AGREEMENT
This Agreement is entered into this 19th day of August, 1999, by and
between JD AMERICAN WORKWEAR, INC., a Delaware corporation (called "JDI") and
PATINA CORPORATION, a Florida corporation (called "PC") and its Shareholders
("Shareholder").
In consideration of the mutual benefits to be derived and the mutual
agreements contained herein, JDI and PC approve and adopt this agreement and
mutually covenant and agree with each other as follows:
1. Shares To Be Transferred and Shares To Be Issued.
1.1 On the closing date PC shall cause to be transferred to JDI certificates
for the number of shares of PC's common and preferred stock specified on
Schedule 1, which in the aggregate shall represent all of the issued and
outstanding shares of PC's common and preferred stock. These certificates
shall be duly endorsed in blank by the applicable shareholders of PC or
accompanied by duly executed stock powers in blank with signatures
guaranteed by a bank or trust company.
1.2 In exchange for PC's stock being transferred pursuant to subparagraph 1.1,
JDI shall on the ratification date, and contemporaneously with the
transfer of PC's common and preferred stock to it by shareholders, issue
and deliver to the shareholders the number of shares of JDI's common and
preferred stock specified on Schedule 1.
2. Representations and Warranties of PC.
2.1 Ownership of Stock. Shareholders are the record and beneficial owners and
holders of the number of fully paid and non-assessable shares of PC's
common stock listed in schedule 1 as of this date and will continue to own
these shares of PC's common stock until delivery to JDI on the
ratification date, and all shares of PC common stock are or will be on the
closing date owned free and clear of all liens, encumbrances, charges and
assessments of every nature and subject to no restrictions with respect to
transferability. The shareholders will on the closing date have full power
and authority to assign and transfer their shares of PC in accordance with
these terms.
2.2 Organization and Authority.
a. PC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida with all requisite
corporate power and authority to own, operate and lease its properties and
to carry on its business as now being conducted, and is duly qualified and
in good standing in every jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes
qualification necessary. The authorized stock of PC consisting of
10,000,000 shares of common stock, of which 10,000,000 shares are issued
and outstanding, and consisting of 5,000,000 authorized shares of
preferred stock, of which no shares are currently issued and outstanding.
b. The outstanding common and preferred shares of PC are legally and
validly issued, fully paid and non-assessable.
c. The execution and delivery of this agreement does not, and, the
consummation of the transaction contemplated will not violate any
provision of PC's certificate of incorporation or bylaws, or any
provisions of, or result in the acceleration of any obligation under, any
mortgage, lien, lease, agreement, instrument, court order, arbitration
award, judgment or decree to which PC is a party or by which it or any of
them is bound and will not violate any other restriction of any kind or
character to which it or any of them is subject.
d. Except for this agreement, or by mutual understanding of the parties,
there are no outstanding options, contracts, calls, commitments or demands
of any character relating to authorized or issued stock of PC.
2.3 Financials.
a. True copies of the opening balance sheet as of the day prior to closing
will be provided. All of the financial statements are true and correct in
all material respects and present an accurate and complete disclosure of
the financial condition of PC as of its respective dates, and the earnings
for the periods covered, in accordance with generally accepted accounting
principles applied on a consistent basis. These financial statements will
be audited and paid for by PC and acceptable to JDI auditors and the
Securities and Exchange Commission and stock listing agencies.
b. PC has good and marketable title to all of its assets, business and
properties, including, without limitation, all properties reflected in the
balance sheet.
c. All currently used property and assets of PC, or in which it has an
interest or which are in its in possession, are substantially in good
operating condition and repair subject only to ordinary wear and tear.
2.4 Changes Since Specified Date. Since the date of the financial statement
there has not been:
a. Any material adverse change in the financial condition or business
operation of PC.
b. Any change in the compensation pattern of PC, nor any material increase
in the compensation payable or to become payable to any of their officers,
directors, employees or agents, except as disclosed to JDI in writing;
c. Any labor dispute or disturbance, litigation, event or condition of any
character, which materially adversely affects the business or future
prospects of PC;
d. The issuance of additional shares of stock or other securities by PC,
except those known by JDI
e. Any distribution of assets, by way of dividends or purchase or
otherwise by PC;
f. Any borrowings from financial institutions except for those known by
JDI;
g. Any sale, transfer or other disposition of assets of PC, except in the
normal course of business.
