Exhibit 2
FORM OF EXCHANGE AGREEMENT
EXCHANGE AGREEMENT, dated this __ day of July, 2007, among ▇▇▇▇ ▇▇▇▇▇▇,
LLC, a Delaware limited liability company ("REVERE"), those shareholders of R&R
Capital Group, Inc., a Delaware corporation ("RRCG") as are set forth on EXHIBIT
A hereto (each a "RRCG SHAREHOLDER" and collectively the "RRCG SHAREHOLDERS"),
and those holders of (a) Senior Convertible Debentures (the "DEBENTURES") issued
by ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Holding, LLC, a Delaware limited liability company
("HOLDING") and (b) warrants (the "WARRANTS") to purchase shares representing
membership interests of Holding ("HOLDING SHARES"), as are set forth on Exhibit
B hereto (each a "DEBENTUREHOLDER" and collectively the "DEBENTUREHOLDERS" and
together with Revere and the RRCG Shareholders, hereinafter individually
referred to as an "EXCHANGER" and collectively referred to as the "EXCHANGERS"),
on the one hand, and Enthrust Financial Services, Inc. a Delaware corporation
(the "COMPANY"), on the other hand.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Revere and RRCG own all of the issued and outstanding shares of
Holding; and
WHEREAS, Revere owns 6,860,000 shares of Holding (the "REVERE HOLDING
SHARES"); and
WHEREAS, RRCG owns 2,940,000 shares of Holding (the "RRCG HOLDING
SHARES") and owns 25.5% of the membership interests of RRPR, LLC (the "RRCG LLC
INTERESTS"); and
WHEREAS, each RRCG Shareholder owns that number of shares of the common
stock of RRCG (the "RRCG COMMON STOCK") as is set forth next to its name on
EXHIBIT A; and the RRCG Shareholders collectively own all of the issued and
outstanding shares of the capital stock of RRCG; and
WHEREAS, each Debentureholder owns that principal amount of Debentures
and that number of Warrants as is set forth next to its name on EXHIBIT B; and
WHEREAS, subject to the terms and conditions set forth herein, Revere
has agreed to exchange its Revere Holding Shares, each RRCG Shareholder has
agreed to exchange its shares of RRCG Common Stock and each Debentureholder has
agreed to exchange its Debentures, in each case for shares of the Company's
common stock, par value $.001 per share (the "COMPANY COMMON STOCK"); and
WHEREAS, subject to the terms and conditions set forth herein, each
Debentureholder has agreed to exchange its Warrants for (a) shares of Company
Common Stock, and (b) warrants to purchase shares of Company Common Stock, which
warrants shall be identical in all respects to the Warrants, except that the
exercise price per share of Company Common Stock shall be $7.00 ("COMPANY
WARRANTS").
NOW, THEREFORE, in consideration of the mutual premises set forth above,
the representations set forth below and other good and valuable consideration,
the parties hereto agree as follows:
1. EXCHANGE.
(a) Simultaneously herewith:
(i) Revere is transferring the Revere Holding Shares to the
Company in exchange for 12,711,683 shares of Company Common Stock;
(ii) each RRCG Shareholder is transferring its shares of RRCG
Common Stock to the Company in exchange for that number of shares of Company
Common Stock as is set forth next to its name on EXHIBIT A; and
(iii) each Debentureholder is transferring its Debentures to
the Company in exchange for that number of shares of Company Common Stock as is
set forth next to its name on Exhibit B: and
(iv) each Debentureholder is transferring its Warrants to the
Company in exchange for (A) that number of shares of Company Common
Stock and (B) that number of Company Warrants, in each case, as is set
forth next to its name on EXHIBIT B hereto.
(b) The parties intend that the transactions contemplated hereby
(collectively referred to as the "REORGANIZATION") shall occur more or less
simultaneously and shall constitute one single transaction pursuant to Section
351 of the Internal Revenue Code of 1986, as amended (the "CODE") and any
corresponding provisions under state and local laws. Each party hereto agrees to
take such action and file such forms, returns and statements as may be required
under such section and the income tax regulations promulgated thereunder.
(c) Giving effect to the transactions contemplated by this
Agreement, immediately following the Reorganization, the outstanding share
capitalization of the Company shall be as follows:
Holder Shares of Common Stock % of Shares
----------------------------- -------------------------- ---------------
Current Stockholders of the
Company 350,627 1.40%
Revere 12,711,683 50.85%
Current RRCG Shareholders 5,967,591 23.87%
Current Debenture Holders 5,970,099 23.88%
In addition there shall be outstanding (1) warrants to purchase
1,355,600 shares of Common Stock at an exercise price of $7.00 per share and (2)
options to purchase 5,405,743 shares of Common Stock at an average weighted
exercise price of $3.66 per share. No other equity securities, or rights to
acquire equity securities of the Company shall be outstanding immediately
following the Reorganization.
(d) In furtherance of the transactions set forth in Section 1(a):
2
(i) Revere is hereby delivering to the Company evidence of
ownership of the Holding Shares with transfer documentation, receipt of which is
hereby acknowledged by the Company, against delivery to Revere of a copy of
irrevocable instructions simultaneously given to Corporate Stock Transfer, Inc.
(the "Transfer Agent"), which instructions direct the Transfer Agent to issue to
Revere a certificate for 12,711,683 shares of Company Common Stock;
(ii) each RRCG Shareholder is hereby delivering to the
Company certificates (endorsed in blank) for the number of shares of RRCG Common
Stock as is set forth next to its name on EXHIBIT A, receipt of which is hereby
acknowledged by the Company, against delivery to such RRCG Shareholder of a copy
of irrevocable instructions simultaneously given to the Transfer Agent, which
instructions direct the Transfer Agent to issue to such RRCG Shareholder a
certificate for that number of shares of Company Common Stock as is set forth
next to its name on EXHIBIT A; and
(iii) each Debentureholder is hereby delivering to the
Company, Debentures (accompanied by an assignment thereof) in the principal
amount as is set forth next to its name on EXHIBIT B, receipt of which is hereby
acknowledged by the Company, against delivery to such Debentureholder of a copy
of irrevocable instructions simultaneously given to the Transfer Agent, which
instructions direct the Transfer Agent to issue to such Debentureholder a
certificate for that number of shares of Company Common Stock as is set forth
next to its name on EXHIBIT B; and
(iv) each Debentureholder is hereby delivering to the
Company, Warrants (accompanied by an assignment thereof) to purchase that number
of Holding Shares as is set forth next to its name on EXHIBIT B, receipt of
which is hereby acknowledged by the Company, against delivery to such
Debentureholder of (A) a copy of irrevocable instructions simultaneously given
to the Transfer Agent, which instructions direct the Transfer Agent to issue to
such Debentureholder a certificate for that number of shares of Company Common
Stock as is set forth next to its name on EXHIBIT B and (B) a Company Warrant to
purchase that number of shares of Company Common Stock as is set forth next to
its name on EXHIBIT B.
