EXHIBIT 1
DEFINITIVE AGREEMENT
AMONG
DeBAUX HOLDINGS, L.L.C.,
WATER STAR BOTTLING, INC.
AND
AMERICAN CAREER CENTERS, INC.
DATED AS OF JANUARY 18, 2002
THIS DEFINITIVE AGREEMENT (the Agreement) is made and
entered into this 18th day of January, 2002, by and among
AMERICAN CAREER CENTERS, INC., a Nevada corporation
(hereinafter referred to as "ACCI"), DeBAUX HOLDINGS,
L.L.C., an Arizona limited liability company (hereinafter
referred to as "DeBaux") and WATER STAR BOTTLING, INC., a
Wyoming corporation (hereinafter referred to as "WSBI").
WITNESSETH
WHEREAS, ACCI is a public company whose stock is traded on
the NASDAQ bulletin board under the symbol "ACCI" and at the
present time is not conducting any business activities;
WHEREAS, Water Star Bottling, Inc., is a privately held
Wyoming corporation (hereinafter referred to as "WSBI") that
bottles and distributes water though out the United States,
controls a unique water source and has recognized branded
products;
WHEREAS, DeBaux owns all of the issued and outstanding
capital stock of WSBI;
WHEREAS, ACCI has authorized 100,000,000 shares of common
stock, has authorized 20,000,000 shares of preferred stock
with attributes that may be assigned to it in by the Board
of Directors of ACCI, has issued 37,787,070 shares of common
stock and has issued no shares of preferred stock;
WHEREAS, WSBI has authorized shares of 1,000,000 common
stock, has issued and outstanding 85,000 shares of its
common stock, and has unissued 915,000 authorized shares of
common stock;
WHEREAS, WSBI desires to be acquired by ACCI by ACCI
acquiring 82,820 shares of the authorized and outstanding
stock of WSBI and ACCI desires to issue 48,000,000 shares of
its common stock (hereinafter referred to as the "Common
Stock") and 4,000,000 shares of preferred stock convertible
into common stock with each share of preferred stock being
convertible into 30 shares of common stock and with voting
rights of 30 votes for each share of preferred stock with
the attributes described in Exhibit A attached hereto and by
this reference made a part hereof as if set forth in full
herein (the "Preferred Stock") in exchange for the issued
and outstanding shares of WSBI on the terms and conditions
contained herein, subject to satisfaction of those certain
conditions to closing hereinafter set forth;
WHEREAS, WSBI currently owns 85% of the member units of
Geyser Products, L.L.C., a Delaware limited liability
company (hereinafter referred to as "GPL"), and GPL is an
85% owned subsidiary of WSBI (hereinafter WSBI and GPL
collectively are hereinafter referred to as the "WSBI
Organization");
WHEREAS, the Boards of Directors of each of ACCI and WSBI
have determined that it is in the best interests of both
companies and their respective shareholders to consummate
the transactions and reorganization contemplated herein in
which, subject to the terms and conditions of this
Agreement, ACCI will acquire 82,820 shares of WSBI's common
stock from DeBaux and DeBaux will acquire stock of ACCI;
WHEREAS, subject to the terms and conditions of this
Agreement, ACCI desires to acquire 97.50% percent of the
shares of WSBI owned by DeBaux, making the WSBI a majority
owned subsidiary of ACCI; and DeBaux desires to make a tax-
free exchange of its shares of WSBI solely for shares of
ACCI, wherein WSBI will remain a majority owned subsidiary
of ACCI; and
WHEREAS, for Federal income tax purposes, the parties intend
that the transactions and reorganization contemplated in
this Agreement qualify as a non-taxable reorganization under
Section 368 (a)(1) (B) of the Internal Revenue Code of 1986,
as amended (hereinafter referred to as the "Code"), and
qualify under a purchase method of accounting; however, such
method of accounting herein contemplated may be changed or
modified, without consent or approval of either party, in
order to complete a duly qualified tax-free exchange of the
shares held by DeBaux solely for shares of ACCI.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and promises
contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows.
ARTICLE I: Acquisition
1.1. Acquisition.
Subject to the terms and conditions set forth in this
Agreement, at the Closing (as defined herein) 82,820 shares
of the shares of capital stock of WSBI held by DeBaux shall
be exchanged solely for the Common Stock (being 48,000,000
shares) and the Preferred Stock (being 4,000,000 shares) of
ACCI, and the parties intend that the transaction shall
qualify as a tax-free acquisition and corporate
reorganization under Section 368 (a) (1) (B) and/or other
related or other applicable sections of the Code there
under. WSBI hereby agrees to, and hereby does, indemnify and
hold harmless DeBaux from any and all tax consequences if
the transaction shall at any time fail to qualify as a tax-
free acquisition and corporate reorganization.
Subject to the terms and conditions set forth in this
Agreement, at the Closing DeBaux shall own 100% of the
issued and outstanding stock of WSBI (being 85,000 shares)
of which 82,820 shares shall be exchanged solely with ACCI
for the Common Stock (being 48,000,000 shares) and the
Preferred Stock (being 4,000,000 shares) and that the
transaction shall qualify as a tax-free acquisition and
corporate reorganization under Section 368 (a) (1) (B)
and/or related or other applicable sections of the Code
thereunder.
DeBaux represents and warrants that it will hold such shares
of Preferred Stock and the shares of Common Stock for
investment purposes and not for public distribution and
further agrees that such shares will be restricted according
to Rule 144 of the Securities Act of 1933, as amended.
At the Closing, DeBaux shall own and hold no less than 81.0%
of the equity of ACCI before the issuance of the shares for
the first Five Hundred Thousand Dollars ($500,000.00) in new
equity to be raised by ACCI in addition to the new equity to
be raised by ACCI as set forth in Section 5.4 hereof and no
less than 76.68% after the issuance of the shares for the
first Five Hundred Thousand Dollars ($500,000.00) of new
equity raised by ACCI.
ACCI further desires to provide for the continuing operation
of the business of WSBI and, to that end, wishes to retain
WSBI as a majority owned subsidiary of ACCI.
1.2 Closing Time.
Subject to terms and conditions of this Agreement as
provided in Article VIII below, the closing of the exchange
of 82,820 shares of the WSBI common stock owned by DeBaux
for the ACCI Common Stock and Preferred Stock (herein
referred to as the "Closing") shall take place at Mesa,
Arizona, on or before the ____ of February, 2002 at 5:00
P.M. Mountain Standard Time (EST), or such other place, time
and date as ACCI and WSBI may mutually agree upon in writing
(herein referred to as "Closing Time").
1.3 Upon Closing.
DeBaux will transfer and assign all right, title and
interest in 82,820 shares of its WSBI common stock, free and
clear of any and all liens, claims, options, charges and
encumbrances whatsoever. In exchange, ACCI will transfer and
deliver to DeBaux the ACCI Preferred Stock and Common Stock.
ARTICLE II: Representations and Warranties of WSBI and
DeBaux.
WSBI and DeBaux each represent and warrant to ACCI as
follows:
2.1 Organization and Standing.
WSBI is a duly organized and validly existing corporation,
in good standing under the laws of the State of Wyoming.
WSBI has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its
business as now conducted, and duly qualified to do business
and in good standing as a foreign corporation in each
jurisdiction in which the property owned, operated or leased
by it or the nature of the business conducted by it makes
such qualification necessary. GPL is in good standing in the
state of its organization, Delaware, is duly foreign
qualified to do business in the State of Arizona and, for
the purpose of conducting GPL's business, has paid a
business transaction fee in the state of New York and a
"Replacement Tax" in the state of Illinois.
2.2 Capitalization.
As of the Closing Date, all of the WSBI shares have been
validly issued and are fully paid and non-assessable; there
is no right of first refusal option or other restriction on
transfer applicable to any shares of any securities of WSBI
exclusive of the 2,180 shares of WSBI common stock pledged
by DeBaux as collateral for the loan of Two Hundred Fifty
Thousand Dollars ($250,000.00) from ACCI to WSBI in
accordance with the provisions of Section
5.3 hereof. The GPL membership units held by WSBI are fully
paid and non- assessable; and subject to GPL's Operating
Agreement there is no right of first refusal, option or
other restriction on transfer applicable to its membership
units of GPL. WSBI has the right to acquire the remaining
fifteen percent (15%) of GPL that has not been presently
transferred to WSBI in accordance with the GPL Put/Call
Option by and between GPL and RDV Beverage, L.L.C. a
Delaware limited liability company, dated February 16, 1996
(hereinafter referred to as the "GPL Put/Call Option"),
which agreement has been disclosed and made available to
ACCI.
WSBI Organization has made available to ACCI complete and
accurate copies of its:
(a) Articles of Incorporation and Bylaws, each as amended
through the date hereof; and Minutes of all of its
directors' and shareholders' meetings through the date
hereof; and
(b) GPL's Operating Agreement.
2.3 Rights to Acquire.
Except as previously disclosed to ACCI, and except for the
GPL Put/Call Option:
(a) WSBI Organization does not have outstanding any
preemptive or subscription rights, options, warrants, rights
to convert, capital stock equivalents or other rights to
purchase or otherwise acquire, now or in the future, any of
its capital stock or other securities.
(b) WSBI Organization does not have outstanding any stock
appreciation rights or other rights granting to any person
the right to be paid money or other property based on the
value of securities of WSBI or GPL.
(c) With the exception of the agreement between DeBaux and
Xxxxx Xxxxxxx which has been disclosed to ACCI and the
pledge of stock to secure the loan from ACCI to WSBI in
accordance with the provisions of Section 5.3 hereof, there
are no other agreements, restrictions or understandings to
which WSBI Organization or DeBaux is a party with respect to
the sale, transfer or voting of any shares of WSBI capital
stock.
2.4 Subsidiaries.
Except for its 85% owned subsidiary GPL, and its ten (10%)
interest in Tenupah, LLC, a Wyoming limited liability
company, WSBI does not own or control, directly or
indirectly, any interest or investment (whether equity or
debt) in any other corporation, partnership, business, trust
or other entity.
2.5 Authority.
(a) WSBI has full corporate power and authority to execute,
deliver and perform its obligations under this Agreement and
all corporate action of WSBI necessary for such execution,
delivery and performance has been duly taken. Complete and
correct copies, certified by the Secretary or Assistant
Secretary of WSBI, of the resolutions adopted by the Board
of Directors, authorizing and ratifying the execution and
delivery of this Agreement and the consummation of the
transactions contemplated herein, will be delivered upon
Closing; DeBaux has full power and authority to execute,
deliver and perform its obligations under this Agreement,
and all action for such execution, delivery and performance
has been duly taken.
(b) Except as previously disclosed to ACCI, to the knowledge
of WSBI Organization, the execution and delivery by WSBI and
DeBaux of this Agreement and the performance of the
transactions contemplated by this Agreement will not result
in any conflict with, breach or violation of or default,
termination or forfeiture under (or upon the giving of
notice or the lapse of time, or both, result in any conflict
with, breach or violation of or default, termination or
forfeiture under) any terms or provisions of WSBI's Articles
of Incorporation or Bylaws, each as amended through the date
hereof, or GPL's Operating Agreement, or any statute, rule,
regulation, judicial or governmental decree, order or
judgment, agreement, lease or other instrument to which
WSBI, GPL or DeBaux is a party or to which any of its or
their assets is subject and which individually or in the
aggregate is material to WSBI, GPL or DeBaux.
