EXCHANGE AGREEMENT
Between
Sealife Corporation
A Delaware Corporation
and
Sealife Corp.
A Nevada Corporation
Dated December 20, 2002
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement") is
entered into as of this 20th day of December, 2002 by and between Sealife
Corporation., formerly Integrated Enterprises, Inc., a Delaware corporation
(hereinafter referred to as the "Company") and Sealife Corp., a Nevada
corporation (hereinafter referred to as "SLC"), upon the following premises:
Premises
WHEREAS, the Company is a publicly held corporation organized under the
laws of the State of Delaware;
WHEREAS, SLC is a privately held corporation organized under the laws of
the State of Nevada;
WHEREAS, management of the constituent corporations have determined
that it is in the best interest of the parties that the Company acquire 100% of
the issued and outstanding securities of SLC in exchange for the issuance of
certain shares of the Company (the "Exchange") and SLC agrees to use its best
efforts to cause its shareholders (the " SLC Shareholders") to exchange their
securities of SLC on the terms described herein; and
WHEREAS, the Company and SLC desire to set forth the terms of the
Exchange, which is intended to constitute a tax-free reorganization pursuant to
the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986.
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 SLC
As an inducement to, and to obtain the reliance of the Company, except
as set forth on the SLC Schedules (as hereinafter defined), SLC represents and
warrants as follows:
Section 1.01 Organization. SLC 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, including qualification
to do business as a foreign corporation in the states or countries in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification, except where failure to be so qualified
would not have a material adverse effect on its business. Included in the SLC
Schedules are complete and correct copies of the articles of incorporation, and
bylaws of SLC 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 SLC 's articles of incorporation or
bylaws. SLC has taken all actions required by law, its articles of
incorporation, or otherwise to authorize the execution and delivery of this
Agreement. SLC has full power, authority, and legal right and has taken all
action required by law, its articles of incorporation, and otherwise to
consummate the transactions herein contemplated.
Section 1.02 Capitalization. The authorized capitalization of SLC
consists of 50,000,000 shares of common stock, $.001 par value, of which
2,524,200 shares are currently issued and outstanding and 100,000 shares of
preferred stock, $.001 par value, of which 0 shares are currently issued and
outstanding. All issued and outstanding shares are legally issued, fully paid,
and non-assessable and not issued in violation of the preemptive or other rights
of any person.
Section 1.03 Subsidiaries and Predecessor Corporations. SLC does not
have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in Schedule 1.03. For purposes hereinafter, the term " SLC " also
includes those subsidiaries, if any, set forth on Schedule 1.03.
Section 1.04 Information. The information concerning SLC set forth in
this Agreement and in the SLC 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. In addition, SLC has
fully disclosed in writing to the Company (through this Agreement or the SLC
Schedules) all information relating to matters involving SLC or its assets or
its present or past operations or activities which (i) indicated or may
indicate, in the aggregate, the existence of a greater than $25,000 liability or
diminution in value, (ii) have led or may lead to a competitive disadvantage on
the part of SLC or (iii) either alone or in aggregation with other information
covered by this Section, otherwise have led or may lead to a material adverse
effect on the transactions contemplated herein or on SLC, its assets, or its
operations or activities as presently conducted or as contemplated to be
conducted after the Closing Date, including, but not limited to, information
relating to governmental, employee, environmental, litigation and securities
matters and transactions with affiliates.
Section 1.05 Options or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued SLC common stock, except options, warrants, calls or commitments, if
any, to which SLC is not a party and by which it is not bound.
Section 1.06 Absence of Certain Changes or Events. Except as set
forth in this Agreement or the SLC Schedules, since October 31, 2002:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of SLC or (ii)
any damage, destruction, or loss to SLC (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of SLC;
(b) SLC has not (i) amended its articles 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 outside of the ordinary course of
business or material considering the business of SLC; (iv) made any
material change in its method of management, operation or accounting;
(v) entered into any other material transaction other than sales in the
ordinary course of its business; (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
salaried employees whose monthly compensation exceeds $1,000; 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) SLC 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 as disclosed herein and except
liabilities incurred in the ordinary course of business; (ii) paid or
agreed to pay any material obligations or liability (absolute or
contingent) other than current liabilities, and current liabilities
incurred in the ordinary course of business and professional and other
fees and expenses in connection with the preparation of this Agreement
and the consummation of the transactions contemplated hereby; (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 $1,000); or (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 SLC;
and
(d) to the best knowledge of SLC, SLC 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 SLC.
