution. The number of shares of the Company's common
--------------
stock issuable upon exchange pursuant to Section 3.01 shall be appropriately
adjusted to take into account any other stock split, stock dividend, reverse
stock split, recapitalization, or similar change in the Company common stock
which may occur (i) between the date of the execution of this Agreement and the
Closing Date, as to the Initial Shares, and (ii) between the date of the
execution of this Agreement and the release date, as to the Additional Shares.
Section 3.04 Closing. The closing ("Closing") of the transactions
--------
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than June 30, 2003, subject to
the right of the Company or Cascade Mountain to extend such Closing Date by up
to an additional ten (10) days. Such Closing shall take place at a mutually
agreeable time and place.
Section 3.05 Closing Events. At the Closing, the Company, Cascade
----------------
Mountain and each of the Cascade Mountain Accepting Shareholders shall execute,
acknowledge, and deliver (or shall ensure to be executed, acknowledged, and
delivered) any and all certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings or other instruments required by this Agreement
to be so delivered at or prior to the Closing, together with such other items as
may be reasonably requested by the parties hereto and their respective legal
counsel in order to effectuate or evidence the transactions contemplated hereby.
Among other things, the Company shall provide an opinion of counsel acceptable
to Cascade Mountain as to such matters as Cascade Mountain may reasonably
request, which shall include, but not be limited to, a statement, to the effect
that to such counsel's best knowledge, after reasonable investigation, from
inception until the Closing Date, the Company has complied with all applicable
statutes and regulations of any federal, state, or other applicable governmental
entity or agency thereof, except to the extent that noncompliance would not
materially and adversely affect the business, operations, properties, assets or
condition of the Company or except to the extent that noncompliance would not
result in the occurrence of any material liability (such compliance including,
but not being limited to, the filing of all reports to date with federal and
state securities authorities).
14
Section 3.06 Termination.
------------
(a) This Agreement may be terminated by the board of directors of
either the Company or Cascade Mountain at any time prior to the Closing Date if:
(i) there shall be any actual or threatened action or proceeding
before any court or any governmental body which shall seek to restrain,
prohibit, or invalidate the transactions contemplated by this Agreement and
which, in the judgment of such board of directors, made in good faith and
based upon the advice of its legal counsel, makes it inadvisable to proceed
with the Exchange; or
(ii) any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to consummate such
transactions (which does not include the Securities and Exchange
Commission) or in the judgment of such board of directors, made in good
faith and based on the advice of counsel, there is substantial likelihood
that any such approval will not be obtained or will be obtained only on a
condition or conditions which would be unduly burdensome, making it
inadvisable to proceed with the Exchange.
In the event of termination pursuant to this paragraph (a) of Section 3.05, no
obligation, right or liability shall arise hereunder, and each party shall bear
all of the expenses incurred by it in connection with the negotiation, drafting,
and execution of this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated by the board of directors of the
Company at any time prior to the Closing Date if:
(i) the board of directors of the Company determines in good faith
that one or more of the Company's conditions to Closing has not occurred,
through no fault of the Company.
(ii) The Company takes the termination action specified in Section
1.17 as a result of Cascade Mountain Schedules or updates thereto which the
Company finds unacceptable; or
(iii) Cascade Mountain shall fail to comply in any material respect
with any of its covenants or agreements contained in this Agreement or if
any of the representations or warranties of Cascade Mountain contained
herein shall be inaccurate in any material respect, where such
noncompliance or inaccuracy has not been cured within ten (10) days after
written notice thereof.
If this Agreement is terminated pursuant to this paragraph (b) of Section 3.05,
this Agreement shall be of no further force or effect, and no obligation, right
or liability shall arise hereunder, except that Purchaser shall bear the costs
in connection with the negotiation, preparation, and execution of this Agreement
and qualifying the offer and sale of securities to be issued in the Exchange
under the registration requirements, or exemption from the registration
requirements, of state and federal securities laws.
