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SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement"), dated as of May 17, 2004,
between Tonga Capital Corp ("TC") a Colorado Corporation, ("Seller") and J ▇▇▇▇
Consulting Corp. and Ultimate Investment Corp. (the "Buyer"), a Colorado
Corporation.
W I T N E S S E T H:
A. WHEREAS, TC is a corporation duly organized under the laws of the State of
Colorado.
B. WHEREAS, Buyer wishes to purchase an aggregate of 21,000,000 shares of
newly issued TC common stock from TC, (the "Purchase Shares"), and Seller
will retire 1,250,000 shares of common stock of Seller surrendered by old
shareholders after all of the conditions under this contract have been
performed and TC desires to sell the Purchase Shares to Buyer pursuant to
this agreement.
C. WHEREAS, prior to the transaction Buyer is not an affiliate of TC.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
1.1 Subject to the conditions set forth herein, and the purchase set forth in
1.2 hereof Seller shall retire 1,250,000 shares surrendered by old
shareholders,.
1.2 TC shall sell 21,000,000 shares to Buyer for $375,000 and Buyer shall
purchase said shares, under the terms and conditions of this agreement.
Closing and Issuance of Shares
2.1 The Purchase Shares (21,000,000) shall be issued by TC in escrow for
delivery to Buyer upon deposit of the consideration of $375,000 in escrow
for share purchase, with escrow agent, M.A. ▇▇▇▇▇▇▇, Attorney at Law The
escrow is subject to satisfaction of the conditions precedent in Article V,
and in Article VIII, subsections 10, 11, 12, 13, 14, and all other terms
and conditions of this Agreement.
2.2 Closing hereunder shall be completed by release from escrow of the cash
consideration, and purchase share certificates on or before May 31, 2004 at
5:00 p.m. MDT ("Closing Date") subject to satisfaction of the terms and
conditions set forth herein. Consideration may be delivered by Federal
Express or wire transfers, and any closing documents may be delivered by
facsimile, Federal Express or other appropriate means.
ARTICLE II
Representations, Warranties and Covenants of TC and Sellers
TC hereby, represents, warrants and covenants to Buyer as follows:
3.1` TC is a corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado, and has the corporate power and
authority carry on its business. The Articles of Incorporation and
Amendments and Bylaws of TC, which will be delivered to Buyer at closing,
are complete and accurate, and the minute books of TC, copies of which have
also been delivered to Buyer, contain a record, which is complete and
accurate in all material respects, of all meetings, and all corporate
actions of the shareholders and Board of Directors of TC.
3.2 The authorized capital stock of TC consists of 500,000,000 shares of common
stock. There are 3,377,539 shares (approximately) of Common Stock of TC
issued and outstanding as of date hereof and will be prior to closing. All
such shares of capital stock of TC are validly issued, fully paid,
non-assessable and free of preemptive rights. TC has no outstanding
warrants, or other rights to purchase, or subscribe to, or other securities
convertible into or exchangeable for any shares of capital stock of TC, or
contracts or arrangements of any kind relating to the issuance, sale or
transfer of any capital stock or other equity securities of TC, except
certain note conversion rights which shall be released at closing. All
outstanding options will be released in writing and cancelled at the time
of the closing of this transaction. This Agreement has been duly
authorized, validly executed and delivered on behalf of TC and is a valid
and binding agreement and obligation of TC enforceable against the parties
in accordance with its terms, subject to limitations on enforcement by
general principles of equity and by bankruptcy or other laws affecting the
enforcement of creditors' rights generally, and TC has complete and
unrestricted power to enter into and to consummate the transactions
contemplated by this Agreement.
3.3 Neither the making of nor the compliance with the terms and provisions of
this Agreement and consummation of the transactions contemplated herein by
TC will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of TC, or of any material provisions of any
indenture, mortgage, deed of trust or other material agreement or
instrument to which TC is a party, or of any material provision of any law,
statute, rule, regulation, or any existing applicable decree, judgment or
order by any court, federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over TC, or any of
its material properties or assets, or will result in the creation or
imposition of any material lien, charge or encumbrance upon any material
property or assets of TC pursuant to the terms of any agreement or
instrument to which TC is a party or by which TC may be bound or to which
any of TC property is subject and no event has occurred with which lapse of
time or action by a third party could result in a material breach or
violation of or default by TC.
