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 (date of earliest event reported) June 18, 1999
DISTINCTIVE DEVICES
(Exact name of registrant as specified in its charter)
New York 0-2749 13-1999951
(State of Incorporation) (Commission (IRS Employer
File Number) Identification umber)
Suite 134, 1324 Motor Parkway, Hauppauge, New York 11788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 751-1375
N/A
(Former name or former address, if changed since last report)
This current Report on Form 8-K has two (2) pages plus Exhibits.
Item 5. Other Events
(a) Execution of Definitive Agreement
On June 18, 1999, a definitive agreement was entered into among registrant and
shareholders of EagleView Industries, Inc. as more fully described in the news
release attached as an exhibit hereto. It is anticipated that other EagleView
shareholders will join in the agreement on or before the scheduled closing date
of August 4, 1999. At a later date a merger, or similar proposal, will be made
to the remaining shareholders of EagleView to exchange their shares for
registrant's common stock on the same basis as provided for in the executed
agreement.
Assuming that 100% of EagleView's outstanding shares are ultimately acquired,
registrant would issue approximately ten million shares of its common stock in
exchange therefor.
(b) Exhibits
- News release dated June 21, 1999 (1 page).
- Executed agreement dated June 18, 1999 (27 pages).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DISTINCTIVE DEVICES, INC.
(Registrant)
Date: June 22, 1999 by: /s/ EARL M. ANDERSON, JR.
Earl M. Anderson, Jr.
President and Principal
Executive Officer
To: P R Newswire, New York City Fax: (800) 793-9313
Attn: Ian
FOR RELEASE 9:00 A.M. June 21, 1999
Contact: Earl M. Anderson, Jr., President
Tel: (561) 416-9804 Fax: (561) 417-9803
DISTINCTIVE DEVICES, INC. (DDI) EXECUTES DEFINITIVE
AGREEMENT TO ACQUIRE EAGLEVIEW INDUSTRIES, INC.
June 21, 1999 - DDI (OTCBB: DDEV) announced today that it has entered into a
definitive agreement to acquire approximately 80% of the equity of EagleView
Industries, Inc. (Industries). The transaction is scheduled to close on
August 4, 1999. The remaining outstanding common shares of Industries will be
acquired by DDI at a later date.
Upon closing, control of DDI will pass to EagleView Technologies, Inc.
(Technologies). Technologies is controlled by Michael J. Paolini, its CEO and,
indirectly, its largest shareholder. Technologies and Industries are based in
Delray Beach, Florida.
Mr. Paolini, who already holds several telecommunications patents, recently
filed a patent application relating to his array system for providing high
quality, low cost, broad bandwidth wireless connectivity for Internet, data and
video-telecommunication services. Industries holds the exclusive worldwide
rights to this technology on a royalty-free basis. Industries has had no
operating revenues to date although discussions are underway with investor
groups who have expressed interest in licensing the technology for use in
several major cities in the U.S. and abroad.
Statements in this news release concerning future events, results, performance,
expectations or intentions are forward-looking statements. Actual developments
or results may differ materially from those expressed or implied by such
statements as a consequence of known or unknown risks, uncertainties and other
factors.
(End of Release)
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (the Agreement), entered into this 18th day of
June, 1999, by and among Distinctive Devices, Inc., a New York corporation
(DDI), EagleView Technologies, Inc., a Florida corporation (Technologies),
and Alfred M. Carroccia (Carroccia). Technologies and Carroccia are
sometimes hereinafter collectively referred to as the Shareholders.
W I T N E S S E T H :
WHEREAS, EagleView Industries, Inc. (Industries), a Florida corporation, has
an authorized capital of 10,000,000 shares of Common Stock, $.0001 par value
(Industries Common Stock), and the Shareholders own shares of Industries Common
Stock (the Shares) as follows: Technologies - 2,870,670 Shares and
Carroccia-200,000 shares; and WHEREAS, DDI desires to acquire the Shares from
the Shareholders, and, in exchange therefor, to issue to the Shareholders
shares of its voting Common Stock, $.05 par value (DDI Common Stock); and
WHEREAS, the parties hereto desire that such exchange of the Shares for DDI
Common Stock shall be a tax free exchange under the provisions of Section 368
(a) (1) (B) of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the parties hereto,
each intending to be legally bound hereby, agree as follows:
ARTICLE 1
EXCHANGE OF STOCK; CLOSING
Section 1.1. Exchange of Stock. At the Closing (as defined in Section 1.2),
each of the Shareholders shall transfer and assign to DDI all of his or its
holdings of Industries Common Stock, to-wit, the Shares, by delivering to DDI
certificates representing their respective holdings of the Shares duly endorsed
for transfer. In exchange therefor, DDI shall issue to the Shareholders the
number of shares of DDI Common Stock set forth in the next succeeding sentence
of this Section 1.1. To effect such issue of its shares of capital stock, DDI
shall prepare and issue an irrevocable letter of instructions, dated as of the
Closing Date, addressed to DDI's Registrar and Transfer Agent, Chase Mellon
Shareholder Services, New York City (CMSS), directing and authorizing CMSS to
issue certificates representing DDI Common Stock to the Shareholders as
follows:
To Technologies - not less than 5,683,927 shares of DDI Common Stock
nor more than 6,315,474 shares of DDI Common Stock; and
To Carroccia - not less than 396,000 shares of DDI Common Stock nor
more than 440,000 shares of DDI Common Stock.