(c) No consent, approval, authorization, order,
registration, qualification or filing of or with any court
or any regulatory authority or any other Governmental Body
(as hereinafter defined) is required for the consummation by
WSBI or GPL of the transactions contemplated by this
Agreement.
(d) Upon due execution and delivery by the parties hereto,
this Agreement and the agreements related hereto would each
be a legal, valid and binding obligation of WSBI, GPL and
DeBaux. This Agreement will be enforceable against WSBI and
DeBaux in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally.
2.6 Financial Statements.
WSBI and GPL have each made available to ACCI, a balance
sheet, income statement and statement of cash flows dated as
of the period ended October 31, 2001 (hereinafter referred
to as the "WSBI Organization Unconsolidated Financials") and
the books and records of WSBI Organization through the date
of this Agreement. The WSBI Organization Unconsolidated
Financials were prepared on a tax accounting basis, but WSBI
and GPL have previously provided certain adjusting entries
to the independent auditors engaged to audit the WSBI
Organization Unconsolidated Financials in connection with
the acquisition of March 2000 which was rescinded in
September of 2001 to bring the WSBI Organization
Unconsolidated Financials into conformance with generally
accepted accounting principles (hereinafter referred to as
"GAAP"). WSBI shall supply to ACCI an aging of WSBI
Organization's accounts payable as of November 30, 2001.
2.7 Material Changes.
Since the 31st day of October, 2001, there has not been with
respect to WSBI Organization:
(a) Any material adverse change in its financial condition
from that shown on the WSBI Organization Unconsolidated
Financials which has not been disclosed to ACCI in writing;
or
(b) Any dividends or other disbursements by WSBI or its
subsidiary GPL;
(c) Any damage or loss, whether covered by insurance or not,
materially and adversely affecting its business, property,
assets or prospects; or
(d) Any other event or condition materially and adversely
affecting its results of operations or business or financial
condition or prospects taken as a whole or any event which
could have such an effect.
From March 1, 2001 through August 31, 2001, there were
adverse changes in the financial condition of WSBI
Organization which may be material when compared to the WSBI
Organization unconsolidated financial statements for the
period ended December 31, 2000, which may be material and
which are the result of the rescinded acquisition of WSBI by
The Theme Factory, Inc., a public company in March of 2001.
The effects of The Theme Factory, Inc.'s failure to provide
the funding committed to impacted WSBI Organization's
ability to pay for the expansion of its business which was
undertaken immediately following such acquisition.
2.8 Accounts Receivable.
(a) All accounts receivable reflected on the WSBI
Organization Unconsolidated Financials are bona fide and
arise from valid sales in the ordinary course of business.
(b) Other than WSBI Organization's accounts receivable
financing and distributor promotional credits, none of
WSBI's or GPL's accounts receivable are subject to any lien
or claim of offset, setoff or counterclaim and neither WSBI,
GPL nor DeBaux has any knowledge of any facts or
circumstances that would give rise to any such lien or
claim. There are no accounts receivable which are contingent
upon the performance by WSBI or GPL of future services.
2.9 No Undisclosed Liabilities.
Except for certain directors fees, deferred officers
salaries and guaranteed payments payable by WSBI
Organization, WSBI has no debts, liabilities or claims
against it, contingent or otherwise, which would be of a
nature required to be reflected in a balance sheet prepared
in accordance with generally accepted accounting principles
which are material individually or in the aggregate and
which are not shown or fully provided for in the WSBI
Organization financial records, except debts, liabilities
and claims incurred in the ordinary course of business since
the date of the WSBI Organization Unconsolidated Financials
which are not material in the aggregate. All products and
services provided to customers by WSBI Organization have
complied in all material respects with all requirements
binding upon WSBI, whether by law, regulation, agreement or
otherwise. Except for the GPL Put/Call Option, GPL has no
debts, liabilities or claims against it, contingent or
otherwise, which would be of a nature required to be
reflected in a balance sheet prepared in accordance with
GAAP which are material individually or in the aggregate and
which are not shown or fully provided for on the GPL
financials for the period ending October 31, 2001, except
debts, liabilities and claims incurred in the ordinary
course of business since the date of the GPL financials
which are not material in the aggregate. To the knowledge of
GPL, all products and services provided to customers by GPL
have complied in all material respects with all requirements
binding upon GPL, whether by law, regulation, agreement or
otherwise.
2.10 Taxes.
(a) To the knowledge of WSBI Organization,
(i) All federal, state, local and foreign tax
returns and reports required to be filed to
date, and which are properly open for
examination under applicable statutes
of limitation, with respect to the
operations of WSBI Organization have been
accurately prepared and duly filed, and
all taxes shown as payable on such returns
and reports have been paid when due,
including, without limitation income,
withholding, payroll, sales and use,
and real and personal property taxes; and
(ii) WSBI Organization has not executed or
filed with any taxing authority any agreement
extending the period for assessment or
collection of any tax to a date
subsequent to the date hereof; and
(iii) No issue has been raised by any federal,
state, local or foreign taxing authority
in connection with an audit or examination
of the tax returns, business or properties
of WSBI Organization that has not been
settled or resolved; and
(iv) There is no pending claim, asserted
deficiency or assessment for additional
taxes that has not been paid, nor is there
any basis for the assertion of any such
claim, deficiency or assessment; and
(v) No material special charges, penalties or
fines have ever been asserted against WSBI
Organization with respect to payment of
or failure to pay any taxes; and
(vi) The provision for taxes shown on the WSBI
Organization Unconsolidated Financials is
sufficient for payment of all unpaid federal,
state, local and foreign taxes (whether
asserted or unasserted) incurred by WSBI
through such date.
(b) WSBI has not filed any consent to the application
of Section 341(f) of the Code, or been subject to any actual or deemed
election under Section 338 of the Code.
2.11 Tangible Assets and Inventories.
(a) Except as disclosed on Exhibit B attached hereto, to the
knowledge of WSBI Organization, WSBI Organization has good
and marketable title to, valid leasehold interests in or
other valid right to use all of the material assets used in
its operations or necessary for the conduct of its business,
free and clear of any material mortgages, pledges, security
interests, licenses, encumbrances, restrictions or adverse
claims, except for the lien of taxes not yet due and
payable. Exhibit C contains a description and the location
of any such material assets that are not in the possession
of WSBI Organization or that are located other than on WSBI
premises in Afton, Wyoming and/or GPL premises in Mesa,
Arizona.
(b) To the knowledge of WSBI Organization;
(i) All of WSBI's and GPL's material assets are in good
operating condition, normal wear and tear excepted, and are
adequate and suitable for the purposes for which they are
presently being used; and
(ii) All obsolete or unusable inventory (including raw
materials, other than canned goods, dry mix ingredients and
frozen products used in the production of WSBI's and GPL's
products that WSBI or GPL does not reasonably expect to sell
within six months of the date of this Agreement) has been
appropriately reserved against or written down or written
off and is reflected in the WSBI Organization Unconsolidated
Financials as adjusted by the entries WSBI or GPL
respectively; and
(iii) All items of equipment, machinery or other tangible
assets of WSBI and GPL that are currently being used in its
business are reflected in the WSBI Organization
Unconsolidated Financials.
(c) To the knowledge of WSBI Organization, there has not
occurred since the date of the WSBI Organization
Unconsolidated Financials any transfer of title other than
in the ordinary course of business, any abandonment, any
material pilferage or any material loss with respect to any
material property, plant or equipment of WSBI or GPL.
2.12 Real Property.
Exhibit B identifies all real property leased by WSBI
Organization. WSBI Organization has made available to ACCI
copies of the written lease agreements with respect thereto.
To the knowledge of WSBI Organization, all real property
used in the operations of WSBI Organization is in as good
repair, reasonable wear and tear excepted, as at the
commencement of the lease by WSBI Organization of such real
property.
2.13 Environmental Matters.
To the knowledge of WSBI Organization;
(i) WSBI Organization has complied in all
material respects with the Safe Drinking
Water and Toxic Enforcement Act
of 1986; and
(ii) WSBI Organization has complied in all
material respects with any and all other
applicable statutes, rules and
regulations in effect (and, to the
knowledge of DeBaux or WSBI Organization
any proposed statutes, rules and
regulations) regarding the environment
including, without limitation, statutes,
rules and regulations regarding the
production, handling, treatment and
disposal of toxic chemicals and hazardous
waste.
2.14 Health and Safety Matters.
To the knowledge of WSBI Organization;
(i) WSBI Organization has complied in all
material respects with any and all applicable
health and safety statutes, rules and regulations
of state, local and federal authorities in
effect (and, to the knowledge of DeBaux
or WSBI Organization any proposed statutes,
rules and regulations) regarding the production
or distribution of any WSBI Organization
product; and
(ii) WSBI Organization has not violated any
such statute, ordinance, rule, regulation or
order of any agency or court, including the
Food and Drug Administration, in any respect
material to the conduct of its business and
has not received any notice of any such
violation from any agency of the type
referred to herein.
2.15 Insurance.
Exhibit D identifies all policies of insurance now in
effect covering the assets, properties and business of WSBI
Organization and all products liability and life insurance policies
maintained by WSBI Organization. WSBI Organization has made
available a true and accurate copy of each of the policies
listed on Exhibit D to ACCI. To the knowledge of WSBI
Organization, WSBI or GPL has done nothing by way of action
or inaction that might invalidate any of such policies in
whole or in part.
2.16 Purchase, Sale and Other Agreements.
(a) Except as disclosed to ACCI and as transpires in the
normal course of business, WSBI Organization states that
neither WSBI nor GPL is a party or subject to any non-
disclosed oral or written Agreement for the:
(i) Purchase of inventory, supplies, equipment or other real
or personal property, or the procurement of services; or
(ii) Joint venture, partnership or other contract or
arrangement involving the sharing of profits; or
(iii) Except for the GPL Put/Call Option, any agreement
relating to the purchase or acquisition, by merger or
otherwise, of a significant portion of the business, assets
or securities of WSBI Organization by any other person or of
any other person by WSBI Organization; or
(iv) Agreement containing a covenant or covenants which
purport to limit the ability or right of WSBI Organization
or DeBaux to engage in any lawful business activity or
compete with any Person; or
(v) Agreements presently in effect pursuant to which WSBI
Organization has appointed any organization or person to act
as its distributor or sales agent or pursuant to which WSBI
Organization has been appointed a distributor or sales agent
by any third party; or
(vi) Material contract or agreement not otherwise described
in this Agreement that is not terminable by and without
penalty to WSBI Organization.
(b) To the knowledge of WSBI Organization:
(i) A complete and accurate copy of each written agreement
and other document identified has been made available to
ACCI; and
(ii) Each agreement or arrangement identified is, except to
the extent fully performed at the date hereof, in full force
and effect and valid and binding in accordance with its
terms in all material respects except as may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights
generally and subject to general equity principles and to
limitations on availability of equitable relief, (including
specific performance). To the knowledge of WSBI
Organization, no party to any such contract, agreement or
arrangement is in material default under, or intends to
cancel, withdraw, modify or amend, any such contract,
agreement or arrangement.
