10.1 Agreement and Plan of Organization
EXHIBIT 10.1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement"), dated as of
March 27, 2006, is made by and among Xxxxx Sports Turf, Inc., a Delaware
corporation (the "Company"), E Cash, Inc., a New Jersey corporation (herein
"E-Cash") and the Person named in Exhibit A hereto (the "E-Cash Shareholder").
BACKGROUND
The E-Cash Shareholder has agreed to transfer to the Company, and the
Company has agreed to acquire from the E-Cash Shareholder, all of the issued and
outstanding capital shares of E-Cash (the "E- Cash Shares), in exchange for
Twenty Million (20,000,000) post 1 for 400 reverse split shares of the Company's
Common Stock to be issued on the Closing Date (the "Company Shares"), which
Company Shares shall constitute 95 % of the issued and outstanding shares of the
Company's total issued and outstanding Common Stock immediately after the
closing of the transactions contemplated herein, in each case on the terms and
conditions as set forth herein.
SECTION I
DEFINITIONS
Unless the context otherwise requires, the terms defined in this Section I
will have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.
1.1 "Accredited Investor" has the meaning set forth in Regulation D under
the Securities Act and set forth on Exhibit B.
1.2 "E-Cash" means, collectively, E-Cash, Inc. and its Subsidiaries, if
any.
1.3 "Company Balance Sheet" means the Company's audited balance sheet at
December 31, 2004, included in its Form 10-KSB for its fiscal year ended
December 31, 2004, with such audited financial statements being made a part
hereof as if fully set forth and repeated herein.
1.4 "Company Board" means the Board of Directors of the Company.
1.5 "Company" means, collectively, the Company and its Subsidiaries, if
any.
1.6 "Company Common Stock" means Xxxxx Sports Turf, Inc. common stock, par
value $0.001 per share.
1.7 "Affiliate" means any Person that directly or indirectly controls, is
controlled by or is under common control with the indicated Person.
1.8 "Agreement" means this Agreement and Plan of Reorganization, including
all Schedules and Exhibits hereto, as the same may be from time to time amended,
modified or supplemented.
1.9 "Approved Plans" means a stock option or similar plan for the benefit
of employees or others which has been approved by the stockholders of the
Company.
1.10 "Company Common Shares" means the aggregate number of the Company's
restricted and unregistered common shares to be issued to the E-Cash Shareholder
at Closing.
1.11 "Closing Date" has the meaning set forth in Section 3.
1.12 "Code" means the Internal Revenue Code of 1986, as amended.
1.13 "E-Cash Shares" means issued and outstanding common stock, no par
value per share, of E-Cash.
1.14 "Commission" means the Securities and Exchange Commission or any other
federal agency then administering the Securities Act.
1.15 "Company Board" means the Board of Directors of the Company.
1.16 "Company Indemnified Party" has the meaning set forth in Section
12.2.1.
1.17 "Covered Persons" means all Persons, other than the Company, who are
parties to indemnification and employment agreements with the Company existing
on or before the Closing Date.
1.18 "Damages" has the meaning set forth in Section 12.1.
1.19 "Distributor" means any underwriter, dealer or other Person who
participates, pursuant to a contractual arrangement, in the distribution of the
securities offered or sold in reliance on Regulation S.
1.20 "Environmental Laws" means any Law or other requirement relating to
the environment, natural resources, or public or employee health and safety.
1.21 "Environmental Permit" means all licenses, permits, authorizations,
approvals, franchises and rights required under any applicable Environmental Law
or Order.
1.22 "Equity Security" means any stock or similar security, including,
without limitation, securities containing equity features and securities
containing profit participation features, or any security convertible into or
exchangeable for, with or without consideration, any stock or similar security,
or any security carrying any warrant, right or option to subscribe to or
purchase any shares of capital stock, or any such warrant or right.
1.23 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.24 "Exchange Act" means the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will then be in effect.
1.25 "Exhibits" means the several exhibits referred to and identified in
this Agreement, as follows:
Name and address of the record and beneficial holder of
all of the outstanding Equity securities of E-Cash. Exhibit A
Definition of Accredited Investor Exhibit B
Definition of U.S. person Exhibit C
Transfer Restrictions on Company Common Shares Exhibit D
Representations and Warranties of E-Cash Shareholder Exhibit E
Conditions Precedent to Closing Exhibit F
1.26 "GAAP" means, with respect to any Person, United States generally
accepted accounting principles applied on a consistent basis with such Person's
past practices.
1.27 "Governmental Authority" means any federal or national, state or
provincial, municipal or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, commission, court, tribunal,
official, arbitrator or arbitral body, in each case whether U.S. or non-U.S.
1.28 "Indebtedness" means any obligation, contingent or otherwise. Any
obligation secured by a Lien on, or payable out of the proceeds of, or
production from, property of the relevant party will be deemed to be
Indebtedness.
1.29 "Indemnified Persons" has the meaning set forth in Section 8.6.1.
1.30 "Intellectual Property" means all industrial and intellectual
property, including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service xxxx
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world.
1.31 "Laws" means, with respect to any Person, any U.S. or non- U.S.
federal, national, state, provincial, local, municipal, international,
multinational or other law (including common law), constitution, statute, code,
ordinance, rule, regulation or treaty applicable to such Person.
1.32 "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including, without limitation, any conditional sale
or other title retention agreement, any lease in the nature thereof and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction and including any lien or charge arising by
Law.
1.33 "Material Company Contract" means any and all agreements, contracts,
arrangements, leases, commitments or otherwise, of the Company, of the type and
nature that the Company is required to file with the Commission.
1.34 "Material Adverse Effect" means, when used with respect to the Company
or E-Cash, as the case may be, any change, effect or circumstance which,
individually or in the aggregate, would reasonably be expected to (a) have a
material adverse effect on the business, assets, financial condition or results
of operations of the Company or E-Cash, as the case may be, in each case taken
as a whole or (b) materially impair the ability of the Company or E-Cash, as the
case may be, to perform their obligations under this Agreement, excluding any
change, effect or circumstance resulting from (i) the announcement, pendency or
consummation of the transactions contemplated by this Agreement, (ii) changes in
the United States securities markets generally, or (iii) changes in general
economic, currency exchange rate, political or regulatory conditions in
industries in which the Company or E-Cash, as the case may be, operate.
1.35 "Order" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any
Governmental Authority.
1.36 "Organizational Documents" means (a) the articles or certificate of
incorporation and the by-laws or code of regulations 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) the articles or certificate of formation and
operating agreement of a limited liability company; (e) any other document
performing a similar function to the documents specified in clauses (a), (b),
(c) and (d) adopted or filed in connection with the creation, formation or
organization of a Person; and (f) any and all amendments to any of the
foregoing.
1.37 "PCAOB" means the Public Company Accounting Oversight Board.
1.38 "Permitted Liens" means (a) Liens for Taxes not yet payable or in
respect of which the validity thereof is being contested in good faith by
appropriate proceedings and for the payment of which the relevant party has made
adequate reserves; (b) Liens in respect of pledges or deposits under workmen's
compensation laws or similar legislation, carriers, warehousemen, mechanics,
laborers and materialmen and similar Liens, if the obligations secured by such
Liens are not then delinquent or are being contested in good faith by
appropriate proceedings conducted and for the payment of which the relevant
party has made adequate reserves; (c) statutory Liens incidental to the conduct
of the business of the relevant party which were not incurred in connection with
the borrowing of money or the
obtaining of advances or credits and that do not in the aggregate materially
detract from the value of its property or materially impair the use thereof in
the operation of its business; and (d) Liens that would not have a Material
Adverse Effect.
1.39 "Person" means all natural persons, corporations, business trusts,
associations, companies, partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political subdivisions.
1.40 "Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative or
investigative) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Authority.
1.41 "Regulation S" means Regulation S under the Securities Act, as the
same may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
1.42 "Rule 144" means Rule 144 under the Securities Act, as the same may be
amended from time to time, or any successor statute.
1.43 "Schedule 14(f) Filing" means an information statement filed by the
Company on Schedule 14f-1 under the Exchange Act.
1.44 "Schedules" means the following schedules referred to and identified
herein, setting forth certain disclosures, exceptions and other information,
data and documents referred to at various places throughout this Agreement:
Brokers or Finders engaged by E-Cash Shareholder Schedule 4.1.5
Liens on E-Cash Shares Schedule 4.3.8
E-Cash Jurisdictions Schedule 5.1
Company Jurisdictions Schedule 6.1
Subsidiaries of the Company Schedule 6.2
Outstanding Company securities obligations Schedule 6.8.1
Brokers or Finders engaged by the Company Schedule 6.11
Undisclosed Liabilities of the Company Schedule 6.12
Company changes subsequent to 12/31/2005 Schedule 6.13
Agreements of the Company Schedule 6.13.14
Company employment contracts Schedule 6.15.2
Company exceptions - Taxes Schedule 6.16.1
1.45 "SEC Documents" has the meaning set forth in Section 6.26.
1.46 "Section 4(2)" means Section 4(2) under the Securities Act, as the
same may be amended from time to time, or any successor statute.
1.47 "Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will be in effect at the time.
1.48 "Subsidiary" means, with respect to any Person, any corporation,
limited liability company, joint venture or partnership of which such Person (a)
beneficially owns, either directly or indirectly, more than 50% of (i) the total
combined voting power of all classes of voting securities of such entity, (ii)
the total combined equity interests, or (iii) the capital or profit interests,
in the case of a partnership; or (b) otherwise has the power to vote or to
direct the voting of sufficient securities to elect a majority of the board of
directors or similar governing body.
1.49 "Survival Period" has the meaning set forth in Section 12.1.
1.50 "Taxes" means all foreign, federal, state or local taxes, charges,
fees, levies, imposts, duties and other assessments, as applicable, including,
but not limited to, any income, alternative minimum or add-on, estimated, gross
income, gross receipts, sales, use, transfer, transactions, intangibles, ad
valorem, value-added, franchise, registration, title, license, capital, paid-up
capital, profits, withholding, payroll, employment, unemployment, excise,
severance, stamp, occupation, premium, real property, recording, personal
property, federal highway use, commercial rent, environmental (including, but
not limited to, taxes under Section 59A of the Code) or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest, penalties or additions to
tax with respect to any of the foregoing; and "Tax" means any of the foregoing
Taxes.
1.51 "Tax Group" means any federal, state, local or foreign consolidated,
affiliated, combined, unitary or other similar group of which the Company is now
or was formerly a member.
1.52 "Tax Return" means any return, declaration, report, claim for refund
or credit, information return, statement or other similar document filed with
any Governmental Authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
1.53 "Transaction Documents" means, collectively, all agreements,
instruments and other documents to be executed and delivered in connection with
the transactions contemplated by this Agreement.
1.54 "U.S." means the United States of America.
1.55 "U.S. person" has the meaning set forth in Regulation S under the
Securities Act and set forth on Exhibit C hereto.
SECTION II
EXCHANGE OF SHARES AND SHARE CONSIDERATION
2.1 Share Exchange. The E-Cash Shareholders desires to transfer to, and the
Company desires to acquire from the E-Cash Shareholder, that number of E-Cash
Shares set out beside the name of the E-Cash Shareholder in Exhibit B for the
consideration and on the terms set forth in this Agreement. Subject to Section
3.2, the aggregate consideration for the E-Cash Shares to be acquired by the
Company pursuant to this Agreement will be Twenty Million (20,000,000) post 1
for 400 reverse split shares of Company Common Stock to be issued to the
Shareholder based on the E-Cash Shares owned by such E-Cash Shareholder as set
forth in Exhibit B.