Section 1.2. The Closing. The exchange of shares of DDI Common Stock for the
Shares, as set forth in Section 1.1 hereof (the Closing), shall take place at
the office of Greenberg Traurig, P.A., 777 S. Flagler Drive, Suite 300 East,
West Palm Beach, Florida 33401, or at such other location as the parties may
determine, on August 4, 1999 at 11:00 a.m., local time (Closing Date), or
such other time or place as the parties hereto shall agree to in writing.
Section 1.3. Closing Information. The parties hereto, at or prior to the
Closing Date, shall deliver to each other the schedules, documents, financial
statements and other information identified or described in this Agreement (the
Closing Information). All actions taken and Closing Information delivered at
the Closing or prior thereto shall be deemed taken or delivered simultaneously
at the Closing and no action shall be deemed taken, or any Closing Information
deemed delivered, until all actions have been taken and all Closing Information
has been delivered.
Section 1.4. Directors and Officers of DDI. At the Closing, the directors and
officers of DDI, other than Earl M. Anderson, Jr., shall submit their
resignations and, at the same time, shall elect new directors designated by the
Shareholders. Information with respect to such designees complying with
Section 14(f) of the Securities Exchange Act of 1934, as amended (Exchange
Act), and the rules and regulations of the Securities and Exchange Commission
(SEC) thereunder, shall be submitted by the Shareholders to DDI prior to
Closing so that DDI can cause an Information Statement pursuant to Section
14(f) of the Exchange Act to be prepared and submitted to CMSS, so that it may
be mailed by CMSS to all DDI shareholders as of, or promptly after, the
Closing. Following the requisite ten-day period following such mailing and the
filing of such information with the SEC, the resignations of DDI's current
directors and officers and the election of the Shareholders designated
directors shall become effective.
Section 1.5. Private Offerings. Industries has prepared a Private Placement
Memorandum, dated October 1, 1998, which provides for the sale of 2,000,000
shares of Industries Common Stock at $.50 per share. Of the shares so offered,
not less than 1,500,000 will have been sold as of the Closing Date.
Technologies will cause Industries to terminate the offering as of the Closing
Date and no further shares of Industries Common Stock shall be sold thereafter.
As of the Closing Date, the number of outstanding shares of Industries Common
Stock shall not be less than 4,500,000 nor more than 5,000,000.
Within thirteen (13) months following the Closing, DDI agrees to offer to
exchange DDI Common Stock for the balance of the outstanding shares of
Industries Common Stock as at the Closing Date not being acquired by DDI
hereunder. Such exchange or exchanges shall have an exchange ratio which shall
reflect DDI's commitment to issue 9,900,000 shares of DDI Common Stock in
exchange for all of the outstanding shares of Industries as at the Closing
Date, which is the exchange ratio by which DDI Common Stock is being exchanged
for the Shares hereunder. At DDI's option such exchange may be effected by a
merger of Industries into or with DDI or a wholly-owned subsidiary of DDI..
ARTICLE 2
REPRESENTATION AND WARRANTIES OF THE PARTIES
Section 2.1. General Representations and Warranties. Each party hereby
warrants and represents to each other party that:
(a) If it is a corporation, it: (i) is duly organized, validly existing
and in good standing under the laws of its state of incorporation and is duly
authorized to conduct business, (ii) is duly qualified or otherwise authorized
as a foreign corporation to transact business and is in good standing under the
laws of each other jurisdiction in which such qualification is required, and
(iii) has full power and authority to carry on its business as now conducted
and is entitled to own, lease or operate all of its properties and assets
wherever located.
(b) It or he has full power and authority to enter into, deliver and
perform this Agreement.
(c) Neither the execution, delivery, consummation or performance of this
Agreement requires the approval or consent of, or notice to, any third party,
or violates any law, regulation or agreement to which it is subject and that it
is in compliance with all provisions of any material agreement to which it is a
party.
Section 2.2. Representations and Warranties of the Shareholders. Each of the
Shareholders warrants and represents to DDI that:
(a) It or he is the owner, beneficially and of record, of the Industries Common
Stock set forth in the first preamble to this Agreement, free and clear of any
liens, mortgages, claims, charges, security interests, encumbrances or other
restrictions or limitations affecting its ability to transfer the same to DDI.
By delivery of the Industries Common Stock to DDI at the Closing in exchange
for DDI Common Stock, DDI will acquire good and marketable title to such
securities, free and clear of any liens, mortgages, claims, charges, security
interest or encumbrance. There is no right, subscription, warrant, call,
unsatisfied preemptive right, option or other agreement of any kind to purchase
or otherwise receive from each such person any shares of capital stock or any
other securities of Industries, and it does not have any such right, option or
other agreement to acquire any such shares or other securities of Industries
from Industries or any other person..
(b) Neither the execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will (i) violate, conflict with or
result in the breach or termination of, or otherwise give any other contracting
party the right to terminate, or constitute a default (by way of substitution,
novation or otherwise) under the terms of, any mortgage, lease, bond,
indenture, agreement, franchise or other instrument or obligation to which
Industries or such Shareholder is a party or by which either of them may be
bound or (ii) violate any judgment, order, injunction, decree or award of any
court, arbitrator, administrative agency or governmental body against or
binding upon either Industries or Technologies.