(e) In connection with the execution of this Agreement by each
Exchanger, the Company is delivering to each Exchanger:
(i) a copy of certificate of the Secretary of State of the
State of Delaware, dated no more than 10 days prior to the date hereof,
certifying that the Company is validly existing and in good standing under the
laws of the State of Delaware;
(ii) an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, special counsel to
the Company, addressed to each Exchanger, in substantially the form annexed
hereto as EXHIBIT C; and
(iii) a copy of irrevocable instructions simultaneously given
to the Transfer Agent, which instructions direct the Transfer Agent to issue to
such Exchanger a certificate for that number of shares of Company Common Stock
as is provided in Section 1(d)(i) hereof, or as is set forth next to its name on
EXHIBIT A, or B, as the case may be.
(f) In connection with the execution of this Agreement by the
Company, Revere and the RRCG Shareholders are delivering to the Company a
certificate of the Secretary of State of the State of Delaware, dated no more
than 10 days prior to the date hereof, certifying that Holding is validly
existing and in good standing under the laws of the State of Delaware.
3
2. REPRESENTATIONS AND WARRANTIES:
(a) Revere hereby represents and warrants to the other Exchangers
and the Company that Revere is the record and beneficial owner of the Revere
Holding Shares, free and clear of all liens, charges, pledges, security
interests, or encumbrances of any kind or nature whatsoever ("LIENS").
(b) Each RRCG Shareholder hereby represents and warrants to the
other Exchangers and the Company that such RRCG Shareholder is the record and
beneficial owner of the number of RRCG Common Stock as is set forth next to such
RRCG Shareholder's name on EXHIBIT A, free and clear of all Liens and that the
RRCG Shareholders collectively own all of the outstanding equity securities of
RRCG.
(c) Each Debentureholder hereby represents and warrants to the other
Exchangers and the Company that such Debentureholder is the record and
beneficial owner of (i) the principal amount of Debentures and (ii) the number
of Warrants, as is set for next to such Debentureholder's name on EXHIBIT B, in
each case, free and clear of all Liens.
(d) The RRCG Shareholders hereby jointly and severally represent and
warrant to the other Exchangers and the Company as follows:
(i) RRCG is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization.
(ii) RRCG is the record and beneficial owner of both the RRCG
Holding Shares and the RRCG LLC Interests, in each case free and clear of all
Liens.
(iii) Except as set forth on SCHEDULE 2(d), RRCG has no
liabilities or obligations of any kind or nature whether absolute, accrued,
contingent or otherwise.
(iv) Except as set forth on SCHEDULE 2(d), RRCG has not
conducted any active business.
4
(e) Each Exchanger hereby represents and warrants to the other
Exchangers and the Company as follows:
(i) Such Exchanger is either an individual or an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or partnership power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations hereunder. As to
Exchangers that are entities, the execution, delivery and performance by such
Exchanger of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of such
Exchanger. This Agreement has been duly executed and delivered by such
Exchanger, and constitutes the valid and legally binding obligation of such
Exchanger, enforceable against it in accordance with its terms, except: (1) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, and (2) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
(ii) Such Exchanger understands that the shares of Company
Common Stock and the Company Warrants to be received by such Exchanger
("SECURITIES") are "restricted securities" and have not been registered under
the Securities Act, of 1933, as amended (the "SECURITIES ACT") or any applicable
state securities law and that such Exchanger (1) is acquiring the Securities as
principal for its own account and not with a view to or for distributing or
reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, (2) has no present intention of
distributing any of such Securities in violation of the Securities Act or any
applicable state securities law and (3) has no arrangement or understanding with
any other persons regarding the distribution of such Securities (this
representation and warranty not limiting such Exchanger's right to sell the
Securities pursuant a registration statement covering such securities or
otherwise in compliance with applicable federal and state securities laws) in
violation of the Securities Act or any applicable state securities law. Such
Exchanger understands and agrees that the certificates representing the
Securities will bear a legend in substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE, AND ARE BEING OFFERED AND SOLD
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND SUCH LAWS. THESE SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR HYPOTHECATED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS."
(iii) Such Exchanger does not have any agreement or
understanding, directly or indirectly, with any person or entity to distribute
any of the Securities.
(iv) Such Exchanger is, either: (i) an "accredited investor"
as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the
Securities Act or (ii) a "qualified institutional buyer" as defined in Rule
144A(a) under the Securities Act. Such Exchanger is not required to
5
be registered as a broker-dealer under Section 15 of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT").
(v) Such Exchanger, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment. Such Exchanger has reviewed the disclosures set
forth in the Company Disclosure Schedules to this Agreement, and has had the
opportunity to ask questions of the Company and receive answers thereto
acceptable to it. Such Exchanger is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a
complete loss of such investment.
(vi) Each Exchanger understands that the Securities are being
offered and issued to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon, among other things, the truth and accuracy of,
and such Exchanger's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Exchanger set forth
herein in order to determine the availability of such exemptions and the
eligibility of such Exchanger to acquire the Securities.
(vii) Each Exchanger acknowledges and agrees that neither the
Company nor any Exchanger has made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in this Agreement.
(viii) No broker, finder, agent or similar intermediary has
acted on such Exchanger's behalf in connection with the transactions
contemplated by this Agreement and there are no brokerage commissions, finder's
fees or similar compensation in connection therewith based on any arrangement or
agreement made by or on its behalf.
(ix) Such Exchanger is aware of the fact that:
(1) Holding was the owner of in excess of 80% of the
outstanding shares of Company Common Stock immediately prior to the consummation
of the transactions contemplated by this Agreement.
(2) ▇▇▇▇▇▇ ▇▇▇▇▇, the sole director of the Company,
has in the past provided services to Holding for which he has been compensated
by Holding.
(3) Morse, Zelnick, Rose and Lander, LLP ("MZRL"),
legal counsel to Holding in connection with the transactions contemplated by
this Agreement, has in the past provided legal counsel to the Company, although
MZRL has not provided any legal services to the Company in connection with this
Agreement or the transactions contemplated hereby.
(x) Such Exchanger has been advised by the Company to seek
independent legal and tax advice from such counsel as such Exchanger may, in its
sole discretion, choose and such Exchanger has had the opportunity to so consult
with counsel.
(f) Revere and the RRCG Shareholders hereby, jointly and severally,
represent and warrant to the Company that, subject to the disclosures and
exceptions set forth under the
6
corresponding section of the disclosure schedules annexed hereto (the "HOLDING
DISCLOSURE SCHEDULES"), which Holding Disclosure Schedules shall be deemed a
part hereof:
(i) All of the direct and indirect subsidiaries of Holding
are set forth on SCHEDULE 2(f)(i) (individually a "SUBSIDIARY" and collectively
the "SUBSIDIARIES"). Holding owns, directly or indirectly, the percentage of the
capital stock or other equity interests of each Subsidiary as set forth on
SCHEDULE 2(f)(i) free and clear of any Liens, and all the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for
or purchase securities of such Subsidiary.
