STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
By and between
LEARNER'S WORLD, INC.
A Florida Corporation
and
LIQUIDICS, INC.
A Nevada Corporation
Effective as of September 26, 2001
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and entered into
this 26th day of September, 2001,by and among Learner's World, Inc., a Florida
corporation (LWI) and Liquidics, Inc., a Nevada Corporation (Liquidics).
Premises
A. This Agreement provides for the acquisition of Advanced Fluid Systems,
Inc. (AFS) whereby AFS shall become a wholly owned subsidiary of LWI and in
connection therewith the issuance of twenty-seven million (27,000,000) common
shares of LWI to Liquidics and the payment of $400,000 to LWI or its designee.
B. Liquidics is the owner of one hundred (100%) percent of the issued and
outstanding capital stock of AFS.
C. Liquidics desires to sell to LWI and LWI desires to purchase from
Liquidics all of the issued and outstanding capital stock of AFS upon the terms
and conditions contained herein.
D. The majority shareholders and boards of directors of LWI and Liquidics
have determined, subject to the terms and conditions set forth in this
Agreement, that the transaction contemplated hereby is desirable and in the best
interests of their stockholders, respectively. This Agreement is being entered
into for the purpose of setting forth the terms and conditions of the proposed
acquisition.
NOW, THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
LEARNER'S WORLD, INC.
As an inducement to and to obtain the reliance of Liquidics, LWI represents
and warrants as follows:
Section 1.1 Organization. LWI is a corporation duly organized, validly
existing, and in good standing under the laws of Florida. Included in the
ATTACHED Schedules (as hereinafter defined) are complete and correct copies of
the articles of incorporation, bylaws and amendments thereto as in effect on the
date hereof.
Section 1.2 Capitalization. The authorized capitalization of LWI consists
of 75,000,000 Common Shares, $0.0001 par value per share, and 10,000,000
Preferred Shares, $0.0001 par value per share. As of the date hereof, LWI has
61,305 common shares issued and outstanding. LWI is presently a public company
whose stock quotation is presently listed on the Over the Counter Bulletin Board
under the symbol LRNW and, except for not filing a 14C Information Statement
with the SEC regarding its reverse stock split and re-domiciling, it has filed
all necessary reports, quarterly, annual and special with the SEC on a timely
basis. Included in this filing are all required Forms 3, 4 and 5 and Schedule
13D.
As of the Closing Date hereof, no shares of Preferred Stock will be issued
or outstanding. All issued and outstanding shares are legally issued, fully paid
and nonassessable and are not issued in violation of the preemptive or other
rights of any person. LWI has no securities, warrants or options authorized or
issued.
Section 1.3 Subsidiaries. LWI presently has no subsidiaries, the
subsidiaries having been sold pursuant to that certain Settlement Agreement and
Release dated September 10, 2001 amongst LWI, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as Exhibit 1.12 attached hereto and made a part
hereof.
Section 1.4 Tax Matters: Books and Records.
(a) The books and records, financial and others, of LWI are in all
material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) LWI has no liabilities with respect to the payment of any country,
federal, state, county, or local taxes (including any deficiencies,
interest or penalties).
Section 1.5 Litigation and Proceedings. To the best of LWI 's knowledge and
belief, there are no actions, suits, proceedings or investigations pending or
threatened by or against LWI or affecting LWI or its properties, at law or in
equity, before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that would have a
material adverse affect on the business, operations, financial condition or
income of LWI. LWI does not have any knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality or
of any circumstances which, after reasonable investigation, would result in the
discovery of such a default.
Section 1.6 Material Contract Defaults. To the best of LWI 's knowledge and
belief, it is not in default in any material respect under the terms of any
outstanding contract, agreement, lease or other commitment which is material to
the business, operations, properties, assets or condition of LWI, and there is
no event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which LWI has not taken adequate steps
to prevent such a default from occurring. Please note that LWI has entered into
an agreement for the sale of all of its assets as set forth in that certain
Settlement Agreement and Release dated September 10, 2001 amongst LWI, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Exhibit 1.12 attached
hereto and made a part hereof.
Section 1.7 Information. The information concerning LWI as set forth in
this Agreement and in the attached Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made in light
of the circumstances under which they were made, not misleading.
