Exhibit 2
PLAN AND AGREEMENT OF REORGANIZATION
by exchange by
XXXX & CO.
of its voting stock
in exchange for one hundred (100) percent
of the Outstanding Stock of
GREEN VOLT, CORP.
on the basis of 1.2436 Xxxx & Co. Common Shares
for One Share of Green Volt
XXXX & CO., a Nevada corporation, a fully reporting public company under the
Securities Exchange Act of 1934, with its $.001 par value common stock
("Common Stock") listed for trading on the over-the-counter bulletin board
(hereinafter sometimes called "Xxxx"), and GREEN VOLT, CORP., an Ontario
corporation ("GV"), and all of the shareholders of GV, whose names and
signatures are set forth on Schedule A hereto, and by this reference
incorporated herein, and who by their execution of Schedule A to this
Agreement, have thereby become a party hereto (hereinafter sometimes
collectively called Shareholders and individually called "Shareholder"),
agree as follows:
ARTICLE 1. PLAN OF REORGANIZATION Plan Adopted
Section 1.01. A plan of reorganization of Xxxx and GV, pursuant to the
provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1954, is
hereby adopted as follows:
(a) Immediately after execution of this Agreement, Xxxxx Xxxx shall cancel
and return to treasury for no consideration, 8.2 million Xxxx Common Stock
shares, Xxxxxxx Xxxxxx shall cancel and return to treasury for no
consideration 200,000 Xxxx Common Stock shares, and Xxxxx Xxxxx/Xxxxxxx Xxxx
shall cancel and return for no consideration 1,200,000 Xxxx Common Stock
shares, with the result that there shall then be 5,617,500 Xxxx Common Stock
shares outstanding.
(b) Shareholders will transfer to Xxxx the number of shares of capital stock
of GV set forth opposite their names in Schedule A hereto, which in the
aggregate represent 100% of the outstanding shares of GV.
(c) Shareholders will deliver their GV certificates, in form for transfer,
fully executed for transfer with signature guaranteed, to Xxxx. Shareholders
agree that the shares to be transferred by them, represented by the
certificates so delivered, are subject to the interests of Xxxx hereunder,
upon delivery to Xxxx or its agents of said certificates.
(d) In exchange for the number of shares transferred by Shareholders, Xxxx
will cause to be
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delivered to Shareholders the number of shares of newly issued Common Stock
of Xxxx as calculated in subsection (e) below.
(e) The shares of GV to be transferred by the Shareholders to Xxxx, and the
shares of Common Stock of Xxxx to be delivered by Xxxx in exchange to the
Shareholders, will be in accord with the following formula:
For each one share of GV Common Stock exchanged, the Shareholder shall
receive 1.2436 shares of Xxxx Common Stock.
(f) Upon consummation of this exchange there will be a total of 18,053,500
Common Stock shares outstanding, of which 5,617,500 shares will be held by
current shareholders of Xxxx, and 12,435,240 shares will be owned by the
exchanging GV Shareholders, and Xxxx will own 100% of the outstanding shares
of GV. (This is after certain Xxxx shares have been canceled as set forth in
Section 1.01(a) hereof.)
(g) The new shares of Xxxx issued in exchange for the tendered shares of GV,
shall be issued with a Rule 144 12 month restriction on resale, and a further
SEC Rule 144 restriction that after 12 months for the following second period
of 12 months, the holder may not sell shares into the public market in any 3
month period in excess of an amount equal to 1% of the outstanding Common
Stock of Xxxx, or the average weekly trading volume in Xxxx shares over the
preceding 4 weeks, and then only in accordance with and in compliance with
the provisions of Rule 144. A legend to such effect shall be placed on the
certificates evidencing the shares.
Shares held by affiliates of Xxxx will have a continuing Rule 144 volume
restriction so long as they remain affiliates.
