EXHIBIT 2.1
RESTATED STOCK TRANSFER AND EXCHANGE AGREEMENT
This RESTATED STOCK TRANSFER AND EXCHANGE AGREEMENT ("Agreement") dated
as of August 28, 2000, by and among those certain shareholders of Sophisticated
Communications, Inc., a Florida corporation ("SCI"), identified in Exhibit A
attached hereto and made a part hereof by this reference (individually, a
"Transferor", and collectively, the "Transferors"), and Far East Venture, Inc.,
a Nevada corporation ("FEVI").
RECITALS
WHEREAS, the Transferors own 100 shares of common stock constituting
100% of the issued and outstanding capital stock of SCI (the "SCI Stock"); and
WHEREAS, the Transferors desire to transfer to FEVI, and FEVI desires
to acquire from the Transferors (the "Acquisition"), all of the Transferors' SCI
Common Stock in exchange for 12,400,000 shares of common stock of FEVI (the
"FEVI Stock") subject to share adjustment as set forth herein and stock options;
and
WHEREAS, the Parties hereto intend that the issuance of the FEVI Stock
in exchange for the SCI Stock, as set forth in this Agreement, shall qualify as
a "tax free" exchange as contemplated by the provisions of Sections 351 and
368(a)(1)(B) of the Internal Revenue Code of 1986; and
WHEREAS, this Agreement supersedes all previous oral or written
agreements, including but not limited to the STOCK TRANSFER AND EXCHANGE
AGREEMENT dated August 15, 2000; and
WHEREAS, the Agreement dated August 15, 2000 shall be of no force and
effect; and
WHEREAS, all the parties hereto deem the Acquisition to be in the best
interests of the Transferors, SCI and FEVI;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby agree as follows:
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ARTICLE I
ISSUANCE AND TRANSFER OF SHARES AND OPTIONS
1. Issuance and Transfer. Upon the terms and subject to the conditions
set forth in this Agreement, at the "Closing" (as hereinafter defined), the
Transferors shall sell, assign, convey, transfer, and deliver to FEVI, and FEVI
shall purchase and receive from the Transferors, 100 shares of SCI Stock,
constituting all of the issued and outstanding SCI Stock owned by the Transferor
and set forth opposite the Transferor's name on Exhibit A. In consideration for
the transfer of such shares of SCI Stock to FEVI, FEVI shall issue to the
Transferor in exchange for all of the shares of SCI Stock, 12,400,000 shares of
its authorized and newly issued Common Stock which shall then equal
approximately fifty percent (50%) of the then issued and outstanding Common
Shares of FEVI. FEVI and Transferor agree that, consistent with federal
Securities law and regulations, they will cooperate in the removal of
restrictions on FEVI shares provided the Transferor and any restricted shares
owned by the current shareholders..
2. Voting Rights. The shares owned by Xxxxx X. Xxxxxxx, XX and any
companies he controls will assign the voting rights for those shares to Xxxxxxx
X. Xxxxxxxx for the purpose of the election of members of the Board of Directors
and all significant corporate actions requiring shareholder approval under the
Nevada Revised Statutes except action that effects negatively the shares of
Xxxxx X. Xxxxxxx, XX or the companies which he controls if any.
3. Stock Options. Transferor shall have the right to acquire additional
shares of FEVI based on the audited results of this fiscal year for SCI. The
amount that the audited EBITDA of this year increases over the audited EBITDA of
last year shall be multiplied by five (5) to arrive at the increased value of
SCI. This amount shall be divided by the share price set forth in Article VII,
Sec, 5(a) hereinbelow to determine the amount of options the Transferor shall
receive. The option exercise price shall equal the average of the five (5) day
average bid price of the FEVI shares prior to the release of the audit. The term
of the options shall be five (5) years from the date of grant.
ARTICLE II
CLOSING; TERMINATION
1. Closing. Subject to the fulfillment or waiver of the conditions
precedent set forth in Articles VII and VIII hereof, the Closing shall take
place on the Closing Date at the offices of SCI, 0000 X.X. 00xx Xxxxxxx,
Xxxxxxxxx Xxxxx 000, Xxxxx, Xxxxxxx 00000 at 10:00 A.M., local time, or at such
other time on the Closing Date as the Transferors and FEVI may mutually agree in
writing.
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2. Closing Date. The Closing Date shall be August 23, 2000 or such
later date upon which the Transferors and FEVI may mutually agree in writing. If
the Closing shall not have taken place on or prior to October 31, 2000, this
Agreement shall terminate upon written notice of such termination given by
either party not then in material default. Upon such termination, the parties
shall be released from all obligations or liabilities arising hereunder except
for (a) liabilities arising out of pre-termination breaches hereof and (b)
obligations arising under Section VII.4 hereof.
3. Filings; Cooperation.
(a) Prior and subsequent to the Closing the parties shall
proceed with due diligence and in good faith to make such filings and take such
other actions as may be necessary to satisfy the conditions precedent set forth
in Articles VI and VII below.
(b) On and after the Closing Date, FEVI and the Transferors
shall, on request and without further consideration, cooperate with one another
by furnishing or using their best efforts to cause others to furnish any
additional information and/or executing and delivering or using their best
efforts to cause others to execute and deliver any additional documents and/or
instruments, and doing or using their best efforts to cause others to do any and
all such other things as may be reasonably required by the parties or their
counsel to consummate or otherwise implement the transactions contemplated by
this Agreement including, but not limited to, filing immediate application for
NASDAQ Small Cap..
4. Election of Terminate.
(a) FEVI shall have the option to terminate this Agreement
should the audited results of the last fiscal year for SCI show an EBITDA of
less than one million dollars ($1,000,000) or for any material reason based upon
the due diligence of FEVI as to the operations of SCI. SCI shall have the right
to cancel this Agreement for any material reason. The right of FEVI and/or to
terminate this Agreement shall cease three (3) business days after the audit is
rendered on SCI.
