EXHIBIT 2.1
AGREEMENT
between
AMERICAN GROUP, INC., a Nevada corporation
and
COVENTRY INDUSTRIES CORP., a Florida corporation
This Agreement (the "Agreement") effective as of May 28, 1998,
between American Group, Inc., a Nevada corporation ("AGI"), and Coventry
Industries Corp., a Florida corporation ("Coventry").
WHEREAS, Coventry owns all of the issued and outstanding shares of
common stock, par value $1.00, of LPS Acquisition Corp., a Florida corporation
("LPS").
WHEREAS, AGI wishes to acquire from Coventry all of the issued and
outstanding common shares of LPS for the consideration and on the other terms
which follow.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth herein, it is agreed as follows:
1. Recitals. The above recitals are true and correct and are herein
incorporated by this reference.
2. Plan of Reorganization. Coventry is the owner of 1,000 shares of LPS
common stock, being all of the issued and outstanding common stock of LPS (the
"LPS Stock"). At closing, Coventry will sell AGI the LPS Stock in exchange for
(i) 75,000 shares of Coventry Series F Preferred Stock (the "Coventry Stock")
held by AGI and (ii) 1,200,000 share of AGI common stock, par value $.001.
3. Closing Date. The closing shall be held on June 29, 1998, or such
other date as may be agreed upon by the parties.
4. Delivery of Shares and Debt Instruments. At closing, the parties
shall deliver to each other the following share certificates.
(a) AGI shall deliver to Coventry a certificate or
certificates for 1,200,000 shares of AGI Common Stock and a certificate
representing 75,000 shares of the Coventry Stock with an assignment executed in
blank and in form satisfactory to Coventry and its counsel.
(b) Coventry shall deliver to AGI a certificate or
certificates for the LPS Stock with an assignment executed in blank and in form
satisfactory to AGI and its counsel.
5. Additional Consideration.
(a) Coventry represents and warrants to AGI that Coventry is a
party to an escrow account maintained by Atlas, ▇▇▇▇▇▇▇▇, Trop & Borkson, Fort
Lauderdale, Florida, in an amount greater than $500,000, being funds deposited
in that account by Profutures Special Equities, Ltd., for the benefit of
Coventry.
(b) Subject to the provisions of Section 5(c), below, Coventry
agrees that it will lend to, or invest on an equity basis in, AGI up to $500,000
from proceeds which may become available to Coventry from such escrow account
for the purpose of financing LPS operations. The timing, nature and amount of
any investment in AGI which Coventry may make pursuant to this Section 5 will be
determined in the sole discretion of Coventry.
(c) The parties confirm their understanding that (i) Coventry
has agreed to pay ▇▇▇▇▇▇ Claire, Trustee, prior to any loan to or investment in
AGI, $125,000 from the $500,000 of escrow proceeds described in the preceding
paragraph if and when such funds become available to Coventry, and (ii) such
funds are payable by Coventry as guarantor of non-interest bearing loans by
▇▇▇▇▇▇ ▇▇▇▇▇▇, Trustee, to LPS in the aggregate principal amount of $125,000.
6. Representations of Coventry. Coventry hereby makes the following
representations and warranties to AGI, each of which is true as of the date
hereof and will be true as of the closing date with the same effect as though
such representations and warranties had been made on the closing date:
(a) Coventry is the sole shareholder of LPS and there are no
warrants, options or other rights outstanding to have issued, or otherwise to
acquire, any shares of the capital stock of LPS. The LPS Stock to be transferred
by Coventry to AGI hereunder is free and clear of all voting trusts, agreements,
arrangements, encumbrances, liens, claims, equities and liabilities of every
nature and Coventry will convey clear and unencumbered title thereto to AGI. The
shares of LPS Stock are fully paid and non-assessable.
(b) This Agreement constitutes the valid and binding
obligation of Coventry enforceable in accordance with its terms except as
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors rights.
(c) The execution and delivery of this Agreement by Coventry
does not, and the consummation of the transactions contemplated herein will not,
violate or constitute a breach or an occurrence of default (or an event which,
with notice or lapse of time or both would constitute a default) under any
provision of, or conflict with, or result in acceleration of any obligations
under, or result in the creation or imposition of
any security interest, lien or other encumbrance, or give rise to a right by any
party to terminate its obligations under any mortgage, deed of trust, conveyance
to secured debt, note, loan, lien, lease, agreement, instrument, order,
judgment, decree or other arrangement to which Coventry, LPS, or either of them,
is a party or to which either is bound.