(ii) Holding and each of the Subsidiaries is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. Neither Holding nor any Subsidiary
is in violation or default of any of the provisions of its respective
certificate or articles of incorporation, or formation, bylaws, operating
agreement or other organizational or charter documents. Holding and each of the
Subsidiaries is duly qualified to conduct business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in (1) a
material adverse effect on the legality, validity or enforceability of this
Agreement, or (2) a material adverse effect on the results of operations,
assets, business, prospects or condition (financial or otherwise) of Holding and
the Subsidiaries, taken as a whole, (any of (1) or (2) a " HOLDING MATERIAL
ADVERSE EFFECT"). and, to the knowledge of Revere and the RRCG Shareholders, no
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened (a "PROCEEDING") has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.
(iii) The consummation of the transactions contemplated hereby
do not and will not: (1) conflict with or violate any provision of Holding's or
any Subsidiary's certificate or articles of incorporation or formation, bylaws,
operating agreement or other organizational or charter documents, or (2)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of Holding or any Subsidiary, or give to
others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any agreement, credit facility,
debt or other instrument (evidencing a Holding or Subsidiary debt or otherwise)
or other understanding to which Holding or any Subsidiary is a party or by which
any property or asset of Holding or any Subsidiary is bound or affected, or (3)
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which Holding or a Subsidiary is subject, or by which any property
or asset of Holding or a Subsidiary is bound or affected; except in the case of
each of clauses (2) and (3), such as could not have or reasonably be expected to
result in a Holding Material Adverse Effect.
(iv) Holding is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority ("GOVERNMENTAL ENTITY"), the NASD, or other
7
person or entity in connection with the transactions contemplated by this
Agreement except for the consent of the NASD which has been obtained prior to
the date hereof.
(v) The issued and outstanding capitalization of Holding
immediately prior to the transactions contemplated by this Agreement is as set
forth on SCHEDULE 2(f)(v). Except as set forth on SCHEDULE 2(f)(v) there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
person or entity any right to subscribe for or acquire, any shares or other
equity interests in Holding or contracts, commitments, understandings or
arrangements by which Holding or any Subsidiary is or may become bound to issue
additional shares or other equity interests. All of the outstanding shares of
Holding are validly issued, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.
(vi) The audited financial statements of Holding and its
consolidated subsidiaries for the years ended December 31, 2006 and 2005, in the
form previously delivered to the Company, have been prepared in accordance with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of Holding and its consolidated
subsidiaries, and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, as applicable, as of and for the dates
thereof and the results of operations and cash flows for the periods then ended.
The unaudited financial statements of Holding and its consolidated subsidiaries
for the period ended March 31, 2007 in the form previously delivered to the
Company do not reflect all adjustments required by GAAP. Subject to the
foregoing, the unaudited statement of income fairly presents in all material
respects the revenues of Holding and its consolidated subsidiaries during the
period presented and the unaudited balance sheet fairly presents in all material
respects the assets and liabilities of Holding and its consolidated subsidiaries
as of the balance sheet date. Since December 31, 2006, except as specifically
disclosed in SCHEDULE 2(f)(vi) (1) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Holding Material Adverse Effect, (2) neither Holding nor any of its Subsidiaries
has incurred any liabilities (contingent or otherwise) other than (A) those
incurred in the ordinary course of business consistent with past practice, (B)
those incurred in connection with the transactions contemplated by this
Agreement, and (C) liabilities not required to be reflected in Holding's
financial statements pursuant to GAAP, and (3) Holding has not altered its
method of accounting.
(vii) There is no action, suit, inquiry, notice of violation,
proceeding or investigation pending or, to the knowledge of Revere and the RRCG
Shareholders, threatened against or affecting Holding, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an "ACTION") which (1) adversely affects or challenges
the legality, validity or enforceability of this Agreement, or (2) could, if
there were an unfavorable decision, have or reasonably be expected to result in
a Holding Material Adverse Effect. Neither Holding nor any Subsidiary is, or has
been, the subject of any Action involving a claim of violation of, or liability
under, federal or state securities laws. None of Holding's or its Subsidiaries'
employees is a member of a union that relates to such employee's relationship
with Holding or its Subsidiaries, and neither Holding nor any of its
Subsidiaries is a party to a collective bargaining agreement. No executive
officer, to the knowledge of Revere and the
8
RRCG Shareholders, is in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject Holding or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. No executive officer of Holding or any of its
Subsidiaries has notified Holding or any of its Subsidiaries that such officer
intends to leave or otherwise terminate such officer's employment with Holding
or any of its Subsidiaries. Holding and its Subsidiaries are in compliance with
all United States federal, state and local, and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a
Holding Material Adverse Effect. SCHEDULE 2(f)(vii) of the Holding Disclosure
Schedules sets forth disclosures and exceptions to this SCHEDULE 2(f)(vii).
(viii) Neither Holding nor any Subsidiary: (1) is in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by Holding
or any Subsidiary), nor has Holding or any Subsidiary received notice of a claim
that it is in default under or that it is in violation of, any indenture, loan
or credit agreement or any other material agreement or instrument to which it is
a party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (2) is in violation of any order of any
court, arbitrator or governmental body, (3) is or has been, to the knowledge of
Revere and the RRCG Shareholders, in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws applicable to its business, or (4) is or
has been, to the knowledge of Revere and the RRCG Shareholders, in violation of
any rule or regulation of the NASD; except, in each case, as could not
reasonably be expected to have a Holding Material Adverse Effect.
(ix) Holding and the Subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such permits could
not have or reasonably be expected to result in a Holding Material Adverse
Effect ("MATERIAL HOLDING PERMITS"), and neither Holding nor any Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any Material Holding Permit.
(x) Holding and each of its Subsidiaries has (1) timely
filed all Tax Returns (as defined below) that are required to have been filed by
them with all appropriate Taxing Authorities (as defined below), and all such
returns are true and correct in all material respects, and (2) timely paid all
Taxes (as defined below) shown as owing on such Tax Returns or assessed by any
Taxing Authority (other than Taxes the validity of which are being contested in
good faith by appropriate proceedings). The Tax Returns of Holding and its
Subsidiaries have not been reviewed or audited by any Taxing Authority and no
deficiencies for any Taxes have been proposed, asserted or assessed either
orally or in writing against Holding or its Subsidiaries that are not adequately
reserved for in accordance with GAAP. Holding and its Subsidiaries have complied
in all material respects with all applicable laws relating to the payment and
withholding of Taxes (including, without limitation, withholding of Taxes
pursuant to Sections 1441, 1442, 3121, 3402 and 3406 of the Code or any
comparable provision of any state, local or foreign laws) and has, within the
time and in the manner prescribed by applicable law, withheld from and paid over
to the proper Taxing Authorities all amounts required to be so withheld and paid
over under applicable laws.
