Exhibit 10.1
EXCHANGE AGREEMENT
Between
NANO HOLDINGS INTERNATIONAL, INC.
and
SUNSHINE GROUP LLC
Dated December ____, 2005
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement") is
entered into as of this _____ day of December, 2005, by and between NANO
HOLDINGS INTERNATIONAL, INC., a Delaware corporation (hereinafter referred to as
the "Company"), SUNSHINE GROUP LLC, a Florida limited liability corporation
(hereinafter referred to as "Sunshine"), and the persons executing this
Agreement listed on the signature page hereto (referred to collectively as
"Sunshine Members") who own one hundred percent (100%) of the ownership
interests in Sunshine, upon the following premises:
Premises.
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WHEREAS, the Sunshine Members own all of the issued an outstanding
ownership interests in Sunshine;
WHEREAS, the Company is a privately held corporation incorporated under the
laws of Delaware;
WHEREAS, Sunshine is a privately held limited liability company organized
under the laws of Florida;
WHEREAS, the Company desires to acquire 100% of the ownership interests in
Sunshine in exchange for unissued shares of its common stock, $.001 par value
per share (the "Common Stock") (the "Exchange Offer"), so that Sunshine will
become a wholly owned subsidiary of the Company; and
WHEREAS, the Sunshine Members desire to exchange all of their
ownership interests in Sunshine solely in exchange for the shares of authorized
but unissued Common Stock of the Company.
Agreement
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NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SUNSHINE
AND THE SUNSHINE MEMBERS
As an inducement to and to obtain the reliance of the Company, except as
set forth on the Sunshine Schedules (as hereinafter defined), Sunshine and the
Sunshine Members represent and warrant as follows:
Section 1.01 Organization. Sunshine is a limited liability corporation
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duly organized, validly existing, and in good standing under the laws of Florida
and has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the states or countries
in which the character and location of the assets owned by it or the nature of
the business transacted by it requires qualification, except where failure to be
so qualified would not have a material adverse effect on its business. Included
in the Sunshine Schedules are complete and correct copies of the Articles of
Organization of Sunshine as in effect on the date hereof. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of Sunshine's Articles of
Organization. Sunshine has taken all actions required by law, its Articles of
Organization, or otherwise to authorize the execution and delivery of this
Agreement. Sunshine has full power, authority, and legal right and has taken
all action required by law, its Articles of Organization, and otherwise to
consummate the transactions herein contemplated.
Section 1.02 Ownership Interests. The Sunshine Members own one hundred
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percent (100%) of the ownership interests in Sunshine. Their membership
interests are legally issued, fully paid, and non-assessable and not issued in
violation of the preemptive or other rights of any person.
Section 1.03 Subsidiaries and Predecessor Corporations. Sunshine does
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not have any predecessor corporation(s) or subsidiary(ies), and does not own,
beneficially or of record, any shares of any other corporation, unless otherwise
disclosed to the Company in writing.
Section 1.04 Other Information.
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(a) Except as otherwise provided, Sunshine has no liabilities with
respect to the payment of any federal, state, county, local or other taxes
(including any deficiencies, interest or penalties), except for taxes
accrued but not yet due and payable.
(b) Sunshine has filed all state, federal or local income and/or
franchise tax returns required to be filed by it from inception to the date
hereof. Each of such income tax returns reflects the taxes due for the
period covered thereby, except for amounts which, in the aggregate, are
immaterial.
(c) The books and records of Sunshine are in all material respects
complete and correct and have been maintained in accordance with good
business and accounting practices.
(d) Sunshine has no material liabilities, direct or indirect, matured
or unmatured, contingent or otherwise in excess of Twenty-Five Thousand
Dollars ($25,000), except as disclosed in writing to the Company on
Schedule 1.04.
Section 1.05 Information. The information concerning Sunshine set
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forth in this Agreement and in the Sunshine Schedules is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading. In
addition, Sunshine has fully disclosed in writing to the Company (through this
Agreement or the Sunshine Schedules) all information relating to matters
involving Sunshine or its assets or its present or past operations or activities
which (i) indicated or may indicate, in the aggregate, the existence of a
greater than Twenty-Five Thousand Dollars ($25,000) liability or diminution in
value, (ii) have led or may lead to a competitive disadvantage on the part of
Sunshine, or (iii) either alone or in aggregation with other information covered
by this Section, otherwise have led or may lead to a material adverse effect on
the transactions contemplated herein or on Sunshine, its assets, or its
operations or activities as presently conducted or as contemplated to be
conducted after the Closing Date, including, but not limited to, information
relating to governmental, employee, environmental, litigation and securities
matters and transactions with affiliates.
Section 1.06 Options or Warrants. There are no existing options,
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warrants, calls, or commitments of Sunshine of any character relating to any
present or future ownership interests in Sunshine, except options, warrants,
calls or commitments, if any, to which Sunshine is not a party and by which it
is not bound.