2.2 Withholding. The Company shall be entitled to deduct and withhold from
the Company Common Shares otherwise payable pursuant to this Agreement to any
holder of E-Cash Shares such amounts as it is required to deduct and withhold
with respect to the making of such payment under the Code or any provision of
state, local, provincial or foreign tax Law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of E-Cash Shares in respect of which
such deduction and withholding was made.
2.3 Section 368 Reorganization. For U.S. federal income tax purposes, the
exchange by the E-Cash Shareholder of the E-Cash Shares for the Company Common
Stock is intended to constitute a "reorganization" within the meaning of Section
368(a)(1)(B) of the Code. The parties to this Agreement hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement, the parties acknowledge and agree that no party is making any
representation or warranty as to the qualification of the exchange by the E-Cash
Shareholder of the E-Cash Shares for the Company Common Stock as a
reorganization under Section 368 of the Code or as to the effect, if any, that
any transaction consummated prior to the Closing has or may have on any such
reorganization status. The parties acknowledge and agree that each (i) has had
the opportunity to obtain independent legal and tax advice with respect to the
transaction contemplated by this Agreement, and (ii) is responsible for paying
its own Taxes including without limitation, any adverse Tax consequences that
may result if the transaction contemplated by this Agreement is not determined
to qualify as a reorganization under Section 368 of the Code.
2.4 Directors of Company at Closing. Simultaneously with the Closing of the
transactions contemplated by this Agreement and after compliance by the Company
with all associated requirements of the Securities Exchange Act, the current
director of the Company, Xx. Xxxx Xxxxxxxx, shall appoint Xxxxxxx Xxxxxxxx,
Xxxxxx Xxxxxxxxx and Xxxxxxx Xxxxxxx to vacant director positions of the Company
Board. Immediately thereafter, Xx. Xxxx Xxxxxxxx shall resign as a director of
the Company.
SECTION III
CLOSING
3.1 Closing. The closing (the "Closing") of the transactions contemplated
by this Agreement will occur at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
on April 24, 2006 or at such other date as all of the closing conditions set
forth in Sections 9 and 10 have been satisfied or waived (the "Closing Date").
At the Closing, each E-Cash Shareholder will deliver to the Company
certificate(s) evidencing the number of E-Cash Shares held by such E-Cash
Shareholder (as set forth in Exhibit B), along with executed stock powers
transferring such E-Cash Shares to the Company, against delivery to each E-Cash
Shareholder by the Company of a certificate evidencing such E-Cash Shareholder's
pro rata share of the Company Common Shares (as set forth in Exhibit B).
SECTION IV
REPRESENTATIONS AND WARRANTIES OF E-CASH SHAREHOLDER
4.1 Generally. The E-Cash Shareholder hereby represents and warrants to the
Company:
4.1.1 Authority. The E-Cash Shareholder has the right, power,
authority and capacity to execute and deliver this Agreement and each of the
Transaction Documents to which the E-Cash Shareholder is a party, to consummate
the transactions contemplated by this Agreement and each of the Transaction
Documents to which the E-Cash Shareholder is a party, and to perform the E-Cash
Shareholder's obligations under this Agreement and each of the Transaction
Documents to which the E-Cash Shareholder is a party. This Agreement has been,
and each of the Transaction Documents to which the E-Cash Shareholder is a party
will be, duly and validly authorized and approved, executed and delivered by the
E-Cash Shareholder. Assuming this Agreement and the Transaction Documents have
been duly and validly authorized, executed and delivered by the parties thereto
other than the E-Cash Shareholder, this Agreement is, and as of the Closing each
of the Transaction Documents to which the E-Cash Shareholder is a party will
have been, duly authorized, executed and delivered by the E-Cash Shareholder and
constitute or will constitute the legal, valid and binding obligation of the
E-Cash Shareholder, enforceable against the E-Cash Shareholder in accordance
with their respective terms, except as such enforcement is limited by general
equitable principles, or by bankruptcy, insolvency and other similar Laws
affecting the enforcement of creditors' rights generally.
4.1.2 No Conflict. Neither the execution or delivery by the E-Cash
Shareholder of this Agreement or any Transaction Document to which the E-Cash
Shareholder is a party, nor the consummation or performance by the E-Cash
Shareholder of the transactions contemplated hereby or thereby will, directly or
indirectly, (a) contravene, conflict with, or result in a violation of any
provision of the Organization Documents of the E-Cash Shareholder (if the E-
Cash Shareholder is not a natural person); (b) contravene, conflict with,
constitute a default (or an event or condition which, with notice or lapse of
time or both, would constitute a default) under, or result in the termination or
acceleration of, any agreement or instrument to which the E-Cash Shareholder is
a party or by which the
properties or assets of the E-Cash Shareholder are bound; or (c) contravene,
conflict with, or result in a violation of, any Law or Order to which the E-Cash
Shareholder, or any of the properties or assets of the E-Cash Shareholder, may
be subject.
4.1.3 Ownership of E-Cash Shares. The E-Cash Shareholder owns, of
record and beneficially, and has good, valid and indefeasible title to and the
right to transfer to the Company pursuant to this Agreement, the E-Cash Shares
of the E-Cash Shareholder, free and clear of any and all Liens. There are no
options, rights, voting trusts, stockholder agreements or any other contracts or
understandings to which the E-Cash Shareholder is a party or by which the E-Cash
Shareholder or the E-Cash Shares of the E-Cash Shareholder are bound with
respect to the issuance, sale, transfer, voting or registration of the E-Cash
Shares of the E-Cash Shareholder. At the Closing, the Company will acquire good,
valid and marketable title to the E-Cash Shares of the E-Cash Shareholder, free
and clear of any and all Liens.
4.1.4 Litigation. There is no pending Proceeding against the E-Cash
Shareholder that challenges, or may have the effect of preventing, delaying or
making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement and, to the knowledge of the E-Cash Shareholder,
no such Proceeding has been threatened, and no event or circumstance exists that
is reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding.
4.1.5 No Brokers or Finders. Except as disclosed in Schedule 4.1.5, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against the E-Cash Shareholder for any commission, fee
or other compensation as a finder or broker, or in any similar capacity, and the
E-Cash Shareholder will indemnify and hold the Company harmless against any
liability or expense arising out of, or in connection with, any such claim.
4.2 Investment Representations. The E-Cash Shareholder hereby represents
and warrants to the Company as follows:
4.2.1 Acknowledgment. The E-Cash Shareholder understands and agrees
that the Company Common Shares have not been registered under the Securities Act
or the securities laws of any state of the U.S. and that the issuance of the
Company Common Shares is being effected in reliance upon an exemption from
registration afforded either under Section 4(2) of the Securities Act for
transactions by an issuer not involving a public offering or Regulation S for
offers and sales of securities outside the U.S.
4.2.2 Status. By its execution of this Agreement, the E- Cash
Shareholder represents and warrants to the Company as indicated on the signature
page to this Agreement, either that:
(a) he is an Accredited Investor; or
(b) he has the right to acquire Company Common Shares under the terms
of this Agreement.
The E-Cash Shareholder understands that the Company Common Shares are being
offered and sold to the E-Cash Shareholder in reliance upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of the E- Cash Shareholder set forth in this Agreement, in order
that the Company may determine the applicability and availability of the
exemptions from registration of the Company Common Shares on which the Company
is relying.
4.2.3 Additional Representations and Warranties of Accredited
Investor. The E-Cash Shareholder indicating that it is an Accredited Investor on
the signature page to this Agreement further makes the representations and
warranties to the Company set forth on Exhibit E.
4.2.4 Stock Legends. The E-Cash Shareholder hereby acknowledges and
agrees with the Company as follows:
(a) Restriction on Transfer Legend. The certificates evidencing the
Company Common Shares will bear a legend indicating that the Company Common
Shares are not registered under any securities Laws and may only be transferred
pursuant to a registration statement or an available exemption from the
registration requirements of such Laws.
(b) Other Legends. The certificates representing such Company Common
Shares, and each certificate issued in transfer thereof, will also bear any
other legend required under any applicable Law, including, without limitation,
any U.S. state corporate and state securities law, or contract.
(c) Opinion. No Shareholder will transfer any or all of the Company
Common Shares absent an effective registration statement under the Securities
Act and applicable state securities law covering the disposition of the Company
Common Shares of the E-Cash Shareholder, without first providing the Company
with an opinion of counsel (which counsel and opinion are reasonably
satisfactory to the Company) to the effect that such transfer will be exempt
from the registration and prospectus delivery requirements of the Securities Act
and the registration or qualification requirements of any applicable U.S. state
securities laws.
(d) Consent. The E-Cash Shareholder understands and acknowledges that
the Company may refuse to transfer the Company Common Shares of the E-Cash
Shareholder unless the E-Cash Shareholder complies with this Section 4.2.4. The
E-Cash Shareholder consents to the Company making a notation on its records or
giving instructions to any transfer agent of the
Company Common Stock in order to implement the restrictions on transfer of the
Company Common Shares.
4.3 Concerning E-Cash. The E-Cash Shareholder hereby represents and
warrants to the Company as follows concerning E-Cash:
4.3.1 Organization and Qualification. E-Cash is duly incorporated and
validly existing under the laws of the State of New Jersey, has all requisite
authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to carry on its business as presently
conducted and as contemplated to be conducted, to own, hold and operate its
properties and assets as now owned, held and operated by it, except where the
failure to be so organized, existing and in good standing or to have such
authority or power will not, in the aggregate, either (i) have a material
adverse effect on the business, assets or financial condition of E-Cash, or (ii)
materially impair the ability of the E-Cash Shareholder to perform his material
obligations under this Agreement (any of such effects or impairments, a
"Material Adverse Effect"). E-Cash is duly qualified, licensed or domesticated
as a foreign corporation in good standing in each jurisdiction wherein the
nature of its activities or its properties owned or leased makes such
qualification, licensing or domestication necessary, except where the failure to
be so qualified, licensed or domesticated will not have a Material Adverse
Effect. Set forth on Schedule 5.1 is a list of those jurisdictions in which
E-Cash presently conducts its business, owns, holds and operates its properties
and assets.
4.3.2 Subsidiaries. E-Cash does not own directly or indirectly, any
equity or other ownership interest in any corporation, partnership, joint
venture or other entity or enterprise.
4.3.3 Articles of Incorporation and Bylaws. The copies of the Articles
of Incorporation of E-Cash as amended to date (the "E-Cash Organizational
Documents") that have been delivered to the Company prior to the execution of
this Agreement are true and complete and have not been further amended or
repealed. E-Cash is not in violation or breach of any of the provisions of the
E-Cash Organizational Documents, except for such violations or breaches as, in
the aggregate, will not have a Material Adverse Effect.
4.3.4 Authorization and Validity of this Agreement. The execution,
delivery and performance by the E-Cash Shareholder of this Agreement and the
recording of the transfer of the E-Cash Shares and the delivery of the E-Cash
Shares do not require from the Board or shareholders of E-Cash any consent or
approval that has not been validly and lawfully obtained, require no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board
,bureau, agency or instrumentality of government that has not been validly and
lawfully obtained, filed or registered, as the case may be, except for those
that, if not
obtained or made would not have a Material Adverse Effect.
