SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Event Requiring Report: October 22, 2002
UNIVERSAL MEDIA HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-28459 22-3360133
(State of Incorporation) (Commission File Number) (IRS Employer
Identification #)
Steven Horowitz, President
National Management Consulting, Inc.
150 Broadhollow Road, Melville, New York 11747
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(Address of Principal Executive Offices)
(631) 385-6200
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(Registrant's telephone number, including area code)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On October 22, 002, the Board of Directors of the Registrant appointed the
following persons to the Board of Directors and to the Executive Office
indicated:
NAME AGE POSITION
- --------------------------------------------------------------------------------
Steven Horowitz 42 Chairman of the Board of Directors,
President and Chief Executive Officer
James W. Zimbler* 37 Director
Andrew J. Schenker 41 Director and Chief Financial Officer
Lee Rubenstein* Director and Chief Operations Officer
*Previously and Director of the Registrant
Biographical Information of the new Directors and Officers follows:
Steve Horowitz - Chairman of the Board of Directors, President and Chief
Executive Officer
Mr. Horowitz has served as Chairman of the Board of Directors and Chief
Executive Officer of CDKnet.com since May 1998. Since April 1, 2000, he has
served as a partner in Moritt, Hock, Hamroff & Horowitz, LLP, a Garden City, New
York-based law firm. From October 1, 1991 to March 2000, he was the founding
principal of Horowitz, Mencher, Klosowski, & Nestler, P.C., a Garden City, New
York-based law firm. Mr. Horowitz holds a degree from Hofstra University School
of Law and a Master of Business Administration degree in Accounting from Hofstra
University School of Business. Mr. Horowitz is an Adjunct Professor of Law at
Hofstra University and since, 1987 Mr. Horowitz was Director of Taxes for Symbol
Technologies, Inc., a New York Stock Exchange corporation. Mr. Horowitz is a
member of the American Bar Association and the New York State Bar Association.
Andrew J. Schenker - Director and Chief Financial Officer
Mr. Schenker was appointed President of CDKnet.com, Inc. on January 3, 2002. He
became a director of CDKnet.com in May, 1998. He recently stepped down from his
position as the General Manager for Education Marketing - Worldwide at Symbol
Technologies, Inc. a manufacturer and world leader in bar-code based data
transaction systems based in Holbrook, New York to concentrate on
entrepreneurial opportunities. Since November 1986, he has held several
financial management positions at Symbol Technologies, Inc., most recently at
the position described above. He is also the trustee for several trusts and a
public foundation, as well as an executive committee member of the Smithtown
School District Industry Advisory Board.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 22, 2002, the Registrant entered into an Asset Purchase Agreement
wherein the Registrant purchased from CDKNet, Inc., certain assets, namely the
entities known as CDKNet, LLC and Diversified Capital Holdings, LLC., and all
assets owned by the two LLC.'s. The purchase price of the assets is a
promissory note in the amount of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000)
plus interest at the rate of five percent (5%), payable monthly until November
2005. The Note is secured by a Security Agreement and UCC Filing.
The $550,000 note that UMHI is obligated to CDKnet.com represents the Technology
License Agreement between CDKnet.com, Inc., namely ValueFlash.com Incorporated,
and Elbit Limited dated June 13, 2001; now known as 24/7. It also includes the
assets of Diversified Capital Holdings, LLC., including debt instruments in
Panama Industries, Ltd., Dominix, Inc., and Augrid of Nevada, Inc., as well as a
note on CD duplication equipment ($60,000) that also is secured by a capital
collateral account with a cash balance of ($60,000). There are also stock
positions of the following: Tilden Associates, Dominix, Inc., Panama Industries.
Ltd., Steam Clean USA, Inc., Augrid of Nevada, Inc. and a retainer due from
Health Care America.
On October 22, 2002, the Registrant entered into a Stock Purchase Agreement with
the shareholders of Human Trans Services Group, Ltd. ("Humana"), to purchase all
issued and outstanding shares of common stock of Humana for shares of common
stock of the Registrant.
Humana Trans Services Group, Ltd. is a Delaware Corporation. Humana's business
is referred to as Employee Leasing. Humana has contracts with various
businesses to provide employees to the business. The business then pays a fee
to Human. Out of this fee, the employee is paid, they receive benefits and
Human retains a portion for its administrative efforts.
ITEM 5. OTHER EVENTS
On October 22, 2002, the Registrant filed a Certificate of Amendment to the
Certificate of Incorporation with the State of Delaware to amend the name of the
corporation to NATIONAL MANAGEMENT CONSULTING INC. The Certificate of Amendment
was filed and is filing was effective as of October 22, 2002.
The Registrant remains in the same location and with the same phone number.
The Board of Directors of the Registrant, and the majority of shares entitled to
vote approved, on October 22, 2002, a reverse split of the shares of common
stock in the amount of 12 shares of old common stock for each one (1) share of
new common stock. Prior to the reverse split, the Registrant has approximately
12,647,245 shares of common stock issued and outstanding after the recent
retirement of 38,000,000 shares of common stock that has been returned to
corporate treasury. After the effectiveness of the reverse split and accounting
for all fraction of shares of less that one (1) share shall be rounded up to the
next whole share the Registrant shall have a total of 1,053,937 common shares
outstanding. Thereafter, the Registrant must issue the equivalent of 4,544,445
shares of common stock to the shareholders of Humana Trans Services Group, Ltd.,
for a total issued and outstanding shares of common stock totaling 5,608,382.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Effective as of October 15, 2002, James W. Zimbler resigned as Chairman of the
Board of Director and Chief Executive Officer. He shall remain as a Director of
the Registrant.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements for the assets and business acquired will be filed
by amendment within the time period prescribed by Rule.
(b) Pro Forma statements will be filed by amendment within the time period
required by Rule.
(c)
Exhibit 3: Certificate of Amendment to Certificate of Incorporation.
Exhibit 10.1 Asset Purchase Agreement with CDKNet, Inc.
Exhibit 10.2 Stock Purchase Agreement with the shareholders of Humana Trans
Services Group, Ltd.
Exhibit 17: Resignation of James W. Zimbler as Chairman of the Board of
Directors and Chief Executive Officer of Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
By: /s/ Steve Horowitz
---------------------------------
Steve Horowitz
President
Date: October 29, 2002
Exhibit 3
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
UNIVERSAL MEDIA HOLDINGS, INC.
Pursuant to 242 of the General Corporation Law of the State of Delaware
The undersigned, pursuant to the provisions of the General Corporation Law
of the State of Delaware, do hereby certify and set forth as follows:
FIRST: That at a meeting of the Board of Directors of Universal Media
Holdings, Inc. (the "Corporation"), the following resolutions were duly adopted
setting forth a proposed amendment of the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable:
RESOLVED, that the Board of Directors hereby declares it advisable and in the
best interests of the Company that Article FIRST of the Certificate of
Incorporation be amended to read as follows:
"FIRST: The name of the Corporation shall be National Management
Consulting Inc."
SECOND: That the said amendment has been consented to and authorized by
the holders of a majority of the issued and outstanding stock entitled to vote
by written consent in accordance with the provisions of Section 228 of the
General Corporation Law of the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted with the
applicable provisions of Sections 242 and 228 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by James W. Zimbler, this 22nd Day of October, A.D. 2002
____________________
James W. Zimbler
Authorized Officer
Exhibit 10.1
AGREEMENT OF SALE
AGREEMENT OF SALE, made as of October 22, 2002, between CDKNet.com, Inc., a
Delaware corporation, having an address at 150 Broadhollow Road, Melville, New
York, ("Seller"), and Universal Media Holdings, Inc., a Delaware corporation,
having an address at 150 Broadhollow Road, Melville, NY 11747 ("Purchaser").
