AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG
SECURITIES RESOLUTION ADVISORS, INC., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇
AND ▇▇▇▇▇▇ ▇▇▇▇▇▇
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is entered into
this 31st of January, 1999, by and among SECURITIES RESOLUTION ADVISORS, INC., a
Delaware corporation (hereinafter referred to as "Buyer"); and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇ (hereinafter collectively
referred to as "Seller"), being all of the shareholders of INTERNET AUCTION,
INC., a Massachusetts corporation (hereafter referred to as "Company").
WHEREAS, Seller is the owner of record and beneficially owns Forty
Thousand (40,000) shares of the issued and outstanding shares of Common Stock of
the Company (the "Shares"); and
WHEREAS, the Shares represent 100% of all the issued and outstanding
shares of the Company; and
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer
desires to purchase the Shares, upon the terms and conditions set forth herein;
WHEREAS, the parties intend that the exchange of Shares for shares of
Buyer's common stock, as contemplated herein, qualify as a tax free transaction
under Section 368 of the Internal Revenue Code;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1.1 Sale and Purchase. Subject to the terms and conditions hereof at
the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Shares listed in Exhibit "A", attached hereto, which together constitute
100% of the issued and outstanding Shares of Common Stock of the Company.
1.2 Closing. The purchase shall be consummated at a closing ("Closing")
to take place at 10:00 o'clock a.m., at the offices of Buyer's counsel on
February 25, 1999 ("Closing Date").
1.3 Purchase Price. The aggregate purchase price ("Purchase Price") for
the Shares shall be Thirty-Seven Million Three Hundred Sixty-Eight Thousand Nine
Hundred Twelve (37,368,912) shares of common stock of the Buyer ("Buyer Shares")
which shall represent 80% of the issued and outstanding stock of the Buyer,
calculated on a fully diluted basis. The purchase
price shall be paid at Closing by issuance and delivery of Buyer's Shares to
Seller against receipt of certificates representing the Shares, duly endorsed
for transfer to Buyer.
1.4 Allocation of Shares. All shares of stock of Buyer to be issued to
Seller pursuant to this Agreement shall be issued to the respective Sellers in
proportion to their respective ownership of stock of the Company as described in
Exhibit "A" hereto.
II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Seller. Seller represent and
warrant to Buyer as follows:
(a) Title to the Shares. At Closing, Seller shall own of record
and beneficially the number of the Shares listed in Exhibit "A", of the Company,
free and clear of all liens, encumbrances, pledges, claims, options, charges and
assessments of any nature whatsoever, with full right and lawful authority to
transfer the Shares to Buyer. No person has any preemptive rights or rights of
first refusal with respect to any of the Shares. There exists no voting
agreement, voting trust, or outstanding proxy with respect to any of the Shares.
Them are no outstanding rights, options, warrants, calls, commitments, or any
other agreements of any character, whether oral or written, with respect to the
Shares.
(b) Organization. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Massachusetts. The Company has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business. The Company
is duly qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its business
requires qualification.
(c) Authorized Capitalization. The authorized capitalization of
the Company consists of Two Hundred Thousand (200,000) shares of Common Stock,
no par value, of which Forty Thousand (40,000) shares have been issued and are
outstanding. The Shares have been duly authorized, validly issued, are fully
paid and nonassessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by the Company in
compliance with all applicable state and federal laws. The Company does not have
any outstanding rights, options, warrants, calls, commitments, conversion or any
other agreements of any character, whether oral or written, obligating it to
issue any shares of its capital stock, whether authorized or not. The Company is
not a party to and are not bound by any agreement, contract~ arrangement or
understanding, whether oral or written, giving any person or entity any interest
in, or any right to share, participate in or receive any portion of, the
Company's income, profits or assets, or obligating the Company to distribute any
portion of its income, profits or assets.
(d) Authority. Seller has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform the
Transactions contemplated thereby. The Basic Agreements constitute (or shall,
upon execution, constitute) valid and legally
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binding obligations upon Seller, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by Seller, nor the
consummation and performance of the Transactions contemplated thereby, conflicts
with, requires the consent, waiver or approval of, results in a breach of or
default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by which
Seller or the Company is a party or by which Seller or the Company or any of
their respective properties or assets are bound or affected.
