EXCHANGE AGREEMENT
Between
STANFORD CAPITAL CORPORATION
and
SKREEM ENTERTAINMENT CORPORATION
Dated January 30, 2004
TABLE OF CONTENTS
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SKREEM
ENTERTAINMENT CORPORATION
1.01 Organization..........................................................1
1.02 Capitalization........................................................1
1.03 Subsidiaries and Predecessor Corporations.............................1
1.04 Financial Statements..................................................1
1.05 Information...........................................................2
1.06 Options and Warrants..................................................2
1.07 Absence of Certain Changes or Events..................................2
1.08 Title and Related Matters.............................................3
1.09 Litigation and Proceedings............................................3
1.10 Contracts.............................................................3
1.11 Material Contract Defaults............................................4
1.12 No Conflict With Other Instruments....................................4
1.13 Governmental Authorizations...........................................4
1.14 Compliance With Laws and Regulations..................................4
1.15 Insurance.............................................................4
1.16 Approval of Agreement.................................................4
1.17 Material Transactions or Affiliations.................................4
1.18 Labor Relations.......................................................4
1.19 Skreem Schedules......................................................5
1.20 Bank Accounts; Power of Attorney......................................5
1.21 Valid Obligation......................................................6
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF STANFORD CAPITAL
CORPORATION
2.01 Organization..........................................................6
2.02 Capitalization........................................................6
2.03 Subsidiaries and Predecessor Corporations.............................6
2.04 Securities Filings; Financial Statements..............................6
2.05 Information...........................................................7
2.06 Options and Warrants..................................................7
2.07 Absence of Certain Changes or Events..................................7
2.08 Title and Related Matters.............................................8
2.09 Litigation and Proceedings............................................8
2.10 Contracts.............................................................8
2.11 Material Contract Defaults............................................9
2.12 No Conflict With Other Instruments....................................9
2.13 Governmental Authorizations...........................................9
2.14 Compliance With Laws and Regulations..................................9
2.15 Insurance.............................................................9
2.16 Approval of Agreement.................................................9
2.17 Continuity of Business Enterprises....................................9
2.18 Material Transactions or Affiliations.................................9
2.19 Labor Relations.......................................................9
2.20 Stanford Schedules...................................................10
2.21 Bank Accounts; Power of Attorney.....................................10
2.22 Valid Obligation.....................................................11
ARTICLE III PLAN OF EXCHANGE
3.01 The Exchange........................................................11
3.02 Closing.............................................................11
3.03 Closing Events......................................................11
3.04 Termination.........................................................11
ARTICLE IV SPECIAL COVENANTS
4.01 Access to Properties and Records...................................13
4.02 Delivery of Books and Records......................................13
4.03 Third Party Consents and Certificates..............................13
4.04 Name Change and Increase in Authorized Capital.....................13
4.05 Stanford Shareholder Meeting.......................................13
4.06 Consent of SKREEM Shareholders.....................................13
4.07 Designation of Directors and Officers..............................13
4.08 Exclusive Dealing Rights...........................................13
4.09 Actions Prior to Closing...........................................14
4.10 Sales Under Rule 144 or 145, If Applicable.........................15
4.11 Indemnification....................................................15
4.12 Limitation of Subsequent Corporate Actions.........................16
4.13 Indemnification of Subsequent Corporate Actions....................16
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF Stanford
5.01 Accuracy of Representations and Performance of Covenants...........16
5.02 Officer's Certificates.............................................16
5.03 No Material Adverse Change.........................................17
5.04 Good Standing......................................................17
5.05 Approval by SKREEM Shareholders....................................17
5.06 No Governmental Prohibitions.......................................17
5.07 Consents...........................................................17
5.08 Other Items........................................................17
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF SKREEM AND THE SKREEM
SHAREHOLDERS
6.01 Accuracy of Representations and Performance of Covenants...........17
6.02 Officer's Certificate..............................................18
6.03 No Material Adverse Change.........................................18
6.04 Good Standing......................................................18
6.05 No Governmental Prohibition........................................18
6.06 Consents...........................................................18
6.07 Other Items........................................................18
ARTICLE VII MISCELLANEOUS
7.01 Brokers............................................................18
7.02 Governing Law......................................................18
7.03 Notices............................................................18
7.04 Attorney's Fees....................................................19
7.05 Confidentiality....................................................19
7.06 Public Announcements and Filings...................................19
7.07 Schedules; Knowledge...............................................19
7.08 Third Party Beneficiaries..........................................19
7.09 Expenses...........................................................19
7.10 Entire Agreement...................................................19
7.11 Survival; Termination..............................................19
7.12 Counterparts.......................................................19
7.13 Amendment or Waiver................................................20
7.14 Best Efforts.......................................................20
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement") is
entered into as of this day of January, 2004 by and between STANFORD CAPITAL
CORPORATION, a Delaware corporation (hereinafter referred to as "Stanford")and
SKREEM ENTERTAINMENT CORPORATION, a Nevada corporation (hereinafter referred to
as "Skreem"), upon the following premises:
Premises
WHEREAS, Stanford is a publicly held corporation organized under the laws
of the State of Delaware;
WHEREAS, Skreem is a 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 Stanford acquire 100% of the issued
and outstanding securities of Skreem in exchange for the issuance of certain
shares of Stanford (the "Exchange") and Skreem agreed to use its best efforts to
cause its shareholders (the "Skreem Shareholders") to exchange their securities
of Skreem on the terms described herein; and
WHEREAS, Stanford and Skreem 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 Skreem
As an inducement to, and to obtain the reliance of Skreem, except as set
forth on the Skreem Schedules (as hereinafter defined), Skreem represents and
warrants as follows:
Section 1.01 Organization. Skreem 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 Skreem
Schedules are complete and correct copies of the Memorandum and Articles of
Association of Skreem 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 Skreem' Articles of
Incorporation or Bylaws. Skreem has taken all actions required by law, its
Memorandum and Articles of Incorporation and Bylaws, or otherwise to authorize
the execution and delivery of this Agreement. Skreem has full power, authority,
and legal right and has taken all action required by law, its Articles of
Incorporation and Bylaws, and otherwise to consummate the transactions herein
contemplated.
