Exhibit No. 1
Form 8-K
ENG Enterprise, Inc.
File No. 000-11225
Exhibit 1
Agreement and Plan of Reorganization
This Agreement and Plan of Reorganization (the "Agreement")
is entered into on this 12th day of June, 2000, by and between
ENG Enterprises, Inc., a Delaware corporation (formerly
Energetics, Inc., hereinafter "Enterprise") ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ #▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇; and GOL ▇▇▇▇▇.▇▇▇, Inc.,
a Delaware corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, (hereinafter "GOL India" or the "Company"); and the
undersigned stockholder of GOL India, USA Global Link, Inc. DBA
Global Online, a Delaware corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (hereinafter the "Stockholder").
RECITALS
WHEREAS, the Stockholder owns beneficially and of record all
of the shares of voting Common Stock of GOL India.
WHEREAS, subject to the terms and conditions of this
Agreement, Enterprise desires to acquire one hundred (100%)
percent of the issued and outstanding Common Stock of GOL India
making the Company a wholly owned subsidiary of Enterprise, and
Stockholder desires to make a tax-free exchange of its shares in
GOL India solely for shares of Enterprise.
WHEREAS, the Boards of Directors of each of Enterprise and
GOL India have determined that it is in the best interests of
their respective companies and their respective shareholders to
consummate the transactions and reorganization contemplated
herein in which, subject to the terms and conditions of this
Agreement, Enterprise will acquire GOL India as a wholly owned
subsidiary and the Stockholder will acquire stock of Enterprise.
WHEREAS, for Federal income tax purposes, the parties intend
that the transactions and reorganization contemplated in this
Agreement qualify as a non-taxable reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and promises contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree
as follows:
SECTION ONE
Agreement
1.1 Plan of Reorganization. Enterprise, the Stockholder,
and GOL India hereby agree that one hundred (100%) percent of the
issued and outstanding capital stock of GOL India shall be
acquired by Enterprise in exchange solely for Enterprise voting
stock in a transaction qualifying as a tax-free stock-for-stock
exchange pursuant to Section 368 (a) (1) (B) of the Code.
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1.2 Exchange of Stock. Enterprise and Stockholder agree that
all 1,000,000 issued and outstanding shares of capital stock of
GOL India, equal to one hundred (100%) percent, shall be
exchanged with Enterprise for 15,750,000 shares of pre-dividend,
(47,250,000 post-dividend shares), restricted common voting stock
of Enterprise, that shall be registered with the Securities and
Exchange Commission (the "S.E.C.") under Section S-3 or S-4 as
soon as possible after the Closing. A list of the shares of GOL
India, the owner thereof, and shares of Enterprise to be received
by said Stockholder is attached hereto as Exhibit "A", and by
this reference is incorporated herein.
The Enterprise shares will, upon the Closing, be delivered
to the Stockholder in exchange for its shares in GOL India.
Stockholder represents and warrants that it will hold such shares
of common stock of Enterprise for investment purposes and not for
further public distribution and agrees that the shares shall be
appropriately restricted.
1.3 Delivery of Shares. Upon or before the Closing,
certificates representing all of the shares of GOL India will be
delivered duly endorsed so as to make Enterprise the sole holder
thereof, free and clear of all claims and encumbrances; and upon
such Closing, delivery of the Enterprise shares, which will be
appropriately restricted as to transfer, will be made to the
Stockholder. The Stockholder shall execute an investment letter.
1.4 Present Capital Structure of Enterprise.
Enterprise is a full-reporting Delaware corporation, created
under S-1, currently trading on the NASDAQ Electronic Bulletin
Board under the symbol: "ENEI". The authorized capital stock of
Enterprise consists of not less than 80,000,000 shares of common
stock, $.01 par value per share, with 473,847 shares of pre-
dividend common stock presently outstanding held by approximately
632 shareholders of record, and 50,000 shares of $1.00 par value
preferred stock authorized, with 2,619 shares issued and
outstanding in two (2) classes of convertible preferred stock:
2,562 shares of Class "A" preferred stock that are convertible
into approximately 80,062 shares of pre-dividend common stock,
(240,186 shares of post-dividend common stock), and 57 shares of
Class "B" preferred stock that are convertible into approximately
1,781 shares of pre-dividend common stock (5,343 shares of post-
dividend common stock) to be converted prior to Closing.
Enterprise, other than the aforementioned conversion rights on
the convertible preferred stock, has issued no options to acquire
common shares, has no other obligations to issue shares of its
common stock and has no other securities outstanding that are
convertible into its common stock.
1.5 Capital Structure of GOL India. GOL India is a
privately held Delaware corporation. The authorized capital stock
of GOL India consists of 2,000,000 shares of common stock, $.001
par value per share, with 1,000,000 shares presently outstanding
held by one (1) shareholder, USA Global Link, Inc., a Delaware
corporation DBA Global Online, an internet telecommunications
conglomerate with established operations throughout the United
States, Europe, Asia and South America. GOL India has no
outstanding options to acquire shares of its common stock, and no
other rights, options, or warrants to purchase any other
securities of GOL India are outstanding. GOL India owns one (1)
wholly owned subsidiary, GOL India Portal Private Limited ("GOL
India Portal"), and 49% ownership of a controlled subsidiary, GOL
India Internet Service Provider Private Limited ("GOL India
ISP"). The transfer of this 49% interest in
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GOL ISP from another wholly owned subsidiary of GOL India's
parent company is expected to be approved by the Government of
India within 30 days.
1.6 Pre-Closing Authorizations by Enterprise. Resolutions
shall be adopted by the Board of Directors of Enterprise prior to
Closing to authorize the following actions:
(a) Approve the cancellation of 60,000 shares of recently
issued pre-dividend Rule 144 restricted common stock and
356 recently issued shares of common stock.
(b) Approve the reorganization agreement between
Enterprise and GOL India whereby Enterprise shall
acquire 100% ownership of GOL India in return for the
issuance to the shareholder of the private company of
15,750,000 pre-dividend shares, (47,250,000 post-
dividend shares), restricted common stock of Enterprise,
that shall be registered with the Securities and
Exchange Commission through the filing of the
appropriate registration statement as soon as possible
after the Closing, (i.e., to transform the restricted
common stock into freely-traded shares).
(c) Approve the issuance at time of Closing of 422,758 pre-
dividend restricted common shares of Enterprise
(1,268,274 post-dividend shares) to the twenty four (24)
finders, advisors and consultants ("Consultants")
working on this transaction (see attached Exhibit "B").
(d) Approve an amendment to the terms of the Class A and
Class B preferred stock and the conversion of all
outstanding Class B preferred stock into 1,781 shares of
pre-dividend common stock (5,343 post-dividend shares)
to be converted prior to Closing.
(e) Approve the appointment to the board of the new
directors designated by GOL India to be followed by the
resignation of present board members to become effective
at time of Closing.
(f) The new board of directors may take appropriate action
after the Closing, in its discretion, to authorize a two
hundred (200%) percent common stock dividend
distribution, that would take effect on such future date
as may be established by the new board. The stock
dividend would be made on a pro-rata basis to all the
post-Closing shareholders of Enterprise through the
issuance of two (2) shares of common stock for each
outstanding common share of Enterprise.
1.7 Capital Structure after Closing. Enterprise, pursuant
to the cancellation of common shares, common share issuances, and
preferred stock conversions to common stock, as specified in
paragraphs 1.6 (a), 16(c) and 16(d) above, shall have, on a fully
diluted basis, no more than 918,092 shares of pre-dividend
(2,754,275 post-dividend shares), common stock issued and
outstanding, and no options or other securities outstanding
convertible into its common stock at time of closing. Enterprise,
after the issuance of all restricted common stock to Consultants,
conversion of all Class A and Class B Preferred Stock, and the
issuance of restricted common shares (with registration rights)
to the Stockholder of GOL India in return for all one
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hundred (100%) percent of the outstanding common stock of GOL
India in a transaction that qualifies as a stock-for-stock tax-
free exchange under 368 (a) (1) (B) of the Internal Revenue Code
of 1989, shall have the following pre-dividend and post-dividend
capital structures:
Pre-Dividend Post-Dividend
Shareholders: Shares: Shares: Percentages:
Shareholders of GOL India 15,750,000 47,250,000 * 94.50%
Shareholders of Enterprise
and (24) Consultants 918,092 2,754,275 ** 5.50%
Totals: 16,668,092 50,004,275 100.00%
* See paragraph 1.6 (b) and 1.6 (d) above.
** See paragraph 1.6 (a), 1.6 (c), 1.6 (d), and 1.6 (f) above.
1.8 Representations by Stockholder of GOL India.
Stockholder hereby represents to Enterprise that GOL India ISP is
the holder of a "Category A" national ISP license in India and
owns 100% of the stock of GOL India Portal.
SECTION TWO
Closing, Effective Date, and Pre-Closing Actions
2.1 Location of Closing. Subject to the terms and
conditions contained in this Agreement, the closing of
transactions contemplated by Section 1.1 herein (the "Closing")
shall follow the full execution of this Agreement and shall be
held at a mutually agreed location in Chicago, Illinois, or by
exchange of documents by facsimile and courier if mutually
agreed, not later than the satisfaction or waiver of all
conditions contained in this Agreement, unless another place or
time is agreed upon in writing by the parties. All of the
documents that are to be exchanged or delivered at, or prior to,
closing shall be summarized on the "Closing Document List"
(attached as Exhibit "C").
2.2 Deliveries at Closing. Enterprise at time of Closing
shall provide: all books and records of Enterprise; resignations
of previous management and appointments of new management chosen
by GOL India; a current stockholders' list certified by
Enterprise's stock transfer agent; and corporate minute books.
The auditing firm for Enterprise shall send a letter to the
auditor for GOL India, (in the form attached hereto as Exhibit
"D"), to confirm a willingness to deliver to GOL India's auditor,
at Closing, copies of all audit papers and worksheets regarding
the prior audits of Enterprise.
2.3 Significant Future Shift of Share Ownership in GOL
India. The laws of India currently require the GOL India
controlled subsidiary, GOL India ISP, that holds the "Category
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A" ISP license, must be majority owned by the Indian business
partner of GOL India. However, there has been movement in India
toward liberalizing these restrictive laws, and it is anticipated
GOL India eventually will be allowed to increase its ownership in
GOL India ISP to 100%. The sole shareholder of GOL India has an
agreement with the business partner in India to obtain his 51%
interest in GOL India ISP in exchange for a significant portion
of the common shares of GOL India at such time as the anticipated
change occurs in the laws of India. At Closing, Stockholder will
assume the obligation of GOL India to provide such shares upon
the exercise of the option. Upon the exercise of the option, the
51% holder of GOL India ISP will then make a capital contribution
to GOL India of the 51% interest in GOL India ISP. Consequently,
this anticipated future exchange transaction will benefit GOL
India without any dilution to its public shareholders.
2.4 Leak-out Agreements. Prior to the Closing, all of the
Consultants to this transaction, current and former management of
Enterprise, and any other party which holds a significant number
of free-trading shares of the merged company which the
Stockholder requires execute leak-out agreements, shall be
subject to leak-out agreements as shall be mutually agreed
between the parties in substantially the form set forth in
attached Exhibit "E".
SECTION THREE
Representations and Warranties of Enterprise
Enterprise represents and warrants to, and covenants with,
the Stockholder as follows:
3.1 Corporate Status. Enterprise warrants and represents
to GOL India that it is duly organized, validly existing and in
good standing in its state of incorporation (Delaware), with
approximately 632 stockholders of record, and currently trades on
the NASDAQ Electronic Bulletin Board.
3.2 Capital Structure of Enterprise. The authorized capital
stock of Enterprise consists of not less than 80,000,000 shares
of common stock, $.01 par value per share, with 473,847 common
shares presently outstanding. Enterprise, at time of Closing,
shall have no issued and outstanding options, rights or warrants
to acquire its common shares and no other securities outstanding
convertible or exchangeable into its common stock, and 50,000
shares of $1.00 par value preferred stock authorized, with 2,619
shares issued and outstanding in two (2) classes of convertible
preferred stock: 2,562 shares of Class "A" preferred stock that
are convertible into approximately 80,062 shares of common stock,
and 57 shares of Class "B" preferred stock that are convertible
into approximately 1,781 shares of common stock (which will be
converted before the Closing). Enterprise, other than the
aforementioned conversion rights of the convertible preferred
stock, has issued no options to acquire common shares, has no
other obligations to issue shares of its common stock and no
other securities outstanding that are convertible into its common
stock.
3.3 No Conflict. Neither the execution and delivery of
this Agreement by Enterprise, nor the consummation of the
transactions contemplated hereby by Enterprise, will: (i)
conflict with or result in a breach of the terms, conditions or
provisions of; (ii) violate or constitute a
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default, an event of default (or an event which, with notice or
lapse of time or both, would constitute a default or an event of
default) or an event creating rights of modification,
acceleration, termination, cancellation or other additional
rights, or loss of rights under; (iii) result in the creation of
any encumbrance upon any of the capital stock, assets or property
of Enterprise pursuant to, the charter or by-laws of
Enterprise, or any note, bond, mortgage, indenture, deed of
trust, lease, contract, permit, agreement, or other instrument or
any order of any governmental authority or regulatory agency to
which Enterprise is a party or subject, or by which any of its
capital stock, assets or property is bound; nor (iv) contravene
any applicable provision of any laws.