(e) Company Financial Statements. The Company Financial Statements
are complete in all material respects, were prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
prior periods and fairly present the financial position of the Company as of
November 30,1998.
(f) No Undisclosed Liabilities. Except as set forth in the Company
Financial Statements previously delivered to Buyer and as set forth on Exhibit
"B", Seller is not aware of any liabilities for which the Company is liable or
will become liable in the future.
(g) Taxes. The Company has filed all federal, state, local tax and
other returns and reports which were required to be filed with respect to all
taxes, levies, imposts, duties, licenses and registration fees, charges or
withholdings of every nature whatsoever ("Taxes"), and their exists a
substantial basis in law and fact for all positions taken in such reports. No
waivers of periods of limitation are in effect with respect to any taxes arising
from and attributable to the ownership of properties or operations of the
business of the Company.
(h) Properties The Company has good and marketable title to all
its personal property, equipment, processes, patents, copyrights, trademarks,
franchises, licenses and other properties and assets (except for items leased or
licensed to the Company), including all property reflected in the Company
Financial Statements (except for assets reflected therein which have been sold
in the normal course of its business where the proceeds from such sale or other
disposition have been properly accounted for in the financial statements of the
Company), in each case free and clear of all liens, claims and encumbrances of
every kind and character, except as set forth in Exhibit "C". The Company has no
ownership interest in any real property. The assets and properties owned,
operated or leased by the Company and used in its business are in good operating
condition in all material respects, reasonable wear and tear excepted, and
suitable for the uses for which intended.
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(i) Books and Record. The books and records of the Company are
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all material
respects the business, financial condition and results of operations of the
Company as set forth in the Company Financial Statements.
(j) Insurance. Exhibit "D" contains an accurate and complete list
and brief description of all performance bonds and policies of insurance,
including fire and extended coverage, general liability, workers compensation,
products liability, property, and other forms of insurance or indemnity bonds
held by the Company. To the Seller's knowledge and belief, the Company is not in
default with respect to any provisions of any such policy or indemnity bond and
has not failed to give any notice or present any claim thereunder in due and
timely fashion. All policies of insurance and bonds are: (1) in full force and
effect; (2) are sufficient for compliance by the Company with all requirements
of law and of all agreements and instruments to which the Company is a party-,
(3) are valid, outstanding and enforceable; (4) provide adequate insurance
coverage for the assets, business and operations of the Company in amounts at
least equal to customary coverage in the Company's industry, (5) will remain in
full force and effect through the Closing; and (6) will not be affected by, and
will not terminate or lapse by reason of~ the transactions contemplated by this
Agreement.
(k) Material Contracts. Except as set forth in Exhibit "E", the
Company has no purchase, sale, commitment, or other contract, the breach or
termination of which would have a materially adverse effect on the business,
financial condition, results of operations, assets, liabilities, or prospects of
the Company.
(l) Authorizations. The Company has no licenses, permits,
approvals and other authorizations from any governmental agencies and any other
entities that are necessary for the conduct of its business, except as set forth
in Exhibit "F" which contains a list of all licenses, permits, approvals, and
other authorizations, as well as a list of all copyrights, patents, trademarks,
tradenames, servicemarks, franchises, licenses and other permits, each of which
is valid and in full force and effect.
(m) No Powers of Attorney. The Company has no powers of attorney
or similar authorizations outstanding.
(n) Compliance with Laws. To Seller's knowledge and belief, the
Company is not in violation of any federal, state, local or other law,
ordinance, rule or regulation applicable to its business, and have not received
any actual or threatened complaint, citation or notice of violation or
investigation from any governmental authority.
(o) Compliance with Environmental Laws. To Seller's knowledge and
belief, the Company is in compliance with all applicable pollution control and
environmental laws, rules and regulations. The Company has no environmental
licenses, permits and other authorizations held by the Company relative to
compliance with environmental laws, rules and regulations.
