Exhibit 10.5
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
this 9th day of October 2003, by and among Prelude Ventures, Inc., a Nevada
corporation ("Prelude"); Tri-State Stores, Inc., an Illinois Corporation
("Tri-State"), GMG Partners LLC, an Illinois Limited Liability Company ("GMG")
and SASCO Springfield Auto Supply Company, a Delaware Corporation, ("SASCO")
(Tri-State, GMG and SASCO are collectively referred to herein as "TSG"), based
on the following:
RECITALS
Prelude, through its subsidiary, Tri-State Stores Acquisition Corp., a
Delaware Corporation ("NEWCO"), wishes to acquire an option to purchase all the
assets and certain liabilities of Tri-State, GMG and SASCO in exchange for FIVE
HUNDRED THOUSAND DOLLARS ($500,000) shall hereby adopt.
AGREEMENT
Based on the stated premises, which are incorporated herein by
reference, and for and in consideration of the mutual covenants and agreements
hereinafter set forth, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
ASSET PURHCASE
1.01 Asset Purchase. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 1.05
hereof), TSG shall assign, transfer, and deliver to Prelude, the option to
purchase, subject to the terms and conditions contained in the option agreement,
all of the assets and certain liabilities of TSG (the "TSG Assets"), as set
forth on the appropriate Schedule 1.01 annexed hereto.
1.02 Further Assurances. At the Closing and from time to time
thereafter, the TSG Stockholders shall execute such additional instruments and
take such other action as Prelude may reasonably request, without undue cost to
the TSG Stockholders in order to more effectively sell, transfer, and assign
clear title and ownership in the TSG Assets to Prelude.
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1.03 Closing and Parties. The Closing contemplated hereby shall be held
at a mutually agreed upon time and place on or about October 9, 2003, or on
another date to be agreed to in writing by the parties (the "Closing Date"). The
Agreement may be closed at any time following approval by a majority of the
shareholders of Prelude Common Stock as set forth in Section 4.02 hereof and the
TSG Stockholders as set forth in Section 5.02. The Closing may be accomplished
by wire, express mail, overnight courier, conference telephone call or as
otherwise agreed to by the respective parties or their duly authorized
representatives.
1.06 Closing Events
(a) Prelude Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article IV, Prelude shall deliver to TSG at Closing all
the following:
(i) A certificate of good standing from the secretary of State
of Nevada, issued as of a date within sixty days prior to the
Closing Date, certifying that Prelude is in good standing as a
corporation in the State of Nevada:
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of Prelude executing
this Agreement and any other document delivered pursuant
hereto on behalf of Prelude;
(iii) Copies of the resolution of Prelude board of directors
and shareholder minutes or consents authorizing the execution
and performance of this Agreement and the contemplated
transactions, certified by the secretary or an assistant
secretary of Prelude as of the Closing Date;
(iv) The certificate contemplated by Section 4.02, duly
executed by the chief executive officer of Prelude;
(v) The certificate contemplated by Section 4.03, dated the
Closing Date, signed by the chief executive officer of
Preludeand;
(x) Prelude shall enter into Consulting Agreements with New
Century Capital Consultants, Inc. Alpha Advisors LLC, National
Securities Corporation and Commonwealth Partners NY LLC, on
the terms and conditions as agreed upon by all parties.
In addition to the above deliveries, Prelude shall take all steps and
actions as TSG and TSG Stockholders may reasonably request or as may otherwise
be reasonably necessary to consummate the transactions contemplated hereby.
(b) TSG Deliveries. Subject to fulfillment or waiver of the conditions
set forth in Article V, TSG and/or TSG Stockholder's shall deliver to Prelude at
Closing all the following:
(i) The Option Agreement as specified in Section 1.01.
