UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 19, 2006
CITY CAPITAL CORPORATION
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(Exact Name of Registrant as specified in Charter)
Commission File No. 33-5902
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Nevada
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(State of Other Jurisdiction of Incorporation)
22-2774460
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(I.R.S. Employer Identification No.)
2535 Pilot Knob Road, Suite 118, Mendota Heights, Minnesota
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(Address of Principal Executive Office)
55120
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(Zip Code)
Registrant's Telephone Number, Including Area Code: (651) 452-1606
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Registrant under
any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On April 19, 2006, CITY CAPITAL CORPORATION (the "Company") entered
into an Exchange Agreement ("Agreement") with the sole unit holder of
ECC Vine Street Real Estate Acquisitions, LLC /DBA/ECC JAZZ DISTRICT
ACQUISITIONS, LLC ("ECC"), pursuant to which all of the issued and
outstanding capital units of ECC will be exchanged for a quantity of
newly issued common shares of the Company.
Item 9.01. Financial Statements and Exhibits.
(a) Exhibits Furnished.
99.1 Exchange Agreement, dated April 19, 2006.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
City Capital Corporation
Date: April 24, 2006 By: /s/ Gary Borglund
Gary Borglund
Chief Executive Officer
EXHIBIT INDEX
Number Description
10.1 Exchange Agreement
EXHIBIT 10.1
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT ("AGREEMENT") is made this 19 day of
April, 2006, by and between CITY CAPITAL CORPORATION, a Nevada
corporation, ("CCCN"), and EPHREN CAPITAL CORPORATION (the "ECC Unit
Holder"), a Missouri corporation and the sole holder of issued and
outstanding limited liability company units of ECC Vine Street Real
Estate Acquisitions, LLC ("ECC"), a Missouri limited liability
company dba "ECC JAZZ DISTRICT ACQUISITIONS, LLC", pursuant to which
all of the issued and outstanding capital units of ECC will be
exchanged for a quantity of newly issued common shares of the
Company. In this Agreement, the parties are at times referred to
collectively as the "Parties" and individually as a "Party."
W I T N E S S ET H
WHEREAS, CCCN is a publicly traded company whose common stock,
par value $.001 per share (the "CCCN Common Stock") is quoted on the
OTC Bulletin Board under the symbol "CCCN," and
WHEREAS, the ECC Unit Holder owns all of the issued and
outstanding units of ECC (the "ECC Units"), and
WHEREAS, the parties desire that CCCN acquire all of the ECC
Units from the ECC Unit Holder solely in exchange for an aggregate of
6,731,364 newly issued shares of common stock of CCCN (the "CCCN
Exchange Shares") pursuant to the terms and conditions set forth in
this Agreement, and
WHEREAS, the Parties intend that the transaction contemplated
herein (the "Transaction") qualifies as a reorganization and tax-free
exchange under Section 368(a) of the Internal Revenue Code of 1986,
as amended, and
WHEREAS, immediately following the Closing (as hereinafter
defined), there will be issued and outstanding an aggregate of
11,569,895 shares of CCCN Common Stock, including the CCCN Exchange
Shares to be issued to the ECC Unit Holder, and
WHEREAS, following the Closing, ECC will become a wholly-owned
subsidiary of CCCN.
WHEREAS, immediately following the consummation of the
Transaction, the CCCN Exchange Shares will represent between
approximately Fifty-Seven Percent (57%) of the total outstanding
Common Stock of CCCN, and
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in
consideration of the foregoing recitals, which are hereby
incorporated by reference, the mutual covenants and agreements
hereinafter set forth and the mutual benefits to the Parties to be
derived herefrom and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the Parties
hereto agree as follows:
EXCHANGE
1.1 The Exchange. At the Closing (as hereinafter defined), each
ECC Unit issued and outstanding immediately prior to the Closing Date
shall be exchanged for share(s) of CCCN Common Stock. The aggregate
number of shares of CCCN Stock exchanged for all of the ECC Units
pursuant to this Agreement shall be 6,731,364. From and after the
Closing Date, the ECC Unit Holder shall no longer own any ECC Units,
and the membership certificate(s) formerly representing ECC Units
shall represent the CCCN Exchange Shares issuable in exchange
therefor pursuant to this Agreement.
1.2 No Dilution. CCCN shall neither effect, nor fix any record
date with respect to, any stock split, stock dividend, reverse stock
split, recapitalization, or similar change in the CCCN Stock between
the date of this Agreement and the Effective Time.
1.3 Closing. The closing ("Closing") of the Transaction shall
occur no later than three (3) business days after each of the closing
conditions set forth in Articles V and VI have been satisfied or
waived (the "Closing Date").
