EXHIBIT
AGREEMENT OF ACQUISITION
STOCK FOR STOCK
THIS AGREEMENT, dated as of June 30, 2004, among Xxxxx Information
Services, Inc., ("Xxxxx")), 00 Xxxx 0000 Xxxxx, Xxxxx, Xxxx 00000, a Utah
corporation, Let's Go Aero, Inc., ("LGA"), 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxx
Xxxxxxx, XX 00000, a Colorado corporation.
Xxxxx desires to acquire all of the issued and outstanding shares of LGA,
from all of the Shareholders of LGA ("Shareholders") in exchange for voting
common stock, $0.001 par value per share, of Xxxxx as hereinafter provided.
1. Representations and Warranties of LGA. LGA represents and warrants to Xxxxx
as follows:
(a) Organization. LGA is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado; is duly qualified to
transact business as a foreign corporation and is in good standing in the
various states in which it transacts business; and has all power necessary to
engage in the business in which it is presently engaged.
(b) Capitalization. The authorized capital of LGA consists of 5,000 shares
of common stock of which 1,629 shares are outstanding. Each outstanding share of
common stock is duly authorized, validly issued, fully paid and nonassessable,
has not been issued and is not owned or held in violation of any preemptive
right of shareholders, and is owned of record and beneficially by shareholders
in accordance with the table attached hereto as Schedule A.
Such capital stock listed in Schedule A is, in each case, free and clear of
all liens, security interests, pledges, charges, encumbrances, shareholders'
agreements, and voting trusts. There is no commitment, plan or arrangement to
issue, and no outstanding option, warrant, or other right calling for the
issuance of, any share of capital stock of LGA, or any security or other
instrument convertible into or exchangeable for capital stock of LGA except as
set forth in Schedule B.
(c) Financial Condition. LGA has delivered to Xxxxx true and correct copies
of the following, initialed by the chief executive officer of LGA: unaudited
balance sheet of LGA as of December 31, 2003; unaudited balance sheet of LGA as
of March 31, 2004; unaudited statement of income, statement of retained
earnings, statement of changes in financial and statement of cash flows position
of LGA for the year ended December 31, 2003; and unaudited statement of income,
statement of retained earnings, statement of changes in financial position and
statement of cash flows of LGA for the three (3) months ended March 31, 2004.
Each balance sheet presents fairly the financial condition, assets, liabilities,
and stockholders' equity of LGA as of its date; each statement of income and
statement of retained earnings presents fairly the results of operations of LGA
for the period indicated; and each statement of changes in financial position
and statement of cash flows presents fairly the information purported to be
shown therein. The financial statements referred to in this Section 1(c) have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, are correct and complete
and are in accordance with the books and records of LGA.
Since December 31, 2003, and since March 31, 2004:
(1) There has, at no time, been a material adverse change in the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of LGA;
(2) LGA has not authorized, declared, paid, or effected any
liquidating or other distribution in respect of its capital stock or any
direct or indirect redemption, purchase, or other acquisition of any of
that stock;
(3) The operations and business of LGA have been conducted in all
respects only in the ordinary course;
(4) LGA has not suffered an extraordinary loss (whether or not covered
by insurance) or waived any right of substantial value;
(5) LGA has not paid or incurred any tax, other liability or expense
resulting from the preparation of, or the transactions contemplated by,
this Agreement; and
(6) There is no fact known to LGA which materially adversely affects,
or in the future may materially adversely affect, the financial condition,
results of operations, business, properties, assets, liabilities, or future
prospects of LGA.
(d) Tax and Other Liabilities. LGA has no liability of any nature, accrued
or contingent, including, without limitation, liabilities for federal, state,
local, or foreign taxes and liabilities to customers or suppliers, other than
the following:
(1) Liabilities for which full provision has been made on the balance
sheet ("LGA Last Balance Sheet") as of March 31, 2004, ("LGA Last Balance
Sheet Date") referred to in Section 1(c); and
(2) Other liabilities arising in the ordinary course of business
(which shall not include liabilities to customers on account of defective
products or services) which are not inconsistent with the representations
and warranties of LGA or any other provision of this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for taxes on the LGA Last Balance Sheet are sufficient for all
accrued and unpaid federal, state, local, and foreign taxes of LGA, whether or
not due and payable and whether or not disputed, under tax laws, as in effect on
the LGA Last Balance Sheet Date or now in effect, for the period ended on that
date and for all fiscal years prior thereto. LGA has filed all federal, state,
local, and foreign tax returns required to be filed by it; has delivered to
Xxxxx a true and correct copy thereof initialed by the chief executive officer
of LGA; has paid (or has established on the Balance Sheet a reserve for) all
taxes, assessments, and other governmental charges payable or remittable by it
or levied upon it or its properties, assets, income, or franchises which are due
and payable; and has delivered to Xxxxx a true and correct copy so initialed of
any report as to adjustments received by LGA from any taxing authority during
the past five years and a statement, so initialed, as to any litigation,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or in prospect with respect to any of those reports or the subject
matter of those reports.
2
(e) Litigation and Claims. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or in prospect (or any basis therefore known to LGA) with respect to
LGA, or any of its business, properties, or assets. LGA is not affected by any
present or threatened strike or other labor disturbance nor, to the knowledge of
LGA, is any union attempting to represent any employee of LGA as collective
bargaining agent. LGA is not in violation of, or in default with respect to, any
law, rule, regulation, order, judgment, or decree; nor is LGA or any Shareholder
required to take any action in order to avoid such a violation or default.
(f) Properties. LGA has good and marketable title in fee simple absolute to
all real properties and good title to all other properties and assets used in
its business or owned by it (except real and other properties and assets as are
held pursuant to leases or licenses described in Schedule C or D), free and
clear of all liens, mortgages, security interests, pledges, charges, and
encumbrances (except those listed in Schedules C or D).
(1) All accounts and notes receivable reflected on the LGA Last
Balance Sheet, or arising since the LGA Last Balance Sheet Date, have been
collected, or are and will be good and collectible, in each case at the
aggregate recorded amounts thereof without right of recourse, defense,
deduction, return of goods, counterclaim, offset, or set off on the part of
the obligor, and, if not collected, can reasonably be anticipated to be
paid within thirty (30) days of the date incurred.
(2) All inventory of raw materials and work in process of LGA is
usable, and all inventory of finished goods is good and marketable, on a
normal basis in the existing product lines of LGA, as the case may be. In
no event do such inventories represent more than a twelve-month supply
measured by the volume of sales or use for the year ended December 31,
2003. All inventory is merchantable and fit for the particular purpose for
which it is intended.
(3) Attached as Schedule C is a true and complete list of all real and
other properties and assets owned, leased, or licensed by LGA (including
inventory, but not including Intangibles, as defined in Section 1(i)),
including with respect to properties and assets owned by LGA, a statement
of cost, book value and (except for land) reserve for depreciation of each
item for tax purposes, and net book value of each item for financial
reporting purposes, and with respect to such properties and assets leased
or licensed by LGA, a description of that lease or license. All real and
other properties and assets (including Intangibles) owned by LGA are
reflected on the LGA Last Balance Sheet, except for acquisitions subsequent
to the LGA Last Balance Sheet and prior to the Closing, which are either
noted on Schedule C or D or are approved in writing by Xxxxx. All real and
other tangible properties and assets owned, leased, or licensed by LGA are
in good and usable condition (reasonable wear and tear which does not
adversely affect the operation of the business of LGA excepted).
(4) No real property owned, leased, licensed, or used by LGA lies in
an area which is, or to the knowledge of LGA will be, subject to zoning,
use, or building code restrictions which would prohibit, and no state of
facts relating to the actions or inaction of another person or entity or
his or its ownership, leasing, licensing, or use of that real property will
prohibit, the business in which LGA is now engaged or the business in which
it contemplates engaging.
(5) The real and other properties and assets (including Intangibles)
owned, leased, or licensed by LGA constitute all such properties and assets
which are necessary to the business of LGA as presently conducted or as it
contemplates conducting.
(g) Contracts and Other Instruments. Attached as Schedule E is a true and
complete list of all material contracts, insurance policies agreements and
instruments not referred to in Schedules B, C, D, F or G.