3.4 There is no claim, legal action, arbitration, governmental investigation or
other legal or administrative proceeding, nor any order, decree or judgment
in progress, pending or in effect, or to the best knowledge of TC
threatened against or relating to TC or affecting any of its assets,
properties, business or capital stock. There is no continuing order,
injunction or decree of any court, arbitrator or governmental authority to
which TC is a party or by which TC or its assets, properties, business or
capital stock are bound.
3.5 TC has accurately prepared and filed all federal, state and other tax
returns required by law, domestic and foreign, to be filed by it through
its fiscal 1993 year and has paid or made provisions for the payment of all
taxes shown to be due and all additional assessments, and adequate
provisions have been and are reflected in the financial statements of TC
for all current taxes and other charges to which TC is subject and which
are not currently due and payable. None of the Federal income tax returns
of TC have been audited by the Internal Revenue Service or other foreign
governmental tax agency. TC has no knowledge of any additional assessments,
adjustments or contingent tax liability (whether federal or state) pending
or threatened against TC for any period, nor of any basis for any such
assessment, adjustment or contingency.
3.6 TC has delivered to Buyer audited financial statements for the period ended
December 31, 2003 and March 31, 2004 unaudited financial statements. All
such statements, herein sometimes called "TC Financial Statements" are
complete and correct in all material respects and, together with the notes
to these financial statements, present fairly the financial position and
results of operations of TC for the periods indicated within the knowledge
of TC. All financial statements of TC have been prepared in accordance with
generally accepted accounting principles.
3.7 As of the date hereof, TC, represents and warrants that all outstanding
indebtedness of TC is as shown on the financial statements attached hereto
(the updated statements), which include debts shown and not shown in March
31, 2004 financial statements, except legal and consulting fees being
incurred and paid in conjunction herewith. Any and all accruals to officers
and directors shall be waived and released by each officer or director, in
writing.
3.8 Since the dates of the updated TC Financial Statements, there have not been
any material adverse changes in the business or condition, financial or
otherwise, of TC within the knowledge of TC and/or Seller. TC does not have
any liabilities, commitments or obligations, secured or unsecured except as
shown on updated financials (whether accrued, absolute, contingent or
otherwise).
3.9 TC is not a party to any contract performable in the future except, and in
conjunction with notes to shareholders which will be paid or released at
closing.
3.10 The representations and warranties of TC and Seller shall be true and
correct as of the date hereof.
3.11 TC will deliver to Buyer, all of its corporate books and records all
available corporate records at closing
3.12 TC has no employee benefit plan in effect at this time.
3.13 No representation or warranty by TC in this Agreement, or any certificate
delivered pursuant hereto contains any untrue statement of a material fact
or omits to state any material fact necessary to make such representation
or warranty not misleading.
3.14 Buyer has received copies of Form 10KSB as filed with the Securities and
Exchange Commission ("SEC") which included audits for the year ended
December 31, 2003 and each of its other reports to shareholders filed with
the SEC through the period. TC is a registered company under the Securities
Exchange Act of 1934, as amended, and is current in its filings.
3.15 Seller has not made to Buyer any general solicitation or general
advertising regarding the shares of TC common stock.
3.16 TC has incurred no liabilities except as shown on the financial statements
and fees in conjunction with this transaction, which fees incurred in
conjunction with this transaction shall be paid at closing
3.17 TC has attached a complete list of all obligations, leases, notes, advances
due, contracts and accounts payable upon which any balance remains due and
outstanding as Schedule 3.17 hereto, and such is complete and accurate
within the knowledge of TC.
ARTICLE IV
Procedure for Closing
4.1 At the Closing Date, the purchase and sale shall be consummated after
satisfaction of all conditions precedent set forth in Article V and
deliveries in Article VIII, by TC common stock certificates for the
Purchase Shares being delivered for 21,000,000 shares of TC in
Consideration of $375,000 for the share purchase, together with delivery of
all other items, agreements, warranties, and representations set forth in
this Agreement.
