STOCK PURCHASE AGREEMENT
This agreement is made between Xxxxxxxx.xxx, Inc, a Colorado corporation
having its principal executive office at 00000 Xxxxx Xxxxx, Xx Xxxxxx, XX
00000, hereinafter called "Tensleep", Xxxxx Xxxx and Xxx Xx, husband and wife,
hereinafter called the "Shareholder", and Master Financial Group, Inc., having
its principal executive offices at 000 Xxxx Xxxx, Xx. Xxxx, XX 00000,
hereinafter called "Master Financial".:
RECITALS
A. The Shareholder is the owner of record of all of the outstanding
shares of the common stock of Master Financial Group, Inc., a
Minnesota corporation, hereinafter called "Master Financial".
Master Financial is doing business as XxxxxxxXxxxx.xxx.
B. Tensleep desires to purchase, and the shareholder desires to sell
all of the issued and outstanding shares of common stock of Master
Financial.
CONSIDERATION
In consideration of the above premises, for the consideration , and
subject to the terms and conditions hereinafter set forth, the parties agree
as follows:
TERMS AND CONDITIONS
Section One. Exchange of Stock.
Prior to the closing date, as hereinafter fixed, the Shareholder shall
deliver in escrow certificates representing all of the outstanding shares of
the common stock of Master Financial, duly indorsed. In exchange therefor,
Tensleep shall deliver to escrow prior to the closing, one certificate
representing one hundred thousand shares of Tensleep common stock, one
certificate representing four hundred thousand shares of Tensleep common stock
and one certificate representing two hundred thousand shares of Tensleep
common stock. On the Closing date the shareholder shall receive the
certificates representing one hundred and four hundred thousand shares of
Tensleep common stock, and Tensleep shall receive the certificates
representing all of the issued and outstanding shares of Master Financial
common stock. The certificate for two hundred thousand shares of Tensleep
common stock will be distributed from escrow to Shareholder as hereinafter
provided. The certificate representing one hundred thousand shares of
Tensleep common stock shall represent shares that are free trading or non-
restricted. The balance of the Tensleep shares shall be restricted pursuant
to Rule 144 under the Securities Act of 1933, as amended (the "Act").
Section Two. Conditioned Payout.
On the first anniversary of the Closing Date Shareholder, provided the
net profits of the Master Financial, during that first anniversary year are
equal to or greater than $1,000,000 shall receive the certificate representing
two hundred thousand shares of Tensleep's common stock. In the event the
Master Financial's net profits do not equal $500,000 then the 200,000 shares
will be returned to Tensleep, canceled and be included in Tensleep's
authorized but unissued shares. If the Master Financial's net profits are
greater than $500,000 and less than $1,000,000 for the first anniversary year,
Shareholder will receive a proportion of the remaining 200,000 shares equal to
the result of multiplying 200,000 by the ratio determined by dividing $500,000
by an amount equal to the net profits for the first anniversary year less
$500,000.
Section Three. Closing.
The closing of the exchange shall take place on or before April 30,
2000, at 12:00 o'clock p.m., at the escrow holder, subject to change by mutual
agreement of the parties.
Section Four. Warranties and Covenants of Shareholder.
The Shareholder represents, warrants, and covenants as follows:
(a) The Shareholder is the owner of record of 1,000,000 fully paid and
non-assessable shares of Master Financial common stock.
(b) As of the date hereof Master Financial is duly authorized to issue
100,000,000 common shares, of which 1,000,000 shares are issued
and outstanding. No options are currently outstanding for the
purchase of any shares of Tensleep.
(c) Master Financial is duly incorporated and authorized to do
business under the laws of the State of Minnesota.
(d) Master Financial has the power and authority to carry on its
business as currently conducted, and holds, or is duly licensed
under all patents, trademarks, trade names, the operation of its
business as currently conducted, free and clear of all liens,
encumbrances, and claims of any kind whatsoever.
(e) The balance sheets and income statements of Master Financial dated
March 31, 2000, attached hereto as Exhibit A and made a part
hereof, fully and accurately reflect respectively the financial
condition of the corporation
(f) No transactions, have been engaged in by Master Financial from
March 31, 2000 to the date hereof, and there has been no material
adverse change in the financial or operating condition of Master
Financial since March 31, 2000.