(h) A consulting fee shall be paid in cash by South Bay Capital Inc. to Park
Street Investments, Inc., upon the consummation of this transaction as
follows:
(i) $178,750 upon Closing Date of the Acquisition;
(ii) $170,000 within 90 days after Closing Date
An investment bankers fee shall be paid in the form of the new issuance of
600,000 shares of restricted Common Stock of Xxxx to South Bay Capital Inc.
(i) Of the 5,617,500 shares of Xxxx as described in Section 1.01(a) the
individuals as set forth on Schedule B hereto will own 1,000,000 shares of
Xxxx and shall be subject to a lockup requirement as set forth herein,
whereby said individuals hereby agree to in the aggregate not sell amongst
themselves more than the following amounts of shares of Xxxx over the
following periods measured from the date of 90 days from the date of Closing:
During the Period
(Measured from a Date Shares Which
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Date 90 Days After Closing) May be Sold
Within the 1st 30 days 25,000
Within the 2nd 30 days 50,000
Within the 3rd 30 days 50,000
Within the 4th 30 days 75,000
Within the 5th 30 days 100,000
Within the 6th 30 days 100,000
Within the 7th 30 days 150,000
Within the 8th 30 days 150,000
Within the 9th 30 days 150,000
Within the 10th 30 days 150,000
Thereafter, there shall be no contractual restriction on sales of these
shares. However, said shares shall remain applicable to any other
restrictions upon resale imposed under federal or state securities laws.
Certificates for the lockup shares shall be escrowed with Facts Corporation,
and released in accord with the above schedule to the owners of said shares.
Each certificate shall have a legend referencing this lockup agreement on its
face.
(j) Xxxx and GV shall use their best efforts to close the transactions
contemplated hereby via facsimile or overnight mail by July 12, 2000
("Closing Date").
(k) For a period of twelve months of Closing Date, all future directors of
Xxxx shall agree not to effect a reverse split on Xxxx'x Common Stock.
(l) Xxxxx Xxxx will release and waive all monies accrued and payable to Xxxx
on Xxxx'x books, except for the sum of $15,000 at the Closing.
ARTICLE 2.
COVENANTS, REPRESENTATIONS,
AND WARRANTIES OF XXXX
Legal Status; Reporting Public Company
Section 2.01. Xxxx is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Nevada, with corporate power to
own property and carry on its business as it is now being conducted. Xxxx is
duly qualified to do business in each jurisdiction in which the character and
location of its properties make such qualification necessary.
Xxxx is a fully reporting company under the Securities Exchange Act of 1934,
is current in the filing of all 1934 Act Reports, and has been so current for
at least the last 9 months, and its shares
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of Common Stock are listed on the over-the-counter bulletin board market.
Subsidiaries
Section 2.02. Xxxx has no subsidiaries.
Capitalization
Section 2.03. Xxxx has an authorized capitalization of $200,000 divided into
200,000,000 shares of Common Stock, of $0.001 par value. As of the date of
this agreement 15,217,500 shares of the Common Stock are validly issued and
outstanding, fully paid and nonassessable.
Financial Statements
Section 2.04. Xxxx has delivered the audited balance sheet of Xxxx for the
years ending June 30, 1999 and 1998, and the related statements of income and
retained earnings, and an unaudited balance sheet as of March 30, 2000, and
related unaudited statements of income and retained earnings for the year
then ended (attached hereto as Schedule 2.04). All such financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis and present fairly the financial
position of Xxxx as of the date indicated, and the results of operations for
the periods then ended subject, however, in the case of the March 30, 2000
interim financial statements, to normal changes resulting from year-end audit
of the financial statements.
Properties
Section 2.05.
(a) Xxxx has delivered to GV a list as of March 30, 2000, of the properties
of Xxxx attached hereto as Schedule 2.05. The list is substantially complete
and the information reported therein is correct in all material respects.
