REORGANIZATION AND STOCK PURCHASE AGREEMENT
by and between
AMERICAN CUSTOM COMPONENTS, INC.
a Nevada corporation
and certain of its shareholders
and
LOYD INTERNATIONAL, INC.
a Wyoming corporation
and its shareholder
REORGANIZATION AND STOCK PURCHASE AGREEMENT
REORGANIZATION AND STOCK PURCHASE
AGREEMENT ("Agreement"), dated March 16, 1999, by and among American
Custom Components, Inc., a Nevada corporation (hereinafter referred
to as "ACCM"), Martin Tony Walk (hereinafter referred to as "Walk"),
Loyd International, Inc., a Wyoming corporation (hereinafter
referred to as "Loyd") and Edward Loyd, an individual (the "Loyd
Shareholder"). Each of ACCM, Walk, Loyd, and the Loyd Shareholder
shall be referred to herein as a "Party" and collectively as the
"Parties."
W I T N E S S E T H
WHEREAS, Walk and Loyd have executed those
certain agreements dated February 13, 1999 and March 4, 1999,
attached hereto as Exhibits "A" and "B", respectively, and desire to
further define the terms of those agreements herein and to replace
those agreements with this Agreement;
WHEREAS, the Loyd Shareholder owns 100% of the
issued and outstanding common stock of Loyd (the "Loyd Shares") as
set forth in Exhibit "C" attached hereto;
WHEREAS, Walk is the owner of 5,372,000 shares
of common stock of ACCM (the "Walk Shares");
WHEREAS, Walk desires to exchange 4,972,000 of
the Walk Shares for 500,000 shares of ACCM Series A Convertible
Preferred Stock, the rights, preferences and privileges of which are
set forth in Exhibit "D" attached hereto.
WHEREAS, the Loyd Shareholder desires to sell
and ACCM desires to purchase the Loyd Shares in accordance with the
terms set forth herein;
NOW THEREFORE, in consideration of the
premises and respective mutual agreements, covenants,
representations and warranties herein contained, it is agreed
between the parties hereto as follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 Transactions Involving Walk.
1.1.1 Exchange of the Walk Shares. At the date
of the signing of this Agreement as provided in Section 3.1 hereto
(the "Closing"), subject to the terms and conditions herein set
forth, and on the basis of the representations, warranties and
agreements herein contained, Walk shall tender to ACCM 4,972,000 of
the Walk Shares and shall receive in exchange 500,000 shares of
Series A Convertible Preferred Stock. The balance of the Walk
Shares, representing 400,000 shares of ACCM common stock, shall be
retained by Walk. Walk shall be responsible for any and all
obligations owing to Paul Montclair and/or Generation Capital
Associates arising out of transactions entered into between Walk and
those respective parties.
1.1.2 Payment to Walk. As additional
consideration for the transactions discussed
herein, on the Closing date, ACCM shall pay to
Walk or Walk's designee(s) the sum of Eleven
Thousand Dollars ($11,000).
1.1.3 Consulting Contract. As a material term
of this Agreement, ACCM agrees to execute a two
(2) year consulting agreement ("Consulting
Agreement") with Walk in form and substance
substantially similar to Exhibit "E" attached
hereto.
1.1.4 Assignment of Certain Assets and
Liabilities. Effective on the Closing Date,
ACCM shall execute an Assignment of Assets and
Liabilities in substantially the form set forth
as Exhibit "F" attached hereto, wherein ACCM
assigns to Walk the technology and assets
associated with Tagnology, Inc. and Walk assumes
all ACCM liabilities associated with the same.
1.1.5 Assumption of Tax Liabilities. Any tax
liabilities incurred by Walk as a result of the
transactions contemplated herein will be assumed
and timely paid by ACCM, up to the sum of $200,000.
1.1.6 General Mutual Release. Effective on the
date of this Agreement, each of ACCM and Walk
shall release and discharge the other, their
affiliates, divisions, predecessors, successors
and assigns, and each and all of their present
and former agents, officers, directors,
attorneys, and employees, from and against any
and all claims, agreements, contracts,
covenants, representations, obligations, losses,
liabilities, demands and causes of action which
each may now or hereafter have or claim to have
against the other arising out of or pertaining
to their relationship and contractual dealings
prior to the date hereof. This release of
claims and defenses shall not alter the
prospective duties between the parties under
this Agreement. It is understood and agreed by
ACCM and Walk that all rights under Section 1542
of the Civil Code of California, which provides
as follows:
"A general release does not extend
to claims which the creditor does
not know or suspect to exist in his
favor at the time of executing the
release, which if known by him must
have materially affected his
settlement with the debtor."
are hereby expressly waived. Each of ACCM
and Walk acknowledges and agrees that they
understand the consequences of a waiver of
Section 1542 of the California Civil Code
and assumes full responsibility for any
and all injuries, damages, losses or
liabilities that may hereinafter arise out
of or be related to matters released
hereunder. Each of ACCM and Walk
understands and acknowledges that the
significance and consequence of this
waiver of Section 1542 of the Civil Code
is that even if such party should
eventually suffer additional damages
arising out of the subject matter hereof,
it will not be permitted to make any claim
for those damages. Furthermore, each
party acknowledges that they intend these
consequences even as to claims for damages
that may exist as of the date of this
Agreement but which a party does not know
exists, and which, if known, would
materially affect each party's decision to
execute this Agreement, regardless of
whether each party's lack of knowledge is
the result of ignorance, oversight, error,
negligence, or any other cause.
1.2 Sale of the Loyd Shares. At the Closing,
subject to the terms and conditions herein set forth, and on the
basis of the representations, warranties and agreements herein
contained, the Loyd Shareholder shall sell to ACCM and ACCM shall
purchase from the Loyd Shareholder, all of the Loyd Shares. As
consideration for the receipt of the Loyd Shares, ACCM shall cause
to be issued to the Loyd Shareholder an aggregate of 1,500,000
shares of ACCM common stock bearing an appropriate 144 restrictive
legend.
1.2.1 Issuance of Shares to the Loyd
Shareholder. In addition to the transaction described in paragraph
1.2 above, as consideration for the advancement of $70,000 by the
Loyd Shareholder to ACCM for working capital purposes, ACCM shall
issue an additional 100,000 shares of restricted common stock to the
Loyd Shareholder.