4.3.5 No Violation. None of the execution, delivery or performance by
the E-Cash Shareholder of this Agreement or any other agreement or instrument
contemplated hereby to which the E-Cash Shareholder is a party, nor the
consummation by the E-Cash Shareholder of the transactions contemplated hereby
will violate any provision of the E-Cash Organizational Documents, or violate or
be in conflict with, or constitute a default (or an event or condition which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination or acceleration of, or result in the creation of
imposition of any Lien under any agreement or instrument to which E- Cash is a
party or by which E-Cash is or will be bound or subject, or violate any laws.
4.3.6 Capitalization. The authorized capital stock of E- Cash consists
of 2,500 shares of Common Stock, of which ten ( 10 ) shares are issued and
outstanding. There are no outstanding or authorized options, warrants, calls,
subscriptions, rights (including any preemptive rights or rights of first
refusal), agreements or commitments of any character obligating E-Cash to issue
any Equity Security of E-Cash. All issued and outstanding shares of the capital
stock of E-Cash are duly authorized, validly issued, fully paid and non
assessable and have not been issued in violation of any preemptive or similar
rights.
4.3.7 No Redemption Requirements. There are no outstanding contractual
obligations (contingent or otherwise) requiring E-Cash to retire, repurchase,
redeem or otherwise acquire any outstanding shares of capital stock of, or other
ownership interests in, E-Cash or to provide funds to or make any investment (in
the form of a loan, capital contribution or otherwise) in any other entity.
4.3.8 Exchanged E-Cash Shares. Upon delivery to the Company of
certificates therefore in accordance with the terms of this Agreement, the
E-Cash Shares will have been validly issued and fully paid and will be
non-assessable, have the rights, preferences and privileges specified, will be
free of preemptive rights and will be free and clear of all Liens and
restrictions, other than Liens set forth on Schedule 4.3.8 or that might have
been created by the Company and restrictions on transfer imposed by this
Agreement and the Securities Act.
4.3.9 E-Cash Shareholder. Exhibit A contains a true and complete list
of the names and addresses of the record and beneficial holders of all of the
outstanding Equity Securities of E-Cash. Except as expressly provided in this
Agreement, no Holder of E-Cash Shares or any other security of E-Cash or any
other Person was entitled to any preemptive right, right of first refusal or
similar right as a result of the issuance of the E-Cash Shares or otherwise.
There is no voting trust agreement or arrangement among any of the Holders of
any Equity Securities of E-Cash affecting the exercise of the voting rights of
any such Equity Securities.
4.3.10 Compliance with Laws and Other Instruments. Except
as would not have a Material Adverse Effect, the business and operations of
E-Cash have been and are being conducted in accordance with all applicable
foreign, federal, state and local laws, rules and regulations and all applicable
orders, injunctions, decrees, writs, judgments, determinations and awards of all
courts and governmental agencies and instrumentalities. Except as would not have
a Material Adverse Effect, E-Cash is not, and is not alleged to be, in violation
of, or (with or without notice or lapse of time or both) in default under, or in
breach of, any term or provision of the E-Cash Organizational Documents or of
any indenture, loan or credit agreement, note, deed of trust, mortgage, security
agreement or other material agreement, lease, license or other instrument,
commitment, obligation or arrangement to which E-Cash is a party or by which any
of the properties, assets or rights of E-Cash are bound or affected. To the
knowledge of the E-Cash Shareholder, no other party to any material contract,
agreement, lease, license, commitment, instrument or other obligation to which
E-Cash is a party is (with or without notice or lapse of time or both) in
default thereunder or in breach of any term thereof. E-Cash is not subject to
any obligation or restriction of any kind or character, nor is there, to the
knowledge of the E-Cash Shareholder, any event or circumstance relating to
E-Cash that materially and adversely affects in any way its business,
properties, assets or prospects or that prohibits E-Cash from entering into this
Agreement or would prevent or make burdensome its performance of or compliance
with all or any part of this Agreement or the consummation of the transactions
contemplated hereby or thereby.
4.3.11 Certain Proceedings. There is no pending Proceeding that has
been commenced against E-Cash and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated in this Agreement. To the knowledge of the E-Cash
Shareholder, no such Proceeding has been threatened.
4.3.12 No Brokers or Finders. No person has, or as a result of the
transactions contemplated herein will have, any right or valid claim against
E-Cash for any commission, fee or other compensation as a finder or broker, or
in any similar capacity, and the E-Cash Shareholder will indemnify and hold the
Company harmless against any liability or expense arising out of, or in
connection with, any such claim.
4.3.13 Title to and Condition of Properties. E-Cash owns or holds
under valid leases or other rights to use all real property, plants, machinery
and equipment necessary for the conduct of the business of E-Cash as presently
conducted, except where the failure to own or hold such property, plants,
machinery and equipment would not have a Material Adverse Effect on E-Cash. The
material buildings, plants, machinery and equipment necessary for the conduct of
the business of E-Cash as presently conducted are structurally sound, are in
good operating
condition and repair and are adequate for the uses to which they are being put,
in each case, taken as a whole, and none of such buildings, plants, machinery or
equipment is in need of maintenance or repairs, except for ordinary, routine
maintenance and repairs that are not material in nature or cost.
SECTION V
[INTENTIONALLY OMITTED]
SECTION VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the E-Cash Shareholder as follows:
6.1 Organization and Qualification. The Company is duly organized, validly
existing and in good standing under the laws of Delaware, has all requisite
authority and power (corporate and other), governmental licenses,
authorizations, consents and approvals to carry on its business as presently
conducted and to own, hold and operate its properties and assets as now owned,
held and operated by it, except where the failure to be so organized, existing
and in good standing, or to have such authority and power, governmental
licenses, authorizations, consents or approvals would not have a Material
Adverse Effect. The Company is duly qualified, licensed or domesticated as a
foreign corporation in good standing in each jurisdiction wherein the nature of
its activities or its properties owned, held or operated makes such
qualification, licensing or domestication necessary, except where the failure to
be so duly qualified, licensed or domesticated and in good standing would not
have a Material Adverse Effect. Schedule 6.1 sets forth a true, correct and
complete list of each jurisdiction of organization and each other jurisdiction
in which the Company presently conducts its business or owns, holds and operates
its properties and assets.
6.2 Subsidiaries. Except as set forth on Schedule 6.2, the Company does not
own, directly or indirectly, any equity or other ownership interest in any
corporation, partnership, joint venture or other entity or enterprise.
6.3 Organizational Documents. True, correct and complete copies of the
certificate of incorporation, bylaws and other constituent documents of the
Company, as amended since inception (the "Company Organizational Documents")
have been delivered to the E-Cash Shareholder prior to the execution of this
Agreement, and no action has been taken, subsequent to such delivery to the
E-Cash Shareholder, to amend or repeal such Company Organizational Documents.
The Company is not in violation or breach of any of the provisions of its
Company Organizational Documents, except for such violations or breaches as
would not have a Material Adverse Effect.
6.4 Authorization. The Company has all requisite authority and power
(corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents to
which the Company is a party, to consummate the transactions contemplated by
this Agreement and each of the Transaction Documents to which the Company is a
party and to perform
its obligations under this Agreement and each of the Transaction Documents to
which the Company is a party. The execution, delivery and performance by the
Company of this Agreement and each of the Transaction Documents to which the
Company is a party, once the same have been validly and lawfully approved by the
Company's Board and the stockholders of the Company, will have been duly
authorized by all necessary corporate action; except for such valid and lawful
approval of the Company's Board and stockholders, the execution, delivery and
performance by the Company of this Agreement and each of the Transaction
Documents to which the Company is a party requires no other authorization,
consent, approval, license, exemption of or filing or registration with any
Governmental Authority or other Person.
6.5 No Violation. Neither the execution or delivery by the Company of this
Agreement or any Transaction Document to which the Company is a party, nor the
consummation or performance by the Company of the transactions contemplated
hereby or thereby will, directly or indirectly, (a) contravene, conflict with,
or result in a violation of any provision of the Company Organizational
Documents; (b) contravene, conflict with, constitute a default (or an event or
condition which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or acceleration of, or result in
the imposition or creation of any Lien under, any agreement or instrument to
which the Company is a party or by which the properties or assets of the Company
are bound; (c) contravene, conflict with, or result in a violation of, any Law
or Order to which the Company, or any of the properties or assets owned or used
by Company, may be subject; or (d) contravene, conflict with, or result in a
violation of the terms or requirements of, or give any Governmental Authority
the right to revoke, withdraw, suspend, cancel, terminate or modify, any
licenses, permits, authorizations, approvals, franchises or other rights held by
the Company or that otherwise relate to the business of, or any of the
properties or assets owned or used by, the Company, except, in the case of
clause (b), (c), or (d), for any such contraventions, conflicts, violations, or
other occurrences as would not have a Material Adverse Effect.
6.6 Binding Obligations. Assuming this Agreement and the Transaction
Documents have been duly and validly authorized, executed and delivered by the
parties thereto other than the Company, this Agreement has been, and as of the
Closing each of the Transaction Documents to which the Company is a party will
be, duly authorized, executed and delivered by the Company and constitutes or
will constitute, as the case may be, the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms, except as such enforcement is limited by general equitable principles, or
by bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
6.7 Securities Laws. Assuming the accuracy of the representations and
warranties of the E-Cash Shareholder contained in Section 4 and Exhibit E, the
issuance of the Company Common Shares pursuant to this Agreement are and will
be, to the best knowledge of the Company (a) exempt from the registration and
prospectus delivery requirements of the Securities Act, (b) have been registered
or qualified (or are exempt from registration and qualification) under
the registration permit or qualification requirements of all applicable state
securities laws, and (c) accomplished in conformity with all other applicable
federal and state securities laws
6.8 Capitalization and Related Matters.
6.8.1 Capitalization. As of the date of this Agreement, the authorized
capital stock of the Company consists of five hundred million (500,000,000)
shares of common stock, par value one mil ($.001), of which four hundred
ninety-seven million, six hundred four thousand, seven hundred sixty-five
(497,604,765) common shares are issued and outstanding. All such issued and
outstanding shares of the Company's common stock are duly authorized, validly
issued, fully paid and non-assessable, and have not been issued in violation of
any preemptive or similar rights. On the Closing Date, and after giving effect
to a four hundred for one (400:1) reverse stock split, the Company will have
sufficient authorized and un-issued Company common stock to consummate the
transactions contemplated hereby. Except as disclosed in Schedule 6.8.1 or the
SEC Documents, (a) there are no outstanding options, warrants, purchase
agreements, participation agreements, subscription rights, conversion rights,
exchange rights or other securities or contracts that could require the Company
to issue, sell or otherwise cause to become outstanding any of its authorized
but un-issued shares of capital stock or any securities convertible into,
exchangeable for or carrying a right or option to purchase shares of capital
stock or to create, authorize, issue, sell or otherwise cause to become
outstanding any new class of capital stock, and (b) there are no outstanding
stockholders' agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the capital
stock of the Company. The issuance of all of the shares of the Company's
outstanding common stock described in this Section 6.8.1 have been in compliance
with U.S. federal and state securities laws.
6.8.2 No Redemption Requirements. Except as set forth in Schedule
6.8.2 or in the SEC Documents, there are no outstanding contractual obligations
(contingent or otherwise) requiring the Company to retire, repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of, or other ownership
interests in, the Company or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any other Person.
6.8.3 Duly Authorized. Upon approval of this Agreement by the Board
and stockholders of the Company, the issuance of the Company Common Shares to
the E-Cash Shareholder, will have been duly authorized and, upon delivery to the
E-Cash Shareholder of certificates therefore in accordance with the terms of
this Agreement, the Company Common Shares will have been validly issued and
fully paid, and will be non-assessable, have the rights, preferences and
privileges specified, will be free of preemptive rights and will be free and
clear of all Liens and restrictions, other than Liens created by the E-Cash
Shareholders and restrictions on transfer imposed by this Agreement and the
Securities Act.
