ETIFF HOLDINGS, LLC
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
November 8, 2001
LMC Capital Corp.
Xxxxx 0000 - 0000 Xxxxx Xxx
Xxxxxxxxx, XX X0X 0X0
Dear Sir or Madam:
Re: Sale of all issued and outstanding shares of ("K-Tronik") to LMC Capital
Corp. ("LMC")
This agreement (the "Agreement") sets forth the terms and conditions of our
agreement whereby LMC Capital Corp. ("LMC") will purchase a 100% beneficial
right, title and interest in and to 53% of the issued and outstanding shares
(the "K-Tronik Majority Shares") of K-Tronik Int'l Corporation ("K-Tronik") from
ETIFF Holdings, Inc. ("ETIFF") and in and to 47 % of the issued and outstanding
shares (the "K-Tronik Minority Shares") from Mr. Xxxxxx Xxx ("Xx. Xxx"). The
K-Tronik Majority Shares and the K-Tronik Minority Shares shall be referred to,
collectively, as the "K-Tronik Shares".
In consideration of the sum of $10.00 paid to each of ETIFF, K-Tronik and to Xx.
Xxx by LMC, the receipt and sufficiency of which is hereby acknowledged, and for
other good and valuable consideration, the parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES
1.1 LMC represents and warrants to ETIFF, K-Tronik and Xx. Xxx that:
(a) LMC is a valid and subsisting corporation duly incorporated and in
good standing under the laws of the State of Nevada;
(b) entering into this Agreement does not and will not conflict with,
and does not and will not result in a breach of, any of the terms of
its incorporating documents or any agreement or instrument to which
LMC is a party;
(c) this Agreement has been or will be authorized by all necessary
corporate action on the part of LMC; and
(d) LMC is in good standing with the Securities and Exchange Commission,
the Nevada Secretary of State and all other regulatory and statutory
bodies having jurisdiction over its business affairs.
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1.2 K-Tronik and ETIFF represent and warrant to LMC that:
(a) K-Tronik beneficially owns any and all rights to the business of
K-Tronik (the "Business and Intellectual Property");
(b) there are no outstanding agreements or options to acquire or
purchase any interest in any of the Business and Intellectual
Property, and no person has any royalty or other interest whatsoever
in the Business and Intellectual Property;
(c) entering into this Agreement does not and will not conflict with,
and does not and will not result in a breach of, any agreement or
instrument to which K-Tronik and / or ETIFF are party; and
(d) K-Tronik and ETIFF have due and sufficient right and authority to
enter into this Agreement in accordance with this Agreement, and
this Agreement has been or will be authorized by all necessary
action on the part of K-Tronik.
1.3 ETIFF and Xx. Xxx represent and warrant to LMC that:
(a) they beneficially own, free and clear of all liens and encumbrances
of any kind, all of the K-Tronik Shares and the K-Tronik Shares
represent all of the issued and outstanding shares, of all types or
classes, of K-Tronik;
(b) there are no outstanding agreements or options to acquire or
purchase any interest in any of the K-Tronik Shares, and no person
has any royalty or other interest whatsoever in the K-Tronik Shares
(save and except that which is created in this Agreement and that
which vests in ETIFF itself); and
(c) entering into this Agreement does not and will not conflict with,
and does not and will not result in a breach of, any agreement or
instrument to which ETIFF is party.
2. PURCHASE AND SALE
2.1 ETIFF hereby agrees to sell to LMC, and LMC hereby agrees to purchase from
ETIFF, an undivided 100% beneficial right, title and interest in and to
the K-Tronik Majority Shares for a deemed price of $5,300,000 (the "ETIFF
Purchase Price"). The ETIFF Purchase Price shall be paid by way of the
issuance to ETIFF of 7,571,428 common shares of LMC (the "New LMC Shares
issued to ETIFF") at a deemed price of $0.70 per common share.
2.2 Xx. Xxx hereby agrees to sell to LMC, and LMC hereby agrees to purchase
from ETIFF, an undivided 100% beneficial right, title and interest in and
to the K-Tronik Minority Shares for a deemed price of $4,700,000 (the "Xxx
Purchase Price"). The Xxx Purchase Price shall be paid by way of the
issuance to Xx. Xxx of 6,714,286 common shares of LMC (the "New LMC Shares
issued to Xx. Xxx") at a deemed price of $0.70 per common share.
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2.3 The New LMC Shares issued to Xx. Xxx and the New LMC Shares issued to
ETIFF shall be referred to, collectively, as the "New LMC Shares".
2.4 As a condition of its sale of the K-Tronik Majority Shares, ETIFF shall be
granted the option (and shall exercise the option) to purchase a total of
3,000,000 LMC Shares from the existing shareholders of LMC for a purchase
price of $30.