1.4 Closing Events. At the Closing, each of the respective
Parties hereto shall execute, acknowledge, and deliver (or shall
cause to be executed, acknowledged, and delivered) any and all stock
certificates, officers' certificates, opinions, financial statements,
disclosures, agreements, resolutions, rulings, or other instruments
required by this Agreement to be so delivered at or prior to the
Closing, and the documents and certificates provided in Sections 5.2,
5.4, 6.2, 6.4 and 6.5, 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 Transaction. If
agreed to by the Parties, the Closing may take place through the
exchange of documents (other than the exchange of stock certificates)
by efax, fax, email and/or express courier. At the Closing, the CCCN
Exchange Shares shall be issued in the names and denominations
provided by the ECC Unit Holder.
1.5 Standstill.
(a) Until the earlier of the Closing or April 28, 2006 (the
"No Shop Period"), neither ECC nor the ECC Unit Holder will (i)
solicit or encourage any offer or enter into any agreement or other
understanding, whether written or oral, for the sale, transfer or
other disposition of any capital stock or assets of ECC to or with
any other entity or person, except as contemplated by the
Transaction, other than sales of goods and services by ECC in the
ordinary course of its business; (ii) entertain or pursue any
unsolicited communication, offer or proposal for any such sale,
transfer or other disposition; or (iii) furnish to any person or
entity (other than CCCN and its authorized agents and
representatives) any nonpublic information concerning ECC or its
business, financial affairs or prospects for the purpose or with the
intent of permitting such person or entity to evaluate a possible
acquisition of any capital stock or assets of ECC. If either ECC or
the ECC Unit Holder shall receive any unsolicited communication or
offer, ECC or the ECC Unit Holder, as applicable, shall immediately
notify CCCN of the receipt of such communication or offer.
(b) During the No-Shop Period, CCCN will not (i) solicit or
encourage any offer or enter into any agreement or other
understanding, whether written or oral, for the sale, transfer or
other disposition of any capital stock or assets of CCCN to or with
any other entity or person, except as contemplated herein, other than
sales of goods and services by CCCN in the ordinary course of its
business; (ii) entertain or pursue any unsolicited communication,
offer or proposal for any such sale, transfer or other disposition;
or (iii) furnish to any person or entity (other than ECC, and its
authorized agents and representatives) any nonpublic information
concerning CCCN or its business, financial affairs or prospects for
the purpose or with the intent of permitting such person or entity to
evaluate a possible acquisition of any capital stock or assets of
CCCN. If either CCCN or any of CCCN's stockholders shall receive any
unsolicited communication or offer, CCCN or CCCN's stockholders, as
applicable, shall immediately notify the ECC Unit Holder of the
receipt of such communication or offer.
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ECC UNIT HOLDER
As an inducement to, and to obtain the reliance of CCCN, the ECC
Unit Holder represents and warrants to CCCN as follows:
2.1 Organization. ECC is a limited liability company duly
organized, validly existing, and in good standing under the laws of
the State of Missouri. ECC has the 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
jurisdictions in which the character and location of the assets owned
by it or the nature of the business transacted by it requires
qualification. The execution and delivery of this Agreement does
not, and the consummation of the Transaction in accordance with the
terms hereof will not, violate any provision of ECC's organizational
documents. ECC has taken all action required by laws, its articles
of incorporation, certificate of business registration, or otherwise
to authorize the execution and delivery of this Agreement. ECC has
full power, authority, and legal right and has taken or will take all
action required by law, its organizational documents, and otherwise
to consummate the Transaction.
2.2 Capitalization. All issued and outstanding ECC Units are
legally issued, fully paid, and non-assessable and were not issued in
violation of the pre-emptive or other rights of any person.
2.3 Subsidiaries and Predecessor Corporations. ECC does not
have any subsidiaries and does not own, beneficially or of record,
any shares or other equity interests of any other corporation or entity.
2.4 Financial Statements.
(a) On or before the Closing Date (the "Audit Period"), ECC
shall have delivered to CCCN (i) audited financial statements and
notes thereto covering its fiscal years ending December 31, 2005 and
2004, including income statements, balance sheets and statements of
cash flow and equity for such fiscal years then ended (the "ECC
Financial Statements").
(b) ECC has filed all local income tax returns required to
be filed by it from its inception to the date hereof. All such
returns are complete and accurate in all material respects.
ECC has no liabilities with respect to the payment of federal,
county, local, or other taxes (including any deficiencies, interest,
or penalties), except for taxes accrued but not yet due and payable,
for which ECC may be liable in its own right or as a transferee of
the assets of, or as a successor to, any other corporation or entity.