6.9 Compliance with Laws. Except as would not have a Material Adverse
Effect, the business and operations of the Company has been and is being
conducted in accordance with all applicable Laws and Orders. Except as would not
have a Material Adverse Effect, the Company has not received notice of any
violation (or any Proceeding involving an allegation of any violation) of any
applicable Law or Order by or affecting the Company and, to the knowledge of the
Company, no Proceeding involving an allegation of violation of any applicable
Law or Order is threatened or contemplated. Except as would not have a Material
Adverse Effect and except for the requirement of the prior approval of the
Company's Board and stockholders, the Company is not subject to any obligation
or restriction of any kind or character, nor is there, to the knowledge of the
Company, any event or circumstance relating to the Company that materially and
adversely affects in any way its business, properties, assets or prospects or
that prohibits the Company from entering into this Agreement or would prevent or
make burdensome its performance of or compliance with all or any part of this
Agreement or the consummation of the transactions contemplated hereby.
6.10 Certain Proceedings. There is no pending Proceeding that has been
commenced against the Company and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated by this Agreement. To the knowledge of the Company, no
such Proceeding has been threatened.
6.11 No Brokers or Finders. Except as disclosed in Schedule 6.11, no Person
has, or as a result of the transactions contemplated herein will have, any right
or valid claim against the Company for any commission, fee or other compensation
as a finder or broker, or in any similar capacity, and the Company will
indemnify and hold the E-Cash Shareholder harmless against any liability or
expense arising out of, or in connection with, any such claim.
6.12 Absence of Undisclosed Liabilities. Except as set forth on Schedule
6.12 or in the SEC Documents, the Company has any no debt, obligation or
liability (whether accrued, absolute, contingent, liquidated or otherwise,
whether due or to become due, whether or not known to the Company) arising out
of any transaction entered into at or prior to the Closing or any act or
omission at or prior to the Closing, except to the extent set forth on or
reserved against on the Company Balance Sheet. Except as set forth on Schedule
6.12, the Company has incurred only liabilities or obligations under agreements
entered into in the usual and ordinary course of business since December 31,
2004.
6.13 Changes. Except as set forth on Schedule 6.13 or in the SEC Documents,
the Company has not, since December 31, 2004:
6.13.1 Ordinary Course of Business. Conducted its business or entered
into any transaction other than in the usual and ordinary course of business,
except for this Agreement.
6.13.2 Adverse Changes. Suffered or experienced any change in, or
affecting, its condition (financial or otherwise), properties,
assets, liabilities, business, operations, results of operations or prospects
other than changes, events or conditions in the usual and ordinary course of its
business, none of which would have a Material Adverse Effect;
6.13.3 Loans. Made any loans or advances to any Person other than
travel advances and reimbursement of expenses made to employees, officers and
directors in the ordinary course of business;
6.13.4 Liens. Created or permitted to exist any Lien on any material
property or asset of the Company, other than Permitted Liens;
6.13.5 Capital Stock. Issued, sold, disposed of or encumbered, or
authorized the issuance, sale, disposition or encumbrance of, or granted or
issued any option to acquire any shares of its capital stock or any other of its
securities or any Equity Security, or altered the term of any of its outstanding
securities or made any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise;
6.13.6 Dividends. Declared, set aside, made or paid any dividend or
other distribution to any of its stockholders;
6.13.7 Material Company Contracts. Terminated or modified any Material
Company Contract, except for termination upon expiration in accordance with the
terms thereof;
6.13.8 Claims. Released, waived or cancelled any claims or rights
relating to or affecting the Company in excess of $10,000 in the aggregate or
instituted or settled any Proceeding involving in excess of $10,000 in the
aggregate;
6.13.9 Discharged Liabilities. Paid, discharged or satisfied any
claim, obligation or liability in excess of $10,000 in the aggregate, except for
liabilities incurred prior to the date of this Agreement in the ordinary course
of business;
6.13.10 Indebtedness. Created, incurred, assumed or otherwise become
liable for any Indebtedness in excess of $10,000 in the aggregate, other than
professional fees;
6.13.11 Guarantees. Guaranteed or endorsed in a material amount any
obligation or net worth of any Person;
6.13.12 Acquisitions. Acquired the capital stock or other securities
or any ownership interest in, or substantially all of the assets of, any other
Person;
6.13.13 Accounting. Changed its method of accounting or the accounting
principles or practices utilized in the preparation of its financial statements,
other than as required by GAAP;
6.13.14 Agreements. Except as set forth on Schedule 6.13.14 or in the
SEC Documents, entered into any agreement, or otherwise obligated itself, to do
any of the foregoing.
6.14 Material Company Contracts. Except to the extent filed with the SEC
Documents, the Company has made available to the Company, prior to the date of
this Agreement, true, correct and complete copies of each written Material
Company Contract, including each amendment, supplement and modification thereto.
6.14.1 No Defaults. Each Material Company Contract is a valid and
binding agreement of the Company, and is in full force and effect. Except as
would not have a Material Adverse Effect, the Company is not in breach or
default of any Material Company Contract to which it is a party and, to the
knowledge of the Company, no other party to any Material Company Contract is in
breach or default thereof. Except as would not have a Material Adverse Effect,
no event has occurred or circumstance exists that (with or without notice or
lapse of time) would (a) contravene, conflict with or result in a violation or
breach of, or become a default or event of default under, any provision of any
Material Company Contract or (b) permit the Company or any other Person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify any Material
Company Contract. The Company has not received notice of the pending or
threatened cancellation, revocation or termination of any Material Company
Contract to which it is a party. There are no renegotiations of, or attempts to
renegotiate, or outstanding rights to renegotiate any material terms of any
Material Company Contract.
6.15 Employees.
6.15.1 The Company has no employees, independent contractors or other
Persons providing research or other services to them. Except as would not have a
Material Adverse Effect, the Company is in full compliance with all Laws
regarding employment, wages, hours, benefits, equal opportunity, collective
bargaining, the payment of Social Security and other taxes, occupational safety
and health and plant closing. The Company is not liable for the payment of any
compensation, damages, taxes, fines, penalties or other amounts, however
designated, for failure to comply with any of the foregoing Laws.
6.15.2 No director, officer or employee of the Company is a party to,
or is otherwise bound by, any contract (including any confidentiality,
non-competition or proprietary rights agreement) with any other Person that in
any way adversely affects or will materially affect (a) the performance of his
or her duties as a director, officer or employee of the Company or (b) the
ability of the Company to conduct its business. Except as set forth on Schedule
6.15.2, each employee of the Company is employed on an at-will basis and the
Company has no contract with any of its employees which would interfere with the
Company's ability to discharge its employees.
6.16 Tax Returns and Audits.
6.16.1 Tax Returns. The Company has filed all material Tax Returns
required to be filed by or on behalf of the Company and has paid all material
Taxes of the Company required to have been paid (whether or not reflected on any
Tax Return). Except as set forth on
Schedule 6.16.1, (a) no Governmental Authority in a jurisdiction where the
Company does not file Tax Returns has made a claim, assertion or threat to the
Company that the Company is or may be subject to taxation by such jurisdiction;
(b) there are no Liens with respect to Taxes on the Company's property or assets
other than Permitted Liens; and (c) there are no Tax rulings, requests for
rulings, or closing agreements relating to the Company for any period (or
portion of a period) that would affect any period after the date hereof.
6.16.2 No Adjustments, Changes. Neither the Company nor any other
Person on behalf of the Company (a) has executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign law; or (b) has
agreed to or is required to make any adjustments pursuant to Section 481(a) of
the Code or any similar provision of state, local or foreign law.
6.16.3 No Disputes. There is no pending audit, examination,
investigation, dispute, proceeding or claim with respect to any Taxes of the
Company, nor is any such claim or dispute pending or contemplated. The Company
has delivered to the Company true, correct and complete copies of all Tax
Returns, if any, examination reports and statements of deficiencies assessed or
asserted against or agreed to by the Company or any of the Company's
Subsidiaries since their inception and any and all correspondence with respect
to the foregoing.
6.16.4 Not a U.S. Real Property Holding Corporation. The Company is
not and has not been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Code at any time during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code.
6.16.5 No Tax Allocation, Sharing. The Company is not a party to any
Tax allocation or sharing agreement. The Company (a) has not been a member of a
Tax Group filing a consolidated income Tax Return under Section 1501 of the Code
(or any similar provision of state, local or foreign law), and (b) has no
liability for Taxes for any Person under Treasury Regulations Section 1.1502-6
(or any similar provision of state, local or foreign law) as a transferee or
successor, by contract or otherwise.
6.16.6 No Other Arrangements. The Company is not a party to any
agreement, contract or arrangement for services that would result, individually
or in the aggregate, in the payment of any amount that would not be deductible
by reason of Section 162(m), 280G or 404 of the Code. The Company is not
"consenting corporations" within the meaning of Section 341(f) of the Code. The
Company does not have any "tax-exempt bond financed property" or "tax-exempt use
property" within the meaning of Section 168(g) or (h), respectively of the Code.
The Company has no outstanding closing agreement, ruling request, request for
consent to change a method of accounting, subpoena or request for information to
or from a Governmental Authority in connection with any Tax matter. During the
last two years, the Company has not engaged in any exchange with a related party
(within the meaning of Section 1031(f) of the Code) under which gain realized
was not recognized by reason of Section 1031 of the
Code. The Company is not a party to any reportable transaction within the
meaning of Treasury Regulation Section 1.6011-4.
6.17 Material Assets. The financial statements of the Company set forth in
the SEC Documents reflect the material properties and assets (real and personal)
owned or leased by the Company.
6.18 Insurance Coverage. The Company has made available to the E-Cash
Shareholder, prior to the date of this Agreement, true, correct and complete
copies of any insurance policies maintained by the Company on its properties and
assets, if any. Except as would not have a Material Adverse Effect, all of such
policies (a) taken together, provide adequate insurance coverage for the
properties, assets and operations of the Company for all risks normally insured
against by a Person carrying on the same business as the Company, and (b) are
sufficient for compliance with all applicable Laws and Material Company
Contracts. Except as would not have a Material Adverse Effect, all of such
policies are valid, outstanding and in full force and effect and, by their
express terms, will continue in full force and effect following the consummation
of the transactions contemplated by this Agreement. Except as set forth on
Schedule 6.18, the Company has not received (a) any refusal of coverage or any
notice that a defense will be afforded with reservation of rights, or (b) any
notice of cancellation or any other indication that any insurance policy is no
longer in full force or effect or will not be renewed or that the issuer of any
policy is not willing or able to perform its obligations thereunder. All
premiums due on such insurance policies on or prior to the date hereof have been
paid. There are no pending claims with respect to the Company or its properties
or assets under any such insurance policies, and there are no claims as to which
the insurers have notified the Company that they intend to deny liability. There
is no existing default under any such insurance policies.
6.19 Litigation; Orders. Except as set forth on Schedule 6.19, there is no
Proceeding (whether federal, state, local or foreign) pending or, to the
knowledge of the Company, threatened against or affecting the Company or the
Company's properties, assets, business or employees. To the knowledge of the
Company, there is no fact that might result in or form the basis for any such
Proceeding. The Company is not subject to any Orders.
