Exhibit 1
ACQUISITION AGREEMENT
July 6, 2005
POCKETSPEC TECHNOLOGIES INC.
ACQUISITION OF
SPANISH TRAILS, LLC
TABLE OF CONTENTS
Page
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Recitals ................................................................ 1
Agreement .............................................................. 1
1. Plan of Acquisition ....................................... 1
2. Exchange of Equity ......................................... 1
3. Delivery of Shares ........................................ 1
4. Representations of Acquiree ............................... 1
5. Representations of Acquiring Corporation .................. 3
6. Closing and Delivery Date ................................. 5
7. Conditions Precedent to the Obligations of Acquiree ....... 5
8. Conditions Precedent to the Obligations of Acquiror ....... 6
9. Indemnification ........................................... 6
10. Nature and Survival of Representations .................... 7
11. Documents at Closing ...................................... 7
12. Miscellaneous ............................................. 7
Signature Page ......................................................... 9
-ii-
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT is entered into this 6th day of July, 2005, by
and between POCKETSPEC TECHNOLOGIES INC., a Colorado corporation, (hereinafter
"Acquiror"); and SPANISH TRAILS, LLC, a New Mexico limited liability company;
(hereinafter referred to as "Acquiree"); and the undersigned Members of
Acquiree, (hereinafter referred to as "Members").
RECITALS
Members of Acquiree own or control all of the issued and outstanding
memberships of Acquiree. Acquiror desires to acquire all of the issued and
outstanding memberships of Acquiree, making Acquiree a wholly-owned subsidiary
of Acquiror, and Members desire to make a tax-free exchange solely of their
memberships in Acquiree for shares of Acquiror's common stock to be exchanged as
set out herein with said Members.
NOW, THEREFORE, for the mutual consideration set out herein, the parties
agree as follows:
AGREEMENT
1. Plan of Acquisition. Members of Acquiree are the owners of all the
issued and outstanding memberships of said Acquiree. It is the
intention of the parties hereto that all of the issued and outstanding
memberships of Acquiree shall be acquired by Acquiror in exchange
solely for newly issued Acquiror voting stock. It is the intention of
the parties hereto that this transaction qualify as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986,
as amended, as an exchange of equity.
2. Exchange of Equity. Acquiror and Members agree that all of the issued
and outstanding memberships of Acquiree shall be exchanged with
Acquiror for an aggregate total of 614,882,069 shares of restricted
common stock of Acquiror. The Acquiror shares will, on the date of
delivery to the Members, (which is hereafter defined as the Delivery
Date), be delivered to the Members in exchange for their memberships
in Acquiree. Members represent and warrant that they will hold such
shares of common stock of Acquiror for investment purposes and not for
further public distribution and agree that the shares shall be
appropriately restricted.
3. Delivery of Shares. On the Delivery Date (which is defined as the date
in Paragraph 6 herein), Members will deliver certificates for the
memberships of Acquiree duly endorsed so as to make Acquiror the sole
holder thereof free and clear of all claims and encumbrances. On the
Delivery Date, delivery of the Acquiror shares, which will be
appropriately restricted as to transfer, will be made to the Members
as set forth herein. A list of the memberships of Acquiree and shares
of Acquiror to be received by said Members is attached hereto as
Exhibit "A" and by this reference is incorporated herein.
4. Representations of Acquiree. The Acquiree, hereby represents and
warrants that, with respect to the Acquiree, effective this date, the
Closing Date (which is defined as the date in Paragraph 6 herein), and
the Delivery Date, the representations listed below are true and
correct to the best of their knowledge, information, and belief. Said
representations are meant and intended by all parties to apply to the
Acquiree:
(a) The listed Members on Exhibit "A" are the sole owners of all of
the issued and outstanding memberships of Acquiree; such
memberships are free from claims, liens, or other encumbrances
except as disclosed in any Exhibit hereto; and Members have the
unqualified right to transfer and dispose of such memberships.