Except as previously disclosed to GV in writing, Xxxx does not know of any
circumstances, events, or other information occurring prior to or subsequent
to March 30, 2000, which would adversely affect the values as of March 30,
2000, or subsequent thereto, of said properties.
(b) Except for properties and interests in properties sold or otherwise
disposed of in the ordinary course of business since March 30, 2000, on the
Closing Date Xxxx will have good and marketable title to all of the
properties and interests in properties, real and personal, reflected in the
list as of March 30, 2000, free and clear of all mortgages, liens, or
encumbrances, other than the following:
(i) The lien of current taxes not yet due and payable.
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(ii) Minor exceptions, not in the aggregate material.
(iii) Such imperfections of title or easements as do not materially detract
from or interfere with the operations, value, or use of the properties
subject thereto or affected thereby, or materially affect the title thereto.
(iv) Such liens, charges, or encumbrances as are set forth in the list.
(c) All leases included among the properties, or to which any of the
properties are subject, are in good standing, valid and effective and, to the
best of Xxxx'x knowledge, information, and belief after reasonable
investigation by Xxxx, there is not under any of such leases any existing
material default or event of default or event which with notice or lapse of
time or both would constitute a material default.
(d) The plants, structures, and equipment, including automotive equipment
of Xxxx, included among the properties, if any, are in good condition and
repair, subject only to ordinary wear and tear.
(e) Except to the extent set forth in Schedule 2.05 hereto, there exists no
restriction on the right of Xxxx to issue the shares contemplated by this
Agreement to shareholders.
Activities Since Balance Sheet Date
Section 2.06. Except as previously disclosed to GV in writing, since June 30,
2000, Xxxx has not:
(a) Suffered any change in its financial condition or the operations of its
business, materially and adversely affecting its properties, or the earning
power thereof, nor suffered any damage, destruction or loss, whether covered
by insurance or not, materially and adversely affecting the properties or the
earning power thereof.
(b) Sold, exchanged, or otherwise disposed of any of its properties or any
interest therein.
(c) Except in the ordinary course of business, entered into any agreement
or arrangement selling, exchanging, or otherwise disposing of any of its
assets or granting any preferential or other right to purchase any of its
assets or rights or requiring the consent of any party to the transfer and
assignment of such assets or rights.
(d) Discharged or satisfied any lien or encumbrance or paid any obligation
or liability, absolute or contingent, other than current liabilities shown on
its balance sheet, including noncurrent liabilities so shown which have
become current by the passage of time, and current liabilities incurred since
that date in the ordinary course of business.
(e) Except current liabilities incurred or obligations under contracts
entered into in the ordinary course of business, Xxxx has not incurred or
agreed to incur any contractual obligation
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or liability, absolute or contingent.
(f) Issued any stock, bonds, or other corporate securities, or any options
with respect thereto.
(g) Except to the extent consistent with past practice, granted any increase
in the compensation of, or paid any bonus to, any employee.
(h) Except in the ordinary course of business, waived any right or claim
having value.
(i) Declared or paid any dividends, or made, or agreed to make, any other
distribution to any shareholder.
(j) Mortgaged or pledged or, subjected to lien, charge, or any other
encumbrance any of its assets, tangible or intangible.
(k) Entered into any transaction or transactions the effect of which,
considered as a whole, would be to cause its net ownership in any of its
properties to be materially less than it was at such date.
(l) Except with respect to any such property as may have been abandoned, or
quit claimed in the exercise of good business judgment in good faith,
performed or omitted to perform any act or acts the effect of which consider
as a whole would be to cause its net ownership in any of its interests to be
materially less than it was at such date.
(m) Sold, assigned, or transferred any trademarks, patents, copyrights,
proprietary or trade secrets, or other intangible assets.
(n) Had any labor troubles other than routine grievance matters, none of
which is material.
(o) Entered into any transaction other than in the ordinary course of
business.
(p) Made any expenditure for capital items, including construction and
work-in-process, or investment in stock of or advances in any form to
corporations or business firms in excess of $2500.
