EXHIBIT 1.1
EXCHANGE AGREEMENT
BETWEEN
SUNBELT EXPLORATION, INC.,
A NEVADA CORPORATION,
IEXALT, INC.,
A TEXAS CORPORATION,
AND
THE SHAREHOLDERS OF IEXALT, INC.
DATED AUGUST _____, 1999
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TABLE OF CONTENTS
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ARTICLES PAGE
ARTICLE I REPRESENTATIONS, COVENANTS, AND
WARRANTIES OF iEXALT AND THE iEXALT PRINCIPAL
1.01 Organization 1
1.02 Capitalization 1
1.03 Subsidiaries and Predecessor Corporations 2
1.04 Financial Statements 2
1.05 Information 2
1.06 Options and Warrants 3
1.07 Absence of Certain Changes or Events 3
1.08 Title and Related Matters 3
1.09 Litigation and Proceedings 4
1.10 Contracts 4
1.11 Material Contract Defaults 5
1.12 No Conflict With Other Instruments 5
1.13 Governmental Authorizations 5
1.14 Compliance With Laws and Regulations 5
1.15 Insurance 5
1.16 Approval of Agreement 5
1.17 Material Transactions or Affiliations 5
1.18 Labor Relations 6
1.19 iExalt Schedules 6
ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES
OF iEXALT SHAREHOLDERS
2.01 Ownership of iExalt Shares 7
ARTICLE III REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF SUNBELT AND SUNBELT PRINCIPAL
3.01 Organization 8
3.02 Capitalization 8
3.03 Subsidiaries and Predecessor Corporations 8
3.04 Financial Statements 8
3.05 Information 9
3.06 Options and Warrants 9
3.07 Absence of Certain Changes or Events 9
3.08 Title and Related Matters 9
ARTICLES PAGE
3.09 Litigation and Proceedings 9
3.10 Contracts 9
3.11 No Conflict With Other Instruments 10
3.12 Governmental Authorizations 10
3.13 Compliance With Laws and Regulations 10
3.14 Insurance 10
3.15 Approval of Agreement 10
3.16 Material Transactions or Affiliations 10
3.17 Employment Matters 10
3.18 Periodic Reports 10
3.19 Sunbelt Schedules 11
ARTICLE IV
[RESERVED]
ARTICLE V PLAN OF EXCHANGE
5.01 The Exchange 11
5.02 Anti-Dilution 11
5.03 Appointment of New Directors 12
5.04 Closing 12
5.05 Closing Events 12
5.06 Termination 12
ARTICLE VI SPECIAL COVENANTS
6.01 Stockholder Meeting of Sunbelt 13
6.02 Access to Properties and Records 13
6.03 Delivery of Books and Records 14
6.04 Special Covenants and Representations
Regarding the Exchanged Sunbelt Stock 14
6.05 Third Party Consents and Certificates 14
6.06 Actions Prior to Closing 14
6.07 Indemnification 15
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS
OF SUNBELT EXPLORATION, INC.
7.01 Accuracy of Representations 15
7.02 Officer's Certificates 15
7.03 No Material Adverse Change 16
7.04 Good Standing 16
7.05 Other Items 16
ARTICLES PAGE
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF
iEXALT AND THE iEXALT SHAREHOLDERS
8.01 Accuracy of Representation 16
8.02 Stockholder Approval 16
8.03 Officer's Certificate 17
8.04 No Material Adverse Change 17
8.05 Good Standing 17
8.06 Other Items 17
ARTICLE IX MISCELLANEOUS
9.01 Governing Law 17
9.02 Notices 17
9.03 Attorneys' Fees 18
9.04 Confidentiality 18
9.05 Schedules; Knowledge 18
9.06 Third Party Beneficiaries 18
9.07 Entire Agreement 18
9.08 Survival; Termination 18
9.09 Counterparts 18
9.10 Amendment or Waiver 18
EXHIBITS
Exhibit "A" Letter of Representation
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement"), is
entered into as of this ______ day of August, 1999, by and among Sunbelt
Exploration, Inc., a Nevada corporation (hereinafter referred to as "Sunbelt");
iExalt, Inc., a Texas corporation (hereinafter referred to as "iExalt"); those
persons identified in Schedule A-1 attached hereto who are the beneficial owners
of 100% of the outstanding capital stock of iExalt,(the iExalt Shareholders"),
Hunter M. A. Carr, officers and shareholders of iExalt (the "iExalt Principal"),
and Roger Lund, an officer of Sunbelt (the "Sunbelt Principal"), upon the
following premises:
PREMISES
This Agreement provides for the acquisition by Sunbelt of all of the
issued and outstanding shares of iExalt solely in exchange for voting shares of
Sunbelt, on the terms and conditions hereinafter provided, all for the purpose
of effecting a so-called "tax-free" reorganization pursuant to Sections
368(a)(1)(B) of the Internal Revenue Code of 1954, as amended.
AGREEMENT
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF IEXALT
AND THE IEXALT PRINCIPAL
As an inducement to, and to obtain the reliance of, Sunbelt, iExalt and
the iExalt Principal make the following representations and warranties, as
modified by the iExalt Schedule (as hereinafter defined), which iExalt
represents as accurate and complete in all material respects:
Section 1.01 ORGANIZATION. iExalt is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Texas, iExalt has
the corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the iExalt Schedules are complete and
correct copies of the articles of incorporation, as amended, and bylaws of
iExalt as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof will not, violate any
provision of iExalt's articles of incorporation or bylaws. iExalt has taken all
action required by laws, its articles of incorporation, its bylaws, or otherwise
to authorize the execution and delivery of this Agreement. iExalt has full
power, authority, and legal right and has taken all action required by law, its
certificate of incorporation, bylaws, and otherwise to consummate the
transactions herein contemplated.