Section 1.07 Title and Related Matters. SLC has good and marketable
title to all of its properties, inventory, interests in properties, and assets,
real and personal, or acquired after that date (except properties, inventory,
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 SLC
Schedules. Except as set forth in the SLC Schedules, SLC 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 SLC 's business. Except as set forth in
the SLC Schedules, no third party has any right to, and SLC 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, propriety
techniques, trademarks, service marks, trade names, or copyrights which,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a materially adverse effect on the business,
operations, financial condition, income, or business prospects of SLC or any
material portion of its properties, assets, or rights.
Section 1.08 Litigation and Proceedings. Except as set forth in the SLC
Schedules, there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of SLC after reasonable investigation, threatened by or
against SLC or affecting SLC 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. SLC does not have any knowledge of any
material default on its part with respect to any judgment, order, 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 1.09 Contracts.
(a) Except as included or described in the SLC Schedules, there are no
"material" contracts, agreements, franchises, license agreements, debt
instruments or other commitments to which SLC is a party or by which it or
any of its assets, products, technology, or properties are bound other than
those incurred in the ordinary course of business (as used in this
Agreement, a "material" contract, agreement, franchise, license agreement,
debt instrument or commitment is one which (i) will remain in effect for
more than six (6) months after the date of this Agreement or (ii) involves
aggregate obligations of at least fifty thousand dollars ($50,000));
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which SLC is a party or by which its properties are
bound and which are material to the operations of SLC taken as a whole are
valid and enforceable by SLC in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) SLC is not a party to or bound by, and the properties of SLC 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, the
business operations, properties, assets, or condition of SLC; and
(d) Except as included or described in the SLC Schedules, SLC 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, (iii) agreement, contract, or indenture
relating to the borrowing of money, (iv) guaranty of any obligation, other
than one on which SLC 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 $25,000 in the aggregate; (v)
collective bargaining agreement; or (vi) agreement with any present or
former officer or director of SLC.
Section 1.10 Material Contract Defaults. SLC 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 SLC and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which SLC has not taken adequate steps to prevent such a default from
occurring.
Section 1.11 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, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which SLC is a party or to which any of its
properties or operations are subject.
Section 1.12 Governmental Authorizations. Except as set forth in the
SLC Schedules, SLC 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 SLC of this Agreement and the consummation by
SLC of the transactions contemplated hereby.
Section 1.13 Compliance With Laws and Regulations. Except as set forth
in the SLC Schedules, to the best of its knowledge SLC 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 SLC or except to the extent that noncompliance would not result in
the occurrence of any material liability for SLC.
Section 1.14 Approval of Agreement. The board of directors of SLC has
authorized the execution and delivery of this Agreement by SLC and has approved
this Agreement and the transactions contemplated hereby, and will recommend to
the SLC Shareholders that the Exchange be accepted by them.
Section 1.15 Material Transactions or Affiliations. Set forth in the
SLC Schedules is a description of every contract, agreement, or arrangement
between SLC 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 SLC to own beneficially, 5% or more of the issued and
outstanding common stock of SLC 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. Except as disclosed in the SLC Schedules or otherwise
disclosed herein, no officer, director, or 5% shareholder of SLC has, or has had
since inception of SLC, any known interest, direct or indirect, in any
transaction with SLC which was material to the business of SLC. There are no
commitments by SLC, whether written or oral, to lend any funds, or to borrow any
money from, or enter into any other transaction with, any such affiliated
person.
Section 1.16 SLC Schedules. SLC has delivered to the Company the
following schedules, which are collectively referred to as the "SLC Schedules"
and which consist of separate schedules dated as of the date of execution of
this Agreement, all certified by the chief executive officer of SLC as complete,
true, and correct as of the date of this Agreement in all material respects:
(a) a schedule containing complete and correct copies of the
articles of incorporation, and bylaws of SLC in effect as of the date
of this Agreement;
(b) a Schedule 1.16(b) containing a list indicating the name
and address of each shareholder of SLC together with the number of
shares owned by him, her or it;
(c) a schedule containing a description of all real property
owned by SLC, 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;
(d) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which
SLC carries on or proposes to carry on its business (except those
which, in the aggregate, are immaterial to the present or proposed
business of SLC);
(e) a schedule setting forth a description of any material
adverse change in the business, operations, property, inventory,
assets, or condition of SLC since October 31, 2002, required to be
provided pursuant to section 1.06 hereof; and
(f) a schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the
SLC Schedules by Sections 1.01 through 1.16.