Schedules Furnished
Section 2.07. Xxxx has delivered to GV the additional schedules enumerated
below. To the extent that any such schedule listed below, or otherwise
referenced in this Agreement, identifies any contract, agreement, or other
instrument in general terms in lieu of specific descriptions thereof, the
schedule will be supplemented by setting forth such specific descriptions as
GV may request. If after the date hereof there shall be any change in the
matters reflected in any such schedule, Xxxx will deliver to GV prior to the
Closing Date appropriate supplements to the
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schedule so affected, making such deletions, modifications, and additions as
may be required in order that GV shall have received complete and correct
information as to the matters to be reflected in each such schedule. Each of
the schedules and any supplement thereto, delivered by Xxxx to GV, and listed
below or listed elsewhere in this Agreement, is substantially complete and
the information reported therein or in any documents provided thereunder is
correct in all material respects as of the date of such schedule or
supplement.
Off-Balance Sheet Liabilities and Obligations
(a) Schedule 2.07 (1): This schedule lists all indebtedness or liabilities
affecting Xxxx or any of its assets or rights which arise under sale and
leaseback arrangements, through-put agreements, and any other agreements or
arrangements which fall within the category or concept of off-balance sheet
financing.
Guaranties
(b) Schedule 2.07(2): This schedule lists all indebtedness or liabilities of
any person, firm, or corporation which Xxxx has guaranteed or otherwise
become liable for, absolutely or contingently.
Certain Material Contracts
(c) Schedule 2.07(3): This schedule lists all agreements, contracts, and
other instruments, to the extent not listed in any other schedule, not
cancelable by Xxxx on 90 days' notice without penalty, which involve a
payment or payments to be made by or to Xxxx, or a liability or liabilities
of or to Xxxx, in excess of $2500 in any year.
Pending Litigation
(d) Schedule 2.07(4): This schedule lists all litigation and proceedings
pending or threatened in courts and governmental commissions and bureaus
affecting Xxxx or any of its properties or rights, whether fully covered by
insurance or not.
Restrictions on Transfer of Properties
(e) Schedule 2.07(5): This schedule lists any of the properties, the
transfer of which by Xxxx is subject to any restriction, or which requires
the consent of any third party, pursuant to a preferential or other right of
purchase or otherwise, and describes in detail each such restriction, consent
requirement, or purchase right.
Options, Warrants, or Other Stock Purchase Rights
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(f) Schedule 2.07(6): This schedule lists all commitments by Xxxx to issue
shares of capital stock pursuant to outstanding options, warrants, or rights
of conversion.
Employment and Deferred Compensation Contracts
(g) Schedule 2.07(7): This schedule lists all employment, deferred
compensation, and similar contracts by which Xxxx is bound.
Insurance
(h) Schedule 2.07(8): This schedule lists all fire, liability, and other
insurance now in effect with respect to any of the properties of Xxxx.
Compliance With Laws and Regulations
Section 2.08. Xxxx is in compliance with all laws, regulations, and orders
applicable to its business.
Agreement Not Violate of Law or Instrument
Section 2.09. The execution and carrying out of this agreement and compliance
with the provisions thereof by Xxxx will not violate, with or without the
giving of notice or passage of time, any provision of law applicable to the
Xxxx, and will not conflict with, or result in the breach or termination of
any provision of, or constitute a default under, or result in the creation of
any lien, charge, or encumbrance upon any of the properties, pursuant to any
corporate charter, bylaws, indenture, mortgage, deed of trust, or other
agreements or instrument to which Xxxx is a party or by which Xxxx of any of
its properties may be bound.