9
(xi) Since December 31, 2006, the business of Holding and its
Subsidiaries has been conducted in the ordinary course consistent with past
practice and there has not been, to the knowledge of Revere and the RRCG
Shareholders, any event, violation or other matter that could, individually or
in the aggregate, reasonably be expected to have a Holding Material Adverse
Effect.
(xii) Neither Holding, nor any person or entity controlling
Holding, is an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(xiii) Except for registration rights granted herein and to the
Debentureholders, Holding has not granted any registration rights with respect
to its securities.
(xiv) None of the representations and warranties made by
Revere and the RRCG Shareholders in this Section 2(f) contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading.
(g) The Company hereby represents and warrants to the Exchangers
that, subject to the disclosures and exceptions set forth under the
corresponding section of the disclosure schedules annexed hereto (the "COMPANY
DISCLOSURE SCHEDULES"), which Company Disclosure Schedules shall be deemed a
part hereof:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation; has the corporate power and authority to own, lease and operate
its assets and property and to carry on its business as now being conducted; and
is duly qualified to do business and in good standing as a foreign corporation
in each jurisdiction in which the failure to be so qualified would have a
material adverse effect on the condition (financial or otherwise), business,
assets or results of operations of the Company or on the ability of the Company
to consummate the transactions contemplated by this Agreement (a "COMPANY
MATERIAL ADVERSE EFFECT"); it being understood, however, that Company's
continuing incurrence of losses, as long as such losses are in the ordinary
course of business shall not, alone, be deemed to be a Company Material Adverse
Effect.
(ii) The Company has no subsidiaries.
(iii) The Certificate of Incorporation and Bylaws of the
Company as included in the Company's Current Report on form 8-K dated January
22, 2007 as Exhibit 3.1 and 3.2 are true and correct copies thereof. The Company
is not in violation of any of the provisions of its Certificate of Incorporation
or Bylaws or equivalent governing instruments.
(iv) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, $.001 par value, of which there are
1,764,913 shares issued and outstanding as of the date hereof and 1,000,000
shares of Preferred Stock, $.001 par value, of which there were no shares issued
and outstanding as of the date hereof. All outstanding shares of the Company are
duly authorized, validly issued, fully paid and nonassessable, were issued in
compliance with applicable securities laws and are not subject to preemptive
rights created by statute, or any agreement to which the Company is a party or
by which it is bound. As of the date hereof, the Company did not have any
options or warrants to purchase common stock outstanding.
10
(v) There are no securities exchangeable or convertible into
any equity securities of the Company. There are no options, warrants, equity
securities, partnership interests or similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any character to
which the Company is a party or by which it is bound obligating the Company to
issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase,
redeem or otherwise acquire, or cause the repurchase, redemption or acquisition,
of any shares of capital stock of the Company or obligating the Company to
grant, extend, accelerate the vesting of or enter into any such option, warrant,
equity security, partnership interest or similar ownership interest, call,
right, commitment or agreement. There are no registration rights and there are
no voting trusts, proxies or other agreements or understandings with respect to
any equity security of any class of the Company.
(vi) The Company has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company. This Agreement has
been duly executed and delivered by the Company and, constitutes the valid and
legally binding obligation of the Company, enforceable in accordance with its
terms, except: (1) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (2) as limited
by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies and (3) insofar as indemnification and contribution
provisions may be limited by applicable law. The execution and delivery of this
Agreement by the Company, does not, and the performance of this Agreement by the
Company, will not (1) conflict with or violate the Certificate of Incorporation
or Bylaws of the Company, (collectively, the "COMPANY CHARTER DOCUMENTS"), (2)
subject to compliance with the requirements set forth in Section 2 (g) (vii)
below, conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company, or by which its properties is bound or
affected or (3) result in any breach of, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair any of, the Company's rights or alter the rights or obligations of any
third party under, or to the Company's knowledge, give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company, pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company is a
party or by which the Company, or any of its properties are bound or affected.
(vii) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity, or other
person or entity, is required by or with respect to the Company in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (1) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal and state securities laws (including under
Regulation D) and (2) such other consents, authorizations, filings, approvals
and registrations which, if not obtained or made, individually or in the
aggregate, would not be reasonably likely to have a Company Material Adverse
Effect.
(viii) The Company has filed all forms, reports and documents
required to be filed with the Securities and Exchange Commission (the "SEC").
All such required forms, reports and documents (including the financial
statements, exhibits and schedules thereto) are
11
collectively referred to herein as the "COMPANY SEC REPORTS" and the Company has
provided or made available to each Exchanger copies thereof and of all
correspondence to or from the SEC with respect to the Company. As of their
respective dates, the Company SEC Reports (1) were prepared in accordance with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable to such Company
SEC Reports, and (2) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(ix) Each of the financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports (the
"COMPANY FINANCIALS"), as of their respective dates, (1) complied as to form in
all material respects with the published rules and regulations of the SEC with
respect thereto, (2) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited interim financial statements, as
may be permitted by the SEC on Form 10-QSB under the Exchange Act) and (3)
fairly present in all material respects the financial position of the Company at
the respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not, or are not expected to be, material in amount. The
balance sheet of the Company as of March 31, 2007 is hereinafter referred to as
the "COMPANY BALANCE SHEET." Except as disclosed in the Company Financials, the
Company does not have any liabilities (absolute, accrued, contingent or
otherwise) of a nature required to be disclosed on a balance sheet or in the
related notes to the consolidated financial statements prepared in accordance
with GAAP, except liabilities incurred since the date of the Company Balance
Sheet in the ordinary course of business consistent with past practices and
which would not reasonably be expected to have a Company Material Adverse
Effect.
(x) Except as disclosed in the Company SEC Reports filed
prior to the date hereof or as contemplated by this Agreement, since the date of
the Company Balance Sheet, the Company has conducted business only in, and has
not engaged in any material transaction other than according to, the ordinary
and usual course of such businesses and there has not been (1) any change that
individually or in the aggregate, has had or is reasonably likely to have a
Company Material Adverse Effect; (2) any material damage, destruction or other
casualty loss with respect to any material asset or property owned, leased or
otherwise used by the Company, whether or not covered by insurance; (3) any
declaration, setting aside or payment of any dividend or other distribution in
cash, stock or property in respect of the capital stock of the Company; or (4)
any change by the Company in accounting principles, practices or methods.