(c) Industries has an authorized capitalization consisting of 10,000,000 shares
of Common Stock, $.0001 par value. As of the date of this Agreement there are
issued and outstanding 3,961,960 shares of such Common Stock, of which
3,070,670 shares are owned beneficially and of record by the Shareholders in
the amounts set forth in the first preamble to this Agreement. All of the
outstanding shares of capital stock of Industries have been duly authorized,
validly issued and are fully paid and nonassessable. There are no other classes
of capital stock of Industries authorized or outstanding. Other than in
connection with the offering described in Section 1.5 hereof, there are no
rights, subscriptions, warrants, calls, unsatisfied preemptive rights, options
or other agreement of any kind to purchase or otherwise to receive from
Industries any of the outstanding, authorized but unissued or treasury shares
of the capital stock or any other securities of Industries and no securities or
obligations of any kind convertible into such capital stock exist in favor of
any person, firm or corporation.
(d) Industries does not directly or indirectly own nor has it made any
investment in any of the capital stock of, or any other proprietary interest
in, any other person including but not limited to joint ventures and
partnerships.
(e) Prior to Closing, the Shareholders shall deliver to DDI a true and complete
copy of the Articles of Incorporation of Industries, certified by the Secretary
of State of Florida, Bylaws certified by the Secretary of Industries as in
effect on the date hereof and the stock records of Industries which will be
true and complete.
(f) (i) The financial statements of Industries, including the footnotes
thereto, to be delivered to DDI as part of the Closing Information will be
prepared in conformity with generally accepted accounting principles and will
fairly present the financial condition and results of operations of Industries
as of December 31, 1998 and May 31, 1999 and for the periods commencing with
its organization to each such date. The financial statements of Industries
shall be audited and reported on by certified public accountants who are
independent within the meaning of the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
(ii) Since the date of the Balance Sheet of Industries included in such
financial statements, there has been no material adverse change in the assets,
properties, business operations or financial condition of Industries.
(g) Industries has recorded no income tax liability on the Balance Sheet
included in the financial statements of Industries. The total amounts set up
as liabilities for current and deferred taxes on the Balance Sheet in such
financial statements are sufficient to cover the payment of all claims, whether
known or unknown, with respect to all Taxes (as hereinafter defined).
Industries has filed all federal, state and local tax returns which are
required to be filed or has requested extensions thereof and has paid all Taxes
shown on such returns and all assessments received by it to the extent that the
same have become due except as shown on the aforesaid Balance Sheet. Industries
has not agreed nor is it required to make any adjustment under the provisions
of the Internal Revenue Code or any similar state or local law by reason of a
change in accounting method or otherwise. To the best knowledge of each of the
Shareholders , there are no pending claims, other than those described on
Schedule 2.2(g) with respect to Taxes. Neither the Federal income tax returns
of Industries nor its state and local returns (measured, in whole or in part,
by income) have been audited. As used herein the term Taxes shall include
all income tax liability, deferred income tax liability and other taxes,
including, without limitation, income taxes, estimated taxes, excise taxes,
sales taxes, use taxes, gross receipts taxes, franchise taxes, employment and
payroll related taxes, property taxes and import duties, whether or not
measured in whole or in part by net income and whether or not assessed or
disputed, that are payable or deferrable, by Industries through December 31,
1998, or as to which Industries may have any liability for taxable periods
ending on or before such date, and all deficiencies or other additions to tax,
interest and penalties owed by Industries or as to which Industries may have
liability in connection with any of the foregoing.
(h) Schedule 2.2(h) sets forth as of the date hereof all of the following
contracts and other agreements to which Industries is a party or by which its
assets or properties are bound or subject:(i) contracts and other agreements
with any current or former officer, director, employee, consultant, agent or
other representative, (ii) contracts or agreements with suppliers, whether
written or oral, for the purchase of equipment or services; (iii) contracts and
other agreements for the sale of any of its assets or properties, tangible or
intangible, other than in the ordinary course of business or for the grant to
any person of any preferential rights to purchase any of their assets or
properties; (iv) joint venture agreements; (v) contracts or other agreements
under which Industries agrees to indemnify any party, other than through
performance bonds, or to share tax liability of any party; (vi) contracts and
other agreements relating to the purchase by Industries of any operating
business or the capital stock of any other person, under which Industries has
any ongoing or unsatisfied liability or obligation; (vii) options for the
purchase of any asset, tangible or intangible, for an aggregate purchase price
of more than $1,000; (viii) contracts and other agreements and instruments
relating to the borrowing or lending of money; (ix) contracts and other
agreements pursuant to which Industries has been granted a license to use the
technology of a third party, whether a subject of a patent, patent application,
or otherwise, to produce and sell its products or systems. There have been
delivered or made available to DDI true and complete copies of all of the
contracts and other agreements set forth on Schedule 2.2 (h) or on any other
Schedule. All of such contracts and other agreements are valid, subsisting, in
full force and effect and binding upon the parties thereto in accordance with
their terms, and Industries has paid in full or accrued all amounts due
thereunder and has satisfied in full or provided for all of its liabilities and
obligations thereunder, and is not in default under any of them, nor, to the
best knowledge of the Shareholders is any other party to any such contract or
other agreement in default thereunder, nor does any condition exist that with
notice or lapse of time or both would constitute a default thereunder.
