Exhibit 7.(A)
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
SUFFIELD TECHNOLOGIES CORP.
a Florida Corporation
and
TOP 10 PROMOTIONS, INC.
a Virginia Corporation
effective as of May 28, 1998
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made
and entered into this 28th day of May, 1998, by and among
Suffield Technologies Corp., a Florida corporation with its
principal place of business located at 777 South Flagler Drive,
0xx Xxxxx, Xxxx Xxxxx, Xxxx Xxxx Xxxxx, Xxxxxxx 00000
("SUFFIELD"), Top 10 Promotions, Inc., a Virginia Corporation
with its principal place of business at 000 Xxxxxx Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000 ("Top 10") and the individual listed
on Exhibit "A" attached hereto and specifically incorporated
herein by this reference (the "Top 10 Shareholder"), (Top 10 and
Top 10 Shareholder jointly referred to as the "Top 10").
Premises
A. This Agreement provides for the acquisition of Top
10 by Suffield whereby Top 10 shall become a wholly owned
subsidiary of Suffield and in connection therewith, the issuance
of 500,000 ($0.0001 par value per share) shares of restricted
common stock of Suffield to the Top 10 Shareholder as designated
on Exhibit "A" and other consideration.
B. The boards of directors of Suffield and Top 10
have determined, subject to the terms and conditions set forth in
this Agreement, that the transaction contemplated hereby is
desirable and in the best interests of their stockholders,
respectively. This Agreement is being entered into for the
purpose of setting forth the terms and conditions of the proposed
acquisition.
Agreement
NOW, THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits to the parties to be derived
herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
SUFFIELD
As an inducement to and to obtain the reliance of Top 10,
Suffield represents and warrants as follows:
Section 1.1 Organization. Suffield is a
corporation duly organized, validly existing, and in good standing
under the laws of Florida and has the corporate power and is 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, including qualification to do business as a foreign
corporation in the jurisdiction in which the character and
location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the Suffield
Schedules (as hereinafter defined) are complete and correct copies
of the articles of incorporation, bylaws and amendments thereto of
Suffield as in effect on the date hereof. 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 violate any provision of Suffield's articles
of incorporation or bylaws. Suffield has full power, authority
and legal right and has taken all action required by law, its
articles of incorporation, its bylaws or otherwise to authorize
the execution and delivery of this Agreement.
Section 1.2 Capitalization. The
authorized capitalization of Suffield consists of 50,000,000
Common Shares, $0.0001 par value per share, and 10,000,000
Preferred Shares, $0.0001 par value per share. As of the date
hereof, Suffield has 3,325,000 common shares issued
and outstanding, of which 1,800,000 are unrestricted. Suffield is
not presently a public company. Within ninety (90) days after the
closing herein, it intends to file Form 211 for the purpose of
being traded on the NASDAQ OTC Bulletin Board.
As of the Closing Date hereof, no shares of Preferred Stock will
be issued or outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in
violation of the preemptive or other rights of any person.
Suffield has no other securities, warrants or options authorized
or issued.
Section 1.3 Subsidiaries and Predecessor
Corporations.
Suffield does not have any other subsidiaries and does not own,
beneficially or of record, any shares of any other corporation.
Section 1.4 Options and Warrants. There
are no existing options, warrants, calls or commitments of any
character to which Suffield is a party and by which it is bound.
Section 1.5 Financing. Suffield
undertook a Regulation D, 504 Offering, whereby Suffield raised
$70,000 and issued 1,800,000 shares of Suffield to such investors.
Such shares are included in the issued and outstanding shares as
set forth in Section 1.2 hereinabove.
Section 1.6 Litigation and Proceedings.
To the best of Suffield's knowledge and belief, there are no
actions, suits, proceedings or investigations pending or
threatened by or against Suffield or affecting Suffield 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 that would have a material
adverse affect on the business, operations, financial condition or
income of Suffield. Suffield does not have any knowledge of 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 or of any
circumstances which, after reasonable investigation, would result
in the discovery of such a default.
Section 1.7 Material Contract Defaults.
To the best of Suffield's knowledge and belief, Suffield 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
Suffield, and there is no event of default in any material respect
under any such contract, agreement, lease or other commitment in
respect of which Suffield has not taken adequate steps to
prevent such a default from occurring.
Section 1.8 No Conflict With Other Instruments.
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 Suffield
is a party or to which any of its properties or operations are
subject.
Section 1.9 Governmental Authorizations.
