EXHIBIT 7.1
SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement"), dated as of February 18,
1999, among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("PURCHASER"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ individually and as Delaware Charter SEP/▇▇▇ FBO ▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("SELLERS"), and JNS Marketing, Inc. ("JNS"),
a corporation organized under the laws of the State of Colorado.
W I T N E S S E T H:
A. WHEREAS, JNS Marketing, Inc. ("JNS") is a corporation duly organized
under the laws of the State of Colorado, SELLERS are individuals, and PURCHASER
is an individual.
B. WHEREAS, Purchaser, and SELLERS will benefit from the transactions
contemplated hereby and desire to implement the contemplated transaction.
C. WHEREAS, JNS will join in this agreement as to the representations
contained herein.
D. WHEREAS, the SELLERS own common shares of JNS as follows:
1. ▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ - 1,802,318 common shares (pre-reverse split one for
100).
2. Delaware Charter SEP/▇▇▇ FBO ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ -
3,932,350 shares (pre-reverse split one for 100).
3. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - 5,734,648 shares (pre-reverse split one
for 100).
4. ▇▇▇▇▇ ▇▇▇▇▇▇ - 5,734,648 shares (pre-reverse split one for
100).
5. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ - 5,734,648 shares (pre-reverse split
one for 100).
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
1.1 Subject to the conditions set forth herein, on the "Closing Date"
(as herein defined), SELLERS shall sell or cause to be delivered for sale and
PURCHASER shall purchase 225,000 common shares of JNS common stock (post reverse
split one for one hundred). The transactions contemplated by this Agreement
shall be completed at a closing ("Closing") on a closing date ("Closing Date")
on or before March 10, 1999. The purchase price for the JNS shares to be paid by
PURCHASER to SELLERS is $125,000 which shall be delivered at closing.
On the Closing Date, all of the documents to be furnished pursuant to
this Agreement shall be delivered to M.A. ▇▇▇▇▇▇▇, to be held in escrow until
all closing conditions hereunder have been met or the date of termination of
this Agreement, but no longer than 3 days after closing date, whichever first
occurs, and thereafter shall be promptly distributed to the parties as their
interests may appear.
1.2 Concurrent with the execution hereof, PURCHASER shall deposit or
cause to be deposited as consideration for this Agreement and the share
purchase, the sum of $125,000 which shall be paid into escrow with M.A. ▇▇▇▇▇▇▇
for delivery to SELLERS upon receipt of the 225,000 shares (post reverse split
one for one hundred) of JNS common stock and satisfaction of all other
conditions of this Agreement.
ARTICLE II
Delivery of Shares and Purchase Price
2.1 The shares of $.01 par value common stock of JNS shall be delivered
and conveyed by SELLERS to PURCHASER at closing by ▇▇▇▇ of Sale and duly
executed stock powers, upon receipt of cash consideration by SELLERS in escrow
or by delivery if no escrow is necessary.
2.2 Purchaser shall deliver cash at closing to sellers and subject to
terms in Article 5.2 subject to pro-rata deductions as set forth in Article 9.7
as follows:
a. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ - $32,000
b. ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - $10,800
Delaware Charter SEP/▇▇▇ FBO ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - $21,920
c. ▇▇▇▇▇ ▇▇▇▇▇▇ - $29,000
d. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - $32,000
ARTICLE III
Representations, Warranties, and Covenants of SELLERS and JNS
No representations or warranties are made by any director, officer,
employee or shareholder of JNS as individuals, except as and to the extent
stated in this Agreement for SELLERS or in a separate written statement.
SELLERS and JNS hereby represent, warrant, and covenant to PURCHASER as
follows:
3.1 JNS is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado, and has the corporate power
and authority to carry on its business as it is now being conducted. The
Articles of Incorporation and Bylaws of JNS, copies of will be delivered to
PURCHASER, are complete and accurate, and the minute books of JNS, which will be
delivered to PURCHASER, contain a record, which is complete and accurate in all
material respects, of those meetings, and those corporate actions of the
shareholders and Board of Directors of JNS.