Section 1.02 Capitalization. The authorized capitalization of Skreem
consists of 50,000,000 shares of common stock, $.001 par value, of which
20,000 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. Skreem 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 "Skreem"
also includes those subsidiaries, if any, set forth on Schedule 1.03.
Section 1.04 Financial Statements.
(a) Included in the Skreem Schedules are (i) the unaudited balance
sheets and the related statements of operations of Skreem as of and for the
nine months ended September 30, 2001, and (ii) the audited balance sheets
of Skreem as successor in interest as of December 31, 1999 and 2000, and
the related audited statements of operations, stockholders' equity and cash
flows for the eight month period ended August 31, 2003 and the year ended
December 31, 2002 together with the notes to such statements and the
opinion of Cuthill & Eddy LLC, independent certified public accountants,
with respect thereto.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles. The Skreem balance sheets
present a true and fair view as of the dates of such balance sheets of the
financial condition of Skreem. Skreem did not have, as of the dates of such
balance sheets, except as and to the extent reflected or reserved against
therein, any 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 Skreem in accordance with generally accepted accounting
principles.
(c) Skreem 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) Skreem has filed all state, federal or local income and/or
franchise tax returns required to be filed by it from inception to the date
hereof. Each of such income tax returns reflects the taxes due for the
period covered thereby, except for amounts which, in the aggregate, are
immaterial.
(e) The books and records, financial and otherwise, of Skreem are in
all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) All of Skreem' assets are reflected on its financial statements,
and, except as set forth in the Skreem Schedules or the financial
statements of Skreem or the notes thereto, Skreem has no material
liabilities, direct or indirect, matured or unmatured, contingent or
otherwise.
Section 1.05 Information. The information concerning Skreem set forth
in this Agreement and in the Skreem 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, Skreem has fully disclosed in writing to
Stanford (through this Agreement or the Skreem Schedules) all information
relating to matters involving Skreem 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 Skreem 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
Skreem, 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 1.06 Options or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized
and unissued Skreem common stock, except options, warrants, calls or
commitments, if any, to which Skreem is not a party and by which it is not
bound.
Section 1.07 Absence of Certain Changes or Events. Except as set forth
in this Agreement or the Skreem Schedules, since August 3, 2003.
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of Skreem or (ii)
any damage, destruction, or loss to Skreem (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or condition of Skreem;
(b) Skreem has not (i) amended its Articles of Incorporation; (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
Skreem; (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) Skreem 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 reflected in or shown on the most recent Skreem 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 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 $1,000), 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); (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 Skreem; or (v) issued, delivered, or agreed to issue or deliver
any stock, bonds or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock); and
(d) to the best knowledge of Skreem, Skreem 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 Skreem.
Section 1.08 Title and Related Matters. Skreem has good and marketable
title to all of its properties, inventory, interests in properties, and
assets, real and personal, which are reflected in the most recent Skreem
balance sheet 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 Skreem Schedules. Except as set forth in the Skreem
Schedules, Skreem 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 Skreem' business. Except as set
forth in the Skreem Schedules, no third party has any right to, and Skreem
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 Skreem or any material portion of its
properties, assets, or rights.
Section 1.09 Litigation and Proceedings. Except as set forth in the
Skreem Schedules, there are no actions, suits, proceedings, or
investigations pending or, to the knowledge of Skreem after reasonable
investigation, threatened by or against Skreem or affecting Skreem 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. Skreem 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 1.10 Contracts.
(a) Except as included or described in the Skreem Schedules, there are
no "material" contracts, agreements, franchises, license agreements, debt
instruments or other commitments to which Skreem 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 Skreem is a party or by which its properties are
bound and which are material to the operations of Skreem taken as a whole
are valid and enforceable by Skreem in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) Skreem is not a party to or bound by, and the properties of Skreem
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 Skreem; and
(d) Except as included or described in the Skreem Schedules or
reflected in the most recent Skreem balance sheet, Skreem 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 Skreem 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;
(vi) collective bargaining agreement; or (vii) agreement with any present
or former officer or director of Skreem.