W I T N E S S E T H:
WHEREAS, Purchaser desires to acquire, and Seller desires to sell, the assets of
Seller, as set forth on Exhibits A1 and A2, annexed hereto, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and agreements hereafter set
forth, and other valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties here-to agree as follows:
1. AGREEMENT TO SELL. Seller agrees to sell, transfer and deliver to
Purchaser, and Purchaser agrees to purchase, upon the terms and conditions
hereinafter set forth, the business entity known as Diversified Capital
Holdings, LLC, a/k/a Azure Capital, LLC including all of the assets thereof
other than cash, certificates of deposit, securities, and cash equivalents, and
the business entity known as CDKNet, LLC. (the "Assets" and the "Purchased
Entities"), including without limitation the following:
(a) the contracts and agreements described in Exhibit A-1 hereto (the
"Contracts");
(b) the other assets described in Exhibit A-2 hereto (the "Other Assets"); and
(c) the goodwill of the business (the "Goodwill").
2. PURCHASE PRICE. The purchase price to be paid by Purchaser is Five Hundred
Fifty Thousand Dollars ($550,000.00), payable as follows:
(a) Five Hundred Fifty Thousand Dollars ($550,000.00) at the closing by the
execution and delivery of a Promissory Note by Purchaser to Seller in said
amount, substantially in the form of Exhibit B hereto (the "Promissory Note"),
secured by a Security Agreement substantially in the form of Exhibit C hereto
and UCC Financing Statements creating a security interest in the assets of the
Business (the "Security Agreement").
(b) If any investment holdings of the Purchased Entities are sold, or in the
event that there are licensing revenues realized, then a minimum of FIFTY
Percent (50%) of the proceeds must be paid to seller and applied on the
outstanding balance of the Note, without any prepayment penalties such sums
shall be paid prior to the issuance of any release of the security interests
then existing on the Purchased Entities or Assets.
3. THE CLOSING. The "closing" means the settlement of the obligations of
Seller and Purchaser to each other under this agreement, including the payment
of the purchase price to Seller as provided in Article 1 hereof and the delivery
of the closing documents pro-vided for in Article 4 hereof. The closing shall
be held at the offices of Universal Media Holdings, Inc., 150 Broadhollow Road,
Melville, New York 11747, at 10 A.M. on or about October 22, 2002 (the "closing
date").
4. CLOSING DOCUMENTS. At the closing Seller shall execute and de-liver to
Purchaser:
(c) a Bill of Sale and Assignment of LLC Ownership Interests that is
substantially in the form of Exhibit D hereto;
(b) certified copies of resolutions duly adopted by the Board of Directors and
shareholders of Seller authorizing the sale of the Assets and the performance by
Seller of its obligations hereunder;
(d) an opinion of Seller's counsel, Michael S. Krome, P.C., dated as of the
closing date, stating such counsel's opinion that: (i) Seller is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware; (ii) Seller has full power and authority, corporate and otherwise, to
enter into this agreement and perform its obligations hereunder; (iii) the
execution and delivery of this agreement and the performance by Seller of its
obligations hereunder have been duly authorized by the Board of Directors and
shareholders of Seller and no further action or approval is required in order
to constitute this agreement as the binding obligation of Seller, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, moratorium, insolvency or other laws affecting creditor's rights
generally; (iv) the execution and delivery of this agreement and the performance
by Seller of its obligations hereunder do not and will not violate any provision
of the Certificate of Incorporation or Bylaws of Seller; and (v) except as may
be set forth in this agreement, such counsel is not representing Seller in any
suit, action or proceeding against Seller which, if adversely determined, would
prohibit the con-summation of the transactions contemplated by this agreement;
and
(e) such other instruments as may be necessary or proper to transfer to
Purchaser all other ownership interests in the Assets to be transferred under
this agreement
At the closing Purchaser shall execute and deliver to Seller:
(a) the Promissory Note, Security Agreement and UCC Financing Statements
provided for in Article 2 hereof;
(b) certified copies of resolutions duly adopted by the Board of Directors and
shareholders of Purchaser authorizing the purchase of the Assets and the
performance by Purchaser of its obligations hereunder;
(c) An opinion of Purchaser's counsel, dated as of the closing date, stating
such counsel's opinion that: (i) Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of Delaware; (ii)
Purchaser has full power and authority, corporate and otherwise, to enter into
this agreement and perform its obligations hereunder; (iii) the execution and
delivery of this agreement and the performance by Purchaser of its obligations
hereunder have been duly authorized by the Board of Directors and shareholders
of Purchaser and no further action or approval is required in order to
constitute this agreement as the binding obligation of Purchaser, enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, moratorium, insolvency or other laws affecting creditor's rights
generally; (iv) the execution and delivery of this agreement and the
performance by Purchaser of its obligations hereunder do not and will not
violate any provision of the Certificate of Incorporation or Bylaws of
Purchaser; and (v) except as may be set forth in this agreement, such counsel is
not representing Purchaser in any suit, action or proceeding against Purchaser
which, if adversely determined, would prohibit the consummation of the
transactions contemplated by this agreement.
5. THE SECURITY AGREEMENT. The Security Agreement shall create a security
interest in the goods, chattels and all other personal property included in this
sale and all other personal property acquired after the closing by Purchaser and
used in connection with the business, together with all proceeds thereof and all
increases, substitutions, replacements and additions thereto.
Purchaser agrees to perfect the security interest of the Security Agreement by
executing and delivering to Seller appropriate Financing Statements and
extensions and renewals thereof, in accordance with the provisions of the
Uniform Commercial Code, and all other instruments or documents as may be
reasonably requested by Seller. All filing fees in connection therewith shall
be paid by Purchaser.
6. WAIVER OF BULK TRANSFER REQUIREMENTS. The parties waive compliance with
the bulk transfer provisions of the Uniform Commercial Code which may be
applicable to this transaction. Seller agrees to indemnify Purchaser against
all claims made by the creditors of Seller.
7. USE OF PURCHASE PRICE TO PAY ENCUMBRANCES. If there is any lien or
encumbrance against the Assets, or anything else affecting this sale, which
Seller is obligated to pay and discharge at the closing, Seller may use any
portion of the balance of the purchase price to discharge it, or Seller may
allow to Purchaser the amount thereof as a credit at the closing. Purchaser
agrees to provide separate certified checks as reasonably requested to assist in
clearing up these matters.
8. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to
Purchaser as follows:
(a) Seller is a corporation duly organized and validly existing under the laws
of Delaware, and is duly qualified to do business in New York. Seller has full
power and authority to conduct its business as now carried on, and to carry out
and perform its undertakings and obligations as provided herein. The execution
and delivery by Seller of this agreement and the consummation of the
transactions contemplated herein have been duly authorized by the Board of
Directors of Seller and will not conflict with or breach any provision of the
Certificate of Incorporation or Bylaws of Seller.
(b) No action, approval, consent or authorization of any governmental authority
is necessary for Seller to consummate the transactions contemplated hereby.
(c) Seller is the owner of and has good and marketable title to the Assets,
free of all liens, claims and encumbrances, except as may be set forth herein.
(d) There are no violations of any law or governmental rule or regulation
pending against Seller or the Assets.
(e) There are no judgments, liens, suits, actions or proceedings pending
against Seller or the Assets.
(f) Seller has not entered into, and the Assets are not subject to, any: (i)
written contract or agreement for the employment of any employee of the
business; (ii) con-tract with any labor union or guild; (iii) pension,
profit-sharing, retirement, bonus, insurance, or similar plan with respect to
any employee of the business; or (iv) similar contract or agreement affecting or
relating to the Assets.
(g) At the time of the closing, there will be no creditors of Seller.
(h) The Contracts are in full force and effect and with-out any default by
Seller thereunder. All copies of the Contracts provided by Seller to Purchaser
are true and complete copies of the original Contracts. Seller is not indebted
under any executory Contracts, except as may be set forth in Exhibit A-1 hereto.
9. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to Seller as follows:
(a) Purchaser is a corporation duly organized and validly existing under the
laws of Delaware, and is duly qualified to do business in New York. Purchaser
has full power and authority to carry out and perform its under-takings and
obligations as provided herein. The execution and delivery by Purchaser of
this agreement and the consummation of the transactions contemplated herein have
been duly authorized by the Board of Directors of Purchaser and will not
conflict with or breach any provision of the Certificate of Incorporation or
Bylaws of Purchaser.
(b) No action, approval, consent or authorization of any governmental authority
is necessary for Purchaser to con-summate the transactions contemplated hereby.
(c) There are no judgments, liens, suits, actions or proceedings pending or, to
the best of Purchaser's knowledge, threatened against Purchaser or its
property.
10. NO OTHER REPRESENTATIONS. Purchaser acknowledges that neither Seller nor
any representative or agent of Seller has made any re-presentation or warranty
(expressed or implied) regarding the Assets or the business, or any matter or
thing affecting or relating to this agreement, except as specifically set forth
in this agreement. Seller shall not be liable or bound in any manner by any
oral or written statement, representation, warranty, agreement or information
pertaining to the Assets or the business or this agreement furnished by any
broker, agent or other person, unless specifically set forth in this agreement.
Purchaser has inspected the Assets, Purchaser agrees to take the Assets "as is"
and in their present condition, subject to reasonable use, wear, tear and
deterioration between now and the closing date.
11. CONDUCT OF THE BUSINESS. Seller, until the closing, shall:
(a) conduct the business in the normal, useful and regular manner;
(b) use its best efforts to preserve the business and the goodwill of the
customers and suppliers of the business and others having relations with
Seller; and
(c) give Purchaser and its duly designated representatives reasonable access
to Seller's premises and the books and records of the business, and furnish to
Purchaser such data and information pertaining to Seller's business as
Purchaser from time to time reasonably may request.
Unless and until the closing shall take place, Purchaser shall hold in
confidence all information obtained in connection with this agreement, and, if
for any reason the closing shall not take place, Purchaser shall return to
Seller all documents received hereunder.
12. EXPENSES BEFORE AND AFTER THE CLOSING. Except as otherwise provided in
this agreement, Seller shall be liable for the payment of all bills for
merchandise, goods and inventory delivered to the business before the closing;
and Purchaser shall be liable for the payment of all bills for merchandise,
goods and inventory delivered to the business after the date of the closing.
Seller shall be liable for the payment of all salaries, payroll deductions and
taxes levied upon the employer in connection with the employee's work performed
before the closing. Purchaser shall be responsible for the payment of all
salaries, payroll deductions and taxes levied upon the employer in connection
with the employee's work performed after the closing.
13. CONDITIONS TO CLOSING. The obligations of the parties to close hereunder
are subject to the following conditions:
(a) All of the terms, covenants and conditions to be complied with or performed
by the other party under this agreement on or before the closing shall have been
com-plied with or performed in all material respects.
(b) All representations or warranties of the other party herein are true in all
material respects as of the closing date.
(c) On the closing date, there shall be no liens or en-cumbrances against the
Assets, except as may be provided for herein.
If Purchaser shall be entitled to decline to close the transactions contemplated
by this agreement, but Purchaser nevertheless shall elect to close, Purchaser
shall be deemed to have waived all claims of any nature arising from the failure
of Seller to comply with the conditions or other provisions of this agreement of
which Purchaser shall have actual knowledge at the closing.
14. BROKERAGE. The parties hereto represent and warrant to each other that
they have not dealt with any broker or finder in connection with this agreement
or the transactions contemplated hereby, and no broker or any other person is
entitled to receive any brokerage commission, finder's fee or similar
compensation in connection with this agreement or the transactions contemplated
hereby. Each of the parties shall indemnify and hold the other harmless from
and against all liability, claim, loss, damage or expense, including reasonable
attorneys' fees, pertaining to any broker, finder or other person with whom such
party has dealt.
15. NOTICES. All notices, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been properly given if delivered by hand or by Federal Express courier or by
registered or certified mail, re-turn receipt requested, with postage prepaid,
to Seller or Purchaser, as the case may be, at their addresses first above
written, or at such other addresses as they may designate by notice given
here-under.
16. SURVIVAL. The representations, warranties and covenant contained herein
shall survive the delivery of the Bill of Sale and shall continue in full force
and effect after the closing, except to the extent waived in writing.
17. FURTHER ASSURANCES. In connection with the transactions contemplated by
this agreement, the parties agree to execute and deliver such further
instruments, and to take such further actions, as may be reasonably necessary or
proper to effectuate and carry out the transactions contemplated in this
agreement.
18. ENTIRE AGREEMENT. This agreement contains all of the terms agreed upon
between Seller and Purchaser with respect to the subject matter hereof. This
agreement has been entered into after full investigation. All prior oral or
written statements, representations, promises, understandings and agreements of
Seller and Purchaser are merged into and superseded by this agreement, which
alone fully and completely expresses their agreement.
19. CHANGES MUST BE IN WRITING. No delay or omission by either Seller or
Purchaser in exercising any right shall operate as a waiver of such right or any
other right. This agreement may not be altered, amended, changed, modified,
waived or terminated in any respect or particular unless the same shall be in
writing signed by the party to be bound. No waiver by any party of any breach
here-under shall be deemed a waiver of any other or subsequent breach.
20. CAPTIONS AND EXHIBITS. The captions in this agreement are for convenience
only and are not to be considered in construing this agreement. The Exhibits
annexed to this agreement are an integral part of this agreement, and where
there is any reference to this agreement it shall be deemed to include said
Exhibits.
21. GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the laws of the State of New York. If any provisions of this
agreement shall be unenforceable or invalid, such unenforceability or invalidity
shall not affect the remaining provisions of this agreement.
22. BINDING EFFECT. This agreement shall not be considered an offer or an
acceptance of an offer by Seller, and shall not be binding upon Seller until
executed and delivered by both Seller and Purchaser. Upon such execution and
delivery, this agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
CDKNET, INC.
By ________________________
President
UNIVERSAL MEDIA HOLDINGS, INC.
By ________________________
President
EXHIBIT A-1
CONTRACTS
Licensing Agreements and Intellectual Property as follows:
Technology License Agreement between CDKnet.com, Inc., ValueFlash.com
Incorporated, and Elbit Limited dated June 13, 2001.
EXHIBIT A-2
OTHER ASSETS AND LIABILITIES
Assets of Diversified Capital Holdings, LLC., as listed herein:
Debt Instruments in:
Panama Industries, Ltd.
Dominix, Inc.
Augrid of Nevada, Inc.
Other Assets:
Assets of CDKNet, LLC, not already listed:
CD Duplication equipment with Capital Collateral Account
Liabilities of Diversified Capital Management, LLC and CDKNet, LLC:
Note on CD Duplication equipment
EXHIBIT B
PROMISSORY NOTE
STATE OF NEW YORK, COUNTY OF , ss.
November 1, 2002 $550,000.00
FOR VALUE RECEIVED, Universal Media Holdings, Inc., a Delaware
corporation, having an address at 150 Broadhollow Road, Melville, NY 11747
("Maker"), hereby covenants and promises to pay to CDKNet, Inc., a Delaware
corporation, having an address at 150 Broadhollow Road, Melville, New York ,
("Payee"), or order, at Payee's address first above written or at such other
address as Payee may designate in writing, Five Hundred Fifty Thousand Dollars
($550,000.00), lawful money of the United States of America, together with
interest thereon computed from the date hereof at the rate of five percent (5%)
per annum, which principal and interest shall be payable in equal monthly
installments of Sixteen Thousand Four Hundred Eighty-Four Dollars and 12/100ths
Dollars ($16,484.12) each, commencing on the 16th day of November, 2002, and
continuing on the 16th day of each month thereafter, to be applied first against
accrued interest at the aforesaid rate on the outstanding principal amount, and
then in reduction of principal, until November 16, 2005 on which date all
outstanding principal and accrued interest shall be due and payable.