Section 1.07 Absence of Certain Changes or Events. Except as set forth
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in this Agreement or the Sunshine Schedules, since inception on June 24, 2002:
(a) there has not been (i) any material adverse change in the proposed
business, operations, properties, assets, or condition of Sunshine or (ii)
any damage, destruction, or loss to Sunshine (whether or not covered by
insurance) materially and adversely affecting the business or financial
condition of Sunshine;
(b) Sunshine has not (i) amended its Articles of Organization; (ii)
declared or made, or agreed to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to members or purchased
or redeemed, or agreed to purchase or redeem, any of the ownership
interests; (iii) waived any rights of value which in the aggregate are
outside of the ordinary course of business or material considering the
business of Sunshine; (iv) made any material change in its method of
management, operation or accounting; (v) entered into any other material
transaction other than sales in the ordinary course of its business; (vi)
made any accrual or arrangement for payment of bonuses or special
compensation of any kind or any severance or termination pay to any present
or former manager, officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its managers,
officers or directors or any of its salaried employees whose monthly
compensation exceeds Ten Thousand Dollars ($10,000); or (viii) made any
increase in any profit sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or
arrangement made to, for, or with its managers, officers, directors, or
employees;
(c) Sunshine has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) in excess of $25,000 except as disclosed herein
and except liabilities incurred in the ordinary course of business; (ii)
paid or agreed to pay any material obligations or liability (absolute or
contingent) other than current liabilities, and current liabilities
incurred in the ordinary course of business and professional and other fees
and expenses in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby; (iii) sold or
transferred, or agreed to sell or transfer, any of its assets, properties,
or rights (except assets, properties, or rights not used or useful in its
business which, in the aggregate have a value of less than Twenty-Five
Thousand Dollars ($25,000)), or canceled, or agreed to cancel, any debts or
claims (except debts or claims which in the aggregate are of a value of
less than Twenty-Five Thousand Dollars ($25,000)); or (iv) made or
permitted any amendment or termination of any contract, agreement, or
license to which it is a party if such amendment or termination is
material, considering the business of Sunshine; and
(d) To the best knowledge of Sunshine, Sunshine has not become subject
to any law or regulation which materially and adversely affects, or in the
future may adversely affect, the business, operations, properties, assets,
or condition of Sunshine.
Section 1.08 Title and Related Matters. No third party has any right
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to, and Sunshine has not received any notice of infringement of or conflict with
asserted rights of others with respect to, any product, technology, data, trade
secrets, know-how, proprietary techniques, trademarks, service marks, trade
names, or copyrights which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a materially adverse
effect on the proposed business, operations, financial condition, income, or
business prospects of Sunshine or any material portion of its properties,
assets, or rights.
Section 1.09 Litigation and Proceedings. Except as otherwise provided,
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there are no actions, suits, or proceedings pending or, to the knowledge of
Sunshine after reasonable investigation, threatened by or against Sunshine or
affecting Sunshine or its properties, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. Sunshine does not have any knowledge of any material
default on its part with respect to any judgment, order, injunction, decree,
award, rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.
Section 1.10 Contracts.
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(a) There are no material contracts, agreements, franchises, license
agreements, debt instruments or other commitments to which Sunshine is a
party or by which it or any of its assets, products, technology, or
properties are bound other than those incurred in the ordinary course of
business (as used in this Agreement, a "material" contract, agreement,
franchise, license agreement, debt instrument or commitment is one which
(i) will remain in effect for more than six (6) months after the date of
this Agreement and (ii) involves aggregate obligations of at least
Twenty-Five Thousand Dollars ($25,000) unless otherwise disclosed pursuant
to this Agreement;
(b) All contracts, agreements, franchises, license agreements, and
other commitments, if any, to which Sunshine is a party and which are
material to the operations of Sunshine taken as a whole are valid and
enforceable by Sunshine in all respects, except as limited by bankruptcy
and insolvency laws and by other laws affecting the rights of creditors
generally;
(c) Sunshine is not a party to or bound by, and the properties of
Sunshine are not subject to, any contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, the business operations, properties, assets, or condition of
Sunshine; and
(d) Except as included or described in the Sunshine Schedules,
Sunshine is not a party to any oral or written (i) contract for the
employment of any manager, officer or employee which is not terminable on
thirty (30) days, or less notice; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or retirement
plan; (iii) agreement, contract, or indenture relating to the borrowing of
money; (iv) guaranty of any obligation, other than one on which Sunshine is
a primary obligor, for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of obligations which,
in the aggregate do not exceed more than one (1) year or provide for
payments in excess of Twenty-Five Thousand Dollars ($25,000) in the
aggregate; (v) collective bargaining agreement; or (vi) agreement with any
present or former manager, officer or director of Sunshine.
Section 1.11 Material Contract Defaults. Sunshine is not in default in
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any material respect under the terms of any outstanding material contract,
agreement, lease, or other commitment which is material to the business,
operations, properties, assets or condition of Sunshine and there is no event of
default in any material respect under any such contract, agreement, lease, or
other commitment in respect of which Sunshine has not taken adequate steps to
prevent such a default from occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
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Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which Sunshine is a party or to which any of its
properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the
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Sunshine Schedules, Sunshine has all licenses, franchises, permits, and other
governmental authorizations that are legally required to enable it to conduct
its business in all material respects as conducted on the date hereof. Except
for compliance with federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body
is required in connection with the execution and delivery by Sunshine of this
Agreement and the consummation by Sunshine of the transactions contemplated
hereby.
Section 1.14 Compliance With Laws and Regulations. Except as set forth
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in the Sunshine Schedules, to the best of its knowledge Sunshine has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of Sunshine or except to the extent that noncompliance
would not result in the occurrence of any material liability for Sunshine.
Section 1.15 Approval of Agreement. The managers of Sunshine have
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authorized the execution and delivery of this Agreement by Sunshine and have
approved this Agreement and the transactions contemplated hereby, and will
recommend to the Sunshine Members that the Exchange Offer be accepted by them.
Section 1.16 Material Transactions or Affiliations. Set forth in the
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Sunshine Schedules is a description, if applicable, of every contract,
agreement, or arrangement between Sunshine and any predecessor and any person
who was at the time of such contract, agreement, or arrangement a manager,
officer, director, or person owning of record, or known by Sunshine to own
beneficially, five percent (5%) or more of the ownership interests of Sunshine
and which is to be performed in whole or in part after the date hereof or which
was entered into not more than three (3) years prior to the date hereof. Except
as disclosed in the Sunshine Schedules or otherwise disclosed herein, no
manager, officer, director, or member owning five percent (5%) or more of the
ownership interests of Sunshine has, or has had since inception of Sunshine, any
known interest, direct or indirect, in any transaction with Sunshine which was
material to the business of Sunshine. There are no commitments by Sunshine,
whether written or oral, to lend any funds, or to borrow any money from, or
enter into any other transaction with, any such affiliated person.
