Exhibit 7.1
AGREEMENT FOR THE PURCHASE OF COMMON STOCK
AGREEMENT, made this 27th day of February, 2001, by and between Corporate
Management Services, Inc. ("Shareholder",) Bail Corp. ("Bail") a Colorado
corporation, and Charles A. Ross ("Ross") is for the purpose of setting forth
the terms and conditions upon which Corporate Management Services, Inc. will
sell to Ross 900,000 shares of Bail's common stock.
In consideration of the mutual promises, covenants, and representations
contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE I
SALE OF SECURITIES
1.01 Subject to the terms and conditions of this Agreement, the
Shareholder agrees to sell, and Ross agrees to purchase, 900,000 shares of the
common stock of Bail for $1,000.
1.02 Upon the execution of this Agreement, Ross will tender a cashiers
check or wire transfer funds in the amount of $1,000 to Corporate Management
Services, Inc., which amount will be payment in full of the shares described
above. Closing is considered to be at the time that the consideration has
been paid by Ross, Ross takes possession of the stock certificates
representing the 900,000 shares of common stock and Corporate Management
Services, Inc. delivers all documents described below and all terms of this
agreement are fulfilled.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Bail represents and warrants to Ross the following:
2.01 Organization. Bail is a corporation duly organized, validly
existing, and in good standing under the laws of Colorado, has all necessary
corporate powers to own properties and carry on a business, and is duly
qualified to do business and is in good standing in Colorado. All actions
taken by the Incorporators, Directors and/or shareholders of Bail have been
valid and in accordance with the laws of the State of Colorado.
2.02 Capital. The authorized capital stock of Bail consists of
20,000,000 shares of common stock, no par value, of which 1,230,000 shares are
issued and outstanding. All outstanding shares are fully paid and non
assessable, free of liens, encumbrances, options, restrictions and legal or
equitable rights of others not a party to this Agreement. At closing, there
will be no outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments obligating Bail to issue or to
transfer from treasury any additional shares of its capital stock. None of the
outstanding shares of Bail are subject to any stock restriction agreements.
There are approximately 47 shareholders of Bail. All of such shareholders
have valid title to such shares and acquired their shares in a lawful
transaction and in accordance with Colorado corporate law.
2.03 Financial Statements. Audited financial statements will be
provided at the closing and will include the balance sheets of Bail as of
April 30, 2000 and the related statements of income and retained earnings for
the period then ended. The financial statements have been prepared in
accordance with generally accepted accounting principles consistently followed
by Bail throughout the periods indicated, and fairly present the financial
position of Bail as of the date of the balance sheet included in the financial
statements, and the results of its operations for the periods indicated.
Additionally, Shareholder will provide Ross with Bail's 10QSB for the period
ended October 31, 2000.
2.04 Absence of Changes. Since January 31, 2001, there has not been
any change in the financial condition or operations of Bail, except changes in
the ordinary course of business, which changes have not in the aggregate been
materially adverse and will be fully disclosed.
2.05 Liabilities. Bail did not as of January 31, 2001 and at the
signing of this Agreement, have any debt, liability, or obligation of any
nature, whether accrued, absolute, contingent, or otherwise, and whether due
or to become due, that is not reflected in Bail's balance sheet as of January
31, 2001. Bail is not aware of any pending, threatened or asserted claims,
lawsuits or contingencies involving Bail, its directors, officers or its
common stock. There is no dispute of any kind between Bail and any third
party, and no such dispute will exist at the closing of this Agreement. At
closing, Bail will be free from any and all liabilities, liens, claims and/or
commitments .
2.06 Tax Returns. Within the times and in the manner prescribed by
law, Bail has filed all federal, state, and local tax returns required by law
and has paid all taxes, assessments, and penalties due and payable. No federal
income tax returns of Bail have been audited by the internal Revenue Service.
The provision for taxes, if any, reflected in Bail's balance sheet as of
January 31, 2001, is adequate for any and all federal, state, county, and
local taxes for the period ending on the date of that balance sheet and for
all prior periods, whether or not disputed. There are no present disputes as
to taxes of any nature payable by Bail.