Section 1.8 Title and Related Matters. As of the closing date, LWI has
transferred all of its assets pursuant to that certain Settlement Agreement and
Release dated September 10, 2001 amongst LWI, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Exhibit 1.12 attached hereto and made a part
hereof, and has no assets.
Section 1.9 Contracts On the closing date:
(a) Except for (i) that certain agreement between LWI and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ dated September 4, 2001 entitled Agreement Regarding
Compensation for Services, attached hereto and made a part hereof as
Exhibit 1.9; and (ii) that certain Settlement Agreement and Release
dated September 10, 2001 amongst LWI, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, there are no material contracts,
agreements franchises, license agreements, or other commitments to
which LWI is a party or by which it or any of its properties are
bound.
(b) LWI is not a party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate restriction or
any judgment, order, writ, injunction, decree or award that materially
and adversely affects, or in the future may (as far as LWI can now
foresee) materially and adversely affect, the business, operations,
properties, assets or conditions of LWI.
(c) Except for (i) that certain agreement between LWI an ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
dated September 4, 2001 entitled Agreement Regarding Compensation for
Services; and (ii) that certain Settlement Agreement and Release dated
September 10, 2001 amongst LWI, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LWI is not a party to any material oral or
written: (I) contract for the employment of any officer or employee;
(ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guaranty of any obligation
for the borrowing of money or otherwise, excluding endorsements made
for collection and other guaranties, of obligations, which, in the
aggregate exceeds $1,000; (v) consulting or other contract with an
unexpired term of more than one year or providing for payments in
excess of $10,000 in the aggregate; (vi) collective bargaining
agreement; (vii) contract,
agreement or other commitment involving payments by it for more than
$10,000 in the aggregate.
Section 1.10 Insurance. All of the insurable properties of LWI are insured
for LWI 's benefit under valid and enforceable policy or policies containing
substantially equivalent coverage and will be outstanding and in full force at
the Closing Date.
Section 1.11 Approval of Agreement The holders of a majority of the Common
Voting Shares outstanding on the Closing Date have authorized the execution and
delivery of the Agreement by LWI and have approved the transactions contemplated
hereby.
Section 1.12 Material Transactions or Affiliations. Except as set forth in
Section 1.9(a), as of the Closing Date, there will exist no material contract,
agreement of arrangement between LWI and any person who was at the time of such
contract, agreement or arrangement an officer, director or person owning of
record, or known to own beneficially, ten percent (10%) or more of the issued
and outstanding Common Shares of LWI and which is to be performed in whole or in
part after the date hereof. LWI has no commitment, whether written or oral, to
lend any funds to, borrow any money from or enter into material transactions
with any such affiliated person.
Section 1.13 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which LWI is a
party or to which any of its properties or operations are subject.
Section 1.14 Governmental Authorizations. To the best of LWI 's knowledge,
it has all licenses, franchises, permits or other governmental authorizations
legally required to enable it to conduct its business in all material respects
as conducted on the date hereof. Except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no authorization,
approval, consent or order of, or registration, declaration or filing with, any
court or other governmental body is required in connection with the execution
and delivery by LWI of this Agreement and the consummation of the transactions
contemplated hereby.
Section 1.15 Compliance With Laws and Regulations. Except for not filing a
14C Information Statement with the SEC regarding its reverse stock split and
re-domiciling, to the best of LWI's knowledge and belief, LWI has complied with
all applicable statutes and regulations of any federal, state or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets or condition of LWI or would not result in LWI's incurring any material
liability.