(b) The issued memberships of Acquiree constitute validly issued
memberships of Acquiree, fully-paid and nonassessable.
(c) Reserved.
(d) Prior to and as of the Closing Date and the Delivery Date, there
will not be any negative material changes in the financial
position of Acquiree, except changes arising in the ordinary
course of business, which changes will in no event adversely
affect the financial position of said Acquiree.
(e) To the best of Acquiree's knowledge, information and belief, it
is not involved in, and has not received judicial notice of any
pending litigation or governmental investigation or proceeding
not reflected in such financial statement, or otherwise disclosed
in writing to Acquiror and, to the best knowledge of Acquiree, no
material litigation, claims, or assessments, or governmental
investigation or proceeding is threatened against Acquiree, its
principal Members or properties.
(f) As of the Closing Date and the Delivery Date, Acquiree will be in
good standing in its jurisdiction of incorporation, and will be
in good standing and in the process of becoming duly qualified to
do business in each jurisdiction where required to be so
qualified.
(g) Acquiree has complied with all applicable laws in connection with
its formation, issuance of securities, organization,
capitalization and operations, and to the best of Acquiree's
knowledge, information and belief, no contingent liabilities have
been threatened or claims made, and no basis for the same exists
with respect to said operations, formation or capitalization,
including claims for violation of any state or federal securities
laws.
(h) Acquiree has filed all governmental, tax or related returns and
reports due or required to be filed and has paid all taxes or
assessments which have or which shall become due as of the
Closing Date and the Delivery Date.
(i) Except as disclosed in this Agreement or on any Exhibit, Acquiree
has not breached any material agreement to which it individually
or collectively may be a party.
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(j) Acquiree has no subsidiary corporations.
(k) The corporate financial records, minute books, and other
documents and records of Acquiree are to be available to present
management of Acquiror prior to the Closing Date and turned over
to new management of Acquiror in their entirety on the Delivery
Date.
(l) The execution of this Agreement will not violate or breach any
agreement, contract, or commitment to which Acquiree or Members
are a party, except as has been disclosed to Acquiror, and has
been duly authorized by all appropriate and necessary action.
(m) The authorized and issued capitalization of Acquiree is 100
Units. Acquiree has only one class of memberhip. As of the
Closing Date, all outstanding memberships will have been duly
authorized, validly issued and will be fully paid and
nonassessable with no personal liability attaching to the
ownership thereof. There will be no outstanding convertible
securities, warrants, options or commitments of any nature which
may cause authorized but unissued securities to be issued to any
person.
(n) To the best knowledge of Members and Acquiree, Acquiree is not
subject to any material labor disputes or disagreements, either
actual or contingent. Further, as of the Closing Date, there will
not be any employee or consultant contracts issued and
outstanding which have not been disclosed in Exhibit D hereto.
(o) To the best knowledge of Members and Acquiree, Acquiree's
products, materials and brochures do not infringe the patent or
copyright rights of any other person or entity.
(p) At the date of this Agreement, Members have, and at the Closing
Date and the Delivery Date, they will have to the best of their
knowledge, disclosed all events, conditions and facts materially
affecting the business and prospects of Acquiree and its assets.
Members have not now and will not have, at the Closing Date or
the Delivery Date, withheld knowledge of any such events,
conditions, and facts which they know, or have reasonable grounds
to know, may materially affect the business and prospects of
Acquiree or its assets.
5. Representations of Acquiring Corporation. Acquiror hereby represents and
warrants as follows, effective this date, the Closing Date, and the
Delivery Date, the representations listed below are true and correct to the
best of its knowledge, information, and belief:
(a) As of the Delivery Date, the Acquiror shares to be delivered to the
Members will constitute valid and legally issued shares of Acquiror,
fully-paid and nonassessable, and will be legally equivalent in all
respects to the common stock of Acquiror issued and outstanding as of
the date thereof.