Section 1.17 Sunshine Schedules. Sunshine will deliver to the Company
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the following schedules, if such schedules are applicable to the business of
Sunshine, which are collectively referred to as the " Sunshine Schedules" and
which consist of separate schedules dated as of the date of execution of this
Agreement, all certified by the managers of Sunshine as complete, true, and
correct as of the date of this Agreement in all material respects:
(a) a schedule containing complete and correct copies of the Articles
of Organization in effect as of the date of this Agreement;
(b) a schedule containing any Corporate Resolutions of the members of
Sunshine;
(c) a schedule containing minutes of meetings of the managers of
Sunshine;
(d) a schedule listing any and all federal, state and local tax
identification numbers of Sunshine and containing complete and correct
copies of all federal, state and local tax returns filed by Sunshine; and
(e) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed by Sunshine. Any
fact known to be, or to the best knowledge of Sunshine or the Sunshine
Members after reasonable investigation, reasonably believed to be, contrary
to the representations, covenants, and warranties made in Article I are
required to be disclosed in the Sunshine Schedules pursuant to this Section
1.17(g).
Sunshine shall cause the Sunshine Schedules and the instruments and data
delivered to the Company hereunder to be promptly updated after the date hereof
up to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by Sunshine. Sunshine
shall have until January 31, 2006 to provide such schedules. If Sunshine cannot
or fails to do so, or if the Company acting reasonably finds any such schedules
or updates provided after the date hereof to be unacceptable according to the
criteria set forth herein, the Company may terminate this Agreement by giving
written notice to Sunshine within five (5) days after the schedules or updates
were due to be produced or were provided. For purposes of the foregoing, the
Company may consider a disclosure in the Sunshine Schedules to be "unacceptable"
only if that item would have a material adverse impact on the financial
condition of Sunshine, taken as a whole.
Section 1.18 Valid Obligation. This Agreement and all agreements and
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other documents executed by Sunshine in connection herewith constitute the valid
and binding obligation of Sunshine, enforceable in accordance with its or their
terms, except as may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
Section 1.19 Acquisition of the Shares by the Sunshine Members. The
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Sunshine Members are acquiring the Shares for their own account without the
participation of any other person and with the intent of holding the Shares for
investment and without the intent of participating, directly or indirectly, in a
distribution of the Shares, or any portion thereof, and not with a view to, or
for resale in connection with, any distribution of the Shares, or any portion
thereof. The Sunshine Members have read, understand and consulted with their
legal counsel regarding the limitations and requirements of Section 5 of the
1933 Act. The Sunshine Members will offer, sell, pledge, convey or otherwise
transfer the Shares, or any portion thereof, only if: (i) pursuant to an
effective registration statement under the 1933 Act and any and all applicable
state securities or Blue Sky laws or in a transaction which is otherwise in
compliance with the 1933 Act and such laws; or (ii) pursuant to a valid
exemption from registration.
Section 1.20 Exemption from Registration. The Exchange and the
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transactions contemplated thereby, meet an exemption from registration pursuant
to Rule 506 of Regulation D promulgated under the 1933 Act.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE COMPANY
As an inducement to, and to obtain the reliance of Sunshine and the
Sunshine Members, except as set forth in the Company Schedules (as hereinafter
defined), the Company represents and warrants as follows:
Section 2.01 Organization. The Company is a corporation duly
------------
organized, validly existing, and in good standing under the laws of the State of
Delaware and has the corporate power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances, and
orders of public authorities to own all of its properties and assets, to carry
on its business in all material respects as it is now being conducted, and
except where failure to be so qualified would not have a material adverse effect
on its business, there is no jurisdiction in which it is not qualified in which
the character and location of the assets owned by it or the nature of the
business transacted by it requires qualification. Included in the Company
Schedules are complete and correct copies of the Certificate of Incorporation
and Bylaws of the Company as in effect on the date hereof. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the Company's Certificate
of Incorporation or Bylaws. The Company has taken all action required by law,
its Certificate of Incorporation, its Bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and the Company has full power,
authority, and legal right and has taken all action required by law, its
Certificate of Incorporation, Bylaws, or otherwise to consummate the
transactions herein contemplated.
Section 2.02 Capitalization. The Company is authorized to issue
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75,000,000 shares of Common Stock, par value $.001 per share, of which 3,100,000
shares will be issued and outstanding on the closing date prior to the issuance
of the shares to the Sunshine Members as set forth in Section 3.01(ii), as
defined herein, and 10,000,000 shares of Preferred Stock, par value $.001 per
share, of which no shares are issued and outstanding. All issued and
outstanding shares are legally issued, fully paid, and non-assessable and not
issued in violation of the preemptive or other rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. The Company
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does not have any predecessor corporation(s) or subsidiaries, and does
not own, beneficially or of record, any shares of any other
corporation.
Section 2.04 Information. The information concerning the Company set
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forth in this Agreement and the Company Schedules is complete and accurate in
all material respects and does not contain any untrue statements of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading. In
addition, the Company has fully disclosed in writing to Sunshine (through this
Agreement or the Company Schedules) all information relating to matters
involving the Company or its assets or its present or past operations or
activities which (i) indicated or may indicate, in the aggregate, the existence
of a greater than One Thousand Dollars ($1,000) liability or diminution in
value, (ii) have led or may lead to a competitive disadvantage on the part of
the Company or (iii) either alone or in aggregation with other information
covered by this Section, otherwise have led or may lead to a material adverse
effect on the transactions contemplated herein or on the Company, its assets, or
its operations or activities as presently conducted or as contemplated to be
conducted after the Closing Date, including, but not limited to, information
relating to governmental, employee, environmental, litigation and securities
matters and transactions with affiliates.
Section 2.05 Options or Warrants. There are no existing options,
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warrants, calls, or commitments of any character relating to the authorized and
unissued stock of the Company.
