EXHIBIT 8.1
STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT, dated May 28, 1998, is made by and between PERFECT FUTURE, LTD.,
a Nevada corporation (the "Buyer"), on the one hand, and ESL PRO SYSTEMS INC., a
corporation incorporated under the laws of the State of Nevada and hereafter
referred to as "ESL PRO" or as the "Sellers" and XXXX X. XXXX duly authorized
and appointed agent of the shareholders of ESL PRO, whose names appear on
"Exhibit A" attached hereto and who constitute all of the shareholders of ESL
PRO, on the other hand.
RECITALS
A. WHEREAS ESL PRO has an exclusive license to develop, market and sell an
existing ESL (English as a Second Language) software and hardware system
developed in Canada;
B. AND WHEREAS the Sellers are desirous of joining together to go public by
exchanging the shares of ESL PRO for shares of an existing publicly traded
entity on the NASD, OTC Bulletin Board, in a share for a share transaction
intending to qualify as a tax-free exchange pursuant to ss.368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended;
C. AND WHEREAS the Buyer is a publicly traded company listed on the NASD, OTC
Bulletin Board, with 2,250,000 (Two Million, Two Hundred and Fifty Thousand)
shares outstanding and desires to acquire the Sellers, for 2,000,000 (Two
Million) of its common shares. NOW THEREFORE the parties hereby agree that in
implementing said tax-free exchange and in consideration of the mutual covenants
set forth below, the parties hereby agree as follows:
Article I
EXCHANGE OF THE SHARES
1.01 Shares Being Exchanged. Subject to the terms and conditions of this
Agreement, the Sellers are selling, assigning, and delivering at the closing
provided for in Section 1.03 hereof (the "Closing"), 2,000,000 (Two Million)
common shares of ESL PRO, which shares represent all of the issued and
outstanding common shares of ESL PRO, free and clear of all liens, charges, or
encumbrances of any kind.
1.02 Consideration. In exchange for the said common shares of ESL PRO being
acquired by the Buyer, at the Closing, the Buyer will deliver to the Sellers
2,000,000 (Two Million) "restricted" common shares of the Buyer as that term is
defined in Rule 144 of the Securities Act of 1933, as amended.
Stock Exchange Agreement between Perfect Future, Ltd. and ESL Pro Systems, Inc.
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1.03 Closing. The Closing of the transactions provided for in Section 1.04 and
1.05 is to take place at the offices of ESL PRO at Reno, Nevada simultaneously
with the execution and delivery of this Agreement, or at such other time or
place as may mutually be agreed upon by the parties. The Closing may also be
accomplished by wire, express mail, or other courier service, conference call,
or as otherwise agreed by the respective parties or their duly authorized
representatives.
1.04 Delivery by the Sellers. At the Closing, the Sellers will deliver to the
attorneys for the Buyer: (i) certificates representing the said common shares of
the Sellers, in form acceptable for transfer on the books of ESL PRO, with all
necessary transfer tax stamps attached; and (ii) all corporate records and items
set forth, the said certificates to be released to the Buyer when the stock
certificates referred to in Section 1.05 are delivered to the Sellers.
1.05 Delivery by the Buyer. At the Closing, or as soon as is practicable
thereafter, the Buyer will deliver to the Sellers, (i) stock certificates for
the said common shares of the Buyer, in the denominations set forth in "Exhibit
A"; and (ii) all corporate records and items set forth.
Article II
RELATED TRANSACTIONS
2.01 Expenses of the Transactions. The Buyer shall be responsible for paying all
expenses of this transaction, including but not limited to any filing fees,
legal fees not to exceed $5,000 (Five Thousand Dollars), accounting fees, escrow
agent fees, printing expenses, certificate engraving fees and transfer fees.
2.02 Additional Offering of Shares. The Buyer intends, shortly after the Closing
hereof, to attempt to raise additional operating capital through a private
offering of securities, contemplated to be offered pursuant to an exemption
under Regulation S of the Securities Act of 1933, as amended.
Article III
REPRESENTATIONS AND WARRANTIES BY THE BUYER
The Buyer hereby represents and warrants as follows:
3.01 Organization, Capitalization, etc.
(a) The Buyer is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Nevada.