(d) Neither the execution nor the delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the terms hereof, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Articles or Incorporation or By-Laws of
Coventry or LPS.
(e) Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby will
violate any statute or law or any judgment, decree, order, award, regulation or
rule of any court, governmental authority or arbitration panel applicable to
Coventry or LPS or give rise to a right of termination by any governmental
authority of any license, registration, certificate, right of authority to
engage in business in such places where either Coventry or LPS now does, or has
a right to engage in, business.
(f) Coventry has delivered to AGI true and correct copies of
the financial statements of LPS for the period ended March 31, 1998, a copy of
which is attached hereto as Exhibit 6(e) and incorporated herein by this
reference. Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied. Since March 31,
1998, LPS has (i) no short- or long-term debt or other obligations other than as
set forth in the financial statements for the year ended March 31, 1998, or as
described in Section 5(c) hereof, excluding trade payables incurred in the
ordinary course of business, (ii) no tax liens or encumbrances of any nature on
its assets, (iii) continued its operations and business as they are presently
conducted, (iv) entered into no employment, consulting or similar agreements,
and (v) not issued or agreed to issue any equity security or any other
securities or obligations that are convertible into or exchangeable, for such
equity securities. Coventry is not aware of any events having a material adverse
effect on LPS since March 31, 1998, including, but not limited to, a loss of a
material customer or contract, which would result in a reduction in revenues or
operating results in the aggregate of greater than 10% for the year ending
December 31, 1998, compared to the year ended December 31, 1997.
(g) Except for liabilities or obligations disclosed or
provided for in the financial statements attached hereto as Exhibit 6(f), and
except for liabilities or obligations incurred in the ordinary course of
business consistent with past practices, LPS does not have any liabilities or
obligations of any nature, whether absolute, accrued, contingent, potential or
unassigned or otherwise, that would be required to be disclosed on a balance
sheet of LPS.
(h) Coventry is acquiring the AGI Stock in a private
transaction exempt from registration under applicable federal and state
securities laws, for its own account for investment and not with a view to the
distribution or resale thereof. Coventry shall not sell, assign, transfer,
hypothecate or otherwise convey the AGI Stock except in compliance with
applicable federal and state securities laws. Coventry shall have the right to
dividend the AGI stock to Coventry's shareholders upon the prior delivery to AGI
of an opinion of counsel, in form and substance acceptable to AGI, that such
dividend is to be made pursuant to a registration statement or an exemption from
registration under applicable federal and state securities laws.
(i) There is no outstanding order, judgment, injunction, award
or decree of any court, governmental or regulatory body or arbitration tribunal
against or involving LPS. There is no action, suit, claim or legal,
administrative or arbitration proceeding, or, to the best knowledge of Coventry
after due inquiry, any investigation (whether or not the defense or liabilities
in respect thereof are covered by insurance) pending, or to the best knowledge
of Coventry, after due inquiry, threatened against or involving LPS or any of
its assets. To the best knowledge of LPS, after due inquiry, there is no fact,
event or circumstance that are likely to give rise to any suit, action, claim,
investigation or proceeds that would be required to be disclosed if currently
pending or threatened.
(j) LPS has good and valid title to all the properties and
assets of the type required to be reflected on the balance sheets attached
hereto as Exhibit 6(f) which it purports to own and all such properties and
assets are free and clear of all title defects or objections, liens, claims,
charges, security interests or other encumbrances of any nature whatsoever.
(k) LPS has timely filed all tax returns and reports required
to be filed by it, including, where applicable, all federal, state, county and
local income, gross receipts, excise, import, property, franchise, ad valorem,
license, sales, use and withholding tax reports and returns. All returns are
true and correct. To the best knowledge of Coventry, there is no basis for any
additional claim or assessment.