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In addition to the above deliveries, TSG shall take all steps and
actions as Prelude may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
1.04. Termination
(a) This Agreement may be terminated by the board of directors of
either Prelude or TSG at any time prior to the Closing Date if:
(i) There shall be any actual or threatened action of
proceeding before any court or any governmental body which
shall seek to restrain, prohibit, or invalidate the
transaction contemplated by this Agreement and which, in the
reasonable judgment of such board of directors, made in good
faith and based upon the advice of its legal counsel, makes it
inadvisable to proceed with the transactions contemplated by
this Agreement;
(ii) Any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions or in the reasonable
judgment of such board of directors, made in good faith and
based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will
be obtained only on a condition or conditions which would be
unduly burdensome, making it inadvisable to proceed with the
exchange;
In the event of termination pursuant to this paragraph (a) of Section
1.07, no obligation, right, or liability shall arise hereunder, and each party
shall bear all of the expenses incurred by it in contemplated hereby.
ARTICLE II
REPRESENTATION, COVENANTS, AND WARRANTIES OF PRELUDE
As an inducement to, and to obtain the reliance of TSG and/or TSG
shareholders, Prelude represents and warrants as follows:
2.01 Organization. Prelude is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the state of Nevada and has the corporate power and is and will be duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there are no other jurisdictions in which it is
not so qualified in which the character and location of the assets owned by it
or the nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operation, properties, assets or condition. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
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violate any provision of Prelude articles of incorporation or bylaws, or other
agreement to which it is a party or by which it is bound.
2.02 Approval of Agreement. Prelude has full power, authority, and
legal right and has taken, or will take, all action required by law, its
articles of incorporation, bylaws, and otherwise to execute and deliver this
Agreement and to consummate the transaction herein contemplated. The board of
directors of Prelude has authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby; subject
to the approval of the Prelude shareholders and compliance with state and
federal corporate and securities laws.
2.03 Capitalization. The authorized capitalization of Prelude consists
of 100,000,000 shares, of common stock, $0.001 par value, of which approximately
15,000,000 shares are issued and outstanding and 10,000,000 shares of preferred
stock, $0.001 par value of which none are issued and outstanding. All issued and
outstanding shares of Prelude are legally issued, fully paid, and nonassessable
and not issued in violation of the preemptive or other right of any person.
There are no dividends or other amounts due or payable with respect to any of
the shares of capital stock of Prelude.
2.04 Financial Statements.
(a) Included in the Schedules are the audited balance sheets of Prelude
as of December 31, 2002 and 2001, and the related statement of operations,
stockholder's equity (deficit), and cash flows for the fiscal year ended
December 31, 2002, and 2001, including the notes thereto, and the accompanying
report of XXXXXXX XXXXXX; independent certified public accountants. At or prior
to the Closing Date, Prelude shall deliver the un-audited balance sheet of
Prelude as of June 30, 2003, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the six months ended June 30,
2003, together with the notes thereto and representations by the principal
accounting and financial officer of Prelude to the effect that such financial
statements contain all adjustments (all of which are normal recurring
adjustments) necessary to present fairly the results of operations and financial
position for the periods and as of the dates indicated and such financial
statements shall not reflect any material changes since the December 31, 2002,
financial statements. All documents referred to herein are available as public
disclosure document pursuant to the Periodic Filing Requirements and as listed
on the XXXXX system of the SEC.