3.4 Consents. Except for the actions and filings
described in Section 1.6 hereof, no consent, approval or
authorization of, exemption or other action by notice or
declaration, filing or registration with, any third party or
governmental agency is required to be obtained, made or given by
Enterprise in connection with the execution, delivery and
performance of this Agreement or the consummation by Enterprise
of the transactions contemplated by this Agreement.
3.5 Financial Statements. The following financial
statements on Enterprise have been furnished to GOL India and the
Stockholder; (a) audited financial statements of Enterprise
accompanied by a report of its independent certified public
accountants containing audited balance sheets of Enterprise for
the one-year period ending December 31, 1999, together with
statements of operations and cash flows for Enterprise for the
one-year period ending December 31, 1999 on Form 10-K (attached
as Exhibit "F"); and (b) unaudited financial statements of
Enterprise containing balance sheets and statements of operations
for Enterprise at June 30, 1999 and September 30, 1999, and March
31, 2000 on Form 10-Q.
To the best knowledge of Enterprise, such financial
statements, together with and subject to the disclosures and
notes thereto, (i) are in accordance with the books and records
of Enterprise; (ii) present fairly and accurately the financial
condition of Enterprise as of the dates of the balance sheets;
(iii) present fairly and accurately the results of operations for
the periods covered by such statements; (iv) have been prepared
in accordance with generally accepted accounting principles
applied on a consistent basis; (v) include all adjustments
(consisting of only normal recurring accruals) which are
necessary for a fair presentation of the financial condition of
Enterprise, and of the results of operations of Enterprise for
the periods covered by such statements; and (vi) fully comply
with all requirements of Regulation SK and all applicable
securities laws.
3.6 No Liabilities. Enterprise has no liabilities of any
nature except to the extent reflected or reserved in its
financial statements, whether accrued, absolute, contingent or
otherwise, including, without limitation, tax liabilities and
interest due or to become due, except for additional liabilities
which may have been incurred in the ordinary course of business
by Enterprise since the date of the financial statements.
3.7 No Current Business Operations. Enterprise has no
present business operations or subsidiaries, and no liabilities
or obligations of any nature and shall have no liabilities or
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obligations at time of Closing whether accrued, absolute,
contingent or otherwise, including, without limitation, tax
liabilities and interest due or to become due.
3.8 S.E.C. Compliance and Listings. Enterprise is a full-
reporting Delaware corporation currently traded on the NASDAQ
Electronic Bulletin Board (under the symbol: "ENEI"). Enterprise
is in full compliance with, and not in violation of, any state or
federal securities laws. All outstanding shares of common stock
of Enterprise have been duly authorized and are validly issued,
fully paid, and non-assessable and free of preemptive rights, and
there are no registration rights existing or granted to any
holders of restricted common stock of Enterprise.
3.9 Compliance With Reporting Requirements. Enterprise
represents, warrants and agrees that, as of the date of Closing,
Enterprise has filed all forms, reports and documents with the
S.E.C. required to be filed by it pursuant to the Securities Act
and the Exchange Act, including, without limitation, all
reporting requirements of 13(a) of the Exchange Act. The reports
filed with the S.E.C., to Enterprise's best knowledge, did not
contain, as of their respective dates, any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
3.10 Title to Property. Enterprise has all requisite
corporate power and authority to own its properties and assets
and has good and marketable title to all properties and assets,
real and personal, reflected in the Balance Sheet of Enterprise,
and the properties and assets of Enterprise are subject to no
mortgage, pledge, lien or encumbrances, except for liens shown
therein, with respect to which no default exists.
3.11 Litigation. There is no litigation, arbitration,
action or proceeding pending, or to the knowledge of Enterprise,
threatened, against or relating to Enterprise, its properties or
business.
3.12 Books and Records. From the date of this Agreement
to the Closing, Enterprise will: (1) provide to GOL India and the
Stockholder or their respective representatives any and all
relevant documents regarding securities filings, broker dealer
due diligence packages, offering memorandums, and copies of Form
D; (2) give to GOL India and the Stockholder, or their respective
representatives, full access during normal business hours to all
of its offices, books, records, contracts, stock certificate
books, stock certificates, transfer ledgers, minutes books and
other corporate documents ("Corporate Records") and properties so
that Stockholders may inspect and audit them; and (3) furnish
such information concerning the properties and affairs of
Enterprise as the Stockholder may reasonably request. Enterprise
represents and warrants that all of Enterprise's Corporate
Records are true, correct and complete and constitute all of its
Corporate Records thereof and, the minute books of Enterprise
reflect all material actions taken and authorizations given by
the Board of Directors of Enterprise or any committee thereof and
all material actions taken and authorization given by the
stockholders of Enterprise.
3.13 Tax Returns. Enterprise has filed (or has obtained
extensions for filing) all income, excise, sales, corporate
franchise, property, payroll and other tax returns or reports
required to be filed by it, as of the date hereof by the United
States of America, any state or other
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political subdivision thereof or any foreign country and has
paid all taxes or assessments relating to the time periods
covered by such returns or reports. The amounts set up as
provisions for taxes in the latest financial statements are
sufficient for the payment of all unpaid federal, foreign, state
or local taxes of accrued for or applicable to all periods ended
on or prior to the date of this Agreement, or which may
subsequently be determined to be owing by with respect to all
periods ending on or prior to the Closing date, subject to normal
year-end adjustments, which will not be material. There are no
present audits or disputes with any federal, foreign, state or
local taxing authority as to taxes of any nature payable by
Enterprise.
3.14 Confidentiality. Enterprise and its representatives
will keep confidential any information that they obtain from the
Stockholder or from GOL India concerning the properties, assets
and business of GOL India. If the transactions contemplated by
this Agreement are not consummated by July 14th, 2000 Enterprise
will return to GOL India all written matter with respect to GOL
India obtained by Enterprise in connection with the negotiation
or consummation of this Agreement.
3.15 Investment Intent. Enterprise is acquiring the GOL
India shares to be transferred to it under this Agreement for
investment and not with a view to the sale or distribution
thereof, and Enterprise has no commitment or present intention to
liquidate GOL India or to sell or otherwise dispose of shares of
its stock.
3.16 Corporate Authority. Enterprise has full corporate
power and authority to enter into this Agreement, to carry out
its obligations hereunder and will deliver to GOL India and the
Stockholder at the closing a certified copy of the resolutions of
each of its Board of Directors authorizing execution of this
Agreement by its officers and performance thereunder and which
also contains approvals of all of the conditions contained in
Section 1.6 above. This Agreement has been duly executed and
delivered by Enterprise and constitutes the legal, valid and
binding obligation of Enterprise enforceable against it in
accordance with its terms.
3.17 Due Authorization. Execution of this Agreement and
performance by Enterprise hereunder has been duly authorized by
all requisite corporate action on the part of Enterprise, has
been duly executed and delivered by authorized officers of
Enterprise, and this Agreement constitutes a valid and binding
obligation of Enterprise that is enforceable against Enterprise
in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and to judicial limitations on the
enforcement of the remedy of specific performance and other
equitable remedies. Performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements,
mortgages or other commitments of Enterprise.
3.18 Benefit Plans of Enterprise. Enterprise is not, and
has never been, a party to: (i) any "employee benefit plan"
within the meaning of Section 3(3) of ERISA; (ii) any profit
sharing, pension, defined compensation, bonus, stock option,
stock purchase, disability, severance, health, welfare or
incentive plan or agreement; or (iii) any written or unwritten
plan or policy providing for "fringe benefits" to its employees,
including but not limited to vacation,
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paid holidays, personal leave, employee discount, educational
benefit or similar programs (individually a "Plan," and
collectively the "Plans").
3.19 Environmental Matters. Enterprise represents and
warrants:
(a) Enterprise represents and warrants it is and has at
all times been in compliance with all applicable federal state
and local environmental laws.
(b) Enterprise has not been required to obtain any
licenses or permits required under environmental laws for the
operation of its business.
(c) No hazardous substances (as defined in applicable
federal, state and local environmental laws and regulations) have
been generated, transported, stored, treated, recycled, disposed
of or otherwise handled in any way in the operation of the
Enterprise's business, except in compliance with all applicable
environmental laws. There are no locations now owned or operated
by Enterprise where hazardous substances have been generated,
transported, stored, treated, recycled, disposed of or otherwise
handled, except in compliance with all applicable environmental
laws. There is no past or ongoing release or threat of release
of hazardous substances from any of the properties currently
owned or operated by Enterprise or any of its affiliates or, to
the knowledge of Enterprise, from any properties formerly owned
or operated by Enterprise or any of its affiliates. Enterprise
has not treated, stored for more than 90 days, or disposed of any
hazardous waste, as such term is used within the meaning of
federal state or local law, except in compliance with all
applicable environmental laws.
(d) Enterprise has not received any written notice from
any governmental authority, regulatory agency or other person
advising that Enterprise is potentially responsible for costs
associated with any release or threatened release of hazardous
substances or potentially liable for any violation of any
environmental law. No pending or, to the knowledge of
Enterprise, threatened order, litigation, settlement or citation
with respect to hazardous substances exists with respect to or in
connection with the operation of the business. There has been no
environmental investigation conducted by any governmental
authority or regulatory agency with respect to the operation of
its business.
(e) No underground storage tanks are or, to the knowledge
of Enterprise, ever were located on any properties currently or
previously owned or leased by Enterprise. To the knowledge of
Enterprise, no PCBs or asbestos-containing materials are located
on, contained in or otherwise form a part of any of the assets or
properties of Enterprise.
3.20 Depositories. Schedule 3.20 contains a complete list
of the name, location and account numbers of each bank, trust
company, securities broker or other financial institution in
which Enterprise has an account, deposits, safe deposit box, lock
box or other assets on hand and the names of all authorized
persons with respect thereto.
3.21 Structure of Transaction. The transaction between GOL
India and Enterprise is a stock-for-stock acquisition, and not a
statutory merger. The current shareholders of Enterprise will
not be entitled to dissenters or appraisal rights under the
corporate laws of Delaware.
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3.22 Leak-out Agreements. The representations, warranties
and other agreements set forth in the Leak-out agreements signed
pursuant to Section 2.4 shall be accurate and shall be fully
performed, and no person who executes such an agreement shall
directly or indirectly own or control any shares, whether held in
nominee name or otherwise, other than those which are subject to
such agreement.
SECTION FOUR
Representations, Warranties and Covenants of GOL India and
Stockholder
GOL India and Stockholder represent and warrant to, and
covenants with, Enterprise as follows:
4.1 Corporate Status. GOL India is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware.
4.2 GOL India Shares. The Stockholder executing this
agreement holds full right, title and interest in 100% of the GOL
India shares, free and clear of adverse claims of third parties.
(However, see paragraph 2.3 - "Significant Future Shift of Share
Ownership in GOL India").
4.3 Capitalization. The authorized capital stock of GOL
India consists of 2,000,000 shares of common voting stock, having
a par value of $.001 per share, of which 1,000,000 shares shall
be issued and outstanding at time of closing. At time of closing,
there shall be no other securities, outstanding options, warrants
or other rights to purchase any of the authorized, but un-issued
shares of common voting stock of GOL India.
4.4 No Conflict. Neither the execution and delivery of
this Agreement by GOL India, nor the consummation of the
transactions contemplated hereby by GOL India, will: (i) conflict
with or result in a breach of the terms, conditions or provisions
of; (ii) violate or constitute a default, an event of default (or
an event which, with notice or lapse of time or both, would
constitute a default or an event of default) or an event creating
rights of modification, acceleration, termination, cancellation
or other additional rights, or loss of rights under; (iii)
result in the creation of any encumbrance upon any of the capital
stock, assets or property of GOL India pursuant to, the charter
or by-laws of GOL India, or any note, bond, mortgage, indenture,
deed of trust, lease, contract, permit, agreement, or other
instrument or any order of any governmental authority or
regulatory agency to which GOL India is a party or subject, or
by which any of its capital stock, assets or property is bound;
nor (iv) contravene any applicable provision of any laws.
4.5 Consents. Except for the actions and filings
described in Section 1.6 hereof no consent, approval or
authorization of, exemption of other action by notice or
declaration, filing or registration with, any third party or
governmental agency is required to be obtained, made or given by
GOL India in connection with the execution, delivery and
performance of this Agreement or the consummation by GOL India of
the transactions contemplated by this Agreement.
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4.6 Financial Statements. The following financial
statements on GOL India have been furnished to Enterprise an un-
audited inception Balance Sheet prepared by the management of GOL
India, (attached hereto as Exhibit "G"). This Balance Sheet
reflects the acquisition of all of the related rights and
licenses relating to prospective operations in India, and
Stockholder as the sole shareholder of the Company. This
preliminary balance sheet and income statement were prepared by
management and are un-audited. Although management has made a
good faith effort to document the transactions associated with
the capitalization of GOL India, and the valuations placed on
certain transaction involving domain names, there is the
possibility that upon full audit that the independent auditors
for GOL India may make material adjustments to valuation of the
assets conveyed to the balance sheet of GOL India.