Taxes
Section 2.10. The respective amounts set up as provisions for taxes on Xxxx'x
balance sheet of $0 are sufficient for the payment of all unpaid federal,
state, county, and local taxes, other than current ad valorem taxes not
exceeding $2500 of Xxxx accrued for or applicable to the fiscal period ended
on said date and all fiscal periods prior thereto. Xxxx has filed all
federal, state, county, and other local tax returns which are required to be
filed, and has paid, or made provision for the payment of all taxes which
have or may become due pursuant to said returns or pursuant to any assessment
received by Xxxx. The Internal Revenue Service has completed any known audit
and review of all federal income tax returns of Xxxx for its fiscal year
ending June 30, 1999, and any prior years, and all additional taxes,
interest, and penalties resulting from all known differences between the
Internal Revenue Service (or any state), and Xxxx with respect to said income
tax returns have been paid.
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Not in Default
Section 2.11. Xxxx has not received any notice of default and, to the
knowledge of any of its officers or directors, is not in default under:
(a) Any order, writ, injunction, or decree of any court or any commission
or other administrative agency.
(b) Any agreement or obligation to which it is a party or by which it is
bound or to which it may be subject.
No Broker's Fee, Consulting Fee
and Investment Bankers Fee
Section 2.12. Xxxx has not incurred any obligation or liability, contingent
or otherwise, for a broker's or finder's fee in respect of the matters
provided for in this agreement, except for a consulting fee to be paid in
cash by South Bay Capital Inc. to Park Street Investments, Inc., upon the
consummation of this transaction as follows:
(i) $178,750 in cash upon Closing Date of the Acquisition;
(ii) $170,000 in cash within 90 days after Closing Date
(iii) An investment bankers fee in the form of the issuance of 600,000 shares
of restricted Common Stock of Xxxx to South Bay Capital Inc.
Contract or Commitment Relating to Properties
Section 2.13. Except as set forth in the list of properties as of June 30,
2000. Xxxx does not have any lease, contract, or commitment, written or oral,
which relates to any of the properties, and it has duly complied with all
provisions of such lease, contract, or commitment set forth in the list and
is not in default with respect to any of them.
Litigation
Section 2.14. Except for matters disclosed in Schedule 2.07(4), there is no
litigation, proceeding, or governmental investigation pending, or, to the
knowledge of any of the officers or directors of Xxxx, threatened, affecting
Xxxx or any of its properties, or its right to enter into this agreement or
to perform its obligations hereunder, nor do any of such officers or
directors know of any ground for any such litigation, proceeding, or
investigation.
Insurance
Section 2.15. Xxxx does not have in force fire, liability, and other
insurance with respect to its properties as set forth in Schedule 2.07(8).
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Approval of Board
Section 2.16. The Board of Directors of Xxxx, acting at a special meeting
thereof called for the purpose and duly held on July 10, 2000, has duly
approved the transactions contemplated hereby and has authorized the
execution and delivery of this Agreement by Xxxx, and the performance thereof
by Xxxx. True copies of the resolution giving such authorization and approval
are attached as Exhibit 2.16 and such authorization and approval have not
since been altered, amended, or revoked.
Character of Statements
Section 2.17. The information provided and to be provided by Xxxx and its
officers and directors to GV pursuant to this Agreement, may be used in a
proxy statement or private placement memorandum prepared by Xxxx in the
future, and such information does not and will not contain any statement
which, at the time and in the light of the circumstances under which it is
made, is false or misleading with respect to any material fact, and does not
and will not omit to state any material fact in order to make the statements
therein not false or misleading.
Status of Shares Deliverable
Section 2.18. The shares of stock of Xxxx deliverable pursuant to this
agreement, when issued and delivered as provided in this agreement, will be
validly issued and outstanding shares of Common Stock of Xxxx, fully paid and
nonassessable, and will be voting stock of Xxxx.
Satisfy Conditions Precedent
Section 2.19 Xxxx will use its best efforts to cause the satisfaction of all
conditions precedent contained in this agreement.
ARTICLE 3.