(b) The financial statements of Prelude delivered pursuant to Section
2.04(a) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved as explained in
the notes to such financial statements. The Prelude financial statements present
fairly, in all material respects, as of their respective dates, the financial
position of Prelude. Prelude did not have, as of the date of any such financial
statements, except as and to the extent reflected or reserved against therein,
any liabilities or obligations (absolute or contingent) which should be
reflected therein in accordance with generally accepted accounting principles,
and all assets reflected therein presently fairly the assets of Prelude in
accordance with generally accepted accounting principles
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(c) Prelude has filed or will file as the Closing Date all tax returns
required to be filed by it from inception to the Closing Date. All such returns
and reports are accurate and correct in all material respect. Prelude has no
material liabilities with respect to the payment of any federal, state, county,
local, or other taxes (including any deficiencies, interest, or penalties)
accrued for or applicable to the period ended on the date of the most recent
balance sheet of Prelude, except to the extent reflected on such balance sheet
and all such dates and years and periods prior thereto and for which Prelude may
at said date have been liable in its own right or as transferee of the assets
of, or as successor to, any other corporation or entity, except for taxes
accrued but not yet due and payable, and to the best knowledge of Prelude, no
deficiency assessment or proposed adjustment of any such tax return is pending,
proposed or contemplated. To the best knowledge of Prelude, none of such income
tax returns has been examined or is currently being examined by the Internal
Revenue Service and no deficiency assessment or proposed adjustment of any such
return is pending, proposed or contemplated. Prelude has not made any election
pursuant to the provisions of any applicable tax laws (other than elections that
relate solely to methods of accounting, depreciation, or amortization) that
would have a material adverse affect on Prelude, its financial condition, its
business as presently conducted or proposed to be conducted, or any of its
respective properties or material assets. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any tax
return of Prelude.
2.05 Outstanding Warrants and Options. Prelude has no existing
Warrants, options, calls, or commitments of any nature relating to the
authorized and un-issued Prelude Common Stock.
2.06 Information. The information concerning Prelude set forth in this
Agreement is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. Prelude shall cause the schedules delivered by
it pursuant hereto and the instruments delivered to TSG hereunder to be updated
after the date hereof up to and including the Closing Date.
2.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement or the schedules hereto, since the date of the most recent Prelude
balance sheet described in Section 2.04 and included in the information referred
to in Section 2.06.
(a) There has not been (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or condition of Prelude or
(ii) any damage, destruction, or loss to Prelude (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or conditions of Prelude;
(b) Prelude has not (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to stockholders
or purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock; (iii) waived any rights of value which in the aggregate are extraordinary
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or material considering the business of Prelude; (iv) made any material change
in its method of management, operation, or accounting; (v) entered into any
other material transactions; (vi) made any accrual or arrangement for or payment
of bonuses or special compensation of any kind or any severance or termination
pay to any present or former officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers or
directors or any of its employees whose monthly compensation exceeds $1,000; or
(viii) made any increase in any profit-sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan, payment, or
arrangement made to, for, or with its officers, directors, or employees;
(c) Prelude has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability (absolute
or contingent) except liabilities incurred in the ordinary course of business;
(iii) paid any material obligation or liability (absolute or contingent) other
than current liabilities reflected in or shown on the most recent Prelude
balance sheet and current liabilities incurred since that date in the ordinary
course of business; (iv) sold or transferred, or agreed to sell or transfer, any
of its material assets, properties, or rights (except assets, properties, or
rights not unused or un-useful in its business which, in the aggregate have a
value of less than $5,000 or canceled, or agreed to cancel, any debts or claims
(except debts and claims which in the aggregate are of a value of less than
$5,000; (v) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or termination is
material, considering the business of Prelude; or (vi) issued, delivered, or
agreed to issue or deliver any stock, bonds, or other corporate securities
including debentures (whether authorized and un-issued or held as treasury
stock); and
(d) To the best knowledge of Prelude, it has not become subject to any
law or regulation which materially and adversely affects, or in the future would
be reasonably expected to adversely affect, the business, operations,
properties, assets, or condition of Prelude.
2.08 Litigation and Proceeding. There are no material actions, suits,
or administrative or other proceedings pending or, to the knowledge of Prelude,
threatened by or against Prelude or adversely affecting Prelude or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign, or before any arbitrator of any kind.
Prelude does not have any knowledge of any default on its part with respect to
any default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule, or regulation of any court, arbitrator, or governmental
agency or instrumentality.