Section 1.16 Escrow Shares . For a period of forty five (45) days from the
date of the execution of this contract there will be 15,000,000 shares of the
issued common stock of LWI
held in escrow, issued in the name of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and 12,000,000 shares
of the issued common stock of LWI held in escrow, issued in the name of
Liquidics. At the end of the 45 day period, the stock held in escrow shall be
either returned or released to certain parties in accordance with the terms of
that certain Escrow Agreement between LWI, Liquidics and ▇▇▇▇▇▇ & Jaclin, LLP,
as escrow agents ("Escrow Agreement"). If there is a default in the Escrow
Agreement, then this transaction shall become null and void and the common stock
of AFS held by LWI shall be distributed in accordance with the decision of
Liquidics Board of Directors, in its sole discretion. Furthermore, the
12,000,000 shares issued to Liquidics shall be returned to LWI and distributed
in accordance with the decision of LWI's Board of Directors, in its sole
discretion. Finally, the 15,000,000 shares issued to ▇▇. ▇▇▇▇▇▇▇▇ shall be
released to him. During the entire period that ▇▇. ▇▇▇▇▇▇▇▇ remains as majority
shareholder of LWI, he will refrain from taking any action that will affect the
assets, liabilities and/or the operations of LWI without written consent of the
entire Board of Directors of LWI (such directors being the directors set forth
in Section 4.6 of this Agreement) and LWI agrees that ▇▇. ▇▇▇▇▇▇▇▇'▇ shares will
not be diluted or subject to a reverse stock split that would cause ▇▇. ▇▇▇▇▇▇▇▇
to hold less than a majority of the issued and outstanding shares of LWI. During
the 45 day escrow period described in this section, the Board of Directors, as
prescribed in Section 4.6 below, will not be changed from the persons named in
Section 4.6 unless at least 75% percent of LWI's issued and outstanding shares
vote for such change.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF LIQUIDICS, INC
As an inducement to, and to obtain the reliance of LWI, Liquidics
represents and warrants as follows:
Section 2.1 Organization. Liquidics is a corporation duly organized,
validly existing and in good standing under the laws of Nevada and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign entity in the country or states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Attached Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation,
bylaws and amendments thereto as in effect on the date hereof. The execution and
delivery of this Agreement does not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of Liquidics 's certificate of incorporation or bylaws.
Liquidics has full power, authority and legal right and has taken all action
required by law, its articles of incorporation, bylaws or otherwise to authorize
the execution and delivery of this Agreement.
Section 2.2 Title and Related Matters. Liquidics represents and warrants to
LWI that is has good, absolute and marketable titles to one hundred percent
(100%) of AFS 's
restricted stock free and clear of all liens, claims and encumbrances. Liquidics
has the complete right, power, and authority to sell, transfer and assign the
herein referenced stock of AFS pursuant to this Agreement. The delivery of
Liquidics stock in AFS to LWI herein contemplated will vest in LWI good and
absolute title to all of AFS 's stock owned by Liquidics.
Section 2.3 Litigation and Proceedings. There are no actions, suits or
proceedings pending or, to the best of Liquidics 's knowledge and belief,
threatened by or against or affecting, at law or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign or before any
arbitrator of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business prospects of
Liquidics. Liquidics does not have any knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality.
Section 2.4 Contracts. On the Closing Date:
(a) There are no material contracts, agreements, franchises, license
agreements, or other commitments to which Liquidics is a party or
by which it or any of its properties are bound;
(b) Liquidics is not a party to any contract, agreement, commitment
or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree or
award which materially and adversely affects, or in the future
may (as far as Liquidics can now foresee) materially and
adversely affect, the business, operations, properties, assets or
conditions of Liquidics; and
(c) Liquidics is not a party to any material oral or written: (i)
contract for the employment of any officer or employee; (ii)
profit sharing, bonus, deferred compensation, stock option,
severance pay, pension, benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guaranty of any
obligation for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of
obligations, which, in the aggregate exceeds $1,000; (v)
consulting or other contract with an unexpired term of more than
one year or providing for payments in excess of $10,000 in the
aggregate; (vi) collective bargaining agreement; (vii) contract,
agreement, or other commitment involving payments by it for more
than $10,000 in the aggregate.
Section 2.5 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not
result in the breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or other material
contract, agreement or instrument to which Liquidics is a party or to which any
of its properties or operations are subject.
Section 2.6 Material Contract Defaults. To the best of Liquidics 's
knowledge and belief, it is not in default in any material respect under the
terms of any outstanding contract, agreement, lease or other commitment which is
material to the business, operations, properties, assets or condition of
Liquidics, and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of which
Liquidics has not taken adequate steps to prevent such a default from occurring.
Section 2.7 Governmental Authorizations. To the best of Liquidics 's
knowledge, Liquidics has all licenses, franchises, permits and other
governmental authorizations that are legally required to enable it to conduct
its business operations in all material respects as conducted on the date
hereof. Except for compliance with federal and state securities or corporation
laws, no authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is required in
connection with the execution and delivery by Liquidics of the transactions
contemplated hereby.
Section 2.8 Compliance With Laws and Regulations. To the best of Liquidics'
knowledge and belief, Liquidics has complied with all applicable statutes and
regulations of any federal, state or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
Liquidics or would not result in Liquidics's incurring any material liability.
