EXHIBIT 7.1
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (the "AGREEMENT") dated as of the 31st
day of May, 2001 is by and amongst, ProCare Industries, Ltd., a Colorado
corporation, ("ProCare"), Fastpoint Acquisition Corp., a Delaware corporation
(hereinafter referred to as "Buyer"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and HK Utility
Construction, Inc., a Delaware corporation, (the "Company"), and those
shareholders who are signatories to this Agreement (hereinafter referred to as
the "Shareholders"). The Shareholders and the Company may jointly be referred to
as the "Seller".
WHEREAS, the respective Board of Directors of the Buyer and the Company
deem the acquisition by Buyer of all of the issued and outstanding capital stock
of the Company on the terms set forth in this Agreement to be desirable,
generally for the welfare and advantage of each, and in the best interests of
the shareholders of each; and
WHEREAS, the Seller has signed a letter of intent with ProCare
Industries, Inc., a publicly traded Colorado corporation which provides in part
for Seller to be acquired by and merged into FastPoint Acquisition, Inc., a
wholly owned subsidiary of ProCare in exchange for shares of common stock of
ProCare; and
WHEREAS, the parties have agreed to certain modifications to the letter
of intent as reflected in this Agreement; and
WHEREAS, Buyer is a wholly owned subsidiary of ProCare Industries,
Ltd., ("ProCare") a publicly traded entity; and
WHEREAS, the ProCare Board of Directors has approved the issuance of
shares of its common stock to the Seller; and
WHEREAS, the respective parties desire that this transaction be treated
as a tax free exchange under Section 368 of the Internal Revenue Service; and
WHEREAS, the closing of this Agreement is contingent upon the Buyer
completing a series of acquisitions including this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants herein contained, and for the purpose of prescribing
the terms and conditions of such acquisition, the mode of carrying it into
effect, and such other details and provisions as are necessary or desirable, the
parties hereto hereby represent, warrant, covenant and agree as follows:
ARTICLE I
PLAN OF AGREEMENT
1.01 Number of Shares and Purchase Price. Subject to the further
conditions of this Agreement and the truth of the representations and warranties
provided herein the Company agrees to exchange 723 shares of the common stock of
Company, said shares representing all of the issued and outstanding shares of
common stock of Company, for a total of 7,230,000 shares of common stock of
ProCare. Attached and marked Exhibit 1.01 is a list of all of the shareholders
of the Company together with the number of shares of common stock owned by each.
The current shareholders of the Company shall receive such number of
shares of the Buyer's shares of stock based upon their equity ownership in the
Company.
In addition to the exchange of stock certificates contemplated hereby,
the Company shall pay ProCare the sum of $275,000 as follows:
$ 50,000, which was previously paid.
$175,000 at Closing
$ 50,000 pursuant to a promissory note made payable to
▇▇▇▇▇▇ ▇▇▇▇▇▇ a copy of which is attached hereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PROCARE AND BUYER
ProCare, the Buyer and ▇▇▇▇▇▇ represent and warrants to the Sellers
that:
2.01 Incorporation, Common Stock, Etc. The authorized capital stock of
ProCare consists of 100,000,000 shares of common stock, no par value ("ProCare
Common Stock"), of which 2,913,844 shares are presently issued and outstanding,
and 5,000,000 shares of preferred stock, $1.00 par value, none of which are
issued or outstanding. All of the issued and outstanding shares of ProCare
Common Stock are validly issued and are fully paid, nonassessable and free of
preemptive rights. Upon closing of this transaction, ▇▇▇▇▇▇ shall tender a total
of 1,000,000 shares of ProCare common stock to Buyer and Buyer shall be
authorized to cancel a total of 1,000,000 shares issued to ▇▇▇▇▇▇. By entering
into this Agreement, ▇▇▇▇▇▇ hereby grants to Buyer or Buyer's authorized
representative the authority to instruct the transfer agent to cancel a total of
1,000,000 shares issued to ▇▇▇▇▇▇. Notwithstanding the foregoing, ▇▇▇▇▇▇ has
represented that the share certificate is currently being held by ▇▇▇▇ ▇▇▇▇▇▇, a
Colorado licensed lawyer. By executing this agreement, ▇▇▇▇▇▇ irrevocably
authorizes ▇▇▇▇▇▇ to submit the share certificate to ProCare's transfer agent
for cancellation.
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The ProCare Common Stock is quoted on the NASD OTC Electronic Bulletin
Board. Since qualifying for trading on the NASD OTC Electronic Bulletin Board,
trading of the ProCare Common Stock thereon has not been suspended, nor is there
any basis for suspension of such trading.
