U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 29, 2001
Commission File Number: 0-29933
TRANSAMERICAN HOLDINGS, INC.
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(Name of Small Business Issuer in its Charter)
Nevada, U.S.A. 77-0434471
(State or other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
9601 Wilshire Boulevard, Suite 620, Beverly Hills, CA 90210
(Address of principal executive offices)
(310) 271-4159
(Issuer's telephone number)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 29, 2001, TransAmerican Holdings, Inc.
("TransAmerican" or the "Company") completed the transactions
contemplated by the Agreement and Plan of Reorganization, dated
as of May 17, 2001 (the "Agreement"), among itself, Certified
Satellite Installers, Inc. ("CSI") and certain shareholders of
CSI. A copy of the Agreement is filed herewith as Exhibit 2.
Pursuant to the Agreement, TransAmerican acquired 80% of the
issued and outstanding capital stock of CSI in exchange for the
issuance of up to 2,000,000 shares of restricted TransAmerican
common stock. The total number of shares to be issued is
contingent upon an audit to be completed within 60 days and CSI's
net profits over the next twelve months. The Company's press
release announcing the closing of this transaction is filed as
Exhibit 99 hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following Exhibits are filed herewith:
(1) Agreement and Plan of Reorganization, dated May 17,
2001
(2) Press Release, dated July 12, 2001
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the Registrant has caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly
authorized.
TRANSAMERICAN HOLDINGS, INC.
Date: July 16, 2001 By: /s/ Najib E. Choufani
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Najib E. Choufani
Chairman and CEO
Date: July 16, 2001 By: /s/ Farid E. Tannous
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Farid E. Tannous
Director
EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
TRANSAMERICAN HOLDINGS, INC.,
CERTIFIED SATELLITE INSTALLERS, INC.
AND
CERTAIN SHAREHOLDERS OF CERTIFIED SATELLITE INSTALLERS, INC.
DATED MAY 17, 2001
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement")
is entered into as of May 17, 2001, by and among TRANSAMERICAN
HOLDINGS, INC., a Nevada corporation ("TRANSAMERICAN"), CERTIFIED
SATELLITE INSTALLERS, INC., a California corporation ("CSI") and
Jay Avenatti, an individual ("Avenatti" or the "Controlling
Shareholder").
PLAN OF REORGANIZATION
The transaction set forth in this Agreement is pursuant to
the provisions of Section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended, by which up to 2,000,000 shares of
TRANSAMERICAN common stock, $0.001 par value per share (the
"TRANSAMERICAN Common Stock") will be issued to the shareholders
of CSI (collectively referred to as the "CSI Shareholders") in
exchange for such number of shares of CSI common stock
representing 80% of the total issued and outstanding capital
stock of CSI (the "CSI Common Stock").
AGREEMENT
ARTICLE I
ISSUANCE OF TRANSAMERICAN STOCK TO THE CSI SHAREHOLDERS.
1.1 Issuance and Delivery of Exchange Shares. As
consideration for the transfer, assignment, conveyance and
delivery of the CSI Common Stock, TRANSAMERICAN shall issue to
the CSI Shareholders the TRANSAMERICAN Common Stock (also
referred to as the "Exchange Shares" and the "Exchange
Transaction") on a fully diluted basis and in accordance with
Schedule 3.3.1.
1.2 Escrow and Issuance of Exchange Shares. Of the
2,000,000 Exchange Shares potentially issuable to the CSI
Shareholders, 350,000 Exchange Shares shall be issued and
delivered at Closing and 500,000 Exchange Shares shall be issued
and delivered to an escrow holder hereinafter named, subject to
the following provisions:
1.2.1 Release of Exchange Shares. The 500,000
Exchange Shares in escrow shall be released from escrow
subsequent to completion of TRANSAMERICAN's initial audit of
CSI (the "Initial Audit") and contingent upon the results
thereof. If the Initial Audit confirms the financial status
of CSI as represented and warranted by CSI in the financial
statements attached hereto as Schedule 5.4 (the "Financial
Statements"), then the Escrow Holder shall release the
500,000 Exchange Shares to the Controlling Shareholder. If
the Initial Audit results in a financial condition of CSI
different than as represented in the Financial Statements,
then only a proportional number of the 500,000 Exchange
Shares shall be released at that time, and the remaining
escrowed shares shall be released on the same basis as the
1,150,000 potentially issuable Exchange Shares, as described
below.
The 1,150,000 potentially issuable Exchange Shares shall be
issued and delivered to the CSI shareholders quarterly,
based upon net profits earned by CSI on the basis of one
Exchange Share issued for every one Dollar of net profit
earned. As an example, if CSI has earned $500,000 in net
profits at its quarterly review, then 500,000 Exchange
Shares will be issued. CSI net profits will be reviewed and
measured quarterly, in conjunction with TRANSAMERICAN's
quarterly SEC filings, with the first quarterly review at
September 30, 2001. CSI shall be entitled to earn some or
all of the 1,150,000 potentially issuable Exchange Shares
for a period of twelve months from the Closing Date herein,
subsequent to which CSI shall forfeit any further right,
title or interest in such potentially issuable, but unearned
Exchange Shares.
Notwithstanding the foregoing, any shares issued as a result
of an unaudited quarterly review will remain subject to
verification and adjustment at the subsequent annual audit
of CSI. In the event that the annual audit of CSI results
in a net profit figure differing from the results at the
quarterly reviews, an adjustment will be made to the issued
shares to reconcile the difference between the quarterly
reviews and the annual audit. As an example, if 500,000
Exchange Shares have been issued as a result of the first
two quarterly reviews and the subsequent audit shows that
CSI's net profits were actually $550,000, then an additional
50,000 Exchange Shares would be issued. On the other hand,
if 500,000 Exchange Shares have been issued as a result of
the first two quarterly reviews and the subsequent audit
shows that CSI's net profits were actually only $450,000,
then 50,000 Exchange Shares would be returned to
TRANSAMERICAN.
1.2.2 Net Profits. The term "net profits" as used
herein shall mean the net earnings of CSI before deduction
of all federal, state and local taxes on income, as
determined by the independent auditor regularly employed by
TRANSAMERICAN; such computation shall be based on generally
accepted accounting principles. For the purpose of
computing net profits under this Agreement, there shall be
deducted compensation paid to all employees, contractors and
consultants of CSI. Furthermore, administrative and other
charges incurred by TRANSAMERICAN, normally allocated to
CSI, shall be deducted from income in computing net profits.
1.2.3 Audit Deadline. The net profits for each
fiscal year then-ended, prior to and including the fiscal
year ending December 31, 2002, shall be determined on or
before ninety (90) days after the end of each fiscal year,
and the written profit and loss statement of CSI shall be
conclusive upon the parties, subject to question only if
generally accepted accounting principles are not utilized.