Section 1.11 Material Contract Defaults. Skreem 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 Skreem and there is no event
of default in any material respect under any such contract, agreement,
lease, or other commitment in respect of which Skreem has not taken
adequate steps to prevent such a default from occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of,
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 Skreem is a party or
to which any of its properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the
Skreem Schedules, Skreem 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 Skreem of this Agreement and the consummation by
Skreem of the transactions contemplated hereby.
Section 1.14 Compliance With Laws and Regulations. Except as set forth
in the Skreem Schedules, to the best of its knowledge Skreem 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 Skreem or except to the
extent that noncompliance would not result in the occurrence of any
material liability for Skreem.
Section 1.15 Insurance. All of the properties of Skreem are fully
insured for their full replacement cost.
Section 1.16 Approval of Agreement. The board of directors of Skreem
has authorized the execution and delivery of this Agreement by Skreem and
has approved this Agreement and the transactions contemplated hereby, and
will recommend to the Skreem Shareholders that the Exchange be accepted by
them.
Section 1.17 Material Transactions or Affiliations. Set forth in the
Skreem Schedules is a description of every contract, agreement, or
arrangement between Skreem 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 Skreem to own beneficially, 5% or
more of the issued and outstanding common stock of Skreem 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 Skreem Schedules or otherwise disclosed herein, no
officer, director, or 5% shareholder of Skreem has, or has had since
inception of Skreem, any known interest, direct or indirect, in any
transaction with Skreem which was material to the business of Skreem. There
are no commitments by Skreem, 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 1.18 Labor Relations. Skreem has not had work stoppage
resulting from labor problems. To the knowledge of Skreem, no union or
other collective bargaining organization is organizing or attempting to
organize any employee of Skreem.
Section 1.19 Skreem Schedules. Skreem has delivered to Stanford the
following schedules, which are collectively referred to as the "Skreem
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 Skreem 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 Skreem in effect as of the date of this
Agreement;
(b) a schedule containing the financial statements of Skreem
identified in paragraph 1.04(a);
(c) a Schedule 1.19(c) containing a list indicating the name and
address of each shareholder of Skreem together with the number of shares
owned by him, her or it;
(d) a schedule containing a description of all real property owned by
Skreem, 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
Skreem carries on or proposes to carry on its business (except those which,
in the aggregate, are immaterial to the present or proposed business of
Skreem);
(f) a schedule listing the accounts receivable and notes and other
obligations receivable of Skreem as of September 30, 2001, or thereafter
other than in the ordinary course of business of Skreem, 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 Skreem as of August 31, 2003, or that arose
thereafter other than in the ordinary course of the business of Skreem,
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 Skreem 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 Skreem since August 31, 2003, required to be provided pursuant
to section 1.07 hereof; and
(i) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Skreem
Schedules by Sections 1.01 through 1.18.
Skreem shall cause the Skreem Schedules and the instruments and data
delivered to Stanford 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 Skreem.
Skreem shall have until February 29, 2004 to provide such schedules. If
Skreem cannot or fails to do so, or if Stanford acting reasonably finds any
such schedules or updates provided after the date hereof to be unacceptable
according to the criteria set forth below, Stanford may terminate this
Agreement by giving written notice to Skreem within five (5) days after the
schedules or updates were due to be produced or were provided. For purposes
of the foregoing, Stanford may consider a disclosure in the Skreem
Schedules to be "unacceptable" only if that item would have a material
adverse impact on the financial statements listed in Section 1.04(a), taken
as a whole.
Section 1.20 Bank Accounts; Power of Attorney. Set forth in Schedule
1.20 is a true and complete list of (a) all accounts with banks, money
market mutual funds or securities or other financial institutions
maintained by Skreem within the past twelve (12) months, the account
numbers thereof, and all persons authorized to sign or act on behalf of
Skreem, (b) all safe deposit boxes and other similar custodial arrangements
maintained by Skreem within the past twelve (12) months, and (c) the names
of all persons holding powers of attorney from Skreem or who are otherwise
authorized to act on behalf of Skreem with respect to any matter, other
than its officers and directors, and a summary of the terms of such powers
or authorizations.
Section 1.21 Valid Obligation. This Agreement and all agreements and
other documents executed by Skreem in connection herewith constitute the
valid and binding obligation of Skreem, 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 STANFORD
As an inducement to, and to obtain the reliance of Skreem and the
Skreem Shareholders, except as set forth in the Stanford Schedules (as
hereinafter defined), Stanford represents and warrants as follows:
Section 2.01 Organization. Stanford is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
Delaware 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 Stanford Schedules are complete and correct
copies of the certificate of incorporation and bylaws of Stanford 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 Stanford's certificate of incorporation or
bylaws. Stanford 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 Stanford 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. Stanford's authorized capitalization
consists of 20,000,000 shares of common stock, par value $.001 of which
19,994,625 shares are issued and outstanding. All issued and outstanding
shares are legally issued, fully paid, and non-assessable and not issued in
violation of the preemptive or other rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. Stanford 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 "Skreem"
also includes those subsidiaries, if any, set forth on Schedule 2.03.