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(p) No Litigation. To Seller's knowledge and belief, there are no
material actions, suits, claims, complaints or proceedings pending or threatened
against the Company, at law or in equity, or before or by any governmental
department, commission, court, board, bureau, agency or instrumentality; and
there are no facts which would provide a valid basis for any such action, suit
or proceeding. There are no orders, judgments or decrees of any governmental
authority outstanding which specifically apply to the Company or any of its
assets.
(q) Validity. To Seller's knowledge and belief, all contracts,
agreements, leases and licenses to which the Company is a party or by which it
or any of its properties or assets are bound or affected, are valid and in full
force and effect; and no breach or default exists, or upon the giving of notice
or lapse of time, or both, would exist, on the part of the Company or by any
other party thereto.
(r) No Adverse Changes. To Seller's knowledge and belief, since
November 30, 1998, there have been no actual or threatened developments of a
nature that is materially adverse to or involves any materially adverse effect
upon the business, financial condition, results of operations, assets,
liabilities, or prospects of the Company.
(s) Fees. All negotiations relating to this Agreement and the
Transactions have been conducted by the Seller in such a manner as not to give
rise to any valid claim for any finder's fees, brokerage commission, financial
advisory fee or related expense or other like payment for which the Company or
Buyer are or may be liable.
(t) Full Disclosure. All statements of Seller contained in this
Agreement and in any other written documents delivered by or on behalf of the
Company or Seller to buyer are true and correct in all material respects and do
not omit any material fact necessary to make the statements contained and
described or referenced herein not misleading in light of the circumstances
under which they were made. There are no facts known to Seller which could have
a materially adversely affect upon the business, financial condition, results of
operations, assets, liabilities, or prospects of the Company, which have not
been disclosed to Buyer in this Agreement.
2.2 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) Organization. The Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of Delaware.
The Buyer has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. The Buyer is duly qualified
and in good standing as a foreign corporation in each jurisdiction where its
ownership of property or operation of its business requires qualification.
(b) Authorized Capitalization. The authorization capitalization of
the Buyer at Closing will consist of One Hundred Million (100,000,000) shares of
Common Stock, $.001 par value, of which Nineteen Million Five Hundred Forty-Two
Thousand Two Hundred Twenty- Eight (19,542,228) shares have bene issued and are
outstanding. All shares have been duly authorized, validly issued, are fully
paid and nonassessable with no personal liability attaching
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to the ownership thereof and were offered, issued, sold and delivered by the
Buyer in compliance with all applicable state and federal laws. The Buyer does
not have any outstanding rights, options, warrants, calls, commitments,
conversion or any other agreements of any character, whether oral or written,
obligating it to issue any shares of its capital stock, whether authorized or
not (whether such obligation is contingent or otherwise). Buyer is not a party
to and is not bound by any agreement, contract, arrangement or understanding,
whether oral or written, giving any person or entity any interest in, or any
right to share, participate in or receive any portion of, the Buyer's income,
profits or assets, or obligating the Buyer to distribute any portion of its
income, profits or assets.
(c) Authority. Buyer has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform the
Transactions contemplated thereby. The Basic Agreements constitute (or shall,
upon execution, constitute) valid and legally binding obligations upon Buyer,
enforceable in accordance with their terms. Neither the execution and delivery
of the Basic Agreements by Buyer, nor the consummation and performance of the
Transactions contemplated thereby, conflicts with, requires the consent, waiver
or approval of, results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or with
respect to, any agreement by which Buyer is a party or by which Buyer or any of
its respective properties or assets are bound or affected.
(d) Buyer's Financial Statements. The Buyer's Financial Statements
are complete, were prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior periods and fairly present
the financial position of the Buyer as of September 30, 1998.
(e) No Undisclosed Liabilities. Except as set forth in the Buyer's
Financial Statements previously delivered to Seller and as set forth on Exhibit
"G", Buyer is not aware of any material liabilities for which the Buyer is
liable or will become liable in the future.
(f) Taxes. Except as set forth in Exhibit "H", the Buyer has filed
all federal, state, local tax and other returns and reports which were required
to be filed with respect to all taxes, levies, imposts, duties, licenses and
registration fees, charges or withholdings of every nature whatsoever ("Taxes"),
and their exists a substantial basis in law and fact for all positions taken in
such reports. No waivers of periods of limitation are in effect with respect to
any b= arising from and attributable to the ownership of properties or
operations of the business of the Company.