To the best of Suffield's knowledge, Suffield has all licenses,
franchises, permits or other governmental authorizations legally
required to enable Suffield to conduct its business in all
material respects as conducted on the date hereof. Except for
compliance with federal and state securities and corporation laws,
as hereinafter provided, no authorization, approval, consent or
order of, or registration, declaration or filing with, any court
or other governmental body is required in connection with the
execution and delivery by Suffield of this Agreement and the
consummation of Suffield of the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF TOP 10
As an inducement to, and to obtain the reliance of
Suffield, Top 10 represents and warrants as follows:
Section 3.1 Organization. Top 10 is a
corporation duly organized, validly existing and in good standing
under the laws of Virginia and has the corporate power and is 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, including qualification to do business as a foreign
entity in the country or states in which the character and
location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the Top 10
Schedules (as hereinafter defined) are complete and correct copies
of the articles of incorporation, bylaws and amendments thereto of
Top 10 as in effect on the date hereof. 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, violate any provision of Top 10's
certificate of incorporation or bylaws. Top 10 has full power,
authority and legal right and has taken all action required by
law, its articles of incorporation, bylaws or otherwise to
authorize the execution and delivery of this Agreement.
Section 3.2 Capitalization. The
authorized capitalization of Top 10 consists of 100,000 shares, no
par value. As of the date hereof, there are 100 Shares issued and
outstanding to the following: Xxxxx X. Xxxxx, Xx.- 100. All
issued and outstanding Top 10 shares have been legally issued,
partially paid, are nonassessable and will be fully paid as of May
, 1998.
Section 3.3 Subsidiaries. Top 10 has no
subsidiary companies.
Section 3.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of
Top 10 are in all material respects complete and correct and have
been maintained in accordance with good business accounting
practices; and
(b) Top 10 has no liabilities with respect to the
payment of any country, federal, state, county, local or other
taxes (including any deficiencies, interest or penalties).
Section 3.5 Information. The information
concerning Top 10 as set forth in this Agreement and in the Top 10
Schedules 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.
Section 3.6 Absence of Certain Changes or Events.
Except as described herein or in the Top 10 Schedules,
since December 31, 1997:
(a) Top 10 has not: (i) amended its certificate
of incorporation or bylaws; (ii) waived any rights of value
which in the aggregate are extraordinary or material
considering the business of Top 10; (iii) made any material
change in its method of management, operation or accounting;
or (iv) 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;
(b) Top 10 has not: (i) granted or agreed to
grant any options, warrants or other rights for its certificates,
bonds or other corporate securities
calling for the issuance thereof, which option, warrant or other
right has not been canceled as of the Closing Date; (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;
and
(c) to the best knowledge of Top 10, it has not
become subject to any law or regulation which materially and
adversely affects, or in the future may adversely affect, the
business, operations, properties, assets or condition of Top 10.
Section 3.7 Title and Related Matters.
Top 10 has good and marketable title to and is the sole and
exclusive owner of all of its properties, inventory, interests in
properties and assets, real and personal (collectively, the
"Assets") which are reflected in the most recent Top 10 balance
sheet and the Top 10 Schedules or acquired after that date (except
properties, interests in properties and assets sold or otherwise
disposed of since such date in the ordinary course of business),
free and clear of all liens, pledges, charges or encumbrances.
Except as set forth in the Top 10 Schedules, Top 10 owns free and
clear of any liens, claims, encumbrances, royalty interests or
other restrictions or limitations of any nature whatsoever and all
procedures, techniques, marketing plans, business plans, methods
of management or other information utilized in connection with Top
10's business. Except as set forth in the Top 10 Schedules, no
third party has any right to, and Top 10 had not received any
notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade
secrets, know-how, proprietary techniques, trademarks, service
marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a materially adverse affect on the business,
operations, financial conditions or income of Top 10 or any
material portion of its properties, assets or rights.
Section 3.8 Litigation and Proceedings.
There are no actions, suits or proceedings pending or, to the best
of Top 10's knowledge and belief, threatened by or against or
affecting Top 10, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or
before any arbitrator of any kind that would have a material
adverse effect on the business, operations, financial condition,
income or business prospects of Top 10. Top 10 does not have any
knowledge of any default on its part with respect to any
judgement, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or
instrumentality.