Section 2.04 Securities Filings; Financial Statements.
(a) For at least the past twelve months Stanford has failed to file
the forms, reports and documents required to be filed with the Securities
and Exchange Commission. All reports prior thereto have heretofore been
delivered to Skreem, in the form filed with the Commission, (i) all
quarterly and annual reports on Forms 10-QSB and 10-KSB filed since
December 31, 2002 (ii) all other reports filed by Stanford with the
Securities and Exchange Commission and all reports prior thereto
(collectively, the "SEC Reports") and (iii) all comment letters from the
Securities and Exchange Commission with respect to the SEC Reports. The SEC
Reports (i) were prepared in accordance with the requirements of the
Securities Exchange Act of 1934 or the Securities Act of 1933, as
appropriate, and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Included in the Stanford Schedules are (i) the unaudited balance
sheets of Stanford and the related statements of operations and cash flows
as of and for the nine months ended December 31, 2002 and (ii) the audited
balance sheets of Stanford as of March 31, 2002 and 2001, and the related
audited statements of operations, stockholders' equity and cash flows for
the two fiscal years ended March 31, 2002 and March 31, 2002, together with
the notes to such statements and the opinion of David T. Thomson,
independent certified public accountants, with respect thereto, all as set
forth in the SEC Reports.
(c) All such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved. The Stanford balance sheets present fairly
as of their respective dates the financial condition of Skreem. As of the
date of such balance sheets, except as and to the extent reflected or
reserved against therein, Stanford 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 Stanford, 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.
(d) Stanford 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.
(e) Stanford has timely filed all state, federal or local income
and/or franchise tax returns required to be filed by it from inception to
the date hereof. Each of such income tax returns reflects the taxes due for
the period covered thereby, except for amounts which, in the aggregate, are
immaterial.
(f) The books and records, financial and otherwise, of Stanford are in
all material aspects complete and correct and have been maintained in
accordance with good business and accounting practices.
(g) All of Stanford's assets are reflected on its financial
statements, and, except as set forth in the Stanford Schedules or the
financial statements of Stanford or the notes thereto, Stanford has no
material liabilities, direct or indirect, matured or unmatured, contingent
or otherwise.
Section 2.05 Information. The information concerning Stanford set
forth in this Agreement and the Stanford 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, Stanford has fully disclosed in writing to
Skreem (through this Agreement or the Stanford Schedules) all information
relating to matters involving Stanford 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 Stanford 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
Skreem, 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 Stanford except as disclosed in Schedules 2.06.
Section 2.07 Absence of Certain Changes or Events. Except as disclosed
in Exhibit 2.07, or permitted in writing by Skreem, since the date of the
most recent Stanford balance sheet:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets or condition of Stanford or (ii)
any damage, destruction or loss to Stanford (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets or condition of Skreem;
(b) Stanford has not (i) amended its certificate of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are outside of the ordinary course of business or material
considering the business of Skreem; (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) Stanford has not (i) granted or agreed to grant any options,
warrants, or other rights for its stock, bonds, or other corporate
securities calling for the issuance thereof; (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 Stanford 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 $1000), or canceled, or agreed to
cancel, any debts or claims (except debts or claims which in the aggregate
are of a value less than $1000); (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
Skreem; or (vi) issued, delivered or agreed to issue or deliver, any stock,
bonds, or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock), except in connection
with this Agreement; and
(d) to the best knowledge of Stanford, 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 Skreem.
Section 2.08 Title and Related Matters. Stanford 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 Stanford 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 Stanford Schedules. Except as set
forth in the Stanford Schedules, Stanford 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 Stanford's
business. Except as set forth in the Stanford Schedules, no third party has
any right to, and Stanford 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 Stanford
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 Stanford after
reasonable investigation, threatened by or against Stanford or affecting
Stanford 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. Stanford has
no knowledge of any default on its part with respect to any judgement,
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) Stanford 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 Stanford is a party or by which its properties
are bound and which are material to the operations of Stanford taken as a
whole are valid and enforceable by Stanford in all respects, except as
limited by bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally;
(c) Stanford is not a party to or bound by, and the properties of
Stanford 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
Skreem; and
(d) Except as included or described in the Stanford Schedules or
reflected in the most recent Stanford balance sheet, Stanford 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 Stanford 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;
(vi) collective bargaining agreement; or (vii) agreement with any present
or former officer or director of Skreem.
Section 2.11 Material Contract Defaults. Stanford 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 Stanford and there is no
event of default in any material respect under any such contract,
agreement, lease, or other commitment in respect of which Stanford 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 Stanford is a party or to which any of its assets or
operations are subject.
