THIS DEFINITIVE AGREEMENT AND SHARE ACQUISITION, (this "Agreement"),
dated March 9, 2001, the ("Closing Date"), among defines the principal terms
of a reverse acquisition between and among:
A. Purchaser: THE THEME FACTORY, INC., a Nevada Corporation, (herein
referred to as "TMFT"), located at 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx, Xxxx 00000;
And
B. Seller (s): AQUAPURE INTERNATIONAL, INC., a Nevada corporation,
(herein referred to as "API"), located at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx, XX
00000; represented by the selling shareholders of API, as listed on Exhibit A,
(herein referred to as "Selling Shareholders").
Witnessed by:
C. Witness: WATER STAR BOTTLING, INC., a Nevada Corporation, (herein
referred to as "WBI", located at XX Xxx 0000, Xxxx, XX 00000; which owns
eighty-five percent of its subsidiary GEYSER PRODUCTS, LLC, a Delaware Limited
Liability Company, (herein referred to as "GPL"), located at 000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxx, XX 00000;
W I T N E S S E T H:
In this Agreement, the above (A) and (B) (collectively referred to as
the "Parties," and each separately as a "Party") seek to memorialize a
definitive legally binding agreement ("Definitive Agreement") providing for an
Acquisition.
RECITALS:
WHEREAS, as of the Closing Date, API had 105,000,000 shares of Capital
Stock authorized, $.0001 par value, with 50 million shares of Common Stock
authorized, 50 million shares Non-voting Preferred Stock authorized and 5
million shares of Voting preferred Stock authorized; API has 9,000,000 shares
of Common Stock issued and Outstanding, and has no other Preferred or other
securities issued or outstanding. Wherein the Selling Shareholders, as listed
on Exhibit A, owned beneficially all of the 9,000,000 shares of issued and
outstanding voting Common Stock of API on a fully diluted basis, with the
percentage owned by each respectively. API has no outstanding options to
acquire shares of its common stock, and no other rights, options, or warrants
to purchase any other securities of API are outstanding.
WHEREAS, the Boards of Directors of each of TMFT and API have determined
that it is in the best interests of the companies and their respective
shareholders to consummate the transactions and reorganization contemplated
herein in which, subject to the terms and conditions of this Agreement, TMFT
will acquire API as a wholly owned subsidiary and the Selling Shareholders
will acquire stock of TMFT.
WHEREAS, TMFT is a publicly held and traded company with access to the
public securities and capital markets; and, API is a privately held
corporation, with management expertise.
WHEREAS, as of the Closing Date, TMFT had 25,000,000 shares of Common
Stock authorized, of which 1,418,831 shares were issued and outstanding on a
fully diluted basis, held by approximately 96 Shareholders, ; TMFT had no
Preferred Stock authorized.
WHEREAS, subject to the terms and conditions of this Agreement, TMFT
desires to acquire one hundred (100%) percent of the issued and outstanding
Common Stock of API, making the Company a wholly owned subsidiary of TMFT; and
the Selling Shareholders desire to make a tax-free exchange of their shares of
API solely for shares of TMFT, wherein API will remain a wholly owned
subsidiary of TMFT.
WHEREAS, the Boards of Directors of each of TMFT and API have determined
that it is in the best interests of the companies and their respective
shareholders to consummate the transactions and reorganization contemplated
herein in which, subject to the terms and conditions of this Agreement, TMFT
will acquire API as a wholly owned subsidiary and the Selling Shareholders
will acquire stock of TMFT.
WHEREAS, for Federal income tax purposes, the parties intend that the
transactions and reorganization contemplated in this Agreement qualify as a
non-taxable reorganization under Section 368 (a)(1) (B) of the Internal
Revenue Code of 1986, as amended (the" Code"), and qualify under a purchase
method of accounting;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows.
ARTICLE I: Acquisition
1.1. Acquisition.
Subject to the terms and conditions set forth in this Agreement, at the
Closing (as defined herein) one-hundred percent of API held by the Selling
Shareholders shall be exchanged solely with TMFT for Nine Million (9,000,000)
shares of newly issued TMFT common voting stock ("TMFT shares"), the parties
intend that the transaction shall qualify as a tax-free acquisition and
corporate reorganization under Section 368 (a) (1) (B) and/or other related or
other applicable sections there under.
The Parties agree that the Selling Shareholders shall collectively
transfer their API Shares to TMFT in exchange for 9,000,000 shares of TMFT
common stock pursuant to a Subsequent Financing as defined in Section 6.13,
and each Selling Shareholder shall receive the number of TMFT shares that
corresponds to that Selling Shareholder's percentage ownership of the API
Shares set forth on Exhibit A.
Subject to the terms and conditions set forth in this Agreement, at the
Closing (as defined herein) one-hundred percent of the 9,000,000 shares issued
and outstanding common stock of API shall be exchanged solely with TMFT for
Nine Million (9,000,000) of newly issued TMFT common voting stock and that the
transaction shall qualify as a tax-free acquisition and corporate
reorganization under Section 368 (a) (1) (B) and/or related or other
applicable sections there under.
Selling Shareholders represent and warrant that they will hold such
shares of TMFT common stock for investment purposes and not for public
distribution and further agree that such shares will be restricted according
to Rule 144 of the Securities Act of 1933, as amended.
TMFT further desires to provide for the continuing operation of the
business of API and, to that end, wishes to retain API as a wholly owned
subsidiary of TMFT; and, obtain certain employment, with attached non-compete
agreements with API, in the forms attached hereto.
1.2 Closing Time.
Subject to terms and conditions of this Agreement as provided in Article
VIII below, the closing of the exchange of the API Common Stock (the
"Closing") shall take place at Boca Raton, Florida, on the ___ of February,
2001 at 5:00 P.M Eastern Standard Time (EST), or such other place, time and
date as TMFT and API may mutually agree upon in writing ("Closing Time").
1.3 Upon Closing.
Selling Shareholders will transfer and assign all right, title and
interest in the API Capital stock, free and clear of any and all liens,
claims, options, charges and encumbrances whatsoever. In Exchange, TMFT upon
the satisfaction on a Subsequent Financing as defined by Section 6.13, will
transfer and deliver the number of TMFT shares that correspond with each
Selling Shareholder percent ownership of API. All additional documents
required to complete the above transaction shall be a condition upon closing,
and API, Selling Shareholders and TMFT acknowledge that said documents must be
exchanged or delivered prior to or at closing, as listed in "Closing
Documents", Exhibit C.
ARTICLE II: Representations and Warranties
Of API and Shareholders
API, and its Selling Shareholders, each represent and warrant to TMFT as
follows:
2.1 Organization and Standing.
API is a duly organized and validly existing corporation, and in good
standing under the laws of the State of Nevada. API has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted, and is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the property owned, operated or leased by it or the nature of the business
conducted by it makes such qualification necessary.
2.2 Capitalization.
All of the issued and outstanding shares of API Capital Stock have been
validly issued, are fully paid and non-assessable; there is no right of first
refusal option or other restriction on transfer applicable to any shares of
any securities API. API has delivered to TMFT complete and accurate copies of
its
(a) Articles of Incorporation and Bylaws, each as amended through the
date hereof;
(b) Minutes of all of its directors' and Shareholders' meetings through
the date hereof.
2.3 Rights to Acquire.
(a) API does not have outstanding any preemptive or subscription rights,
options, warrants, rights to convert, capital stock equivalents or other
rights to purchase or otherwise acquire, now or in the future, any of its
capital stock or other securities;
(b) API does not have outstanding any stock appreciation rights or other
rights granting to any person the right to be paid money or other property
based on the value of securities of API;
(c) There are no agreements, restrictions or understandings to which API
or any Selling Shareholders is a party with respect to the sale, transfer or
voting of any shares of the API Shares.
2.4 Subsidiaries.
API does not own or control, directly or indirectly, any interest or
investment (whether equity or debt) in any other corporation, partnership,
business, trust or other entity.
2.5 Authority.
(a) API has full corporate power and authority to execute, deliver and
perform its obligations under this Agreement and all corporate action of API
necessary for such execution, delivery and performance has been duly taken.
Complete and correct copies, certified by the Secretary or Assistant Secretary
of API, of the resolutions adopted by the Board of Directors, authorizing and
ratifying the execution and delivery of this Agreement and the consummation of
the transactions contemplated herein, will be delivered upon Closing.
(b) To the knowledge of API, the execution and delivery by API and each
of the Selling Shareholders of this Agreement and the performance of the
transactions contemplated by this Agreement will not result in any conflict
with, breach or violation of or default, termination or forfeiture under (or
upon the giving of notice or the lapse of time, or both, result in any
conflict with, breach or violation of or default, termination or forfeiture
under) any terms or provisions of API's Articles of Incorporation or Bylaws,
each as amended through the date hereof, or any statute, rule, regulation,
judicial or governmental decree, order or judgment, agreement, lease or other
instrument to which API or any Selling Shareholders is a party or to which any
of its or their assets is subject and which individually or in the aggregate
is material to API or any Selling Shareholders.
(c) No consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or
any other governmental body is required for the consummation by API of the
transactions contemplated by this Agreement.
(d) Upon due execution and delivery by the parties hereto, this
Agreement and the agreements related hereto would each be a legal, valid and
binding obligation of API and Selling Shareholders. Such Agreement will be
enforceable against API and API in accordance with their terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally.
2.6 Financial Statements.
To the knowledge of API, API has no significant liabilities, receivables
nor fixed assets. API shall make available to TMFT true and accurate listing
of all financial data that would be required to be shown on a consolidated
financial statement prepared in accordance with generally accepted accounting
principles (collectively the " API Financials"). The books of account of API
reflects actual transactions as of the dates shown thereon and provide a true
and correct representation of substantially all items of income and expense,
and all assets, liabilities and accruals of API required to be reflected
therein under generally accepted accounting principles.