(b) Should FEVI elect to terminate this Agreement, the
Transferor shall immediately tender back to FEVI the FEVI shares issued to the
Transferor. Should SCI elect to terminate this Agreement for any reason, FEVI
shall immediately tender back to SCI the SCI shares received from the
Transferor.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SCI AND TRANSFERORS
SCI and Transferors Represent and Warrant to FEVI as follows:
1. Organization and Good Standing. SCI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and has full corporate power and authority to own or lease its
properties, and to operate and carry on its business as now being conducted and
as proposed to be conducted. SCI is not qualified to conduct business as a
foreign corporation in Nevada. The Certificate of Incorporation of SCI and all
amendments thereto as presently in effect, certified by the Secretary of State
of Florida, and the Bylaws of SCI as presently in effect, certified by the
President and Secretary of SCI, have been delivered to FEVI and are complete and
correct and since the date of such delivery, there has been no amendment,
modification or other change thereto.
2. Authority.
(a) SCI has full corporate power to enter into this Agreement,
to execute all attendant documents and instruments necessary to consummate the
transactions contemplated hereunder and to carry out all of SCI's obligations
hereunder. The execution and delivery of this Agreement and all other
agreements, documents and instruments to be executed by SCI in connection
herewith, and the consummation of the transactions contemplated hereby, have
been duly authorized by all necessary corporate action required on the part of
SCI. This Agreement constitutes the valid and legally binding obligation of SCI
and is enforceable against SCI in accordance with its terms subject to
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally and the application of equitable
principles.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor compliance by SCI
with any of the provisions hereof will:
(i) violate or conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a
default) under, any of the terms, conditions or provisions
of the Articles of Incorporation or Bylaws of SCI or any
note, bond, mortgage, indenture, deed of trust, license,
agreement or other instrument to which SCI is a party, or by
which SCI or its properties or assets may be bound or
affected; or
(ii) violate any order, writ, injunction or decree, or any
statute, rule, Permit, or regulation applicable to SCI or
any of its properties or assets.
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3. Capitalization. SCI's authorized capital stock consists of
100 shares of Common Stock, no par value, of which 100 shares (defined above as
"SCI Stock") are issued and outstanding. No other equity securities or debt
obligations of SCI are authorized, issued or outstanding and as of the Closing,
there will be no outstanding options, warrants, agreements, contracts, calls,
commitments or demands of any character, preemptive or otherwise, other than
this Agreement, relating to any of the SCI Stock, and there will be no
outstanding security of any kind convertible into common stock of SCI. All of
shares of common stock of SCI have been duly authorized, are validly issued,
fully paid and nonassessable. All shares of common stock of SCI are free and
clear of all liens, charges, claims, pledges, restrictions and encumbrances
whatsoever of any kind or nature.
4. Subsidiaries, Joint Ventures, Joint Production
Arrangements. SCI has no subsidiaries and no investments, directly or
indirectly, or other financial interest in any other corporation or business
organization. Except as set forth in Schedule III.4, there are no joint
ventures, partnerships, revenue sharing or other similar arrangements with any
other entity. (No Schedule Required)
5. Material Contracts. Set forth in Schedule III.5 is a list
of all contracts, "deal memos", letters of intent and other commitments to which
SCI is a party (collectively "Commitments"). Except as set forth on said
Schedule each Commitment is valid and subsisting; (No Schedule Required)
6. Financial Statements. Balance sheets and related statements
of earnings and retained earnings unaudited, dated as of December 31, 1999 shall
be delivered to FEVI forthwith by SCI and the Transferors (and are collectively
referred to as "SCI Financial Statements"), are complete and correct and have
been prepared from the books and records of SCI in accordance with generally
accepted accounting principles applied on a consistent basis throughout such
period. SCI shall immediately commence an audit of its last three (3) years of
operations. The audit shall be performed by Merdinger, Fruchter, Xxxxx & Xxxxx,
P.C. The parties shall use their best efforts to complete the audit within 60
days of the effective date of the Closing. FEVI will finish its 6-30-00 10Q this
week. All of the FEVI data will be posted on Xxxxx. FEVI will post additionally
as the Forms are completed. FEVI will include all required financial
information. Except as set forth in Schedule III.6, the SCI Financial Statements
(and the notes thereto) fairly present the assets, liabilities and financial
condition of SCI at the date thereof and such statements of earnings and
retained earnings (deficit) of SCI for such periods and the notes thereto fairly
present the results of operations for the periods referred to therein. (No
Schedule Required)
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7. Absence of Certain Changes. Since the date of the SCI
Financial Statements, (a) SCI has not entered into any material transaction; (b)
there has been no change in the condition (financial or otherwise), business,
property, prospects, assets or liabilities of SCI as shown on the SCI Financial
Statements, other than changes that both individually and in the aggregate do
not have a consequence that is materially adverse to such condition, business,
property, prospects, assets and liabilities; (c) there has been no damage to,
destruction or loss of any of the properties or assets or erosion of any of the
values thereto of SCI (whether or not covered by insurance) materially and
adversely affecting the condition (financial or otherwise), business, property,
prospects, assets or liabilities of SCI; (d) SCI has not declared, or paid any
dividend or made any distribution on its capital stock, redeemed, purchased or
otherwise acquired any of its capital stock, granted any options to purchase
shares of its stock, or issued any shares of its capital stock; (e) there has
been no material change, except in the ordinary course of business, and the
contingent obligations of SCI by way of guarantee, endorsement, indemnity,
warranty or otherwise; (f) there have been no loans made by SCI to its
employees, officers or directors; (g) there has been no waiver or compromise by
SCI of any valuable right or of a material debt owed to it; (h) there has been
compensation paid to any of SCI's employees, officers or directors and there has
been no accrued compensation of any such employee, officer or director; (i)
there has been no agreement or commitment by SCI to do or perform any of the
acts described in this section III.7; and (j) there has been no other event or
condition of any character which might reasonably be expected either to result
in a material and adverse change in the condition (financial or otherwise),
business, property, prospects, assets or liabilities of SCI or to impair
materially the ability of SCI to conduct the business now being conducted by it
or proposed to be conducted by it.