Section 3.9 Contracts. On the Closing Date:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to which Top
10 is a party or by which it or any of its properties are bound;
(b) Top 10 is not a party to any contract,
agreement, commitment or instrument or subject to any charter or
other corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely
affects, or in the future may (as far as Top 10 can now foresee)
materially and adversely affect, the business, operations,
properties, assets or conditions of Top 10; and
(c) Top 10 is not a party to any material oral or
written: (i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension, benefit or retirement plan,
agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement,
contract or indenture relating to the borrowing of money; (iv)
guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate exceeds $1,000;
(v) consulting or other contract with an unexpired term of more
than one year or providing for payments in excess of $10,000 in
the aggregate; (vi) collective bargaining agreement; (vii)
contract, agreement, or other commitment involving payments by it
for more than $10,000 in the aggregate.
Section 3.10 No Conflict With Other Instruments.
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 Top 10
is a party or to which any of its properties or operations are
subject.
Section 3.11 Material Contract Defaults.
To the best of Top 10's knowledge and belief, Top 10 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
Top 10, and there is no event of default in any material respect
under any such contract, agreement, lease or other commitment in
respect of which Top 10 has not taken adequate steps to prevent
such a default from occurring.
Section 3.12 Governmental Authorizations.
To the best of Top 10's knowledge, Top 10 has all licenses,
franchises, permits and other governmental authorizations that are
legally required to enable it to conduct its business operations
in all material respects as conducted on the date hereof. Except
for compliance with federal and state securities or corporation
laws, no authorization, approval, consent or order of, or
registration, declaration or filing with, any court or other
governmental body is required in connection with the execution and
delivery by Top 10 of the transactions contemplated hereby.
Section 3.13 Compliance With Laws and
Regulations.
To the best of Top 10's knowledge and belief, Top 10 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 would not materially and
adversely affect the business; operations, properties, assets or
condition of Top 10 or would not result in Top 10's incurring any
material liability.
Section 3.14 Insurance. All of the
insurable properties of Top 10 are insured for Top 10's benefit in
accordance with the insurance policies disclosed in the Top 10
Schedules under valid and enforceable policy or policies
containing substantially equivalent coverage and will be
outstanding and in full force at the Closing Date.
Section 3.15 Approval of Agreement. The
holders of a majority of the Common Voting Shares outstanding of
Top 10 have authorized the execution and delivery of the Agreement
by Top 10 and have approved the transactions contemplated hereby.
Section 3.16 Material Transactions or
Affiliations. As of the Closing Date, there will exist no
material contract, agreement or arrangement between Top 10 and any
person who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or
known by Top 10 to own beneficially, ten percent (10%) or more of
the issued and outstanding Common Shares of Top 10 and which is to
be performed in whole or in part after the date hereof. Top 10
has no commitment, whether written or oral, to lend any funds to,
borrow any money from or enter into any other material
transactions with, any such affiliated person.
Section 3.17 Labor Relations. Top 10 has
never had a work stoppage resulting from labor problems.
Section 3.18 Top 10 Schedules. Upon
execution hereof, Top 10 shall deliver to Suffield the following
schedules, which are collectively referred to as the "Top 10
Schedules" which are dated the date of this Agreement, all
certified by an officer of Top 10 to be complete, true and
accurate:
(a) complete and correct copies of the certificate of
incorporation, bylaws and amendments thereto of Top 10 as in
effect as of the date of this Agreement;
(b) copies of financial statement of Top 10 since incorporation
of Top 10 in November, 1997;
(c) copies of income and any other tax returns of Top 10 since
incorporation of Top 10 in November, 1997 ;
(d) all contracts of Top 10 presently in effect;
(e) Disclosure Statement, and Officers and Directors
Questionnaires, both required for filing Form 211 with the NASD
for purposes of applying to the NASDAQ OTC Bulletin Board;
(f) the description of any material adverse change in the
business, operations, property, assets, or condition of Top 10
since December 31, 1997 required to be provided pursuant to
Section 2.5; and
(g) any other information, together with any required copies of
documents, required to be disclosed in the Top 10 Schedules by
Sections 3.1 through 3.17.
Top 10 shall cause the Top 10 Schedules and the
instruments to be delivered to Suffield hereunder to be updated
after the date hereof up to and including the Closing Date.
ARTICLE IV
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 4.1 Share Exchange/Delivery of Top 10
Securities. On the Closing Date, the holders of Top 10
Common Shares shall deliver to Suffield (i) certificates or other
documents evidencing all of the issued and outstanding Top 10
Common Shares, duly endorsed in blank or with executed power
attached thereto in transferrable form. On the Closing Date, all
previously issued and outstanding Common Shares of Top 10 shall be
canceled and all rights in respect thereof shall cease and
Suffield shall receive such shares in Top 10, so that Top 10 shall
become a wholly owned subsidiary of Suffield. Top 10's legal
counsel shall take all appropriate action in North Carolina to
confirm such transaction.