2.7 Material Changes.
Since 31st of December, 2000, there has not been with respect to API:
(a) Any material adverse change in its financial condition from that
shown on the API Financials;
(b) Any damage or loss, whether covered by insurance or not,
materially and adversely affecting its business, property, assets
or prospects; or
(c) Any other event or condition materially and adversely affecting
its results of operations or business or financial condition or
prospects taken as a whole or any event which could have such an
effect.
2.8 Accounts Receivable.
(a) The Company represents that it has no accounts receivable
outstanding as of the date of the API Financials.
(b) None of API's accounts receivable are subject to any lien or claim
of offset, setoff or counterclaim and neither API nor any Shareholders have
any knowledge of any facts or circumstances that would give rise to any such
lien or claim. There are no accounts receivable which are contingent upon the
performance by API of future services. API's backlog as represented by
released, valid purchase orders received in the ordinary course of business
which by their terms were noncancellable, has all been shipped as of the date
of this Agreement.
2.9 No Undisclosed Liabilities.
API has no debts, liabilities or claims against it, contingent or
otherwise, which would be of a nature required to be reflected in a balance
sheet prepared in accordance with generally accepted accounting principles
which are material individually or in the aggregate and which are not shown or
fully provided for on the API Financials, except debts, liabilities and claims
incurred in the ordinary course of business since the date of the API
Financials which are not material in the aggregate. The applicable reserves
reflected on the API Financials are sufficient for payment of all claims,
asserted and unasserted, of customers to which API has sold products or
provided services through such date. All products and services provided to
customers by API have complied in all material respects with all requirements
binding upon API, whether by law, regulation, agreement or otherwise.
2.10 Taxes.
(a) To the knowledge of the API,
(i) All federal, state, local and foreign tax returns and
reports required to be filed to date, and which are properly
open for examination under applicable statutes of
limitation, with respect to the operations of API have been
accurately prepared and duly filed, and all taxes shown as
payable on such returns and reports have been paid when due,
including, without limitation income, withholding, payroll,
sales and use, and real and personal property taxes; and
(ii) API has not executed or filed with any taxing authority any
agreement extending the period for assessment or collection
of any tax to a date subsequent to the date hereof; and
(iii) No issue has been raised by any federal, state, local or
foreign taxing authority in connection with an audit or
examination of the tax returns, business or properties of
API that has not been settled or resolved; and
(iv) There is no pending claim, asserted deficiency or assessment
for additional taxes that has not been paid, nor is there
any basis for the assertion of any such claim, deficiency or
assessment; and
(v) No material special charges, penalties or fines have ever
been asserted against API with respect to payment of or
failure to pay any taxes; and
(vi) The provision for taxes shown on the API Financials is
sufficient for payment of all unpaid federal, state, local
and foreign taxes (whether asserted or unasserted) incurred
by API through such date.
(b) API has not filed any consent to the application of Section 341(f)
of the Internal Revenue Code of 1986, as amended (the "Code"), or been subject
to any actual or deemed election under Section 338 of the Code.
2.11 Tangible Assets and Inventories.
To the knowledge of API, API has no material assets.
2.12 Real Property.
To the knowledge of API, API currently neither owns nor leases any real
property.
2.13 Environmental Matters.
To the knowledge of API:
(i) API has complied in all material respects with the Safe
Drinking Water and Toxic Enforcement Act of 1986; and
(ii) API has complied in all material respects with any and all
other applicable statutes, rules and regulations in effect
(and, to the knowledge of Shareholders or API any proposed
statutes, rules and regulations) regarding the environment
including, without limitation, statutes, rules and
regulations regarding the production, handling, treatment
and disposal of toxic chemicals and hazardous waste.
2.14 Health and Safety Matters.
To the knowledge of API,
(i) API has complied in all material respects with any and all
applicable health and safety statutes, rules and regulations
of state, local and federal authorities in effect (and, to
the knowledge of Shareholders or API any proposed statutes,
rules and regulations) regarding the production or
distribution of any API product; and
(ii) API has not violated any such statute, ordinance, rule,
regulation or order of any agency or court, including the
Food and Drug Administration, in any respect material to the
conduct of its business and has not received any notice of
any such violation from any agency of the type referred to
herein.
2.15 Insurance.
To the knowledge of API, API does not have nor has ever had any
insurance policies in force.
2.16 Purchase, Sale and Other Agreements.
(a) Except as disclosed to TMFT, API states that it is not a party or
subject to any non-disclosed oral or written Agreement for the:
(i) Purchase of inventory, supplies, equipment or other real or
personal property, or the procurement of services; or
(ii) Joint venture, partnership or other contract or arrangement
involving the sharing of profits; or
(iii) Agreement relating to the purchase or acquisition, by merger
or otherwise, of a significant portion of the business,
assets or securities of API by any other person or of any
other person by API; or
(iv) Agreement containing a covenant or covenants which purport
to limit the ability or right of API or any Selling
Shareholders to engage in any lawful business activity or
compete with any person or entity; or
(v) Agreements presently in effect pursuant to which API has
appointed any organization or person to act as its
distributor or sales agent or pursuant to which API has been
appointed a distributor or sales agent by any third party;
or
(vi) Material contract or agreement not otherwise described in
this Agreement that is not terminable by and without penalty
to API.
(b) To the knowledge of API:
(i) A complete and accurate copy of each written agreement and
other document identified has been disclosed and delivered
to TMFT; and
(ii) Each agreement or arrangement identified is, except to the
extent fully performed at the date hereof, in full force and
effect and valid and binding in accordance with its terms in
all material respects except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and
subject to general equity principles and to limitations on
availability of equitable relief, (including specific
performance). To the knowledge of the API, no party to any
such contract, agreement or arrangement is in material
default under, or intends to cancel, withdraw, modify or
amend, any such contract, agreement or arrangement.
2.17 Intellectual Property.
To the knowledge of API, API currently neither holds nor has filed for
any recipes, formulas, trade secrets, trademarks, trade names, patents,
copyrights, inventions nor discoveries.
To the knowledge of API, API is not making use of any patentable or
unpatentable invention or any confidential information in which any present or
past employee of API has or has claimed an interest and API and Selling
Shareholders are not aware of facts that could reasonably be expected to give
rise to such a claim.
2.18 Employees and Consultants.
(a) To the knowledge of API, API currently has neither consulting,
employment agreements nor other material agreements, either oral or written,
with individual consultants or employees to which API is a party. Except for
the Officers and Directors of API, as agreed upon in this Agreement, no other
officer, manager or key employee of API has notified API of an intention to
terminate employment or to seek a material change in his terms of employment.
Except as to be agreed upon by TMFT, no employee of API has accrued more than
three (3) weeks of paid vacation. API agrees that at the closing all such
consulting and employment agreements, bonus plans, employee stock option plans
and/or other agreements between API and its Officers, Directors, Consultants
or Employees shall be void and null.
(b) API is not a party to any pension, retirement, profit sharing,
savings, bonus, incentive, deferred compensation, group health insurance or
group life insurance plan or obligation, employee welfare benefit plan, or
collective bargaining agreement or other agreement, written or oral, with any
trade or labor union, employees' association or similar organization.
(c) API has delivered to counsel for TMFT
(i) All documentation received by API relating to union
activities, including but not limited to, correspondence or
orders from the National Labor Relations Board and any state
labor relations agencies or organizations, and
(ii) All documentation relating to union activity and labor
practices at API given by API to its employees. There are
currently no agreements with any unions and no strikes or
labor disputes pending or threatened by any of the employees
of API.
(d) To the knowledge of API,
(i) API has complied in all material respects with all
applicable laws or regulations relating to the employment of
labor; and
(ii) API has withheld all amounts required by law or agreement to
be withheld from its employees for the payment of any tax or
contribution.
(e) There are no currently outstanding loans from API or to any officer,
director or employee of API and no commitments to lend any money or other
property to any such person.
(f) To the knowledge of API,
a. No employee is obligated under any agreement or judgment
that would conflict with such employee's obligation to use
his best efforts to promote the interests of API would
conflict with API's or 's business as conducted or proposed
to be conducted; and
b. No employee of API is in violation of the terms of any
employment agreement or any other agreement relating to such
employee's relationship with any previous employer and no
litigation is pending or threatened with regard thereto.
2.19 Bank Accounts.
Exhibit D identifies all bank accounts used in connection with the
operations of API whether or not such accounts are held in the name of API,
lists the respective signatories therefore and lists the names of all persons
holding a power of attorney from API and a summary statement of the terms
thereof
2.20 Borrowings and Guarantees.
To the knowledge of API, API has neither entered into any agreements nor
undertakings to which API is borrowing nor is entitled to borrow any money, is
lending nor has committed itself to lend any money, is a guarantor nor surety
with respect to the obligations of any person.
2.21 Compliance with Laws.
To the knowledge of API, the present conduct of the business of API does
not violate any law, ordinance, regulation, judgment, order, decree or rule of
any court, arbitrator or governmental agency or entity in any respect material
to the conduct of its business and, to the knowledge of API or any Selling
Shareholder, there are no laws, ordinances or regulations proposed, and legal
or administrative proceedings or investigations pending or threatened, which,
if enacted or determined adversely to API, could reasonably be expected to
result, individually or in the aggregate, in any material adverse change in
API 's business, prospects or financial condition..
2.22 Customers.
To the knowledge of API, API has no nor has ever had any customers.
2.23 Absence of Litigation:
Neither API, nor any officer or director of API nor any Selling
Shareholders are engaged in, or has received any threat of, any litigation,
arbitration, investigation or other proceeding relating to API or its employee
benefit plans, property, business assets, licenses, permits or goodwill, or
against or affecting the transactions contemplated by this Agreement, nor, to
the knowledge of the API, is there any basis therefore.
2.24 Transactions.
To the knowledge of API, API has no material contracts now in effect
between API and any person who now is or at any time since inception has been
an officer, director or controlling shareholder of API, other than salary and
incentive compensation arrangements of a customary nature entered into in the
ordinary course of business.