Section 2.13 Governmental Authorizations. Stanford 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 Stanford of this
Agreement and the consummation by Stanford of the transactions contemplated
hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
knowledge, Stanford 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 Stanford 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 Insurance. All of the properties of Stanford are fully
insured for their full replacement cost.
Section 2.16 Approval of Agreement. The board of directors of Stanford
has authorized the execution and delivery of this Agreement by Stanford and
has approved this Agreement and the transactions contemplated hereby and
will recommend to its shareholders that they approve this Agreement and the
transactions contemplated hereby.
Section 2.17 Continuity of Business Enterprises. Stanford has no
commitment or present intention to liquidate Skreem or sell or otherwise
dispose of a material portion of Skreem' business or assets following the
consummation of the transactions contemplated hereby.
Section 2.18 Material Transactions or Affiliations. Except as
disclosed herein and in the Stanford Schedules, there exists no contract,
agreement or arrangement between Stanford 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 Stanford to own
beneficially, 5% or more of the issued and outstanding common stock of
Stanford 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 Stanford has,
or has had since inception of Stanford, any known interest, direct or
indirect, in any such transaction with Stanford which was material to the
business of Stanford. Stanford 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 2.19 Labor Relations. Stanford has not had work stoppage
resulting from labor problems. To the knowledge of Skreem, no union or
other collective bargaining organization is organizing or attempting to
organize any employee of Skreem.
Section 2.20 Stanford Schedules. Stanford has delivered to Skreem the
following schedules, which are collectively referred to as the "Stanford
Schedules" and which consist of separate schedules, which are dated the
date of this Agreement, all certified by the chief executive officer of
Stanford 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 Stanford as in effect as of the
date of this Agreement;
(b) a schedule containing the financial statements of Stanford
identified in paragraph 2.04(b);
(c) a Schedule 2.20(c) containing a list indicating the name and
address of each shareholder of Stanford together with the number of shares
owned by him, her or it;
(d) a schedule containing a description of all real property owned by
Stanford, 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
Stanford carries on or proposes to carry on its business (except those
which, in the aggregate, are immaterial to the present or proposed business
of Stanford);
(f) a schedule listing the accounts receivable and notes and other
obligations receivable of Stanford as of December 31, 2002, or thereafter
other than in the ordinary course of business of Skreem, 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 Stanford as of December 31, 2001, or that arose
thereafter other than in the ordinary course of the business of Skreem,
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 Stanford 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 Stanford since December 31, 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 Stanford
Schedules by Sections 2.01 through 2.19.
Stanford shall cause the Stanford Schedules and the instruments and
data delivered to Skreem 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 Skreem.
Stanford shall have until February 28, 2002 to provide such schedules. If
Stanford cannot or fails to do so, or if Skreem acting reasonably finds any
such schedules or updates provided after the date hereof to be unacceptable
according to the criteria set forth below, Skreem may terminate this
Agreement by giving written notice to Stanford within five (5) days after
the schedules or updates were due to be produced or were provided. For
purposes of the foregoing, Skreem may consider a disclosure in the Stanford
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 2.21 Bank Accounts; Power of Attorney. Set forth in Schedule
2.21 is a true and complete list of (a) all accounts with banks, money
market mutual funds or securities or other financial institutions
maintained by Stanford within the past twelve (12) months, the account
numbers thereof, and all persons authorized to sign or act on behalf of
Skreem, (b) all safe deposit boxes and other similar custodial arrangements
maintained by Stanford within the past twelve (12) months, and (c) the
names of all persons holding powers of attorney from Stanford or who are
otherwise authorized to act on behalf of Stanford with respect to any
matter, other than its officers and directors, and a summary of the terms
of such powers or authorizations.
Section 2.22 Valid Obligation. This Agreement and all agreements and
other documents executed by Stanford in connection herewith constitute the
valid and binding obligation of Stanford, 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 Skreem 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 Skreem set forth on Schedule 1.19(c)
attached hereto, in the aggregate constituting 100% of the issued and
outstanding shares of common stock of Skreem held by each of such
shareholders; the objective of such Exchange being the acquisition by
Stanford of 100% of the issued and outstanding common stock of Skreem. In
exchange for the transfer of such securities by the Skreem Shareholders,
Stanford shall issue to the Skreem Shareholders (1) an aggregate of
22,000,000 post reverse split shares of common stock of Stanford. At the
Closing, each Skreem Shareholder shall, on surrender of his certificate or
certificates representing such Skreem shares to Stanford 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 Skreem Shareholders, all of the shares of capital stock of
Skreem shall be held by Stanford.
Section 3.02 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 February 28, 2004,
subject to the right of Stanford or Skreem to extend such Closing Date by
up to an additional sixty (60) days. Such Closing shall take place at a
mutually agreeable time and place.