2.17 Intellectual Property.
(a) To the knowledge of WSBI Organization, WSBI Organization
holds in full force and effect all licenses, permits or
other authorizations necessary for the sale of its products
and the conduct of its business as currently conducted.
(b) As listed on Exhibit E, to the knowledge of WSBI
Organization, WSBI Organization owns all of the:
(i) rights, title and interest in and to any and all of the
recipes, formulas, trade secrets, trademarks, trade names,
patents, copyrights, inventions and discoveries being used
by, owned or licensed by WSBI Organization with the
exception of the patent known as "Product Sales Enhancing
Internet Game System" owned by Ayecon Entertainment, L.L.C.
and licensed to GPL; and
(ii) recipes, formulas, trade secrets, trademarks, trade
names, patents, copyrights, inventions and discoveries,
including any and all recipes, formulas or inventions in
process (whether or not reduced to practice) or any patent
or trademark applications filed by WSBI Organization, shall
be conveyed at closing.
(c) To the knowledge of WSBI Organization, except as
disclosed on Exhibit E and with the exception of the patent
known as "Product Sales Enhancing Internet Game System"
owned by Ayecon Entertainment, L.L.C. and licensed to GPL,
WSBI Organization and DeBaux are not making use of any
patentable or unpatentable invention or any confidential
information in which any present or past employee of WSBI
Organization has or has claimed an interest and WSBI
Organization and DeBaux are not aware of facts that could
reasonably be expected to give rise to such a claim.
(d) To the knowledge of WSBI Organization:
(i) WSBI Organization possesses all patents, patent rights,
trademarks, trademark rights, trade names, trade name
rights, copyrights and other proprietary rights necessary to
conduct its business as now being conducted and as planned
to be conducted, the lack of which could materially and
adversely affect its operations, condition or prospects,
financial or otherwise, as listed on Exhibit E; and
(ii) There is no conflict with or infringement upon any
valid rights of others and WSBI Organization has not
received any notice of infringement upon or conflict with
the asserted rights of others.
2.18 Employees and Consultants.
(a) WSBI has provided to ACCI copies of all currently
effective consulting and employment agreements and other
material agreements, either oral or written, with individual
consultants or employees to which WSBI Organization is a
party. Complete and accurate copies of all such written
agreements and summaries of all oral agreements have been
made available to ACCI. Except for the officers and
directors of WSBI Organization, as agreed upon in this
Agreement, no other officer, manager or key employee of WSBI
Organization has notified WSBI Organization of an intention
to terminate employment or to seek a material change in his
terms of employment. Except as to be agreed upon by ACCI, no
employee of WSBI Organization has accrued more than three
(3) weeks of paid vacation.
(b) Except as disclosed to ACCI, WSBI Organization is not a
party to any other pension, retirement, profit sharing,
savings, bonus, incentive, deferred compensation, group
health insurance or group life insurance plan or obligation,
employee welfare benefit plan, or collective bargaining
agreement or other agreement, written or oral, with any
trade or labor union, employees' association or similar
organization. WSBI Organization has furnished to ACCI
complete and accurate copies of the plan, the Internal
Revenue Service determination letter, if any, all plan
applications and amendments, the most recent plan actuarial
reports and all reports of or regarding such plan required
by ERISA (as hereinafter defined). With respect to each
plan, if any, which is subject to ERISA, WSBI Organization
has properly prepared and timely filed all governmental
reports and has properly and timely posted or distributed
all notices and reports to employees required to be filed,
posted or distributed with respect to such plan. No
prohibited transaction has occurred with respect to any such
plan that is subject to ERISA, nor is there any pending
assertion of the occurrence of any such transaction. WSBI
and GPL agree that ACCI shall upon the closing of this
Agreement have sole discretion of whether to retain or
change said agreements mentioned in this Agreement.
(c) WSBI Organization made available to ACCI;
(i) All documentation received by WSBI or GPL relating to
union activities, including but not limited to,
correspondence or orders from the National Labor Relations
Board and any state labor relations agencies or
organizations, and
(ii) All documentation relating to union activity and labor
practices at WSBI or GPL given by WSBI or GPL to its
employees. There are currently no agreements with any unions
and no strikes or labor disputes pending or threatened by
any of the employees of WSBI or GPL.
(d) To the knowledge of WSBI Organization;
(i) WSBI and GPL have complied in all material respects with
all applicable laws or regulations relating to the
employment of labor; and
(ii) WSBI and GPL have withheld all amounts required by law
or agreement to be withheld from its employees for the
payment of any tax or contribution.
(e) There are no currently outstanding loans from WSBI or
GPL to any officer, director or employee of WSBI
Organization and no commitments to lend any money or other
property to any such person.
(f) To the knowledge of WSBI Organization;
(i) No employee is obligated under any agreement
or judgment that would conflict with such
employee's obligation to use his best efforts
to promote the interests of WSBI or
GPL or would conflict with WSBI's or GPL's
business as conducted or proposed to be
conducted; and
(ii) No employee of WSBI or GPL is in violation
of the terms of any employment agreement or
any other agreement relating to such employee's
relationship with any previous employer and no
litigation is pending or threatened with
regard thereto.
2.19 Bank Accounts.
WSBI Organization has provided ACCI with the identity of
all bank accounts used in connection with the operations of WSBI and
GPL whether or not such accounts are held in the name of
WSBI or GPL.
2.20 Borrowings and Guarantees.
Exhibit F identifies all agreements and undertakings
pursuant to which WSBI or GPL is borrowing or is entitled to
borrow any money, is lending or has committed itself to lend
any money, or is a guarantor or surety with respect to the
obligations of any person. Complete and accurate copies of
all such written agreements have been delivered to ACCI.
2.21 Compliance with Laws.
To the knowledge of WSBI Organization, the present conduct
of the business of WSBI or GPL does not violate any law,
ordinance, regulation, judgment, order, decree or rule of
any court, arbitrator or governmental agency or entity in
any respect material to the conduct of its business and,
there are no laws, ordinances or regulations proposed, and
legal or administrative proceedings or investigations
pending or threatened, which, if enacted or determined
adversely to WSBI Organization, could reasonably be expected
to result, individually or in the aggregate, in any material
adverse change in WSBI Organization's business, prospects or
financial condition.
2.22 Absence of Litigation.
Except as previously disclosed to ACCI, neither WSBI
Organization, nor any officer or director of WSBI
Organization nor DeBaux is engaged in, or has received any
threat of, any litigation, arbitration, investigation or
other proceeding relating to WSBI Organization or its
employee benefit plans, property, business assets, licenses,
permits or goodwill, or against or affecting the
transactions contemplated by this Agreement, nor, to the
knowledge of WSBI Organization, is there any basis
therefore.
2.23 Transactions.
WSBI Organization has made available to ACCI a true and
complete list of all material contracts now in effect
between WSBI Organization and any person who now is an
officer, director or controlling shareholder of WSBI
Organization, other than salary and incentive compensation
arrangements of a customary nature entered into in the
ordinary course of business; and WSBI Organization has made
available to ACCI a true and complete list of all equipment
or other property, real or personal, tangible or intangible,
including, but without limitation, any item of intellectual
property, used in connection with or pertaining to the
business of WSBI Organization.
2.24 Accuracy of Documents.
The copies of all instruments, agreements, other documents
and written information delivered to ACCI by WSBI
Organization or any of its representatives are and will be
true and correct copies as of the date of delivery thereof.
No representations or warranties made by WSBI Organization
in this Agreement nor any document, written information
statement, financial statement, certificate or exhibit
prepared and furnished or to be prepared and furnished by
WSBI Organization, or its representatives, to ACCI pursuant
hereto or in connection with the transactions contemplated
hereby, taken as a whole, contains or will contain any
untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements or
facts contained herein or therein not misleading. There is
no event, fact or condition which, to the knowledge and
belief of WSBI Organization, materially and adversely
affects the business, assets, financial condition or
prospects of WSBI Organization, or which could reasonably be
expected to do so, which has not been set forth in this
Agreement or the Exhibits hereto.
2.25 Title to DeBaux WSBI shares of common stock.
DeBaux has good, valid and marketable title to the WSBI
shares listed on Exhibit G attached hereto, free and clear
of any and all liens, claims, options, charges and
encumbrances whatsoever. WSBI has good, valid and marketable
title to its GPL membership units, as listed on Exhibit G,
free and clear of any and all liens, claims, options,
charges and encumbrances.
2.26 Authority of DeBaux.
DeBaux has the absolute and unrestricted right, power and
authority to sell, assign, transfer, pledge and deliver its
WSBI shares listed on Exhibit G attached hereto, to execute
this Agreement and the agreements related hereto, to make
the representations, warranties and agreements contained
herein and in the related agreements and to perform its
obligations hereunder and under the agreements related
hereto. Subject to the terms of the Operating Agreement,
WSBI has the absolute and unrestricted right, power and
authority to sell, assign, transfer and deliver 85% of the
GPL membership units.
ARTICLE III: Representations And Warranties Of ACCI
ACCI represents, warrants and covenants to WSBI and DeBaux
as follows:
3.1 Organization and Standing.
ACCI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada and
has all requisite corporate power and authority to own,
operate and lease its properties and carry on its business
as now conducted. ACCI is a fully reporting public company
pursuant to section 12 (g) of the Exchange Act of 1934, as
amended. The voting common stock currently trades on the
NASD Over The Counter (OTC) Electronic Bulletin Board under
the symbol [OTC BB: ACCI]. The authorized capital stock of
ACCI consists of: 100,000,000 shares of voting common stock,
($.001 par value per share), and the Board has authorized
20,000,000 of Preferred Stock the terms of which may be set
by the Board of Directors, however no amendment has been
filed with the Secretary of State of Nevada to specify the
rights of the Preferred Stock. ACCI has currently 37,787,070
shares of common stock issued and outstanding and has issued
no preferred stock. There are a total of 2,250,000 warrants
outstanding. The warrants were issued in three (3) series,
Series A 750,000 warrants that entitle the holder to
purchase 750,000 shares of common stock for a period of two
(2) years at a price of $0.125 per share; Series B 750,000
warrants that entitle the holder to purchase 750,000 shares
of common stock for a period of two (2) years at a price of
$0.167 per share; and Series C 750,000 warrants that entitle
the holder to purchase 750,000 shares of common stock for a
period of two (2) years at a price of $0.208 per share. The
Series A, B and C warrants have anti-dilution clauses that
provide that in the case of a recapitalization that effects
a roll back of the number of shares outstanding or in the
form of a reverse split or an increase in the number of
shares by a stock split, the number of shares that the
warrant holder will be able to purchase if there is a
reverse split will be the number of shares pre-reverse split
that could be acquired and the purchase price per share will
be equal to the produce of the original exercise price per
share multiplied by the multiple of the roll back or reverse
stock split and if there is an increase in shares
outstanding by a stock split the number of shares will be
equal to the number of shares that could be purchased
originally multiplied by the multiple of the increase in
shares outstanding and in such event there will be no
adjustment in the purchase price per share. ACCI has a stock
option plan and has granted certain options as listed in
Schedule "H" , has no other obligations to issue shares of
its common stock or preferred stock and has no other
securities outstanding that are convertible into its common
stock. ACCI's common stock is the only publicly listed
security.