(i) Except as set forth on Schedule 2.2(i) or as reflected in the notes to the
Financial Statements, Industries owns outright and has good and marketable
title to all of Industries assets, including, without limitation, all of the
assets, receivables and properties reflected on the Financial Statements, in
each case free and clear of any lien, security interest or other encumbrance,
except for (i) immaterial assets and properties; (ii) assets and properties
disposed of, or subject to purchase or sales orders, in the ordinary course of
business since the date of the Balance Sheet included in Industries Financial
Statements; (iii) liens or other encumbrances securing taxes, assessments,
governmental charges or levies, or the claims of material men, carriers,
landlords and like persons, all of which are not yet due and payable, or (iv)
minor liens or other encumbrances of a character that do not substantially
impair the assets or properties of Industries or detract materially from their
business.
(j) As at the date of the Balance Sheet of Industries included in its
financial statements, Industries did not have any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency or obligation, known
or reasonably anticipated, liquidated or unliquidated, secured or unsecured,
accrued, absolute, contingent or otherwise, including, without limitation,
liabilities on account of taxes, other governmental charges or lawsuits
brought, whether or not of kind required by generally accepted accounting
principles to be set forth in a financial statement (Liabilities) which in the
aggregate exceeds $1,000, that were not fully and adequately reflected or
reserved against on such Balance Sheet included in the financial statements.
Except as set forth on Schedule 2.2(j), Industries does not have any
Liabilities, other than (i) Liabilities fully and adequately reflected or
reserved against on the Financial Statement, and (ii) Liabilities incurred
since the date of the Balance Sheet in the ordinary course of business.
(k) All documents, Schedules, Exhibits and other materials delivered or to be
delivered by or on behalf of Industries to DDI in connection with this
Agreement and the transactions contemplated hereby are to the best of their
knowledge true and complete. The information furnished by or on behalf of
Industries in connection with this Agreement and the transactions contemplated
hereby does not to the best of their knowledge contain any untrue statement of
a material fact and does not omit to state any material fact required to be
stated therein or necessary to make the statements therein not false or
misleading. Other than economic conditions effecting the industry in which
Industries operates, there is no fact known to the Shareholders which has not
been disclosed to DDI in writing which materially adversely affects or, insofar
as the Shareholders can now foresee will materially adversely affect
Industries assets and the operations or financial condition of Industries.
Section 2.3. Representations and Warranties DDI. DDI warrants and represents
to the Shareholders that:
(a) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) violate, conflict
with or result in the breach or termination of, or otherwise give any other
contracting party the right to terminate, or constitute a default (by way of
substitution, novation or otherwise) under the terms of, any mortgage, lease,
bond, indenture, agreement, franchise or other instrument or obligation to
which DDI is a party or by which it may be bound or (ii) violate any judgment,
order, injunction, decree or award of any court, arbitrator, administrative
agency or governmental body against or binding upon DDI.
(b) DDI has authorized capitalization consisting of 20,000,000 shares of
Common Stock, $.05 par value, and 1,000,000 shares of blank-check Series
Preferred Stock, $1.00 par value. As of the date of this Agreement there are
issued and outstanding 4,119,902 shares of such Common Stock and no shares of
Series Preferred Stock. All of the outstanding shares of capital stock of DDI
have been duly authorized, validly issued and are fully paid and nonassessable.
There are no other classes of capital stock of DDI authorized or outstanding.
There are no rights, subscriptions, warrants, calls, unsatisfied preemptive
rights, options or other agreement of any kind to purchase or otherwise to
receive from DDI any of the authorized but unissued shares of the capital stock
or any other securities of DDI and no securities or obligations of any kind
convertible into such capital stock exist in favor of any person, firm or
corporation.
(c) DDI does not directly or indirectly own nor has it made any investment in
any of the capital stock of, or any other proprietary interest in, any other
person including but not limited to joint ventures and partnerships.
(d) Prior to Closing, DDI shall deliver to the Shareholders a true and
complete copy of the Certificate of Incorporation of DDI, certified by the
Secretary of State of New York, and Bylaws certified by the Secretary of DDI as
in effect on the date hereof.
(e) (i) The financial statements of DDI, including the footnotes thereto, to
be delivered to DDI as part of the Closing Information have been prepared in
conformity with generally accepted accounting principles and fairly present the
financial condition and results of operations of DDI as of February 28, 1999
and May 31, 1999, respectively, and for the two years ended February 28, 1999
and for the three months ended May 31, 1999. The financial statements of DDI as
at February 28, 1999 and for the two years then ended shall be audited and
reported on by a certified public accountant who is independent within the
meaning of the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
(ii) Since May 31, 1999 there has been no material adverse change in the
assets, properties or financial condition of DDI.
(f) DDI has recorded no income tax liability on its Balance Sheets included in
the financial statements of DDI. The total amounts set up as liabilities for
current taxes on the Balance Sheets in such financial statements are sufficient
to cover the payment of all claims, whether known or unknown, with respect to
all Taxes (as hereinafter defined). DDI has filed all federal, state and local
tax returns which are required to be filed or has requested extensions thereof
and has paid all Taxes shown on such returns and all assessments received by it
to the extent that the same have become due except as shown on the aforesaid
Balance Sheet. DDI has not agreed nor is it required to make any adjustment
under the provisions of the Internal Revenue Code or any similar state or local
law by reason of a change in accounting method or otherwise. To the best
knowledge of DDI, there are no pending claims, other than those described on
Schedule 2.3(f) with respect to Taxes. Neither the Federal income tax returns
of DDI nor its state and local returns (measured, in whole or in part, by
income) have been audited. As used herein the term Taxes shall include all
income tax liability, deferred income tax liability and other taxes, including,
without limitation, income taxes, estimated taxes, excise taxes, sales taxes,
use taxes, gross receipts taxes, franchise taxes, employment and payroll
related taxes, property taxes and import duties, whether or not measured in
whole or in part by net income and whether or not assessed or disputed, that
are payable or deferrable, by DDI through February 28, 1999, or as to which DDI
may have any liability for taxable periods ending on or before such date, and
all deficiencies or other additions to tax, interest and penalties owed by DDI
or as to which DDI may have liability in connection with any of the foregoing.