8. Absence of Undisclosed Liabilities. Except as disclosed in
SCI Financial Statements, SCI did not have as of the date of those financial
statements and SCI shall not have as of the Closing Date, any liabilities
(secured or unsecured and whether accrued, absolute, direct, indirect, or
otherwise) of a kind required by generally accepted accounting principles and
consistent with past practice to be set forth on a financial statement or the
notes thereto that were as of the date of the SCI Financial Statements or will
be as of the Closing Date, individually or in the aggregate, material to the
results of operations or financial condition of SCI (which for purposes of this
Section III shall be any amount individually or in the aggregate in excess of
$5,000).
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9. Litigation. Except as disclosed in Schedule IV.9, there are
no outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against SCI. Except as
disclosed in Schedule IV.9, there are no actions, suits or proceedings pending,
or, to the knowledge of the Transferors, threatened, against or affecting SCI,
or any of its or their properties, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, in connection with the
business, operations or affairs of SCI which might result in any material
adverse change in the operations or financial condition of SCI, or which might
prevent or materially impede the consummation of the transactions contemplated
under this Agreement.
10. Compliance with Laws. The operations and affairs of SCI do
not violate any law, ordinance, rule or regulation currently in effect, or any
order writ, injunction or decree of any court or governmental agency, the
violation of which would substantially and adversely affect the business,
financial conditions or operations of SCI.
11. Disclosure. Neither this Agreement, nor any certificate,
exhibit, schedule or other written document or statement, furnished to FEVI by
the Transferors in connection with the transactions contemplated by this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to be stated in order to
make the statements contained herein or therein not misleading.
12. Representations and Warranties of Transferor. Set forth in
this Section III.12 are representations and warranties made by the Transferor,
with respect to the transactions covered by this Agreement and their respective
shares of SCI Stock.
(a) Transactional Representations.
(iii) Transferor has full right, power, capacity and
authority to enter into and to deliver this Agreement
and to carry out its obligations hereunder. This
Agreement constitutes the valid and legally binding
obligation of the Transferor and is or will be, as
the case may be, enforceable against the Transferor
in accordance with its terms subject to applicable
bankruptcy, insolvency, moratorium or other similar
laws affecting creditors' rights generally and the
application of equitable principles.
(iv) Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby or thereby, nor compliance by the
Transferor with any of the provisions hereof or
thereof will:
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A. violate or conflict with, or result in a
breach of any provisions of, or constitute a default
(or an event which, with notice or lapse of time or
both, would constitute a default) under, any of the
terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license,
agreement or other instrument or obligation to which
such Transferor is a party, or by which he or any of
his or his properties or assets may be bound or
affected; or
B. violate any order, writ, injunction or
decree, or any statute, rule or regulation applicable
to Transferor or any of his or his properties or
assets.
(b) Title to Stock. The Transferor owns, beneficially and of
record, his shares of SCI Stock set forth opposite his name on Exhibit A, free
and clear of all liens, charges, claims, pledges, restrictions and encumbrances
whatsoever of any kind or nature except as set forth on Schedule III.12(b). The
Transferor represents and warrants as to his shares that, except as set forth on
Schedule III.12(b), there are no community property interests, voting trust
agreements or other contracts, agreements or arrangements restricting voting or
dividend rights or transferability with respect to such shares. (No Schedule
Required)
(c) Brokers; Underwriters. The Transferor has used the
services of U. S. Funding in connection with this Agreement and the transactions
contemplated thereby. Further the Transferor has not taken any action which
could result in any other broker's, finder's or other fees or commission being
due and payable to any party with respect to this Agreement or the transactions
contemplated thereby except U. S. Funding. The Transferor has not entered into
any agreements, commitments, arrangements or understandings of any kind
whatsoever with any broker-dealer or underwriter in connection with the
transactions contemplated under this Agreement or the FEVI Stock being acquired
hereunder.
(d) Investment.
(i) The Transferor acknowledges that the FEVI Stock to be
received in exchange for the SCI Stock has not been
registered under the Securities Act of 1933, as amended (the
"1933 Act") or qualified under the California Securities Law
of 1968, as amended (the "California Securities Law") on the
ground that no distribution or public offering of the FEVI
Stock is to be effected, and that in this connection FEVI is
relying in part on the representations of the Transferor set
forth in this Section III.12(d).
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(ii) The Transferor further acknowledges that a public
market now exists for only those securities issued by FEVI
for which a registration statement under the 1933 Act has
been filed or for which applicable exemptions from federal
securities laws may be available, and that a public market
may never exist or may otherwise be restricted or limited
for the FEVI Stock issued pursuant to this Agreement.
(iii) By reason of their business or financial experience or
the business or financial experience of their personal
adviser/purchaser representative, and/or by reason of their
pre-existing relationship with FEVI, the Transferor has the
capacity to protect his interest in connection with the
transactions contemplated hereunder, is able to bear the
risks of an investment in FEVI, and at the present time
could afford a complete loss of such investment.
(iv) The Transferor or his, her or its personal
adviser/purchaser representative has acquired sufficient
information about FEVI to form an informed decision to
acquire the FEVI Stock.