(g) As of the date hereof Master Financial is not, and as of the
closing date, Master Financial will not be, in default under any
contract or agreement, or under the order or decree of any court.
To the knowledge of the shareholder there is no actions or
proceedings pending or threatened against Master Financial as of
the date hereof, and neither the execution and delivery of this
agreement nor the consummation of the transaction herein
contemplated will conflict with, result in the breach of, or
accelerate the performance required by any contract or agreement
to which Master Financial or the shareholder is now a party.
(h) There are no dividends declared and unpaid on any of the common
shares of Master Financial.
(i) Master Financial is not a party to any contract or agreement, and
is not subject to any other restriction, materially and adversely
affecting its business, property, or assets.
(j) Attached hereto as Exhibit B, and made a part hereof is a complete
list of the assets and properties of Master Financial as of March
31, 2000. Except as otherwise stated in footnotes to Exhibit B,
Master Financial is in good condition and repair and conforms to
all applicable zoning, building, safety, and other regulations.
(k) Attached hereto as Exhibit C, and made a part hereof, is an
accurate list of all insurance policies in effect with respect to
the business and property of Master Financial as of the date
hereof. Such insurance, or comparable coverage shall be kept in
effect until the closing date.
(l) Attached hereto as Exhibit D and made a part hereof is an accurate
list of every lease to which Master Financial is a party, together
with the terms of each such lease.
(m) Attached hereto as Exhibit E and made a part hereof is an accurate
list of accounts and notes receivable by Master Financial as of
the date hereof. If any accounts or notes receivable listed
therein or acquired by Master Financial before the closing date
are not fully paid when due, the Shareholder shall pay them in
full on written notice by Tensleep of any default, provided that
the liability of the Shareholder hereunder shall be limited to the
amount exceeding the reserve for bad debts shown on the balance
sheet of Master Financial set forth in Exhibit A.
Section Five. Interim Operations; Additional Covenants of Shareholder.
The Shareholder represents, warrants, and covenants that Master
Financial will not enter into any transactions, prior to the closing date,
other than in the ordinary course of business, and that the Shareholder will
take such action as is necessary to insure that Master Financial will not
enter into any such transactions, and in particular will not, without the
prior written consent of Tensleep:
(a) Create or incur any indebtedness other than unsecured current
liabilities incurred in the ordinary course of business;
(b) Grant or permit to arise any mortgage, deed of trust, security
interest, lien, or encumbrance of any kind;
(c) Sell or otherwise dispose of any of its assets other than
merchandise inventories sold in the ordinary course of business;
(d) Declare or pay any dividends, or repurchase or redeem any of its
shares, or establish a sinking fund or other reserve for such
purpose;
(e) Issue, sell or grant options for the sale of any of its shares,
whether or not previously authorized or issued;
(f) Expend any funds for capital additions or improvements other than
ordinary expenditures for maintenance, repairs, and replacements;
(g) Acquire an interest in any other business enterprise, whether for
cash or in exchange for stock or other securities of Master
Financial;
(h) Increase the compensation paid to any of its officers or directors
above the level paid on the date hereof as set forth in Exhibit E
or agree to pay to any of its officers or employees any bonus,
severance pay, or pension, whether under an existing compensation
or deferred compensation plan, or otherwise.
Section Six. Covenants of Acquiring Corporation as to Stock.
Tensleep hereby represents, covenants, and warrants as follows:
(a) As of the date of this agreement Tensleep is authorized to issue,
in the aggregate, 50,000,000 shares of common stock, without par
value, of which approximately 7,500,000 shares are issued and
outstanding;
(b) Between the date of this agreement and the closing date, Tensleep
will not, without the prior written consent of the shareholders,
recapitalize, reclassify, or increase its presently authorized
common stock (or issue additional shares thereof).
Section Seven. Indemnification.