(xi) The Company has (1) filed all Tax Returns that are
required to have been filed by it with all appropriate Taxing Authorities, and
all such returns are true and correct in all material respects, and (2) paid all
Taxes shown as owing on such Tax Returns or assessed by any Taxing Authority
(other than Taxes the validity of which are being contested in good faith by
appropriate proceedings). The Tax Returns of the Company have not been reviewed
or audited by any Taxing Authority and no deficiencies for any Taxes have been
proposed, asserted or assessed either orally or in writing against the Company
that are not adequately reserved for in accordance with GAAP. The Company has
complied in all material respects with all applicable laws relating to the
payment and withholding of Taxes (including, without limitation, withholding of
Taxes pursuant to Sections 1441, 1442, 3121, 3402 and 3406 of the Code or any
comparable
12
provision of any state, local or foreign laws) and has, within the time and in
the manner prescribed by applicable law, withheld from and paid over to the
proper Taxing Authorities all amounts required to be so withheld and paid over
under applicable laws.
(xii) The Company has no patents, trademarks, licenses,
sublicenses, or any agreement relating to the ownership or use of any
intellectual property.
(xiii) The Company is not in conflict with, or in default or
violation of (1) any law, rule, regulation, order, judgment or decree applicable
to the Company or by which its properties are bound or affected, or (2) any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
properties is bound or affected except for those conflicts, defaults or
violations which would not be reasonably expected to have a Company Material
Adverse Effect. To the knowledge of the Company, no investigation or review by
any Governmental Entity is pending or threatened against the Company, nor has
any Governmental Entity indicated in writing an intention to conduct the same;
other than those which would not reasonably be expected to have a Company
Material Adverse Effect. There is no agreement, judgment, injunction, order or
decree binding upon the Company which has or would reasonably be expected to
have the effect of prohibiting or materially impairing any business practice of
the Company, any acquisition of material property by the Company or the conduct
of business by the Company as currently conducted.
(xiv) The Company holds all permits, licenses, variances,
exemptions, orders and approvals from Governmental Entities which are necessary
to the conduct of the business of the Company except those the absence of which
would not, individually or in the aggregate, be reasonably likely to have a
Company Material Adverse Effect, (collectively, the "COMPANY PERMITS") and the
Company is in compliance in all material respects with the terms of the Company
Permits.
(xv) There is no Action which (1) adversely affects or
challenges the legality, validity or enforceability of this Agreement, or (2)
could, if there were an unfavorable decision, have or reasonably be expected to
result in a Company Material Adverse Effect. The Company is not, or has not
been, the subject of any Action involving a claim of violation of, or liability
under, federal or state securities laws. None of the Company's employees is a
member of a union that relates to such employee's relationship with the Company,
and the Company is not a party to a collective bargaining agreement. There are
no employment agreements for executive officers or employees of the Company. No
executive officer, to the knowledge of the Company, is in violation of any
material term of any, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant, and the continued employment of each such executive
officer does not subject the Company to any liability with respect to any of the
foregoing matters. No executive officer of the Company has notified the Company
that such officer intends to leave or otherwise terminate such officer's
employment with the Company. The Company is in compliance with all United States
federal, state and local, and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(xvi) The Company has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
13
(xvii) The Company is not a party to any written or oral
agreements except that the Company has entered into retainer and engagement
agreements with its audit and legal professionals in the ordinary course of its
business.
(xviii) The shares of Company Common Stock issued by the Company
pursuant to this Agreement have been duly authorized, validly issued, and are
fully paid and nonassessable, free of all Liens and not subject to preemptive
rights and, subject to the accuracy of the representations made by each
Exchanger in Sections 2(e) (ii), 2(e) (iii) and 2(e) (iv) will be exempt from
the registration requirements of the Securities Act and applicable blue sky
laws.
(xix) None of the representations and warranties made by the
Company in this Section 2 (g) contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
(xx) The consummation of the transactions set forth in
Sections 1(a)(i), 1(a)(ii), 1(a)(iii) and 1(a)(iv) of this Agreement will
constitute an exchange described in Section 351 of the Code, and as a result,
except to the extent that the Company Warrants constitute "boot", none of the
Exchangers will recognize gain or loss by reason of such transactions. Tax
counsel to the Company has provided a legal opinion addressed to the Company,
based in part upon certain representations made to such counsel by the Company,
Revere and certain of the RRCG Shareholders and Debentureholders, with respect
to the matter covered in the preceding sentence and a copy of such opinion has
been made available to each Exchanger that has previously requested it. A copy
of such opinion will be made available to any Exchanger that requests it after
the date hereof.
3. DEFINITIONS. In addition to the terms defined elsewhere in
this Agreement the following terms shall have the meanings indicated in this
Section 3.
"TAXES" shall mean all Federal, state, local, foreign,
provincial, territorial or other taxes, imports, tariffs, fees, levies or other
similar assessments or liabilities and other charges of any kind, including
income taxes, profits taxes, franchise taxes, ad valorem taxes, excise taxes,
withholding taxes, stamp taxes or other taxes of or with respect to gross
receipts, premiums, real property, personal property, windfall profits, sales,
use, transfers, licensing, employment, social security, workers' compensation,
unemployment, payroll and franchises imposed by or under any law (meaning all
laws, statutes, ordinances and regulations of any governmental authority
including all decisions of any court having the effect of law), and any other
taxes, duties or assessments, together with all interest, penalties and
additions imposed with respect to such amounts.
"TAXING AUTHORITY" shall mean any domestic, foreign, Federal,
national, provincial, state, county or municipal or other local government or
court, any subdivision, agency, commission or authority thereof, or any
quasi-governmental body exercising tax regulatory authority.
"TAX RETURNS" shall mean any declaration, return, report,
schedule, certificate, statement or other similar document (including relating
or supporting information) required to be filed with any Taxing Authority (as
defined above), or where none is required to be filed with a Taxing Authority,
the statement or other document issued by the applicable Taxing Authority in
14
connection with any Tax, including, without limitation, any information return,
claim for refund, amended return or declaration of estimated Tax.
4. COVENANTS.
(a) The Company shall promptly make all filings required by
applicable securities laws, including, without limitation, current reports on
Form 8-K and information required by Rule 14f-1 under the Exchange Act.
(b) Each outstanding option to purchase shares of Holding (each, a
"HOLDING STOCK OPTION") under any option plan or otherwise, whether or not
vested, is hereby assumed by the Company. Each Holding Stock Option so assumed
by the Company under this Agreement will continue to have, and be subject to,
the same terms and conditions of such options immediately prior to the date
hereof (including, without limitation, any repurchase rights or vesting
provisions and provisions regarding the acceleration of vesting and
exerciseability on certain transactions), except that (i) each Holding Stock
Option will become exercisable in accordance with its terms for that number of
shares of Company Common Stock as is determined pursuant to SCHEDULE 4(b) hereof
and (ii) the exercise price per share under the Holding Stock Option for the
shares of Company Common Stock issuable upon exercise of such assumed Holding
Stock Option shall be the exercise price per share as is determined pursuant to
SCHEDULE 4(b) hereof. Except as set forth on SCHEDULE 4(b), no vesting periods
for Holding Stock Options will accelerate as a result of the transaction
contemplated hereby. All references to Holding in the Holding Stock Options
shall be deemed to refer to the Company and the Company shall assume all of
Holding's obligations with respect to the Holding Stock Options as so amended.
