AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("the Agreement"), dated
as of the 8th day of March, 2001, by and between Var-Jazz Entertainment,
Inc., a Nevada corporation ("Var-Jazz") and Cal-Bay Controls, Inc., a
Nevada corporation ("Cal-Bay") and the shareholders of Cal-Bay
("Shareholders"), with reference to the following:
A. Var-Jazz is a Nevada corporation organized on December 9, 1998.
Var-Jazz has authorized capital stock of 25,000,000 shares, $.001 par
value, of which 1,426,000 shares are issued and outstanding.
B. Cal-Bay, Inc. is a privately held corporation organized under
the laws of the State of Nevada on February 22, 2001. Cal-Bay has
authorized capital stock of 25,000,000 shares, $.001 par value, of
which 1,000,000 shares are issued and outstanding.
C. The respective Boards of Directors of Var-Jazz and Cal-Bay have
deemed it advisable and in the best interests of Var-Jazz and Cal-Bay
that Cal-Bay be acquired by Var-Jazz, pursuant to the terms and
conditions set forth in this Agreement.
D. Var-Jazz and Cal-Bay propose to enter into this Agreement which
provides among other things that all of the outstanding shares of
Cal-Bay be acquired by Var-Jazz, in exchange for 5,704,000 shares of
Var-Jazz and such additional items as more fully described
in the Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization under Section 368 (a)(1)(B) of the Internal Revenue
Code of 1986, as amended.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 At the Closing, a total of 1,000,000 common shares, which
represents all of the outstanding shares of Cal-Bay shall be
acquired by Var-Jazz in exchange for 5,704,000 restricted common
shares of Var-Jazz (the "Shares"). The Shares of Var-Jazz to be
issued in this transaction shall be issued as set forth in Exhibit
A to this Agreement.
1.02 At the Closing, the Cal-Bay shareholders will deliver
certificates for the outstanding shares of Cal-Bay, duly endorsed so
as to make Var-Jazz the sole holder thereof, free and clear of all
claims and encumbrances and Var-Jazz shall deliver a transmittal letter
directed to the transfer agent of Var-Jazz directing the issuance of the
Shares to the shareholders of Cal-Bay as set forth on Exhibit A of this
Agreement.
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1.03 Following the reorganization there will be a total of 7,130,000
shares, $.001 par value, issued and outstanding in Var-Jazz.
1.04 Following the reorganization, Cal-Bay will be a wholly owned
subsidiary of Var-Jazz.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at 620 Judge Building, 0
Xxxx Xxxxxxxx, Xxxx Xxxx Xxxx, XX 00000xx or before March 8, 2001,
(the "Closing Date") or at such other place or date and time as may
be agreed to in writing by the parties hereto.
2.02 The following conditions are a part of this Agreement and must be
completed on the Closing Date, or such other date specified by the
parties:
(a) Xxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxx will be appointed to, and
shall be the sole members of, the Board of Directors of Var-Jazz. Xxx
X. Xxxxxx shall resign as a director of Var-Jazz
(b) Xxx Xxxxxx, who is currently the sole officer, will resign as an
officer of Var-Jazz and Xxxxxx X. Xxxxxxxx will be appointed as
President, Secretary and Treasurer and Xxxxxxx X. Xxxxxx will be
appointed as Vice President of Var-Jazz.
(c) Var-Jazz will obtain the necessary approval and amend its
Articles of Incorporation to change the name of the Company to Cal-Bay
International, Inc., or such similar name as is available in the State
of Nevada, increase the authorized capital to 75,000,000 shares and
opt out of the Nevada Control Securities Acquisition Act and Combinations
with Interested Stockholders statute.
(d) Var-Jazz will obtain the necessary approval to forward split its
issued and outstanding common stock on a three for one basis following
the Closing of this Agreement.
(e) Var-Jazz shall assign all right, title and interest of inventory
and the production and distribution of compact disks featuring Nevada
lounge acts, valued at $3,538 to Xxxxxx X. Xxxxxx as compensation for
past services to the Company.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF VAR-JAZZ
Var-Jazz hereby represents and warrants to Cal-Bay as follows:
3.01 Var-Jazz shall deliver to Cal-Bay, on or before Closing,
each of the following:
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(a) Financial Statements. Audited financial statements of Var-Jazz
including, but not limited to, balance sheets and profit and loss
statements from the fiscal years end 1998, 1999 and 2000, prepared in
accordance with generally accepted accounting principles and which
fairly present the financial condition of Var-Jazz at the dates thereof.
(Schedule A)
(b) Property. An accurate list and description of all property,
real or personal, owned by Var-Jazz of a value equal to or greater than
$1,000.00. (Schedule B.)
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule A. (Schedule C.)
A complete and accurate list of all debts, liabilities and obligations
of Var-Jazz incurred or owing as of the date of this Agreement.
(Schedule C.1.)
(d) Leases and Contracts. A complete and accurate list describing
all material terms of each lease (whether of real or personal property)
and each contract, promissory note, mortgage, license, franchise, or
other written agreement to which Var-Jazz is a party which involves
or can reasonably be expected to involve aggregate future payments or
receipts by Var-Jazz (whether by the terms of such lease, contract,
promissory note, license, franchise or other written agreement or as a
result of a guarantee of the payment of or indemnity against the
failure to pay same) of $1,000.00 or more annually during the twelve-
month period ended December 31, 2000, or any consecutive twelve-month
period thereafter, except any of said instruments which terminate or
are cancelable without penalty during such twelve-month period.
(Schedule D.)
(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of Var-Jazz
for the repayment of borrowed money. (Schedule E.)
(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid
a default thereunder; or where notice of such transaction is
required at or subsequent to closing, or where consent to an
acquisition, consolidation, or sale of all or substantially all of
the assets is required to avoid a default thereunder. (Schedule F.)
(g) Articles and Bylaws. Complete and accurate copies of the
Certificate and Articles of Incorporation and Bylaws of Var-Jazz
together with all amendments thereto to the date hereof. (Schedule G.)
(h) Shareholders. A complete list of all persons or entities
holding capital stock of Var-Jazz (as certified by Var-Jazz's
transfer agent) or any rights to subscribe for, acquire, or receive
shares of the capital stock of Var-Jazz (whether warrants, calls,
options, or
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conversion rights), including copies of all stock option
plans whether qualified or nonqualified, and other similar agreements.
(Schedule H.)