3.2 The aggregate number of shares which JNS is authorized to issue is
10,000,000,000 shares of common stock with a $.01 par value per share, of which
251,822 shares of such common stock (post reverse split one for twenty) will be
issued and outstanding, fully paid and non-assessable; prior to closing under
this Agreement. JNS has no outstanding options, warrants or other rights to
purchase, or subscribe to, or securities convertible into or exchangeable for
any shares of capital stock.
3.3 SELLERS and JNS have complete and unrestricted power to enter into
and, upon receipt of the appropriate approvals as required by law, to consummate
the transactions contemplated by this Agreement.
3.4 Neither the making of nor the compliance with the terms and
provisions of this Agreement and consummation of the transactions contemplated
herein by JNS will conflict with or result in a breach or violation of the
Articles of Incorporation or Bylaws of JNS.
3.5 The execution of this Agreement has been duly authorized and
approved by the JNS's Board of Directors.
3.6 JNS has delivered to PURCHASER financial statements of JNS dated
December 31, 1997 (audited) and March 31, 1998 June 30, 1998 (unaudited). All
such financial statements, herein sometimes called "JNS Financial Statements"
are complete and correct in all material respects and, together with the notes
to these financial statements, present fairly the financial position and results
of operations of JNS of the periods indicated. All financial statements of JNS
will have been prepared in accordance with generally accepted accounting
principles.
3.7 Since the dates of the JNS Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise, of JNS. JNS does not have any material liabilities or obligations,
secured or unsecured, except as are being settled by issuance of shares.
3.8 There are no pending legal proceedings or regulatory proceeding
involving JNS or SELLERS, and there are no legal proceedings or regulatory
proceedings involving material claims pending, or, to the knowledge of the
officers of JNS or SELLERS, threatened against JNS or SELLERS or affecting any
of their assets or properties, and neither JNS nor SELLERS are in any material
breach or violation of or default under any contract or instrument to which JNS
or SELLERS are party, and no event has occurred which with the lapse of time or
action by a third party could result in a material breach or violation of or
default by JNS or SELLERS under any contract or other instrument to which JNS or
SELLERS are a party or by which they or any of their respective properties may
be bound or affected, or under their respective Articles of Incorporation or
Bylaws, nor is there any court or regulatory order pending, applicable to JNS or
SELLERS, except that certain shareholders of JNS have contacted the Company and
its representatives to complain about the reverse stock split that was approved
by the shareholders on May 13, 1998.
3.9 JNS shall not enter into or consummate any transactions prior to
the Closing Date and will pay no dividend, or increase the compensation of
officers and will not enter into any agreement or transaction, except as set
forth in this Agreement.
3.10 JNS is not a party to any contract performable in the future.
3.11 The representations and warranties of JNS and SELLERS shall be
true and correct as of the date hereof and as of the Closing Date.
3.12 JNS will deliver to PURCHASER, all of its corporate books and
records for review and true and correct copies of JNS's tax returns to the
extent due for the last five years.
3.13 JNS has no employee benefit plan in effect at this time, and no
employment contract of any type exist for any employee, officer, or consultant.
3.14 No representation or warranty by JNS in this Agreement, or any
certificate delivered pursuant hereto contains any untrue statement of a
material fact or omits to state any material fact necessary to make such
representation or warranty not misleading.
3.15 SELLERS and JNS hereby covenant that during the contract period,
prior to closing, JNS will not take any board action without PURCHASER's
approval in writing, pending selection of new officers and directors at closing.
3.16 Each SELLER represents and warrants for himself only that he owns
all rights, title, and interest to the shares of JNS to be transferred to
PURCHASER hereunder (the "Shares") and the Shares are free and clear of any and
all liens, claims, and encumbrances of any kind or nature.
3.17 JNS shall have settled and released all liabilities shown in the
September 30, 1998 unaudited financial statements as of date of Closing.