LGA has furnished to Xxxxx:
(1) The Articles of Incorporation and Bylaws of LGA and all amendments
thereto, as presently in effect, certified by the Secretary of the
corporation, and
(2) The following, initialed by the chief executive officer of LGA:
(i) true and correct copies of all options, warrants, or other rights
calling for the issuance of, any share of capital stock of LGA, or any
security or other instruments convertible into or exchangeable for capital
stock of LGA set forth in Schedule B; (ii) true and correct copies of all
leases and licenses referred to in Schedule C or D; (iii) true and correct
copies of all contracts, insurance policies, agreements, and instruments
referred to in Schedule E; and (iv) true and correct written descriptions
of all supply, distribution, agency, financing, or other arrangements or
understandings not described in Schedules C, D or E.
3
Neither LGA nor (to the knowledge of LGA) any other party to any of those
contracts, agreements, instruments, leases, or licenses, is now or expects in
the future to be in violation or breach of, or in default with respect to
complying with, any material provision thereof, and each contract, agreement,
instrument, lease, or license is in full force and is the legal, valid, and
binding obligation of the parties thereto and is enforceable as to them in
accordance with its terms. Each supply, distribution, agency, financing, or
other arrangement or understanding is a valid and continuing arrangement or
understanding; neither LGA, nor any other party to any arrangement or
understanding has given notice of termination or taken any action inconsistent
with the continuance of such arrangement or understanding; and the execution,
delivery, and performance of this Agreement will not prejudice any such
arrangement or understanding in any way. LGA enjoys peaceful and undisturbed
possession under all leases and licenses under which it is operating. LGA is not
a party to or bound by any contract, agreement, instrument, lease, license,
arrangement, or understanding, or subject to any charter or other restriction,
which has had, or (to the knowledge of LGA) may in the future have, a material
adverse effect on the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of LGA.
LGA within the last five (5) years has not engaged in, is not engaging in,
and does not intend to engage in any transaction with, and has not had within
the last five (5) years, is not now having, and does not intend to have any
contract, agreement, lease, license, arrangement, or understanding with, any
Shareholder, any director, officer, or employee of LGA (except for employment
agreements listed in Schedule E and employment and compensation arrangements
described in Schedule F, in each case with directors, officers, and employees
who are not relatives or affiliates described in the next clause), any relative
or affiliate of any Shareholder or of any director, officer, or employee, or any
other corporation or enterprise in which any Shareholder, any director, officer,
or employee, or any relative or affiliate then had or now has a five (5%)
percent or greater equity or voting or other substantial interest, other than
contracts and agreements listed and so specified in Schedule E.
The stock ledgers and stock transfer books and the minute book records of
LGA relating to all issuances and transfers of shares by LGA and all proceedings
of the Shareholders and the Board of Directors and committees thereof of LGA
since its incorporation made available to Xxxxx'x counsel are the original stock
ledgers and stock transfer books and minute book records of LGA or exact copies
thereof.
LGA is not in violation or breach of, or in default with respect to, any
term of its certificate of incorporation or by-laws.
(h) Employees. LGA does not have and has not contributed to any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA")), or have any obligation to or customary
arrangement with employees for bonuses, incentive compensation, vacations,
severance pay, insurance, or other benefits, except as set forth in Schedule F.
LGA has furnished to Xxxxx true and correct copies initialed by the chief
executive officer of LGA of all documents evidencing plans, obligations or
arrangements referred to in Schedule F (or true and correct written summaries so
initialed of such plans, obligations, or arrangements to the extent not
evidenced by documents), and true and correct copies so initialed of all
documents evidencing trusts relating to any such plans. Schedule F also contains
a true and correct statement of the names, relationship with LGA, present rates
of compensation (whether in the form of salary, bonuses, commissions, or other
supplemental compensations now or hereafter payable), and aggregate compensation
as of the LGA Last Balance Sheet Date of (i) each director, officer, or other
employee of LGA, and (ii) all sales agents, dealers, or distributors of LGA.
Since the LGA Last Balance Sheet Date, LGA has not changed the rate of
compensation of any of its directors, officers, employees, agents, dealers, or
distributors.
4
(i) Patents, Trademarks, Et Cetera. LGA does not own or have pending, or is
licensed under, any patent, patent application, trademark, trademark
application, trade name, service xxxx, copyright, franchise, or other intangible
property or asset (all of the foregoing being herein called "Intangibles"),
other than as described in Schedule D, all of which are in good standing and
uncontested. Schedule D accurately sets forth with respect to Intangibles owned
by LGA, where appropriate, a statement of cost, book value and reserve for
depreciation of each item for tax purposes, and net book value of each item for
financial reporting purposes, and with respect to Intangibles licensed by LGA
from or to a third party, a description of that license. Neither any director,
officer, or employee of LGA, any relative or affiliate of any director, officer,
or employee, nor any other corporation or enterprise in which any director,
officer, of employee, or any relative or affiliate had or now has a five (5%)
percent or greater equity or voting or other substantial interest, possesses any
Intangible which relates to the business of LGA.
There is no right under any Intangible necessary to the business of LGA as
presently conducted or as it contemplates conducting, except those so designated
in Schedule D. LGA has not infringed, is not infringing, and has not received
notice of infringement of asserted Intangibles of others. To the knowledge of
LGA, there is no infringement by others of Intangibles of LGA except as set
forth on Schedule F. As far as LGA can foresee, there is no Intangible of others
which may materially adversely affect the financial condition, results of
operations, business, properties, assets, liabilities, or future prospects of
LGA.
(j) Authority of LGA. LGA has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary proceedings of LGA have been
duly taken to authorize the execution, delivery, and performance of this
Agreement by LGA. This Agreement has been duly authorized, executed and
delivered by LGA, is the legal, valid, and binding obligation of LGA, and is
enforceable as to it in accordance with its terms.
No consent, authorization, approval, order, license, certificate, or permit
of or from, or declaration of filing with, any federal, state, local, or other
governmental authority or any court or other tribunal that will not have been
received by Closing will be required by LGA for the execution, delivery, or
performance of this Agreement by LGA. No consent of any party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
LGA is a party, or to which any of its properties or assets are subject and that
will not have been received by Closing will be required for the execution,
delivery or performance of this Agreement (except those consents referred to in
Schedule G as having been obtained at or prior to the date of this Agreement,
true and correct copies of which, initialed by the chief executive officer of
LGA, have been delivered to Xxxxx); and the execution, delivery, and performance
of this Agreement will not violate, result in a breach of, conflict with, or
(with or without the giving of notice or the passage of time or both) entitle
any party to terminate or call a default under any contract, agreement,
instrument, lease, license, arrangement, or understanding, or violate or result
in a breach of any term of the Articles of Incorporation or Bylaws of LGA, or
violate, result in a breach of, or conflict with any law, rule, regulation,
order, judgment, or decree binding on LGA or to which any of its operations,
business, properties, or assets are subject.
5
(k) Completeness of Disclosure. No representation or warranty by LGA in
this Agreement contains, or on the date of Closing will contain, any untrue
statement of material fact or omits, or on the date of the Closing will omit, to
state a material fact necessary to make the statements made not misleading under
the circumstances under which they were made, or will be made.
(2). Representations and Warranties of Xxxxx. Xxxxx represents and
warrants to LGA as follows:
(a) Organization. Xxxxx is a corporation duly organized, validly
existing, and in good standing under the lasts of the State of Utah with all
requisite power and authority to own, lease, license, and use its properties and
assets, and to carry on the business in which it is now engaged and in which it
contemplates engaging.
(b) Capitalization. The authorized capital stock of Xxxxx consists of
100,000,000 shares of common stock, $0.001 par value, of which 1,016,860 shares
are outstanding and 1,000,000 shares of preferred stock, $0.01 par value, of
which no shares are outstanding. Each outstanding share of common stock is duly
authorized, validly issued, fully paid and nonassessable, has not been issued
and is not owned or held in violation of any preemptive right of shareholders,
and is owned of record and beneficially by shareholders in accordance with the
table attached hereto as Schedule X.