1.2.4 Escrow Holder. Manhattan Transfer Registrar
Co., TRANSAMERICAN's transfer agent and registrar for its
Common Stock, is designated Escrow Holder of the Exchange
Shares and all dividends and earnings thereon, if any, to be
held in escrow pursuant to Section 1.2 hereof. Said shares
shall be held in escrow in accordance with the terms and
conditions hereof and for the uses and purposes herein set
forth, and shall be released to the Controlling Shareholder
upon performance of the conditions hereinafter set forth.
Voting of said shares shall be pursuant to the provisions of
Section 1.2.5. The Escrow Agent shall not be held to take
notice of any terms of any agreement or any rights stated
with respect to the deposited shares except pursuant to the
terms hereof. During the period of holding the Exchange
Shares in escrow, no transfer or any other disposition of
any of said shares or of any interest therein is to be made
whether subject to this Escrow Agreement or otherwise, but
all of said shares are to be held intact as issued and
placed in escrow hereunder, together with all dividends and
earnings thereon. In performing any of its duties
hereunder, the Escrow Agent shall not incur any liability to
anyone for any damages, losses or expenses except for its
willful default or negligence, and it shall accordingly not
incur any such liability with respect (i) to any action
taken or omitted in good faith upon advice of its' counsel
or counsel for TRANSAMERICAN given with respect to any
questions relating to the duties and responsibilities of the
Escrow Agent under this Agreement, or (ii) to any action
taken or omitted in reliance upon any instrument including
the written advices provided for herein, not only as to its
due execution and the validity and effectiveness of its
provisions but also as to the truth and accuracy of any
information contained therein, which the Escrow Agent shall
in good faith believe to be genuine, to have been signed or
presented by a proper person or persons and to conform with
the provisions of this Agreement. TRANSAMERICAN hereby
agrees to indemnify and hold harmless the Escrow Agent
against any and all losses, claims, damages, liabilities and
expenses, including reasonable costs of investigation and
counsel fees and disbursements, which may be imposed upon
the Escrow Agent or incurred by the Escrow Agent in
connection with his acceptance of appointment as the Escrow
Agent hereunder, or the performance of its duties hereunder,
including any litigation arising from this Agreement or
involving the subject matter hereof or the shares deposited
hereunder. Any shares of TRANSAMERICAN Common Stock not
earned or released to the CSI Shareholders by reason of
CSI's non-compliance with the preconditions set forth in
Section 1.2 or any other Section hereof shall be returned to
TRANSAMERICAN together with all dividends and earnings
thereon after the year ended December 31, 2002 has been
audited by TRANSAMERICAN's regularly employed auditor or
upon the termination of this Agreement, whichever is
earlier.
1.2.5 Voting of Stock Held by Escrow Holder. The
Controlling Shareholder shall be entitled to vote any
Exchange Shares then held by the Escrow Holder in escrow
pursuant to the provisions of Section 1.2 at any meeting of
the shareholders of TRANSAMERICAN. TRANSAMERICAN agrees
that CSI has an irrevocable voting interest in said Exchange
Shares held in escrow pursuant to the terms of this
Agreement, and appoints CSI's President its proxy to vote
said escrowed stock in accordance with the instructions of
CSI's Board of Directors.
1.2.6 Cancellation of Escrow and Return of Exchange
Shares. The escrow shall be cancelled twelve months from
the Closing Date herein. Any Exchange Shares remaining in
escrow at the time of cancellation shall be returned to
TRANSAMERICAN, and the CSI Shareholders, including the
Controlling Shareholder, shall forfeit any further right,
title or interest in such Exchange Shares, as well as any
further right, title or interest in any remaining
potentially issuable, but unearned Exchange Shares.
1.3 No Lien or Encumbrances on Exchange Shares. The
issuance of the Exchange Shares shall be made free and clear of
all liens, mortgages, pledges, encumbrances or charges, except as
otherwise set forth herein.
1.4 No Registration of the Exchange Shares. None of the
Exchange Shares issued to the CSI Shareholders shall, at the time
of Closing, be registered under federal or state securities laws
but, rather, shall be issued pursuant to an exemption therefrom
and shall be restricted stock within the meaning of Rule 144
promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). The TRANSAMERICAN Common Stock so issued shall
bear a legend worded as follows:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN
RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR
ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION
STATEMENT THEN IN EFFECT UNDER THE SECURITIES ACT, (2)
IN COMPLIANCE WITH RULE 144, OR (3) PURSUANT TO AN
OPINION OF COUNSEL TO THE ISSUER HEREOF, SATISFACTORY
IN FORM AND SUBSTANCE TO THE ISSUER, THAT SUCH
REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SUCH
SALE, OFFER TO SELL, PLEDGE, HYPOTHECATION, TRANSFER OR
ASSIGNMENT."
TRANSAMERICAN's transfer agent shall annotate its records to
reflect the restrictions on transfer embodied in the legend set
forth above. There shall be no requirement that TRANSAMERICAN
register the Exchange Shares under the Securities Act, but
TRANSAMERICAN may agree to register such shares later under such
terms and conditions as TRANSAMERICAN's Board of Directors,
exercising reasonable business judgment and considering the best
interests of TRANSAMERICAN and all of its Shareholders, may
determine.
1.5 Restrictions on Disposition. Before any disposition is
made by the Controlling Shareholder, or any successor in
interest, of any of the Exchange Shares, the Controlling
Shareholder shall give written notice to TRANSAMERICAN describing
briefly the manner and timing of any such proposed disposition.
No such disposition shall be made unless and until (i) the
Controlling Shareholder has furnished to TRANSAMERICAN an opinion
of counsel that no registration, post-effective amendment, or
notification under the Securities Act of 1933, as amended, is
required with respect to such disposition, and TRANSAMERICAN
shall have advised the Controlling Shareholder that such counsel
and such opinion are satisfactory to it (and TRANSAMERICAN agrees
that it will not unreasonably delay or withhold its consent to or
approval of said opinion), or (ii) a post-effective amendment or
other registration or notification has been filed by
TRANSAMERICAN and/or the Controlling Shareholder and has become
effective, or (iii) the Controlling Shareholder has obtained a
"no-action letter" regarding the proposed disposition from the
staff of the Commission and has delivered a copy thereof to
TRANSAMERICAN, which no-action letter must be satisfactory to
TRANSAMERICAN (and TRANSAMERICAN agrees that it will not
unreasonably delay or withhold its consent to or approval of said
no-action letter).
ARTICLE II
DELIVERY OF CSI STOCK TO TRANSAMERICAN
2.1 Issuance and Delivery of Exchange Shares. As
consideration for issuance and delivery of the TRANSAMERICAN
Common Stock, the Controlling Shareholder shall deliver to
TRANSAMERICAN the CSI Common Stock (hereafter referred to as the
"CSI Common Stock" and the "Exchange Transaction") on a fully
diluted basis.