3.18 PURCHASER agrees that all rights to indemnification now existing
in favor of the employees, agents, directors, or officers of JNS and its
subsidiaries, as provided in the Articles of Incorporation or Bylaws or
otherwise in effect on the date hereof, shall survive the transactions
contemplated hereby in accordance with their terms.
3.19 SELLERS have delivered to PURCHASER true and correct copies of the
JNS 10KSB for 1997 and each of its other reports to shareholders and filing with
the Securities and Exchange Commission ("SEC") for the current year. JNS will
also deliver to PURCHASER, on or before the Closing Date, any reports relating
to the financial and business condition of JNS which are filed with the SEC
after the date of this Agreement and any other reports sent generally to its
shareholders after the date of this Agreement.
3.20 JNS has duly filed all reports required to be filed by it under
the Securities Act of 1933, as amended, and the Securities and Exchange Act of
1934, as amended, (the "Federal Securities Laws") except the 10KSB for December
31, 1998 and the 10QSB for September 30, 1998. No such reports, or any
reports sent to the shareholders of JNS generally, contained any untrue
statement of material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements in such report, in light of
the circumstances under which they were made, not misleading.
ARTICLE IV
Obligations of the Parties Pending the Closing Date
4.1 At all times prior to the Closing Date during regular business
hours, JNS will permit the PURCHASER to examine its books and records and the
books and records of its subsidiaries and will furnish copies thereof on
request. It is recognized that, during the performance of this Agreement, each
party may provide the other parties with information which is confidential or
proprietary information. During the term of this Agreement, and for one year
following the termination of this Agreement, the recipient of such information
shall protect such information from disclosure to persons, other than members of
its own or affiliated organizations and its professional advisers, in the same
manner as it protects its own confidential or proprietary information from
unauthorized disclosure, and not use such information to the competitive
detriment of the disclosing party. In addition, if this Agreement is terminated
for any reason, each party shall promptly return or cause to be returned all
documents or other written records of such confidential or proprietary
information, together with all copies of such writings and, in addition, shall
either furnish or cause to be furnished, or shall destroy, or shall maintain
with such standard of care as is exercised with respect to its own confidential
or proprietary information, all copies of all documents or other written records
developed or prepared by such party on the basis of such confidential or
proprietary information. No information shall be considered confidential or
proprietary if it is (a) information already in the possession of the party to
whom disclosure is made, (b) information acquired by the party to whom the
disclosure is made from other sources, or (c) information in the public domain
or generally available to interested persons or which at a later date passes
into the public domain or becomes available to the party to whom disclosure is
made without any wrongdoing by the party to whom the disclosure is made.
4.2 SELLERS and PURCHASER shall promptly provide each other with
information as to any significant developments in the performance of this
Agreement, and shall promptly notify the other if it discovers that any of its
representations, warranties and covenants contained in this Agreement or in any
document delivered in connection with this Agreement was not true and correct in
all material respects or became untrue or incorrect in any material respect.
4.3 All parties to this Agreement shall take all such action as may be
reasonably necessary and appropriate and shall use their best efforts in order
to consummate the transactions contemplated hereby as promptly as practicable.
ARTICLE V
Procedure for Closing
5.1 At the Closing Date, the purchase and Sale shall be effected with
common stock certificates of JNS together with stock powers executed in blank,
being delivered by SELLERS duly executed for 225,000 shares (post reverse split
one for 100) of common stock to Escrow Agent for PURCHASER M.A. ▇▇▇▇▇▇▇ and the
delivery of $125,000 to Escrow Agent for PURCHASER, M.A. ▇▇▇▇▇▇▇, for delivery
to Sellers upon completion of items in 5.2 to SELLERS from PURCHASER, together
with delivery of all other agreements, schedules, warranties, and
representations set forth in this Agreement to Escrow Agent.