1.3 Instruments of Conveyance and Transfer.
At the Closing, Walk shall deliver to ACCM certificates representing
4,972,000 of the Walk Shares. At the Closing, ACCM shall deliver to
Walk certificates representing 500,000 shares of ACCM Series A
Convertible Preferred Stock. At the closing, ACCM shall deliver to
the Loyd Shareholder certificates representing an aggregate of
1,500,000 shares of ACCM common stock.
1.4 Termination of Earlier Agreements. Upon
execution of this Agreement, those certain agreements between Walk
and Loyd dated February 13, 1999 and March 4, 1999 are terminated in
their entirety and replaced hereby.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of
Loyd and the Loyd Shareholder. To induce Walk and ACCM to enter
into this Agreement and to consummate the transactions contemplated
hereby, Loyd and the Loyd Shareholder represent and warrant, as of
the date hereof and as of the Closing, as follows:
2.1.1 Loyd and the Loyd Shareholder have
the full right, power and authority to
enter into this Agreement and to carry out
and consummate the transaction
contemplated herein. This Agreement
constitutes the legal, valid and binding
obligation of Loyd and the Loyd Shareholder.
2.1.2 Corporate Existence and Authority
of Loyd. Loyd is a corporation duly
organized, validly existing and in good
standing under the laws of the State of
Wyoming. It has all requisite corporate
power, franchises, licenses, permits and
authority to own its properties and assets
and to carry on its business as it has
been and is being conducted. It is in
good standing in each state, nation or
other jurisdiction wherein the character
of the business transacted by it makes
such qualification necessary.
2.1.3 Capitalization of Loyd. The
authorized equity securities of Loyd
consists of 1,000 shares of common stock,
of which 100 shares are issued and
outstanding. No other shares of capital
stock of Loyd are issued and outstanding.
All of the issued and outstanding shares
have been duly and validly issued in
accordance and compliance with all
applicable laws, rules and regulations and
are fully paid and nonassessable. There
are no options, warrants, rights, calls,
commitments, plans, contracts or other
agreements of any character granted or
issued by Loyd which provide for the
purchase, issuance or transfer of any
shares of the capital stock of Loyd nor
are there any outstanding securities
granted or issued by Loyd that are
convertible into any shares of the equity
securities of Loyd, and none is
authorized. Loyd is not obligated or
committed to purchase, redeem or otherwise
acquire any of its equity. All presently
exercisable voting rights in Loyd are
vested exclusively in its outstanding
shares of common stock, each share of
which is entitled to one vote on every
matter to come before it's Shareholder,
and other than as may be contemplated by
this Agreement, there are no voting trusts
or other voting arrangements with respect
to any of Loyd's equity securities.
2.1.4 Subsidiaries. "Subsidiary" or
"Subsidiaries" means all corporations,
trusts, partnerships, associations, joint
ventures or other Persons, as defined
below, of which a corporation or any other
Subsidiary of such corporation owns not
less than twenty percent (20%) of the
voting securities or other equity or of
which such corporation or any other
Subsidiary of such corporation possesses,
directly or indirectly, the power to
direct or cause the direction of the
management and policies, whether through
ownership of voting shares, management
contracts or otherwise. "Person" means
any individual, corporation, trust,
association, partnership, proprietorship,
joint venture or other entity. There are
no Subsidiaries of Loyd.
2.1.5 Execution of Agreement. The
execution and delivery of this Agreement
does not, and the consummation of the
transactions contemplated hereby will not:
(a) violate, conflict with, modify or
cause any default under or acceleration of
(or give any party any right to declare
any default or acceleration upon notice or
passage of time or both), in whole or in
part, any charter, article of
incorporation, bylaw, mortgage, lien, deed
of trust, indenture, lease, agreement,
instrument, order, injunction, decree,
judgment, law or any other restriction of
any kind to which either the Loyd
Shareholder or Loyd are a party or by
which either of them or any of their
properties are bound; (b) result in the
creation of any security interest, lien,
encumbrance, adverse claim, proscription
or restriction on any property or asset
(whether real, personal, mixed, tangible
or intangible), right, contract, agreement
or business of the Loyd Shareholder or
Loyd (exception of London Office Lease);
(c) violate any law, rule or regulation of
any federal or state regulatory agency; or
(d) permit any federal or state regulatory
agency to impose any restrictions or
limitations of any nature on the Loyd
Shareholder or Loyd or any of their
respective actions.
2.1.6 Taxes.
2.1.6.1 All taxes, assessments,
fees, penalties, interest and other
governmental charges with respect
to Loyd which have become due and
payable on the date hereof have
been paid in full or adequately
reserved against by Loyd,
(including without limitation,
income, property, sales, use,
franchise, capital stock, excise,
added value, employees' income
withholding, social security and
unemployment taxes), and all
interest and penalties thereon with
respect to the periods then ended
and for all periods thereto;
2.1.6.2 There are no
agreements, waivers or other
arrangements providing for an
extension of time with respect to
the assessment of any tax or
deficiency against Loyd, nor are
there any actions, suits,
proceedings, investigations or
claims now pending against Loyd,
nor are there any actions, suits,
proceedings, investigations or
claims now pending against Loyd in
respect of any tax or assessment,
or any matters under discussion
with any federal, state, local or
foreign authority relating to any
taxes or assessments, or any claims
for additional taxes or assessments
asserted by any such authority, and
there is no basis for the assertion
of any additional taxes or
assessments against Loyd, and
2.1.6.3 The consummation of the transactions
contemplated by this Agreement will not result in the
imposition of any additional taxes on or assessments
against Loyd.