Section 2.06 Absence of Certain Changes or Events. Except as disclosed
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in Schedule 2.06, or permitted in writing by Sunshine, since the date of the
most recent Company balance sheet:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets or condition of the Company or
(ii) any damage, destruction or loss to the Company (whether or not covered
by insurance) materially and adversely affecting the business, operations,
properties, assets or condition of the Company;
(b) The Company has not and will not (i) amend its Certificate of
Incorporation or Bylaws except to complete the performance of the Company
as set forth herein; (ii) declare or make, or agree to declare or make any
payment of dividends or distributions of any assets of any kind whatsoever
to stockholders or purchase or redeem, or agree to purchase or redeem, any
of its capital stock; (iii) waive any rights of value which in the
aggregate are outside of the ordinary course of business or material
considering the business of the Company; (iv) make any material change in
its method of management, operation, or accounting; (v) enter into any
transaction or agreement other than in the ordinary course of business;
(vi) make any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present
or former officer or employee; (vii) increase the rate of compensation
payable or to become payable by it to any of its officers or directors or
any of its salaried employees whose monthly compensation exceed One
Thousand Dollars ($1,000); or (viii) make any increase in any profit
sharing, bonus, deferred compensation, insurance, pension, retirement, or
other employee benefit plan, payment, or arrangement, made to, for or with
its officers, directors, or employees;
(c) The Company has not (i) granted or agreed to grant any options or
warrants; (ii) borrowed or agreed to borrow any funds or incurred, or
become subject to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary course of business;
(iii) paid or agreed to pay any material obligations or liabilities
(absolute or contingent) other than current liabilities reflected in or
shown on the most recent Company balance sheet and current liabilities
incurred since that date in the ordinary course of business and
professional and other fees and expenses in connection with the preparation
of this Agreement and the consummation of the transaction contemplated
hereby; (iv) sold or transferred, or agreed to sell or transfer, any of its
assets, properties, or rights (except assets, properties, or rights not
used or useful in its business which, in the aggregate have a value of less
than One Thousand Dollars ($1,000)), or canceled, or agreed to cancel, any
debts or claims (except debts or claims which in the aggregate are of a
value less than One Thousand Dollars ($1,000)); and (v) made or permitted
any amendment or termination of any contract, agreement, or license to
which it is a party if such amendment or termination is material,
considering the business of the Company; and
(d) The Company has not become subject to any law or regulation which
materially and adversely affects, or in the future, may adversely affect,
the business, operations, properties, assets or condition of the Company.
Section 2.07 Title and Related Matters. The Company has good and
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marketable title to all of its properties, inventory, interest in properties,
and assets, real and personal, which are reflected in the most recent Company
balance sheet or acquired after that date (except properties, inventory,
interest in properties, and assets sold or otherwise disposed of since such date
in the ordinary course of business), free and clear of all liens, pledges,
charges, or encumbrances except (a) statutory liens or claims not yet
delinquent; (b) such imperfections of title and easements as do not and will not
materially detract from or interfere with the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties; and (c) as described in the
Company Schedules. Except as set forth in the Company Schedules, the Company
owns, free and clear of any liens, claims, encumbrances, royalty interests, or
other restrictions or limitations of any nature whatsoever, any and all products
it is currently manufacturing, including the underlying technology and data, and
all procedures, techniques, marketing plans, business plans, methods of
management, or other information utilized in connection with the Company's
business. Except as set forth in the Company Schedules, no third party has any
right to, and the Company has not received any notice of infringement of or
conflict with asserted rights of others with respect to any product, technology,
data, trade secrets, know-how, proprietary techniques, trademarks, service
marks, trade names, or copyrights which, individually or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
materially adverse effect on the business, operations, financial condition,
income, or business prospects of the Company or any material portion of its
properties, assets, or rights.
Section 2.08 Litigation and Proceedings. There are no actions, suits,
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proceedings or investigations pending or, to the knowledge of the Company after
reasonable investigation, threatened by or against the Company or affecting the
Company or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. The Company has no knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator, or governmental agency or instrumentality,
or any circumstance which after reasonable investigation would result in the
discovery of such default.
Section 2.9 Contracts.
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(a) The Company is not a party to, and its assets, products,
technology and properties are not bound by, any material contract,
franchise, license agreement, agreement, debt instrument or other
commitments whether such agreement is in writing or oral.
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which the Company is a party or by which its
properties are bound and which are material to the operations of the
Company taken as a whole are valid and enforceable by the Company in all
respects, except as limited by bankruptcy and insolvency laws and by other
laws affecting the rights of creditors generally;
(c) The Company is not a party to or bound by, and the properties of
the Company are not subject to any contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, the business operations, properties, assets, or condition of the
Company; and
(d) Except as included or described in the Company Schedules or
reflected in the most recent Company balance sheet, the Company is not a
party to any oral or written (i) contract for the employment of any officer
or employee which is not terminable on thirty (30) days, or less notice;
(ii) profit sharing, bonus, deferred compensation, stock option, severance
pay, pension benefit or retirement plan, (iii) agreement, contract, or
indenture relating to the borrowing of money, (iv) guaranty of any
obligation, other than one on which the Company is a primary obligor, for
the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations which, in the aggregate do
not exceed more than one year or provide for payments in excess of
Twenty-Five Thousand Dollars ($25,000) in the aggregate; (v) collective
bargaining agreement; or (vi) agreement with any present or former officer
or director of the Company.
Section 2.10 Material Contract Defaults. The Company is not in default
--------------------------
in any respect under the terms of any outstanding contract, agreement, lease, or
other commitment which is material to the business, operations, properties,
assets or condition of the Company and there is no event of default in any
material respect under any such contract, agreement, lease, or other commitment
in respect of which the Company has not taken adequate steps to prevent such a
default from occurring.
Section 2.11 No Conflict With Other Instruments. The execution of this
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Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or to which any of its assets or operations are subject.
Section 2.12 Governmental Authorizations. The Company has all
----------------------------
licenses, franchises, permits, and other governmental authorizations, that are
legally required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal
and state securities or corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby.