Section 2.9 Approval of Agreement. The holders of a majority of the Common
Voting Shares outstanding of Liquidics, consisting of 10,352,961 shares, have
authorized the execution and delivery of the Agreement by Liquidics and have
approved the transactions contemplated hereby.
Section 2.10 Material Transactions or Affiliations. As of the Closing Date,
there will exist no material contract, agreement or arrangement between
Liquidics and any person who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or known by to own
beneficially, ten percent (10%) or more of the issued and outstanding Common
Shares of Liquidics and which is to be performed in whole or in part after the
date hereof. Liquidics has no commitment, whether written or oral, to lend any
funds to, borrow any money from or enter into any other material transactions
with, any such affiliated person.
ARTICLE III
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF
ADVANCED FLUID SYSTEMS, INC.
As an inducement to, and to obtain the reliance of LWI, AFS represents and
warrants as follows:
Section 3.1 Organization. AFS is a corporation duly organized, validly
existing and in good standing under the laws of Nevada and has the corporate
power and is duly authorized, qualified, franchised and licensed under all
applicable laws, regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in all material
respects as it is now being conducted, including qualification to do business as
a foreign entity in the country or states in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification. Included in the Attached Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation, bylaws and
amendments thereto as in effect on the date hereof. The execution and delivery
of this Agreement does not and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof will not, violate any
provision of AFS 's certificate of incorporation or bylaws. AFS has full power,
authority and legal right and has taken all action required by law, its articles
of incorporation, bylaws or otherwise to authorize the execution and delivery of
this Agreement.
Section 3.2 Capitalization. The authorized capitalization of AFS consists
of 25,000,000 shares, $0 .0001 par value. As of the date hereof, there are
10,352,961 shares issued and outstanding of which none are unrestricted.
As of the Closing date hereof, no shares of Preferred Stock will be
authorized, issued and outstanding. All issued and outstanding common shares
have been legally issued, fully paid, are nonassessable and not issued in
violation of the preemptive rights of any other person. AFS has no other
securities, warrants or options authorized or issued.
Section 3.3 Subsidiaries. AFS has no subsidiaries.
Section 3.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of AFS are in all
material respects complete and correct and have been maintained
in accordance with good business accounting practices; and
(b) AFS has no liabilities with respect to the payment of any
country, federal, state, county, local or other taxes (including
any deficiencies, interest or penalties).
Section 3.5 Information. The information concerning AFS as set forth in
this Agreement and in the attached Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required
to make the statements made, in light of the circumstances under which they were
made, not misleading.
Section 3.6 Title and Related Matters. AFS has good and marketable title to
and is the sole and exclusive owner of all of its properties, inventory,
interests in properties and assets, real and personal (collectively, the
"Assets") free and clear of all liens, pledges, charges or encumbrances. Except
as set forth in the ATTACHED Schedules, AFS owns free and clear of any liens,
claims, encumbrances, royalty interests or other restrictions or limitations of
any nature whatsoever and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with "
AFS" 's business. Except as set forth in the attached Schedules, no third party
has any right to, and AFS had not received any notice of infringement of or
conflict with asserted rights of others with respect to any product, technology,
data, trade secrets, know-how, proprietary techniques, trademarks, service
marks, trade names or copyrights which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a materially
adverse affect on the business, operations, financial conditions or income of
AFS or any material portion of its properties, assets or rights.
Section 3.7 Litigation and Proceedings. There are no actions, suits or
proceedings pending or, to the best of AFS's knowledge and belief, threatened by
or against or affecting AFS at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before any
arbitrator of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business prospects of AFS.
AFS does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality.
Section 3.8 Contracts. On the Closing Date:
(a) There are no material contracts, agreements, franchises, license
agreements, or other commitments to which AFS is a party or by
which it or any of its properties are bound;
(b) AFS is not a party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree or
award which materially and adversely affects, or in the future
may (as far as AFS can now foresee) materially and adversely
affect, the business, operations, properties, assets or
conditions of AFS; and
(c) AFS is not a party to any material oral or written: (i) contract
for the employment of any officer or employee; (ii) profit
sharing, bonus, deferred compensation, stock option, severance
pay, pension, benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating
to the borrowing of money; (iv) guaranty of any obligation for
the borrowing of money or otherwise, excluding endorsements made
for collection and other guaranties of obligations, which, in the
aggregate exceeds $1,000; (v) consulting or other contract with
an unexpired term of more than one year or providing for payments
in excess of $10,000 in the aggregate; (vi) collective bargaining
agreement; (vii) contract, agreement, or other commitment
involving payments by it for more than $10,000 in the aggregate.