Section 3.03 Closing Events. At the Closing, Stanford, Skreem and each
of the 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, Stanford shall provide an opinion
of counsel acceptable to Skreem as to such matters as Skreem may reasonably
request, which shall include, but not be limited to, a statement, to the
effect that (i) to such counsel's best knowledge, after reasonable
investigation, from inception until the Closing Date, Stanford 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 Stanford 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) and (ii) based on a summary of the facts and applicable law,
such counsel believes that the Placement described in Section 4.08 below is
not subject to "integration" with the offering being made pursuant to the
Registration Statement (Skreem acknowledges that "integration" is a highly
factual issue not susceptible to the rendering of a legal opinion and that
the statement to be delivered hereunder shall merely constitute a summary
of the reasoning which counsel to Stanford believes would apply if a third
party were to assert that such offerings should be integrated).
Section 3.04 Termination.
(a) This Agreement may be terminated by the board of directors of
either Stanford or Skreem 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 judgement 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 judgement 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 3.04, 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 in
accordance with the Expense Sharing Agreement attached hereto as Exhibit "B".
(b) This Agreement may be terminated by the board of directors of
Stanford 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 Skreem in the assets, properties, business, or financial
condition of Skreem, which could have a materially adverse effect on the
financial statements of Skreem listed in Section 1.04(a) taken as a whole,
except any changes disclosed in the Skreem Schedules;
(ii) the board of directors of Stanford determines in good faith that
one or more of Stanford's conditions to Closing has not occurred, through
no fault of Skreem.
(iii) Stanford takes the termination action specified in Section 1.18
as a result of Skreem Schedules or updates thereto which Stanford finds
unacceptable;
(iv) on or before January 15, 2004, Stanford notifies Skreem that
Stanford's investigation pursuant to Section 4.01 below has uncovered
information which it finds unacceptable by the same criteria set forth in
Section 1.19; or
(v) Skreem 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 Skreem 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
3.04, this Agreement shall be of no further force or effect, and no
obligation, right or liability shall arise hereunder, except that Skreem
shall bear its own costs as well as the reasonable costs of Stanford 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 Skreem 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 Stanford in the assets, properties, business or financial condition of
Stanford, which could have a material adverse effect on the financial
statements of Stanford listed in Section 2.04(b) taken as a whole, except
any changes disclosed in the Stanford Schedules;
(ii) the board of directors of Skreem determines in good faith that one or more
of Skreem' conditions to Closing has not occurred, through no fault of
Skreem;
(iii)Skreem takes the termination action specified in Section 2.20 as a result
of Stanford Schedules or updates thereto which Skreem finds unacceptable;
(iv) on or before January 15, 2004 Skreem notifies Stanford that Skreem'
investigation pursuant to Section 4.01 below has uncovered information
which it finds unacceptable by the same criteria set forth in Section 2.20;
or
(v) Stanford 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 Stanford 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
3.04, this Agreement shall be of no further force or effect, and no
obligation, right or liability shall arise hereunder, except that Stanford
shall bear its own costs as well as the reasonable costs of Skreem and its
principal shareholders incurred in connection with the negotiation,
preparation and execution of this Agreement.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. Stanford and Skreem will
each afford to the officers and authorized representatives of the other full
access to the properties, books and records of Stanford or Skreem, 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 Stanford or Skreem, 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), each party shall provide the other with quarterly internally
prepared and unaudited financial statements.
Section 4.02 Delivery of Books and Records. At the Closing, Skreem shall
deliver to Stanford the originals of the corporate minute books, books of
account, contracts, records, and all other books or documents of Skreem now in
the possession of Skreem or its representatives.
Section 4.03 Third Party Consents and Certificates. Stanford and Skreem
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 Name Change. At or prior to the Closing Date, Stanford's Board
of Directors shall have approved an amendment to the certificate of
incorporation to change the name of Stanford to "Skreem Entertainment
Corporation" reverse split the existing common shares on a one for five basis
and increased the authorized capital to 50,000,000 shares including 5,000,000
preferred shares. Such amendment shall be carried out promptly upon approval of
the same by the shareholders of Skreem.
Section 4.05 Stanford Shareholder Meeting. Stanford shall call a special
shareholders meeting to be held on or prior to the Closing Date at which meeting
the shareholders of Stanford shall be requested to approve, and Stanford's Board
of Directors shall recommend approval of, the terms of this Agreement, including
the name change and increase in authorized capital described in Section 4.04 and
such other matters as shall require shareholder approval hereunder.
Section 4.06 Consent of Skreem Shareholders. Skreem shall use its best
efforts to obtain the consent of all Skreem Shareholders to participate in the
Exchange.
Section 4.07 Designation of Directors and Officers. On or before the
Closing Date, Stanford shall designate its board of directors as three (3)
persons. Charles Comorata shall be designated as Chairman of the Board of
Stanford and Tony Harris and Karen Polino shall be designated as additional
board members.
Section 4.08 Exclusive Dealing Rights. Until 5:00 P.M. Eastern Daylight
Time on January 15, 2004.
(a) In recognition of the substantial time and effort which Stanford has
spent and will continue to spend in investigating Skreem 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 Skreem, 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 Stanford 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 Skreem) or similar transactions involving Skreem (all such
transactions being referred to as "Skreem Acquisition Transactions"). If Skreem
receives any proposal with respect to a Skreem Acquisition Transaction, it will
immediately communicate to Stanford the fact that it has received such proposal
and the principal terms thereof.