2.2 No Lien or Encumbrances on Exchange Shares. The
issuance of the CSI Common Stock shall be made free and clear of
all liens, mortgages, pledges, encumbrances or charges.
2.3 No Registration of the Exchange Shares. None of the
CSI Common Stock issued to TRANSAMERICAN shall, at the time of
Closing, be registered under federal or state securities laws
but, rather, shall be issued pursuant to an exemption therefrom
and shall be within the meaning of Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). The
CSI Common Stock so issued shall bear a legend worded as set
forth in Section 1.3. The requirements set forth in the last
paragraph of Section 1.4 shall similarly apply to CSI and its
transfer agent.
ARTICLE III
CLOSING
3.1 Closing of Transaction. The Closing of the Exchange
Transaction (the "Closing" or "Closing Date") shall take place on
or before June 29, 2001, at such time as shall be mutually agreed
upon by the parties. The Closing shall take place at the offices
of TRANSAMERICAN.
3.2 Deliveries at Signing of Agreement. Prior to executing
this Agreement, TRANSAMERICAN and CSI shall provide the other
with their respective Board Minutes or consents approving the
terms of this Agreement and the Exchange Transaction.
3.3 Deliveries at Closing by TRANSAMERICAN. TRANSAMERICAN
shall deliver or cause to be delivered to CSI at the Closing:
3.3.1 certificates representing the Exchange Stock,
in the names of the CSI Shareholders as set forth on
Schedule 3.3.1, with the aggregate amount as described
above;
3.3.2 a copy of a consent of its Board of Directors
authorizing TRANSAMERICAN to take the necessary steps to
complete the Exchange Transaction; and
3.3.3 a copy of a Certificate of Good Standing for
TRANSAMERICAN issued not more than 90 days prior to Closing
by the Nevada Secretary of State.
3.4 Deliveries at Closing by CSI. CSI shall deliver or
cause to be delivered to TRANSAMERICAN at the Closing:
3.4.1 a copy of a consent of its Board of Directors
authorizing CSI to take the necessary steps to complete the
Exchange Transaction;
3.4.2 a copy of a Certificate of Good Standing for
CSI issued not more than 90 days prior to Closing by the
jurisdiction in which CSI is domiciled; and
3.5 Deliveries at Closing by Controlling Shareholder. The
Controlling Shareholder shall deliver or cause to be delivered to
TRANSAMERICAN at the Closing:
3.5.1 certificates representing the CSI Common
Stock, endorsed in blank by the registered owner.
3.5.2 books and records of CSI, as may be requested
by TRANSAMERICAN.
3.5.3 evidence satisfactory to TRANSAMERICAN that
all previously-existinng bank accounts for the benefit of
CSI or any related entity have been or will be closed and
that all sums therein have been or will be transferred to
the newly-designated CSI bank accounts.
3.5.4 evidence satisfactory to TRANSAMERICAN that
all future deposits, incomes and revenues of CSI or any
related entity will be directed to the newly-designated CSI
bank accounts.
3.6 Filings; Cooperation. CSI and TRANSAMERICAN shall,
upon request and without further consideration, cooperate with
one another by furnishing or using their best efforts to cause
others to furnish any additional information and/or executing and
delivering or using their best efforts to cause others to execute
and deliver any additional documents and/or instruments, and
doing or using their best efforts to cause others to do any and
all such other things as may be reasonably required by the
parties or their counsel to consummate or otherwise implement the
transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES BY TRANSAMERICAN
TRANSAMERICAN represents and warrants to CSI and the
Controlling Shareholder as follows:
4.1 Organization and Good Standing. TRANSAMERICAN is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada and has full corporate
power and authority to own or lease its properties and to carry
on its business as now being conducted and as proposed to be
conducted.
4.2 Capitalization. TRANSAMERICAN's authorized capital
stock consists of 100,000,000 shares of $0.001 par value Common
Stock (defined above as "TRANSAMERICAN Common Stock"), of which
approximately 16,271,090 shares are issued and outstanding at the
date of this Agreement. All of such outstanding shares are
validly issued, fully paid and nonassessable.
4.3 Authority to Execute Agreement. The Board of Directors
of TRANSAMERICAN, pursuant to the power and authority legally
vested in it, has duly authorized the execution and delivery by
TRANSAMERICAN of this Agreement, and has duly agreed to each of
the transactions hereby contemplated. TRANSAMERICAN has the power
and authority to execute and deliver this Agreement, to approve
the transactions hereby contemplated and to take all other
actions required to be taken by it pursuant to the provisions
hereof. Subject to obtaining the approval of its Shareholders,
TRANSAMERICAN has taken all actions required by law, its
Certificate of Incorporation, as amended, or otherwise to
authorize the execution and delivery of this Agreement and this
Agreement is valid and binding upon TRANSAMERICAN. Neither the
execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will constitute a violation
or breach of the Certificate of Incorporation, as amended, or the
Bylaws, as amended, of TRANSAMERICAN, or any agreement,
stipulation, order, writ, injunction, decree, law, rule or
regulation applicable to TRANSAMERICAN.
4.4 Financial Statements. The audited financial statements
and unaudited financial statements included in the Form 10-KSB
Annual Report and Form 10-QSB Quarterly Reports filed with the
Securities and Exchange Commission have been prepared in
accordance with generally accepted accounting principles.
4.5 Absence of Certain Changes. There has been no material
change in the financial condition, assets or liabilities of
TRANSAMERICAN, except capital contributions and the incurring of
expenses in the ordinary course of business and in connection
with this transaction.
4.6 Absence of Undisclosed Liabilities. Except as disclosed
on the most recent Form 10-KSB Report and Form 10-QSB Report,
TRANSAMERICAN has no other material liabilities, as of such date,
of any nature, whether accrued, absolute, contingent, or
otherwise.
4.7 Litigation. There are no outstanding orders,
judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against
TRANSAMERICAN or its properties. There are no material actions,
suits or proceedings pending, or, to the knowledge of
TRANSAMERICAN, threatened against or affecting TRANSAMERICAN, any
of its officers or directors relating to their positions as such,
or any of its properties, at law or in equity, or before or by
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, in connection with the business, operations or affairs
of TRANSAMERICAN which might result in any material adverse
change in the operations or financial condition of TRANSAMERICAN,
or which might prevent or materially impede the consummation of
the transactions under this Agreement.
4.8 Tax Matters. All federal, foreign, state and local tax
returns, reports and information statements required to be filed
by or with respect to the activities of TRANSAMERICAN, have been
timely filed. Such returns, reports and information statements
are true and correct in all material respects insofar as they
relate to the activities of TRANSAMERICAN. TRANSAMERICAN has not
incurred any liability with respect to any federal, foreign,
state or local taxes except in the ordinary and regular course of
business and with respect to such tax or assessment.
TRANSAMERICAN is not delinquent and no deficiencies for any
amount of such tax have been proposed or assessed.