The authorized capital stock of Fastpoint consists of 1,000 shares of
common stock, $.001 par value, of which 100 shares are issued and outstanding,
all of which shares are owned beneficially and of record by ProCare.
ProCare is a corporation duly organized and existing in good standing
under the laws of the State of Colorado. Fastpoint is a corporation duly
organized and existing in good standing under the laws of the state of Delaware.
Attached hereto as Exhibit 2.01 are copies of the ProCare and Fastpoint good
standing certificates.
Procare and Fastpoint have full corporate power and authority to carry
on its business as it is now being conducted.
There are and at the Closing will be no outstanding subscriptions,
options, warrants, convertible securities, calls, commitments or agreements
calling for or requiring issuance or transfer, sale or other disposition of any
shares of capital stock of either Fastpoint or ProCare. All of the outstanding
shares of both ProCare and Fastpoint are duly authorized, validly issued, fully
paid, and non-assessable. There are no dividends due, to be paid or are in
arrears with respect to any of the capital stock of either Company.
2.02 Financial Statements. Attached hereto as Exhibit 2.02 are the most
recent financial statements dated as of May 31, 2001 for Fastpoint. The
financial statements filed as part of ProCare's annual report filed with the
Securities and Exchange Commission on Form 10-KSB and ProCare's most recent
quarterly report on Form 10-QSB filed with the Commission are specifically
incorporated herewith. Said financial statements include ProCare's Balance
Sheet, Income Statement and Changes in Stockholders Equity. The financial
statements present fairly the financial position of each company as of the dates
set forth in the financial statements. The financial statements for ProCare have
been prepared in conformity with generally accepted accounting principles. There
has been no material adverse change in the financial condition since the date of
the financial statements. All liabilities, contingent or otherwise, are set
forth in the financial statements and there are no undisclosed liabilities of
any kind or nature since the date of the financial statements. Except for fees
and expenses incurred in connection with this transaction, neither ProCare nor
FastPoint has incurred any liabilities in excess of $100.00 and except as
contemplated by this transaction, there have been no transactions entered into
outside of the usual course of business. As to any legal, accounting or other
costs incurred by either ProCare or FastPoint in closing this transaction, it is
specifically agreed and understood that all fees and costs shall be the personal
responsibility of ▇▇▇▇▇▇ and that HKUC and ProCare may offset any amounts due
▇▇▇▇▇▇ from any promissory notes as a result of ▇▇▇▇▇▇'▇ breach of this
obligation..
ProCare is a public entity that files periodic reports with the
Securities and Exchange Commission. Copies of the ProCare reports are accessible
through the Commission's Internet website located at ▇▇▇.▇▇▇.▇▇▇ (in its ▇▇▇▇▇
archives). Except as contemplated by this Agreement and the anticipated
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acquisitions, since March 31, 2001, ProCare has neither issued any additional
shares of its common stock or issued any rights or warrants of any kind or
nature which when exercised could be converted into shares of common stock of
ProCare.
2.03 Litigation and Liens. Except as set forth in any ProCare filings
with the Securities and Exchange Commission (the "Commission"), there are no
actions, suits, proceedings, or investigations pending or, to the best of its
knowledge, threatened or contemplated against either Company. The Company, at
law or in equity, before any federal, state, municipal or other governmental
department, commission, board, agency or instrumentality, domestic or foreign.
Neither Company is The Company is not subject to any outstanding judgments or
operating under or subject to or in default with respect to any order, writ,
injunction or decree of any court or federal, state, municipal or other
governmental department, commission, board, agency or instrumentality, domestic
or foreign. Attached and marked Exhibit 2.03(b) is a list of all outstanding
liens filed against the Company.
2.04 Compliance with Laws. Each Company has complied in all material
respects with all laws, regulations, orders, domestic and foreign, and neither
the present uses of their properties nor the conduct of its business violate any
such laws, regulations, orders or requirements, and except as set forth in
Exhibit 2.04 neither has the Company received any notice of any claim or
assertion that it is not so in compliance.
Since December 31, 1998, ProCare has filed on a timely basis with the
Securities and Exchange Commission (the "SEC") all forms, statements, reports
and documents (including all exhibits, amendments and supplements thereto)
required to be filed by it under each of the Securities Act of 1933, as amended
(the "Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the respective rules and regulations there under, all of
which, as amended if applicable (collectively, the "ProCare SEC Reports"), and
has complied in all material respects with all applicable requirements of the
appropriate act and the rules and regulations there under. ProCare is not
subject to any Liability (as defined in Section 4.6) for its failure to comply
prior to December 31, 1998 with the filings described in the preceding sentence.