(b) In recognition of the substantial time and effort which Skreem has
spent and will continue to spend in investigating Stanford 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 Stanford, 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 Skreem 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 Stanford or similar transactions involving Stanford (all
such transactions being referred to as "Stanford Acquisition Transactions"). If
Stanford receives any proposal with respect to a Stanford Acquisition
Transaction, it will immediately communicate to Skreem the fact that it has
received such proposal and the principal terms thereof.
Section 4.09 Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date and
except as set forth in the Stanford Schedules or Skreem Schedules or as
permitted or contemplated by this Agreement, Stanford (subject to paragraph (d)
below) and Skreem 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 Stanford nor Skreem will:
(i) make any changes in their articles or certificate of incorporation or
bylaws;
(ii) take any action described in Section 1.07 in the case of Skreem, or in
Section 2.07, in the case of Stanford (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 Sections 4.07 and 4.08 hereof and the sale of
securities underlying existing warrants or options of Skreem) or
conduct any similar transactions other than in the ordinary course of
business.
(C) In light of the fact that Skreem' shareholders will control Stanford
as a result of the Exchange, from and after the date of this Agreement
until the Closing Date, Stanford shall take no action which is
material to its business without the prior written approval of Skreem,
which Skreem may give or withhold in its sole discretion after
consultation with Skreem.
Section 4.10 Sales Under Rule 144 or 145,If Applicable.
(a) Stanford will use its best efforts to at all times comply with the
reporting requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including timely filing of all periodic reports
required under the provisions of the Exchange Act and the rules and
regulations promulgated thereunder.
(b) Upon being informed in writing by any such person holding
restricted stock of Stanford that such person intends to sell any shares
under Rule 144, Rule 145 or Regulation S promulgated under the Securities
Act (including any rule adopted in substitution or replacement thereof),
Stanford will certify in writing to such person that it has filed all of
the reports required to be filed by it under the Exchange Act to enable
such person to sell such person's restricted stock under Rule 144, 145 or
Regulation S, as may be applicable in the circumstances, or will inform
such person in writing that it has not filed any such report or reports.
(c) If any certificate representing any such restricted stock is
presented to Stanford's transfer agent for registration of transfer in
connection with any sale theretofore made under Rule 144, 145 or Regulation
S, provided such certificate is duly endorsed for transfer by the
appropriate person(s) or accompanied by a separate stock power duly
executed by the appropriate person(s) in each case with reasonable
assurances that such endorsements are genuine and effective, and is
accompanied by an opinion of counsel satisfactory to Stanford and its
counsel that the stock transfer has complied with the requirements of Rule
144, 145 or Regulation S, as the case may be, Stanford will promptly
instruct its transfer agent to register such shares and to issue one or
more new certificates representing such shares to the transferee and, if
appropriate under the provisions of Rule 144, 145 or Regulation S, as the
case may be, free of any stop transfer order or restrictive legend. The
provisions of this Section 4.11 shall survive the Closing and the
consummation of the transactions contemplated by this Agreement.
Section 4.11 Indemnification.
(a) Skreem hereby agrees to indemnify Stanford and each of the
officers, agents and directors of Stanford 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) Stanford hereby agrees to indemnify Skreem and each of the
officers, agents, and directors of Skreem and each of the Skreem
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 4.12 Limitation of Subsequent Corporate Actions.
It is expressly understood and agreed that Stanford, the shareholders
of Skreem, and their affiliates, will take all steps necessary to ensure
that for a period of eighteen months following this Agreement:
(a) and that the assets of Stanford shall remain in Stanford as part of
its business operations;
(b) that Stanford will not issue shares for any consideration less than
$0.50 per share.
Section 4.13 Indemnification of Subsequent Corporate Actions.
(a) No officer, director, controlling shareholder, agent or representative
of Skreem, or any other person currently affiliated with Stanford, has
offered or agreed to assist in the promotion, market making,
development, enhancement, or support of Stanford's business, capital
raising, or securities market.
(b) Stanford hereby represents and warrants that it will indemnify and
hold harmless any officer, director, controlling shareholder, agent or
representative of Stanford, or any other person affiliated with
Stanford, from any decisions, activities, or conduct of Stanford
contemporaneous with, or subsequent to this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF SKREEM
The obligations of Stanford 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 Skreem 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).
Skreem shall have performed or complied with all covenants and conditions
required by this Agreement to be performed or complied with by Skreem prior
to or at the Closing. Stanford shall be furnished with a certificate,
signed by a duly authorized executive officer of Skreem and dated the
Closing Date, to the foregoing effect.
Section 5.02 Officer's Certificate. Stanford shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of Skreem to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of Skreem
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 Skreem Schedules, by or against Skreem, which
might result in any material adverse change in any of the assets,
properties, business, or operations of Skreem.
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 Skreem 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 1.19.