(c) This Agreement may be terminated by the board of directors of
Cascade Mountain at any time prior to the Closing Date if:
(i) there shall have been any change after the date of the latest
balance sheet of the Company in the assets, properties, business or
financial condition of the Company, which could have a material adverse
effect on the financial statements of the Company listed in Section 2.04(a)
and 2.04(b) taken as a whole, except any changes disclosed in the Company
Schedules;
(ii) the board of directors of Cascade Mountain determines in good
faith that one or more of Cascade Mountain's conditions to Closing has not
occurred, through no fault of Cascade Mountain;
(iii) Cascade Mountain takes the termination action specified in
Section 2.18 as a result of the Company Schedules or updates thereto which
Cascade Mountain finds unacceptable;
15
(iv) on or before June 5, 2003, Cascade Mountain notifies the Company
that Cascade Mountain's investigation pursuant to Section 4.01 below has
uncovered information which it finds unacceptable by the same criteria set
forth in Section 2.18; or
(v) The Company shall fail to comply in any material respect with any
of its covenants or agreements contained in this Agreement or if any of the
representations or warranties of the Company contained herein shall be
inaccurate in any material respect, where such noncompliance or inaccuracy
has not been cured within ten (10) days after written notice thereof.
If this Agreement is terminated pursuant to this paragraph (c) of Section 3.05,
this Agreement shall be of no further force or effect, and no obligation, right
or liability shall arise hereunder, except that the Company shall bear the costs
as well as the reasonable costs of the Company incurred in connection with the
negotiation, preparation and execution of this Agreement.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. The Company and Cascade
-----------------------------------
Mountain will each afford to the officers and authorized representatives of the
other full access to the properties, books and records of the Company or, as the
case may be, in order that each may have a full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of the other,
and each will furnish the other with such additional financial and operating
data and other information as to the business and properties of the Company or
Cascade Mountain, as the case may be, as the other shall from time to time
reasonably request. Without limiting the foregoing, as soon as practicable after
the end of each fiscal quarter (and in any event through the last fiscal quarter
prior to the Closing Date), the Company shall provide Cascade Mountain with
quarterly internally prepared and unaudited financial statements.
Section 4.02 Delivery of Books and Records. At the Closing, Cascade
--------------------------------
Mountain shall deliver to the Company copies of the corporate minute books,
books of account, contracts, records, and all other books or documents of
Cascade Mountain now in the possession of Cascade Mountain or its
representatives.
Section 4.03 Third Party Consents and Certificates. The Company and
----------------------------------------
Cascade Mountain agree to cooperate with each other in order to obtain any
required third party consents to this Agreement and the transactions herein
contemplated.
Section 4.04 Consent ofCascade Mountain Shareholders. Cascade Mountain
---------- -------------
shall use its best efforts to obtain the consent of all Cascade Mountain
Shareholders to participate in the Exchange.
Section 4.05 Designation of Directors and Officers.On or before the
-----------------------------------------
Closing Date, the Company's board of directors shall consist of a maximum of
three directors. Xxxxx Xxxxxxxxxx Xxxxx shall serve as President and Director;
and Xxxxxxx Xxxxxx shall serve as Chief Geologist and Director. The current
officers and directors of the Company shall resign.
Section 4.06 Exclusive Dealing Rights. Until 5:00 P.M. Eastern
---------------------------
Daylight Time on June 30, 2003.
(a) In recognition of the substantial time and effort which the Company
has spent and will continue to spend in investigating Cascade Mountain and its
business and in addressing the matters related to the transactions contemplated
herein, each of which may preempt or delay other management activities, neither
Cascade Mountain, nor any of its officers, employees, representatives or agents
will directly or indirectly solicit or initiate any discussions or negotiations
with, or, except where required by fiduciary obligations under applicable law as
advised by counsel, participate in any negotiations with or provide any
information to or otherwise cooperate in any other way with, or facilitate or
encourage any effort or attempt by, any corporation, partnership, person or
other entity or group (other than the Company and its directors, officers,
employees, representatives and agents) concerning any merger, sale of
substantial assets, sale of shares of capital stock, (including without
limitation, any public or private offering of the common stock of Cascade
Mountain) or similar transactions involving Cascade Mountain (all such
transactions being referred to as " Cascade Mountain Acquisition Transactions").
If Cascade Mountain receives any proposal with respect to a Cascade Mountain
Acquisition Transaction, it will immediately communicate to the Company the fact
that it has received such proposal and the principal terms thereof.