2.25 Accuracy of Documents
The copies of all instruments, agreements, other documents and written
information delivered to TMFT by API or any Selling Shareholders, or any of
their representatives are and will be true and correct copies as of the date
of delivery thereof. No representations or warranties made by API or any
Shareholders in this Agreement nor any document, written information
statement, financial statement, certificate or exhibit prepared and furnished
or to be prepared and furnished by API or any Selling Shareholders, or their
representatives, to TMFT pursuant hereto or in connection with the
transactions contemplated hereby, taken as a whole, contains or will contain
any untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading. There is no event, fact or condition which, to the
knowledge and belief of the API, materially and adversely affects the
business, assets, financial condition or prospects of API, or which could
reasonably be expected to do so, which has not been set forth in this
Agreement or the Exhibits hereto.
2.26 Title to Shares.
Each Selling Shareholder has good, valid and marketable title to the API
shares listed in opposite his or her respective name on Exhibit A attached
hereto, free and clear of any and all liens, claims, options, charges and
encumbrances whatsoever.
2.27 Authority of Shareholders
Each Selling Shareholders has the absolute and unrestricted right, power
and authority to sell, assign, transfer and deliver the API shares listed
opposite his or her respective name on Exhibit A attached hereto, to execute
this Agreement and the agreements related hereto, to make the representations,
warranties and agreements contained herein and in the related agreements and
to perform his or her obligations hereunder and under the agreements related
hereto.
2.28 Representations of Selling Shareholders
Each Selling Shareholders hereby represents and warrants to TMFT as of
the date hereof that, to his or her knowledge, the representations and
warranties of API and each other Selling Shareholders set forth herein are
true and correct.
ARTICLE III: Representations And Warranties Of TMFT
TMFT represents, warrants and covenants to API and Selling Shareholders
as follows:
3.1 Organization and Standing.
TMFT is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has all requisite corporate
power and authority to own, operate and lease its properties and carry on its
business as now conducted. TMFT is a fully reporting public company pursuant
to section 15 (d) of the Exchange Act of 1934, as amended. The voting common
stock currently trades on the NASDAQ Over The Counter (OTC) Electronic
Bulletin Board under the symbol [OTC BB: TMFT]. The authorized capital stock
of TMFT consists of: 25,000,000 shares of voting common stock, $.001 par
value per share, and no shares of preferred stock. TMFT has currently
1,418,831 shares of common stock issued and outstanding held by approximately
96 shareholders of record, and has issued no preferred stock. TMFT has issued
no options to acquire common shares, has no other obligations to issue shares
of its common stock and has no other securities outstanding that are
convertible into its common stock. TMFT's only publicly listed security is
such voting common stock.
3.2 Authority:
(a) TMFT has full corporate power and authority to execute, deliver and
perform its obligations under this Agreement, and all corporate action
necessary for such execution, delivery and performance hereof and thereof by
TMFT has been duly taken. Complete and correct copies, certified by the
Secretary or Assistant Secretary of TMFT, of the resolutions adopted by the
Board of Directors, authorizing and ratifying the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein,
(b) Subject to TMFT obtaining all necessary consents, which consents
have been obtained or will be obtained on or prior to the Closing Date, the
execution and delivery by TMFT of this Agreement and the agreements related
hereto do not, and the performance and consummation of the transactions
contemplated by this Agreement and the agreements related hereto will not,
result in any conflict with, breach or violation of or default, termination or
forfeiture under (or upon the giving of notice or the lapse of time, or both,
result in any conflict with, breach or violation of or default, termination or
forfeiture under) any terms or provisions of its Certificate of Incorporation
or Bylaws, each as amended through the date hereof, or any statute, rule,
regulation, judicial or governmental decree, order or judgment, agreement,
lease or other instrument to which TMFT is a party or to which any of the
assets of TMFT is subject and which individually or in the aggregate is
material to TMFT.
(c) Each consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or
any other governmental body which is required for the consummation by TMFT of
the transactions contemplated by this Agreement has been obtained or will be
obtained prior to or upon the Closing.
(d) Upon due execution and delivery by the parties hereto, this
Agreement and the agreements related hereto will each be legal, valid and
binding obligations of TMFT, enforceable against TMFT in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally. Except for the actions and filings with the State of Nevada, the
Securities & Exchange Commission and the NASDAQ OTC Bulletin Board, hereof, no
consent, approval or authorization of, exemption or other action by notice
or declaration, filing or registration with, any third party or governmental
agency is required to be obtained, made or given by TMFT in connection with
the execution, delivery and performance of this Agreement or the
consummation by TMFT of the transactions contemplated by this Agreement.
3.3 Absence of Litigation.
Neither TMFT nor any officer or director of TMFT is engaged in, or has
received any threat of any litigation, arbitration, investigation or other
proceeding related to or affecting the transactions contemplated by this
Agreement, nor to the knowledge of TMFT, is there any basis therefore. There
is no litigation, arbitration, action or proceeding pending, or to the
knowledge of TMFT, threatened, against or relating to TMFT, its properties or
business.
3.4 No Liabilities.
TMFT has no liabilities of any nature except to the extent reflected or
reserved in its financial statements, whether accrued, absolute, contingent or
otherwise, including, without limitation, tax liabilities and interest due or
to become due, except for additional liabilities which may have been incurred
in the ordinary course of business by TMFT since the date of the financial
statements.
3.5 No Current Business Operations.
TMFT has no present business operations or subsidiaries, and no
liabilities or obligations of any nature and shall have no liabilities or
obligations at time of Closing whether accrued, absolute, contingent or
otherwise, including, without limitation, tax liabilities and interest due or
to become due.
3.6 S.E.C. Compliance and Listings.
TMFT is a full-reporting Nevada Corporation currently traded on the NASD
Electronic Bulletin Board (under the symbol: "TMFT"). TMFT is in full
compliance with, and not in violation of, any state or federal securities
laws. All outstanding shares of common stock of TMFT have been duly authorized
and are validly issued, fully paid, and non-assessable and free of preemptive
rights, and there are no registration rights existing or granted to any
holders of restricted common stock of TMFT.
3.7 Compliance With Reporting Requirements.
TMFT represents, warrants and agrees that, as of the date of Closing,
TMFT has filed all forms, reports and documents with the S.E.C. required to be
filed by it pursuant to the Securities Act and the Exchange Act, including,
without limitation, all reporting requirements of the Exchange Act. The
reports filed with the S.E.C., to TMFT's knowledge, did not contain, as of
their respective dates, any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
3.8 Title to Property.
TMFT has all requisite corporate power and authority to own its
properties and assets and has good and marketable title to all properties and
assets, real and personal, reflected in the Balance Sheet of TMFT, and the
properties and assets of TMFT are subject to no mortgage, pledge, lien or
encumbrances, except for liens shown therein, with respect to which no default
exists.
3.9 Accuracy of Documents and Information.
The copies of all instruments, agreements, other documents and written
information delivered to API or any Shareholders by TMFT, or any of their
representatives are and will be true and correct copies as of the date of
delivery thereof. No representations or warranties made by TMFT in this
Agreement nor any document, written information statement, financial
statement, certificate or exhibit prepared and furnished or to be prepared and
furnished by TMFT, or their representatives, to API or any Shareholders
pursuant hereto or in connection with the transactions contemplated hereby,
taken as a whole, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements or facts contained herein or therein not misleading.
3.10 Financial Statements.
The following financial statements of TMFT have been furnished to API
and the Selling Shareholders; audited financial statements of TMFT accompanied
by a report of its independent certified public accountants containing audited
balance sheets of TMFT for the period ending April 30th, 1998, 1999 and 2000,
(b) unaudited financial statements of TMFT containing balance sheets and
statements of operations for the most recent quarter of October 31st, 2000 as
filed on December 15th, 2000 available on Form 10-SB. To the knowledge of
TMFT,
such financial statements, together with and subject to the disclosures and
notes thereto,
(i) Are in accordance with the books and records of TMFT; and
(ii) Present fairly and accurately the financial condition of
TMFT as of the dates of the balance sheets; and
(iii) Present fairly and accurately the results of operations for
the periods covered by such statements; and
(iv) Have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis; and
(v) Include all adjustments (consisting of only normal recurring
accruals) which are necessary for a fair presentation of the
financial condition of TMFT, and of the results of
operations of TMFT for the periods covered by such
statements; and
(vi) Fully comply with all requirements of Regulation SK and all
applicable securities laws.
3.11 Books and Records:
From the date of this Agreement to the Closing, TMFT will:
(1) Provide to API and the Selling Shareholders or their
respective representatives any and all relevant documents
regarding securities filings, broker dealer due diligence
packages, offering memorandums, and copies of Form D; and
(2) Give to API and the Selling Shareholders, or their
respective representatives, full access during normal
business hours to all of its offices, books, records,
contracts, stock certificate books, stock certificates,
transfer Ledgers, minutes books and other corporate
documents ("Corporate Records") and properties so that
Selling Shareholders may inspect and audit them; and
(3) Furnish such information concerning the properties and
affairs of TMFT as the Selling Shareholders may reasonably
request. TMFT represents and warrants that all of TMFT's
Corporate Records are true, correct and complete and
constitute all of its Corporate Records, thereof and, the
minute books of TMFT reflect all material actions taken and
authorizations given by the Board of Directors of TMFT or
any committee thereof and all material actions taken and
authorization given by the Selling Shareholders of TMFT.
3.12 Tax Returns.
TMFT has filed (or has obtained extensions for filing) all income,
excise, sales, corporate franchise, property, payroll and other tax returns or
reports required to be filed by it, as of the date hereof by the United States
of America, any state or other political subdivision thereof or any foreign
country and has other paid all taxes or assessments relating to the time
periods covered by such returns or reports. The amounts set up as provisions
for taxes in the latest financial statements are sufficient for the payment of
all unpaid federal, foreign, state or local taxes of accrued for or applicable
to all periods ended on or prior to the date of this Agreement, or which may
subsequently be determined to be owing by with respect to all periods ending
on or prior to the Closing date, subject to normal year-end adjustments, which
will not be material. There are no present audits or disputes with any
federal, foreign, state or local taxing authority as to taxes of any nature
payable by TMFT.
