STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March 15, 2000 by and between
XXX.XXX, INC., a company incorporated under the laws of Florida, having an
office and address at 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx
00000 ("Company"), EMBRYO CAPITAL GROUP, INC., a company incorporated under the
laws of Delaware, having an office at 0000 Xxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxx 00000 ("Purchaser"), and VLR HOLDINGS CORP. (formerly known as "Ventech,
Inc."), a company incorporated under the laws of Nevada, having an office and
address at 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000
("Seller").
W I T N E S S E T H
WHEREAS, Seller desires to sell to Purchaser 11,900,000 shares of the
Company's common stock ("Shares"), representing 70.4142 % of the Company's
issued and outstanding shares in the common stock of the Company, on the terms
and conditions set forth in this Stock Purchase Agreement ("Agreement"); and
WHEREAS, Purchasers desire to buy the Shares on the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the promises and respective mutual
agreements herein contained, it is agreed by and between the parties hereto as
follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 Sale of the Shares. Upon the execution of this Agreement, subject
to the terms and conditions herein set forth, and on the basis of the
representations, warranties and agreements herein contained, Seller shall
deliver the Shares to Purchaser, and Purchaser shall purchase the Shares from
Seller.
1.2 Instruments of Conveyance and Transfer. At the Closing, Seller
shall deliver a certificate or certificates representing the Shares to
Purchaser, in form and substance satisfactory to Purchaser ("Certificates"), as
shall be effective to vest in Purchaser all right, title and interest in and to
all of the Shares.
1.3 Consideration and Payment for the Shares. In consideration for the
Shares, Purchaser shall pay to Seller the purchase price of $300,000 ($300,000
Dollars in U.S. currency, plus an amount equal to the cash on hand of the
Company at the time of Closing (together the "Purchase Price"), which sum shall
be wired into the trust account of Purchaser's counsel pursuant to a separate
Escrow Agreement. ("Escrow Agreement") The Purchase Price shall be payable only
upon Closing (as set forth in Article 7 hereof).
1.4 Finder's Fee. Purchaser shall pay a finder's fee ("Finder's Fee")
to Halter Capital Corp., 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000
("Finder"), pursuant to a separate agreement between Purchaser and Finder.
ARTICLE 2
RESIGNATION OF THE OF DIRECTORS AND OFFICERS
2.1 Prior to the Closing, the Company will cause each person who is a
director or officer of the Company, as set forth in Schedule 2.1, to submit his
or her written resignation as director or officer of the Company which will be
effective immediately and the Company will take all steps required to appoint
nominees of Purchaser as directors and officers of the Company.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser the following:
3.1 Transfer of Title. Seller shall transfer title, in and to the
Shares to the Purchaser free and clear of all liens, security interests,
pledges, encumbrances, charges, restrictions, demands and claims, of any kind or
nature whatsoever, whether direct or indirect or contingent.
3.2 (a) Seller's Organization, Good Standing, and Authority. The Seller
is a corporation duly organized, validly existing and in good standing under the
laws of Nevada (as evidenced by the certificate of good standing attached hereto
as Schedule 3.2(a)(1)), with full power and authority to own, lease, use and
operate its properties and to carry on its business as and where now owned,
leased, used, operated and conducted. The Seller has no Subsidiaries other than
the Company. The Seller is not qualified to conduct business as a foreign
corporation in any jurisdiction and does not believe such qualification
necessary All actions taken by the incorporators, directors and shareholders of
the Seller have been valid and in accordance with the laws of the State of
Nevada. The Seller has all requisite corporate power and authority to enter into
and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby and thereby and to deliver the Shares in
accordance with the terms hereof. As used herein, (x) "Subsidiary" means any
Person 50.1% or more of the voting power of which is controlled by another
Person, and (y) "Person" means any individual, corporation, limited liability
company, proprietorship, firm, partnership, limited partnership, trust,
association, or other entity, including government or government department,
agency or instrumentality.
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(b) Authorization. The execution, delivery and performance by the
Seller of this Agreement and the delivery by the Seller of the Shares have been
duly and validly authorized and no further consent or authorization of the
Seller, its Board of Directors, or its shareholders as required (as evidenced by
the resolutions of Seller's shareholders and Board of Directors attached hereto
as Schedule 3.2(b)).
(c) Due Execution. This Agreement has been duly executed and delivered
by the Seller.
(d) Valid Agreement. This Agreement constitutes, and upon execution and
delivery thereof by the Seller, will constitute, a valid and binding agreement
of the Seller enforceable against the Seller in accordance with its respective
terms.