SLC shall cause the SLC Schedules and the instruments and data
delivered to the Company hereunder to be promptly updated after the date hereof
up to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to
above have been completed or are available to be furnished by SLC. SLC shall
have until January 31, 2002 to provide such schedules. If SLC cannot or fails to
do so, or if the Company acting reasonably finds any such schedules or updates
provided after the date hereof to be unacceptable according to the criteria set
forth below, the Company may terminate this Agreement by giving written notice
to SLC within five (5) days after the schedules or updates were due to be
produced or were provided. For purposes of the foregoing, the Company may
consider a disclosure in the SLC Schedules to be "unacceptable" only if that
item would have a material adverse impact on the financial condition of SLC,
taken as a whole.
Section 1.17 Valid Obligation. This Agreement and all agreements and
other documents executed by SLC in connection herewith constitute the valid and
binding obligation of SLC, enforceable in accordance with its or their terms,
except as may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and subject to the
qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefor may be brought.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE COMPANY
As an inducement to, and to obtain the reliance of SLC and the SLC
Shareholders, except as set forth in the Company Schedules (as hereinafter
defined), the Company represents and warrants as follows:
Section 2.01 Organization. The Company 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, to carry on its
business in all material respects as it is now being conducted, and except where
failure to be so qualified would not have a material adverse effect on its
business, 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 Company Schedules are
complete and correct copies of the certificate of incorporation and bylaws of
the Company 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 the Company's certificate of incorporation or
bylaws. The Company has taken all action required by law, its certificate of
incorporation, its bylaws, or otherwise to authorize the execution and delivery
of this Agreement, and the Company has full power, authority, and legal right
and has taken all action required by law, its certificate of incorporation,
bylaws, or otherwise to consummate the transactions herein contemplated.
Section 2.02 Capitalization. The Company's authorized capitalization
consists of 100,000,000 shares of common stock, par value $ .0001 of which
274,554 shares will be issued and outstanding at the Closing as defined in
Section 3.03 (the "Original Company Shares") and 10,000,000 shares of preferred
stock, $ .0001 par value of which no shares of preferred stock are issued and
outstanding. All issued and outstanding shares are legally issued, fully paid,
and non-assessable and not issued in violation of the preemptive or other rights
of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. The Company
does not have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in Schedule 2.03. For purposes hereinafter, the term "Company" also
includes those subsidiaries, if any, set forth on Schedule 2.03.
Section 2.04 Financial Statements.
(a) Included in the Company Schedules are (i) the audited balance
sheets of the Company and the related statements of operations and cash
flows as of and for the twelve months ended September 30, 2001 and (ii) the
unaudited balance sheets of the Company and the related statements of
operations and cash flows for the twelve months ended September 30, 2002.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved. The Company balance sheets present fairly
as of their respective dates the financial condition of the Company. As of
the date of such balance sheets, except as and to the extent reflected or
reserved against therein, the Company had no liabilities or obligations
(absolute or contingent) which should be reflected in the balance sheets 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 the Company, in accordance with
generally accepted accounting principles. The statements of operations,
stockholders' equity and cash flows reflect fairly the information required
to be set forth therein by generally accepted accounting principles.
(c) The Company 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) The books and records, financial and otherwise, of the Company are
in all material aspects complete and correct and have been maintained in
accordance with good business and accounting practices.
(e) All of the Company's assets are reflected on its financial
statements, and, except as set forth in the Company Schedules or the
financial statements of the Company or the notes thereto, the Company has
no material liabilities, direct or indirect, matured or unmatured,
contingent or otherwise.
Section 2.05 Information. The information concerning the Company set
forth in this Agreement and the Company Schedules is complete and accurate in
all material respects and does not contain any untrue statements 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. In
addition, the Company has fully disclosed in writing to SLC (through this
Agreement or the Company Schedules) all information relating to matters
involving the Company or its assets or its present or past operations or
activities which (i) indicated or may indicate, in the aggregate, the existence
of a greater than $5,000 liability or diminution in value, (ii) have led or may
lead to a competitive disadvantage on the part of the Company or (iii) either
alone or in aggregation with other information covered by this Section,
otherwise have led or may lead to a material adverse effect on the transactions
contemplated herein or on the Company, its assets, or its operations or
activities as presently conducted or as contemplated to be conducted after the
Closing Date, including, but not limited to, information relating to
governmental, employee, environmental, litigation and securities matters and
transactions with affiliates.
Section 2.06 Options or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of the Company, other than those disclosed in the Company
Schedules.
