EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
and
PLAN OF REORGANIZATION
BY AND BETWEEN
XXXXXXXXXXX.XXX INC.
AND
IFT FINANCIAL GROUP INC.
TABLE OF CONTENTS
1. Plan of Reorganization..............................................1
2. Terms of Acquisition................................................1
3. Assignment of Assets................................................4
4. Representations of IFT..............................................4
5. Representations of NHCC.............................................8
6. Closing and Effective Date.........................................13
7. Review Period......................................................13
8. Conditions Precedent to the Obligations
of IFT..........................................................13
9. Conditions Precedent to the Obligation of
NHCC..............................................................16
10. Availability of Information........................................16
11. Private Transaction................................................16
12. Termination........................................................17
13. Indemnification....................................................17
14. Nature and Survival of Representations.............................17
15. Documents at Closing...............................................17
16. Finder's Fee.......................................................18
17. Conduct of Business................................................19
18. Miscellaneous......................................................21
Signature Page.........................................................22
Exhibit A - IFT Assets
Exhibit B - NewBridge Agreement
Exhibit C1-4 - NHCC Warrant Agreements
Exhibit D - Resignation and Election of Officers and Directors
Exhibit E - Schedule of Encumbrances, Off-Balance Sheet Obligations and
Contingent Claims
Exhibit F - Escrow Agreement
Exhibit G - Investment Letter
(ii)
ASSET PURCHASE AGREEMENT and PLAN OF REORGANIZATION
This Asset Purchase Agreement and Plan of Reorganization (hereinafter
the "Agreement") is entered into effective this 9th day of May, 2001, by and
between XxxXxxxxxxx.xxx Inc., a Nevada corporation ("NHCC") and IFT Financial
Group, Inc., a Nevada corporation ("IFT").
RECITALS:
WHEREAS, NHCC desires to acquire the assets and business interests of
IFT in exchange for shares of NHCC common stock ("NHCC Common Stock") upon the
terms and conditions set forth herein.
NOW THEREFORE, for the mutual consideration set out herein, and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Plan of Reorganization. The parties hereto do hereby agree that NHCC
shall acquire all of the assets of IFT upon the terms and conditions set forth
herein (the "Acquisition"). It is the intention of the parties hereto that this
transaction qualify as a tax-free reorganization under Section 368(a)(1)(C) of
the Internal Revenue Code of 1986, as amended, and related sections thereunder.
2. Terms of Acquisition. In accordance with the provisions of this
Agreement and the requirements of applicable law, the Acquisition shall have an
Effective Date of the date hereof. Consummation of the Acquisition shall be upon
the following terms and subject to the following conditions:
(a) Purchase of Assets.
On the basis of the representations and warranties herein
contained, subject to the terms and conditions set forth herein, and
for Eight Million Seven Hundred Seventy Five Thousand(8,775,000) shares
of NHCC Common Stock (the NHCC's Shares), IFT agrees to sell, transfer,
assign, convey and deliver to NHCC all of the assets of IFT of every
type and description, real, personal and mixed, including, without
limitation, its business as a going concern; its good will; the claimed
exclusive right to use the names "IFT Financial Group, Inc." and any
names so similar thereto as to tend to cause confusion on the part of
the public; trademarks, trade names, trade secrets, plans, files,
notebooks, and development activities, production data, shop rights,
customer lists and information related to customers; real estate and
interests therein (including leaseholds and all other interests);
machinery and equipment (including all of IFT's right, title and
interest under any equipment leases and contracts for purchase of
equipment); motor vehicles; supplies; notes and accounts receivable;
books and records; work in process, finished products, and supplies;
fixtures; contracts; claims of every description, including those for
refund; any restrictive covenants and obligations of former officers
and employees, including, without limitation, all rights and interests
provided by invention agreements and assignments and other contracts
with employees; franchises; funds of whatever nature; past present, or
future, escrow, security, and other deposits, if any; and all other
property and rights of every kind and nature, tangible or intangible,
owned by IFT on the date of closing whether or not
specifically referred to in this Agreement. Collectively, such assets
and business interests are identified in Schedule A attached hereto and
incorporated herein by reference (the "IFT Assets").
(b)NHCC's Shares
(1) The consideration for the purchase of the IFT Assets consists
solely of the NHCC Shares, which shall be issued and deposited with
Escrowholder (as defined herein) for the benefit of IFT within five (5)
business days of the date hereof in denominations to be determined by
IFT. In the event IFT is unable to deliver all of the its Assets, the
number of NHCC Shares shall be decreased proportionally to the decrease
in the composition and value of the IFT Assets.
(2) To induce NHCC to enter into the Agreement IFT has provided a
Proforma Statement of Operations a copy of which is attached as Exhibit
"H", a true and correct copy of which is attached hereto and made a
part hereof, against which, at a minimum IFT shall within 90 days after
Closing, have achieved a $15.0 M annualized revenue based upon a ninety
(90) day "runrate [defined herein as a ninety day gross revenue
accumulation multiplied by four (4)]. In the event such revenue shall
not have been reached as hereinabove stated, to such extent as may be
reasonably necessary, the parties hereto agree that they each shall
executed such further documents and do such further acts as necessary
to un-wind the transaction contemplated herein and to place the
parties, as nearly as legally practicable in the same position as they
each presently enjoyed, as additional consideration for the issuance
and delivery of the NHCC Shares to the Escrowholder as contemplated
herein, IFT acknowledges and agrees, warrants and covenants to accept
that all shares of common stock, warrants and options of NHCC presently
issued and outstanding as of the date of this Agreement ("Pre-existing
Shares") have been issued for valued consideration and, subsequent to
the Closing, IFT, for itself and on behalf of any Successors in
agreement, will not restrict, block or attempt to restrain or block the
sale, transfer or assignment of the Pre-existing Shares. Further, the
new Board of Directors of IFT shall agree by resolution executed at
closing, and shall so notify the NHCC transfer agents in writing that
the Pre-existing Shares are subject to such covenant and agreement.
(c) Events Occurring at or Prior to Closing.
(1) NHCC shall and will demonstrate to the satisfaction of IFT
that it has fulfilled the requirements of the Securities and Exchange
Commission ("SEC") and has satisfied all requirements in connection
therewith including but not limited to the submission of any and all
documents necessary to allow NHCC to be fully reporting and trading on
the NASDAQ OTC-BB not later than the Closing May 30, 2001and with
respect to the transactions contemplated by this Agreement including,
without limitation, obtaining the requisite vote or consent of its
shareholders and directors.
(2) NHCC shall and will demonstrate to the satisfaction of IFT
that it has satisfied all requirements of the National Association of
Securities Dealers ("NASD") with respect to the transactions
contemplated by this Agreement.
