EX-2
AGREEMENT OF SALE OF SHARES
ENTERED INTO AT MINNEAPOLIS, MINNESOTA AS OF NOVEMBER 15, 2001
BETWEEN: Shareholders of H. J.
Ventures, Inc.
herein acting and
represented
by ▇▇▇▇▇▇ ▇▇▇▇▇▇, its
President, duly
authorized
as he warrants
hereinafter referred
to as
the
"SELLER"
AND: ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.,
a
Corporation, herein
acting and
represented by
▇▇▇▇ ▇▇▇▇▇▇▇▇, its
chairman, duly
authorized
as he warrants,
hereinafter
referred to as the
"PURCHASER"
WHEREAS the SELLER is the owner of one million (1,000,000) shares in
the capital stock of H. ▇.▇▇▇▇▇▇▇▇ Inc. ("COMPANY"), which SHARES
represent all of the issued and outstanding shares of the COMPANY;
and
WHEREAS the SELLER wishes to sell and the PURCHASER wishes to
purchase the SHARES on the terms and conditions hereinafter set out;
THE PARTIES THEREFORE AGREE AS FOLLOWS:
SECTION 1 - SALE OF SHARES
1.1 The SELLER hereby sells the SHARES to the PURCHASER,
thereby purchasing 100% of the outstanding stock of the COMPANY..
SECTION 2 - PURCHASE PRICE
2.1 The purchase price for the SHARES ("PURCHASE PRICE")shall
be Twelve Million (12,000,000) shares of the issued and outstanding
stock of the PURCHASER, shall be transferred to the SELLER for all
the outstanding shares of the COMPANY.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF THE YENDOR
3.1 The SELLER hereby represents and warrants that:
3.1.1 The SHARES are owned by the SELLER by good and
marketable title, free and clear of any security interests or
third party claims of any nature;
3.1.2 The SHARES represent one hundred percent (100 %) of
the issued and outstanding capital stock of the COMPANY and have
been validly allotted and issued as fully paid and
non-assessable;
3.1.3 No person, other than the PURCHASER pursuant to this
Agreement, has any option, right or privilege to purchase of
otherwise acquire the SHARES or any other securities of the
COMPANY and the SELLER is not bound by or subject to any
agreement, commitment or restriction of any nature which would
in any way prevent or restrict the sale of the SHARES to the
PURCHASER,
3.1.4 None of the SHARES are subject to any voting trust or
voting agreement;
3.1.5 There is one warrant outstanding for the COMPANY,
which is convertible into 50,000 shares of common stock of the
COMPANY with a striking price of $.60;
3.1.6 The certificate representing the SHARES is not subject
to the approval of any regulatory authority or any other person
except for those listed on the attached Schedule A and their
respective approvals are attached thereto.
3.2 WITH RESPECT TO THE COMPANY
3.2.1 The COMPANY has been validly incorporated and validly
exists pursuant to the business laws of the state of Minnesota
and holds all appropriate licenses and permits and has the
corporate power to do business in all the jurisdictions in which
it presently carries on business;
3.2.2 There are presently no other issued and outstanding
shares of the COMPANY other than the SHARES;
3.2.3 (a) The COMPANY is not in violation of any by-law,
ordinance, rule, policy or regulation of any governing
body, or provincial, federal or municipal or private
authority;
(b) Neither the COMPANY not the SELLER has received notice
or advice of or has knowledge of a violation of any zoning
regulation, ordinance or other law, order or regulation
relating to the COMPANY's operations or properties;
(c) Neither the COMPANY nor the SELLER has received
notice or advice of or has knowledge of a violation of any
environmental regulatory law, order or regulation relating
to the COMPANY'S operations or properties;
3.2.4 The COMPANY's only place of business is located at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
3.2.5 The minute books of the COMPANY contain copies of the
articles of incorporation or other constating documents and
all amendments thereto issued to the COMPANY, the complete
by-laws of the COMPANY and the minutes of all meetings and all
resolutions of the directors and shareholders of the COMPANY
from the time of its incorporation to date;
3.2.6 The current corporate Officers and Directors of
the COMPANY are:
DIRECTORS: ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇
OFFICERS: Position
▇▇▇▇▇▇ ▇▇▇▇▇▇ Chief Executive Officer, Treasurer
▇▇▇▇▇▇ ▇▇▇▇▇▇ President, Secretary
3.2.7 The following is a list of each bank account
maintained by the COMPANY and the names of all persons currently
authorized to draw thereon:
Bank Authorized Person
Central Bank ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇
US Bank ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇
3.2.8 The COMPANY is not a member of any partnership, joint
venture or other form of business organization and owns no
shares in any other corporation;
3.2.9 The COMPANY has never been convicted of a criminal or
any other offence and is not presently involved in an
investigation or prosecution of any such offense.