Xxxxx has no commitment, plan or arrangement to issue, and no outstanding
option, warrant, or other right calling for the issuance of, any share of
capital stock of Xxxxx, or any security or other instrument convertible into or
exchangeable for capital stock of Xxxxx except as set forth in Schedule I and in
this Agreement.
(c) Validity of Shares. The shares of Xxxxx'x common stock to be
delivered to the Shareholders pursuant to this Agreement, when issued in
accordance with the terms and provisions of this Agreement, will be duly
authorized, validly issued, fully paid, and nonassessable.
(d) Financial Condition. Xxxxx has delivered to LGA true and correct
copies of the following, initialed by the chief executive officer of Xxxxx;
audited balance sheets of Xxxxx as of June 30, 2003; the unaudited balance sheet
of Xxxxx as of March 31, 2004; audited statement of income, statement of
retained earnings, statement of changes in financial position and statement of
cash flows of Xxxxx for the year ended June 30, 2003; and the unaudited
statement of income, statement of retained earnings, statement of changes in
financial position and statement of cash flows of Xxxxx for the nine (9) months
ended March 31, 2004. Each balance sheet presents fairly the financial
condition, assets, liabilities, and stockholders' equity of Xxxxx as of its
date; each statement of income and statement of retained earnings presents
fairly the results of operations of Xxxxx for the period indicated; and each
statement of changes in financial position and statement of cash flows presents
fairly the information purported to be shown therein. The financial statements
referred to in this Section 2(d) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, are correct and complete and are in accordance with the books and
records of Xxxxx.
Since June 30, 2003 and March 31, 2004:
(1) There has, at no time, been a material adverse change in the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of Xxxxx;
(2) Xxxxx has not authorized, declared, paid, or effected any dividend
or liquidating or other distribution in respect of its capital stock or any
direct or indirect redemption, purchase, or other acquisition of any of
that stock;
(3) The operations and business of Xxxxx have been conducted in all
respects only in the ordinary course;
6
(4) Xxxxx has not suffered an extraordinary loss (whether or not
covered by insurance) or waived any right of substantial value;
(5) Xxxxx has not paid or incurred any tax, other liability or expense
resulting from the preparation of, or the transactions contemplated by,
this Agreement; and
(6) There is no fact known to Xxxxx which materially adversely
affects, or in the future may materially adversely affect, the financial
condition, results of operations, business, properties, assets,
liabilities, or future prospects of Xxxxx.
(e) Tax and Other Liabilities. Xxxxx has no liability, of any nature,
accrued or contingent, including, without limitation, liabilities for federal,
state, local or foreign taxes and liabilities to customers or suppliers, other
than the following:
(1) Liabilities for which full provision has been made on the balance
sheet ("Xxxxx Last Balance Sheet") as of March 31, 2004, ("Xxxxx Last
Balance Sheet Date") referred to in Section 2(d); and
(2) Other liabilities arising in the ordinary course of business
(which shall not include liabilities to customers on account of defective
products or services) which are not inconsistent with the representations
and warranties of Xxxxx or any provision of this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for taxes on the Xxxxx Last Balance Sheet are sufficient for all
accrued and unpaid federal, state, local, and foreign taxes of Xxxxx, whether or
not due and payable and whether or not disputed, under tax laws, as in effect on
the Xxxxx Last Balance Sheet Date or now in effect, for the period ended on that
date and for all fiscal years prior thereto. Xxxxx has filed all federal, state,
local, and foreign tax returns required to be filed by it; has delivered to LGA
a true and correct copy thereof initialed by the chief executive officer of
Xxxxx; has paid (or has established on the Balance Sheet a reserve for) all
taxes, assessments, and other governmental charges payable or remittable by it
or levied upon it or its properties, assets, income, or franchises which are due
and payable; and has delivered to LGA a true and correct copy so initialed of
any report as to adjustments received by Xxxxx from any taxing authority during
the past five years and a statement, so initialed, as to any litigation,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or in prospect with respect to any of those reports or the subject
matter of those reports.
(f) Litigation and Claims. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or in prospect (or any basis therefore known to Xxxxx) with respect
to Xxxxx, or any of its business, properties, or assets. Xxxxx is not affected
by any present or threatened strike or other labor disturbance nor, to the
knowledge of Xxxxx, is any union attempting to represent any employee of Xxxxx
as collective bargaining agent. Xxxxx is not in violation, of or in default with
respect to, any law, rule, regulation, order, judgment, or decree; nor is Xxxxx
required to take any action in order to avoid such a violation or default.
(g) Properties. Xxxxx has good and marketable title in fee simple absolute
to all real properties and good title to all other properties and assets used in
its business or owned by it (except real and other properties and assets as are
held pursuant to leases or licenses described in Schedule J or L), free and
clear of all liens, mortgages, security interests, pledges, charges, and
encumbrances (except those listed in Schedule J or K).
7
(1) All accounts and notes receivable reflected on the Xxxxx Last
Balance Sheet, or arising since the Xxxxx Last Balance Sheet Date, have
been collected, or are and will be good and collectible, in each case at
the aggregate recorded amounts thereof without right of recourse, defense,
deduction, return of goods, counterclaim, offset, or set off on the part of
the obligor, and, if not collected, can reasonably be anticipated to be
paid within thirty (30) days of the date incurred.
(2) Xxxxx has no inventory of raw materials, work in process or
finished goods.
(3) Attached as Schedule J is a true and complete list of all real and
other properties and assets owned, leased, or licensed by Xxxxx (not
including Intangibles, as defined in Section 1(i)), including with respect
to properties and assets owned by Xxxxx, a statement of cost, book value
and (except for land) reserve for depreciation of each item for tax
purposes, and net book value of each item for financial reporting purposes,
and with respect to such properties and assets leased or licensed by Xxxxx,
a description of that lease or license. All real and other properties and
assets (including Intangibles) owned by Xxxxx are reflected on the Xxxxx
Last Balance Sheet, except for acquisitions subsequent to the Xxxxx Last
Balance Sheet and prior to the Closing, which are either noted on Schedule
J or K or are approved in writing by LGA. All real and other tangible
properties and assets owned, leased, or licensed by Xxxxx are in good and
usable condition (reasonable wear and tear which does not adversely affect
the operation of the business of Xxxxx excepted).
(4) No real property owned, leased, licensed, or used by Xxxxx lies in
an area which is, or to the knowledge of Xxxxx will be, subject to zoning,
use, or building code restrictions which would prohibit, and no state of
facts relating to the actions or inaction of another person or entity or
his or its ownership, leasing, licensing, or use of that real property will
prohibit, the business in which Xxxxx is now engaged or the business in
which it contemplates engaging.
(5) The real and other properties and assets (including Intangibles)
owned, leased, or licensed by Xxxxx constitute all such properties and
assets which are necessary to the business of Xxxxx as presently conducted
or as it contemplates conducting.
(h) Contracts and Other Instruments. Attached as Schedule E is a true and
complete list of all material contracts, insurance policies agreements and
instruments not referred to in Schedules I, J, K, M or X.
Xxxxx has furnished to LGA:
(1) The Articles of Incorporation and Bylaws of Xxxxx and all
amendments thereto, as presently in effect, certified by the Secretary of
the corporation, and
(2) The following, initialed by the chief executive officer of Xxxxx:
(i) true and correct copies of all options, warrants, or other rights
calling for the issuance of, any share of capital stock of Xxxxx, or any
security or other instruments convertible into or exchangeable for capital
stock of Xxxxx set forth in Schedule I; (ii) true and correct copies of all
leases and licenses referred to in Schedule J or K; (iii) true and correct
copies of all contracts, insurance policies, agreements, and instruments
referred to in Schedule L; and (iv) true and correct written descriptions
of all supply, distribution, agency, financing, or other arrangements or
understandings not described in Schedules J, K or L.