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(3) NHCC shall have authorized One Hundred Million (100,000,000)
shares of $.001 par value Common Stock, allocated as Seventy Five
Million (75,000,000) shares of Common Stock and Twenty Five Million
(25,000,000) shares of Preferred Stock, of which Two Million Three
Thousand Seven Hundred Thirty-Seven (2,203,737) shares of Common Stock
will be issued and outstanding: NHCC does not have any shares of
preferred stock issued or outstanding as of the date hereof, and there
are no other existing option, calls, warrants, preemptive rights,
dividend rights, registration rights or commitments of any character
relating thereto. Additionally, NHCC will have reserved, subject to the
exercise the options and warrants to purchase Two Million One Hundred
Seventy Three Thousand Three Hundred Sixteen (2,173,316) shares of its
Common Stock allocated as follows: (A) "B" Warrant to Purchase Common
Stock in the amount of Three Hundred Fifty Five Thousand (355,000)
shares of XxxXxxxxxxx.xxx Inc. common stock (the "Series B Warrants")
at an exercise price of $5.00 expiring on September 30, 2002. A copy of
the "B" Warrants to Purchase Common Stock in the amount of Three
Hundred Fifty Five Thousand (355,000) shares of common stock, is
attached hereto as Exhibit C-1; (B) "C" Warrant to Purchase Common
Stock in the amount of Three Hundred Fifty Five Thousand (355,000)
shares of XxxXxxxxxxx.xxx Inc. common stock (the "Series C Warrants")
at an exercise price of $ 7.50 expiring on September 30, 2002. A copy
of the "C" Warrant to Purchase Common Stock in the amount of Three
Hundred Fifty Five Thousand (355,000) shares of common stock, is
attached hereto as Exhibit C-2; (C) "D" Warrant to Purchase Common
Stock in the amount of Three Hundred Eleven Thousand Six Hundred Fifty
Eight (311,658) shares of XxxXxxxxxxx.xxx Inc. common stock (the
"Series D Warrants") at an exercise price of $10.00 expiring on
September 30, 2002 except as amended. A copy of the "D" Warrant to
Purchase Common Stock in the amount of Three Hundred Eleven Thousand
Six Hundred Fifty Eight (311,658) shares of common stock, is attached
hereto as Exhibit C-3; (D) "E" Warrant to Purchase Common Stock in the
amount of Three Hundred Eleven Thousand Six Hundred Fifty Eight
(311,658) shares of XxxXxxxxxxx.xxx Inc. common stock (the "Series E
Warrants") at an exercise price of $15.00 expiring on September 30,
2002 except as amended. A copy of the "E" Warrant to Purchase Common
Stock in the amount of Three Hundred Eleven Thousand Six Hundred Fifty
Eight (311,658) shares of common stock, is attached hereto as Exhibit
C-4; (the B, C, D, and E Warrants are collectively the "NHCC
Warrants"), (E) incentive stock options to purchase Three Hundred and
Forty Thousand (340,000) common shares of NHCC at an exercise price of
$4.00 with expirations in accordance with the Second Amended and
Restated NHCC Stock Option Agreement; (the "XPLA Options"); (F) stock
options to purchase Five Hundred Thousand (500,000) shares of NHCC
common stock exercisable at a price of Fifty Cents ($0.50) per share
(the "NHCC Options"). All issued and outstanding shares, options and
warrants shall be legally issued, fully paid, and non-assessable, and
not issued in violation of any securities laws or any preemptive or
other rights of any person.
(4) It is agreed and understood by NHCC and IFT, for itself and on
behalf of any Successors heirs or assigns to this agreement, that after
the Closing Date herein that no amendments shall be made by NHCC, its
Board of Directors, its Officers or any successors or assigns, to the
existing agreements or amendments thereto, that govern the NHCC
Warrants, the XPLA Options and the NHCC Options now issued and
outstanding, without the express written consent of the warrant holders
or option holders.
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(5) NHCC shall have and will demonstrate to the reasonable
satisfaction of IFT that it has no material assets and no debts,
liabilities, liens and/or judgments, contingent or fixed.
(d) Other Matters.
(1) There shall be no stock dividend, stock split,
recapitalization, or exchange of shares with respect to or rights
issued in respect of NHCC's common stock or preferred stock paid or
outstanding after the date hereof and there shall be no dividends paid
on NHCC's common stock or preferred stock after the date hereof, in
each case through and including the Effective Date.
(2) IFT and NHCC shall have received all requisite director and
shareholder approval of all matters set forth herein and no shareholder
of IFT or NHCC shall have exercised any dissenters rights under
applicable corporate law.
(3) Effective as of the Closing Date, there shall occur, the
resignation of the existing NHCC officers and certain directors and the
appointment of new officers and directors as described in Exhibit "D"
attached hereto.
(4) That certain Advisory and Management Agreement by and between
NewBridge Capital, Inc. ("NewBridge") and NHCC dated June 25, 1999, as
amended, a copy of which is attached as Exhibit "B" (the "NewBridge
Agreement"), shall survive the closing and shall be ratified as of the
Effective Date with the personal guarantee for payment thereunder by
IFT or some other entity or individual acceptable to NewBridge in it's
sole discretion. As part of such Advisory and Management Agreement,
upon execution hereof, IFT shall cause to be paid to NewBridge the sum
of Twenty Five Thousand ($25,000) Dollars for the purpose of
reimbursing NewBridge for its costs in effecting the transaction. Said
funds shall be delivered to the Client Trust Account of Xxxxxxx X.
Xxxx, Esq., and released to NBRG at the earlier of termination of this
agreement or upon Closing hereof..
3. Assignment of Assets. On or as soon as practicable after the
Closing Date, IFT will use its best efforts to cause the assignment of the IFT
Assets against delivery of certificates representing NHCC's Shares.
(a) Assets Retained by IFT: Dissolution of IFT
(1) IFT shall retain its franchise to be a Nevada corporation, its
stock transfer books and records, the record books containing the
minutes of meetings of its directors and shareholders, and such other
of its records as have exclusively to do with its organization,
existence, or share capitalization.
(2) IFT agrees to comply with all applicable rules, regulations
and requirements of Section 368 of the Code, including, if necessary,
IFT's dissolution and distribution of NHCC's
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Shares to IFT's equity holders within twelve (12) months of the Closing
Date, to enable NHCC and IFT to meet, if possible, the standards and
requirements as a tax-free reorganization.
(b) Effective Date and Closing
The closing of the transfer and exchange of the Assets for
NHCC's Shares as contemplated by this Agreement (the "Closing") shall
occur upon the earlier of such date that the parties have satisfied
their respective obligations and covenants contained herein, or May 30,
2001, but shall have an Effective Date as of May 1, 2001. At the
Closing, NHCC shall deliver the NHCC Shares to IFT and IFT shall
deliver the IFT Assets to NHCC, along with the opinions, certificates,
exhibits as stated in this Agreement and other documents as reasonably
requested by the other party.
(c) Escrowholder
Within ten (10) business days of execution of this Agreement
by the parties, NHCC and IFT will agree upon an Escrow Agent
("Escrowholder") who will receive and distribute all necessary
documents and securities being exchanged under this Agreement and
facilitate the Closing. NHCC, IFT and Escrowholder agree to execute
escrow instructions within ten (10) business days following the date
hereof.