Section 1.02 CAPITALIZATION. The authorized capitalization of iExalt
consists of 50,000,000 shares of common stock, par value $0.001 per share, of
which 18,393,666 shares are currently issued and
outstanding, and 2,000,000 shares are reserved for issuance pursuant to a
private placement offering currently being undertaken, and certain asset
acquisitions which are in progress. All issued and outstanding shares are
legally issued, fully paid, and non-assessable and not issued in violation of
the pre-emptive or other rights of any person.
Section 1.03 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. iExalt does not
have any subsidiaries and does not own, beneficially or of record, any shares of
any other corporation.
Section 1.04 FINANCIAL STATEMENTS.
(a) Included in the iExalt Schedules is the unaudited balance sheet
of iExalt at July 31, 1999, together with an unaudited statement of
operations from inception through July 31, 1999.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles. The iExalt balance sheet
presents fairly as of its date the financial condition of iExalt. IExalt
did not have, as of the date of such balance sheet, except as and to the
extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in a
balance sheet or the notes thereto, prepared in accordance with generally
accepted accounting principles, and all assets reflected therein are
properly reported and present fairly the value of the assets of iExalt in
accordance with generally accepted accounting principles. The statements
of income, stockholders' equity, and changes in financial condition
reflect fairly the information required to be set forth therein by
generally accepted accounting principles.
(c) iExalt has filed all state, federal, and local income tax
returns required to be filed by it from inception to the date hereof.
Included in the iExalt Schedules are true and correct copies of the
federal income tax returns of iExalt filed since the date of inception.
None of such federal income tax returns have been examined by the Internal
Revenue Service. Each of such income tax returns reflects the taxes due
for the period covered thereby, except for amounts which, in the
aggregate, are immaterial.
(d) iExalt does not owe any unpaid federal, state, county, local, or
other taxes (including any deficiencies, interest, or penalties) through
June 30, 1999, for which iExalt may be liable in its own right or as a
transferee of the assets of, or as a successor to, any other corporation
or entity. Furthermore, except as accruing in the normal course of
business, iExalt does not own any accrued and unpaid taxes to date of this
Agreement.
(e) The books and records, financial and otherwise, of iExalt are in
all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) iExalt has good and marketable title to its assets and, except
as set forth in the iExalt Schedules or the financial statements of iExalt
or the notes thereto, has no material contingent liabilities, direct or
indirect, matured or unmatured.
Section 1.05 INFORMATION. The information concerning iExalt set forth in
this Agreement and in the iExalt Schedules is complete and accurate in all
material respects and does not contain any untrue
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statement of a material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which they were made,
not misleading.
Section 1.06 OPTIONS OR WARRANTS. Except as set forth in the iExalt
Schedules, there are no existing options, warrants, calls, or commitments of any
character relating to the authorized and unissued iExalt common stock, except
options, warrants, calls or commitments, if any, to which iExalt is not a party
and by which it is not bound.
Section 1.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
this Agreement or the iExalt Schedules, since July 31, 1999:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of iExalt; or (ii)
any damage, destruction, or loss to iExalt (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of iExalt;
(b) iExalt has not (i) amended its certificate of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment
of dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem,
any of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of
iExalt; (iv) made any material change in its method of management,
operation, or accounting; (v) entered into any other material transaction;
(vi) made any accrual or arrangement for payment of bonuses or special
compensation of any kind or any severance or termination pay to any
present or former officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers or
directors or any of its employees whose monthly compensation exceeds
$5,000; or (viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement made to, for, or with its officers,
directors, or employees;
(c) iExalt has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary
course of business; (ii) paid any material obligation or liability
(absolute or contingent) other than current liabilities reflected in or
shown on the most recent iExalt balance sheet, and current liabilities
incurred since that date in the ordinary course of business; (iii) sold or
transferred, or agreed to sell or transfer, any of its assets, properties,
or rights (except assets, properties, or rights not used or useful in its
business which, in the aggregate have a value of less than $5,000), or
canceled, or agreed to cancel, any debts or claims (except debts or claims
which in the aggregate are of a value of less than $5,000); (iv) made or
permitted any amendment or termination of any contract, agreement, or
license to which it is a party if such amendment or termination is
material, considering the business of iExalt; or (v) issued, delivered, or
agreed to issue or deliver any stock, bonds or other corporate securities
including debentures (whether authorized and unissued or held as treasury
stock); and
(d) to the best knowledge of iExalt, iExalt has not become subject
to any law or regulation which materially and adversely affects, or in the
future may adversely affect, the business, operations, properties, assets,
or condition of iExalt.
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Section 1.08 TITLE AND RELATED MATTERS. iExalt has good and marketable
title to all of its properties, inventory, interests in properties, and assets,
real and personal, which are reflected in the most recent iExalt balance sheet
or acquired after that date (except properties, interests in properties, and
assets sold or otherwise disposed of since such date in the ordinary course of
business), free and clear of all liens, pledges, charges, or encumbrances except
(a) statutory liens or claims not yet delinquent; (b) such imperfections of
title and easements as do not and will not materially detract from or interfere
with the present or proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties; and (c) as described in the iExalt Schedules. Except as set forth in
the iExalt Schedules, iExalt owns, free and clear of any liens, claims,
encumbrances, royalty interests, or other restrictions or limitations of any
nature whatsoever, any and all products it is currently manufacturing, including
the underlying technology and data, and all procedures, techniques, marketing
plans, business plans, methods of management, or other information utilized in
connection with iExalt's business. Except as set forth in the iExalt Schedules,
no third party has any right to, and iExalt has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, tradenames, or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling, or finding, would
have a materially adverse affect on the business, operations, financial
condition, income, or business prospects of iExalt or any material portion of
its properties, assets, or rights.