(g) Properties. The Buyer has good and marketable title to all its
personal property, equipment, processes, patents, copyrights, trademarks,
franchises, licenses and other properties and assets (except for items leased or
licensed to the Buyer), including all property reflected in the Buyer's
Financial Statements (except for assets reflected therein which have been sold
in the normal course of its business where the proceeds from such sale or other
disposition
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have been properly accounted for in the financial statements of the Buyer), in
each case free and clear of all liens, claims and encumbrances of every kind and
character, except as set forth in Exhibit "I". The Buyer has no ownership
interest in any real property. The assets and properties owned, operated or
leased by the Buyer and used in its business are in good operating condition,
reasonable wear and tear excepted, and suitable for the uses for which intended.
(h) Books and Records. The books and records of the Buyer are
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all material
respects the business, financial condition and results of operations of the
Buyer as set forth in the Buyer's Financial Statements.
(i) Insurance. Exhibit "J" contains an accurate and complete list
and brief description of all performance bonds and policies of insurance,
including fire and extended coverage, general liability, workers compensation,
products liability, property, and other forms of insurance or indemnity bonds
held by the Buyer. The Buyer is not in default with respect to any provisions of
any such policy or indemnity bond and has not failed to give any notice or
present any claim thereunder in due and timely fashion. All policies of
insurance and bonds are: (1) in M force and effect; (2) am sufficient for
compliance by the Buyer with all requirements of law and of all agreements and
instruments to which the Buyer is a party-, (3) are valid, outstanding and
enforceable; (4) provide adequate insurance coverage for the assets, business
and operations of the Buyer in amounts at least equal to customary coverage in
the Buyer's industry;, (5) will remain in full force and effect through the
Closing; and (6) will not be affected by, and will not terminate or lapse by
reason of, the transactions contemplated by this Agreement.
(j) Transactions with Certain Persons. Except as disclosed in
Exhibit "K", the Buyer has no outstanding agreement, understanding, contract,
lease, commitment, loan or other arrangement with any officer, director or
shareholder of the Buyer or any Affiliate (as defined herein) of any such
person. For purposes of this Agreement~ the term "Affiliate' shall be defined as
follows: An Affiliate of a specified Person is (i) any Person that directly or
indirectly through one or more intermediaries controls or is controlled by or is
under common control with such specified person, (ii) any Person which is an
officer, director, partner or trustee o~ or serves in a similar capacity with
respect to, such specified Person, (iii) any Person which is directly or
indirectly the owner of more than ten percent (10%) of any class of equity
securities of such specified Person and (iv) the parents, siblings, children or
spouse of such specified Person. Additionally, for
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purposes of this Agreement, the term 'Person" shall mean: Any individual,
corporation, business trust, estate, trust, partnership, limited partnership,
association, joint venture, limited liability company, governmental subdivision,
agency or instrumentality or any other legal or commercial entity."
(k) Material Contracts. The Buyer has no purchase, sale,
commitment, or other contract, the breach or termination of which would have a
materially adverse effect on the business, financial condition, results of
operations, assets, liabilities, or prospects of the Buyer.
(l) Authorizations. The Buyer has no licenses, permits, approvals
and other authorizations from any governmental agencies and any other entities
that are necessary for the conduct of its business, except as set forth in
Exhibit "L" which contains a list of all licenses, permits, approvals, and other
authorizations, as well as a list of all copyrights, patents, trademarks,
tradenames, servicemarks, franchises, licenses and other permits, each of which
is valid and in full force and effect.
(m) No Powers of Attorney. The Buyer has no powers of attorney or
similar authorizations outstanding.
(n) Compliance with Laws. The Buyer is not in violation of any
federal, state, local or other law, ordinance, rule or regulation applicable to
its business, and have not received any actual or threatened complaint, citation
or notice of violation or investigation from any governmental authority.
(o) Compliance with Environmental Laws. The Buyer is in compliance
with all applicable pollution control and environmental laws, rules and
regulations. The Buyer has no environmental licenses, permits and other
authorizations held by the Buyer relative to compliance with environmental laws,
rules and regulations.