Section 2.07 Absence of Certain Changes or Events. Except as disclosed
in Exhibit 2.07, or permitted in writing by SLC, since the date of the most
recent Company balance sheet:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets or condition of the Company or
(ii) any damage, destruction or loss to the Company (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets or condition of the Company;
(b) The Company has not (i) amended its certificate of
incorporation or bylaws except to reflect the name change and reverse
stock split; (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 outside of the ordinary course of
business or material considering the business of the Company; (iv) made
any material change in its method of management, operation, or
accounting; (v) entered into any transactions or agreements other than
in the ordinary course of business; (vi) made any accrual or
arrangement for or 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 salaried employees whose monthly compensation exceed $1,000; 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) The Company has not (i) granted or agreed to grant any
options or warrants; (ii) 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; (iii) paid or agreed to pay any material
obligations or liabilities (absolute or contingent) other than current
liabilities reflected in or shown on the most recent the Company
balance sheet and current liabilities incurred since that date in the
ordinary course of business and professional and other fees and
expenses in connection with the preparation of this Agreement and the
consummation of the transaction contemplated hereby; (iv) 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 $1,000), or canceled, or agreed to cancel, any debts or claims
(except debts or claims which in the aggregate are of a value less than
$1,000); and (v) 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 the
Company;; and
(d) to the best knowledge of the Company, it 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 the Company.
Section 2.08 Title and Related Matters. The Company has good and
marketable title to all of its properties, inventory, interest in properties,
and assets, real and personal, which are reflected in the most recent Company
balance sheet or acquired after that date (except properties, inventory,
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
Company Schedules. Except as set forth in the Company Schedules, the Company
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 the Company's
business. Except as set forth in the Company Schedules, no third party has any
right to, and the Company 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, propriety techniques, trademarks, service marks,
trade names, or copyrights which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a materially
adverse effect on the business, operations, financial condition, income, or
business prospects of the Company or any material portion of its properties,
assets, or rights.
Section 2.09 Litigation and Proceedings. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of the Company after
reasonable investigation, threatened by or against the Company or affecting the
Company 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 except as disclosed in Schedule 2.09. The Company has no
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 any circumstance which after
reasonable investigation would result in the discovery of such default.
Section 2.10 Contracts.
(a) The Company is not a party to, and its assets, products,
technology and properties are not bound by, any material contract,
franchise, license agreement, agreement, debt instrument or other
commitments whether such agreement is in writing or oral, except as
disclosed in Schedule 2.10.
(b) All contracts, agreements, franchises, license agreements,
and other commitments to which the Company is a party or by which its
properties are bound and which are material to the operations of the
Company taken as a whole are valid and enforceable by the Company in
all respects, except as limited by bankruptcy and insolvency laws and
by other laws affecting the rights of creditors generally;
(c) The Company is not a party to or bound by, and the
properties of the Company 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, the business operations,
properties, assets, or condition of the Company; and
(d) Except as included or described in the Company Schedules
or reflected in the most recent Company balance sheet, the Company 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, (iii)
agreement, contract, or indenture relating to the borrowing of money,
(iv) guaranty of any obligation, other than one on which the Company 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 $25,000 in the aggregate; (v) collective
bargaining agreement; or (vi) agreement with any present or former
officer or director of the Company.
Section 2.11 Material Contract Defaults. The Company 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 the Company and there is no event of default
in any material respect under any such contract, agreement, lease, or other
commitment in respect of which the Company has not taken adequate steps to
prevent such a default from occurring.
Section 2.12 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, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or to which any of its assets or operations are subject.
Section 2.13 Governmental Authorizations. The Company has all licenses,
franchises, permits, and other governmental 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, of registration, declaration or filing with, any
court or other governmental body is required in connection with the execution
and delivery by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
knowledge, the Company 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 condition of
the Company or except to the extent that noncompliance would not result in the
occurrence of any material liability. This compliance includes, but is not
limited to, the filing of all reports to date with federal and state securities
authorities.
Section 2.15 Approval of Agreement. The board of directors of the
Company has authorized the execution and delivery of this Agreement by the
Company and has approved this Agreement and the transactions contemplated
hereby.
Section 2.16 Continuity of Business Enterprises. The Company has no
commitment or present intention to liquidate SLC or sell or otherwise dispose of
a material portion of SLC's business or assets following the consummation of the
transactions contemplated hereby.
Section 2.17 Material Transactions or Affiliations. Except as disclosed
herein and in the Company Schedules, there exists no contract, agreement or
arrangement between the Company 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 the Company to own beneficially, 5% or more
of the issued and outstanding common stock of the Company and which is to be
performed in whole or in part after the date hereof or was entered into not more
than three years prior to the date hereof. Neither any officer, director, nor 5%
shareholder of the Company has, or has had since inception of the Company, any
known interest, direct or indirect, in any such transaction with the Company
which was material to the business of the Company. The Company has no
commitment, whether written or oral, to lend any funds to, borrow any money
from, or enter into any other transaction with, any such affiliated person.