Section 2.13 Compliance With Laws and Regulations. To the best of its
------------------------------------
knowledge, the Company has complied with all applicable statutes and regulations
of any federal, state, or other applicable governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
the Company or except to the extent that noncompliance would not result in the
occurrence of any material liability. This compliance includes, but is not
limited to, the filing of all reports, filings and schedules to date with
federal and state securities authorities.
Section 2.14 Approval of Agreement. The Board of Directors of the
-----------------------
Company has authorized the execution and delivery of this Agreement by the
Company and has approved this Agreement and the transactions contemplated
hereby.
Section 2.15 Material Transactions or Affiliations. Except as
----------------------------------------
disclosed herein and in the Company Schedules, there exists no contract,
agreement or arrangement between the Company and any predecessor and any person
who was at the time of such contract, agreement or arrangement an officer,
director, or person owning of record or known by the Company to own
beneficially, five percent (5%) or more of the issued and outstanding Common
Stock of the Company and which is to be performed in whole or in part after the
date hereof or was entered into not more than three years prior to the date
hereof. Neither any officer, director, nor five percent (5%) shareholder of the
Company has, or has had since inception of the Company, any known interest,
direct or indirect, in any such transaction with the Company which was material
to the business of the Company. The Company has no commitment, whether written
or oral, to lend any funds to, borrow any money from, or enter into any other
transaction with, any such affiliated person.
Section 2.16 The Company Schedules. Within ten (10) days following the
---------------------
Closing, the Company will deliver to Sunshine the following schedules, which are
collectively referred to as the "Company Schedules" and which consist of
separate schedules, which are dated the date of this Agreement, all certified by
the principal executive officer of the Company to be complete, true, and
accurate in all material respects as of the date of this Agreement:
(a) a schedule containing complete and accurate copies of the
Certificate of Incorporation and Bylaws of the Company as in effect as of
the date of this Agreement;
(b) a schedule containing a description of all real property owned by
the Company, together with a description of every mortgage, deed of trust,
pledge, lien, agreement, encumbrance, claim, or equity interest of any
nature whatsoever in such real property;
(c) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which the
Company carries on or proposes to carry on its business (except those
which, in the aggregate, are immaterial to the present or proposed business
of the Company); and
(d) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed by the Company. Any
fact known to be, or to the best knowledge of the Company after reasonable
investigation, reasonably believed to be, contrary to the representations,
covenants, and warranties made in Article II are required to be disclosed
in the Company Schedules pursuant to this Section 2.16(d).
The Company shall cause the Company Schedules and the instruments and data
delivered to Sunshine hereunder to be promptly updated after the date hereof up
to and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by the Company. The
Company shall have until January 31, 2006 to provide such schedules. If the
Company cannot or fails to provide the schedules required by this Section, or if
Sunshine or the Sunshine Members find any such schedules or updates provided
after the date hereof to be unacceptable, Sunshine or the Sunshine Members may
terminate this Agreement by giving written notice to the Company within five (5)
days after the schedules or updates were due to be produced or were provided.
For purposes of the foregoing, the Sunshine may consider a disclosure in the
Company Schedules to be "unacceptable" only if that item would have a material
adverse impact on the financial condition of the Company, taken as a whole.
Section 2.17 Valid Obligation. This Agreement and all agreements and
-----------------
other documents executed by the Company in connection herewith constitute the
valid and binding obligation of the Company, enforceable in accordance with its
or their terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
Section 2.18 Liabilities. The Company acknowledges that it will
-----------
have no liabilities outstanding on the Closing Date (as defined in Section
3.02).
Section 2.19 Approval of the Exchange by the Company''s Shareholders.
--------------------------------------------------------
The transactions contemplated by this Agreement do not require the approval of
the Company''s shareholders.
Section 2.20 The Directors of the Company shall have approved the
Exchange Offer and the related transactions described herein.
Section 2.21 Approval of the Exchange Offer and related transactions by
the Company''s Shareholders is not required by Delaware law or the Company''s
Certificate of Incorporation or Bylaws or any amendments thereto.
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. (i) On the terms and subject to the
-------------
conditions set forth in this Agreement, on the Closing Date (as defined in
Section 3.02), each Sunshine Member who shall elect to accept the Exchange Offer
described herein shall assign, transfer and deliver, free and clear of all
liens, pledges, encumbrances, charges, restrictions or known claims of any kind,
nature, or description, their ownership interests of Sunshine set forth herein,
in the aggregate constituting 100% of the ownership interests of Sunshine.
After the acquisition of 100% of the ownership interests of Sunshine, Sunshine
shall become a majority-owned subsidiary of the Company.
Section 3.01(ii) The Sunshine Members will receive Thirty-Five Thousand
(35,000) shares of the Company''s common stock for every one percent (1%)
ownership interest of Sunshine held or an aggregate amount of Three Million Five
Hundred Thousand (3,500,000) shares of the Company''s Common Stock. Following
the execution of this Agreement, the Sunshine Members shall own 3,500,000 shares
out of 6,600,000 shares outstanding in the Company, representing approximately
Fifty-Three percent (53%) of the Company's then outstanding Common Stock.
Section 3.02 Closing. The closing ("Closing") of the transaction
-------
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than December 31, 2005, subject
to the right of the Company or Sunshine to extend such Closing Date by up to an
additional ten (10) days. Such Closing shall take place at a mutually agreeable
time and place. At Closing, or immediately thereafter, the following will
occur:
a) The Sunshine Members shall surrender the certificates evidencing
100% of the ownership interests of Sunshine, so as to make the Company the
sole owner thereof;
b) The Company will issue and deliver 3,500,000 newly issued treasury
shares of the Company''s Common Stock in the name of the Sunshine Members
in accordance with this Agreement; and
c) At the Closing, the Company, Sunshine and each of the Sunshine
Members shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered at or prior to
the Closing, together with such other items as may be reasonably requested
by the parties hereto and their respective legal counsel in order to
effectuate or evidence the transactions contemplated hereby.
Section 3.03 Name Change. The Company will change its name to
-------------
Sunshine Group, Inc. in connection with the transactions contemplated by this
Agreement.