(c) The Board of Directors of the Company, in accordance with
applicable law and the Company Charter Documents, shall immediately take all
necessary action (which action may include the resignation of existing
directors) to cause the Board of Directors of the Company as of the close of
business on the date hereof, to appoint ▇▇▇▇▇▇ ▇▇▇▇▇ as a director of the
Company.
(d) The Board of Directors of the Company, in accordance with
applicable law and the Company Charter Documents shall immediately take all
necessary action to appoint the officers of Holding to similar offices of
Company.
(e) The Company shall include in the next registration statement
that it files with the SEC on Form S-1 or similar form after the date hereof
(the "REGISTRATION STATEMENT"), that includes the shares of Company Common Stock
that have been issued to the Debentureholders hereunder, the shares of each of
those current stockholders of the Company or their affiliates or lawful
transferees whose names are set forth on EXHIBIT D hereto (the "COMPANY
STOCKHOLDER SHARES"). If at any time following the date hereof, the Company
shall determine to prepare and file with the SEC a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities (a "SUBSEQUENT REGISTRATION
STATEMENT"), other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act), and the Shellco Stockholder Shares are not at such time covered
by an effective registration statement permitting their resale, then the Company
shall include in the Subsequent Registration Statement the Shellco Stockholder
Shares. If the Subsequent Registration Statement is being filed pursuant to a
third-party written agreement obligating the Company to file the same, the
holders of the Shellco Stockholder Shares shall be entitled to receive all
notices and documents sent by the Company to the third-party whose securities
are being registered pursuant to such Subsequent Registration Agreement.
15
5. MISCELLANEOUS.
(a) The representations and warranties made by the Company in
Section 2(g) (xx) shall survive in perpetuity. All of the other representations
and warranties of the parties set forth in this Agreement shall survive for a
period of six (6) months following the date hereof. Notwithstanding the
foregoing and anything to the contrary contained in this Agreement, except as a
result of a fraud perpetrated by such officer or director, no officer or
director of the Company, or their respective successors, shall have any
liability hereunder from and after the date hereof.
(b) The Company will promptly pay the expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated by this Agreement, including all fees and
expenses of agents, representatives, counsel, and accountants listed on SCHEDULE
5(b) hereto.
(c) All notices, consents, waivers and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by written notice to the other parties):
If to the Company:
Enthrust Financial Services, Inc.
c/o Rodman & ▇▇▇▇▇▇▇, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer.
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to Revere:
▇▇▇▇ ▇▇▇▇▇▇, LLC
c/o Rodman & ▇▇▇▇▇▇▇, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇.
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to an RRCG Shareholder:
c/o ▇▇▇▇ ▇. ▇▇▇▇▇, III
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to a Debentureholder, at the address for notice set forth in the Securities
Purchase Agreement dated March 1, 2007 between the Debentureholder and Holding.
16
In each case, with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(d) Any dispute or controversy under this Agreement shall be settled
exclusively by arbitration in the City of New York, County of New York in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.
(e) The parties agree (i) to furnish upon request to each other such
further information, (ii) to execute and deliver to each other such other
documents, and (iii) to do such other acts and things, all as any other party
may reasonably request for the purpose of carrying out the intent of this
Agreement.
(f) This Agreement supersedes all prior agreements between the
parties with respect to its subject matter and constitutes a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party against whom the enforcement of such
amendment is sought.
(g) No party may assign any of its rights under this Agreement
without the prior consent of the other parties. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.
(h) If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
(i) The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
(j) This Agreement will be governed by the laws of the State of New
York without regard to conflicts of laws principles.
(k) This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
17
SIGNATURE PAGE FOLLOWS
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
ENTHRUST FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
▇▇▇▇ ▇▇▇▇▇▇, LLC
By:
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Member
RRCG SHAREHOLDERS:
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, III
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
19
DEBENTUREHOLDERS
----------------
VISIUM BALANCED OFFSHORE FUND, LTD
BY:
-----------------------------------------
NAME:
TITLE:
VISIUM LONG BIAS FUND, LP
BY:
-----------------------------------------
NAME:
TITLE:
VISIUM LONG BIAS OFFSHORE FUND, LTD
BY:
-----------------------------------------
NAME:
TITLE:
VISIUM BALANCED FUND, LP
BY:
-----------------------------------------
NAME:
TITLE:
ATLAS MASTER FUND, LTD
BY:
-----------------------------------------
NAME:
TITLE:
--------------------------------------
▇▇▇▇▇ ▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇
SUB TRUST F/B/O ▇▇▇▇ ▇▇▇▇▇ U/A/D 11/01/01
BY:
-----------------------------------------
NAME:
TITLE:
SUB TRUST F/B/O ▇▇▇ ▇▇▇▇▇ U/A/D 11/01/01
BY:
-----------------------------------------
NAME:
TITLE:
20
SUN TRUST F/B/O ▇▇▇▇▇ ▇▇▇▇▇ U/A/D 11/01/01
BY:
-----------------------------------------
NAME:
TITLE:
SUB TRUST F/B/O ▇▇▇▇▇ ▇▇▇▇▇ U/A/D 11/01/01
BY:
-----------------------------------------
NAME:
TITLE:
SUB TRUST F/B/O ▇▇▇▇▇▇ ▇▇▇▇▇, U/A/D 11/01/01
BY:
-----------------------------------------
NAME:
TITLE:
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇ GOROVICI
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EUROPA INTERNATIONAL, INC.
BY:
-----------------------------------------
NAME:
TITLE:
▇▇▇▇▇ CAPITAL FUND II MASTER FUND, LTD
BY:
-----------------------------------------
NAME:
TITLE:
21
BRISTOL INVESTMENT FUND, LTD.
BY:
-----------------------------------------
NAME:
TITLE:
TAJ VENTURES LLC
BY:
-----------------------------------------
NAME:
TITLE:
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ MANA
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
FCC CUST. FBO ▇▇▇ ▇▇▇▇▇ ▇▇▇ # 4701-7196
BY:
-----------------------------------------
NAME:
TITLE:
CRANSHIRE CAPITAL, LP
BY:
-----------------------------------------
NAME:
TITLE:
BB PRIVATE EQUITY N.V.