COVENANTS, REPRESENTATIONS,
AND WARRANTIES OF GV
Legal Status
Section 3.01. GV is a corporation duly organized, validly existing, and in
good standing under the laws of Ontario, Canada, with corporate power to own
property and carry on its business as it is now being conducted. GV is duly
qualified to do business in each jurisdiction in which the character and
location of its properties make such qualification necessary.
Subsidiaries
Section 3.02. GV has no subsidiaries.
Capitalization
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Section 3.03. GV has an authorized capitalization of $______ divided into
10,000,000 shares of common stock, $.001 par value. As of the date of
consummation of this agreement 10,000,000 shares of GV's common stock were
validly issued and outstanding, fully paid and nonassessable.
Financial Statements
Section 3.04. GV has delivered to Xxxx the unaudited balance sheet of GV for
_______________, and the related statements of income and retained earnings
for the periods years then ended (attached hereto as Schedule 3.04). All such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis and present fairly the
financial position of GV as of the date indicated, and the results of
operations for the periods then ended subject, however, to normal changes
resulting from year-end audit of the financial statements.
Properties
Section 3.05.
(a) GV has delivered to Xxxx a list as of June 30, 2000, of the properties
of GV attached hereto as Schedule 3.05. The list is substantially complete
and the information reported therein is correct in all material respects.
Except as previously disclosed to Xxxx in writing, GV does not know of any
circumstances, events, or other information occurring prior to or subsequent
to June 30, 2000, which would adversely affect the values as of June 30,
2000, or subsequent thereto, of said properties.
(b) Except for properties and interests in properties sold or otherwise
disposed of in the ordinary course of business since June 30, 2000, on the
Closing Date GV will have good and marketable title to all of the properties
and interests in properties, real and personal, reflected in the list as of
June 30, 2000, free and clear of all mortgages, liens, or encumbrances, other
than the following:
(i) The lien of current taxes not yet due and payable.
(ii) Minor exceptions, not in the aggregate material.
(iii) Such imperfections of title or easements as do not materially detract
from or interfere with the operations, value, or use of the properties
subject thereto or affected thereby, or materially affect the title thereto.
(iv) Such liens, charges, or encumbrances as are set forth in the list.
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(c) All leases included among the properties, or to which any of the
properties are subject, are in good standing, valid and effective and, to the
best of GV's knowledge, information, and belief after reasonable
investigation by GV, there is not under any of such leases any existing
material default or event of default or event which with notice or lapse of
time or both would constitute a material default.
(d) The plants, structures, and equipment, including automotive equipment of
GV, included among the properties, if any, are in good condition and repair,
subject only to ordinary wear and tear.
Activities Since Balance Sheet Date
Section 3.06. Except as previously disclosed to Xxxx in writing, since June
30, 2000, GV has not:
(a) Suffered any change in its financial condition or the operations of its
business, materially and adversely affecting its properties, or the earning
power thereof, nor suffered any damage, destruction or loss, whether covered
by insurance or not, materially and adversely affecting the properties or the
earning power thereof.
(b) Sold, exchanged, or otherwise disposed of any of its properties or any
interest therein.
(c) Except in the ordinary course of business, entered into any agreement or
arrangement selling, exchanging, or otherwise disposing of any of its assets
or granting any preferential or other right to purchase any of its assets or
rights or requiring the consent of any party to the transfer and assignment
of such assets or rights.
(d) Discharged or satisfied any lien or encumbrance or paid any obligation
or liability, absolute or contingent, other than current liabilities shown on
its balance sheet, including noncurrent liabilities so shown which have
become current by the passage of time, and current liabilities incurred since
that date in the ordinary course of business.
(e) Except current liabilities incurred or obligations under contracts
entered into in the ordinary course of business, GV has not incurred or
agreed to incur any contractual obligation or liability, absolute or
contingent.
(f) Issued any stock, bonds, or other corporate securities, or any options
with respect thereto.
(g) Except to the extent consistent with past practice, granted any increase
in the compensation of, or paid any bonus to, any employee.