2.07 Ability to Carry Out Obligations. The Shareholder has the right,
power, and authority to enter into, and perform their obligations under this
Agreement. The execution and delivery of this Agreement by the Shareholder
and the performance by the Shareholder of its obligations hereunder will not
cause, constitute, or conflict with or result in (a) any breach or violation
or any of the provisions of or constitute a default under any license,
indenture, mortgage, charter, instrument, articles of incorporation, bylaw, or
other agreement or instrument to which Bail or the Shareholder is a party, or
by which they may be bound, nor will any consents or authorizations of any
party other than those hereto be required, (b) an event that would cause Bail
to be liable to any party, or (c) an event that would result in the creation
or imposition of any lien, charge, or encumbrance on any asset of Bail or upon
the securities of Bail to be acquired by Ross.
2.08 Full Disclosure. None of representations and warranties made by
Bail or the Shareholder, or in any certificate or memorandum furnished or to
be furnished by Bail or the Shareholder, or on their behalf, contains or will
contain any untrue statement of a material fact, or omit any material fact the
omission of which would be misleading.
2.09 Contracts and Leases. Bail does not and has never carried on any
business. Bail is not a party to any contract, agreement or lease. No person
holds a power of attorney from Bail.
2.10 Compliance with Laws. Bail has complied with, and is not in
violation of any federal, state, or local statute, law, and/or regulation
pertaining to Bail. Bail has complied with all federal and state securities
laws in connection with the offer, sale and distribution of its securities.
2.11 Litigation. Bail is not (and has not been) a party to any suit,
action, arbitration, or legal, administrative, or other proceeding, or pending
governmental investigation. To the best knowledge of the Shareholders, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against Bail. Bail is not subject to or in default with respect
to any order, writ, injunction, or decree of any federal, state, local, or
foreign court, department, agency, or instrumentality.
2.12 Conduct of Business. Prior to the closing, Bail shall conduct
its business in the normal course, and shall not (without the prior written
approval of Ross) (i) sell, pledge, or assign any assets (ii) amend its
Articles of Incorporation or Bylaws, (iii) declare dividends, redeem or sell
stock or other securities, (iv) incur any liabilities, (v) acquire or dispose
of any assets, enter into any contract, guarantee obligations of any third
party, or (vi) enter into any other transaction.
2.13 Corporate Documents. Copies of each of the following documents,
which are true, complete and correct in all material respects, will be
attached to and made a part of this Agreement:
(i) Articles of Incorporation;
(ii) Bylaws;
(iii) Organizational Consent of Shareholders;
(iv) Consent of Directors;
(v) List of Officers and Directors;
(vi) List of Shareholders;
(vii) 10-QSB including Balance Sheet as of October 31, 2000, together with
other financial statements described in Section 2.03;
(viii) Secretary of State Filing Receipt;
(ix) Copies of all federal and state income tax returns of Bail;
(x) Stock register and stock certificate records of Bail;
(xi) Form 10SB.
2.14 Closing Documents. All minutes, consents or other documents
pertaining to Bail to be delivered at closing shall be valid and in accordance
with the laws of Colorado.
2.15 Title. The Shareholder has good and marketable title to all of
the securities to be sold to Ross pursuant to this Agreement. The securities
to be sold to Ross will be, at closing, free and clear of all liens, security
interests, pledges, charges, claims and encumbrances of any kind. None of such
shares are or will be subject to any voting trust or agreement. No person
holds or has the right to receive any proxy or similar instrument with respect
to such shares. Except as provided in this Agreement, the Shareholder is not a
party to any agreement which offers or grants to any person the right to
purchase or acquire any of the securities to be sold to Ross. There is no
applicable local, state or federal law, rule, regulation, or decree which
would, as a result of the purchase of the shares by Ross, impair, restrict or
delay Ross voting rights with respect to the shares.
ARTICLE III
INVESTMENT INTENT
3.01 Ross agrees that the securities being acquired pursuant to this
Agreement may be sold, pledged, assigned, hypothecated or otherwise
transferred, with or without consideration ("Transfer") only pursuant to an
effective registration statement under the Act, or pursuant to an exemption
from registration under the Act, the availability of which is to be
established to the satisfaction of Bail.