Section 1.09 LITIGATION AND PROCEEDINGS. There are no actions, suits,
proceedings, or investigations pending or, to the knowledge of iExalt after
reasonable investigation, threatened by or against iExalt or affecting iExalt or
its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind. iExalt does not have any knowledge of any default on its part with respect
to any judgment, order, writ, injunction, decree, award, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default.
Section 1.10 CONTRACTS.
(a) Except as included or described in the iExalt Schedules, there
are no material contracts, agreements, franchises, license agreements, or
other commitments to which iExalt is a party or by which it or any of its
assets, products, technology, or properties are bound;
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which iExalt is a party or by which its properties
are bound and which are material to the operations of iExalt taken as a
whole are valid and enforceable by iExalt in all respects, except as
limited by bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally;
(c) iExalt is not a party to or bound by, and the properties of
iExalt are not subject to, any contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, or in the future may (as far as iExalt can now foresee)
materially and adversely affect, the business, operations, properties,
assets, or condition of iExalt; and
(d) Except as included or described in the iExalt Schedules or
reflected in the most
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recent iExalt balance sheet, iExalt is not a party to any oral or written
(i) contract for the employment of any officer or employee which is not
terminable on 30 days or less notice; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or retirement
plan, agreement, or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract, or
indenture relating to the borrowing of money; (iv) guaranty of any
obligation, other than one on which iExalt is a primary obligor, for the
borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations, which, in the aggregate do
not exceed more than one year or providing for payments in excess of
$5,000 in the aggregate; (vi) collective bargaining agreement; (vii)
agreement with any present or former officer or director of iExalt; or
(viii) contract, agreement, or other commitment involving payments by it
of more than $5,000 in the aggregate.
Section 1.11 MATERIAL CONTRACT DEFAULTS. iExalt is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets, or condition of iExalt and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which iExalt has not taken adequate steps to prevent such a default
from occurring.
Section 1.12 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust, or other material contract, agreement, or instrument to which iExalt is a
party or to which any of its properties or operations are subject.
Section 1.13 GOVERNMENTAL AUTHORIZATIONS. iExalt has all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof. Except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, or registration, declaration, or filing with,
any court or other governmental body is required in connection with the
execution and delivery by iExalt of this Agreement and the consummation by
iExalt of the transactions contemplated hereby.
Section 1.14 COMPLIANCE WITH LAWS AND REGULATIONS. iExalt has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of iExalt or except to the extent that noncompliance would
not result in the incurrence of any material liability for iExalt.
Section 1.15 INSURANCE. All the insurable properties of iExalt are
insured in their full replacement value against all risks customarily insured
against by persons operating similar properties in localities where such
properties are located and under valid and enforceable policies by insurers of
recognized responsibility. Such policy or policies containing substantially
equivalent coverage will be outstanding on the date of consummation of the
transactions contemplated by this Agreement.
Section 1.16 APPROVAL OF AGREEMENT. The board of directors of iExalt has
authorized the execution and delivery of this Agreement by iExalt, has approved
the transactions contemplated hereby, and approved the submission of this
Agreement and the transactions contemplated hereby to the
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shareholders of iExalt for their approval with the recommendation that the
reorganization be accepted.
Section 1.17 MATERIAL TRANSACTIONS OR AFFILIATIONS. Set forth in the
iExalt Schedules is a description of every material contract, agreement, or
arrangement between iExalt and any predecessor and any person who was at the
time of such contract, agreement, or arrangement an officer, director, or person
owning of record, or known by iExalt to own beneficially, 5% or more of the
issued and outstanding common stock of iExalt and which is to be performed in
whole or in part after the date hereof or which was entered into not more than
three years prior to the date hereof. In all of such transactions, the amount
paid or received, whether in cash, in services, or in kind, is, had been during
the full term thereof, and is required to be during the unexpired portion of the
term thereof, no less favorable to iExalt than terms available from otherwise
unrelated parties in arm's length transactions. Except as disclosed in the
iExalt Schedules or otherwise disclosed herein, no officer, director, or 5%
shareholder of iExalt has, or has had since inception of iExalt, any interest,
direct or indirect, in any material transaction with iExalt. There are no
commitments by iExalt, whether written or oral, to lend any funds to, borrow any
money from, or enter into any other material transaction with, any such
affiliated person.
Section 1.18 LABOR RELATIONS. iExalt has not had a work stoppage resulting
from labor problems. To the knowledge of iExalt, no union or other collective
bargaining organization is organizing or attempting to organize any employee of
iExalt.