MAKER COVENANTS AND AGREES WITH PAYEE FOLLOWING:
1. Maker will pay the indebtedness evidenced by this Note as provided
herein.
2. This Note is secured by a Security Agreement of even date herewith
(the "Security Agreement"). All of the terms, covenants and conditions,
contained in the Security Agreement are expressly incorporated by reference
herein and hereby made a part hereof. In the event of any conflict between the
provisions of this Note and the provisions of the Security Agreement, the terms
of the Security Agreement shall be paramount and shall govern.
3. In the event any payment due hereunder shall not be paid on the
date when due, such payment shall bear interest at the lesser of 8 percent per
annum or the highest lawful rate permitted under applicable law, from the date
when such payment was due until paid. This paragraph shall not be deemed to
extend or otherwise modify or amend the date when such payments are due
hereunder. The obligations of Maker under this Note are subject to the
limitation that payments of interest shall not be required to the extent that
the charging of or the receipt of any such payment by Payee would be contrary to
the provisions of law applicable to Payee limiting the maximum rate of interest
which may be charged or collected by Payee.
4. The holder of this Note may declare the entire unpaid amount of
principal and interest under this Note to be immediately due and payable if
Maker defaults in the due and punctual payment of any installment of principal
or interest hereunder.
5. Maker shall have the right to prepay the indebtedness evidenced by
this Note, in whole or in part, without penalty, upon ten days prior written
notice to Payee. The installment payments provided for herein shall continue
without change after any such prepayment.
6. Maker, and all guarantors, endorsers and sureties of this Note,
hereby waive presentment for payment, demand, protest, notice of protest, notice
of nonpayment, and notice of dishonor of this Note. Maker and all guarantors,
endorsers and sureties con-sent that the holder of this Note at any time may
extend the time of payment of all or any part of the indebtedness secured
hereby, or may grant any other indulgences.
7. Any notice or demand required or permitted to be made or given
hereunder shall be deemed sufficiently given or made if given by personal
service or by Federal Express courier or by certified or registered mail,
return receipt requested, addressed, if to Maker, at Maker's address first above
written, or if to Payee, at Payee's address first above written. Either party
may change its address by like notice to the other party.
8. This Note may not be changed or terminated orally, but only an
agreement in writing signed by the party against whom enforcement of any change,
modification, termination, waiver, or discharge is sought. This Note shall be
construed and enforced in accordance with the laws of New York.
IN WITNESS WHEREOF Maker has executed this Note as of the date first
above written.
UNIVERSAL MEDIA HOLDINGS, INC.
By ________________________
President
EXHIBIT C
SECURITY AGREEMENT
AGREEMENT, dated as of October 22, 2002, between Universal Media
Holdings, Inc., a Delaware corporation, having an address at 150 Broadhollow
Road, Melville, NY 11747 ("Debtor"), and CDKNet, Inc., a Delaware corporation,
having an address at New York, ("Secured Party").
W I T N E S S E T H:
WHEREAS, concurrently herewith Secured Party is lending to Debtor the
sum of $550,000.00, as evidenced by a Promissory Note of even date herewith (the
"Note"); and
WHEREAS, in order to induce Secured Party to make said loan, Debtor
has agreed to pledge to Secured Party certain property as security for the loan;
NOW THEREFORE, in consideration of Ten Dollars, and other valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS. The following terms as used in this Agreement shall
have the meanings set forth below:
"Collateral" shall mean all of the property set forth in Exhibit A attached
hereto and made a part hereof, and all property of the same class or character
acquired by Debtor subsequent to the date hereof, and all proceeds thereof, and
all substitutions, replacements and accessions thereto.
"Obligations" shall mean all principal and interest due or to become due under
the aforesaid Note, and any other indebtedness or liability of Debtor to Secured
Party, direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising.
2. CREATION OF THE SECURITY INTEREST. Debtor hereby grants to
Secured Party a security interest in all of the right, title and interest of
Debtor in and to the Collateral to secure the full and prompt payment and
performance of all of the Obligations.
3. DEBTOR'S OBLIGATIONS TO PAY. Debtor shall pay and perform all of
the Obligations of Debtor to Secured Party as the same may become due according
to their terms. Debtor shall be liable for, and shall reimburse to Secured
Party, all expenses, including reasonable attorneys' fees, incurred or paid in
connection with establishing, perfecting, maintaining, protecting or enforcing
any of Secured Party's rights and remedies hereunder.
4. PROTECTION OF THE COLLATERAL. Debtor shall defend the title to
the Collateral against all claims and demands whatsoever. Debtor shall keep
the Collateral free and clear of all liens, charges, encumbrances, taxes and
assessments, and shall pay all taxes, assessments and fees relating to the
Collateral. Upon request by Secured Party, Debtor shall furnish further
assurances of title, execute any further instruments and do any other acts
necessary to effectuate the purposes and provisions of this Agreement. The
risk of loss of the Collateral at all times shall be borne by Debtor. Debtor
shall keep the Collateral in good repair and condition and shall not misuse,
abuse or waste the Collateral or allow the Collateral to deteriorate except for
normal wear and tear.
The Collateral shall be kept at Debtor's place of business set forth
above, except for temporary removal in connection with its ordinary use or
unless Debtor shall have obtained the prior written consent of Secured Party for
its removal to another location. Secured Party shall have the right to enter
upon Debtor's premises at any reasonable time, and from time to time, to inspect
the Collateral.
5. FILING AND RECORDING. Debtor, at its own cost and expense, shall
execute and deliver to Secured Party any financing statements, and shall procure
for Secured Party any other documents, necessary or appropriate to protect the
security interest granted to Secured Party hereunder against the rights and
interests of third parties, and shall cause the same to be duly recorded and
filed in all places necessary to perfect the security interest of Secured Party
in the Collateral. In the event that any recording or refiling thereof (or
filing of any statements of continuation or assignment of any financing
statement) is required to protect and preserve such security interest, Debtor,
at its own cost and expense, shall cause the same to be re-recorded and/or
refiled at the time and in the manner requested by Secured Party. Debtor hereby
authorizes Secured Party to file or refile any financing statements or
continuation statements with respect to the security interest granted pursuant
to this Agreement which at any time may be required or appropriate, although
the same may have been executed only by Secured Party, and to execute such
financing statement on behalf of Debtor. Debtor hereby irrevocably designates
Secured Party, its agents, representatives and designees, as agent and
at-torney-in-fact for Debtor for the aforesaid purposes.
6. DEFAULT. The occurrence of any one or more of the following
events (hereinafter referred to as "Events of Default") shall constitute a
default hereunder, whether such occurrence is voluntary or involuntary or comes
about or is effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental authority:
(a) If Debtor shall default in the payment of any principal or interest due
under the Note; or
(b) If Debtor shall fail to pay, perform or observe any covenant, agreement,
term or provision of this Agreement, or any other agreement or arrangement now
or hereafter entered into between the parties hereto or with respect to any
Obligation of Debtor to Secured Party; or
(c) If any representation, warranty or other statement of fact herein or in any
writing, certificate, report or statement at any time furnished to Secured Party
pursuant to or in connection with this Agreement or the Note shall be false or
misleading in any material respect; or
(d) If Debtor shall: admit in writing its inability to pay its debts generally
as they become due; file a petition for relief under the bankruptcy laws or a
petition to take advantage of any insolvency act; make an assignment for the
benefit of creditors; commence a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or the whole or any substantial
part of its property; file a petition or answer seeking reorganization or
arrangement or similar relief under the Federal Bankruptcy Laws or any other
applicable law or statute of the United States or any State; or if Debtor shall
be adjudged a bankrupt or insolvent, or a court of competent jurisdiction shall
enter any order, judgment or decree appointing a receiver, trustee, liquidator
or conservator of Debtor or of the whole or any substantial part of the
property of Debtor or approves a petition filed against Debtor seeking
reorganization or similar relief under the Federal Bankruptcy Laws or any other
applicable law or statute of the United States or any State; or if, under the
provisions of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of Debtor or the whole
or any substantial part of its property; or if there is commenced against Debtor
any proceeding for any of the foregoing relief; or if Debtor by any act
indicates its consent to, approval of, or acquiescence in any such proceeding;
or
(e) If any creditor of Debtor for any reason whatsoever hereafter shall
accelerate payment in whole or in part of any outstanding obligation owed to it
by Debtor under any agreement or arrangement, or if any judgment against the
Debtor or any execution against any of its property for any amount remains
unpaid, unstayed or undismissed for a period in excess of ten days; or
(f) If Debtor or any guarantor or surety of any Obligation shall die or cease
to exist; or
(g) If there occur any reduction in the value of the Collateral or any act of
Debtor which imperils the prospect of the full performance or satisfaction of
the Obligations.