2.1.7 Disputes and Litigation. There is no suit, action,
litigation, proceeding, investigation, claim, complaint, or
accusation pending, threatened against or affecting Loyd or
any of its properties, assets or business or to which Loyd is
a party, in any court or before any arbitrator of any kind or
before or by any governmental agency (including, without
limitation, any federal, state, local, foreign or other
governmental department, commission, board, bureau, agency or
instrumentality), and there is no basis for such suit,
action, litigation, proceeding, investigation, claim,
complaint, or accusation; (b) there is no pending or
threatened change in any environmental, zoning or building
laws, regulations or ordinances which affect or could affect
Loyd or any of its properties, assets or businesses; and (c)
there is no outstanding order, writ, injunction, decree,
judgment or award by any court, arbitrator or governmental
body against or affecting Loyd or any of its properties,
assets or business. There is no litigation, proceeding,
investigation, claim, complaint or accusation, formal or
informal, or arbitration pending, or any of the aforesaid
threatened, or any contingent liability which would give rise
to any right of indemnification or similar right on the part
of any director or officer of Loyd or any such person's
heirs, executors or administrators as against Loyd.
2.1.8 Compliance with laws. Loyd has at all times been,
and presently is, in full compliance with, and has not
received notice of any claimed violation of, any applicable
federal, state, local, foreign and other laws, rules and
regulations. Loyd has filed all returns, reports and other
documents and furnished all information required or requested
by any federal, state, local or foreign governmental agency
and all such returns, reports, documents and information are
true and complete in all respects. All permits, licenses,
orders, franchises and approvals of all federal, state, local
or foreign governmental or regulatory bodies required of Loyd
for the conduct of its business have been obtained, no
violations are or have been recorded in respect of any such
permits, licenses, orders, franchises and approvals, and
there is no litigation, proceeding, investigation,
arbitration, claim, complaint or accusation, formal or
informal, pending or threatened, which may revoke, limit, or
question the validity, sufficiency or continuance of any such
permit, license, order, franchise or approval. Such permits,
licenses, orders, franchises and approvals are valid and
sufficient for all activities presently carried on by Loyd.
2.1.9 Guaranties. Loyd has not guaranteed any dividend,
obligation or indebtedness of any Person; nor has any Person
guaranteed any dividend, obligation or indebtedness of Loyd.
2.1.10 Books and Records. Loyd keeps its books, records and
accounts (including, without limitation, those kept for
financial reporting purposes and for tax purposes) in
accordance with good business practice and in sufficient
detail to reflect the transactions and dispositions of its
assets, liabilities and equities. The minute books of the
Loyd contain records of its shareholders' and directors'
meetings and of action taken by such shareholders and
directors. The meeting of directors and shareholders
referred to in such minute books were duly called and held,
and the resolutions appearing in such minute books were duly
adopted. The signatures appearing on all documents contained
in such minute books are the true signatures of the persons
purporting to have signed the same. A true and accurate
balance sheet of Loyd as of the Closing Date, as well as an
income statement and statement of cash flows from March 31,
1998 to the Closing Date are attached hereto as Exhibit "G".
Further, a true and correct balance sheet as of March 31,
1998 and an income statement and statement of cash flows for
the year ended March 31, 1998 are attached hereto as Exhibit
"H".
2.2 Representations and Warranties of ACCM. To induce
Loyd and the Loyd Shareholder to enter into this Agreement and to
consummate the transactions contemplated hereby, ACCM represents and
warrants, as of the date hereof and as of the Closing, as follows:
2.2.1 Corporate Existence and Authority of ACCM. ACCM is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. It has all
requisite corporate power, franchises, licenses, permits and
authority to own its properties and assets and to carry on
its business as it has been and is being conducted. It is in
good standing in each state, nation or other jurisdiction in
each state, nation or other jurisdiction wherein the
character of the business transacted by it makes such
qualification necessary.
2.2.2 Capitalization of ACCM. The authorized equity
securities of ACCM consists of 24,000,000 shares of common
stock, of which 13,778,341 shares are issued and outstanding
as of February 16, 1999, and 1,000,000 shares of Preferred
Stock, of which no shares are issued and outstanding prior to
the date hereof. No other shares of capital stock of ACCM
are issued and outstanding. All of the issued and
outstanding shares have been duly and validly issued in
accordance and compliance with all applicable laws, rules and
regulations and are fully paid and nonassessable. All
presently exercisable voting rights in ACCM are vested
exclusively in its outstanding shares of common stock, each
share of which is entitled to one vote on every matter to
come before it's shareholders, and other than as may be
contemplated by this Agreement, there are no voting trusts or
other voting arrangements with respect to any of ACCM's
equity securities.
2.2.3 Subsidiaries. ACCM currently has three subsidiaries,
namely American Custom Components, Inc., a California
corporation, K5 Plastics, Inc., a California corporation, and
Caribbean Electronics, Inc.
2.2.4 Execution of Agreement. The execution and delivery
of this Agreement does not, and the consummation of the
transactions contemplated hereby will not: (a) violate,
conflict with, modify or cause any default under or
acceleration of (or give any party any right to declare any
default or acceleration upon notice or passage of time or
both), in whole or in part, any charter, article of
incorporation, bylaw, mortgage, lien, deed of trust,
indenture, lease, agreement, instrument, order, injunction,
decree, judgment, law or any other restriction of any kind to
which ACCM is a party or by which it or any of its properties
are bound; (b) result in the creation of any security
interest, lien, encumbrance, adverse claim, proscription or
restriction on any property or asset (whether real, personal,
mixed, tangible or intangible), right, contract, agreement or
business of ACCM; (c) violate any law, rule or regulation of
any federal or state regulatory agency; or (d) permit any
federal or state regulatory agency to impose any restrictions
or limitations of any nature on ACCM or any of its actions.
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMENTS
3.1 Closing. The Closing shall be deemed to have occurred as
of the date of signing of this Agreement. Subsequent to the
signing, the following shall occur as a single integrated transaction:
3.2 Delivery by Walk and ACCM:
(a) Walk shall deliver to ACCM that portion of the Walk
Shares and all instruments of conveyance and transfer required
by Section 1.1.
(b) ACCM shall deliver to Walk 500,000 shares of ACCM Series
A Convertible Preferred Stock and all instruments of conveyance
and transfer required by Section 1.1.
(c) ACCM shall deliver to the Loyd Shareholder an aggregate
of 1,500,000 shares of ACCM common stock and all instruments of
conveyance and transfer required by Section 1.2.