Section 2.18 The Company Schedules. The Company has delivered to SLC
the following schedules, which are collectively referred to as the "Company
Schedules" and which consist of separate schedules, which are dated the date of
this Agreement, all certified by the chief executive officer of the Company to
be complete, true, and accurate in all material respects as of the date of this
Agreement:
(a) a schedule containing complete and accurate copies of the
certificate of incorporation and bylaws of the Company as in effect as
of the date of this Agreement;
(b) a schedule containing the financial statements of the
Company identified in paragraph 2.04(b);
(c) a Schedule 2.18(c) containing a list indicating the name
and address of each shareholder of the Company together with the number
of shares owned by him, her or it;
(d) a schedule containing a description of all real property
owned by the Company, 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;
(e) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which
the Company carries on or proposes to carry on its business (except
those which, in the aggregate, are immaterial to the present or
proposed business of the Company);
(f) a schedule listing the accounts receivable and notes and
other obligations receivable of he Company as of September 30, 2002, or
thereafter other than in the ordinary course of business of the
Company, 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 debtor;
(g) a schedule listing the accounts payable and notes and
other obligations payable of the Company as of September 30, 2002, or
that arose thereafter other than in the ordinary course of the business
of the Company, 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, set offs,
reimbursements, discounts, or other adjustments, which in the aggregate
are material and due to or claimed by the Company respecting such
obligations;
(h) a schedule setting forth a description of any material
adverse change in the business, operations, property, inventory,
assets, or condition of the Company since September 30, 2002 required
to be provided pursuant to section 2.07 hereof; and
(i) a schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the
Company Schedules by Sections 2.01 through 2.18.
The Company shall cause the Company Schedules and the instruments and
data delivered to SLC hereunder to be promptly updated after the date hereof up
to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to
above have been completed or are available to be furnished by the Company. The
Company shall have until January 31, 2002 to provide such schedules. If the
Company cannot or fails to do so, or if SLC acting reasonably finds any such
schedules or updates provided after the date hereof to be unacceptable according
to the criteria set forth below, SLC may terminate this Agreement by giving
written notice to the Company within five (5) days after the schedules or
updates were due to be produced or were provided. For purposes of the foregoing,
SLC may consider a disclosure in the Company Schedules to be "unacceptable" only
if that item would have a material adverse impact on the financial statements
listed in Section 2.04(b), taken as a whole.
Section 2.19 Valid Obligation. This Agreement and all agreements and
other documents executed by the Company in connection herewith constitute the
valid and binding obligation of the Company, enforceable in accordance with its
or their terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 3.03),
each SLC Shareholder who shall elect to accept the exchange offer described
herein (the "Accepting Shareholders"), shall assign, transfer and deliver, 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 SLC set forth on Schedule 1.16(b) attached hereto, in the aggregate
constituting a minimum of 80% of the issued and outstanding shares of common
stock of SLC held by each of such shareholders; the objective of such Exchange
being the acquisition by the Company of 100% of the issued and outstanding
common stock of SLC. In exchange for the transfer of such securities by the SLC
Shareholders, the Company shall issue to the SLC Shareholders an aggregate of up
to 6,805,364 shares of common stock of the Company (the "Initial Shares"). At
the Closing, each SLC Shareholder shall, on surrender of his certificate or
certificates representing such SLC shares to the Company or its registrar or
transfer agent, be entitled to receive a certificate or certificates evidencing
his proportionate interest in the Initial Shares. Upon consummation of the
transaction contemplated herein, assuming participation by all of the SLC
Shareholders, all of the shares of capital stock of SLC shall be held by the
Company.
Section 3.02 Anti-Dilution. The number of shares of the Company's
common stock issuable upon exchange pursuant to Section 3.01 shall be
appropriately adjusted to take into account any other stock split, stock
dividend, reverse stock split, recapitalization, or similar change in the
Company common stock which may occur (i) between the date of the execution of
this Agreement and the Closing Date, as to the Initial Shares, and (ii) between
the date of the execution of this Agreement and the release date, as to the
Additional Shares.
Section 3.03 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") but not later than December 31, 2002, subject
to the right of the Company or SLC to extend such Closing Date by up to an
additional ten (10) days. Such Closing shall take place at a mutually agreeable
time and place.
Section 3.04 Closing Events. At the Closing, the Company, SLC and each
of the SLC Accepting Shareholders shall execute, acknowledge, and deliver (or
shall ensure 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. Among
other things, the Company shall provide an opinion of counsel acceptable to SLC
as to such matters as SLC may reasonably request, which shall include, but not
be limited to, a statement, to the effect that to such counsel's best knowledge,
after reasonable investigation, from inception until the Closing Date, the
Company 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 condition of the Company
or except to the extent that noncompliance would not result in the occurrence of
any material liability (such compliance including, but not being limited to, the
filing of all reports to date with federal and state securities authorities).