4.9 Investment Intent. TRANSAMERICAN is acquiring the CSI
Common Stock from the CSI Shareholders for investment and not
with a view to or for sale in connection with any distribution
thereof.
4.10 Finder's, Broker's Fees. TRANSAMERICAN is not liable
or obligated to pay any finder's, agent's or broker's fee arising
out of or in connection with this Agreement or the transactions
contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES BY CSI
Subject to the schedules, attached hereto and incorporated
herein by this reference, (which schedules shall be acceptable to
TRANSAMERICAN), CSI and the Controlling Shareholder represent and
warrant to TRANSAMERICAN as follows:
5.1 Organization and Good Standing of CSI. The Certificate
of Incorporation of CSI and all amendments thereto as presently
in effect, certified by the jurisdiction in which CSI is
domiciled, and the Bylaws of CSI as presently in effect,
certified by the President and Secretary of CSI, have been
delivered to TRANSAMERICAN and are complete and correct and since
the date of such delivery, there has been no amendment,
modification or other change thereto.
5.2 Capitalization. CSI's authorized capital stock
consists of 1,000,000 shares of common stock, no par value per
share (defined above as "CSI Common Stock"), of which 1,000,000
shares of CSI Common Stock shall be issued and outstanding at the
date of this Agreement. All of such outstanding shares are
validly issued, fully paid and nonassessable.
5.3 Subsidiaries. Except as disclosed in Schedule 5.3, CSI
has no subsidiaries and no other material investments, directly
or indirectly, or other material financial interest in any other
corporation or business organization, joint venture or
partnership of any kind whatsoever.
5.4 Financial Statements. Attached hereto as Schedule 5.4
are the unaudited financial statements of CSI for the fiscal year
ended November 30, 2000 ("Last Unaudited Statement") and the
balance sheets at March 31, 2001 and April 19, 2001, as provided
by the Controlling Shareholder, prepared in accordance with
generally accepted accounting principles ("GAAP") consistently
applied (collectively referred to as the "Financial Statements").
Since the Last Unaudited Statement, there have been no material
adverse changes in such financial statements other than changes
in the usual and ordinary conduct of the business.
5.5 Absence of Undisclosed Liabilities. CSI has no
liabilities which are not adequately reflected or reserved
against in the CSI Financial Statements or otherwise reflected in
this Agreement, and CSI shall not have as of the Closing Date,
any liabilities, secured or unsecured and whether accrued,
absolute, contingent, direct, indirect or otherwise, which were
incurred since the Last Unaudited Statement other than those
incurred in the ordinary course of business and which, either
individually or in the aggregate, are not material to the results
of operations or financial condition of CSI as of the Closing
Date.
5.6 Litigation. There are no outstanding orders,
judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against
CSI or its properties. Except as disclosed in Schedule 5.6,
there are no actions, suits or proceedings pending, or, to the
knowledge of CSI, threatened against or affecting CSI, any of its
officers or directors relating to their positions as such, or any
of its properties, at law or in equity, or before or by any
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, in connection with the
business, operations or affairs of CSI which might result in any
material adverse change in the operations or financial condition
of CSI, or which might prevent or materially impede the
consummation of the transactions under this Agreement.
5.7 Compliance with Laws. Except as set forth in Schedule
5.7, the operations and affairs of CSI do not violate any law,
ordinance, rule or regulation currently in effect, or any order,
writ, injunction or decree of any court or governmental agency,
the violation of which would substantially and adversely affect
the business, financial condition or operations of CSI.
5.8 Absence of Certain Changes. Except as set forth in
Schedule 5.8 or otherwise disclosed in writing to TRANSAMERICAN,
since the Last Unaudited Statement:
5.8.1 CSI has not entered into any material
transaction other than in the normal course of business;
5.8.2 there has been no material adverse change in
the condition (financial or otherwise), business, property,
prospects, assets or liabilities of CSI as shown on the CSI
Financial Statements, other than changes that both
individually and in the aggregate do not have a consequence
that is materially adverse to such condition, business,
property, prospects, assets or liabilities;
5.8.3 there has been no material damage to,
destruction of or loss of any of the properties or assets of
CSI (whether or not covered by insurance) materially or
adversely affecting the condition (financial or otherwise),
business, property, prospects, assets or liabilities of CSI;
5.8.4 CSI has not declared or paid any dividend or
made any distribution on its capital stock, redeemed,
purchased or otherwise acquired any of its capital stock,
granted any options to purchase shares of its stock, or
issued any shares of its capital stock;
5.8.5 there has been no material change, except in
the ordinary course of business, in the contingent
obligations of CSI by way of guaranty, endorsement,
indemnity, warranty or otherwise;
5.8.6 CSI has not made any loans or to its
employees, officers or directors;
5.8.7 CSI has not waived or compromised a valuable
right or of a material debt owed to it;
5.8.8 there has been no increase in the
compensation of any CSI employees other than in the normal
course of business;
5.8.9 there has been no agreement or commitment by
CSI to do or perform any of the acts described in this
Section 5.8 other than in the normal course of business; and
5.8.10 there has been no other event or condition
of any character which might reasonably be expected either
to result in a material adverse change in the condition
(financial or otherwise) business, property, prospects,
assets or liabilities of CSI or to impair materially the
ability of CSI to conduct the business now being conducted.
5.9 Assets. All of the assets reflected on the CSI
Financial Statements or acquired and held as of the Closing Date,
other than any capital leases, are, and on the Closing Date will
be, owned by CSI. Except as set forth in Schedule 5.9, CSI owns
outright and has good and marketable title, or holds valid and
enforceable leases, to all of such assets, and no liens exist,
except for liens placed upon the property at the time of purchase
or lease or through one or more financing transactions. None of
CSI's equipment has any material defects and in all material
respects is in good operating condition and repair, is adequate
for the uses to which it is being put and is not in need of
maintenance or repairs, except for ordinary, routine maintenance
and repair. All inventory held by CSI is fit and available for
use or resale. Except to the extent disclosed in Schedule 5.9 to
this Agreement or reserved against on its balance sheet in the
CSI Financial Statements, CSI has no reason to believe that any
of the accounts and contracts receivable existing would be
uncollectible in whole or material part.
5.10 Tax Matters. Except as set forth on Schedule 5.10 all
required local tax returns, reports and information statements
required to be filed by or with respect to the activities of CSI,
have been timely filed. Such returns, reports and information
statements are true and correct in all material respects insofar
as they relate to the activities of CSI. Except as set forth on
Schedule 5.10, CSI has not incurred any liability with respect to
any domestic or foreign taxes since the Last Unaudited Statement
except in the ordinary and regular course of business, and with
respect to such tax or assessment CSI is not delinquent and no
deficiencies for any amount of such tax have been proposed or
assessed.