(p) Litigation. Except as disclosed in Exhibit "W, there are no
material actions, suits, claims, complaints or proceedings pending or threatened
against the Buyer, at law or in equity, or before or by any governmental
department, commission, court, board, bureau, agency or instrumentality- and
there are no facts which would provide a valid basis for any such action, suit
or proceeding. There are no orders, judgments or decrees of any governmental
authority outstanding which specifically apply to the Company or any of its
assets.
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(q) Validity. All contracts, agreements, leases and licenses to
which the Buyer is a party or by which it or any of its properties or assets are
bound or affected, are valid and in full force and effect; and no breach or
default exists, or upon the giving of notice or lapse of time, or both, would
exist, on the part of the Buyer or by any other party thereto.
(r) No Adverse Changes. Since September 30, 1998, there have been
no actual or threatened developments of a nature that is materially adverse to
or involves any materially adverse effect upon the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Buyer.
(s) Full Disclosure. All statements of Buyer contained*in the
Basic Agreements and in any other written documents delivered by or on behalf of
the Buyer to Seller are true and correct in all material respects and do not
omit any material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made. There are
no facts known to Buyer which could have a materially adversely affect upon the
business, financial condition, results of operations, assets, liabilities, or
prospects of the Buyer, which have not been disclosed to Buyer in the Basic
Agreements.
III.
COVENANTS
3.1 Covenants of Seller. Seller covenants and agrees that from the date
hereof to the Closing without the prior written consent of Buyer:
(a) Ordinary Course of Business. Seller will operate the business
of the Company only in the ordinary course and will use their best efforts to
preserve the Company's business, organization, goodwill and relationships with
persons having business dealings with them.
(b) Maintain Properties. Seller will maintain all of the Company's
properties in good working order, repair and condition (reasonable wear and use
excepted) and cause the Company to take all steps reasonably necessary to
maintain in full force and effect its patents, trademarks, servicemarks, trade
names, brand names, copyrights and other intangible assets.
(c) Compensation. Seller will not permit the Company to (1) enter
into or alter any employment agreements; (2) grant any increase in compensation
other than normal merit increases consistent with the Company's general
prevailing practices to any officer or employee; or (3) enter into or alter any
labor or collective bargaining agreement or any bonus or other employee fringe
benefit.
(d) No Indebtedness. Seller will not permit the Company to create,
incur, assume, guarantee or otherwise become liable with respect to any
obligation for borrowed money, indebtedness, capitalized lease
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or similar obligation, except in the ordinary course of business consistent with
past practices where the entire net proceeds thereof are deposited with and used
by and in connection with the business of the Company.
(e) Maintain Books. Seller will cause the Company to maintain its
books, accounts and records in the usual, regular ordinary and sound business
manner and in accordance with generally accepted accounting principles applied
on a basis consistent with past practices.
(f) No Amendments. Seller will not permit the Company to amend its
corporate charter or bylaws (or similar documents) without prior consent of
Buyer and will cause the Company to maintain their corporate existence,
licenses, permits, powers and rights in full force and effect.
(g) Taxes and Accounting Matters. Seller will cause the Company to
file when due all federal, state and local tax returns and reports which shall
be accurate and complete, including but not limited to income, franchise,
excise, ad valorem, and other taxes with respect to its business and properties,
and to pay as they become due all taxes or assessments, except for taxes for
which adequate reserves are established and which are being contested in good
faith by appropriate proceedings. Seller will not permit the Company to change
their accounting methods or practices or any depreciation, amortization or
inventory valuation policies or practices.
(h) No Disposition or Encumbrance. Except in the ordinary course
of business consistent with past practice, Seller will not permit the Company to
(1) dispose of or encumber any of its properties and assets, (2) discharge or
satisfy any lien or encumbrance or pay any obligation or liability (fixed or
contingent) except for previously scheduled repayment of debt, (3) cancel or
compromise any debt or claim, (4) transfer or grant any rights under any
concessions, leases, licenses, agreements, patents, inventions, proprietary
technology or process, trademarks, servicemarks or copyrights, or with respect
to any know-how, or (5) enter into or modify in any material respect or
terminate any existing license, lease, or contract.