BY:
-----------------------------------------
NAME:
TITLE:
CAPE CAPITAL INVESTMENT MANAGEMENT LTD.
BY:
-----------------------------------------
NAME:
TITLE:
22
CAPE CAPITAL INVESTMENT MANAGEMENT LTD.
BY:
-----------------------------------------
NAME:
TITLE:
PROVIDENTIA HOLDINGS LIMITED
BY:
-----------------------------------------
NAME:
TITLE:
DAKOTA GROUP, LTD
BY:
-----------------------------------------
NAME:
TITLE:
HILLSWOOD HOLDINGS LIMITED
BY:
-----------------------------------------
NAME:
TITLE:
BY PRIMARY MANAGEMENT LIMITED
BY:
-----------------------------------------
NAME:
TITLE:
TETLOE LIMITED
BY:
-----------------------------------------
NAME:
TITLE:
BIOVISION INC
BY:
-----------------------------------------
NAME:
TITLE:
ADVICORP PLC
BY:
-----------------------------------------
NAME:
TITLE:
23
REPUBLIC NOMINEE LIMITED A/C 1955
FOR AND ON BEHALF OF REPUBLIC NOMINEES LIMITED
BY:
-------------------------------------------
NAME:
TITLE:
REPUBLIC NOMINEE LIMITED A/C 2548
FOR AND ON BEHALF OF REPUBLIC NOMINEES LIMITED
BY:
-------------------------------------------
NAME:
TITLE:
----------------------------------------------
▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
24
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ REVOCABLE LIVING TRUST
BY:
-----------------------------------------
NAME:
TITLE:
--------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. MOGUL
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
I. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
RPM ▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇ PENSION ACCOUNT
BY:
-----------------------------------------
NAME:
TITLE:
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
25
EXHIBIT A
---------
RRCG SHAREHOLDERS
-----------------
NUMBER OF RRCG SHARES NUMBER OF SHARES TO BE
SHAREHOLDER OWNED RECEIVED
----------- --------------------- ----------------------
▇▇▇▇ ▇. ▇▇▇▇▇, III 599,755 2,428,210
▇▇▇▇▇ ▇▇▇▇▇▇ 73,607 298,011
▇▇▇▇ ▇▇▇▇▇▇▇ 133,989 542,477
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 43,658 176,756
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 268,526 1,087,173
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 22,000 89,071
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 22,000 89,071
▇▇▇▇▇▇ ▇▇▇▇▇▇ 202,669 820,542
▇▇▇▇▇▇▇ ▇▇▇▇ 1,000 4,049
▇▇▇▇▇▇ ▇▇▇▇▇ 106,759 432,231
A-1
EXHIBIT B
---------
DEBENTUREHOLDERS
----------------
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
SHARES ISSUED SHARES ISSUED NEW
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
FOR
DEBENTURE HOLDER PRINCIPAL AMOUNT # OF WARRANTS DEBENTURES(1) FOR WARRANTS WARRANTS
---------------- ---------------- ------------- ------------- ------------ --------
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
VISIUM BALANCED OFFSHORE FUND, LTD $1,336,958.00 47,749 360,993 38,096 90,619
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
VISIUM LONG BIAS FUND, LP $378,518.00 13,519 102,204 10,786 25,656
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
VISIUM LONG BIAS OFFSHORE FUND, LTD $1,212,638.00 43,309 327,425 34,553 82,193
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
VISIUM BALANCED FUND, LP $840,378.00 30,014 226,911 23,946 56,961
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
ATLAS MASTER FUND, LTD $231,511.00 8,268 62,510 6,597 15,692
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇ JTWROS $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
SUB TRUST F/B/O ▇▇▇▇ ▇▇▇▇▇ U/A/D 11/01/01 $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
SUB TRUST F/B/O ▇▇▇ ▇▇▇▇▇ U/A/D 11/01/01 $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
SUN TRUST F/B/O ▇▇▇▇▇ ▇▇▇▇▇ U/A/D 11/01/01 $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
SUB TRUST F/B/O ▇▇▇▇▇ ▇▇▇▇▇ U/A/D 11/01/01 $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
SUB TRUST F/B/O ▇▇▇▇▇▇ ▇▇▇▇▇, U/A/D 11/01/01 $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇ ▇▇▇▇▇ $425,000.00 15,179 114,755 12,110 28,806
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $425,000.00 15,179 114,755 12,110 28,806
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇ GOROVICI $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
EUROPA INTERNATIONAL, INC. $750,000.00 26,786 202,507 21,371 50,835
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇ CAPITAL FUND II MASTER FUND, LTD $750,000.00 26,786 202,507 21,371 50,835
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
BRISTOL INVESTMENT FUND, LTD. $1,950,000.00 69,643 526,521 55,564 1 32,171
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
TAJ VENTURES LLC $150,000.00 5,357 40,502 4,274 10,167
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $200,000.00 7,143 54,002 5,699 13,556
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $200,000.00 7,143 54,002 5,699 13,556
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇ MANA $500,000.00 17,857 135,005 14,247 33,890
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
FCC CUST. FBO ▇▇▇ ▇▇▇▇▇ ▇▇▇ # 4701-7196 $200,000.00 7,143 54,002 5,699 13,556
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
CRANSHIRE CAPITAL, LP $750,001.00 26,786 202,507 21,371 50,835
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
BB PRIVATE EQUITY N.V. $2,500,000.00 89,286 675,027 71,236 169,450
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
CAPE CAPITAL INVESTMENT MANAGEMENT LTD. $1,500,000.00 53,571 405,016 42,741 101,670
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
CAPE CAPITAL INVESTMENT MANAGEMENT LTD. $500,000.00 17,857 135,005 14,247 33,890
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
PROVIDENTIA HOLDINGS LIMITED $150,000.00 5,357 40,502 4,274 10,167
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
DAKOTA GROUP, LTD $150,000.00 5,357 40,502 4,274 10,167
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
HILLSWOOD HOLDINGS LIMITED
BY PRIMARY MANAGEMENT LIMITED $1,500,000.00 53,571 405,016 42,741 101,670
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
TETLOE LIMITED $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
BIOVISION INC $500,000.00 17,857 135,005 14,247 33,890
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
ADVICORP PLC $500,000.00 17,857 135,005 14,247 33,890
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
----------
(1) Includes interest on the principal amount through June 30, 2007.