7. RIGHTS AND REMEDIES. Upon the occurrence of an Event of Default,
the Obligations shall immediately become due and payable in full without notice
or demand. Secured Party shall have all rights and remedies provided by the
Uniform Commercial Code in effect in the State of New York on the date hereof.
In addition to, or in conjunction with, or substitution for such rights and
remedies, Secured Party may at any time and from and after the occurrence of an
Event of Default hereunder:
(a) with or without notice to Debtor, foreclose the security interest created
herein by any available judicial procedure, or take possession of the
Collateral, or any portion thereof, with or without judicial process, and enter
any premises where the Collateral may be located for the purpose of taking
possession of or removing the same, or rendering the same unusable, or disposing
of the Collateral on such premises, and Debtor agrees not to resist or interfere
therewith;
(b) require Debtor to prepare, assemble or collect the Collateral, at Debtor's
own expense, and make the same available to Secured Party at such place as
Secured Party may designate, whether at Debtor's premises or elsewhere;
(c) sell, lease or otherwise dispose of all or any part of the Collateral,
whether in its then condition or after further preparation, in Debtor's name or
in its own name, or in the name of such party as Secured Party may designate,
either at public or private sale (at which Secured Party shall have the right to
purchase), in lots or in bulk, for cash or for credit, with or without
re-presentations or warranties, and upon such other terms as Secured Party, in
its sole discretion, may deem advisable; and ten days' written notice of such
public sale date or dates after which private sale may occur, or such lesser
period of time in the case of an emergency, shall constitute reasonable notice
hereunder;
(d) execute and deliver documents of title, certificates of origin, or other
evidence of payment, shipment or storage of any Collateral or proceeds on behalf
of and in the name of Debtor;
(e) remedy any default by Debtor hereunder, without waiving such default, and
any monies expended in so doing shall be chargeable with interest to Debtor and
added to the Obligations secured hereby; and
(f) apply for an injunction to restrain a breach or threatened breach of this
Agreement by Debtor.
8. CUMULATIVE RIGHTS. All rights, remedies and powers granted to
Secured Party herein, or in any instrument or document related hereto, or
provided or implied by law or in equity shall be cumulative and may be exercised
singly or concurrently on any one or more occasions.
9. DEBTOR'S REPRESENTATIONS AND WARRANTIES. Debtor hereby represents
and warrants to Secured Party that:
(a) Debtor is not in default under any indenture, mortgage, deed of trust,
agreement or other instrument to which it is a party or by which it may be
bound. Neither the execution nor the delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will violate any law or regulation, or any order or decree of
any court of governmental authority, or will conflict with, or result in the
breach of, or constitute a default under, any in-denture, mortgage, deed or
trust, agreement or other instrument to which Debtor is a party or by which
Debtor may be bound, or result in the creation or imposition of any lien, claim
or encumbrance upon any property of Debtor.
(b) Debtor has the power to execute, deliver and perform the provisions of this
Agreement and all instruments and documents delivered or to be delivered
pursuant hereto, and has taken or caused to be taken all necessary or
appropriate actions to authorize the execution, delivery and performance of
this Agreement and all such instruments and documents.
(c) Debtor is the legal and equitable owner of the Col-lateral, free and clear
of all security interests, liens, claims and encumbrances of every kind and
nature. Except as may be set forth in Exhibit A annexed hereto, no financing
statement covering the Collateral or its proceeds is on file in any public
office.
(d) No default exists, and no event which with notice or the passage of time,
or both, would constitute a default under the Collateral by any party thereto,
and there are no offsets, claims or defenses against the obligations evidenced
by the Collateral, except as may be expressly set forth in Exhibit A annexed
hereto.
10. NOTICES. All notices, requests, demands or other communications
provided for herein shall be in writing and shall be deemed to have been
properly given if sent by Federal Express courier or by registered or certified
mail, return receipt request-ed, with postage prepaid, addressed to the parties
at their respective addresses herein above set forth, or at such other
addresses as the parties may designate in writing. Debtor immediately shall
notify Secured Party of any change in the address of Debtor or discontinuance of
the place of business or residence of Debtor.
11. MODIFICATION AND WAIVER. No modification or waiver of any
provision of this Agreement, and no consent by Secured Party to any breach
thereof by Debtor, shall be effective unless such modification or waiver shall
be in writing and signed by Secured Party, and the same shall then be effective
only for the period and on the conditions and for the specific instances and
purposes specified in such writing. No course of dealing between Debtor and
Secured Party in exercising any rights or remedies hereunder shall operate as a
waiver or preclude the exercise of any other rights or remedies hereunder. All
such rights and remedies shall continue unimpaired, notwithstanding any delay,
extension of time, renewal, compromise or other indulgence granted with respect
to any of the Obligations. Debtor hereby waives all notice of any such delay,
extension of time, renewal, compromise or indulgence, and consents to be bound
thereby as fully and effectually as if Debtor expressly had agreed thereto in
advance. The aforesaid Note may be negotiated by Secured Party, without
releasing Debtor or the Collateral.
12. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Secured Party may assign this
Agreement, and if assigned, the assignee shall be entitled, upon notifying
Debtor, to the payment and performance of all of the Obligations and agreements
of Debtor hereunder and to all of the rights and remedies of Secured Party
hereunder, and Debtor will assert no claims or defenses Debtor may have against
Secured Party against the assignee. The gender and number used in this
Agreement are used for reference term only and shall apply with the same effect
whether the parties are masculine, feminine, neuter, singular or plural.
13. MISCELLANEOUS. This Agreement shall be construed in accordance
with and shall be governed by the laws of the State of New York. The invalidity
or unenforceability of any provision of this Agreement shall not effect the
validity or enforceability of any other provision of this Agreement. Debtor
covenants and agrees to execute and deliver to Secured Party on demand such
additional assurances, writings and instruments as may be required by Secured
Party for purposes of effectuating the intent of this Agreement. The captions
in this Agreement are for convenience only, and shall not be considered in
construing this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
UNIVERSAL MEDIA HOLDINGS, INC.
By ________________________
President
CDKNET, INC.
By ________________________
President
EXHIBIT D
BILL OF SALE
KNOW THAT, for valuable consideration, CDKNet, Inc., a Delaware
corporation, having an address at 150 Broadhollow Road, Melville, New York,
("Seller"), does hereby grant, sell, transfer and assign unto Universal Media
Holdings, Inc., a Delaware corporation, having an address at 150 Broadhollow
Road, Melville, NY 11747 ("Purchaser"), all right, title and interest of Seller
in and to the assets of the business known as Assets of Diversified Capital
Holdings, LLC, more particularly described in Exhibit A attached hereto and
made a part here-of, and the entity known as CDKNet, LLC.
TO HAVE AND TO HOLD the same unto Purchaser and the heirs, executors,
administrators, successors and assigns of Purchaser forever.
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale as of
October 22, 2002.
CDKNET, INC.
By ________________________
President
Exhibit 10.2
STOCK PURCHASE AGREEMENT
Dated October 22, 2002
Shareholders of Humana Trans Services Group, Ltd.