16
(b) In recognition of the substantial time and effort which Cascade
Mountain has spent and will continue to spend in investigating the Company and
its business and in addressing the matters related to the transactions
contemplated herein, each of which may preempt or delay other management
activities, neither the Company, nor any of its officers, employees,
representatives or agents will directly or indirectly solicit or initiate any
discussions or negotiations with, or, except where required by fiduciary
obligations under applicable law as advised by counsel, participate in any
negotiations with or provide any information to or otherwise cooperate in any
other way with, or facilitate or encourage any effort or attempt by, any
corporation, partnership, person or other entity or group (other than Cascade
Mountain and its directors, officers, employees, representatives and agents)
concerning any merger, sale of substantial assets, sale of shares of capital
stock, (including without limitation, any public or private offering of the
common stock of the Company or similar transactions involving the Company (all
such transactions being referred to as "Company Acquisition Transactions"). If
the Company receives any proposal with respect to a Company Acquisition
Transaction, it will immediately communicate to Cascade Mountain the fact that
it has received such proposal and the principal terms thereof.
Section 4.07 Actions Prior to Closing.
----------------------------
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the Company Schedules or Cascade Mountain Schedules
or as permitted or contemplated by this Agreement, the Company (subject to
paragraph (d) below) and Cascade Mountain respectively, will each:
(i) carry on its business in substantially the same manner as it has
heretofore;
(ii) maintain and keep its properties in states of good repair and
condition as at present, except for depreciation due to ordinary wear and
tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in amount
and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations under
material contracts, leases, and instruments relating to or affecting its
assets, properties, and business;
(v) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and all
rules, regulations, and orders imposed by federal or state governmental
authorities.
(b) From and after the date of this Agreement until the Closing Date,
neither the Company nor Cascade Mountain will:
(i) make any changes in their articles or certificate of incorporation
or bylaws, except as otherwise provided in this Agreement;
(ii) take any action described in Section 1.07 in the case of Cascade
Mountain, or in Section 2.07, in the case of the Company (all except as
permitted therein or as disclosed in the applicable party's schedules);
17
(iii) enter into or amend any contract, agreement, or other instrument
of any of the types described in such party's schedules, except that a
party may enter into or amend any contract, agreement, or other instrument
in the ordinary course of business involving the sale of goods or services;
or
(iv) sell any assets or discontinue any operations (other than the
Divestiture), sell any shares of capital stock (other than as contemplated
in Section 4.06 hereof and the sale of securities underlying existing
warrants or options of the Company) or conduct any similar transactions
other than in the ordinary course of business.
Section 4.08 Indemnification.
----------------
(a) Cascade Mountain hereby agrees to indemnify the Company and each of
the officers, agents and directors of the Company as of the date of execution of
this Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentations made under Article I of this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
(b) The Company hereby agrees to indemnify Cascade Mountain and each of
the officers, agents, and directors of Cascade Mountain and each of the Cascade
Mountain Shareholders as of the date of execution of this Agreement against any
loss, liability, claim, damage, or expense (including, but not limited to, any
and all expense whatsoever reasonably incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever), to which it or they may become subject arising out of or based on
any inaccuracy appearing in or misrepresentation made under Article II of this
Agreement. The indemnification provided for in this paragraph shall survive the
Closing and consummation of the transactions contemplated hereby and termination
of this Agreement.
Section 4.09 Indemnification of Subsequent Corporate Actions.
----------------------------------------------------
(a) No officer, director, controlling shareholder, agent or representative
of the Company, or any other person currently affiliated with the Company, has
offered or agreed to assist in the promotion, market making, development,
enhancement, or support of the Company's business, capital raising, or
securities market.
(2) Cascade Mountain hereby represents and warrants that it will indemnify
and hold harmless any officer, director, controlling shareholder, agent or
representative of the Company, or any other person affiliated with the Company,
from any decisions, activities, or conduct of the Company contemporaneous with,
or subsequent to this Agreement.
Section 4.10 Name Change. After the Closing, the Company shall amend its
-----------
certificate of incorporation to effect a name change to Cascade Mountain Mining
Corp.
Section 4.11 Audited Financial Statements. The Company shall file audited
----------------------------
financial statements of Cascade Mountain as required by the Securities and
Exchange Commission within 75 days from the Closing. Cascade Mountain shall
supply the Company's present management with a copy of its audited financial
statements within 70 days from the Closing.
18
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants.
---------------------------------------------------------
The representations and warranties made by Cascade Mountain in this Agreement
were true when made and shall be true at the Closing Date with the same force
and effect as if such representations and warranties were made at and as of the
Closing Date (except for changes therein permitted by this Agreement). Cascade
Mountain shall have performed or complied with all covenants and conditions
required by this Agreement to be performed or complied with by Cascade Mountain
prior to or at the Closing. The Company shall be furnished with a certificate,
signed by a duly authorized executive officer of Cascade Mountain and dated the
Closing Date, to the foregoing effect.