3.3 WITH RESPECT TO THE ASSETS OF THE COMPANY
3.3.1 The COMPANY has the corporate power to own and owns
all of its assets by good and marketable title, free and clear
of any and all encumbrances, restrictions, and rights of first
refusal, liens or security interests of any nature whatsoever,
except for those listed in the attached Schedule B;
3.3.2 No person has any option, right or privilege to
purchase, acquire, lease of use any asset of the COMPANY, with
the exception of pending orders for the purchase of inventory in
the normal course of business;
3.3.3 The COMPANY has no current obligations to sell, lease,
mortgage, pledged or otherwise encumbered or disposed of any of
its assets or properties, except in the ordinary course of its
business;
3.3.4 The COMPANY has no current obligations to acquire, or
lease or agreed to lease, any additional assets;
3.3.5 The COMPANY has only liability insurance coverage over
its assets;
3.3.6 All License agreements and leases including without
limitation, real estate and equipment leases, to which the
COMPANY is a party are listed on the attached Schedule C, are in
full force and effect and vary in the degree of their status;
3.3.7 All buildings, machinery, equipment, vehicles and
other assets of the COMPANY are in an "as is" condition;
3.3.8 All inventory assets of the COMPANY are reasonably and
properly valued and priced in its interim financial statements
for the period ending September 30, 2001. ("2001 FINANCIAL
STATEMENTS") in accordance with generally accepted accounting
principles applied on a basis consistent with prior years; are
not substandard, damaged, obsolete or not useable or saleable in
the normal course of business; comprise the proper inventory
to conduct business consistent with the COMPANY's prior
practice, and the COMPANY has not written off or disposed of any
of its inventory, other than in the ordinary course of business,
since October 1, 2001; and
3.3.9 The COMPANY has no known claims against it since inception.
3.4 WITH RESPECT TO FINANCIAL INFORMATION
3.4.1 The 2001 FINANCIAL STATEMENTS have been prepared in
accordance with generally accepted accounting principles applied
on a basis consistent with prior periods and present fairly in
all material respects the financial position of the COMPANY and
the results of its operations and are attached as Exhibit D;
3.5 WITH RESPECT TO THE BUSINESS OF THE COMPANY
3.5.1 Since inception, the operations of the COMPANY have
been carried on in the normal course, and no contract,
arrangement or transaction has been made nor any liability or
obligation incurred, nor release or cancellation of any debt
made, nor any commitment made since such date, other than in the
ordinary course of business, and no material adverse change has
occurred in the business, financial condition or assets of the
COMPANY, and neither the COMPANY nor the SELLER knows of any
facts which may materially adversely affect the business of the
COMPANY;
3.5.2 The COMPANY is not in breach of or in default under
any agreement, commitment or security instrument to which it is a
party;
3.5.3 The COMPANY is not liable through insurance, guarantee
or otherwise for the obligations of any other person, firm or
corporation
3.5.4 The execution of this Agreement and its implementation
do not contravene the contesting documents or by-laws of the
COMPANY nor any agreement, commitment or security instrument to
which the COMPANY is a party or which affects it, and no consent
of any party to any indenture, mortgage or other agreement of
the COMPANY is required for the carrying out of this Agreement;
3.5.5 The COMPANY is not engaged in any controversy with its
employees and there is no claim, action, court proceeding,
arbitration, labor dispute, petition for union certification or
administrative proceeding pending or, to the knowledge of any
SELLER, threatened against or affecting the COMPANY;
3.5.6 The current position, salary, wage or other form of
compensation payable to or to become payable to any officer,
employee or agent of the COMPANY as of the effective date hereof
is disclosed in Schedule E-1 through E-3 hereto and the COMPANY
has not agreed to any increase or any other change thereto;
3.5.7 There are no agreements, which restrict the activities