The Shareholder agrees to indemnify Tensleep against any and all loss,
damage, cost, and expense exceeding Ten Thousand Dollars ($10,000.00) that
Tensleep may sustain as a result of any inaccurate representation or the
breach of any warranty or covenant made by the Shareholder herein. In the
event it is determined, as hereinafter provided, that Tensleep is entitled to
indemnification hereunder, indemnification shall firs be effected by
redelivery to Tensleep of shares of common stock of Tensleep held in escrow as
hereinafter provided, such shares to be valued as follows: Five Dollars per
share. To the extent that the escrow fund is insufficient to effect
indemnification, the Shareholder shall be liable to indemnify Tensleep, but
only to a proportion of the sum owning equal to the proportion of the total
number of shares of Tensleep received by him hereunder.
Section Eight. Escrow.
Prior to the closing date, the Shareholder shall deliver to an escrow
agent, to be agreed upon by the parties, hereinafter called escrow agent
1,000,000 shares of Master Financial duly indorsed. Said shares representing
all the issued and outstanding shares of Master Financial. Tensleep shall
deliver to the escrow agent 700,000 shares of its common stock as described in
Section One of this agreement. The escrow shall be subject to the following
terms and conditions:
(a) On the Closing Date, the escrow agent shall deliver the shares of
Tensleep and Master Financial's common stock as set forth and
provided in Section One and Two of this agreement.
(b) All fees and expenses of the escrow agent shall be borne equally
by the parties.
(c) Additional shares received by the Shareholder with respect to
shares held in escrow, as a result of stock dividends and stock
splits shall be delivered to the escrow agent and shall be subject
to the terms of this agreement.
(d) The escrow agent shall hold the undistributed shares deposited
hereunder until May 1, 2001, whereupon he shall release to the
Shareholder the balance of shares remaining in escrow after
adjustment as set forth in Section Two of this agreement and
payment to Tensleep of all of its indemnity claims, approved as
hereinafter provided, except that in the event a claim that may
result in indemnification hereunder remains undetermined as of
April 30, 2001, as adequate number of shares shall be retained in
escrow to provide for payment of such claim.
(e) In the event of any claim by Tensleep for indemnification
hereunder, Tensleep shall give written notice to the Shareholder
thereof, and the parties shall attempt to reach agreement in
respect thereto. If the parties fail to reach agreement within
ten days after notice of a claim has been given, the issue shall
be submitted to arbitration in accordance with the rules and
requirements of the American Arbitration Association then
obtaining. The decision of the arbitrator shall be final and
binding on all parties, and appropriate instructions in conformity
therewith shall immediately be given by the arbitrator to the
escrow agent, who is authorized and directed to rely on such
instructions.
(f) The Shareholder shall have the right, at his own expense, to be
represented by counsel of his own choice in connection with the
defense of any claim which may be brought against Master Financial
in respect to which Tensleep may be entitled to indemnification
under this agreement. In the event of any such claim, Tensleep
shall give prompt written notice thereof to the Shareholder. If,
after having received such notice, the Shareholder elects not to
participate in the defense of such claim, they shall be bound by
the result obtained by Tensleep in defense thereof.
Section Nine. Conditions Precedent to Obligations of Acquiring Corporation.
The obligations of Tensleep hereunder are subject to the following
conditions:
(a) There shall be tendered for exchange by the Shareholder at the
closing, certificates representing all of the issued and
outstanding shares of the common stock of Master Financial in form
approved by counsel for Tensleep.
(b) The representations of the Shareholder contained herein shall be
true as of the closing date, and the Shareholder shall execute and
deliver to Tensleep, a certificate to that effect in form and
substance satisfactory to counsel for Tensleep.
(c) All directors and officers of Master Financial requested by
Tensleep in writing to do so at least 10 days prior to the closing
date shall have tendered their resignations effective as of the
closing date.
(d) Neither the inventories or operating assets of Master Financial
shall have been substantially damaged or destroyed.
Section Ten. Condition Precedent to Obligation of Shareholders; Nontaxability
of Exchange.
The obligation of the Shareholder hereunder to deliver to Tensleep his
shares of the common stock of Master Financial is subject to the condition
that the Tensleep Board of Directors approve this transaction and that the
exchange of the shares of Master Financial common stock for shares of Tensleep
common stock under the terms of this agreement can qualify as a tax-free
"reorganization" within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code.