2.5 As a condition of the sale of the K-Tronik Shares, LMC shall agree to
settle the outstanding debts of K-Tronik to its parent, ETIFF, in the
amount of $4,071,000 by way of the issuance of 4,071,000 common shares of
LMC at a deemed price of one common share per $1.00 of outstanding debt
owed to ETIFF.
2.6 The New LMC Shares shall be placed in escrow for release as follows:
(a) 10% of the escrowed shares shall be released upon closing of the
transactions herein (the "First Release Date"); and
(b) 15% of the escrowed shares shall be released every six months (on
the six month anniversary of the First Release Date.
3. RIGHTS AND OBLIGATIONS OF THE PARTIES
3.1 Upon execution of this Agreement, ETIFF, LMC and K-Tronik shall take all
reasonable steps to:
(a) gain, prior to Closing, such approvals to the purchase and sale of
the K-Tronik Shares as may be required from K-Tronik and from
regulatory and statutory authorities having jurisdiction;
(b) at any time prior to Closing, not do or permit to be done any act or
thing which would or might in any way adversely affect the rights of
LMC hereunder;
(c) ensure that K-Tronik and LMC (through its ownership of the K-Tronik
Shares) will have, upon Closing, exclusive and quiet possession of
the Business and Intellectual Property, without the occupation of
the same or any part thereof by any other person; and
(d) Upon Closing, LMC shall take all reasonable steps and make all
reasonably necessary efforts to ensure that its common shares are
posted for trading through the facilities of the NASD's OTCBB and
shall further take all reasonably necessary efforts to ensure the
New LMC Shares issued to Xx. Xxx and to ETIFF are registered for
resale in the United States under the Securities Exchange Act of
1934.
4. CLOSING
4.1 The closing of the purchase of the K-Tronik Shares (the "Closing") shall
occur no later than 10 business days following the later of the date of
any required regulatory approval to this transaction being granted or the
date of execution of this Agreement unless otherwise agreed by LMC, ETIFF,
Xx. Xxx and K-Tronik.
4.2 Upon Closing, the Directors of LMC shall concurrently resign and shall
appoint to the
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Board of Directors of LMC Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxx and X.X.
Xxxxx provided each consents to so act. The present President, Secretary
and Treasurer of LMC shall resign and the new Board of Directors shall
appoint Xxxxxx Xxx as President, Xxxxx Xxxxx as Treasurer and X.X. Xxx as
Secretary provided each consents to so act.
4.3 Upon Closing, the sole shareholder of K-Tronik (which shall then be LMC)
shall hold a shareholders' meeting for K-Tronik and shall confirm the
appointment of the present President and Directors of K-Tronik.
5. MISCELLANEOUS
5.1 Any notice to be required or permitted hereunder will be in writing and
sent by delivery, facsimile transmission, or prepaid registered mail
addressed to the party entitled to receive the same, or delivered to such
party at the address specified above, or to such other address as either
party may give to the other for that purpose. The date of receipt of any
notice, demand or other communication hereunder will be the date of
delivery if delivered, the date of transmission if sent by facsimile, or,
if given by registered mail as aforesaid, will be the date on which the
notice, demand or other communication is actually received by the
addressee.
5.2 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, successors and
permitted assigns.
5.3 Each of the parties hereto agrees that it shall be responsible for its own
legal expenses and disbursements relating to this Agreement and the
negotiation and preparation of any further agreements.
5.4 This Agreement shall be interpreted and construed in accordance with the
laws of the State of New Jersey and the parties agree to attorn to the
courts thereof.
5.5 All dollar figures in this Agreement are given in valid currency of the
United States of America.
5.6 This Agreement may be executed by facsimile and in counterpart.
5.7 All amendments to this Agreement must be in writing and signed by all of
the parties hereto.
5.8 The interests, rights and obligations of the parties herein may not be
assigned, sold, transferred or otherwise conveyed without the express
written consent of the parties hereto.
5.9 All parties have been advised to seek independent legal advice with
respect to applicable securities, tax and other laws, statutes and
regulations and with respect to their review of this Agreement.
If the above terms and conditions accurately record your understanding of our
agreement, please
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so acknowledge by signing a copy of this Agreement in the space provided below
turning the same to us at your earliest convenience. Upon your execution
thereof, this Agreement will constitute a legal and binding agreement subject to
its terms.
Yours truly,
ETIFF HOLDINGS, LLC
________________________________
Operating Manager
The terms of the Agreement above are hereby read, understood, acknowledged,
accepted and consented to (should such consent by required) by the undersigned
effective the 8th day of November, 2001.
MR. XXXXXX XXX
________________________________
LMC CAPITAL CORP.
________________________________
Authorized Signatory
K-TRONIK INT'L CORPORATION
________________________________
Authorized Signatory