To
Universal Media Holdings, Inc.
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement, dated as of October 22, 2002, between the
shareholders of Humana Trans Services Group, Ltd., (individually "Seller" and
collectively "Sellers") and Universal Media Holdings, Inc., a company formed and
existing under the laws of the State of Delaware (the "Purchaser").
RECITALS
WHEREAS, the shareholders of Humana Trans Services Group, Ltd., (the "Company")
desire to sell their shares of the Company to the Purchaser, for shares of
common stock of the Purchaser (Sellers' shares of common stock of the Company
are hereinafter referred to as the "Shares"); and
WHEREAS, Universal Media Holdings, Inc., the Purchaser, has offered to purchase
all of the Shares.
NOW THEREFORE, in consideration of the mutual covenants and undertakings and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties, intending to be bound, agree as follows:
PURCHASE, SALE AND TERMS OF SHARES
Purchase and Sale. The Sellers agree to sell and Purchaser agrees to purchase
all but not less than all of the Shares on the terms and subject to the
conditions hereinafter set forth.
Terms. The purchase price for all of the Shares is 4,544,445 shares of common
stock of the Purchaser, subject to the restrictions of Rule 144 of the
Securities and Exchange Commission.
The Closing. Closing. The Closing shall take place at the offices of the
Purchaser, 150 Broadhollow Road, Melville, New York 11747 on October 22, 2002
(the "Closing Date"), or such other date and place as the parties shall agree to
in writing.
Representations by the Purchaser. The Purchaser makes the following
representations and warranties to the Company:
Access to Information The Purchaser, in making the decision to purchase the
Shares, has relied upon the representations and warranties contained in this
Agreement as well as independent investigations made by it and/or its
representatives, if any.
Sophistication and Knowledge. The Purchaser and/or its representatives has such
knowledge and experience in financial and business matters that it can represent
itself and is capable of evaluating the merits and risks of the purchase of the
Shares
Authority. The Purchaser has full right and power to enter into and perform
pursuant to this Agreement and make an investment in the Company, and this
Agreement constitutes the Purchaser's valid and legally binding obligation,
enforceable in accordance with its terms. The Purchaser is authorized and
otherwise duly qualified to purchase and hold the Shares and to enter into this
Agreement.
Brokers or Finders. No person has or will have, as a result of the transactions
contemplated by this Agreement, any right, interest or valid claim against or
upon the Company for any commission, fee or other compensation as a finder or
broker because of any act or omission by such Purchaser or its respective
agents.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
REGARDING THE COMPANY
Each Seller, severally, makes the following representations and warranties
to Purchaser as of the date hereof and as of the Closing Date, unless a
different date is specifically provided herein.
Organization and Standing. The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of New York
and has the requisite corporate power and authority necessary to own its
properties and to conduct its business as presently conducted. The Company is
duly qualified to transact business as a foreign corporation and is in good
standing in every jurisdiction in which the failure to so qualify would have a
material adverse effect on the operations or financial condition of the Company.
Subsidiaries. The Company has no subsidiaries.
Capitalization. The total authorized capital of the Company consists of
100,000,000 shares of common stock, par value of $0.0001 of which 4,544,445 are
issued and outstanding. All shares bear a restrictive legend.
Shareholders. Exhibit A attached hereto accurately and fully reflects the name
and number of shares owned by each shareholder of the Company ("Shareholders")
as of the date hereof and whether said shares are subject to any restriction on
transferability. The shares of common stock of the Company issued to the persons
and companies identified in Exhibit B-1 were lawfully and properly cancelled and
returned to the treasury. No individual or company identified in Exhibit B-1
has any claim against the Company regarding the issuance or cancellation of
shares of common stock of the Company.
Options and Rights. There are no outstanding subscriptions, options, warrants,
rights, securities, contracts, commitments, understandings or arrangements under
which the Company is bound or obligated to issue any additional shares of its
capital stock or rights to purchase shares of its capital stock (collectively,
"Options").
Financial Statements. The audited balance sheets as the year end of the Company
are attached hereto as Exhibit C, and fairly present the financial position of
the Company as at the dates and for the periods indicated.
Absence of Liabilities. Except as set forth in the Financial Statements, the
Company has no material liabilities, contingent or otherwise, other than (i)
obligations not required under generally accepted accounting principles to be
reflected in the Financial Statements and (ii) as disclosed on Schedule 2.7
hereto.
Absence of Changes. Except as set forth on Schedule 2.8 hereto, the Company has
conducted its business only in the ordinary course of business and there has not
been: (a) any material adverse change; (b) any amendment or change in the
Company's authorized or issued capital stock, or Articles of Incorporation; (c)
any declaration, setting aside or payment of any dividend or distribution
(whether in cash, stock or property) in respect of, the capital stock of the
Company, any purchase, retirement, redemption or other acquisition of, any grant
of any stock option, warrant or other right to purchase shares of, or the grant
of any registration rights with respect to, the capital stock of the Company;
(d) any cancellation of, or agreement to cancel any indebtedness or obligation
owing to the Company; (e) any amendment, modification or termination of any
existing permits or contracts, or entering into any new Contract or plan
relating to any salary, bonus, insurance, pension, health or other employee
welfare or benefit plan for or with any directors, officers, employees or
consultants of the Company; (f) any entry into any material Contract by the
Company not in the ordinary course of business, including, without limitation,
relating to any borrowing, capital expenditure or the sale or purchase of any
property, rights, or assets or any options or similar agreements with respect to
the foregoing; (g) any disposition by the Company of any material asset; or (h)
any change by the Company in accounting methods or principles.
Litigation. There is no action, suit, proceeding or investigation pending or, to
the Sellers' knowledge, is currently threatened, against the Company, except as
described on Schedule 2.9 to this Agreement. The Sellers are not aware of any
basis for any of the foregoing or any intent on its part to initiate any of the
foregoing.
Consents; Contracts. No consent of any party to any contract or from any
authority is required in connection with the execution, delivery or performance
of this Agreement, or the consummation of the transactions contemplated hereby,
except for such consents that are obtained, in form and substance reasonably
acceptable to Purchaser, and delivered to Purchaser at the Closing. Each
material Contract to which the Company is a party is in full force and effect
and is valid and enforceable in accordance with its terms. The Company has
performed in all material respects all obligations required to be performed by
it and (i) is not in default in any respect under or in breach of, and (ii) is
not in receipt of any claim of default or breach under any material Contract. No
event has occurred which with the passage of time or the giving of notice or
both would result in a default, breach or event of non-compliance under any
material Contract to which the Company is subject (including without limitation
all performance bonds, warranty obligations or otherwise).
Taxes. The Company has paid all taxes due as of the date hereof. The Company
has timely filed or has obtained presently effective extensions with respect to
all Federal, state, county, local and foreign tax returns (collectively, "Tax
Returns") that the Company are required to file. The Tax Returns are true and
correct and all taxes shown thereon to be due have been timely paid, with any
exceptions permitted by any taxing authority not having a materially adverse
effect on the Company. No penalties or other charges are or will become due
with respect to any such Tax Returns as the result of the late filing thereof.
The Company has either paid or established in the Financial Statements adequate
reserves for the payment of all such taxes due or claimed to be due by any
taxing authority in connection with any such Tax Returns. None of the Company's
federal income tax returns have been audited by the Internal Revenue Service,
and no controversy with respect to taxes of any type is pending or, to the
knowledge of the Company, threatened. The Company has withheld or collected
from each payment made to its employees the amount of all taxes required to be
withheld or collected therefrom and has paid all such amounts to the appropriate
taxing authorities when due. Neither the Company nor any of its stockholders
has ever filed (i) an election pursuant to Section 1362 of the Internal Revenue
Code of 1986, as amended (the "Code"), that the Company be taxed as an S
Corporation, or (ii) a consent pursuant to Section 341(f) of the Code relating
to collapsible corporations. The Company intends, pursuant to Section
368(a)1)(b) of the Internal Revenue Code that this AGREEMENT refers to a
transaction that qualifies as a tax free event and is solely based on the
reorganization and exchange of the voting stock of the acquiring corporation.
