SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report: October 12, 1999
W3 GROUP, INC,
(Exact name of registrant as specified in its charter)
Colorado 33-21546-D 84-1108035
(State or other Commission File (IRS Employer
Jurisdiction of Number)
Identification No.)
444 Madison Avenue, Suite 1710, New York, NY 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 317-0060
Concorde Strategies Group, Inc.
Former Name or Former Address If Changed Since Last Report
Item 1. Change in Control of Registrant.
(a) On September 20,, 1999 the registrant filed Articles of Share
Exchange with the Colorado Secretary of State, reflecting a change in
control of the registrant pursuant to the consummation as of October 1, 1999
of the Agreement and Plan of Share Exchange ("Agreement") between the
registrant and W3 Group, Inc., a Delaware Corporation, dated April 21, 1999.
Pursuant to the Agreement, which was approved by shareholders at a
special meeting of shareholders on August 12, 1999, (i) the registrant has
issued 3,275,000 restricted shares of Common Stock, on a post reverse split
basis, in exchange for all of the outstanding stock of W3 Group, Inc.;
(ii) all outstanding shares of Common Stock were subjected to a 1 for 30
reverse split as of September 30, 1999, such that as of October 1, 1999
there were 3,401,667 shares issued and outstanding; (iii) as of October 1,
1999 the directors and officers of the registrant elected the following
persons to the board of directors and to serve as officers:
Name Position
P. Richard Sirbu Presid
ent
and
the
Chief
Execut
ive
Office
r,
D
i
r
e
c
t
o
r
Thomas C. Hushen Senior Vice President, Chief
Operating Officer,
S
e
c
r
e
t
a
r
y
,
D
i
r
e
c
t
o
r
Robert Gordon Executive Vice President
Martin I. Saposnick Director of Strategic
Planning, and Director
Joseph J. Messina Director
Robert Gordon, William C. Hayde, and David Vigor resigned as Directors
of the registrant; Robert Gordon, the former President of the registrant was
elected Executive Vice President; and Gera Laun, the former Secretary
resigned, effective October 1, 1999.
(iv) the name of the registrant was changed to W3 Group, Inc. ; and
(v) the registrant may change its legal domicile from Colorado to Delaware
at a subsequent date.
Pursuant to the closing of the Agreement, W3 Group, Inc. has become a
wholly-owned subsidiary of the registrant, and the business of the
registrant shall be the acquisition and development of Internet related
companies.
The above five new officers and directors to whom the registrant
issued 2,475,000 (post reverse split) shares of Common Stock had acquired
the shares of W3 Group, Inc. (a Delaware corporation) which were exchanged
for 2,475,000 shares of the registrant, for a total of $24,750 cash (their
personal funds). The balance of 800,000 (post reverse split) shares of
Common Stock were issued by the registrant to minority shareholders in
exchange for 800,000 shares of W3 Group, Inc. (a Delaware corporation). None
of the minority shareholders own more than 1.53 percent of the total shares
outstanding.
(b) In connection with the acquisition of W3 Group, Inc., as of
October 1, 1999, three new directors were elected (Mr. Sirbu, Mr. Hushen,
and Mr. Saposnick), and new shares of common stock were issued by the
registrant to an entity controlled by Mr. Sirbu, and to entities controlled
by Mr. Saposnick and Mr. Messina and to Mr. Hushen, and Mr. Gordon, all of
whom constituted the principal shareholders of W3 Group, Inc. before the
acquisition. The election of such three persons as directors, and the issue
of more stock, constitutes a change in control of the registrant, even
though entities controlled by Mr. Saposnick and Mr. Messina, and by Mr.
Gordon individually, previously owned stock in the registrant. The
percentage of issued and outstanding shares of Common Stock of the
registrant owned by (i) each officer and director of the registrant and the
officers and directors of the registrant as a group, are stated below. All
numbers are stated on a 1 for 30 post-reverse stock split basis (approved
by shareholders on August 12, 1999) which was effected on October 1, 1999.
Name and Address of Number of Shares of
Beneficial Owner Common Stock Owned Percent of Class
Sirbu Enterprises, LLLP a 625,000 18.37%
Colorado Limited Liability
Limited Partnership (1) *
16414 Sandstone Drive
Morrison, CO 90465
Wilmont Holdings Corp.(2) * 630,000 18.52%
444 Madison Avenue, Suite
1710
New York, NY 10022
Lomar Corp.(3) * 625,000 18.37%
444 Madison Avenue, Suite
1710
New York, NY 10022
Thomas C. Hushen* 500,000 14.70%
33278 Bluebell Circle
Evergreen, CO 80439
Robert Gordon * 103,667 3.04%
444 Madison Avenue, Suite
1710
New York, NY 10022
Dunhill Limited (4) * 3,333 0.10%
444 Madison Avenue
New York, NY 10022
Remsen Group, Ltd. (5) * 5,000 0.15%
21 Schermerhorn Street
Brooklyn, NY 11201
Ameristar Group Incorporated 22,500 0.66%
(6) *
444 Madison Avenue
New York, NY 10022
Officers and Directors 2,514,500 73.92%
as a Group (5 Persons)
* Officer and/or Director
(1) Sirbu Enterprises, LLLP, a Colorado Limited Liability Limited
Partnership is privately owned and controlled equally by P. Richard
Sirbu, Chairman and CEO, and President of the Company and his wife
Karen K. Sirbu.
(2) Wilmont Holdings Corp. is a privately held corporation principally
owned and controlled by Joseph J. Messina, a Director of the Company.
(3) Lomar Corp. is privately held corporation principally owned and
controlled by Martin I. Saposnick, a Director of the Company.
(4) Dunhill Limited is a privately held corporation principally owned and
controlled by Joseph J. Messina and Martin I. Saposnick, Directors of
the Company.
(5) Remsen Group, Ltd. is a privately held corporation principally owned
and controlled by Martin I. Saposnick, a Director of the Company.