Section 1.19 IEXALT SCHEDULES. iExalt has delivered to Sunbelt the
following schedules, which are collectively referred to as the "iExalt
Schedules" and which consist of separate schedules dated as of the date of
execution of this Agreement and instruments and data as of such date, all
certified by the chief executive officer of iExalt as complete, true, and
correct:
(a) a schedule containing complete and correct copies of the
certificate of incorporation, as amended, and bylaws of iExalt in effect
as of the date of this Agreement;
(b) a schedule containing the financial statements of iExalt
identified in paragraph 1.04(c);
(c) a schedule containing the federal income tax returns of iExalt
identified in paragraph 1.04(c);
(d) a schedule containing a list indicating the name and address of
each shareholder of iExalt together with the number of shares owned by him
or her;
(e) a schedule containing a description of all real property owned
by iExalt, together with a description of every mortgage, deed of trust,
pledge, lien, agreement, encumbrance, claim, or equity interest of any
nature whatsoever in such real property;
(f) a schedule containing true and correct copies of all contracts,
agreements, or other instruments to which iExalt is a party or by which it
or its properties are bound, together with a description of all contracts,
leases, agreements, and other instruments, whether or not deemed material,
including oral agreements, to which iExalt is a party or by which it or
its properties are bound, specifically including all contracts,
agreements, or arrangements referred to in section 1.17;
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(g) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which
iExalt carries on or proposes to carry on its business (except those
which, in the aggregate, are immaterial to the present or proposed
business of iExalt);
(h) a schedule listing the accounts receivable and notes and other
obligations receivable of iExalt as of July 31, 1999, or that arose
thereafter other than in the ordinary course of business of iExalt,
indicating the debtor and amount, and classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, set offs, reimbursements, discounts, or
other adjustments which are in the aggregate material and due to or
claimed by such creditor;
(i) a schedule listing the accounts payable and notes and other
obligations payable of iExalt as of July 31, 1999, or that arose
thereafter other than in the ordinary course of the business of iExalt,
indicating the creditor and amount, classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, setoffs, reimbursements, discounts, or
other adjustments, which in the aggregate are material and due or payable
to iExalt respecting such obligations;
(j) a schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of iExalt since July 31, 1999, required to be provided pursuant
to section 1.07 hereof;
(k) a schedule containing a copy of the board of directors' and
shareholders' minutes of iExalt since inception; and
(l) a schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the iExalt
Schedules by sections 1.01 through 1.18.
iExalt shall cause the iExalt Schedules and the instruments and data
delivered to Sunbelt hereunder to be updated after the date hereof up to and
including the Closing Date.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF IEXALT SHAREHOLDERS
As an inducement to, and to obtain reliance of Sunbelt, the iExalt
Shareholders represent and warrant as follows:
Section 2.01 OWNERSHIP OF IEXALT SHARES. Each iExalt shareholder is, to
the best of the iExalt Principals' knowledge, the legal and beneficial owner of
the number of iExalt shares set forth opposite its name at the foot of this
agreement, free and clear of any claims, charges, equities, liens, security
interests, and encumbrances whatsoever, and each such shareholder has full
right, power, and authority to transfer, assign, convey, and deliver its iExalt
shares; and delivery of such shares at the closing will convey to Sunbelt good
and marketable title to such shares free and clear of any claims, charges,
equities, liens, security interests, and encumbrances whatsoever.
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ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF
SUNBELT AND SUNBELT PRINCIPAL
As an inducement to, and to obtain the reliance of iExalt and the iExalt
Shareholders, Sunbelt and the Sunbelt Principal make the following
representations and warranties, as modified by the Sunbelt Schedules (as
hereinafter defined), which Sunbelt represents and warrants as accurate and
complete in all material respects:
Section 3.01 ORGANIZATION. Sunbelt is a corporation duly organized,
validly existing, and in good standing under the laws of the state of Nevada,
and has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, and there is no
jurisdiction in which it is not qualified in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification. Included in the Sunbelt Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation and bylaws of
Sunbelt as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of Sunbelt's articles of incorporation or
bylaws. Sunbelt has taken all action required by law, its articles of
incorporation, its bylaws, or otherwise to authorize the execution and delivery
of this Agreement, and Sunbelt has full power, authority, and legal right and
has taken all action required by law, its articles of incorporation, bylaws, or
otherwise to consummate the transactions herein contemplated.
Section 3.02 CAPITALIZATION. Sunbelt's authorized capitalization consists
of 100,000,000 shares of common stock, par value $.001, of which 24,805,000
shares are issued and outstanding. All issued and outstanding shares are legally
issued, fully paid, and non-assessable and not issued in violation of the
pre-emptive or other rights of any person.
Section 3.03 SUBSIDIARIES. Sunbelt does not have any subsidiaries and does
not own, beneficially or of record, any shares of any other corporation.
Section 3.04 FINANCIAL STATEMENTS.
(a) Included in the Sunbelt Schedules are the audited balance sheets
of Sunbelt as of August 31, 1998 and 1997, and the related audited
statements of operations, stockholders' equity, and changes in financial
position for the two fiscal years ended August 31, 1998 together with the
notes to such statements and the opinion of Jones, Jensen & Company,
independent certified public accountants, with respect thereto, and the
unaudited balance sheet of Sunbelt as of May 31, 1999, and the related
statement of operations for the nine months ended May 31, 1999;
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved. The Sunbelt balance sheets present fairly
as of their respective dates the financial condition of Sunbelt. Sunbelt
did not have as of the date of any such Sunbelt balance sheet, except as
and to the extent reflected or reserved against therein, any liabilities
or obligations (absolute or contingent) which should be reflected in a
balance sheet or the notes thereto prepared in accordance with generally
accepted accounting principles, and all assets reflected therein are
properly reported and present fairly the value of the assets of Sunbelt,
in accordance with generally accepted accounting principles. The
statements of operations, stockholders' equity, and changes in financial
position reflect fairly the
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information required to be set forth therein by generally accepted
accounting principles.
(c) Sunbelt has no liabilities with respect to the payment of any
federal, state, county, local, or other taxes (including any deficiencies,
interest, or penalties), except for taxes accrued but not yet due and
payable.
(d) Sunbelt has filed all state, federal, or local income tax
returns required to be filed by it from inception to the date hereof.
Included in the Sunbelt Schedules are true and correct copies of the
federal income tax returns of Sunbelt filed since the date of inception.
None of such federal income tax returns have been examined by the Internal
Revenue Service. Each of such income tax returns reflects the taxes due
for the period covered thereby, except for amounts which, in the
aggregate, are immaterial.