Compliance. The Company has, in all material respects, complied with all laws,
regulations and orders applicable to their business and have all material
permits and licenses required thereby. There is no term or provision of any
material mortgage, indenture, contract, agreement or instrument to which the
Company is a party or by which it is bound, or, to the best of the Sellers'
knowledge, of any state or Federal judgment, decree, order, statute, rule or
regulation applicable to or binding upon the Company that materially adversely
affects the business, prospects, condition, affairs or operations of the Company
or any of its properties or assets. To the Sellers' knowledge, no employee of
the Company is in violation of any contract or covenant (either with the Company
or with another entity) relating to employment, patent, other proprietary
information disclosure, non-competition, or non-solicitation.
Books and Records. The books of account, ledgers, order books, records and
documents of the Company accurately and completely reflect all material
information relating to the business of the Company, the location and collection
of its assets, and the nature of all transactions giving rise to the obligations
or accounts receivable of the Company.
Brokers or Finders. The Company has not agreed to incur, directly or
indirectly, any liability for brokerage or finders' fees, agents' commissions or
other similar charges in connection with this Agreement or any of the
transactions contemplated hereby or thereby.
Disclosures. The Sellers and the Company have provided the Purchaser with all
information requested by the Purchaser in connection with their decision to
purchase the Shares. Neither this Agreement, any Exhibit hereto, nor any
report, certificate or instrument furnished to the Purchaser or its agents in
connection with the transactions contemplated by this Agreement, when read
together, contains or will contain any material misstatement of fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller, individually, and not jointly and severally, makes the
following representations and warranties to Purchaser as of the date hereof and
as of the Closing Date, unless a different date is specifically provided herein.
5.1 Authorization. Each Seller has full legal right, power and capacity to
enter into this Agreement and all other agreements, documents, instruments and
certificates contemplated herein or related hereto (collectively the
"Transaction Documents") and perform his or her obligations hereunder and
thereunder. Upon execution and delivery of this Agreement by the parties hereto
and thereto, this Agreement shall constitute the legal, valid and binding
obligation of each Seller, enforceable against him or her in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditor rights generally and by general equitable principles.
5.2 Title. Each Seller (a) is the sole record and beneficial owner of the
Shares set forth it the above recitals, which recital is incorporated herein,
free and clear of all liens or encumbrances, save as disclosed in this Agreement
and (b) has sole managerial and dispositive authority with respect to such
Shares. All proxies granted with respect to such Seller's Shares have been
validly revoked. Upon delivery to Sellers by Purchaser of the Purchase Price at
the Closing, each Seller will convey their respective Shares, and Purchaser will
own and hold, good and marketable title to the Shares, free and clear of any and
all liens or contractual restrictions or limitations whatsoever.
5.3 Authorization. Each Seller has complied with all applicable regulations
and orders in connection with the execution, delivery and performance of this
Agreement, and the transactions contemplated hereby and thereby. Each Seller is
not required to submit any notice, report, or other filing with any governmental
authority in connection with such Seller's execution or delivery of this
Agreement, nor the consummation of the transactions contemplated hereby. No
authorization, consent, approval, exemption or notice is required to be obtained
by such Seller in connection with the execution, delivery, and performance of
this Agreement and the transactions contemplated hereby.
CLOSING DELIVERIES
`5.1 Deliveries by Purchaser. Purchaser shall deliver the Purchase Price by
wire transfer in collected funds and shall cause the shares of Sterling Energy
to be delivered to Sellers as instructed in writing by the Escrow Agent.
5.2 Deliveries by Sellers. At the Closing, in addition to any other
documents or agreements required under this Agreement, Sellers shall deliver to
Purchaser the following:
Certificates, in genuine and unaltered form, representing all of the Shares
owned by each Seller, free and clear of all Liens, duly endorsed in blank or
accompanied by duly executed stock powers endorsed in blank, for transfer to
Purchaser.
A letter from the President confirming that the Articles of Incorporation of the
Company, as amended and restated are up-to-date and correct and that he has
applied for a Certificate from the Delaware Secretary of State;
A letter from the President confirming that the Company is in good standing and
that he has applied for a Certificate of Good Standing from the Delaware
Secretary of State;
The opinion of counsel for the Company in form and substance acceptable to the
Purchaser regarding the tradability of the unrestricted shares of common stock
issued by the Company.
Corporate Minute Book containing all minutes of meetings of the Corporations
Shareholders and Board of Directors as well as any actions taken by the
Shareholders of Board of Directors without a meeting.
Tax and accounting records of the Corporation from inception.
The original Articles of Incorporation and any amendments to the Articles as
well as the corporation's bylaws.
Such other agreements, documents and instruments reasonably requested by
Purchaser to effectuate the transactions contemplated in this Agreement.
SURVIVAL OF TERMS; INDEMNIFICATION
5.1 Survival; Knowledge. All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (i) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations set
forth therein shall have been performed and satisfied; and (ii) all
representations and warranties shall survive and continue until eighteen (18)
months from the Closing Date (the "Anniversary Date"), except for
representations and warranties for which a claim for indemnification hereunder
(an "Indemnification Claim") shall be pending as of the Anniversary Date, in
which event such representations and warranties shall survive with respect to
such Indemnification Claim until the final disposition thereof.
5.2 Indemnification by Seller. Each Seller shall, jointly and severally,
indemnify, defend and hold harmless Purchaser and each of the officers,
directors, employees, shareholders, attorneys, accountants, partners,
representatives, agents, successors and assigns of the foregoing (each an
"Purchaser Indemnified Party" and collectively, the "Purchaser Indemnified
Parties"), at all times after the date of this Agreement, from and against any
liabilities, damages, losses, claims, liens, costs, or expenses (including
reasonable attorney's fees) of any nature (any or all of the foregoing are
hereinafter referred to as a "Loss") insofar as a Loss or any action in respect
thereof, whether now existing or accruing prior to or subsequent to the Closing,
which arises out of or is based on any misrepresentation (or alleged
misrepresentation), breach (or alleged breach) of any of the warranties,
representations or covenants made by Sellers or either of them, in this
Agreement or in any certificate, schedule, document attached hereto or delivered
pursuant to this Agreement
5.3 Indemnification by Purchaser. Purchaser shall indemnify, defend and hold
harmless each Seller and each of the representatives, agents, successors and
assigns of such Seller (each a "Seller Indemnified Party" and collectively, the
"Seller Indemnified Parties"), at all times after the date of this agreement,
from and against any liabilities, damages, losses, claims, liens, costs, or
expenses (including reasonable attorney's fees) of any nature (any or all of the
foregoing are hereinafter referred to as a "Loss") insofar as a Loss or any
action in respect thereof, whether now existing or accruing prior to or
subsequent to the Closing, which arises out of or is based on any
misrepresentation (or alleged misrepresentation), breach (or alleged breach) of
any of the warranties, representations or covenants made by Purchaser in this
Agreement or in any certificate, schedule, document attached hereto or delivered
pursuant to this Agreement
5.4 Third Party Claims. Except as otherwise provided in this Agreement, the
following procedures shall be applicable with respect to indemnification for
third party claims ("Claims").
Promptly after receipt by the party seeking indemnification hereunder
(hereinafter referred to as the "Indemnitee") of notice of the commencement of
any (a) tax audit or proceeding for the assessment of Tax by any taxing
authority or any other proceeding likely to result in the imposition of a Tax
liability or obligation, or (b) any action or the assertion of any Claim,
liability or obligation by a third party (whether by legal process or
otherwise), against which Claim, liability or obligation the other party to this
Agreement (hereinafter the "Indemnitor") is, or may be, required under this
Agreement to indemnify such Indemnitee, the Indemnitee will, if a Claim thereon
is to be, or may be, made against the Indemnitor, notify the Indemnitor in
writing of the commencement or assertion thereof and give the Indemnitor a copy
of such Claim, process and all legal pleadings. The Indemnitor shall have the
right to participate in the defense of such with counsel of reputable standing.