(6) Ameristar Group Incorporated is a privately held corporation
principally owned and controlled by Joseph J. Messina and Martin I.
Saposnick, Directors of the Company.
Item 2. Acquisition or Disposition of Assets.
As described under Item 1, the registrant has acquired W3 Group, Inc.
as a wholly owned subsidiary. The only assets acquired in connection with
the transaction consist of minimal cash.
The registrant divested itself of its sole operating subsidiary,
L'Abbigliamento, Ltd., under the terms of a Termination Agreement, effective
as of March 31, 1999, and previously reported on Form 10-QSB for the three
months ended March 31, 1999. Pursuant to the terms of such Agreement, which
was approved by shareholders on August 12, 1999, the subsidiary resumed
operations as an independent company and returned to the registrant all of
the Class A Preferred Shares in exchange for all of the subsidiary's capital
stock held by the registrant. The former subsidiary will repay its
outstanding indebtedness to the registrant in the principal amount of
$158,000 in five equal monthly payments of $1,300, plus 55 monthly payments
of $1,700, which payments shall be inclusive of interest at the rate of six
percent per annum, to be followed by a final payment at the end of aforesaid
term equal to the sum of any accrued but unpaid interest due thereon plus
the entire unpaid principal amount.
Item 7. Financial Statements and Exhibits.
(a) and (b) Financial statements of the acquired company, W3 Group,
Inc., and pro forma financial information will be filed by amendment to this
Form 8-K Report before the expiration of 60 days from the date this initial
Form 8-K Report was required to be filed.
(c) Exhibits.
The Agreement and Plan of Share Exchange(1) and Termination
Agreement with L'Abbigliamento, Ltd.(2) are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: October 15, 1999 W3 GROUP, INC.
By: /s/ P. Richard Sirbu
P. Richard Sirbu, Chairman and CEO
EXHIBIT 1 Agreement and Plan of Share Exchange
This Agreement and Plan of Share Exchange ("Agreement"), dated as of
April 21, 1999, is entered into by and between (i) Concorde Strategies
Group, Inc., Inc., a Colorado corporation ("Concorde"); (ii) W3 Group,
Inc., a Delaware corporation ("W3"); and (iii) P. Richard Sirbu, Joseph J.
Messina, Martin I. Saposnick, Thomas C. Hushen, Robert Gordon (hereafter
together the "W3 Shareholders"), with the same business address as W3.
R E C I T A L S
A. The Exchange and Subsequent Reverse Split. As of the Effective Time
(as defined in Section 1.4), the parties intend for Concorde to acquire
all of the 3,275,000 issued and outstanding shares of Common Stock of W3
("W3 Shares"), in exchange for 3,600,000 shares of the Common Stock of
Concorde ("Concorde Shares"). The Concorde Shares shall be voting stock
and shall be restricted from transfer without registration under the
Securities Act of 1933, as amended (the "1933 Act"). The parties
acknowledge that the Concorde Shares shall be issued in individual
certificates, in the names of the current W3 Shareholders and in such
amounts as shall equal with the same proportion of ownership in the
Concorde Shares that each W3 Shareholder currently has with respect to all
W3 Shares presently outstanding. Each W3 Shareholder shall, at or prior
to the time of delivery of such certificates, sign an Investment Letter in
form and content acceptable to counsel for Concorde.
It is understood and agreed that the Board of Directors shall, within 5
business days following the execution of this Agreement, approve a plan
for the restructuring of the capital stock of Concorde as follows:
A. Concorde shall effect a reverse split of its currently issued
and outstanding shares of Common Stock on the basis of 1 new
share for each 30 existing shares so that there will be 120,000
shares of Common Stock issued and outstanding prior to the
Closing herein;
B. The reverse split of Concorde's Common Stock shall also include
a special distribution of post split common stock purchase
warrants (the "Warrants") to all securities holders of all
classes of capital stock and currently outstanding warrants, of
record as of the close of business on April 15, 1999, to be
distributed on the basis of 1 Warrant for each 10 shares of
Common Stock either outstanding or committed to be issued upon
the conversion of the presently outstanding Preferred Shares (or
the outstanding warrants to purchase Preferred Shares) as
follows:
(i) as of April 15, 1999 there were issued and outstanding
3,600,000 shares of Concorde's Common Stock. The holders
of such Common Stock will receive an aggregate of 360,000
Warrants to be distributed in proportion to their ownership
of the Common Stock;
(ii) as of April 15, 1999 there were issued and outstanding
shares of Concorde's Series B Preferred Shares which when
converted would represent an aggregate of 1,175,000 shares
of Common Stock. The holders of such Preferred Shares will
receive an aggregate of 117,500 Warrants to be distributed
in proportion to their ownership of the Preferred Shares;
(iii) as of April 15, 1999 there were issued and outstanding
warrants to purchase shares of Concorde's Series B
Preferred Shares which, when exercised and converted
to common stock, represent an aggregate of 422,000
shares of Concorde's Common Stock. The holders of
such warrants will receive an aggregate of 42,200
Warrants to be distributed in proportion to their
ownership of the warrants to purchase Preferred
Shares;
(iv) the warrants to be so distributed will be for a period of
two (2) years from the date of their issue and are to be
callable at a price of $.001 per warrant by Concorde upon
30 days prior written notice to all holders thereof.
However, the Warrants may only be called after (1) the
Concorde Common Shares have traded at a "bid" price of at
least $7.50 per share for a period of 10 consecutive
trading days or (2) a letter of intent is entered into with
an underwriter for a public offering of Concorde's
securities.
C. The Warrants shall each represent the right to purchase 1 share
of Common Stock at a price of $6.00 per share during the
exercise period, including any notice period in the event the
Concorde elects to call the Warrants as permitted herein;
D. Following the preliminary approval of the foregoing structure of
Concorde's capital stock by the Board of Directors, Concorde
shall take all required action to have the foregoing approved by
its shareholders.