5.11 Contracts. Set forth on Schedule 5.11 is a true and
complete list of all material contracts, agreements or
commitments to which CSI is a party or is bound. All such
material contracts, agreements and commitments are valid and
binding on CSI in accordance with their respective terms.
5.12 Operating Authorities. CSI has all material operating
authorities, governmental certificates and licenses, permits,
authorizations and approvals ("Permits") required to conduct its
business as presently conducted. Such Permits are set forth on
Schedule 5.12. Except as set forth on Schedule 5.12 or otherwise
disclosed in this Agreement, during the last two years, there has
not been any notice or adverse development regarding such
Permits; such Permits are in full force and effect; no material
violations are or have been recorded in respect of any Permit;
and no proceeding is pending or threatened to revoke or limit any
Permit.
5.13 Books and Records. The books and records of CSI are
complete and correct, are maintained in accordance with good
business practice and accurately present and reflect, in all
material respects, all of the transactions therein described, and
there have been no transactions involving CSI which properly
should have been set forth therein and which have not been
accurately so set forth.
5.14 Authority to Execute Agreement. The Board of Directors
of CSI, pursuant to the power and authority legally vested in it,
has duly authorized the execution and delivery by CSI of this
Agreement, and has duly agreed to each of the transactions hereby
contemplated. CSI has the power and authority to execute and
deliver this Agreement, to approve the transactions hereby
contemplated and to take all other actions required to be taken
by it pursuant to the provisions hereof. CSI has taken all
actions required by law, its Certificate of Incorporation, as
amended, or otherwise to authorize the execution and delivery of
this Agreement. This Agreement is valid and binding upon CSI in
accordance with its terms. Neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby will constitute a violation or breach of the
Certificate of Incorporation, as amended, or the Bylaws, as
amended, of CSI or any agreement, stipulation, order, writ,
injunction, decree, law, rule or regulation applicable to CSI or
any of the CSI Shareholders.
5.15 Investment Intent. The CSI Shareholders are acquiring
the TRANSAMERICAN Common Stock from TRANSAMERICAN for investment
and not with a view to or for sale in connection with any
distribution thereof.
5.16 Finder's, Broker 's Fees. Neither CSI nor the CSI
Shareholders are liable or obligated to pay any finder's, agent's
or broker's fee arising out of or in connection with this
Agreement or the transactions contemplated by this Agreement.
5.17 Disclosure. CSI and the CSI Shareholders have
disclosed all events, conditions and facts materially affecting
the business and prospects of CSI. CSI has not withheld
knowledge of any such events, conditions or facts which CSI
knows, or has reasonable grounds to know, may materially affect
CSI's business and prospects. No representation or warranty by
CSI in this Agreement, nor any certificate, exhibit, schedule or
other written document furnished to TRANSAMERICAN by CSI in
connection with the transactions contemplated by this Agreement,
contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to be
stated in order to make the statements contained herein or
therein not misleading.
ARTICLE VI
ACCESS AND INFORMATION
6.1 As to TRANSAMERICAN. TRANSAMERICAN shall give to CSI,
its accountants and other representatives, full access, during
normal business hours throughout the period prior to the Closing,
to all of TRANSAMERICAN's books and records concerning
TRANSAMERICAN's affairs as CSI shall reasonably request.
6.2 As to CSI. CSI shall give to TRANSAMERICAN, its
accountants and other representatives full access during normal
business hours throughout the period prior to and after the
Closing, to all of CSI's properties, books, contracts,
commitments, and records, including information concerning its
customer base and sales and installation, and shall furnish
TRANSAMERICAN during such period with all such information
concerning CSI's affairs as TRANSAMERICAN shall reasonably
request.
ARTICLE VII
CONDUCT OF PARTIES PENDING CLOSING
7.1 Conduct of TRANSAMERICAN pending Closing.
TRANSAMERICAN covenants that pending the Closing:
7.1.1 TRANSAMERICAN will conduct business only in
the ordinary course; and
7.1.2 No change will be made in TRANSAMERICAN's
Certificate of Incorporation or Bylaws or in TRANSAMERICAN's
authorized shares of stock other than such changes or
actions as are necessary to effect this transaction.
7.2 Conduct of CSI pending Closing. CSI covenants that
pending the Closing:
7.2.1 CSI will conduct business only in the
ordinary course;
7.2.2 No change will be made in CSI's Certificate
of Incorporation or Bylaws, and no change will be made in
CSI's issued shares of stock, other than such changes as may
be first approved in writing by TRANSAMERICAN;
7.2.3 No contract or commitment will be entered
into by or on behalf of CSI or indebtedness otherwise
incurred, other than in the ordinary course of business and
with the prior written consent of TRANSAMERICAN;
7.2.4 No dividends shall be declared, no stock
bonuses or options shall be granted and no extraordinary
increases in compensation to employees, including officers,
shall be declared and no new employment agreement shall be
entered into with officers or directors of CSI; and
7.2.5 Except as otherwise requested by
TRANSAMERICAN, CSI and the CSI Shareholders will use their
best efforts to preserve CSI's business organization intact;
to keep available to CSI the services of its present
officers and employees; and to preserve the goodwill of
those having business relations with CSI.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to TRANSAMERICAN's Obligations.