Section 3.9 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which AFS is a
party or to which any of its properties or operations are subject.
Section 3.10 Material Contract Defaults. To the best of AFS 's knowledge
and belief, it is not in default in any material respect under the terms of any
outstanding contract, agreement, lease or other commitment which is material to
the business, operations, properties, assets or condition of AFS, and there is
no event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which AFS has not taken adequate steps
to prevent such a default from occurring.
Section 3.11 Governmental Authorizations. To the best of AFS 's knowledge,
AFS has all licenses, franchises, permits and other governmental authorizations
that are legally required to enable it to conduct its business operations in all
material respects as conducted on the date hereof. Except for compliance with
federal and state securities or corporation laws, no authorization, approval,
consent or order of, or registration, declaration or filing with, any court or
other governmental body is required in connection with the execution and
delivery by AFS of the transactions contemplated hereby.
Section 3.12 Compliance With Laws and Regulations. To the best of AFS's
knowledge and belief, AFS has complied with all applicable statutes and
regulations of any federal, state or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
AFS or would not result in AFS 's incurring any material liability.
Section 3.13 Insurance. All of the insurable properties of AFS are insured
for AFS's benefit under valid and enforceable policy or policies containing
substantially equivalent coverage and will be outstanding and in full force at
the Closing Date.
Section 3.14 Approval of Agreement. Liquidics, the holder of all AFS'
common voting shares outstanding, consisting of 10,352,961 shares, has
authorized the execution and delivery of the Agreement by AFS and has approved
the transactions contemplated hereby.
Section 3.15 Material Transactions or Affiliations. As of the Closing Date,
there will exist no material contract, agreement or arrangement between AFS and
any person who was at the time of such contract, agreement or arrangement an
officer, director or person owning of record, or known by AFS to own
beneficially, ten percent (10%) or more of the issued and outstanding Common
Shares of AFS and which is to be performed in whole or in part after the date
hereof. AFS has no commitment, whether written or oral, to lend any funds to,
borrow any money from or enter into any other material transactions with, any
such affiliated person.
ARTICLE IV
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 4.1 Share Exchange/Delivery of AFS Securities. On the Closing Date,
the holders of 10,352,961 of AFS' common shares shall deliver to LWI (i)
certificates or other documents evidencing all of the issued and outstanding AFS
Common Shares, duly endorsed in blank or with executed power attached thereto in
transferable form, so that AFS shall become a wholly owned subsidiary of LWI.
Payment of $200,000 shall be made to LWI at closing. Provided LWI complies with
the terms of this Agreement, such $200,000 payment shall be non- refundable. An
additional payment of $200,000 shall be made to LWI within forty-five (45) days
of the closing date.
Section 4.2 Issuance of LWI Common Shares. In exchange for all of the
Common Shares tendered pursuant to Section 4.1, LWI shall issue 27,000,000
shares of its common stock, to be held in accordance with the Escrow Agreement
as follows: (a) 15,000,000 shares to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to be held in accordance
with the terms of the Escrow Agreement. Provided that ▇▇. ▇▇▇▇▇▇▇▇ receives full
payment of the $400,000 set forth in Section 4.1 hereof, ▇▇. ▇▇▇▇▇▇▇▇'▇ shares
of LWI shall be tendered back to LWI and distributed in accordance with LWI's
Board of Directors, in its sole discretion; (b) 12,000,000 shares to Liquidics,
such issuance to be determined by Liquidics Board of Directors, in its sole
discretion.
Section 4.3 Events Prior to Closing. Upon execution hereof or as soon
thereafter as practical, management of LWI and Liquidics shall execute,
acknowledge and deliver (or shall cause to be executed, acknowledged and
delivered) any and all certificates, opinions, financial statements, schedules,
agreements, resolutions rulings or other instruments required by this Agreement
to be so delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel in order to
effectuate or evidence the transactions contemplated hereby, subject only to the
conditions to Closing referenced herein below.
Section 4.4 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on or about September , 2001 ("Closing
Date").
