RAKO CAPITAL CORPORATION
XXX XXXXX XXXXXXX XXXXXX
XXXXXXXXXXXX, XXXXXXXX 00000
December 30, 2002
Osprey Investments II, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn. D. Xxxxxx Xxxxxx, Jr., President
Re: Contribution of Shares
Gentlemen:
By this agreement Osprey Investments II, Inc. ("Osprey") agrees to
contribute to the Company shares of its common stock, par value $0.001 per share
(the "Shares") in the amount set forth next to Osprey's name on the attached
Schedule A, in accordance with, and subject to, the terms and conditions
described below.
1.0 OSPREY'S REPRESENTATIONS
Osprey hereby represents, warrants and acknowledges to, and agrees
with, the Company as follows:
1.1 Osprey is the principal shareholder of RAKO Capital Corporation
(the "Company") and has access to all of the Company's books and records and
information relevant to its decision to contribute the Shares on the terms of
this Agreement. Osprey has carefully considered and has, to the extent Osprey
believes such discussion necessary, discussed with its own professional legal,
tax, accounting, and financial advisers the suitability of contributing the
Shares in view of Osprey's particular tax, legal and financial situation.
1.2 Osprey acknowledges that all documents, records, and books
pertaining to its decision to contribute the Shares which Osprey has requested
have been made available for its inspection or inspection by its attorney(s),
accountant(s), or adviser(s).
1.3 Osprey and/or its adviser(s) has/have had a reasonable opportunity
to ask questions of, and receive answers from, a person or persons acting on
behalf of the Company concerning the Company's business and financial affairs
and the Shares and all such questions have been answered to Osprey's full
satisfaction.
1.4 Osprey or its investment advisor, as the case may be, have such
knowledge and experience in financial, tax, legal, and business matters so as to
enable Osprey to utilize the
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information made available to it in connection with its contribution of the
Shares, and to make an informed decision with respect thereto.
1.5 Osprey agrees to surrender for cancellation certificates
representing presently outstanding shares registered in its name (as set forth
in the attached Schedule A) and, if the number of shares represented by that
certificate exceeds the number being surrendered for cancellation, to accept a
new certificate for the number of shares retained by Osprey after contributing
the agreed number of Shares (as set forth in the attached Schedule A). Osprey
acknowledges that the certificates representing the Shares shall be stamped or
otherwise imprinted with a legend substantially in the following form and that
the Company may issue stop transfer instructions to the transfer agent of such
securities:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED
FOR SALE, SOLD, OR OTHERWISE DISPOSED OF OR ASSIGNED FOR VALUE,
DIRECTLY OR INDIRECTLY, NOR MAY ANY OF THE FOREGOING SECURITIES BE
TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT REGISTRATION OF
SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL AND STATE
SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM.
SUCH COMPLIANCE (AT THE OPTION OF THE CORPORATION) SHALL BE EVIDENCED
BY AN OPINION OF COUNSEL TO THE HOLDER THEREOF, IN FORM AND SUBSTANCE
ACCEPTABLE TO THE CORPORATION, THAT NO VIOLATION OF SUCH REGISTRATION
PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT."
1.6 Osprey will not sell or otherwise transfer any Shares without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), or applicable state securities laws or an exemption therefrom. Osprey
understands that the Shares have not been registered under the Securities Act or
under the securities laws of any state. Osprey represents that it has acquired
and are holding the Shares for its own account, for investment, and not with a
view to resale or distribution, except in compliance with the Securities Act.
Osprey has not offered or sold any portion of the Shares held by it nor does it
have any present intention of dividing such Shares with others or of selling,
distributing, or otherwise disposing of any portion of such Shares either
currently or after the passage of a fixed or determinable period of time or upon
the occurrence or non-occurrence of any predetermined event or circumstance in
violation of the Securities Act.
1.7 Osprey agrees to indemnify and hold harmless the Company, and each
officer, director, employee, agent, representative or control person thereof,
who is or may be a party to, or is or may be threatened to be made a party to,
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, by reason of, or arising
from, any actual or alleged misrepresentation or misstatement of facts or
omission to represent or state facts made or alleged to have been made by Osprey
to the Company or any agent or representative thereof, or omitted or alleged to
have been omitted by Osprey, concerning Osprey's authority to contribute the
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Shares, including, without limitation, any such misrepresentation, misstatement,
or omission contained in any document submitted by Osprey against losses,
liabilities, and expenses (including reasonable attorneys' fees, judgments,
fines, and amounts paid in settlement) actually and reasonably incurred by the
Company, or other such indemnified person in connection with such action, suit,
or proceeding, for which the Company, or other such indemnified person, has not
otherwise been reimbursed.
2.0 UNDERSTANDINGS.
Osprey understands, acknowledges, and agrees with the Company as
follows:
2.1 Osprey's contribution of the Shares to the Company and acceptance
of a new certificate for the Shares retained by it is intended to be exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), and the Florida Securities Act, which is in part dependent upon the
truth, completeness, and accuracy of the statements made by Osprey.
2.2 Insofar as indemnification for liabilities under the Securities Act
may be permitted to directors, officers or controlling persons of the Company,
the Company has been informed that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable to such extent.
2.3 IN MAKING ITS DECISION TO CONTRIBUTE THE SHARES, OSPREY MUST RELY
ON ITS OWN EXAMINATION OF THE COMPANY AND THE CONTRIBUTION, INCLUDING THE MERITS
AND RISKS INVOLVED. THE SHARES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
3.0 MISCELLANEOUS.
3.1 Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
or sent by registered mail, return receipt requested, addressed: (i) if to the
Company, at RAKO Capital Corporation., Xxx Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxx Xxxxxxxx, Secretary, with a copy to Reitler
Xxxxx LLC, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxx X. Xxxxxx, Esq. or (ii) if to Osprey, at the address appearing on the
Company's records, or at such other address as may have been specified by
written notice given in accordance with this Section 3.1.
3.2 Failure of Osprey or the Company to exercise any right or remedy
under this Agreement or any other agreement between the Company and Osprey, or
otherwise, or delay by Osprey or the Company in exercising such right or remedy,
will not operate as a waiver thereof. No waiver by either party will be
effective unless and until it is in writing and signed by the party to be bound.
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3.3 This Agreement shall be governed by, and enforced and construed in
all respects in accordance with, the laws of the State of Nevada, as such laws
are applied by Nevada courts to agreements entered into, and to be performed in,
Nevada by and between residents of Nevada, and shall be binding upon the parties
and their legal representatives, successors, and assigns.. If any provision of
this Agreement is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to the minimum extent
required to conform with such statute or rule of law. Any provision hereof that
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
3.4 This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof.
3.5 This Agreement may be executed in two or more counterparts, each of
which shall be an original but all of which together shall constitute one
instrument.
4.0 EXECUTION
Please confirm Osprey's agreement to the terms of this Agreement by
signing in the place indicated below.
Very truly yours,
RAKO CAPITAL CORPORATION.
By: /s/ Xxxx Xxxxx
------------------
Xxxx Xxxxx, CEO
Accepted and agreed:
OSPREY INVESTMENTS II, INC.
By: /s/ D. Xxxxxx Xxxxxx, Jr.
--------------------------------
D. Xxxxxx Xxxxxx, Jr., President
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Schedule A
to
Contribution Agreement
Shareholder Present Holdings Contribution Balance
----------- ---------------- ------------ -------
Osprey Investments II, Inc. 4,619,162 2,619,162 2,000,000