4. Representations of IFT. IFT hereby represents and warrants as
follows, which warranties and representations shall also be true as of the
Effective Date:
(a) Except as noted on Exhibit "F" (the "Schedule of Encumbrances,
Off Balance Sheet Obligations and Contingent Claims) IFT, (i) is the
sole owner (of record and beneficially) of the IFT Assets and (ii)
there are no actual or contingent liabilities against such assets,
including but not limited to claims for participation, reimbursement
profit sharing or security interests.
(b) The audited financial statements of IFT's principal asset,
Xxxxxxx & Associates, LLC, as of December 31, 2000 , together with the
unaudited statements of IFT through March 31, 2001, which have been or
will be delivered to NHCC (hereinafter collectively referred to as the
"IFT Financial Statements") are and will be materially complete,
accurate and fairly present the financial condition of IFT, as of the
date thereof and the results of its operations for the periods covered.
It is represented that an audit of the consolidated financial
statements of IFT can be accomplished within the filing requirements of
the SEC following the date of closing. Additionally, at Closing IFT
shall provide to NHCC and audit letter or other evidence satisfactory
to NHCC verifying that IFT on a consolidated basis has a net asset
value of One Million ($1,000,000) Dollars. . Other than as set forth in
any schedule attached hereto, to the best knowledge of IFT, there are
no material liabilities or obligations, either fixed or contingent, not
disclosed in the IFT Financial Statements or in any exhibit thereto or
notes thereto other than contracts or obligations in the ordinary
course of business; and no such contracts or obligations in the
ordinary course of business constitute liens or other liabilities which
materially alter the financial condition of IFT, as reflected in the
IFT Financial Statements. IFT has or will have at Closing, good title
to all assets shown on the IFT Financial Statements subject only to
dispositions and other transactions in the ordinary course of business,
the disclosures set forth therein
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and liens and encumbrances of record. The IFT Financial Statement has
been prepared in accordance with generally accepted accounting
principles consistently applied (except as may be indicated therein or
in the notes thereto and except with respect to such interim
statements, certain year-end closing adjustments).
(c) To the best knowledge of IFT, since December 31, 2000, there
have not been any material adverse changes in the financial position of
IFT, except changes arising in the ordinary course of business, and
disclosed in the IFT March 31, 2001 financial statements, which changes
will in no event materially and adversely affect the financial position
of IFT.
(d) IFT is not a party to any material pending litigation or, to
its best knowledge, any governmental investigation or proceeding, not
reflected in the IFT Financial Statement, and to its best knowledge, no
material litigation, claims, assessments or any governmental
proceedings are threatened against it.
(e) IFT is in good standing in its state of incorporation, and it
is in good standing and duly qualified to do business in each state
where required to be so qualified except where the failure to so
qualify would have no material negative impact on its financial
condition.
(f) IFT has, or will have by the Closing Date, filed all material
tax, governmental and/or related forms and reports (or extensions
thereof) due or required to be filed and has (or will have) paid or
made adequate provisions for all taxes or assessments which have become
due as of the Effective Date.
(g) To the best of its knowledge, IFT has not materially breached
any material agreement to which it is a party. IFT will each give NHCC
copies or access thereto of all material contracts, commitments and/or
agreements to which it is a party, including all relationships or
dealings with related parties or affiliates.
(h) IFT does not have any subsidiary corporations except those
disclosed in Exhibit "G" attached hereto.
(i) IFT will make its corporate financial records, minute books,
and other corporate documents and records ("IFT Disclosure Documents")
available for review to present management of NHCC prior to the Closing
Date, during reasonable business hours and on reasonable notice.
(j) To the best knowledge of IFT the execution of this Agreement
does not materially violate or breach any material agreement or
contract to which it is a party, and this Agreement has been duly
authorized by all appropriate and necessary corporate action and IFT,
to the extent required, has obtained all necessary approvals or
consents required by any agreement to which it is a party.
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(k) Employee and Labor Matters. The IFT Disclosure Documents
accurately set forth the names, positions, and annual salary of each
person employed by IFT including officers, whose annual salary
including bonuses exceeds Ten Thousand Dollars ($10,000). Except as
disclosed in the IFT Disclosure Documents, IFT does not have any
employment agreements that cannot be canceled on thirty (30) days
notice, or collective bargaining agreement covering any of its
employees and has encountered no material labor difficulties. The IFT
Disclosure Documents also set forth a complete and accurate list of all
employee benefit plans, including all profit sharing, bonus, stock,
pension, or similar plans to which IFT and is a party or by which IFT
is bound. To the best knowledge of IFT, there are no existing defaults
by it under any of the agreements, plans, or arrangements identified in
the IFT Disclosure Documents, and to the best of knowledge of IFT,
there exists no condition or circumstance which, with notice or lapse
of time or both, would constitute such a default except as otherwise
disclosed to NHCC. Except as disclosed in the IFT Disclosure Documents,
there is no pending or threatened labor dispute, strike, slowdown, or
work stoppage, no unfair labor practice pending against IFT before the
National Labor Relations Board, to the best knowledge of IFT, they are
not engaged in any unfair labor practice, and there is no grievance or
arbitration proceeding pending against, or threatened to be asserted or
commenced against IFT under any collective bargaining agreement or
other labor contract. All Taxes relating to IFT which it is required by
law to withhold or collect have been duly withheld or collected and
have been timely paid over to the proper authorities to the extent due
and payable.
(l) Real Properties. IFT does not own any real property.
(m) Other Properties and Equipment. Except as disclosed pursuant
to this Agreement or as of record, or except for liens for taxes not
yet due and payable or liens that are being contested in good faith IFT
has good title, free of any all security interests, liens,
encumbrances, or claims of others, to all personal property and
equipment in, at, on or about such properties owned or leased by it, or
used or necessary in its operations or in connection with IFT, and
assets, including without limitation those reflected in the IFT
Financials. To the best knowledge of IFT all intellectual and personal
property is in reasonably good operating condition and repair and are
sufficient to enable IFT to carry on its operations.
(n) Trademarks. Except as disclosed in the IFT Disclosure
Documents, IFT does not own or use any trademark, service xxxx, trade
name, copyright or patent and to the best knowledge and belief of IFT
they have not infringed or are infringing upon any trademark, service
xxxx, trade name, copyright, or patent that is owned or used by any
other person.
(o) Leaseholds and Executory Contracts. Except as disclosed
pursuant to this Agreement or in the IFT Disclosure Documents, to the
best knowledge and belief of IFT none of the parties have any lease or
executory contracts to which they are a party which is null and void or
otherwise valid and enforceable. IFT has not received any notice of
default by them under the terms of any such lease or executory contract
which default remains uncured, and to the best of their knowledge, they
are not in material breach or default under the terms of any such lease
or executory contract, except as disclosed on the IFT Disclosure
Documents.