As of their respective dates, the ProCare SEC Reports did not contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited financial
statements and unaudited interim financial statements of ProCare included in the
ProCare SEC Reports (collectively, the "ProCare Financial Statements") were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and fairly presented the financial position of ProCare as of the dates thereof
and the results of its operations and changes in financial position for the
periods then ended, subject, in the case of the unaudited interim financial
statements, to normal year-end and audit adjustments and any other adjustments
described therein. None of the information that will be supplied by ProCare for
inclusion in the documentation contemplated by this Agreement will contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading
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Since January 1, 1991, ProCare has not engaged in any business
operations. Fastpoint has never engaged in any business operations.
2.05 Indebtedness. Except for the matters referred to in this Agreement
and excedpt as set forth in the Company's financial statements, the Company has
not executed any instruments, entered into any agreements or arrangements
pursuant to which the either has borrowed any money, incurred or guaranteed any
indebtedness or established any line of credit which represents a liability of
the Company either except as of the date thereof.
2.06 No Material Adverse Change. Since the date of the most recent
financial statements, there has not been any material adverse change in the
condition, financial or otherwise, of any aspect of its business taken as a
whole; nor has there been any material transaction entered into by either
Company. Neither Company has incurred any material obligations, contingent or
otherwise except for legal and accounting fees and expenses in connection with
the transactions contemplated by this Agreement. There has not been any damage,
destruction or loss, whether or not covered by insurance adversely affecting
either Company, their businesses, property or assets; nor has either (a) created
or incurred any indebtedness; (b) issued, sold, purchased, redeemed or granted
any shares of Company Common Stock or any other securities or any options,
warrants or other rights to purchase any shares of Company Common Stock (c)
amended its Certificate of Incorporation or bylaws; (d) paid any obligation or
liability other than obligations or liabilities reflected in its Balance Sheet
dated as of the Company Balance Sheet Date or incurred any liabilities except
for legal and accounting fees and disbursements incurred in the ordinary course
of business or in connection with this Agreement and the transactions
contemplated hereby.
2.07 No Defaults. Neither the execution nor delivery of this Agreement
nor the consummation of the contemplated transaction are events which, of
themselves or with the giving of notice or passage of time or both, could
constitute a violation of or conflict with or result in any breach of or default
under the terms, conditions or provisions of any judgment, law or regulation of
either Company's Certificate of Incorporation or Bylaws, or of any agreement or
instrument to which the Company is a party or by which it is bound; or could
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever on the property or assets of Company; and no consent of any
third party except as expressly contemplated herein is required for the
consummation of this Agreement by Company.
2.08 Corporate Action of Company. The Board of Directors of both
Fastpoint and ProCare have duly authorized the execution and delivery of this
Agreement. Subject to the approval of the stockholders of ProCare as provided
herein, this Agreement constitutes a valid, legal and binding agreement of
Company and is enforceable in accordance with its terms.
2.09 Liabilities. As of the date of this Agreement, ProCare has not
incurred any liabilities except in the ordinary course of business.
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2.10 Taxes. Except as set forth on Exhibit 2.10, all federal, state,
and local tax returns, reports and declarations of estimated tax or estimated
tax deposit forms required to be filed by either Company. Both companies have
has paid all taxes which have become due pursuant to such returns or pursuant to
any assessment received by it, and has paid all installments of estimated taxes
due; and all taxes, levies and other assessments which each is required by law
to withhold or to collect have been duly withheld and collected and have been
paid over to the proper governmental authorities. Both Companies have no
knowledge of any tax deficiency which has been or might be asserted against it
which would materially and adversely affect the business or operations of
ProCare. Prior to Closing, ProCare and Fastpoint shall provide Buyer with copies
of all tax returns, of any kind or nature, filed by Company, together with all
accounting information. ProCare and Fastpoint have no knowledge of any tax
deficiency which has been or might be asserted against it which would materially
and adversely affect the business or operations of either company. Prior to
Closing, the Company shall provide Buyer with copies of all tax returns, of any
kind or nature, filed by Company, together with all accounting information.
There are no unresolved issues of law or fact arising out of a notice of a
deficiency, proposed deficiency or assessment from the IRS or any other
governmental taxing authority with respect to any type of tax liability which,
if adversely determined, singly or in the aggregate, would have a material
adverse effect on the business, operations, properties, assets, condition
(financial or otherwise) or results of operation.