5.2 In the event that audited financial statements for December 31,
1998 have not been delivered to PURCHASER's attorneys and the 10KSB for December
31, 1998 and 10QSB for September 30, 1998 have not been signed by SELLERS, at
time of closing, the purchase price shall be held in escrow until delivery of
such audited financials and signed 10QSB and 10KSB for the periods specified. In
the event the financials have not been delivered within 10 days after closing,
PURCHASER shall have the right to engage the auditors and pay them from the
escrowed proceeds together with all other costs when the audit is delivered and
the 10KSB and 10QSB are signed, monies to be released from escrow. Penalty: If
SELLERS fail to comply with terms of this Agreement during escrow period, 3 days
after written notice, penalties of $1,000 per day shall accrue against SELLERS.
ARTICLE VI
Conditions Precedent to the
Consummation of the Purchase
The following are conditions precedent to the consummation of the
Agreement on or before the Closing Date:
6.1 SELLERS and JNS shall each have performed and complied with all of
their respective obligations hereunder which are to be complied with or
performed on or before the Closing Date and SELLERS and JNS and PURCHASER shall
provide one another at the Closing with a certificate to the effect that such
party has performed each of the acts and undertakings required to be performed
by it on or before the Closing Date pursuant to the terms of this Agreement.
6.2 This Agreement and the transactions contemplated herein shall have
been duly and validly authorized, approved and adopted by SELLERS and JNS and
PURCHASER in accordance with the applicable laws.
6.3 No action, suit or proceeding shall have been instituted or shall
have been threatened before any court or other governmental body or by any
public authority to restrain, enjoin or prohibit the transactions contemplated
herein, or which might subject any of the parties hereto or their directors or
officers to any material liability, fine, forfeiture or penalty on the grounds
that the transactions contemplated hereby, the parties hereto or their directors
or officers, have violated any applicable law or regulation or have otherwise
acted improperly in connection with the transactions contemplated hereby, and
the parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
6.4 All actions, proceedings, instruments and documents required to
carry out this Agreement and the transactions contemplated hereby and the form
and substance of all legal proceedings and related matters shall have been
approved by counsel for PURCHASER.
6.5 The representations and warranties made by JNS and SELLERS in this
Agreement shall be true as though such representations and warranties had been
made or given on and as of the Closing Date.
6.6 JNS shall furnish PURCHASER with a certified copy of a resolution
or resolutions duly adopted by the Board of Directors of JNS, approving this
Agreement and the representations required of JNS in Article III.
6.7 All outstanding liabilities of JNS shall have been paid and
released prior to closing.
6.8 SELLERS shall appoint two additional directors concurrent
designated by PURCHASER with the Closing under of this Agreement to the JNS
Board to serve as directors until the Closing under this Agreement and subject
to filing Notice pursuant to Section 14f of the Securities Exchange Act of 1934
and mailing to shareholders, prior directors shall resign. Further, at Closing,
the Board of JNS shall obtain the resignation of the current officers and
appoint officers specified by purchaser.
6.9 JNS and SELLERS shall furnish to PURCHASER a favorable opinion of
counsel for JNS and SELLERS, dated the Closing Date, that: (i) this Agreement,
and the transaction contemplated herein, have been duly and validly authorized,
approved and adopted by SELLERS and JNS in accordance with applicable laws; and
the bylaws and articles or certificate of incorporation of JNS; (ii) this
Agreement is enforceable against SELLERS and JNS in accordance with its terms,
subject to the effect of bankruptcy and similar laws; (iii) the 225,000 shares
transferred by SELLERS to PURCHASER at the Closing are duly authorized, validly
issued and fully paid and nonassessable, and (iv) based upon the corporate
records of JNS, such shares are free and clear of any and all liens, claims and
encumbrances.
6.10 The PURCHASER hereunder shall have 10 days from date of receipt of
copies of corporate books, records, and SEC filings of JNS within which to
conduct its due diligence investigation, and if within such ten day period
PURCHASER, in his sole discretion, determines that his due diligence review is
unsatisfactory, PURCHASER may cancel this Agreement in writing without penalty
or forfeiture of any monies deposited.