8
Neither Xxxxx nor (to the knowledge of Xxxxx) any other party to any of
those contracts, agreements, instruments, leases, or licenses, is now or expects
in the future to be in violation or breach of, or in default with respect to
complying with, any material provision thereof, and each contract, agreement,
instrument, lease, or license is in full force and is the legal, valid, and
binding obligation of the parties thereto and is enforceable as to them in
accordance with its terms. Each supply, distribution, agency, financing, or
other arrangement or understanding is a valid and continuing arrangement or
understanding; neither Xxxxx, nor any other party to any arrangement or
understanding has given notice of termination or taken any action inconsistent
with the continuance of such arrangement or understanding; and the execution,
delivery, and performance of this Agreement will not prejudice any such
arrangement or understanding in any way. Xxxxx enjoys peaceful and undisturbed
possession under all leases and licenses under which it is operating. Xxxxx is
not a party to or bound by any contract, agreement, instrument, lease, license,
arrangement, or understanding, or subject to any charter or other restriction,
which has had, or (to the knowledge of Xxxxx) may in the future have, a material
adverse effect on the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of Xxxxx.
Xxxxx within the last five (5) years has not engaged in, is not engaging
in, and does not intend to engage in any transaction with, and has not had
within the last five (5) years, does not now have, and doe not intend to have
any contract, agreement, lease, license, arrangement, or understanding with, any
Shareholder, any director, officer, or employee of Xxxxx (except for employment
agreements listed in Schedule L and employment and compensation arrangements
described in Schedule M, in each case with directors, officers, and employees
who are not relatives or affiliates described in the next clause), any relative
or affiliate of any Shareholder or of any director, officer, or employee, or any
other corporation or enterprise in which any Shareholder, any director, officer,
or employee, or any relative or affiliate then had or now has a five (5%)
percent or greater equity or voting or other substantial interest, other than
contracts and agreements listed and so specified in Schedule M.
The stock ledgers and stock transfer books and the minute book records of
Xxxxx relating to all issuances and transfers of shares by Xxxxx and all
proceedings of the shareholders and the Board of Directors and committees
thereof of Xxxxx since its incorporation made available to LGA's counsel are the
original stock ledgers and stock transfer books and minute book records of Xxxxx
or exact copies thereof.
Xxxxx is not in violation or breach of, or in default with respect to, any
term of its certificate of incorporation or by-laws.
(i) Employees. Xxxxx does not have and has not contributed to any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan, or have any obligation to or customary arrangement with employees
for bonuses, incentive compensation, vacations, severance pay, insurance, or
other benefits, except as set forth in Schedule X. Xxxxx has furnished to LGA
true and correct copies initialed by the chief executive officer of Xxxxx of all
documents evidencing plans, obligations or arrangements referred to in Schedule
M (or true and correct written summaries so initialed of such plans,
obligations, or arrangements to the extent not evidenced by documents), and true
and correct copies so initialed of all documents evidencing trusts relating to
any such plans. Schedule M also contains a true and correct statement of the
names, relationship with Xxxxx, present rates of compensation (whether in the
form of salary, bonuses, commissions, or other supplemental compensations now or
hereafter payable), and aggregate compensation as of the Xxxxx Last Balance
Sheet Date of (i) each director, officer, or other employee of Xxxxx, and (ii)
all sales agents, dealers, or distributors of Xxxxx. Since the Xxxxx Last
Balance Sheet Date, Xxxxx has not changed the rate of compensation of any of its
directors, officers, employees, agents, dealers, or distributors.
9
(j) Patents, Trademarks, Et Cetera. Xxxxx does not own or have pending, or
is licensed under, any patent, patent application, trademark, trademark
application, trade name, service xxxx, copyright, franchise, or other intangible
property or asset (all of the foregoing being herein called "Intangibles"),
other than as described in Schedule K, all of which are in good standing and
uncontested. Schedule K accurately sets forth with respect to Intangibles owned
by Xxxxx, where appropriate, a statement of cost, book value and reserve for
depreciation of each item for tax purposes, and net book value of each item for
financial reporting purposes, and with respect to Intangibles licensed by Xxxxx
from or to a third party, a description of that license. Neither any director,
officer, or employee of Xxxxx, any relative or affiliate of any director,
officer, or employee, nor any other corporation or enterprise in which any
director, officer, of employee, or any relative or affiliate had or now has a
five (5%) percent or greater equity or voting or other substantial interest,
possesses any Intangible which relates to the business of Xxxxx.
There is no right under any Intangible necessary to the business of Xxxxx
as presently conducted or as it contemplates conducting, except those so
designated in Schedule X. Xxxxx has not infringed, is not infringing, and has
not received notice of infringement of asserted Intangibles of others. To the
knowledge of Xxxxx, there is no infringement by others of Intangibles of Xxxxx
except as set forth on Schedule K. As far as Xxxxx can foresee, there is no
Intangible of others which may materially adversely affect the financial
condition, results of operations, business, properties, assets, liabilities, or
future prospects of Xxxxx.
(k) Authority of Xxxxx. Xxxxx has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary proceedings of Xxxxx
have been duly taken to authorize the execution, delivery, and performance of
this Agreement by Xxxxx. This Agreement has been duly authorized, executed and
delivered by Xxxxx, is the legal, valid, and binding obligation of Xxxxx, and is
enforceable as to it in accordance with its terms.
Other than filings to be made by Xxxxx pursuant to federal and state
securities law as a consequence of the terms of this Agreement, No consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration of filing with, any federal, state, local, or other governmental
authority or any court or other tribunal that will not have been received by
Closing will be required by Xxxxx for the execution, delivery, or performance of
this Agreement by Xxxxx. No consent of any party to any contract, agreement,
instrument, lease, license, arrangement, or understanding to which Xxxxx is a
party, or to which any of its properties or assets are subject and that will not
have been received by Closing will be required for the execution, delivery or
performance of this Agreement (except those consents referred to in Schedule N
as having been obtained at or prior to the date of this Agreement, true and
correct copies of which, initialed by the chief executive officer of Xxxxx, have
been delivered to LGA); and the execution, delivery, and performance of this
Agreement will not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle any party
to terminate or call a default under any contract, agreement, instrument, lease,
license, arrangement, or understanding, or violate or result in a breach of any
term of the Articles of Incorporation or Bylaws of Xxxxx, or violate, result in
a breach of, or conflict with any law, rule, regulation, order, judgment, or
decree binding on Xxxxx or to which any of its operations, business, properties,
or assets are subject. Upon the Closing, Shareholders will have good title to
all the exchanged common stock of Xxxxx, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders' agreements, and voting
trusts.
(l) Nondistributive Intent. Xxxxx is acquiring the shares of LGA common
stock for its own account (and not for the account of others) for investment and
not with a view to the distribution thereof. Xxxxx will not sell or otherwise
dispose of the shares (whether pursuant to a liquidating dividend or otherwise)
without registration under the Securities Act of 1933 or an exemption therefrom,
and the certificate or certificates representing the shares may contain a legend
to the foregoing effect. By virtue of its position, Xxxxx has access to the kind
of financial and other information about LGA as would be contained in a
registration statement filed under the Securities Act of 1933. Xxxxx understands
that it may not sell or otherwise dispose of the shares in the absence of either
a registration statement under the Securities Act of 1933 or an exemption from
the registration provisions of the Securities Act of 1933.
10
(m) Xxxxx maintains a corporate listing in the recognized manual of
Standard and Poors. A copy of such listing is attached as Schedule O hereto.
(n) Completeness of Disclosure. No representation or warranty by Xxxxx in
this Agreement contains, or on the date of Closing will contain, any untrue
statement of material fact or omits, or on the date of the Closing will omit, to
state a material fact necessary to make the statements made not misleading under
the circumstances under which they were made, or will be made.
(o) Xxxxx'x transfer agent is Interwest Transfer Company, Inc., and all
costs and fees owing to such transfer agent are paid.
3. Exchange.
(a) Terms of Exchange. On the basis of the representations, warranties,
covenants, and agreements contained in this Agreement and subject to the terms
and conditions of this Agreement:
(1) The Shareholders shall sell, assign, transfer, and convey to Xxxxx
at the Closing all of the outstanding shares of capital stock of LGA
pursuant to the terms of Subscription Agreements executed by each LGA
Shareholder. The Shareholders shall deliver at the Closing certificates
representing those shares fully endorsed in blank or accompanied by stock
powers duly endorsed in blank, in each case in proper form for transfer,
with signatures guaranteed by a commercial bank or a member firm of the New
York Stock Exchange, Inc., and with all stock transfer and any other
required documentary stamps affixed thereto.