6.20 Licenses. Except as would not have a Material Adverse Effect, the
Company possesses from the appropriate Governmental Authority all licenses,
permits, authorizations, approvals, franchises and rights that are necessary for
the Company to engage in its business as currently conducted and to permit the
Company to own and use its properties and assets in the manner in which it
currently owns and uses such properties and assets (collectively, "Company
Permits"). The Company has not received notice from any Governmental Authority
or other Person that there is lacking any license, permit, authorization,
approval, franchise or right necessary for the Company to engage in its business
as currently conducted and to permit the Company to own and use its properties
and assets in the manner in which it currently owns and uses such properties and
assets. Except as would not have a Material Adverse Effect, the Company Permits
are valid and in full force and effect. Except as would not have a
Material Adverse Effect, no event has occurred or circumstance exists that may
(with or without notice or lapse of time): (a) constitute or result, directly or
indirectly, in a violation of or a failure to comply with any Company Permit; or
(b) result, directly or indirectly, in the revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any Company Permit. The
Company has not received notice from any Governmental Authority or any other
Person regarding: (a) any actual, alleged, possible or potential contravention
of any Company Permit; or (b) any actual, proposed, possible or potential
revocation, withdrawal, suspension, cancellation, termination of, or
modification to, any Company Permit. All applications required to have been
filed for the renewal of such Company Permits have been duly filed on a timely
basis with the appropriate Persons, and all other filings required to have been
made with respect to such Company Permits have been duly made on a timely basis
with the appropriate Persons. All Company Permits are renewable by their terms
or in the ordinary course of business without the need to comply with any
special qualification procedures or to pay any amounts other than routine fees
or similar charges, all of which have, to the extent due, been duly paid.
6.21 Interested Party Transactions. Except as disclosed in Schedule 6.21,
no officer, director or stockholder of the Company or any Affiliate or
"associate" (as such term is defined in Rule 405 of the Commission under the
Securities Act) of any such Person, has or has had, either directly or
indirectly, (1) an interest in any Person which (a) furnishes or sells services
or products which are furnished or sold or are proposed to be furnished or sold
by the Company, or (b) purchases from or sells or furnishes to, or proposes to
purchase from, sell to or furnish the Company any goods or services; or (2) a
beneficial interest in any contract or agreement to which the Company is a party
or by which it may be bound or affected.
6.22 Governmental Inquiries. The Company has provided to the E- Cash
Shareholder a copy of each material written inspection report, questionnaire,
inquiry, demand or request for information received by the Company from any
Governmental Authority, and the applicable Company's response thereto, and each
material written statement, report or other document filed by the Company with
any Governmental Authority.
6.23 Bank Accounts and Safe Deposit Boxes. Schedule 6.23 discloses the
title and number of each bank or other deposit or financial account, and each
lock box and safety deposit box used by the Company, the financial institution
at which that account or box is maintained and the names of the persons
authorized to draw against the account or otherwise have access to the account
or box, as the case may be.
6.24 Intellectual Property. The Company does not own, use or license any
Intellectual Property in its business as presently conducted, except as set
forth in the SEC Documents.
6.25 Title to and Condition of Properties. Except as would not have a
Material Adverse Effect, the Company owns (with good and marketable title in the
case of real property) or holds under valid leases or other rights to use all
real property, plants, machinery,
equipment and other personal property necessary for the conduct of its business
as presently conducted, free and clear of all Liens, except Permitted Liens. The
material buildings, plants, machinery and equipment necessary for the conduct of
the business of the Company as presently conducted are structurally sound, are
in good operating condition and repair and are adequate for the uses to which
they are being put, and none of such buildings, plants, machinery or equipment
is in need of maintenance or repairs, except for ordinary, routine maintenance
and repairs that are not material in nature or cost.
6.26 SEC Documents; Financial Statements. Except as set forth on Schedule
6.26, the Company has filed all reports required to be filed by it under the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
three years preceding the date hereof (or such shorter period as the Company was
required by law to file such material) (the foregoing materials being
collectively referred to herein as the "SEC Documents") and is current with
respect to its Exchange Act filing requirements. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statement
therein, in light of the circumstances under which they were made, not
misleading. All material agreements to which the Company is a party or to which
the property or assets of the Company are subject have been appropriately filed
as exhibits to the SEC Documents as and to the extent required under the
Exchange Act. The financial statements of the Company included in the SEC
Documents comply in all material respects with applicable accounting requirement
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing, were prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto, or, in the case of unaudited statements as permitted by Form
10-QSB of the Commission), and fairly present in all material respects (subject
in the case of unaudited statements, to normal, recurring audit adjustments) the
financial position of the Company as at the dates thereof and the results of its
operations and cash flows for the periods then ended. The Company's common stock
is listed on the OTC Bulletin Board maintained by the NASD under the symbol
AVST, and the Company is not aware of any facts which would make the Company's
common stock ineligible for continued quotation on the OTC Bulletin Board.
6.27 Stock Option Plans; Employee Benefits.
6.27.1 Set forth on Schedule 6.27.1 and in the Company's December
31, 2004 10-KSB is a complete list of all stock option plans providing for the
grant by the Company of stock options to directors, officers or employees.
Except as disclosed on Schedule 6.27.1, all such stock option plans are Approved
Plans.
6.27.2 The Company has no employee benefit plans or arrangements
covering their present and former employees or providing benefits to such
persons in respect of services provided by the Company.
6.27.3 Neither the consummation of the transactions contemplated
hereby alone, nor in combination with another event, with respect to each
director, officer, employee and consultant of the Company, will result in (a)
any payment (including, without limitation, severance, unemployment compensation
or bonus payments) becoming due from the Company, (b) any increase in the amount
of compensation or benefits payable to any such individual or (c) any
acceleration of the vesting or timing of payment of compensation payable to any
such individual. No agreement, arrangement or other contract of the Company
provides benefits or payments contingent upon, triggered by, or increased as a
result of a change in the ownership or effective control of the Company.
6.28 Environmental and Safety Matters. Except as set forth on Schedule 6.28
or in the SEC Documents and except as would not have a Material Adverse Effect:
6.28.1 The Company has at all time been and is in compliance with all
Environmental Laws applicable to the Company..
6.28.2 There are no Proceedings pending or threatened against the
Company alleging the violation of any Environmental Law or Environmental Permit
applicable to the Company or alleging that the Company is a potentially
responsible party for any environmental site contamination.
6.28.3 Neither this Agreement nor the consummation of the transactions
contemplated by this Agreement shall impose any obligations to notify or obtain
the consent of any Governmental Authority or third Persons under any
Environmental Laws applicable to the Company.
6.29 Money Laundering Laws. The operations of the Company are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all U.S. and non-U.S.
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
Governmental Authority (collectively, the "Money Laundering Laws") and no
Proceeding involving the Company with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company, threatened.
6.30 Board Recommendation. The Board of the Company, at a meeting duly
called and held, has determined that this Agreement and the transactions
contemplated by this Agreement are advisable and in the best interests of the
Company's stockholders and has duly authorized this Agreement and the
transactions contemplated by this Agreement.
SECTION VII
COVENANTS OF THE E-CASH SHAREHOLDER
7.1 Access and Investigation. Between the date of this Agreement and the
Closing Date, the E-Cash Shareholder will cause E-Cash to
(a) afford the Company and its agents, advisors and attorneys during normal
business hours, full and free access to the personnel, properties, contracts,
books and records, and other documents and data of E-Cash, (b)furnish the
Company and its agents, advisors and attorneys with copies of all such
contracts, books and records, and other existing documents and data as the
Company may reasonably request, and (c) furnish the Company and its agents,
advisors and attorneys with such additional financial, operating, and other data
and information as the Company may reasonably request.
7.2 Operation of the Business of E-Cash.
7.2.1 Between the date of this Agreement and the Closing Date, the
E-Cash Shareholder will cause E-Cash to (a) conduct its business only in the
ordinary course of business; (b) preserve intact its current business
organization and business relationships, including, without limitation,
relationships with suppliers, customers, landlords, creditors, officers,
employees and agents; and (c) otherwise report periodically to the Company
concerning the status of its business, operations, and finances.
7.3 No Transfers of Capital Stock.
7.3.1 Between the date of this Agreement and the Closing Date, the
E-Cash Shareholder shall not assign, transfer, mortgage, pledge or otherwise
dispose of any or all of his E-Cash Shares (or any interest therein) or grant
any Person the option or right to acquire such E-Cash Shares (or any interest
therein).
7.4 Required Filings and Approvals.
7.4.1 As promptly as practicable after the date of this Agreement, the
E-Cash Shareholder will make all filings required to be made by them in order to
consummate the transactions contemplated by this Agreement, if applicable.
Between the date of this Agreement and the Closing Date, the E-Cash Shareholder
will (a) cooperate with the Company with respect to all filings that the Company
elects to make or is required to make in connection with the transactions
contemplated by this Agreement, and (b) cooperate with the Company in obtaining
any consents or approvals required to be obtained by the Company in connection
herewith.
7.4.2 Without limiting the foregoing, the E-Cash Shareholder shall
promptly furnish to the Company any information reasonably requested by the
Company in connection with the preparation, filing and mailing of the Schedule
14(c) Filing, including, without limitation, information concerning E-Cash and
the E-Cash Shareholder. the E-Cash Shareholder represents and warrants to the
Company that the information supplied by him for inclusion in the Schedule 14(c)
Filing will not, on the date the Schedule 14(c) Filing is filed with the
Commission or first mailed to the stockholders of the Company, contain any
statement which, at such time and in light of the circumstances under which it
shall be made, is false or misleading with respect to any material fact, or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein not false or misleading. If, at any time prior to
the Closing Date, any information should be discovered by
the Company or the E-Cash Shareholder which should be set forth in an amendment
to the Schedule 14(c) Filing so that such Schedule 14(c) Filing would not
include any misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, the E-Cash Shareholder shall promptly
notify the Company.
7.5 Notification. Between the date of this Agreement and the Closing Date,
the E-Cash Shareholder will promptly notify the Company in writing if he becomes
aware of any fact or condition that causes or constitutes a breach of any of his
representations and warranties herein, as of the date of this Agreement, or if
the E-Cash Shareholder becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would (except as expressly contemplated
by this Agreement) cause or constitute a breach of any such representation or
warranty had such representation or warranty been made as of the time of
occurrence or discovery of such fact or condition. Should any such fact or
condition require any change in the Schedules to this Agreement if the Schedules
to the Agreement were dated the date of the occurrence or discovery of any such
fact or condition, the E-Cash Shareholder will promptly deliver to the Company a
supplement to the Schedules to the Agreement specifying such change; provided,
however, that such delivery shall not materially adversely affect any rights of
the Company set forth herein, including the right of the Company to seek a
remedy in damages for losses incurred as a result of such supplemented
disclosure. During the same period, the E-Cash Shareholder will promptly notify
the Company of the occurrence of any breach of any of his covenants in this
Section 7 or of the occurrence of any event that may make the satisfaction of
the conditions in Section 9 impossible or unlikely.
7.6 Closing Conditions. Between the date of this Agreement and the Closing
Date, the E-Cash Shareholder will use his commercially reasonable efforts to
cause the conditions in Section 9 to be satisfied.