The Indemnitor shall have the right to assume the defense of such action unless
such action (i) may result in injunctions or other equitable remedies in respect
of the Indemnitee or its business; (ii) may result in liabilities which, taken
with other then existing Claims under this Article V, would not be fully
indemnified hereunder; or (iii) may have an adverse impact on the business or
financial condition of the Indemnitee after the Closing Date (including an
effect on the Tax liabilities, earnings or ongoing business relationships of the
Indemnitee). The Indemnitor and the Indemnitee shall cooperate in the defense of
such Claims. In the case that the Indemnitor shall assume or participate in the
defense of such audit, assessment or other proceeding as provided herein, the
Indemnitee shall make available to the Indemnitor all relevant records and take
such other action and sign such documents as are necessary to defend such audit,
assessment or other proceeding in a timely manner.
b. Upon judgment, determination, settlement or compromise of any third party
Claim, the Indemnitor shall pay promptly on behalf of the Indemnitee, and/or to
the Indemnitee in reimbursement of any amount theretofore required to be paid by
it, the amount so determined by judgment, determination, settlement or
compromise, unless in the case of a judgment an appeal is made from the
judgment, plus all other Claims of the Indemnitee with respect thereto
(including legal fees and expenses). If the Indemnitor desires to appeal from an
adverse judgment, then the Indemnitor shall post and pay the cost of the
security or bond to stay execution of the judgment pending appeal. Upon the
payment in full by the Indemnitor of such amounts, the Indemnitor shall succeed
to the rights of such Indemnitee, to the extent not waived in settlement,
against the third party who made such third party Claim.
c. Prior to paying or settling any Claim against which an Indemnitor is, or
may be, obligated under this Agreement to indemnify an Indemnitee, the
Indemnitee must first supply the Indemnitor with a copy of a final court
judgment or decree holding the Indemnitee liable on such claim or failing such
judgment or decree, and must first receive the written approval of the terms and
conditions of such settlement from the Indemnitor. An Indemnitor shall have the
right to settle any Claim against it or as to which it has assumed the defense,
subject to the prior written approval of the Indemnitee, which approval shall
not be unreasonably withheld provided that such settlement involves only the
payment of a fixed sum which the Indemnitor is obligated to pay and does not
include any admission of liability or other such similar admissions by or
related to Indemnitee with respect to such Claim.
d. An Indemnitee shall have the right to employ its own counsel in any case,
but the fees and expenses of such counsel shall be at the expense of the
Indemnitee unless: (i) the employment of such counsel shall have been authorized
in writing by the Indemnitor in connection with the defense of such action or
Claim; (ii) the Indemnitor shall not have employed, or is prohibited under this
Section 5.4 from employing, counsel in the defense of such action or Claim; or
(iii) such Indemnitee shall have reasonably concluded that there may be defenses
available to it which are contrary to, or inconsistent with, those available to
the Indemnitor, in any of which events such fees and expenses of not more than
one additional counsel for the indemnified parties shall be borne by the
Indemnitor.
MISCELLANEOUS
No Waiver; Cumulative Remedies. No failure or delay on the part of any party to
this Agreement in exercising any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Amendments, Waivers and Consents. Any provision in the Agreement to the
contrary notwithstanding, and except as hereinafter provided, changes in,
termination or amendments of or additions to this Agreement may be made, and
compliance with any covenant or provision set forth herein may be omitted or
waived, if the Sellers shall obtain consent thereto in writing from the
Purchaser. Any waiver or consent may be given subject to satisfaction of
conditions stated therein and any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
Addresses for Notices. All notices, requests, demands and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and mailed, telegraphed or delivered to each applicable party at the address set
forth on Schedule 6.3 hereto or at such other address as to which such party may
inform the other parties in writing in compliance with the terms of this
Article. All such notices, requests, demands and other communications shall be
considered to be effective when delivered.
Costs, Expenses and Taxes. All parties to bear their own expenses.
Effectiveness; Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the Sellers and each of them, the Purchaser and
their respective successors and assigns; provided, that, the Sellers may not
assign any of its rights or obligations under this Agreement without the prior
written consent of the Purchaser
Prior Agreements. The Transaction Documents executed and delivered in
connection herewith constitute the entire agreement between the parties and
supersede any prior understandings or agreements concerning the subject matter
hereof.
Severability. The provisions of the Transaction Documents are severable and, in
the event that any court of competent jurisdiction shall determine that any one
or more of the provisions or part of a provision contained therein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of such Transaction Document and the terms thereof shall
be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of a provision, had never been contained herein, and such
provisions or part reformed so that it would be valid, legal and enforceable to
the maximum extent possible.
Governing Law; Venue.
This Agreement shall be enforced, governed and construed in accordance with the
laws the State of New York or federal securities law where applicable without
giving effect to choice of laws principles or conflict of laws provisions.
Sellers and Purchaser hereby jointly waive one against the other, and agree not
to assert against either of them, or any successor assignee thereof, by way of
motion, as a defense, or otherwise, in any such suit, action or proceeding, (i)
any claim that any Seller or the Purchaser is not personally subject to the
jurisdiction of the arbitrator, and (ii) to the extent permitted by applicable
law, any claim that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of any such suit, action or proceeding is
improper or that this Agreement may not be enforced in or by such courts
Headings. Article, section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Survival of Representations and Warranties. All representations and warranties
made in the Transaction Documents or any other instrument or document delivered
in connection therewith, shall survive the execution and delivery hereof or
thereof.
Counterparts. This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
Further Assurances. From and after the date of this Agreement, upon the request
of the Purchaser or the Company, the Company and the Purchaser shall execute and
deliver such instruments, documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of the Transaction Documents and the Shares.
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed as of the date first above written.
Universal Media Holdings, Inc.
BY:
Shareholders of Humana Trans Services Group, Ltd.
______________________________ ______________________________
James W. Zimbler Andrew J. Schenker
______________________________ ______________________________
Steve A. Horowitz Kevin Whitmore
______________________________ ______________________________
Andrew Mazzone Michael S. Krome
_______________________________ _______________________________
Lee Rubinstein Chris Hascom-Bolton
Riggs & Associates
By: ___________________________
________________________________ _________________________________
Robert M. Brown Bradley T.J. Mette, Jr.
________________________________ _________________________________
Jimmy M. Rogers Pauline W. Trinka
EXHIBIT A
Shareholders of Human Trans Services Group, Ltd., as of October 22, 2002.
NAME NUMBER OF SHARES
- ----------------------- -------------------------
James W. Zimbler 2,000,000
Steve Horowitz 1,715,445
Andrew Mazzone 100,000
Kevin Whitmore 100,000
Andrew Schenker 150,000
Lee Rubinstein 250,000
Michael Krome 100,000
Riggs & Company 50,000
Chris Hascom-Bolton 50,000
Robert M. Brown 15,000
Bradley T.J. Mette, Jr. 4,000
Jimmy M, Rogers 5,000
Pauline W. Trnka 5,000
Total Shares 4,544,445
-----------
EXHIBIT B
FINANCIAL STATEMENT AS OF
DECEMBER 31, 2001
Exhibit 17
October 15, 2002
To The Board of Directors
Universal Media Holdings
150 Broadhollow Road
Melville, New York 11747
Dear Sirs:
Please be advised that I hereby resign as Chairman of the Board, President
and Chief Executive Officer of Universal Media Holdings, Inc., but I will remain
as a Director effective upon the execution of the Purchase Agreement between
Universal Media Holdings and CDKnet.
Very truly yours,
James W. Zimbler