(e) Seller's Title to Shares; No Liens or Preemptive Rights; Valid
Issuance. Seller has and at the Closing will have full and valid title and
control of the Shares; there will be no existing impediment or encumbrance to
the sale and transfer of such Shares to the Purchaser; and on delivery to the
Purchaser of the Shares, all of the Shares will be free and clear of all taxes,
liens, encumbrances, charges or assessments of any kind and shall not be subject
to preemptive rights, tag-along rights, or similar rights of any of the
stockholders of the Company; such Shares will be legally and validly issued in
material compliance with all applicable U.S. federal and state securities laws,
and will be fully paid and non-assessable shares of the Company's common stock;
and the Shares have all been issued under duly authorized resolutions of the
Board of Directors of the Company. On the Closing, Seller shall deliver to the
Purchaser certificates representing the Shares subject to no liens, security
interests, pledges, encumbrances, charges, restrictions, demands or claims in
any other party whatsoever.
3.3 No Governmental Action Required. The execution and delivery by the
Seller of this Agreement does not and will not, and the consummation of the
transactions contemplated hereby will not, require any action by or in respect
of, or filing with, any governmental body, agency or governmental official,
including but not limited to the Securities and Exchange Commission
("Commission") and the National Association of Securities Dealers ("NASD"),
except such actions or filings that have been undertaken or made prior to the
date hereof and that will be in full force and effect (or as to which all
applicable waiting periods have expired) on and as of the date hereof or which
are not required to be filed on or prior to the date of Closing.
3.4 Compliance with Applicable Law and Corporate Documents. The
execution and delivery by the Seller of this Agreement did not and will not and,
the sale by the Seller of the Shares will not contravene or constitute a default
under or violation of (i) any provision of applicable law or regulation, (ii)
the articles of incorporation or by-laws of the Company or Seller, (iii) any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Seller or any its assets, or result in the creation or imposition of any
lien on any asset of the Seller. The Seller is in compliance with and conforms
to all statutes, laws, ordinances, rules, regulations, orders, restrictions and
all other legal requirements of any domestic or foreign government or any
instrumentality thereof having jurisdiction over the conduct of its businesses
or the ownership of its properties.
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3.5 Taxes. All United States federal, state, county, municipality local
or foreign income tax returns and all other material tax returns (including
foreign tax returns) which are required to be filed by or on behalf of the
Seller have been filed (or will be filed in a timely manner) and all material
taxes due pursuant to such returns or pursuant to any assessment received by the
Seller have been paid, except those being disputed in good faith and for which
adequate reserves have been established. The charges, accruals and reserves on
the books of the Seller in respect of taxes or other governmental charges have
been established in accordance with GAAP.
3.6 No Joint Venture. The Seller does not have a direct or indirect
investment in any entity (other than the Company); nor is the Seller a party to
any partnership, management, shareholders' or joint venture or similar agreement
which would affect the Seller's performance of this Agreement or the Seller's
representations and warranties in this Agreement.
3.7 Not an "Investment Company". The Seller is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
3.8 Due Diligence Materials. The information heretofore furnished by
the Seller to the Purchaser for purposes of or in connection with this Agreement
or any transaction contemplated hereby does not, and all such information
hereafter furnished by the Seller to the Purchaser will not (in each case taken
together and on the date as of which such information is furnished), contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein, in the light of the
circumstances under which they are made, not misleading.
3.9 No Solicitation. No form of general solicitation or general
advertising was used by the Seller or, to the best of its actual knowledge, any
other person acting on behalf of the Seller, in connection with the offer and
sale of the Shares. Neither the Seller, nor, to its knowledge, any person acting
on behalf of the Seller, has, either directly or indirectly, sold or offered for
sale to any person (other than the Purchaser) any of the Shares, and the Seller
represents that neither itself nor any person authorized to act on its behalf
(except that the Seller makes no representation as to the Purchaser) will sell
or offer for sale any such security to, or solicit any offers to buy any such
security from, or otherwise approach or negotiate in respect thereof with, any
person or persons so as thereby to cause the issuance or sale of any of the
Shares to be in violation of any of the provisions of Section 5 of the
Securities Exchange Act of 1934 or any other provision of law.
3.10 No Liabilities. There are no liabilities of the Seller of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, which could be charged as a liability to the Company, and to the best
knowledge of Seller there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability.
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3.11 Not a Voting Trust; No Proxies. None of the Shares are or will be
subject to any voting trust or agreement. No person holds or has the right to
receive any proxy or similar instrument with respect to the Shares. Except as
provided in this Agreement, the Company is not a party to any agreement which
offers or grants to any person the right to purchase or acquire any of the
Shares. There is no applicable local, state or federal law, rule, regulation, or
decree which would, as a result of the sale contemplated by this Agreement,
impair, restrict or delay any voting rights with respect to the Shares.