(v) The Transferor represents that he is acquiring the FEVI
Stock for his account for investment purposes and not with a
view to, or for sale in connection with, any distribution
thereof in a manner contrary to Section 5 of the 1933 Act or
of the Securities Law and Rules and Regulations of the
Nevada thereunder.
(e) Transfer of Securities. None of the FEVI Stock acquired
pursuant to this Agreement shall be transferable except upon the conditions
specified in this Section III.12(e), which conditions are intended to insure
compliance with the provisions of the 1933 Act in respect to the transfer of any
shares of FEVI Stock.
(i) Legend. Unless and until otherwise permitted by this
Section III.12(e), The certificate or other document
evidencing any of the FEVI Stock shall be endorsed with a
legend substantially in the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) COVERED BY AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, (B) IN COMPLIANCE WITH RULE 144 UNDER SUCH
ACT, OR (C) THE COMPANY HAS BEEN FURNISHED WITH AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT
THAT NO REGISTRATION IS REQUIRED BY SUCH TRANSFER."
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(ii) Restrictions on Transfer. None of the FEVI Stock shall
be transferred, and FEVI shall not be required to register
any such transfer on the books of FEVI unless and until one
of the following events shall have occurred:
A. FEVI shall have received an opinion of counsel, in
form and substance reasonably acceptable to FEVI and its
counsel, stating that the contemplated transfer is exempt
from registration under the 1933 Act as then in effect, and
the Rules and Regulations of the Securities and Exchange
Commission (the "Commission") thereunder. Within five
business days after delivery to FEVI and its counsel of such
an opinion, FEVI either shall deliver to the proposed
transferor a statement to the effect that such opinion is
not satisfactory in the reasonable opinion of its counsel
(and shall specify in detail the legal analysis supporting
for any such conclusion) or shall authorize FEVI's transfer
agent to make the requested transfer;
B. FEVI shall have been furnished with a letter from
the Commission in response to a written request in form and
substance acceptable to counsel for FEVI setting forth all
of the facts and circumstances surrounding the contemplated
transfer, stating that the Commission will take no action
with regard to the contemplated transfer;
C.The shares of the FEVI Stock are transferred pursuant
to a registration statement which has been filed with the
Commission and has become effective; or
D.The shares of the FEVI Stock are transferred pursuant
to and in accordance with Rule 144 promulgated by the
Commission under the 1933 Act.
(iii) Termination of Restrictions and Removal of Legend. The
restrictions on transfer imposed by this Section III.12(e)
shall cease and terminate as to the FEVI Stock, when (i)
such securities shall have been effectively registered under
the 1933 Act and sold by the holder thereof in accordance
with such registration, (ii) an acceptable opinion as
described in Section III.12(e)(ii)(A) or a "no action"
letter described in Section III.12(e)(ii)(B) states that
future transfers of such securities by the transferor or the
contemplated transferee would be exempt from registration
under the 1933 Act, or (iii) such securities may be sold
under and in accordance with Rule 144(k) promulgated by the
Commission under the 1933 Act. When the restrictions on
transfer contained in this Section III.12(e) have terminated
as provided above, the holder of the securities as to which
such restrictions shall have terminated or the transferee of
such holder shall be entitled to receive promptly from FEVI,
without expense to him, new certificates not bearing the
legend set forth in Section III.12(e)(i).
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(c) Proprietary Rights. Except as set forth on Schedule
III.12(f) SCI possesses full ownership of or adequate and enforceable rights to
use all Proprietary Rights (as defined herein) owned by or registered in the
name of SCI or used or to be used in the business or proposed business of SCI.
SCI has not received any notice of conflict which asserts the rights of others
with respect to SCI's proprietary rights; and SCI has in all material respects
performed all of the obligations required to be performed by it and is not in
default in any material respect under any agreement relating to any Proprietary
Right. As used herein the term "Proprietary Right" means trade secrets,
copyrights, patents, trademarks, service marks, designs, customer lists films,
scripts, treatments, scores and all similar types of intangible property
developed, created or owned by SCI or used or to be used by SCI in connection
with its business or proposed business whether or not the same are entitled to
legal protection. (No Schedule Required)
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FEVI
FEVI represents and warrants to the Transferor as follows:
1. Organization and Good Standing. FEVI 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 or lease its properties
and to carry on its business as now being conducted and as proposed to be
conducted. FEVI is qualified to conduct business as a foreign corporation in no
other jurisdiction, and the failure to so qualify in any other jurisdiction does
not materially, adversely affect the ability of FEVI to carry on its business as
most recently conducted. The Certificate of Incorporation of FEVI and all
amendments thereto as presently in effect, certified by the Secretary of State
of Nevada, and the Bylaws of FEVI as presently in effect, certified by the
President and Secretary of FEVI, have been delivered to the Transferor and are
complete and correct and since the date of such delivery, there has been no
amendment, modification or other change thereto.
2. Authority.
(a) FEVI has full corporate power to enter into this
Agreement, to execute all attendant documents and instruments necessary to
consummate the transactions contemplated hereunder to, issue and transfer the
FEVI Stock to the Transferor and to carry out all of its obligations hereunder.
The execution and delivery of this Agreement and all other agreements, documents
and instruments to be executed in connection herewith, and the consummation of
the transactions contemplated hereby, have been duly authorized by all necessary
corporate action required on the part of FEVI. This Agreement constitutes the
valid and legally binding obligation of FEVI and is enforceable against FEVI in
accordance with its terms subject to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally and the application of equitable principles.