2.5 Liabilities.
a. There are no liabilities of PC, whether accrued, absolute, contingent
or otherwise, which arose or relate to any transaction of PC, their agents
or servants which are not disclosed by or reflected in the financial
statements. There are no liabilities of PC which have arisen or relate to
any transaction of PC, their agents or servants, other than normal
liabilities incurred in the normal conduct of PC's business. As of this
date there are no known circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may give rise to
liabilities, except in the normal course of PC's business.
b. All federal, state, county and local income, ad valorem, excise, sales,
use, gross receipts and other taxes and assessments which are due and
payable have been duly reported, fully paid and discharged as reported by
PC, and there are no unpaid taxes which are or could become a lien on the
properties and assets of PC, except as provided for in the financial
statements, or have been incurred in the normal course of PC's business.
All tax returns of any kind required to be filed have been filed and the
taxes paid or accrued.
c. All parties with whom PC has contractual arrangements are in
substantial compliance with those arrangements. PC is not in default in
any material respect under any contracts to which any of them is a party.
d. All corporate acts required of PC have been taken and all reports and
returns required to be filed by them with any governmental agency have
been filed. PC is in substantial compliance with all, and has no notice of
any claimed violation of any, applicable federal, state, county and local
laws, ordinances or regulations, including those applicable to
discrimination in employment, pollution and safety except as disclosed in
Exhibit A.
e. There are no legal, administrative or other proceedings, investigations
or inquiries, product liability or other claims, judgments, injunctions or
restrictions, either threatened, pending or outstanding against or
involving PC, or any of their assets, properties, or business, nor does PC
know, or have reasonable grounds to know, of any basis for any
proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions.
f. PC has no contract with any governmental body which is subject to
renegotiation.
g. The past and anticipated future operations of PC do not infringe or
violate any patents, patent rights, trademarks, trade names, copyrights
and/or licenses of others.
h. To the knowledge of the officers of PC, there is no event, condition or
trend of any character which might materially and adversely affect the
financial condition, business, properties or assets of PC.
i. The assets of PC are adequately insured and all policies of insurance
carried by PC are in full force and all premiums are paid to date.
j. Neither PC nor Shareholder has engaged, consented to or authorized any
broker, investment banker or third party to act on its behalf directly as
broker or finder in connection with the transactions contemplated by this
agreement.
k. There are no inquiries, investigations or pending claims or litigation
challenging or threatening to challenge PC's right, title and interest
with respect to their continued use, or right to preclude others from
using, any patent, patent application, invention, discovery, trademark,
trade name or copyright of PC.
l. PC has not granted any license or made any assignment of any of their
patents, patent applications, invention discoveries, trademarks, trade
names or copyrights, nor do they pay any royalties or other consideration
for the right to use any patent, patent right, trademark, trade name or
copyright of others.
m. To the knowledge of the officers of PC, PC is not a party to or bound
by any agreement, deed, lease or other instrument which is so burdensome
as to materially affect or impair the operation of PC.
2.6. Accuracy of All Statements Made by PC. No representation or warranty by PC
or Shareholder in this agreement, nor any statement, certificate, schedule
or exhibit furnished or to be furnished by or on behalf of PC pursuant to
this agreement, nor any document or certificate delivered to JDI pursuant
to this agreement or in connection with actions contemplated, contains or
shall contain any untrue statement of material fact or omits or shall omit
a material fact necessary to make the statement contained not misleading.
3. Representations and Warranties of JDI. JDI represents and warrants as
follows:
3.1 Organization and Good Standing. JDI is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
3.2 Performance of This Agreement. The execution and performance of this
agreement and the issuance of stock contemplated will be ratified by the
shareholders and accepted by the board of directors of JDI.
3.3 Legality of Shares To Be Issued. The shares of JDI's common stock to be
delivered pursuant to this agreement, when delivered, will have been duly
and validly authorized and issued by JDI and will be fully paid and
non-assessable. The shares of JDI's common stock to be issued will have
been listed for trading on OTC Bulletin Board. The shares of JDI's
preferred shares to be delivered pursuant to this agreement, when
delivered will have been duly and validly authorized and issued by JDI and
will be fully paid and non-assessable. JDI will have authorized, by
shareholder vote, 20,000,000 common shares, all of one class and a minimum
of 1,000,000 blank check preferred shares. Any required filing with any
regulatory agency will be undertaken immediately after approval by the
shareholders.
3.4 No Covenant as to Tax Consequences. It is expressly understood and agreed
that neither JDI nor its officers or agents has made any warranty or
agreement, expressed or implied, as to the tax consequences of the
transactions contemplated by this agreement or the tax consequences of any
action pursuant to or growing out of this agreement.