(i) Officers and Directors. A complete and current list of all
Officers and Directors of Var-Jazz, each of whom shall resign effective
as of the Closing Date. (Schedule I.)
(j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate for each present
employee of Var-Jazz who received $1,000.00 or more in aggregate
compensation from Var-Jazz whether in salary, bonus or
otherwise, during the year 2000, or who is presently scheduled to
receive from Var-Jazz a salary in excess of $1,000.00 during the year
ending December 2001, including in each case the amount of
compensation received or scheduled to be received, and a schedule
of the hourly rates of all other employees listed according to
departments. All such employees are "at will" employees of
Var-Jazz. (Schedule J.)
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative,
arbitration or other such proceedings or investigations (including
without limitations unfair labor practice matters, labor organization
activities, environmental matters and civil rights violations)
pending or, to the knowledge of Var-Jazz threatened, which may
materially and adversely affect Var-Jazz. (Schedule K.)
(l) Tax Returns. Accurate copies of all Federal and State tax
returns for Var-Jazz for the last fiscal year. (Schedule L.)
(m) Agency Reports. Copies of all material reports or filings (and
a list of the categories of reports or filings made on a regular
basis) made by Var-Jazz under ERISA, EEOC, FDA and all other
governmental agencies (federal, state or local) during the last
fiscal year. (Schedule M.)
(n) Banks. A true and complete list (in all material respects),
as of the date of this Agreement, showing (1) the name of each
bank in which Var-Jazz has an account or safe deposit box, and
(2) the names and addresses of all signatories. (Schedule N.)
(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein Var-Jazz is qualified to do business and is in good standing.
(Schedule O.)
(p) Subsidiaries. A complete list of all subsidiaries
of Var-Jazz. (Schedule P.) The term "Subsidiary" or "Subsidiaries"
shall include corporations, unincorporated associations, partnerships,
joint ventures, or similar entities in which VAR-JAZZ has an interest,
direct or indirect.
(q) Union Matters. An accurate list and description (in all material
respects) of all union contracts and collective bargaining agreements
of Var-Jazz, if any. (Schedule Q.)
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(r) Employee and Consultant Contracts. A complete and accurate list
of all employee and consultant contracts which Var-Jazz may have, other
than those listed in the schedule on Union Matters. (Schedule R.)
(s) Employee Benefit Plans. Complete and accurate copies
of all salary, stock options, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance,
disability, death benefit or other benefit plans, trust agreements or
arrangements of Var-Jazz in effect on the date hereof or to become
effective after the date thereof, together with copies of any
determination letters issued by the Internal Revenue Service with
respect thereto. (Schedule S.)
(t) Insurance Policies. A complete and accurate list (in all
material respects) and a description of all material insurance
policies naming Var-Jazz as an insured or beneficiary or as a loss
payable payee or for which Var-Jazz has paid all or part of the
premium in force on the date hereof, specifying any notice or other
information possessed by Var-Jazz regarding possible claims
thereunder, cancellation thereof or premium increases thereon,
including any policies now in effect naming Var-Jazz as beneficiary
covering the business activities of Var-Jazz. (Schedule T.)
(u) Customers. A complete and accurate list (in all material
respects) of the customers of Var-Jazz, including presently effective
contracts of Var-Jazz to be assigned to Var-Jazz, accounting for the
principle revenues of Var-Jazz, indicating the dollar amounts of
gross income of each such customer for the period ended December
31, 2000. (Schedule U.)
(v) Licenses and Permits. A complete list of all licenses, permits
and other authorizations of Var-Jazz. (Schedule V.)
3.02 Organization, Standing and Power. Var-Jazz is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Nevada with all requisite corporate power to own
or lease its properties and carry on its businesses as are now being
conducted.
3.03 Qualification. Var-Jazz is duly qualified and is licensed as
a foreign corporation authorized to do business in each jurisdiction
wherein it conducts its business operations. Such jurisdictions,
which are the only jurisdictions in which Var-Jazz is duly qualified
and licensed as a foreign corporation, are shown in Schedule O.
3.04 Capitalization of Var-Jazz. The authorized capital stock of Var-
Jazz consists of 25,000,000 shares of Common Stock, $.001 par value, of
which the only shares issued and outstanding are 1,426,000 issued to
shareholders listed on Schedule H, which shares were duly authorized,
validly issued and fully paid and nonassessable, and were issued in
accordance with the registration or qualification provisions of the
Securities Act of 1933, as amended (the "Act") and any relevant state
securities laws or pursuant to valid exemptions therefrom.. There are
no preemptive rights with
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respect to the Var-Jazz stock. There is no
agreement or understanding between any persons and/or entities, which
affects or relates to the voting or giving of written consents with
respect to any security or by a director of Var-Jazz.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate actions, including but not
limited to duly and validly authorized action and approval by the
Board of Directors, on the part of Var-Jazz. This Agreement constitutes
the valid and binding obligation of Var-Jazz enforceable against it in
accordance with its terms, subject to the principles of equity
applicable to the availability of the remedy of specific performance.
This Agreement has been duly executed by Var-Jazz and the execution and
delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement shall not result in any breach of any
terms or provisions of Var-Jazz's Certificate and Articles of
Incorporation or Bylaws or of any other agreement, court order or
instrument to which Var-Jazz is a party or bound by.
3.06 Absence of Undisclosed Liabilities. Var-Jazz has no material
iabilities of any nature, whether fixed, absolute, contingent or
accrued, which were not reflected on the financial statements set
forth in Schedule A or otherwise disclosed in this Agreement or any
of the Schedules or Exhibits attached hereto. As of the Closing,
Var-Jazz shall have no assets or liabilities other than those resulting
from the acquisition of Cal-Bay.
3.07 Absence of Changes. Since December 31, 2000 there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of Var-Jazz, except for changes
resulting from completion of those transactions described in Section
2.02(e) and Section 5.01
3.08 Tax Matters. All taxes and other assessments and levies which
Var-Jazz is required by law to withhold or to collect have been duly
withheld and collected, and have been paid over to the proper government
authorities or are held by Var-Jazz in separate bank accounts for such
payment or are represented by depository receipts, and all such
withholdings and collections and all other payments due in connection
therewith (including, without limitation, employment taxes, both the
employee's and employer's share) have been paid over to the government
or placed in a separate and segregated bank account for such purpose.