B-1
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
SHARES ISSUED SHARES ISSUED NEW
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
FOR
DEBENTURE HOLDER PRINCIPAL AMOUNT # OF WARRANTS DEBENTURES(1) FOR WARRANTS WARRANTS
---------------- ---------------- ------------- ------------- ------------ --------
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
REPUBLIC NOMINEE LIMITED A/C 1955
FOR AND ON BEHALF OF REPUBLIC NOMINEES LIMITED $250,000.00 8,929 67,503 7,124 16,945
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
REPUBLIC NOMINEE LIMITED A/C 2548
FOR AND ON BEHALF OF REPUBLIC NOMINEES LIMITED $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇ ▇▇▇▇▇▇ $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇ ▇▇▇▇▇▇▇ $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇ ▇. ▇▇▇▇▇ $25,000.00 893 6,750 712 1,694
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇ ▇▇▇▇ $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ $25,000.00 893 6,750 712 1,694
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ REVOCABLE LIVING TRUST $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $25,000.00 893 6,750 712 1,694
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇▇ ▇. MOGUL $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇ ▇▇▇▇▇ $100,000.00 3,571 27,001 2,849 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇▇▇▇▇, JTWROS $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ $125,000.00 4,464 33,751 3,562 8,472
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇ ▇▇▇▇▇▇ $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
I. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $50,000.00 1,786 13,501 1,425 3,389
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
RPM ▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇ PENSION ACCOUNT $100,000.00 3,571 27,001 2,848 6,778
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ & ▇▇▇▇▇ ▇. ▇▇▇▇, JTROS $49,996.00 1,786 13,498 1,424 3,391
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
$20,000,000.00 714,286 5,400,215 569,884 1,355,600
------------------------------------------------ ------------------- --------------- --------------- --------------- -------------
B-2
EXHIBIT C
---------
FORM OF OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
-----------------------------------------
To those persons and entities set forth on Schedule 1 hereto:
Ladies and Gentlemen:
We have acted as counsel to Enthrust Financial Services, Inc., a
Delaware corporation (the "Company") in connection with the execution
and delivery of an Exchange Agreement, dated as of______________, 2007
(the "Agreement") by and between The Company and those persons and
entities set forth on Schedule 1 hereto ("each an "Exchanger and
collectively the "Exchangers") and the transactions contemplated
thereby.
This opinion is being furnished to you pursuant to Section ___ of the
Agreement. Capitalized terms used herein and not otherwise defined herein have
the respective meanings assigned to them in the Agreement.
In rendering this opinion, we have examined the following documents:
(1) the Agreement;
(2) Form of Stock Purchase Warrant, dated the date hereof (the
"Warrant");
(3) a certificate, dated ________, 2007 of the Secretary of State of
the State of Delaware relating to the incorporation, legal
existence and good standing of The Company in the State of
Delaware;
(4) Resolutions of the board of directors of the Company dated ___,
2007, certified by the Company's Secretary on ___, 2007; and
(5) Certificate of the Company's Chief Executive Officer and Chief
financial Officer amended hereto as Exhibit A.
As to factual matters we have relied upon the representations of the
Company set forth in the Agreement and assumed the truthfulness of the
representations of the Exchangers set forth in the Agreement. We also have
examined such certificates of public officials, corporate documents and records
and other certificates, opinions, agreements and instruments and have made such
other investigations as we have deemed necessary in connection with the opinions
hereinafter set forth.
We are members of the Bar of the State of New York and are not expert
in, and express no opinion regarding, the laws of any jurisdictions other than
the State of New York, the corporate laws of the State of Delaware, and the
federal laws of the United States of America. Accordingly, our opinion is
limited to the laws of the State of New York and the General Corporation Law of
the State of Delaware and the federal laws of the United States, to the extent
that such laws apply to the matters discussed herein, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction.
The documents referred to in clauses (1) through (2) above are sometimes
hereinafter collectively called the "Operative Agreements".
C-1
Based on the foregoing, we give you our opinion as follows:
1. The Company is a corporation incorporated, validly existing and
in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and corporate authority to
enter into and perform each of the Operative Agreements and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Operative Agreements.
3. The Operative Agreements have been duly executed and delivered
by the Company and constitute the legally valid and binding obligation of the
Company, enforceable against it in accordance with the respective terms of such
Operative Agreements; except (a) that such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights in general and (b) that the remedies of specific performance
and injunctive and other forms of injunctive relief may be subject to equitable
defenses.
5. No consents, approvals or authorizations of, or notices to or
filings with the shareholders of the Company or any governmental authority or
agency are required on the part of the Company in connection with the execution
and delivery by the Company of the Operative Agreements, except such filings
that are necessary to give notice of or perfect exemptions from registration
under the Securities Laws of the United States or the several states applicable
to the Exchangers.
6. The execution, delivery and performance by the Company of the
Operative Agreements and the consummation by the Company of the transactions
contemplated thereby, does not (i) violate or conflict with any provision of the
Certificate of Incorporation or ByLaws of the Company, (ii) constitute a breach
of, or result in a default under any agreement to which the Company is a party,
known to us or (iii) violate any federal, state or local law, statute, rule or
regulation that we have in the exercise of customary professional diligence,
recognized as applicable to the Company or to transactions of the type
contemplated by the Operative Agreements.
7. The authorized capital stock of the Company consists of
_____________________shares of Common Stock ("Company Common Stock") of which
_______________shares are issued and outstanding. To our knowledge, there are no
outstanding any options, warrants, rights (including conversion or preemptive
rights), or agreements for the purchase or acquisition from the Company of any
shares of capital stock of the Company.
8. The shares of Company Common Stock to be issued pursuant to the
Agreement, upon delivery to each Exchanger of certificates therefor against
delivery by such Exchanger of the consideration therefor in accordance with the
terms of the Agreement, and the shares of Company Common Stock issuable upon
exercise of the Company Warrants when issued and paid for in accordance with the
terms of the Company Warrants: (i) will be validly issued, fully paid and
nonassessable and free of preemptive rights; and (ii) other than restrictions
set forth in the Operative Agreements, will be free and clear of all liens,
claims and encumbrances arising from actions of the Company.
9. Assuming that the representations of the Exchangers contained in
the Agreement are true, correct and complete, it is not necessary in connection
with the offer, sale and delivery of the Company Common Stock and the Company
Warrants to the Exchangers pursuant to the Agreement to register the issuance of
such Company Common Stock and Company Warrants under Section 5 and 6 of the
Securities Act of 1933, as amended.
C-2
10. To our knowledge, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board or body or any
governmental agency or self-regulatory organization pending or currently
threatened against the Company wherein an unfavorable decision, ruling or
finding would have a Material Adverse Effect.
We express no opinion as to any matter other than as expressly set forth
above, and no other opinion is intended to be implied nor may be inferred
herefrom. The opinions expressed herein are given as of the date hereof and we
undertake no obligation and hereby disclaim any obligation to advise you of any
change after the date of this opinion pertaining to any matter referred to
herein. The opinions expressed herein are solely for the benefit of you in
connection with the transactions contemplated by the Agreement and may not be
used or relied upon in connection with any other matter or transaction or by any
other person or entity.
Very truly yours,
C-3
EXHIBIT D
---------
COMPANY STOCKHOLDERS
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Moyo Partners, LLC
MBA Investors, Ltd.