3.5 Disclosure. No representation or warranty by JDI in this Agreement, nor
any document, written information, statement or certificate furnished or
to be furnished by JDI to PC pursuant hereto or in connection with the
transactions contemplated hereby, 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 contained herein or therein not
misleading. JDI's Form 10-K for the year ended February 28, 1999, and its
Form 10-Q for the quarters ending May 31, 1998, August 31, 1998, and
November 30, 1998, copies of which have been furnished to PC and its
shareholders, are materially true and correct as of the date of the filing
and do not fail to state any material fact with respect to JDI which is
required to be stated under the rules of the Securities and Exchange
Commission. Since the date the Form 10-Q and Form 10-K referred to above
were filed, there have been no material changes in the information
contained in JDI's Form 10-K or Form 10-Q or in material facts which would
have been included in JDI's Form 10-Q or Form 10-K if the facts would have
existed or been known by JDI on the date of filing, and which have not
been disclosed by JDI in other public filings made with the Securities and
Exchange commission since the dates the Form 10-K and Form 10-Q referred
to above were filed.
3.6 Brokers. In the event JDI has engaged or otherwise used the services of
any broker or finder in connection with the Agreement or the transactions
contemplated hereby, then JDI agrees to indemnify and hold harmless PC
from and against any liability for any fee, compensation, commission or
expense (including attorneys' fees) arising out of any claim by any person
acting or claiming to act on behalf of JDI for fees, compensation,
commission or expense with respect to the Agreement or the transactions
contemplated hereby.
4. Covenants of PC. PC covenants and agrees as follows:
4.1 Documents To Be Furnished. PC will furnish to JDI, no later than September
5, 1999, the following documents, lists and schedules certified by a
principal officer of PC as being accurate and complete:
a. A list of the states of incorporation and states qualified to do
business of PC;
b. A list of the authorized and outstanding securities of PC;
c. A list of the officers, directors and shareholders of PC;
d. Copies of the articles of incorporation and bylaws currently in effect
of PC;
e. A list of the legal descriptions of all real property owned of record
or beneficially, or held under lease, or option, or similar agreements by
PC;
f. Copies of all surveys and policies of title insurance relating to real
property owned by PC;
g. Copies of all leases to which PC is a party;
h. Copies of all contracts, agreements or commitments of PC, whether
involving purchases, sales or otherwise, which expire more than one year
from the date of this agreement or which involve an amount or value in
excess of $5,000;
i. Copies of all collective bargaining or other union contracts to which
PC is a party;
j. Copies of all employment contracts to which PC or any of its
subsidiaries is a party;
k. Copies of all pension, retirement and profit sharing plans to which PC
is a party;
l. A list of all fringe benefit plans and programs applying to employees
of PC, including but not limited to, pension, profit sharing, life
insurance, medical, bonus, incentive and similar plans and the approximate
annual cost of each;
m. A list of all employees of PC whose total remuneration, via contract
for each calendar year, will exceed $100,000;
n. Copies of all financing or loan agreements, mortgages or similar
agreements to which PC is a party;
o. A list of all PC's bank accounts, brokerage accounts, safety deposit
boxes, with the authorized signers indicated;
p. A list of each insurance policy owned by PC, with the name of the
insurance carrier, the policy number, a brief description of the coverage,
the annual premium, the corporate owner and any claims pending;
q. Proof of filing of designation of preferred shares issued in any
capital raise
5. Actions Prior to Ratification. From and after the date of this agreement
and until the closing date:
a. JDI and its authorized representatives shall have full access during
normal business hours to all properties, books, records, contracts and
documents of PC, and PC shall furnish or cause to be furnished to JDI and
its authorized representatives all information with respect to its affairs
and business of PC as JDI may reasonably request.
b. Except with the prior written consent of JDI, PC shall carry on their
business diligently and substantially in the same manner as before.
c. Without the prior written consent of JDI, PC will not grant any general
or uniform increase in the rates of pay of its employees, nor grant any
general or uniform increase in the benefits under any pension plan or
other contract or commitment, nor increase the compensation payable or to
become payable to officers or key salaried employees, insurance, pension
or other benefit plan, payment or arrangement made to, for or with any of
the officers, key salaried employees or agents.
d. PC shall not enter into any contract or commitment or engage in any
transaction not in the usual and ordinary course of business and
consistent with PC's business practices without the prior written consent
of JDI.
e. PC shall not create any indebtedness other than that incurred in the
usual and ordinary course of business, that incurred pursuant to existing
contracts disclosed in the exhibits submitted, and that reasonably
incurred in doing the acts and things contemplated by this agreement.