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(b) The authorized capital stock of the Buyer consists of 50,000,000 (Fifty
Million) common shares with a par value of $.001 per share, of which only
2,250,000 (Two Million, Two Hundred and Fifty Thousand) are issued and
outstanding, fully paid and nonassessable, and 5,000,000 (Five Million)
preferred shares with a par value of $.001 per share, of which none are
issued or outstanding.
(c) The Buyer has the corporate power and authority to carry on its
business as presently conducted and has full corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder and
the Buyer has been so authorized by the required majority of its
shareholders as evidenced by a certified resolution of the shareholders of
the Buyer and delivered to the Sellers at Closing.
3.02 Non Violation. Neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will constitute a
violation or default under any term or provision of the Certificate of
Incorporation or Bylaws of the Buyer, or of any contract, commitment, indenture,
other agreement or restriction of any kind or character to which the Buyer is a
party or by which the Buyer is bound.
3.03 Financial Statement. The Buyer has delivered to the Seller the balance
sheet of the Buyer as of June 30, 1997, prepared by Xxxxx X. Xxxxxxxx, P.C.,
C.P.A. The balance sheet is true and correct and a fair and accurate
presentation of the financial condition, assets and liabilities (whether
accrued, absolute, contingent, or otherwise) of the Buyer as of the date thereof
in accordance with generally accepted principals of accounting applied on a
consistent basis.
3.04 Tax Returns. The Buyer has duly filed all tax reports and returns required
to be filed by it and has fully paid all taxes and other charges claimed to be
due from it by federal, state, or local taxing authorities (including without
limitation those due in respect of its properties, income, franchises, licenses,
sales, and payrolls); there are not liens upon any of the Buyer's property or
assets; and there are not now any pending questions relating to, or claims
asserted for, taxes or assessments asserted against the Buyer.
3.05 Title to Properties: Encumbrances. The Buyer
has good and marketable title to all of its properties and assets, real and
personal, tangible and intangible, including without limitation the properties
and assets reflected in the June 30, 1997 balance sheet of the Buyer. All such
properties and assets reflected in that balance sheet have fair market or
realizable value at least equal to the value thereof as reflected upon the
balance sheet, and they are subject to no mortgage, pledge, lien, conditional
sale agreement, encumbrance, or charge of any nature.
3.06 Accounts Receivable. Any accounts receivable of the Buyer, whether
reflected in the Buyer's June 30, 1997 balance sheet or otherwise, represent
sales actually made in the ordinary course of business and any reserve for
uncollectability of receivables as reflected in the aforesaid balance sheet is
adequate and was calculated in a way consistent with past practice. Except to
extent set forth herein, there are not now any questions,
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controversies, or disputes relating to any accounts receivable of the Buyer.
3.07 Undisclosed Liabilities. Except to the extent reflected, or reserved
against, in the June 30, 1997 balance sheet of the Buyer, the Buyer as of that
date had no liabilities or obligations of any nature, whether absolute, accrued,
contingent, or otherwise, whether due or to become due.
3.08 Absence of Certain Changes. The Buyer has not since June 30 1997, and shall
not, have
(a) Suffered any material adverse change in financial condition, assets,
liabilities, or business;
(b) Incurred any obligation or liability (whether absolute, accrued,
contingent, or otherwise) other than as disclosed to the Sellers;
(c) Paid any claim or discharged or satisfied any lien or encumbrance or
paid or satisfied any liability (whether absolute, accrued, contingent, or
otherwise) other than liabilities shown or reflected in the Buyer's June
30, 1997 balance sheet or liabilities incurred since June 30, 1997 other
than those disclosed to the Sellers;
(d) Permitted or allowed any of its assets, tangible or intangible, to be
mortgaged, pledged, or subjected to any liens or encumbrances;
(e) Written down the value of any inventory or written-off as uncollectible
any notes or accounts receivable or any portion thereof, except for
write-offs of such items as disclosed to the Sellers;
(f) Cancelled any other debts or claims or waived any rights of substantial
value, or sold or transferred any of its assets or properties, tangible or
intangible, other than sales of inventory or merchandise as disclosed to
the Sellers;
(g) Made any capital expenditures or commitments for additions to property,
plant or equipment;
(h) Declared, paid or set aside for payment to its stockholders any
dividend or other distribution in respect of its capital stock or redeemed
or purchased or otherwise acquired any of its capital stock or any options
relating thereto or agreed to take any such action;
(i) Made any material change in any method of accounting or accounting
practice.