Section 3.04 Tradability of Shares. The shares of the Common Stock of
----------------------
the Company to be issued to the Sunshine Members have not been registered under
the 1933 Act, nor registered under any state securities law, and are "restricted
securities" as that term is defined in Rule 144 under the ▇▇▇▇ ▇▇▇. The
securities may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the 1933 Act, or pursuant
to an exemption from registration under the 1933 Act. The shares to be issued to
the Sunshine Members will bear the following restrictive legend:
""THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED WITHOUT EITHER: i)
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, OR ii) SUBMISSION TO THE CORPORATION OF AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION THAT SAID SHARES AND THE TRANSFER THEREOF ARE
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS.""
Section 3.05 Anti-Dilution. The number of shares of the Company''s
-------------
Common Stock issuable upon the Exchange Offer shall be appropriately adjusted to
take into account any other stock split, stock dividend, reverse stock split,
recapitalization, or similar change in the Company''s Common Stock which may
occur (i) between the date of the execution of this Agreement and the Closing
Date.
Section 3.06 Termination.
-----------
(a) This Agreement may be terminated by the board of directors of the
Company, the managers of Sunshine or by the Sunshine Members at any time
prior to the Closing Date if:
(i) there shall be any actual or threatened action or proceeding
before any court or any governmental body which shall seek to
restrain, prohibit, or invalidate the transactions contemplated by
this Agreement and which, in the judgment of such board of directors
or managers made in good faith and based upon the advice of its legal
counsel, makes it inadvisable to proceed with the Exchange;
(ii) any of the transactions contemplated hereby are disapproved
by any regulatory authority whose approval is required to consummate
such transactions (which does not include the Securities and Exchange
Commission) or in the judgment of such board of directors or managers,
made in good faith and based on the advice of counsel, there is
substantial likelihood that any such approval will not be obtained or
will be obtained only on a condition or conditions which would be
unduly burdensome, making it inadvisable to proceed with the Exchange;
or
(iii) if Sunshine Members representing less than one hundred
(100%) of the ownership interests of Sunshine agree to the Exchange
Offer.
In the event of termination pursuant to this paragraph, no obligation,
right or liability shall arise hereunder, and each party shall bear all of
the expenses incurred by it in connection with the negotiation, drafting,
and execution of this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated by the board of directors of the
Company at any time prior to the Closing Date if:
(i) the board of directors of the Company determines in good
faith that one or more of the Company's conditions to Closing has not
occurred, through no fault of the Company.
(ii) The Company takes the termination action specified in
Section 1.17 as a result of Sunshine Schedules or updates thereto
which the Company finds unacceptable; or
(iii) Sunshine shall fail to comply in any material respect with
any of its covenants or agreements contained in this Agreement or if
any of the representations or warranties of Sunshine contained herein
shall be inaccurate in any material respect, where such noncompliance
or inaccuracy has not been cured within ten (10) days after written
notice thereof.
If this Agreement is terminated pursuant to this paragraph, this
Agreement shall be of no further force or effect, and no obligation, right
or liability shall arise hereunder, except that Sunshine shall bear the
costs in connection with the negotiation, preparation, and execution of
this Agreement and qualifying the offer and sale of securities to be issued
in the Exchange under the registration requirements, or exemption from the
registration requirements, of state and federal securities laws.
(c) This Agreement may be terminated by the managers of Sunshine or by
the Sunshine Members at any time prior to the Closing Date if:
(i) the managers of Sunshine determines in good faith that one or
more of Sunshine's conditions to Closing has not occurred, through no
fault of Sunshine;
(ii) Sunshine takes the termination action specified in Section
2.16 as a result of the Company Schedules or updates thereto which
Sunshine finds unacceptable;
(iii) on or before December 31, 2005, if Sunshine notifies the
Company that Sunshine's investigation pursuant to Section 4.01 below
has uncovered information which it finds unacceptable by the same
criteria set forth herein; or
(iv) The Company shall fail to comply in any material respect
with any of its covenants or agreements contained in this Agreement or
if any of the representations or warranties of the Company contained
herein shall be inaccurate in any material respect, where such
noncompliance or inaccuracy has not been cured within ten (10) days
after written notice thereof.
If this Agreement is terminated pursuant to this paragraph, this
Agreement shall be of no further force or effect, and no obligation, right
or liability shall arise hereunder.
No revenue ruling or opinion of counsel will be sought as to the tax-free
nature of the subject Exchange and such tax treatment is not a condition to
Closing herein.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. The Company and
-----------------------------------
Sunshine will each afford to the officers and authorized representatives of the
other full access to the properties, books and records of the Company or
Sunshine, as the case may be, in order that each may have a full opportunity to
make such reasonable investigation as it shall desire to make of the affairs of
the other, and each will furnish the other with such additional financial and
operating data and other information as to the business and properties of the
Company or Sunshine, as the case may be, as the other shall from time to time
reasonably request. Any such investigation and examination shall be conducted at
reasonable times and under reasonable circumstances, and each party hereto shall
cooperate fully therein. No investigation by a party hereto shall, however,
diminish or waive in any way any of the representations, warranties, covenants
or agreements of the other party under this Agreement. In order that each party
may investigate as it may wish the business affairs of the other, each party
shall furnish the other during such period with all such information and copies
of such documents concerning the affairs of it as the other party may reasonably
request, and cause its officer, employees, consultants, agents, accountants, and
attorneys to cooperate fully in connection with such review and examination, and
to make full disclosure to the other parties all material facts affecting its
financial condition, business operations, and the conduct of operations. Without
limiting the foregoing, as soon as practicable after the end of each fiscal
quarter (and in any event through the last fiscal quarter prior to the Closing
Date), the Company shall provide Sunshine with quarterly internally prepared and
unaudited financial statements for all periods up to the date of Closing.
Section 4.02 Delivery of Books and Recordsand the Company''s Accounts.