3.3 Delivery by the Loyd Shareholder:
(a) The Loyd Shareholder shall deliver to ACCM all of the
Loyd Shares and all instruments of conveyance and transfer
required by Section 1.2.
ARTICLE 4
CONDITIONS, TERMINATION, AMENDMENT AND WAIVER
4.1 Condition Precedent. This Agreement, and the
transactions contemplated hereby, shall be subject to the approval
of the Board of Directors of ACCM and Loyd, and, if necessary, the
respective shareholders thereof.
4.2 Termination. Notwithstanding anything to the
contrary contained in this Agreement, this Agreement may be
terminated and the transactions contemplated hereby may be abandoned
at any time prior to the Closing by the mutual consent of all of the
parties;
4.3 Waiver and Amendment. Any term, provision, covenant,
representation, warranty or condition of this Agreement may be
waived, but only by a written instrument signed by the party
entitled to the benefits thereof. The failure or delay of any party
at any time or times to require performance of any provision hereof
or to exercise its rights with respect to any provision hereof shall
in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any
condition, or of the breach of any term, provision, covenant,
representation or warranty contained in this Agreement, in any one
or more instances, shall be deemed to be or construed as a further
or continuing waiver of any such condition or breach or waiver of
any other condition or of the breach of any other term, provision,
covenant, representation or warranty. No modification or amendment
of this Agreement shall be valid and binding unless it be in writing
and signed by all parties hereto.
ARTICLE 5
COVENANTS
5.1 To induce Walk and ACCM to enter into this Agreement
and to consummate the transactions contemplated hereby, and without
limiting any covenant, agreement, representation or warranty made
the Loyd Shareholder covenant and agree as follows:
5.1.1 Notices and Approvals. The Loyd Shareholder agree:
(a) to give and to cause Loyd to give all notices to third
parties which may be necessary or deemed desirable by ACCM in
connection with this Agreement and the consummation of the
transactions contemplated hereby; (b) to use its best efforts
to obtain and to cause Loyd to obtain, all federal and state
governmental regulatory agency approvals, consents, permit,
authorizations, and orders necessary or deemed desirable by
ACCM in connection with this Agreement and the consummation
of the transaction contemplated hereby; and (c) to use its
best efforts to obtain, and to cause Loyd to obtain, all
consents and authorizations of any other third parties
necessary or deemed desirable by ACCM in connection with this
Agreement and the consummation of the transactions
contemplated hereby.
5.1.2 Information for ACCM's Statements and Applications.
The Loyd Shareholder and Loyd and their employees,
accountants and attorneys shall cooperate fully with ACCM in
the preparation of any statements or applications made by
ACCM to any federal or state governmental regulatory agency
in connection with this Agreement and the transactions
contemplated hereby and to furnish ACCM with all information
concerning the Loyd Shareholder and Loyd necessary or deemed
desirable by ACCM for inclusion in such statements and
applications, including, without limitation, all requisite
financial statements and schedules.
5.1.3 Access to Information. ACCM, together with its
appropriate attorneys, agents and representatives, shall be
permitted to make the full and complete investigation of the
Loyd Shareholder and Loyd and have full access to all of the
books and records of the other during reasonable business
hours. Notwithstanding the foregoing, such parties shall
treat all such information as confidential and shall not
disclose such information without the prior consent of the
other.
5.2 To induce the Loyd Shareholder to enter into this
Agreement and to consummate the transactions contemplated hereby,
and without limiting any covenant, agreement, representation or
warranty made ACCM covenants and agrees as follows:
5.2.1 Access to Information. The Loyd Shareholder, together
with their appropriate attorneys, agents and representatives,
shall be permitted to make the full and complete
investigation of ACCM and have full access to all of the
books and records of the other during reasonable business
hours. Notwithstanding the foregoing, such parties shall
treat all such information as confidential and shall not
disclose such information without the prior consent of the
other.
ARTICLE 6
MISCELLANEOUS
6.1 Expenses. Except as otherwise specifically provided
for herein, whether or not the transactions contemplated hereby are
consummated, each of the parties hereto shall bear all taxes of any
nature (including, without limitation, income, franchise, transfer
and sales taxes) and all fees and expenses relating to or arising
from its compliance with the various provisions of this Agreement
and such party's covenants to be performed hereunder, and except as
otherwise specifically provided for herein, each of the parties
hereto agrees to pay all of its own expenses (including, without
limitation, attorneys and accountants' fees and printing expenses)
incurred in connection with this Agreement, the transactions
contemplated hereby, the negotiations leading to the same and the
preparations made for carrying the same into effect, and all such
taxes, fees and expenses of the parties hereto shall be paid prior
to Closing.
6.2 Notices. Any notice, request, instruction or other
document required by the terms of this Agreement, or deemed by any
of the parties hereto to be desirable, to be given to any other
party hereto shall be in writing and shall be given by prepaid
telegram or delivered or mailed by registered or certified mail,
postage prepaid, with return receipt requested, to the following
addresses:
TO ACCM:
American Custom Components, Inc.
3310 W. MacArthur Blvd.
Santa Ana, CA 92704
Attn: John Groom, President
with a copy to:
M. Richard Cutler, Esq.
The Law Offices of M. Richard Cutler
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
TO LOYD OR THE LOYD SHAREHOLDER:
Edward Loyd
423 E. Promontory Point Dr.
Newport Beach, CA 92660
with a copy to:
Robin Waterer
1 Templar St.
London EE5 9JB, England
The persons and addresses set forth above may be changed from
time to time by a notice sent as aforesaid. If notice is given by
delivery in accordance with the provisions of this Section, said
notice shall be conclusively deemed given at the time of such
delivery. If notice is given by mail in accordance with the
provisions of this Section, such notice shall be conclusively deemed
given forty-eight (48) hours after deposit thereof in the United
States mail. If notice is given by telegraph in accordance with the
provisions of this Section, such notice shall be conclusively deemed
given at the time that the telegraphic agency shall confirm delivery
thereof to the addressee.