Section 4.5 Termination.
(a) This Agreement may be terminated by the board of directors or
majority
interest of Shareholders of either LWI or Liquidics,
respectively, at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any court or
any governmental body which shall seek to restrain, prohibit
or invalidate the transactions contemplated by this
Agreement and which, in the judgment of such board of
directors, made in good faith and based on the advice of its
legal counsel, makes it inadvisable to proceed with the
exchange contemplated by this Agreement. Notwithstanding
same, any lawsuit commenced by shareholders of Liquidics
based on such shareholders dissenters rights under state law
shall not be a basis for termination; or
(ii) any of the transactions contemplated hereby are disapproved
by any regulatory authority whose approval is required to
consummate such transactions.
In the event of termination pursuant to this paragraph (a) of this Section 4.5,
no obligation, right, or liability shall arise hereunder and each party shall
bear all of the expenses incurred by it in connection with the negotiation,
drafting and execution of this Agreement and the transactions herein
contemplated.
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of LWI if Liquidics
shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of
the representations or warranties of AFS Contained herein shall
be inaccurate in any material respect, which noncompliance or
inaccuracy is not cured after 20 days written notice thereof is
given to Liquidics. If this Agreement is terminated pursuant to
this paragraph (b) of this Section 4.5, this Agreement shall be
of no further force or effect and no obligation, right or
liability shall arise hereunder.
(c) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of Liquidics if LWI
shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of
the representations or warranties of LWI contained herein shall
be inaccurate in any material respect, which noncompliance or
inaccuracy is not cured after 20 days written notice thereof is
given to LWI. If this Agreements is terminated pursuant to this
paragraph (c) of this Section 4.5, this Agreement shall be of no
further force or effect and no obligation, right or liability
shall arise hereunder.
Section 4.6 Directors of LWI After Acquisition. Upon the Closing, the Board
of Directors of LWI shall be the following: ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇, and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇. Each director shall hold office until his
successor shall have been duly elected and shall have qualified or until his
earlier death, resignation or removal.
Section 4.7 Officers of LWI. Upon the closing, the following persons shall
be elected as officers of LWI in accordance with procedures set forth in the LWI
bylaws:
NAME OFFICER
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President
▇▇▇▇▇▇▇ ▇. ▇▇▇ Vice President- Secretary-Treasurer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Vice President-Technical
ARTICLE V
SPECIAL COVENANTS
Section 5.1 Access to Properties and Records. Prior to closing, LWI and
Liquidics will each afford to the officers and authorized representatives of the
other full access to the properties, books and records of each other, in order
that each may have full opportunity to make such reasonable investigation as it
shall desire to make of the affairs of the other and each will furnish the other
with such additional financial and operating data and other information as to
the business and properties of each other, as the other shall from time to time
reasonably request.
Section 5.2 Availability of Rule 144. LWI and Liquidics shareholders
holding "restricted securities, " as that term is defined in Rule 144
promulgated pursuant to the Securities Act will remain as "restricted
securities". LWI is under no obligation to register such shares under the
Securities Act, or otherwise. The stockholders of LWI and Liquidics holding
restricted securities as of the date of this Agreement and their respective
heirs, administrators, personal representatives, successors and assigns, are
intended third party beneficiaries of the provisions set forth herein. The
covenants set forth in this Section 5.2 shall survive the Closing and the
consummation of the transactions herein contemplated.
Section 5.3 Special Covenants and Representations Regarding the LWI Common
Shares to be Issued in the Exchange. The consummation of this Agreement,
including the issuance of the LWI Common Shares to the Shareholders of Liquidics
as contemplated hereby, constitutes the offer and sale of securities under the
Securities Act, and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes, which depend, inter alia, upon the
circumstances under which the Shareholders acquire such securities.
Section 5.4 Third Party Consents. LWI and Liquidics agree to cooperate with
each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
Section 5.5 Actions Prior and Subsequent to Closing.