f. PC shall maintain current insurance and any additional insurance in
effect as may be reasonably required by increased business and risks; and
all property shall be used, operated, maintained and repaired in a normal
business manner.
g. PC shall use their best efforts (without making any commitments on
behalf of JDI) to preserve their business organization intact, to keep
available to JDI the present key officers and employees of PC, and to
preserve for JDI the present relationships of PC with their suppliers and
customers and others having business relations with them.
h. PC shall not do any act or omit to do any act, or permit any act or
omission to act, which will cause a material breach of any material
contract, commitment or obligation of PC. i. PC shall duly comply with all
applicable laws as may be required for the valid and effective transfer of
property, assets and business contemplated by this agreement, except that
JDI waives compliance with the provisions of any bulk sales act.
j. PC shall not sell or dispose of any property or assets except products
sold in the ordinary course of business.
k. PC shall promptly notify JDI of any lawsuits, claims, proceedings or
investigations that may be threatened, brought, asserted or commenced
against them, their officers or directors involving in any way the
business, properties or assets of PC.
l. PC will provide JDI with interim monthly financial statements and any
other management reports as and when they are available.
6. Conditions Precedent to JDI's Obligations. Each and every obligation of
JDI to be performed on the closing date shall be subject to the prior
satisfaction of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by Shareholder in this agreement or given on its behalf,
shall be substantially accurate in all material respects on and as of the
closing date with the same effect as though the representations and
warranties had been made or given on and as of the closing date.
6.2 Compliance With Covenants. Shareholder shall have performed and complied
with all its obligations under this agreement which are to be performed or
complied with by it prior to or on the closing date including the delivery
of its documents specified in subparagraph 4.1 and the closing documents
specified in subparagraph 12.2.
6.3 Absence of Suit. No suit or proceeding shall be threatened or pending in
which it will be or it is sought, by anyone, to restrain, prohibit,
challenge or obtain damages or other relief in connection with this
agreement or the consummation of the transactions contemplated, or in
connection with any material claim against PC.
6.4 No Material Adverse Change. As of the closing date there shall not have
occurred any material adverse change which materially impairs the ability
of PC to conduct its business or the earning power on the same basis as in
the past.
6.5 Accuracy of Financial Statements. JDI and its representatives shall be
satisfied as to the substantial accuracy of all balance sheets, statements
of income and other financial statements of PC furnished to JDI.
6.6 Approval of JDI's Board of Directors. This agreement shall have been
ratified by the shareholders of JDI and approved by the JDI Board of
Directors immediately following ratification.
6.7 Listing of Shares. The shares of JDI's common stock to be issued pursuant
to this agreement shall have been duly listed, or listed subject to
official notice of issuance, upon the OTC Bulletin Board.
6.8 Time Limit on Ratification. Closing shall take place by September 15,
1999.
6.9 Legal Opinion. JDI shall have received an opinion of counsel for PC
referred to in subparagraph 12.2(f).
7. Conditions Precedent to PC's Obligations. Each and every obligation of PC
to be performed on the closing date shall be subject to the prior
satisfaction of the following conditions:
7.1 Listing of Shares. The JDI's common stock to be delivered shall have been
listed, or listed subject to official notice of issuance upon the OTC
Bulletin Board. Any additional shares issued and the required name change
will be noticed, immediately after closing to the OTCBB.
7.2 Truth of Representations and Warranties. JDI's representations and
warranties contained in this agreement shall be true at and as of the
closing date as though the representations and warranties were made at and
as of the transfer date.
7.3 JDI's Compliance With Covenants. JDI shall have performed and complied
with its obligations under this agreement which are to be performed or
complied with by it prior to or on the closing date.
7.4 Limitation on Survival and Effect of Certain Warranties, Representations
and Covenants. All statements contained in any certificate, instrument or
document delivered by or on behalf of any of the parties pursuant to this
agreement and the transactions contemplated shall be deemed
representations and warranties by the respective parties.
7.5. PC's Obligations. The representations and warranties and covenants of
Shareholder contained in this agreement shall survive the closing date,
and any investigation made by JDI or its agents, and all representations,
warranties and covenants surviving shall be deemed joint and several. The
conveyance of the common shares by Shareholder will be deemed to be
acceptance of all representations, warranties and covenants contained
herein, on there behalf.
7.6. JDI's Obligations. The representations, warranties and covenants of JDI
contained in this agreement shall survive the closing date.