(g) Schedule 2.3(g) sets forth as of the date hereof all of the following
contracts and other agreements to which DDI is a party or by which its assets
or properties are bound or subject: (i) contracts and other agreements with any
current or former officer, director, employee, consultant, agent or other
representative, (ii) contracts or agreements with suppliers, whether written or
oral, for the purchase of equipment or services; (iii) contracts and other
agreements for the sale of any of its assets or properties, tangible or
intangible, other than in the ordinary course of business or for the grant to
any person of any preferential rights to purchase any of their assets or
properties; (iv) joint venture agreements; (v) contracts or other agreements
under which DDI agrees to indemnify any party, other than through performance
bonds, or to share tax liability of any party; (vi) contracts and other
agreements relating to the purchase by DDI of any operating business or the
capital stock of any other person, under which DDI has any ongoing or
unsatisfied liability or obligation; (vii) options for the purchase of any
asset, tangible or intangible, for an aggregate purchase price of more than
$1,000; (viii) contracts and other agreements and instruments relating to the
borrowing or lending of money; and (ix) contracts and other agreements pursuant
to which DDI has been granted a license to use the technology of a third party,
whether a subject of a patent or otherwise, to produce and sell its products.
There have been delivered or made available to Technologies true and complete
copies of all of the contracts and other agreements set forth on Schedule
2.3(g) or on any other Schedule. All of such contracts and other agreements
are valid, subsisting, in full force and effect and binding upon the parties
thereto in accordance with their terms, and DDI has paid in full or accrued all
amounts due thereunder and has satisfied in full or provided for all of its
liabilities and obligations thereunder, and is not in default under any of
them, nor, to the best knowledge of DDI is any other party to any such contract
or other agreement in default thereunder, nor does any condition exist that
with notice or lapse of time or both would constitute a default thereunder.
(h) Except as set forth on Schedule 2.3(h) or as reflected in the notes to the
Financial Statements, DDI owns outright and has good and marketable title to
all of DDI's assets, including, without limitation, all of the assets,
receivables and properties reflected on the Financial Statements, in each case
free and clear of any lien, security interest or other encumbrance, except for
(i) immaterial assets and properties; (ii) assets and properties disposed of,
or subject to purchase or sales orders, in the ordinary course of business
since May 31, 1999; (iii) liens or other encumbrances securing taxes,
assessments, governmental charges or levies, or the claims of material men,
carriers, landlords and like persons, all of which are not yet due and payable,
or (iv) minor liens or other encumbrances of a character that do not
substantially impair the assets or properties of DDI or detract materially from
its business.
(i) As at the date of the May 31, 1999 Balance Sheet of DDI included in its
financial statements, DDI did not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency or obligation, known or reasonably
anticipated, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise, including, without limitation, liabilities
on account of taxes, other governmental charges or lawsuits brought, whether or
not of kind required by generally accepted accounting principles to be set
forth on a financial statement (Liabilities) which in the aggregate exceeds
$1,000, that were not fully and adequately reflected or reserved against on
such Balance Sheet included in the financial statements. Except as set forth
on Schedule 2.3(i), DDI does not have any Liabilities, other than (i)
Liabilities fully and adequately reflected or reserved against on the Financial
Statement, and (ii) Liabilities incurred since May 31, 1999 in the ordinary
course of business.
(j) All documents, Schedules, Exhibits and other materials delivered or to
be delivered by or on behalf of DDI to Technologies in connection with this
Agreement and the transactions contemplated hereby are to the best of DDIs
knowledge true and complete. The information furnished by or on behalf of DDI
in connection with this Agreement and the transactions contemplated hereby does
not, to the best of DDI's knowledge, contain any untrue statement of a material
fact and does not omit to state any material fact required to be stated therein
or necessary to make the statements therein not false or misleading.
ARTICLE 3
ADDITIONAL COVENANTS
Section 3.1. No Changes or Transactions. Each of DDI and the Shareholders
covenants and agrees that, except for transactions expressly authorized or
contemplated by this Agreement, between the date hereof and the Closing Date,
DDI will not, without prior written consent of the Shareholders and Industries
will not, without the prior written consent of DDI:
(a) effect any material change, in their respective capital structures
including outstanding debt, shares, options or warrants, subsequent to the date
of this Agreement.
(b) issue or sell or purchase, or issue options or rights to subscribe, or
entered into any contracts or commitments to issue or sell or purchase, any
shares of its capital stock;
(c) declare or pay any dividends or declare or make any other distributions of
any kind to its shareholders, or make any direct or indirect redemption,
retirement or purchase of any shares of its capital stock;
(d) except in the ordinary course of business, enter into any lease (as lessor
or lessee); sell, abandon or make any other disposition of any of its assets or
properties; grant any lien or other encumbrance on any of its assets or
properties; enter into or amend any contract or other agreement to which it is
a party, or by or to which it or its assets or properties are bound or subject,
or pursuant to which it agrees to indemnify any party to or to refrain from
competing with any party; or
(e) except in the ordinary course of business, enter into any other material
contract or other agreement or other material transaction.