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(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor compliance by FEVI
with any of the provisions hereof will:
(i) violate or conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a
default) under, any of the terms, conditions or provisions
of the Articles of Incorporation or Bylaws of FEVI or any
note, bond, mortgage, indenture, deed of trust, license,
agreement or other instrument to which FEVI is a party, or
by which it or its properties or assets may be bound or
affected; or
(ii) violate any order, writ, injunction or decree, or any
statute, rule, Permit, or regulation applicable to FEVI or
any of its properties or assets.
3. Capitalization. FEVI's authorized capital stock consists of
50,000,000 shares of Common Stock, $0.001 par value (defined above as " FEVI
Stock"), of which approximately 12,400,000 shares of common stock are issued and
outstanding and none of which are held by FEVI as treasury shares. Except as set
forth in Schedule IV.3, including the Preston Research debt obligation, no other
equity securities or debt obligations of FEVI are authorized, issued or
outstanding and, except as set forth on Schedule IV.3, as of the Initial
Closing, there will be no outstanding options, warrants, agreements, contracts,
calls, commitments or demands of any character, preemptive or otherwise, other
than this Agreement, relating to any of the FEVI Stock, and there will be no
outstanding security of any kind convertible into FEVI Stock except for the FEVI
Stock. All of shares of the FEVI Stock to be issued when issued, transferred and
delivered as provided herein, will be duly authorized, validly issued, fully
paid and nonassessable.
(No Schedule Required)
4. Title to Stock. (a) The shares of FEVI Stock are free and clear of
all liens, charges, claims, pledges, restrictions and encumbrances whatsoever of
any kind or nature that would inhibit, prevent or otherwise interfere with the
transactions contemplated hereby. All of the outstanding shares of FEVI Stock
are validly issued, fully paid and nonassessable and except as set forth on
Schedule IV.4 there are no voting trust agreements or other contracts,
agreements or arrangements restricting or affecting voting or dividend rights or
transferability with respect to the outstanding shares of FEVI Stock. (No
Schedule Required)
(a) All of the FEVI Stock to be issued to or transferred to
the Transferor pursuant to this Agreement, when issued, transferred and
delivered as provided herein, will be duly authorized, validly issued, fully
paid and nonassessable, and will be free and clear of all liens, charges,
claims, pledges, restrictions and encumbrances whatsoever of any kind or nature.
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5. Subsidiaries. Except as may be set forth in its financial
statements, FEVI has no subsidiaries and no investments, directly or indirectly,
or other financial interest in any other corporation or business organization,
joint venture or partnership of any kind whatsoever.
6. Absence of Certain Changes. Except as set forth on Schedule IV.6,
since the date of FEVI's Annual Report on Form 10K (the "10-K") as filed with
the Securities and Exchange Commission and delivered to the Transferor, (a)FEVI
has not entered into any material transaction; (b) there has been no change in
the condition (financial or otherwise), business, property, prospects, assets or
liabilities of FEVI as shown, other than changes that both individually and in
the aggregate do not have a consequence that is materially adverse to such
condition, business, property, prospects, assets or liabilities; (c) there has
been no damage to, destruction of or loss of any of the properties or assets of
FEVI (whether or not covered by insurance) materially and adversely affecting
the condition (financial or otherwise), business, property, prospects, assets or
liabilities of FEVI; (d) FEVI has not declared, or paid any dividend or made any
distribution on its capital stock, redeemed, purchased or otherwise acquired any
of its capital stock, granted any options to purchase shares of its stock, or
issued any shares of its capital stock; (e) there has been no material change,
except in the ordinary course of business, in the contingent obligations of FEVI
by way of guaranty, endorsement, indemnity, warranty or otherwise; (f) there
have been no loans made by FEVI to its employees, officers or directors; (g)
there has been no waiver or compromise by FEVI of a valuable right or of a
material debt owed to it; (h) there has been compensation paid to of any of
FEVI's employees, officers or directors and there has been paid or accrued
compensation of any such employee, officer or director; (i) there has been no
agreement or commitment by FEVI to do or perform any of the acts described in
this Section IV.7; and (j) there has been no other event or condition of any
character which might reasonably be expected either to result in a material and
adverse change in the condition (financial or otherwise), business, property,
prospects, assets or liabilities of FEVI or to impair materially the ability of
FEVI to conduct the business now being conducted by it. (No Schedule Required)
7. Omitted.
8. Absence of Undisclosed Liabilities. Except as disclosed in the 10-K
or in Schedule IV.6, FEVI does not have, and as of the Closing Date will not
have, any liabilities (secured or unsecured and whether accrued, absolute,
direct, indirect, or otherwise) of a kind required by generally accepted
accounting principles and consistent with past practice to be set forth on a
financial statement or the notes thereto that will be as of the Closing Date,
individually or in the aggregate, material to the results of operation or
financial condition of FEVI. (No Schedule Required)
13
9. Litigation. Except as disclosed in Schedule IV.9, there are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against FEVI or its
properties. Except as disclosed in Schedule IV.9, there are no actions, suits or
proceedings pending, or, to the knowledge of FEVI threatened, against or
affecting FEVI, or any of its properties, at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, in connection
with the business, operations or affairs of FEVI which might result in any
material adverse change in the operations or financial condition of FEVI, or
which might prevent or materially impede the consummation of the transactions
contemplated under this Agreement. (No Schedule Required)
10. Compliance with Laws. The operations and affairs of FEVI do not
violate any law, ordinance, rule or regulation currently in effect, or any
order, writ, injunction or decree of any court or governmental agency, the
violation of which would substantially and adversely affect the business,
financial conditions or operations of FEVI.