3.12 No Litigation. The Seller is not (and has not been) a party to any
suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the Seller, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against the Seller or the Company and neither the Seller nor the
Company is subject to or in default with respect to any order, writ, injunction,
or decree of any federal, state, local, or foreign court, department, agency, or
instrumentality
3.13 Survival of Representations. The representations and warranties
herein by the Seller will be true and correct in all material respects on and as
of the Closing with the same force and effect as though said representations and
warranties had been made on and as of the Closing and will, except, as otherwise
provided herein, survive the Closing.
3.14 Adoption of Company's Representations. The Seller adopts and
remakes as its own each and every representation made by the Company in Article
4 below.
3.15 No relationship to XXX.Xxx Canada Inc. The Company is not the
parent or subsidiary of, affiliated with, and has no relationship with or
obligation of any kind to XXX.Xxx Canada Inc. ("the Canadian Company"), which is
an unrelated company incorporated under Canadian law. There are no liabilities
of the Canadian Company of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances which could reasonably be expected
to result in any liability to Seller or the Company.
3.16 Corporate Documents Effective. The articles of incorporation, as
amended, and the bylaws of the Seller, annexed hereto as Schedule 3.16, are, or
will at Closing be, in full force and effect and all actions of the Board of
Directors or shareholders required to accomplish same have, or will at Closing
have been, taken.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser the following:
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4.1 Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of Florida (as evidenced by
the certificate of good standing attached hereto as Schedule 4.1), with full
power and authority to own, lease, use and operate its properties and to carry
on its business as and where now owned, leased, used, operated and conducted.
The Company has no Subsidiaries. The Company is not qualified to conduct
business as a foreign corporation in any jurisdiction and does not believe that
such qualification is necessary. All actions taken by the incorporators,
directors and shareholders of the Company have been valid and in accordance with
the laws of the State of Florida.
4.2 (a)Company Authority. The Company has all requisite corporate power
and authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby and to effect the transfer of the Shares in
accordance with the terms hereof.
(b) Due Authorization. The execution, delivery and performance by
the Company of this Agreement has been duly and validly authorized and no
further consent or authorization of the Company, its Board of Directors or its
shareholders is required, as is evidenced by the resolutions of the Company's
Board of Directors annexed hereto as Schedule 4.2(b).
(c) Valid Execution. This Agreement has been duly executed and
delivered by the Company.
(d) Binding Agreement. This Agreement constitutes, and upon
execution and delivery thereof by the Company, will constitute, a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms.
(e) No Violation of Corporate Documents or Agreements. The
execution and delivery of this Agreement by the Company and the performance by
the Company of its obligations hereunder will not cause, constitute, or conflict
with or result in (i) any breach or violation or any of the provisions of or
constitute a default under any license, indenture, mortgage, charter,
instrument, articles of incorporation, bylaw, or other agreement or instrument
to which the Company or its shareholders are a party, or by which they may be
bound, nor will any consents or authorizations of any party other than those
hereto by required, (ii) an event that would cause the Company to be liable to
any party, or (iii) an event that would result in the creation or imposition or
any lien, charge or encumbrance on any asset of the Company or on the securities
of the Company to be acquired by the Buyer.
4.3. Authorized Capital; No Preemptive Rights; No Liens; Anti-Dilution.
As of the date hereof, the authorized capital of the Company is 50,000,000
shares of common stock with a par value of $0.001 per share. The issued and
outstanding capital stock of the Company is 16,900,000 shares of common stock
and no other shares of capital stock of the Company will be issued or
outstanding as of the date of Closing. All of such outstanding shares of capital
stock are, or upon issuance will be, duly authorized, validly issued, fully paid
and non-assessable. No shares of capital stock of the Company are subject to
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preemptive rights or similar rights of the stockholders of the Company or any
liens or encumbrances imposed through the actions or failure to act of the
Company, or otherwise. As of the date hereof and at Closing, (i) there are no
outstanding options, warrants, convertible securities, scrip, rights to
subscribe for, puts, calls, rights of first refusal, tag-along agreements, nor
any other agreements, understandings, claims or other commitments or rights of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for any shares of capital stock of the Company, or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company, and (ii) there are no agreements or arrangements
under which the Company is obligated to register the sale of any of its
securities under the Securities Act and (iii) there are no anti-dilution or
price adjustment provisions contained in any security issued by the Company (or
in the Company's articles of incorporation or by-laws or in any agreement
providing rights to security holders) that will be triggered by the transactions
contemplated by this Agreement. The Company has furnished to Purchaser true and
correct copies of the Company's articles of incorporation and by-laws.
4.4 Seller's Title to Shares; No Liens or Preemptive Rights; Valid
Issuance. Seller has and at the Closing will have full and valid title and
control of the Shares; there will be no existing impediment or encumbrance to
the sale and transfer of such Shares to the Purchaser; and on delivery to the
Purchaser of the Shares, all of the Shares will be free and clear of all taxes,
liens, encumbrances, charges or assessments of any kind and shall not be subject
to preemptive rights, tag-along rights, or similar rights of any of the
stockholders of the Company; such Shares will be legally and validly issued in
material compliance with all applicable U.S. federal and state securities laws,
and will be fully paid and non-assessable shares of the Company's common stock;
and the Shares have all been issued under duly authorized resolutions of the
Board of Directors of the Company. On the Closing, Seller shall deliver to the
Purchaser certificates representing the Shares subject to no liens, security
interests, pledges, encumbrances, charges, restrictions, demands or claims in
any other party whatsoever.