There are no known deficiencies in income taxes for any periods and
further, the representations and warranties as to absence of undisclosed
liabilities contained in Section 3.06 includes any and all tax
liabilities of whatsoever kind or nature (including, without limitation,
all federal, state, local and foreign income, profit, franchise, sales,
use and property taxes) due or to become due, incurred in respect of or
measured by Var-Jazz income or business prior to the Closing Date.
3.09 Options, Warrants, etc. Except as otherwise described in Schedule
H, there are no outstanding options, warrants, calls, commitments or
agreements of any character to which Var-Jazz or its shareholders
are a party or by which Var-Jazz or its shareholders are bound, or
are a party, calling
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for the issuance of shares of capital stock
of Var-Jazz or any securities representing the right to
purchase or otherwise receive any such capital stock of Var-Jazz.
3.10 Title to Assets. Except for liens set forth in Schedule C,
Var-Jazz is the sole unconditional owner of, with good and marketable
title to, all assets listed in the schedules as owned by it and all
other property and assets are free and clear of all mortgages, liens,
pledges, charges or encumbrances of any nature whatsoever.
3.11 Agreements in Force and Effect. Except as set forth in Schedules
D and E, all material contracts, agreements, plans, promissory notes,
mortgages, leases, policies, licenses, franchises or similar instruments
to which Var-Jazz is a party are valid and in full force and effect on
the date hereof, and Var-Jazz has not breached any material provision of,
and is not in default in any material respect under the terms of, any
such contract, agreement, plan, promissory note, mortgage, lease, policy,
license, franchise or similar instrument which breach or default would
have a material adverse effect upon the business, operations or financial
condition of Var-Jazz.
3.12 Legal Proceedings, Etc. Except as set forth in Schedule K, there
are no civil, criminal, administrative, arbitration or other such
proceedings or investigations pending or, to the knowledge of either
Var-Jazz or the shareholders thereof, threatened, in which, individually
or in the aggregate, an adverse determination would materially and
adversely affect the assets, properties, business or income of
Var-Jazz. Var-Jazz has substantially complied with, and is not in
default in any material respect under, any laws, ordinances, requirements,
regulations or orders applicable to its businesses.
3.13 Governmental Regulation. To the knowledge of Var-Jazz and
except as set forth in Schedule K, Var-Jazz is not in violation of or in
default with respect to any applicable law or any applicable rule,
regulation, order, writ or decree of any court or any governmental
commission, board, bureau, agency or instrumentality, or delinquent with
respect to any report required to be filed with any governmental
commission, board, bureau, agency or instrumentality which violation or
default could have a material adverse effect upon the business, operations
or financial condition of Var-Jazz.
3.14 Brokers and Finders. Var-Jazz shall be solely responsible for
payment to any broker or finder retained by Var-Jazz for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated herein. Var-Jazz has not agreed to pay any fees or
commissions to any party.
3.15 Accuracy of Information. No representation or warranty by Var-
Jazz contained in this Agreement and no statement contained in any
certificate or other instrument delivered or to be delivered to Cal-Bay
pursuant hereto or in connection with the transactions contemplated
hereby(including without limitation all Schedules and exhibits hereto)
contains or will contain any untrue statement of material fact or omits
or will omit to state any material fact necessary in order to make the
statements contained herein or therein not misleading.
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3.16 Subsidiaries. Except as listed in Schedule P, Var-Jazz does not
have any other subsidiaries or own capital stock representing ten
percent (10%) or more of the issued and outstanding stock of any other
corporation.
3.17 Consents. Except as listed in Schedule F, no consent or approval
of, or registration, qualification or filing with, any governmental
authority or other person is required to be obtained or accomplished by
Var-Jazz or any shareholder thereof in connection with the consummation
of the transactions contemplated hereby.
3.18 Improper Payments. Neither Var-Jazz, nor any person acting on
behalf of Var-Jazz has made any payment or otherwise transmitted
anything of value, directly or indirectly, to (a) any official or any
government or agency or political subdivision thereof for the purpose of
influencing any decision affecting the business of Var-Jazz (b) any
customer, supplier or competitor of Var-Jazz or employee of such
customer, supplier or competitor, for the purpose of obtaining,
retaining or directing business for Var-Jazz or (c) any political party
or any candidate for elective political office nor has any fund or other
asset of Var-Jazz been maintained that was not fully and accurately
recorded on the books of account of Var-Jazz.
3.19 Copies of Documents. Var-Jazz has made available for inspection
and copying by Cal-Bay and its duly authorized representatives, and
will continue to do so at all times, true and correct copies of all
documents which it has filed with the Securities and Exchange Commission
and all other governmental agencies which are material to the terms and
conditions contained in this Agreement. Furthermore, all filings by
Var-Jazz with the Securities and Exchange Commission, and all other
governmental agencies, including but not limited to the Internal Revenue
Service, have contained information which is true and correct, to the
best knowledge of the Board of Directors of Var-Jazz, in all material
respects and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made
therein not misleading or which could have any material adverse effect
upon the financial condition or operations of Var-Jazz or adversely
effect the objectives of this Agreement with respect to Cal-Bay including,
but not limited to, the issuance and subsequent trading of the shares of
common stock of Var-Jazz to be received hereby, subject to compliance by
the shareholders of Cal-Bay with applicable law.
3.20 Valid Issuance of Securities. The Shares, when issued, sold and
delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully
paid and non-assessable, and will be free of restrictions on transfer
other than restrictions on transfer under this Agreement and under
applicable state and federal securities laws.
3.21 Related Party Transactions. No employee, officer or director
of the Company or member of his or her immediate family is indebted
to the Company, nor is the Company indebted (or committed to make
loans or extend or guarantee credit) to any of them. No member of
the immediate family of any officer or director of the Company is
directly or indirectly interested in any material contract with
the Company.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
CAL-BAY CONTROLS, INC.
Cal-Bay hereby represents and warrants to Var-Jazz as follows:
4.01 Cal-Bay shall deliver to Var-Jazz, on or before Closing,
the following:
(a) Financial Statements. Unaudited balance sheet of Cal-Bay
as of a current date. (Schedule AA)
(b) Property. An accurate list and description of all property,
real or personal owned by Cal-Bay of a value equal to or greater
than $1,000.00. (Schedule BB)
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule AA.
(Schedule CC.) A complete and accurate list of all debts, liabilities
and obligations of Cal-Bay incurred or owing as of the date of this
Agreement. (Schedule CC.1.)