In addition to the approval of the foregoing reverse split and warrant
issuance, Concorde shall also amend its Articles of Incorporation to
change the name to W3 Group, Inc., may at a subsequent date change its
domicile from Colorado to Delaware and to take such additional action as
may be required by Concorde's Articles or By-Laws.
B. Tax Structure of the Transaction. It is the intention of the parties
that for federal income tax purposes the exchange of Concorde Shares for
the W3 Shares as contemplated under this Agreement (hereafter referred to
as the "Exchange") shall qualify as a tax free "reorganization" within the
meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended ("Code").
C. Approvals. The respective Boards of Directors of Concorde and W3 have
determined that this Agreement is in the best interests of Concorde and
W3, as the case may be, and its respective shareholders, and have duly
approved this Agreement and authorized its execution and delivery.
Now, Therefore, in consideration of the premises and of the
representations, warranties, covenants, and agreements set forth herein,
the parties agree as follows:
Article I
The Exchange; Closing; Effective Time
1.1 The Exchange. Subject to the terms and conditions of this Agreement,
at the Effective Time (hereinafter defined), Concorde and W3 and the W3
Shareholders shall consummate the Exchange by which W3 shall become a 100
percent owned subsidiary of Concorde, without change in the separate
existence of W3 as an operating corporation under the laws of the State of
Delaware. The Exchange shall have the effects specified in Section 7-111-
102(4) of the Colorado Business Corporation Act ("CBCA").
1.2 Effective Time. Promptly after all conditions to consummation of this
Agreement have been satisfied, Concorde shall prepare and file Articles of
Share Exchange with the Colorado Secretary of State, pursuant to CBCA
Section 7-111-105. The Effective Time of the Exchange shall be the time
and date of such filing.
1.3 Closing. The closing of the Exchange ("Closing") shall take place at
the offices of W3, 444 Madison Avenue, Suite 1710, New York, New York
10022, at 10:30 a.m. on the first business day on which all the conditions
set forth in this Agreement (other than those that are waived by the party
for whose benefit such conditions exist) can be fulfilled, or at such
other place and/or time and/or on such other date to which the parties
agree. The date upon which the Closing shall occur is herein called the
"Closing Date."
Article II
Articles of Incorporation and Bylaws of Concorde and W3
2.1 Articles of Incorporation. The Articles of Incorporation of Concorde,
and of W3, in existence as of the date of this Agreement shall not be
affected by the Exchange as of the Closing Date. A proposed amendment to
the Articles of Incorporation of Concorde shall have been submitted to,
and approved by, the shareholders of Concorde for approval prior to the
Closing Date, as set forth in Section 7.3(v) of this Agreement. After the
Closing Date, Concorde shall change its name to W3 Group, Inc. or similar
name.
2.2 Bylaws. The Bylaws of Concorde, and of W3, as of the date of this
Agreement shall not be affected by the Exchange.
Article III
Directors and Officers of Concorde and W3
3.1 Directors. At the Closing, the current directors of Concorde shall
elect new directors of Concorde, and thereafter the current directors of
Concorde shall resign. The directors of W3 shall remain in office.
3.2 Officers. The current officers of Concorde shall resign as of the
Closing, and new officers shall be appointed by the new directors of W3.
Article IV
Exchange Consideration; Conversion or Cancellation of Shares in the
Exchange
4.1 Exchange Consideration; Conversion or Cancellation of Shares. At the
Effective Time, by virtue of the Exchange and without any further action
on the part of any W3 Shareholder, except for his execution of this
Agreement prior to the Closing Date, all of the W3 Shares shall be
exchanged for Concorde Shares, at the rate of one Concorde Share for one
W3 Share. From and after the Effective Time, Concorde shall own all the
outstanding W3 Shares.
Article V
Representations and Warranties
5.1 Representations and Warranties of W3 and Concorde. W3 hereby
represents and warrants to Concorde, and Concorde represents and warrants
to W3 that:
a. Corporation Organization and Qualification. Each is a corporation
duly organized and in good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or operated, or the
business conducted by it requires such qualification, except for any such
failure so to qualify or be in good standing which is not reasonably
likely to have a Material Adverse Effect. "Material Adverse Effect" means
an effect which would be materially adverse to the properties, business,
financial condition, results of operations or prospects of W3 or Concorde.
Each corporation has the requisite corporate power and authority to carry
on its business as is now being conducted. Each has made available to the
other complete and correct copies of its Articles of Incorporation and
Bylaws, each as amended to date.
b. Capital Stock.
(i) Concorde. Concorde has an authorized capital stock of
100,000,000 preferred shares, no par value, and 500,000,000
common shares, no par value. There are 940,000 shares of Series
B Convertible Preferred Stock, 337,600 Series B Convertible
Stock Purchase Warrants, and 3,600,000 common shares issued and
outstanding as of the date of this Agreement. There will be
120,000 shares of Common Stock of Concorde issued and
outstanding as of the Closing Date. All issued and outstanding
shares of Common Stock of Concorde have been duly authorized and
validly issued and are fully paid and nonassessable. Concorde
has outstanding no bonds, debentures or other obligations the
holders of which have any right to vote with the shareholders of
Concorde on any matter. Concorde has issued and outstanding no
bonds, debentures or other obligations which are convertible or
exchangeable into or which are exercisable for securities of
Concorde having the right to vote.
(ii) W3. W3 has an authorized capital stock of 10,000,000 shares of
Common Stock, $.01 par value, of which 3,275,000 are issued and
outstanding. All issued and outstanding shares of W3 Common
Stock have been duly authorized and validly issued and are fully
paid and nonassessable. W3 has outstanding no bonds, debentures
or other obligations the holders of which have any right to vote
with the shareholders of W3 on any matter. W3 has issued and
outstanding no bonds, debentures or other obligations which are
convertible or exchangeable into or exercisable for securities
of W3 having the right to vote.
c. Corporate Authority. Subject only to the approval of this Agreement
by the holders of the issued and outstanding shares of Common Stock of W3
and Concorde, W3 and Concorde each has the requisite corporate power and
authority and has taken all corporate action necessary in order to
execute, deliver and perform this Agreement and to consummate the
transactions contemplated herein.
d. Governmental Filings; No Violations.