(a) From and after the date of this Agreement until the Closing Date,
except as permitted or contemplated by this Agreement, LWI and
AFS will each use its best efforts to:
(i) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to
ordinary wear and tear and
damage due to casualty;
(ii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by
it;
(iii) perform in all material respects all of its obligations
under material contracts, leases and instruments relating to
or affecting its assets, properties and business;
(b) From and after the date of this Agreement until the Closing Date,
LWI will not, without the prior consent of Liquidics:
(i) except as otherwise specifically set forth herein, make any
change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding Common
Shares, except as may otherwise be required by law, or
effect any stock split or otherwise change its
capitalization, except as provided herein;
(iii) enter into or amend any employment, severance or agreements
or arrangements with any directors or officers;
(v) grant, confer or award any options, warrants, conversion
rights or other rights not existing on the date hereof to
acquire any Common Shares; or
(vi) purchase or redeem any Common Shares.
Section 5.6 Indemnification.
(a) The Officers and Directors of LWI, individually, hereby agree to
indemnify each of the officers, agents and directors of Liquidics and
AFS as of the date of execution of this Agreement against any loss,
liability, claim, damage or expense (including, but not limited to,
any and all expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened
or any claim whatsoever), to which it or they may become subject to or
rising out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement, including, but not limited
to, misrepresentations . The indemnification provided for in this
paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement;
and
(b) Liquidics And its officers and directors hereby agrees to indemnify
LWI each of the officers, agents, directors and current shareholders
of LWI as of the closing date against any loss, liability, claim,
damage or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject arising out of or
based on any inaccuracy appearing in or misrepresentation made in this
Agreement. Specifically, Liquidics indemnifies LWI for any liabilities
incurred for the failure to timely reports pursuant to Section 14C of
the Securities Act of 1933. The indemnification provided for in this
Section shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF LWI
The obligations of LWI under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.1 Accuracy of Representations. The representations and warranties
made by LWI in this Agreement were true when made and shall be true at the
Closing Date with the same force and effect as if such representations and
warranties were made at the Closing Date (except for changes therein permitted
by this Agreement), and LWI shall have performed or compiled with all covenants
and conditions required by this Agreement to be performed or complied with by
LWI prior to or at the Closing. Liquidics shall be furnished with a certificate,
signed by a duly authorized officer of LWI and dated the Closing Date, to the
foregoing effect.
Section 6.2 Shareholder Approval. A majority of the outstanding Common
Shares of LWI shall have approved this Agreement and the transactions
contemplated herein.
Section 6.3 Officer's Certificate. LWI shall be furnished with a
certificate dated the Closing date and signed by a duly authorized officer of
Liquidics to the effect that: (a) the representations and warranties of
Liquidics set forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material respects true and
correct as if made on the Effective Date; and (b) Liquidics had performed all
covenants, satisfied all conditions, and complied with all other terms and
provisions of the Agreement to be performed, satisfied or complied with by it as
of the Effective Date.
Section 6.4 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business or operations of nor shall any event have occurred which, with the
lapse of time or the giving of notice, may
cause or create any material adverse change in the financial condition, business
or operations of LWI business except as set forth in Exhibit attached hereto
with regard to the sale of its assets.
Section 6.5 Other Items. Liquidics shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as Liquidics may reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF LIQUIDICS
The obligations of Liquidics under this Agreement are subject to the
satisfaction, at or before the Closing date (unless otherwise indicated herein),
of the following conditions:
Section 7.1 Accuracy of Representations. The representations and warranties
made by LWI in this Agreement were true when made and shall be true as of the
Closing Date (except for changes therein permitted by this Agreement) with the
same force and effect as if such representations and warranties were made at and
as of the Closing Date, and Liquidics shall have performed and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by LWI prior to or at the Closing. LWI shall have been furnished with a
certificate, signed by a duly authorized executive officer of Liquidics and
dated the Closing Date, to the foregoing effect.
Section 7.2 Shareholder Approval. A majority of the outstanding Common
Shares of Liquidics shall have approved this Agreement and the transactions
contemplated herein.
Section 7.3 Officer's Certificate. Liquidics shall be furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
LWI to the effect that: (a) the representations and warranties of LWI set forth
in the Agreement and in all Exhibits, Schedules and other documents furnished in
connection herewith are in all material respects true and correct as if made on
the Effective Date; (b) LWI has performed all covenants, satisfied all
conditions, and complied with all other terms and provisions of this Agreement
to be performed, satisfied or complied with by it as of the Effective Date; (c)
since such date and other than as previously disclosed to Liquidics, LWI has not
entered into any material transaction other than transactions which are usual
and in the ordinary course of its business except as set forth in Exhibit 1.12
attached hereto and made a part hereof with regard to the sale of its assets;
and (d) no litigation, proceeding, investigation or inquiry is pending or, to
the best knowledge of LWI, threatened, which might result in an action to enjoin
or prevent the consummation of the transactions contemplated by this Agreement
or, to the extent not disclosed in the Schedules, by or against LWI which might
result in any material adverse change in any of the assets, properties, business
or operations of LWI.