SECTION VIII
COVENANTS OF THE COMPANY
8.1 Access and Investigation. Between the date of this Agreement and the
Closing Date, the Company will (a) afford the E-Cash Shareholder and his agents,
advisors and attorneys during normal business hours full and free access to the
Company's personnel, properties, contracts, books and records, and other
documents and data, (b) furnish the E-Cash Shareholder and his agents, advisors
and attorneys with copies of all such contracts, books and records, and other
existing documents and data as the E-Cash Shareholder may reasonably request,
and (c) furnish the E-Cash Shareholder and his agents, advisors and attorneys
with such additional financial, operating, and other data and information as he
may reasonably request.
8.2 Operation of the Business of the Company. Between the date of this
Agreement and the Closing Date, the Company will:
8.2.1 conduct its business only in the ordinary course of business;
8.2.2 use its best efforts to preserve intact the current business
organization and business relationships, including, without limitation,
relationships with suppliers, customers, landlords, creditors, officers,
employees and agents;
8.2.3 obtain the prior written consent of the E-Cash Shareholder prior
to taking any action of the type specified in Section 6.13 or entering into any
Material Company Contract;
8.2.4 confer with the E-Cash Shareholder concerning operational
matters of a material nature; and
8.2.5 otherwise report periodically to the E-Cash Shareholder
concerning the status of its business, operations, and finances.
8.3 Required Filings and Approvals.
8.3.1 As promptly as practicable after the date of this Agreement, the
Company will make all filings legally required to be made by it to consummate
the transactions contemplated by this Agreement. Between the date of this
Agreement and the Closing Date, the Company will cooperate with the E-Cash
Shareholder with respect to all filings that the Company is legally required to
make in connection with the transactions contemplated hereby.
8.3.2 Without limiting the foregoing, as promptly as practicable
before or after the execution of this Agreement, the Company shall prepare and
file the Schedule 14(c) Filing with the Commission. The Company will advise the
E-Cash Shareholder, promptly after it receives notice thereof, of any request by
the Commission for the amendment of the Schedule 14(c) Filing or comments
thereon and responses thereto or requests by the Commission for additional
information. The Company shall mail the Schedule 14(c) Filing to its
stockholders as promptly as practicable pursuant to the Securities Act, the
Exchange Act and the rules and regulations of the Commission related thereto.
8.4 Notification. Between the date of this Agreement and the Closing Date,
the Company will promptly notify the E-Cash Shareholder in writing if the
Company becomes aware of any fact or condition that causes or constitutes a
breach of any of the representations and warranties of the Company, as of the
date of this Agreement, or if the Company becomes aware of the occurrence after
the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. Should any
such fact or condition require any change in the Schedules to this Agreement if
the Schedules to the Agreement were dated the date of the occurrence or
discovery of any such fact or condition, the Company will promptly deliver to
the E-Cash Shareholder a supplement to the Schedules to the Agreement specifying
such change; provided, however, that such delivery shall not materially
adversely affect any rights of the E- Cash Shareholder set forth herein,
including the right of the E-Cash
Shareholder to seek a remedy in damages for losses incurred as a result of such
supplemented disclosure. During the same period, the Company will promptly
notify the E-Cash Shareholder of the occurrence of any breach of any covenant of
the Company in this Section 8 or of the occurrence of any event that may make
the satisfaction of the conditions in Section 10 impossible or unlikely.
8.5 Closing Conditions. Between the date of this Agreement and the Closing
Date, the Company will use commercially reasonable efforts to cause the
conditions in Section 10 to be satisfied.
8.6 SEC Documents. Between the date of this Agreement and the Closing Date,
Company shall file all reports and other documentation, including without
limitation, the preparation of the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2006, required by the Exchange Act and/or the
Commission to assure that the Company is current on all Exchange Act reports and
to maintain its listing on the OTCBB. In the event the Commission notifies the
Company of its intent to review any SEC Document filed prior to Closing or the
Company receives any oral or written comments from the Commission with respect
to any SEC Document filed prior to Closing, the Company shall promptly notify
the E-Cash Shareholder and shall fully comply with all such requests of the
Commission.
SECTION IX
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO CLOSE
The Company's obligation to acquire the E-Cash Shares and to take the other
actions required to be taken by the Company at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Company, in whole or in part):
9.1 Accuracy of Representations. The representations and warranties of the
E-Cash Shareholder set forth in this Agreement or in any Schedule or certificate
delivered pursuant hereto that are not qualified as to materiality shall be true
and correct in all material respects as of the date of this Agreement, and shall
be deemed repeated as of the Closing Date and shall then be true and correct in
all material respects, except to the extent a representation or warranty is
expressly limited by its terms to another date and without giving effect to any
supplemental Schedule. The representations and warranties of the E-Cash
Shareholder set forth in this Agreement or in any Schedule or certificate
delivered pursuant hereto that are qualified as to materiality shall be true and
correct in all respects as of the date of this Agreement, and shall be deemed
repeated as of the Closing Date and shall then be true and correct in all
respects, except to the extent a representation or warranty is expressly limited
by its terms to another date and without giving effect to any supplemental
Schedule.
9.2 Performance by the E-Cash Shareholder.
9.2.1 All of the covenants and obligations that the E-Cash Shareholder
is required to perform or to comply with pursuant to this Agreement at or prior
to the Closing (considered collectively), and
each of these covenants and obligations (considered individually), must have
been duly performed and complied with in all material respects.
9.2.2 Each document required to be delivered by E-Cash and the E-Cash
Shareholder pursuant to this Agreement at or prior to Closing must have been
delivered.
9.3 No Force Majeur Event. Since the date of this Agreement, there shall
not have been any delay, error, failure or interruption in the conduct of the
business of E-Cash, or any loss, injury, delay, damage, distress, or other
casualty affecting E-Cash, due to force majeur including but not limited to (a)
acts of God; (b) fire or explosion; (c) war, acts of terrorism or other civil
unrest; or (d) national emergency.
9.4 Certificate of E-Cash Shareholder. The E-Cash Shareholder will have
delivered to the Company a certificate, dated the Closing Date, executed by an
authorized representative of the E-Cash Shareholder, certifying the satisfaction
of the conditions specified in Sections 9.1, 9.2 and 9.3.
9.6 Consents.
9.6.1 all material consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by E-Cash
and/or the E-Cash Shareholder for the authorization, execution and delivery of
this Agreement and the consummation by them of the transactions contemplated by
this Agreement, shall have been obtained and made, as the case may be, except
where the failure to receive such consents, waivers, approvals, authorizations
or orders or to make such filings would not have a Material Adverse Effect on
transactions contemplated by this Agreement.
9.6.2 without limiting the foregoing, the necessary majority of the
stockholders of the Company, in response to the Schedule 14(c) Filing, shall
have approved this Agreement and the transactions contemplated by this
Agreement, at a duly held meeting of the Company's stockholders, and no
Proceeding occasioned by the Section 14(c) Filing shall have been initiated or
threatened by the Commission (which Proceeding remains unresolved as of the
Closing Date).
9.7 Documents. E-Cash and the E-Cash Shareholder must have caused the
following documents to be delivered to the Company:
9.7.1 share certificates evidencing the number of E-Cash Shares held
by the E-Cash Shareholder (as set forth in Exhibit A), along with executed stock
powers transferring such E-Cash Shares to the Company;
9.7.2 a Secretary's Certificate of E-Cash, dated the Closing Date,
certifying attached copies of (A) the E-Cash Organizational Documents, and (B)
the resolutions of the E-Cash Board and the shareholders of E-Cash approving
this Agreement and the transactions contemplated hereby;
9.7.3 a certified certificate of good standing, or equivalent thereof,
of E-Cash;
9.7.4 each of the Transaction Documents to which E-Cash and/or the
E-Cash Shareholder is a party, duly executed; and
9.7.5 such other documents as the Company may reasonably request for
the purpose of (i) evidencing the accuracy of any of the representations and
warranties of the E-Cash Shareholder pursuant to Section 9.1, (ii) evidencing
the performance of, or compliance by the E-Cash Shareholder with any covenant or
obligation required to be performed or complied with by them, (iii) evidencing
the satisfaction of any condition referred to in this Section 9, or (iv)
otherwise facilitating the consummation or performance of any of the
transactions contemplated by this Agreement.
9.8 No Proceedings. Since the date of this Agreement, there must not have
been commenced or threatened against the Company, E- Cash or the E-Cash
Shareholder, or against any Affiliate thereof, any Proceeding (which Proceeding
remains unresolved as of the Closing Date) (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the transactions
contemplated by this Agreement, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the transactions
contemplated by this Agreement.
9.9 No Claim Regarding Stock Ownership or Consideration. There must not
have been made or threatened by any Person any claim asserting that such Person
(a) is the holder of, or has the right to acquire or to obtain beneficial
ownership of the E-Cash Shares or any other stock, voting, equity, or ownership
interest in, E-Cash, or (b) is entitled to all or any portion of the Company
Common Shares
9.10 Further Conditions Precedent. All of the further conditions precedent
set forth on Exhibit F hereto must be satisfied by the Person required to take
such actions as indicated thereon, or otherwise waived by the parties hereto.
SECTION X
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE E-CASH SHAREHOLDER TO THE CLOSING
The E-Cash Shareholder's obligation to transfer the E-Cash Shares and to
take the other actions required to be taken by the E-Cash Shareholder at the
Closing are subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by the E-Cash Shareholder,
in whole or in part):
10.1 Accuracy of Representations. The representations and warranties of the
Company set forth in this Agreement or in any Schedule or certificate delivered
pursuant hereto that are not qualified as to materiality shall be true and
correct in all material respects as of the date of this Agreement, and shall be
deemed repeated as of the Closing Date and shall then be true and correct in all
material respects, except to the extent a representation or
warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Schedule. The representations and warranties of the
Company set forth in this Agreement or in any Schedule or certificate delivered
pursuant hereto that are qualified as to materiality shall be true and correct
in all respects as of the date of this Agreement, and shall be deemed repeated
as of the Closing Date and shall then be true and correct in all respects,
except to the extent a representation or warranty is expressly limited by its
terms to another date and without giving effect to any supplemental Schedule.
10.2 Performance by the Company.
10.2.1 All of the covenants and obligations that the Company is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all respects.
10.2.2 Each document required to be delivered by the Company pursuant
to this Agreement must have been delivered.
10.3 No Force Majeur Event. Since the date of this Agreement, there shall
not have been any delay, error, failure or interruption in the conduct of the
business of the Company, or any loss, injury, delay, damage, distress, or other
casualty affecting the Company, due to force majeur including but not limited to
(a) acts of God; (b) fire or explosion; (c) war, acts of terrorism or other
civil unrest; or (d) national emergency.
10.4 Certificate of Officer. The Company will have delivered to the E-Cash
Shareholder a certificate, dated the Closing Date, executed by an officer of the
Company, certifying the satisfaction of the conditions specified in
Sections10.1, 10.2. and 10.3.
10.6 Consents.
10.6.1 All material consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by the
Company for the authorization, execution and delivery of this Agreement and the
consummation by it of the transactions contemplated by this Agreement, shall
have been obtained and made by the Company, except where the failure to receive
such consents, waivers, approvals, authorizations or orders or to make such
filings would not have a Material Adverse Effect on the transactions
contemplated hereby.
10.6.2 without limiting the foregoing, the necessary majority of the
stockholders of the Company, in response to the Schedule 14(c) Filing, shall
have approved this Agreement and the transactions contemplated by this
Agreement, at a duly held meeting of the Company's stockholders, and no
Proceeding occasioned by the Section 14(c) Filing shall have been initiated or
threatened by the Commission (which Proceeding remains unresolved as of the
Closing Date).