3.2 Authority.
(a) ACCI has full corporate power and authority to execute,
deliver and perform its obligations under this Agreement,
and all corporate action necessary for such execution,
delivery and performance hereof and thereof by ACCI has been
duly taken. Complete and correct copies, certified by the
Secretary or Assistant Secretary of ACCI, of the resolutions
adopted by the Board of Directors, authorizing and ratifying
the execution and delivery of this Agreement and the
consummation of the transactions contemplated herein,
(b) Subject to ACCI obtaining all necessary consents, which
consents have been obtained or will be obtained on or prior
to the Closing Date, the execution and delivery by ACCI of
this Agreement and the agreements related hereto do not, and
the performance and consummation of the transactions
contemplated by this Agreement and the agreements related
hereto will not, result in any conflict with, breach or
violation of or default, termination or forfeiture under (or
upon the giving of notice or the lapse of time, or both,
result in any conflict with, breach or violation of or
default, termination or forfeiture under) any terms or
provisions of its Certificate of Incorporation or Bylaws,
each as amended through the date hereof, or any statute,
rule, regulation, judicial or governmental decree, order or
judgment, agreement, lease or other instrument to which ACCI
is a party or to which any of the assets of ACCI is subject
and which individually or in the aggregate is material to
ACCI.
(c) Each consent, approval, authorization, order,
registration, qualification or filing of or with any court
or any regulatory authority or any other Governmental Body
which is required for the consummation by ACCI of the
transactions contemplated by this Agreement has been
obtained or will be obtained prior to or upon the Closing.
(d) Upon due execution and delivery by the parties hereto,
this Agreement and the agreements related hereto will each
be legal, valid and binding obligations of ACCI, enforceable
against ACCI in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally. Except for the actions and
filings with the State of Nevada, the Securities and
Exchange Commission and the NASDAQ OTC Bulletin Board,
hereof, no consent, approval or authorization of, exemption
or other action by notice or declaration, filing or
registration with, any third party or governmental agency is
required to be obtained, made or given by ACCI in connection
with the execution, delivery and performance of this
Agreement or the consummation by ACCI of the transactions
contemplated by this Agreement.
3.3 Absence of Litigation.
Neither ACCI nor any officer or director of ACCI is engaged
in, or has received any threat of any litigation,
arbitration, investigation or other proceeding related to or
affecting the transactions contemplated by this Agreement,
nor to the knowledge of ACCI, is there any basis therefore.
There is no litigation, arbitration, action or proceeding
pending, or to the knowledge of ACCI, threatened, against or
relating to ACCI, its properties, its business, its
subsidiaries, their respective officers and directors.
3.4 No Liabilities.
ACCI will have on the Closing Date no liabilities of any
kind or nature whatsoever, whether accrued, absolute,
contingent or otherwise, including, without limitation, tax
liabilities and interest due or to become due other than a
non-recourse promissory note payable to Xxxxxxxx, August &
Xxxxxxxxx LLP in the amount of Eighty Eight Thousand Four
Hundred Nine and 51/100 Dollars ($88,409.51) guaranteed by
Arcadia Resources, Inc.
3.5 No Current Business Operations.
Neither ACCI nor it subsidiaries have any present business
operations or any material liabilities or obligations of any
nature and shall have no liabilities or obligations of any
kind or nature whatsoever at time of Closing whether
accrued, absolute, contingent or otherwise, including,
without limitation, tax liabilities and interest due or to
become due.
3.6 Securities Compliance and Listings.
ACCI is a full-reporting Nevada Corporation currently traded
on the NASD Electronic Bulletin Board (under the symbol:
"ACCI"). ACCI is in full compliance with federal and state
securities and corporate laws. All outstanding shares of
common stock of ACCI have been duly authorized and are
validly issued, fully paid, and non-assessable and free of
preemptive rights, and there are no registration rights
existing or granted to any holders of restricted common
stock of ACCI.
3.7 Compliance With Reporting Requirements.
ACCI represents, warrants and agrees that, as of the date of
Closing, ACCI will have filed all forms, reports and
documents with the S.E.C. required to be filed by it
pursuant to the Securities Act and the Exchange Act,
including, without limitation, all reporting requirements of
the Exchange Act and the Form 10-KSB for the calendar year
ended December 31, 2001. The reports filed with the S.E.C.,
to ACCI's knowledge, did not contain, as of their respective
dates, any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.8 Title to Property.
ACCI has all requisite corporate power and authority to own
its properties and assets and has good and marketable title
to all properties and assets, real and personal, reflected
in the Balance Sheet of ACCI, and the properties and assets
of ACCI are subject to no mortgage, pledge, lien or
encumbrances, except for liens shown therein, with respect
to which no default exists.
3.9 Accuracy of Documents and Information.
The copies of all instruments, agreements, other documents
and written information delivered to WSBI or any of ACCI's
shareholders by ACCI, or any of their representatives are
and will be true and correct copies as of the date of
delivery thereof. No representations or warranties made by
ACCI in this Agreement nor any document, written information
statement, financial statement, certificate or exhibit
prepared and furnished or to be prepared and furnished by
ACCI, or their representatives, to WSBI or DeBaux hereto or
in connection with the transactions contemplated hereby or
to any of ACCI's shareholders or to any person from whom a
solicitation to purchase shares of common stock of ACCI was
made, taken as a whole, contains or will contain any untrue
statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements or facts
contained herein or therein not misleading.
3.10 Financial Statements.
ACCI shall have furnished WSBI and DeBaux financial
statements and balance sheets for the period ending December
31, 2000 accompanied by a report of its independent
certified public accountants; and the financial information
necessary to prepare reviewed balance sheets and statements
of operations for the most recent quarters of March 31,
2001, June 30, 2001 and September 30, 2001 as required by
the Securities and Exchange Commission on Form 10-QSB. To
the knowledge of ACCI, such financial statements, together
with and subject to the disclosures and notes thereto,
(a) Are in accordance with the books and records of ACCI;
(b) Present fairly and accurately the financial condition of
ACCI as of the dates of the balance sheets;
(c) Present fairly and accurately the results of operations
for the periods covered by such statements;
(d) Have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis;
(e) Include all adjustments (consisting of only normal
recurring accruals) which are necessary for a fair
presentation of the financial condition of ACCI, and
of the results of operations of ACCI for the
periods covered by such statements; and
(f) Fully comply with all requirements of Regulation SB and/or
SK K and all applicable securities laws.
3.11 Books and Records:
From the date of this Agreement to the Closing, ACCI will:
(a) Provide to WSBI and DeBaux or their respective
representatives any and all relevant documents regarding
securities filings, broker dealer due diligence packages,
offering memorandums, and copies of Form D;
(b) Give to WSBI and DeBaux, or their respective
representatives, full access during normal business hours
to all of its offices, books, records, contracts, stock
certificate books, stock certificates, transfer ledgers,
minutes books and other corporate documents
(hereinafter referred to as "ACCI's Corporate Records")
and properties so that WSBI Organization and DeBaux may
inspect and audit them;
(c) Furnish such information concerning the properties and
affairs of ACCI as WSBI Organization and DeBaux may
reasonably request. ACCI represents and warrants that
all of ACCI's Corporate Records are true,
correct and complete and constitute all of ACCI's
Corporate Records, thereof and, the minute books of
ACCI reflect all material actions taken and authorizations
given by the Board of Directors of ACCI or any
committee thereof and all material actions taken and
authorization given by the shareholders of ACCI.
3.12 Tax Returns.
ACCI has filed (or has obtained extensions for filing) all
income, excise, sales, corporate franchise, property, payroll and
other tax returns or reports required to be filed by it, as
of the date hereof by the United States of America, any
state or other political subdivision thereof or any foreign
country and has paid all taxes or assessments relating to
the time periods covered by such returns or reports. ACCI
does not, directly or indirectly, owe any federal, foreign,
state or local taxes for or applicable to all periods ended
on or prior to the date of this Agreement. ACCI has no tax
liability or obligation of any kind or nature whatsoever for
income or employee withholdings or employment contributions
and interest and penalties thereon or for property taxes
which may be owed by its subsidiaries to federal, state and
local taxing authorities. There are no present audits or
disputes with any federal, foreign, state or local taxing
authority as to taxes of any nature payable by ACCI or its
subsidiaries.
3.13 Environmental Matters.
ACCI represents and warrants:
(a) ACCI represents and warrants it is and has at all times
been in compliance with all applicable federal state and
local environmental laws.
(b) ACCI has not been required to obtain any licenses or
permits required under environmental laws for the operation
of its business.
(c) No hazardous substances (as defined in applicable
federal, state and local environmental laws and regulations)
have been generated, transported, stored, treated, recycled,
disposed of or otherwise handled in any way in the operation
of the ACCI's business, except in compliance with all
applicable Environmental laws. There are no locations now
owned or operated by ACCI where hazardous substances have
been generated, transported, stored, treated, recycled,
disposed of or otherwise handled, except in compliance with
all applicable environmental laws. There is no past or
ongoing release or threat of release of hazardous substances
from any of the properties currently owned or operated by
ACCI or any of its affiliates or subsidiaries or, to the
knowledge of ACCI, from any properties formerly owned or
operated by ACCI or any of its affiliates or subsidiaries.
ACCI has not treated, stored for more than 90 days, or
disposed of any hazardous waste; as such term is used within
the meaning of federal state or local law, except in
compliance with all applicable environmental laws.
(d) ACCI has not received any written notice from any
governmental authority, regulatory agency or other person
advising that ACCI or its affiliates or subsidiaries is
potentially responsible for costs associated with any
release or threatened release of hazardous substances or
potentially liable for any violation of any environmental
law. No pending or, to the knowledge of ACCI, threatened
order, litigation, settlement or citation with respect to
hazardous substances exists with respect to or in connection
with the operation of their respective businesses. There has
been no environmental investigation conducted by any
governmental authority or regulatory agency with respect to
the operation of their respective businesses.
(e) No underground storage tanks are or, to the knowledge of
ACCI, ever were located on any properties currently or
previously owned or leased by ACCI or its affiliates or
subsidiaries. To the knowledge of ACCI, no PCBs or asbestos-
containing materials are located on, contained in or
otherwise form a part of any of the assets or properties of
ACCI or its affiliates or subsidiaries.
3.14 Depositories.
ACCI shall make available to WSBI a complete list of the
name, location and account numbers of each bank, trust
company, securities broker or other financial institution in
which ACCI has an account, deposits, safe deposit box, lock
box or other assets on hand and the names of all authorized
persons with respect thereto.
3.15 Structure of Transaction.
The transaction between WSBI and ACCI is a stock-for-stock
acquisition, and not a statutory merger. The current
shareholders of ACCI will not be entitled to dissenters or
appraisal rights under the corporate laws of Nevada.
3.16 Benefit Plans of ACCI.
Other than ACCI's employee stock option plan, ACCI is not a
party to
(i) any 'employee benefit plan' within the meaning of
Section 3(3) of ERISA,
(ii) any profit sharing, pension, defined compensation,
bonus, stock option, stock purchase, disability, severance,
health, welfare or incentive plan or agreement or (iii) any
written or unwritten plan or policy providing for 'fringe
benefits' to its employees, including but not limited to
vacation, paid holidays, personal leave, employee discount,
educational benefit or similar programs (individually a
"Plan" and collectively the "Plans").