6.3 Entire Agreement. This Agreement, together with the
Schedule and exhibits hereto, sets forth the entire agreement and
understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements,
arrangements and understandings related to the subject matter
hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant or condition, written
or oral, express or implied, whether by statute or otherwise, has
been made by any party hereto which is not embodied in this
Agreement, or exhibits hereto or the written statements,
certificates, or other documents delivered pursuant hereto or in
connection with the transactions contemplated hereby, and no party
hereto shall be bound by or liable for any alleged understanding,
promise, inducement, statement, representation, warranty, covenant
or condition not so set forth.
6.4 Survival of Representations. All statements of fact
(including financial statements) contained in the Schedule, the
exhibits, the certificates or any other instrument delivered by or
on behalf of the parties hereto, or in connection with the
transactions contemplated hereby, shall be deemed representations
and warranties by the respective party hereunder. All
representation, warranties agreements and covenants hereunder shall
survive the Closing and remain effective regardless of any
investigation or audit at any time made by or on behalf of the
parties or of any information a party may have in respect thereto.
Consummation of the transactions contemplated hereby shall not be
deemed or construed to be a waiver of any right or remedy possessed
by any party hereto, notwithstanding that such party knew or should
have known at the time of Closing that such right or remedy existed.
6.5 Incorporated by Reference. All documents (including,
without limitation, all financial statements) delivered as part
hereof or incident hereto are incorporated as a part of this
Agreement by reference.
6.6 Remedies Cumulative. No remedy herein conferred upon
and Party is intended to be exclusive of any other remedy and each
and every such remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise.
6.7 Execution of Additional Documents. Each party hereto
shall make, execute, acknowledge and deliver such other instruments
and documents, and take all such other actions as may be reasonably
required in order to effectuate the purposes of this Agreement and
to consummate the transactions contemplated hereby.
6.8 Finders' and Related Fees. Each of the parties
hereto is responsible for, and shall indemnify the other against,
any claim by any third party to a fee, commission, bonus or other
remuneration arising by reason of any services alleged to have been
rendered to or at the instance of said party to this Agreement with
respect to this Agreement or to any of the transactions contemplated
hereby.
6.9 Governing Law. This Agreement has been negotiated
and executed in the State of California and shall be construed and
enforced in accordance with the laws of such state.
6.10 Forum. Each of the parties hereto agrees that any
action or suit which may be brought by any party hereto against any
other party hereto in connection with this Agreement or the
transactions contemplated hereby may be brought only in a federal or
state court in Orange County, California.
6.11 Binding Effect and Assignment. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and
their respective heirs, executors, administrators, legal
representatives and assigns.
6.12 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. In
making proof of this Agreement, it shall not be necessary to produce
or account for more than one such counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, as of the date first written hereinabove.
AMERICAN CUSTOM COMPONENTS, INC.
a Nevada corporation ("ACCM")
/s/ John Groom
By: John Groom
Its: President
LOYD INTERNATIONAL, INC.
a Wyoming corporation ("LOYD")
/s/ Edward Loyd
By:_______________________________
Its: _______________________________
MARTIN TONY WALK ("WALK")
/s/ Martin Tony Walk
Martin Tony Walk
"THE LOYD SHAREHOLDER"
/s/ Edward Loyd
Edward Loyd
Exhibit "A"
Agreement Between Walk and Loyd
dated February 13, 1999
Letter of conditions for the sale of ACC to Loyd International.
Feb. 13, 1999
Martin T. Walk agreement.
A) Sale of tools and all rights for Tagnology shelf tag system
currently held by ACC to Martin T. Walk. The tools and
rights have an approximate value of $80,000 for the tools
with forecasted revenue by Tagnology based on 50 store
installation of $500,000 per year for the current connectors
and cable sets. Total cost to Mr. Walk would be $1.00.
B) ACC to assign current Tagnology debt of approximately
$9,000.00, now in default to Martin T. Walk.
C) Loyd International to sign a private purchase contract for
Mr. Walk's shares (approximately 5,192,000 shares) for
$400,000. The $400,000 will be paid in terms, structured
with the least income tax exposure to Mr. Walk.
D) Loyd International will provide a $100,000 note paid over a
3-year period on a quarterly basis at 10% interest. This
note represents Mr. Walk's deferred salary for 1998.
E) Mr. Walk to retain 300,000 shares of stock.
F) Loyd International will assume all tax liability for shares
sold by Mr. Walk where the funds were invested back into the
company.
G) Mr. Walk to sign an agreement that he will not recruit ACC
staff.
H) All other funds provided to ACC by Mr. Walk shall be
considered paid in capital.
I) Agreement per the above to be signed by Feb 15, 1999.
Estimated stock position summary after sale.
Estimated fully diluted 10,473,340 shares (3 million
redeemed from Oxford)
Addition 144 stock to Loyd 2,600,000 shares
Total dilution 12,973,340 shares
Sale of Walk Stocks to Loyd 5,192,000 shares
144 Stock issued to Loyd 2,600,000 shares (@$0.15 per
shares $390,000)
Total Loyd Shares 7,792,000 shares
Loyd percent of ownership 60%
/s/ Martin T. Walk /s/
Edward Loyd
Martin T. Walk Edward Loyd, President
on behalf of Loyd International
Exhibit "B"
Agreement Between Walk and Loyd
dated March 4, 1999
AGREEMENT
This AGREEMENT is an amendment to the February 13, 1999 agreement
between Ed Loyd as President of Loyd International and Martin T.
Walk as major stockholder of American Custom Components, Inc.
This amendment affects the paragraphs of said agreement as follows:
1. Paragraph C is further defined as follows: WALK shall
receive *$400,000 worth of preferred stock in American Custom
Components, Inc. Said Preferred stock shall pay a dividend of 10%
per annum payable quarterly. Said stock shall be convertible into
American Custom Components, Inc. common stock at any time after 24
months at WALK's option and at 80% of the then market price of the
common stock.
2. Paragraph D is amended as follows: The company agrees to
retain **WALK as a Consultant at $75,000.00 per year with a 5%
commission on sales which he develops. Company to pay all expenses
including car with the prior approval of John Groom. This agreement
to commence April 1, 1999 for a period of two years.
3. Paragraph E is amended to read that Walk is to be
compensated for the 100,000 shaers of sotck sold to Montclair. Walk
to retain 300,000 shares of American Custom Components, Inc. common
stock.