3.02 Ross, on behalf of Bail, agrees to use his best efforts to file a
registration statement with the Securities and Exchange Commission to
register, at Ross' or Bail's sole expense, the resale of at least all of the
Bail shares issued to all of the Bail shareholders (except the shares being
sold hereby which may be registered or not at the sole option of Ross) of
record on the date of this Agreement within 60 days after acquiring the shares
being purchased hereby and to use his best efforts to have that registration
statement declared effective at the earliest practicable date thereafter and
to thereafter use best efforts to establish a public market for Bail's common
stock. Shareholder agrees to cooperate in all respects with this endeavor and
to assist Ross in any reasonable way.
3.03 Subsequent to the transfer contemplated hereby neither Ross, on
behalf of Bail, or Bail will unduly delay or refuse to render legal opinions
or provide any other reasonable assistance to permit current shareholders of
Bail to transfer their securities, once a public market for the Bail shares
develops.
ARTICLE IV
CLOSING
The closing of this transaction will occur when all of the documents
and/or consideration described below has been delivered. Unless the closing of
this transaction takes place on or before March 1, 2001, then either party may
terminate this Agreement. As part of the closing, the following documents, in
form reasonably acceptable to counsel to the parties, shall be delivered:
By the Shareholder:
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A. A certificate or certificates for 900,000 shares of Bail common
stock, registered in names so designated by Ross as designated.
B. The resignation of all officers of Bail.
C. The resignation of all the directors of Bail.
D. A Board of Directors resolution appointing directors as
designated by Ross.
E. Certified Audited financial statements of Bail, which shall
include a balance sheet dated as of April 30, 2000 and statements of
operations, stockholders' equity and cash flows for the twelve month period
then ended.
F. All of the business and corporate records of Bail, including but
not limited to correspondence files, bank statements, checkbooks, savings
account books, minutes of shareholder and directors meetings, financial
statements, shareholder listings, stock transfer records, agreements and
contracts.
By Ross:
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A. A cashiers check or wired funds made payable to Corporate
Management Services, Inc. in the amount of $1,000, representing the payment in
full for the 900,000 shares of Bail common stock.
ARTICLE V
REMEDIES
5.01 Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be settled by arbitration in Littleton, Colorado in accordance
with the Rules of the American Arbitration Association then existing, and
judgment on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy.
5.02 Indemnification. Each party agrees to indemnify the others
against all actual losses, damages and expenses caused by (i) any material
breach of this Agreement or any material misrepresentation of any party
contained herein or (ii) any misstatement of a material fact or omission to
state a material fact required to be stated herein or necessary to make the
statements herein not misleading.
ARTICLE VI
MISCELLANEOUS
6.01 Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
6.02 No Oral Change. This Agreement and any provision hereof, may not
be waived, changed, modified, or discharged, orally, but only by an agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.
6.03 Non Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to
insist in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future
of any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure, and (iii) no
waiver by any party of one breach by another party shall be construed as a
waiver with respect to any other or subsequent breach.
6.04 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
6.05 Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
6.06 Significant Changes. The Shareholder understands that
significant changes may be made in the capitalization and/or stock ownership of
Bail, which changes could involve a reverse stock split and/or the issuance of
additional shares of common stock, thus possibly having a dramatic negative
effect on the percentage of ownership and/or number of shares owned by present
shareholders of Bail.
6.07 Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Facsimile
signatures will be acceptable to all parties.
6.08 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party
to whom notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
If to Shareholder or Bail:
George Andrews, Corporate Management Services, Inc., 7899 West Frost Drive,
Littleton, CO 88128
If to Ross:
Charles A. Ross, Sr., 11952 Farley, Overland Park, Kansas 66213
6.09 Binding Effect. This Agreement shall inure to and be binding
upon the heirs, executors, personal representatives, successors and assigns of
each of the parties to this Agreement.
6.10 Effect of Closing. All representations, warranties, covenants,
and agreements of the parties contained in this Agreement, or in any
instrument, certificate, opinion, or other writing provided for in it, shall
be true and correct as of the closing and shall survive the closing of this
Agreement.
6.11 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other
and further documents and take such other and further actions as may be
necessary or convenient to effect the transaction described herein.
AGREED AND ACCEPTED as of the date first above written.
Corporate Management Services, Inc. Bail Corporation
By:________________________________ By:__________________________
George Andrews, President George Andrews, President
Charles A. Ross, Sr.
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