(c) No deficiency for any taxes has been proposed, asserted
or assessed against ECC. There has been no tax audit, nor has there
been any notice to ECC by any taxing authority regarding any such tax
audit, or, to the knowledge of ECC, is any such tax audit threatened
with regard to any taxes or ECC tax returns. ECC does not expect the
assessment of any additional taxes of ECC for any period prior to the
date hereof and has no knowledge of any unresolved questions
concerning the liability for taxes of ECC.
(d) The books and records, financial and otherwise, of ECC
are in all material respects complete and correct and have been
maintained in accordance with good business and accounting practices.
2.5 Information. The information concerning ECC set forth in
this Agreement and the ECC Information are and will be 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, nor misleading as of the date hereof and
as of the Closing Date.
2.6 Common Stock Equivalents. There are no existing options,
warrants, calls, commitments of any character or other common stock
equivalents relating to any authorized but un-issued ECC Units.
2.7 Absence of Certain Changes or Events. Except as set forth
in this Agreement or the ECC Information, since the date of the ECC
Financial Statements:
(a) except in the normal course of business, there has not
been (i) any material adverse change in the business, operations,
properties, assets, or condition of ECC; or (ii) any damage,
destruction, or loss to ECC (whether or not covered by insurance)
materially and adversely affecting the business, operations,
properties, assets, or condition of ECC;
(b) ECC has not (i) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or
liability (absolute or contingent) not otherwise in the ordinary
course of business, and except for capital raised by issuance of debt
or equity in a private placement or other capital raising transaction
deemed advisable by ECC; (ii) paid any material obligation or
liability not otherwise in the ordinary course of business (absolute
or contingent) other than current liabilities reflected in or shown
on the most recent ECC consolidated balance sheet, and current
liabilities incurred since that date in the ordinary course of
business; (iii) sold or transferred, or agreed to sell or transfer,
any of its assets, properties, or rights not otherwise in the
ordinary course of business (except assets, properties, or rights not
used or useful in its business which, in the aggregate have a value
of less than $50,000), 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 $50,000); (iv) made or permitted any amendment or
termination of any contract, agreement, or license to which they are
a party not otherwise in the ordinary course of business if such
amendment or termination is material, considering the business of
ECC; 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).
(c) 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.
2.8 Litigation and Proceedings. Except as set forth in the ECC
Information, there are no actions, suits, proceedings, or
investigations pending or, to the knowledge of ECC, threatened by or
against ECC, or affecting ECC 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.
2.9 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the Transaction will not result in
the breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust, or
other material contract, agreement, or instrument to which ECC is a
party or to which any of its properties or operations are subject.
2.10 Contracts. ECC has provided, or will provide CCCN, copies
of all material contracts, agreements, franchises, license
agreements, or other commitments to which ECC is a party or by which
it or any of its assets, products, technology, or properties are bound.
2.11 Compliance With Laws and Regulations. ECC has complied
with all applicable statutes and regulations of any national, county,
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 ECC, or
except to the extent that noncompliance would not result in the
incurrence of any material liability for ECC.
2.12 Approval of Agreement. The management of ECC (the "ECC
Management") and the ECC Unit Holder have approved the execution and
delivery of this Agreement by the ECC Unit Holders, and have approved
the Transaction.
2.13 ECC Information. ECC will deliver, as soon as practicable,
the following information, which are collectively referred to as the
"ECC Information," all certified by the chief executive officer of
ECC as complete, true, and correct:
(a) Complete and correct copies of the organizational
documents, as amended, of ECC in effect as of the date of this
Agreement, and
(b) True and correct copies of all material contracts,
agreements, or other instruments to which ECC is a party or by which
it or its properties are bound, specifically including all contracts,
agreements, or arrangements referred to in Section 2.10.
2.14 Title and Related Matters. ECC has good and marketable
title to all of its properties, interest in properties, and assets,
real and personal, which are reflected in the ECC Financial
Statements or acquired after that date (except properties, 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 ECC Information.
2.15 Governmental Authorizations. ECC has all licenses,
franchises, permits, and other government 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, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and
delivery by ECC of this Agreement and the consummation by ECC of the
Transaction.
2.16 Continuity of Business Enterprises. ECC has no commitment
or present intention to liquidate ECC or sell or otherwise dispose of
a material portion of its business or assets following the
consummation of the Transaction.