Section 3.2. Severance Compensation. At or prior to Closing the Board of
Directors of DDI may approve severance pay for the Directors of DDI and
compensation for the President of DDI for contributions and guarantees provided
by him to enhance DDI's capital position over the course of many years. The
total amount of such severance pay and compensation shall not exceed $200,000.
Subject to approval of Technologies, Directors of DDI may elect to receive a
portion of such severance pay in the form of shares of common stock of DDI.
Section 3.3. Finder.
(a) The parties acknowledge that James W. Wolff introduced them to each
other for purposes of entering into the within transaction and that no other
broker or finder was engaged by them, or has acted on their behalf, in
connection with this Agreement or the transactions contemplated hereby. Each
of the parties hereto agrees to indemnify and hold each other harmless from and
against any claim by any other broker or finder who alleges that it acted on
such party's behalf for any fee, commission or payment resulting from, or
arising out of, the negotiation or execution of this Agreement or the
consummation of the transactions contemplated hereby.
(b) At the time of Closing, DDI shall cause to be issued to James W. Wolff for
his services as a finder such number of shares of DDI Common Stock as shall
equal one percent (1%) of the shares of DDI Common Stock to be outstanding
immediately following the Closing.
Section 3.4. Additional Shareholders. In the event that at the time of the
Closing the aggregate number of the Shares to be exchanged by the Shareholders
for DDI Common Stock is less than 80% of the then outstanding shares of
Industries Common Stock, the Shareholders shall cause one or more holders of
Industries Common Stock to become parties to this Agreement so that the number
of shares of Industries Common Stock to be exchanged hereunder for DDI Common
Stock shall be in excess of 80% of the then outstanding shares of Industries
Common Stock, provided however, that the number of such additional holders of
Industries Common Stock shall not exceed five (5) and each shall be a person
having knowledge and experience in financial and business matters so that he or
she is capable of evaluating the merits and risks of the investment in DDI
Common Stock. Further, each such person shall execute and deliver to DDI such
documents and agreements as DDI shall reasonably require by which each shall
become a party to this Agreement and shall be deemed a Shareholder hereunder.
Section 3.5. Additional Information. Prior to the Closing each party hereto
will supply to the other all information reasonably required to enable the
other party to make such due diligence investigation as the requesting party
deems necessary and shall make available such persons as needed to verify or
substantiate any information supplied.
Section 3.6. Confidentiality. Each party hereto will treat confidentially all
confidential information supplied and will use same solely to evaluate the
contemplated transaction. No confidential information transmitted hereunder
shall be disclosed to any third party, other than the party's directors,
officers and legal and accounting advisors. They will not disclose information
concerning this Agreement, to the public or the press, except as deemed
necessary by DDI with respect to disclosures it believes are required pursuant
to federal securities laws and regulations.
Section 3.7. Expenses. Each party will pay its own expenses with respect to
preparation of this Agreement and documents attendant thereto.
ARTICLE 4
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES; TERMINATION
Section 4.1. Conditions Precedent to Obligations of DDI. The obligations of
DDI under this Agreement are, at its option, subject to the satisfaction at the
Closing on the Closing Date of the following conditions precedent:
(a) The representations and warranties of the Shareholders contained in this
Agreement were true when made and shall continue to be true at all times after
the date hereof an as of the Closing on the Closing Date with the same force
and effect as though such representations and warranties had been made at and
as of the Closing on the Closing Date, subject to changes permitted by the
provisions of this Agreement or in the ordinary course of Industries business
to the extent contemplated with in such representations and warranties so long
as such changes are not prohibited by the provisions of this Agreement and will
not, together with all other events prior to Closing, result in there being a
material adverse change in the condition, financial or otherwise, and results
of operations of Industries. The Shareholders shall deliver at the Closing a
certificate to the foregoing effect.
(b) Other than as set forth in the Schedules to this Agreement, there has been
no materially adverse change in the financial condition, business or operations
since the date of Balance Sheet of Industries, other than changes in the
ordinary course of business which have not been materially adverse.
(c) Each of the Shareholders shall have satisfied all the conditions and
performed all the covenants and agreements on their part required by this
Agreement to be satisfied and performed and shall not be in default under any
of the provisions of this Agreement.
(d) No litigation, proceeding, investigation or inquiry shall be pending or
threatened to set aside the authorization of this Agreement, or to enjoin or
prevent the consummation of the transactions contemplated hereby, or to enjoin
or prevent the consummation of the transactions contemplated hereby, or
involving any of the assets of Industries, which might materially and adversely
affect the business or prospects of Industries.
(e) An executed opinion of Siegel, Lipman, Dunay & Shepard, counsel to the
Shareholders, dated the Closing date, addressed to DDI, in form and substance
reasonably acceptable to counsel to DDI, shall be delivered to DDI. In
rendering such opinion, such counsel may rely as to factual matters on
certificates of officers, directors, shareholders, employees and attorneys of
Industries and the Shareholders, and may also rely on certificates of
government officers and on opinions of accountants and associated counsel,
provided that such certificates or opinions and the identity of the person
issuing the same were delivered and disclosed to DDI and its counsel on the
Closing Date and are in the form and substance reasonably satisfactory to
counsel to DDI.