Section 4.2 Issuance of Top 10 Common Shares.
In exchange for all of the Top 10 Common Shares tendered
pursuant to Section 4.1, Suffield shall issue an aggregate of
500,000 "restricted" Suffield Common Shares to Xxxxx X. Xxxxx, Xx.
Such shares shall be "restricted" for two (2) years from issuance.
Section 4.3 Other Consideration. Top 10 shall receive
the following additional consideration:
(a) $50,000.00 payable at the Closing Date;
(b) $17,500.00 per month for an eleven (11) month period
commencing ninety (90) days after the Closing Date;
(c) Xxxxx X. Xxxxx, Xx. shall have the ability to borrow
up to 25% of retained earnings of the surviving corporation in
fiscal year 1998 or the first two quarters of fiscal year 1999.
Such borrowings shall be secured by his restricted stock received
in this transaction at a 75% discount value to market.
Repayment shall be for a two year period at a 5% annual interest
rate.
(d) Xxxxx X. Xxxxx, Xx. shall be provided with a two (2)
year employment agreement by the surviving corporation with the
following terms: salary not to exceed $10,000 per month (with not
more than a 3% salary increase provided the surviving corporation
is profitable by at least twice the amount of the salary
increase); quarterly bonus of 30% of net income before income tax
of surviving corporation; standard non-competition clause; an
option to renew the employment agreement for an additional two
year term, upon notice to the surviving company within two months
of the end of the current term (provided he is not in default
under the employment agreement); and the following management
incentives: for fiscal year ending September 30, 1998 (commencing
with the date of closing herein) - 100,000 "restricted" shares if
the surviving corporation has $1,000,000 in gross revenues; for
fiscal year ending September 30, 1999 - (a) 100,000 "restricted"
shares if the surviving corporation has $2,000,000 in gross
revenues; (b) 100,000 "restricted" shares if the surviving
corporation has $400,000 in after tax earnings.
Section 4.3 Events Prior to Closing. Upon
execution hereof or as soon thereafter as practical, management of
Top 10 and Suffield shall execute, acknowledge and deliver (or
shall cause to be executed, acknowledged and delivered) any and
all certificates, opinions, financial statements, schedules,
agreements, resolutions rulings or other instruments required by
this Agreement to be so delivered, together with such other items
as may be reasonably requested by the parties hereto and their
respective legal counsel in order to effectuate or evidence the
transactions contemplated hereby, subject only to the conditions
to Closing referenced
hereinbelow.
Section 4.4 Closing. The closing
("Closing") of the transactions contemplated by this Agreement
shall be on or about May 28, 1998 ("Closing Date").
Section 4.5 Termination.
(a) This Agreement may be terminated by the
board of directors or majority interest of Shareholders of either
Suffield or Top 10, respectively, at any time prior to the
Closing Date if:
(i) there shall be any action or
proceeding before any court or any governmental body which
shall seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement and which, in the
judgement of such board of directors, made in good faith and based
on the advice of its legal counsel, makes it inadvisable to
proceed with the exchange contemplated by this Agreement; or
(ii) any of the transactions contemplated
hereby are disapproved by any regulatory authority whose approval
is required to consummate such transactions.
In the event of termination pursuant to this paragraph
(a) of this Section 4.5, no obligation, right, or liability shall
arise hereunder and each party shall bear all of the expenses
incurred by it in connection with the negotiation, drafting and
execution of this Agreement and the transactions herein
contemplated;
(b) This Agreement may be terminated at any
time prior to the Closing Date by action of the board of directors
of Suffield if Top 10 shall fail to comply in any material respect
with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of Top 10
contained herein shall be inaccurate in any material respect,
which noncompliance or inaccuracy is not cured after 20 days
written notice thereof is given to Top 10. If this Agreement is
terminated pursuant to this paragraph (b) of this Section 4.5,
this Agreement shall be of no further force or effect and no
obligation, right or liability shall arise hereunder.
Section 4.6 Directors of Suffield After
Acquisition. Upon the Closing, the Board of Directors of Suffield
shall be the following: Xxxxx Xxx and Xxxxx X. Xxxxx, Xx. Each
director shall hold office until his successor shall have been
duly elected and shall have qualified or until his earlier death,
resignation or removal.