However, to the best knowledge of GOL India, such financial
statements, together with and subject to the disclosures and
notes thereto, (i) are in accordance with the books and records
of GOL India; (ii) present fairly and accurately the assets and
liabilities of GOL India; as of the dates of the balance sheets;
(iii) present fairly and accurately the results of initial
organizational activities for the periods covered by such
statements; (iv) have been prepared in accordance with the
Company's usual accounting policies and procedures applied on a
consistent basis; and (v) include all adjustments (consisting of
only normal recurring accruals) which are necessary for a fair
presentation of the financial condition of GOL India, and of the
results of operations of GOL India for the periods covered by
such statements.
4.7 Left blank intentionally.
4.8 Undisclosed Liabilities. GOL India has no liabilities
of any nature except to the extent reflected or reserved against
the un-audited inception Balance Sheet of GOL India attached
hereto as Exhibit "G", whether accrued, absolute, contingent or
otherwise, including, without limitation, tax liabilities and
interest due or to become due, except for additional liabilities
which may have been incurred in the ordinary course of business
by GOL India since the date of the financial statements.
4.9 Interim Changes. Since the date of the financial
statements described in paragraph 4.6, there have been no changes
in financial condition, assets, liabilities or business of GOL
India, or other distribution in respect of capital stock of GOL
India, or any direct or indirect redemption, purchase or other
acquisition of any such stock, nor increase paid, or agreed to,
in the compensation, retirement benefits or other commitments to
employees.
4.10 Title to Property. GOL India has all requisite
corporate power and authority to own its properties and assets
and has good and marketable title to all properties and assets,
real and personal, reflected in the un-audited inception Balance
Sheet of GOL India, and the properties and assets of GOL India
are subject to no mortgage, pledge, lien or encumbrances, except
for liens shown therein, with respect to which no default exists.
4.11 Litigation. There is no litigation, arbitration,
action or proceeding pending, or to the knowledge of GOL India,
threatened, against or relating to GOL India, its properties or
business.
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4.12 Books and Records. From the date of this Agreement
to the Closing, GOL India will: (1) provide to Enterprise or its
representatives any and all relevant documents regarding
securities filings, broker dealer due diligence packages,
offering memorandums, and copies of Form D; (2) give to
Enterprise or its representatives full access during normal
business hours to all of its offices, books, records, contracts,
stock certificate books, stock certificates, transfer ledgers,
minutes books and other corporate documents ("Corporate
Records") and properties so that Enterprise may inspect and audit
them; and (3) furnish such information concerning the properties
and affairs of GOL India as Enterprise may reasonably request.
GOL India represents and warrants that all of GOL India's
Corporate Records are true, correct and complete and constitute
all of its Corporate Records thereof and, the minute books of GOL
India reflect all material actions taken and authorizations given
by the Board of Directors of GOL India or any committee thereof
and all material actions taken and authorization given by the
stockholders of GOL India.
4.13 Tax Returns. GOL India has filed (or has obtained
extensions for filing) all income, excise, sales, corporate
franchise, property, payroll and other tax returns or reports
required to be filed by it, as of the date hereof by the United
States of America, any state or other political subdivision
thereof or any foreign country and has paid all taxes or
assessments relating to the time periods covered by such returns
or reports. The amounts set up as provisions for taxes in the
latest financial statements are sufficient for the payment of all
unpaid federal, foreign, state or local taxes of accrued for or
applicable to all periods ended on or prior to the date of this
Agreement, or which may subsequently be determined to be owing by
with respect to all periods ending on or prior to the Closing
date, subject to normal year-end adjustments, which will not be
material. There are no present audits or disputes with any
federal, foreign, state or local taxing authority as to taxes of
any nature payable by GOL India.
4.14 Confidentiality. GOL India and its representatives
will keep confidential any information, which they obtain from
Enterprise concerning the properties, assets and business of
Enterprise. If the transactions contemplated by this Agreement
are not consummated by July 14th, 2000 GOL India will return to
Enterprise all written matter with respect to Enterprise obtained
by GOL India in connection with the negotiation or consummation
of this Agreement.
4.15 Investment Intent. Stockholder and Consultants are
acquiring the restricted shares to be delivered to them under
this Agreement for investment and not with a view to the sale or
distribution thereof, and Stockholder and Consultants have no
commitment or present intention to liquidate the Company or to
sell or otherwise dispose of the Enterprise stock. Stockholder
and the Consultants shall execute and deliver to Enterprise on
the Closing an Investment Letter attached hereto as Exhibit "H".
4.16 Corporate Authority. GOL India has full corporate
power and authority to enter into this Agreement, to carry out
its obligations hereunder and will deliver to Enterprise at the
closing a certified copy of the resolutions of its Board of
Directors authorizing execution of this Agreement by its officers
and performance thereunder and which also contains approvals of
all of the conditions contained in Section 1.7 above. This
Agreement has been duly executed and
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delivered by GOL India and constitutes the legal, valid and
binding obligation of GOL India enforceable against it in
accordance with its terms.
4.17 Due Authorization. Execution of this Agreement and
performance by GOL India hereunder has been duly authorized by
all requisite corporate action on the part of GOL India, has been
duly executed and delivered by authorized officers of GOL India,
and this Agreement constitutes a valid and binding obligation of
GOL India that is enforceable against GOL India in accordance
with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and to judicial limitations on the enforcement of the
remedy of specific performance and other equitable remedies.
Performance hereunder will not violate any provision of the
Articles of Incorporation, Bylaws, agreements, mortgages or other
commitments of GOL India. All matters described in Section 1.6
will have been duly and properly approved by consent of the
Stockholder before the Closing.
4.18 Benefit Plans of GOL India. GOL India is not, and
has never been, a party to (i) any "employee benefit plan" within
the meaning of Section 3(3) of ERISA, (ii) any profit sharing,
pension, defined compensation, bonus, stock option, stock
purchase, disability, severance, health, welfare or incentive
plan or agreement or (iii) any written or unwritten plan or
policy providing for "fringe benefits" to its employees,
including but not limited to vacation, paid holidays, personal
leave, employee discount, educational benefit or similar programs
(individually a "Plan," and collectively the "Plans").
4.19 Environmental Matters. GOL India represents and
warrants:
(a) GOL India represents and warrants it is and has at
all times been in compliance with all applicable federal state
and local environmental laws.
(b) GOL India has not been required to obtain any licenses
or permits required under environmental laws for the operation of
its business.
(c) No hazardous substances (as defined in applicable
federal, state and local environmental laws and regulations) have
been generated, transported, stored, treated, recycled, disposed
of or otherwise handled in any way in the operation of the GOL
India's business, except in compliance with all applicable
environmental laws. There are no locations now owned or operated
by GOL India where hazardous substances have been generated,
transported, stored, treated, recycled, disposed of or otherwise
handled, except in compliance with all applicable environmental
laws. There is no past or ongoing release or threat of release
of hazardous substances from any of the properties currently
owned or operated by GOL India or any of its affiliates or, to
the knowledge of GOL India, from any properties formerly owned or
operated by GOL India or any of its affiliates. GOL India has
not treated, stored for more than 90 days, or disposed of any
hazardous waste, as such term is used within the meaning of
federal state or local law, except in compliance with all
applicable environmental laws.
(d) GOL India has not received any written notice from any
governmental authority, regulatory agency or other person
advising that GOL India is potentially responsible for costs
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associated with any release or threatened release of hazardous
substances or potentially liable for any violation of any
environmental law. No pending or, to the knowledge of GOL India,
threatened order, litigation, settlement or citation with respect
to hazardous substances exists with respect to or in connection
with the operation of the business. There has been no
environmental investigation conducted by any governmental
authority or regulatory agency with respect to the operation of
its business.
(e) No underground storage tanks are or, to the knowledge
of GOL India, ever were located on any properties currently or
previously owned or leased by GOL India. To the knowledge of GOL
India, no PCBs or asbestos-containing materials are located on,
contained in or otherwise form a part of any of the assets or
properties of GOL India.
4.20 Depositories. Schedule 4.20 contains a complete list
of the name, location and account numbers of each bank, trust
company, securities broker or other financial institution in
which GOL India has an account, deposits, safe deposit box, lock
box or other assets on hand and the names of all authorized
persons with respect thereto.
SECTION FIVE
Termination
5.1 Termination. This Agreement may be terminated and
abandoned solely as follows:
(a) At any time until the Closing Date by the mutual
agreement of the Board of Directors of Enterprise and GOL India.
(b) By either party hereto, if the conditions, as set forth
in this Agreement to such terminating party's obligations under
this Agreement are not fulfilled on or prior to the Closing Date;
provided that any such termination shall not limit the remedies
otherwise available to such party as a result of
misrepresentations of or breaches by the other party.
(c) By either party if the other party is in material breach
or default of its respective covenants, agreements or other
obligations hereunder, or if any of its representations and
warranties herein are not true and accurate in all material
respects when made or when otherwise required by this Agreement
to be true and accurate.
(d) By either Enterprise, or GOL India if for any reason the
parties have failed to close this Agreement on or before July
14th, 2000, provided that neither Enterprise nor GOL India is
then in default hereunder.
In the event of any termination pursuant to this Section
5.1, (other than pursuant to Section 5.1(a)), written notice
setting forth the reasons therefor shall forthwith be given by
the terminating party, to the other party.
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5.2 Effect of Termination. If terminated as provided for
in Section 5.1, this Agreement shall forthwith become wholly void
and of no effect, except for the confidentiality obligations set
forth in Sections 3.14 and 4.14 hereof, without liability to any
party to this Agreement except for breach of this Agreement.
5.3 Notice of Termination. Notwithstanding anything
contained in this Agreement to the contrary and subject to the
provisions of Section 5.1 respectively, none of the parties shall
terminate this Agreement under Section 5.1 unless such party
shall have first given the other party notice of its intent to
terminate this Agreement, setting forth the nature of the
condition to the terminating party's obligation to close which
remains unsatisfied and the other party shall have failed to
satisfy such condition within 10 days after receipt of such
notice; provided, however, that if such condition is of a nature
that it cannot be reasonably satisfied within such 10 day period,
then, if the defaulting or breaching party shall have commenced
an attempt to satisfy such condition within such 10 day period,
the period to satisfy such condition shall be extended until the
date which is 30 days after receipt of such notice.
SECTION SIX
Post-Merger Governance
6.1 Articles of Incorporation and Bylaws. At the Closing,
the Articles of Incorporation and By-Laws of Enterprise as in
effect immediately prior to the Closing, shall be and continue to
be the Articles of Incorporation and By-Laws of Enterprise, until
duly amended in accordance with law. At the Closing, the
Articles of Incorporation and By-Laws of GOL India, as in effect
immediately prior to the Closing, shall be and continue to be the
Articles of Incorporation and By-Laws of GOL India, until duly
amended in accordance with law.
6.2 Directors, Officers and Employees
(a) Directors of Enterprise. On Closing, the current
members of the Board of Directors of Enterprise shall, in
accordance with the Delaware General Corporation Law and the
Articles of Incorporation and By-Laws of Enterprise, cause the
Board of Directors of Enterprise to be reconstituted to consist
of a total of two (2) persons, who shall be the persons
designated by the Stockholder in a letter provided to Enterprise
in advance of the Closing. The current members of the Enterprise
Board of Directors shall resign their respective board
memberships.
(b) Executive Officers of Enterprise. Immediately after
the Closing, the newly constituted Board of Directors of
Enterprise shall elect persons to serve as executive officers of
Enterprise. Any persons serving as executive officers of
Enterprise immediately prior to the Closing who will not continue
in such capacity immediately after the Closing shall tender their
resignations in accordance with the Delaware General Corporation
Law.
(c) Directors of GOL India. Immediately after the
Closing, the Board of Directors of GOL India shall be
reconstituted to consist of one (1) or more persons as shall be
appointed by a majority vote of the newly constituted Board of
Directors of Enterprise.
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(d) Executive Officers of GOL India. Immediately after
the Closing, the newly constituted Board of Directors of GOL
India shall elect persons to serve as executive officers of GOL
India. Any persons serving as executive officers of GOL India
immediately prior to the Closing who will not continue in such
capacity immediately after the Closing shall tender their
resignations in accordance with the Delaware General Corporation
Law.
SECTION SEVEN
Covenants and Conditions of Closing
7.1 Covenants Regarding the Closing. The parties hereby
covenant and agree that they shall: (i) use reasonable efforts to
cause all of their respective representations and warranties set
forth in this Agreement to be true upon and as of the Closing;
(ii) use reasonable efforts to cause all of their respective
obligations that are to be fulfilled upon or prior to the Closing
to be so fulfilled; (iii) use reasonable efforts to cause all
conditions to the Closing set forth in this Agreement to be
satisfied upon or prior to the Closing; and (iv) deliver to each
other at the Closing the certificates, updated lists, opinion of
counsel, notices, consents, authorizations, approvals,
agreements, transfer documents, receipts and amendments
contemplated by this Agreement (with such additions or exceptions
to such items as are necessary to make the statements set forth
in such items accurate, provided that if any such additions or
exceptions cause any of the conditions to the parties'
obligations hereunder as set forth in this Agreement not to be
fulfilled, such additions and exceptions shall in no way limit
the rights of the parties to terminate this Agreement or refuse
to consummate the transactions contemplated hereby).