11. Brokers; Underwriters. With the exception of U.S. Funding
Corporation, FEVI has not used the services of or entered into any agreement
with, any broker, agent or finder in connection with this Agreement or the
transactions contemplated hereby, nor has FEVI taken any action which could
result in any other broker's, finder's or other fees or commission being due and
payable to any party with respect to this Agreement or the transactions
contemplated hereby. FEVI has not entered into any agreements, commitments,
arrangements or understandings of any kind whatsoever with any broker-dealer or
underwriter in connection with the transactions contemplated under this
Agreement or the SCI Stock being acquired hereunder or the FEVI Stock being
issued hereunder.
12. Disclosure. Neither this Agreement, nor any certificate, exhibit,
schedule or other written document or statement, furnished to the Transferor by
FEVI in connection with the transactions contemplated by this Agreement contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to be stated in order to make the statements
contained herein or therein not misleading.
13. Reporting Company Requirements. FEVI has filed all reports required
to be filed by it pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and or the rules promulgated thereunder.
14. Operating Authorities. FEVI has all material operating authorities,
governmental certificates and licenses, permits, authorizations and approvals
("Permits") required to conduct its business as presently conducted. There has
not been any notice or adverse development regarding the current validity of
such Permits; such Permits are in full force and effect; no material violations
are or have been recorded in respect of any Permit; and no proceeding is pending
or threatened to revoke or limit any Xxxxxx.
00
00. Books and Records. The books and records of FEVI are complete and
correct, are maintained in accordance with good business practice and accurately
present and reflect, in all material respects, all of the transactions therein
described, and there have been no transactions involving FEVI which properly
should have been set forth therein and which have not been accurately so set
forth.
16. No Registration Rights. Except as set forth on Schedule IV.16
hereto, FEVI has not granted or agreed to grant any rights relating to the
registration of its securities under applicable federal and state securities
laws, including piggy-back rights. (No Schedule Required)
ARTICLE V
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties and covenants of SCI and the Transferor
contained herein shall survive the execution and delivery of this Agreement, the
Closing and the consummation of the transactions called for by this Agreement.
The representations, warranties and covenants of FEVI contained herein shall
survive the execution and delivery of this Agreement, the Closing and the
consummation of the transactions called for by this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF FEVI
The obligations of FEVI under this Agreement in respect of the issuance
and transfer of the FEVI Stock shall, at the option of FEVI, be subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions precedent.
1. Accuracy of Representations and Warranties; Performance. All
representations and warranties made by the Transferor in this Agreement shall be
true and correct in all material respects on and as of the Closing Date with the
same effect as if such representations and warranties had been made on and as of
the Closing Date; SCI and the Transferor shall have performed or complied with
all covenants, agreements and conditions contained in this Agreement on its part
required to be performed or complied with at or prior to the Closing.
2. Consents. All material authorizations, consents or approvals of any
and all governmental regulatory authorities necessary in connection with the
consummation of the transactions contemplated by this Agreement shall have been
obtained and be in full force and effect.
15
3. No Contrary Judgment. The Closing shall not violate any Permit or
order, decree or judgment of any court or governmental body having competent
jurisdiction and there shall not have been instituted any legal or
administrative action or proceeding to enjoin the transaction contemplated
hereby or seeking damages from FEVI with respect thereto.
4 Agreements. Xxxxxxx X. Xxxxxxxx and FEVI shall enter into a written
five (5) year employment agreement, on terms acceptable to Xxxxxxx X. Xxxxxxxx
with FEVI whereby Xxxxxxx X Xxxxxxxx shall be Chairman of the Board, President
and CEO of both FEVI and SCI with authority to approve all press releases.
Xxxxxxx X. Xxxxxxxx and the SCI top managers shall participate in a bonus
program and a stock option plan.
5. Control of Operations: Xxxxxxx X. Xxxxxxxx shall appoint a new Board
of Directors of FEVI upon the resignation of Xxxxx X. Xxxxxxx, XX and Xxxxxx
Xxxxx which shall occur at Closing. Upon Closing Xxxxxxx X. Xxxxxxxx shall be
the largest and controlling shareholder of FEVI.
6. Closing. The Transferor shall deliver, or cause to be delivered, to
FEVI at or prior to the Closing the following documents:
(a) Certificate(s) representing all of the Transferor' shares
of SCI Stock, which certificate(s) shall be either (A) duly endorsed in blank,
or (B) accompanied by stock powers duly executed;
(b) A certificate of officers of SCI confirming accuracy of
representations and warranties of Transferor referred to in hereof;
(c) SCI's Certificate of Incorporation, certified by the
Secretary of State of Florida as of a date not more than thirty (30) days prior
to the Closing Date that said corporation is in good standing;
(d) Such other documents, instruments or certificates as shall
be reasonably requested by FEVI or its counsel.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE TRANSFEROR
The obligations of the Transferor under this Agreement to sell the SCI
Stock shall, at the option of the Transferor, be subject to the satisfaction, on
or prior to the Closing Date, of each of the following conditions precedent.
1. Accuracy of Representations and Warranties; Performance. All
representations and warranties made by FEVI in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as if such representations and warranties had been made on and as of the
Closing Date; FEVI shall have performed or complied with all covenants,
agreements and conditions contained in this Agreement on its part required to be
performed or complied with at or prior to the Closing Date. FEVI shall have
delivered to the Transferor a certificate, dated the Closing Date, to the
foregoing effect.
16
2. Consents. All material authorizations, consents or approvals of any
and all governmental regulatory authorities necessary in connection with the
consummation of the trans actions contemplated by this Agreement shall have been
obtained and be in full force and effect.
3. No Contrary Judgment. The Closing shall not violate any Permit or
order, decree or judgment of any court or governmental body having competent
jurisdiction and there shall not have been instituted any legal or
administrative action or proceeding to enjoin the transaction contemplated
hereby or seeking damages from the Transferor or SCI with respect thereto.