10.7 Documents. The Company must have caused the following
documents to be delivered to the E-Cash Shareholder:
10.7.1 share certificates evidencing the E-Cash Shareholder's
ownership of the Company Common Shares (as set forth in Exhibit A);
10.7.2 a Secretary's Certificate, dated the Closing Date, certifying
attached copies of (A) the Company Organizational Documents, (B) the resolutions
of the Board of the Company approving this Agreement and the transactions
contemplated hereby; and (C) the incumbency of each authorized officer of the
Company signing this Agreement and any other agreement or instrument
contemplated hereby to which the Company is a party;
10.7.3 a Certificate of Good Standing of the Company;
10.7.4 each of the Transaction Documents to which the Company is a
party, duly executed; and
10.7.5 such other documents as the E-Cash Shareholder may reasonably
request for the purpose of (i) evidencing the accuracy of any representation or
warranty of the Company pursuant to Section 10.1, (ii) evidencing the
performance by the Company of, or the compliance by the Company with, any
covenant or obligation required to be performed or complied with by the Company,
(iii) evidencing the satisfaction of any condition referred to in this Section
10, or (iv) otherwise facilitating the consummation of any of the transactions
contemplated by this Agreement.
10.8 No Proceedings. Since the date of this Agreement, there must not have
been commenced or threatened against the Company, E- Cash or any Shareholder, or
against any Affiliate thereof, any Proceeding (which Proceeding remains
unresolved as of the Closing Date) (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the transactions contemplated
hereby, or (b) that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with any of the transactions contemplated hereby.
10.9 Further Conditions Precedent. All of the further conditions precedent
set forth on Exhibit F hereto must be satisfied by the party required to take
such actions as indicated thereon, or otherwise waived by the parties hereto
SECTION XI
TERMINATION
11.1 Termination Events. This Agreement may, by notice given prior to or at
the Closing, be terminated:
11.1.1 by mutual consent of the Company and the E-Cash Shareholder;
11.1.2 by the Company, if any of the conditions in Section 9 have not
been satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of the Company to comply
with its obligations under this
Agreement) and the Company has not waived such condition on or before the
Closing Date; or (ii) by the E-Cash Shareholder, if any of the conditions in
Section 10 have not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of the
E-Cash Shareholder to comply with its obligations under this Agreement) and the
E-Cash Shareholder has not waived such condition on or before the Closing Date;
11.1.3 by either the Company or the E-Cash Shareholder, if there shall
have been entered a final, non-appealable order or injunction of any
Governmental Authority restraining or prohibiting the consummation of the
transactions contemplated hereby;
11.1.4 by the Company, if, prior to the Closing Date, the E-Cash
Shareholder is in material breach of any representation, warranty, covenant or
agreement herein contained and such breach shall not be cured within 10 days of
the date of notice of default served by the Company claiming such breach;
provided, however, that the right to terminate this Agreement pursuant to this
Section 11.1.5 shall not be available to the Company if the Company is in
material breach of this Agreement at the time notice of termination is
delivered;
11.1.5 by the E-Cash Shareholder, if, prior to the Closing Date, the
Company is in material breach of any representation, warranty, covenant or
agreement herein contained and such breach shall not be cured within 10 days of
the date of notice of default served by the E-Cash Shareholder claiming such
breach or, if such breach is not curable within such 10 day period, such longer
period of time as is necessary to cure such breach; provided, however, that the
right to terminate this Agreement pursuant to this Section 11.1.6 shall not be
available to the E-Cash Shareholder if the E-Cash Shareholder is in material
breach of this Agreement at the time notice of termination is delivered.
11.2 Effect of Termination.
11.2.1 If this Agreement is terminated pursuant to Section 11.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 5.12, 6.11, 11.2, and 13 will survive;
provided, however, that if this Agreement is terminated by a party because of
the breach of the Agreement by another party or because one or more of the
conditions to the terminating party's obligations under this Agreement is not
satisfied as a result of another party's failure to comply with its obligations
under this Agreement, the terminating party's right to pursue all legal remedies
will survive such termination unimpaired.
11.2.2 Each party's right of termination under Section 11.1 is in
addition to any other rights it may have under this Agreement or otherwise, and
the exercise of a right of termination will not be an election of remedies.
SECTION XII
INDEMNIFICATION; REMEDIES
12.1 Survival. All representations, warranties, covenants, and
obligations in this Agreement shall survive the Closing and expire on the sixth
anniversary of the Closing (the "Survival Period"). The right to
indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with any such representation, warranty, covenant,
or obligation. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
12.2 Indemnification by the Company.
12.2.1 From and after the Closing until the expiration of the Survival
Period, the Company shall indemnify and hold harmless the E-Cash Shareholder
(the "Company Indemnified Party"), from and against any Damages arising,
directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by the Company in
this Agreement or in any certificate delivered by the Company pursuant to this
Agreement; or
(b) any breach by the Company of any covenant or obligation of the Company
in this Agreement required to be performed by the Company on or prior to the
Closing Date.
12.3 Limitations on Amount - the Company. The Company Indemnified Party
shall not be entitled to indemnification pursuant to Section 12.3, unless and
until the aggregate amount of Damages with respect to such matters under Section
12.3.1 exceeds $250,000, at which time the Company Indemnified Party shall be
entitled to indemnification for the total amount of such Damages in excess of
$250,000.
12.4 Determining Damages. Materiality qualifications to the representations
and warranties of the Company shall not be taken into account in determining the
amount of Damages occasioned by a breach of any such representation and warranty
for purposes of determining whether the amounts set forth in Section 12.3 has
been met.
12.5 Breach by E-Cash Shareholder. Nothing in this Section 12 shall limit
the Company's right to pursue any appropriate legal or equitable remedy against
the E-Cash Shareholder with respect to any Damages arising, directly or
indirectly, from or in connection with: (a) any breach by the E-Cash Shareholder
of any representation or warranty made by the E-Cash Shareholder in this
Agreement or in any certificate delivered by the E-Cash Shareholder pursuant to
this Agreement or (b) any breach by the E-Cash Shareholder of his covenants or
obligations in this Agreement. All claims pursuant to this Section 12.5 shall be
brought by the Company and those Persons who were stockholders of the Company
immediately prior to the Closing.
SECTION XIII
GENERAL PROVISIONS
13.1 Expenses. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated by this Agreement, including all fees and
expenses of agents, representatives, counsel, and accountants. In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.
13.2 Public Announcements. The Company shall promptly, but no later than
three business days following the effective date of this Agreement, issue a
press release disclosing the transactions contemplated hereby. Between the date
of this Agreement and the Closing Date, the Company and the E-Cash Shareholder
shall consult with each other in issuing any other press releases or otherwise
making public statements or filings and other communications with the Commission
or any regulatory agency or stock market or trading facility with respect to the
transactions contemplated hereby and neither party shall issue any such press
release or otherwise make any such public statement, filings or other
communications without the prior written consent of the other, which consent
shall not be unreasonably withheld or delayed, except that no prior consent
shall be required if such disclosure is required by law, in which case the
disclosing party shall provide the other party with prior notice of such public
statement, filing or other communication and shall incorporate into such public
statement, filing or other communication the reasonable comments of the other
party.
13.3 Confidentiality.
13.3.1 Subsequent to the date of this Agreement, the Company and the
E-Cash Shareholder will maintain in confidence, and will cause their respective
directors, officers, employees, agents, and advisors to maintain in confidence,
any written, oral, or other information obtained in confidence from another
party in connection with this Agreement or the transactions contemplated by this
Agreement, unless (a) such information is already known to such party or to
others not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any required filing with the
Commission, or obtaining any consent or approval required for the consummation
of the transactions contemplated by this Agreement, or (c) the furnishing or use
of such information is required by or necessary or appropriate in connection
with legal proceedings.
13.3.2 In the event that any party is required to disclose any
information of another party pursuant to clause (b) or (c) of Section 13.3.1,the
party requested or required to make the disclosure (the "disclosing party")
shall provide the party that provided such information (the "providing
party")with prompt notice of any such requirement so that the providing party
may seek a protective order or other appropriate remedy and/or waive compliance
with the
provisions of this Section 13.3. If, in the absence of a protective order or
other remedy or the receipt of a waiver by the providing party, the disclosing
party is nonetheless, in the opinion of counsel, legally compelled to disclose
the information of the providing party, the disclosing party may, without
liability hereunder, disclose only that portion of the providing party's
information which such counsel advises is legally required to be disclosed,
provided that the disclosing party exercises its reasonable efforts to preserve
the confidentiality of the providing party's information, including, without
limitation, by cooperating with the providing party to obtain an appropriate
protective order or other relief assurance that confidential treatment will be
accorded the providing party's information.
13.3.3 If the transactions contemplated by this Agreement are not
consummated, each party will return or destroy as much of such written
information as the other party may reasonably request.
13.4 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), or (c) when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by written notice to the other parties):
If to Company: With a copy to:
Xxxxx Sports Turf, Inc.
0000 Xxxxx Xxxx Xxxx Xxxxx 000
Xxxxxxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx Attention:
Telephone: No.: 000-000-0000 Telephone No.:
Facsimile No.: 000-000 0000 Facsimile No:
If to Company With a copy to
E Cash, Inc.
00 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx Attention:
Telephone No.: 000-000-0000 Telephone No.:
Facsimile No.: 000-000-0000 Facsimile No.:
13.5 Further Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
13.6 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
13.7 Entire Agreement and Modification. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party against whom the enforcement of such
amendment is sought.
13.8 Assignments, Successors, and No Third-Party Rights. No party may
assign any of its rights under this Agreement without the prior consent of the
other parties. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon, and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties. Except as set
forth in Section 8.6 and Section 12.3, nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
13.9 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
13.10 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
13.11 Governing Law. This Agreement will be governed by the laws of the
State of New York without regard to conflicts of laws principles.
13.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.
Company:
Xxxxx Sports Turf, Inc. Signed: /s/
Signed: /s/ Printed Name: Xxxx Xxxxxxxx
Printed Name Xxxx Xxxxxxxx
Title: President and Chairman
"E-Cash"
E Cash, Inc.
Signed: /s/ Xxxxxxx Xxxxxxxx
Printed Name: Xxxxxxx Xxxxxxxx
Title: President and Chairman of the Board
"E-Cash Shareholder"
Xxxxxxx Xxxxxxxx
EXHIBIT A
E-CASH SHAREHOLDER AND
E-CASH SHARES AND COMPANY COMMON
SHARES TO BE EXCHANGED
Total shares to be delivered by the E-Cash Shareholder to the Company: 10 Shares
Total Company Common Shares to be delivered by the Company to the Shareholder:
------------------
Number of Percentage of Percentage of Company's
Name and Address of Shares Total Shares Shares of Common
Each Shareholder Owned Owned Stock Immediately After
Closing
Xxxxxxx Xxxxxxxx 10 100% 95%
EXHIBIT B
DEFINITION OF "ACCREDITED INVESTOR
"The term "accredited investor" means:
1. A bank as defined in Section 3(a)(2) of the Securities Act, or a savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act, whether acting in its individual or fiduciary capacity; a broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934; an insurance company as defined in Section 2(13) of the Securities Act; an
investment company registered under the Investment Company Act of 1940 (the
"Investment Company Act") or a business development company as defined in
Section 2(a)(48) of the Investment Company Act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; a plan established and
maintained by a state, its political subdivisions or any agency or
instrumentality of a state or its political subdivisions for the benefit of its
employees, if such plan has total assets in excess of $5,000,000; an employee
benefit plan within the meaning of the Employee Retirement Income Security Act
of 1974 ("ERISA"), if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank, savings and loan
association, insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors.