of the COMPANY, any of its employees, agents or
representatives or the COMPANY's right to compete with any
person or disclose any information;
3.5.8 The COMPANY has kept its business organization intact
and insofar as possible, maintained its business relationship
with distributors, suppliers, customers and others, and has not
done or permitted to be done anything which might reasonably be
expected to diminish the business or goodwill of the COMPANY,
and there has been no notice of any possible termination of
continuing relations with any such persons, other than such as
may be the consequence of their knowledge of the transaction
contemplated herein;
3.6 WITH RESPECT TO THE SELLER
3.6.1 No representation, warranty or covenant of or by the
SELLER contained in the Agreement or in any Schedule hereto, and
no statement or certificate furnished or to be furnished to the
PURCHASER or upon which the PURCHASER has relied contains not
shall contain any untrue or inaccurate statement of any fact or
any omission or anything which shall constitute it as materially
misleading to the PURCHASER. No fact is known or should be
known to the SELLER which should be disclosed to the PURCHASER
which would make any of the foregoing warranties,
representations, covenants, statements or certificates
misleading or inaccurate or which, if disclosed, would cause the
PURCHASER, acting reasonable, not to proceed with this
transaction.
3.6.2 There is no legal impediment known to the SELLER to
prevent or delay the consummation by the SELLER of this
transaction.
SECTION 4 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The PURCHASER hereby represents and warrants that:
4.1 It has been validly incorporated and validly exists under the
laws of the State of Nevada;
4.2 This Agreement has been duly authorized by all necessary
corporate action on the part of the PURCHASER and duly executed and
delivered by the PURCHASER, and this Agreement constitutes a valid
and binding obligation of the PURCHASER enforceable against it in
accordance with its terms; and
4.3 Since inception, the operations of the PURCHASER have been
carried on in the normal course, and no contract, arrangement or
transaction has been made nor any liability or obligation incurred,
nor release or cancellation of any debt made, nor any commitment made
since such date, other than in the ordinary course of business, and
no material adverse change has occurred in the business, financial
condition or assets of the PURCHASER, and PURCHASER knows of any
facts which may materially adversely affect the business of PURCHASER
or the COMPANY after acquisition;
4.4 PURCHASER is not in breach of or in default under any agreement,
commitment or security instrument to which it is a party, except as
represented;
4.5 PURCHASER is not liable through insurance, guarantee or
otherwise for the obligations of any other person, firm or
corporation, except as represented;
4.6 The execution of this Agreement and its implementation do not
contravene the contesting documents or by-laws of PURCHASER nor any
agreement, commitment or security instrument to which PURCHASER is a
party or which affects it, and no consent of any party to any
indenture, mortgage or other agreement of PURCHASER is required for
the carrying out of this Agreement;
4.7 PURCHASER is not engaged in any controversy with its employees
and there is no claim, action, court proceeding, arbitration, labor
dispute, petition for union certification or administrative
proceeding pending or, to the knowledge of PURCHASER, threatened
against or affecting PURCHASER;
4.8 PURCHASER is in good standing with all applicable federal and
state regulatory agencies including the Securities and Exchange
Commission.
SECTION 5 - SURVIVAL AND CONSEQUENCES OF THE REPRESENTATIONS AND
WARRANTIES OF THE SELLER
5.1 The foregoing representations, warranties and covenants of
the SELLER are essential, true and correct and shall survive the
execution hereof until statute-barred, and regardless of any
investigation by or on behalf of the PURCHASER, they shall continue
in full force and effect for its benefit. The parties acknowledge
that the PURCHASER would not have entered into the present Agreement
without such representations, warranties and covenants.