Section 3.05 Termination.
(a) This Agreement may be terminated by the board of directors of either
the Company or SLC 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 upon the advice of its legal counsel, makes it
inadvisable to proceed with the Exchange; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions (which does not
include the Securities and Exchange Commission) 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.
In the event of termination pursuant to this paragraph (a) of Section
3.05, 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 by the board of directors
of the Company at any time prior to the Closing Date if:
(i) the board of directors of the Company determines
in good faith that one or more of the Company's conditions to
Closing has not occurred, through no fault of the Company.
(ii) The Company takes the termination action
specified in Section 1.16 as a result of SLC Schedules or
updates thereto which the Company finds unacceptable; or
(iii) SLC 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 SLC contained herein shall be inaccurate in any material
respect, where such noncompliance or inaccuracy has not been
cured within ten (10) days after written notice thereof.
If this Agreement is terminated pursuant to this paragraph (b) of
Section 3.05, this Agreement shall be of no further force or effect,
and no obligation, right or liability shall arise hereunder, except
that Purchaser shall bear the costs in connection with the negotiation,
preparation, and execution of this Agreement and qualifying the offer
and sale of securities to be issued in the Exchange under the
registration requirements, or exemption from the registration
requirements, of state and federal securities laws.
(c) This Agreement may be terminated by the board of directors
of SLC at any time prior to the Closing Date if:
(i) there shall have been any change after the date
of the latest balance sheet of the Company in the assets,
properties, business or financial condition of the Company,
which could have a material adverse effect on the financial
statements of the Company listed in Section 2.04(b) taken as a
whole, except any changes disclosed in the Company Schedules;
(ii) the board of directors of SLC determines in good
faith that one or more of SLC's conditions to Closing has not
occurred, through no fault of SLC;
(iii) SLC takes the termination action specified in
Section 2.18 as a result of the Company Schedules or updates
thereto which SLC finds unacceptable;
(iv) on or before December 31, 2002, SLC notifies the
Company that SLC's investigation pursuant to Section 4.01
below has uncovered information which it finds unacceptable by
the same criteria set forth in Section 2.18; or
(v) The Company 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 the Company contained herein shall be inaccurate in any
material respect, where such noncompliance or inaccuracy has
not been cured within ten (10) days after written notice
thereof.
If this Agreement is terminated pursuant to this paragraph (c) of
Section 3.05, this Agreement shall be of no further force or effect,
and no obligation, right or liability shall arise hereunder, except
that the Company shall bear the costs as well as the reasonable costs
of the Company incurred in connection with the negotiation, preparation
and execution of this Agreement.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. The Company and SLC will
each afford to the officers and authorized representatives of the other full
access to the properties, books and records of the Company or SLC, as the case
may be, in order that each may have a 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 the Company or SLC, as
the case may be, as the other shall from time to time reasonably request.
Without limiting the foregoing, as soon as practicable after the end of each
fiscal quarter (and in any event through the last fiscal quarter prior to the
Closing Date), the Company shall provide SLC with quarterly internally prepared
and unaudited financial statements.
Section 4.02 Delivery of Books and Records. At the Closing, SLC shall
deliver to the Company copies of the corporate minute books, books of account,
contracts, records, and all other books or documents of SLC now in the
possession of SLC or its representatives.
Section 4.03 Third Party Consents and Certificates. The Company and SLC
agree to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein contemplated.
Section 4.04 Accredited Status. All of the SLC Shareholders
participating in the Share Exchange must represent that they are accredited
investors as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933.
Section 4.05 Consent of SLC Shareholders. SLC shall use its best
efforts to obtain the consent of all SLC Shareholders to participate in the
Exchange.
Section 4.06 Designation of Directors and Officers. On or before
the Closing Date, the Company's board of directors shall consist of George W.
Bogle Jr. and Richard Mark. George Bogle shall be elected Chief Executive
Officer of the Company.
Section 4.07 Exclusive Dealing Rights. Until 5:00 P.M. Eastern
Daylight Time on December 31, 2002.
(a) In recognition of the substantial time and effort which
the Company has spent and will continue to spend in investigating SLC
and its business and in addressing the matters related to the
transactions contemplated herein, each of which may preempt or delay
other management activities, neither SLC, nor any of its officers,
employees, representatives or agents will directly or indirectly
solicit or initiate any discussions or negotiations with, or, except
where required by fiduciary obligations under applicable law as advised
by counsel, participate in any negotiations with or provide any
information to or otherwise cooperate in any other way with, or
facilitate or encourage any effort or attempt by, any corporation,
partnership, person or other entity or group (other than the Company
and its directors, officers, employees, representatives and agents)
concerning any merger, sale of substantial assets, sale of shares of
capital stock, (including without limitation, any public or private
offering of the common stock of SLC) or similar transactions involving
SLC (all such transactions being referred to as "SLC Acquisition
Transactions"). If SLC receives any proposal with respect to a SLC
Acquisition Transaction, it will immediately communicate to the Company
the fact that it has received such proposal and the principal terms
thereof.