--------------------------------------------------------
At the Closing, Sunshine shall deliver to the Company copies of the corporate
minute books, books of account, contracts, records, and all other books or
documents of Sunshine now in the possession of Sunshine or its representatives.
Section 4.03 Third Party Consents and Certificates. The Company and
---------------------------------------
Sunshine agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein contemplated.
Section 4.04 Consent of Sunshine Members. Sunshine shall use its best
---------------------------
efforts to obtain the consent of all Sunshine Members to participate in the
Exchange.
Section 4.05 Exclusive Dealing Rights. Until 5:00 P.M. Eastern
--------------------------
Daylight Time on December 31, 2005.
(a) In recognition of the substantial time and effort which the
Company has spent and will continue to spend in investigating Sunshine and
its business and in addressing the matters related to the transactions
contemplated herein, each of which may preempt or delay other management
activities, neither Sunshine, nor any of its managers, officers, employees,
representatives or agents will directly or indirectly solicit or initiate
any discussions or negotiations with, or, except where required by
fiduciary obligations under applicable law as advised by counsel,
participate in any negotiations with or provide any information to or
otherwise cooperate in any other way with, or facilitate or encourage any
effort or attempt by, any corporation, partnership, person or other entity
or group (other than the Company and its directors, officers, employees,
representatives and agents) concerning any merger, sale of substantial
assets, sale of the ownership interests, (including without limitation, any
public or private offering of ownership interests of Sunshine) or similar
transactions involving Sunshine (all such transactions being referred to as
" Sunshine Acquisition Transactions"). If Sunshine receives any proposal
with respect to a Sunshine Acquisition Transaction, it will immediately
communicate to the Company the fact that it has received such proposal and
the principal terms thereof.
(b) In recognition of the substantial time and effort which Sunshine
has spent and will continue to spend in investigating the Company and its
business and in addressing the matters related to the transactions
contemplated herein, each of which may preempt or delay other management
activities, neither the Company, nor any of its officers, employees,
representatives, shareholders or agents will directly or indirectly solicit
or initiate any discussions or negotiations with, or, except where required
by fiduciary obligations under applicable law as advised by counsel,
participate in any negotiations with or provide any information to or
otherwise cooperate in any other way with, or facilitate or encourage any
effort or attempt by, any corporation, partnership, person or other entity
or group (other than Sunshine and its manager(s), directors, officers,
employees, representatives and agents) concerning any merger, sale of
substantial assets, sale of shares of capital stock, (including without
limitation, any public or private offering of the Common Stock of the
Company or similar transactions involving the Company (all such
transactions being referred to as "Company Acquisition Transactions"). If
the Company receives any proposal with respect to a Company Acquisition
Transaction, it will immediately communicate to Sunshine the fact that it
has received such proposal and the principal terms thereof.
Section 4.06 Actions Prior to Closing.
---------------------------
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the Company Schedules or Sunshine Schedules or
as permitted or contemplated by this Agreement, the Company and Sunshine
respectively (subject to paragraph (b) below), will each:
(i) carry on its business in substantially the same manner as it
has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(v) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
neither the Company nor Sunshine will:
(i) make any changes in the Certificate of Incorporation or
Bylaws in the case of the Company, or in the Articles of Organization
in the case of Sunshine, except as otherwise provided in this
Agreement;
(ii) take any action described in Section 1.07 in the case of
Sunshine, or in Section 2.07, in the case of the Company (all except
as permitted therein or as disclosed in the applicable party's
schedules);
(iii) enter into or amend any contract, agreement, or other
instrument of any of the types described in such party's schedules,
except that a party may enter into or amend any contract, agreement,
or other instrument in the ordinary course of business involving the
sale of goods or services; or
(iv) sell any assets or discontinue any operations, sell any
shares of capital stock in the case of the Company, any ownership
interests in the case of Sunshine, or conduct any similar transactions
other than in the ordinary course of business.
Section 4.07 Indemnification.
---------------
(a) The Company hereby agrees to indemnify Sunshine and each of the
managers, officers, agents, and directors of Sunshine and each of the
Sunshine Members as of the date of execution of this Agreement against any
loss, liability, claim, damage, or expense (including, but not limited to,
any and all expense whatsoever reasonably incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or
any claim whatsoever), to which it or they may become subject arising out
of or based on any inaccuracy appearing in or misrepresentation made by the
Company under this Agreement. The indemnification provided for in this
paragraph shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
Section 4.08 Indemnification of Subsequent Corporate Actions.
---------------------------------------------------
(1) No officer, director, controlling shareholder, agent or
representative of the Company, or any other person currently
affiliated with the Company, has offered or agreed to assist
in the promotion, market making, development, enhancement,
or support of the Company''s business, capital raising, or
securities market.
(2) Sunshine hereby represents and warrants that it will
indemnify and hold harmless any officer, director,
controlling shareholder, agent or representative of the
Company, or any other person affiliated with the Company,
from any decisions, activities, or conduct of the Company
contemporaneous with, or subsequent to this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants.
--------------------------------------------------------
The representations and warranties made by Sunshine in this Agreement were true
when made and shall be true at the Closing Date with the same force and effect
as if such representations and warranties were made at and as of the Closing
Date (except for changes therein permitted by this Agreement). Sunshine shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Sunshine prior to or at the
Closing. The Company shall be furnished with a certificate, signed by a duly
authorized manager of Sunshine and dated the Closing Date, to the foregoing
effect.
Section 5.02 No Material Adverse Change. Prior to the Closing Date,
----------------------------
there shall not have occurred any material change in the financial condition,
business, or operations of Sunshine nor shall any event have occurred which,
with the lapse of time or the giving of notice, is determined to be unacceptable
using the criteria set forth in Section 1.17.
Section 5.03 Approval by Sunshine Members. The Exchange shall have
-------------------------------
been approved, and shares delivered in accordance with Section 3.01, by the
holders of not less than one hundred (100%) of the ownership interests of
Sunshine.