3.09 Litigation. There are no actions, claims, proceedings, or investigations
pending or, to the knowledge of the Buyer, threatened against the Buyer, and the
Buyer knows, or has no reason to know, of any basis for any such action,
proceeding, or investigation. There is no event or condition of any kind or
character pertaining to the business, assets, or prospects
Stock Exchange Agreement between Perfect Future, Ltd. and ESL Pro Systems, Inc.
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of the buyer that may materially and adversely affect such business, assets or
prospects.
3.10 Disclosure. The Buyer has disclosed to the Sellers all facts material to
the assets, prospects, and business of the Buyer. No representation or warranty
by the Buyer contained in this Agreement, and no statement contained in any
instrument, list, certificate, or writing furnished to the Sellers pursuant to
the provisions hereof or in connection with the transaction contemplated hereby,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading or necessary in order to provide a prospective purchaser of the
business of the Buyer with proper information as to the buyer and its affairs.
3.11 SEC Filings. The Buyer has filed on a timely basis all reports required to
be filed with the United States Securities and Exchange Commission (hereinafter
the "SEC").
3.12 Legend. The Certificates representing the shares in the Buyer, delivered by
Buyer to Seller pursuant to this Agreement shall bear a legend in the following
or similar form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 (the "Act"), as amended, or any other applicable
federal or state securities acts; and are 'restricted securities' as
defined by Rule 144 of the Act. The shares may not be transferred, sold or
otherwise disposed of unless: (1) a registration statement with respect to
the shares shall be effective under the act or any other federal or state
securities acts and (2) Buyer shall have received an opinion of counsel for
that no violations of any securities acts will be involved in any
transfer."
3.13 Holding Period. If the shares represented by these Certificates have been
held for a period of at least one (1) year and if Rule 144 of the Act is
applicable (there being no representations by the Buyer that Rule 144 is
applicable), then the Sellers may make sales of the Shares only under the terms
and conditions prescribed by Rule 144 of the Act.
3.14 Investment Intent. The Buyer is acquiring the said shares of the Sellers to
be transferred to it under this Agreement for investment and not with a view to
the sale or distribution thereof, and the Buyer has no commitment or present
intention to liquidate ESL PRO or to sell or otherwise dispose of the Shares.
3.15 Unregistered Shares and Access to Information. The Buyer understands the
offer and sale of the said shares of the Sellers have not been registered with
or reviewed by the Securities and Exchange Commission under the Securities Act
of 1933, as amended, or with or by any state securities law administrator, and
no federal or state securities law administrator has reviewed or approved any
disclosure or other material concerning ESL PRO or the shares in the Buyer. The
Buyer has been provided with and reviewed all information concerning ESL PRO and
the said shares of the Sellers, as it has considered necessary or appropriate as
a prudent and knowledgeable investor to enable it to make an informed investment
decision concerning the said shares of the Sellers.
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Article IV
REPRESENTATIONS AND WARRANTIES BY THE SELLERS
The Sellers hereby represent and warrant as follows:
4.01 Organization, etc.
(a) ESL PRO is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada.
(b) The authorized capital stock of ESL PRO consists of 10,000,000 (Ten
Million) common shares with a par value of $.001 per share, 2,000,000 (Two
Million) of which are validly issued and outstanding, fully paid and
nonassessable.
(c) The Sellers have the corporate power and authority to carry on their
business as presently conducted and have full corporate power and authority
to enter into this Agreement and to carry out their obligations hereunder.
4.02 Authority. The execution and delivery of this Agreement by the Buyer and
the consummation by ESL PRO and Sellers of the transactions contemplated hereby
have been duly authorized.
4.03 No Violation. Neither the execution nor the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will constitute a
violation or default under any term or provision of the Certificate of
Incorporation or Bylaws of ESL PRO or of any contract, commitment, indenture, or
other agreement or restriction of any kind or character to which ESL PRO is a
party or by which they or the Sellers are bound.