(h) Except in the ordinary course of business, waived any right or claim
having value.
(i) Declared or paid any dividends, or made, or agreed to make, any other
distribution to any shareholder.
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(j) Mortgaged or pledged or, subjected to lien, charge, or any other
encumbrance any of its assets, tangible or intangible.
(k) Entered into any transaction or transactions the effect of which,
considered as a whole, would be to cause its net ownership in any of its
properties to be materially less than it was at such date.
(l) Except with respect to any such property as may have been abandoned, or
quit claimed in the exercise of good business judgment in good faith,
performed or omitted to perform any act or acts the effect of which consider
as a whole would be to cause its net ownership in any of its interests to be
materially less than it was at such date.
(m) Sold, assigned, or transferred any trademarks, patents, copyrights,
proprietary or trade secrets, or other intangible assets.
(n) Had any labor troubles other than routine grievance matters, none of
which is material.
(o) Entered into any transaction other than in the ordinary course of
business.
(p) Made any expenditure for capital items, including construction and
work-in-process, or investment in stock of or advances in any form to
corporations or business firms in excess of $2500.
Schedules Furnished
Section 3.07. GV has delivered to Xxxx the additional schedules enumerated
below. To the extent that any such schedule listed below, or otherwise
referenced in this Agreement, identifies any contract, agreement, or other
instrument in general terms in lieu of specific descriptions thereof, the
schedule will be supplemented by setting forth such specific descriptions as
Xxxx may request. If after the date hereof there shall be any change in the
matters reflected in any such schedule, GV will deliver to Xxxx prior to the
Closing Date appropriate supplements to the schedule so affected, making such
deletions, modifications, and additions as may be required in order that Xxxx
shall have received complete and correct information as to the matters to be
reflected in each such schedule. Each of the schedules and any supplement
thereto, delivered by GV to Xxxx, and listed below or listed elsewhere in
this Agreement, is substantially complete and the information reported
therein or in any documents provided thereunder is correct in all material
respects as of the date of such schedule or supplement.
Off-Balance Sheet Liabilities and Obligations
(a) Schedule 3.07 (1): This schedule lists all indebtedness or liabilities
affecting GV or any of its assets or rights which arise under sale and
leaseback arrangements, through-put agreements, and any other agreements or
arrangements which fall within the category or concept of off-balance sheet
financing.
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Guaranties
(b) Schedule 3.07(2): This schedule lists all indebtedness or liabilities of
any person, firm, or corporation which GV has guaranteed or otherwise become
liable for, absolutely or contingently.
Certain Material Contracts
(c) Schedule 3.07(3): This schedule lists all agreements, contracts, and
other instruments, to the extent not listed in any other schedule, not
cancelable by GV on 90 days' notice without penalty, which involve a payment
or payments to be made by or to GV, or a liability or liabilities of or to
GV, in excess of $2500 in any year.
Pending Litigation
(d) Schedule 3.07(4): This schedule lists all litigation and proceedings
pending or threatened in courts and governmental commissions and bureaus
affecting GV or any of its properties or rights, whether fully covered by
insurance or not.
Restrictions on Transfer of Properties
(e) Schedule 3.07(5): This schedule lists any of the properties, the
transfer of which by GV is subject to any restriction, or which requires the
consent of any third party, pursuant to a preferential or other right of
purchase or otherwise, and describes in detail each such restriction, consent
requirement, or purchase right.
Options, Warrants, or Other Stock Purchase Rights
(f) Schedule 3.07(6): This schedule lists all commitments by GV to issue
shares of capital stock pursuant to outstanding options, warrants, or rights
of conversion.
Employment and Deferred Compensation Contracts
(g) Schedule 3.07(7): This schedule lists all employment, deferred
compensation, and similar contracts by which GV is bound.
Insurance
(h) Schedule 3.07(8): This schedule lists all fire, liability, and other
insurance now in effect with respect to any of the properties of GV.