4. Closing. FEVI shall deliver, or cause to be delivered, to the
Transferor at or prior to the Initial Closing the following documents:
(a) Certificates representing the shares of the FEVI Stock to
be newly issued by FEVI under this Agreement, which certificates shall be in the
name of the Transferor and duly executed by FEVI;
(b) An officer's certificate signed by the President and
Secretary of FEVI in the form of Exhibit D hereto, as to such matters as the
Transferor deem necessary, including, without limitation, the matters referred
to in Section VII.1 hereof;
(c) FEVI's Certificate of Incorporation, certified by the
Secretary of State of Nevada as of a date not more than thirty (30) days prior
to the Closing Date;
(d) Certificates of the Secretaries of State of Nevada and
each of the states in which FEVI is qualified to transact business as a foreign
corporation dated not more than thirty (30) days prior to the Closing Date, as
to the payment of franchise taxes and the good standing of FEVI in each such
jurisdiction;
(e) Certified copies of resolutions adopted by the Board of
Directors of FEVI authorizing the execution and delivery of this Agreement and
the transactions contemplated hereby;
(d) Bylaws of FEVI, certified as of the Closing Date by the
President and Secretary of FEVI;
(e) EPA permits if any.
(f) Evidence satisfactory to the Transferor and their counsel
of the authorization and issuance of the FEVI Stock; and
(g) Such other documents, instruments or certificates as shall
be reasonably requested by the Transferor, or any of them, or their special
counsel.
17
ARTICLE VIII
ADDITIONAL COVENANTS OF THE PARTIES
1. Expenses. The of the parties hereto shall pay all of its respective
costs and expenses (including attorneys' and accountants' fees, costs and
expenses) incurred in connection with this Agreement and the consummation of the
transactions contemplated herein.
2. Access to Properties and Records. The Transferor shall use their
best efforts to cause SCI to, and FEVI shall, at all reasonable times prior to
Closing, make the properties, premises, books and records of SCI and FEVI
available to The other and The other's authorized representatives, during
reasonable business hours, in such a manner as not unduly to disrupt normal
business activities.
3. Corporate Existence, Rights and Franchises. FEVI and its authorized
representatives shall cause FEVI to conduct its business in the ordinary course
and, to the extent not inconsistent with prudent business practice, in such a
manner as to preserve in effect all Permits, and, without the prior written
consent of the Transferor, shall not permit FEVI's assets, if any, to become
bound by or subject to any contracts or other agreements. FEVI shall respond
promptly to any reasonable requests for reports or additional information by the
Transferor.
4. Confidentiality. Except for such documents, reports, information and
data (including financial statements) which are of a public nature, pending the
Closing (and, if this Agreement is terminated, at all times after the date
hereof), FEVI shall treat as confidential and, except as may be required by law
or necessary or, in the opinion of counsel to Transferor or FEVI, desirable, to
obtain required regulatory approval of the transactions contemplated hereby or
otherwise, will not use, submit or disclose to, or file with others, or permit
any person, firm, corporation or entity under its control to use, submit or
disclose to, or file with others, any documents, reports, information or data
(including financial statements) concerning SCI which FEVI may obtain from the
Transferor or SCI; and, except for such documents, reports and other written
materials (including financial statements) which are of a public nature, if this
Agreement is terminated, FEVI shall return to the Transferor any and all such
documents, reports and other written materials (including financial statements)
concerning SCI as the Transferor may reasonably request.
5. Public Reporting. FEVI shall continue to make available current
public information in compliance with the applicable reporting provisions of the
Exchange Act and in such a manner that the Transferor will be able to sell
shares of the FEVI Stock pursuant to Rule 144 under the Exchange Act after
holding such shares for the period specified by such rule. SCI shall make press
releases consistent with Securities and Exchange Commission Rules and
Regulations. All such press releases shall be approved by Xxxxxxx X. Xxxxxxxx
prior to release. This covenant may be modified or eliminated by a written
agreement between the FEVI and the holders of sixty percent (60%) of the FEVI
Stock received by the Transferor pursuant to this Agreement.
18
6. Dispute Resolution. In the event of a dispute between the parties
hereto involving a claim of breach of representation or warranty hereunder, or
to enforce a covenant herein (either or both of which are referred to hereafter
as a "Claim"), if it is the desire of both parties for quick resolution, then
the rights and obligations of the parties hereto arising under the terms of this
Agreement with respect to such Claims and/or resolution of such disputes may be
by the means of the judgment of an independent third party ("Rent-A-Judge") who
has been selected and hired through the mutual agreement of the parties.
(h) In the event of a Claim by either party, either party may
make a written request upon the other party for a "Rent-A-Judge." A request by
either party for the employment of a "Rent-A-Judge" to resolve the Claim shall
be binding on the other party in accordance with the terms hereof upon written
agreement to such employment by the other party.
The parties may agree upon one "Rent-A-Judge," but in the event that
they cannot agree, there shall be three, one named in writing by The of the
parties within twenty (20) days after the demand for employment of a
"Rent-a-Judge," and a third chosen by the two appointed. Should either party
refuse or neglect to join in the appointment of the "Rent-A-Judge(s)" or to
furnish the "Rent-A-Judge(s)" with any papers or information demanded, the
"Rent-A-Judge(s)" are empowered by both parties to proceed ex parte.
(i) Claim resolution proceedings shall take place in the
County of Xxxxx, State of Nevada, or such other place as the parties may agree,
and the hearing before the "Rent-A-Judge(s)" of the matter to be arbitrated
shall be at the time and place within the city or county as is selected by the
"Rent-A-Judge(s)". The "Rent-A-Judge(s)" shall select such time and place
promptly after appointment and shall give written notice thereof to The party at
least thirty (30) days prior to the date so fixed. At the hearing any relevant
evidence may be presented by either party, and the formal rules or evidence
applicable to judicial proceedings shall not govern. Evidence may be admitted or
excluded in the sole discretion of the "Rent-A-Judge(s)." Said "Rent-A-Judge(s)"
shall hear and determine the matter and shall execute and acknowledge their
award in writing and cause a copy thereof to be delivered to The of the parties.