3.13 Environmental Matters. TMFT represents and warrants:
(a) TMFT represents and warrants it is and has at all times been in
compliance with all applicable federal state and local environmental laws.
(b) TMFT has not been required to obtain any licenses or permits
required under environmental laws for the operation of its business.
(c) No hazardous substances (as defined in applicable federal, state and
local environmental laws and regulations) have been generated, transported,
stored, treated, recycled, disposed of or otherwise handled in any way in the
operation of the TMFT's business, except in compliance with all applicable
Environmental laws. There are no locations now owned or operated by TMFT where
hazardous substances have been generated, transported, stored, treated,
recycled, disposed of or otherwise handled, except in compliance with all
applicable environmental laws. There is no past or ongoing release or threat
of release of hazardous substances from any of the properties currently owned
or operated by TMFT or any of its affiliates or, to the knowledge of TMFT,
from any properties formerly owned or operated by TMFT or any of its
affiliates. TMFT has not treated, stored for more than 90 days, or disposed
of any hazardous waste; as such term is used within the meaning of federal
state or local law, except in compliance with all applicable environmental
laws.
(d) TMFT has not received any written notice from any governmental
authority, regulatory agency or other person advising that TMFT is potentially
responsible for costs associated with any release or threatened release of
hazardous substances or potentially liable for any violation of any
environmental law. No pending or, to the knowledge of TMFT, threatened
order, litigation, settlement or citation with respect to hazardous substances
exists with respect to or in connection with the operation of the business.
There has been no environmental investigation conducted by any governmental
authority or regulatory agency with respect to the operation of its business.
(e) No underground storage tanks are or, to the knowledge of TMFT, ever
were located on any properties currently or previously owned or leased by
TMFT. To the knowledge of TMFT, no PCBs or asbestos-containing materials are
located on, contained in or otherwise form a part of any of the assets or
properties of TMFT.
3.14 Depositories.
TMFT shall make available to API a complete list of the name, location
and account numbers of each bank, trust company, securities broker or other
financial institution in which TMFT has an account, deposits, safe deposit
box, lock box or other assets on hand and the names of all authorized persons
with respect thereto.
3.15 Structure of Transaction.
The transaction between API and TMFT is a stock-for-stock acquisition,
and not a statutory merger. The current shareholders of TMFT will not be
entitled to dissenters or appraisal rights under the corporate laws of Nevada.
3.16 Leak-out Agreements.
The representations, warranties and other agreements set forth in the
Leak-out Provision shall be accurate and shall be fully performed, and no
person who executes such an agreement shall directly or indirectly own or
control any shares, whether held in nominee name or otherwise, other than
those which are subject to such agreement.
3.17 Benefit Plans of TMFT.
TMFT is not a party to (i) any "employee benefit plan" within the
meaning of Section 3(3) of ERISA, (ii) any profit sharing, pension, defined
compensation, bonus, stock option, stock purchase, disability, severance,
health, welfare or incentive plan or agreement or (iii) any written or
unwritten plan or policy providing for "fringe benefits" to its
employees, including but not limited to vacation, paid holidays, personal
leave, employee discount, educational benefit or similar programs
(individually a "Plan," and collectively the "Plans").
3.18 Confidentiality:
TMFT and its representatives will keep confidential any information that
they obtain from the Selling Shareholders or from API concerning the
properties, assets and business of API. If the transactions contemplated by
this Agreement are not consummated by March 1, 2001 TMFT will return to API
all written matter with respect to API obtained by TMFT in connection with the
negotiation or consummation of this Agreement.
3.19 Investment Intent.
TMFT is acquiring API shares transferred to it under this Agreement for
investment and not with a view to the sale or distribution thereof, and TMFT
has no commitment or present intention to liquidate API or to sell or
otherwise dispose of shares of its stock.
ARTICLE IV: Covenants Of API And Selling Shareholders
4.1 Maintenance of Business.
API and Selling Shareholders will use their best efforts to carry on and
preserve the business, goodwill and relationships of API with customers,
suppliers, officers, employees, agents and others in substantially the same
manner as they have prior to the date hereof. Subject to any directions from
TMFT, API and Selling Shareholders will use its best efforts to keep and
maintain the existing favorable business relationship with each of such
customers, suppliers and officers, employees and agents. If API or any
Shareholders becomes aware of deterioration in a relationship with any
customer, supplier or officer, employee or agent, API or such Shareholders
will promptly bring such information to the attention of TMFT and will exert
its best efforts to restore such relationship.
4.2 Absence of Certain Changes.
Prior to the Closing, including 90 days prior to this Agreement, except
as expressly permitted or contemplated hereby, neither API nor any
Shareholders has or will, without TMFT's prior express written consent, cause
API to:
(i) Incur any additional indebtedness for money borrowed, or
guarantee any indebtedness or obligation of any other party;
(ii) Set aside or pay any dividend or distribution of assets to,
or repurchase any of its stock from, any of its
Shareholders,
(iii) Issue any capital stock or securities convertible into
capital stock or grant or issue any options, warrants or
rights to subscribe for its capital stock or securities
convertible into its capital stock;
(iv) Enter into, amend or terminate any employment agreement or
any agreement or arrangement which, if in effect on the date
hereof, would be required to be disclosed;
(v) Extraordinarily increase the compensation payable or to
become payable by API to any of its officers, employees or
agents above the amount payable, or adopt or amend any
employee benefit plan or arrangement;
(vi) Acquire or dispose of any material properties or assets used
in its business;
(vii) Waive any statute of limitations so as to extend any tax or
other liability of API;
(viii) Permit any material change in the nature of the business of
API or the manner in which the API books and records are
maintained;
(ix) Create or suffer to be imposed any lien, mortgage, security
interest or other charge on or against its properties or
assets, except for purchase money security interests
incurred in the ordinary course of business;
(x) Enter into, amend or terminate any lease of real or personal
property;
(xi) Amend its Articles of Incorporation or Bylaws; or
(xii) Engage in any activities or transactions outside the
ordinary course of its business as conducted at the date
hereof.
4.3 Maintenance of Condition.
Prior to the Closing, including 90 days prior to this Agreement, except
as expressly permitted or contemplated hereby, no Shareholders will, without
TMFT's prior express written consent:
(i) Enter into any agreement, restriction or understanding with
respect to the sale, transfer or voting of any shares of API
Capital Stock;
(ii) Permit any change in the good, valid and marketable title to
his or her API Capital Stock, including the imposition any
lien, charge or encumbrance on such stock;
(iii) Impair his or her right, power and authority to sell,
assign, transfer and deliver the API Capital Stock, to
execute this Agreement and the agreements related hereto, to
make the representations, warranties and agreements
contained herein and in the related agreements and to
perform his or her obligations hereunder and under the
agreements related hereto;
(iv) Be obligated under any agreement or judgment that would
conflict with such Shareholders obligations under the
proposed Employment Agreement, Consulting Agreements or
Noncompetition Agreement attached, as applicable;
(v) Enter into any agreement containing a covenant or covenants
that purport to limit the ability or right of any
Shareholders to engage in any lawful business activity.
4.4 Access to Information.
At all times throughout the period prior to the Closing, API will give
TMFT and its accountants, legal counsel and other representatives reasonable
access, during normal business hours, to all of the properties, books,
contracts, commitments and records relating to the business, assets and
liabilities of API, and will furnish TMFT, its accountants, legal counsel and
other representatives during such period all such information concerning its
affairs as TMFT may reasonably request; provided, however, that any furnishing
of such information pursuant hereto or any investigation by TMFT shall not
affect TMFT's right to rely on the representations, warranties and covenants
made by API in this Agreement.
4.5 Prior to the Closing.
API shall continue to maintain properties of API that are material to
its business operations, prospects or financial condition, and to maintain its
tangible assets as they have heretofore been maintained by API in the ordinary
course of business.
4.6 Compliance with Obligations.
Prior to the Closing, API shall comply:
(a) All applicable federal, state, local and foreign laws, rules and
regulations;
(b) All material agreements and obligations, including Articles of
Incorporation and Bylaws, by which it, its properties or its
assets may be bound; and
(c) All decrees, orders, writs, injunctions, judgments, statutes,
rules and regulations applicable to API, its properties or assets,
which, if enforced individually or in the aggregate, would have a
material adverse effect on API.
4.7 Necessary Consents.
Prior to the Closing, API and each Shareholders will use their best
efforts to obtain such written consents and take such other actions as may be
necessary or appropriate to allow the consummation of the transactions
contemplated hereby and to allow the continuation of API's business after the
Closing as conducted and as proposed to be conducted at the date hereof.
4.8 Notification.
API will give prompt notice to TMFT of:
(a) Any notice of default received by API subsequent to the date of this
Agreement under any material instrument or material agreement to which API is
a party or by which it is bound, which default could, if not remedied, result
in any material adverse change in the financial condition, business or
prospects of API, taken as a whole, or which would render incorrect in any
material respect any representation made herein; and
(b) Any suit, action, proceeding or investigation instituted or, to the
knowledge of API or any Shareholders, threatened against or affecting API or
concerning any claim of ownership of or rights with respect to any API Capital
Stock subsequent to the date of this Agreement and prior to the Closing which,
if adversely determined, could result in any material adverse change in the
financial condition, business or prospects of API, taken as a whole, or which
would render incorrect any representation made herein.
4.9 Good Faith.
From the date hereof until the termination of this Agreement, neither
API, any Shareholders nor any of its officers or directors will initiate
discussions or negotiate, or authorize any person or entity to discuss or
negotiate on its behalf, with any other party, or entertain or consider
(except to the extent required by their respective fiduciary duties) any
inquiries or proposals received from any other party, concerning the possible
disposition of API's
business, assets or capital stock.
ARTICLE V: Covenants Of TMFT
5.1 Investment Representation.
TMFT hereby represents, warrants and agrees that it is acquiring the API
Capital Stock solely for purposes of investment and not with a view to any
public distribution thereof. TMFT will deliver to API at the Closing an
investment representation, in form and substance to the reasonable
satisfaction of Shareholders and their counsel.