5.2(a) If the COMPANY, or the PURCHASER on its behalf, after the
effective date hereof but relating to any event or period prior
thereto, would be required to pay any amount ("AMOUNT") in
connection with any liability, loss, damage, injury, expense or
disbursement including, without limitation, all interest and all
reasonable legal and accounting fees, arising out of or
resulting from a breach of or the inaccuracy or falsity of any
of the representations, warranties or covenants made or
undertaken by the SELLER in Section 3 of this Agreement, then
the SELLER shall hold the COMPANY and the PURCHASER free and
harmless therefrom and shall pay the AMOUNT, as well as all
reasonable related expenses incurred by the PURCHASER or the
COMPANY including, without limitation, interest and legal and
accounting fees and expenses.
(b) No actual or deemed waiver or acceptance of any
representations, warranties or covenants shall be implied or
considered as having occurred as a result of any investigation
having been carried out by or on behalf of the PURCHASER prior
to the effective date hereof.
(c) Neither the COMPANY nor the PURCHASER shall, however, be
entitled to be indemnified for any AMOUNT to the extent that
same has already been reflected or provided for in the 2001
FINANCIAL STATEMENTS.; and
(d) Any AMOUNT shall bear interest at an annual rate equal to
the COMPANY's principal bank's prime lending rate for commercial
loans, plus one percent (1%), calculated from the date the
amount is paid by the COMPANY or the PURCHASER and shall be paid
by the SELLER at the same time as the AMOUNT.
5.3 In the event the PURCHASER shall have knowledge of any
claim or liability indemnified against pursuant to this Section 5, it
shall give prompt written notice thereof to the SELLER. The SELLER
may, at his expense, resist and defend and action, suit or proceeding
in respect of which he would be required to indemnify hereunder, or
cause the same to be resisted and defended by counsel which he may
designate, and reasonable acceptable to the PURCHASER. Upon payment
in full of any indemnity, the SELLER shall be subrogated in such
rights, if any, as the PURCHASER or the COMPANY may have in respect
of the matter against which the indemnity was given. The PURCHASER
shall cause the COMPANY to lend the SELLER reasonable cooperation in
the event that the SELLER wishes to resist or defend any such action,
suit or proceeding, including the filing of any notices of
contestation or appeal of any tax assessments or reassessments.
SECTION 6 - SURVUVAL AND CONSEQUENCES OF THE REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER
6.1 The representations and warranties of the PURCHASER
contained in the Agreement are essential, true and correct and shall
survive the execution hereof and regardless of any investigation by
or on behalf of the SELLER with respect thereto, shall continue in
full force and effect for the benefit of the SELLER; provided,
however, that such representations and warranties shall terminate
when statute barred.
6.2 The PURCHASER covenants and agrees to indemnify and save
harmless the SELLER from and against any loss suffered or incurred by
the SELLER as a result of any breach or representation, warranty or
covenant contained in the Agreement and all claims, demands, costs
and expenses and including, without limitation, reasonable legal
expenses in respect thereof.
6.3 In the event that the SELLER shall have knowledge of any
claim or liability indemnified against pursuant to this Section 6,
the SELLER shall give prompt written notice thereof to the PURCHASER.
The PURCHASER may, at its expense, resist and defend any action, suit
or proceeding in respect of which it would be required to indemnify
hereunder, or cause the same to be resisted and defended by counsel
designated by it. Upon payment in full of any indemnity, the
PURCHASER shall be subrogated in such rights, if any, as the SELLER
may have in respect of the matter against which indemnity was given.
SECTION 7 - NOTICES
7.1 All notices in connection with this agreement shall be in
writing and shall be delivered, mailed by registered or certified
mail or transmitted by telex or telecopier. A notice shall be deemed
to have been received on the date of the delivery, telecopy or telex
transmission or on the fifth (5th) business day following the date of
mailing. The addresses for such notices are:
SELLER:
H. J. Ventures, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PURCHASER:
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Any of the foregoing may, at any time, give notice of any change of
address to all of the others, and after the giving of such notice,
the address specified therein shall be such person's address for the
purpose of receiving notices.