2.11 Title to Property; Leases. Each Company has good and defensible
title in fee simple to, or valid and enforceable leasehold estates in, all
properties and assets, which are material to its continued operations, free and
clear of all liens, encumbrances, charges or restrictions or are not materially
significant or important in relation to its operations and business. All of such
leases and subleases under which ProCare is the lessor or sublessor, lessee or
sublessee of properties or assets or under which Company holds properties or
assets as lessee or sublessee are in full force and effect. Company is not in
default in respect of any of the terms or provisions of any of such leases or
subleases, and no claim has been asserted by anyone adverse to their respective
rights as lessor, sublessor, lessee or sublessee under any of the leases or
subleases mentioned above, or affecting or questioning their respective rights
to continued possession of the leased or subleased premises or assets under any
such lease or sublease; and Company either owns or leases all such properties as
are necessary to its operations as now conducted.
Attached hereto and marked Exhibit 2.11 is a list of all assets owned
by each company including all tangible and intangible assets and assets owned
through any subsidiaries.
2.12 Licenses. Each Company has obtained all required licenses, permits
or other governmental authorization for the conduct of its business as now being
conducted. Each Company is in compliance with all laws governing the operation
of its business in any jurisdiction where either conducts business.
2.13 Bank Accounts. Attached hereto as Exhibit 2.13 is a listing of all
bank accounts with account numbers currently that is held by ProCare or
Fastpoint. Immediately following closing, ▇▇▇▇▇▇▇ ▇▇▇▇ shall be appointed as a
signatory to each account and all existing signatories shall be removed. At
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Closing, the Company shall deliver to Buyer Board minutes approving ▇▇▇▇▇▇▇ ▇.
▇▇▇▇ as a signatory to the bank account.
2.14 Contracts and Commitments. Except as set forth in the SEC Reports
or Exhibit 2.14, there are no contracts or commitments of the Company requiring
any future payment to an officer, director, employee, agent or shareholder of
either Company.
2.15 Representations True and Correct. This Agreement and the Schedules
and Exhibits attached hereto do not contain any untrue statement of a material
fact concerning ProCare or Fastpoint which is necessary in order to make the
statements therein not misleading. All of the representations and warranties
contained herein (including all statements contained in any certificate or other
instrument delivered by or on behalf of the Shareholders pursuant hereto or in
connection with the transactions contemplated hereby) shall survive the Closing.
2.16 Retirement Plans. Neither ProCare or Fastpoint nor any subsidiary
or affiliate is obligated under any pension plan, profit-sharing or similar
employee benefit plan.
2.17 Intellectual Property Rights. Attached hereto as Exhibit 2.17 is a
list of all trademarks and trade names that are owned by Procare and Fastpoint,
together with copies of any official notice from any issuing governing
organization.
2.18 Resignations and Appointments. Attached hereto as Exhibit 2.18 are
the resignations of all officers and directors of ProCare and Fastpoint together
with a Board resolution of each nominating the following persons to fill two of
the vacant board seats:
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
It is agreed and understood that upon closing of certain transactions, the
following persons may, but shall not be required to fill remaining board seats
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Concurrently with the resignation of the officers, the Board of
Fastpoint shall appoint Drew as chief executive officer of Fastpoint.
2.19 Indemnification. Each of ProCare and ▇▇▇▇▇▇ ▇▇▇▇▇▇, jointly and
individually shall indemnify and hold Seller, , its officers and directors,
harmless of and in respect of:
(1) Any damage or loss resulting from any loss, any liability
of any kind or nature which is not set forth in the financial statements,
damage, misrepresentation, breach of warranty or non-fulfillment on the part of
ProCare or Fastpoint under this Agreement or from any misrepresentation or
omission from any certificates or other instruments furnished to Company
pursuant to this Agreement or pursuant to any Commission filings.
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(2) All actions, suits, proceedings, demands assessments,
judgments, costs and expenses incident to any of the foregoing including
reasonable attorney's fees and all costs incurred by Buyer to enforce this
agreement against Company.
2.20 Environmental Matters. Each Company is in full compliance with all
environmental laws and regulations affecting the operation of its business and
the ownership or lease of any real estate. ProCare has not improperly disposed
of any hazardous or toxic waste and as of the date of this Agreement has no
toxic or hazardous waste in its possession. ProCare has not been advised of any
violation or potential violation of any local or federal rules or regulations
pertaining to environmental matters.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to the Shareholders and the Company that:
3.01 Incorporation, Common Stock, Etc. Seller is a corporation duly
organized and existing in good standing under the laws of the State of Delaware.