(i) Other than filings required to be made by Concorde under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
a filing with the Securities and Exchange Commission ("SEC") of a
notice on Form D of the SEC promulgated under the 1933 Act, no
notices, reports or other filings are or will be required to be made
by Concorde or W3 with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by
Concorde or W3 from any governmental or regulatory authority, agency,
court, commission or other entity, domestic or foreign, in connection
with this Agreement, the failure to make or obtain any or all of
which, individually or in the aggregate, is reasonably likely to have
a Material Adverse Effect.
(ii) The execution, delivery and performance by Concorde or by W3 of
this Agreement does not, and the consummation by either corporation
of any of the transactions contemplated herein will not, constitute
or result in (x) a breach or violation of, or a default under, its
Articles of Incorporation or Bylaws, or (y) a breach or violation of,
or acceleration or creation of a security interest or other
encumbrance on its assets pursuant to any material agreement, lease
or other obligation or any law, ordinance, regulation or judgment or
decree or permit to which it is subject.
e. Reports; Financial Statements; No Undisclosed Liabilities.
(i) At the closing, Concorde will deliver to W3 each report, prepared
by it since its inception through December 31, 1998 (the "Reports")
and filed with the SEC. As of their respective dates, the Reports of
Concorde did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. All of the
Concorde financial statements included or incorporated by reference
into its Reports fairly present the financial position of Concorde as
of the date and for the periods set forth therein, in each case in
accordance with generally accepted accounting principles.
(ii) At the closing, W3 will deliver to Concorde unaudited financial
statements prepared by W3 for the period from inception through March
31, 1999. The W3 financial statements fairly present the financial
position of W3 as of the date and for the period set forth therein,
in accordance with generally accepted accounting principles.
(iii) To the knowledge of its executive officers, except as
disclosed in the Reports of Concorde, or in the case of W3 as
disclosed in the W3 financial statements, neither corporation has any
liabilities, whether or not accrued, contingent or otherwise, that,
individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
(iv) Since its inception, Concorde has filed with the SEC on a timely
basis (including any extended filing date allowed by SEC Rule 12b-25)
all required quarterly, annual and interim Reports.
f. Absence of Certain Events and Changes. Except as disclosed in its
Reports filed with the SEC prior to the date of this Agreement, since
December 31, 1998 Concorde has conducted its business only in the ordinary
and usual course, and there has not been any change or development which
is reasonably likely to result in a Material Adverse Effect. W3 has
conducted its business only in the ordinary and usual course, and there
has not been any change or development which is reasonably likely to
result in a Material Adverse Effect.
g. Compliance with Laws. Each has complied with all applicable laws,
regulations, ordinances, judgments, orders or decrees applicable to it or
its business, except where the failure to comply is not reasonably likely
to have a Material Adverse Effect. To the knowledge of its officers, each
has all permits and has made all filings, applications, and registrations
with governmental or regulatory bodies that are required in order to
permit it to carry on business as presently conducted, except for such
failures which are not reasonably likely to have a Material Adverse
Effect.
h. Title to Assets. Each has good and marketable title to its assets
(other than leased property), including intellectual property assets in
the case of W3, except for such defects in title that are not reasonably
likely to have a material adverse effect, and in the case of Concorde
except for such title matters as are disclosed in its Reports.
i. Litigation. In the case of Concorde, except as disclosed in its
Reports filed with the SEC prior to the date hereof, and in the case of
W3, except as disclosed in its financial statements or otherwise as has
been disclosed in writing to Concorde, there are no suits, investigations
or proceedings pending or, to the knowledge of its executive officers,
threatened against it that, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect. Except, in the case
of Concorde, as may be disclosed in its Reports, and in the case of W3, as
may have been disclosed in writing to Concorde, there are no judgments or
outstanding injunctions, or awards against it, its properties or business,
which are reasonably likely to have a Material Adverse Effect.
j. Taxes. All material federal, state, local and foreign tax returns
required to be filed by or on behalf of it have been timely filed or
requests for extensions have been timely filed and any such extension
requests have been granted and not have expired. All such filed returns
are complete and accurate in all material respects. All material taxes
required to be shown on returns filed by it have been paid in full or have
been recorded on its balance sheet and statement of earnings or income (in
accordance with generally accepted accounting principles). As of the date
of this Agreement, in the case of Concorde, there is no outstanding audit
examination, deficiency, or refund litigation with respect to any taxes of
it that, individually or in the aggregate, is reasonably likely to have a
material adverse effect. All material taxes, interest, additions, and
penalties due with respect to completed and settled examinations or
concluded litigation relating to it have been paid in full or have been
recorded on its balance sheet and statement of earnings or income (in
accordance with generally accepted accounting principles).
k. Employee Benefits. The Reports filed by Concorde with the SEC, and
the W3 financial statements, disclose all bonus, deferred compensation,
retirement, employee stock ownership, and other stock plans, as well as
all material employment or similar provisions in any consulting plan.
l. Brokers and Finders. Neither Concorde nor W3 has employed any broker
or finder in connection with the Exchange.
5.2 Additional Representations and Warranties of W3 and the W3
Shareholders. W3 represents and warrants to Concorde that:
a. W3 Business Plan. The W3 Business Plan will be carefully
prepared by the officers and directors of W3 and delivered at the
closing.
b. Each W3 Shareholder represents and warrants to Concorde as
follows:
(i) He is acquiring the Concorde Shares for his account as a
principal, for investment purposes only. No other person has an
indirect beneficial interest in such shares.