Section 4.7 Officers of Suffield. Upon
the closing, the following persons shall be elected as officers of
Suffield in accordance with procedures set forth in the Suffield
bylaws:
NAME OFFICE
---- -------
Xxxxx X. Xxxxx, Xx. President
Xxxxx Xxx Chief Executive
Officer, Secretary and
Treasurer
Section 4.8 Post Closing Requirements of Surviving
Company. Subsequent to closing of this transaction, the surviving
company (wholly-owned subsidiary of Suffield) shall undertake the
following: (i) provide all financial information to Xxxxx
Xxx on a bi-weekly basis; (ii) maintain a separate operating bank
accounts in North Carolina (Xx. Xxxxx shall be the sole signatory)
and Florida (Xx. Xxx shall be the sole signatory; and (iv) provide
Xx. Xxx with duplicate monthly banking statements. Top 10 and the
Top 10 Shareholder shall cooperate fully with Suffield regarding
same.
ARTICLE V
SPECIAL COVENANTS
Section 5.1 Access to Properties and Records.
Prior to closing, Top 10 and Suffield will each afford to the
officers and authorized representatives of the other full access
to the properties, books and records of Top 10, Suffield and as
the case may be, in order that each may have full opportunity to
make such reasonable investigation as it shall desire to make of
the affairs of the other and each will furnish the other with such
additional financial and operating data and other information as
to the business and properties of Top 10, Suffield and as the
case may be, as the other shall from time to time reasonably
request.
Section 5.2 Availability of Rule 144.
Each of the parties acknowledge that the stock of both Suffield
and to be issued pursuant to this Agreement will be "restricted
securities, " as that term is defined in Rule 144 promulgated
pursuant to the Securities Act. Suffield and are under no
obligation to register such shares under the Securities Act, or
otherwise. The stockholders of Suffield and holding restricted
securities of Suffield as of the date of this Agreement and their
respective heirs, administrators, personal representatives,
successors and assigns, are intended third party beneficiaries of
the provisions set forth herein. The covenants set forth in this
Section 5.2 shall survive the Closing and the consummation of the
transactions herein contemplated. All "restricted" shares issued
in accordance with this Agreement shall be restricted in
accordance with Rule 144 for two (2) years from the date of
issuance.
Section 5.3 Special Covenants and Representations
Regarding the Top 10 Common Shares to be Issued in the Exchange.
The consummation of this Agreement, including the issuance of
the Suffield and Common Shares to the Shareholders of Top 10 as
contemplated hereby, constitutes the offer and sale of securities
under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from
the registration and prospectus delivery requirements of such
statutes which depend, inter alia, upon the circumstances under
which the Top 10 Shareholders acquire such securities.
Section 5.4 Third Party Consents. Top 10
and Suffield and agree to cooperate with each other in order to
obtain any required third party consents to this Agreement and the
transactions herein contemplated.
Section 5.5 Actions Prior and Subsequent to
Closing.
(a) From and after the date of this
Agreement until the Closing Date and except as set forth in the
Top 10 Schedules or as permitted or contemplated by this
Agreement, Top 10 will each use its best efforts to:
(i) carry on its business in
substantially the same manner as it has heretofore;
(ii) maintain and keep its properties
in states of good repair and condition as at present, except for
depreciation due to ordinary wear and tear and damage due to
casualty;
(iii) maintain in full force and effect
insurance comparable in amount and in scope of coverage to that
now maintained by it;
(iv) perform in all material respects
all of its obligations under material contracts, leases and
instruments relating to or affecting its assets,
properties and business;
(v) maintain and preserve its business
organization intact, to retain its key employees and to maintain
its relationship with its material suppliers and customers; 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 until the Closing Date, Top 10 will not,
without the prior consent of Suffield:
(i) except as otherwise specifically
set forth herein, make any change in its articles of incorporation
or bylaws;
(ii) declare or pay any dividend on its
outstanding Common Shares, except as may otherwise be required by
law, or effect any stock split or otherwise change its
capitalization, except as provided herein;
(iii) enter into or amend any
employment, severance or agreements or arrangements with any
directors or officers;
(v) grant, confer or award any options,
warrants, conversion rights or other rights not existing on the
date hereof to acquire any Common Shares; or
(vi) purchase or redeem any Common
Shares.
Section 5.6 Indemnification.