5.2 Documents.
TMFT agrees to deliver unto Shareholders at the Closing, duly certified
as of the Closing Date by the Secretary or any Assistant Secretary of TMFT,
copies of resolutions duly adopted by TMFT 's Board of Directors, authorizing
the execution, delivery and performance of this Agreement and all agreements
related hereto. Such resolutions and certification shall be in form and
substance to the reasonable satisfaction of Shareholders and their counsel.
ARTICLE VI: Conditions To Obligations Of TMFT
The obligations of TMFT to consummate the transactions contemplated
hereby are, at TMFT's election, subject to satisfaction or waiver of the
following conditions by API:
6.1 Consents and Approvals.
API shall have obtained all consents and approvals of third parties
(including governmental authorities) required of API and TMFT to consummate
the transactions contemplated by this Agreement.
6.2 Representations.
All representations and warranties made herein by API and/or Selling
Shareholders shall be true in all material respects as of the date made and as
of the Closing, except to the extent such representations and warranties are
rendered untrue by the performance by API or any Shareholders of obligations
and agreements undertaken by them to be performed at or prior to the Closing
as set forth in this Agreement. API and each Shareholder shall have performed
all obligations and agreements undertaken by it herein to be performed at or
prior to the Closing.
6.3 Certificate.
TMFT shall have received at the Closing a certificate, dated as of the
Closing and executed by API's President and each Shareholders, to the effect
that the conditions set forth in Sections 6 have been satisfied. If any
representation or warranty made herein is not true as of the Closing, such
certificate shall identify such representation or warranty expressly and shall
indicate in reasonable detail the nature of all exceptions thereto not
previously disclosed in the Schedule of Exceptions. If TMFT thereafter elects
to consummate the transactions contemplated hereby, Shareholders shall not be
liable for indemnification for any Damages resulting solely from the facts
described in such certificate.
6.4 Opinion of Counsel.
TMFT shall have received at the Closing, in form and substance
satisfactory to TMFT and its counsel, to the effect that:
(a) API is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, has all requisite corporate
power and authority to own, operate and lease its properties and to carry on
its business as now conducted and is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the
nature of its business or the ownership of its properties makes such
qualification necessary;
(b) All outstanding shares of such stock are held of record and
beneficially as set forth on Exhibit A. All outstanding shares of API capital
stock have been validly issued, are fully paid and nonassessable, and have
been issued in full compliance with all applicable federal and state
securities laws (provided such counsel need not express any opinion with
respect to the anti-fraud provisions of such securities laws).
(c) To such counsel's actual knowledge, no right of first refusal option
or other restriction is applicable to any shares of API Capital Stock. To such
counsel's actual knowledge, API does not have outstanding any preemptive or
subscription rights, options, warrants, rights to convert, capital stock
equivalents, stock appreciation rights or other rights to purchase or
otherwise acquire any of its capital stock or other securities, or to be paid
any amount based on the value of any such securities.
(d) API has full corporate power and authority to execute and deliver,
and to perform its obligations under this Agreement. API has taken all
requisite corporate action to approve and adopt this Agreement and the
performance by API of its obligations hereunder. This Agreement, the
Employment Agreement and Agreement Not to Compete have been duly and validly
executed and delivered by API to the extent that each is a party thereto, and
constitute legal, valid and binding obligations of API and each such
Shareholders that is a party to the applicable agreement, enforceable against
them in accordance with their terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors' rights generally and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance.
(e) To such counsel's actual knowledge, the execution and delivery of
this Agreement and the Related Agreements by API and Selling Shareholders, and
the performance and consummation by API and Selling Shareholders of the
transactions contemplated by this Agreement and Related Agreements, do not
result in any conflict with, breach or violation of or default, termination,
forfeiture or lien under (or upon the failure to give notice or the lapse of
time, or both, result in any conflict with, breach or violation of or default,
termination, forfeiture or lien under) any terms or provisions of API's
Articles of Incorporation or Bylaws, or any statute, rule, regulation,
judicial or governmental decree, order or judgment, or to f such counsel' s
actual knowledge, any material agreement, lease or other instrument to which
API or any Shareholders is a party or to which they or any of API's assets
are subject.
(f) Assuming TMFT is a bona fide purchaser within the meaning of 8 of
the Uniform Commercial Code, the transfer and assignment in accordance with
this Agreement by or on behalf of each Shareholders to TMFT of the API Capital
Stock to be purchased from such Shareholders, against the payment provided by
this Agreement, will transfer good, absolute, valid and marketable title
thereto, free and clear of any and all liens, claims, options, charges and
encumbrances whatsoever.
(g) To such counsel's actual knowledge, there is no consent, approval,
authorization, order, registration, qualification or filing of or with any
court or any regulatory authority or other governmental body required for the
consummation by API and Selling Shareholders of the transactions contemplated
by this Agreement which has not been obtained.
(h) To such counsel's actual knowledge, there is no suit, arbitration or
legal, administrative or other proceeding or governmental investigation
pending or threatened to which API or any Shareholders are a party.
(i) To such counsel's actual knowledge, there is no outstanding judicial
or administrative order, ruling, decree, judgment or stipulation to which API
or any Shareholders is a party or is subject materially adversely affecting or
threatening API or its business or financial condition.
6.5 Delivery of the API Capital Stock.
Within 60 days of Closing, TMFT shall have received at the Closing
certificates representing all of the API Capital Stock, duly endorsed to TMFT
or accompanied by stock powers duly executed in blank (with signatures
guaranteed by any national bank or trust company) and otherwise in form
acceptable for transfer on the books of API, duly endorsed to TMFT.
6.6 Good Standing Certificate.
Within 60 days of Closing, TMFT shall have received a Status Certificate
from API, issued by the Secretary of State of the State of Nevada and a good
standing certificate from any other state in which API is qualified to do
business, dated as of the date hereof, or in the alternative in a letter of
opinion from API counsel.
6.7 No Material Adverse Change.
During the period from the date of this Agreement to the Closing Date,
there shall not have been any material adverse change in the condition
(financial or other), liabilities, business or prospects of API, and Selling
Shareholders shall not have sustained any material uninsured loss or damage to
its assets that could materially and adversely affect its ability to conduct
its business.
6.8 No Actions.
Consummation of the transactions contemplated by this Agreement shall
not violate any order, decree or judgment of any court or governmental body
having jurisdiction and no action or proceeding shall have been instituted by
any person or entity or threatened by any governmental agency which, in either
such case, in the good faith judgment of TMFT's Board of Directors (acting
upon advice of its outside counsel) has a reasonable probability of resulting
in an order, judgment or decree restraining, prohibiting or rendering unlawful
the consummation of the transactions contemplated by this Agreement.
6.9 Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated hereby and all documents and instruments incident to such
transactions shall be in form and substance to the reasonable satisfaction of
TMFT's counsel, and TMFT shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
6.10 Reconstitute API Board of Directors and Resignations.
After Closing, the Board of Directors of API shall be reconstituted to
consist of one (1) or more persons as shall be appointed by a majority vote of
the newly constituted Board of Directors of TMFT.
6.11 Executive Officers of API and Resignations.
After the Closing, the newly constituted Board of Directors of API shall
elect persons to serve as executive officers of API. Any persons serving as
executive officers of API prior to the Closing who will not continue in such
capacity immediately after the Closing shall tender their resignations in
accordance with the Nevada General Corporation Law; however, this section
shall have no effect on API's hired employees.
6.12 Subsequent Acquisition of WBI (with GPL subsidiary).
As a subsequent condition to the Closing of this Agreement, TMFT shall
complete the acquisition of WBI and GPL subsidiary, by acquiring all the
issued and outstanding shares of WBI from the Selling Shareholders in exchange
for shares of TMFT; wherein along with API, WBI (with GPL subsidiary) shall
become wholly owned subsidiaries of TMFT.
6.13 Escrow of Selling Shareholders' stock; Subsequent Private or Public
Offering.
Upon Closing, the 9,000,000 shares of common stock of TMFT designated to
be issued to the Selling Shareholders of API shall be held in the attorney
trust account of Corporate Stock Transfer, Inc., of Denver, Colorado, to act
as escrow agent ("Selling Shareholders' Escrowed Stock").
The Parties agree to release said Selling Shareholders' Escrowed Stock
upon such time as the Selling Shareholders have: (a) prepared a private
offering pursuant to Regulation Form D (and/or other exemptions from
registration of the Securities Act), or in the alternative prepared a public
offering by the filing of a registration statement with the S.E.C. under the
Securities Act ("Private or Public Offering"); and, (b) received commitments
from investors participating in said private or public offering for a minimum
of one million dollars ($1,000,000), less selling commissions and costs
("Minimum Offering"). The kind of securities offered in the Private or Public
Offering (whether common stock, preferred stock, debt, etc.), the number or
price of said securities offered, and all other details of said Private or
Public Offering are to be determined by the Parties. The Private or Public
Offering shall be completed in compliance with all applicable state and
federal securities laws.
The Selling Shareholders intend to deliver, to the control of the newly
appointed or re-slated Board of Directors of TMFT, the Minimum Offering from
said Private or Public Offering on or before thirty (30) calendar days after
passed since completed audited financials for the reorganized Registrant have
been prepared by the independent auditors engaged to complete the audit for
the Parties ("Financing Time Limit"). After the Financing Time Limit has
passed, each additional thirty calendar day (30) period that passes wherein
the Selling Shareholders have not delivered commitments from investors for the
Minimum Offering, the Selling Shareholders shall forfeit the right to receive
1,000,000 shares of the 9,000,000 shares it may receive upon delivering the
Financing described above. However, said Financing Time Limit, and the
subsequent time afterward, shall be tolled for delays caused by inquiries by
the SEC, filing of required forms or documents with other regulatory or
government bodies, or extreme market contingencies. However, this Section
shall not conflict with any other sections of this Agreement regarding the
reconstitution of TMFT's Board of Directors, change of Executive officers, or
change of name of TMFT.