3.17 Confidentiality.
ACCI and its representatives will keep confidential any
information that they obtain from DeBaux or from WSBI
concerning the properties, assets and business of WSBI
Organization. If the transactions contemplated by this
Agreement are not consummated by February 19, 2002 ACCI will
return to WSBI all written matter with respect to WSBI
obtained by ACCI in connection with the negotiation or
consummation of this Agreement.
3.18 Investment Intent.
ACCI is acquiring WSBI shares transferred to it under this
Agreement for investment and not with a view to the sale or
distribution thereof, and ACCI has no commitment or present
intention to liquidate WSBI or to sell or otherwise dispose
of shares of its stock.
3.19 Subsidiaries.
Except for its 100% owned subsidiaries Tunlaw Capital Corp.
and Alpha Computer Solutions, Inc., ACCI does not own or
control, directly or indirectly, any interest or investment
(whether equity or debt) in any other corporation,
partnership, business, trust or other entity. Each of ACCI's
subsidiaries is in good standing and is duly and legally
authorized to transact business in their states of
organization. The present officers and directors of such
subsidiaries shall remain as the officers and directors of
the subsidiary without compensation or reimbursement of any
kind or nature whatsoever for a period of two years from the
Closing, unless ACCI requests such Persons subsequent to the
Closing to resign.
ARTICLE IV: Covenants of WSBI and DeBaux
4.1 Maintenance of Business.
WSBI will use its best efforts to carry on and preserve the
business, goodwill and relationships of WSBI Organization
with customers, suppliers, officers, employees, agents and
others in substantially the same manner as they have prior
to the date hereof. Subject to any directions from ACCI,
WSBI will use its best efforts to keep and maintain the
existing favorable business relationship with each of such
customers, suppliers and officers, employees and agents. If
WSBI Organization or DeBaux becomes aware of deterioration
in a relationship with any customer, supplier or officer,
employee or agent, WSBI or DeBaux will promptly bring such
information to the attention of ACCI and will exert their
best efforts to restore such relationship.
4.2 Absence of Certain Changes.
Prior to the Closing, except as expressly permitted or
contemplated hereby, neither WSBI nor DeBaux will, without
ACCI's prior express written consent, cause WSBI to:
(a) Incur any additional indebtedness for money borrowed, or
guarantee any indebtedness or obligation of any other party
other than in the normal course of business;
(b) Set aside or pay any dividend or distribution of assets
to, or repurchase any of its stock from, any of its
shareholders,
(c) Issue any capital stock or securities convertible into
capital stock or grant or issue any options, warrants or
rights to subscribe for its capital stock or securities
convertible into its capital stock;
(d) Enter into, amend or terminate any employment agreement
or any agreement or arrangement which, if in effect on the
date hereof, would be required to be disclosed;
(e) Extraordinarily increase the compensation payable or to
become payable by WSBI to any of its officers, employees or
agents above the amount payable, or adopt or amend any
employee benefit plan or arrangement;
(f) Acquire or dispose of any material properties or assets
used in its business;
(g) Waive any statute of limitations so as to extend any tax
or other liability of WSBI;
(h) Permit any material change in the nature of the business
of WSBI or the manner in which the WSBI books and records
are maintained;
(i) Create or suffer to be imposed any lien, mortgage,
security interest or other charge on or against its
properties or assets, except for purchase money security
interests incurred in the ordinary course of business;
(j) Enter into, amend or terminate any lease of real or
personal property;
(k) Amend its Articles of Incorporation or Bylaws; or
(l) Engage in any activities or transactions outside the
ordinary course of its business as conducted at the date
hereof.
4.3 Maintenance of Condition.
Prior to the Closing, except as expressly permitted or
contemplated hereby, DeBaux will not, without ACCI's prior
express written consent:
(a) Enter into any agreement, restriction or understanding
with respect to the sale, transfer or voting of any shares
of WSBI Capital Stock other than the pledge agreement
provided for in Section 5.3 hereof;
(b) Permit any change in the good, valid and marketable
title to its WSBI capital stock, including the imposition
any lien, charge or encumbrance on such stock;
(c) Impair its right, power and authority to sell, assign,
transfer and deliver the WSBI capital stock, to execute this
Agreement and the agreements related hereto, to make the
representations, warranties and agreements contained herein
and in the related agreements and to perform its obligations
hereunder and under the agreements related hereto;
(d) Be obligated under any agreement or judgment that would
conflict with its obligations under this Agreement; or
(e) Enter into any agreement containing a covenant or
covenants that purport to limit the ability or right of
DeBaux to engage in any lawful business activity.
4.4 Access to Information.
At all times throughout the period prior to the Closing,
WSBI will give ACCI and its accountants, legal counsel and
other representatives reasonable access, during normal
business hours, to all of the properties, books, contracts,
commitments and records relating to the business, assets and
liabilities of WSBI, and will furnish ACCI, its accountants,
legal counsel and other representatives during such period
all such information concerning its affairs as ACCI may
reasonably request; provided, however, that any furnishing
of such information pursuant hereto or any investigation by
ACCI shall not affect ACCI's right to rely on the
representations, warranties and covenants made by WSBI in
this Agreement.
4.5 Compliance with Obligations.
Prior to the Closing, WSBI shall comply with:
(a) All applicable federal, state, local and foreign laws,
rules and regulations;
(b) All material agreements and obligations, including
Articles of Incorporation and Bylaws, by which it, its
properties or its assets may be bound; and
(c) All decrees, orders, writs, injunctions, judgments,
statutes, rules and regulations applicable to WSBI, its
properties or assets, which, if enforced individually or in
the aggregate, would have a material adverse effect on WSBI.
4.6 Necessary Consents.
Prior to the Closing, WSBI and DeBaux will use their best
efforts to obtain such written consents and take such other
actions as may be necessary or appropriate to allow the
consummation of the transactions contemplated hereby and to
allow the continuation of WSBI's business after the Closing
as conducted and as proposed to be conducted at the date
hereof; provided, however, no consent shall be requested of
or obtained from the Town of Afton, a Wyoming municipality,
based on the advice of WSBI's counsel that no such consent
is necessary or required.
4.7 Notification.
WSBI will give prompt notice to ACCI of:
(a) Any notice of default received by WSBI subsequent to the
date of this Agreement under any material instrument or
material agreement to which WSBI is a party or by which it
is bound, which default could, if not remedied, result in
any material adverse change in the financial condition,
business or prospects of WSBI, taken as a whole, or which
would render incorrect in any material respect any
representation made herein; and
(b) Any suit, action, proceeding or investigation instituted
or, to the knowledge of WSBI or DeBaux, threatened against
or affecting WSBI or concerning any claim of ownership of or
rights with respect to any WSBI capital stock subsequent to
the date of this Agreement and prior to the Closing which,
if adversely determined, could result in any material
adverse change in the financial condition, business or
prospects of WSBI, taken as a whole, or which would render
incorrect any representation made herein.
4.8 Good Faith.
From the date hereof until the termination of this
Agreement, neither WSBI, DeBaux nor any of their officers or
directors will initiate discussions, or authorize any Person
to initiate discussions on their behalf, with any other
party, concerning the possible disposition of WSBI's
business, assets or capital stock; provided, however, ACCI
agrees that WSBI may continue pursing its pending
discussions with the Bio-Aquatic Group and its associates
and each other Person with WSBI has been in discussions with
prior to January 4, 2002.
ARTICLE V: Covenants of ACCI
5.1 Investment Representation.
ACCI hereby represents, warrants and agrees that it is
acquiring the WSBI Capital Stock solely for purposes of
investment and not with a view to any public distribution
thereof. ACCI will deliver to WSBI at the Closing an
investment representation, in form and substance to the
reasonable satisfaction of WSBI and DeBaux and their
counsel.
5.2 Documents.
ACCI agrees to deliver unto WSBI at the Closing, duly
certified as of the Closing Date by the Secretary or any
Assistant Secretary of ACCI, copies of resolutions duly
adopted by ACCI's Board of Directors, authorizing the
execution, delivery and performance of this Agreement and
all agreements related hereto. Such resolutions and
certification shall be in form and substance to the
reasonable satisfaction of WSBI, DeBaux and their counsel.
5.3 Loan to WSBI.
On or prior to January 28, 2002, ACCI shall lend to WSBI Two
Hundred Fifty Thousand Dollars ($250,000.00), which loan
shall be evidenced by a loan and security agreement and
secured by DeBaux's pledge of 2,180 shares of WSBI common
stock as collateral for the repayment of the loan. The
pledged stock will be fully paid and be non-assessable when
issued. The loan will be due and payable on January 28, 2003
and shall bear interest at the rate of five percent (5%) per
annum. The loan will be advanced in increments of not less
than Twenty Five Thousand Dollars ($25,000.00) per advance
and the first advance shall be on or before January 18, 2002
in an amount not less than Seventy Five Thousand Dollars
($75,000.00). WSBI shall have the option to repay the loan
by requiring ACCI to take the pledged shares as payment in
full of principal and interest.
5.4 Requirement to Raise Additional Capital.
ACCI represent, warrants, covenants and agrees that that it
has signed a letter of intent with Camden Securities, a NASD
Broker/Dealer to complete a private placement of ACCI's
common stock to raise at least One Million Seven Hundred
Fifty Thousand Dollars ($1,750,000.00) net of commissions,
fees, costs and expenses (including without limitation legal
fees). The placement will be for no more than 17% of the
then outstanding equity of ACCI on a fully diluted basis for
all outstanding common stock as if the Preferred Stock had
all been converted to common stock. It is anticipated that
the placement shall be at least 70% completed within one
hundred twenty days of January 15, 2002. In addition to the
foregoing placement, a net to ACCI of Five Hundred Thousand
Dollars ($500,000.00) shall have first been raised by ACCI
or Camden Securities on or prior to the Closing for not more
than 5.51% of the then outstanding equity of ACCI
immediately following the issuance of the Preferred Stock
and Common Stock to DeBaux, and ACCI shall have at least Two
Hundred Fifty Thousand Dollars ($250,000.00) in its bank
account at Closing. It is contemplated that Camden
Securities will place the common stock on a best efforts
basis with accredited investors. There shall be no minimum
in the offering and all funds shall be released to ACCI as
they are raised from the accredited investors. Camden
Securities will recover its fees, costs and expenses
(including without limitation any and all legal fees) on a
pro-rata basis from each sale of stock and shall be
paid/reimbursed in the first placement described herein in
an amount equal to the product of the total amount of such
fees, costs and expenses multiplied by a fraction the
numerator of which is the amount then raised from the sale
of the stock and the denominator of which is One Million
Seven Hundred Thousand Dollars ($1,750,000.00). The private
placement will be made pursuant to Rule 506 of Regulation D
of the Securities and Exchange Commission. The purchasers of
the common stock will be granted a one time right of
registration of the securities at the cost and expense of
ACCI, such registration process to be commenced thirty (30)
days from the final closing of the offering as established
by ACC. ACCI acknowledges and understands that its
obligations hereunder, which shall be fully supported and
managed by ACCI's present officers and directors.