(d) Leases and Contracts. A complete and accurate list describing
all material terms of material leases (whether of real or personal
property) and each contract, promissory note, mortgage, license,
franchise, or other written agreement to which Cal-Bay is a party
which involves or can reasonably be expected to involve aggregate
future payments or receipts by Cal-Bay (whether by the terms of
such lease, contract, promissory note, license, franchise or
other written agreement or as a result of a guarantee of
the payment of or indemnity against the failure to pay same) of
$1,000.00 or more annually during the twelve-month period ended
December 31, 2001 or any consecutive twelve-month period
thereafter, except any of said instruments which terminate or are
cancelable without penalty during such twelve-month period.
(Schedule DD.)
(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of Cal-
Bay for the repayment of borrowed money. (Schedule EE.)
(f) Consents Required. A complete list of all agreements
wherein consent to the transaction herein contemplated is required
to avoid a default thereunder; or where notice of such transaction
is required at or subsequent to closing, or where consent to an
acquisition, consolidation, or sale of all or substantially
all of the assets is required to avoid a default thereunder.
(Schedule FF.)
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(g) Articles and Bylaws. Complete and accurate copies of the
Articles of Incorporation and Bylaws of Cal-Bay, together with
all amendments thereto to the date hereof. (Schedule GG.)
(h) Shareholders. A complete list of all persons or entities
holding capital stock of Cal-Bay or any rights to subscribe for,
acquire, or receive shares of the capital stock of Cal-Bay
(whether warrants, calls, options, or conversion rights),
including copies of all stock option plans whether qualified or
nonqualified, and other similar agreements. (Schedule HH.)
(i) Officers and Directors. A complete and current list of
all officers and Directors of Cal-Bay. (Schedule II.)
(j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate or each
present employee of Cal-Bay who received $1,000 or more in aggregate
compensation from Cal-Bay whether in salary, bonus or
otherwise, during the year 2001, or who is presently scheduled to
receive from Cal-Bay a salary in excess of $1,000.00 during the year
ending December 31, 2001, including in each case the amount of
compensation received or scheduled to be received, and a schedule of
the hourly rates of all other employees listed according to
departments. (Schedule JJ.)
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative,
arbitration or other such proceedings or investigations
(including without limitations unfair labor practice matters,
labor organization activities, environmental matters and civil rights
violations) pending or, to the knowledge of Cal-Bay threatened, which
may materially and adversely affect Cal-Bay. (Schedule KK.)
(l) Tax Returns. Accurate copies of all Federal and State tax
returns for Cal-Bay, if any. (Schedule LL.)
(m) Agency Reports. Copies of all material reports or filings
(and a list of the categories of reports or filings made on a
regular basis) made by Cal-Bay under ERISA, EEOC, FDA and all other
governmental agencies (federal, state or local). (Schedule MM.)
(n) A true and complete list (in all material respects), as of
the date of this Agreement, showing (1) the name of each bank in
which Cal-Bay has an account or safe deposit box, and (2) the names
and addresses of all signatories. (Schedule NN.)
(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein Cal-Bay is qualified to do business and is in good standing.
(Schedule OO.)
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(p) Subsidiaries. A complete list of all subsidiaries of Cal-Bay.
(Schedule PP.) The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint
ventures, or similar entities in which Cal-Bay has an interest,
direct or indirect.
(q) Union Matters. An accurate list and description (in all material
respects of union contracts and collective bargaining agreements of
Cal-Bay, if any. (Schedule QQ.)
(r) Employee and Consultant Contracts. A complete and accurate list
of all employee and consultant contracts which Cal-Bay may have, other
than those listed in the schedule on Union Matters. (Schedule RR.)
(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock option, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance,
disability, death benefit or other benefit plans, trust agreements or
arrangements of Cal-Bay in effect on the date hereof or to become
effective after the date thereof, together with copies of any
determination letters issued by the Internal Revenue Service with
respect thereto. (Schedule SS.)
(t) Insurance Policies. A complete and accurate list (in all
material respects) and description of all material insurance
policies naming Cal-Bay as an insured or beneficiary or as a loss
payable payee or for which Cal-Bay has paid all or part of the premium
in force on the date hereof, specifying any notice or other information
possessed by Cal-Bay regarding possible claims thereunder,
cancellation thereof or premium increases thereon, including
any policies now in effect naming Cal-Bay as beneficiary covering
the business activities of Cal-Bay. (Schedule TT.)
(u) Customers. A complete and accurate list (in all material
respects) of the customers of Cal-Bay, including all presently
effective contracts of Cal-Bay to be assigned to Cal-Bay,
accounting for the principle revenues of Cal-Bay, indicating
the dollar amounts of gross revenues of each such customer for
the period ended as of a recent date. (Schedule UU.)
(v) Licenses and Permits. A complete list of all licenses,
permits and other authorizations of Cal-Bay. (Schedule VV.)
4.02 Organization, Standing and Power. Cal-Bay is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Nevada with all requisite corporate power to own or
lease its properties and carry on its business as is now being
conducted.
4.03 Qualification. Cal-Bay is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it
conducts business operations. Such jurisdictions, which are the only
jurisdictions in which Cal-Bay is duly qualified and licensed as a
foreign corporation, is shown in Schedule OO.
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4.04 Capitalization of Cal-Bay. The authorized capital stock of Cal-
Bay consists of 25,000,000 shares of Common Stock, par value $.001 per
share, of which the only shares issued and outstanding are 1,000,000
shares issued to the shareholders listed on Schedule HH, which shares
were duly authorized, validly issued and fully paid and nonassessable.
There are no preemptive rights with respect to the Cal-Bay stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, including but not limited
to duly and validly authorized action and approval by the Board of
Directors, on the part of Cal-Bay. This Agreement constitutes the
valid and binding obligation of Cal-Bay , enforceable against it in
accordance with its terms, subject to the principles of equity
applicable to the availability of the remedy of specific performance.
This Agreement has been duly executed by Cal-Bay and the execution
and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement shall not result in any
breach of any terms or provisions of Cal-Bay's Articles of
Incorporation or Bylaws or of any other agreement, court order
or instrument to which Cal-Bay is a party or bound.
4.06 Absence of Undisclosed Liabilities. Cal-Bay has no material
liabilities of any nature, whether fixed, absolute, contingent or
accrued, which were not reflected on the financial statements set forth
in Schedule AA or otherwise disclosed in this Agreement or any of the
Schedules or Exhibits attached hereto.