2.09 Compliance With Laws and Regulations. Prelude has complied with
all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
(i) could not materially and adversely affect the business, operations,
properties, assets, or conditions of Prelude or (ii) could not result in the
occurrence of any material liability for Prelude. To the best knowledge of
Prelude, the consummation of this transaction will comply with all applicable
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statures and regulations, subject to the preparation and filing of any forms
required by state and federal securities laws.
2.10 Material Contract Defaults. Prelude is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets, or condition of Prelude, and there is no event of default in any
material respect under any such contract, agreement, lease, or other commitment
in respect of which Prelude has not taken adequate steps to prevent such a
default from occurring.
2.11 No Conflict With Other Instrument. The execution of this Agreement
and the consummation of the transactions contemplated by this Agreement will not
result in the breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust, or other
material contract, agreement, or instrument to which Prelude is a party or to
which any of its properties or operations are subject.
2.12 Subsidiary. Prelude does not own, beneficially or of record, any
equity securities in any other entity, other than as previously disclosed and
the NEWCO
2.13 Prelude Schedules. Prelude has delivered to TSG the following
schedules, which are collectively referred to as the "Prelude Schedules" and
which consist of the following separate schedules dated as of the date of
execution of this Agreement, all certified by a duly authorized officer of
Prelude as complete, true and accurate:
(a) A schedule including copies of the articles of incorporation and
bylaws of Prelude in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the board of
directors of Prelude approving this Agreement and the transactions herein
contemplated;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or condition of
Prelude since the most recent Prelude balance sheet, required to be provided
pursuant to Section 2.04 hereof,
(d) A schedule setting forth the financial statements required pursuant
to Section 2.04(a) hereof; and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Prelude Schedules
by Sections 2.01 through 2.12.
Prelude shall cause the Prelude Schedules and the instruments delivered
to TSG hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date. Such
updated Prelude Schedules, certified in the same manner as the original Prelude
Schedules, shall be delivered prior to and as a condition precedent to the
obligation of the TSG to close.
2.14 Additional Conditions. Omitted
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ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF TSG
As an inducement to, and to obtain the reliance of, Prelude, TSG
represents and warrants as follows:
3.01 Organization. TSG Shareholders own all of the outstanding shares
of Tri-State, GMG and SASCO, and have the right to grant the option.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF TSG
The obligations of TSG under this Agreement are subject to the
satisfaction of TSG, at or before the Closing Date, of the following conditions;
4.01 Shareholder Approval. Prelude shall call and hold a meeting of its
shareholders, or obtain the written consent of a majority of its shareholders,
to approve the transactions contemplated by this agreement including the
acquisition of the assets of TSG through the issuance of Prelude Common Stock.
4.02 Accuracy of Representation. The representations and warranties
made by Prelude in this Agreement were true when made and shall be true at the
closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and Prelude shall have performed or complied with
all covenants and conditions required by this Agreement to be performed or
complied with by Prelude prior to or at the Closing. TSG shall be furnished with
certificates, signed by duly authorized officers of Prelude and dated the
Closing Date, to the foregoing effect.
4.03 Officer's Certificates. TSG shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of Prelude to the effect that to such officers best knowledge
no litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of Prelude threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement.
Furthermore, based on certificates of good standing, representations of
government agencies, and Prelude own documents and information, the certificate
shall represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by Prelude board of directors
and shareholders and has been duly executed and delivered in the name and on
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behalf of Prelude by its duly authorized officers pursuant to, and in compliance
with, authority granted by the board of directors of Prelude pursuant to a
unanimous consent;
(b) There has been no material adverse changes in Prelude up to and
including the date of the certificate;
(c) All conditions required by this Agreement has been met, satisfied,
or performed by Prelude;
(d) All authorizations, consents, approvals, registrations, and/or
filings with any governmental body, agency, or court required in connection with
the execution and delivery of the documents by Prelude have been obtained and
are in full force and effect or, if not required to have been obtained, will be
in full force and effect by such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against Prelude, wherein an unfavorable decision, ruling, or finding
could have an adverse effect on the financial condition of Prelude, the
operation of Prelude, or the acquisition and reorganization contemplated herein,
or any agreement or instrument by which Prelude is bound or in any way contests
the existence of Prelude.