4. Additionally, Loyd to pay Irving Walk $6,000.00 and Tony
Walk $5,000.
* Min redeemable after 24 months
** Company to provide a separate consulting contract to Walk.
Dated: March 4, 1999
/s/ Martin T. Walk
/s/ Edward Loyd
Martin T. Walk Edward Loyd, President
Loyd International
Exhibit "C"
Loyd Shareholder
Edward Loyd is the holder of 100% of the issued and
outstanding shares of common stock of Loyd International, Inc.,
consisting of 100 shares.
Exhibit "D"
Certificate of Designation
of
Series A Convertible Preferred Stock
AMERICAN CUSTOM COMPONENTS, INC.
CERTIFICATE OF DESIGNATION
SERIES A CONVERTIBLE PREFERRED STOCK
John Groom and Edward Loyd hereby certify that they are
the President and Secretary, respectively, of American Custom
Components, Inc., a Nevada corporation (hereinafter referred
to as the "Corporation" or the "Company"); that, pursuant to
the Corporation's Articles of Incorporation, as amended, and
the General Corporation Law of the State of Nevada, the Board
of Directors of the Corporation adopted the following
resolutions on March 4, 1999; and that none of the Series A
Convertible Preferred Stock has been issued.
1. Creation and Designation of Series A
Convertible Preferred Stock. There is hereby created a series
of preferred stock consisting of 500,000 shares and designated
as the Series A Preferred Stock (the "Preferred Stock"),
having the voting powers, preferences, relative,
participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are
set forth below.
2. Dividend Provisions. Each share of Preferred
Stock shall be entitled to receive a cumulative dividend equal
to $0.08 per annum, payable on March 31, June 30, September
30, and December 31 of each year. Each share of Preferred
Stock shall rank on a parity with each other share of
Preferred Stock with respect to dividends.
3. Liquidation Provisions. The Series A
Convertible Preferred Stock shall not have any rights to
assets or proceeds from sale of assets of the Company in the
event of liquidation.
4. Conversion Provisions. At any time or from time
to time after March 8, 2001, the holders of the Series A
Convertible Preferred Stock shall have the right, but not the
obligation, to convert the Series A Convertible Preferred
Stock into shares of common stock of ACCM on the following terms:
A. For purposes of conversion only, each shares of
Series A Convertible Preferred Stock shall have a value of $0.80.
B. Upon conversion, the aggregate dollar value of
all the Series A Convertible Preferred Stock being converted
shall be converted into common stock based upon 80% of the
common stock's average bid price for the 30 days immediately
preceding the date of conversion.
C. The holders of the Series A Convertible
Preferred Stock shall exercise their conversion rights by
completing the attached Notice of Conversion and delivering it
to the Company.
5. Call Provisions. The shares of Series A
Convertible Preferred Stock shall, at the sole discretion of
the Board of Directors of the Corporation, be callable, in
whole or in part, from time to time or at any time, at a price
of $0.80 per share. Notwithstanding the foregoing, however,
the Corporation may not call the shares of Series A
Convertible Preferred Stock unless all dividends have been
paid in full to the holders of the Preferred Stock as of the
time of call.
6. Notices. Any notices required by the
provisions of this Certificate of Designation to be given to
the holders of shares of Preferred Stock shall be deemed given
if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at its address appearing on
the books of the Corporation.
7. Voting Provisions. The Preferred Stock shall
have no voting rights.
IN WITNESS WHEREOF, the Company has caused this
Certificate of Designation of Series A Convertible Preferred
Stock to be duly executed by its President and attested to by
its Secretary and has caused its corporate seal to be affixed
hereto this 16th day of March, 1999.
By: /s/ John Groom By:
/s/ Edward Loyd
John Groom, President Edward Loyd,
Secretary
CONVERSION NOTICE
(To be executed upon Conversion of Series A Convertible
Preferred Stock)
To: American Custom Components, Inc. (the "Company")
The undersigned hereby irrevocably elects to exercise
the right, represented by that certain Certificate of
Designation of Series A Convertible Preferred Stock (the
"Preferred Stock") as adopted by the Company's Board of
Directors on March 4, 1999, and by Preferred Stock Certificate
No. _______, attached hereto, to convert ______________ shares
of Preferred Stock into __________ shares of Common Stock
("Common Stock") of the Company according to the Conversion
Ratio set forth in the Certificate of Designation. The
undersigned requests that certificates for the Common Stock be
registered in the name of
______________________________________________________________whose
address is
________________________________________________________ and
that such certificates be delivered to
_______________________________________________whose address
is_____________________________________________. If said
number of shares of Preferred Stock is less than all of the
shares of Preferred Stock currently held by the undersigned,
the undersigned requests that a new Preferred Stock
Certificate representing the number of shares held by the
undersigned after giving effect to the conversion herein be
registered in the name of _____________________________whose
address is _________________________________and that such
Preferred Stock Certificate be delivered to
_____________________________whose address is
___________________________________.
Dated:
Signature:_________________________________
(Signature
must
conform in
all
respects
to name of
holder as
specified
on the
Preferred
Stock
Certificate)
Exhibit "E"
Consulting Agreement
AMERICAN CUSTOM COMPONENTS, INC.
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement"), made and
entered into as of this 1st day of April, 1999 by and between
American Custom Components, Inc., a Nevada corporation ("ACC"
or the "Company") and Martin Tony Walk ("Walk" or the
"Consultant").
RECITALS
WHEREAS, Consultant has significant experience and
potential sales contacts within the industry in which ACC
currently operates;
WHEREAS, ACC wishes to engage the consulting services
of Consultant; and
WHEREAS, Consultant wishes to provide ACC with
consulting services.
NOW, THEREFORE, in consideration of the mutual promises
herein contained, the parties hereto hereby agree as follows:
1. CONSULTING SERVICES
ACC hereby authorizes, appoints and engages the
Consultant to perform the following services in accordance
with the terms and conditions set forth in this Agreement:
The Consultant will consult with ACC concerning the
preparation of the Company's brochures, contracts, and other
sales materials to be used by the Company and its sales force
and independent representatives. In addition, Consultant will
provide the Company and its agents with potential sales
contacts and will communicate and negotiate with potential
sales contacts in order to consummate sales on behalf of the
Company. The parties hereto acknowledge that the value of
Consultants services shall be measured by a combination of the
following: development of existing and new markets,
developmemt of a monthly, quarterly and annual sales plan,
increased sales or revenues, education, preparation, and
positioning within the marketplace. Consultant shall maintain
a minimum margin of thirty percent for all sales developed.