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(p) Investments. IFT has provided, or will provide to NHCC, prior
to Closing, a complete and accurate description of the IFT Assets,
including but not limited to a list of all investments of IFT which
accurately sets forth the nature of IFT interest or ownership in each
investment and, if applicable, the jurisdictions in which the
respective investments have been incorporated, organized, and currently
doing business. Except for its wholly owned subsidiaries and the
entities identified on the list to be provided to NHCC, there is no
corporation, limited partnership, limited partnership, joint venture,
association, trust, or other entity or organization which IFT directly
or indirectly controls or in which IFT directly or indirectly owns any
equity interest or any other interest.
(q) Permits. Except as disclosed pursuant to this Agreement or in
the IFT Disclosure Documents, to the best knowledge of IFT they have
obtained and maintained in full force and effect all franchises,
permits, certificates, authorizations, licenses and other similar
authority required by law or governmental regulations from all
applicable federal, state or local authorities and any other regulatory
authorities, which are necessary for the conduct of its business as now
being conducted and they are not in default or noncompliance in any
material respect under any of such franchises, permits, certificates,
authorizations, licenses or other similar authority except for those
permits, certificates, authorizations, licenses or other similar
authority that could not reasonably be expected to have a material
adverse effect on IFT if not obtained.
(r) Compliance with Laws, Rules, Etc. To the best knowledge of IFT
the capitalization, business and operations of each of them is and has
been conducted in compliance with all applicable federal, state, and
local laws, rules and regulations, and it is not in violation of any
terms of any mortgage, indenture, contract, agreement, instrument,
judgment, decree, order, statute, rule or regulation to which it is
subject, except to the extent any violation or noncompliance would not
materially and adversely affect its business, operations, properties,
assets, or financial condition, and except to the extent that any
violation or noncompliance would not result in the incurring of any
material liability. Further, IFT has not been notified by any
regulatory or governmental authority that it is now in violation of any
law, rule, regulation, ordinance, or order.
(s) Conflict of Interest Transactions. As of the Closing and
except as disclosed in the IFT Disclosure Documents, no past or present
shareholder or employee of IFT or any affiliate, and no Associate of
any past or present shareholder or employee of IFT or any affiliate,
(i) is indebted to, or has any financial, business, or contractual
relationship or arrangement with IFT and or any affiliate, (ii) has any
direct or indirect interest in any property, asset, or right which is
owned or used by IFT or any affiliate, or (iii) has been directly or
indirectly involved in any transaction with IFT or any affiliate.
(t) Brokers. Except as disclosed in writing to NHCC simultaneously
with the delivery of this Agreement, IFT has not agreed to pay any
brokerage fees, finder's fees, or other fees or commissions with
respect to the transactions contemplated in this and other Agreements,
and to the best knowledge of IFT no other person or entity is entitled,
or intends to claim that they are entitled, to receive any such fees or
commissions in connection with such transactions. IFT agrees to
indemnify and hold harmless NHCC against liability to any other broker
claiming to act on their behalf.
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(u) Full Disclosure. The information concerning IFT set forth in
this Agreement, in the IFT Disclosure Documents and in the IFT
Financials is, to the best knowledge of IFT complete and accurate in
all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact required to make the
statements made, in light of the circumstances under which they were
made, not misleading.
5. Representations of NHCC. NHCC hereby represents and warrants as
follows, each of which representations and warranties shall continue to be
true as of the Effective Date:
(a) As of the Effective Date, the shares of NHCC common stock to
be issued and delivered to the IFT hereunder will, when so issued and
delivered, constitute duly authorized, validly and legally issued
shares of NHCC capital stock, fully-paid and nonassessable and free of
all liens and encumbrances. All shares of common stock, warrants and
options of NHCC presently issued and outstanding as of the date Closing
have been issued for good, reasonable and valued consideration.
(b) NHCC has the corporate power to enter into this Agreement and
to perform its obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been or will be duly authorized and approved by the NHCC
shareholders, by the respective Boards of Directors of NHCC. The
execution and performance of this Agreement will not constitute a
material breach of any agreement, indenture, mortgage, license or other
instrument or document to which NHCC is a party and will not violate
any judgment, decree, order, writ, rule, statute, or regulation
applicable to NHCC, or their properties. The execution and performance
of this Agreement will not violate or conflict with any provision of
the respective Certificate of Incorporation or by-laws of NHCC.
(c) NHCC has delivered to IFT a true and complete copy of its (i)
audited financial statements for the fiscal years ended December 31,
2000, and 1999, and its unaudited interim financial statements for the
period ended March 31, 2001, (the "NHCC Financial Statements"). The
NHCC Financial Statements are complete, accurate and fairly present the
financial condition of NHCC as of the dates thereof and the results of
its operations for the periods then ended. There are no material
liabilities or obligations either fixed or contingent not reflected
therein. The NHCC audited financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes
thereto) and fairly present the financial position of NHCC as of the
dates thereof and the results of its operations and changes in
financial position for the periods then ended. NHCC has no
subsidiaries.
(d) Since December 31, 2000, there have not been any material
adverse changes in the financial condition of NHCC. At Closing, NHCC
will have no material assets and no liabilities of any kind.
(e) NHCC is not a party to or the subject of any pending
litigation, claims, or governmental investigation or proceeding not
reflected in the NHCC Financial Statements or otherwise disclosed
herein, and there are no lawsuits, claims, assessments, investigations,
or similar matters, threatened or
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contemplated against or affecting NHCC, its management or its
properties.
(f) NHCC is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation; it has the
corporate power to own its property and to carry on its business as now
being conducted and is duly qualified to do business in any
jurisdiction where so required except where the failure to so qualify
would have no material negative impact.
(g) NHCC has filed all federal, state, county and local income,
excise, property and other tax, governmental and/or related returns,
forms, or reports, which are due or required to be filed by it prior to
the date hereof and have paid or made adequate provision in the NHCC
Financial Statements for the payment of all taxes, fees, or assessments
which have or may become due pursuant to such returns or pursuant to
any assessments received. NHCC is not delinquent or obligated for any
tax, penalty, interest, delinquency or charge.
(h) NHCC's authorized capital stock and other securities presently
consists of Seventy Five Million (75,000,000) shares of $.001 par value
common stock and Twenty Five Million (25,000,000) shares of preferred,
of which, subject to the exercise of the options and NHCC Warrants, not
more than Two Million Three Thousand Seven Hundred Thirty-Seven
(2,203,737) shares of common stock will be issued and outstanding at
closing and there will be no preferred shares issued or outstanding at
Closing; except as otherwise described herein, or agreed between NHCC
and IFT subsequent to the date hereof in writing, there are no other
existing options, calls, warrants, preemptive rights, registration
rights or commitments of any character relating to the issued or
unissued capital stock or other securities of NHCC.
(i) NHCC has (and/or not later than 15 days prior to Closing will
have) disclosed to IFT in writing all events, conditions and facts
materially affecting the business, financial conditions or results of
operations of NHCC.