(i) Insurance. Seller will cause the Company to maintain in effect
all its current insurance policies.
(j) No Securities Issuances. Seller will not permit the Company to
issue any shares of any class of capital stock, or enter into any contract,
option, wan-ant or right calling for the issuance of any such shares of capital
stock, or create or issue any securities convertible into any securities of the
Company except for the transactions contemplated herein.
(k) No Dividends. Seller will not permit the Company to declare,
set aside or pay any dividends or other distributions of any nature whatsoever.
(l) Contracts. Seller will not permit the Company to enter into or
assume any contract, agreement, obligation, lease, license, or commitment except
in the ordinary course of business consistent with past practice or as
contemplated by this Agreement.
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(m) No Breach. Seller will not permit the Company to do any act or
omit to do any act which would cause a breach of any contract, commitment or
obligation of the Company.
(n) Due Compliance. Seller will cause the Company to comply with
all laws, regulations, rules and ordinances applicable to it and to the conduct
of its business.
(o) No Waivers of Rights. Seller will not permit the Company to
amend, terminate or waive any material right whether or not in the ordinary
course of business.
(p) Capital Commitments. Seller will not permit the Company to
make or commit to make any capital expenditure, capital addition or capital
improvement.
(q) No Related Party Transactions. Seller will not permit the
Company to make any loans to, or enter into any transaction, agreement,
arrangement or understanding or any other nature with, any officer, director or
employee of the Company.
(r) Notice of Change. Seller will promptly advise Buyer in writing
of any material adverse change, or the occurrence of any event which involves
any substantial possibility of a material adverse change, in the business,
financial condition, results of operations, assets, liabilities or prospects of
the Company.
(s) Consents. Seller will use their, and will cause the Company to
use its, best good faith efforts to obtain the consent or approval of each
person or entity whose consent or approval is required for the consummation of
the Transactions contemplated hereby and to do all things necessary to
consummate the Transactions contemplated by the Basic Agreements.
3.2 Covenants of Buyer. Buyer covenants and agrees that from the date
hereof to the Closing without the prior written consent of Seller:
(a) Ordinary Course of Business. Buyer will operate the business
in the ordinary course and will use their best efforts to preserve the Company's
business, organization, goodwill and relationships with persons having business
dealings with them.
(b) Maintain Properties. Buyer will maintain all of its properties
in good working order, repair and condition (reasonable wear and use excepted)
and cause all steps reasonably necessary to maintain in full force and effect
its patents, trademarks, servicemarks, trade names, brand names, copyrights and
other intangible assets.
(c) Compensation. Buyer will not (1) enter into or alter any
employment agreements; (2) grant any increase in compensation other than normal
merit increases consistent with the Company's general prevailing practices to
any officer or employee; or (3) enter into or alter any labor or collective
bargaining agreement or any bonus or other employee fringe benefit.
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(d) No Indebtedness. Buyer will not create, incur, assume,
guarantee or otherwise become liable with respect to any obligation for borrowed
money, indebtedness, capitalized lease or similar obligation, except in the
ordinary course of business consistent with past practices where the entire net
proceeds thereof are deposited with and used by and in connection with the
business of the Company.
(e) Maintain Books. Buyer will maintain its books, accounts and
records in the usual, regular ordinary and sound business manner and in
accordance with generally accepted accounting principles applied on a basis
consistent with past practices.
(f) No Amendments. Buyer will not amend its corporate charter or
bylaws (or similar documents) without prior consent of Seller and will cause the
Company to maintain its corporate existence, licenses, permits, powers and
rights in full force and effect.
(g) Taxes and Accounting Matters. Buyer will file when due all
federal, state and local tax returns and reports which shall be accurate and
complete, including but not limited to income, franchise, excise, ad valorem,
and other taxes with respect to its business and properties, and to pay as they
become due all taxes or assessments, except for taxes for which adequate
reserves are established and which are being contested in good faith by
appropriate proceedings. Buyer will not permit the Company to change their
accounting methods or practices or any depreciation, amortization or inventory
valuation policies or practices.