6.14 NASDAQ Small Cap Eligibility:
API represents that after closing, in conjunction with the subsequent
condition of the Acquisition of WBI (with GPL subsidiary) by TMFT, that the
Reorganized Company shall be eligible to qualify for the initial listing
requirements of the National Association of Securities Dealers Automated
Quotation (NASDAQ) Small cap Market, under either (a) or (b) satisfying:
a. The requirement of having $4 million dollars of Net Tangible
Assets as defined by NASDAQ, and may include capital raised in a
private or public offering after closing; or
b. The requirement of having $750,000 Net Income in latest fiscal
year or 2 out of last 3 fiscal years.
6.15 Call and Put Option Rights.
Upon the Closing of this Agreement, the Parties agree to grant Xx. Xxxxx
Xxxxxxx a Put Option ("Put Option"), on 250,000 shares of his Common Stock,
("Put/Call Escrowed Stock"), wherein for an exercise period of ninety (90)
days ("Exercise period"), after 90 days from the signed execution of this
Agreement, Xx. Xxxxxxx has the right, but not the obligation, to 'Put' or
redeem such shares to TMFT at an exercise price of $1.60 per share, in minimum
amounts of fifty thousand shares, or a total redemption of $400,000; however,
upon the end of the exercise period the Put Option shall expire void and
worthless; and
Upon the Closing of this Agreement, Xx. Xxxxx Xxxxxxx agrees to grant
the newly elected Board of Directors of TMFT a Call Option ("Call Option"), on
250,000 shares of his Common Stock, ("Put/Call Escrowed Stock"), wherein for
an exercise period of ninety (90) days ("Exercise period"), after 90 days from
the signed execution of this Agreement, TMFT has the right, but not the
obligation, to 'Call' or redeem such shares from Xx. Xxxxxxx at an exercise
price of $2.00 per share, in minimum amounts of fifty thousand shares, or a
total redemption of $500,000; however, upon the end of the exercise period the
Call Option shall expire void and worthless;
ARTICLE VII: Conditions To Obligations Of API And Selling Shareholders
The obligations of API and Selling Shareholders to consummate the
transactions contemplated hereby are, at API's election, subject to
satisfaction or waiver of the following conditions by TMFT:
7.1 Consents and Approvals.
TMFT shall have obtained all consents and approvals of third parties
(including governmental authorities) required of API and TMFT to consummate
the transactions contemplated by this Agreement.
7.2 Representations.
All representations and warranties made herein by TMFT shall be true in
all material respects as of the date made and as of the Closing except to the
extent such representations and warranties are rendered untrue by the
performance by TMFT of obligations and agreements undertaken by it to be
performed at or prior to the Closing as set forth in this Agreement. TMFT
shall have performed all obligations and agreements undertaken by it herein to
be performed at or prior to the Closing.
7.3 Opinion of Counsel.
API shall have received at the Closing the opinion of Xx. Xxxxxxx X.
Xxxxxxxxxx, Esq., counsel to TMFT, in form and substance satisfactory to API
and their counsel, to the effect that:
(a) TMFT is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has full corporate power
and authority to own, operate and lease its properties and to carry on its
business as now conducted;
(b) TMFT has full corporate power and authority to execute and deliver,
and to perform its obligations under this Agreement and the Related
Agreements. TMFT has taken all requisite corporate action to approve and
adopt this Agreement and the Related Agreements, and the performance by TMFT
of its obligations hereunder and hereunder. This Agreement and the Related
Agreements have been duly and validly executed and delivered by TMFT and
constitute legal, valid and binding obligations of TMFT, enforceable against
it in accordance with their terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors rights generally, and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance;
(c) The execution and delivery of this Agreement by TMFT, and the
performance and consummation by TMFT of the transactions contemplated by this
Agreement, does not violate any provision of TMFT's Certificate of
Incorporation or Bylaws, and does not constitute a material default under the
provisions of any material agreement known to counsel to which TMFT is a party
or by which it is bound;
(d) There is no consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or
other governmental body required for the consummation by TMFT of the
transactions contemplated by this Agreement which has not been obtained;
(e) The execution and delivery of this Agreement and the Related
Agreements by TMFT and the performance and consummation by TMFT of the
transactions contemplated by this Agreement and the Related Agreements, does
not result in any conflict with, breach or violation of or default,
termination, forfeiture or lien under (or upon the failure to give notice or
the lapse of time, or both, result in any conflict with, breach or violation
of or default, termination, forfeiture or lien under) any terms or provisions
of TMFT's Certificate of Incorporation or Bylaws, or any statute, rule,
regulation, judicial or governmental decree, order or judgment, or to f such
counsel' s actual knowledge, any material agreement, lease or other instrument
to which TMFT is a party or to which it or any of its assets are subject.
7.4 Election of Board of Directors.
On Closing, the current members of the Board of Directors of TMFT shall,
as their last act of business prior to their resignation, in accordance with
the Nevada General Corporation Law and the Articles of Incorporation and
By-Laws of TMFT, cause the Board of Directors (the "Board") of TMFT to be
reconstituted to consist of a total of seven (7) persons, who shall be the
persons designated as the following seven individuals to be the sole members
of the Board of Directors, as slated and confirmed: Messrs. Xxxxxxxxxxx X.
Xxxxx, Xx. X.X. Xxxxxx, Xx. Xxxxx Xxxxxxx, Mr. Xxxxxxx Xxxxx, Mr. B.R.
Xxxxxxxxx, Xx. Xxxxxx Xxxxxxxx, and Xx. Xxxxxx X' Xxxxxxxxxxx ("Reorganized
Board"). The current members of the TMFT Board of Directors shall resign
their respective board memberships.
7.5 Executive Officers of TMFT.
Upon Closing, the newly constituted Board of Directors of TMFT shall
elect the following persons to serve as executive officers of TMFT: as
President Mr. C. Xxxxxxx Xxxxx, as Chief Executive Officer Xx. Xxxxx Xxxxxxx,
and as Managing Director Xx. X.X. Xxxxxx. Any persons presently serving, as
executive officers of TMFT shall not continue in such capacity and upon
Closing shall tender their resignations in accordance with the Nevada General
Corporation Law.
The Reorganized Board shall at the next Special Meeting, execute with
the above newly elected Officers an Employment Agreement, which will include a
Non-Competition Agreement.
7.6 Finder, Consultant, and Legal Fees.
It is recognized by the Parties hereto that API entered into an
agreement, including all amendments thereto (the "Consultants Agreement") as
listed on Exhibit E, wherein said Consultants agreed to identify a public
company to be involved in a merger or acquisition with API and WBI (with GPL
subsidiary), and that TMFT is the public company agreed to by said Consultants
and API. Under said Consultants Agreement, at Closing of the transactions
described herein, TMFT shall issue 881,169 shares of its Common Stock
to Consultants ("Consultants Shares"). TMFT recognizes and hereby assumes, at
Closing, the obligations of API set forth in the Consultants Agreement
including the obligation to register a number of the Consultants Shares upon
any subsequent X-0, XX-0 or SB-2 registration statement in accordance with the
express terms and conditions of said Consultants Agreement including
'Piggyback" registration rights.
Except as disclosed on Exhibit E to the knowledge of the Parties,
neither of them, or any party acting on their behalf, has incurred any
liabilities, either express or implied, to any "broker" of "finder" or similar
person in connection with this Agreement or any of the transactions
contemplated hereby other than the arrangements described on Exhibit E. In
this regard, TMFT, on the one hand, and API on the other hand, will indemnify
and hold the other harmless from any claim, loss, cost or expense whatsoever
(including reasonable fees and disbursements of counsel) from or relating to
any such express or implied liability other than as disclosed herein.
7.7 Escrow Agreement.
Upon the Closing of this Agreement, Xx. Xxxxx Xxxxxxx agrees to place
his Put/Call Escrowed Stock in safekeeping with an Escrow Agent, subject to
the Put Option and Call Option described in Section 6.15. The balance of Xx.
Xxxxxxx'x holdings of Common Stock may be subject to a 'Leak-Out' Agreement as
stipulated by the Parties. The shares subject to a leak-out agreement shall be
re-issued in separate certificates (in denominations equal to each monthly
leak-out amount), with a legend stamped on all certificates, to be negotiated
by the Parties.
7.8 TMFT To Be Free of all Debts and Obligations.
Upon Closing TMFT shall be free of all debts or obligations, and the
Reorganized Company shall have no outstanding obligations associated with the
transaction.
7.9 Leak-out Agreements.
Prior to the Closing, all of the Consultants to this transaction,
current and former management of TMFT, and any other party which holds a
significant number of free trading shares of the merged company which the WBI
Shareholders requires execute leak-out agreements, shall be subject to
leak-out agreements as shall be mutually agreed between the parties in
substantially the form set forth in attached Exhibit F.
7.10 Retirement of Xx. Xxxxxxx'x Stock.
Immediately upon Closing, Xx. Xxxxxxx agrees to retire 550,000 to the
treasury of TMFT his shares he had held for over two years and is eligible for
Rule 144 (K) of the Securities Act.
7.11 Stock issued to Resigning TMFT Officer.
The Parties agree to newly issue Xx. Xxxxxxx Fifty Thousand (50,000)
shares of common stock by the Reorganized Company. Newly issued common stock
by the Reorganized Company, shall be deemed to be restricted securities, as
defined and subject to Rule 144 of the Securities Act of 1933, as amended,
unless incorporated into a registration statement with SEC.
7.12 No Action.
Consummation of the transactions contemplated by this Agreement shall
not violate any order, decree or judgment of any court or governmental body
having jurisdiction and no action or proceeding shall have been instituted by
any person or entity or threatened by any governmental agency which, in either
such case, in the good faith judgment of API (acting upon advice of their
outside counsel) has a reasonable probability of resulting in an order,
judgment or decree restraining, prohibiting or rendering unlawful the
consummation of the transactions contemplated by this Agreement.