2.17 Ownership of ECC Units. The ECC Unit Holder is the legal
and beneficial owner of 100% of the ECC Units, free and clear of any
claims, charges, equities, liens, security interests, and
encumbrances whatsoever, and the ECC Unit Holder has full right,
power, and authority to transfer, assign, convey, and deliver his ECC
Units; and delivery of such ECC Units at the Closing will convey to
CCCN good and marketable title to such ECC Units, free and clear of
any and all claims, charges, equities, liens, security interests, and
encumbrances whatsoever.
2.18 Brokers. The ECC Unit Holder has not entered into any
contract with any person, firm or other entity that would obligate
ECC or CCCN to pay any commission, brokerage or finder's fee in
connection with the Transaction.
2.19 Nominees. During the past five years, no event listed in
Sub-paragraphs (1) through (4) of Subparagraph (d) of Item 401 of
Regulation S-B has occurred with respect to any of the nominees of
the ECC Unit Holder (the "Nominees") to serve as CCCN's directors and
officers following the Closing which is material to an evaluation of
the ability or integrity of such Nominee.
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF CCCN
As an inducement to, and to obtain the reliance of the ECC Unit
Holder, CCCN represents and warrants as follows:
3.1 Organization. CCCN 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, and 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 CCCN Information (as
hereinafter defined) are complete and correct copies of the Articles
of Incorporation and bylaws of CCCN, and all amendments thereto, as
in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the Transaction will not,
violate any provision of CCCN's Articles of Incorporation or bylaws.
CCCN has taken all action required by law, its Articles of
Incorporation, its bylaws, or otherwise to authorize the execution
and delivery of this Agreement, and CCCN has full power, authority,
and legal right and has taken all action required by law, its
Articles of Incorporation, bylaws, or otherwise to consummate the
Transaction.
3.2 Capitalization. CCCN's authorized capitalization consists
of 235,000,000 shares of Common Stock, of which no more than
4,838,531 shares will be issued and outstanding immediately prior to
the Closing (an aggregate of 10,569,895 shares of CCCN Stock shall be
outstanding immediately following the Closing); and 15,000,000 shares
of preferred stock, none of which are issued and outstanding. All
presently issued and outstanding shares are legally issued, fully
paid, and non-assessable and not issued in violation of the pre-
emptive or other rights of any person. The CCCN Exchange Shares will
be legally issued, fully paid and non-assessable and shall not be
issued in violation of the pre-emptive or other rights of any other person.
3.3 Subsidiaries. Except as otherwise disclosed in its SEC
reports, CCCN does not have any subsidiaries and does not own,
beneficially or of record, any shares or other equity interests of
any other corporation or other entity.
3.4 Financial Statements. Except as otherwise disclosed in its
SEC reports:
(a) CCCN 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, for which CCCN may be liable in its own
right, or as a transferee of the assets of, or as a successor to, any
other corporation or entity;
(b) CCCN has filed all federal, state, or local income tax
returns required to be filed by it from its inception to the date
hereof; and
(c) The books and records, financial and otherwise, of CCCN
are in all material respects complete and correct and have been
maintained in accordance with good business and accounting practices.
No deficiency for any taxes has been proposed, asserted or assessed
against CCCN. There has been no tax audit, nor has there been any
notice to CCCN by any taxing authority regarding any such tax audit,
or, to the knowledge of CCCN, is any such tax audit threatened with
regard to any taxes or CCCN tax returns. CCCN does not expect the
assessment of any additional taxes of CCCN for any period prior to
the date hereof and has no knowledge of any unresolved questions
concerning the liability for taxes of CCCN.
CCCN has good and marketable title to its assets and, except as set
forth in the CCCN Information or the Financial Statements of CCCN or
the notes thereto, has no material contingent liabilities, direct or
indirect, matured or unmatured.
3.5 Information. The information concerning CCCN set forth in
this Agreement and the CCCN Information are and will be 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 as of the date hereof and
as of the Closing Date.
3.6 Common Stock Equivalents. Except as set forth herein, there
are no existing options, warrants, calls, commitments of any
character or other common stock equivalents relating to authorized
and unissued stock of CCCN.