ARTICLE VII
Termination and Abandonment
7.1 Anything contained in this Agreement to the contrary
notwithstanding, the Agreement may be terminated and abandoned at any time prior
to the Closing Date:
(a) By mutual consent of PURCHASER and SELLERS;
(b) By either party, if any condition set forth in Article VI
relating to the other party has not been met or has not been
waived;
(c) By PURCHASER, if any suit, action or other proceeding shall be
pending or threatened by the federal or a state government
before any court or governmental agency, in which it is sought
to restrain, prohibit or otherwise affect the consummation of
the transactions contemplated hereby;
(d) By any party, if there is discovered any material error,
misstatement or omission in the representations and warranties
of another party;
(e) By any party if the Closing Date is not by March 10, 1999.
7.2 Any of the terms or conditions of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof, by action taken
by its Board of Directors or Manager, provided; however, that such action shall
be taken only if, in the judgment of the Board of Directors or Manager taking
the action, such waiver will not have a material adverse effect on the benefits
intended under this Agreement to the party waiving such term or condition.
7.3 If SELLERS and JNS shall each have performed and complied with all
of their respective representations, warranties, covenants and obligations
hereunder and if PURCHASER does not complete the transaction contemplated
herein, and, if PURCHASER has not elected to cancel the contract under Article
6.10, then PURCHASER shall pay SELLERS $10,000 as a break-up fee which shall be
paid and accepted in full and complete satisfaction of any and all liabilities,
claims, obligations or demands between the parties relating in any way to this
Agreement and the transaction contemplated hereby.
ARTICLE VIII
Termination of Representations and
Warranties and Certain Agreements
8.1 The respective representations and warranties of the parties hereto
shall expire after closing, except that such representations and warranties
shall be true and correct at date of Closing.
8.2 The SELLERS agree to promptly engage auditors within 3 days
hereafter and provide books and records, and representation letters as necessary
to complete December 31, 1998 audits and 10KSB filing in an expedient manner.
ARTICLE IX
Miscellaneous
9.1 This Agreement embodies the entire agreement between the parties,
and there have been and are no agreements, representations or warranties among
the parties other than those set forth herein or those provided for herein.
9.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument.
9.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
9.4 This Agreement may be amended upon approval of SELLERS and the
Board of Directors of each corporate party provided that the shares issuable
hereunder shall not be amended without approval of PURCHASER.
9.5 Any notices, requests, or other communications required or
permitted hereunder shall be delivered personally or sent by overnight courier
service, fees prepaid, addressed as follows:
Sellers Purchaser
To: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & Associates, P.C. ▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇., #▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ (fax)
(303) 296-880 (fax)
copy to:
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
9.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of PURCHASER
and SELLERS. However, either PURCHASER and SELLERS may issue at any time any
press release or other public statement it believes on the advice of its counsel
it is obligated to issue to avoid liability under the law relating to
disclosures, but the party issuing such press release or public statement shall
make a reasonable effort to give the other party prior notice of and opportunity
to participate in such release or statement.
9.7 SELLERS agree to share equally the cost of ▇▇▇▇▇ filing fees for
the September 30, 1998 10 QSB and the December 31, 1998 10 KSB.
9.8 PURCHASER's attorney shall prepare, at PURCHASER's expense, the
September 30, 1998 10QSB upon receipt of the unaudited financials and the
December 31, 1998 10 KSB upon receipt of audited financials.
9.9 Subject to the provisions of section 6.8 of this Agreement, at
Closing, the directors existing at the date of this Agreement will resign upon
the request of PURCHASER.
IN WITNESS WHEREOF, the parties have set their hands and seals this ____
day of February, 1999.
Consenting as to the Representations
in this Agreement:
JNS MARKETING, INC.
by:________________________ ___________________________
Its:________________________ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Purchaser
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Seller ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Seller
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Seller ▇▇▇▇▇ ▇▇▇▇▇▇, Seller
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DELAWARE CHARTER SEP/▇▇▇
FBO ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