The obligations of TRANSAMERICAN to consummate the Exchange
Transaction are subject to the fulfillment, prior to or at the
Closing, of all conditions elsewhere herein set forth, including,
but not limited to, its receipt of all deliveries required by
Section 3 herein, and fulfillment, prior to the Closing, of each
of the following conditions:
8.1.1 CSI's representations, warranties and
covenants contained in this Agreement shall be true at the
time of Closing as though such representations, warranties
and covenants were made at such time;
8.1.2 CSI and the Controlling Shareholder shall
have performed and complied with all agreements and
conditions required by this Agreement to be performed or
complied with by each prior to or at the Closing;
8.1.3 The CSI Shareholders acquiring Exchange Stock
will be required, at Closing, to submit to TRANSAMERICAN an
investment letter (the "Investment Letter") in substantially
the form as Exhibit A, confirming to TRANSAMERICAN (if true)
the information provided therein, including that all the
Exchange Stock received will be acquired for investment and
not with a view to, or for sale in connection with, any
distribution thereof. Neither the foregoing provision nor
anything in the Investment Letter shall prohibit the
registration of those shares at any time following the
Closing;
8.1.4 The balance sheet of CSI, after payment of
all expenses of CSI related to the transaction contemplated
by this agreement, shows (i) total assets of at least
$253,755 (as reflected in the March 31, 2001 balance sheet
provided by the Controlling Shareholder) excluding all
uncollectible receivables and unsellable inventory; (ii)
total debt and liabilities of no more than $55,602,
excluding debt and payables incurred in equipment purchasing
in the ordinary course of business; and (iii) cash of at
least $5,000;
8.1.5 Receipt of all necessary approvals of
regulatory authorities having jurisdiction over the Exchange
Transaction and the approval of a majority of the
outstanding shares of TRANSAMERICAN Common Stock;
8.1.6 There shall be no material adverse change or
notice of material adverse change in the business, assets,
financial condition or prospects of CSI through the Closing
Date;
8.1.7 Appropriate confirmations shall be given as
to compliance with representations, warranties and
covenants;
8.1.8 TRANSAMERICAN shall have reasonably satisfied
itself that, since the date of this Agreement, the business
of CSI has been conducted in the ordinary course; that no
withdrawals of cash or other assets have been made and no
indebtedness has been incurred since the date of this
Agreement, except which have occurred in the ordinary course
of business or with respect to services rendered or expenses
incurred in connection with the Closing of this Agreement,
unless said withdrawals or indebtedness were either
authorized by the terms of this Agreement or subsequently
disclosed in writing by the parties;
8.1.9 CSI shall have granted to TRANSAMERICAN
(acting through its management personnel, counsel,
accountants or other representatives designated by it) full
opportunity to examine CSI's books and records, properties,
plants and equipment, proprietary rights and other
instruments, rights and papers of all kinds in accordance
with Section 6 hereof, and TRANSAMERICAN shall be reasonably
satisfied to proceed with the transactions contemplated by
this Agreement upon completion of such examination and
investigation;
8.1.10 Except as otherwise disclosed in writing to
CSI, TRANSAMERICAN's independent accountants shall have
confirmed that the books, records, business and affairs of
CSI are in a condition that will permit TRANSAMERICAN, in
cooperation with its accountants, to prepare and file CSI's
audited financial statements within the time limits and for
the periods required by Item 7 of Form 8-K under the
Exchange Act; and
8.1.11 TRANSAMERICAN shall have satisfied itself
that all transactions contemplated by this Agreement shall
be legal and binding under applicable statutory and case law
of the State of Nevada, including, but not limited to all
applicable state securities laws.
8.2 Conditions Precedent to CSI's Obligations. The
obligations of CSI to consummate the Exchange Transaction are
subject to the fulfillment, prior to or at the Closing, of all
conditions elsewhere herein set forth, including, but not limited
to, its receipt of all deliveries required by Section 3 herein,
and fulfillment, prior to the Closing, of each of the following
conditions:
8.2.1 TRANSAMERICAN's representations, warranties and
covenants contained in this Agreement shall be true at the
time of Closing as though such representations, warranties
and covenants were made at such time;
8.2.2 TRANSAMERICAN shall have performed and
complied with all agreements and conditions required by this
Agreement to be performed or complied with by each prior to
or at the Closing;
8.2.3 There shall be no material adverse change in
the business, assets, financial condition or prospects of
TRANSAMERICAN through the Closing date;
8.2.4 Appropriate confirmations shall be given as
to compliance with the representations, warranties and
covenants;
8.2.5 Receipt of all necessary approvals of
regulatory authorities having jurisdiction over the
Agreement;
8.2.6 TRANSAMERICAN shall have granted CSI (acting
through its management personnel, counsel, accountants or
other representatives designated by it) full opportunity to
examine its books and records, properties, plants and
equipment, proprietary rights and other instruments, rights
and papers of all kinds in accordance with Section 6 hereof,
and CSI shall be reasonably satisfied to proceed with the
transactions contemplated by this Agreement upon completion
of such examination and investigation; and
8.2.7 The CSI Shareholders shall have reasonably
satisfied themselves that all transactions contemplated by
this Agreement shall be legal and binding under applicable
laws of the jurisdiction in which CSI is domiciled,
including, but not limited to any and all applicable state
and federal securities laws.
ARTICLE IX
ADDITIONAL COVENANTS OF THE PARTIES
9.1 Cooperation. TRANSAMERICAN and CSI will cooperate with
each other and their respective agents in carrying out the
transactions contemplated by this Agreement, and in delivering
all documents and instruments deemed reasonably necessary or
useful by the other party.
9.2 Expenses. Each of the parties shall pay all of its
respective costs and expenses (including attorneys' and
accountants' fees, finder's fees, costs and expenses) incurred in
connection with this Agreement and the Exchange Transaction.
9.3 Post-Closing Covenants. The parties hereto agree to
the following post-closing covenants:
9.3.1 Capital for CSI. From time to time, the
Controlling Shareholder may request funds from TRANSAMERICAN
for CSI by delivering to TRANSAMERICAN a portion of the
TRANSAMERICAN Common Stock held by him or in escrow on the
basis of one share for every $1.00 of funds requested. Such
funds shall be delivered to the account of CSI upon the
receipt by TRANSAMERICAN, to its satisfaction, of all of the
following:
(a) a written request for funds specifying the amount
of funds requested, with the first request being $40,000 on
the Closing, less any sums already advanced by TRANSAMERICAN
prior to the Closing. The second and third request shall be
for $30,000 each, to be funded 30 and 60 days, respectively,
from the Closing;
(b) proof that the funds will be used only for approved
CSI business purposes; and
(c) for all funds subsequent to the initial $100,000,
certificates representing the TRANSAMERICAN Common Stock,
endorsed in blank by the registered owner.
Upon receipt of all of the foregoing to the reasonable
satisfaction of TRANSAMERICAN, TRANSAMERICAN shall deliver
to (i) CSI the funds, and (ii) the Controlling Shareholder,
or to escrow, as the case may be, a certificate representing
the number of shares previously issued to him less the
number of shares returned to TRANSAMERICAN.
The request for funds by the Controlling Shareholder
under this Section and this Agreement shall be limited to
and shall not exceed $100,000 during the first 90 days
following Closing. Notwithstanding the foregoing,
TRANSAMERICAN may, at its sole and absolute discretion,
advance further funds to CSI in accordance with the terms of
this Section.
9.3.2 Return of Exchange Shares. TRANSAMERICAN
shall have the right, twelve months from the date of
Closing, to demand the return of any Exchange Shares issued
to the CSI Shareholders remaining in escrow and/or not
released and/or not earned pursuant to the terms and
conditions of Section 1.2 herein.
9.3.3 Share Price Guarantee. TRANSAMERICAN
guarantees and warrants that TRANSAMERICAN's shares will be
trading at a minimum price per share of $1.00 on the
one-year anniversary of the Closing Date. In the event that
the Shares are trading at a price per share less than $1.00,
the CSI Shareholders shall be entitled to such additional
shares as necessary to make up the difference in value. As
an example, if TRANSAMERICAN shares are trading at $0.50 per
share, then the CSI Shareholders would be entitled to an
additional number of shares equal to the number of shares
that they would otherwise be entitled to pursuant to this
Agreement.