5.5 Absence of Certain Changes.
Prior to the Closing, except as expressly permitted or
contemplated hereby, ACCI will not, without WSBI's or
DeBaux's prior express written consent, cause WSBI to:
(a) Incur any additional indebtedness for money borrowed, or
guarantee any indebtedness or obligation of any other party
other than in the normal course of business;
(b) Set aside or pay any dividend or distribution of assets
to, or repurchase any of its stock from, any of its
shareholders,
(c) Issue any capital stock or securities convertible into
capital stock or grant or issue any options, warrants or
rights to subscribe for its capital stock or securities
convertible into its capital stock other than the issuance
of up to 12,000,000 shares of common stock in the raising of
the additional capital prior to the Closing of Five Hundred
Thousand Dollars ($500,000.00) as provided in Section 5.4
hereof;
(d) Enter into, amend or terminate any employment agreement
or any agreement or arrangement which, if in effect on the
date hereof, would be required to be disclosed;
(e) Extraordinarily increase the compensation payable or to
become payable by ACCI to any of its officers, employees or
agents above the amount payable, or adopt or amend any
employee benefit plan or arrangement;
(f) Acquire or dispose of any material properties or assets
used in its business;
(g) Waive any statute of limitations so as to extend any tax
or other liability of ACCI;
(h) Permit any material change in the nature of the business
of WSBI or the manner in which the ACCI books and records
are maintained;
(i) Create or suffer to be imposed any lien, mortgage,
security interest or other charge on or against its
properties or assets, except for purchase money security
interests incurred in the ordinary course of business;
(j) Enter into, amend or terminate any lease of real or
personal property;
(k) Amend its Articles of Incorporation or Bylaws; or
(l) Engage in any activities or transactions outside the
ordinary course of its business as conducted at the date
hereof.
ARTICLE VI: Conditions to Obligations of ACCI
The obligations of ACCI to consummate the transactions
contemplated hereby are, at ACCI's election, subject to
satisfaction or waiver of the following conditions by WSBI:
6.1 Consents and Approvals.
WSBI shall have obtained all consents and approvals of third
parties (including governmental authorities) required of
WSBI and ACCI to consummate the transactions contemplated by
this Agreement; provided, however, no consent or approval
shall be sought or obtained from either the Town of Afton, a
Wyoming municipality, based on the advice of WSBI's counsel
that no such consent is necessary or required.
6.2 Representations.
All representations and warranties made herein by WSBI
and/or DeBaux shall be true in all material respects as of
the date made and as of the Closing, except to the extent
such representations and warranties are rendered untrue by
the performance by WSBI or DeBaux of obligations and
agreements undertaken by them to be performed at or prior to
the Closing as set forth in this Agreement. WSBI and DeBaux
shall have performed all obligations and agreements
undertaken by them herein to be performed at or prior to the
Closing.
6.3 Certificate.
ACCI shall have received at the Closing a certificate, dated
as of the Closing and executed by WSBI's President and
DeBaux's President, to the effect that the conditions set
forth in Section 6 have been satisfied. If any
representation or warranty made herein is not true as of the
Closing, such certificate shall identify such representation
or warranty expressly and shall indicate in reasonable
detail the nature of all exceptions thereto not previously
disclosed in the Schedule of Exceptions. If ACCI thereafter
elects to consummate the transactions contemplated hereby,
DeBaux shall not be liable for indemnification for any
Damages (as hereinafter defined) resulting solely from the
facts described in such certificate.
6.4 Opinion of Counsel.
ACCI shall have received at the Closing the opinion of
counsel of WSBI and DeBaux, in form and substance
satisfactory to ACCI and its counsel, to the effect that:
(a) WSBI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wyoming,
has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its
business as now conducted and is duly qualified to do
business and to counsel's actual knowledge is in good
standing as a foreign corporation in each jurisdiction in
which the nature of its business or the ownership of its
properties makes such qualification necessary; GPL is a
limited liability company duly organized, validly existing
and in good standing under the laws of the State of
Delaware, has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its
business as now conducted and is duly foreign qualified to
do business in the state of Arizona and for the purpose of
conducting GPL's business, has paid a business transaction
fee in the state of New York and a "Replacement Tax" in the
state of Illinois; and DeBaux is a limited liability company
duly organized, validly existing and in good standing under
the laws of the State of Arizona, has all requisite
corporate power and authority to own, operate and lease its
properties and to carry on its business as now conducted and
is duly qualified to do business in the state of Arizona.
(b) All outstanding shares of such stock held by DeBaux are
held of record and beneficially as set forth on Exhibit H
attached. All outstanding shares of WSBI capital stock have
been validly issued, are fully paid and nonassessable, and
have been issued in full compliance with all applicable
federal and state securities laws.
(c) To such counsel's actual knowledge, no right of first
refusal option or other restriction is applicable to the
shares of WSBI common stock held by DeBaux, with the
exception of the agreement between DeBaux and Xxxxx Xxxxxxx
previously disclosed to ACCI. To such counsel's actual
knowledge, WSBI does not have outstanding any preemptive or
subscription rights, options, warrants, rights to convert,
capital stock equivalents, stock appreciation rights or
other rights to purchase or otherwise acquire any of its
capital stock or other securities, or to be paid any amount
based on the value of any such securities except as
otherwise provided in Section 5.3 hereof. To such counsel's
actual knowledge, except for the GPL Put/Call Option, no
other right of first refusal option or other restriction is
applicable to the membership units in GPL. To such counsel's
actual knowledge, no Persons have any preemptive or
subscription rights, options, warrants, rights to convert,
capital stock equivalents, stock appreciation rights or
other rights to purchase or otherwise acquire any of WSBI's
capital stock or other securities, or to be paid any amount
based on the value of any such securities. However, GPL may
acquire the remaining 15% of GPL or the GPL un-transferred
membership units, voluntarily or involuntarily, according to
the GPL Put/Call Option.
(d) WSBI Organization has full corporate power and authority
to execute and deliver, and to perform its obligations under
this Agreement. WSBI Organization has taken all requisite
corporate action to approve and adopt this Agreement and the
performance by WSBI Organization of its obligations
hereunder. This Agreement has been duly and validly executed
and delivered by WSBI and constitutes a legal, valid and
binding obligations of WSBI, except as enforcement may be
limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar
laws affecting creditors' rights generally and subject to
general equity principles and to limitations on availability
of equitable relief, including specific performance.
(e) To such counsel's actual knowledge, except as previously
disclosed by WSBI, the execution and delivery of this
Agreement by WSBI Organization, and the performance and
consummation by WSBI Organization of the transactions
contemplated by this Agreement, do not result in any
conflict with, breach or violation of or default,
termination, forfeiture or lien under (or upon the failure
to give notice or the lapse of time, or both, result in any
conflict with, breach or violation of or default,
termination, forfeiture or lien under) any terms or
provisions of WSBI Organization's Articles of Incorporation
or Bylaws, GPL Operating Agreement, or any statute, rule,
regulation, judicial or governmental decree, order or
judgment, or to the best of such counsel's actual knowledge,
any material agreement, lease or other instrument to which
WSBI Organization or DeBaux is a party or to which it or any
of WSBI's assets are subject, with the possible exception of
the agreement with the Town of Afton, a Wyoming
municipality.
(f) Assuming ACCI is a bona fide purchaser within the
meaning of the Uniform Commercial Code as adopted by the
State of Arizona, to such counsel's actual knowledge the
transfer and assignment in accordance with this Agreement by
or on behalf of DeBaux to ACCI of the WSBI shares of common
stock owned by it, against the payment provided by this
Agreement, will transfer good, absolute, valid and
marketable title thereto, free and clear of any and all
liens, claims, options, charges and encumbrances whatsoever.
(g) To such counsel's knowledge, there is no consent,
approval, authorization, order, registration, qualification
or filing of or with any court or any regulatory authority
or other Governmental Body required for the consummation by
WSBI Organization and DeBaux of the transactions
contemplated by this Agreement which has not been obtained.
(h) To such counsel's actual knowledge, except as previously
disclosed to ACCI, there is no suit, arbitration or legal,
administrative or other proceeding or governmental
investigation pending or threatened to which WSBI
Organization or DeBaux is a party.
(i) To such counsel's actual knowledge, except as previously
disclosed to ACCI, there is no outstanding judicial or
administrative order, ruling, decree, judgment or
stipulation to which WSBI Organization or DeBaux is a party
or is subject materially adversely affecting or threatening
WSBI or its business or financial condition.
6.5 Delivery of the WSBI Capital Stock.
At the Closing, ACCI shall have received at the Closing
certificates representing all of the WSBI capital stock
owned by DeBaux, duly endorsed to ACCI or accompanied by
stock powers duly executed in blank (with signatures
guaranteed by any national bank or trust company) and
otherwise in form acceptable for transfer on the books of
WSBI, duly endorsed to ACCI.
6.6 No Material Adverse Change.
During the period from the date of this Agreement to the
Closing Date, there shall not have been any material adverse
change in the condition (financial or other), liabilities,
business or prospects of WSBI, and WSBI shall not have
sustained any material uninsured loss or damage to its
assets that could materially and adversely affect its
ability to conduct its business.
6.7 No Actions.
Consummation of the transactions contemplated by this
Agreement shall not violate any order, decree or judgment of
any court or Governmental Body having jurisdiction and no
action or proceeding shall have been instituted by any
Person or threatened by any governmental agency which, in
either such case, in the good faith judgment of ACCI's Board
of Directors (acting upon advice of its outside counsel) has
a reasonable probability of resulting in an order, judgment
or decree restraining, prohibiting or rendering unlawful the
consummation of the transactions contemplated by this
Agreement.
6.8 Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated hereby and all documents and
instruments incident to such transactions shall be in form
and substance to the reasonable satisfaction of ACCI's
counsel, and ACCI shall have received all such counterpart
originals or certified or other copies of such documents as
it may reasonably request.
6.10 WSBI's Board of Directors.
After Closing, the Board of Directors of WSBI shall
remain the same.
6.11 Executive Officers of WSBI.
After the Closing, any persons serving as executive
officers of WSBI prior to the Closing shall will continue in
such capacity after the Closing.
ARTICLE VII: Conditions to Obligations of WSBI and DeBaux
The obligations of WSBI and DeBaux to consummate the
transactions contemplated hereby are, at WSBI's election,
subject to satisfaction or waiver of the following
conditions by ACCI:
7.1 Consents and Approvals.
ACCI shall have obtained all consents and approvals of third
parties (including governmental authorities) required of
WSBI and ACCI to consummate the transactions contemplated by
this Agreement. ACCI shall have obtained the consents and
approval of its Board of Directors.
7.2 Representations.
All representations and warranties made herein by ACCI shall
be true in all material respects as of the date made and as
of the Closing. ACCI shall have performed all obligations
and agreements undertaken by it herein to be performed at or
prior to the Closing, including without limitation those
contained in Sections 3.7 and 5.3.