4.5 No Governmental Action Required. The execution and delivery by the
Company of this Agreement does not and will not, the sale by Seller of the
Shares does not and will not, and the consummation of the transactions
contemplated hereby will not, require any action by or in respect of, or filing
with, any governmental body, agency or governmental official, including but not
limited to the Commission and the NASD, except such actions or filings that have
been undertaken or made prior to the date hereof and that will be in full force
and effect (or as to which all applicable waiting periods have expired) on and
as of the date hereof or which are not required to be filed on or prior to the
Closing.
4.6 Compliance with Applicable Law and Corporate Documents. The
execution and delivery by the Company of this Agreement does not and will not
contravene or constitute a default under or violation of (i) any provision of
applicable law or regulation, (ii) the Company's articles of incorporation or
bylaws, (iii) any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or any its assets, or result in the creation
or imposition of any lien on any asset of the Company. The Company is in
compliance with and conforms to all statutes, laws, ordinances, rules,
regulations, orders, restrictions and all other legal requirements of any
domestic or foreign government or any instrumentality thereof having
jurisdiction over the conduct of its businesses or the ownership of its
properties.
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4.7 SEC Representations. Since July 10, 1998 through the date hereof,
the Company has timely filed all forms, reports and documents with the
Commission required to be filed by it (all of the foregoing filed prior to the
date hereof, including but not limited to any filings required in connection
with or pursuant to Regulation D, Sections 504, 505, and 506, as applicable, and
all exhibits included therein and financial statements and schedules thereto and
documents (other than exhibits) incorporated by reference therein, being
referred to herein collectively as the "SEC Reports"). The Company has delivered
to Purchaser true and complete copies of the SEC Reports. Such SEC Reports, at
the time filed, complied in all material respects with the requirements of the
federal and state securities laws and the rules and regulations of the
Commission thereunder applicable to such SEC Reports. None of the SEC Reports,
including without limitation, any financial statements or schedules included
therein, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
4.8 Financial Statements. (a) The Purchaser has received a copy of the
audited financial statements of the Company as of May 21, 1998, and the related
statements of income and retained earnings for the period then ended. ("May 1998
Financial Statement"), which are annexed hereto as Schedule 4.8(a) The May 1998
Financial Statement was prepared in accordance with generally accepted
accounting principles consistently followed by the Company throughout the
periods indicated. The Purchaser has received a copy of the unaudited financial
statements of the Company for the year ended December 31, 1998, and December 31,
1999, and the related statements of income and retained earnings for the period
then ended ("December 1998 and December 1999 Unaudited Financial Statements"),
which are annexed hereto as Schedule 4.8(b). The December 1998 and December 1999
Unaudited Financial Statements have been prepared by management, and are
believed to fairly present the financial position of the Company as of the date
of the financial statements, subject to changes required by the auditors which
might be shown on the Company's audited financial statements for the periods
ended December 31, 1998 and December 31, 1999. The December 1998 and December
1999 Unaudited Financial Statements fairly present the financial condition of
the Company at the dates indicated and its results of their operations and cash
flows for the periods then ended and, except as indicated therein, reflect all
claims against, debts and liabilities of the Company, fixed or contingent, and
of whatever nature. Seller shall provide to Purchaser audited financial
statements for the periods ended December 31, 1998 and December 31, 1999,
prepared by an SEC recognized auditor, within 30 days of the Closing as provided
in the Escrow Agreement. ("December 1998 and December 1999 Audited Financial
Statements")
(b) Since December 31, 1999 (the "Balance Sheet Date"), there has been
(x) no material adverse change in the assets or liabilities, or in the business
or condition, financial or otherwise, or in the results of operations or
prospects, of the Company, whether as a result of any legislative or regulatory
change, revocation of any license or rights to do business, fire, explosion,
accident, casualty, labor trouble, flood, drought, riot, storm, condemnation,
act of God, public force or otherwise and (y) no material adverse change in the
assets or liabilities, or in the business or condition, financial or otherwise,
or in the results of operations or prospects, of the Company, except in the
ordinary course of business; and no fact or condition exists or is contemplated
or threatened which might cause such a change in the future.
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(c) There have been no material adverse changes in the Company's
business, properties, results of operations, condition (financial or otherwise)
or prospects since the Balance Sheet Date.