9.3.4 Employment. TRANSAMERICAN covenants and
warrants that for a period of five years from the Closing
Date of this Agreement, or for so long as TRANSAMERICAN
maintains a majority position in CSI, whichever is sooner,
TRANSAMERICAN shall not terminate Avenatti's employment with
CSI, except for cause. In addition, and as part of CSI's
consideration for this Agreement, without which
TRANSAMERICAN would not enter into the Agreement, Avenatti
covenants and warrants that he shall devote his best efforts
and full-time attention to the operations of CSI for a
period of five years from the Closing Date of this
Agreement.
(a) Cause shall be defined as (i) Avenatti's willful
breach or habitual neglect of the duties which he has
agreed and is required to perform herein under the
terms of this Agreement; (ii) any act of dishonesty,
fraud, or misrepresentation, or any other act of moral
turpitude undertaken by Avenatti that in any manner
prevents or hinders the effective performance of
Avenatti's duties under this Agreement; (iii) any act
of Avenatti which is intended to result in the personal
enrichment of either Avenatti or any person in any way
associated with him, to the detriment of and/or at the
expense of TRANSAMERICAN; and (iv) any negligent or
intentional act of Avenatti which in any way diminishes
the goodwill or tarnishes the image or reputation of
TRANSAMERICAN within the community.
(b) TRANSAMERICAN may, at its option, immediately
terminate this Agreement for any of the reasons
aforementioned in this Section upon written notice of
said termination to Avenatti, and without prejudice to
any other remedy to which TRANSAMERICAN may be entitled
either at law, in equity, or under the terms of this
Agreement. If terminated for cause under the terms of
this Section, Avenatti shall cease to receive or be
entitled to any compensation as of the date of
termination for cause.
(c) The notice of termination required by this Article
shall specify the relevant grounds for termination and
shall be supported by a statement of all relevant
facts. Termination under this Section shall be
considered "for cause" for the purposes of this
Agreement.
(d) If terminated for cause in the first year following
the Closing, Avenatti shall forfeit all right, title or
interest in and to the Exchange Shares then in escrow.
If terminated for cause in years two through five
following the Closing Date of this Agreement,
TRANSAMERICAN shall be entitled, at its sole and
absolute discretion, to repurchase from Avenatti, or
any successor-in-interest, the Exchange Shares at a
price of $0.075 per share (the approximate value
attributed by Avenatti to the Exchange Shares pursuant
to this Agreement).
9.3.5 Non-Compete. The Controlling Shareholder
acknowledges and agrees that in order for TRANSAMERICAN to
protect its interests against the competitive use of any:
(a) confidential information or knowledge concerning
the business of TRANSAMERICAN or its subsidiaries, to
which the Controlling Shareholder shall have access
because of his employment; or
(b) relationships established by the Controlling
Shareholder in the conduct of such business, during the
term of this Agreement and for a period of two years
after termination thereof (for any cause whatsoever).
The Controlling Shareholder shall not, nor shall he
induce any other person to, directly or indirectly, by
ownership of securities or otherwise, become associated
with, or engage in, or render services to, or furnish
confidential information (including, but not limited to,
customer lists), to any business or other enterprise then or
thereafter during such period competing or seeking to
compete with TRANSAMERICAN or its subsidiaries. Nothing
contained herein shall be deemed to prevent the Controlling
Shareholder from investing in the securities of publicly
held corporations, notwithstanding that such corporations
may engage in a business of the type and character engaged
in by TRANSAMERICAN provided that the Controlling
Shareholder shall not own shares representing more than 5%
of the outstanding shares of stock of such corporation.
The Controlling Shareholder agrees that TRANSAMERICAN
shall be entitled to an injunction to be issued by any
competent court enjoining and restraining the Controlling
Shareholder from violating any of the provisions of this
Section. In addition, if the Controlling Shareholder
breaches the terms of this Section, he shall forfeit all
right, title or interest in and to any Exchange Shares not
yet released pursuant to the terms of this Agreement.
9.3.6 Future Acquisitions. TRANSAMERICAN covenants
and warrants that for so long as TRANSAMERICAN maintains a
majority position in CSI, all acquisitions completed by
TRANSAMERICAN of companies in the same field as CSI ("Like
Companies") shall be made through and under the CSI
corporate subsidiary. Like Companies shall include all
retailers and installers of satellite and cable equipment
and accessories and other low-voltage-wiring-related
business concerns. The Controlling Shareholder shall have
the authority to identify and enter into negotiations with
potential acquisition candidates. With respect to future
acquisitions under this Section, TRANSAMERICAN shall
reimburse the Controlling Shareholder for all pre-approved
and reasonable expenses incurred by the Controlling
Shareholder in connection with such acquisition, including
but not limited to expenses of travel and entertainment,
upon presentation of itemized statements therefor.
9.3.7 Future Spin-Off. TRANSAMERICAN shall use its
best efforts to cause CSI to be spun-off independently from
TRANSAMERICAN at such future time as, in the sole discretion
of TRANSAMERICAN, such a spin-off is justified.
9.3.8 Audit. The Controlling Shareholder covenants
and warrants that CSI is auditable, and that such audit can
be completed without unreasonable delay or expense, and in
no event later than 60 days from the Closing Date of this
Agreement. TRANSAMERICAN shall pay the cost for such
initial audit; however, the audit fee shall be allocated as
an expense of CSI in accordance with Section 1.2.2.
ARTICLE X
REMEDIES
10.1 Defaults Permitting Termination. If either
TRANSAMERICAN or CSI materially defaults in the due and timely
performance of any of their warranties, covenants, or agreements
under this Agreement, the nondefaulting party or parties may on
or prior to the Closing Date give notice of termination of this
Agreement, in the manner provided in Section 12.6. The notice
will specify with particularity the default or defaults on which
the notice is based. The termination will be effective 30 days
after the notice is sent, unless the specified default or
defaults have been cured on or before the effective date for
termination.
If the Controlling Shareholder breaches the terms of this
Agreement, TRANSAMERICAN shall be entitled, at its sole and
absolute discretion, to repurchase from the CSI Shareholders, or
any successor-in-interest, the Exchange Shares at a price of
$0.075 per share for the 850,000 shares (the approximate value
attributed by the Controlling Shareholder to the Exchange Shares
pursuant to this Agreement). In addition, TRANSAMERICAN shall be
entitled, at its sole and absolute discretion, to repurchase from
the CSI Shareholders, or any successor-in-interest, the balance
of the Exchange Shares at a price of $0.80 per share (the "earn
out" rate specified in Section 1.2 herein).
10.2 Post-Closing Covenants Benefit Third Parties. The
post-closing covenants of Section 9.3 are expressly intended to
benefit TRANSAMERICAN and the Shareholders of TRANSAMERICAN, any
one or more of whom may seek to enforce the same on his or her
own behalf or on behalf of Shareholders similarly situated.