7.3 Opinion of Counsel.
WSBI and DeBaux shall have received at the Closing the
opinion of counsel to ACCI, in form and substance
satisfactory to WSBI and DeBaux and their counsel, to the
effect that:
(a) ACCI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada
and has full corporate power and authority to own, operate
and lease its properties and to carry on its business as now
conducted;
(b) ACCI has full corporate power and authority to execute
and deliver, and to perform its obligations under this
Agreement. ACCI has taken all requisite corporate action to
approve and adopt this Agreement and the performance by ACCI
of its obligations hereunder. This Agreement has been duly
and validly executed and delivered by ACCI and constitutes
legal, valid and binding obligations of ACCI, enforceable
against it in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other
similar laws affecting creditors rights generally, and
subject to general equity principles and to limitations on
availability of equitable relief, including specific
performance;
(c) The execution and delivery of this Agreement by ACCI,
and the performance and consummation by ACCI of the
transactions contemplated by this Agreement, does not
violate any provision of ACCI's Certificate of Incorporation
or Bylaws, and does not constitute a material default under
the provisions of any material agreement known to counsel to
which ACCI is a party or by which it is bound;
(d) There is no consent, approval, authorization, order,
registration, qualification or filing of or with any court
or any regulatory authority or other Governmental Body
required for the consummation by ACCI of the transactions
contemplated by this Agreement which has not been obtained;
(e) The execution and delivery of this Agreement by ACCI and
the performance and consummation by ACCI of the transactions
contemplated by this Agreement, does not result in any
conflict with, breach or violation of or default,
termination, forfeiture or lien under (or upon the failure
to give notice or the lapse of time, or both, result in any
conflict with, breach or violation of or default,
termination, forfeiture or lien under) any terms or
provisions of ACCI's Certificate of Incorporation or Bylaws,
or any statute, rule, regulation, judicial or governmental
decree, order or judgment, or to such counsel's actual
knowledge, any material agreement, lease or other instrument
to which ACCI is a party or to which it or any of its assets
are subject.
(f) All outstanding shares of ACCI's capital stock have been
validly issued, are fully paid and nonassessable and have
been issuedin full compliance with all applicable federal
and state securities laws.
(g) No right of first refusal option or other restriction is
applicable to the ACCI capital stock. ACCI does not have
outstanding any preemptive or subscription rights,
outstanding options (other than the options issued under
ACCI's employee stock option plan), outstanding warrants
(other than the 2,250,000 warrants referred in Section 3.1),
rights to convert, capital stock equivalents, stock
appreciation rights or other rights to purchase or otherwise
acquire any of its capital stock or other securities, or to
be paid any amount based on the value of any such
securities. No other right of first refusal option or other
restriction is applicable to the shares of ACCI's capital
stock outstanding. No Persons have any preemptive or
subscription rights, options, warrants, rights to convert,
capital stock equivalents, stock appreciation rights or
other rights to purchase or otherwise acquire any of ACCI's
capital stock or other securities, or to be paid any amount
based on the value of any such securities.
(h) Assuming DeBaux is a bona fide purchaser within the
meaning of the Uniform Commercial Code as adopted by the
State of Arizona, to such counsel's actual knowledge the
transfer and assignment in accordance with this Agreement by
or on behalf of ACCI of the ACCI shares of Preferred Stock
and Common Stock to DeBaux, against the payment provided by
this Agreement, will transfer good, absolute, valid and
marketable title thereto, free and clear of any and all
liens, claims, options, charges and encumbrances whatsoever.
(i) ACCI has no obligations of any kind or nature whatsoever
owing to any Governmental Body arising from unpaid income or
property taxes and/or wages paid and/or not paid and payroll
taxes withheld and not paid to the appropriate taxing
authority by Alpha Computer Solutions, Inc.
7.4 Election of Board of Directors.
On Closing, the current members of the Board of Directors of
ACCI shall, as their last act of business prior to their
resignation, in accordance with the Nevada General
Corporation Law and the Articles of Incorporation and By-
Laws of ACCI, cause the Board of Directors of ACCI to be
reconstituted to have three (3) then present members of the
Board of Directors, who shall be the sole members of the
Board of Directors. The current members of the ACCI Board of
Directors with the exception of Xxxxxx Xxxxxxx shall resign
their respective board memberships, and WSBI shall determine
the members of the Board of Directors who shall appointed to
fill vacancies on the Board of Directors.
7.5 Executive Officers of ACCI.
Upon Closing, the newly constituted Board of Directors of
ACCI shall call a Special Meeting to elect officers for the
corporation. Any persons presently serving, as executive
officers of ACCI shall not continue in such capacity; and,
upon Closing shall tender their resignations in accordance
with the Nevada General Corporation Law.
7.6 Finders and/or Consultants.
With the exception the existing arrangements with
consultants to ACCI, to the knowledge of the parties,
neither of them, or any party acting on their behalf, has
incurred any liabilities, either express or implied, to any
"broker" of "finder" or similar person in connection with
this Agreement or any of the transactions contemplated. In
this regard, ACCI has issued 3,500,000 shares of its
restricted stock to a certain consultant with respect to the
consummation of this transaction.
7.7 ACCI to be Free of all Debts and Obligations.
Upon Closing ACCI shall be free of any and debts or
obligations of any kind or nature, and the reorganized
company shall have no outstanding obligations associated
with the transaction other than a non-recourse promissory
note payable to Xxxxxxxx, August & Xxxxxxxxx LLP in the
amount of ($88,409.51) guaranteed by Arcadia Resources, Inc.
ACCI shall deliver to WSBI at the Closing the report of its
auditors certifying that ACCI has no outstanding obligations
of any kind or nature whatsoever other than a non- recourse
promissory note payable to Xxxxxxxx, August & Xxxxxxxxx in
the amount of Eighty Eight Thousand Four Hundred Nine and
51/100 Dollars ($88,409.51) guaranteed by Arcadia Resources,
Inc.
7.10 No Action.
Consummation of the transactions contemplated by this
Agreement shall not violate any order, decree or judgment of
any court or Governmental Body having jurisdiction and no
action or proceeding shall have been instituted by any
Person or threatened by any governmental agency which, in
either such case, in the good faith judgment of WSBI (acting
upon advice of their outside counsel) has a reasonable
probability of resulting in an order, judgment or decree
restraining, prohibiting or rendering unlawful the
consummation of the transactions contemplated by this
Agreement.
ARTICLE VIII: Termination
8.1 Termination by Mutual Consent.
At any time prior to the Closing, this Agreement may be
terminated by any of ACCI, WSBI or DeBaux. If DeBaux, ACCI
or WSBI desire to terminate this Agreement at any time prior
to the Closing, it may do so by delivery of written notice
to the other parties to this Agreement.
ARTICLE IX: Miscellaneous
9.1 Notices.
Any notice given hereunder shall be in writing and shall be
deemed effective upon the earlier of personal delivery
(including personal delivery by fax) or the third business
day after mailing by certified or registered mail, postage
prepaid, as follows:
(a) If to ACCI:
Xx. Xxxxxx Xxxxxxx, President
American Career Centers, Inc.
0000 Xxxxxx Xxx Xxx
Xxx Xxxxx, Xxxxxx 00000
(000) 000-0000 (fax)
With a copy to:
Xxxxxxx X. August, Esq.
FELDHAKE, AUGUST & XXXXXXXXX, LLP
Newport Gateway
Tower 2
00000 Xxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
(000) 000-0000 (fax)
(b) If to WSBI:
Xx. Xxxxxxxxxxx Xxxxxxx Xxxxx, President Water Star
Bottling, Inc.
XX Xxx 0000
Xxxx, XX 00000
(000) 000-0000 (fax)
With a copy to:
T. Xxxxxx Xxxxxxx, Xx., Esq.
Law Offices of Xxxxxx X. Xxxxxxx, Xx., P.C.
000 X. Xxxx Xxxxx, Xxx. 0
Xxxx, Xxxxxxx 00000
602) 000-0000 (fax)
(c) If to DeBaux:
Xx. Xxxxxxxxxxx X. Xxxxx
0000 X. Xxxxxxxx Xx.
Xxxx, Xxxxxxx 00000
(d) If to GPL:
Xx. Xxxxx Xxxxxxx, Chief Executive Officer
Geyser Products, L.L.C.
XX Xxx 0000
Xxxx, XX 00000
(000) 000-0000 (fax)
Or to such other address as any party may have furnished in
writing to the other parties in the manner provided above.
9.2 Entire Agreement.
This Agreement together with the agreements between ACCI and
the consultants and between the consultants and DeBaux
constitutes the final, exclusive and complete understanding
of the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and
discussions with respect thereto. No variation or
modification of this Agreement and no waiver of any
provision or condition hereof, or granting of any consent
contemplated hereby, shall be valid unless in writing and
signed by the party against whom enforcement of any such
variation, modification, waiver or consent is sought.
9.3 Confidentiality.
Except for disclosure (if any) required by any law to which
any party is subject, no public announcement regarding the
consummation of the transactions described herein, shall be
made without the approval of both ACCI and WSBI. ACCI, WSBI
and DeBaux agree to hold all information regarding the
Letter of Intent and the transactions described herein in
confidence until the time of any such public announcement.
9.4 Successors and Assigns.
No party may, without the prior express written consent of
each other party, assign this Agreement in whole or in part.
This Agreement shall be binding upon and inure to the
benefit of the respective heirs, personal representatives,
successors and permitted assigns of the parties hereto.
9.5 Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona.
9.6 Survival.
The representations and warranties made by the parties
hereto in this Agreement, and their respective obligations
to be performed under the terms hereof at or prior to the
Closing hereunder shall terminate and expire three years
after the Closing Date, notwithstanding any investigation of
the facts constituting the basis of the representations and
warranties of any party by any other party hereto.
9.7 Arbitration.
Arbitration shall be the initial means for resolving
disputes between the parties with respect to this Agreement
and any agreements related thereto, and any such arbitration
shall take place in the county of Arizona, in the state of
Arizona. If any party wishes to commence arbitration
hereunder, it shall serve written notice to such effect on
the other party or parties hereto and, within fifteen (15)
days thereafter, the parties shall mutually select a single
arbitrator to conduct such arbitration. In the event that
the parties fail to agree on such single person, each of the
parties shall choose one (1) member of three (3) member
panel and those two (2) members shall select a third. In
conducting the arbitration, the arbitrator or arbitration
panel shall apply the Commercial Arbitration Rules of the
American Arbitration Association as modified by any other
instructions that the parties may agree upon at the time,
except that each party shall have the right to conduct
discovery in any manner and to any extent authorized by the
Federal Rules of Civil Procedure as interpreted by the
federal courts. The arbitrator shall decide the dispute upon
equitable principles and industry usage, as determined by
the arbitrator, but shall not modify the terms of this
Agreement. Costs and expenses, including reasonable
attorneys' fees, incurred with respect to the arbitration
shall be borne by the losing party, unless otherwise
determined by the arbitrator based on a showing of good
cause to vary from usual rule expressed in this sentence.
The arbitrator's award shall be final and unappealable. A
judgment upon the award may be entered in any court having
jurisdiction of the parties.
9.8 Confidential.
ACCI and its representatives agree that all information
obtained during its investigation conducted that is not
publicly available will be held in confidence and will be
used solely for the purpose of evaluating the ACCI
investment in WSBI. In the event the transaction
contemplated by this Agreement does not close, all copies of
such information will be returned to WSBI, and such
information will continue to be kept in confidence by ACCI
and its representatives, except for such information that is
required to be disclosed by court order or decree or that is
otherwise in the public domain.