(j) The corporate financial records, minute books, and other
documents and records of NHCC have been made available to IFT prior to
the Closing.
(k) NHCC has not breached, nor is there any pending, or to the
knowledge of management, any threatened claim that NHCC has breached,
any of the terms or conditions of any agreements, contracts or
commitments to which it is a party or by which it or its properties is
bound. The execution and performance hereof will not violate any
provisions of applicable law or any agreement to which NHCC is subject.
NHCC hereby represents that it is not a party to any material contract
or commitment other than appointment documents with its transfer agent,
and that it has disclosed to IFT all relationships or dealings with
related parties or affiliates.
(l) NHCC has complied with the all provisions of the Securities
and Exchange Act of 1934 (the "Exchange Act") and all provisions for
registration under the Securities Act of 1933, as amended (the
"Securities Act") and all applicable blue sky laws in connection with
its stock offerings. There are no outstanding, pending or threatened
stop orders or other actions or investigations relating thereto and at
Closing there are no "open" SEC comment letters regarding any filings
of NHCC
10
(m) All information regarding NHCC which has been provided to IFT
by NHCC or set forth in any document disseminated to the public or
filed with the NASD or the SEC is true, complete and accurate in all
material respects.
(n) NHCC is in compliance with, and NHCC has operated any
businesses previously owned or operated by it in compliance with, all
applicable laws, orders, rules and regulations of all governmental
bodies and agencies, including applicable securities laws and
regulations and environmental laws and regulations, except where such
noncompliance has and will have, in the aggregate, no material adverse
effect. NHCC has not received notice of any noncompliance with the
foregoing.
(o) Without limiting the foregoing, NHCC and any other person or
entity for whose conduct NHCC is legally held responsible are in
material compliance with all applicable federal, state, regional, local
or provincial laws, statutes, ordinances, judgments, rulings and
regulations relating to any matters of pollution, protection of the
environment, health or safety, or environmental regulation or control
(collectively, "Environmental Laws"). Neither NHCC nor any other person
or entity for whose conduct NHCC is legally responsible, has (i)
received any notice, demand, request for information, or administrative
inquiry relating to any violation of an Environmental Law or the
institution of any suit, action, claim or proceeding alleging such
violation or investigation by any governmental authority or any third
party of any such violation, (ii) manufactured, generated, treated,
stored, handled, processed, released, transported or disposed of any
hazardous substance on, under, from or at any of NHCC's properties or
any other properties, (iii) become aware or received notice of the
release or disposal of any hazardous substances in violation of any
applicable Environmental Law, on, under or at any of NHCC's properties
or any other properties, (iv) become aware or received notice of any
actual or potential material liability on the part of NHCC for the
response to or remediation of any hazardous substance at or arising
from any of NHCC's properties or any other properties owned or operated
by NHCC or any other person for whose conduct NHCC is legally
responsible, or (v) become aware of or received notice of any actual or
potential liability on the part of NHCC for the costs of response to or
remediation of hazardous substances at or arising from any properties
owned or operated by NHCC or any other person for whose conduct NHCC is
or may be held responsible. For purposes of this Agreement, the term
"Hazardous Substance" shall mean any toxic or hazardous materials or
substances, including asbestos, buried contaminants, chemicals,
flammable explosives, radioactive materials or petroleum and petroleum
products and any substances defined as, or included in the definition
of, "Hazardous Substances", "Hazardous Wastes", "Hazardous Materials"
or "Toxic Substances" under any Environmental Law. No Environmental Law
imposes any obligation upon NHCC arising out of or as a condition to
any transaction contemplated hereby, including, without limitation, any
requirement to modify or to transfer any permit or license, any
requirement to file any notice or other submission with any
governmental authority, the placement of any notice, acknowledgment, or
covenant in any land records, or the modification of or provision of
notice under any agreement, consent order, or consent decree.
(p) NHCC has timely filed all required documents, reports and
schedules with the SEC and NASD through the date hereof (collectively,
the "NHCC SEC Documents"). As of their respective dates, the NHCC SEC
Documents complied in all material respects with the requirements of
the
11
Securities Act or the NASD rules and regulations, as the case may be,
and, at the respective times they were filed, none of the NHCC SEC
Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements (including, in
each case, any notes thereto) of NHCC included in the NHCC SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles (except as may be indicated therein or
in the notes thereto) applied on a consistent basis during the periods
involved (except as may be indicated therein or in the notes thereto)
and fairly presented in all material respects the consolidated
financial position of NHCC as of the respective dates thereof and the
results of its operations and its cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein). NHCC has
not, since December 31, 2000, made any change in the accounting
practices or policies applied in the preparation of financial
statements.
(q) Except as and to the extent specifically disclosed in this
Agreement and those that are specifically reflected or reserved against
as to amount in the latest balance sheet contained in the NHCC
Financials, there is no basis for the assertion against NHCC of any
material liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise and whether due or to become due,
including, without limitation, any liability for taxes and interest,
penalties and other charges payable with respect thereto. Except as set
forth in this Agreement, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will (a) result in any payment (whether severance pay, unemployment
compensation or otherwise) becoming due from NHCC to any employee,
director or officer or former employee, director or officer of NHCC,
(b) increase any benefits otherwise payable to any employee, director
or officer or former employee, director or officer of NHCC, or (c)
result in the acceleration of the time of payment or vesting of any
such benefits.
(r) No patent, formula, process, trade secret, trademark, trade
name, assumed name or copyright used by NHCC, including all
intellectual property used in the operation of the business of NHCC
(collectively, the "NHCC Intellectual Property"), infringes on any
patent, copyright, trademark or other intellectual property right of
any person, or violates the terms of any agreements related thereto,
nor have there been any claims of infringement or to NHCC's knowledge,
threatened against NHCC.
(s) No aspect of NHCC's business, operations or assets is of such
character as would restrict NHCC from carrying on the business of IFT
and its subsidiaries as it is presently being conducted.
(t) Except as otherwise disclosed to IFT in writing, NHCC has no
consultants or independent contractors to whom it is paying
compensation for services.
(u) Other than the NewBridge Agreements, the XPLA Options the NHCC
Options and the NHCC Warrants, NHCC has no material contracts,
commitments, arrangements, or understandings relating to its business,
operations, financial condition, or prospects. For purposes of this
Section,
12
"Material" means payment or performance of a contract, commitments or
bids, lease or purchase commitments, sales proposals, arrangements or
understandings entered into in the ordinary course of business which is
expected to (i) involve payments in excess of $10,000 per year, or (ii)
have a duration exceeding one (1) year.
(v) There are no outstanding lease or purchase commitments of
NHCC.
(w) No representation or warranty by NHCC contained in this
Agreement and no statement contained in any certificate or schedule
furnished pursuant to the provisions hereof contains or shall contain
any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein not misleading.
There is no current event or condition of any kind or character
pertaining to NHCC that may reasonably be expected to have a material
adverse effect on NHCC or IFT and its subsidiaries. Except as
specifically indicated elsewhere in this Agreement, all documents
delivered by NHCC in connection herewith have been and will be complete
originals, or exact copies thereof.