(ii) He understands that the offer and sale of the Concorde
Shares, by Concorde, pursuant to this Agreement is intended to
be exempt from registration under the 1933 Act by virtue of
Section 4(2) of the Act.
(iii) He has the financial ability to bear the economic risk of
the investment in Concorde and he has no current need for
liquidity with respect to the investment;
(iv) He has read and understood the W3 Business Plan, this
Agreement, and the Reports of Concorde filed by Concorde with
the SEC. He acknowledges that the Concorde Shares are
"restricted securities" under the 1933 Act, and accordingly
cannot be resold absent registration under the 1933 Act or the
availability of an exemption from such registration, which would
have to be established to the reasonable satisfaction of
Concorde.
Article VI
Covenants
6.1 Interim Operations. Concorde and W3 each covenants and agrees that
from and after the date hereof until the Closing Date, or the termination
of this Agreement, except as the other party otherwise consents or as
otherwise may be contemplated by this Agreement:
a.. W3 will continue to develop and implement its business, as set
forth in the W3 Business Plan to be delivered to Concorde at the
closing.
b. Concorde will continue to maintain existing relations with its
stock transfer agent and audit firm.
c. Neither W3 nor Concorde will (i) amend its Articles of
Incorporation or Bylaws; (ii) split, combine or reclassify any
outstanding capital stock except as contemplated by this Agreement;
(iii) declare, set aside or pay any dividend with respect to its
capital stock; or (iv) repurchase shares of capital stock or
securities convertible or exercisable for capital stock.
d. Neither W3 nor Concorde will not issue any shares of, or
securities convertible or exchangeable for, or options, puts,
warrants, calls, commitments or rights of any kind to acquire any
shares of capital stock.
e. Neither W3 nor Concorde will not sell, mortgage or dispose of
property or assets or encumber any property or assets or incur or
modify any indebtedness or other liability other than in the ordinary
course of business.
f. In the case of Concorde, except as required by agreements
disclosed in its Reports or otherwise disclosed in writing to W3, and
in the case of W3 except as required by agreements disclosed in the
W3 financial statements or otherwise disclosed in writing to
Concorde, grant severance or termination pay to a director or
officer.
6.2 Information Supplied. W3 agrees that none of the information to be
supplied by it to Concorde concerning the W3 Business Plan, or the
officers or directors or holders of more than 5% of the outstanding
securities of W3, or other information relating to W3, for use by Concorde
in filing Reports, shall contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
6.3 Filing of Concorde Form 8-K Report. Concorde agrees to promptly
prepare and file with the SEC a Current Report on Form 8-K upon the
execution and delivery of this Agreement by the parties, including
financial information about W3 and pro forma financial information, as
required by Form 8-K and the rules of the SEC.
6.4 Access. Each party agrees to afford each other party's officers and
other authorized representatives access until the Closing Date to its
properties, books and records, and furnish information concerning its
business, properties and personnel as may be reasonably requested. Each
party will not use information obtained for any purpose unrelated to the
transactions contemplated by this Agreement.
6.5 Notification of Certain Matters. Each party will give prompt notice
to the other party of any event that is reasonably likely to result in any
Material Adverse Effect.
6.6 Publicity. W3 acknowledges Concorde will control distribution to the
public of information concerning this Agreement and the transactions
hereunder.
6.7 Expenses. Each party shall pay its own expenses in connection with
the Exchange.
Article VII
Conditions to Closing, Closing Procedures, and Post-Closing Matters
7.1 Conditions to Each Party's Obligation to Effect the Reorganization.
The respective obligations of Concorde and W3 to consummate the Exchange
are subject to the following conditions.
(a) Any consent or approval of third persons required for or in
connection with this Agreement shall have been obtained.
(b) No material litigation shall have been initiated against either
party.
(c) The representations and warranties of each party set forth in
this Agreement shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date.
7.2 Closing Procedures. At the Closing,
(a) Certificates for the shares of Common Stock of Concorde in the
names of the officers, directors, and certain other persons shall be
delivered to counsel to Concorde.
(b) Certificates of Representations and Warranties by the officers of
W3 shall be delivered to Concorde, and Certificates of
Representations and Warranties by the officers of Concorde shall be
delivered to W3, in each instance confirming the representations and
warranties made by W3 and Concorde as of the date of this Agreement.
(c) Concorde shall deliver to counsel for W3 the resolutions of the
board of directors of Concorde (i) approving the execution and
delivery of this Agreement; (ii) authorizing the issuance of the
Concorde Shares to the shareholders of W3; (iii) authorizing the
reverse stock split and all other action required to be performed
under this Agreement.
(d) Counsel to Concorde shall deliver to W3, and counsel to W3 shall
deliver to Concorde, their respective legal opinions to the effects
that:
(i) Concorde, or W3, is a corporation duly organized and in good
standing in the jurisdiction of its incorporation and all issued
and outstanding shares have been, and in the case of Concorde,
the Concorde Shares to be issued at the Closing Date will be,
issued as fully paid and nonassessable shares of the Common
Stock of the corporation;
(ii) The board of directors of each corporation has duly
authorized this Agreement, and the exhibits hereto, and this
Agreement is a valid agreement and is enforceable against the
corporation (except in the event of proceedings commenced in
bankruptcy or under other insolvency laws). The consummation of
the transactions contemplated by this Agreement will not
conflict with or result in a breach of any of the terms,
conditions, or provisions of, or constitute a default under, the
Articles of Incorporation or Bylaws of the corporation, or any
note, indenture, mortgage, deed of trust or other agreement or
instrument (however characterized or described) to which the
corporation or its property is bound, or any law, order, or
regulation known to such counsel of any agency, arbitration
tribunal or court, domestic or foreign, having jurisdiction over
the corporation or its property.
7.3 Post-Closing Procedures. After the Closing,
(a) Counsel for Concorde shall file the Articles of Exchange with
the Colorado Secretary of State.