Margin shall be defined as the amount that remains after all
direct costs, consultant fees, consultant expenses and sales
commissions is deducted. Consultant shall provide all
information required to develop a quotation as defined in the
companies "request for quotation" (RFQ) documents. Consultant
shall not perform any services by, for, or on behalf of the
Company without the consent of the Company and shall take
direction with respect to Consultants activities hereunder
from the Company.
2. TERM OF AGREEMENT
This Agreement shall be in full force and effect as of
the date hereof and for a period of two (2) years herefrom.
ACC shall have the right to terminate this Agreement in the
event of a breach of its terms by the Consultant or the death
or assignment for the benefit of creditors of the Consultant.
Consultant shall have the right to terminate this Agreement if
ACC fails to comply with the terms of this Agreement,
including without limitation its responsibilities for
compensation as set forth in this Agreement.
3. COMPENSATION TO CONSULTANT
a. Consultant shall receive cash consideration in
the amount of Thirty Six Dollars and Six Cents
($36.06) per hour, not to exceed Seventy Five
Thousand Dollars ($75,000) in any 12 month
period (the "Compensation"), payable within
fifteen (15) days of delivery by Consultant to
the Company of an invoice documenting
performance of services on behalf of the Company.
b. In addition to the Compensation set forth above,
Consultant shall receive a commission equal to
five percent (5%) of the gross revenues received
by the Company as a result of Consultants
efforts. Said commission shall be paid on the
first of the month following the receipt of
revenues by the Company. In addition, the
Company shall reimburse Consultant for all
reasonable expenses incurred by Consultant while
performing direct services for the Company under
this Agreement and pre-approved by the Company's
President, including automobile expenses up to a
maximum of $500 per month.
4. REPRESENTATIONS AND WARRANTIES OF CONSULTANT
Consultant represents and warrants to and agrees
with ACC that:
a. This Agreement has been duly authorized,
executed and delivered by Consultant.
This Agreement constitutes the valid,
legal and binding obligation of
Consultant, enforceable in accordance
with its terms, except as rights to
indemnity hereunder may be limited by
applicable federal or state securities
laws, and except as such enforceability
may be limited by bankruptcy,
insolvency, reorganization or similar
laws affecting creditor's rights
generally; and
b. The consummation of the transactions
contemplated hereby will not result in
any breach of the terms or conditions
of, or constitute a default under, any
agreement or other instrument to which
Consultant is a party, or violate any
order, applicable to Consultant, of any
court or federal or state regulatory
body or administrative agency having
jurisdiction over Consultant or over any
of its property, and will not conflict
with or violate the terms of
Consultants's current employment.
c. The parties hereto acknowledge and agree
that ACC shall have the right to refuse
any course of action proposed by
Consultant and to refuse any customer or
sale identified by Consultant or any
other source. Further, Consultant will
abide by all the policies and procedures
of the Company in effect from time to
time. Consultant shall provide and
maintain necessary documentation to
support the companies ISO 9001 and ISO
9002 certification requirements.
d. Consultant agrees that he shall not
perform any services, either as an
employee, independent contractor, or
otherwise, for any other company without
the express written permission of the
Company. Further, all properties,
patents, trademarks, formulas,
inventions, etc. which are developed by
or involving Consultant while performing
services for the Company, and for a
period of one (1) year after the
temination of this Agreement, shall be
the property of the Company.
5. REPRESENTATIONS AND WARRANTIES OF ACC
ACC hereby represents, warrants, covenants to and
agrees with Consultant that:
a. This Agreement has been duly authorized,
and executed by ACC. This Agreement
constitutes the valid, legal and binding
obligation of ACC, enforceable in
accordance with its terms, except as
rights to indemnity hereunder may be
limited by applicable federal or state
securities laws, except in each case as
such enforceability may be limited by
bankruptcy, insolvency, reorganization
or similar laws affecting creditor's
rights generally.
b. There is not now pending or, to the
knowledge of ACC, threatened, any
action, suit or proceeding to which ACC
is a party before or by any court or
governmental agency or body which might
result in a material adverse change in
the financial condition of ACC. The
performance of this Agreement and the
consummation of the transactions
contemplated hereby will not result in a
breach of the terms or conditions of, or
constitute a default under, any statute,
indenture, mortgage or other material
Agreement or instrument to which ACC is
a party, or violate any order,
applicable to ACC, or governmental
agency having jurisdiction over ACC or
over any of its property.
c. The parties hereto agree that ACC shall be
responsible for any and all costs and expenses
reasonably incurred by Consultant in performing
his duties hereunder, including but not limited
to legal fees, printing costs, fees paid to
third-party professionals, etc. No expense to
be reimbursed by ACC shall be incurred by
Consultant without the prior written approval of
ACC.
6. INDEPENDENT CONTRACTOR
Both ACC and the Consultant agree that the Consultant
will act as an independent contractor in the performance of
his duties under this Agreement. Nothing contained in this
Agreement shall be construed to imply that Consultant, or any
employee, agent or other authorized representative of
Consultant, is a partner, joint venturer, agent, officer or
employee of ACC. Neither party hereto shall have any
authority to bind the other in any respect vis a vis any third
party, it being intended that each shall remain an independent
contractor and responsible only for its own actions.
7. ARBITRATION
If a dispute or claim shall arise between the parties with
respect to any of the terms or provisions of this Agreement,
or with respect to the performance by any of the parties under
this Agreement, then the parties agree that the dispute shall
be arbitrated in Orange County, California, before a single
arbitrator, in accordance with the rules of either the
American Arbitration Association ("AAA") or Judicial
Arbitration and Mediation Services, Inc./Endispute
("JAMS/Endispute"). The selection between AAA and
JAMS/Endispute rules shall be made by the claimant first
demanding arbitration. The arbitrator shall have no power to
alter or modify any express provisions of this Agreement or to
render any award which by its terms affects any such
alteration or modification. The parties to the arbitration
may agree in writing to use different rules and/or
arbitrator(s). In all other respects, the arbitration shall
be conducted in accordance with Part III, Title 9 of the
California Code of Civil Procedure. The parties agree that
the judgment award rendered by the arbitrator shall be
considered binding and may be entered in any court having
jurisdiction as stated in Paragraph 10 of this Agreement. The
provisions of this Paragraph shall survive the termination of
this Agreement.