4.07 Absence of Changes. Since inception, there has not been any
material adverse change in the condition (financial or otherwise),
assets, liabilities, earnings or business of Cal-Bay , except for
changes resulting from completion of those transactions described
in Section 5.02.
4.08 Tax Matters. All taxes and other assessments and levies
which Cal-Bay is required by law to withhold or to collect have
been duly withheld and collected, and have been paid over to the proper
government authorities or are held by Cal-Bay in separate bank
accounts for such payment or are represented by depository receipts,
and all such withholdings and collections and all other payments due
in connection therewith (including, without limitation,
employment taxes, both the employee's and employer's share) have
been paid over to the government or placed in a separate and
segregated bank account for such purpose. There are no known deficiencies
in income taxes for any periods and further, the representations and
warranties as to absence of undisclosed liabilities contained in
Section 4.06 includes any and all tax liabilities of whatsoever
kind or nature (including, without limitation, all federal, state, local
and foreign income, profit, franchise, sales, use and property taxes)
due or to become due, incurred in respect of or measured by Cal-Bay
income or business prior to the Closing Date.
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4.09 Options, Warrants, etc. Except as otherwise described in Schedule
HH, there are no outstanding options, warrants, calls, commitments
or agreements of any character to which Cal-Bay or its shareholders are
a party or by which Cal-Bay or its shareholders are bound, or are a
party, calling for the issuance of shares of capital stock of Cal-Bay
or any securities representing the right to purchase or otherwise receive
any such capital stock of Cal-Bay .
4.10 Title to Assets. Except for liens set forth in Schedule CC,
Cal-Bay is the sole and unconditional owner of, with good and
marketable title to, all the assets and patents listed in the
schedules as owned by them and all other property and assets are free
and clear of all mortgages, liens, pledges, charges or encumbrances
of any nature whatsoever.
4.11 Agreements in Force and Effect. Except as set forth in Schedules
DD and EE, all material contracts, agreements, plans, promissory
notes, mortgages, leases, policies, licenses, franchises or similar
instruments to which Cal-Bay is a party are valid and in full force
and effect on the date hereof, and Cal-Bay has not breached any material
provision of, and is not in default in any material respect under the
terms of, any such contract, agreement, plan, promissory note,
mortgage, lease, policy, license, franchise or similar instrument
which breach or default would have a material adverse effect
upon the business, operations or financial condition of Cal-Bay.
4.12 Legal Proceedings, Etc. Except as set forth in Schedule KK,
there are no civil, criminal, administrative, arbitration or other
such proceedings or investigations pending or, to the knowledge of
Cal-Bay , threatened, in which, individually or in the aggregate,
an adverse determination would materially and adversely affect the
assets, properties, business or income of Cal-Bay . Cal-Bay
has substantially complied with, and is not in default in any
material respect under, any laws, ordinances, requirements,
regulations or orders applicable to its businesses.
4.13 Governmental Regulation. To the knowledge of Cal-Bay and except
as set forth in Schedule KK, Cal-Bay is not in violation of or in
default with respect to any applicable law or any applicable rule,
regulation, order, writ or decree of any court or any governmental
commission, board, bureau, agency or instrumentality, or delinquent
with respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality
which violation or default could have a material adverse effect
upon the business, operations or financial condition of Cal-Bay.
4.14 Broker and Finders. Cal-Bay shall be solely responsible for
payment to any broker or finder retained by Cal-Bay for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated herein.
4.15 Accuracy of Information. No representation or warranty by
Cal-Bay contained in this Agreement and no statement contained in
any certificate or other instrument delivered or to be delivered to
Var-Jazz pursuant hereto or in connection with the transactions
contemplated hereby (including without limitation all Schedules and
Exhibits hereto) contains or will contain any untrue
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statement of a
material fact or omits or will omit to state any material fact
necessary in order to make the statements contained herein or therein
not misleading.
4.16 Subsidiaries. Except as listed in Schedule PP, Cal-Bay does
not have any other subsidiaries or own capital stock
representing ten percent (10%) or more of the issued and
outstanding stock of any other corporation.
4.17 Consents. Except as listed in Schedule FF, no consent or
approval of, or registration, qualification or filing with, any
other governmental authority or other person is required to be
obtained or accomplished by Cal-Bay or any shareholder thereof, in
connection with the consummation of the transactions contemplated
hereby.
4.18 Improper Payments. No person acting on behalf of Cal-Bay has
made any payment or otherwise transmitted anything of value, directly
or indirectly, to (a) any official or any government or agency or
political subdivision thereof for the purpose of influencing any
decision affecting the business of Cal-Bay , or (b) any political
party or any candidate for elective political office, nor has any fund
or other asset of Cal-Bay been maintained that was not fully and
accurately recorded on the books of account of Cal-Bay.
4.19 Copies of Documents. Cal-Bay has made available for
inspection and copying by VAR-JAZZ and its duly authorized
representatives, and will continue to do so at all times, true
and correct copies of all documents which it has filed with any
governmental agencies which are material to the terms and
conditions contained in this Agreement. Furthermore, all filings by
Cal-Bay with governmental agencies, including but not limited to the
Internal Revenue Service, have contained information which is true and
correct in all material respects and did not contain any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements made therein not misleading or which could have
any material adverse effect upon the financial condition or
operations of Cal-Bay or adversely affect the objectives of this
Agreement.
4.20 Investment Intent of Shareholders. Each shareholder of Cal-Bay
represents and warrants to Var-Jazz that the shares of Var-Jazz being
acquired pursuant to this Agreement are being acquired for his own
account and for investment and not with a view to the public resale
or distribution of such shares and further acknowledges that
the shares being issued have not been registered under the
Securities Act and are "restricted securities" as that term is
defined in Rule 144 promulgated under the Securities Act and must be
held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE ACQUISITION
5.01 Conduct and Transactions of Var-Jazz. During the period
from the date hereof to the date of Closing, Var-Jazz shall:
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(a) Conduct its operations in the ordinary course of business,
including but not limited to, paying all obligations as they mature,
complying with all applicable tax laws, filing all tax returns
required to be filed and paying all taxes due;
(b) Maintain its records and books of account in a manner that
fairly and correctly reflects its income, expenses, assets and
liabilities.