4.04 No Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business, or operations of Prelude, nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of Prelude.
4.05 Good Standings. TSG shall have received a certificate of good
standing from the secretary of state of Nevada, dated as of the date within five
days prior to the Closing Date, certifying that Prelude is in good standing as a
corporation in the State of Nevada.
4.06 Other Items. TSG shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby as
TSG may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF PRELUDE
The obligations of Prelude under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions;
5.01 Shareholder Approval. Tri-State, GMG and SASCO shall call and hold
a meeting of its shareholders, or obtain through a majority written consent of
its shareholders, whereby the shareholders of Prelude authorize and approve this
Agreement and the transactions contemplated hereby.
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5.02 Other Items. Prelude shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby as
Prelude may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of Prelude and TSG
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the respective schedules to be delivered by Prelude
and TSG pursuant hereto or as permitted or contemplated by this Agreement,
Prelude and TSG will each:
(i) Carry on its business in substantially the same manner as
it has heretofore;
(ii) Maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to
or affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve its
business organization intact, to retain its key employees, and
to maintain its relationships with its material suppliers and
customers;
(v) Duly and timely file for all taxable periods ending on or
prior to the Closing Date all federal, state, county, and
local tax returns required to be filed by or on behalf of such
entity or for which such entity may be held responsible and
shall pay, or cause to pay, all taxes required to be shown as
due and payable on such returns, as well as all installments
of tax due and payable during the period commencing on the
date of this Agreement and ending on the Closing Date; and
(vi) Fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and
state laws and all rules, regulations, and orders imposed by
federal or state governmental authorities.
(b) From and after the date of this Agreement and except as provided
herein until the Closing Date, Prelude and TSG will not:
(i) Make any change in its articles of incorporation or
bylaws;
(ii) Enter into or amend any material contract, agreement, or
other instrument of any of the types described in such party's
schedules, except that a party may enter into or amend any
contract, agreement, or other instrument in the ordinary
course of business; and Enter into any agreement for the sale
of TSG or Prelude securities without the prior approval of the
other party.
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6.02 Access to Properties and Records. Until the Closing Date, TSG and
Prelude will afford to the other party's officers and authorized representatives
full access to the properties, books, and records of the other party in order
that each party may have full opportunity to make such reasonable investigation
as it shall desire to make of the affairs of TSG or Prelude and will furnish the
other party with such additional financial and other information as to the
business and properties of TSG or Prelude as each party shall from time to time
reasonably request.
6.03 Separate Counsel. In connection with the transaction contemplated
by this Agreement, TSG and Prelude shall each file with the assistance of the
other and their respective legal counsel, such notices, applications, reports,
or other instruments as may be deemed by them to be necessary or appropriate in
an effort to document reliance on such exemptions, and the appropriate
regulatory authority in the states where the TSG Stockholders reside unless an
exemption requiring no filing is available in such jurisdictions, all to the
extent and in the manner as may be deemed by such parties to be appropriate.
(b) In order to more fully document reliance on the exemptions as
provided herein, TSG, the TSG Stockholders, and Prelude shall execute and
deliver to the other, at or prior to the Closing, such further letters of
representation, acknowledgment, suitability, or the like as Prelude or TSG and
their respective counsel may reasonably request in connection with reliance on
exemptions from registration under such securities laws.
6.06 Prelude Liabilities. Immediately prior to the Closing Date,
Prelude shall have no material assets and no liabilities in excess of $1,000 and
all expenses related to this Agreement or otherwise shall have been paid.
6.07 Sales of Securities Under Rule 144, If Applicable.
(a) Prelude will use its best efforts to at all times satisfy the
current public information requirements of rule 144 promulgated under the
Securities Act so that its shareholders can sell restricted securities that have
been held for two years or more or such other restricted period as required by
rule 144 as it is from time to time amended.