10.3 Arbitration. In the event that there shall be any
dispute arising out of or relating to this Agreement, the parties
agree that such dispute shall be submitted to binding arbitration
or such other non-judicial procedures as the parties may agree to
at the time (such as use of a "Rent-a-Judge") and such dispute
resolution shall occur in Los Angeles, California. Arbitration
shall be under the auspices and pursuant to the rules of, the
American Arbitration Association, as then in effect, before a
tribunal of one arbitrator, who is mutually agreeable to each of
the parties to the dispute. The provisions of Section 1283.05 of
the Code of Civil Procedure of the State of California are hereby
incorporated herein and made a part of this agreement to
arbitrate. Any award issued as a result of such arbitration or
other non-judicial procedure shall be final and binding between
the parties, and shall be enforceable by any court having
jurisdiction over the party against whom enforcement is sought.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS
11.1 As to TRANSAMERICAN. The representations, warranties
and covenants of TRANSAMERICAN contained herein shall survive the
execution and delivery of this Agreement, and the Closing and the
consummation of the transactions called for by this Agreement,
for a period of one (1) year from the Closing.
11.2 As to CSI. The representations, warranties and
covenants of CSI and the CSI Shareholders contained herein shall
survive the execution and delivery of this Agreement, and the
Closing and the consummation of the transactions called for by
this Agreement, for a period of one (1) year from the Closing.
ARTICLE XII
MISCELLANEOUS
12.1 Entire Agreement; Amendments. This Agreement contains
the entire agreement between the parties with respect to the
transactions contemplated hereby, and supersedes all
negotiations, representations, warranties, commitments, offers,
contracts, and writings prior to the date of this Agreement. No
waiver and no modification or amendment of any provision of this
Agreement shall be effective unless specifically made in writing
and duly signed by the parties to this Agreement bound thereby.
12.2 Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective assigns and successors in interest; provided, that
neither this Agreement nor any right hereunder shall be
assignable by TRANSAMERICAN or CSI without the prior written
consent of the other parties.
12.3 Attorney's Fees. Except as otherwise provided herein,
in the event of any controversy, claim or dispute among the
parties to this Agreement arising out of or relating to this
Agreement or breach thereof, each party hereto shall pay his, her
or its own legal expenses, attorney's fees and costs.
12.4 Severability. If any provision hereof shall be held
invalid or unenforceable by any court of competent jurisdiction
or as a result of future legislative action, such holding or
action shall be strictly construed and shall not affect the
validity or effect on any other provisions hereof.
12.5 Governing Law. In any action or proceeding arising out of
or related to this Agreement, the law of the State of California
shall be followed.
12.6 Notices. All notices or other communications required
hereunder shall be in writing and shall be sufficient in all
respects and shall be deemed delivered after 3 days if sent via
registered or certified mail, postage prepaid; the next day if
sent by overnight courier service; or upon completion of
transmission if sent by facsimile:
To CSI:
Jay Avenatti, President
Certified Satellite Installers, Inc.
7349 Milliken Avenue, #140-211
Rancho Cucamonga, California 91730
(Fax): (909) 476-8724
To TRANSAMERICAN:
TransAmerican Holdings, Inc.
9601 Wilshire Boulevard, Suite 620
Beverly Hills, California 90210
Fax: (310) 271-7042
or, if by facsimile, to the facsimile number provided by the
party, or by personal delivery.
12.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which may be deemed an original, but
all of which together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
TransAmerican Holdings, Inc. Certified Satellite
Installers, Inc.
By: /s/ By: /s/
Najib Choufani Jay Avenatti
Chairman and Chief President, Chief Executive
Executive Officer Officer and Controlling
Shareholder
Schedule 3.3.1
TRANSAMERICAN shall deliver or cause to be delivered to CSI
at the Closing, certificates representing 850,000 Exchange
Shares, out of a total 2,000,000 potentially issuable Exchange
Shares, in the names of the CSI Shareholders as set forth below,
and in accordance with Article I:
350,000 Exchange Shares to the minority CSI Shareholders:
Total: 350,000
500,000 Exchange Shares to the Controlling Shareholder, Jay
Avenatti, to be held in escrow in accordance with the terms of
Section 1.2:
Jay Avenatti 500,000
Total: 850,000
Schedule 5.4
CSI and the Controlling Shareholder have provided the
following financial statements, prepared in accordance with
Generally Accepted Accounting Principles, to TRANSAMERICAN and
have represented and warranted the accuracy thereof:
Profit and Loss for the period December 1999 through
November 2000
Balance Sheet as of March 31, 2001
Balance Sheet as of April 19, 2001
Schedule 5.12
CSI and the Controlling Shareholder have provided the
following evidence of CSI's DIRECTV Dealer License.
EXHIBIT 99
TRANSAMERICAN COMPLETES ACQUISITION OF CSI
BEVERLY HILLS, California, July 12, TransAmerican Holdings, Inc.
(NASD OTCBB: TAHI) Chairman and CEO, Najib Choufani, announced
the completion of the company's acquisition of Certified
Satellite Installers ("CSI").
CSI is an industry leader in satellite sales and installations
and holds dealer licenses for both DIRECTV and Echostar
Communications. CSI was among the top installers of digital
satellite systems in California last year, and its retail arm was
recently ranked in the top 100 among all distributors in the
United States. "We are extremely excited to have completed the
acquisition and to now be a part of the TransAmerican family.
Our sales team is on track to easily meet our first year
projections, and even if we fulfill just 10% of the contracts we
have signed, we should be profitable within the next quarter,"
stated Jay Avenatti, CSI's President and CEO. "In the month of
June alone, our sales team signed contracts representing sales
and installations of up to 11,000 satellite systems per month."
In addition, CSI is in the process of setting up a
state-of-the-art call center, which should be completed by the
end of the month, to process the anticipated influx of orders
from the presently-signed contracts and to generate additional
sales from new contracts. CSI's diversified products include
Dish Network, Tivo, Ultimate TV, Hughes High Speed Internet,
Broadband Internet Satellite, and cellular and pager products.
"We have big plans for CSI, both in the U.S. and
internationally," stated Najib Choufani, TransAmerican's Chairman
and CEO. "We have already had discussions with investors and
potential partners in the Middle East where TransAmerican and CSI
can bring the benefits of U.S. technology overseas." CSI is also
working with a strategic partner in the U.S. to provide
satellite-based wireless communications and networking products
and services through its own marketing and installation team.
About TransAmerican Holdings
TransAmerican is a holding company whose primary objective is to
build a portfolio of high-technology, Internet and high-growth
franchise businesses by developing, acquiring and investing in
emerging companies to help them establish a significant presence
in major segments of the economy.
This document contains forward-looking statements that are
subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in
the statements. These and all forward-looking statements
(including oral representations) are only predictions or
statements of current plans that are constantly under review.
TransAmerican does not intend to update or revise these
forward-looking statements to reflect the occurrence of future
events or circumstances.
CONTACT: Najib E. Choufani, Chairman and Chief Executive
Officer, 310/271-4159, nc@tahiusa.com