9.9 Captions and/or Headings.
The Captions and/or Headings in this Agreement are for
convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision
of this Agreement.
9.10 Counterparts.
This Agreement may be executed in any number of
counterparts, each of which when so executed shall
constitute an original copy thereof, but all of which
together shall constitute one agreement.
9.11 Facsimile Execution.
For the convenience of the parties, this Agreement shall be
executed by facsimile signatures and shall be effective upon
delivery of a facsimile signed copy of this Agreement to
each of the parties. A fax transmission of a document
bearing the signature(s) of a party hereto shall be acted
upon and be deemed and treated to be an original document
for all purposes. If a fax transmission is so made, the
original of the signed document shall be mailed or placed
with a courier for personal delivery or mailed within three
(3) business days of the fax transmission.
DEFINITIONS:
"Actual Knowledge"--Notwithstanding anything to the
contrary, a Person will only be deemed to have actual
knowledge if such Person is actually aware of such fact or
other matter.
"Breach"--a "Breach" of a representation, warranty,
covenant, obligation, or other provision of this Agreement
or any instrument delivered pursuant to this Agreement will
be deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or
comply with, such representation, warranty, covenant,
obligation, or other provision, or (b) any claim (by any
Person) or other occurrence or circumstance that is or was
inconsistent with such representation, warranty, covenant,
obligation, or other provision, and the term "Breach" means
any such inaccuracy, breach, failure, claim, occurrence, or
circumstance.
"Consent"--any approval, consent, ratification, waiver, or
other authorization (including any Governmental
Authorization).
"Contract"--any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or
implied) that is legally binding.
"Damages"--any loss, liability, claim, damage (incidental
and consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or
diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising, directly or
indirectly, from or in connection with:
a. Any Breach of any representation or warranty made by any
party in this Agreement; or
b. Any Breach by any party of any covenant or obligation of
such Person in this Agreement; or
c. Any claim by any Person for finder's fees based upon any
agreement or understanding alleged to have been made by any
such Person in connection with any of the contemplated
transactions.
"Duty of Care"--Directors occupy a fiduciary relationship to
the corporation, and must exercise the care of ordinarily
prudent and diligent persons in like positions.
"Encumbrance"--any charge, claim, community property
interest, condition, equitable interest, lien, option,
pledge, security interest, right of first refusal, or
restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
"Environment"--soil, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters,
streams, ponds, drainage basins, and wetlands), ground
waters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other
environmental medium or natural resource.
"Environmental, Health, and Safety Liabilities"--any cost,
damages, expense, liability, obligation, or other
responsibility arising from or under Environmental Law or
Occupational Safety and Health Law and consisting of or
relating to:
(a) Any environmental, health, or safety matters or
conditions (including on-site or off-site contamination,
occupational safety and health, and regulation of chemical
substances or products); or
(b) Fines, penalties, judgments, awards, settlements, legal
or administrative proceedings, damages, losses, claims,
demands and response, investigative, remedial, or inspection
costs and expenses arising under Environmental Law or
Occupational Safety and Health Law; or
(c) Financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or
corrective action, including any investigation, cleanup,
removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law
or Occupational Safety and Health Law (whether or not such
Cleanup has been required or requested by any Governmental
Body or any other Person) and for any natural resource
damages; or
(d) Any other compliance, corrective, investigative, or
remedial measures required under Environmental Law or
Occupational Safety and Health Law.
"Environmental Law"--any Legal Requirement that requires or
relates to:
(a) Advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants or
hazardous substances or materials, violations of discharge
limits, or other prohibitions and of the commencements of
activities, such as resource extraction or construction,
that could have significant impact on the Environment; or
(b) Preventing or reducing to acceptable levels the release
of pollutants or hazardous substances or materials into the
Environment; or
(c) Reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are
generated; or
(d) Assuring that products are designed, formulated,
packaged, and used so that they do not present unreasonable
risks to human health or the Environment when used or
disposed of; or
(e) Protecting resources, species, or ecological amenities;
or
(f) Reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or
other potentially harmful substances; or
(g) Cleaning up pollutants that have been released,
preventing the threat of release, or paying the costs of
such clean up or prevention; or
(h) Making responsible parties pay private parties, or
groups of them, for damages done to their health or the
Environment, or permitting self- appointed representatives
of the public interest to recover for injuries done to
public assets.
"ERISA"--the Employee Retirement Income Security Act of 1974
or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.
"Exchange Act"--the Exchange Act of 1934, as amended.
"Facilities"--any real property, leaseholds, or other
interests currently or formerly owned or operated by any
Acquired Company and any buildings, plants, structures, or
equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated.
"GAAP"--generally accepted United States accounting
principles, applied on a basis consistent with the basis on
which the Balance Sheet and the other financial statements
referred to.
"Governmental Authorization"--any approval, consent,
license, permit, waiver, or other authorization issued,
granted, given, or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body"-includes any nation, state, county,
city, town, village, district, or other jurisdiction of any
nature; or Federal, state, local, municipal, foreign, or
other government; or Governmental or quasi-governmental
authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or
other tribunal); or Multi-national organization or body; or
Body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature.
"Hazardous Activity"--the distribution, generation,
handling, importing, management, manufacturing, processing,
production, refinement, release, storage, transfer,
transportation, treatment, or use (including any withdrawal
or other use of groundwater) of Hazardous Materials in, on,
under, about, or from the Facilities or any part thereof
into the Environment, and any other act, business,
operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or
property on or off the Facilities, or that may affect the
value of the Facilities or WSBI Organization.
"Hazardous Materials"--any waste or other substance that is
listed, defined, designated, or classified as, or otherwise
determined to be, hazardous, radioactive, or toxic or a
pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution
thereof, and specifically including petroleum and all
derivatives thereof or synthetic substitutes therefore and
asbestos or asbestos-containing materials.
"HSR Act"--the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.
"Intellectual Property Assets"--includes
(a) All fictional business names, trading names, registered
and unregistered trademarks, service marks, and applications
(collectively, "Marks"); and
(b) All patents, patent applications, and inventions and
discoveries that may be patentable (collectively,
"Patents"); and
(c) All copyrights in both published works and unpublished
works (collectively, "Copyrights"); and
(d) All know-how, trade secrets, confidential information,
customer lists, software, technical information, data,
process technology, plans, drawings, and blue prints
(collectively, "Trade Secrets"); owned, used, or licensed by
any Acquired Company as licensee or licensor.
"IRC"--the Internal Revenue Code of 1986 or any successor
law, and regulations issued by the IRS pursuant to the
Internal Revenue Code or any successor law.
"IRS"--the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United
States Department of the Treasury.
"Knowledge"--an individual will be deemed to have
"Knowledge" of a particular fact or other matter if:
(a) Such individual is actually aware of such fact or other
matter; or, a prudent individual in similar circumstances
should be expected to be aware of such fact or other matter
if he or she had conducted a reasonably thorough inquiry
concerning the existence of such fact or other matter; or
(b) In the case of an officer or director of a corporation,
he or she would be expected to either know or should have
known of facts or other matters material to the corporation,
in the course of conducting reasonable corporate governance
in satisfying their Duty of Care to the Corporation; or an
officer or director in similar circumstances should be
expected to be aware of facts or other matters material to
the corporation, if he or she had conducted a reasonable
inquiry concerning such fact or other matter. A Person
(other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any
individual who is serving, or who has at any time served, as
a director, officer, partner, executor, or trustee of such
Person (or in any similar capacity) has, or at any time had
or should have had, knowledge of such fact or other matter.
"Legal Requirement"--any federal, state, local, municipal,
foreign, international, multinational, or other
administrative order, constitution, law, ordinance,
principle of common law, regulation, statute, or treaty.
"Net Tangible Assets"--Net tangible assets equals Total
Assets minus Total Liabilities minus Goodwill minus
Redeemable Securities.
"Occupational Safety and Health Law"--any Legal Requirement
designed to provide safe and healthful working conditions
and to reduce occupational safety and health hazards, and
any program, whether governmental or private (including
those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful
working conditions.
"Order"--any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or
rendered by any court, administrative agency, or other
Governmental Body or by any arbitrator.
"Ordinary Course of Business"--an action taken by a Person
will be deemed to have been taken in the "Ordinary Course of
Business" only if:
(a) Such action is consistent with the past practices of
such Person and is taken in the ordinary course of the
normal day-to-day operations of such Person; and
(b) Such action is not required to be authorized by the
board of directors of such Person (or by any Person or group
of Persons exercising similar authority) [and is not
required to be specifically authorized by the parent company
(if any) of such Person]; and
(c) Such action is similar in nature and magnitude to
actions customarily taken, without any authorization by the
board of directors (or by any Person or group of Persons
exercising similar authority), in the ordinary course of the
normal day-to-day operations of other Persons that are in
the same line of business as such Person.
"Organizational Documents"--
(a) The articles or certificate of incorporation and the
bylaws of a corporation;
(b) The partnership agreement and any statement of
partnership of a general partnership;
(c) The limited partnership agreement and the certificate of
limited partnership of a limited partnership;
(d) Any charter or similar document adopted or filed in
connection with the creation, formation, or organization of
a Person; and
(e) Any amendment to any of the foregoing.
"Person"--any individual, corporation (including any non-
profit corporation), general or limited partnership, Limited
Liability Company, joint venture, estate, trust,
association, organization, labor union, or other entity or
Governmental Body.
"Proceeding"--any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced,
brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Related Person"--with respect to a particular individual,
(a) Each other member of such individual's family;
(b) Any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's
family;
(c) Any Person in which such individual or members of such
individual's family hold (individually or in the aggregate)
a material interest; and
(d) Any Person with respect to which such individual or one
or more members of such individual's family serves as a
director, officer, partner, executor, or trustee (or in a
similar capacity).
"Representative"--with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or
other representative of such Person, including legal
counsel, accountants, and financial advisors.
"Securities Act"--the Securities Act of 1933, as amended or
any successor law.
"Subsidiary"--with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other
interests having the power to elect a majority of that
corporation's or other Person's board of directors or
similar governing body, or otherwise having the power to
direct the business and policies of that corporation or
other Person (other than securities or other interests
having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more
of its Subsidiaries; when used without reference to a
particular Person, "Subsidiary" means a Subsidiary of the
Company.
"Tax Return"--any return (including any information return),
report, statement, schedule, notice, form, or other document
or information filed with or submitted to, or required to be
filed with or submitted to, any Governmental Body in
connection with the determination, assessment, collection,
or payment of any tax.
FACSIMILE COPY SHALL BE DEEMED AS ORIGINAL
IN WITNESS WHEREOF, the parties hereto have caused this
definitive, final and legally binding Agreement to be
executed by their respective authorized officers as of this
18th day of January, 2002.
AMERICAN CAREER CENTERS, INC.
By:
_____/s/________________
Name: Xxxxxx Xxxxxxx
Title: President
WATER STAR BOTTLING, INC.
By:
_____/s/________________
Name: Xxxxxxxxxxx X. Xxxxx
Title: President
DeBAUX HOLDING, L.L.C.
By:
_____/s/________________
Name: Xxxxxxxxxxx Xxxxxxx Xxxxx
Title: President
GEYSER PRODUCTS, L.L.C.
By:
_____/s/________________
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