Section 5.02 Officer's Certificate. The Company shall have been
-----------------------
furnished with a certificate dated the Closing Date and signed by a duly
authorized officer of Cascade Mountain to the effect that no litigation,
proceeding, investigation, or inquiry is pending, or to the best knowledge of
Cascade Mountain threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement, or,
to the extent not disclosed in the Cascade Mountain Schedules, by or against
Cascade Mountain, which might result in any material adverse change in any of
the assets, properties, business, or operations of Cascade Mountain. In
addition, the Officer will certify that there are no liabilities of Cascade
Mountain.
Section 5.03 No Material Adverse Change. Prior to the Closing Date,
-----------------------------
there shall not have occurred any change in the financial condition, business,
or operations of Cascade Mountain nor shall any event have occurred which, with
the lapse of time or the giving of notice, is determined to be unacceptable
using the criteria set forth in Section 1.06.
Section 5.04 Approval by Cascade Mountain Shareholders. The Exchange
------------ -------------
shall have been approved, and shares delivered in accordance with Section 3.01,
by the holders of not less than one hundred percent (100%) of the outstanding
common stock of Cascade Mountain, unless a lesser number is agreed to by the
Company. Cascade Mountain believes that the transaction is exempt from
registration pursuant to Section 4(2) of the Securities Act as transactions by
an issuer not involving a public offering as the recipients had sufficient
knowledge and experience in financial and business matters that they were able
to evaluate the merits and risks of an investment in the Company, they had
access to the type of information normally provided in a prospectus, and since
the transaction is non-recurring.
Section 5.05 No Governmental Prohibition. No order, statute, rule,
------------------------------
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.06 Consents. All consents, approvals, waivers or amendments
---------
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and Cascade Mountain after the Closing Date on the
basis as presently operated shall have been obtained.
Section 5.07 Other Items.
-------------
(a) The Company shall have received a list of Cascade Mountain 's
shareholders containing the name, address, and number of shares held by each
Cascade Mountain shareholder as of the date of Closing, certified by an
executive officer of Cascade Mountain as being true, complete and accurate; and
(b) The Company shall have received such further opinions, documents,
certificates or instruments relating to the transactions contemplated hereby as
the Company may reasonably request.
19
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF CASCADE MOUNTAIN
AND THE CASCADE MOUNTAIN SHAREHOLDERS
The obligations of Cascade Mountain and the Cascade Mountain Shareholders
under this Agreement are subject to the satisfaction, at or before the Closing
Date, of the following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants.
---------------------------------------------------------
The representations and warranties made by the Company in this Agreement were
true when made and shall be true as of the Closing Date (except for changes
therein permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, the Company shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
the Company and shall have satisfied the conditions described below prior to or
at the Closing:
(a) Immediately prior to the Closing, the Company shall have no more
than an aggregate of 2,000,000 shares of common stock issued and outstanding,
excluding any shares issuable pursuant to the Exchange.
(b) The directors of the Company shall have approved the Exchange and
the related transactions described herein.
Cascade Mountain shall have been furnished with certificates, signed by duly
authorized executive officers of the Company and dated the Closing Date, to the
foregoing effect.
Section 6.02 Officer's Certificate. Cascade Mountain shall have been
-----------------------
furnished with certificates dated the Closing Date and signed by the duly
authorized executive officer of the Company, to the effect that no litigation,
proceeding, investigation or inquiry is pending, or to the best knowledge of the
Company threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the Company Schedules, by or against the Company, which
might result in any material adverse change in any of the assets, properties or
operations of the Company.
Section 6.03 No Material Adverse Change. Prior to the Closing Date,
-----------------------------
there shall not have occurred any change in the financial condition, business or
operations of the Company nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable using
the criteria set forth in Section 2.18.
Section 6.04 No Governmental Prohibition. No order, statute, rule,
------------------------------
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.05 Consents. All consents, approvals, waivers or amendments
---------
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and Cascade Mountain after the Closing Date on the
basis as presently operated shall have been obtained.
Section 6.06 Other Items. Cascade Mountain shall have received further
------------
opinions, documents, certificates, or instruments relating to the transactions
contemplated hereby as Cascade Mountain may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Bankruptcy and No Criminal Convictions.