3.7 Absence of Certain Changes or Events. Except as described
herein or in the CCCN Information, since September 30, 2005:
(a) There has not been (i) any material adverse change,
financial or otherwise, in the business, operations, properties,
assets, or condition of CCCN (whether or not covered by insurance)
materially and adversely affecting the business, operations,
properties, assets, or condition of CCCN;
(b) CCCN has not (i) amended its Articles of Incorporation
or bylaws; (ii) declared or made, or agreed to declare or make any
payment of dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed, or agreed to
purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are extraordinary or material
considering the business of CCCN; (iv) made any material change in
its method of management, operation, or accounting; (v) entered into
any other material transactions; (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 employees; 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) CCCN has not (i) granted or agreed to grant any
options, warrants, or other rights for its stocks, bonds, or other
corporate securities calling for the issuance thereof, except for
those issued to Macenta Group, LLC pursuant to this transaction; (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 obligation or liability (absolute
or contingent) other than current liabilities reflected in or shown
on the most recent CCCN balance sheet and current liabilities
incurred since that date in the ordinary course of business and
professional and other fees and expenses incurred in connection with
the preparation of this Agreement and the consummation of the
Transaction; (iv) sold or transferred, or agreed to sell or transfer,
any of its assets, property, or rights (except assets, property, or
rights not used or useful in its business which, in the aggregate
have a value of less than $5,000), or canceled, or agreed to cancel,
any debts or claims (except debts or claims which in the aggregate
are of a value of less than $5,000); (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 CCCN; 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 CCCN, 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 CCCN.
3.8 Title and Related Matters. Except as otherwise stated in its Sec
reports, CCCN has good and marketable title to all of its properties,
interest in properties, and assets, real and personal, which are
reflected in the CCCN balance sheet or acquired after that date
(except properties, 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 CCCN Information.
3.9 Litigation and Proceedings. There are no actions, suits, or
proceedings pending or, to the knowledge of CCCN, threatened by or
against or affecting CCCN, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind.
3.10 Contracts. CCCN is not a party to any material contract,
agreement, or other commitment, except as specifically disclosed in
its SEC reports and the disclosures called for by this Agreement.
3.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the Transaction will not result in
the breach of any term or provision of, or constitute a default
under, any indenture, mortgage, deed of trust, or other material
agreement or instrument to which CCCN is a party or to which it or
any of its assets or operations are subject.
3.12 Governmental Authorizations. CCCN has all licenses,
franchises, permits, and other government 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, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and
delivery by CCCN of this Agreement and the consummation by CCCN of
the Transaction.
3.13 Compliance With Laws and Regulations. Except as described
herein, in its SEC reports or in the CCCN Information, to the best of
its knowledge, CCCN 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 conditions of CCCN or except to the extent
that noncompliance would not result in the incurrence of any material
liability. This compliance includes, but is not limited to, to the
extent such compliance is applicable, the filing of all reports to
date with the United States Securities and Exchange Commission (the
"SEC") and state securities authorities.
3.14 Insurance. CCCN owns no insurable properties and carries
no casualty or liability insurance except a fidelity bond covering
its officers and directors.
3.15 Approval of Agreement. The board of directors of CCCN (the
"CCCN Board") has authorized the execution and delivery of this
Agreement by CCCN and the CCCN Board and a majority of CCCN's
shareholders (the "CCCN Shareholders") have by written consent
approved this Agreement and the Transaction.
3.16 Continuity of Business Enterprises. CCCN has no commitment
or present intention to liquidate CCCN or sell or otherwise dispose
of a material portion of its business or assets following the
consummation of the Transaction.
3.17 Material Transactions of Affiliations. Except as disclosed
herein and in the CCCN Information, there exists no material
contract, agreement, or arrangement between CCCN 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 CCCN to own
beneficially, 10% or more of the issued and outstanding common stock
of CCCN 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 10% stockholder
of CCCN has, or has had during the last preceding full fiscal year,
any known interest in any material transaction with CCCN which was
material to the business of CCCN. CCCN has no commitment, whether
written or oral, to lend any funds to, borrow any money from, or
enter into any other material transaction with any such affiliated
person.
3.18 Employment Matters. CCCN has no employees other than its
executive officers.
3.19 CCCN Information. CCCN has delivered to ECC, or will
deliver as soon as practicable at ECC's request, the following
disclosures, which are collectively referred to as the "CCCN
Information," which are dated the date of this Agreement, all
certified by an officer to be complete, true, and accurate:
(a) complete and accurate copies of the Articles of
Incorporation and bylaws, as amended, of CCCN as in effect as of the
date of this Agreement;
(b) a copy of the federal income tax returns of CCCN
identified in Section 3.4(b);
(c) a description of any material adverse change in the
business, operations, property, assets, or condition of CCCN,
required to be provided pursuant to Section 3.7; and
(d) any other information, together with any required
copies of documents, required to be disclosed in the CCCN Information
by Sections 3.1 through 3.17.
3.20 Current Information. CCCN shall cause the CCCN Information
and the instruments and data delivered to ECC hereunder to be updated
after the date hereof up to and including the Closing Date.