4.04 Representations Regarding the Acquisition of the Shares.
(a) The undersigned understand that the SAID SHARES OF THE BUYER TO BE
RECEIVED FROM THE BUYER HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES AGENCIES;
(b) The Sellers are not underwriters and are acquiring the said shares of
the Buyer solely for investment for their own account and not with a view
to, or for, resale in connection with any distribution within the meaning
of the federal securities act, the state securities acts or any other
applicable state securities acts;
(c) The Sellers understand the speculative nature and risks of investments
associated with the Buyer and confirm that the said shares of the Buyer are
suitable and consistent with their investment program and that their
financial position enables them to bear the risks of this investment; and
that there may not be any
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public market for the said shares of the Buyer subscribed for herein;
(d) The said shares of the Buyer to be received by the Sellers may not be
transferred, encumbered, sold, hypothecated, or otherwise disposed of to
any person, without the express prior written consent of the Buyer and the
prior opinion of counsel for the Buyer that such disposition will not
violate federal and/or state securities acts. Disposition shall include,
but is not limited to acts of selling, assigning, transferring, pledging,
encumbering, hypothecating, or any form of conveying, whether voluntary or
not;
(e) To the extent that any federal, and/or state securities laws shall
require, the Sellers hereby agree that any shares of the Buyer acquired
pursuant to this Agreement shall be without preference as to assets;
(f) The Buyer is under no obligation to register or seek an exemption under
any federal and/or state securities acts for any shares of the Buyer or to
cause or permit such shares to be transferred in the absence of any such
registration or exemption and that the Sellers herein must hold such shares
indefinitely unless such shares are subsequently registered under any
federal and/or state securities acts or any exemption from registration is
available;
(g) The Sellers have been given: (1) all material books and records of the
Buyer; and (2) all material contracts and documents relating to the
proposed transactions;
(h) The Sellers have satisfied the suitability standards imposed by their
respective state securities laws. The said shares of the Buyer being
acquired from the Buyer have not been registered under federal or state
securities laws. The Sellers acknowledge that the Buyer has not complied
with any state securities laws in seeking an exemption from the
transactions contemplated by this Agreement. Accordingly, the Sellers waive
any and all rights, claims or causes of action they may have against the
Buyer under any state securities laws as a result of the Buyer's failure to
comply with applicable state securities laws.
4.05 Undisclosed Liabilities. ESL PRO has no liabilities or obligations of any
nature, whether absolute, accrued, contingent, or otherwise.
4.06 Absence of Certain Changes. ESL PRO shall not from the date of the balance
sheet (attached hereto as "Exhibit B") and income statements (attached hereto as
"Exhibit C") to be provided have:
(a) Suffered any material adverse change in financial condition, assets,
liabilities, business, or prospects;
(b) Incurred any obligation or liability (whether absolute, accrued,
contingent, or otherwise) other than in the ordinary course of business and
consistent with past
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practices;
(c) Paid any claim or discharged or satisfied any lien or encumbrances or
paid or satisfied any liability (whether absolute, accrued, contingent, or
otherwise) other than liabilities to be shown or reflected in the audited
balance sheets or liabilities incurred in the ordinary course of business
and consistent with past practices;
(d) Permitted or allowed any of their assets, tangible or intangible, to be
mortgaged, pledged, or subjected to any liens or encumbrances;
(e) Written down the value of any inventory or written-off as uncollectible
any notes or accounts receivable or any portion thereof, except for
write-offs of such items in the ordinary course of business;
(f) Cancelled any other debts or claims or waived any rights of substantial
value, or sold or transferred any assets or properties, tangible or
intangible, other than sales of inventory or merchandise made in the
ordinary course of business and consistent with past practice;
(g) Made any capital expenditures or commitments in excess of $2,000 (Two
Thousand Dollars) for additions to property, plant or equipment;
(h) Declared, paid, or set aside for payment to stockholders any dividend
or other distribution in respect of its capital stock or any options
relating thereto or agreed to take any such options relating thereto or
agreed to take any such action;
(i) Made any material change in any method of accounting or accounting
practice.
4.07 Litigation. There are no actions, proceedings, or investigations pending
or, to the knowledge of the Sellers, threatened against ESL PRO, and Sellers
know, or have no reason to know, of any basis for any such actions, proceeding,
or investigation. There is no event or condition of any kind or character
pertaining to the businesses, assets, or prospects of ESL PRO that may
materially and adversely affect such business, assets or prospects.
4.08 Disclosure. ESL PRO have disclosed to the Buyer all facts material to the
assets, prospects, and business of ESL PRO, particularly with respect to ESL
PRO's abilities to develop, market, and sell English as a Second Language
software and hardware, ESL PRO's primary asset. No representation or warranty by
ESL PRO contained in this agreement, and no statement contained in any
instrument, list, certificate, or writing furnished to Buyer pursuant to the
provisions hereof or in connection with the transaction contemplated hereby,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading or necessary in order to provide a prospective purchaser of the
shares of ESL PRO with proper information as to ESL PRO and their affairs.