(a) Top 10 and Xxxxx X. Xxxxx, Xx.,
individually, hereby agree to indemnify Suffield and each of the
officers, agents and directors of Suffield
as of the date of execution of this Agreement including, but not
limited to Xxxxx Xxx, against any loss, liability, claim, damage
or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing or
defending against and litigation, commenced or threatened or any
claim whatsoever), to which it or they may become subject arising
out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement, including, but not
limited to, misrepresentations . The indemnification provided
for in this paragraph shall survive the Closing and consummation
of the transactions contemplated hereby and termination of this
Agreement; and
(b) Suffield and its officers and
directors hereby agrees to indemnify Top 10 and each of the
officers, agents, directors and current shareholders of Top 10 as
of the Closing Date against any loss, liability, claim, damage or
expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened or any
claim whatsoever), to which it or they may become subject arising
out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement and
particularly the representation regarding no liabilities referred
to in Section 3.4 (b). The indemnification provided for in this
Section shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this
Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SUFFIELD
The obligations of Suffield under this Agreement are
subject to the satisfaction, at or before the Closing Date, of the
following conditions:
Section 6.1 Accuracy of Representations.
The representations and warranties made by Top 10 in this
Agreement were true when made and shall be true at the Closing
Date with the same force and effect as if such representations and
warranties were made at the Closing Date (except for changes
therein permitted by this Agreement), and Top 10 shall have
performed or compiled with all covenants and conditions required
by this Agreement to be performed or complied with by Top 10 prior
to or at the Closing. Suffield and shall be furnished with a
certificate, signed by a duly authorized officer of Top 10 and
dated the Closing Date, to the foregoing effect.
Section 6.2 Shareholder Approval. All of
the Shareholders of Top 10 shall have approved this Agreement and
the transactions contemplated herein.
Section 6.3 Officer's Certificate.
Suffield shall have been furnished with a certificate dated the
Closing Date and signed by a duly authorized officer of Top 10 to
the effect that: (a) the representations and warranties of Top
10 set forth in the Agreement and in all Exhibits, Schedules and
other documents furnished in connection herewith are in all
material respects true and correct as if made on the Effective
Date; (b) Top 10 has performed all covenants, satisfied all
conditions, and complied with all other terms and provisions
of this Agreement to be performed, satisfied or complied with
by it as of the Effective Date; (c) since such date and
other than as previously disclosed to Suffield, and Top 10 have
not entered into any material transaction other than transactions
which are usual and in the ordinary course if its business; and
(d) No litigation, proceeding, investigation or inquiry is pending
or, to the best knowledge of Top 10, threatened, which might
result in an action to enjoin or prevent the consummation of
the transactions contemplated by this Agreement or, to the
extent not disclosed in the Top 10 Schedules, by or against
Top 10 which might result in any material adverse change in any of
the assets, properties, business or operations of Top 10.
Section 6.4 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 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 or Top 10.
Section 6.5 Opinion of Counsel to Top 10.
Suffield shall receive an opinion dated the Closing date of May
28, 1998, counsel to Top 10, in substantially the following form:
(a) Top 10 is a corporation duly organized,
validly existing, and in good standing under the laws of Virginia
and has the corporate power and is duly authorized, qualified,
franchised and licensed under all material applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to conduct its business as
now conducted, including qualification to do business as a foreign
corporation in the states in which the character and location
of the assets owned by it or the nature of the business transacted
by it requires qualifications;
(b) To the best knowledge of such legal
counsel, the execution and delivery by Top 10 of this Agreement
and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not conflict
with or result in the breach of any term or provision of Top 10's
certificate of incorporation or Bylaws or violate any court order,
writ, injunction or decree applicable to Top 10, or its properties
or assets;
(c) All issued and outstanding Share
Certificates are legally issued, fully paid and nonassessable.
Except as set forth in the Top 10 Schedules, to the best knowledge
of such legal counsel, there are no outstanding subscriptions,
options, rights, warrants, convertible securities or other
agreements or commitments obligating Top 10 to issue any
additional Share Certificates.
(d) This Agreement has been duly and validly
authorized, executed and delivered by Top 10;
(e) To the best knowledge of such legal
counsel, except as set forth in the Top 10 Schedules, there are no
actions, suits or proceedings pending or threatened by or
against or affecting Top 10 or its properties, at laws or in
equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator of
any kind;
(f) Top 10 has taken all actions required by
the applicable laws of Virginia to permit the acquisition of the
outstanding shares of Top 10 into Suffield.
Section 6.6 Other Items. Suffield shall
have received such further documents, certificates or instruments
relating to the transactions contemplated hereby as Suffield may
reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF TOP 10
The obligations of Top 10 under this Agreement are
subject to the satisfaction, at or before the Closing date
(unless otherwise indicated herein), of the following
conditions:
Section 7.1 Accuracy of Representations.