(l) LPS currently maintains policies of property insurance
that provide coverage in kind and amount reasonably necessary to protect against
the risks inherent or associated with the operation of LPS. All insurance
policies are in full force and effect. There is not any state of facts and no
event has occurred forming the basis for any claim covered by a property,
casualty, fidelity, automobile, general liability, libel or slander, ▇▇▇▇▇▇▇'▇
compensation, health insurance or reinsurance or excess polity that is not fully
covered by insurance or that may be expected to exceed the available limits of
liability of the applicable insurance policies, nor has any carrier declined
coverage or reserved its rights to determine its liability to provide coverage
to LPS with respect to any claim or circumstance.
(m) LPS has complied in all material respect with all laws,
including applicable rules and regulations, or all applicable federal, state,
local and foreign governments and their respective agencies concerning the
environment, public health and safety and employee health and safety, and no
complaint, action, suit, proceeding, hearing, investigation, claim, demand or
notice has been filed or commenced against either LPS alleging any failure to
comply with any such law or regulation, including, without limitation, any law
of any government or agency concerning release or threatened release of
hazardous substances, public health and safety or pollution or protection of the
environment.
7. Representations of AGI. AGI hereby makes the following
representations and warranties to Coventry each of which is true as of the date
hereof and will be true as of the closing date with the same effect as though
such representations and warranties had been made on the closing date:
(a) AGI is a corporation duly organized and existing under and
by virtue of the laws of the State of Nevada, is in good standing under the laws
thereof, and is qualified to do business and is in good standing in any other
jurisdiction in which it is required to be qualified.
(b) When issued and delivered pursuant to this Agreement, the
AGI Stock will be duly and validly issued, and fully paid and nonassessable.
(c) AGI is the record and beneficial owner of the 75,000
Coventry Stock and are free and clear of all liens, encumbrances, options,
warrants, voting trusts, stockholder agreements, arrangements, and equities and
liabilities of any nature and AGI will convey clear and unencumbered title
thereto to AGI. The Coventry Stock is fully-paid and non-assessable. AGI has
full power and authority to assign the Coventry Stock.
(d) This Agreement constitutes the valid and binding
obligation of AGI enforceable in accordance with its terms, except as such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors rights.
(e) The execution and delivery of this Agreement by AGI does
not, and the consummation of the transactions contemplated herein will not,
violate or constitute an occurrence of default (which violations or defaults
either singularly or in the aggregate would be considered material) under any
provision of, or conflict with, or result in acceleration of any obligations
under, or give rise to a right by any party to terminate its obligations under
any mortgage, deed of trust, note, loan, lien, lease, agreement, instrument,
order, judgment, decree or other arrangement to which AGI is a party or by which
it is bound.
(f) Neither the execution nor the delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor compliance
with the terms hereof, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Articles of Incorporation or By-Laws of
AGI as amended, or any agreement or instrument to which AGI is now a party.
(g) AGI is acquiring the LPS Stock in a private transaction
exempt from registration under applicable federal and state securities laws, for
its own account and for investment and not with a view to the distribution or
resale of any thereof.
(h) In consideration with its acquisition of the LPS Stock,
AGI has made such investigations of LPS as it has deemed necessary for purposes
of such acquisition and has not relied on Coventry with respect to such purchase
except to the extent of any representation or warranty of AGI specifically set
forth in this Agreement.
8. Conditions of Closing. All of the obligations of the parties under
this Agreement are subject to the fulfillment, prior to or on the closing date
set forth in Section 3 of this Agreement, of each of the following conditions:
(a) Delivery by AGI of the following:
(i) Certificates for the Coventry Stock endorsed
in blank;
(ii) Certificates of AGI for the Common Stock
being sold hereunder;
(iii) AGI's certification that all
representations and warranties made by it contained in Section 7 of this
Agreement shall be true on and as of the closing date as though such
representations and warranties were made at and as of such date, and shall be
true on and as of said closing date as though such representations and
warranties were made at and as of such date; and
(b) Delivery by Coventry of the following:
(i) Certificates for the LPS Stock described in
Section 2 hereof;
(ii) Delivery of such other instruments as are
required to be delivered under Section 4 hereof; and
(iii) A certificate of Coventry that all
representations and warranties made by it contained in Section 6 of this
Agreement shall be true on and as of the closing date set forth in Section 3 of
this Agreement as though such representations and warranties were made at and as
of such date, and shall be true on
and as of said closing date as though such representations and warranties were
made at and as of such date.