(b) In recognition of the substantial time and effort which
SLC has spent and will continue to spend in investigating the Company
and its business and in addressing the matters related to the
transactions contemplated herein, each of which may preempt or delay
other management activities, neither the Company, nor any of its
officers, employees, representatives or agents will directly or
indirectly solicit or initiate any discussions or negotiations with,
or, except where required by fiduciary obligations under applicable law
as advised by counsel, participate in any negotiations with or provide
any information to or otherwise cooperate in any other way with, or
facilitate or encourage any effort or attempt by, any corporation,
partnership, person or other entity or group (other than SLC and its
directors, officers, employees, representatives and agents) concerning
any merger, sale of substantial assets, sale of shares of capital
stock, (including without limitation, any public or private offering of
the common stock of the Company or similar transactions involving the
Company (all such transactions being referred to as "Company
Acquisition Transactions"). If the Company receives any proposal with
respect to a Company Acquisition Transaction, it will immediately
communicate to SLC the fact that it has received such proposal and the
principal terms thereof.
Section 4.08 Actions Prior to Closing.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the Company Schedules or SLC
Schedules or as permitted or contemplated by this Agreement, the
Company (subject to paragraph (d) below) and SLC 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;
(iv) perform in all material respects all of its
obligations 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 the Company nor SLC will:
(i) make any changes in their articles or certificate
of incorporation or bylaws, except as otherwise provided in
this Agreement;
(ii) take any action described in Section 1.06 in the
case of SLC, or in Section 2.07, in the case of the Company
(all except as permitted therein or as disclosed in the
applicable party's schedules);
(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; or
(iv) sell any assets or discontinue any operations
(other than the Divestiture), sell any shares of capital stock
(other than as contemplated in Section 4.06 hereof and the
sale of securities underlying existing warrants or options of
the Company) or conduct any similar transactions other than in
the ordinary course of business.
Section 4.09 Indemnification.
(a) SLC hereby agrees to indemnify the Company and each of the
officers, agents and directors of the Company 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 misrepresentations 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) The Company hereby agrees to indemnify SLC and each of the
officers, agents, and directors of SLC and each of the SLC Shareholders
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 II 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.
Section 4.10 Limitation of Subsequent Corporate Actions.
It is expressly understood and agreed that the Company, the
shareholders of SLC, and their affiliates, will take all steps
necessary to ensure that the assets of SLC shall remain in the
Company as part of its business operations;
Section 4.11 Indemnification of Subsequent Corporate Actions.
(a) No officer, director, controlling shareholder, agent or
representative of the Company, or any other person currently
affiliated with the Company, has offered or agreed to assist
in the promotion, market making, development, enhancement,
or support of the Company's business, capital raising, or
securities market.
(2) SLC hereby represents and warrants that it will indemnify
and hold harmless any officer, director, controlling
shareholder, agent or representative of the Company, or any
other person affiliated with the Company, from any
decisions, activities, or conduct of the Company
contemporaneous with, or subsequent to this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants.
The representations and warranties made by SLC 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). SLC shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by SLC prior to or at the Closing.
The Company shall be furnished with a certificate, signed by a duly authorized
executive officer of SLC and dated the Closing Date, to the foregoing effect.
Section 5.02 Officer's Certificate. The Company shall have been
furnished with a certificate dated the Closing Date and signed by a duly
authorized officer of SLC to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of SLC
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 SLC Schedules, by or against SLC, which might result
in any material adverse change in any of the assets, properties, business, or
operations of SLC.
Section 5.03 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any change in the financial condition, business,
or operations of SLC nor shall any event have occurred which, with the lapse of
time or the giving of notice, is determined to be unacceptable using the
criteria set forth in Section 1.06.
Section 5.04 Approval by SLC Shareholders. The Exchange shall have been
approved, and shares delivered in accordance with Section 3.01, by the holders
of not less than eighty percent (80%) of the outstanding common stock of SLC,
unless a lesser number is agreed to by the Company.
Section 5.05 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.06 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and SLC after the Closing Date on the basis as
presently operated shall have been obtained.
Section 5.07 Other Items.