(b) Counsel for W3 shall file such instruments or documents with the
Delaware Secretary of State as may be required by the General
Corporation Law of the State of Delaware.
(c) The board of directors of Concorde shall elect new officers for
Concorde, and shall notify the stock transfer agent (Corporate Stock
Transfer, Inc., Denver, Colorado) of the change in directors and
officers of such corporation.
Article VIII
Termination
8.1 Termination by Mutual Consent. This Agreement may be terminated and
the Exchange may be abandoned at any time prior to the Effective Time by
the mutual consent of the boards of directors of W3 and Concorde.
8.2 Termination by Either W3 or Concorde. This Agreement may be
terminated and the reorganization may be abandoned by action of the board
of directors of either W3 or Concorde if the Exchange shall not have been
consummated by June 30, 1999.
8.3 Effect of Termination and Abandonment. If this Agreement is
terminated pursuant to this Article VIII, no party shall have liability or
further obligation to any other party, except for liability resulting from
material and willful breach of any covenant, or the material falsity of
any representation and warranty, contained herein. Each party shall bear
its own expenses in the event of termination absent material and willful
breach of any covenant, or the material falsity of any representation and
warranty, contained herein.
Article IX
Miscellaneous and General
9.1 Survival. Only those agreements and covenants of the parties that by
their express terms apply in whole or in part after the Effective Time,
including but not limited to the Lockup Agreement, shall survive the
Effective Time. All other representations, warranties, agreements and
covenants shall be deemed only to be conditions of the Exchange and shall
not survive the Effective Time.
9.2 Modification or Amendment. At any time prior to the Closing Date,
the parties may modify or amend this Agreement, by written agreement
executed and delivered.
9.3 Waiver of Conditions. The conditions to each party's obligation to
consummate the Exchange are for the sole benefit of such party and may be
waived by such party in whole or in part.
9.4 Counterparts. This Agreement may be executed in any number of
separate counterparts.
9.5 Governing Laws. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
9.6 Notices. Any notice or document to be given hereunder shall be in
writing and shall be deemed to have been duly given on the date of
delivery if delivered personally upon confirmation of receipt, or on the
third business day following the date of mailing if delivered by certified
mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to other instructions
agreed upon.
a. If to W3:
W3 Group, Inc.
16414 Sandstone Drive
Morrison, CO 80465
b. If to Concorde:
Concorde Strategies Group, Inc.
444 Madison Avenue, Suite 1710
New York, New York 10022
9.7 Entire Agreement. This Agreement (a) constitutes the entire
agreement and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, among the parties,
with respect to the subject matter hereof, and (b) shall not be assignable
by operation of law or otherwise.
9.8 Captions and Exhibits. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of
this Agreement, and shall not be deemed to limit or otherwise affect any
of the provisions hereof. The specific terms of any exhibit to this
Agreement shall control the subject matter thereof, and shall supersede
the description of the effect or operation any exhibit contained in the
principal text of this Agreement.
9.9 Specific Performance. In the event of actual or threatened default
in or breach of any term of this Agreement, the party which is or is to be
thereby aggrieved shall have the right of specific performance and
injunctive relief giving effect to its rights under this Agreement, in
addition to other rights and remedies at law or in equity. All such
rights and remedies shall be cumulative. The parties agree that the
remedies at law for any breach or threatened breach, including monetary
damages, are inadequate compensation for any loss, and that any defense in
any action for specific performance that a remedy at law would be adequate
is waived.
9.10 Severability. If any provision of this Agreement or the application
thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or otherwise not enforceable,
the remaining provisions hereof, or the application of such provision to
persons or circumstances other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated thereby, so long as the
economic or legal substance of the transaction contemplated hereby is not
affected in any manner substantially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to
agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
9.11 No Third Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to confer any benefit, right or remedies
on any person except for the parties hereto.
9.12 Legal Proceedings. In the event of litigation hereunder, the
prevailing party shall be entitled to recover, as part of the judgment on
the dispute, reasonable attorneys' fees, and all costs of investigation
and all court costs, from the adverse party or parties.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the corporate parties hereto, and by the
other parties to this Agreement, on the date first above written.
W3 Group, Inc. Concorde Strategies Group, Inc.
/s/ Thomas C. Hushen /s/ Robert Gordon
By: Thomas C. Hushen By: Robert Gordon
Chief Operating Officer President
W3 Shareholders
/s/ P. Richard Sirbu
P. Richard Sirbu
/s/ Thomas C. Hushen
Thomas C. Hushen
/s/ Joseph J. Messina
Joseph J. Messina
/s/ Martin I. Saposnick
Martin I. Saposnick
/s/ Robert Gordon
Robert Gordon
Amendment to Agreement and Plan of Share Exchange
An Agreement and Plan of Share Exchange ("Agreement"), dated April 21,
1999, was entered into by and between (i) Concorde Strategies Group, Inc.,
Inc., a Colorado corporation ("Concorde"); (ii) W3 Group, Inc., a Delaware
corporation ("W3"); and (iii) P. Richard Sirbu, Joseph J. Messina, Martin
I. Saposnick, Thomas C. Hushen, Robert Gordon (hereafter together the "W3
Shareholders").
The Boards of Directors of Concorde and W3 have agreed to the following
amendment to said Agreement:
Article VIII, 8.2 Termination by Wither W3 or Concorde. This Agreement
may be terminated and the reorganization may be abandoned by action of the
board of directors of either W3 or Concorde if the exchange shall have not
been consummated by August 31, 1999.
All other terms and conditions of the Agreement remain the same.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the duly authorized officers of the corporate parties hereto, and by the
other parties to this Agreement, on June 15, 1999.
W3 Group, Inc. Concorde Strategies Group, Inc.