8. Indemnification.
8.1 Requirement of Indemnification. PC shall indemnify JDI for any loss, cost,
expense or other damage suffered by JDI resulting from, arising out of, or
incurred with respect to the falsity or the breach of any representation,
warranty or covenant made by shareholders. Without limiting the generality
of the above, JDI shall be deemed to suffer loss, costs, expense or other
damage if PC suffers loss, costs, expense or other damage.
8.2 Notice. JDI shall assert any right to indemnification by furnishing Xxxxxx
Birmingham, or any other person as may be designated in writing by
shareholders, with a written notice and list of charges detailed by item
showing the nature of any breach of any representation, warranty or
covenant, date of payment or assertion of claim, summary of settlement or
litigation procedures, and the amount of the loss, cost or expense. If the
right to indemnification is based on a claim of a third party, JDI shall
give the notice within 60 days after JDI has notice of any claim and
shareholders shall have the right to contest any such claim by a third
party but all expenses of the contest shall be borne by shareholders.
8.3 Resolution of Claim. Except in the event that the claim for
indemnification is based upon a claim of a third party and shareholders
shall have notified JDI as provided in paragraph 8.2 that they will
contest the claim, unless shareholders object to the determination or
computation of the total amount of the indemnification shown on the
written notice specified in subparagraph 8.2 within 60 days after receipt,
the total amount of indemnification shown by notice shall be paid by
shareholders to JDI. If shareholders object to the determination contained
in the written notice specified in subparagraph 8.2 within 60 days after
receipt, they shall have the right to submit any claim for indemnification
not brought by a third party to the American Arbitration Association for
binding arbitration in accordance with its rules, and the expenses of the
American Arbitration Association shall be borne equally by the parties.
8.4 Time Limit on Indemnification. No claim for indemnification may be
asserted by JDI after 90 days of notice of claim by a third party.
8.5 Amount Limit on Indemnification. Notwithstanding any other provision to
the contrary, shareholders shall not be charged with any loss, cost or
expense which in the aggregate does not exceed $ 5,000.
9. Employment Agreements, Consulting Agreements and Non-Compete Agreements.
The active shareholders and/or other key employees shall enter into either
an employment or consulting agreement with PC, subject to satisfaction in
form and substance to the post closing JDI Board of Directors. Further,
non-competition agreements shall be entered into by the key employees, for
period not to exceed two (2) years. The key employees of JDI will be
required to enter into contracts equivalent in form and substance to those
of PC.
10. Securities Act Provisions.
10.1 Restrictions on Disposition of Shares. Shareholders covenant and warrant
that the shares of common stock of JDI to be received by them pursuant to
this agreement are being acquired for their own account and for investment
and not with the present view toward sale or distribution and will not be
disposed of except (i) pursuant to an effective registration statement
under the Securities Act of 1933, as amended, or (ii) any other
transaction which, in the opinion of counsel acceptable to JDI, is exempt
from registration under the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission. In order
to effectuate the covenants of this subparagraph 10.1, an appropriate
endorsement will be placed on the certificates for shares of common stock
of JDI delivered to shareholders pursuant to this agreement and such
instructions shall be placed with the transfer agent for the securities.
10.2 Evidence of Compliance With Private Offering Exemption. Shareholder agree
to supply JDI with evidence of the financial sophistication of the
shareholder, or evidence of appointment of a sophisticated investment
representative, and any other items which counsel for JDI may require in
order to evidence the private offering character of the distribution of
shares made pursuant to this agreement.
10.3 Notice of Limitation on Distribution. Each shareholder is aware that the
shares distributed will not have been registered pursuant to the
Securities Act of 1933, as amended; and, therefore, under current
interpretations and applicable rules, he or she will probably have to
retain the shares for a period of at least one year and at the expiration
of the one year period sales may be confined to brokerage transactions of
limited amounts requiring certain notification or filings with the
Securities and Exchange Commission. The disposition of shares may be
available only if JDI is current with all required with the Securities and
Exchange Commission; and the shareholders are aware of Rule 144 issued by
the Securities and Exchange Commission under the Securities Act of 1933,
as amended, and the other limitations imposed on their disposition of
JDI's shares.
10.4 Registration Rights on Form SB-2. If shareholder shall so request in
writing,after the first anniversary of this agreement, JDI will, after
request, proceed at its own expense to prepare and to file with the
Securities and Exchange Commission ("SEC") as soon as reasonably
practicable after receipt of the request one registration statement on
Form SB-2 under the Securities Act of 1933, as amended, with respect to
all or part (as so requested) of the shares of common stock of JDI
received by the shareholder, and will use its best efforts to cause the
registration statement to become effective. JDI will, furthermore, at its
own expense, use its best efforts to keep the registration statement
current, in accordance with the rules and regulations of the SEC for the
period ending upon a date two years subsequent to the closing date or 30
days after the effectiveness, whichever occurs later.