Stock Exchange Agreement between Perfect Future, Ltd. and ESL Pro Systems, Inc.
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Article V
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
5.01 Survival of Representations. All representations, warranties and agreements
of the parties as contained in this Agreement, or expressly incorporated herein
by reference, shall survive the Closing hereunder and any investigation made by
or on behalf of any party hereto.
5.02 Statements as Representations. All statements contained herein, or in any
certificate or other document delivered pursuant to this Agreement shall be
deemed representations and warranties within the meaning of Section 5.01 hereof.
5.03 Indemnification by the Sellers. Subject to the terms and conditions of this
Article 5, the Sellers (sometimes referred to herein as the "Indemnifying
Party") hereby agree to indemnify, defend and hold harmless Buyer, any
subsidiary, director, officer, employee, agent or representative of Buyer
(collectively the "Indemnitees" and each individually, a "Indemnitee") from and
against all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including, without limitation,
interest, penalties, attorneys' fees and expenses (collectively, "Damages"),
asserted against, imposed upon or incurred by the Indemnitees or any Indemnitee,
resulting from, relating to or arising out of:
(a) any breach of any representation, warranty or agreement of the Sellers
contained in or made pursuant to this Agreement or any facts or
circumstances constituting such a breach; or
(b) any act or omission of the Sellers or any of their respective
affiliates, trustees, officers, employees, agents or representatives
relating to the property, business, operations and activities of ESL PRO
which occurred, existed or failed to occur or exist prior to the Closing;
or
(c) any event, state of facts, circumstance or condition occurring or
existing (or not occurring or not in existence if the absence of such fact,
circumstance or condition forms the basis for Damages) relating to the
property, business, operations or activities of the Sellers before the
Closing.
5.04 Indemnification by Buyer. Subject to the terms and conditions of this
Article 5, Buyer (sometimes referred to herein as the "Indemnifying Party")
hereby agrees to indemnify, defend and hold harmless the Sellers, and any
director, officer, employee, agent or representative of the same (collectively
the "Indemnitees" and each individually, a "Indemnitee") from and against all
demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses, including, without limitation, interest,
penalties, attorneys' fees and expenses (collectively, "Damages"), asserted
against, resulting from, imposed upon or incurred by the Indemnitees or any
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Indemnitee, resulting from, relating to or arising out of:
(a) a breach of any representation, warranty or agreement of Buyer
contained in or made pursuant to this Agreement or any facts or
circumstances constituting such a breach;
(b) any act or omission of
Buyer or any of their respective affiliates, directors, officers,
employees, agents or representatives relating to the property,
business, operations and activities of the Buyer which occurred,
existed or failed to occur or exist subsequent to the Closing; or
(c)
any event, state of facts, circumstance or condition occurring or
existing (or not occurring or existing if the absence of such event,
fact, circumstance or condition forms the basis for Damages) relating
to the property, business, operations or activities of the Buyer
subsequent to the Closing.
5.05 Notice of Indemnification Claims. If a claim is made against any Indemnitee
(as defined in Section 5.03 or 5.04 hereof) and if such Indemnitee believes that
such claim, if successful, would give rise to a right of indemnification
hereunder against the Indemnifying Party (as defined in Section 5.03 or 5.04
hereof) or if any officer of an Indemnitee (an "executive officer") becomes
aware of facts or circumstances establishing that an Indemnitee has experienced
or incurred Damages subject to indemnification hereunder, then such Indemnitee
shall give written notice to the Indemnifying Party of such claim as soon as
reasonably practicable after the Indemnitee has received notice thereof, and in
no event more than 60 days after the Indemnitee has obtained actual knowledge
thereof (provided that failure to give such notice shall not limit the
Indemnifying Party's indemnification obligation hereunder except to the extent
that the delay in giving, or failure to give, the notice adversely affects the
Indemnifying Party's ability to defend against the claim). The Indemnitee
against whom such claim is made shall give the Indemnifying Party an opportunity
to defend such claim, at the Indemnifying Party's own expense and with counsel
selected by the Indemnifying Party and reasonably satisfactory to the
Indemnitee, provided that such Indemnitee shall at all times also have the right
to fully participate in the defense at its own expense. Failure of an
Indemnifying Party to give the Indemnitee written notice of its election to
defend such claim within 20 days after notice thereof shall have been given by
the Indemnitee against whom such claim is made to the Indemnifying Party shall
be deemed a waiver by such Indemnifying Party of its right to defend such claim.