(x) Assuming all such consents and approvals have been obtained
and assuming the appropriate filings and mailings are made by NHCC
under the Securities Act and the NASD and with the Secretary of State
of Nevada, (i) the execution and delivery by NHCC of this Agreement and
the closing documents and the consummation by NHCC of the transactions
contemplated hereby do not and will not require the consent, approval
or action of, or any filing or notice to, any corporation, firm, person
or other entity or any public, governmental or judicial authority
(except for such consents, approvals, actions, filing or notices the
failure of which to make or obtain will not in the aggregate have a
material adverse effect); (ii) violate in any material respect the
terms of any material instrument, document or agreement to which NHCC
is a party, or by which NHCC or the property of NHCC is bound, or be in
conflict in any material respect with, result in a material breach of
or constitute (upon the giving of notice or lapse of time or both) a
material default under any such instrument, document or agreement, or
result in the creation of any lien upon any of the property or assets
of NHCC; (iii) violate in any respect the terms of any instrument,
document or agreement to which NHCC is a party, or by which NHCC or the
property of NHCC is bound, or be in conflict in any respect with,
result in a breach of or constitute (upon the giving of notice or lapse
of time or both) a default under any such instrument, document or
agreement, or result in the creation of any lien upon any of the
property or assets of NHCC if the aggregate effect of all such
violations listed in this subsection (iv) results in a material adverse
effect on NHCC taken as a whole; (v) violate NHCC's Articles of
Incorporation or Bylaws; or (vi) violate any order, writ, injunction,
decree, judgment, ruling, law, rule or regulation of any federal,
state, county, municipal, or foreign court or governmental authority
applicable to NHCC, or its business or assets. NHCC is not subject to,
or a party to, any mortgage, lien, lease, agreement, contract,
instrument, order, judgment or decree or any other material restriction
of any kind or character which would prevent or hinder the continued
operation of the business of NHCC and IFT after the closing.
6. Closing and Effective Date. The Closing of the transactions
contemplated herein shall take place on such date (the "Closing") as mutually
determined by the parties hereto when all conditions precedent have been met and
all required documents have been delivered, which Closing is expected to be on
or about May
13
30, 2001, or such earlier date as mutually agreed to by all parties hereto. The
"Effective Date" of the Acquisition shall be May 1, 2001.
7. Review Period. From the date of execution of this Agreement until
the Closing Date, or termination of the Agreement, as provided for herein, NHCC
and IFT will permit the other's officers, employees, and authorized
representatives to have immediate and full access to the offices, properties,
books, and records of the other, relevant to the transaction contemplated by
this Agreement, and will cooperate with the other in order to provide and
prepare the documents and other materials necessary to the transaction. Upon
discovery of matters in due diligence or receipt of documents from the other
party to this transaction, each party shall have ten (10) business days in which
to raise objections. Subject to paragraphs 8 and 9 hereof, if an objection is
raised and not resolved to the objecting party's satisfaction, such approval to
not be unreasonably withheld, the other party shall be entitled to terminate
without penalty.
8. Conditions Precedent to the Obligations of IFT. All obligations of
IFT under this Agreement are subject to the fulfillment, prior to or as of the
Closing and/or the Effective Date, as indicated below, of each of the following
conditions:
(a) The representations and warranties by or on behalf of NHCC
contained in this Agreement or in any certificate or document delivered
pursuant to the provisions hereof shall be true in all material
respects at and as of the Closing and Effective Date as though such
representations and warranties were made at and as of such time.
(b) If necessary, NHCC and shall have performed and complied with
all covenants, agreements, and conditions set forth herein, and shall
have executed and delivered all documents required by this Agreement to
be performed or complied with or executed and delivered by them prior
to or at the Closing including, to the satisfaction of IFT, the
completion of the filing, the expiration of the applicable time periods
and received no objections from its shareholders, the SEC or the NASD
with respect to its Information or Proxy Statement, as required, and
all other regulatory filings.
(c) If necessary, NHCC shall have demonstrated to the satisfaction
of IFT that it has satisfied all requirements of the NASD with respect
to the transactions contemplated by this Agreement.
(d) On or before the Closing, if necessary, the shareholders of
NHCC by majority written consent, the directors of NHCC shall have
approved in accordance with applicable state corporation law the
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein.
(e) On or before the Closing Date, if necessary, NHCC shall have
delivered certified copies of resolutions of the directors and
shareholders of NHCC approving and authorizing the execution, delivery
and performance of this Agreement and authorizing all of the necessary
and proper action to enable NHCC to comply with the terms of this
Agreement including the election of IFT's nominees to the Board of
Directors of NHCC.
14
(f) The Acquisition shall be permitted by applicable state law and
NHCC shall have sufficient shares of its capital stock authorized to
complete the Acquisition.
(g) At Closing, the officers and the designated directors of NHCC
as described in Exhibit "D" shall have resigned in writing from their
positions as directors and officers of NHCC effective upon the election
and appointment of the IFT nominees.
(h) At the Closing, all instruments, documents and consideration
delivered to IFT pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for IFT.
(i) At the Closing, upon consummation of the Acquisition, NHCC
shall have the same authorized capital as at present, except as
described herein.
(j) The shares of restricted NHCC common stock to be issued to IFT
at Closing will be validly issued, nonassessable and fully-paid under
Nevada corporation law and will be issued in a nonpublic offering in
compliance with all federal, state and applicable securities laws.
(k) IFT and NHCC each agree to look solely to and rely exclusively
upon the advice of their tax advisors that this transaction is a tax
free reorganization as to exchanging the IFT assets for the NHCC
shares.
(l) IFT shall have received all necessary and required approvals
and consents from required parties and its shareholders.
(m) At the Closing, NHCC shall have delivered to IFT an opinion of
its counsel dated as of the Closing to the effect that:
(i) NHCC is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of incorporation;
(ii) This Agreement has been duly authorized, executed and
delivered by NHCC and is a valid and binding obligation of
NHCC enforceable in accordance with its terms;
(iii) NHCC through its Board of Directors and stockholders
have taken all corporate action necessary for performance
under this Agreement;
(iv) The documents executed and delivered to IFT hereunder
are valid and binding in accordance with their terms and vest
in the IFT all right, title and interest in and to the shares
of NHCC's Common Stock to be issued pursuant to Paragraph 2(b)
hereof, and the shares of NHCC capital stock when issued will
be duly and validly issued, fully-paid and nonassessable; and
(v) NHCC each has the corporate power to execute, deliver
and perform under this
15
Agreement.
(vi) Legal counsel for NHCC is not aware of any liabilities,
claims or lawsuits involving NHCC.
(n) The Agreements by and between NHCC and NewBridge Capital Inc.,
("NewBridge") shall be ratified and become effective upon the Effective
Date and said Agreement shall be attached hereto and made a part hereof
to this Agreement as Exhibit "B".