Section Eleven. Investment Intent.
The Shareholder represents that the shares of common stock of Tensleep
being acquired by him under this agreement are being acquired for investment
purposes only, and not with a view to reselling the same or dividing
participation therein with others. Shareholder represents that he has no
present intent to resell or otherwise dispose of all or any part of such
shares. That such shares will not be sold unless registered pursuant to the
Securities Act of 1933, as amended, or exempt therefrom.
Section Twelve. Access to Records.
Tensleep, and its counsel, accountants, engineers, and other
representatives shall have the right at all times during ordinary business
hours to inspect all of the properties, books, and records of Master
Financial, and Shareholder shall cooperate with and furnish to Tensleep and
its representatives, all such information and documents with respect to their
affairs of Master Financial as Tensleep or its representatives may reasonably
request.
Section Thirteen. Notices.
All notices required or permitted to be given hereunder shall be deemed
duly given which delivered personally or sent by registered or certified mail,
postage prepaid, properly addressed to the party to receive such notice, at
the addresses specified above.
Section Fourteen. Entire Agreement.
This agreement constitutes the entire agreement between the parties;
there are no agreements, warranties, or representations, express or implied,
except those expressly set forth herein. All agreements, representations, and
warranties contained in this agreement shall apply as of the closing date and
shall survive the closing of this agreement.
Section Fifteen. Modification.
This agreement may not be amended or modified, except by written
agreement of the parties.
Section Sixteen. Binding Effect.
This agreement shall bind and inure to the benefit of the parties and
their heirs, legal representatives, successors, and assigns.
Section Seventeen. Governing Law.
This agreement shall be construed under and governed by the laws of the
State of Colorado.
Section Eighteen. Signature in Counterparts.
The parties may execute separate copies of this agreement as original
counterparts and be bound thereby as though each had executed the same
document in the presents of each other.
In witness where of the parties have executed this agreement this 29th_
day of March, 2000.
Xxxxxxxx.xxx, Inc.
By: __/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Pres.
Master Financial Group, Inc.
By: /s/ Xxxxx Xxxx
Xxxxx Xxxx, Pres.
/s/ Xxxxx Xxxx
Xxxxx Xxxx
/s/ Lei Li
Lei Li
EXHIBIT - A
MASTER FINANCIAL GROUP, INC.
Balance Sheet as of
March 31, 2000
ASSETS
Current Assets:
Cash $ 143,091.11
Marketable Securities* 65.000.00
Prepaid Items 558.70
--------------
TOTAL CURRENT ASSETS 208,649.81
Property and Equipment 18,100.00
Other Assets:
Intangible Assets** 2,000,000.00
--------------
TOTAL ASSETS $ 2,226,749.81
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 2,500.00
--------------
TOTAL LIABILITIES 2,500.00
Stockholder's Equity 2,224,249.81
--------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 2,226,749.81
==============
* Note: 500 free trading shares of Professional Transportation Group Inc.
common stock and 20,000 144-restricted shares of APEX Pharmaceuticals Inc.
common stock.
** Note: Intangible assets = Excess annual earnings/return in investment =
$300,000/15%= $2,000,000. Excess annual earnings are estimated as an extra
gain from our investment portfolio. 15% is an average return in investment in
the industry.
MASTER FINANCIAL GROUP, INC.
Income Statement
(Quarter Ended March 31, 2000)
Revenues: $ 216,780.53
Costs of Goods Sold: 9,750.00
------------
Gross Profit: 207,030.53
Expense 880.72
------------
Net Profit before tax: $ 206,149.81
============
EXHIBIT B
LIST OF ASSETS AND PROPERTIES
Cash
5,000 Shares of Professional Transportation Group, Inc.
20,000 Shares of APEX Pharmaceuticals, Inc.
Equipment - Computers, etc.
EXHIBIT C
INSURANCE POLICIES
NONE
EXHIBIT D
LEASES
NONE
EXHIBIT E
ACCOUNTS RECEIVABLE OR NOTES RECEIVABLE
NONE