4.9 No Litigation. The Company is not (and has not been) a party to
any suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the best knowledge of the Company, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against the Company and the Company is not subject to or in
default with respect to any order, writ, injunction, or decree of any federal,
state, local, or foreign court, department, agency, or instrumentality.
4.10 No Taxes. The Company is not liable for any income, sales,
withholding, real or personal property taxes to any governmental agencies
whatsoever. All United States federal, state, county, municipality local or
foreign income tax returns and all other material tax returns (including foreign
tax returns) which are required to be filed by or on behalf of the Company have
been filed or will be filed within 30 days of the Closing as provided in the
Escrow Agreement and all material taxes due pursuant to such returns or pursuant
to any assessment received by the Company have been or will be paid by Seller
within 30 days after the Closing, except those being disputed in good faith and
for which adequate reserves have been established. The charges, accruals and
reserves on the books of the Company in respect of taxes or other governmental
charges have been established in accordance with GAAP.
4.11 (a) The Company is not currently carrying on any business and is
not a party to any contract, agreement, lease or order which would subject it to
any performance or business obligations or restrictions in the future after the
closing of this Agreement.
(b) The Company has no employment contracts or agreements with any
of its officers, directors, or with any consultants, employees or other such
parties.
(c) The Company has no shareholder contracts or agreements.
(d) The Company has no insurance, stock option plans or employee
benefit plans whatsoever.
(e) The Company is not in default under any contract, or any other
document.
(f) The Company has no written or oral contracts with any third
party.
(g) The Company has no outstanding powers of attorney and no
obligations concerning the performance of the Seller concerning this Agreement.
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(h) The Company does not have a direct or indirect Investment
("Investment" means any investment, whether by means of share purchase,
partnership interest, capital contribution, loan, time deposit or otherwise) in
any Person ("Person" means individual, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof) or other entity of
any kind) and the Company is not a party to any partnership, management,
shareholders' or joint venture or similar agreement.
(i) (A) The Company has all material Permits ("Permits" means all
licenses, franchises, grants, authorizations, permits, easements, variances,
exemptions, consents, certificates, orders and approvals necessary to own, lease
and operate the properties of, and to carry on the business of the Company); (B)
all such Permits are in full force and effect, and the Company has fulfilled and
performed all material obligations with respect to such Permits; (C) no event
has occurred which allows, or after notice or lapse of time would allow,
revocation or termination by the issuer thereof or which results in any other
material impairment of the rights of the holder of any such Permit; and (D) the
Company has no reason to believe that any governmental body or agency is
considering limiting, suspending or revoking any such Permit.
(j) The Company does not have and will not have any assets at the
time of Closing other than cash, as disclosed in the December 1999 Audited
Financial Statement. The Company does not own any real estate or any interests
in real estate. The Company does not own any patents, copyrights, or trademarks.
The Company does not license the intellectual property of others nor owe fees or
royalties on the same.
(k) Neither the Company nor, to the Company's knowledge, any
employee or agent of the Company has made any payments of funds of the Company,
or received or retained any funds, in each case (x) in violation of any law,
rule or regulation or (y) of a character required to be disclosed by the Company
in any of the SEC Reports.
(l) There are no outstanding judgments or UCC financing
instruments or UCC Securities Interests filed against the Company or any of its
properties.
(m) The Company has no debt, loan, or obligations of any kind, to
any of its directors, officers, shareholders, or employees, which will not be
satisfied at the Closing other than as set forth on Schedule 4.11(m).
4.12 Not an "Investment Company", Not a Reporting Company The Company
is not an "investment company" within the meaning of the Investment Company Act
of 1940, as amended. The Company is not subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act.
4.13 Not a "Blind Pool" The Company was not, has not been, and is not,
at any time between July 10,1998 and the present, a " blind pool" as that term
is generally interpreted, or a "blank check company" as that term is defined in
Rule 419 of the Securities and Exchange Act of 1933.
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4.14 Not a "Control Share Acquisition" The acquisition of the Shares by
Purchaser from Seller is not and will not be a "control share acquisition" as
defined in Section 607.0902, Title XXXVI of the Florida Business Corporations
Act ("FBCA"), and none of the provisions of Chapter 607 of the Act apply to the
transactions contemplated herein.
4.15 No Shareholder Approval Required. The acquisition of the Shares by
Purchaser from Seller does not require the approval of the shareholders of the
Company under the FBCA, the Company's articles of incorporation or bylaws, or
any other requirement of law or, if shareholder approval is required it has or
will, prior to the Closing, be properly obtained in accordance with the
requirements of the Company's articles of incorporation and by-laws and the
FBCA.
4.16 No Dissenters' Rights. The acquisition of the Shares by Purchaser
from Seller will not will not give rise to any dissenting shareholders' rights
under Sections 607.0902 or 607.1302 of the FBCA, the Company's articles of
incorporation or bylaws, or otherwise.