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(b) The officers of Acquiror are duly authorized to execute this Agreement
and have taken all actions required by law and agreements, charters,
and bylaws, to properly and legally execute this Agreement.
(c) Acquiror has made available to Acquiree combined audited financial
statements for the past two fiscal years, which shall be true,
complete and accurate; there are and shall be no substantial
liabilities, either fixed or contingent, not reflected in such
financial statements and records or to which the Acquiree has not been
made aware. Said financial statements fairly and accurately reflect
the financial condition of the Acquiror as of the date thereof and the
results of operations for the period reflected therein. Such
statements shall have been prepared in accordance with US Generally
Accepted Accounting Principles, consistently applied.
(d) Prior to and as of the Closing Date and the Delivery Date, there will
not be any material changes in the financial position of Acquiror,
except changes arising in the ordinary course of business, which
changes will in no event adversely affect the financial condition of
the Acquiror.
(e) Except as previously disclosed, Acquiror is not involved in any
pending litigation, claims, or governmental investigation or
proceeding not reflected in such financial statements or otherwise
disclosed in writing to the Members, and there are otherwise no
lawsuits, claims, assessments, investigations, or similar matters, to
the best knowledge of management, threatened or contemplated against
Acquiror, its management or properties.
(f) As of the Closing Date and the Delivery Date, Acquiror is duly
organized, validly existing and in good standing under the laws of the
State of Colorado; it has the corporate power to own its property and
to carry on its business as now being conducted and is duly qualified
to do business in any jurisdiction where so required.
(g) Acquiror will have filed, by the Delivery Date, all federal, state,
county and local income, excise, property and other tax returns,
forms, or reports, which are due or required to be filed by it prior
to the date hereof and has paid or made adequate provision for the
payment of all taxes, fees, or assessments which have or may become
due pursuant to such returns or pursuant to any assessments received.
(h) Except as previously disclosed, Acquiror has not breached, nor is
there any pending or threatened claims or any legal basis for a claim
that Acquiror has breached, any of the terms or conditions of any
agreements, contracts or commitments to which it is a party or is
bound and the execution and performance hereof will not violate any
provisions of applicable law of any agreement to which Acquiror is
subject.
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(i) The present capitalization of Acquiror is consists of 900,000,000
authorized common shares, of which 137,265,372 shares are issued and
outstanding, and 1,000,000 authorized preferred shares, of which none
are issued or outstanding. All outstanding shares have been duly
authorized, validly issued, and fully paid. There are also shares
reserved for issuance under the Aquiror's Form S-8 registration
statement. Otherwise, there are not outstanding or presently
authorized securities, warrants, options or related commitments of any
nature.
(j) Acquiror has one subsidiary corporation, Sierra Norte, LLC.
(k) The shares of restricted common stock of Acquiror to be issued to
Members as of the Delivery Date, will be validly issued, nonassessable
and fully-paid under Colorado corporation law and will be issued in a
non-public offering and exempted transaction under federal and state
securities laws.
(l) At the date of this Agreement, Acquiror has, and at the Closing Date,
and as of the Delivery Date it will have, disclosed all events,
conditions and facts materially affecting the business and prospects
of Acquiror. Acquiror has not now and will not have, at the Closing
Date, or at the Delivery Date, withheld disclosure of any such events,
conditions, and facts which it, through management has knowledge of,
or has reasonable grounds to know, may materially affect the business
and prospects of Acquiror.
(m) Acquiror is a public company and represents that, except as previously
disclosed, it has no existing or threatened liabilities, claims,
lawsuits, or basis for the same with respect to its shareholders, the
public, brokers, the U.S. Securities and Exchange Commission, state
agencies or other persons. This includes matters relating to state or
federal securities laws as well as general common law or state
corporation law principles.