/s/ Thomas C. Hushen /s/ Robert Gordon
By: Thomas C. Hushen By: Robert Gordon
Chief Operating Officer President
W3 Shareholders
/s/ P. Richard Sirbu
P. Richard Sirbu
/s/ Thomas C. Hushen
Thomas C. Hushen
/s/ Joseph J. Messina
Joseph J. Messina
/s/ Martin I. Saposnick
Martin I. Saposnick
/s/ Robert Gordon
Robert Gordon
Amendment to Agreement and Plan of Share Exchange
An Agreement and Plan of Share Exchange ("Agreement"), dated April 21,
1999, was entered into by and between (i) Concorde Strategies Group, Inc.,
Inc., a Colorado corporation ("Concorde"); (ii) W3 Group, Inc., a Delaware
corporation ("W3"); and (iii) P. Richard Sirbu, Joseph J. Messina, Martin
I. Saposnick, Thomas C. Hushen, Robert Gordon (hereafter together the "W3
Shareholders").
The Boards of Directors of Concorde and W3 have agreed to the following
amendment to said Agreement, as amended on June 15, 1999:
Article VIII, 8.2 Termination by Wither W3 or Concorde. This Agreement
may be terminated and the reorganization may be abandoned by action of the
board of directors of either W3 or Concorde if the exchange shall have not
been consummated by October 31, 1999.
All other terms and conditions of the Agreement remain the same.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the duly authorized officers of the corporate parties hereto, and by the
other parties to this Agreement, on August 26, 1999.
W3 Group, Inc. Concorde Strategies Group, Inc.
/s/ Thomas C. Hushen /s/ Robert Gordon
By: Thomas C. Hushen By: Robert Gordon
Chief Operating Officer President
W3 Shareholders
/s/ P. Richard Sirbu
P. Richard Sirbu
/s/ Thomas C. Hushen
Thomas C. Hushen
/s/ Joseph J. Messina
Joseph J. Messina
/s/ Martin I. Saposnick
Martin I. Saposnick
/s/ Robert Gordon
Robert Gordon
EXHIBIT 2 TERMINATION AGREEMENT
AGREEMENT, made and entered into this 5th day of May, 1999, by and
between:
CONCORDE STRATEGIES GROUP, LTD. ("Concorde"), a corporation existing under
the laws of Delaware, with its principal office located at 444 Madison
Avenue, Suite 1710, New York, NY 10022 hereinafter also referred to as the
"Company"; and
L'ABBIGLIAMENTO, INC., a corporation existing under the laws of the state
of New York with an address at 55 Plaza Road, Lawrence, NY 11559,
hereinafter "L' Abbigliamento"; and
MICHELINA VISTA, ("Shareholder") with an address at 116-17 149th Avenue,
Ozone Park, NY 11420, all of whom are sometime referred to as "the
Parties."
W I T N E S S E T H
WHEREAS, pursuant to the terms of a certain Agreement and Plan of
Reorganization dated March 19, 1996, Concorde acquired 100% of the capital
voting stock of L'Abbigliamento from Shareholder in exchange for 100% of
the Company's Class A Convertible Redeemable Preferred Stock (the
"Preferred Shares"); and
WHEREAS, The Company completed the aforesaid acquisition on September 16,
1996 on which date the Preferred Shares were duly issued to Shareholder;
and
WHEREAS, The Company and L'Abbigliamento have mutually agreed that it
would be in the best interest of all the parties hereto, and of the
shareholders of Concorde, to reverse the acquisition of L'Abbigliamento by
Concorde upon the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Cancellation of Acquisition. Management of Concorde and
L'Abbigliamento have mutually elected to rescind and cancel the
acquisition of L'Abbigliamento by Concorde effective the date hereof.
2. Return of Shares. Upon the execution of this Agreement it is
understood and agreed that Shareholder shall return to Concorde 100% of
the Preferred Shares in exchange for which Concorde shall deliver to
Shareholder 100% of the L'Abbigliamento capital stock held by it.
3. Repayment of Loan. The parties hereto acknowledge and confirm that,as of
the date hereof, L'Abbigliamento is indebted to Concorde in the
principal amount of $158,000 (the "Loan"). It is understood and agreed
that the Loan shall be repaid as follows:
A. Term. The Loan shall be repaid by L'Abbigliamento in sixty (60)
monthly installments as follows: five (5) equal monthly payments
of $1300.00, plus fifty five (55) equal monthly installments of
$1700.00, which payments shall be inclusive of interest at the
rate of six (6%) percent per annum, to be followed by a final
payment at the end of the aforesaid term equal to the sum of any
accrued but unpaid interest due thereon plus the entire unpaid
principal amount.
B. Application of Payments. All payments made by L'Abbigliamento
shall be first applied to the payment of any late charges, next
to the payment of accrued interest through the date of payment
with the balance thereof to be applied to the reduction of the
principal amount.
C. Payment Date. The parties agree that the aforesaid monthly
payments shall be due and payable on the first business day of
each month, commencing on May 1, 1999 and continuing monthly
thereafter until the end of the term hereof at which time the
entire remaining unpaid principal amount shall be due and
payable.
D. Grace Period and Late Charges. L'Abbigliamento shall have a
grace period of ten (10) days following the due date within
which to make each monthly payment. Thereafter, in its
discretion, Concorde may serve upon L'Abbigliamento a written
notice advising that the payment due has not been made and
providing that unless all past due payments are made within five
(5) days after receipt of said notice the entire unpaid
principal amount shall be due and payable.
4. Other Obligations. The parties acknowledge that Concorde remains
liable pursuant to a guarantee of payment made to State Bank in
connection with certain outstanding loans that are being paid according
to their terms by L'Abbigliamento (the "Bank Loan"). L'Abbigliamento
and Shareholder hereby confirm and agree to make all payments required
to be made pursuant to the Bank Loan and hereby agree to indemnify and
hold Concorde free and harmless from and against all liability, damages
or losses of whatsoever nature and kind related to the performance by
L'Abbigliamento of its obligations under the Bank Loan.