3.21 Brokers. CCCN has not entered into any contract with any
person, firm or other entity that would obligate ECC or CCCN to pay
any commission, brokerage or finders' fee in connection with the
Transaction.
SPECIAL COVENANTS
4.1 Shareholders' Actions of CCCN. Prior to the Closing (and in
compliance with applicable laws, rules and regulations), CCCN shall
cause the following actions to be taken by the written consent of the
Board of Directors of the Company:
(a) Current Directors of CCCN shall appoint and elect
Ephren Taylor, Jr. as a director and the CEO of CCCN, effective at
the time of the Closing;
(b) Approval of this Agreement and the Transaction; and
(c) Current Directors will resign at closing and take such
other actions as the directors may determine are necessary or
appropriate.
4.2 Unit Holders' Actions of ECC. Prior to the Closing, the
following actions shall be taken by the written unanimous consent of
the ECC Unit Holders:
(a) the approval of this Agreement and the Transaction; and
(b) such other actions as the management of ECC may
determine are necessary or appropriate.
4.3 Access to Properties and Records. CCCN and ECC will each
afford to the officers and authorized representatives of the other
reasonable access to the properties, books, and records of CCCN or
ECC in order that each may have 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 CCCN or ECC as the other shall from time to time
reasonably request.
4.4 Delivery of Books and Records. At the Closing, CCCN shall
deliver to ECC, the originals of the corporate minute books, books of
account, contracts, records, and all other books or documents of CCCN
now in the possession or control of CCCN or its representatives and agents.
4.5 Dilution Protection. Until ninety (90) days after the
Closing, CCCN shall not effect any stock dividend, subdivision,
reclassification, recapitalization, split, conversion, consolidation
or combination of CCCN Common Stock.
4.6 Actions Prior to Closing by both Parties.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the CCCN or ECC Information
or as permitted or contemplated by this Agreement, CCCN and ECC 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 obligation 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 CCCN nor ECC will: (i) make any change in their
organizational documents, Articles of Incorporation or bylaws; (ii)
take any action described in Section 2.7 in the case of ECC, or in
Section 3.7, in the case of CCCN (all except as permitted therein or
as disclosed in the applicable Party's disclosures); (iii) enter into
or amend any contract, agreement, or other instrument of any of the
types described in such Party's disclosures, 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) make or change any material tax election, settle or
compromise any material tax liability or file any amended tax return.
4.7 Indemnification.
(a) ECC hereby agrees to indemnify CCCN and each of the
officers, agents and directors of CCCN 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 in Article II. The
indemnification provided for in this paragraph shall not survive the
Closing and consummation of the Transaction but shall survive the
termination of this Agreement pursuant to Section 7.1(b) of this Agreement.
(b) CCCN hereby agrees to indemnify ECC and each of the
officers, agents and directors of ECC 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 III.
The indemnification provided for in this paragraph shall not survive
the Closing and consummation of the Transaction but shall survive the
termination of this Agreement pursuant to Section 7.1(c) of this
Agreement.
CONDITIONS PRECEDENT TO OBLIGATIONS OF CCCN
The obligations of CCCN under this Agreement are subject to the
satisfaction, at or before the Closing, of the following conditions:
5.1 Accuracy of Representations; Performance. The
representations and warranties made by the ECC Unit Holders 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), and ECC shall have
performed or complied with all covenants and conditions required by
this Agreement to be performed or complied with by the ECC Unit
Holders prior to or at the Closing. CCCN may request to be furnished
with a certificate, signed by a duly authorized representative of all
of the ECC Unit Holders and dated the Closing Date, to the foregoing effect.
5.2 Certificates. CCCN shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized
representative of all of the ECC Unit Holders to the effect that no
litigation, proceeding, investigation, or inquiry is pending or, to
the best knowledge of such ECC Unit Holders is threatened, which
might result in an action to enjoin or prevent the consummation of
the Transaction, or, to the extent not disclosed in the ECC
Information, by or against ECC which might result in any material
adverse change in any of the assets, properties, business, or
operations of ECC.
5.3 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any material adverse change in the
financial condition, business, or operations of ECC, nor shall any
event have occurred which, with the lapse of time or the giving of
notice, may cause or create any material adverse change in the
financial condition, business, or operations.
5.4 Other Items.
(a) CCCN shall have received a member list of ECC
containing the name, address, and number of units held by each ECC
Unit Holder as of the date of Closing certified by an executive
officer of ECC as being true, complete, and accurate;
(b) CCCN shall have received such further documents,
certificates, or instruments relating to the Transaction as CCCN may
reasonably request;
(c) complete and satisfactory due diligence review of ECC
by CCCN;
(d) approval of the Transaction by the ECC Board and the
ECC Unit Holders;
(e) on or before the date of the Closing, ECC shall have
delivered to CCCN the ECC Financial Statements; and
(f) any necessary third-party consents shall be obtained
prior to Closing, including but not limited to consents necessary
from ECC's lenders, creditors, vendors and lessors.