6. Closing and Delivery Date. The Closing Date herein referred to shall be
upon such date as the parties hereto may mutually agree for the execution
of this Agreement but is expected to be on or about July 6, 2005. This
Agreement is executed by the parties and effective as of the date hereof,
subject only to the final approval of the Boards of Directors of both
parties. The date of final approval of the transaction shall be known as
the Delivery Date. Certain exhibits, etc. may be delivered subsequent to
the Delivery Date upon the mutual agreement of the parties hereto. The
Members will be deemed to have accepted, as of the Delivery Date, delivery
of the certificates of stock to be issued in their respective names, and in
connection therewith will make delivery of their stock in Acquiree to
Acquiror.
7. Conditions Precedent to the Obligations of Acquiree. All obligations of
Acquiree and Members under this Agreement are subject to the fulfillment,
prior to, as of the Closing Date, or at the Delivery Date, of each of the
following conditions:
(a) The representations and warranties by or on behalf of Acquiror
contained in this Agreement or in any certificate or document
delivered to Acquiree pursuant to the provisions hereof shall be true
in all material respects at and as of the Closing Date and the
Delivery Date as though such representations and warranties were made
at and as of such time.
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(b) Acquiror shall have performed and complied with all covenants,
agreements, and conditions required by this Agreement to be performed
or complied with by it prior to or at the Closing Date, subject only
to the conditions required on the Delivery Date.
(c) The Directors of Acquiror shall have approved this transaction and
such other reasonable matters as requested by Acquiree as pertaining
to this transaction.
8. Conditions Precedent to the Obligations of Acquiror. All obligations of the
Acquiror under this Agreement are subject to the fulfillment, prior to, as
of the Closing Date, or at the Delivery Date, of each of the following
conditions:
(a) The representations and warranties by Acquiree and Members contained
in this Agreement or in any certificate or document delivered to
Acquiror pursuant to the provisions hereof shall be true at and as of
the Closing Date and the Delivery Date as though such representations
and warranties were made at and as of such time.
(b) Acquiree and Members shall have performed and complied with all
covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing Date,
subject only to the conditions on the Delivery Date.
(c) Members shall deliver to Acquiror a letter commonly known as an
"investment letter" agreeing that the shares of stock in Acquiror are
being acquired for investment purposes, and not with a view to resale.
(d) Members shall state, and reaffirm as of the Delivery Date, that the
materials, including, current financial statements, prepared and
delivered by Acquiror to Members, have been read and understood by
Members, that they are familiar with the business of Acquiror, that
they are acquiring the Acquiror shares under Section 4(2), commonly
known as the private offering exemption of the Securities Act of 1933,
and that the shares are restricted and may not be resold, except in
reliance on an exemption under the Act.
(e) The Directors of the Acquiror shall have approved this Agreement.
9. Indemnification. Within the period provided in paragraph 10 herein and in
accordance with the terms of that paragraph, each party to this Agreement,
shall indemnify and hold harmless each other party at all times after the
date of this Agreement against and in respect of any liability, damage or
deficiency, all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses including attorney's fees incident to any of
the foregoing, resulting from any misrepresentations, breach of covenant or
warranty or non-fulfillment of any agreement on the part of such party
under this Agreement or from any misrepresentation in or omission from any
certificate furnished or to be furnished to a party hereunder. Subject to
the terms of this Agreement, the defaulting party shall reimburse the other
party or parties on demand, for any reasonable payment made by said parties
at any time after the Closing, in respect of any liability or claim to
which the foregoing indemnity relates, if such payment is made after
reasonable notice to the other party to defend or satisfy the same and such
party failed to defend or satisfy the same.
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10. Nature and Survival of Representations. All representations, warranties and
covenants made by any party in this Agreement shall survive the Closing
hereunder and the consummation of the transactions contemplated hereby for
three years from the date hereof. All of the parties hereto are executing
and carrying out the provisions of this Agreement in reliance solely on the
representations, warranties and covenants and agreements contained in this
Agreement and not upon any investigation upon which it might have made or
any representations, warranty, agreement, promise or information, written
or oral, made by the other party or any other person other than as
specifically set forth herein.