(f) All consents of third parties necessary to prevent (a) any material
agreement of Industries from terminating or (b) any indebtedness of Industries
from becoming due or being subject to becoming due, in each case as a result of
the transactions contemplated by this Agreement, shall be delivered to DDI.
(g) The Shareholders shall have delivered to DDI the stock certificates
evidencing the shares of Industries Common Stock owned by each, each duly
endorsed in blank.
(h) Each of the Shareholders shall have executed and delivered to DDI a letter
in the form of Schedule 4.1(h) concerning their investment intent with respect
to the shares of DDI Common Stock and to be received by each hereunder.
(i) The information required under Section 1.5 hereof with respect to the
designees of the Shareholders to be the officers and directors of DDI shall
have been delivered to DDI.
(j) Such certified resolutions, certificates, telephone confirmations,
documents or instruments with respect to each of the Shareholders and
Industries as DDI may reasonably have requested prior to the Closing Date to
carry out the intent and purpose of this Agreement shall have been delivered to
DDI.
Section 4.2. Conditions Precedent to the Obligations of the Shareholders . The
obligations of the Shareholders under this Agreement are, at their option,
subject to the satisfaction at the Closing on the Closing Date of the following
conditions precedent:
(a) The representation and warranties of DDI contained in this Agreement were
true when made and shall be true at and as of the closing on the Closing Date
as though such representations and warranties had been made at and as of the
Closing on the Closing Date, subject, in each case, to changes in the ordinary
course or as permitted by the provisions of this Agreement, and DDI shall
deliver a certificate to this effect from its President.
(b) The irrevocable letter of instructions to CMSS authorizing the issue of
the DDI Common Stock and DDI Preferred Stock as set forth in Section 1.1 of
this Agreement shall have been delivered by DDI to the Shareholders.
(c) An executed opinion of Greenberg Traurig, P.A., counsel to DDI, dated the
Closing Date, addressed to the Shareholders, in form and substance reasonably
acceptable to counsel to the Shareholders, shall be delivered to the
Shareholders. In rendering such opinion, such counsel may rely as to factual
matters on certificates of officers, directors, shareholders, employees and
attorneys of DDI, and may also rely on certificates of government officers and
on opinions of accountants and associated counsel, provided that such
certificates or opinions and the identity of the person issuing the same were
delivered and disclosed to DDI and its counsel on the Closing Date and are in
the form and substance reasonably satisfactory to counsel to the Shareholders.
(d) DDI shall have satisfied all the conditions and performed all the
covenants and agreements on its part required by this Agreement to be satisfied
and performed and shall not be in default under any of the provisions of this
Agreement.
(e) No litigation, proceeding, investigation or inquiry shall be pending or
threatened to set aside the authorization of this Agreement or to enjoin or
prevent the consummation of the transactions contemplated hereby.
(f) Such certified resolutions, certificates, documents or instruments with
respect to DDI as the Shareholders may reasonably have requested prior to the
Closing Date hereof to carry out the intent and purpose of this Agreement shall
have been delivered.
Section 4.3. Termination of Agreement. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing on the
Closing Date:
(a) By mutual consent of DDI and the Shareholders.
(b) By the Shareholders if DDI shall fail to or refuse to perform or observe
any covenant or agreement hereof to be performed or observed by it on or prior
to the Closing on the Closing Date or any condition to the obligations of DDI
hereunder shall not have been met or satisfied prior to the Closing on the
Closing Date. Failure of the Shareholders to exercise their right of
termination pursuant hereto, at any time or from time to time, shall not be
deemed a waiver of their right to terminate the Agreement pursuant to the
provisions of this subparagraph (b) even if the failure or refusal to perform
or observe a covenant or agreement hereof, or the failure of any condition to
be met or satisfied, is subsequently cured prior to the Closing on the Closing
Date.
(c) By DDI if the Shareholders shall fail to perform or observe an covenant or
agreement hereof to be performed or observed by them on or prior to the Closing
on the Closing Date or any condition to the obligations of DDI hereunder shall
not have been met or satisfied prior to the Closing on the Closing Date.
Failure of DDI to exercise its right of termination pursuant hereto, at any
time or from time to time, shall not be deemed a waiver of its right to
terminate the Agreement pursuant to the provisions of this subparagraph (c),
even if the failure or refusal to perform or observe a covenant or agreement
hereof, or the failure of any condition to be met or satisfied, is subsequently
cured prior to the Closing on the Closing Date.
ARTICLE 5
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations Contained in Agreement. The representations and
warranties contained in this Agreement and in any schedules, certificates or
other documents delivered pursuant hereto shall survive the execution and
delivery hereof and the Closing for a period of three (3) years except for
representations and warranties with respect to any and all tax matters which
shall survive until any liability for such matters shall be barred by the
applicable statute of limitations.
Section 5.2. Entire Agreement. This Agreement sets forth the entire
understanding and agreement between the parties and supersedes and replaces any
prior understanding, agreement or statement (written or oral) of intent. No
provision of this Agreement shall be construed to confer any rights or remedies
on any person other than the parties hereto.