(2) In consideration for the shares referred to in Section 3(a)(1),
Xxxxx shall deliver at the Closing certificates registered in names and for
the number of shares of Xxxxx Common Stock as set forth in Schedule A.
(3) Xxxxx shall issue options to acquire its common stock in exchange
for the outstanding options to acquire LGA common stock as set forth in
Schedule B.
(b) Closing. The closing of the transactions contemplated by Sections
3(a)(1) and 3(a)(2) shall take place at the offices of LGA, at 10:00.m., local
time, on June 30, 2004 and be effective as of June 30, 2004. The closing may
occur at such different place, different time, or different date, or a
combination thereof, as LGA and Xxxxx agree in writing. The closing of the
transactions contemplated by Sections 3(a)(1) and 3(a)(2) is herein called the
"Closing." [If the Closing shall not take place by July 31, 2004 then the
parties not at fault shall, in addition to all other rights and remedies
available at law or in equity against the defaulting parties, have the right to
cancel and terminate this Agreement.]
(c) Indemnity Against Liabilities.
(1) Each party to this Agreement agrees to indemnify and hold harmless
the other parties to this Agreement and their respective officers,
directors, controlling persons (if any), employees, attorneys, agents, and
stockholders, in each case past, present, or as they may exist at any time
after the date of this Agreement (the "Indemnitees") against and in respect
of any and all claims, suits, actions, proceedings (formal or informal),
investigations, judgments, deficiencies, damages, settlements, liabilities,
and legal and other expenses (including legal fees and expenses of
attorneys chosen by any Indemnitee), as and when incurred, arising out of
or based upon any breach of any representation, warranty, covenant, or
agreement of such party contained in this Agreement.
11
(2) Each Indemnitee shall give the indemnifying party prompt notice of
any claim asserted or threatened against any Indemnitee on the basis of
which that Indemnitee intends to seek indemnification from any indemnifying
party as herein provided.
4. Conditions to Obligations of Xxxxx. The obligations of Xxxxx under this
Agreement are subject, at the option of Xxxxx to the following conditions:
(a) Accuracy of Representations and Compliance with Conditions. All
representations and warranties of LGA contained in this Agreement shall be
accurate when made and, in addition, shall be accurate as of the Closing as
though the representations and warranties were then made in exactly the same
language by LGA and regardless of knowledge or lack thereof on the part of LGA
or changes beyond its control; as of the Closing, LGA and the Shareholders shall
have performed and complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by any of them at or
before that time by this Agreement; and Xxxxx shall have received certificates
signed by the chief executive officer and the chief financial officer of LGA
dated the date of the Closing to that effect, substantially in the form of
Exhibit Q.
(b) Review of Proceedings. All actions, proceedings, instruments, and
documents required to carry out this Agreement or incidental thereto and all
other related legal matters shall be subject to the reasonable approval of
Xxxxx'x counsel, and LGA and the Shareholders shall have furnished that counsel
those documents as such counsel may have reasonably requested for the purpose of
enabling them to pass upon such matters.
(c) Legal Action. There shall not have been instituted or threatened any
legal proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(d) Contractual Consents Needed. The parties to this Agreement shall
have obtained, at or prior to the Closing, all consents required for the
consummation of the transactions contemplated by this Agreement from any party
to any contract, agreement, instrument, lease, license, arrangement, or
understanding to which any of them is a party, or to which any of their
respective businesses, properties, or assets are subject.
(e) Debt Conversion. All of the Notes Payable of LGA owed to Xxxxx &
Xxxx Xxxxxxxx, JTWROS (exclusive of accrued and unpaid wages), Xxxxx Xxxxxx,
Xxxxxxx Xxxxx, Xxxxxxxx Xxxx Xxxx & Xxxx X. Xxxx JTWROS and Third Century II is
converted to LGA stock at or prior to the Closing.
(f) Shareholder Subscription Agreements. Xxxxx shall have received an
executed Subscription Agreement from each LGA Shareholder agreeing to the
exchange of his, her or its LGA shares of Common Stock for 2,181.89 shares of
Xxxxx Common Stock (with the aggregate shares to be exchanged with each
shareholder rounded up to the next full share).
5. Conditions to the Obligations of LGA. The obligations of LGA under this
Agreement are subject, at the option of LGA, to the following conditions:
(a) Accuracy of Representations and Compliance with Conditions. All
representations and warranties of Xxxxx contained in this Agreement shall be
accurate when made and, in addition, shall be accurate as of the Closing as
though the representations and warranties were then made in exactly the same
language by Xxxxx and regardless of knowledge or lack thereof on the part of
Xxxxx or any changes beyond its control; as of the Closing, Xxxxx shall have
performed and complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by any of them at or
before that time by this Agreement; and LGA shall have received certificates
signed by the Chief executive officer and the treasurer of Xxxxx dated the date
of the Closing to that effect, substantially in the form of Exhibit P.
12
(b) Review of Proceedings. All actions, proceedings, instruments, and
documents required to carry out this Agreement or incidental thereto and all
other related legal matters shall be subject to the reasonable approval of LGA's
counsel and any counsel to the Shareholders, and Xxxxx shall have furnished that
counsel those documents as such counsel may have reasonably requested for the
purpose of enabling them to pass upon such matters.
(c) Legal Action. There shall not have been instituted or threatened any
legal proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(d) Contractual Consents Needed. The parties to this Agreement shall have
obtained, at or prior to the Closing, all consents required for the consummation
of the transactions contemplated by this Agreement from any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which any of them is a party, or to which any of their respective businesses,
properties or assets are subject.
(f) Resignations. The present Xxxxx officers and Xxxxx directors Xxxxxx and
Xxxxxxxx shall, at or prior to closing, have resigned and the remaining Xxxxx
director Xxxxxxxxx shall have appointed Xxxxx Xxxxxxxx and Xxxx Xxxxxxxx as
Xxxxx directors.
6. Covenants and Agreements of LGA. LGA covenants and agrees as follows:
(a) Capital Stock Changes. If, prior to the time for delivery of any share
certificates of LGA Common Stock under Section 3(a)(1), LGA Common Stock shall
be recapitalized or reclassified, LGA shall effect any stock dividend, stock
split, or reverse stock split of LGA Common Stock, or LGA shall merge,
consolidate, reorganize, or enter into another business combination with any
other corporation or shall sell or exchange all or substantially all of its
assets, then the shares of LGA Common Stock to be delivered thereafter under
Section 3(a)(1) shall be appropriately and equitably adjusted to the kind and
amount of shares of stock and other securities and property to which the holders
of those shares of LGA Common Stock would have been entitled to receive had such
stock been issued and outstanding as of the record date for determining
stockholders entitled to participate in that corporate event. The provisions of
this Section 6(a) shall apply to successive mergers, consolidations,
reorganizations, and combinations.
(b) Access. LGA will afford the officers, employees, attorneys, agent,
investment bankers, accountants, and other representatives of Xxxxx free and
full access to the plants, properties, books, and records of LGA, will permit
them to make extracts from and copies of such books and records, and will, from
time to time, furnish Xxxxx with additional financial and operating data and
other information as to the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of LGA that Xxxxx
from time to time may request. LGA will cause the independent certified public
accountants of LGA to make available to Xxxxx and its independent certified
public accountants the work papers relating to the audits of LGA.
(c) Conduct of Business. LGA will conduct its affairs so that at the
Closing no representation or warranty of LGA will be inaccurate, no covenant or
agreement of LGA will be breached, and no condition in this Agreement will
remain unfulfilled by reason of the actions or omissions of LGA. Except as
otherwise requested by Xxxxx in writing, until the Closing or the earlier
rightful termination of this Agreement, LGA will use its best efforts to
preserve the business operations of LGA intact, to keep available the services
of its present personnel, to preserve in full force and effect the contracts,
agreements, instruments, leases, licenses, arrangements, and understandings of
LGA, and to preserve the goodwill of their suppliers, customers, and others
having business relations with any of them. Until the Closing or earlier
rightful termination of this Agreement, LGA will conduct its business and
operations, in all respects, only in the ordinary course.