(h) No Disposition or Encumbrance. Except in die ordinary course
of business consistent with past practice, Buyer will not (1) dispose of or
encumber any Of its properties and assets, (2) discharge or satisfy any lien or
encumbrance or pay any obligation or liability (fixed or contingent) except for
previously scheduled repayment of debt, (3) cancel or compromise any debt or
claim, (4) transfer or grant any rights under any concessions, leases, licenses,
agreements, patents, inventions, proprietary technology or process, trademarks,
servicemarks or copyrights, or with respect to any know-how, or (5) enter into
or modify in any material respect or terminate any existing license, lease, or
contract.
(i) Insurance. Buyer will maintain in effect all its current
insurance policies.
(j) No Securities Issuances. Buyer will not issue any shares of
any class of capital stock, or enter into any contract, option, warrant or right
calling for the issuance of any such shares of capital stock, or create or issue
any securities convertible into any securities of the Buyer except for the
transactions contemplated herein.
(k) No Dividends. Buyer will not declare, set aside or pay any
dividends or other distributions of any nature whatsoever.
(l) Contracts. Buyer will not enter into or assume any contract,
agreement, obligation, lease, license, or commitment except in the ordinary
course of business consistent with past practice or as contemplated by this
Agreement.
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(m) No Breach. Buyer will not do any act or omit to do any act
which would cause a breach of any contract, commitment or obligation.
(n) Due Compliance. Buyer will comply with all laws, regulations,
rules and ordinances applicable to it and to the conduct of its business.
(o) No Waivers of Rights. Buyer will not amend, terminate or waive
any material right whether or not in the ordinary course of business.
(p) Capital Commitments. Buyer will not make or commit to make any
capital expenditure, capital addition or capital improvement.
(q) No Related Party Transactions. Buyer will not make any loans
to, or enter into any transaction, agreement, arrangement or understanding or
any other nature with, any officer, director or employee of the Buyer.
(r) Notice of Change. Buyer will promptly advise Seller in writing
of any material adverse change, or the occurrence of any event which involves
any substantial possibility of a material adverse change, in the business,
financial condition, results of operations, assets, liabilities or prospects of
the Buyer.
(s) Consents. Buyer will use its best good &M efforts to obtain
the consent or approval of each person or entity whose consent or approval is
required for the consummation of the Transactions contemplated hereby and to do
all things necessary to consummate the Transactions contemplated by the Basic
Agreements.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby
is subject to the fulfillment by Seller prior to Closing of each of the
following conditions, which may be waived in whole or in part by Buyer:
4.1 Compliance with Representations, Warranties and Covenant. The
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Seller shall have
performed all agreements, covenants and conditions required to be performed by
Seller prior to the Closing.
4.2 No Adverse Change. There shall have been no event which has had or
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of the Company.
- 13 -
4.3 No Legal Proceedings. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
4.4 Documents to be Delivered by Seller. Seller shall have delivered
the following documents:
(a) Stock certificates representing all of the Shares, duly
endorsed to Buyer and in blank or accompanied by duly executed stock powers,
copies of which are attached as Exhibit "A".
(b) A copy of (i) the Certificate of Incorporation of the Company,
certified as correct by the Company, and (ii) the Bylaws of the Company
certified as correct by the Company-, and (iii) a certificate of the
Massachusetts Tax Commission, Franchise Tax Division, to the effect that the
Company is in good standing and has paid all franchise taxes in such state, all
as attached hereto as Exhibit 'N";
(c) All corporate and other records of or applicable to the
Company included but not limited to, current and up-to-date minute books, stock
transfer books and registers, books of accounts, leases and material contracts.
(d) Such other documents or certificates as shall be reasonably
required by Buyer or its counsel in order to close and consummate this
Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Seller:
5.1 Compliance with Representations, Warranties and Covenants. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
5.2 No Legal Proceedings. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3 Documents to be Delivered by Buyer.
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(a) A copy of (i) the Certificate of Incorporation of the Buyer,
certified as correct by the Buyer; and (ii) the Bylaws of the Buyer certified as
correct by the Buyer; and (iii) a certificate of the Delaware Tax Commission,
Franchise Tax Division, to the effect that the Buyer is in good standing and has
paid all franchise taxes in such state.