If the Indemnifying Party shall elect not to assume the defense of such claim
(or if such Indemnifying Party shall be deemed to have waived its right to
defend such claim), the Indemnitee against whom such claim is made shall have
the right, but not the obligation, to undertake the sole defense of, and to
compromise or settle, the claim on behalf, for the account, and at the risk and
expense, of the Indemnifying Party (including without limitation the payment by
Indemnifying Party of the attorneys' fees of the Indemnitees). If one or more of
the Indemnifying Parties assume the defense of such claim, the obligation of
such Indemnifying Party hereunder as to such claim shall include taking all
steps necessary in the defense or settlement of such claim. The Indemnifying
Party shall not, in the defense of such claim, consent to the entry of any
judgment or enter into any settlement (except with
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the written consent of the Indemnitee) which does not include as an
unconditional term thereof the giving by the claimant to the Indemnitee against
whom such claim is made of a release from all liability in respect of such claim
except the liability satisfied by the Indemnifying Party on behalf of such
Indemnitee in connection with such judgment or settlement. If the claim is one
that cannot by its nature be defended solely by the Indemnifying Party, then the
Indemnitee shall make available, at the Indemnifying Party's expense, all
information and assistance that the Indemnifying Party may reasonably request.
5.06 Interpretation of Indemnification Rights. Notwithstanding the fact that
certain representations contained in Articles 3 and 4 of the Stock Exchange
Agreement may relate more directly to the basis or subject matter of an
indemnification claim asserted by a party to this Agreement, the parties
acknowledge and agree that even if any Damages asserted in such claim are not
subject to indemnification pursuant to paragraph (a) of Section 5.03 or 5.04, as
the case may be, such indemnification claim is subject to indemnification
hereunder if such claim comes within the scope of paragraphs (b) and (c) of
Section 5.03 or paragraphs (b) and (c) of Section 5.04, as the case may be.
Article VI
MISCELLANEOUS PROVISIONS
6.01 Amendment and Modifications. Subject to applicable law, this Agreement may
be amended, modified and supplemented only by written agreement between the
parties hereto which states that it is intended to be a modification of this
Agreement.
6.02 Waiver of Compliance. Any failure of the Buyer, on the one hand,
or Sellers, on the other, to comply with any obligation, covenant, agreement or
condition herein may be expressly waived in writing by the other party, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
6.03 Notices. All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand or mailed, certified or registered mail with postage
prepaid:
(a) if to the Buyer, to:
Perfect Future, Ltd.
0000 X. Xxxxxxxxxx, Xxxxx 00
Xxx Xxxxx, Xxxxxx 00000
or to such other person or address as the Buyer shall furnish in
writing;
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(b) if to Sellers, to:
ESL Pro Systems Inc.
0000 Xxxxxxxx Xxx, Xxxxx 000
Xxxx, Xxxxxx 00000
or to such other person or address as the Sellers shall furnish in
writing.
6.04 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other party.
6.05 Governing Law. This Agreement and the legal relations among the parties
hereto shall be governed by and construed in accordance with the laws of the
State of Nevada.
6.06 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.
6.07 Headings. The headings of the Sections and Articles of this Agreement are
inserted for convenience only and shall not constitute a part hereof or affect
in any way the meaning or interpretation of this Agreement.
6.08 Entire Agreement. This Agreement, including the Schedules hereto and the
other documents and certificates delivered pursuant to the terms hereof, set
forth the entire agreement and understanding of the parties hereto in respect of
the subject matter contained herein, and supersede all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party hereto.
6.09 Third Parties. Except as specifically set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any person or corporation other than the parties hereto and
their successors or assigns, any rights or remedies under or by reason of this
Agreement.
6.10 Further Assurances. Each of the parties hereto agrees that from time to
time, at the request of any of the other parties hereto and without further
consideration, it will execute and deliver such other documents and take such
other action as such other party may reasonably request in order to consummate
more effectively the transactions contemplated hereby. 6.11 Effect. In the event
any portion of this Agreement is deemed to be null and void under any state or
federal law, all other portions and provisions not deemed void or voidable shall
Stock Exchange Agreement between Perfect Future, Ltd. and ESL Pro Systems, Inc.