4.17 No Liabilities. There are no liabilities of the Company of any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise and, to the best knowledge of Seller, there is no existing
condition, situation or set of circumstances which could reasonably be expected
to result in such a liability.
4.18 Not Subject to Voting Trust. None of the Shares are or will be
subject to any voting trust or agreement. No person holds or has the right to
receive any proxy or similar instrument with respect to such shares. The Company
is not a party to any agreement which offers or grants to any person the right
to purchase or acquire any of the securities to be issued pursuant to this
Agreement. There is no applicable local, state or federal law, rule, regulation,
or decree which would, as a result of the transfer of the Shares to Purchaser,
impair, restrict or delay any voting rights with respect to the Shares.
4.19 OTC Listing. The Company is currently listed on the OTC Electronic
Bulletin Board with the following trading symbol: "VDOO". The Company is not in
default with respect to any listing requirements of the NASD.
4.20 Prior Offerings. All issuances by the Company of shares of common
stock in past transactions have been legally and validly effected, and all of
such shares of common stock are fully paid and non-assessable. To the date of
this Agreement, the Company has offered its shares for sale only as shown on
Schedule 4.20 annexed hereto. All of the offerings listed on Schedule 4.20 were
conducted in strict accordance with the requirements of Regulation D, Rules 504
and 506, as applicable, in full compliance with the requirements of the
Securities Exchange Acts of 1933 and 1934, as applicable, and in full compliance
with and according to the requirements of the FBCA and the Company's articles of
incorporation and bylaws. The Company did not prepare or distribute any offering
prospectus, solicitation, or other documents in connection with any prior
offering and has provided to Purchaser copies of all documents prepared and
filed in connection with any such offerings. All investors in all prior
offerings were "accredited" investors as that term is defined in Rule 501 of
Regulation D.
11
4.21 Compliance with Law. To the best of its knowledge, the Company has
complied with, and is not in violation of any provision of laws or regulations
of federal, state or local government authorities and agencies. There are no
pending or threatened proceedings against the Company by any federal, state or
local government, or any department, board, agency or other body thereof.
4.22 Corporate Documents Effective. The articles of incorporation, as
amended, annexed hereto as Schedule 4.22, are, or will at Closing be, in full
force and effect and all actions of the Board of Directors or shareholders
required to accomplish same have, or will at Closing have been, taken.
4.23 True Representations. The information heretofore furnished by the
Company to the Purchaser for purposes of or in connection with this Agreement or
any transaction contemplated hereby does not, and all such information hereafter
furnished by the Company to the Purchaser will not (in each case taken together
and on the date as of which such information is furnished), contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein, in the light of the circumstances
under which they are made, not misleading.
4.24 No relationship to XXX.Xxx Canada Inc. The Company is not the
parent or subsidiary of, affiliated with, and has no relationship with or
obligation of any kind to XXX.Xxx Canada Inc. ("the Canadian Company"), which is
an unrelated company incorporated under Canadian law. There are no liabilities
of the Canadian Company of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances which could reasonably be expected
to result any liability to Seller or the Company.
4.25 Survival. The representations and warranties herein by the Company
will be true and correct in all material respects on and as of the Closing with
the same force and effect as though said representations and warranties had been
made on and as of the Closing Time and will, except, as otherwise provided
herein, survive the Closing for a period of one (1) year.
ARTICLE 5
COVENANTS
From the date of this Agreement to Closing, the Seller and the Company
covenant as follows:
5.1 They will each to the best of their ability preserve intact the
current status of the Company and the trading capacity of the Company as a NASD
Bulletin Board company.
12
5.2 The Seller will furnish Purchaser with whatever corporate records
and documents are available, such as Articles of Incorporation and Bylaws.
5.3 The Company will not enter into any contract, written or oral, or
business transaction, merger or business combination, or incur any debts, loan,
or obligations without the express written consent of Purchaser or enter into
any agreements with its officers, directors, or shareholders.
5.4 The Company will not amend or change its Articles of Incorporation
or Bylaws, or issue any further shares in the common stock of the Company
without the express written consent of Purchaser.
5.5 The Company will not issue any stock options, warrants or other
rights or interests in the Shares or to its shares of common stock.
5.6 The Seller will not encumber or mortgage any right or interest in
the Shares, and will not transfer any rights to the Shares to any third party
whatsoever.
5.7 The Company will not declare any dividend in cash or stock, or any
other benefit to its shareholders.
5.8 The Company will not institute any bonus, benefit, profit sharing,
stock option, pension retirement plan or similar arrangement.
5.9 The Seller will obtain and submit to the Purchaser resignations of
current officers and directors.
5.10 The Company will arrange for the Company's current bank account to
be closed, all funds transferred into trust, and the delivery of all bank
account statements and records pertaining to this account.