SECTION 8 - GENERAL
8.1 All representations and warranties contained in this
Agreement, which are for the benefit of any party hereto, may be
waived by such party.
8.2 The SELLER will make every reasonable effort to preserve
and improve, where possible, the present relationships with and
between its distributors, suppliers, customers and others having
business relationships with the COMPANY.
8.3 The rights and recourses of the PURCHASER and of the SELLER
shall be cumulative and not alternative and not limited by
specification.
8.4 No waiver of any breach hereunder shall be a waiver of any
subsequent breach hereunder, nor shall any forbearance or delay or
failure to proceed to litigation or to seek a remedy for any breach
be a waiver or renunciation of any right or remedy with respect to
such breach or any subsequent breach of the Agreement.
8.5 The Agreement and the benefits hereunder shall be non-assignable
except pursuant to statutory amalgamation or other corporate
reorganization and shall be binding upon the parties hereto and their
respective successors, administrators, permitted assigns and
representatives.
8.6 The parties agree to do, sign and execute all acts, deeds,
documents and corporate proceedings necessary or desirable in the
reasonable opinion of their respective counsel to give full force and
effect to this Agreement.
8.7 This Agreement, inclusive of all schedules thereto annexed,
constitutes the whole agreement between the parties and repeals and
replaces any previous agreements, written or verbal, relating to the
sale and purchase of the SHARES. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express
or implied, collateral, statutory or otherwise relating to the
COMPANY which the PURCHASER may have received prior to the execution
hereof and including, without limitation, any information memorandum
with respect to the business of the COMPANY.
8.8 The present Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota and subject to the
foregoing obligatory and binding arbitration, the courts of the
judicial districts of the state of Nevada shall be the exclusive
forum for any legal proceedings arising from the Agreement.
8.9 If any term, covenant or condition of the Agreement or the
application thereof to any person or circumstance shall, to any
extent, be held to be invalid or unenforceable, and unless such term,
covenant or condition is essential, the remainder of the Agreement,
or the applications of such term, covenant or condition to persons or
circumstances other then those to which it is held invalid or
unenforceable, shall not be affected thereby, and each term, covenant
and condition of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
8.10 Unless otherwise dictated by the context, the singular
shall include the plural and vice versa; the masculine shall include
the feminine and vice versa and, where applicable to firms, companies
or corporations, the neuter.
8.11 If the expiry of any delay provided for in this Agreement
falls on a non-juridical day, then the delay shall be extended to the
next following juridical day.
8.12 No disclosure or announcements, public or otherwise, in
respect of this or any prior agreement or any other aspect of the
transaction shall be made without the consent of the SELLER, except
as may be required by applicable legislation.
8.13 The parties acknowledge that they have required that this
Agreement and all related documents be prepared in English only.
IN WITNESS HEREOF, the parties have executed this Agreement this
15th
day of November, 2001.
SELLER: Shareholders of H. J. Ventures
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, President of H. J. Ventures
PURCHASER: ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
ADDENDUM TO
AGREEMENT OF SALE OF SHARES
This is an addendum ("Addendum") to the Agreement of Sale of Shares
("Agreement") entered into between Shareholders of H. J. Ventures,
Inc. and ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., dated Noevmber 15, 2001. Paragraph
3.2.6 of the Agreement is amended to add the following language:
"In connection with ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ taking
positions with the Purchaser, they shall each enter into an
employment agreement with Puchaser, effective as of the date of this
Agreement. Also the Purchaser shall in connection with this
Agreement enter into a consulting agreement with L S Enterprises,
Inc., which is controlled by ▇▇. ▇▇▇▇▇▇, to provide services to the
Purchaser in the capacity of a CFO."
This Addendum is dated this 15th day of November, 2001.
SELLER: Shareholders of H. J. Ventures
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, President of H. J. Ventures
PURCHASER: ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