13
(d) No LGA Corporate Transactions. LGA agrees that until the Closing or
earlier rightful termination of this Agreement, it will not engage in:
(1) Any merger, consolidation, reorganization, or other business
combination involving LGA;
(2) Any sale of assets of LGA not in the ordinary course of
business;
(3) Any stock split, stock dividend, or reverse stock split
relating to any class of LGA stock;
(4) Any issuance of any shares of capital stock of LGA, any
option, warrant, or other right calling for the issuance of any share
of capital stock, or any security convertible into or exchangeable for
any share of capital stock;
(5) Any authorization of any other class of stock of LGA;
(6) The amendment of the certificate of incorporation (or other
charter document) or the bylaws of LGA; or
(7) Any proposition the effect of which may be to prohibit,
restrict, or delay the consummation of any of the transactions
contemplated by this Agreement or impair the contemplated benefits to
LGA of the transactions contemplated by this Agreement.
(e) Voting by the Shareholders. The Shareholders, until the Closing or
earlier rightful termination of this Agreement, shall not have voted for:
(1) Any merger, consolidation, reorganization, or other business
combination involving LGA;
(2) Any sale of assets of LGA;
(3) Any stock split, stock dividend, or reverse stock split
relating to any class of LGA stock;
(4) Any issuance of any shares of capital stock of LGA, any
option, warrant, or other right calling for the issuance of any share
of capital stock, or any security convertible into or exchangeable for
any share of capital stock, except as set forth in Schedule A;
(5) Any authorization of any other class of stock of LGA;
(6) The amendment of the articles of incorporation (or other
charter document) or the bylaws of LGA; or
14
(7) Any proposition the effect of which may be to prohibit,
restrict, or delay the consummation of any of the transactions
contemplated by this Agreement or impair the contemplated benefits to
Xxxxx of the transactions contemplated by this Agreement.
7. Covenants and Agreements of Xxxxx . Xxxxx covenants and agrees as follows:
(a) Capital Stock Changes. If, prior to the time for issuance of any shares
of Xxxxx Common Stock under Section 3(a)(2), Xxxxx Common Stock shall be
recapitalized or reclassified, Xxxxx shall effect any stock dividend, stock
split, or reverse stock split of Xxxxx Common Stock, or Xxxxx shall merge,
consolidate, reorganize, or enter into another business combination with any
other corporation or shall sell or exchange all or substantially all of its
assets, then the shares of Xxxxx Common Stock to be delivered thereafter under
Section 3(a)(2) shall be appropriately and equitably adjusted to the kind and
amount of shares of stock and other securities and property to which the holders
of those shares of LGA Common Stock would have been entitled to receive had such
stock been issued and outstanding as of the record date for determining
stockholders entitled to participate in that corporate event. The provisions of
this Section 7(a) shall apply to successive mergers, consolidations,
reorganizations, and combinations.
(b) Access. Xxxxx will afford the officers, employees, attorneys, agent,
investment bankers, accountants, and other representatives of LGA or the
Shareholder Representative (if any) free and full access to the plants,
properties, books, and records of Xxxxx, will permit them to make extracts from
and copies of such books and records, and will, from time to time, furnish LGA
with additional financial and operating data and other information as to the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of Xxxxx that LGA or the Shareholder
Representative (if any) from time to time may request. Xxxxx will cause the
independent certified public accountants of Xxxxx to make available to LGA and
its independent certified public accountants the work papers relating to the
audits of Xxxxx.
(c) Conduct of Business. Xxxxx will conduct its affairs so that at the
Closing no representation or warranty of Xxxxx will be inaccurate, no covenant
or agreement of Xxxxx will be breached, and no condition in this Agreement will
remain unfulfilled by reason of the actions or omissions of Xxxxx. Except as
otherwise requested by LGA in writing, until the Closing or the earlier rightful
termination of this Agreement, Xxxxx will use its best efforts to preserve the
business operations of Xxxxx intact, to keep available the services of their
present personnel, to preserve in full force and effect the contracts,
agreements, instruments, leases, licenses, arrangements, and understandings of
Xxxxx, and to preserve the goodwill of their suppliers, customers, and others
having business relations with any of them. Until the Closing or earlier
rightful termination of this Agreement, Xxxxx will conduct its business and
operations, in all respects, only in the ordinary course.
(d) No Xxxxx Corporate Transactions. Xxxxx agrees that until the Closing or
earlier rightful termination of this Agreement, it will not engage in:
(1) Any merger, consolidation, reorganization, or other business
combination involving Xxxxx;
(2) Any sale of assets of Xxxxx;
(3) Any stock split, stock dividend, or reverse stock split
relating to any class of Xxxxx stock;
(4) Any issuance of any shares of capital stock of Xxxxx, any
option, warrant, or other right calling for the issuance of any share
of capital stock, or any security convertible into or exchangeable for
any share of capital stock;
15
(5) Any authorization of any other class of stock of Xxxxx;
(6) The amendment of the certificate of incorporation (or other
charter document) or the bylaws of Xxxxx; or
(7) Any proposition the effect of which may be to prohibit,
restrict, or delay the consummation of any of the transactions
contemplated by this Agreement or impair the contemplated benefits to
Xxxxx of the transactions contemplated by this Agreement.
(e) Resignations. The present Xxxxx officers and Xxxxx directors Xxxxxx and
Xxxxxxxx shall, at or prior to closing, resign in a manner such that the
remaining Xxxxx director Xxxxxxxxx shall appoint Xxxxx Xxxxxxxx and Xxxx
Xxxxxxxx as Xxxxx directors.
(f) Name Change. Subsequent to Closing, Xxxxx shall change the name of
Xxxxx to LGA Holdings, Inc.
(d) Blue-Sky Law Compliance. Xxxxx shall, as soon as practicable after
Closing, prepare and file any required notices or applications for permits with
appropriate blue-sky or securities law administrators with regard to the
issuance of Xxxxx Common Stock as contemplated by this Agreement.
8. Miscellaneous.
(a) Further Actions. At any time and from time to time, each party agrees,
at its or his or her expense, to take actions and to execute and deliver
documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
(b) Availability of Equitable Remedies. Since a breach of the provisions of
this Agreement could not adequately be compensated by money damages, any party
shall be entitled, either before or after the Closing, in addition to any other
right or remedy available to it, to an injunction restraining the breach or
threatened breach and to specific performance of any provision of this
Agreement, and, in either case, no bond or other security shall be required in
connection therewith, and the parties hereby consent to the issuance of such an
injunction and to the ordering of specific performance.
(c) Survival. The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive the Closing and
any delivery of shares of Xxxxx Common Stock by Xxxxx, irrespective of any
investigation made by or on behalf of any party. The statements contained in any
document executed by LGA, or any Shareholder relating hereto or delivered to
Xxxxx in connection with the transactions contemplated hereby or thereby, or in
any statement, certificate, or other instrument delivered by or on behalf of
Xxxxx pursuant hereto or delivered to LGA or the Shareholders in connection with
the transactions contemplated hereby or thereby, shall be deemed representations
and warranties, covenants and agreements, or conditions, as the case may be, of
the respective parties hereunder for all purposes of this Agreement (including
all statements, certificates or other instruments delivered pursuant hereto or
thereto or delivered in connection with the transactions contemplated hereby or
thereby).
(d) Appointment of Agent. Xxxxx Xxxxxxxx will be the representative
("Representative") of the interest of the Shareholders for all purposes of this
Agreement. Without giving notice to the Shareholders, the Representative shall
have full and irrevocable authority on behalf of Shareholders to:
16
(1) Deal with the other parties to this Agreement;
(2) Accept the shares of Xxxxx Common Stock or any other amounts
payable by the other parties to this Agreement;
(3) Accept and give notices and other communications relating to
this Agreement;
(4) Settle any dispute relating to the terms of this Agreement;
(5) Modify or amend this Agreement except with respect to the
number of shares of Xxxxx Common Stock to be received by a any
Shareholder;
(6) Execute any instrument or document that the Representative
may determine is necessary or desirable in the exercise of his or her
authority under this Section 8(d); and
(7) Act in connection with all matters relating to this Agreement
and the transactions contemplated hereby.