The Seller has full corporate power and authority to carry on its business as it
is now being conducted and to own and operate its assets, businesses and
properties. The Seller has authorized capital stock consisting of 1,500 shares
of Common Stock, without par value, of which 723 are issued and are outstanding.
As of April 30, 2001, all of the outstanding shares of the Company are duly
authorized, validly issued, fully paid and non-assessable. There are no
dividends due, to be paid or are in arrears with respect to any of the capital
stock of Company.
3.02 Seller Financial Statements. Attached hereto as Exhibit 3.02 is
the April 30, 2001 Balance Sheet. The Seller's Balance Sheet presents fairly the
financial position of Seller as of the dates set forth in the financial
statements. The Balance Sheet has been prepared in conformity with generally
accepted accounting principles ("GAAP"). All liabilities of the Seller are set
forth in the financial statements and there are no undisclosed liabilities of
any kind or nature.
The Seller, at its own expense, further agrees to provide the buyer
within 75 days of closing with certified financial statements in conformity with
Securities and Exchange Commission reporting. If the Company is unable to
provide the required certified financial statements, then in that event the
Buyer may, in its sole and absolute discretion and in addition to any remedies
available at law, rescind this Agreement.
3.03 Litigation. Except as set forth in Exhibit 3.03, there are no
actions, suits, proceedings, or investigations pending or, to the best of its
knowledge, threatened or contemplated against Seller at law or in equity, before
any federal, state, municipal or other governmental department, commission,
board, agency or instrumentality, domestic or foreign. The Seller is not subject
to any outstanding judgments or operating under or subject to or in default with
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respect to any order, writ, injunction or decree of any court or federal, state,
municipal or other governmental department, commission, board, agency or
instrumentality, domestic or foreign
3.04 Compliance with Laws. The Seller has complied in all material
respects with all laws, regulations, orders, domestic and foreign, and neither
the present uses by Seller of its properties nor the conduct of its business
violate any such laws, regulations, orders or requirements, and the Seller has
not received any notice of any claim or assertion that it is not so in
compliance.
3.05 No Defaults. Neither the execution nor delivery of this Agreement
nor the consummation of the contemplated transaction are events which, of
themselves or with the giving of notice or passage of time or both, could
constitute a violation of or conflict with or result in any breach of or default
under the terms, conditions or provisions of any judgment, law or regulation or
of Seller's Certificate of Incorporation or Bylaws, or of any agreement or
instrument to which Seller is a party or by which it is bound; or could result
in the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever on the property or assets of Seller; and no consent of any third
party except as expressly contemplated herein is required for the consummation
of this Agreement by Seller.
3.06 Corporate Action of Seller. The Board of Directors of the Seller
has duly authorized the execution and delivery of this Agreement. This Agreement
constitutes a valid, legal and binding agreement of Seller and is enforceable in
accordance with its terms.
3.07 Taxes. Except as set forth on Exhibit 3.07, all federal, state,
and local tax returns, reports and declarations of estimated tax or estimated
tax deposit forms required to be filed by Seller have been duly filed; Seller
has paid all taxes which have become due pursuant to such returns or pursuant to
any assessment received by it, and has paid all installments of estimated taxes
due; and all taxes, levies and other assessments which Seller is required by law
to withhold or to collect have been duly withheld and collected and have been
paid over to the proper governmental authorities. Seller has no knowledge of any
tax deficiency which has been or might be asserted against Seller which would
materially and adversely affect the business or operations of Seller.
3.08 Title to Property; Leases. Seller has good and defensible title in
fee simple to, or valid and enforceable leasehold estates in, all properties and
assets, which are material to its continued operations, free and clear of all
liens, encumbrances, charges or restrictions except as set forth in the attached
Exhibit 3.08 or are not materially significant or important in relation to its
operations and business. All of such leases and subleases under which Seller is
the lessor or sublessor, lessee or sublessee of properties or assets or under
which Seller holds properties or assets as lessee or sublessee are in full force
and effect. Seller is not in default in respect of any of the terms or
provisions of any of such leases or subleases, and no claim has been asserted by
anyone adverse to their respective rights as lessor, sublessor, lessee or
sublessee under any of the leases or subleases mentioned above, or affecting or
questioning their respective rights to continued possession of the leased or
subleased premises or assets under any such lease or sublease; and Seller either
owns or leases all such properties as are necessary to its operations as now
conducted.