All indemnifications, guarantees, covenants, agreements,
representations and warranties made by the parties hereunder or
pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing regardless of any
investigation at any time made by or on behalf of the parties.
7.2 Conditions to Obligation of Enterprise. The
obligation of Enterprise to complete this Agreement upon the
Closing on the terms set forth in this Agreement is, at the
option of Enterprise, subject to the satisfaction or waiver by
Enterprise of each of the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by GOL India in this
Agreement shall be correct in all material respects upon and as
of the Closing with the same force and effect as though such
representations and warranties had been made upon the Closing.
(b) Compliance with Covenants. All covenants which GOL
India is required to perform or comply with upon or before the
Closing shall have been fully complied with or performed in all
material respects.
(c) Corporate Approvals. The Board of Directors and
Stockholder of GOL India shall have approved and ratified this
Agreement and shall have authorized the appropriate officers of
GOL India to execute same and fully perform its terms.
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(d) Consents and Approvals. To the extent that any material
lease, mortgage, deed of trust, contract or agreement to which
GOL India is a party shall require the consent of any person to
the exchange of GOL India's shares of common stock or any other
transaction provided for herein, such consent shall have been
obtained; provided, however, that GOL India shall not make, as a
condition for the obtaining of any such consent, any agreements
or undertakings not approved in writing by Enterprise to the
extent that such condition otherwise has an effect on Enterprise.
(e) No Governmental Actions. No action or proceeding
before any governmental authority shall have been instituted or
threatened to restrain or prohibit the transactions contemplated
by this Agreement, and the parties shall have delivered to each
other certificates dated as of the Closing and executed by such
parties, stating that to their best knowledge, no such items
exist. No governmental authority shall have taken any other
action as a result of which the management of Enterprise, in its
sole discretion, reasonably deems it inadvisable to proceed with
the transactions contemplated by this Agreement.
(f) No Material Adverse Change. No material adverse
change in the business, property or assets of any party hereto
shall have occurred, and no loss or damage to any of the assets,
whether or not covered by insurance, with respect to any party
hereto has occurred, and the parties hereto shall have delivered
to each other certificates dated as of the Closing and executed
by each of the parties to all such effects.
(g) Update of Contracts. The parties hereto shall have
delivered to each other an accurate list, as of the Closing,
showing (i) all agreements, contracts and commitments entered
into since the date of this Agreement; and (ii) all other
agreements, contracts and commitments related to the businesses
or the assets of the respective parties entered into since the
date of this Agreement, together with true, complete and accurate
copies of all such documents (the "New Contracts"). Each party
shall have had the opportunity to review and approve the New
Contracts of the other, and any of the parties shall have the
right to delay the Closing for up to ten (10) days if it in its
sole discretion deems such delay necessary to enable it to
adequately review the New Contracts.
(h) No Adverse Information. The investigations with
respect to the parties, the assets and the respective businesses
performed by each party's respective professional advisors and
other representatives shall not have revealed any information
concerning the other parties, their assets or their business and
with respect to the backgrounds of the proposed directors and
officers of Enterprise nominated by GOL India that has not been
made known to the discovering party, in writing prior to the date
of this Agreement and that, in the opinion of such party and its
advisors, materially and adversely affects the business or assets
of the other party or the viability of the transaction
contemplated by this Agreement.
(i) Liens. GOL India shall have delivered to Enterprise a
reasonably current lien and judgment search (both state and
county levels in each jurisdiction where the party is qualified
to or is doing business or owns material assets) confirming the
absence of any judicial liens, security interests, tax liens and
similar such liens affecting any of its business or assets. Each
and every lien or encumbrance of any nature, if any, relating to
the assets, business, or the shares
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of common stock of GOL India shall have been terminated and
released, and proof thereof delivered to Enterprise.
(j) Other Documents. The parties shall have delivered or
caused to be delivered all other documents, agreements,
resolutions, certificates or declarations as each respective
party or its attorneys may have reasonably requested.
(k) Governmental and Regulatory Approvals. The parties
shall have obtained evidence, in form and substance satisfactory
to each of them, that there have been obtained all consents,
approvals and authorizations required by this Agreement,
including, without limitation, the following:
(i) GOL India and Stockholder approval of all the
transactions contemplated pursuant to this Agreement; and
(ii) All regulatory approvals necessary for GOL India to
conduct business in the ordinary course in each jurisdiction
where such approval may be required.
(l) Audit Confirmation. The parties recognize that, in
order to comply with the reporting requirements of the Exchange
Act, it will be necessary for GOL India to prepare and file with
the S.E.C. a Current Report on Form 8-K which must include the
audited financial statements of GOL India and pro forma financial
information in accordance with Item 7 of Form 8-K. Prior to
Closing, Enterprise shall have received confirmation from its
independent accountants or the independent public accountants
selected by GOL India that books and records of GOL India will
permit the preparation by GOL India of audited financial
statements, together with report of independent public
accountants, in conformity with generally accepted accounting
principles consistently applied and in compliance with all
requirements of Regulation SX under the Securities Act.
(m) Federal and State Securities Laws. The sale and/or
issuance of Enterprise securities pursuant to this Agreement
shall have been cleared by all applicable federal and state
securities authorities or the issuance of such securities shall
be exempt from registration with said authorities, and the
transactions contemplated by this Agreement shall comply in all
material respects with all applicable federal and state laws.
7.3 Conditions to Obligation of GOL India. The obligations
of GOL India to complete this Agreement upon the Closing on the
terms set forth in this Agreement is, at the option of GOL India,
subject to the satisfaction or waiver by GOL India of each of the
following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by Enterprise in this
Agreement shall be correct in all material respects upon and as
of the Closing with the same force and effect as though such
representations and warranties had been made upon the Closing.
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(b) Compliance with Covenants. All covenants, which
Enterprise is required to perform or comply with upon or before
the Closing, shall have been fully complied with or performed in
all material respects.
(c) Corporate Approvals. The Board of Directors of
Enterprise shall have approved and ratified this Agreement and
shall have authorized the appropriate officers of Enterprise to
execute same and fully perform its terms.
(d) Consents and Approvals. To the extent that any
material lease, mortgage, deed of trust, contract or agreement to
which Enterprise is a party shall require the consent of any
person to the exchange of Enterprise's shares of common stock or
any other transaction provided for herein, such consent shall
have been obtained; provided, however, that Enterprise shall not
make, as a condition for the obtaining of any such consent, any
agreements or undertakings not approved in writing by GOL India
to the extent that such condition otherwise has an effect on GOL
India or Enterprise.
(e) No Governmental Actions. No action or proceeding
before any governmental authority shall have been instituted or
threatened to restrain or prohibit the transactions contemplated
by this Agreement, and the parties hereto shall have delivered to
each other certificates dated as of the Closing and executed by
such parties stating that, to their best knowledge, no such items
exist. No governmental authority shall have taken any other
action as a result of which the management of any of the parties,
in its sole discretion, reasonably deems it inadvisable to
proceed with the transactions contemplated by this Agreement.
(f) No Material Adverse Change. No material adverse
change in the business, property or assets of any party hereto
shall have occurred, and no loss or damage to any of the assets,
whether or not covered by insurance, with respect to any party
hereto has occurred, and the parties shall have delivered to each
other certificates dated as of the Closing and executed by each
of the parties to all such effects.
(g) Update of Contracts. The parties shall have delivered
to each other an accurate list, as of the Closing, showing (i)
all agreements, contracts and commitments entered into since the
date of this Agreement; and (ii) all other agreements, contracts
and commitments related to the businesses or the assets of the
respective parties entered into since the date of this Agreement,
together with true, complete and accurate copies of all such
documents (the "New Contracts"). Each party shall have had the
opportunity to review the New Contracts of the other, and any of
the parties shall have the right to delay the Closing for up to
ten (10) days if it in its sole discretion deems such delay
necessary to enable it to adequately review the New Contracts.
(h) No Adverse Information. The investigations with
respect to the parties, the assets and their respective
businesses performed by each party's respective professional
advisors and other representatives shall not have revealed any
information concerning the other panes, their assets or their
business that has not been made known to the discovering party,
in writing prior to the date of this Agreement and that, in the
opinion of such party and its advisors, materially and adversely
affects the business or assets of the other party or the
viability of the transaction contemplated by this Agreement.
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(i) Liens. GOL India shall have delivered to Enterprise a
reasonably current lien and judgment search (both state and
county levels in each jurisdiction where the party is qualified
to or is doing business or owns material assets) confirming the
absence of any judicial liens, security interests, tax liens and
similar such liens affecting any of its business or assets. Each
and every lien or encumbrance of any nature, if any, relating to
the assets, business, or the shares of common stock of GOL India
shall have been terminated and released, and proof thereof
delivered to Enterprise.
(j) Other Documents. The parties shall have delivered or
caused to be delivered all other documents, agreements,
resolutions, certificates or declarations as each respective
party or its attorneys may have reasonably requested.
(k) Governmental and Regulatory Approvals. The parties
shall have obtained evidence, in form and substance satisfactory
to each of them, that there have been obtained all consents,
approvals and authorizations required by this Agreement,
including, without limitation, the following:
(i) Enterprise approval of all the transactions contemplated
pursuant to this Agreement; and
(ii) All regulatory approvals necessary for Enterprise to
conduct business in the ordinary course in each jurisdiction
where such approval may be required.
(l) Audit Confirmation. The parties recognize that, in
order to comply with the reporting requirements of the Exchange
Act, it will be necessary for GOL India to prepare and file with
the S.E.C. a Current Report on Form 8-K which must include the
audited financial statements of GOL India and pro forma financial
information in accordance with Item 7 of Form 8-K.
(m) Federal and State Securities Laws. The sale and/or issuance
of Enterprise securities pursuant to this Agreement shall have
been cleared by all applicable federal and state securities
authorities or the issuance of such securities shall be exempt
from registration with said authorities, and the transactions
contemplated by this Agreement shall comply in all material
respects with all applicable federal and state laws.
(n) The execution and delivery of Leak-out Agreements which are
acceptable to Stockholder pursuant to section 2.4.
SECTION EIGHT
Indemnification and Remedies for Breach
8.1 Indemnification by Enterprise
(a) Indemnification Agreement. At time of Closing, Enterprise
shall have no liabilities of any kind or nature whatsoever, and
at time of Closing ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇,
shall execute the indemnification agreement attached hereto as
Exhibit "I" to
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indemnify and hold harmless GOL India and the Stockholder
relying upon the representations in this Agreement against any
and all losses, claims, damages, liabilities, and expenses, joint
or several to which such Stockholder may become subject under the
Securities Act, Exchange Act or otherwise.
8.2 Indemnification by GOL India.
(a) GOL India shall defend, indemnify and hold Enterprise
harmless against and in respect of any damage, loss, liability,
cost or expense, including expert witness fees and reasonable
attorneys' fees, whether or not recoverable under applicable
state law, resulting or arising from or incurred in connection
with:
(i) any misrepresentation, breach of warranty, or
nonfulfillment or nonperformance of any agreement on the part of
GOL India under this Agreement, or any misrepresentation or
omission from any exhibit, schedule, list, certificate or other
instrument furnished or to be furnished by it under this
Agreement;
(ii) any and all liabilities of GOL India of any nature
whatsoever, whether accrued, absolute, contingent or otherwise
and whether known or unknown, except to the extent that any such
liability arises from Enterprise's failure to perform or
discharge, when due, Enterprise's future obligations;
(iii) any actions, suits, proceedings, damages,
assessments, judgments, costs or expenses incident to any of the
foregoing.
(b) Promptly after the receipt by Enterprise of notice of
any claim asserted by a third party that may give rise to GOL
India's liability to Enterprise under this Section, Enterprise
shall give to GOL India written notice of such claim and GOL
India shall be entitled to participate at its own expense in the
defense of any such claim. Enterprise shall not pay,
acknowledge, compromise or settle any such claim without the
written consent of GOL India, unless such payment,
acknowledgement, compromise or settlement results in a full and
complete release and discharge of GOL India from any liability.
8.3 Additional Notice. Notwithstanding the provisions of
Sections 8.1 or 8.2 above, promptly after the receipt by any
party hereto of notice of any claim asserted by a third party
that may give rise to the liability of any party for which the
right to indemnification may be claimed under this Section, such
party shall give to each other party written notice of such claim
as soon as practicable. The provisions of this Section 8.3 are
in addition to and not in lieu of the covenants of the parties
contained in Sections 8.1 or 8.2 above.
8.4 Determination of Damages and Related Matters.
(a) Upon the occurrence of any event which would give rise
to a claim by Enterprise against, or to a right of defense and
indemnity against GOL India pursuant to this Section 8, or in the
event that any suit, action, investigation, claim or proceeding
is begun, made or instituted as a
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result of which GOL India may become obligated to Enterprise
hereunder, Enterprise shall give notice to GOL India of the
occurrence of such event and shall identify Enterprise's choice
of counsel to represent such investigation, claim or proceedings,
provided that the failure of Enterprise to give notice shall not
affect the indemnification obligations of GOL India hereunder.