Section 5.3. Indemnification by Technologies . For claims asserted with
respect to the matters set forth below, including tax matters, during the time
periods set forth in Section 5.1 the Shareholders, jointly and severally agree
to indemnify in respect of, and hold DDI and Industries harmless against, any
and all damages, claims, deficiencies, losses, and all expenses (including
interest, penalties, and reasonable attorneys' and accountants' fees and
disbursements) (collectively, "Damages"), based upon, resulting from or
otherwise in respect of any misrepresentation, breach of warranty, or
nonfulfillment or failure to perform any covenant or agreement on the part of
the Shareholders under this Agreement.
Section 5.4. Indemnification by DDI. For claims asserted during the time
periods set forth in Section 5.1, DDI agrees to indemnify in respect of, and
hold the Shareholders and Industries harmless against, any and all Damages
based upon, resulting from or otherwise in respect of any misrepresentation,
breach of warranty, or nonfulfillment or failure to perform any covenant or
agreement on the part of DDI under this Agreement.
Section 5.5. Notice and Opportunity to Defend. The party claiming
indemnification hereunder (the "Indemnified Party") shall give the other party
(the "Indemnifying Party") written notice of any claim, event,
misrepresentation, breach or occurrence giving rise to such claim for
indemnification within 60 days of its discovery of any such claim, event,
misrepresentation, breach or occurrence. Failure to give such notice within
the aforesaid time period shall release the Indemnifying Party from any
liability therefor under the provisions of Section 5.4 hereof. The
Indemnifying Party shall have the right at its sole cost and expense to:
(a) cure the claim, event, misrepresentation, breach, or occurrence giving
rise to the right of indemnification within 60 days following receipt of such
notice; provided, however, that if such cure is commenced within such 60 day
period and is pursued diligently and in good faith to completion, such period
shall be extended for a reasonable sufficient period of time to enable such
cure to be completed, or
(b) defend any third party claim, other than a claim by or through any taxing
authority, alleged to give rise to the right of indemnification with counsel
satisfactory to the Indemnified Party, and the Indemnifying Party shall be
liable to the extent of all Damages. In computing the amount for which any
party is liable under this Agreement, there shall be deducted an amount equal
to any tax savings or benefits, insurance recoveries, benefits or off-sets to
which the Indemnified Party shall be entitled directly as a result of the
Damages.
ARTICLE 6
POST-CLOSING OBLIGATIONS
Section 6.1. Further Assurances. Following the Closing, each of the parties
hereto shall each execute and deliver such documents, and take such other
action, as shall be reasonably requested by any of the other parties hereto to
carry out the transactions contemplated by this Agreement.
Section 6.2. Publicity. Except as permitted by Section 3.4 hereof, the
parties hereto shall not issue or make, or cause to have issued or made, any
publicity release or announcement concerning the transactions contemplated
hereby, without the advance approval in writing of the form and substance
thereof by all parties.
ARTICLE 7
MISCELLANEOUS
Section 7.1. Notices. All notices or other communications required or
permitted by this Agreement shall be sufficiently given if in writing and only
delivered (personally, by courier service such as Federal Express or by other
messenger) or mailed by registered or certified mail, return receipt requested,
as follows:
If to the Shareholders, as follows:
c/o Eagleview Industries, Inc.
5030 Champion Blvd.
Suite 6-271
Boca Raton, FL 33496
with a copy to:
Siegel, Lipman, Dunay & Shepard
5355 Town Center Road, Suite 801
Boca Raton, FL 33486
Att: Jonathan Shepard, Esq.
If to DDI, as follows:
c/o Earl M. Anderson, Jr., President
21693 Town Place Drive
Boca Raton, FL 33433
with a copy to:
Greenberg Traurig, P.A.
777 South Flagler Drive
Third Floor East
West Palm Beach, Florida 33401
Attention: Allan Salovin, Esq.
or to such other address as hereafter shall be furnished as provided in this
Section 7.1 by any of the parties hereto to the other party hereto.
Section 7.2. Assignment and Amendment. This Agreement shall not be assignable
by any party, and shall not be altered or otherwise amended except pursuant to
a writing executed by all of the parties hereto.
Section 7.3. Severability. If any provision of this Agreement, or the
application of any such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those as to which it is held invalid, shall not be affected thereby.
Section 7.4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single instrument. It shall not be necessary that
any counterpart be signed by all of the parties hereto.
Section 7.5. Variation in Pronouns. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the person or persons or entity or entities may
require.
Section 7.6. Indulgences, Etc. Neither the failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy, power
or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
Section 7.7. Controlling Law; Jurisdiction. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the State of
Florida, notwithstanding any conflict-of-laws doctrines of such state or other
jurisdiction to the contrary, and without the aid of any canon, custom or rule
of law requiring construction against the draftsman. The Courts of the State
of Florida or of the United States District Court, Southern District, Florida
shall be competent courts to adjudicate any disputes arising out of this
Agreement and the parties hereto submit to the personal jurisdiction of each of
such courts and waive all rights to waive jurisdiction.
Section 7.8. Exhibits and Schedules. All Exhibits and Schedules attached
hereto are incorporated by reference into, and made a part of, this Agreement.
Section 7.9. Headings. The Article and Section headings are for convenience
only; they form in part of this Agreement and shall not affect its
interpretation. IN WITNESS WHEREOF, this Agreement has been executed and
delivered as of the date first written above.
DISTINCTIVE DEVICES, INC.
By:
President
EAGLEVIEW TECHNOLOGIES, INC.
By:
President
Alfred M. Carroccia