ARTICLE V
Conditions Precedent to the
Consummation of the Purchase
The following are conditions precedent to the consummation of the
Agreement on or before the Closing Date:
5.1 TC shall have performed and complied with all of its respective obligations
hereunder which are to be complied with or performed on or before the
Closing Date.
5.2 No action, suit or proceeding shall have been instituted or shall have been
threatened before any court or other governmental body or by any public
authority to restrain, enjoin or prohibit the transactions contemplated
herein, or which might subject any of the parties hereto or their directors
or officers to any material liability, fine, forfeiture or penalty on the
grounds that the transactions contemplated hereby, the parties hereto or
their directors or officers, have violated any applicable law or regulation
or have otherwise acted improperly in connection with the transactions
contemplated hereby, and the parties hereto have been advised by counsel
that, in the opinion of such counsel, such action, suit or proceeding
raises substantial questions of law or fact which could reasonably be
decided adversely to any party hereto or its directors or officers.
5.3 The representations and warranties made by TC in this Agreement shall be
true as though such representations and warranties had been made or given
on and as of the Closing Date, except to the extent that such
representations and warranties may be untrue on and as of the Closing Date
because of changes caused by transactions suggested or approved in writing
by the Buyer.
ARTICLE VI
Termination and Abandonment
6.1 Anything contained in this Agreement to the contrary notwithstanding, the
Agreement may be terminated and abandoned at any time prior to or on the
Closing Date:
(a) By mutual consent of parties;
(b) By either party, if any condition set forth in Article V or any
other Article relating to the other party has not been met or has
not been waived;
(c) By Buyer, if any suit, action, or other proceeding shall be
pending or threatened by the federal or a state government before
any court or governmental agency, in which it is sought to
restrain, prohibit, or otherwise affect the consummation of the
transactions contemplated hereby;
(d) By Buyer, if there is discovered any material error, misstatement
or omission in the representations and warranties of another
party;
(e) By TC, if the Closing does not occur, through no failure to act
by TC, on closing date, or if Buyer fails to deliver the
consideration required herein;
(f) If all of the outstanding liabilities cannot be settled for
within the purchase price;
6.2 Any of the terms or conditions of this Agreement may be waived at any time
by the party which is entitled to the benefit thereof, by action taken by
its Board of Directors provided; however, that such action shall be taken
only if, in the judgment of the Board of Directors taking the action, such
waiver will not have a materially adverse effect on the benefits intended
under this Agreement to the party waiving such term or condition.
ARTICLE VII
Continuing Representations and
Warranties and Covenants
7.1 The respective representations, warranties, and covenants of the parties
hereto and agreements of the parties hereto shall survive after the closing
under this Agreement for a period of two years hereafter in accordance with
the terms thereof.
ARTICLE VIII
Miscellaneous
8.1 This Agreement embodies the entire agreement between the parties, and there
have been and are no agreements, representations or warranties among the
parties other than those set forth herein or those provided for herein,
except that a companion document, the Reorganization Agreement, has been
executed concurrently which contains numerous warranties and
representations.
8.2 To facilitate the execution of this Agreement, any number of counterparts
hereof may be executed, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute
but one instrument.
8.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances
as are deemed necessary, the party requested to do so will use its best
efforts to provide such executed instruments or do all things necessary or
proper to carry out the purpose of this Agreement.
8.4 This Agreement may not be amended except by written consent of both
parties.
8.5 Any notices, requests, or other communications required or permitted
hereunder shall be delivered personally or sent by overnight courier
service, prepaid, addressed as follows:
To TC: Tonga Capital Corp
c/o ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To Buyer:
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
8.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of the
Buyer and Sellers. However, TC may issue at any time any press release or
other public statement it believes on the advice of its counsel it is
obligated to issue to avoid liability under the law relating to
disclosures, but the party issuing such press release or public statement
shall make a reasonable effort to give the other party prior notice of and
opportunity to participate in such release or statement.