Enterprise (i) shall have the exclusive right to so defend,
contest or protect against such matter utilizing the counsel of
Enterprise's choice (who shall be reasonably acceptable to GOL
India), and (ii) without further notice may set off or apply
against all amounts due GOL India hereunder, or their affiliates,
under any instrument or pursuant to any obligation, the full
amount for which indemnification hereunder is provided. GOL
India shall have the right, but not the obligation, to
participate, at its own expense, in the defense thereof by
counsel of their choice.
(b) As Enterprise incurs expenses for which indemnification
hereunder is provided and after any final judgment or award shall
have been rendered by a court, arbitration board or
administrative agency of competent jurisdiction, and the
expiration of the time in which to appeal therefrom, or a
settlement shall have been consummated, Enterprise shall forward
to GOL India notice of any sums due and owing by them pursuant to
this Agreement with respect to such matter and they shall be
required to pay all of the sums so due and owing to Enterprise by
certified or bank cashier's check within ten (10) days of such
notice.
(c) Upon the occurrence of any event which would give rise
to a claim by GOL India against, or to a right of defense and
indemnity against Enterprise pursuant to this Section 8, or in
the event that any suit, action, investigation, claim or
proceeding is begun, made or instituted as a result of which
Enterprise may become obligated to GOL India hereunder. GOL India
shall give notice to Enterprise of the occurrence of such event
and shall identify their choice of counsel to represent such
investigation, claim or proceedings, provided that the failure of
GOL India to give notice shall not affect the indemnification
obligations of Enterprise hereunder. GOL India (i) shall have the
exclusive right to so defend, contest or protect against such
matter utilizing the counsel of their choice (who shall be
reasonably acceptable to Enterprise), and (ii) without further
notice may set off or apply against all amounts due Enterprise
hereunder, or their affiliates, under any instrument or pursuant
to any obligation, the full amount for which indemnification
hereunder is provided. Enterprise shall have the right, but not
the obligation, to participate, at their own expense, in the
defense thereof by counsel of their choice.
(d) As GOL India incurs expenses for which indemnification
hereunder is provided and after any final judgment or award shall
have been rendered by a court, arbitration board or
administrative agency of competent jurisdiction, and the
expiration of the time in which to appeal therefrom, or a
settlement shall have been consummated. GOL India shall forward
to Enterprise notice of any sums due and owing by it pursuant to
this Agreement with respect to such matter, and Enterprise shall
be required to pay all of the sums so due and owing to GOL India
by certified or bank cashier's check within ten (10) days of such
notice.
8.5 Remedies For Breach. Prior to the Closing, in the event of
any material breach of any of the provisions of this Agreement,
including but not limited to any breach of any covenant, warranty
or representation made by any party hereto, the other party may
terminate this Agreement as provided for in Section 5.1 above.
E-22
8.6 Escrow of Shares by Consultants. To provide security
for the representations and warranties made by Enterprise and
protection beyond the indemnification agreement in paragraph 8.1
above, certain of the Consultants on this transaction have agreed
to execute the Escrow Agreement (attached hereto as Exhibit "J")
and escrow for one (1) year a total of 300,000 shares of their
restricted common stock. The indemnification liability of the
Consultants shall be limited to the shares that are placed in
this escrow.
SECTION NINE
General Provisions
9.1 Further Assurances. At any time, and from time to
time, after the Closing, 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. 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.
9.2 Survival and Incorporation of Representations. The
representations, warranties, covenants and agreements made herein
or in any certificates or documents executed in connection
herewith shall survive the execution and delivery thereof for a
period of one (1) year, and all statements contained in any
certificate or other document delivered by any party hereunder or
in connection herewith shall be deemed to constitute
representations and warranties made by that party to this
Agreement.
9.3 Incorporation by Reference. All appendices, schedules
and exhibits to this Agreement and all documents delivered
pursuant to or referred to in this Agreement are herein
incorporated by reference and made a part hereof.
9.4 Parties in Interest. Nothing in this Agreement,
whether express or implied, is intended to, or shall, confer any
rights or remedies under, or by reason of, this Agreement, on any
person other than the parties hereto and their respective and
proper successors and assigns. Nor shall anything in this
Agreement act to relieve or discharge the obligation or liability
of any third persons to any party to this Agreement.
9.5 Amendments and Waivers. This Agreement may not be
amended, nor may compliance with any term, covenant, agreement,
condition or provision set forth herein be waived (either
generally or in a particular instance and either retroactively or
prospectively) unless such amendment or waiver is agreed to in
writing by all parties hereto.
9.6 Waiver. No waiver of any breach of any one of the
agreements, terms, conditions, or covenants of this Agreement by
the parties shall be deemed to imply or constitute a waiver of
any other agreement, term, condition, or covenant of this
Agreement. The failure of any party to insist on strict
performance of any agreement, term, condition, or covenant,
herein set forth, shall not constitute or be construed as a
waiver of the rights of either or the other thereafter to enforce
E-23
any other default of such agreement, term, condition, or
covenant; neither shall such failure to insist upon strict
performance be deemed sufficient grounds to enable either party
hereto to forego or subvert or otherwise disregard any other
agreement, term, condition, or covenants of this Agreement.
9.7 Expenses. The present controlling shareholders of
Enterprise shall pay the following costs: its securities counsel;
for any legal opinion required of Enterprise pursuant to this
transaction; all its other legal fees and auditor's fees incurred
prior to the Closing; Delaware franchise fees and filing fees (to
complete capital structure changes called for in Section 1.6
hereto); and the cost of preparation of board minutes and
resolutions of Enterprise.
9.8 Brokers. Except as otherwise shown in Exhibit "B",
each party represents to the other party hereunder that no
consultants, advisors, brokers or finders have acted for it in
connection with this Agreement, and agrees to indemnify and hold
harmless the other party against any fee, loss or expense arising
out of claims by consultants, advisors, brokers or finders
employed or alleged to have been employed by it.
9.9 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, as
follows:
GOL India and Stockholder:
▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President
USA Global Link, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief In-House Counsel
USA Global Link, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Enterprise:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
5882 South, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
9.10 Entire Agreement. This Agreement constitutes the
entire agreement between the parties and supersedes and cancels
any other agreement, representation, or communication,
E-24
whether oral or written, between the parties hereto relating to
the transactions contemplated herein or the subject matter
hereof.
9.11 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.
9.12 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State
of New York.
9.13 Assignment. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their successors
and assigns; provided, however, that any assignment by either
party of its rights under this Agreement without the written
consent of the other party shall be void.
9.14 Limitation of Actions. No action may be brought by any
party to this Agreement to enforce any covenant made by any party
hereto or to seek damages or equitable relief arising from any
claimed breach or nonperformance of a covenant, representation,
warranty or other performance provided for herein unless such
action is commenced within one (1) year of the date of Closing.
The parties hereto agree to be bound by the aforesaid limitation
of actions notwithstanding the provisions of any applicable
statutory limitation of actions to the contrary.
9.15 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.
9.16 Severability. Wherever there is any conflict between
any provision of this Agreement and any statute, law, regulation
or judicial precedent, the latter shall prevail, but in such
event the provisions of this Agreement thus affected shall be
curtailed and limited only to the extent necessary to bring it
within the requirement of the law. In the event that any part,
section, paragraph or clause of this Agreement shall be held by a
court of proper jurisdiction to be invalid or unenforceable, the
entire Agreement shall not fail on account thereof, but the
balance of the Agreement shall continue in full force and effect
unless such construction would clearly be contrary to the
intention of the parties or would result in unconscionable
injustice.
9.17 Jurisdiction and Venue. Jurisdiction over any action,
proceeding or arbitration shall be proper only if filed and
maintained in New York, and venue shall be proper therefor only
in the County of New York as to state court proceedings or the
District Court for the Southern District of New York as to
federal court proceedings.
9.18 Good Faith Cooperation and Additional Documents. The
parties shall use their best good faith efforts to fulfill all of
the conditions set forth in this Agreement over which it has
control or influence. Each party covenants and agrees to
cooperate in good faith and to enter into and deliver such other
documents and papers as the other party reasonably shall require
in order to consummate the transactions contemplated hereby,
provided in each instance,
E-25
any such document is in form and substance approved by the
parties and their respective legal counsel.
IN WITNESS WHEREOF, the parties have executed this Agreement
and Plan of Reorganization as of the date first above written.
WITNESS ENG ENTERPRISES, INC.
__________________________ By:
Name:
Title:
WITNESS GOL ▇▇▇▇▇.▇▇▇, INC.
___________________________ By:
Name:
Title:
WITNESS STOCKHOLDER OF GOL ▇▇▇▇▇.▇▇▇, INC.
___________________________ USA GLOBAL LINK, INC.
By:
Name:
Title:
E-26
EXHIBIT A
List of Restricted Shares to be Issued by
Enterprise to the Stockholder of GOL India
Pre-Dividend Post-Dividend
Common Shares Common Shares
Stockholder: of Enterprise of Enterprise
USA Global Link, Inc. 15,750,000 47,250,000
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
E-27
EXHIBIT B
Rule 144 Restricted Common Shares to be Issued to ENG
Enterprises, Inc.,
Advisors and Consultants and Management
Stockholder Names and Address Enterprise Enterprise Total
Pre-Dividend Dividend Enterprise
Shares Shares Shares
Bridgestone Capital Group L.L.C. 13,822 27,644 41,466
▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust dated 23,726 47,452 71,178
1-31-83
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust dated 34,164 68,328 102,492
12-24-73
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 12,812 25,624 38,436
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. Silver 6,168 12,336 18,504
26530 Wyoming
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Silver 1,898 3,796 5,694
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,898 3,796 5,694
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3,500 7,000 10,500
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Trust 3,500 7,000 10,500
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 1,000 2,000 3,000
E-28
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Affiliated Holdings, Inc. 70,519 141,038 211,557
▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Danali Systems, Inc. 70,519 141,038 211,557
▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc. 70,519 141,038 211,557
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. 37,145 74,290 111,435
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
International Business Concepts 3,333 6,666 9,999
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 634 1,268 1,902
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ 100 200 300
18406 Shiawassee
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Capital Consulting, Inc. 30,000 60,000 90,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,667 3,334 5,001
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Olympic Capital Group, Inc. 9,000 18,000 27,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇, P.C. 2,667 5,334 8,001
E-29
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇ 18,312 36,624 54,936
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 5,355 10,710 16,065
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 500 1,000 1,500
▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Total: 422,758 845,516 1,268,274
E-30
EXHIBIT C
Closing Document List
ENG Enterprises, Inc.:
1. Executed copy of minutes of the meeting of the Board of
Directors of Enterprise to approve the reorganization transaction
with GOL India and to authorize its officers to take all
appropriate action to complete the transaction.
2. Executed Officers & Directors Certificate.
3. Certificate of Good Standing from the State of Delaware.
4. Current shareholders list.
5. Signed auditors letter (see Exhibit "D").
6. All minute books, corporate records, and accounting records
of Enterprise.
7. Executed Leak-out Agreement(s).
8. Corporate By-laws and Amendments.
9. Evidence of the cancellation of 60,000 shares of restricted
common stock and evidence of the cancellation of 356 shares of
free-trading stock.
10. Stock Certificates for common stock issuance to the
Stockholder and the Consultants.
11. Executed Indemnification Agreements.
12. Resignations of Officers and Directors.
USA Global Link, Inc., DBA as Global Online, the Stockholder of
GOL India:
1. Executed copy of minutes of the meeting of the Board of
Directors of USA Global Link, Inc. to approve the reorganization
transaction with Enterprise and to authorize its officers to take
all appropriate action to complete the transaction.
2. Executed Officers & Directors Certificate.
3. Certificate of Good Standing from the State of Delaware.
4. Investment letter executed by USA Global Link, Inc.
5. Letter to appoint slate of directors.
6. Common stock share certificates representing 100% of the
issued and outstanding shares of GOL India with green medallion
signature guarantee attached to each certificate.
Consultants and Advisors:
1. Executed escrow agreement.
2. Executed Leak-out Agreements.
3. Executed investment letters.
E-31
EXHIBIT D
Letter from Enterprise's Auditor
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇.
Certified Public Accountants and Business Consultants
941 East ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone ▇▇▇-▇▇▇-▇▇▇▇ / Fax ▇▇▇-▇▇▇-▇▇▇▇
June 8, 2000
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇
President
Global ▇▇▇▇▇▇.▇▇▇, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: Books and records of ENG Enterprises, Inc.
Dear ▇▇. ▇▇▇▇▇▇▇▇▇:
Our firm is currently the independent auditor for ENG
Enterprises, Inc. ("ENG"). This letter is to confirm that we
stand ready at the closing of the reorganization to deliver to a
representative of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & co., the newly appointed
auditor designated by GOL ▇▇▇▇▇.▇▇▇, Inc. ("GOL India"), any and
all corporate records and books of account that are in our
possession pertaining to our engagement as the auditor for ENG.