CONDITIONS PRECEDENT TO OBLIGATIONS OF ECC UNIT HOLDERS
The obligations of the ECC Unit Holders under this Agreement are
subject to the satisfaction, at or before the Closing, of the
following conditions:
6.1 Accuracy of Representations; Performance. The
representations and warranties made by CCCN 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, and CCCN shall have performed and complied with
all covenants and conditions required by this Agreement to be
performed or complied with by CCCN prior to or at the Closing. ECC
shall have been furnished with a certificate, signed by a duly
authorized executive officer of CCCN and dated the Closing Date, to
the foregoing effect.
6.2 Officer's Certificate. ECC shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized
executive officer of CCCN to the effect that no litigation,
proceeding, investigation, or inquiry is pending or, to the best
knowledge of CCCN threatened, which might result in an action to
enjoin or prevent the consummation of the Transaction.
6.3 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any material adverse change in the
financial condition, business, or operations of CCCN nor shall any
event have occurred which, with the lapse of time or the giving of
notice, may cause or create any material adverse change in the
financial condition, business, or operations of CCCN.
6.4 Good Standing. ECC shall have received a certificate of
good standing from the Secretary of State of the State of Nevada or
other appropriate office, dated as of a date within ten days prior to
the Closing Date certifying that CCCN is in good standing as a
corporation in the State of Nevada and has filed all tax returns
required to have been filed by it to date and has paid all taxes
reported as due thereon.
6.5 Other Items.
(a) ECC shall have received a stockholder list of CCCN
containing the name, address, and number of shares held by each CCCN
stockholder as of the date of Closing certified by an executive
officer of CCCN as being true, complete, and accurate;
(b) ECC shall have received such further documents,
certificates, or instruments relating to the Transaction as ECC may
reasonably request;
(c) complete and satisfactory due diligence review of CCCN
by the ECC Unit Holders;
(d) approval of the Transaction by the CCCN Board and a
majority of the CCCN Shareholders;
(e) there shall have been no material adverse changes in
CCCN, financial or otherwise, from the information provided in the
CCCN Financial Statements;
(f) at the Closing, the authorized capitalization of CCCN
shall consist of (i) 235,000,000 shares of CCCN Stock, of which
4,838,531 shares shall be issued and outstanding immediately after
the Closing, excluding the CCCN Exchange Shares;
(g) except as set forth herein, there shall be no CCCN
Common Stock Equivalents outstanding as of immediately prior to the
Closing. For purposes of the foregoing, "CCCN Common Stock
Equivalents" shall mean any subscriptions, warrants, options or other
rights or commitments of any character to subscribe for or purchase
from CCCN, or obligating CCCN to issue, any shares of any class of
the capital stock of CCCN or any securities convertible into or
exchangeable for such shares;
(h) the resignation of the officers and directors of CCCN
effective upon the Closing, with such vacancies filled by the
nominees of the ECC Unit Holders as set forth herein; and
(i) any necessary third-party consents shall be obtained
prior to Closing, including but not limited to consents necessary
from CCCN's lenders, creditors, vendors and lessors.
TERMINATION
7.1 Termination.
(a) This Agreement may be terminated by either the ECC Unit
Holders or the CCCN Board 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 Transaction and which, in the
judgment of such board of directors, made in good faith and based on
the advice of its legal counsel, makes it inadvisable to proceed with
the exchange contemplated by this Agreement; (ii) the Transaction is
disapproved by any regulatory authority whose approval is required to
consummate such transaction or in the judgment of such board of
directors, made in good faith and based on the advice of counsel,
there is substantial likelihood that any such approval will not be
obtained or will be obtained only on a condition or conditions which
would be unduly burdensome, making it inadvisable to proceed with the
exchange; (iii) there shall have been any change after the date of
the latest balance sheets of ECC and CCCN, respectively, in the
assets, properties, business, or financial condition of ECC and CCCN,
which could have a materially adverse effect on the value of the
business of ECC and CCCN respectively, except any changes disclosed
in the ECC and CCCN Information, as the case may be, dated as of the
date of execution of this Agreement. In the event of termination
pursuant to this paragraph (a) of Section 7.1, 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 Transaction; (iv)
the Closing Date shall not have occurred by May 30, 2006; or (v) if
CCCN shall not have provided responses satisfactory in ECC's
reasonable judgment to ECC's request for due diligence materials.