Var-Jazz shall not during such period, except in the ordinary
course of business, without the prior written consent of Cal-Bay :
(a) Except as otherwise contemplated or required by this Agreement,
sell, dispose of or encumber any of its properties or assets;
(b) Except as set forth in paragraph 5.01(c) above, declare or pay any
dividends on shares of its capital stock or make any other
distribution of assets to the holders thereof;
(c) Except as set forth in paragraph 5.01(d) above, issue, reissue or
sell, or issue options or rights to subscribe to, or enter into any
contract or commitment to issue, reissue or sell, any shares of
its capital stock or acquire or agree to acquire any shares of
its capital stock;
(d) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or
into any other corporation or sell all or substantially all of
its assets or change in any manner the rights of its capital stock
or other securities;
(e) Except as contemplated or required by this Agreement,
pay or incur any obligation or liability, direct or contingent, of
more than $1,000;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other
party, or make loans or advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or indirect,
of any of its officers or executive employees; except in accordance
with existing employment contracts;
(i) Enter into any agreement or make any commitment to any labor
union or organization;
(j) Make any capital expenditures.
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5.02 Conduct and Transactions of Cal-Bay . During the period from
the date hereof to the date of Closing, Cal-Bay shall:
(a) Obtain an investment letter from each shareholder of Cal-Bay
in a form substantially like that attached hereto as Exhibit B.
(b) Conduct the operations of Cal-Bay in the ordinary course
of business.
Cal-Bay shall not during such period, except in the ordinary
course of business, without the prior written consent of Var-Jazz:
(a) Except as otherwise contemplated or required by this
Agreement, sell, dispose of or encumber any of the properties
or assets of Cal-Bay;
(b) Declare or pay any dividends on shares of its capital stock
or make any other distribution of assets to the holders thereof;
(c) Issue, reissue or sell, or issue options or rights to subscribe
to, or enter into any contract or commitment to issue, reissue or
sell, any shares of its capital stock or acquire or agree to acquire
any shares of its capital stock;
(d) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or
into any other corporation or sell all or substantially all of its
assets or change in any manner the rights of its capital stock
or other securities;
(e) Except as otherwise contemplated and required by this Agreement,
pay or incur any obligation or liability, direct or contingent, of more
than $1,000;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other
party, or make loans or advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or indirect,
of any of its officers or executive employees; except in accordance
with existing employment contracts;
(i) Enter into any agreement or make any commitment to any labor
union or organization;
(j) Make any material capital expenditures in excess of $1,000.00.
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(k) Allow any of the foregoing actions to be taken by any
subsidiary of Cal-Bay .
ARTICLE 6
RIGHTS OF INSPECTION
6.01 During the period from the date of this Agreement to the date
of Closing of the acquisition, Var-Jazz and Cal-Bay agree to use their
best efforts to give the other party, including its representatives
and agents, full access to the premises, books and records of each
of the entities, and to furnish the other with such financial and
operating data and other information including, but not limited to,
copies of all legal documents and instruments referred to on any
schedule or exhibit hereto, with respect to the business and
properties of Var-Jazz or Cal-Bay, as the case may be, as the
other shall from time to time request; provided, however, if there
are any such investigations: (1) they shall be conducted in such
manner as not to unreasonably interfere with the operation of the
business of the other parties and (2) such right of inspection shall
not affect in any way whatsoever any of the representations or
warranties given by the respective parties hereunder. In the event
of termination of this Agreement, Var-Jazz and Cal-Bay will each
return to the other all documents, work papers and other materials
obtained from the other party in connection with the transactions
contemplated hereby, and will take such other steps necessary to
protect the confidentiality of such material.
ARTICLE 7
CONDITIONS TO CLOSING
7.01 Conditions to Obligations of Cal-Bay. The obligation of Cal-Bay
to perform this Agreement is subject to the satisfaction of the
following conditions on or before the Closing unless waived in
writing by Cal-Bay .
(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by Var-Jazz which in the
opinion of Cal-Bay would materially adversely affect the proposed
transaction and intent of the parties as set forth in this Agreement.
The representations and warranties of Var-Jazz set forth in Article 3
hereof shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing as though made on and
as of the Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. Var-Jazz shall have in all material
respects performed all agreements required to be performed by it under
this Agreement and shall have performed in all material respects any
actions contemplated by this Agreement prior to or on the Closing and
Var-Jazz shall have complied in all material respects with the course
of conduct required by this Agreement.
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(c) Corporate Action. Var-Jazz shall have furnished minutes,
certified copies of corporate resolutions and/or other documentary
evidence satisfactory to counsel for Cal-Bay that Var-Jazz has
submitted with this Agreement and any other documents required hereby
to such parties for approval as provided by applicable law.
(d) Consents. Execution of this Agreement by the shareholders of
Cal-Bay and any consents necessary for or approval of any party listed
on any Schedule delivered by Var-Jazz whose consent or approval is
required pursuant thereto shall have been obtained.
(e) Financial Statements. Cal-Bay shall have been furnished with
audited financial statements of Var-Jazz including, but not limited
to, balance sheets and profit and loss statements from fiscal year
end 1998, 1999 and 2000. Such financial statements shall have been
prepared in conformity with generally accepted accounting principles
on a basis consistent with those of prior periods and fairly present
the financial position of Var-Jazz as of December 31, 2000.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by Var-Jazz of the transactions contemplated by this
Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals,
permits and orders of all federal and state governmental agencies
required to be obtained by Var-Jazz for consummation of the transactions
contemplated by this Agreement shall have been obtained.
(h) Changes in Financial Condition of Var-Jazz. There shall not have
occurred any material adverse change in the financial condition or
in the operations of the business of Var-Jazz, except expenditures
in furtherance of this Agreement.
(i) Absence of Pending Litigation. Var-Jazz is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement
or the consummation of the transactions contemplated hereunder.
(j) Authorization for Issuance of Stock. Cal-Bay shall have received
in form and substance satisfactory to counsel for Cal-Bay a letter
instructing and authorizing the Registrar and Transfer Agent for
the shares of common stock of Var-Jazz to issue stock certificates
representing ownership of Var-Jazz common stock to Cal-Bay
shareholders in accordance with the terms of this Agreement and
a letter from said Registrar and Transfer Agent acknowledging receipt
of the letter of instruction and stating to the effect that the Registrar
and Transfer Agent holds adequate supplies of stock certificates
necessary to comply with the letter of instruction and the terms
and conditions of this Agreement.
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7.02 Conditions to Obligations of Var-Jazz. The obligation of Var-Jazz
to perform this Agreement is subject to the satisfaction of the
following conditions on or before the Closing unless waived in writing
by Var-Jazz.