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3.09 Representations True and Correct. This Agreement and the Schedules
and Exhibits attached hereto do not contain any untrue statement of a material
fact concerning Seller or omits any material fact concerning Seller which is
necessary in order to make the statements therein not misleading. All of the
representations and warranties contained herein (including all statements
contained in any certificate or other instrument delivered by or on behalf of
the Seller) shall survive the closing.
3.10 Indemnification. Seller shall indemnify and hold ProCare, its pre-
and post-closing officers and directors, harmless of and in respect of:
(1) Any damage or loss resulting from any loss, liability, damage,
misrepresentation, breach of warranty or non-fulfillment on the part of Seller
under this agreement or from any misrepresentation or omission from any
certificates or other instrument furnished to the Company pursuant to this
agreement.
(2) All actions, suits, proceedings, demands assessments, judgments,
costs and expenses incident to any of the foregoing including reasonable
attorney's fees and all costs incurred by Company to enforce this agreement
against Seller.
3.11 Investment Knowledge. That the undersigned shareholders, either
alone or with the assistance of their own professional advisor, has such
knowledge and experience in financial and business matters that the undersigned
shareholder(s) are capable of evaluating the merits and risks of entering into
this transaction and the shares of common stock to be received from ProCare
Industries. That this transaction involves significant investment risk and the
undersigned shareholders have the net worth to undertake such risks, and each
shareholder is acquiring the ProCare shares for investment and not for purposes
of distribution, and each acknowledges that certificates representing the shares
shall bear the following restrictive legend:
The securities represented by this certificate may not be offered for
sale, sold or otherwise transferred except pursuant to an effective
registration statement under the Securities Act of 1933 (the "Act"), or
pursuant to an exemption from registration under the Act, the
availability of which is to be established to the satisfaction of the
company.
3.12 Acquisition Companies. Seller has reviewed the business, affairs,
financial statements, management, future prospects, liabilities and obligations,
including without limitation, exposure to risks of responsibility for
environmental claims from others, and such other information as Seller deemed to
be material, for each of the Acquisition Companies, identified on Exhibit 3.12,
which the parties acknowledge may be acquired by ProCare following the
completion and closing of this Agreement. To the best of Seller's present
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belief, after such review, none of the Acquisition Companies is subject to a
risk that its business will be materially and adversely affected in the
foreseeable future.
3.14. Representations Complete. None of the representations or
warranties made in this Article 5 contains any untrue statement of a material
fact, or omits or state any material fact necessary in order to make the
statements made, in light of the circumstances under which made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders own 100% of the issued and outstanding shares of stock
of Seller. The Shares are owned free and clear of any liens or encumbrances and
that the Shareholders are free to transfer the Shares without the consent of any
third party.
The Shareholders, or their authorized representatives, have had an
opportunity to meet with the officers and directors of the Buyer and ProCare and
both have provided the Shareholders with any and all information. The Seller has
had an opportunity to review all filings made by ProCare with the Securities and
Exchange Commission and is familiar with these filings that are available for
inspection at ▇▇▇.▇▇▇.▇▇▇. Each is taking the Shares for investment and not for
purposes of distribution.
None of the Shareholders own shares of ProCare.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF BUYER TO CLOSE
The obligations of Buyer under this Agreement are, subject to the
fulfillment of the following conditions at, or prior to, the Closing date:
5.01 Representations, Warranties and Covenants. All representations and
warranties of the Company contained in this Agreement and in any statement,
certificate, schedule or other document delivered by the Company pursuant hereto
or in connection herewith shall have been true and accurate in all respects as
of the date when made and as of the Closing Date.
5.02 Covenants, Etc. The Company shall have performed and complied with
each and every covenant, agreement and condition required by this Agreement to
be performed or complied with by them prior to, or at, the Closing Date.
5.03 Certificate. Company shall have delivered to Buyer a certificate
of the President and Secretary of Company, dated the Closing Date, certifying to
the fulfillment of the conditions set forth in 5.01 and 5.02.
5.04 Proceedings. No action or proceedings shall have been instituted
or threatened against the Company that could materially adversely affect the
business of the Company. No action or proceedings shall have been instituted or
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threatened against any of the parties to this Agreement or their directors or
officers before any court or governmental agency to restrain, prohibit or obtain
substantial damages in respect of this Agreement or the consummation of the
transaction contemplated hereby.