(o) IFT shall have taken all corporate and other action necessary
to transfer to NHCC the Assets and all business rights of IFT,
including those acquired following the date hereof, free and clear of
any and all liens except as agreed between IFT and NHCC in writing.
(p) At least fifteen (15) business days prior to the Closing Date
dated not more than ninety (90) days prior to such delivery date, IFT
will have delivered to NHCC its financial statements ("IFT's
Financials"). IFT further agrees to provide to NHCC income statements
related to the operations of the IFT Assets and its business up to and
including the Closing, and any other documents necessary to
substantiate the value of the IFT Assets at or greater than One Million
Dollars ($1,000,000) in net assets, hereinafter referred to as the "Net
Asset Value." Upon receipt and review of the IFT Financials, NHCC shall
have ten (10) business days to raise objections to IFT's Financials, or
information contained in IFT's Financials, which shall be accomplished
by submission of a written list of such objections to IFT. If there are
objections, or if the value as determined by the IFT's financials and
other materials provided by IFT, is less than the Net Asset Value, then
NHCC shall have the option to terminate this Agreement without penalty.
Alternatively, NHCC may elect, in its sole discretion, to proceed with
Closing in reliance upon a warranty of title, guarantee of value, or
other mutually acceptable form of assurance to be made by IFT.
9. Conditions Precedent to the Obligations of NHCC. All obligations
of NHCC under this Agreement are subject to the fulfillment, prior to or at the
Closing, of each of the following conditions:
(a) The representations and warranties by IFT contained in this
Agreement or in any certificate or document delivered pursuant to the
provisions hereof shall be true in all material respects at and as of
the Closing as though such representations and warranties were made at
and as of such time.
(b) IFT shall have performed and complied with, in all material
respects, all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by them prior to or at the
Closing;
(c) IFT shall cause at or as soon as practicable after Closing,
each of its shareholders to deliver to NHCC, a letter commonly known as
an "Investment Letter," in substantially the form attached hereto as
Exhibit "I", acknowledging that the NHCC common stock are being
acquired by IFT for investment purposes.
16
(d) IFT shall deliver an opinion of its legal counsel to the
effect that:
(i) IFT is a corporation duly organized, validly existing
and in good standing under the laws of the state of Nevada;
(ii) This Agreement has been duly authorized, executed and
delivered by IFT.
10. Availability of Information IFT represents that, by virtue of
its business activities and economic bargaining power, or otherwise, it has been
able to conduct its own due diligence and has had access to or has been
furnished with, prior to or concurrently with the execution hereof, the
information which it considers to be adequate to make a decision to exchange the
IFT assets for the NHCC Shares.
11. Private Transaction
A. Private Offering. IFT understands that this
transaction is being issued in reliance on specific exemptions from the
registration requirements of the United States federal and state securities
rules and regulations, and that NHCC is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of IFT set forth in the Investment Letter in order to determine the
applicability of such exemptions to this transactions.
B. No Registration; No Public Market. The NHCC Shares
being issued herein have not been registered under the Securities Act, nor
qualified under applicable state securities laws further, and there is no
present public market for such shares.
C. Investment Risk. Because of IFT's financial position
and other factors, the purchase and sale contemplated by this Agreement may
involve a high degree of financial risk, including the risk that NHCC may lose
its entire investment.
D. Access to Information. IFT and its advisors have
been afforded the opportunity to discuss the transaction with legal and
accounting professionals and to examine and evaluate the financial condition of
it prior to Closing in the NHCC Shares.
12. Termination. This Agreement may be terminated at anytime prior
to the date of Closing by either party if (a) there shall be any actual or
threatened action or proceeding by or before any court or any other governmental
body which shall seek to restrain, prohibit, or invalidate the transaction
contemplated by this Agreement, and which, in the judgment of such party giving
notice to terminate and based upon the advice of legal counsel, makes it
inadvisable to proceed with the transaction contemplated by this Agreement, or
(b) unless otherwise mutually agreed in writing by IFT and NHCC if the
transaction contemplated herein has not closed by April 30, 2001.
13. Indemnification. For a period of two (2) years from the
Closing, NHCC agrees to jointly and severally indemnify and hold harmless IFT,
its officers, directors and employees, and IFT agrees to indemnify and hold
harmless NHCC, against and in respect of any liability, damage or deficiency,
all actions, suits,
17
proceedings, demands, assessments, judgments, costs and expenses including
attorney's fees (hereinafter "Claims") incident to any of the foregoing,
resulting from any material misrepresentations made by an indemnifying party to
an indemnified party, an indemnifying party's breach of covenant or warranty or
an indemnifying party's nonfulfillment of any agreement hereunder, or from any
material misrepresentation in or omission from any certificate furnished or to
be furnished hereunder or with respect to matters arising from or out of events
or occurrences prior to the Closing.
14. Nature and Survival of Representations. All representations,
warranties and covenants made by any party in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby for two
years from the Closing. All of the parties hereto are executing and carrying out
the provisions of this Agreement in reliance solely on the representations,
warranties and covenants and agreements contained in this Agreement and not upon
any investigation upon which it might have made or any representation, warranty,
agreement, promise or information, written or oral, made by the other party or
any other person other than as specifically set forth herein.
15. Documents at Closing. At the Closing, the following documents
shall be delivered:
(a) IFT will deliver, or will cause to be delivered, to NHCC the
following:
(i) a certificate executed by the President and Secretary
of IFT to the effect that all representations and warranties
made by IFT under this Agreement are true and correct as of
the Closing, the same as though originally given to NHCC on
said date;
(ii) a certificate from the state of IFT, and
incorporation dated at or about the Closing to the effect that
each respective corporation is in good standing under the laws
of said state;
(iii) such other instruments, documents and certificates,
if any, as are required to be delivered pursuant to the
provisions of this Agreement;
(iv) all other items, the delivery of which is a condition
precedent to the obligations of NHCC, as set forth herein.
(v) the legal opinion required by Paragraph 8(m) hereof.
(b) NHCC will deliver or cause to be delivered to IFT:
(i) stock certificates representing that portion of
the NHCC shares to be issued as a part of the Acquisition as
described herein;
(ii) a certificate of NHCC to the effect that all
representations and warranties of NHCC made under this
Agreement are true and correct as of the Closing, the same as
though
18
originally given to IFT on said date;
(iii) certified copies of resolutions adopted by NHCC's
Board of Directors authorizing the Acquisition and all related
matters;
(iv) certificates from the State of Nevada dated at or
about the Closing Date that NHCC is in good standing under the
laws of said state;
(v) opinion of NHCC's counsel as described herein;
(vi) such other instruments and documents as are
required to be delivered pursuant to the provisions of this
Agreement;
(vii) resignation of the officers and designated directors
of NHCC as described in Exhibit "D"; and
(viii) all other items, the delivery of which is a condition
precedent to the obligations of IFT as set forth in Paragraph
8 hereof.