These items shall include original documents and records, (or
photocopies of documents where originals are not available), the
general ledger, cash receipt journals, stock ledgers, minute
books, all audit work papers and spread sheets, all financial
statements including foot notes and any supporting documents
relating to the public status of ENG.
Please let us know if there is any other was we can be of
service.
Sincerely,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Strong, L.C.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ CPA
E-32
EXHIBIT E
Sample Leak-out Agreement
June ___, 2000
To: GOL ▇▇▇▇▇.▇▇▇, Inc. and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
USA Global Link, Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Bridgestone Capital Group, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Agreement and Plan of Reorganization Between GOL ▇▇▇▇▇.▇▇▇
and ENG Enterprises, Inc.
The undersigned is the owner ("Record Owner") of ___________
common shares (the "Shares") of ENG Enterprises, Inc., ("ENG"),
which Shares are or will be evidenced by one or more certificate
number(s). The Record Owner hereby represents and warrants to
the USA Global Link, Inc., GOL ▇▇▇▇▇.▇▇▇, Inc., Bridgestone
Capital Group, and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. that the Shares
are the only shares of ENG owned of record or beneficially
controlled by the undersigned, and that the undersigned does not
directly or indirectly own or control, whether in nominee name or
otherwise, any shares of ENG other than the Shares. The
undersigned hereby agrees, among other things enumerated below,
not to sell or otherwise transfer any shares of ENG (or of such
entity as re-named subsequent to this Agreement), including but
not limited to the Shares, any shares of ENG purchased or
otherwise received on or after the date of this Agreement, any
restricted shares of ENG, and any shares of ENG not owned by the
Record Owner, except as provided herein. The undersigned further
agrees that the restriction on the transfer of shares relates to
the certificates referenced above and to any other certificates
which may be issued or acquired in the future which evidence the
Record Owner's ownership of shares or the ownership of shares by
any transferee of shares who acquired same by operation of law,
and to the transfer by or on behalf of the undersigned of any
other shares of ENG (or of such entity as re-named subsequent to
this Agreement). In connection with the foregoing, the
undersigned represents, warrants and agrees as follows:
1. The Record Owner has full power and authority to enter
into this Agreement and to restrict the transferability and
salability of the shares of ENG (including but not limited to
the Shares, any shares of ENG purchased or otherwise received
on or after the date of this Agreement, any restricted shares
of ENG, and any shares of ENG not owned by the Record Owner)
as provided herein.
2. The Record Owner's compliance with the terms and conditions
of this Agreement will not conflict with any instrument or
agreement, and will not conflict with, result in a breach of,
or constitute a default under any instrument or agreement to
which Record Owner is a party.
3. The Record Owner owns, or when issued will own, the Shares
and represents that they are clear of any and all liens and
encumbrances.
4. Beginning on the date of the Closing of the transaction
between GOL India and ENG and for a period of six (6) months
following said Closing, the Record Owner agrees not to sell more
than five hundred (500) shares (including but not limited to the
Shares, any shares of ENG purchased or otherwise received on or
after the date of this Agreement, any restricted shares of ENG,
and any shares of ENG not owned by the Record Owner) of ENG (or
of such entity as re-named subsequent to this Agreement), in any
calendar month without the prior written consent of USA Global
Link, Inc., GOL ▇▇▇▇▇.▇▇▇, Inc., Bridgestone Capital Group, and
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. During the period of the seventh
(7th) month through the twelfth (12th) month after Closing the
Record Owner agrees not to sell more than one thousand (1,000)
shares (including but not limited to the Shares) of ENG (or of
such entity as re-named subsequent to this Agreement) in any
calendar month without the prior written consent of the USA
Global Link, Inc., GOL ▇▇▇▇▇.▇▇▇, Inc., Bridgestone Capital
Group, and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
E-33
5. The Record Owner agrees not to make any private transfer of
any shares of ENG (including but not limited to the Shares, any
shares of ENG purchased or otherwise received on or after the
date of this Agreement, any restricted shares of ENG, and any
shares of ENG not owned by the Record Owner) unless the
transferee agrees in writing to be bound by the restrictions
contained herein.
6. The Record Owner agrees that the restrictions described
herein will be placed on the stock certificates(s) issued to the
Record Owner.
7. For the purpose of evidencing written consent pursuant to
the terms of this Agreement, the individuals identified above may
bind each of their respective entities until such time as Record
Owner is notified of a change of the designated representative.
Very truly yours,_______________________________________
E-34
EXHIBIT F
Unaudited financial statements of Enterprise containing balance
sheets and statements of operations for Enterprise at June 30,
1999 and September 30, 1999, and March 31, 2000 on Form 10-Q.
35
EXHIBIT F
Financial Statements of ENG Enterprises, Inc.
Audited Financial Statements
Board of Directors
ENG Enterprises, Inc.
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of ENG
Enterprises, Inc. (development stage company) at December 31,
1999 and the related statement of operations, stockholders'
equity, and cash flows for the years ended December 31, 1999, and
1998 and the period from January 1, 1995 (date of inception of
development stage) to December 31, 1999. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the balance sheet is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the balance sheet. An audit also
includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall balance
sheet presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of ENG Enterprises, Inc. at December 31, 1999
and the results of operations, and cash flows for the years ended
December 31, 1999 and 1998 and the period January 1, 1995 (date of
inception of development stage) to December 31, 1999, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company is in the
development stage and will need additional working capital for
its planned activity, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in
regard to these matters are described in Note 6. These financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
Salt Lake City, Utah
February 18, 2000
E-36
ENG Enterprises, Inc.
(Development Stage Company)
BALANCE SHEET
December 31, 1999
December 31,
1999
------------
ASSETS
CURRENT ASSETS
Cash $ -
------------
Total Current Assets $ -
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -
------------
Total Current Liabilities -
------------
STOCKHOLDERS' EQUITY
Preferred stock
10,000,000 shares authorized, at
$1.00 par value; 2,791 shares
issued and outstanding - Note 4 2,791
Common stock
100,000,000 shares authorized, at
$0.001 par value; 348,456
shares issued and outstanding 3,485
Capital in excess of par value 6,683,457
Stock subscription received - Note 3 59,870
Accumulated deficit (6,749,603)
------------
Total Stockholders' Equity
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -
============
The accompanying notes are an integral part of these financial
statements.
E-37
ENG Enterprises, Inc.
(Development Stage Company)
Statement of Operations
For the Years Ended December 31, 1999 and 1998
and the Period from January 1, 1995 (Date of Inception of
Development Stage) to December 31, 1999
January 1, 1995
December 31, December 31, (Note 1) to
1999 1998 December 31, 1999
------------ ------------ ------------
REVENUES $ - $ 3,666 $ 62,793
EXPENSES 8,687 3,415 194,601
------------ ------------ ------------
NET PROFIT (LOSS) FROM
OPERATIONS- (before other
income and expense) $ (8,687) $ 251 $(131,808)
OTHER INCOME AND EXPENSE
Gain on settlement of debt $ 961,841 $ 51,104 2,725,467
Loss of assets - - (1,592,626)
------------ ------------ ----------
NET INCOME $ 953,154 $ 51,355 $1,001,033
============ ============ ==========
GAIN (LOSS) PER COMMON SHARE
Basic
Net profit (loss) from
operations - (before other
income and expense) $(.03) $ -
----- ----
Net income $3.37 $.18
----- ----
AVERAGE OUTSTANDING SHARES
Basic 282,894 282,894
------- -------
The accompanying notes are an integral part of these financial
statements.
E-38
ENG Enterprises, Inc.
(Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period from January 1, 1995 (date of inception
of development stage) to December 31, 1999
Capital in
Preferred Stock Common Stock Excess of Accumulated
Shares Amount Shares Amount Par Value Deficit
----- ------- -------- -------- -------- ----------
Balance January 1, 1995
(note 1) 4,879 $ 4,879 282,89 $ 2,829 $6,553,613 $(7,750,636)
Net loss for the year
ended December 31, 1995 - - - - - (1,692,318)
Net loss for the year ended
December 31, 1996 - - - - - 1,688,999
Net loss for the year ended
December 31, 1997 - - - - - (157)
Net loss for the year ended
December 31, 1998 - - - - - 51,355
------- -----------------------------------------------
Balance December
31, 1998 4,879 $ 4,879 282,894 $ 2,829 $ 6,553,613 $ (7,702,757)
Issuance of common
stock for redemption
of preferred stock -
December 31, 1999 (2,088) (2,088) 65,250 653 129,847 -
Additional shares issued
resulting from reverse
common stock split -
Note 1 - - 312 3 (3) -
Net profit for the year
ended December 31, 1999 - - - - - 953,154
------- ---------------------------------------------
Balance December
31, 1999 2,791 $ 2,791 348,456 $3,485 $6,683,457 $(6,749,603)
======================================================
The accompanying notes are an integral part of these financial
statements.
E-39
ENG Enterprises, Inc.
(Development Stage Company)
STATEMENT OF CASH FLOWS
For the Years Ended December 31, 1999 and 1998
and the Period January 1, 1995 (Date of Inception
of Development Stage) to December 31, 1999
January 1, 1995
December 31, December 31, (Note 1) to
1999 1998 December 31, 1999
------------ ------------ ------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net profit $ 953,154 $ 51,355 $ 1,001,033
Adjustments to reconcile net
loss to net cash provided by
operating activities
Loss of assets - - 1,592,626
Gain on settlement of dept (961,841) (51,104) (2,725,467)
Changes in accounts payable (55,721) (251) 67,400
------------ ------------ ------------
Net Cash Used by Operations (64,408) - (64,408)
------------ ------------ ------------
CASH FLOWS FROM INVESTING
ACTIVITIES
- - -
------------ ------------ ------------
CASH FLOWS FROM FINANCING
ACTIVITIES
- - -
------------ ------------ ------------
Net proceeds from issuance of
common stock 64,408 - 64,408
Net Increase (Decrease) in Cash - - -
------------ ------------ ------------
Cash at End of Period $ - $ - $ -
============ ============ ============
The accompanying notes are an integral part of these financial
statements.
E-40
ENG ENTERPRISES, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the state of
Delaware on August 2, 1982 with the name of "Energetics, Inc."
with authorized common stock of 100,000,000 shares at $0.01 par
value and 10,000,000 preferred shares at $1.00 par value. On
November 4, 1999 the Company changed its name to "ENG Enterprises,
Inc." and on March 3, 2000 a reverse common stock split of one
share for 200 outstanding shares.
This report has been prepared showing the after stock split
shares from inception.
Since inception the Company has been engaged in the business of
the exploration, development, and production of oil and natural gas
through three wholly owned subsidiaries. During 1995 the Company
ceased operations resulting from the loss of its remaining assets.
Since that time the Company has remained inactive is considered
to have been in the developmental stage since January 1, 1995.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual
method of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of
dividends.
Income Taxes
On December 31, 1999, the Company had a net operating loss carry
forward of $6,749,603. The tax benefit from the loss carry forward has been
fully offset by a valuation reserve because the use of the future tax
benefit is doubtful since the Company has no operations and there has been a
substantial change in its stockholders. The loss carryover will expire
beginning in years 1998 though 2019.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on
the weighted average number of shares actually outstanding. Diluted net
income (loss) per share amounts are computed using the weighted average
number of common shares and common equivalent shares outstanding as if
shares had been issued on the exercise of the preferred share rights
unless the exercise becomes antidilutive and then only the basic per
share amounts are shown in the report.
Accounting for Stock-Based Compensation
The Company has adopted Statement of Financial Accounting
Standards No. 123 but has elected to continue to measure compensation
cost under APB 25. The adoption of FASB No. 123 has no impact on
the Company's financial statements.
E-41
ENG ENTERPRISES, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS - continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards
No. 130. The adoption of this standard had no impact on
the total stockholder's equity on June 30, 1999.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent
accounting pronouncements will have a material impact on its financial
statements.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of the
assets and liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
Financial instruments
The carrying amounts of financial instruments are considered by
management to be their estimated fair values. These values are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange.
3. STOCK SUBSCRIPTION RECEIVED
During November and December 1999 the Company received cash
advances on a convertible loan of $59,870. The terms of the loan provided
for the conversion of the loan to common capital stock at the rate of $.50
per share (post split) at the option of the lender. During January 2000
the lender elected to receive 120,000 (post split) common shares of capital
stock in exchange for the advances.
4. CONVERTIBLE PREFERRED STOCK
The terms of the convertible preferred stock outstanding provides
for the payment of annual cash dividends at the rate of $80 per share,
payable quarterly, when and if declared by the Board of Directors. To the
date of this report no dividends had been declared and paid on the preferred
shares issued.
Each share of preferred stock is convertible into common stock at
a determined amount by dividing the sum of $1,000 and any unpaid cumulative
dividends on the date of the conversion, by the conversion price on the date
of conversion. The conversion price is defined in the agreement. No dividends
can be declared on the common stock until the cumulative dividends are paid
on the preferred.
E-42
ENG ENTERPRISES, INC.