In the event of the refusal or inability to serve, death, incapacity, or
resignation for any reason of the Representative, Xxxx Xxxxxxxx will become his
successor, with all the powers and irrevocable authority of the Representative,
and with full power of substitution.
(e) Modification. This Agreement and the Schedules hereto set forth the
entire understanding of the parties with respect to the subject matter hereof
(except as provided in Section 8(c)), supercede all existing agreements among
them concerning the subject matter, and may be modified only by a written
instrument duly executed by each party with the approval of the Board of
Directors of each corporate party (except as otherwise provided in Section
8(d)).
(f) Notices. Subject to Section 8(d), any notice or other communication
required or permitted to be given hereunder shall be in writing and shall be
mailed by certified mail, return receipt requested, or delivered against receipt
to the party to whom it is to be given at the address of that party set forth in
the preamble to this Agreement. Any notice or other communication given by
certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which will be deemed given at the
time of receipt thereof.
(g) Waiver. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any breach of
that provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions will not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver must be in writing and, in the case of
a corporate party, be authorized by a resolution of the Board of Directors or by
an officer of the waiving party.
(h) Binding Effect. The provisions of this Agreement shall be binding upon
and inure to the benefit of LGA, and Xxxxx, their respective successors and
assigns.
17
(i) No Third-Party Beneficiaries. This Agreement does not create, and shall
not be construed as creating, any rights enforceable by any person not a party
to this Agreement (except as provided in Section 8(i)).
(j) Severability. If any provision of this Agreement is invalid, illegal,
or unenforceable, the balance of this Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
(k) Headings. The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
(l) Counterparts; Governing Law. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with
the laws of Colorado, without giving effect to conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.
Let's Go Aero, Inc
By:
/s/ Xxxxx Xxxxxxxx
--------------------------
Xxxxx Xxxxxxxx, President
Xxxxx Information Services, Inc.
By: /s/ Xxxxx Xxxxxx
--------------------------
Xxxxx Xxxxxx , President
18
LIST OF SCHEDULES AND EXHIBITS
Exhibit or Schedule
Designation Schedule Description
----------- --------------------
A LGA Shares Owned and Xxxxx Shares to Be Issued to
LGA Shareholders
B LGA Schedule of Options, Warrants, or Other Rights
Calling for the Issuance of, Any Share of Capital
Stock of LGA, or Any Security or Other Instruments
Convertible Into or Exchangeable for Capital Stock of
LGA
C LGA List of Property Owned, Leased, and Licensed
D LGA List of Intangibles Owned and Licensed
E LGA List of Contracts, Agreements, and Instruments
and Arrangements
F LGA List of Employee Plans and Benefits and of
Certain Employees and Agents
G LGA Required Consents
H Xxxxx Shareholders
I Xxxxx Schedule of Options, Warrants, or Other Rights
Calling for the Issuance of, Any Share of Capital
Stock of Xxxxx, or Any Security or Other Instruments
Convertible Into or Exchangeable for Capital Stock of
Xxxxx
J Xxxxx List of Property Owned, Leased, and Licensed
K Xxxxx List of Intangibles Owned and Licensed
L Xxxxx List of Contracts, Agreements, and Instruments
and Arrangements
M Xxxxx List of Employee Plans and Benefits and of
Certain Employees and Agents
N Xxxxx Required Consents
O Tenet Corporate Listing
P LGA Officers' Certificate Concerning Accuracy
19
R Xxxxx Officers' Certificate Concerning Accuracy
S Shareholder Subscription Agreements
20
Schedule A
LGA Shares Owned and
Xxxxx Shares to Be Issued to LGA Shareholders
-------------------------------------- ----------------------- -------------------- --------------------
Number of Xxxxx
Shares (All
Shares to Be Held Amounts to Be
Upon Conversions Rounded to Next
Name of LGA Shareholder Number of LGA Shares of Debt Highest Full Share)
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxx & Xxxx Xxxxxxxx, JTWROS 723 127.18
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxxx Xxxxxxxx 120 0
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxx Xxxx 28 0
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxxx Xxxx 60 0
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxxx Xxxxxxx 30 0
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxx Xxxxxx 386 113.75
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxxx Xxxxx 130 82.38
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxxx X. X'Xxxxxx 00 0
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxx X. Xxxxxxxxx 25 0
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxxxx Xxxx Xxxx Xxxx X. Xxxx JTWROS 60 15.30
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxxx Xxxxxx 10 0
-------------------------------------- ----------------------- -------------------- --------------------
Xxxx Xxxxxxxxx 15 0
-------------------------------------- ----------------------- -------------------- --------------------
Third Century, II 0 673.32
-------------------------------------- ----------------------- -------------------- --------------------
Xxxxx & Xxxx Xxxxxxxxx JTWROS 17 0
-------------------------------------- ----------------------- -------------------- --------------------
Subtotal
-------------------------------------- ----------------------- -------------------- --------------------
TOTAL
-------------------------------------- ----------------------- -------------------- --------------------
PERCENTAGE
-------------------------------------- ----------------------- -------------------- --------------------
21
Schedule B
LGA Schedule of Options, Warrants, or Other Rights
Calling for the Issuance of, Any Share of Capital
Stock of LGA, or Any Security or Other Instruments
Convertible Into or Exchangeable for Capital Stock of LGA
Name of LGA Option Holder Number of Xxxxx
Number of LGA Share Options
Shares (All (All Amounts to
Outstanding LGA Be Rounded to Xxxxx
Options Are Expiration Exercise Next Highest Full Exercise
Fully Vested) Date Price Share) Price
-------------------------- --------------- -------------- ----------- ------------------- ------------
Xxxxx Xxxxxxxx 90 3/31/2006 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Xxxx Xxxxxxxx 90 3/31/2006 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Xxxxxxx Xxxxxxxx 90 3/31/2006 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Xxxxxx Xxxx 75 1/1/2007 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Xxxxxxx Xxxx 45 3/31/2006 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Xxxxx Xxxx 20 8/31/2006 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Xxxxxx Xxxxxx 10 1/1/2007 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Third Century II 20 8/31/2005 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Third Century II 100 1/5/2006 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Xxxxx Xxxxxx 20 1/3/2008 $1,500
-------------------------- --------------- -------------- ----------- ------------------- ------------
Cambridge 25 9/10/2007 $1,500
Communications, Inc.
-------------------------- --------------- -------------- ----------- ------------------- ------------
TOTAL
-------------------------- --------------- -------------- ----------- ------------------- ------------
22
Schedule C
LGA List of Property Owned, Leased, and Licensed
1. For 0000 Xxxxxxx Xx., Xxxxxxxx Xxxxxxx, XX 00000 (old address) lease from
November 1 2003 through October 31 2004 for $16,200.00 plus shared utilities of
about $20 per month.
2. For 0000 X. Xx Xxxx Xx., Xxx X, Xxxxxxxx Xxxxxxx, XX 00000 (new address)
lease from June 1 2004 through May 31, 2007 for $49,257.60 plus operating
expenses estimated for first year of the lease term to be $197.92 per month,
plus tenant improvement over-budget agreed shared expense of $231.58 per month.
This totals to $1,731.58 per month.