ARTICLE 6
INDEMNIFICATION
6.1 Seller hereby agrees to, indemnify and hold harmless the Purchaser
and the Company (which includes, for purposes of this Article, Purchaser's and
the Company's officers and directors, and shareholders) against any Losses,
joint or several, to which Purchaser may become subject under the Exchange Act,
any state or federal law, statutory or common law, or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise by reason of the inaccuracy
of any warranty or representation contained in this Agreement, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and Seller
will in addition reimburse Purchaser and the Company for any legal or any other
expenses reasonably incurred by Purchaser in connection with investigating or
defending any such loss, claim, liability, action or proceeding. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of Purchaser and shall survive the Closing for a period of one (1)
year. As used herein, "Losses" means any loss, claim, demand, damage, award,
liabilities, suits, penalties, forfeitures, cost or expense (including, without
limitation, reasonable attorneys', consultant and other professional fees and
disbursements of every kind, nature and description).
13
ARTICLE 7
CLOSING AND DELIVERY OF DOCUMENTS
7.1 Closing. The closing shall be held on or before March 17, 2000, but
this date may be extended by mutual agreement of the parties for an additional
seven (7) days. The Closing shall occur as a single integrated transaction, as
follows:
(a) Delivery by Seller
(i) Seller shall deliver to the Purchaser such instruments,
documents and certificates as are required to be delivered by Seller or its
representatives pursuant to the provisions of this Agreement, subject only to
the Escrow Agreement.
(ii) Seller shall deliver the Certificates as directed by
Purchaser and appropriate powers of attorney made in blank with requisite
medallion guaranties in a form acceptable to the Company's transfer agent for
transfer of the Shares into the name of the Purchaser or Purchaser's designee.
(b) Delivery by Purchaser
(i) The Purchaser shall pay the Purchase Price to the Seller
as provided in this Agreement and subject to the Escrow Agreement.
(ii) The Purchaser shall deliver, or cause to be delivered, to
Seller such instruments, documents and certificates as are required to be
delivered by the Purchaser or their representatives pursuant to the provisions
of this Agreement.
(iii) The Purchaser shall pay the Finder's Fee pursuant to a
separate agreement.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Mutual Consent. Notwithstanding anything to the contrary contained
in this Agreement, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to delivery of the
Purchase Price solely by the mutual consent of all of the parties.
8.2 Waiver. Any term, provision, covenant, representation, warranty or
condition of this Agreement may be waived, but only by a written instrument
signed by the party entitled to the benefits thereof. The failure or delay of
any party at any time or times to require performance of any provision hereof or
to exercise its rights with respect to any provision hereof shall in no manner
operate as a waiver of or affect such party's right at a later time to enforce
the same. No waiver by any party of any condition, or of the breach of any term,
provision, covenant, representation or warranty contained in this Agreement, in
any one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach or waiver of any other
condition or of the breach of any other term, provision, covenant,
representation or warranty. No modification or amendment of this Agreement shall
be valid and binding unless it be in writing and signed by all parties hereto.
14
8.3 Termination by Purchaser. Notwithstanding anything to the contrary
herein, Purchaser shall have the right, in its sole and absolute discretion, at
any time prior to its payment of the Purchase Price, to terminate this
Agreement, in which event, this Agreement shall be terminated and no party shall
have any further obligation to any other party.
ARTICLE 9
MISCELLANEOUS
9.1 Entire Agreement This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not set forth.
9.2 Notices All notices provided for in this Agreement shall be in
writing signed by the party giving such notice, and delivered personally or sent
by overnight courier or messenger or sent by registered or certified mail (air
mail if overseas), return receipt requested, or by telex, facsimile
transmission, telegram or similar means of communication. Notices shall be
deemed to have been received on the date of personal delivery, telex, facsimile
transmission, telegram or similar means of communication, or if sent by
overnight courier or messenger, shall be deemed to have been received on the
next delivery day after deposit with the courier or messenger, or if sent by
certified or registered mail, return receipt requested, shall be deemed to have
been received on the third business day after the date of mailing. Notices shall
be sent to the addresses set forth below:
15
If to Seller: Xxxxxx Xxxxx
-------------
VLR Holdings, Inc.
0000 Xxxx Xxxxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
with a copy to: Xxxxx Xxxxxxx
---------------
VENTURE LAW CORPORATION
Suite 618 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Purchaser: Xxxxxx Xxxxxxxxx
---------------
Embryo Capital, Inc.
0000 Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
with a copy to: Xxxxxx X. Crystal, Esq.
--------------
Xxxxxx Xxxxxxxx Xxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company: XXX.Xxx, Inc.
-----------------
c/o VLR Holdings, Inc.