The representations and warranties made by Suffield in this
Agreement were true when made and shall be true as of the Closing
Date (except for changes therein permitted by this Agreement) with
the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Suffield
shall have performed and complied with all covenants and
conditions required by this Agreement to be
performed or complied with by Suffield prior to or at the Closing.
Top 10 shall have been furnished with a certificate, signed by a
duly authorized executive officer of Suffield and dated the
Closing Date, to the foregoing effect.
Section 7.2 Officer's Certificate. Top 10
shall be furnished with a certificate dated the Closing date and
signed by a duly authorized officer of Suffield to the effect
that: (a) the representations and warranties of Suffield set
forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material
respects true and correct as if made on the Effective Date; and
(b) Suffield had performed all covenants, satisfied all
conditions, and complied with all other terms and provisions of
the Agreement to be performed, satisfied or complied with by it as
of the Effective Date.
Section 7.3 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 or 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 Suffield.
Section 7.4 Opinion of Counsel to Suffield.
Top 10 shall receive an opinion dated the Closing Date of
Xxxxxxx X. Xxxxxx & Associates, counsel to Suffield, in
substantially the following form:
(a) Suffield is a corporation duly
organized, validly existing, and in good standing under the laws
of the state of Florida and has the corporate power and is 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, including qualification to do business as a foreign
corporation in the states in which the character and location of
the assets owned by it or the nature of the business transacted by
it requires qualification;
(b) To the best knowledge of such legal
counsel, the execution and delivery by Suffield of this Agreement
and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not conflict
with or result in the breach of any term or provision of
Suffield's articles of incorporation or bylaws or constitute a
default or give rise to a right of termination, cancellation or
acceleration under any material mortgage, indenture, deed of
trust, license agreement or other obligation or violate any court
order, writ, injunction or decree applicable to Suffield or its
properties or assets;
(c) The authorized capitalization of
Suffield consists of 50,000,000 shares of Common Stock, par value
$0.0001 per share and 10,000,000 shares of Preferred Stock, par
value $0.0001 per share. As of the Closing Date, there will be
the following issued and outstanding common shares of Suffield:
3,325,000 common shares of which 1,525,000 are "restricted"
shares. In addition, in accordance with the terms of this
Agreement, the Top 10 Shareholder shall obtain 500,000 Suffield
"restricted" common shares under Rule 144, restricted for a two
(2) year period.
There are no Preferred Shares issued and outstanding.
All issued and outstanding shares are legally issued, fully paid
and nonassessable and issued in violation of the preemptive rights
of any person;
(d) The Suffield Common Shares to be
issued to the Top 10 Shareholders pursuant to the terms of this
Agreement will be, when issued in accordance with the terms
hereof, legally issued, fully paid and non-assessable;
(e) This Agreement has been duly and
validly authorized, executed, and delivered and constitutes the
legal and binding obligation of Suffield, except as limited by
bankruptcy and insolvency laws and by other
laws affecting the rights of creditors generally;
(f) To the best knowledge of such
counsel, there are no actions, suits or proceedings pending or
threatened by or against Suffield or affecting
Suffield's 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; and
(g) Suffield has taken all actions
required by the applicable laws of the state of Florida to permit
the issuance of the Suffield Common Shares to the Top 10
Shareholder.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Brokers and Finders. Each
party hereto hereby represents and warrants that it is under no
obligation, express or implied, to pay certain finders in
connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The
parties each agree to indemnify the other against any claim by any
third person not listed in Schedule 7.1 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 the
indemnifying party and such third person, whether express or
implied from the actions of the indemnifying party.
Section 8.2 Law, Forum and Jurisdiction.
This Agreement shall be construed and interpreted in accordance
with the laws of the State of New York, United States of America.
Section 8.3 Notices. Any notices or other
communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Suffield and : Xxxxxxx X. Xxxxxx & Associates
0000 Xxxxx 0, Xxxxx X
Xxxxxxxx, Xxx Xxxxxx 00000
If to Top 10: Outten, Barrett, Xxxx & Xxxxxxxx, P.C.
000 Xxxxx Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000
or such other addresses as shall be furnished in writing by any
party in the manner for giving notices hereunder, and any such
notice or communication shall be deemed to have given as of the
date so delivered, mailed or telegraphed.
Section 8.4 Attorneys' 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 parities shall reimburse the non-
breaching party or parties for all costs, including reasonable
attorneys' fee, incurred in connection therewith and in enforcing
or collecting any judgment rendered therein.