ARTICLE VIII: Termination
8.1 Termination by Mutual Consent.
At any time prior to the Closing, this Agreement may be terminated by
mutual written consent of TMFT, API and API's Shareholder.
8.2 Termination by TMFT.
TMFT may terminate this Agreement at any time prior to the Closing by
delivery of written notice to API or Selling Shareholders if:
(a) There has been a material adverse change since the date of the API
Financials in API's business, assets, financial condition or prospects;
(b) API or Selling Shareholders have violated this Agreement in any
material respect;
(c) Any representation or warranty made by API or API in this Agreement
is false or inaccurate in any material respect or there is any material
misrepresentation or material omission by API or API; or
(d) Any condition has not been satisfied (or waived by TMFT) on or prior
to the Closing Date.
8.3 Termination by API.
API may terminate this Agreement at any time prior to the Closing by
delivery of written notice to TMFT if TMFT has violated this Agreement in any
material respect; any representation or warranty made by TMFT in this
Agreement is false or inaccurate in any material respect or there is any
material misrepresentation or material omission by TMFT; or any condition has
not been satisfied (or waived by API) on or prior to the Closing Date.
ARTICLE IX: Miscellaneous
9.1 Notices.
Any notice given hereunder shall be in writing and shall be deemed
effective
upon the earlier of personal delivery (including personal delivery by telex)
or the third business day after mailing by certified or registered mail,
postage prepaid, as follows:
(a) If to TMFT:
Xx. Xxxxx Xxxxxxx, President
The Theme Factory, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx, Xxxx 00000
With a copy to:
Xx. Xxxxxxx X. Xxxxxxxxxx, Esq.
Hermes Building, Suite 205
455 East Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
(b) If to API:
Mr. Xxxxxx Xxxxxx, President
c/o AquaPure International, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
With a copy to:
Xx. Xxxxxx X. Xxxxxx, Esq.
Xxxxxx X. Xxxxxx, PLC
0000 Xxxxxxxxx Xxxx., Xxx. 000
Xxxx Xxxxx, XX 00000
(c) If to Selling Shareholders:
Mr. Xxxxxx Xxxxxx, President
c/o AquaPure International, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Or to such other address as any party may have furnished in writing to the
other parties in the manner provided above.
9.2 Entire Agreement.
This Agreement constitutes the final, exclusive and complete
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and discussions with
respect thereto. No variation or modification of this Agreement and no waiver
of any provision or condition hereof, or granting of any consent contemplated
hereby, shall be valid unless in writing and signed by the party against whom
enforcement of any such variation, modification, waiver or consent is sought.
9.3 Confidentiality.
Except for disclosure (if any) required by any law to which any party is
subject, no public announcement regarding the consummation of the transactions
described herein, shall be made without the approval of TMFT and API. TMFT,
API and Selling Shareholders agree to hold all information regarding the
Letter of Intent and the transactions described herein in confidence until the
time of any such public announcement.
9.4 Limitation on Communication with Other Parties.
API and the Selling Shareholders agree to refrain from initiating any
contact or participating in any discussions with any person other than their
own representatives relating to a purchase of the API Capital Stock or assets
or an acquisition, merger or reorganization of API. Such agreement shall
terminate upon the closing of this Agreement.
9.5 Successors and Assigns.
No party may, without the prior express written consent of each other
party, assign this Agreement in whole or in part. This Agreement shall be
binding upon and inure to the benefit of the respective heirs, personal
representatives, successors and permitted assigns of the parties hereto.
9.6 Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida.
9.7 Survival.
The representations and warranties made by the parties hereto in this
Agreement, and their respective obligations to be performed under the terms
hereof at or prior to the Closing hereunder shall terminate and expire one
year after the Closing Date, notwithstanding any investigation of the facts
constituting the basis of the representations and warranties of any party by
any other party hereto.
9.8 Arbitration.
Arbitration shall be the initial means for resolving disputes between
the parties with respect to this Agreement and any agreements related thereto,
and any such arbitration shall take place in the county of Palm Beach, in the
state of Florida. If any party wishes to commence arbitration hereunder, it
shall serve written notice to such effect on the other party or parties hereto
and, within fifteen (15) days thereafter, the parties shall mutually select a
single arbitrator to conduct such arbitration. In the event that the parties
fail to agree on such single person, each of the parties shall choose one (1)
member of three- (3) member panel and those two (Section 2) members shall
select a third. In conducting the arbitration, the arbitrator or arbitration
panel shall apply the Commercial Arbitration Rules of the American Arbitration
Association as modified by any other instructions that the parties may agree
upon at the time, except that each party shall have the right to conduct
discovery in any manner and to any extent authorized by the Federal Rules of
Civil Procedure as interpreted by the federal courts. The arbitrator shall
decide the dispute upon equitable principles and industry usage, as determined
by the arbitrator, but shall not modify the terms of this Agreement. Costs and
expenses, including reasonable attorneys ' fees, incurred with respect to the
arbitration shall be borne by the losing party, unless otherwise determined by
the arbitrator based on a showing of good cause to vary from usual rule
expressed in this sentence. The arbitrator's award shall be final and
unappealable. A judgment upon the award may be entered in any court having
jurisdiction of the parties.
9.9 Confidential.
TMFT and its representatives agree that all information obtained during
its investigation conducted that is not publicly available will be held in
confidence and will be used solely for the purpose of evaluating the TMFT
investment in API. In the event the transaction contemplated by this Agreement
does not close, all copies of such information will be returned to API, and
such information will continue to be kept in confidence by TMFT and its
representatives, except for such information that is required to be disclosed
by court order or decree or that is otherwise in the public domain.
9.10 Captions and/or Headings.
The Captions and /or Headings in this Agreement are for convenience only
and shall not be considered a part of or affect the construction or
interpretation of any provision of this Agreement.
9.11 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall constitute an original copy hereof, but all of
which together shall constitute one agreement.
DEFINITIONS:
"Actual Knowledge" - Notwithstanding anything to the contrary, a Person will
only be deemed to have actual knowledge if such Person is actually aware of
such fact or other matter.
"Breach"--a "Breach" of a representation, warranty, covenant, obligation, or
other provision of this Agreement or any instrument delivered pursuant to this
Agreement will be deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other provision, or (b) any
claim (by any Person) or other occurrence or circumstance that is or was
inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
"Consent"--any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).
"Contract"--any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"Damages"--any loss, liability, claim, damage (incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-
party claim (collectively, "Damages"), arising, directly or indirectly, from
or in connection with:
a. Any Breach of any representation or warranty made by Selling
Shareholders in this Agreement; or
b. Any Breach by either Shareholders of any covenant or obligation of
such Shareholders in this Agreement; or
c. Any claim by any Person for finder's fees based upon any agreement
or understanding alleged to have been made by any such Person in
connection with any of the Contemplated Transactions.
"Duty of Care"-Directors occupy a fiduciary relationship to the Corporation,
and must exercise the care of ordinarily prudent and diligent persons in like
positions.
"Earn-In Provision"-Shares agreed to be issued but set aside as unissued in
contemplation of Specific Performance or Act to certain shareholders to earn
such shares or not, per the provisions set forth in Section 6.11.
"Encumbrance"--any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership.
"Environment"--soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins,
and wetlands), ground waters, drinking water supply, stream sediments, ambient
air (including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental, Health, and Safety Liabilities"--any cost, damages, expense,
liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:
(a) Any environmental, health, or safety matters or conditions
(including on-site or off- site contamination, occupational safety
and health, and regulation of chemical substances or products); or
(b) Fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and
response, investigative, remedial, or inspection costs and
expenses arising under Environmental Law or Occupational Safety
and Health Law; or
(c) Financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action,
including any investigation, cleanup, removal, containment, or
other remediation or response actions ("Cleanup") required by
applicable Environmental Law or Occupational Safety and Health Law
(whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural
resource damages; or
(d) Any other compliance, corrective, investigative, or remedial
measures required under Environmental Law or Occupational Safety
and Health Law.
"Environmental Law"--any Legal Requirement that requires or relates to:
(a) Advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances
or materials, violations of discharge limits, or other
prohibitions and of the commencements of activities, such as
resource extraction or construction, that could have significant
impact on the Environment; or
(b) Preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the
Environment; or
(c) Reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated; or
(d) Assuring that products are designed, formulated, packaged, and
used so that they do not present unreasonable risks to human
health or the Environment when used or disposed of; or
(e) Protecting resources, species, or ecological amenities; or
(f) Reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other
potentially harmful substances; or
(g) Cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such clean up or
prevention; or
(h) Making responsible parties pay private parties, or groups of them,
for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover
for injuries done to public assets.
"ERISA"--the Employee Retirement Income Security Act of 1974 or any successor
law, and regulations and rules issued pursuant to that Act or any successor
law.
"Exchange Act" - the Exchange Act of 1934, as amended.
"Facilities"--any real property, leaseholds, or other interests currently or
formerly owned or operated by any Acquired Company and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated
"GAAP"--generally accepted United States accounting principles, applied on a
basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to.
"Governmental Authorization"--any approval, consent, license, permit, waiver,
or other authorization issued, granted, given, or otherwise made available by
or under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body"-includes any
(a) Nation, state, county, city, town, village, district, or other
jurisdiction of any nature; or
(b) Federal, state, local, municipal, foreign, or other government; or
(c) Governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official,
or entity and any court or other tribunal); or
(d) Multi-national organization or body; or
(e) Body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"Hazardous Activity"--the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release,
storage, transfer, transportation, treatment, or use (including any withdrawal
or other use of groundwater) of Hazardous Materials in, on, under, about, or
from the Facilities or any part thereof into the Environment, and any other
act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Acquired
Companies.
"Hazardous Materials"--any waste or other substance that is listed, defined,
designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and
specifically including petroleum and all derivatives thereof or synthetic
substitutes therefore and asbestos or asbestos-containing materials.