(a) The Company shall have received a list of SLC's shareholders
containing the name, address, and number of shares held by each SLC
shareholder as of the date of Closing, certified by an executive officer of
SLC as being true, complete and accurate; and
(b) The Company shall have received such further opinions, documents,
certificates or instruments relating to the transactions contemplated
hereby as the Company may reasonably request.
Section 5.08 Accredited Status. All of the SLC Shareholders
participating in the Share Exchange must represent that they are accredited
investors as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SLC
AND THE SLC SHAREHOLDERS
The obligations of SLC and the SLC Shareholders under this Agreement
are subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants.
The representations and warranties made by the Company 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.
Additionally, the Company shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
the Company and shall have satisfied the conditions described below prior to or
at the Closing:
(a) Immediately prior to the Closing, the Company shall have
no more than an aggregate of 7,000,000 shares of common stock issued
and outstanding and 0 shares of preferred stock, excluding any shares
issuable pursuant to the Exchange.
(b) The directors of the Company shall have approved the
Exchange and the related transactions described herein.
SLC shall have been furnished with certificates, signed by duly authorized
executive officers of the Company and dated the Closing Date, to the foregoing
effect.
Section 6.02 Officer's Certificate. SLC shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized executive
officer of the Company, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of the Company
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 Company Schedules, by or against the Company, which
might result in any material adverse change in any of the assets, properties or
operations of the Company.
Section 6.03 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any change in the financial condition, business or
operations of the Company nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable using
the criteria set forth in Section 2.18.
Section 6.04 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.05 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and SLC after the Closing Date on the basis as
presently operated shall have been obtained.
Section 6.06 Other Items. SLC shall have received further opinions,
documents, certificates, or instruments relating to the transactions
contemplated hereby as SLC may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Bankruptcy and No Criminal Convictions.
None of the Parties to the Agreement, nor their officers, directors or
affiliates, promoter or control person, nor any predecessor, thereof have been
subject to the following:
(4) Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer within the past five
years;
(5) Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
(6) Being subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities; and
(7) Being found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission (the "SEC") or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended, or
vacated.
Section 7.02 Brokers. The Company and SLC agree that, except as set out
on Schedule 7.02 attached hereto, there were no brokers or finders involved in
bringing the parties together or who were instrumental in the negotiation,
execution or consummation of this Agreement. The Company and SLC each agree to
indemnify the other against any claim by any third person other than those
described above for any commission, brokerage, or finder's fee arising from the
transactions contemplated hereby based on any alleged agreement or understanding
between the indemnifying party and such third person, whether express or implied
from the actions of the indemnifying party.
Section 7.03 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 the matters of state law, with the laws
of the State of Texas without giving effect to principles of conflicts of law
thereunder. Each of the parties (a) irrevocably consents and agrees that any
legal or equitable action or proceedings arising under or in connection with
this Agreement shall be brought exclusively in the federal courts of the United
States, (b) by execution and delivery of this Agreement, irrevocably submits to
and accepts, with respect to any such action or proceeding, generally and
unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives
any and all rights such party may now or hereafter have to object to such
jurisdiction.
Section 7.04 Notices. Any notice or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to the Company, to: Sealife Corporation (Delaware)
If to SLC, to: Sealife Corp (Nevada)
18482 Park Villa Place
Villa Park CA 92861
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 (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.05 Attorney's Fees. In the event that either party institutes
any action or suit to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the prevailing party shall be reimbursed by
the losing party for all costs, including reasonable attorney's fees, incurred
in connection therewith and in enforcing or collecting any judgment rendered
therein.
Section 7.06 Confidentiality. Each party hereto agrees with the other
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, of 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; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.07 Public Announcements and Filings. Unless required by
applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
Section 7.08 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.
Section 7.09 Third Party Beneficiaries. This contract is strictly
between the Company and SLC, and, except as specifically provided, no director,
officer, stockholder (other than the SLC Shareholders), employee, agent,
independent contractor or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.
Section 7.10 Expenses. Subject to Sections 3.05 and 7.05 above, whether
or not the Exchange is consummated, the Company will bear the expenses,
including legal, accounting and professional fees, incurred in connection with
the Exchange or any of the other transactions contemplated hereby.
Section 7.11 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.12 Survival; Termination. The representations, warranties,
and covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
Section 7.13 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 7.14 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 by 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 may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.15 Best Efforts. Subject to the terms and conditions herein
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
Section 7.16 Faxed Copies. For purposes of this Agreement, a faxed
signature will constitute an original signature.
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.
Sealife Corporation (Delaware)
BY: /s/ Robert A McCaslin
---------------------------
Robert A McCaslin
President
Sealife Corp (Nevada)
BY: /s/ John W Vilagi
--------------------------
John W Vilagi
Secretary