2. A private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940.
3. An organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000.
4. A director or executive officer of the Company.
5. A natural person whose individual net worth or joint net worth with that
person's spouse, at the time of his or her purchase exceeds $1,000,000.
6. A natural person who had an individual income in excess of $200,000 in each
of the two most recent years or joint income with that person's spouse in excess
of $300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year.
7. A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) (i.e., a person who has such knowledge and experience in financial
and business matters that he is capable of evaluating the merits and risks of
the prospective investment).
8. An entity in which all of the equity owners are accredited investors. (If
this alternative is checked, the Shareholder must identify each equity owner and
provide statements signed by each demonstrating how each is qualified as an
accredited investor.)
EXHIBIT C
DEFINITION OF "U.S. PERSON"
1. "U.S. person" (as defined in Regulation S) means:
i. Any natural person resident in the United States;
ii. Any partnership or corporation organized or incorporated under the laws of
the United States;
iii. Any estate of which any executor or administrator is a U.S. person;
iv. Any trust of which any trustee is a U.S. person;
v. Any agency or branch of a foreign entity located in the United States;
vi. Any non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a U.S.
person;
vii. Any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated, or (if an
individual) resident in the United States; and
viii. Any partnership or corporation if: (A) organized or incorporated under the
laws of any foreign jurisdiction; and (B) formed by a U.S. person principally
for the purpose of investing in securities not registered under the Securities
Act, unless it is organized or incorporated, and owned, by accredited investors
(as defined in Rule 501(a)) who are not natural persons, estates or trusts.
2. Notwithstanding paragraph (1) above, any discretionary account or similar
account (other than an estate or trust) held for the benefit or account of a
non-U.S. person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States shall not be
deemed a "U.S. person.
3. Notwithstanding paragraph (1), any estate of which any professional fiduciary
acting as executor or administrator is a U.S. person shall not be deemed a U.S.
person if:
i. An executor or administrator of the estate who is not a U.S. person has sole
or shared investment discretion with respect to the assets of the estate; and
ii. The estate is governed by foreign law
4. Notwithstanding paragraph (1), any trust of which any professional fiduciary
acting as trustee is a U.S. person shall not be deemed a U.S. person if a
trustee who is not a U.S. person has sole or shared investment discretion with
respect to the trust assets, and no beneficiary of the trust (and no settlor if
the trust is revocable) is a U.S. person.
5. Notwithstanding paragraph (1), an employee benefit plan established and
administered in accordance with the law of a country other than the United
States and customary practices and documentation of such country shall not be
deemed a U.S. person.
6. Notwithstanding paragraph (1), any agency or branch of a U.S. person located
outside the United States shall not be deemed a "U.S. person" if:
i. The agency or branch operates for valid business reasons; and
ii. The agency or branch is engaged in the business of insurance or banking and
is subject to substantive insurance or banking regulation, respectively, in the
jurisdiction where located.
7. The International Monetary Fund, the International Bank for Reconstruction
and Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their agencies,
affiliates and pension plans, and any other similar international organizations,
their agencies, affiliates and pension plans shall not be deemed "U.S. persons."
EXHIBIT D
TRANSFER RESTRICTIONS ON COMPANY COMMON SHARES
1. Restriction on Transfer Legend. The certificates evidencing the Company
Common Shares will bear a legend indicating that the Company Common Shares are
not registered under any securities Laws and may only be transferred pursuant to
a registration statement or an available exemption from the registration
requirements of such Laws; AND
2. Other Legends. The certificates representing such Company Common Shares, and
each certificate issued in transfer thereof, will also bear any other legend
required under any applicable Law, including, without limitation, any U.S. state
corporate and state securities law, or contract; AND
3. Opinion. No Shareholder may transfer any or all of the
Company Common Shares absent an effective registration statement under the
Securities Act and applicable state securities law covering the disposition of
the Company Common Shares, without first providing the Company with an opinion
of counsel (which counsel and opinion are reasonably satisfactory to the
Company) to the effect that such transfer will be exempt from the registration
and prospectus delivery requirements of the Securities Act and the registration
or qualification requirements of any applicable U.S. state securities laws.
(d) Consent. Each E-Cash Shareholder understands and acknowledges that the
Company may refuse to transfer the Company Common Shares of any E-Cash
Shareholder unless such E-Cash Shareholder complies with this Section 4.2.4.
Each E-Cash Shareholder consents to the Company making a notation on its records
or giving instructions to any transfer agent of the Company Common Stock in
order to implement the restrictions on transfer of the Company Common Shares.
EXHIBIT E
ACCREDITED INVESTOR REPRESENTATIONS
Each E-Cash Shareholder indicating that he is an Accredited Investor further
represents and warrants to the Company as follows:
1. Such Shareholder qualifies as an Accredited Investor on the basis set forth
on his signature page to this Agreement.
2. Such Shareholder has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to protect such
Shareholder's interests in connection with the transactions contemplated by this
Agreement.
3. Such Shareholder has consulted, to the extent that he has deemed necessary,
with his tax, legal, accounting and financial advisors concerning his investment
in the Company Common Shares.
4. Such Shareholder understands the various risks of an investment in the
Company Common Shares and can afford to bear such risks for an indefinite period
of time, including, without limitation, the risk of losing his entire investment
in the Company Common Shares.
5. Such Shareholder has had access to the Company's publicly filed reports with
the SEC.
6. Such Shareholder has been furnished during the course of the transactions
contemplated by this Agreement with all other public information regarding the
Company that such Shareholder has requested and all such public information is
sufficient for such Shareholder to evaluate the risks of investing in the
Company Common Shares.
7. Such Shareholder has been afforded the opportunity to ask questions of and
receive answers concerning the Company and the terms and conditions of the
issuance of the Company Common Shares.
8. Such Shareholder is not relying on any representations and warranties
concerning the Company made by the Company or any officer, employee or agent of
the Company, other than those contained in this Agreement.
9. Such Shareholder is acquiring the Company Common Shares for such
Shareholder's own account, for investment and not for distribution or resale to
others.
10. Such Shareholder will not sell or otherwise transfer the Company Common
Shares, unless either (A) the transfer of such securities is registered under
the Securities Act or (B) an exemption from registration of such securities is
available.
11. Such Shareholder understands and acknowledges that the Company is under no
obligation to register the Company Common Shares for sale under the Securities
Act.
12. Such Shareholder consents to the placement of a legend on any certificate or
other document evidencing the Company Common Shares substantially in the form
set forth in Section 4.2.5(a).
13. Such Shareholder represents that the address furnished by such Shareholder
on his signature page to this Agreement and in Exhibit A is such Shareholder's
principal residence if he is an individual or its principal business address if
it is a corporation or other entity.
14. Such Shareholder understands and acknowledges that the Company Common Shares
have not been recommended by any federal or state securities commission or
regulatory authority, that the foregoing authorities have not confirmed the
accuracy or determined the adequacy of any information concerning the Company
that has been supplied to such Shareholder and that any representation to the
contrary is a criminal offense.
15. Such Shareholder acknowledges that the representations, warranties and
agreements made by such Shareholder herein shall survive the execution and
delivery of this Agreement and the purchase of the Company Common Shares.
EXHIBIT F
FURTHER CONDITIONS PRECEDENT TO CLOSING
Notwithstanding anything to the contrary contained in the Agreement (including
the exhibits and schedules annexed hereto) the following conditions must be
satisfied (or waived by all parties) prior to closing:
1. The Company shall effectuate (or set into motion the effectuation of) a 1 for
400 reverse stock split of all
outstanding Company shares of common stock so that the remaining 400 million pre
split shares of Company common stock (after cancellation of the shares referred
to in 1 above) will be reduced to approximately 1 million shares.
2. The Company shall provide the E-Cash Shareholder and E-Cash evidence that the
$355,394 indebtedness of Company to Xxxx Xxxxxxxx has been satisfied and/or
otherwise extinguished and that Xx. Xxxxxxxx has released the Company from any
further liability regarding such indebtedness.
3. The Company shall provide the E-Cash Shareholder and E-Cash with written
documentation indicating that the Letter of Intent between the Company and
Copacabana disclosed in the SEC Documents has been terminated with no further
obligation or liability to the Company.
4. The Company shall have settled the Xxxxxx Litigation disclosed in the SEC
Documents and shall provide the E-Cash Shareholder and E-Cash with all
documentation as they may reasonably request, including, without limitation, a
copy of the stipulation of discontinuance filed with the appropriate court and
any and all releases executed in connection therewith.
5. Unless otherwise disclosed in this Agreement, the Company shall provide the
E-Cash Shareholder and E-Cash with all documentation relating to all Stock
Plans, including, without limitation a schedule containing a list of all persons
participating in such plans and the amount of shares issued to such persons
under said plans.
6. The Company shall provide the E-Cash Shareholder and E-Cash with written
documentation indicating that the Consulting Agreement between the Company and
Xx. Xxxxx disclosed in the SEC Documents has been terminated with no further
obligation or liability to the Company.
7. The Company shall prepare Company's Annual Report on Form 10-KSB in such form
as is required by the Exchange Act and the rules and regulations thereunder so
that such report may be ready for filing as of the Closing Date.
8. The Company shall have fully and effectively assigned all of its obligations
under the Lease disclosed in the SEC Documents.
SCHEDULE 4.1.5.
BROKERS OR FINDERS - E-CASH SHAREHOLDERS
None
[end of schedule]
SCHEDULE 4.3.8
LIENS ON E-CASH SHARES
None
[end of schedule]
SCHEDULE 5.1
E-CASH JURISDICTIONS
New Jersey
[end of exhibit]
SCHEDULE 6.1
COMPANY JURISDICTIONS
Delaware
[end of schedule]
SCHEDULE 6.2
SUBSIDIARIES OF THE COMPANY
None
[end of schedule]
SCHEDULE 6.8.1
SECURITIES OBLIGATIONS OF THE COMPANY
None
[end of schedule]
SCHEDULE 6.8.2
COMPANY OBLIGATIONS - COMPANY SHARES
None
[end of schedule]
SCHEDULE 6.11
BROKERS OR FINDERS - THE COMPANY
None
[end of schedule]
SCHEDULE 6.12
COMPANY LIABILITIES
None
[end of schedule]
SCHEDULE 6.13
COMPANY CHANGES SUBSEQUENT TO 12/31/2004
None
[end of schedule]
SCHEDULE 6.13.14
AGREEMENTS OF THE COMPANY
None
[end of schedule]
SCHEDULE 6.15.2
EMPLOYMENT AGREEMENTS - THE COMPANY
None
[end of schedule]
SCHEDULE 6.16.1
COMPANY EXCEPTIONS - TAXES
None
[end of schedule]
SCHEDULE 6.18
INSURANCE MATTERS (COMPANY)
None
[end of schedule]
SCHEDULE 6.19
COMPANY LITIGATION
None
[end of schedule]
SCHEDULE 6.21
COMPANY INTERESTED PARTY TRANSACTIONS
None
[end of schedule]
SCHEDULE 6.23
COMPANY BANKING INFORMATION
None
[end of schedule]
SCHEDULE 6.26
COMPANY EXCEPTIONS - SEC FILINGS
None
[end of schedule]
SCHEDULE 6.27.1
COMPANY STOCK OPTION PLANS
None
[end of schedule]
SCHEDULE 6.28
COMPANY ENVIRONMENTAL EXCEPTIONS
None
[end of schedule]