5.05 Corporate Documents. Prior to Closing the Company shall furnish to
Buyer copies of the Certificate of Incorporation of Company and each amendment
thereto, if any, which shall be certified by a proper state official; one copy
of the By-Laws and minutes of Company by its secretary or an assistant secretary
as being currently in effect, and a certificate of good standing issued by the
proper state officials of each state in which Company transacts business and is
required to qualify.
5.06 Document & Production. This Agreement is expressly conditioned on
Company providing all identified schedules and exhibits at the time of closing.
5.07 Registration Rights. At the Effective Date, Procare shall enter
into a Registration Agreement with ▇▇▇▇▇▇ in the form attached as Exhibit 5.07
relating to piggyback registration rights as to 130,000 restricted shares held
by ▇▇▇▇▇▇.
5.08 Legal Opinions. ProCare shall have received an opinion of legal
counsel to HK in the form of Exhibit 5.08 hereto; and
5.09 Promissory Note. HK shall have delivered to ▇▇▇▇▇▇ HK's Promissory
Note ("Note") for $50,000 payable to ▇▇▇▇▇▇, in the form attached hereto as
Exhibit 5.09. ProCare shall guarantee the payment of principal and interest on
the Note.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE SHAREHOLDERS
The obligations of the Shareholders is subject to the fulfillment of
the following conditions at or prior to the Closing Date:
6.01 Representations, Warranties and Covenants. All representations and
warranties of Buyer and ▇▇▇▇▇▇ contained in this Agreement and in any statement,
certificate, schedule or other document delivered pursuant hereto, or in
connection herewith, shall have been true and accurate in all respects as of the
date when made and as of the Closing Date.
6.02 Closing with ProCare. This Agreement is specifically contingent
upon the Buyer closing its acquisition of at least three of the Acquisition
companies identified on the attached Exhibit 6.02 in such form as previously
disclosed to Seller.
6.03 Covenants, Etc. Buyer shall have substantially performed and
complied with each and every covenant, agreement and condition required by this
Agreement to be performed or complied with by it prior to, or at, the Closing
Date.
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6.04 Proceedings. No action or proceedings shall have been instituted
or threatened against Buyer that could materially and adversely affect the
business of Buyer. No actions or proceedings shall have been instituted or
threatened against any of the parties to this Agreement, or their directors or
officers before any court or governmental agency to restrain, prohibit or obtain
substantial damages in respect to this Agreement or the consummation of the
transaction contemplated hereby.
6.05 Corporate Actions. ProCare shall have taken the following actions:
a. ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ shall have been appointed to the
ProCare Board and Fastpoint Board and Drew shall have been appointed chief
executive officer of Fastpoint.
b. All other officers and directors shall have resigned.
c. Attached hereto and marked Exhibit 6.05 is a list of all bank
accounts maintained by either ProCare or Buyer. Following Closing, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇ shall be appointed as a signatory to each of the accounts and any current
signatories shall resign, except for ProCare's prior checking account for which
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have the right to withdraw all deposits for purposes
consistent with this Agreement.
d. Upon execution of this Agreement, all current officers and directors
of Fastpoint shall tender their resignation and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ shall
immediately be appointed as sole director and Chief Executive Officer of Buyer,
and Buyer shall be authorized to enter into any of the proposed acquisitions as
set forth in Exhibit 6.02, subject to requirements of applicable corporate law.
e. Seller shall have received an opinion of counsel to ProCare in
connection with the validity of this Agreement and the enforceability of any
outstanding claims that were not dismissed in the prior ProCare bankruptcy. The
opinion shall be addressed to the Company and shall be updated or amended to
name each of the acquisition candidates.
ARTICLE VII
OBLIGATIONS OF ▇▇▇▇▇▇ FOLLOWING CLOSING
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ hereby agree not to sell in
excess of 15,000 shares of ProCare Common Stock in any thirty (30) day period
following the closing of this Agreement prior to the first anniversary of the
Effective Time, without the prior consent of the Chairman of the Board or the
Chief Executive Officer of ProCare. In order to insure compliance with the terms
and conditions of this paragraph, ▇▇▇▇▇▇ agrees to supply ProCare with monthly
trading reports
▇▇▇▇▇▇ shall be solely responsible for all costs incurred by ProCare in
connection with this transaction. To the extent that ▇▇▇▇▇▇ should fail to pay
any claim when it becomes due, ProCare or Drew may, together with other remedies
available at law or in equity may offset any payment which remain outstanding
against those liabilities for which ▇▇▇▇▇▇ has refused to pay or to reimburse
ProCare.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.01 Abandonment of Agreement. This Agreement may be terminated and the
transaction hereby contemplated abandoned at any time prior to the Closing Date,
whether before or after the approval and adoption hereof by the shareholders of
each Company by (a) the mutual consent of the Board of Directors of Company and
Buyer or (b) the Board of Directors of the Company if any condition to its
obligations provided in this Agreement has not been met at the time such
condition is to be met and has not been waived by it, or (c) by the Board of
Directors of Buyer, if any condition to its obligations provided in this
Agreement has not been met at the time such condition is to be met and has not
been waived by it.