9. Investment Purpose. Each of the parties represents and warrants that
it is acquiring the securities to be acquired hereby for investment purposes and
not for the distribution or resale except for the right of Coventry to dividend
the AGI Stock to AGI's shareholders in accordance with Section 6(h) hereof.
Sales of such securities may be made only pursuant to applicable securities
laws. Each of the parties acknowledges that it has been advised that such
securities have not been registered under any securities act and that there is
no obligation or intention to register any of the securities.
10. Representations to Survive Closing. All the terms, conditions,
warranties, representations and guarantees contained in this Agreement shall
survive delivery of the securities and debt instruments transferred at the
closing hereunder and any investigations made by or on behalf of the parties at
any time.
11. Indemnification.
(a) Each of the parties agrees to indemnify, defend and hold
the other party and, if applicable, its shareholders, officers, directors,
successors and assigns, harmless from and against any and all claims, damages,
liability, loss, cost or expense, which either party may suffer or become liable
for as a result of or in connection with any material breach by the other party
of any representation or warranty, covenant or agreement made or contained in
this Agreement or in any related agreement or instruments executed and delivered
pursuant to this Agreement on or prior to the closing date set for in Section 3
hereof.
(b) Within 60 days after learning of the assertion by a third
party of any claim against which a party claims indemnification under this
Agreement (the "Indemnified Party"), the Indemnified Party shall notify the
other party (the "Indemnifying Party") and afford the Indemnifying Party the
opportunity to assume the defense or settlement thereof at the Indemnifying
Party's own expense with counsel of his or its own choosing and the Indemnified
Party shall cooperate fully and make available to the Indemnifying Party all
pertinent information under its control or in its possession. The Indemnified
Party shall have the right to join in the defense of any claim with the counsel
of its own choosing and at its own expense.
(c) Notwithstanding the notice requirements provided
hereunder, the right to indemnification under this Agreement shall not be
affected by any failure to give or any delay in giving notice unless, and then
only to the extent that, the rights and remedies of the party to whom notice was
to have been given shall have been prejudiced.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the parties shall be entitled to exercise and resort to all rights
and remedies for misrepresentations or breaches afforded to them by statute, at
law or in equity, including without limitation, recision, specific performance,
action for damages, or any other remedies and relief as may be afforded to them
under this Agreement or by a court of competent jurisdiction.
12. Miscellaneous.
(a) Each of the parties hereto will bear its own legal fees
and other expenses in connection with the transactions contemplated by this
Agreement.
(b) If any term or provision of this Agreement or any exhibits
thereto or the application thereof to any person, property or circumstances
shall to any extent be invalid or unenforceable, the remainder of this Agreement
or the exhibits thereto or the application or such term or provision to person,
property or circumstances other than those as to which it is invalid and
unenforceable shall not be affected thereby, and each term and provision of this
Agreement or the exhibits thereto shall be valid and enforced to the fullest
extent permitted by law.
(c) Any notices, requests or consents hereunder shall be
deemed given, and any instruments delivered, two days after they have been
mailed by first class mail, postage prepaid, or upon receipt of delivered
personally or by facsimile transmission as follows:
If to Coventry: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Coventry Industries Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esquire
Atlas, ▇▇▇▇▇▇▇▇, Trop & Borkson, P.A.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to AGI: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
American Group, Inc.
=========================
except that any of the foregoing may from time to time by written notice to the
other designate another address which shall thereupon become its effective
address for the purposes of this paragraph.
(d) This Agreement, including the exhibits and documents
referred to herein which are a part hereof, contain the entire understanding of
the parties hereto with respect to the subject matter and may be amended only by
a written instrument executed by the parties hereto or their successors or
assigns. Any paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(e) 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.
(f) This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors but shall not
insure to the benefit of anyone other than the parties signing this Agreement
and their respective successors.
(g) This Agreement shall be governed by the laws of the State
of Florida.
(h) The parties have either (i) been represented by
independent legal counsel in connection with the negotiations and execution of
this Agreement, or (ii) each has had the opportunity to obtain independent legal
counsel, has been advised that it is in its best interests to do so, and by
execution of this Agreement has waived such right.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
AMERICAN GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇, President
COVENTRY INDUSTRIES CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