(a) Representations and Warranties. There shall be no
information disclosed in the schedules delivered by Cal-Bay, which
in the opinion of Var-Jazz, would materially adversely affect the
proposed transaction and intent of the parties as set forth in this
Agreement. The representations and warranties of Cal-Bay set forth
in Article 4 hereof shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing as
though made on and as of the Closing, except as otherwise permitted
by this Agreement.
(b) Performance of Obligations. Cal-Bay shall have in all material
respects performed all agreements required to be performed by
it under this Agreement and shall have performed in all material
respects any actions contemplated by this Agreement prior to or on
the Closing and Cal-Bay shall have complied in all respects with
the course of conduct required by this Agreement.
(c) Corporate Action. Cal-Bay shall have furnished minutes,
certified copies of corporate resolutions and/or other
documentary evidence satisfactory to Counsel for Var-Jazz that
Cal-Bay has submitted with this Agreement and any other documents
required hereby to such parties for approval as provided by
applicable law.
(d) Consents. Any consents necessary for or approval of any
party listed on any Schedule delivered by Cal-Bay, whose consent
or approval is required pursuant thereto, shall have been obtained.
(e) Financial Statements. Var-Jazz shall have been furnished with
an unaudited balance sheet of Cal-Bay as of a recent date.
(f) Statutory Requirements. All statutory requirements for the
valid consummation by Cal-Bay of the transactions contemplated
by this Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state governmental
agencies required to be obtained by Cal-Bay for consummation
of the transactions contemplated by this Agreement shall have been
obtained.
(h) Employment Agreements. Existing Cal-Bay employment agreements
will have been delivered to counsel for Var-Jazz.
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(i) Changes in Financial Condition of Cal-Bay . There shall
not have occurred any material adverse change in the financial
condition or in the operations of the business of Cal-Bay,
except expenditures in furtherance of this Agreement.
(j) Absence of Pending Litigation. Cal-Bay is not engaged in
or threatened with any suit, action, or legal, administrative
or other proceedings or governmental investigations pertaining to
this Agreement or the consummation of the transactions contemplated
hereunder.
(k) Shareholder Approval. The Cal-Bay shareholders shall have
approved the Agreement and Plan of Reorganization.
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.01 Covenant of Further Assurance. The parties covenant and agree
that they shall, from time to time, execute and deliver or cause to
be executed and delivered all such further instruments of
conveyance, transfer, assignments, receipts and other instruments,
and shall take or cause to be taken such further or other actions
as the other party or parties to this Agreement may reasonably
deem necessary in order to carry out the purposes and intent of this
Agreement.
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.01 All statements contained in any written certificate, schedule,
exhibit or other written instrument delivered by Var-Jazz or
Cal-Bay pursuant hereto, or otherwise adopted by Var-Jazz, by its
written approval, or by Cal-Bay by its written approval, or in
connection with the transactions contemplated hereby, shall be
deemed representations and warranties by Var-Jazz or Cal-Bay
as the case may be. All representations, warranties and agreements
made by either party shall survive for the period of the applicable
statute of limitations and until the discovery of any claim, loss,
liability or other matter based on fraud, if longer.
ARTICLE 10
TERMINATION OF AGREEMENT AND ABANDONMENT OF REORGANIZATION
10.01 Termination. Anything herein to the contrary notwithstanding,
this Agreement and any agreement executed as required hereunder and
the acquisition contemplated hereby may be terminated at any time before
the Closing as follows:
(a) By mutual written consent of the Boards of Directors of
Var-Jazz and Cal-Bay .
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(b) By the Board of Directors of Var-Jazz if any of the conditions
set forth in Section 7.02 shall not have been satisfied by the
Closing Date.
(c) By the Board of Directors of Cal-Bay if any of the conditions
set forth in Section 7.01 shall not have been satisfied by the
Closing Date.
10.02 Termination of Obligations and Waiver of Conditions; Payment
of Expenses. In the event this Agreement and the acquisition are
terminated and abandoned pursuant to this Article 10 hereof, this
Agreement shall become void and of no force and effect and there shall
be no liability on the part of any of the parties hereto, or their
respective directors, officers, shareholders or controlling persons
to each other. Each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and
any of the documents evidencing the transactions contemplated
hereby, including fees, expenses and disbursements of counsel.
ARTICLE 11
EXCHANGE OF SHARES; FRACTIONAL SHARES
11.01 Exchange of Shares. At the Closing, Var-Jazz shall issue a
letter to the transfer agent of Var-Jazz with a copy of the
resolution of the Board of Directors of Var-Jazz authorizing and
directing the issuance of Var-Jazz shares as set forth on Exhibit
A to this Agreement.
11.02 Restrictions on Shares Issued to Cal-Bay . Due to the fact
that Cal-Bay will receive shares of Var-Jazz common stock in
connection with the acquisition which have not been registered
under the 1933 Act by virtue of the exemption provided in Section
4(2) of such Act, those shares of Var-Jazz will contain the
following legend:
The shares represented by this certificate have not
been registered under the Securities Act of 1933. The shares
have been acquired for investment and may not be sold or offered
for sale in the absence of an effective Registration Statement
for the shares under the Securities Act of 1933 or an opinion
of counsel to the Corporation that such registration is
not required.
ARTICLE 12
MISCELLANEOUS
12.01 Construction. This Agreement shall be construed and enforced
in accordance with the laws of the State of Nevada excluding the
conflicts of laws.
12.02 Notices. All notices necessary or appropriate under this
Agreement shall be effective when personally delivered or deposited
in the United States mail, postage prepaid, certified or registered,
return receipt requested, and addressed to the parties last known
address which addresses are currently as follows:
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If to "Var-Jazz If to "Cal-Bay "
Mr. Xxx Xxxxxx Xx. Xxxxxx X. Xxxxxxxx
Var-Jazz Entertainment, Inc. Cal-Bay Controls, Inc.
0000 Xxxx Xxxxxx Xxxxxx 0000 Xxxxxxx Xxxx, xxxxx X
Xxx Xxxxx, XX 00000 Xxxxxx, XX 00000
With copies to: With copies to:
Xxxxxx X. Xxxxxxxxx, Esq. Xxxx X. Xxxxxxx, Esq.