8.02 Liabilities. In the event this Agreement is terminated pursuant to
Section 8.01, no party hereto shall have any liability to the other and each
party shall bear their own costs incurred except that any monies paid to date by
the Seller to either ▇▇▇▇▇▇ or to ProCare shall be non-refundable.
8.03 Assignments. This Agreement may not be assigned except with the
written consent of the non-assigning party. Notwithstanding the foregoing, the
rights of the Shareholders to receive the Shares shall be freely assignable.
8.04 Survival of Representations and Warranties. Company and Buyer
agree all representations and warranties contained herein or made hereunder
shall survive the Closing, except that any breach disclosed in writing to either
party prior to Closing is waived by such party if it elects to close
notwithstanding such breach.
8.05 Notices. All notices, demands and other communications which may
or are required to be given pursuant to this Agreement shall be given or made
when personally delivered or when deposited in the United States Mail, first
class, postage pre-paid, addressed as follows:
If to Company to: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as Company may, from time to time, designate by Notice
to Buyer.
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If to Buyer to: ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ Utility Construction Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
or to such other addresses as Buyer may, from time to time, designate by notice
to Company.
8.06 Closing. The closing date for the contemplated transaction shall
be on or before May 31, 2001 or such other date as may be agreed upon between
the parties.
8.07 Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes and cancels any and all prior agreements
between the parties relating to its subject matter. The representations,
warranties, covenants and conditions of the obligations of the parties hereto
may not be orally amended, modified or altered, but may be amended, modified or
altered in a writing signed by each of the parties, whether before or after the
meeting of shareholders of Company contemplated herein.
8.08 Captions. The captions of Articles and Sections of Articles hereof
are for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
8.09 Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the state of Ohio and jurisdiction for
any dispute shall be in Ohio.
8.10 Waivers. Any failure of either party hereto to comply with any of
its obligations or agreements, or to fulfill conditions herein contained may be
waived in writing by the other party. No waiver by any party of any condition or
the breach of any provision, term, covenant, representation or warranty
contained in this Agreement, whether by conduct or otherwise, shall be deemed to
be or construed as a further or continuing waiver of any such condition or of
the breach of any other provision, term, covenant, representation, or warranty
of this Agreement.
8.11 Counterparts. This Agreement may be executed in several
counterparts and all so executed shall constitute one agreement, binding upon
all of the parties hereto, notwithstanding that not all of the parties are
signatory to the original or the same counterpart.
8.12 Successors. The terms covenants and conditions of the Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, legal representatives, successors and assigns.
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8.13 Binding Agreement. This Agreement represents the entire agreement
among the parties hereto with respect to the matters described herein and is
binding upon and shall inure to the benefit of the parties hereto and their
legal representatives. This Agreement may not be assigned and, except as stated
herein, may not be altered or amended except in writing executed by the party to
be charged.
8.14 Brokers and Finders. Except for the obligation of ▇▇▇▇▇▇ following
the Effective Time to transfer 25,000 shares of ProCare Common Stock to ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, who acted as a finder in connection with the Merger, neither ProCare
nor any affiliate thereof has entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of
ProCare to pay any finders fees, brokerage or agent commissions or other like
payments in connection with the transactions contemplated hereby. Except as
described in the preceding sentence, there is no claim for payment by ProCare or
any affiliate thereof of payments of any investment banking fees, finder's fees,
brokerage or agent commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
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This Agreement entered into the date first entered above.
Fastpoint Acquisition Corp, Inc. WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ----------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
ProCare Industries, Ltd
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ----------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
HK Utility Construction, Inc.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------- ----------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, CEO
THE SHAREHOLDERS
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ C. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------- ----------------------------------
C. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Business Intelligence Group
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Lone Eagle Trust
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ BJ Ukra
--------------------------------- ----------------------------------
BJ Ukra
Innersources, Inc.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------- ----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
17