(e) The books and records, financial and otherwise, of Sunbelt are
in all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) Sunbelt has good and marketable title to its assets and, except
as set forth in the Sunbelt Schedules or the Financial Statements of
Sunbelt or the notes thereto, has no material contingent liabilities,
direct or indirect, matured or unmatured.
Section 3.05 INFORMATION. The information concerning Sunbelt set forth in
this Agreement and the Sunbelt Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 3.06 OPTIONS OR WARRANTS. There are no existing options, warrants,
calls, or commitments of any character relating to authorized and unissued stock
of Sunbelt.
Section 3.07ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as described
herein or in the Sunbelt Schedules, since the date of the most recent Sunbelt
balance sheet, there has not been any change in the business, operations,
properties, assets, or condition of Sunbelt (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of Sunbelt.
Section 3.08 TITLE AND RELATED MATTERS. Sunbelt has good and marketable
title to all of its properties, interest in properties, and assets, real and
personal, which are reflected in the Sunbelt balance sheet or acquired after
that date (except properties, interest in properties, and assets sold or
otherwise disposed of since such date in the ordinary course of business), free
and clear of all liens, pledges, charges, or encumbrances except (a) statutory
liens or claims not yet delinquent; (b) such imperfections of title and
easements as do not and will not materially detract from or interfere with the
present or proposed use of the properties subject thereto or affected thereby or
otherwise materially impair present business operations on such properties; and
(c) as described in the Sunbelt Schedules.
9
Section 3.09 LITIGATION AND PROCEEDINGS. There are no actions, suits, or
proceedings pending or, to the knowledge of Sunbelt, threatened by or against or
affecting Sunbelt, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind. Sunbelt does not have any knowledge of any default on its part with
respect to any judgment, order, writs, injunction, decree, award, rule, or
regulation of any court, arbitrator, or governmental agency or instrumentality.
Section 3.10 CONTRACTS. Sunbelt is not a party to any material contract,
agreement, or other commitment.
Section 3.11 NO CONFLICT WITH OTHER INSTRUMENTS. The consummation of the
transactions contemplated by this Agreement will not result in the breach of any
term or provision of, or constitute a default under, any indenture, mortgage,
deed of trust, or other material agreement or instrument to which Sunbelt is a
party or to which it or any of its assets or operations are subject.
Section 3.12 GOVERNMENTAL AUTHORIZATIONS. Sunbelt has all licenses,
franchises, permits, and other government authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, or registration, declaration, or filing with,
any court or other governmental body is required in connection with the
execution and delivery by Sunbelt of this Agreement and the consummation by
Sunbelt of the transactions contemplated hereby.
Section 3.13 COMPLIANCE WITH LAWS AND REGULATIONS. During the past two
years, Sunbelt has complied with all applicable statutes and regulations of any
federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets, or conditions of Sunbelt or
except to the extent that noncompliance would not result in the incurrence of
any material liability.
Section 3.14 INSURANCE. Sunbelt owns no insurable properties and carries
no casualty or liability insurance.
Section 3.15 APPROVAL OF AGREEMENT. The board of directors of Sunbelt has
authorized the execution and delivery of this Agreement by Sunbelt and has
approved this Agreement and the transactions contemplated hereby.
Section 3.16 MATERIAL TRANSACTIONS OF AFFILIATIONS. Set forth in the
Sunbelt Schedules is a description of every material contract, agreement, or
arrangement between Sunbelt and any predecessor and any person who was at the
time of such contract, agreement, or arrangement an officer, director, or person
owning of record, or known by Sunbelt to own beneficially, 5% or more of the
issued and outstanding common stock of Sunbelt and which is to be performed in
whole or in part after the date hereof or which was entered into not more than
three years prior to the date hereof. In all of such transactions, the amount
paid or received, whether in cash, in services, or in kind, is, had been during
the full term thereof, and is required to be during the unexpired portion of the
term thereof, no less favorable to Sunbelt than terms available from otherwise
unrelated parties in arm's length transactions. Except as disclosed in the
Sunbelt Schedules or otherwise disclosed herein, no officer, director, or 5%
shareholder of Sunbelt has, or has had since inception of Sunbelt, any interest,
direct or indirect, in any material transaction with
10
Sunbelt. There are no commitments by Sunbelt, whether written or oral, to lend
any funds to, borrow any money from, or enter into any other material
transaction with, any such affiliated person.
Section 3.17 EMPLOYMENT MATTERS. Sunbelt has no employees other than its
executive officers.
Section 3.18 PERIODIC REPORTS. Sunbelt has made all filings under the
Securities Exchange Act of 1934, as amended, for the period from May 31, 1998 to
the present, and all such filings are accurate and complete in all material
respects. There have been no material changes in the business, or assets of
Sunbelt since May 31, 1999.
Section 3.19 SUNBELT SCHEDULES. Sunbelt has delivered to iExalt the
following schedules, which are collectively referred to as the "Sunbelt
Schedules," which are dated the date of this Agreement, all certified by an
officer to be complete, true, and accurate:
(a) a schedule containing complete and accurate copies of the
articles of incorporation and bylaws of Sunbelt as in effect as of the
date of this Agreement;
(b) a schedule containing a copy of the federal income tax returns
of Sunbelt identified in paragraph 3.04(d);
(c) a schedule setting forth the description of any material adverse
change in the business, operations, property, assets, or condition of
Sunbelt since May 31, 1999, required to be provided pursuant to section
3.07 hereof; and
(d) a schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the Sunbelt
Schedules by sections 3.01 through 3.18.
Sunbelt shall cause the Sunbelt Schedules and the instruments and data
delivered to iExalt hereunder to be updated after the date hereof up to and
including the Closing Date.