10.5 Piggyback Rights.. In the event JDI files a registration statement under
the Securities Act of 1933, as amended, with respect to shares of its
common stock, prior to two years after this the signing of this agreement,
on a form appropriate for registering shareholders' common stock, JDI
shall give written notice to shareholders prior to filing, and
shareholders shall have the right to request to have included such shares
of JDI's common stock as shall be specified in the request; provided,
however, that the inclusion of the shares shall not interfere with JDI's
registration of its shares and that in no event shall JDI be obligated (i)
to file a registration statement at any time other than during the period
ended August 20, 2000, or (ii) to keep the prospectus with respect to the
stock current for more than 30 days after the effective date of the
registration statement; and provided, further, that all shares sold
pursuant to the registration statement are effected within the 30 day
period. If shareholders do not make a request for registration within 20
days after receipt of notice from JDI, JDI shall have no obligation to
include any shares of JDI's common stock owned by those shareholders in
the registration statement.
11. Payment of Expenses. In the event of a registration under paragraph 10,
shareholder shall pay and bear the direct selling fees, disbursements and
expenses, including without limitation all underwriters' discounts,
commissions and expenses, but no other cost of registration.
12. Signing
12.1 Time and Place. The closing of this transaction ("closing") shall take
place at the offices of JDI in Coventry, RI, on August 19, 1999, or at any
other time and place as the parties shall agree upon. This date is
referred to in this agreement as the "closing date." The closing on the
date referenced above shall be subject to the approval of the shareholders
as required under the corporate laws of the State of Delaware. JDI has
reason to believe that the requisite votes for ratification are available.
The annual meeting date is set for September 15, 1999. JDI, Patina Corp.
and all subsidiaries of either will act in unison for the common good and
as if the transaction has been ratified until such date.
12.2 Documents To Be Delivered by PC. At the closing, PC shall deliver to JDI
the following documents:
a. Certificates for 10,000,000 shares of PC's common stock in the manner
and form required by subparagraph 1.1; and no shares of PC's preferred
stock. These shares represent all of the issued and outstanding shares of
PC.
b. The minute book, stock transfer book, all books of account, records,
contracts, and other documents of PC as JDI may in writing request;
c. Written resignations effective on the closing date of all directors and
officers of PC except those designated by agreement between JDI and PC;
d. A general release, in form and substance satisfactory to JDI and its
counsel, of all claims shareholders may have to the date of closing
against any of PC and the directors, officers, agents and employees of PC
except as may be expressed in written contract and expressly described and
excepted in the release;
e. Certificates signed by the shareholders that the representations and
warranties made by the shareholders in this agreement are substantially
accurate in all material respects on and as of the closing date with the
same effect as though the representations and warranties had been made on
or given on and as of the closing date and that shareholders have
performed and complied with all their obligations under this agreement
which are to be performed or complied with by or prior to or on the
closing date;
f. A written opinion from counsel for PC and shareholder stated as of the
closing date addressed to JDI satisfactory in form and substance to JDI to
the effect that:
1. Ownership of PC's common stock is as stated in subparagraph
2.1;
2. The corporate existence and good standing, qualification of PC
and authorized and issued stock of PC are as stated in
subparagraph 2.2;
3. This agreement has been duly executed and duly delivered by
each shareholder and constitutes a legal, valid and binding
obligation of each shareholder enforceable in accordance with
its terms;
4. Counsel has no knowledge of any of the proceedings as stated
in subparagraph 2.5(e);
5. To the best of counsel's knowledge PC is in compliance with
all statutes, regulations, rules and executive orders of all
government authority as stated in subparagraph 2.5(d); or
6. To the best of counsel's knowledge shareholder representations
and warranties in subparagraphs 2.5(h) and 2.5(l) are true and
correct; and
g. Certificates or letters from each shareholder evidencing the taking of
shares in accordance with the provisions of paragraph 10 and their
understanding of the restrictions;
h. The balance sheet of PC as of the September 1, 1999 representing net
assets with a fair market value of $3,500,000 with no known or contingent
liabilities. The balance sheet shall be audited using generally accepted
auditing standard and be prepared by an independent auditor chosen and
paid for by PC, with the credentials for acceptance by the Securities and
Exchange Commission and the current auditors of JDI.
i. PC shall have been awarded or executed contracts with a face valueue of
$10,000,000 with an estimated 20% profit EBITDA.
j. PC shall have raised a minimum of $2,000,000 in new capital to sustain
operations for the committed contracts and to provide JDI's newly formed
subsidiary with one half of this amount or one half of all amounts in
excess of $2,000,000 up to a total of $1,750,000. This capitalization must
be escrowed by September 13, 1999 and accessible immediately following
ratification of this contract by the JDI shareholders.
k. Any other documents of transfer, certificates of authority, and other
documents as JDI may reasonably request.