Section 8.5 Confidentiality. Each party
hereto agrees with the other parties that, unless and until the
reorganization contemplated by this Agreement has been
consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to
another party or any subsidiary thereof from any representative,
officer, director or employee, or from any books or records or
from personal inspection, of such other party, and shall not used
such data or information or disclose the same to others, except:
(i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such
data or information must be used or disclosed in order to
consummate the transactions contemplated by this Agreement.
Section 8.6 Schedules; Knowledge. Each
party is presumed to have full knowledge of all information set
forth in the other party's schedules delivered pursuant to this
Agreement.
Section 8.7 Third Party Beneficiaries.
This contract is solely among Top 10, Top 10 Shareholders and
Suffield and except as specifically provided, no director,
officer, stockholder, employee, agent, independent contractor or
any other person or entity shall be
deemed to be a third party beneficiary of this Agreement.
Section 8.8 Entire Agreement. This
Agreement represents the entire agreement between the parties
relating to the subject matter hereof. This Agreement alone fully
and completely expresses the agreement of the parties relating to
the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written
or oral, except a set forth herein. This Agreement may not be
amended or modified, except by a written agreement signed by all
parties hereto.
Section 8.9 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 18 months.
Section 8.10 Counterparts. This
Agreements 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.
Section 8.11 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 may be enforced concurrently herewith, 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 hereof may be
extended by a writing signed by the party or parties for whose
benefit the provision is intended.
Section 8.12 Incorporation of Recitals.
All of the recitals hereof are incorporated by this reference and
are made a part hereof as though set forth at length herein.
Section 8.13 Expenses. Each party herein
shall bear all of their respective cost s and expenses incurred in
connection with the negotiation of this Agreement and in the
consummation of the transactions provided for herein and the
preparation thereof.
Section 8.14 Headings; Context. The
headings of the sections and paragraphs contained in this
Agreement are for convenience of reference only and do not form a
part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
Section 8.15 Benefit. This Agreement
shall be binding upon and shall insure only to the benefit of the
parties hereto, and their permitted assigns hereunder. This
Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 8.16 Public Announcements. Except
as may be required by law, neither party shall make any public
announcement or filing with respect to the transactions provided
for herein without the prior consent of the other party hereto.
Section 8.17 Severability. In the event
that any particular provision or provisions of this Agreement or
the other agreements contained herein shall for any reason
hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability
or violation shall not affect the remaining provisions of such
agreements, which shall continue in full force and effect and be
binding upon the respective parties hereto.
Section 8.18 Failure of Conditions; Termination.
In the event of any of the conditions specified in this
Agreement shall not be fulfilled on or before the Closing Date,
either of the parties have the right either to proceed or, upon
prompt written notice to the other, to terminate and rescind this
Agreement without liability to any other party. The election to
proceed shall not affect the right of such electing party
reasonably to require the other party to continue to use its
efforts to fulfill the unmet conditions.
Section 8.19 No Strict Construction. The
language of this Agreement shall be construed as a whole,
according to its fair meaning and intendment, and not strictly for
or against wither party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or terms or
conditions hereof.
Section 8.20 Execution Knowing and Voluntary.
In executing this Agreement, the parties severally acknowledge
and represent that each: (a) has fully and carefully read and
considered this Agreement; (b) has been or has had the
opportunity to be fully apprized of its attorneys of the legal
effect and meaning of this document and all terms and conditions
hereof; and (c) is executing this Agreement voluntarily, free from
any influence, coercion or duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have
caused this Agreement to be executed by their respective officers,
hereunto duly authorized, and entered into as of the date first
above written.
SUFFIELD TECHNOLOGIES CORP.
ATTEST:
/s/ Xxxxx Xxx
--------------------------- By: /s/ Xxxxx Xxx
----------------------------
Xxxxx Xxx, Secretary Xxxxx Xxx, President
ATTEST: TOP 10 PROMOTIONS, INC.
/s/ Xxxxx X. Xxxxx, Xx. /s/ Xxxxx X. Xxxxx, Xx.
--------------------------- By:-----------------------------
Xxxxx X. Xxxxx, Xx., Secretary Xxxxx X. Xxxxx, Xx., President
TOP 10 SHAREHOLDER:
/s/ Xxxxx X. Xxxxx, Xx.
---------------------------
XXXXX X. XXXXX, XX.
EXHIBIT "A"
------------------------
LIST OF TOP 10 SHAREHOLDERS *
------------------------
Name % of Shares
-------- ------------
XXXXX X. XXXXX, XX. 100%
TOTAL 100%
------------
------------