(b) Upon being informed in writing by any person holding restricted
stock of Prelude as of the date of this Agreement that such person intends to
sell any shares under rule 144 promulgated under the Securities Act (including
any rule adopted in substitution or replacement thereof), Prelude will certify
in writing to such person that it is compliance with rule 144 current public
information requirement to enable such person to sell such person's restricted
stock under rule 144, as may be applicable under the circumstances.
(c) If any certificate representing any such restricted stock is
presented to Prelude transfer agent for registration or transfer in connection
with any sales theretofore made under Rule 144, provided such certificate is
duly endorsed for transfer by the appropriate person(s) or accompanied by a
separate stock power duly executed by the appropriate person(s) in each case
with reasonable assurances that such endorsements are genuine and effective, and
is accompanied by an opinion of counsel satisfactory to Prelude and its counsel
that such transfer has complied with the requirements of rule 144, as the case
may be, Prelude will promptly instruct its transfer agent to register such
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transfer and to issue one or more new certificates representing such shares to
the transferee and, if appropriate under the provisions of rule 144, as the case
may be, free of any stop transfer order or restrictive legend. The provisions of
this Section 6.07 shall survive the Closing and the consummation of the
transactions contemplated by this Agreement for a period of two years.
(d) The shareholders of Prelude as of the date of this Agreement, as
well as those receiving Prelude Common Stock pursuant to this Agreement, are
intended third-party beneficiaries of this Section 6.07.
6.08 New Board of Directors and Officers. Upon closing of the
transactions contemplated by this Agreement and the simultaneous Agreement with
Alliance Petroleum, Inc., the current board of directors and officers of Prelude
shall resign and in their place nominees of TSG and Alliance shall be appointed,
subject to the approval of the suitability and qualifications of such nominees.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. Except as provided herein, Prelude and TSG agree that
there were no finders or brokers involved in bringing the parties together or
who were instrumental in the negotiation, execution, or consummation of this
Agreement. Further, Prelude and TSG each agree to indemnify the other against
any claim by any third person for any commission, brokerage, or finder's fee or
other payment with respect to this Agreement or the transactions contemplated
hereby based on any alleged agreement or understanding between such party and
such third person, whether express or implied, from the actions of such party.
The covenants set forth in this section shall survive the Closing Date
and the consummation of the transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation or
warranty is being made by any party to any other regarding the treatment of this
transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding the
treatment of this transaction for federal and state income taxes and on
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced and
constructed under and in accordance with the laws of the State of Nevada.
7.04 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication confirmed
by registered or certified mail, postage prepaid, or if sent by prepaid
overnight courier addressed or such other addresses as shall be furnished in
writing by any party in the manner for giving notices, hereunder, and any such
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notice or communication shall be deemed to have been given as of the date so
delivered or sent by facsimile or telecopy transmission or other electronic
communication, or one day after the date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any action
or suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties from all costs, including reasonable attorneys
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
7.06 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged into
this Agreement. The Agreement alone fully and completely expresses the agreement
of the parties relating to the subject matter hereof. There are no other courses
of dealing, understandings, agreements, representations, or warranties, written
or oral, except as set forth herein.
7.07 Survival Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of six months
from the Closing Date, unless otherwise provided herein.
7.08 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
7.09 Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and such remedies may be enforced concurrently, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance thereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
[Signature Page to Agreement Follows]
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IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the date first above written.
PRELUDE VENTURES, INC.
A Nevada Corporation
By: __________________________
Xxxxxxx Sarvuicci,
President
Tri-State Stores, Inc.
An Illinois Corporation
By: __________________________
GMG Partners LLC
an Illinois Limited Liability Company
By: __________________________
SASCO Springfield Auto Supply Company
a Delaware Corporation
By: __________________________
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