0000 Xxxx Xxxxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
with a copy to: Xxxxx Xxxxxxx
---------------
VENTURE LAW CORPORATION
Suite 618 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
16
9.3 Governing Law. This Agreement shall be governed in all respects,
including validity, construction, interpretation and effect, by the laws of the
State of New York (without regard to principles of conflicts of law). Each of
the parties hereto agrees to submit to the exclusive jurisdiction of any federal
or state court within the County of New York, with respect to any claim or cause
of action arising under or relating to this Agreement. The parties agree that
any service of process to be made hereunder may be made by certified mail,
return receipt requested, addressed to the party at the address appearing in
Section 9.2, together with a copy to be delivered to such party's attorneys via
telecopier (if provided in Section 9.2). Such service shall be deemed to be
completed when mailed and sent and received by telecopier. Seller and Purchaser
each waives any objection based on forum non conveniens. Nothing in this
paragraph shall affect the right of Seller or Purchaser to serve legal process
in any other manner permitted by law.
9.4 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.5 Taxes Any income taxes required to be paid in connection with the
payments due hereunder, shall be borne by the party required to make such
payment. Any withholding taxes in the nature of a tax on income shall be
deducted from payments due, and the party required to withhold such tax shall
furnish to the party receiving such payment all documentation necessary to prove
the proper amount to withhold of such taxes and to prove payment to the tax
authority of such required withholding.
9.6 Waivers and Amendments; Non-Contractual Remedies; Preservation of
Remedies. This Agreement may be amended, superseded, cancelled, renewed, or
extended, and the terms hereof may be waived, only by a written instrument
signed by authorized representatives of the parties or, in the case of a waiver,
by an authorized representative of the party waiving compliance. No such written
instrument shall be effective unless it expressly recites that it is intended to
amend, supersede, cancel, renew or extend this Agreement or to waive compliance
with one or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege shall hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any such right, power or privilege, or any single or partial exercise of any
such right, power of privilege, preclude any further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies that any
party may otherwise have at law or in equity. The rights and remedies of any
party based upon, arising out of or otherwise in respect of any inaccuracy in or
breach of any representation, warranty, covenant or agreement contained in this
Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement contained in this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
17
9.7 Binding Effect; No Assignment, No Third-Party Rights. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. This Agreement is not
assignable without the prior written consent of each of the parties hereto or by
operation of law.
9.8 Further Assurances. Each party shall, at the request of the other
party, at any time and from time to time following the Closing promptly execute
and deliver, or cause to be executed and delivered, to such requesting party all
such further instruments and take all such further action as may be reasonably
necessary or appropriate to carry out the provisions and intents of this
Agreement and of the instruments delivered pursuant to this Agreement.
9.9 Severability of Provisions. If any provision or any portion of any
provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or portion of
such provision is held invalid or unenforceable to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and such provision or portion of any provision as shall have
been held invalid or unenforceable shall be deemed limited or modified to the
extent necessary to make it valid and enforceable; in no event shall this
Agreement be rendered void or unenforceable.
9.10 Exhibits and Schedules. All exhibits annexed hereto, and all
schedules referred to herein, are hereby incorporated in and made a part of this
Agreement as if set forth herein. Any matter disclosed on any schedule referred
to herein shall be deemed also to have been disclosed on any other applicable
schedule referred to herein.
9.11 Captions. All section titles or captions contained in this
Agreement or in any schedule or exhibit annexed hereto or referred to herein,
and the table of contents to this Agreement, are for convenience only, shall not
be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement. All references herein to sections shall be
deemed references to such parts of this Agreement, unless the context shall
otherwise require.
9.12 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the Closing occurs, each party hereto shall pay its
own expenses incidental to the preparation of this Agreement, the carrying out
of the provisions hereof and the consummation of the transactions contemplated.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date first written herein above.
XXX.XXX, INC. EMBRYO CAPITAL GROUP, INC.
--------------------------- ---------------------------
By: Xxxxxx Xxxxx, President By: Xxxxxx Xxxxxxxxx
VLR HOLDINGS CORP.
By: Xxxxxx Xxxxx, President
19
SCHEDULE 2.1
Directors and Officers of XXX.Xxx and Certificates of Resignation
SCHEDULE 3.2(a)
Seller's Certificate of Good Standing
SCHEDULE 3.2(b)
Resolutions of Seller's Shareholders and Board of Directors
SCHEDULE 3.10
Liabilities of Seller
SCHEDULE 3.16
Seller's Articles of Incorporation, Bylaws, and Amendments
SCHEDULE 4.1
The Company's Certificate of Good Standing
SCHEDULE 4.2(b)
Resolutions of the Company's Board of Directors
SCHEDULE 4.8(a)
May 21, 1998 Audited Financial Statement of the Company
SCHEDULE 4.8(b)
December 1998 and December 1999 Unaudited Financial Statements of the Company
SCHEDULE 4.17
The Company's Liabilities
SCHEDULE 4.20
The Company's Past Offerings
SCHEDULE 4.22
The Company's Articles of Incorporation and Amendments