13. Documents To Be Delivered by JDI. At the closing JDI shall deliver to
shareholders the following documents:
a. Certificates for the number of shares of JDI's common stock as
determined in subparagraph 1.2. These shares are to be registered in the
name and denominations as shareholders may specify.
b. A true copy of the filing showing the designation of preferred shares.
c. A written opinion of counsel for JDI dated as of the closing date,
addressed to the shareholders and satisfactory in form and substance to
counsel for shareholders, to the effect that:
d. JDI's corporate existence and good standing are as set forth in
subparagraph 3.1;
e. This agreement has been duly authorized, executed and delivered by JDI
and is a valid and legally binding obligation of JDI enforceable in
accordance with its terms; and
1. JDI has taken the corporate action necessary to authorize the
performance of the obligations imposed upon it by this
agreement.
f. A certified copy of the duly adopted resolutions of JDI's board of
directors or executive committee authorizing or ratifying the execution,
delivery and performance of this agreement and authorizing or ratifying
the acts of its officers and employees in carrying out its terms and
provisions.
g. Concurrent with the closing of the transaction, JDI will cause its
current assets, liabilities and business operations to become a newly
formed, wholly owned subsidiary of the JDI parent. The Officers and
Directors of the wholly owned subsidiary will remain as they were prior to
the restructuring.
14. Disengagement. In the event this transaction must be unwound for any
purpose, including but not limited to regulatory action, the inability to
list the companies stock on a viable public exchange or actions of any
parties making the continuation of the business combination nonviable, the
parties will restore themselves to the relative positions on the date of
closing. In the event that PC or its combined subsidiaries have not been
awarded $25,000,000 in contracts by 2/28/00 or if funding of $2,500,000
has not taken place by 2/28/00, to the newly formed clothing subsidiary an
orderly disengagement may take place by a majority vote in favor of
disengagement by the parent company board of directors with Xxxxxx
Birmingham and his nominees abstaining.
15. Post Ratification. The parties acknowledge that immediately after the
closing, the Board of Directors shall have seven members consisting of:
Xxxxx XxXxxxx and two nominees of Xxxxx XxXxxxx, Xxxxxx Birmingham and two
nominees of Xxxxxx Birmingham, and Xxxxxxx Xxxxxxxx or the nominee of
Union Labor Life Insurance Co. (ULLICO). JDI will cause a new subsidiary
to be incorporated and all of the current operational assets, liabilities
and related equity will be organized as the opening balance sheet
The Officers shall be Norman Birmingham as President, CFO Xxxxxxx X.
Xxxxxxxx, a Secretary nominated by the Board of Directors and a position
of authority for Xxxxx XxXxxxx, as desired.
All officers and directors of the subsidiary companies shall remain as
they were on the date of the signing of the letter of intent. The newly
formed clothing subsidiary will carry with it as many officers and
directors as desired by Xxxxx XxXxxxx.
15.1 Law Governing. This agreement may not be modified or terminated orally,
and shall be construed and interpreted according to the laws of the State
of Delaware.
15.2. Assignment. This agreement shall not be assigned by any party without the
written consent of the others.
15.3. Amendment and Modification. JDI and shareholders may amend, modify and
supplement this agreement in any manner as may be agreed upon by them in
writing. In the event any requirement pertaining to SEC or NASDAQ OTCBB
regulations or any securities laws of the State of Delaware or any term or
condition stipulated in the binding letter of intent dated August 3, 1999
has been omitted such terms shall by added by amendment and attached
hereto.
16. Termination and Abandonment. This agreement may be terminated and the
transaction provided for by this agreement may be abandoned without
liability on the part of any party to any other, at any time before the
closing date:
a. By mutual consent of JDI and PC
b. By JDI:
1. If any of the conditions provided for in paragraph 6 and 12 of
this agreement have not been met and have not been waived in
writing by JDI; or
c. By PC:
1. If any of the conditions provided for in paragraph 7 and 13 of
this agreement have not been met and have not been waived in
writing by PC.
In the event of termination and abandonment by any party as provided
above in this paragraph 16, written notice shall be given to the other party,
and each party shall pay its own expenses incident to preparation for the
consummation of this agreement and the transactions contemplated.