Section 7.4 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business or operations of nor shall any event have occurred which, with the
lapse of time or the giving of notice, may
cause or create any material adverse change in the financial condition, business
or operations of AFS.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Brokers and Finders. Each party hereto hereby represents and
warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person not listed in
Schedule 7.1 for any commission, brokerage or finder's fee or other payment with
respect to this Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party and such third
person, whether express or implied from the actions of the indemnifying party.
Section 8.2 Law, Forum and Jurisdiction. This Agreement shall be construed
and interpreted in accordance with the laws of the State of Florida, United
States of America.
Section 8.3 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to LWI : ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Liquidics: ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
Section 8.4 Attorneys' Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs,
including reasonable attorneys' fees, incurred in connection therewith and in
enforcing or collecting any judgment rendered therein.
Section 8.5 Confidentiality. Each party hereto agrees with the other party
that, unless and until the transactions contemplated by this Agreement have been
consummated, they and their representatives will hold in strict confidence all
data and information obtained with respect to another party or any subsidiary
thereof from any representative, officer, director or employee, or from any
books or records or from personal inspection, of such other party, and shall not
use such data or information or disclose the same to others, except: (i) to the
extent such data is a matter of public knowledge or is required by law to be
published; and (ii) to the extent that such data or information must be used or
disclosed in order to consummate the transactions contemplated by this
Agreement.
Section 8.6 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 8.7 Third Party Beneficiaries. This contract is solely between LWI
and Liquidics and except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
Section 8.8 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written or oral,
except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
Section 8.9 Survival; Termination. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 18 months.
Section 8.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 8.11 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may
be waived or the time for performance hereof may be extended by a writing signed
by the party or parties for whose benefit the provision is intended.
Section 8.12 Incorporation of Recitals. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
Section 8.13 Expenses. Each party herein shall bear all of their respective
cost s and expenses incurred in connection with the negotiation of this
Agreement and in the consummation of the transactions provided for herein and
the preparation thereof.
Section 8.14 Headings; Context. The headings of the sections and paragraphs
contained in this Agreement are for convenience of reference only and do not
form a part hereof and in no way modify, interpret or construe the meaning of
this Agreement.
Section 8.15 Benefit. This Agreement shall be binding upon and shall inure
only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 8.16 Public Announcements. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto. Notwithstanding same, both parties agree that LWI will be issuing a
press release regarding this transaction, which shall be prepared by the new
officers of LWI listed in Section 4.7 hereof. Liquidics will file the necessary
documents as required by the Securities Exchange Act of 1934, including, without
limitation, the documents necessitated by the failure by LWI to file a 14C
Information Statement with the SEC regarding its reverse stock split and
re-domiciling.
Section 8.17 Severability. In the event that any particular provision or
provisions of this Agreement or the other agreements contained herein shall for
any reason hereafter be determined to be unenforceable, or in violation of any
law, governmental order or regulation, such unenforceability or violation shall
not affect the remaining provisions of such agreements, which shall continue in
full force and effect and be binding upon the respective parties hereto.
Section 8.18 Failure of Conditions; Termination. In the event of any of the
conditions specified in this Agreement shall not be fulfilled on or before the
Closing Date, either of the parties have the right either to proceed or, upon
prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
Section 8.19 No Strict Construction. The language of this Agreement shall
be construed as a whole, according to its fair meaning and intendment, and not
strictly for or against either party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or terms or conditions
hereof.
Section 8.20 Execution Knowing and Voluntary; Conflict of Interest. In
executing this Agreement, the parties severally acknowledge and represent that
each: (a) has fully and carefully read and considered this Agreement; (b) has
been or has had the opportunity to be fully apprized by its attorneys of the
legal effect and meaning of this document and all terms and conditions hereof;
and (c) is executing this Agreement voluntarily, free from any influence,
coercion or duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, and
entered into as of the date first above written.
ATTEST: LEARNERS WORLD, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------- -------------------------------
ATTEST: LIQUIDICS, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- -------------------------------
President