(Development Stage Company)
NOTES TO FINANCIAL STATEMENTS - continued
5. RELATED PARTY TRANSACTIONS
Related parties own 52% of the outstanding common stock after the
issuance the stock outlined in note 3.
6. GOING CONCERN
The Company intends to acquire interests in various business
opportunities which, in the opinion of management, will provide a profit
to the Company but it does not have the working capital to be successful
in this effort.
Continuation of the Company as a going concern is dependent upon
obtaining the working capital necessary for its planned activity.
Management of the Company has developed a strategy, which they believe can
obtain the needed working capital through additional equity funding and long
term debt which will enable the Company to continue operations for the
coming year.
E-43
EXHIBIT G
Financial Statements of GOL ▇▇▇▇▇.▇▇▇, Inc.
Unaudited Balance Sheet For the Period Ending June
9th, 2000
Assets
Current Assets
Cash & Cash Equivalents 9,998
Total Current Assets 9,998
Fixed Assets
Computer & Office Equipment, 65,526
Furniture
Computer Software 62,403
Leased Computer Equipment 158,800
Total Fixed Assets 286,729
Accumulated Depreciation (103,174)
Total Net Fixed Assets 183,555
Intangible Assets
Internet Domain Names 12,600
Other Investments
Investment in GOL India ISP 23,226
Private Limited (49% of Common Shares
at $0.023 par value per share)
Investment in USA Global Link, 5
Inc. (5,000 Shares of Common Stock at
$0.001 par value per share)
Total Other Investments 23,231
Total Assets 229,384
Liabilities & Equity
Current Liabilities
Capital Lease - Short Term 26,493
Long Term Liabilities
Capital Lease - Long Term 29,849
Total Liabilities 56,342
Equity
Common Stock (1,000,000 shares @ 1,000
$0.001 par value per share)
Additional Paid-In Capital 355,195
Retained Earnings (183,153)
Total Equity 173,042
Total Liabilities & Equity 229,384
E-44
EXHIBIT H
Investment Letter
USA Global Link, Inc.
The undersigned hereby certifies to ENG Enterprises, Inc., a
Delaware corporation, that it is acquiring 15,750,000 shares of
ENG Enterprises, Inc. capital stock to be represented by a single
certificate with purpose and intent of investment and not with
any purpose or intent for resale or disposition, and that said
stock will be held by the undersigned subject to all applicable
provisions of and rules and regulations under the securities act
of 1933.
The undersigned further certifies that it is acquiring both
the record and beneficial ownership of all said stock and
consents to having the certificate representing the same, stamped
with an appropriate legend indicating investment status and also
indicating that the certificate may not be divided into lesser
denominations or otherwise transferred without the consent of the
corporation in respect of the investment character denominated by
this statement.
USA GLOBAL LINK, INC:
By:____________________________________
Name:_________________________________
Title:__________________________________
Date:__________________________________
E-45
June ___, 2000
Board of Directors
ENG Enterprises, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: Issuance of restricted shares of ENG Enterprises,
Inc., a Delaware Corporation ("Enterprise") as
described in Exhibits A and B of the Agreement and Plan
of Reorganization signed between GOL ▇▇▇▇▇.▇▇▇ Inc. a
private Delaware corporation ("GOL India") and
"Enterprise".
Gentlemen:
I hereby acknowledge the receipt of __________ shares of the
pre 200% dividend restricted common stock (the "Shares"), of ENG
Enterprises, Inc. (formerly Energetics Inc.), a publicly traded
Delaware corporation, ("Enterprise"), pursuant to that certain
Agreement and Plan of Reorganization dated June ___, 2000,
whereby Global ▇▇▇▇▇.▇▇▇, Inc., a private Delaware corporation,
("GOL India"), has been acquired for 15,750,000 pre 200% dividend
restricted common shares of Enterprise.
I hereby acknowledge that I approve this exchange; that I
have previously received and personally reviewed a copy of the
financial statements of "Enterprise"; that I have been informed
that at the time of closing that Enterprise will have no assets
or liabilities reflected in audited financial statements for the
most recent fiscal year end; that the exchange diluted my
interest in GOL India; and, I represent and warrant that I have
sufficient knowledge and experience to understand the nature of
the exchange and am fully capable of bearing the economic risk of
loss of my entire cost basis.
I am not relying on any particular representation made by
any person concerning Enterprise in connection with the exchange
of these shares, and I understand that I must bear the economic
risk of ownership of any of these shares for a long period of
time, the minimum of which will be one (1) year, and which could
be longer, as these shares are unregistered shares.
I acknowledge that I have been advised that the Shares are
not being registered under the Securities Act of 1933 (the
"Act"), that the Shares will be issued to me pursuant to the
statutory exemption contained in Section 4(2) of the Act, and
that the Shares are "restricted securities" within the meaning of
Rule 144 promulgated by the Securities and Exchange Commission
(the "Commission") under the Act. I represent that I will not
sell the Shares without registration under the Act and any
applicable state securities laws (unless exempted therefrom).
I hereby represent to you that I am acquiring the Shares for
investment purposes for my own account and not with a view to or
for resale in connection with any distribution of the Shares
within the meaning of the Act, and that I do not intend to
dispose of all or any part of the Shares for any reason within
the near future.
I acknowledge that I have been advised of the provisions of
Rule 144 and understand that I may not resell the Shares except:
(1) in compliance with the registration provisions of the Act, or
(2) pursuant to the provisions of Rule 144 or pursuant and by an
opinion of my attorney satisfactory to the Corporation that the
Shares may legally be sold in accordance with the provisions of
Rule 144. I understand that Rule 144 provides for:
E-46
1. a one-year holding period by me of the Shares before
the sale of any Shares;
2. a limitation on the amount of Shares which may then be
sold;
3. certain public information to be made available on
behalf of the
Corporation;
4. the manner by which any sale may take place; and
5. the filing of a report by the Seller with the
Commission.
I further acknowledge that I have been advised that a legend
will be placed on the certificate or other document evidencing
the Shares stating that the Shares have not been registered under
the Act or any state securities laws and setting forth the
restriction on transferability and resale of the Shares. In
addition, stop transfer restriction instructions will be issued
to the Corporation's transfer agent, with respect to the Shares,
or if the Corporation transfers its own securities, making a
notation in the appropriate records of the Corporation.
These Shares were not offered or sold by means of any
general advertisement or general solicitation. No commission is
being paid, except to a properly registered unaffiliated
broker/dealer.
I further acknowledge that I have been furnished with all of
the information concerning the Corporation and the acquisition of
the Shares (to the extent the Corporation possesses such
information, or could acquire it without unreasonable effort or
expenses), which I considered necessary in order for me to make
the decision to acquire the Shares. I have had the opportunity
to inquire as to additional information and to meet with and
discuss this transaction with my advisors, and understand the
transaction herein contemplated.
I have reviewed all such information and after such review,
I believe that the Shares are of the kind I wish to acquire and
hold for investment, and that the nature and amount of the Shares
acquired are consistent with my investment program. I further
agree and represent that I have such knowledge, and experience in
financial and business matters that I am capable of utilizing the
information referred to above in order to evaluate the risks, and
to make an informed decision. And I am able to bear the economic
risks of ownership of the Shares.
Very truly yours,
__________________________________________
(Print Address):
___________________________________________
___________________________________________
__________________________ Zip Code ________
E-47
EXHIBIT I
Indemnification Agreement
In consideration of the acquisition of GOL ▇▇▇▇▇.▇▇▇, Inc.,
a Delaware corporation ("GOL India"), by ENG Enterprises, Inc., a
Delaware corporation (the "Company" or "Enterprise"), and the
surrender of the shares of GOL India owned by the shareholder of
GOL India, USA Global Link, Inc., (the "Stockholder"), in
connection with the transfer of control of the Company by ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, of Salt Lake City,
Utah, (the "Guarantors"), to Stockholder by issuance of shares of
common stock of the Company, the Guarantors individually, jointly
and severally hereby warrant and represent to the Stockholder as
follows:
1. At closing of the acquisition of control of the Company
by the Stockholder (the "Closing Date"), by the issuance of a
sufficient number of shares of the Company to the Stockholder:
(a) the Company will have no assets or liabilities of any kind,
contingent or absolute, liquidated or un-liquidated, known or
unknown; the Company on the date of Closing shall have, on a
fully diluted basis, no more than 918,092 shares of pre-dividend,
(2,754,275 post-dividend), common shares issued and outstanding;
and (c) all stock options and warrants to issue shares of the
Company will have been canceled and there will be no agreements
between the Company and any person or entity with respect to the
issuance of any shares of stock in the Company.
2. The Guarantors hereby individually, jointly and
severally indemnify and hold harmless the Stockholder and/or
their designees, successors and assigns, from any and all
liabilities of the Company that existed prior to the Closing
Date, other than those arising out of the transfer of control of
the Company, and will pay any and all claims against the Company
arising out of any and all transactions which occurred prior to
the Closing Date, including reasonable attorney's fees, and
including, without limitation, any liabilities of the Company
which constitute breach of the Guarantors' warranties and
representations set forth in this Agreement. This guaranty shall
expire three (3) years from the Closing Date.
3. The Guarantors shall defend, indemnify and hold GOL
India and Stockholder harmless against and in respect of any
damage, loss, liability, cost or expense, including expert
witness fees and reasonable attorneys' fees, whether or not
recoverable under applicable state law, resulting or arising from
or incurred in connection with:
(i) any misrepresentation, breach of warranty, or non-
fulfillment or nonperformance of any agreement on the part
of Enterprise under this Agreement, or any misrepresentation
or omission from any exhibit, schedule, list, certificate or
other instrument furnished or to be furnished by it under
this Agreement;
(ii) any and all liabilities of Enterprise of any
nature whatsoever, whether accrued, absolute, contingent or
otherwise and whether known or unknown, except to the extent
that any such liability arises from Enterprise's failure to
perform or discharge, when due, Enterprise's future
obligations;
E-48
(iii) any actions, suits, proceedings, damages,
assessments, judgments, costs or expenses incident to any of
the foregoing.
4. Promptly after the receipt by Stockholder or GOL India
of notice of any claim asserted by a third party that may give
rise to Guarantor's liability to Stockholder or GOL India under
this Section, Stockholder or GOL India Enterprise shall give to
Guarantors written notice of such claim and Guarantors shall be
entitled to participate at their own expense in the defense of
any such claim. Stockholder or GOL India shall not pay,
acknowledge, compromise or settle any such claim without the
written consent of Guarantors, unless such payment,
acknowledgement, compromise or settlement results in a full and
complete release and discharge of Guarantors from any liability.
5. Stockholder and GOL India hereby agree that whenever the
Stockholder, GOL India or its designees have received a written
notice that a claim or demand has been asserted or threatened
against the Company regarding an obligation or liability of the
Company asserted to be in effect prior to the Closing Date,
Stockholder or GOL India shall notify Guarantors of such claim
and demand and the facts within Stockholder's knowledge that
relate thereto, within a reasonable time after receiving such
notice. Guarantors shall then have the right to contest,
negotiate and settle any such claim or demand through counsel of
its own selection, satisfactory to Stockholder and GOL India and
solely at Guarantors own risk, cost and expense.
6. If Guarantors fail to give written notice of their
intentions to contest or settle any claim or demand within 10
calendar days after Stockholder or GOL India have notified them
that such claim or demand has been made in writing and received
by Stockholder or GOL Inidia, or any such notice is given, but
such claim or demand is not promptly contested by Guarantors,
Stockholder or GOL India shall have the right to satisfy and
discharge same, by payment, compromise or otherwise, and
Guarantors shall be entirely liable to Stockholder or GOL India
therefore, under this Agreement.
7. Stockholder or GOL India may, if it so elects, entirely
within its discretion, defend any such claim or demand if
Guarantors fail to give notice of their intention to defend or
settle any such claim or demand. In such event, Guarantors shall
be required to indemnify Stockholder from any and all costs,
losses, liabilities and expenses whatsoever, including without
limitation, attorneys and other professional fees that
Stockholder may suffer, sustain, incur or become subject to as a
result of their decision to defend any such claim or demand.
8. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given (i) if
delivered in person, or (ii) sent by prepaid first class
registered or certified United States mail, return receipt
requested, or (iii) sent by nationally recognized overnight
express courier, addressed as follows:
To Stockholder: To Guarantors:
▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇▇, President Chairman and Chief Executive
Officer 5882 South, 900 East, Suite 202
E-49
GOL ▇▇▇▇▇.▇▇▇, Inc. and USA Global Link, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief In-House Counsel
USA Global Link, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. If any
provision of this Agreement shall be invalid under such laws, the
validity of the others shall not be affected.
8. This Agreement shall be binding upon the Guarantors and
their respective heirs, administrators, successors and assigns,
and shall inure to the benefit of the Stockholder and their
designees, successors and assigns.
9. This Agreement may be signed in any number of facsimile
counterparts with the same effect as if the signatures to each
counterpart were upon a single instrument. All facsimile
counterparts shall be deemed an original of this Agreement.
By affixing their signatures below on this ____ day of June,
2000, this Agreement shall be accepted and binding upon the
Parties hereto.