----------------------------------------------
None of the Parties to the Agreement, nor their officers, directors or
affiliates, promoter or control person, nor any predecessor, thereof have been
subject to the following:
20
(1) Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer within the past five years;
(2) Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; and
(4) Being found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission (the "SEC") or the Commodity Futures
Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended, or vacated.
Section 7.02 Brokers. The Company and Cascade Mountain agree that,
--------
except as set out on Schedule 7.02 attached hereto, there were no brokers or
finders involved in bringing the parties together or who were instrumental in
the negotiation, execution or consummation of this Agreement. The Company and
Cascade Mountain each agree to indemnify the other against any claim by any
third person other than those described above for any commission, brokerage, or
finder's fee arising from the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party and such third
person, whether express or implied from the actions of the indemnifying party.
Section 7.03 Governing Law. This Agreement shall be governed by,
---------------
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to the matters of state law, with the laws
of the State of Nevada without giving effect to principles of conflicts of law
thereunder. Each of the parties (a) irrevocably consents and agrees that any
legal or equitable action or proceedings arising under or in connection with
this Agreement shall be brought exclusively in the federal courts of the United
States, (b) by execution and delivery of this Agreement, irrevocably submits to
and accepts, with respect to any such action or proceeding, generally and
unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives
any and all rights such party may now or hereafter have to object to such
jurisdiction.
Section 7.04 Notices. Any notice or other communications required or
--------
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to the Company, to: Web Views Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
If to CASCADE MOUNTAIN, to: CASCADE MOUNTAIN MINING CORP.
Attn: Xxxxx Xxxxxxxxxx Xxxxx
Two Union Square
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
With copies to: Xxxxx X. Xxxx, Attorney at Law
0000 Xxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
21
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.05 Attorney's Fees. In the event that either party
-----------------
institutes any action or suit to enforce this Agreement or to secure relief from
any default hereunder or breach hereof, the prevailing party shall be reimbursed
by the losing party for all costs, including reasonable attorney's fees,
incurred in connection therewith and in enforcing or collecting any judgment
rendered therein.
Section 7.06 Confidentiality. Each party hereto agrees with the other
----------------
that, unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.07 Public Announcements and Filings. Unless required by
------------------------------------
applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
Section 7.08 Schedules; Knowledge. Each party is presumed to have full
---------------------
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.09 Third Party Beneficiaries. This contract is strictly
----------------------------
between the Company and Cascade Mountain, and, except as specifically provided,
no director, officer, stockholder (other than the Cascade Mountain
Shareholders), employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
Section 7.10 Expenses. Subject to Sections 3.05 and 7.05 above,
---------
whether or not the Exchange is consummated, the Company will bear the expenses,
including legal, accounting and professional fees, incurred in connection with
the Exchange or any of the other transactions contemplated hereby.
Section 7.11 Entire Agreement. This Agreement represents the entire
------------------
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.12 Survival; Termination. The representations, warranties,
-----------------------
and covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
Section 7.13 Counterparts. This Agreement may be executed in multiple
-------------
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.14 Amendment or Waiver. Every right and remedy provided
----------------------
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
22
Section 7.15 Best Efforts. Subject to the terms and conditions herein
-------------
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
Section 7.16 Faxed Copies. For purposes of this Agreement, a faxed
-------------
signature will constitute an original signature.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
WEB VIEWS CORPORATION
BY: /s/ Xxxxxxx Xxxxxx
----------------
Chief Executive Officer
CASCADE MOUNTAIN MINING CORP.
BY: /s/ Xxxxx Xxxxxxxxxx Xxxxx
----------------
President
The undersigned Cascade Mountain Shareholders hereby agree to participate in the
Exchange on the terms set forth above. Subject to Section 7.12 above, each of
the undersigned hereby represents and affirms that he has read each of the
representations and warranties of Cascade Mountain set out hereof and that, to
the best of his knowledge, all of such representations and warranties are true
and correct. PLEASE RETURN ORIGINAL STOCK CERTIFICATE ALONG WITH THIS EXCHANGE
AGREEMENT.
/s/ Xxxxx Xxxxxxxxxx Xxxxx, individually No. of Shares 600,000
----------
Xxxxx Xxxxx Printed Name
-----------
/s/ Xxxxxxx Xxxxxx, individually No. of Shares 100,000
----------
Xxxxxxx Xxxxxx Printed Name
--------------
23