8.7 This Agreement shall be governed by and construed in accordance with and
enforced under the laws of the state of Colorado applicable to all
agreements made hereunder. Venue and jurisdiction for any legal actions
hereunder shall be District Court in and for Jefferson County, Colorado.
8.8 TC and Buyer agree that Buyer and TC can and will cause the effectuation,
of a reverse split, of the common shares of TC issued and outstanding at
such date, in a ratio of not more than one for 8 shares within 90 days
following the Closing hereunder.
8.9 In the event of a breach or default of this Agreement or any of the
continuing covenants hereunder which results in a party or any effected
shareholder who is a beneficiary of a surviving or continuing covenant,
commencing legal action, the prevailing party in such legal action shall be
entitled to an award of all legal fees and costs of the action, against the
non-prevailing party.
8.10 Buyer shall designate at least two new directors to be effective subject to
compliance with Section 14f of the Securities & Exchange Act of 1934, and
Seller agrees to appoint such Directors by consent minutes to be drawn by
Buyers attorney.
8.11 In connection with this Agreement the parties have appointed the escrow
agent, M.A. ▇▇▇▇▇▇▇, Attorney at Law who shall be authorized by this
agreement to do the following:
1) Accept the deposit of $375,000 purchase price for Purchase shares,
upon receipt of a copy of this Agreement signed by TC and Buyer and
hold it in accordance with this Agreement;
2) Accept the newly issued common stock certificates of TC duly
authorized for 21,000,000 common shares in name of Buyer and,
1,250,000 shares of TC duly executed, for retirement to treasury;
3) Upon receipt of Directors & Officers Settlement Agreements for
compensation claims, audits and signed SEC filings to bring all
reporting current, Escrow Agent shall disburse the proceeds received
from the escrow in accordance with this Agreement; and shall deliver
the stock certificates to Buyer at: _________________________;
4) In the event of default in delivery any item by a party
under this agreement, any cash or certificates received
from the other party shall be returned to the remitting
party 3 business days after default; and
5) Escrow Agent is specifically indemnified and held harmless hereby for
its actions or inactions in following these instructions. In the event
of a dispute involving the escrow instructions or the consideration to
be delivered in escrow, the escrow agent is authorized to implead the
consideration received into the District Court of Jefferson County,
Colorado upon ten days written notice, and be relieved of any further
escrow duties thereupon. Any and all costs of attorney's fees and
legal actions of escrow agent for any dispute resolution or impleader
action shall be paid in equal shares by the parties to this agreement.
6) Disburse the funds as shown on an exhibit to be provided to escrow
agent by TC prior to closing.
8.12 Current President agrees to sign, as CEO/CFO all filings and Sarbanes/Oxley
Certifications at closing, for all SEC filings required. ▇▇▇▇▇ ▇▇▇▇▇▇ shall
thereafter resign as CEO/CFO, and he shall resign as director effective
upon compliance with Section 14f by mailing Notice to Shareholders.
8.13 Written Release and Waiver of any and all compensation, consulting, or
salary claims of Seller shall be delivered prior to Closing.
8.14 Buyer intends to implement by shareholder meeting:
1) A reverse split of 1 for __ shares;
2) A name change to a name to be determined.
IN WITNESS WHEREOF, the parties have executed this Agreement this _____
day of __________________________, 2004.
BUYER:
TONGA CAPITAL CORP J ▇▇▇▇ CONSULTING CORP
By: _________________________________ By: ______________________________
Name: _______________________________ Name: ____________________________
Title: ________________________________ Tile: ______________________________
ULTIMATE INVESTMENT CORP
By: ______________________________
Name: ____________________________
Tile: ______________________________
SCHEDULE 3.17
Debts to be paid at closing:
▇▇▇▇▇ ▇▇▇▇▇▇ $50,000
M.A. ▇▇▇▇▇▇▇ $4,500
Note release ▇▇▇▇▇▇ ▇▇▇▇▇▇ $5,000
▇. ▇▇▇▇▇▇▇▇ advances $20,000