ARTICLE IV
[RESERVED]
ARTICLE V
PLAN OF EXCHANGE
Section 5.01 THE EXCHANGE. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 5.04), each
of the iExalt Shareholders hereby agrees to assign, transfer, and deliver to
Sunbelt, free and clear of all liens, pledges, encumbrances, charges,
restrictions, or known claims of any kind, nature, or description, the number of
shares of common stock of iExalt set after his signature at the foot of this
Agreement, in the aggregate constituting all of the issued and outstanding
shares of common stock of iExalt, or 18,393,666 shares, and Sunbelt agrees to
acquire such shares on such date by issuing and delivering in exchange therefor
solely shares of Sunbelt restricted common stock, par value $0.001, in the
amount of one (1) share of Sunbelt for each outstanding share of iExalt, after
giving effect to a reverse split of the Sunbelt stock described in Section 6.01
below, or an aggregate amount of 18,393,666 shares of Sunbelt common stock, or
approximately 88% of the 20,874,166
11
shares of Sunbelt common stock to be issued and outstanding on the Closing Date
(after such reverse split) (the "Exchanged Sunbelt Stock.") At the Closing, each
of the iExalt Shareholders shall, on surrender of his certificate or
certificates representing such iExalt shares to the registrar and transfer
agent, be entitled to receive a certificate or certificates evidencing shares of
the Exchanged Sunbelt Stock as provided herein. Upon the consummation of the
transaction contemplated herein, all shares of capital stock of iExalt shall be
held by Sunbelt.
Section 5.02 ANTI-DILUTION. The number of shares of Exchanged Sunbelt
Stock shall be appropriately adjusted to take into account any other stock
split, stock dividend, reverse stock split, recapitalization, or similar change
in the Sunbelt common stock, par value $0.001, which may occur between the date
of the execution of this Agreement and the date of delivery of such shares.
Section 5.03 APPOINTMENT OF NEW DIRECTORS. In connection with the Closing
of the transactions contemplated by this Agreement, the existing directors of
Sunbelt shall resign, seriatim, and shall appoint the designers of iExalt as
directors to fill the vacancies created thereby, to serve until the next annual
stockholders' meeting of Sunbelt and their successors shall have been elected
and qualified.
Section 5.04 CLOSING. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date"), within ten (10) days from the date of
Sunbelt Shareholders' meeting, described in Section 6.01 below. Such Closing
shall take place at a mutually agreeable time and place.
Section 5.05 CLOSING EVENTS. At the Closing, each of the respective
parties hereto shall execute, acknowledge, and deliver (or shall cause to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings, or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby.
Section 5.06 TERMINATION.
(a) This Agreement may be terminated by the board of directors of
either Sunbelt or iExalt at any time prior to the Closing Date if:
(i) there shall be any actual or threatened action or
proceeding before any court or any governmental body which shall
seek to restrain, prohibit, or invalidate the transactions
contemplated by this Agreement and which, in the judgment of such
board of directors, made in good faith and based on the advice of
its legal counsel, makes it inadvisable to proceed with the exchange
contemplated by this Agreement;
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required
to consummate such transactions or in the judgment of such board of
directors, made in good faith and based on the advice of counsel,
there is substantial likelihood that any such approval will not be
obtained or will be obtained only on a condition or conditions which
would be unduly burdensome, making it inadvisable to proceed with
the exchange; or
(iii) there shall have been any change after the date of the
latest balance sheets of Sunbelt and iExalt, respectively, in the
assets, properties, business, or financial
12
condition of Sunbelt or iExalt, which could have a materially
adverse affect on the value of the business of Sunbelt or iExalt
respectively, except any changes disclosed in the Sunbelt or iExalt
Schedules, as the case may be, dated as of the date of execution of
this Agreement.
In the event of termination pursuant to this paragraph (a) of section 5.06, no
obligation, right, or liability shall arise hereunder, and each party shall bear
all of the expenses incurred by it in connection with the negotiation, drafting,
and execution of this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated at any time prior to the
Closing by action of the board of directors of Sunbelt if iExalt shall
fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations or
warranties of iExalt contained herein shall be inaccurate in any material
respect. If this Agreement is terminated pursuant to this paragraph (b) of
section 5.06 this Agreement shall be of no further force or effect, and no
obligation, right, or liability shall arise hereunder, except that iExalt
shall bear its own costs as well as the costs incurred by Sunbelt in
connection with the negotiation, preparation, and execution of this
Agreement and qualifying the offer and sale of securities contemplated
hereby for exemption from the registration requirements of state and
federal securities laws.
(c) This Agreement and the Plan of Exchange may be terminated at any
time prior to the Closing by action of the board of directors of iExalt if
Sunbelt shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of Sunbelt contained herein shall be
inaccurate in any material respect. If this Agreement is terminated
pursuant to this paragraph (c) of section 5.06, this Agreement shall be of
no further force or effect, and no obligation, right, or liability shall
arise hereunder, except that Sunbelt shall bear its own costs as well as
the costs of iExalt incurred in connection with the negotiation,
preparation, and execution of this Agreement.
ARTICLE VI
SPECIAL COVENANTS
Section 6.01 STOCKHOLDER MEETING OF SUNBELT. As soon as practicable
following the execution of this Agreement, and prior to the Closing, Sunbelt
shall call a special meeting of its shareholders to approve the following
proposals:
(a) the authorization and approval of this Agreement and the
transactions contemplated thereby;
(b) the election of Jack Tompkins, Hunter Carr, Don Sapaugh,
Jonathan C. Gilchrist, and Morris Chapman, as directors of Sunbelt;
(c) the adoption of amended and restated articles of incorporation
of Sunbelt, to change its name to "iExalt, Inc." or such name as may be
deemed appropriate, to change the authorized capitalization of Sunbelt,
and to make such other changes as deemed appropriate by the parties;
13
(d) to approve a recapitalization, or reverse split, of the issued
and outstanding shares of Sunbelt, for the purpose of reducing the issued
and outstanding shares of Sunbelt to approximately 2,480,500 shares;
(e) to approve Sunbelt's 1998 Stock Option Plan and Directors' Stock
Option Plan; and
(f) to take such other actions as the directors may determine are
appropriate.