(b) This Agreement may be terminated at any time prior to
the Closing by action of the CCCN Board if the ECC Unit Holders shall
fail to comply in any material respect with any of their covenants or
agreements contained in this Agreement or if any of the
representations or warranties of the ECC Unit Holders contained
herein shall be inaccurate in any material respect, and, in either
case if such failure is reasonably subject to cure, it remains
uncured for seven days after notice of such failure is provided to
the ECC Unit Holders. If this Agreement is terminated pursuant to
this paragraph (b) of Section 7.1, this Agreement shall be of no
further force or effect, and no obligation, right, or liability shall
arise hereunder.
(c) This Agreement may be terminated at any time prior to
the Closing by action of the ECC Unit Holders if CCCN 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 CCCN contained herein shall be
inaccurate in any material respect, and, in either case if such
failure is reasonably subject to cure, it remains uncured for seven
days after notice of such failure is provided to CCCN. If this
Agreement is terminated pursuant to this paragraph (c) of Section
7.1, this Agreement shall be of no further force or effect, and no
obligation, right, or liability shall arise hereunder.
MISCELLANEOUS
8.1 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 matters of state law,
with the laws of Nevada. Any dispute arising under or in any way
related to this Agreement will be submitted to binding arbitration
before a single arbitrator by the American Arbitration Association in
accordance with the Association's commercial rules then in effect.
The arbitration will be conducted in San Antonio, Texas. The decision
of the arbitrator will set forth in reasonable detail the basis for
the decision and will be binding on the parties. The arbitration
award may be confirmed by any court of competent jurisdiction.
8.2 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally
delivered to it or sent by registered mail or certified mail, postage
prepaid, or by prepaid telegram addressed as follows:
If to CCCN, to:
City Capital Corporation
ATTN: Gary Borglund
2535 Pilot Knob Road, Suite 118
Mendota Heights, MN 55120
If to the ECC
Ephren Capital Corporation
Unit Holders, to: ATTN: Ephren Taylor, Jr.
2000 Mallory Lane, Suite 130-301
Franklin, TN 37067
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 as of the date so
delivered, mailed, or telegraphed.
8.3 Attorney's Fees. In the event that any Party institutes any
action or suit to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the breaching Party or Parties
shall reimburse the non-breaching Party or Parties for all costs,
including reasonable attorneys' fees, incurred in connection
therewith and in enforcing or collecting any judgment rendered therein.
8.4 Confidentiality. CCCN and the ECC Unit Holders will keep
confidential all information and materials regarding the other Party
designated by such Party as confidential. The provisions of this
Section 8.5 shall not apply to any information which is or shall
become part of the public domain through no fault of the Party
subject to the obligation from a third party with a right to disclose
such information free of obligation of confidentiality. CCCN and ECC
agree that no public disclosure will be made by either Party of the
existence of the Transaction or the letter of intent or any of its
terms without first advising the other Party and obtaining its prior
written consent to the proposed disclosure, unless such disclosure is
required by law, regulation or stock exchange rule.
8.5 Expenses. Except as otherwise set forth herein, each Party
shall bear their own costs and expenses associated with the
Transaction. Without limiting the generality of the foregoing, all
costs and expenses incurred by ECC and CCCN after the Closing shall
be borne by CCCN. After the Closing, the costs and expenses of the
ECC Unit Holders shall be borne by the ECC Unit Holders.
8.6 Information; Knowledge. Each Party is presumed to have full
knowledge of all information set forth in the other party's
disclosures delivered pursuant to this Agreement.
8.7 Third Party Beneficiaries. This contract is solely between
CCCN and the ECC Unit Holders, and, except as specifically provided,
no director, officer, stockholder, employee, agent, independent
contractor, or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.
8.8 Entire Agreement. This Agreement represents the entire
agreement between the Parties relating to the Transaction. There are
no other courses of dealing, understandings, agreements,
representations, or warranties, written or oral, except as set forth herein.
8.9 Survival. The representations and warranties of the
respective Parties shall not survive the Closing and the consummation
of the Transaction.
8.10 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.
8.11 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 be 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
hereof may be extended by a writing signed by the party or parties
for whose benefit the provision is intended.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed by their respective representatives,
hereunto duly authorized, as of the date first above-written.
"ECC UNIT HOLDER" EPHREN CAPITAL CORPORATION
By ___________________________________
Ephren Taylor, President
"CCCN" CITY CAPITAL CORPORATION
By __________________________________
Gary Borglund, President