Lehman Walstrand & Associates, LLC Xxxxxxx, Xxxxx & Xxxx, LLP
620 Judge Building 00000 Xxx Xxxxxx Xxxxxx, Xxxxx 0000
0 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxx
Xxxx Xxxx Xxxx, XX 00000
12.03 Amendment and Waiver. The parties hereby may, by mutual
agreement in writing signed by each party, amend this Agreement
in any respect. Any term or provision of this Agreement may
be waived in writing signed by an authorized officer at any time by
the party which is entitled to the benefits thereof, such waiver
right shall include, but not be limited to, the right of either
party to:
(a) Extend the time for the performance of any of the obligations
of the other;
(b) Waive any inaccuracies in representations by the other
contained in this Agreement or in any document delivered pursuant
hereto;
(c) Waive compliance by the other with any of the covenants
contained in this Agreement, and performance of any obligations
by the other; and
(d) Waive the fulfillment of any condition that is precedent
to the performance by the party so waiving of any of its obligations
under this Agreement.
Any writing on the part of a party relating to such amendment,
extension or waiver as provided in this Section 12.03 shall be
valid if authorized or ratified by the Board of Directors of such
party.
12.04 Remedies not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive
of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute or otherwise. The election of any one or more remedies by
Var-Jazz or Cal-Bay shall not constitute a waiver of the right to
pursue other available remedies.
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12.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of Var-Jazz and Cal-Bay
and its shareholders.
12.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigned
regarding the subject matter hereof, and supersedes all prior
written or oral understandings or agreements between the parties.
12.08 Cal-Bay shall bear all expenses incurred in connection with the
negotiation, execution, closing, and performance of this Agreement,
including counsel fees and accountant fees. Such expenses are
estimated to be $8,000.
12.09 Captions and Section Headings. Captions and section headings
used herein are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.
Executed as of the date first written above.
Var-Jazz Entertainment, Inc. Cal-Bay Controls, Inc.
By: /s/Xxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
Xxx Xxxxxx, President Xxxxxx X. Xxxxxxxx, President
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The undersigned hereby approves the Agreement and Plan of Reorganization
with Var-Jazz Entertainment, Inc. The undersigned hereby represents and
warrants that the undersigned has read the Agreement and Plan of
Reorganization with Var-Jazz Entertainment, Inc. and understands its
terms and conditions.
Shareholders of Cal-Bay Controls, Inc.
/s/Xxxxxx X. Xxxxxxxx Date: March 8, 2001
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx Xxxxxxx Date: March 8, 2001
Xxxxx Xxxxxxx
/s/Xxxx X. Xxxxxxxx Date: March 8, 2001
Xxxx X. Xxxxxxxx
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EXHIBIT A
Name of Number of
Shareholder Shares
Xxxxxx X. Xxxxxxxx 5,404,540
Xxxxx Xxxxxxx 242,420
Xxxx X. Xxxxxxxx 57,040
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
ISSUER: Var-Jazz Entertainment, Inc.
SECURITY: Common Stock, par value $.001
QUANTITY: ___________________ Shares
In connection with the purchase of the above-listed Securities of
the Company, I, the purchaser represent to the Company the following:
(1) Investment. I am aware of the Company's business affairs and
financial condition. I am purchasing the Securities for investment for
my own account only and not with a view to, or for resale in connection
with, any "distribution" thereof within the meaning of the Securities
Act of 1933 (as Amended). These securities have not been registered
under the Securities Act by reason of a specific exemption therefrom,
which exemption depends on, among other things, the bona fide nature
of the investment intent as expressed herein. In this connection I
understand that, in view of the Securities and Exchange Commission
("SEC"), the statutory basis for such exemption may be unavailable if
my representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in
the market price of the Securities or for the period of one year or any
other fixed period in the future.
(2) Restrictions on Transfer Under Securities Act. I further
acknowledge and understand that the Securities must be held indefinitely
unless they are subsequently registered under the Securities Act or
unless an exemption from such registration is available. Moreover, I
understand that the Company is under no obligation to register the
Securities. In addition, I understand that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the
transfer of the Securities unless they are registered or unless the
Company receives an opinion of counsel reasonably satisfactory to the
Company that such registration is not required.
(3) Sales Under Rule 144. I am aware of the adoption of Rule 144
by the SEC promulgated under the Securities Act, which in substance
permits limited public resale of securities acquired in a non- public
offering subject to the satisfaction of certain conditions, including:
(i) the availability of certain current public information about the
Company, (ii) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a " market maker,"
and (iv) the amount of securities sold during any three-month period not
exceeding specified limitations (generally 1% of the total shares
outstanding).
(4) Limitations on Rule 144. I further acknowledge and understand that
the Company is not now, and at any time I wish to sell the Securities may
not be, satisfying the public information requirement of Rule 144, and,
in such case, I would be precluded from selling the Securities under Rule
144 even if the minimum holding period had been satisfied.
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(5) Sales Not Under Rule 144. I further acknowledge that, if all the
requirements of Rule 144 are not met, then Regulation A, or some other
registration exemption will be required; and that, although Rule 144
is not exclusive, the staff of the Commission has expressed its opinion
(i) that persons proposing to sell private placement securities other
than in a registered offering or exemption from registration is available
for such offers or sales, and (ii) that such persons and the brokers who
participate in the transactions do so their own risk.
(6) Stop Transfer Instructions. I further understand that stop
transfer instructions will be in effect with respect to the transfer
of the Securities consistent with the above.
(7) Additional Representations and Warranties. In addition, I
represent and warrant:
(i) That I have had the opportunity to ask questions of, and receive
answers from, the Company ( or any person acting on its behalf)
concerning the Company and my proposed investment in the Securities;
(ii) That I have concluded that I have sufficient information upon
which to base my decision to acquire the Securities;
(iii) That I have made my own determination of the value of the
Securities and have not relied upon any statements, representations or
warranties of the Company regarding the value of the Securities or the
business prospects of the Company;
(iv) That I understand that in acquiring the Securities, I am making a
highly speculative investment with the knowledge that the Company is in
the initial stages of development;
(v) That I am capable of bearing the economic risk and burdens of the
investment, the possibility of complete loss of all of the investment,
and the possible inability to readily liquidate the investment due to
the lack of public market; and
(vi) That I understand that, in selling and transferring the Securities,
the Company had relied upon an exemption from the registration requirements
of the Securities Act and that, in an attempt to effect compliance with all
the conditions of such exemption, the Company is relying in good faith
upon all of my foregoing representations and warranties.
SIGNATURE OF PURCHASER
Date:_______________
_______________________________
Address:
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