11. Documents at Closing. Between the date hereof and the Delivery Date, the
following transactions shall occur, all of such transactions being deemed
to occur simultaneously:
(a) Members will deliver, or cause to be delivered, to Acquiror the
following:
(1) membership certificates for the memberships of Acquiree being
tendered hereunder, duly endorsed in blank,
(2) all corporate records of Acquiree, including without limitation
corporate minute books (which shall contain copies of the
Articles of Incorporation and Bylaws, as amended to the Delivery
Date), stock books, stock transfer books, corporate seals, and
such other corporate books and records as may reasonably
requested for review by Acquiror and its counsel;
(3) such other instruments, documents and certificates, if any, as
are required to be delivered pursuant to the provisions of this
Agreement or which may be reasonably requested in furtherance of
the provisions of this Agreement;
(b) Acquiror will deliver or cause to be delivered to Members and
Acquiree:
(1) stock certificates for Common Stock to be issued as a part of the
exchange as listed on Exhibit "A";
(2) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement.
12. Miscellaneous.
(a) Further Assurances. At any time, and from time to time, after the
effective date, each party will execute such additional instruments
and take such action as may be reasonably requested by the other party
to confirm or perfect title to any property transferred hereunder or
otherwise to carry out the intent and purposes of this Agreement.
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(b) Waiver. Any failure on the part of any party hereto to comply with any
of its obligations, agreements or conditions hereunder may be waived
in writing by the party to whom such compliance is owed.
(c) Brokers. Neither party has employed any brokers or finders with regard
to this Agreement unless otherwise described in writing to all parties
hereto.
(d) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person
or sent by prepaid first class registered or certified mail, return
receipt requested to such person's address as it appears in Exhibit
"A".
(e) Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(g) Governing Law. This Agreement was negotiated and is being contracted
for in the State of Colorado, and shall be governed by the laws of the
State of Colorado, and the securities being issued herein are being
issued and delivered within said jurisdiction in accordance with the
isolated transaction and non-public offering exemption.
(h) Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective
heirs, administrators, executors, successors and assigns.
(i) Entire Agreement. This Agreement is the entire agreement of the
parties covering everything agreed upon or understood in the
transaction. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind of condition or
inducements to the execution hereof.
(j) Time. Time is of the essence.
(k) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force
and effect.
(l) Default Costs. In the event any party hereto has to resort to legal
action to enforce any of the terms hereof, such party shall be
entitled to collect attorneys fees and other costs from the party in
default.
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IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
POCKETSPEC TECHNOLOGIES INC. a
Colorado Corporation
By: /s/
----------------------------------
President
SPANISH TRAILS, LLC
a New Mexico limited liability company
By: /s/
----------------------------------
Manager
MEMBERS OF ACQUIREE:
REAL ESTATE SERVICES, INC.
a New Mexico corporation
By: /s/
----------------------------------
/s/ XXXX X. XXXXXXX President
----------------------------
XXXX X. XXXXXXX, Indivdually
NEW WORLD DEVELOPMENT, INC.
/s/ XXXXX X. XXXXX
----------------------------
XXXXX X. XXXXX, Individually
By: /s/
----------------------------------
President
FALCON RIDGE DEVELOPMENT, LLC
By: /s/
----------------------------------
Manager
BALBOA LIMITED LIABILITY COMPANY,
a Colorado limited liability company
By: /s/
----------------------------------
Manager
SIESTA KEY REVOCABLE LIVING TRUST,
a Colorado trust
By: /s/
--------------------------------
Trustee
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EXHIBIT A
Name Number of Shares to be Received
----- -------------------------------
Real Estate Services, Inc. 25,148,674
New World Development, Inc. 25,150,446
Falcon Ridge Development, LLC. 61,488,207
Xxxx X. Xxxxxxx 239,437,267
Xxxxx X. Xxxxx 195,934,363
Balboa Limited Liability Co. 33,861,556
Siesta Key Revocable Trust 33,861,556
-----------
Total: 614,882,069
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