Page 12 of 16
be given full force and effect.
6.12 Press Release and Shareholders Communications. On the date of Closing, or
as soon thereafter as practicable Buyer and Sellers shall cause to have promptly
prepared and disseminated a news release concerning the execution and
consummation of the Agreement, such press release and communication to be
released promptly and within the time required by the laws, rules and
regulations as promulgated by the United States Securities and Exchange
Commission, and concomitant therewith to cause to be prepared a full and
complete letter to Buyer's shareholders which shall contain information required
by Regulation 240.14f-1 as promulgated under Section 14(f) as mandated under the
Securities and Exchange Act of 1934, as amended.
6.13 Tax Treatment. The transaction contemplated by this Agreement is intended
to qualify as a "tax-free" reorganization under the provisions of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. The Buyer and the
Sellers acknowledge, however, that each are being represented by their own tax
advisors in connection with this transaction, and neither has made any
representations or warranties to the other with respect to treatment of such
transaction or any part or effect thereof under applicable tax laws, regulations
or interpretations; and no attorney's opinion or tax revenue ruling has been
obtained with respect to the tax consequences of the transactions contemplated
therewith.
6.14 Signatures via Fax. Signatures via fax are sufficient to bind the
respective parties to this Agreement, provided that the original is delivered by
courier to the Sellers' address as set out in Section 6.03(b).
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
Buyer and the Sellers, effective on the date first above written.
--------------------------------------------------------------------------------
BUYER: PERFECT FUTURE LTD.
BY: ------------------------------ BY: -----------------------------
President and Director Director
--------------------------------------------------------------------------------
SELLERS: ESL PRO SYSTEMS INC.
BY: ------------------------------
President and Director
Stock Exchange Agreement between Perfect Future, Ltd. and ESL Pro Systems, Inc.
Page 13 of 16
EXHIBIT A
TO STOCK EXCHANGE AGREEMENT
# to be Issued in
ESL PRO SHARES # Issued in ESL PRO Perfect Future
-------------- ------------------- --------------
Xxxx X. Xxxx 806,950 806,950
Xxxx Xxxxxxx 806,950 806,950
Xxxxxxx Industries Inc. 360,509 360,509
Xxxxxx Xxxxx Xxxx 5,591 5,591
Xx Xxxxxx 5,000 5,000
Xxxxx Xxxxxxxx 2,500 2,500
Xxx Xxxxxxx 10,000 10,000
Xxxxx Xxxxx 2,500 2,500
TOTAL 2,000,000 2,000,000
Stock Exchange Agreement between Perfect Future, Ltd. and ESL Pro Systems, Inc.
Page 14 of 16
EXHIBIT B
TO STOCK EXCHANGE AGREEMENT
ESL PRO SYSTEMS INC.
BALANCE SHEET
as of May 27, 1998
ASSETS
------
CURRENT
Cash $2,000
Total Assets $2,000
LIABILITIES
CURRENT
Liabilities $ 0
---------
Total Liabilities $ 0
---------
SHAREHOLDER'S EQUITY
Share Capital $2,000
Retained Earnings $ 0
---------
Total Shareholder's Equity $2,000
Total Liabilities & Shareholder's Equity $2,000
APPROVED BY THE DIRECTORS:
--------------------------, Director
Stock Exchange Agreement between Perfect Future, Ltd. and ESL Pro Systems, Inc.
Page 15 of 16
EXHIBIT C
TO STOCK EXCHANGE AGREEMENT
ESL PRO SYSTEMS INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
as of May 27, 1998
Revenue $ 0
---------
Gross Profit $ 0
---------
Expenses $ 0
---------
Total Expenses $ 0
Income (Loss) before Income Taxes $ 0
Income Taxes $ 0
---------
Net Income (Loss) for the Year $ 0
Retained Earnings (Deficit), beginning of year $ 0
---------
Retained Earnings (Deficit), end of year $ 0
=========
APPROVED BY THE DIRECTORS:
--------------------------, Director
Stock Exchange Agreement between Perfect Future, Ltd. and ESL Pro Systems, Inc.
Page 16 of 16