(b) All corporate and other records of or applicable to the Buyer
included but not limited to, current and up-to-date minute books, stock transfer
books and registers, books of accounts, leases and material contracts.
(c) Such other documents or certificates as shall be reasonably
required by Buyer or its counsel in order to close and consummate this
Agreement.
5.4 Payments. Seller shall have received from Buyer all Common Stock to
be issued at the Closing by Buyer.
5.5 No Adverse Change. There shall have been no event which has had or
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of the Buyer.
5.6 Shares Price. The average market price per share of the Common
Stock for the five trading days prior to the Closing shall be at least $0.3125
per share.
5.7 Certain Agreements. The Option Agreement with Universal Funding,
Inc. and the Lock-Up Agreement with Universal Funding, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
other persons identified by Sellers substantially in the forms attached hereto,
shall have been duly executed and delivered to Sellers.
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 Modification. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
6.2 Waivers. Buyer and Seller may in writing extend the time for or
waive compliance by the other with any of the covenants or conditions of the
other contained herein.
6.3 Termination and Abandonment. This Agreement may be terminated and
the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of Seller set
forth herein shall not be accurate, or the conditions precedent set forth in
Article IV shall have not have been satisfied, in all material respects; or
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(c) By Seller, if the representations and warranties of Buyer set
forth herein shall not be accurate, or the conditions precedent set forth in
Article V shall not have been satisfied in all material respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VII.
MISCELLANEOUS
7.1 Representations and Warranties to Survive. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall constitute
a waiver of any representation or warranty, and no such representation or
warranty shall be merged into the Closing.
7.2 Binding Effect of the Basic Agreements. The Basic Agreements and
the certificates; and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The terms
and conditions of the Basic Agreements shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successor and assigns
of the parties hereto. Nothing in the Basic Agreements, expressed or implied,
confers any rights or remedies upon any party other than the parties hereto and
their respective heirs, legal representatives and assigns.
7.3 Applicable Law. The Basic Agreements are made pursuant to, and will
be construed under, the laws of the State of New York.
7.4 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Internet Auction, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Mr. Abba ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇, Feinblatt, Rothman, Hoffberger & ▇▇▇▇▇▇▇▇▇, LLC
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Buyer, to:
Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Securities Resolution Advisors, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Mr. G. ▇▇▇▇▇ ▇▇▇▇▇▇
G. ▇▇▇▇▇ ▇▇▇▇▇▇ & Associates, P.C.
One Memorial Place
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
These addresses may be changed from time to time by written notice to the other
parties.
7.5 Headings. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed an original and all of which together will constitute
one instrument
7.7 Severability. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 Forbearance; Waiver. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
7.9 Attorneys' Fees and Expenses. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
- 17 -
7.10 Expenses. Each party shall pay all fees and expenses incurred by
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
7.11 Integration. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement on the date first written above.
"BUYER"
SECURITIES RESOLUTION ADVISORS, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
"COMPANY"
INTERNET AUCTION, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
"SELLER"
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
- 18 -
EXHIBIT "A"
40,000 Shares
- 19 -
EXHIBIT "B"
NONE
- 20 -
EXHIBIT "C"
NONE
- 21 -
EXHIBIT "D"
NONE
- 22 -
EXHIBIT "E"
NONE
- 23 -
EXHIBIT "F"
Company Logo and Software
- 24 -
EXHIBIT "G"
NONE
- 25 -
EXHIBIT "H"
TAXES
FORM TAX PERIOD ENDED
1120 December 31, 1998
- 26 -
EXHIBIT "I"
NONE
- 27 -
EXHIBIT "J"
NONE
- 28 -
EXHIBIT "K"
TRANSACTIONS WITH CERTAIN PERSONS
1. SALE OF SECURITIES RESOLUTION ADVISORS, INC., A NEW YORK CORPORATION TO
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
- 29 -
EXHIBIT "L"
NONE
- 30 -
EXHIBIT "M"
NONE
76813.636 T:2
- 31 -