17. Notices. All notices, requests, demands and other communications shall be
deemed to have been duly given, if delivered by hand or mailed, certified
or registered mail with postage prepaid:
a. If to PC to:
Xxxxxx Birmingham
000 Xxxxxxx Xxxx.
Xxxxx 000.
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
or to such other person and place as shareholders shall have
specified to JDI in writing; or
b. If to JDI, to:
Xxxxx XxXxxxx
00 Xxx Xxxx Xxxxx Xx
Xxxxxxxx, XX 00000
or to such other person and place as JDI shall have specified to
shareholders in writing.
18. Announcements. Any and all announcements concerning the transactions
provided for in this agreement must be mutually agreed to by the parties.
19. Entire Agreement. This instrument embodies the entire agreement between
the parties with respect to the transactions contemplated, and there have
been and are no agreements, representations or warranties between the
parties other than those set forth or provided for.
20. Counterparts. This agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Facsimile
signatures are acceptable and valid.
21. Headings. The headings in the paragraphs of this agreement are inserted
for convenience only and shall not constitute a part of the agreement.
22. Further Documents. JDI and PC agree to execute any and all other
documents, and to take any other action or corporate proceedings which may
be necessary or desirable to carry out the terms of this agreement.
IN WITNESS OF, the parties have caused this agreement to be duly executed
all as of the day and year first written above.
JD AMERICAN WORKWEAR, INC. PATINA CORPORATION
a Delaware corporation a Florida corporation
By:______________________________ By:_________________________________
Xxxxx X XxXxxxx, President Xxxxxx X. Birmingham, President
ATTEST: ATTEST:
____________________________________ ____________________________________
Xxxxxxx X. Xxxxxxxx, Secretary Xxxxx X. Xxxxxx, Secretary
Schedule 1
Shareholder Patina JDI
Of Preferred Shares with voting rights
Trustee, Veche Trust 1,534 1,534
M. C. Chillingworth 532 532
Trustee, X Trust 266 266
Trustee, Y Trust 266 266
Xxxxxx X. Birmingham 532 532
Xxxx X. Xxxxxx P.A 99 99
Xxxxxxx Xxxxxxx 100 100
--------- ---------
Total 3,329 3,329
Patina Corp. Earn Up Shares Common 5,000,000 5,000,000
--------- ---------
JDI sets aside 1,500,000 common shares for capital raising.
Amendment to the Agreement
Between
JD American Workwear, Inc.
And Patina Corp.
Dated August 19, 1999
Section 2.1 will have the following statement added as the final sentence:
Shareholders are the record and beneficial owners and holders of the number
fully paid and non-assessable shares of PC's preferred shares as listed in
schedule 1. These preferred shareholders agree to the same terms and conditions
as stipulated by the common shareholders in this paragraph 2.1.
Section 2.2 (a) is removed in its entirety and replaced with the following:
PC is a corporation duly organized, validly existing and in good standing under
the laws of the State of Florida with all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as now being conducted, and is duly qualified and in good standing in every
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes qualification necessary. The authorized
stock, consisting of 10,000,000 common shares of which five million are issued
and outstanding and held in escrow to fund the earn-up provisions of various
employment agreements. Additional authorized stock consists of 5,000,000 shares
of preferred stock, with 3,329 shares issued and outstanding. The preference
stipulates a conversion privilege of 1,000 shares of common stock per share of
preferred stock held. Each preferred share also contains voting privileges on as
converted basis. The stated dividend is 6% per annum payable annually. The
stated value of each outstanding preferred share is $1,000.
Section 12.2 (a) is removed in its entirety and replaced with the following:
Certificates for 5,000,000 shares of PC's common stock in the manner and form
required by subparagraph 1.1; and 3,329 shares of PC's preferred stock. These
shares represent all of the issued and outstanding shares of PC.
Section 12.2 (f) 1 is removed and replaced in its entirety with the following:
Ownership of PC's common and preferred stock is as is stated in subparagraph
2.1;
Section 12.2 (h) the value specified is reduced to $3,329,000.
Section 12.2 (j) is rendered moot by the actions of the JDI board of directors,
October 1, 1999 authorizing the sale of the 1,500,000 common shares by JDI that
were originally set aside for capital raising by PC's shareholders.
Section 13 (a) is amended by replacing " common shares" with the following:
common and preferred shares
Section 14 the statement if funding of $2,500,000 has not taken place by 2/28/00
is omitted.
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Section 17 (a) address correction to;
00000 XX 00xx Xx., Xxxxx Xxxxxxx, XX 00000
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