Section 5.04 Good Standing. Stanford shall have received a certificate
of good standing from the State of Nevada, dated as of a date within ten
days prior to the Closing Date certifying that Skreem is in good standing
as a corporation in the State of Nevada.
Section 5.05 Approval by Skreem Shareholders. The Exchange shall have
been approved, and shares delivered in accordance with Section 3.01, by the
holders of not less than ninety percent (90%) of the outstanding common
stock of Skreem, unless a lesser number is agreed to by Skreem.
Section 5.06 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 5.07 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 Stanford and Skreem after the Closing Date on
the basis as presently operated shall have been obtained.
Section 5.08 Other Items.
(a) Stanford shall have received a list of Skreem' shareholders
containing the name, address, and number of shares held by each Skreem
shareholder as of the date of Closing, certified by an executive officer of
Skreem as being true, complete and accurate; and
(b) Stanford shall have received such further opinions, documents,
certificates or instruments relating to the transactions contemplated
hereby as Stanford may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF Skreem
AND THE Skreem SHAREHOLDERS
The obligations of Skreem and the Skreem 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 Stanford 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, Stanford shall have performed and complied with all
covenants and conditions required by this Agreement to be performed or
complied with by Stanford and shall have satisfied the conditions described
below prior to or at the Closing:
(a) Immediately prior to the Closing, and subsequent to the reverse
split, Stanford shall have no more than an aggregate of 4,000,000 shares of
common stock issued and outstanding or issuable pursuant to outstanding
warrants and options, excluding any shares and warrants issuable pursuant
to the Exchange or the Placement.
(b) The shareholders of Stanford shall have approved the Exchange and
the related transactions described herein.
Skreem shall have been furnished with certificates, signed by duly
authorized executive officers of Stanford and dated the Closing Date, to
the foregoing effect.
Section 6.02 Officer's Certificate. Skreem shall have been furnished
with certificates dated the Closing Date and signed by duly authorized
executive officers of Stanford, to the effect that no litigation,
proceeding, investigation or inquiry is pending, or to the best knowledge
of Stanford 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 Stanford Schedules, by or against
Stanford, which might result in any material adverse change in any of the
assets, properties or operations of Stanford.
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 Stanford 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 2.20.
Section 6.04 Good Standing. Skreem shall have received a certificate
of good standing from the Secretary of State of the State of Delaware or
other appropriate office, dated as of a date within ten days prior to the
Closing Date certifying that Stanford is in good standing as a corporation
in the State of Delaware and has filed all tax returns required to have
been filed by it to date and has paid all taxes reported as due thereon.
Section 6.05 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 6.06 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 Stanford and Skreem after the Closing Date on
the basis as presently operated shall have been obtained.
Section 6.07 Other Items. Skreem shall have received further opinions,
documents, certificates, or instruments relating to the transactions
contemplated hereby as Skreem may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. Stanford and Skreem agree that, except as set
out on Schedule 7.01 attached hereto, there were no finders or brokers
involved in bringing the parties together or who were instrumental in the
negotiation, execution or consummation of this Agreement. Stanford and
Skreem 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 7.02 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 Delaware 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 7.03 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 Stanford, to: STANFORD CAPITAL CORPORATION
1464 East Vineyard Court
Salt Lake City, UT 84106
With copies to: Vanderkam & Sanders
1301 Travis, #1301
Houston, Texas 77002
If to Skreem, to: SKREEM ENTERTAINMENT CORPORATION
11637 Orpington Street
Orlando, FL 32817
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 7.04 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 judgement rendered
therein.
Section 7.05 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 7.06 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 7.07 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 7.08 Third Party Beneficiaries. This contract is strictly between
Stanford and Skreem, and, except as specifically provided, no director, officer,
stockholder (other than the Skreem Shareholders), employee, agent, independent
contractor or any other person or entity shall be deemed to be a third party
beneficiary of this Agreement.
Section 7.09 Expenses. Subject to Sections 3.05 and 7.04 above, whether or
not the Exchange is consummated, each of Stanford and Skreem will bear their own
respective expenses, including legal, accounting and professional fees, incurred
in connection with the Exchange or any of the other transactions contemplated
hereby.
Section 7.10 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 7.11 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 7.12 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 7.13 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 7.14 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.
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.
ATTEST: STANFORD CAPITAL CORPORATION
/s/ Kevin Monson BY: /s/ Kevin Monson
Secretary or Assistant Secretary President
ATTEST: SKREEM ENTERTAINMENT CORPORATION
/s/ Karen Pollino BY: /s/ Charles Camorata
Secretary or Assistant Secretary President
The undersigned shareholders of SKREEM ENTERTAINMENT CORPORATION hereby
agree to participate in the Exchange on the terms set forth above. Subject to
Section 7.11 above, each of the undersigned hereby represents and affirms that
he has read each of the representations and warranties of SKREEM ENTERTAINMENT
CORPORATION set out in Article I hereof and that, to the best of his knowledge,
all of such representations and warranties are true and correct.
/s/ Jeff Martin, individually
Martin Consultants, Inc., individually