Section 6.02 ACCESS TO PROPERTIES AND RECORDS. Sunbelt and iExalt will
each afford to the officers and authorized representatives of the other full
access to the properties, books, and records of Sunbelt or iExalt as the case
may be, in order that each may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other, and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of Sunbelt or iExalt, as the
case may be, as the other shall from time to time reasonably request.
Section 6.03 DELIVERY OF BOOKS AND RECORDS. At the Closing, Sunbelt shall
deliver to iExalt the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of Sunbelt now in the
possession of Sunbelt or its representatives.
Section 6.04 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE EXCHANGED
SUNBELT STOCK. The consummation of this Agreement and the transactions herein
contemplated, including the issuance of the Exchanged Stock to the shareholders
of iExalt as contemplated hereby, constitutes the offer and sale of securities
under the Securities Act and applicable state statutes. Such transaction shall
be consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, INTER ALIA, upon the
circumstances under which the iExalt shareholders acquire such securities. In
connection with reliance upon exemptions from the registration and prospectus
delivery requirements for such transactions, at the Closing, iExalt shall cause
to be delivered, and the shareholders shall deliver to Sunbelt, letters of
representation in the form attached hereto as Exhibit "A."
Section 6.05 THIRD PARTY CONSENTS AND CERTIFICATES. Sunbelt and iExalt
agree to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein and therein contemplated.
Section 6.06 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the Sunbelt or iExalt Schedules or as permitted
or contemplated by this Agreement, Sunbelt and iExalt respectively, will
each:
(i) carry on its business in substantially the same manner as
it has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by it;
14
(iv) perform in all material respects all of its obligation
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(v) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain
its relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and state
laws and all rules, regulations, and orders imposed by federal or
state governmental authorities.
(b) From and after the date of this Agreement until the Closing
Date, neither Sunbelt nor iExalt will:
(i) make any change in their articles of incorporation or
bylaws, except as provided herein;
(ii) take any action described in section 1.07 in the case of
iExalt, or in section 3.07, in the case of Sunbelt (all except as
permitted therein or as disclosed in the applicable party's
schedules); or
(iii) enter into or amend any contract, agreement, or other
instrument of any of the types described in such party's schedules,
except that a party may enter into or amend any contract, agreement,
or other instrument in the ordinary course of business involving the
sale of goods or services.
Section 6.07 INDEMNIFICATION.
(a) iExalt and the iExalt Principals hereby agree to indemnify
Sunbelt and each of the officers, agents and directors of Sunbelt as of
the date of execution of this Agreement against any loss, liability,
claim, damage, or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any claim
whatsoever), to which it or they may become subject arising out of or
based on any inaccuracy appearing in or misrepresentation made under
Article I of this Agreement. The indemnification provided for in this
paragraph shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
(b) Sunbelt and the Sunbelt Principal hereby agree to indemnify
iExalt and each of the officers, agents and directors of iExalt as of the
date of execution of this Agreement against any loss, liability, claim,
damage, or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever),
to which it or they may become subject arising out of or based on any
inaccuracy appearing in or misrepresentation made under Article III of
this Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated
hereby and termination of this Agreement.
(c) All obligations under this Section shall terminate after
December 31, 1999.
15
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SUNBELT
The obligations of Sunbelt under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 7.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by iExalt and the iExalt Shareholders in this Agreement were
true when made and shall be true at the Closing Date with the same force and
effect as if such representations and warranties were made at and as of the
Closing Date (except for changes therein permitted by this Agreement), and
iExalt and the iExalt Shareholders shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by iExalt and the iExalt Shareholders prior to or at the Closing. Sunbelt
shall be furnished with a certificate, signed by a duly authorized officer of
iExalt and dated the Closing Date, to the foregoing effect.
Section 7.02 OFFICER'S CERTIFICATES. Sunbelt shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of iExalt to the effect that no litigation, proceeding, investigation,
or inquiry is pending or, to the best knowledge of iExalt threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement, or, to the extent not disclosed in
the iExalt Schedules, by or against iExalt which might result in any material
adverse change in any of the assets, properties, business, or operations of
iExalt.
Section 7.03 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business, or operations of iExalt nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of iExalt.
Section 7.04 GOOD STANDING. Sunbelt shall have received a certificate of
good standing from the Secretary of State of the state of Texas or other
appropriate office, dated as of a date within ten days prior to the Closing Date
certifying that iExalt, Inc., is in good standing as a corporation in the state
of Texas and has filed all tax returns required to have been filed by it to date
and has paid all taxes reported as due thereon.
Section 7.05 OTHER ITEMS.
(a) Sunbelt shall have received uniform commercial code certificates
from the appropriate state of local authority or agency for each county
and state in which any personal property of iExalt with a value in excess
$5,000 is situated, dated as of the Closing Date, to the effect that there
are no liens on such personal property, other than those disclosed in the
iExalt Schedules.
(b) Sunbelt shall have received a shareholders list of iExalt
containing the name, address, and number of shares held by each iExalt
shareholder as of the date of Closing certified by an executive officer of
iExalt as being true, complete, and accurate.
(c) Sunbelt shall have received such further documents,
certificates, or instruments relating to the transactions contemplated
hereby as Sunbelt may reasonably request.