"HSR Act"--the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law. "Intellectual Property Assets" -includes
(i) The name Geyser Products, LLC and Water Star Bottling, Inc., all
fictional business names, trading names, registered and
unregistered trademarks, service marks, and applications
(collectively, "Marks"); and
(ii) All patents, patent applications, and inventions and discoveries
that may be patentable (collectively, "Patents"); and
(ii) All copyrights in both published works and unpublished works
(collectively, "Copyrights"); and
(iii) All rights in mask works (collectively, "Rights in Mask
Works");
and
(iv) All know-how, trade secrets, confidential information, customer
lists, software, technical information, data, process
technology,
plans, drawings, and blue prints (collectively, "Trade
Secrets");
owned, used, or licensed by any Acquired Company as licensee or
licensor.
"IRC"--the Internal Revenue Code of 1986 or any successor law, and regulations
issued by the IRS pursuant to the Internal Revenue Code or any successor law.
"IRS"--the United States Internal Revenue Service or any successor agency,
and, to the extent relevant, the United States Department of the Treasury.
"Knowledge"--an individual will be deemed to have "Knowledge" of a particular
fact or other matter if:
(a) Such individual is actually aware of such fact or other matter;
or, a prudent individual in similar circumstances should be
expected to be aware of such fact or other matter if he or she had
conducted a reasonably thorough inquiry concerning the existence
of such fact or other matter; or
(b) In the case of an officer or director of a corporation, he or she
would be expected to either know or should have known of facts or
other matters material to the corporation, in the course of
conducting reasonable corporate governance in satisfying their
Duty of Care to the Corporation; or a prudent officer or director
in similar circumstances should be expected to be aware of facts
or other matters material to the corporation, if he or she had
conducted a reasonably thorough inquiry concerning such fact or
other matter. A Person (other than an individual) will be deemed
to have "Knowledge" of a particular fact or other matter if any
individual who is serving, or who has at any time served, as a
director, officer, partner, executor, or trustee of such Person
(or in any similar capacity) has, or at any time had or should
have had, knowledge of such fact or other matter.
"Legal Requirement"--any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution,
law, ordinance, principle of common law, regulation, statute, or treaty.
"Net Tangible Assets" -- Net tangible assets equals Total Assets minus Total
Liabilities minus Goodwill minus Redeemable Securities.
"Occupational Safety and Health Law"--any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational
safety and health hazards, and any program, whether governmental or private
(including those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful working
conditions.
"Order"--any award, decision, injunction, judgment, order, ruling, subpoena,
or verdict entered, issued, made, or rendered by any court, administrative
agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business"--an action taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:
(a) Such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal day-to-day
operations of such Person; and
(b) Such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons
exercising similar authority) [and is not required to be
specifically authorized by the parent company (if any) of such
Person]; and
(c) Such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of
directors (or by any Person or group of Persons exercising similar
authority), in the ordinary course of the normal day-to-day
operations of other Persons that are in the same line of business
as such Person.
"Organizational Documents"-
(a) The articles or certificate of incorporation and the bylaws of a
corporation;
(b) The partnership agreement and any statement of partnership of a
general partnership;
(c) The limited partnership agreement and the certificate of limited
partnership of a limited partnership;
(d) Any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and
(e) Any amendment to any of the foregoing.
"Person"--any individual, corporation (including any non-profit corporation),
general or limited partnership, Limited Liability Company, joint venture,
estate, trust, association, organization, labor union, or other entity or
Governmental Body.
"Proceeding"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative,
or informal) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Related Person"--with respect to a particular individual,
(a) Each other member of such individual's Family;
(b) Any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) Any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a
Material Interest; and
(d) Any Person with respect to which such individual or one or more
members of such individual's Family serves as a director, officer,
partner, executor, or trustee (or in a similar capacity).
"Representative"--with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.
"Securities Act"--the Securities Act of 1933, as amended or any successor law.
"Subsidiary"--with respect to any Person (the "Owner"), any corporation or
other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or
similar governing body, or otherwise having the power to direct the business
and policies of that corporation or other Person (other than securities or
other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more of its
Subsidiaries; when used without reference to a particular Person, "Subsidiary"
means a Subsidiary of the Company.
"Tax Return"--any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection, or payment of any Tax.
IN WITNESS WHEREOF, the parties hereto have caused this definitive final and
legally binding Agreement to be executed by their respective authorized
officers as of this 9th day of March, 2001.
The Theme Factory, Inc.:
By: /s/ Xxxxx Xxxxxxx
Name: Xx. Xxxxx Xxxxxxx
Title: President
AquaPure International, Inc.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xx. Xxxxxx X. Xxxxxx
Title: President
Representative to Selling Shareholders:
By: /s/ Xxxxxx X. Xxxxxx
Name: Xx. Xxxxxx X. Xxxxxx
The Signatories below acknowledge this Agreement and act as Witnesses:
Water Star Bottling, Inc,
By: /s/ Xxxxxxxxxxx X. Xxxxx
Name: Xx. Xxxxxxxxxxx X. Xxxxx
Title: President
Geyser Products, LLC
By: /s/ Xxxxxxxxxxx X. Xxxxx
Name Xx. Xxxxxxxxxxx X. Xxxxx
Title Manager Member
EXHIBIT A
AQUAPURE STOCKHOLDERS
Xxxxxxx X. Xxxxxx 450,000
Xxxxx Xxxxxxx 2,000,000
Xxxxx Xxxx Xxxxxxxxx 450,000
Xxx Xxxxxxxx 200,000
X.X. Xxxxxx 1,000,000
Xxxx Xxxxx 50,000
Xxxxxxx Xxxxxxx 224,500
G.B. Xxxxxx WROS Xxxxxxx X. Xxxxxx 1,000,000
Xxxxxxx X. Xxxxxx/Xxxxxxxx Xxxxxx 3,000,000
Xxxxxxxx Xxxxxxxxxx 50,000
Xxxxx Xxxxx 10,000
Xxxxxxx X. Xxxxxxxxx 18,000
Xxxxxxx X. Kapelaski 70,000
Xxxxxx X. Xxxxx 10,000
Xxxxxxx Xxxxx 177,000
Xxx Xxxxxxx 125,000
Xxxxxx Xxxxxxx 40,000
A.N. Xxxxxx 5,000
Xxxx Barbabente 7,500
Xxxxx Xxxxxxx 10,000
Xxxxx X. Xxxxx 10,000
Xxxxxxx Xxxxxxxx 5,000
Xxxxxx Xxxxxx 5,000
Xxxxxxxxx Xxxxx 10,000
Rard Jano 5,000
Xxxx Xxxxxx 5,000
Xxxxxx X. Xxxxxxxx 30,000
Bakida M. Hurizam 10,000
Xxxxx Xxxxxx 18,000
EXHIBIT F
LEAK-OUT AGREEMENT
March ___, 2001
To: The Leak-out Committee:
Geyser Group Ltd.
000 X. Xxxxxxxx Xxxxxx., Xxxxx 000
Xxxx, Xxxxxxx 00000
Xxxx Xxxxxxxxx, Secretary
Bridgestone Capital Group, LLC
00000 Xxxxxxxxx Xx.
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxx Xxxxxxxx, President
Re: Agreement and Plan or Reorganization between Geyser Group Ltd. (formerly
The Theme Factory, Inc.) and AquaPure International Inc. ("AquaPure")
To the Above Leak-out Committee:
The undersigned is the owner ("Record Owner") of ________ post dividend
common shares of Geyser Group Ltd., formerly The Theme Factory, Inc.,
(hereinafter the "Company" or "GGRP"). The Record Owner hereby represents to
the Company and to the above "Leak-out Committee" (the "Committee") that the
Shares are the only shares currently owned of record or beneficially
controlled by the undersigned that are currently freely-traded or that will be
eligible to become freely-traded within the next eight month period. The
undersigned hereby agrees pursuant to this leak-out agreement (the
"agreement"), among other things enumerated below, not to sell the Shares or
otherwise transfer the Shares except as provided herein. The undersigned
further agrees that the restriction on the transfer of the Shares relates to
the certificates referenced above and to any other certificates which may be
issued by the Company or acquired during the eight-month period of this
agreement. In connection with the foregoing, the undersigned agrees as
follows:
1. The Record Owner has full power and authority to enter into this
Agreement and to restrict the transferability and saleability of the Shares as
provided herein.
2. The Record Owner's compliance with the terms and conditions of
this Agreement will not conflict with any instrument or agreement pertaining
to such Shares, and will not conflict with, result in a breach of, or
constitute a default under any instrument to which Record Owner is a party.
3. The Record Owner owns the Shares and represents that they are
clear of any and all liens and encumbrances.
4. Beginning on March 7, 2001, closing date of the transaction
between "AquaPure" and GGRP beginning with the current month (ending March 31,
2001) and in each calendar month during the first five (5) calendar months
following said Closing the Record Owner agrees not to sell more than _______
Shares in any calendar month on a cumulative basis without the unanimous prior
written consent of all members of the Leak-out Committee. During the period
of the sixth (6th) month after Closing through the eighth (8th) month (ending
October 31, 2001), the Record Owner agrees not to sell more than _______
Shares in any calendar month on a cumulative basis without the prior unanimous
written consent of all three members of the Leak-out Committee.
5. The Record Owner agrees not to make any private transfer of any of
the Shares unless the transferee agrees in writing to be bound by the
restrictions contained herein.
6. The Record Owner agrees to return any and all share certificates
that are subject to this agreement and agrees to cooperate with the Leak-out
Committee in executing such stock transmittal requests or other documents for
the transfer agent as may be necessary to reissue the stock in separate
certificates in the amount of the monthly sale allotments and with each
certificate stamped with the following restrictions:
"Pursuant to a "leak-out Agreement" dated 03/__/01, the shares
represented by this certificate may not be sold, in whole or in part, in
the open market until ___________, 2001, and no private transfer of
these shares shall be made unless the transferee agrees in writing to be
bound by the terms of the leak-out agreement.
Very truly yours,
______________________________