GUARANTORS: STOCKHOLDER:
_____________________________ By:_____________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_____________________________
▇▇▇ ▇▇▇▇▇▇▇
_____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
E-50
EXHIBIT J
Escrow Agreement
THIS ESCROW AGREEMENT (the "Escrow Agreement"), made as of
June 12, 2000, by and between USA Global Link, Inc., the
Stockholder of GOL India (the "Stockholder") and the Consultants
and Advisors (the "Consultants"), as listed in the attached
Exhibit "One", and the Escrow Agent, defined herein (the "Escrow
Agent").
Whereas, ENG Enterprises, Inc., a Delaware corporation,
(formerly Energetics, Inc., hereinafter "Enterprise") has made
certain representations and warranties in the Agreement and Plan
of Reorganization (the "Agreement") dated June 12, 2000; and
Whereas, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
Salt Lake City, Utah, (the "Guarantors") have entered into the
indemnification agreement (Exhibit "I") to the Agreement; and
Whereas, the Consultants have agreed to escrow certain of
their shares to further secure the accuracy of the
representations and warranties made by Enterprise.
Now, therefore, in consideration of the mutual
representations, warranties, covenants and promises contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. Appointment of Escrow Agent. The Stockholder and the
Consultants hereby appoint the Stockholder and the Stockholder
hereby agree to serve as Escrow Agent pursuant to the terms of
this Escrow Agreement.
2. Acknowledgement of Receipt of Escrowed Shares. Escrow
Agent hereby acknowledges receipt of stock certificates for
300,000 shares of post-dividend common stock of GOL India into
the Escrow (the "Escrowed Shares"). The ownership and breakdown
of the Escrowed Shares are detailed in the "Schedule of Escrowed
Shares" attached hereto as Exhibit "Two". The Escrowed Shares
were issued to the Consultants pursuant to a certain Agreement
and Plan of Reorganization dated June 12, 2000 (the
"Reorganization Agreement"), whereby GOL ▇▇▇▇▇.▇▇▇, Inc. was
acquired for all common shares of ENG Enterprises, Inc., a
Delaware corporation, ("Enterprise"), and the Escrowed Shares
represent a portion of the common stock issued to Consultants in
consideration for their work on the reorganization transaction,
plus a proportionate share of any additional shares as may be
issued in respect of the Escrowed Shares upon any stock split,
stock dividend or recapitalization effected by Enterprise after
the Closing of the Reorganization Agreement and prior to the
Expiration Date (as defined below), without any act of
Enterprise. The Escrowed Shares, plus (i) a proportionate share
of any additional shares as may be issued in respect of such
shares upon any stock split, stock dividend or recapitalization
effected by Enterprise, (ii) cash dividends, if any, received,
and (iii) any amounts earned on cash held in escrow (items (ii)
and (iii) above referred to as "Earned Proceeds"), shall
constitute an escrow fund (the "Escrow Fund") and shall be
governed by the terms set forth in this Escrow Agreement. Prior
to the Expiration Date, Stockholder shall have the right to vote
the shares of
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Enterprise common stock contributed to the Escrow Fund and on any
voting securities added to the Escrow Fund in respect of such
shares of Enterprise common stock.
3. Escrow Agent's Right to Distribute Escrowed Shares. If
neither the Consultants nor the Guarantors under that certain
Indemnification Agreement ("Indemnification Agreement") dated as
of June 12, 2000, by and among ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇ have cured or caused the cure of any breach under
or with respect to any covenant, representation or warranty of
Enterprise contained in the Reorganization Agreement within 90
days after delivery to the Consultants and the Guarantors of
notice of such breach and provided that the damages associated
with such claim for indemnification can be readily quantified
(including, as examples and without limitation, unpaid bills and
taxes), then the Escrow Agent shall promptly release and deliver
an appropriate number of Escrowed Shares in accordance with the
terms of this Escrow Agreement. Any amounts for damages
indemnified against by Enterprise shall be paid first in Earned
Proceeds and not Enterprise Common stock. For the purposes of
determining the number of shares of Enterprise common stock to be
delivered to Stockholder out of the Escrow Fund pursuant to
Section 8.06, the shares of Enterprise common stock shall be
calculated based on the average of the reported last sale price
of a share of Enterprise Common stock as reported by the NASDAQ
Electronic Bulletin Board, for the fifteen (15) consecutive
trading days immediately preceding the second trading day before
the date of the Officer's Certificate. In the event that notice
of breach is given for a claim for indemnification which is for
damages arising from a third party claim which cannot be readily
quantified, and neither the Consultants nor the Guarantors under
the Indemnification Agreement have cured or caused the cure of
such breach within 90 days after delivery of such notice, then
the Escrow Agent shall promptly release and deliver an
appropriate number of Escrowed Shares to Stockholder determined
in good faith by the Escrow Agent. In such event, if written
notice is given by Consultants to the Escrow Agent, prior to
expiration of the 90 day period referenced in the immediately
preceding sentence, that Consultants dispute the number of shares
to be distributed, then Escrow Agent shall cause ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and Consultants shall cause ▇▇▇▇ ▇▇▇, to make themselves
available to discuss by telephone their respective positions
within 48 hours of receipt by Escrow Agent of such notice from
Consultants.
4. Escrow Period and Distribution upon Termination of
Escrow Period. Subject to the following requirements, the Escrow
Fund shall be in existence for the period (the "Escrow Period")
commencing immediately following the Closing and terminating at
5:00 p.m., Central Time, on the first anniversary of the Closing
(the "Expiration Date"). On the Expiration Date, the balance then
in the Escrow Fund, less amounts for any damages suffered or
incurred by Stockholder, GOL India or Enterprise and indemnified
under the Reorganization Agreement and to the Indemnification
Agreement, shall be released from the Escrow Fund and distributed
to the Consultants (the "Escrow Release"). Notwithstanding the
above, no Escrow Release shall occur and the Escrow Period shall
not terminate with respect to such amount (or some portion
thereof) that is necessary in the reasonable judgment of the
Stockholder, subject to the objection of Enterprise to satisfy
any unsatisfied claims concerning facts and circumstances
existing prior to the contemplated date of the Escrow Release or
the termination of the Escrow Period, as the case may be, each as
specified in an Officer's Certificate of the Escrow Agent
delivered to the Consultants prior to the contemplated date of an
Escrow Release or termination of the Escrow Period, as
appropriate. As soon as all such claims have been resolved, the
Escrow Agent shall
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deliver and distribute to the Consultants, on a pro rata basis
the amount which is subject to an Escrow Release or at the end of
the Escrow Period, as appropriate, the remaining portion of the
Escrow Fund not required to satisfy such claims.
5. Operation of Escrow. The parties hereto agree that the
Escrow created by this Escrow Agreement shall operate as follows:
(a) Distribution of the Escrowed Shares by Escrow
Agent shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of Consultants
to this Escrow Agreement (other than the distributee) in and
to the Escrowed Shares distributed and shall be a perpetual
bar, both in law and in equity, against the parties to this
Escrow Agreement and against any person claiming or
attempting to claim such distributed Escrowed Shares from,
through or under such party.
(b) Consultants agree to indemnify and hold harmless
Escrow Agent against and in respect of any and all claims,
suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages,
settlements, liabilities and legal and other expenses
(including legal fees and expenses of attorneys chosen by
Escrow Agent) as and when incurred and arising out of or
based upon any act, omission, alleged act, or alleged
omission by Escrow Agent or any other cause, in any case in
connection with the acceptance of or the performance or non-
performance by Escrow Agent of any Escrow Agent's duties
under this Escrow Agreement, except as a result of Escrow
Agent's bad faith. Escrow Agent shall be fully protected by
acting in reliance upon any notice, advice, direction, other
document or signature believed by Escrow Agent to be
genuine, by assuming that any person purporting to give
Escrow Agent any notice, advice, direction or other document
in accordance with the provisions hereof, in connection with
this Escrow Agreement, has been duly authorized so to do, or
by acting or failing to act in good faith on the advice of
any counsel retained by Escrow Agent. Escrow Agent shall
not be liable for any mistake of fact or of law or any error
of judgment, or for any act or any omission, except as a
result of Escrow Agent's bad faith .
(c) Escrow Agent makes no representation as to the
validity, value, or genuineness of any security or other
documents or instruments held by or delivered to Escrow
Agent.
(d) Escrow Agent shall have no duties or
responsibilities except those expressly set forth herein.
Escrow Agent shall not be bound by any notice of a claim or
demand with respect thereto, or any waiver, modification,
amendment, termination, cancellation or revision of this
Escrow Agreement, unless in writing and signed by the other
parties hereto, and, if Escrow Agent's duties as Escrow
Agent hereunder are affected, unless Escrow Agent shall have
given his prior written consent thereto, Escrow Agent shall
not be bound by any assignments hereunder unless Escrow
Agent shall have received written notice thereof from the
assignor. Escrow Agent shall perform any acts ordered by a
court of competent jurisdiction.
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(e) If Escrow Agent shall be uncertain as to Escrow
Agent duties or rights hereunder, shall receive any notice,
advice, direction or other document from any other party
with respect to the Escrowed Shares which, in Escrow Agent's
opinion, is in conflict with any of the provisions of this
Escrow Agreement, or should be advised that a dispute has
arisen with respect to the ownership or right or possession
of the Escrowed Shares or any part thereof (or as to the
delivery, non-delivery or content of any notice, advice,
direction or other document), Escrow Agent shall be
entitled, without liability to anyone to take an action or
refrain from taking any action provided that Escrow Agent
acts in good faith. Provided, however, Escrow Agent shall
be under no duty to institute or to defend any proceeding,
although Escrow Agent may, in Escrow Agent's discretion
institute or defend such proceedings.
(f) Escrow Agent may, but is not required to,
interplead all interested parties in any court of competent
jurisdiction and to deposit the Escrowed Shares with the
clerk of that court.
(g) Escrow Agent's responsibilities and liabilities
hereunder, except as a result of Escrow Agent's own bad
faith, will terminate upon the delivery by Escrow Agent of
all the Escrowed Shares under any provision of this Escrow
Agreement.
GENERAL TERMS
6. Good Faith. Each party agrees to act in good faith in
carrying out the provisions of this Escrow Agreement and to sign
documents appropriate to carrying out its terms.
7. Binding Effect; Assignment. This Escrow Agreement
shall inure to the benefit of and be binding upon the parties
hereto and their heirs, successors and assigns.
8. Severability. If any terms hereof or the application
thereof to any person or circumstance shall be determined to be
null and void, ineffectual, invalid or unenforceable by any
competent tribunal, the remaining terms hereof or the application
of such term to persons or circumstances other than to those
which were determined to be invalid or unenforceable shall not be
affected thereby and shall continue in full force and effect.
9. Waivers. The waiver by any party of a breach by
another party of any provision of this Escrow Agreement shall not
operate or be construed as a waiver of any subsequent breach.
10. Notices. Any notice required to be given or made to a
party hereunder must be in writing and delivered in person or
sent by certified first class mail, return receipt requested, to
each of the parties whose signature appears below.
11. Amendment. No waiver, modification or amendment of any
terms of this Escrow Agreement shall be effective unless made in
writing and signed by all the parties.
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12. Entire Agreement. This Escrow Agreement contains the
entire understanding between and among the parties concerning the
matters herein and supersedes any prior understandings or
agreements between and among them respecting the subject matter
of this Escrow Agreement.
13. Headings. The section and subsection headings in this
Escrow Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Escrow
Agreement.
14. Multiple Copies. This Escrow Agreement is made in
multiple copies, each of which shall constitute an original.
15. Governing Law. This Escrow Agreement shall be deemed
to be made under and shall be construed in accordance with the
laws of the state of New York without regard to its principles of
conflicts of laws.
IN WITNESS WHEREOF, the undersigned have duly executed this
Escrow Agreement the day and year first above written.
WITNESS: ESCROW AGENT:
___________________________ By:
Name:
Its:
WITNESS: STOCKHOLDER OF GOL ▇▇▇▇▇.▇▇▇, INC:
___________________________ By:
Name:
Its:
CONSULTANTS OR THEIR REPRESENTATIVES:
Name Signature
Bridgestone Capital Group, L.L.C.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust Ltd.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust Ltd.
Continued.
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Name Signature
▇▇▇▇▇▇ ▇▇▇▇▇▇
Affiliated Holdings, Inc.
Danali Systems, Inc.
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
Olympic Capital Group, Inc.
▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT ONE
List of Consultants
Bridgestone Capital Group, L.L.C.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust Ltd.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇
Affiliated Holdings, Inc.
Danali Systems, Inc.
▇▇▇▇▇▇, Young & ▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
Olympic Capital Group, Inc.
▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT TWO
Schedule of Escrowed Shares
Name Number of Shares
Bridgestone Capital Group, L.L.C. 11,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust Ltd. 20,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust Ltd. 30,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 11,000
Affiliated Holdings, Inc. 58,000
Danali Systems, Inc. 58,000
▇▇▇▇▇▇, Young & ▇▇▇▇▇▇▇, Inc. 58,000
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. 31,000
Olympic Capital Group, Inc. 8,000
▇▇▇▇ ▇. ▇▇▇▇
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