16
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF IEXALT
AND THE IEXALT SHAREHOLDERS
The obligations of iExalt and the iExalt Shareholders under this Agreement
are subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section 8.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Sunbelt in this Agreement were true when made and shall be
true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Sunbelt shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Sunbelt prior to or at the
Closing. iExalt shall have been furnished with a certificate, signed by a duly
authorized executive officer of Sunbelt and dated the Closing Date, to the
foregoing effect.
Section 8.02 STOCKHOLDER APPROVAL. The stockholders of Sunbelt shall have
approved this Agreement, the transactions contemplated hereby, and the other
matters described in Section 5.01.
Section 8.03 OFFICER'S CERTIFICATE. iExalt shall have been furnished with
a certificate dated the Closing Date and signed by a duly authorized executive
officer of Sunbelt to the effect that no litigation, proceeding, investigation,
or inquiry is pending or, to the best knowledge of Sunbelt threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement.
Section 8.04 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business, or operations of Sunbelt nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of Sunbelt.
Section 8.05 GOOD STANDING. iExalt shall have received a certificate of
good standing from the Secretary of State of the state of Nevada or other
appropriate office, dated as of a date within ten days prior to the Closing Date
certifying that Sunbelt is in good standing as a corporation in the state of
Nevada and has filed all tax returns required to have been filed by it to date
and has paid all taxes reported as due thereon.
Section 8.06 OTHER ITEMS.
(a) iExalt shall have received a shareholders list of Sunbelt,
current at least ten (10) days prior to Closing, containing the name,
address and number of shares held by each such Sunbelt Shareholder
certified by an executive officer of Sunbelt as being true, complete and
accurate.
(b) iExalt shall have received such further documents, certificates,
or instruments relating to the transactions contemplated hereby as iExalt
may reasonably request.
17
ARTICLE IX
MISCELLANEOUS
Section 9.01 GOVERNING LAW. This Agreement shall be governed by, enforced,
and construed under and in accordance with the laws of the United States of
America and, with respect to matters of state law, with the laws of Nevada.
Section 9.02 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Sunbelt, to: Sunbelt Exploration, Inc.
2612 East Kentucky Avenue
Salt Lake City, UT 84117
With copies to: James C. Lewis, Esq.
Lewis Law Offices
10 West 100 South, Suite 600
Salt Lake City, UT 84101
If to iExalt, to: iExalt, Inc.
4301 Windfern
Houston, Texas 77041
With copies to: Thomas C. Pritchard, Esq.
Brewer & Pritchard
1111 Bagby, Suite 2450
Houston, Texas 77002
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed, or
telegraphed.
Section 9.03 ATTORNEY'S FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 9.04 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the transactions contemplated by this Agreement
have been consummated, it and its representatives will hold in strict confidence
all data and information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director, or employee, or
from any books or records or from personal inspection, os such other party, and
shall not use such data or information or disclose the same to others, except
(i) to the extent such data or information is published, is a matter of public
knowledge, or is required by law to be published; and (ii) to the extent that
such data or information must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.
Section 9.05 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
18
Section 9.06 THIRD PARTY BENEFICIARIES. This contract is solely between
Sunbelt and iExalt, and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor, or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
Section 9.07 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof, including
This Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
Section 9.08 SURVIVAL; TERMINATION. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated.
Section 9.09 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 9.10 AMENDMENT OR WAIVER. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be
waived or the time for performance hereof may be extended by a writing signed by
the party or parties for whose benefit the provision is intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the date first above-written.
SUNBELT EXPLORATION, INC.
ATTEST:
___________________________________ By _________________________________
Secretary or Assistant Secretary Roger Lund, President
IEXALT, INC.
ATTEST:
___________________________________ By _________________________________
Secretary or Assistant Secretary Don Sapaugh, President
19
AGREEMENT OF IEXALT PRINCIPALS
In witness whereof, the iExalt Principals hereby agrees to Article II of
the Agreement.
____________________________________
Hunter M. A. Carr
AGREEMENT OF SUNBELT PRINCIPAL
In witness whereof, the iExalt Principal hereby agrees to Article IV of
the Agreement.
____________________________________
Roger Lund
20
IEXALT SHAREHOLDERS
NUMBER OF IEXALT CONVERTED TO NUMBER
IEXALT SHAREHOLDERS SHARES HELD OF SHARES OF SUNBELT
- ------------------- ------------------ ----------------------
_______________________________ 2,250,000 2,250,000
Hunter Carr
AGROSOURCE
_______________________________ 1,500,000 1,500,000
By: Duly Authorized Officer
_______________________________ 6,000,000 6,000,000
Jack Tompkins
_______________________________ 3,000,000 3,000,000
Morris Chapman
_______________________________ 2,250,000 2,250,000
Jonathan Gilchrist
_______________________________ 2,250,000 2,250,000
Don Sapaugh
_______________________________ 600,000 600,000
Randy Beck
_______________________________ 300,000 300,000
James Sneeringer
21
NUMBER OF IEXALT CONVERTED TO NUMBER
IEXALT SHAREHOLDERS SHARES HELD OF SHARES OF SUNBELT
- ------------------- ------------------ ----------------------
_______________________________ 100,000 100,000
Stan Coffee
ICCT, INC.
_______________________________ 70,000 70,000
By: Duly Authorized Officer
_______________________________ 41,666 41,666
Tommy Waldrop
_______________________________ 12,000 12,000
Duane Ward
_______________________________ 12,000 12,000
Bruce Barbour
_______________________________ 6,000 6,000
Brian Lang
22
CERTIFIED BUSINESS BROKERS
_______________________________ 2,000 2,000
By: Duly Authorized Officer
TOTAL 18,393,666 18,393,666
23