16. Finder's Fees. NHCC, represents and warrants to IFT and IFT
represents and warrants to NHCC, they will each be separately responsible for
the party acting on their behalf as "broker" of "finder" or similar person in
connection with this Agreement or any of the transactions contemplated hereby
and each shall notify the other of such relationship.
17. Conduct of Business. From the date hereof through the
earlier to occur of the Closing or the termination of this Agreement, the
parties hereby agree, except as contemplated by this Agreement, or as consented
to by the other party in writing, to cause NHCC or IFT, as the case may be, to
be operated in the ordinary course and in accordance with past practice and will
not take any action inconsistent with this Agreement or with the consummation of
the Closing. Without limiting the generality of the foregoing, the parties shall
not:
(a) change or amend their Articles of Incorporation or Bylaws;
(b) enter into, extend, materially modify, terminate or renew any
lease or any contract, except modifications, extensions or renewals of
contracts in the ordinary course of business;
(c) sell, assign, transfer, convey, lease, mortgage, pledge or
otherwise dispose of or encumber any of their assets or any interests
therein except in the ordinary course of business;
(d) incur any liability for indebtedness for borrowed money,
guarantee the obligations of others, indemnify or agree to indemnify
others
19
or, except in the ordinary course of business, incur any other
liability;
(e) (i) take any action with respect to the grant
of any bonus, severance or termination pay (otherwise than
pursuant to policies or agreements in effect on the date
hereof) or with respect to any increase of benefits payable
under its severance or termination pay policies or agreements
in effect on the date hereof or increase in any manner the
compensation or fringe benefits of any employee or pay, any
benefit not required by any existing agreement, plan or
policy, other than as set forth in the disclosure schedules;
(ii) make any change in the key management structure,
including, without limitation, the hiring of additional
officers or the termination of existing officers, other than
as set forth in the disclosure schedules;
(iii) adopt, enter into or amend any employee plan,
agreement (including, without limitation, any collective
bargaining or employment agreement), trust, fund or other
arrangement for the benefit or welfare of any employee, except
for any such amendment as may be required to comply with
applicable regulations; or
(iv) fail to maintain all employee plans in accordance
with applicable law;
(f) acquire by acquisition or consolidation with, or merge or
consolidate with, or purchase substantially all of the assets of, or
otherwise acquire any material assets or business of, any corporation,
partnership, association or other business organization or division
thereof or acquire any subsidiary;
(g) willingly allow or permit to be done any act by which any of
the insurance policies may be suspended, impaired or canceled;
(h) enter into, renew, modify or revise any material contract or
agreement;
(i) fail to maintain the assets in substantially their current
state of repair, excepting normal wear and tear, or fail to replace
(consistent with past practice) inoperable, worn-out or obsolete or
destroyed assets;
(j) make any loans or advances relating to any partnership, firm,
individual, or corporation, except for expenses incurred in the
ordinary course of business consistent with past practice; (k) fail to
comply in all material respects with all laws and regulations
applicable to their respective businesses;
(l) change any of their respective accounting methods or practices
as historically applied or make any new elections or change any
existing elections with respect to Taxes;
20
(m) intentionally do any other act which would cause any of their
respective representations or warranties in this Agreement to be or
become untrue, or any covenant in this Agreement to be breached, in any
material respect;
(n) fail to use reasonable efforts consistent with past business
practice to (i) maintain the services of their officers, employees,
consultants and agents will remain available to it on and after the
Closing Date, (ii) maintain existing relationships with suppliers,
customers and others having business dealings with them, and (iii)
otherwise preserve the goodwill of their respective business so that
such relationships and goodwill will be preserved on and after the
Closing Date;
(o) enter into any agreement, or otherwise become obligated, to do
any action prohibited hereunder;
(p) except as otherwise set forth herein, declare, set aside for
payment, or pay any dividend or distribution in respect of any capital
stock of NHCC or IFT; redeem, purchase or otherwise acquire any of the
equity securities of NHCC or IFT; pay any bonus, fee or other payment;
or otherwise transfer any of the assets to or on behalf of any
stockholder or any of their respective affiliates, including, without
limitation, any payment of principal of or interest on any debt owed to
any of the foregoing or any payment of a bonus, fee or other payment to
any of their respective employees; or
(q) fail to comply with all applicable filing, payment,
withholding, collection and record retention obligations under all
applicable federal, state, local or foreign tax laws.
18. Miscellaneous.
(a) Further Assurances. At any time, and from time to time, after
the Effective Date, each party will execute such additional instruments
and take such action as may be reasonably requested by the other party
to confirm or perfect title to any property transferred hereunder or
otherwise to carry out the intent and purposes of this Agreement.
(b) Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
(c) Amendment. This Agreement may be amended only in writing as
agreed to by all parties hereto.
(d) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first class registered or certified mail,
return receipt requested to the last known address of the noticed
party.
21
(e) Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in any
way the meaning or interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
(g) Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their
respective heirs, administrators, executors, successors and assigns.
(h) Entire Agreement. This Agreement and the attached Exhibits the
entire agreement of the parties covering everything agreed upon or
understood in the transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind
as conditions or inducements to the execution hereof.
(i) Time. Time is of the essence.
(j) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force
and effect.
(k) Responsibility and Costs. Whether the Acquisition is
consummated or not, all fees, expenses and out-of-pocket costs and
expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred by the parties
hereto shall be borne solely and paid (immediately prior to Closing in
the event the transactions contemplated by this Agreement are
consummated) entirely by the party that has incurred such costs and
expenses, unless the failure to consummate the Acquisition constitutes
a breach of the terms hereof, in which event the breaching party shall
be responsible for all costs of all parties hereto provided.
(l) Applicable Law. This Agreement shall be construed and governed
by the laws of the State of Nevada.
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SIGNATURES ON NEXT PAGE
22
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
XXXXXXXXXX.XXX INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
IFT FINANCIAL GROUP INC.
By: /s/ Xxxxx Xxxx
-----------------------
Name: Xxxxx Xxxx
Title: Chief Executive Officer
23
EXHIBIT "A"
To Agreement and Plan of Reorganization
IFT Assets
24
EXHIBIT "B"
To Agreement and Plan of Reorganization
NewBridge Agreement
25
EXHIBIT "C"
To Agreement and Plan of Reorganization
NHCC Warrant Agreements
26
EXHIBIT "D"
To Agreement and Plan of Reorganization
Resignation and Election of Officers and Directors
Resignation of the Officers and Directors of NHCC:
Xxxxx Xxxxxxxxx
Xxx Xxxxxx
Xxx Xxxxx
Election of New NHCC Officers and Directors:
Xxxxx Xxxx, CEO, Director
Xxxx Xxxx, President, Director
27
EXHIBIT "E"
To Agreement and Plan of Reorganization
Schedule of Encumbrances, Off-Balance Sheet Obligations and Contingent Claims
28
EXHIBIT "F"
To Agreement and Plan of Reorganization
Joint Escrow Instructions
29
EXHIBIT "G"
To Agreement and Plan of Reorganization
Investment Letter
30