5. Law, Service of Process and Waiver of Trial by Jury. This Agreement
is governed by the laws of the State of New York. Any legal action or
proceeding arising out of or relating to this Agreement may be
instituted only in the Courts of the state of New York or of the United
States of America for New York, and the parties hereto hereby
irrevocably submits to the jurisdiction of each such court in any such
action or proceeding. The parties further each consent and agree that
service of process in any such action may be made by certified or
registered mail addressed to each party at the address set forth herein,
or as may be changed from time to time in writing, return receipt
requested. In any action or proceeding relating to the rights or
obligations under this Agreement, or for the collection of any
payment(s) due hereunder, the parties hereby waives the right to a trial
by jury.
6. Warranties, Representations and Covenants By The Company. To induce
the L'Abbigliamento and Shareholder to enter into this Agreement and
with full knowledge that the warranties, representations and covenants
herein are being relied upon in entering this Agreement, the Company
warrants, represents and covenants that:
6.1 Organization. Concorde is validly organized and exists in good
standing under the laws of the State of Delaware. It has full
corporate power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now owns.
6.2 Qualification to Do Business. Concorde is qualified as a foreign
corporation in good standing in each state in which such
qualification is necessary except where the failure to be so
qualified would not materially adversely affect its business,
operations, properties, assets or condition (financial or
otherwise);
6.3 Litigation. Concorde is not involved in any pending litigation
or governmental investigation or proceeding, and to the best of its
knowledge, no material litigation, claim, assessment or
governmental investigation or proceeding is threatened which might
reasonably be expected to result in any material liability to
Concorde or which questions the validity of this Agreement, or
might reasonably be expected to otherwise adversely affect
Concorde, or of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement;
6.4 Compliance With Law. Concorde has complied with all state,
federal and local laws in connection with its formation, issuance
of securities, organization, capitalization and operation, and no
contingent liabilities have been threatened, or claims made or
threatened with respect thereto, including claims for violation of
any state or federal securities laws and there is no basis for any
such claim or liability except in all such cases for violations and
claims which individually or in the aggregate would not materially
adversely affect Concorde or the conduct of its business;
6.5 Corporate Authority. Concorde has full power, authority and
legal right to enter into this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of
this Agreement, the consummation of the transaction contemplated
hereby and the compliance by Concorde with the provisions hereof
will not: (i) conflict with or result in a breach of any provisions
of, or constitute a material default (or an event which, with
notice or lapse of time or both, would constitute a material
default) under, or result in the creation of any material lien,
security interest, charge or encumbrance upon any of the material
property or assets of Concorde under any of the terms, conditions
or provision of its Certificate of Incorporation or By-Laws or any
material note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to which it is bound; or (ii)
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Concorde or any of its properties or
assets.
6.6 Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is
required in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions
contemplated hereby.
7. Warranties, Representations and Covenants By The Company. To induce
Concorde to enter into this Agreement and with full knowledge that the
warranties, representations and covenants herein are being relied upon
in entering this Agreement, L'Abbigliamento warrants, represents and
covenants that:
7.1 Organization. L'Abbigliamento is validly organized and exists
in good standing under the laws of the State of New York. It has
full corporate power and authority to carry on its business as it
is now being conducted and to own the properties and assets it now
owns.
7.2 Qualification to Do Business. L'Abbigliamento is qualified as a
foreign corporation in good standing in each state in which such
qualification is necessary except where the failure to be so
qualified would not materially adversely affect its business,
operations, properties, assets or condition (financial or
otherwise);
7.3 Litigation. L'Abbigliamento is not involved in any pending
litigation or governmental investigation or proceeding, and to the
best of its knowledge, no material litigation, claim, assessment
or governmental investigation or proceeding is threatened which
might reasonably be expected to result in any material liability
or which questions the validity of this Agreement, or might
reasonably be expected to otherwise adversely affect
L'Abbigliamento, or of any action taken or to be taken pursuant to
or in connection with the provisions of this Agreement;
7.4 Compliance With Law. L'Abbigliamento has complied with all
state, federal and local laws in connection with its formation,
issuance of securities, organization, capitalization and operation,
and no contingent liabilities have been threatened, or claims made
or threatened with respect thereto, including claims for violation
of any state or federal securities laws and there is no basis for
any such claim or liability except in all such cases for violations
and claims which individually or in the aggregate would not
materially adversely affect L'Abbigliamento or the conduct of its
business;
7.5 Corporate Authority. L'Abbigliamento has full power, authority
and legal right to enter into this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of
this Agreement, the consummation of the transaction contemplated
hereby and the compliance by it with the provisions hereof will
not: (i) conflict with or result in a breach of any provisions of,
or constitute a material default (or an event which, with notice
or lapse of time or both, would constitute a material default)
under, or result in the creation of any material lien, security
interest, charge or encumbrance upon any of the material property
or assets of L'Abbigliamento under any of the terms, conditions or
provision of its Certificate of Incorporation or By-Laws or any
material note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to which it is bound; or (ii)
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to L'Abbigliamento or any of its properties
or assets.
7.6 Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is
required in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions
contemplated hereby.
8. Saving Clause. In case any one or more of the provisions contained
in this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
If, moreover, any one or more provisions contained in this Agreement
shall for any reason be held to be excessively broad as to duration
or geographic scope, activity or subject matter, including but not
limited to any rate of interest being deemed to be excessive or
beyond the highest such rate permitted by applicable law, then, in
such event, it shall be construed by limiting and reducing it so as
to be enforceable to the extent compatible with the applicable law as
it shall then appear.
9. CHANGES IN WRITING. This Agreement may be changed only in writing
and only if the writing is signed by the party to be charged with
such change or modification.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CONCORDE STRATEGIES GROUP, LTD.
By: _/s/ Robert Gordon____
Robert Gordon, President
L'ABBIGLIAMENTO, INC.
By: /s/ Paolo Vista ______
Paolo Vista, President
/s/ Michelina Vista ____
MICHELINA VISTA