23
Schedule D
LGA List of Intangibles Owned and Licensed
Patents
Issued Patents:
6,609,725 Securing Device for Receiver Hitch Assemblies
6,409,203 Securing Device for Receiver Hitches
6,389,290 Equipment Transportation System
6,213,539 Equipment Transportation System
6,042,175 Equipment Transportation System
Pending Published Applications
106004,893 Securing Device for Receiver Hitch Assemblies
09788,299 Equipment Transportation System (Spine System)
09683,820 Adjustable Hitch Mounted Cargo Carrier (Twin Tube)
Two Non-Published Applications
Trademarks:
Silent Hitch Pin
Sport Performance Carrier
Gear Management Solutions
Sport Performance Trailer
GearWagon
GearBed
GearDeck
GearDeck HardTop
PowerPack
GearCage
GearLocker
SpiderGear
GearSafe
GearShed
STOGear (Storage, Transportation and Organization Gear)
TwinTube
TT-UBI (TwinTube U-Build-It)
Rapid Deployment Trailer
Xxxxxx
Remora
LeatherBack
HardPoint
Little Giant Trailer
Haul It All
24
Schedule D
LGA List of Intangibles Owned and Licensed
(continued)
Licenses
LGA has issued three intellectual property licenses for the manufacture and sale
of its designs. These three licenses were issued in May of 2002 to the
following:
Silent Hitch Pin licensee is Valley Industries TwinTube licensee is SportRack
Intl. TriplePlay licensee is SportRack Intl.
In addition to advance royalty payments, Valley and SportRack are obligated to
pay LGA ongoing royalties based on volume targets.
LGA also has a "Rep." agreement with X.X. Xxxxxxxxxxx and Associates signed on
2-9-04. This agreement stipulates the fee's that Xxxxxxxxxxx earns as LGA's
automotive representative.
LGA's relationship with Prodesign Products is on an "as order" basis. No formal
agreement or contract is in place with Prodesign.
25
Schedule E
LGA List of Contracts, Agreements,
and Instruments and Arrangements
None
26
Schedule F
LGA List of Employee Plans and Benefits and of
Certain Employees and Agents
Let's Go Aero, Inc. 2000 Stock Option Plan
27
Schedule G
LGA Required Consents
None
28
Schedule H
Xxxxx Shareholders
Provided by Interwest Transfer Company, Inc.
29
Schedule I
Xxxxx Schedule of Options, Warrants, or Other Rights
Calling for the Issuance of, Any Share of Capital
Stock of Xxxxx, or Any Security or Other Instruments
Convertible Into or Exchangeable for Capital Stock of Xxxxx
None
30
Schedule J
Xxxxx List of Property Owned, Leased, and Licensed
Real estate lease with Bluewater Properties, LLC expires by its terms November
9, 2004; planned to be canceled by mutual agreement of tenant and landlord
effective July 18, 2004
31
Schedule K
Xxxxx List of Intangibles Owned and Licensed
Trademark
InteliChart
32
Schedule L
Xxxxx List of Contracts, Agreements,
and Instruments and Arrangements
Software License Agreement
Xxxxx Information Services, Inc. and ClinicalVentures, LLC
Dated July 31, 2003
33
Schedule M
Xxxxx List of Employee Plans and Benefits and of
Certain Employees and Agents
None
34
Schedule N
Xxxxx Required Consents
None
35
Schedule O
Tenet Corporate Listing
None
36
Exhibit P
LGA Officers' Certificate Concerning Accuracy
We the undersigned officers of Let's Go Aero, Inc. hereby certify that
(1) LGA is a corporation validly existing and in good standing under the
laws of the State of Colorado, with all requisite corporate power and authority
to own its properties and to carry on the business in which it is now engaged;
(2) LGA is duly qualified to transact the business in which it is engaged
and is in good standing as a foreign corporation in the following jurisdictions:
Colorado; and these jurisdictions are the only jurisdictions in which the real
or personal property owned or leased or business conducted by LGA is material to
the operations of LGA taken as a whole;
(3) The authorized and outstanding capital stock of LGA is as set forth in
Section 1(b) of the Agreement of Acquisition, Stock for Stock dated of even date
herewith ("Agreement"); and all outstanding shares of the capital stock of LGA
are duly authorized, validly issued, fully paid, and nonassessable;
(4) The authorized and outstanding capital stock of, and ownership of LGA
is as set forth in Schedule A to the Agreement;
(5) All necessary corporate proceedings of LGA have been duly taken to
authorize the execution, delivery, and performance of the Agreement by LGA and
the consummation of the transactions contemplated by the Agreement;
(6) LGA has corporate power and authority to execute, deliver, and perform
the Agreement, and the Agreement has been duly authorized, executed, and
delivered by LGA, constitutes the legal, valid, and binding obligation of LGA,
and is enforceable as to LGA in accordance with its terms;
(7) The execution, delivery, and performance of the Agreement by LGA will
not violate or result in a breach of any term of LGA's certificate of
incorporation or of its bylaws; and the execution, delivery, and performance of
the Agreement by LGA will not violate, result in a breach of, or constitute a
default under any term of any agreements to which it is a party;
(8) There is no consent of, or declaration or filing with, any governmental
authority which is required of LGA, or any Shareholder for the execution,
delivery, or performance of the Agreement by LGA;
(9) There is no action, suit, or proceeding pending or threatened against
LGA, at law or in equity, or before any federal, state, municipal, or other
governmental department, commission, board, bureau, agency, or instrumentality
that:
(i) Can reasonably be expected to result in any materially adverse
change in the business, properties, operations, prospect, or assets, or in
the condition, financial or otherwise, of LGA taken as a whole, or
(ii) Seeks to prohibit or otherwise challenge the consummation of the
transactions contemplated by the Agreement, or to obtain substantial
damages with respect thereto, except as disclosed in the Agreement.
Dated Effective June 30, 2004
/s/ Xxxxx Xxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxx, President
/s/ Xxxx Xxxxxxxx
---------------------------------------
Xxxx Xxxxxxxx, Treasurer
37
Exhibit Q
Xxxxx Officers' Certificate Concerning Accuracy
We the undersigned officers of Xxxxx Information Systems, Inc. hereby
certify that
(1) Xxxxx is a corporation validly existing and in good standing under the
laws of the State of Utah, with all requisite corporate power and authority to
own its properties and to carry on the business in which it is now engaged;
(2) Xxxxx is duly qualified to transact the business in which it is engaged
and is in good standing as a foreign corporation in the following jurisdictions:
Utah; and these jurisdictions are the only jurisdictions in which the real or
personal property owned or leased or business conducted by Xxxxx is material to
the operations of Xxxxx taken as a whole;
(3) The authorized and outstanding capital stock of Xxxxx is as set forth
in Section 2(b) of the Agreement of Acquisition, Stock for Stock dated of even
date herewith ("Agreement"); and all outstanding shares of the capital stock of
Xxxxx are duly authorized, validly issued, fully paid, and nonassessable;
(4) The authorized and outstanding capital stock of, and ownership of Xxxxx
is as set forth in Schedule H to the Agreement;
(5) All necessary corporate proceedings of Xxxxx have been duly taken to
authorize the execution, delivery, and performance of the Agreement by Xxxxx and
the consummation of the transactions contemplated by the Agreement;
(6) Xxxxx has corporate power and authority to execute, deliver, and
perform the Agreement, and the Agreement has been duly authorized, executed, and
delivered by Xxxxx, constitutes the legal, valid, and binding obligation of
Xxxxx, and is enforceable as to Xxxxx in accordance with its terms;
(7) The execution, delivery, and performance of the Agreement by Xxxxx will
not violate or result in a breach of any term of Xxxxx'x certificate of
incorporation or of its bylaws; and the execution, delivery, and performance of
the Agreement by Xxxxx will not violate, result in a breach of, or constitute a
default under any term of any agreements to which it is a party;
(8) There is no consent of, or declaration or filing with, any governmental
authority which is required of Xxxxx, or any Shareholder for the execution,
delivery, or performance of the Agreement by Xxxxx;
(9) There is no action, suit, or proceeding pending or threatened against
Xxxxx, at law or in equity, or before any federal, state, municipal, or other
governmental department, commission, board, bureau, agency, or instrumentality
that:
(i) Can reasonably be expected to result in any materially adverse
change in the business, properties, operations, prospect, or assets, or in
the condition, financial or otherwise, of Xxxxx taken as a whole, or
(ii) Seeks to prohibit or otherwise challenge the consummation of the
transactions contemplated by the Agreement, or to obtain substantial
damages with respect thereto, except as disclosed in the Agreement.
Dated Effective June 30, 2004
/s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx, President
---------------------------------------
________________________, Treasurer
(print name)
38
Exhibit R
Shareholder Subscription Agreements
To Be Provided by LGA Shareholders
39