Section 5.04 No Governmental Prohibition. No order, statute, rule,
-----------------------------
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.05 Consents. All consents, approvals, waivers or amendments
--------
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and Sunshine after the Closing Date on the basis as
presently operated shall have been obtained.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SUNSHINE
AND THE SUNSHINE MEMBERS
The obligations of Sunshine and the Sunshine Members under this Agreement
are subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants.
--------------------------------------------------------
The representations and warranties made by the Company in this Agreement were
true when made and shall be true as of the Closing Date (except for changes
therein permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, the Company shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
the Company and shall have satisfied all conditions set forth herein prior to or
at the Closing. Sunshine shall have been furnished with certificates, signed by
duly authorized executive officers of the Company and dated the Closing Date, to
the foregoing effect.
Section 6.02 No Material Adverse Change. Prior to the Closing Date,
----------------------------
there shall not have occurred any change in the financial condition, business or
operations of the Company nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable using
the criteria set forth in Section 2.16.
Section 6.03 No Governmental Prohibition. No order, statute, rule,
-----------------------------
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.04 Consents. All consents, approvals, waivers or amendments
--------
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of the Company and Sunshine after the Closing Date on the basis as
presently operated shall have been obtained.
Section 6.05 Other Items. Sunshine shall have received further
------------
opinions, documents, certificates, or instruments relating to the transactions
contemplated hereby as Sunshine may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 No Bankruptcy and No Criminal Convictions. None of the
-------------------------------------------
Parties to the Agreement, nor their managers, officers, directors or affiliates,
promoters, beneficial shareholders, members or control persons, nor any
predecessor thereof have been subject to the following:
(a) Any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer within the past five
(5) years;
(b) Any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(c) Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; and
(d) Being found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission (the ""SEC"") or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated.
Section 7.02 Broker/Finder''s Fee. No broker''s or finder''s fee will
--------------------
be paid in connection with the transaction contemplated by this Agreement other
than fees payable to persons registered as broker-dealers pursuant to Section 15
of the Securities Exchange Act of 1934. The Company and Sunshine agree that,
except as set forth herein and on Schedule 7.02 attached hereto, there were no
brokers or finders involved in bringing the parties together or who were
instrumental in the negotiation, execution or consummation of this Agreement.
The Company and Sunshine each agree to indemnify the other against any claim by
any third person other than those described above for any commission, brokerage,
or finder's fee arising from the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party and such third
person, whether express or implied from the actions of the indemnifying party.
Section 7.03 Governing Law and Arbitration. This Agreement shall be
-------------------------------
governed by, enforced, and construed under and in accordance with the laws of
the United States of America and, with respect to the matters of state law, with
the laws of the State of Texas without giving effect to principles of conflicts
of law thereunder. All controversies, disputes or claims arising out of or
relating to this Agreement shall be resolved by binding arbitration. The
arbitration shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. All arbitrators shall possess
such experience in, and knowledge of, the subject area of the controversy or
claim so as to qualify as an ""expert"" with respect to such subject matter. The
governing law for the purposes of any arbitration arising hereunder shall be in
Texas. The prevailing party shall be entitled to receive its reasonable
attorney''s fees and all costs relating to the arbitration. Any award rendered
by arbitration shall be final and binding on the parties, and judgment thereon
may be entered in any court of competent jurisdiction.
Section 7.04 Notices. Any notice or other communications required or
-------
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to the Company, to: Nano Holdings International, Inc.
-----------------------------
-----------------------------
-----------------------------
If to Sunshine, to: Sunshine Group LLC
-----------------------------
-----------------------------
-----------------------------
With copies to: ▇▇▇▇▇ ▇. ▇▇▇▇, Attorney at Law
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.05 Attorney's Fees. In the event that either party
----------------
institutes any action or suit to enforce this Agreement or to secure relief from
any default hereunder or breach hereof, the prevailing party shall be reimbursed
by the losing party for all costs, including reasonable attorney's fees,
incurred in connection therewith and in enforcing or collecting any judgment
rendered therein.
Section 7.06 Confidentiality. Each party hereto agrees with the other
---------------
that, unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, manager, officer, director or employee, or from any
books or records or from personal inspection, of such other party, and shall not
use such data or information or disclose the same to others, except (i) to the
extent such data or information is published, is a matter of public knowledge,
or is required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.07 Public Announcements and Filings. Unless required by
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applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
Section 7.08 Schedules; Knowledge. Each party is presumed to have
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full knowledge of all information set forth in the other party's schedules
delivered pursuant to this Agreement.
Section 7.09 Third Party Beneficiaries. This contract is strictly
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between the Company and Sunshine and the Sunshine Members, and, except as
specifically provided, no manager, director, officer, member (other than the
Sunshine Members), stockholder, employee, agent, independent contractor or any
other person or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.10 Expenses. The Company and Sunshine each hereto agree to
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pay its own costs and expenses incurred in negotiating this Agreement including
legal, accounting and professional fees, incurred in connection with the
Exchange or any of the other transactions contemplated hereby, and those costs
and expenses incurred in consummating the transactions described herein.
Section 7.11 Entire Agreement. This Agreement represents the entire
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agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.12 Survival; Termination. The representations, warranties,
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and covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two (2)
years.
Section 7.13 Counterparts. This Agreement may be executed in multiple
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counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.14 Amendment or Waiver. Every right and remedy provided
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herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.15 Best Efforts. Subject to the terms and conditions herein
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provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
Section 7.16 Faxed Copies. For purposes of this Agreement, a
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faxed signature will constitute an original signature.
Section 7.17 Severability. The invalidity or unenforceability of
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any term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
[Remainder of page left intentionally blank. Signature page follows.]
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
NANO HOLDINGS INTERNATIONAL, INC.
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
SUNSHINE GROUP LLC
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing Member
SUNSHINE MEMBERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
58.5% ownership interest in Sunshine Group LLC
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
29.7% ownership interest in Sunshine Group LLC
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
10% ownership interest in Sunshine Group LLC
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
1.8% ownership interest in Sunshine Group LLC