(j) If there is only one "Rent-A-Judge," his or her decision
shall be binding and conclusive on the parties, and if there are three
"Rent-A-Judge(s)" the decision of any two shall be binding and conclusive.
(k) If three "Rent-A-Judge(s)" are selected under the
foregoing procedure but two of the three fail to reach an agreement in the
determination of the matter in question, the matter shall be decided by three
new "Rent-A-Judge(s)" who shall be appointed and shall proceed in the same
manner, and the process shall be repeated until a decision is finally reached by
two of the three "Rent-A-Judge(s)" selected.
19
(l) The costs of such Claim resolution shall be borne by the
parties equally and The party shall pay its own attorneys' fees, provided,
however, that in the event either party challenges or in any way seeks to have
the Rent-A-Judge's decision or award vacated or corrected or modified, if the
challenge is denied or the original decision or award is affirmed, the
challenging party shall pay the costs and fees, including reasonable attorneys'
fees, of the non-challenging party, both for the challenge and for the original
Claim resolution process.
ARTICLE IX
MISCELLANEOUS
1. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) contains the entire agreement between the parties with respect
to the transactions contemplated hereby, and supersedes all negotiations,
representations, warranties, commitments, offers, contracts, and writings prior
to the date hereof. No waiver and no modification or amendment of any provision
of this Agreement shall be effective unless specifically made in writing and
duly signed by the party to be bound thereby.
2. Counterparts. This Agreement may be executed in one or more
counterparts, The of which shall be deemed an original, but all of which
together, shall constitute one and the same instrument.
3. Severability. If any provisions hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and shall
not affect the validity or effect of any other provision hereof.
4. Assignability. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto; provided, that
neither this Agreement nor any right hereunder shall be assignable by the
Transferor, or any of them, or FEVI without the prior written consent of the
other party.
5. Captions. The captions of the various Articles and Sections of this
Agreement have been inserted only for convenience of reference and shall not be
deemed to modify, explain, enlarge or restrict any of the provisions of this
Agreement.
6. Governing Law. The validity, interpretation and effect of this
Agreement shall be governed exclusively by the laws of the State of Nevada.
7 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and delivered in person or sent by
certified mail, postage prepaid and properly addressed as follows:
20
To the Transferor: With a Copy to:
Xxxxxxx X. Xxxxxxxx
C/O Sophisticated Communications, Inc.
0000 X.X. 00xx Xxxxxxx, Xxxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
To the Acquirer: With a Copy to:
Far East Ventures, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, XX
Facsimile: (000) 000-0000
21
Any party may from time to time change its address for the
purpose of notices to that party by a similar notice specifying a new address,
but no such change shall be deemed to have been given until it is actually
received by the respective party hereto.
All notices and other communications required or permitted under this
Agreement which are addressed as provided in this Section IX.7 if delivered
personally, shall be effective upon delivery; and, if delivered by mail, shall
be effective three days following deposit in the United States mail, postage
prepaid.
8. Finders Fees: Upon the closing of this transaction as contemplated
by this Agreement FEVI will provide shares of FEVI to Xxxxxx Xxxxxxxx as a
finders fee equal to two percent (2%) of the 12,400,000 shares of FEVI provided
the Transferor and to U.S. Funding Corporation a finders fee equal to four
percent (4%) of the 12,400,000 shares of FEVI provided the Transferor. FEVI
agrees for future acquisitions to pay up to a three percent (3%) finders fee to
any third party, officer or director involved in said acquisition payable in
FEVI common stock..
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
TRANSFEROR FAR EAST VENTURES, INC.
XXXXXXX X. XXXXXXXX A Nevada Corporation
By:------------------- By: ---------------------
Xxxxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxx, XX
Chairman of the Board
22
EXHIBIT A TO
STOCK TRANSFER AND EXCHANGE AGREEMENT
Number of shares of Common Stock
Transferor: Sophisticated Communications, Inc.
Xxxxxxx X. Xxxxxxxx 100
------------------- ------------------------------------
Total: 100
---
23
SCHEDULE III.2(B) OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
Transferor's Title to Stock
---------------------------
24
SCHEDULE III.2(F) OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
Proprietary Rights of SCI.
--------------------------
25
SCHEDULE IV.6 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
Absence of Certain Changes
--------------------------
FEVI entered into a settlement agreement with Xxxxx Xxxxxxxx to provide with Xx.
Xxxxxxxx the sum of $150,000 payable at the rate of $12,500 per month in stock
or cash and 100,000 shares of FEVI restricted shares. Xx. Xxxxxxxx was formerly
an officer and director of FEVI,
26
SCHEDULE IV.9 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
Litigation
----------
RJM Card Services, Inc. vs. Sophisticated Communications. Action against SCI
alleging that SCI infringed upon Plaintiff's trade dress by imitating the
appearance of Plaintiff's phone card and advertisements. Action filed July 2000.
SCI filed a motion to dismiss which shall be heard by a judge within the next
few weeks. In this matter SCI has filed a Cross Complaint.
27
SCHEDULE IV.13 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
Reporting Company Requirements
------------------------------
28
SCHEDULE IV.14 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
Title to Assets
---------------
29
SCHEDULE IV.16 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
Contracts
---------
30
SCHEDULE IV.20 OF
STOCK TRANSFER AND EXCHANGE AGREEMENT
No Registration Rights
----------------------
31