8. NOTICES
Any notice, request, demand, or other communication given
pursuant to the terms of this Agreement shall be deemed given
upon delivery, if hand delivered or sent via facsimile, or
Forty-Eight (48) hours after deposit in the United States
mail, postage prepaid, and sent certified or registered mail,
return receipt requested, correctly addressed to the addresses
of the parties indicated below or at such other address as
such party shall in writing have advised the other party.
If to ACC:
American Custom Components, Inc.
3310 W. MacArthur Boulevard
Santa Ana, CA 92704
Attention: John Groom, President
Facsimile No: 714-662-2081
with a copy to:
Law Offices of M. Richard Cutler
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Attn: M. Richard Cutler, Esq.
Facsimile No: 949-719-1988
If to Consultant:
Martin Tony Walk
177 Promontory West
Newport Beach, CA 92660
Facsimile No.: 949-675-0833
9. ASSIGNMENT
This contract shall inure to the benefit of the parties
hereto, their heirs, administrators and successors in
interest. This Agreement shall not be assignable by either
party hereto without the prior written consent of the other.
10. CHOICE OF LAW AND VENUE
This Agreement and the rights of the parties hereunder shall
be governed by and construed in accordance with the laws of
the State of California including all matters of construction,
validity, performance, and enforcement and without giving
effect to the principles of conflict of laws. Any action
brought by any party hereto shall be brought within the State
of California, County of Orange.
11. NONDISCLOSURE
Each party hereto agrees to keep the terms of this
Agreement and the transactions contemplated hereby as
confidential and shall not disclose such information to any
third party, other than professional advisors utilized to
negotiate and consummate the transactions contemplated hereby.
The parties hereto agree that in the event there is a breach
of the foregoing confidentiality provision, the damage to the
parties hereto would be difficult to estimate and as a result,
in the event of such a breach, the non-breaching party, in
addition to any and all other remedies allowed by law, would
be entitled to injunctive relief enjoining the actions of the
breaching party.
12. ENTIRE AGREEMENT
Except as provided herein, this Agreement, including
exhibits, contains the entire agreement of the parties, and
supersedes all existing negotiations, representations, or
agreements and all other oral, written, or other
communications between them concerning the subject matter of
this Agreement. There are no representations, agreements,
arrangements, or understandings, oral or written, between and
among the parties hereto relating to the subject matter of
this Agreement that are not fully expressed herein.
13. SEVERABILITY
If any provision of this Agreement is unenforceable, invalid,
or violates applicable law, such provision, or unenforceable
portion of such provision, shall be deemed stricken and shall
not affect the enforceability of any other provisions of this
Agreement.
14. CAPTIONS
The captions in this Agreement are inserted only as a matter
of convenience and for reference and shall not be deemed to
define, limit, enlarge, or describe the scope of this
Agreement or the relationship of the parties, and shall not
affect this Agreement or the construction of any provisions
herein.
15. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
shall together constitute one and the same instrument.
16. MODIFICATION
No change, modification, addition, or amendment to this
Agreement shall be valid unless in writing and signed by all
parties hereto.
17. ATTORNEYS FEES
Except as otherwise provided herein, if a dispute should
arise between the parties including, but not limited to
arbitration, the prevailing party shall be reimbursed by the
non-prevailing party for all reasonable expenses incurred in
resolving such dispute, including reasonable attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the Effective Date.
"ACC" "CONSULTANT"
American Custom Components, Inc. Martin Tony Walk
a Nevada corporation
/s/ John Groom /s/ Martin Tony Walk
By: John Groom
Its: President
Exhibit "F"
Assignment of Assets and Assumption of Liabilities
ASSIGNMENT OF ASSETS
AND
ASSUMPTION OF LIABILITIES
This Assignment of Assets and Assumption of Liabilities
("Assignment and Assumption") is executed this 1st day of
March, 1999, between Martin Tony Walk ("Walk") and American
Custom Components, Inc. ("ACCM").
WHEREAS, ACCM is the holder of certain assets and
technology related to Tagnology, Inc. (the "Tagnology Assets")
as set forth on Exhibit "F1" attached hereto;
WHEREAS, ACCM is indebted to Tagnology is the
approximate sum of $9,000 (the "Tagnology Debts");
WHEREAS, ACCM desires to assign the Tagnology Assets to
Walk and Walk desires to assume the Tagnology Debts;
NOW, THEREFORE, for good and mutual consideration, the
receipt of which is hereby acknowledged:
1. ACCM hereby assign all of the Tagnology Assets
to Walk.
2. Walk hereby expressly assumes all of the
Tagnology Debts.
EXECUTED as of the date first written above.
/s/ Martin Tony Walk AMERICAN CUSTOM COMPONENTS, INC.
Martin Tony Walk
/s/ John Groom
By: John Groom
Its: President
Exhibit "G"
Loyd Financial Statements as of Closing Date
Exhibit "H"
Loyd Financial Statements as of March 31, 1998
Exhibit I
Inventory for
Tagnology
Assembly and Molding
Tools
Date: 3/8/99
Part# Description Location
Santa Ana St. Lucia
Tagnology Mold 4 cavity tool
including mold base 1
Print Part #s A0506600 Cover Connector-Rail End
A0516600 Cover Connector-Swing Arm
A0516606 Housing Connector-
Swing Arm
Tagnology
Tools for
Assembly Use
PHK 1/2" Steinel Type 1
Bases 6
Insert for Bases 7
Note: Stamp tools shall be assigned to Mr. Walk if owned by
ACC. If not owned by ACC, no such requirement shall exist.
/s/ John Groom /s/ Tony Walk
3/8/99 3-8-99
John Groom Tony Walk