Compliance With Laws and Regulations
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Section 3.08. GV is in compliance with all laws, regulations, and orders
applicable to its business.
Agreement Not Violative of Law or Instrument
Section 3.09. The execution and carrying out of this agreement and compliance
with the provisions thereof by GV will not violate, with or without the
giving of notice or passage of time, any provision of law applicable to GV,
and will not conflict with, or result in the breach or termination of any
provision of, or constitute a default under, or result in the creation of any
lien, charge, or encumbrance upon any of the properties, pursuant to any
corporate charter, bylaws, indenture, mortgage, deed of trust, or other
agreements or instrument to which GV is a party or by which GV or any of its
properties may be bound.
Taxes
Section 3.10. The respective amounts set up as provisions for taxes on GV's
balance sheet of $0 are sufficient for the payment of all unpaid taxes, other
than current ad valorem taxes not exceeding $2500 of GV accrued for or
applicable to the fiscal period ended on said date and all fiscal periods
prior thereto. GV has filed all tax returns which are required to be filed,
and has paid, or made provision for the payment of all taxes which have or
may become due pursuant to said returns or pursuant to any assessment
received by GV. Not in Default
Section 3.11. GV has not received any notice of default and, to the knowledge
of any of its officers or directors, is not in default under:
(a) Any order, writ, injunction, or decree of any court or any commission or
other administrative agency.
(b) Any agreement or obligation to which it is a party or by which it is
bound or to which it may be subject.
No Broker's Fee, Consulting Fee
and Investment Bankers Fee
Section 3.12. GV has not incurred any obligation or liability, contingent or
otherwise, for a broker's or finder's fee in respect of the matters provided
for in this agreement, except for a consulting fee to be paid in cash by
South Bay Capital Inc. to Park Street Investments, Inc., upon the
consummation of this transaction as follows:
(i) $178,750 in cash upon Closing Date of the Acquisition;
(ii) $170,000 in cash within 90 days after Closing Date
15
(iii) An investment bankers fee in the form of the issuance of 600,000 shares
of restricted Common Stock of Xxxx to South Bay Capital Inc.
Contract or Commitment Relating to Properties
Section 3.13. Except as set forth in the list of properties as of June 30,
2000. GV does not have any lease, contract, or commitment, written or oral,
which relates to any of the properties, and it has duly complied with all
provisions of such lease, contract, or commitment set forth in the list and
is not in default with respect to any of them.
Section 3.14. Except for matters disclosed in Schedule 3.07(4), there is no
litigation, proceeding, or governmental investigation pending, or, to the
knowledge of any of the officers or directors of GV, threatened, affecting GV
or any of its properties, or its right to enter into this agreement or to
perform its obligations hereunder, nor do any of such officers or directors
know of any ground for any such litigation, proceeding, or investigation.
Insurance
Section 3.15. GV now has in force fire, liability, and other insurance with
respect to its properties as set forth in Schedule 3.07(8) and, except in
accordance with the written approval of Xxxx pending the Closing Date, will
not change, increase, or decrease any such insurance.
Approval of Board
Section 3.16 The Board of Directors of GV, has duly approved the transactions
contemplated hereby and has authorized the execution and delivery of this
agreement by GV, and the performance by GV. True copies of the resolution
giving such authorization and approval are attached hereto as Schedule 3.16,
and such authorization and approval have not since been altered, amended, or
revoked.
Character of Statements
Section 3.17. The information provided and to be provided by GV and its
officers and directors to Xxxx does not and will not contain any statement
which, at the time and in the light of the circumstances under which it is
made, is false or misleading with respect to any material fact, and does not
and will not omit to state any material fact in order to make the statements
therein not false or misleading.
Status of Shares Deliverable
Section 3.18. The shares of stock of GV deliverable pursuant to this
agreement, were validly issued and outstanding shares of Common Stock of GV,
fully paid and nonassessable voting shares.
16
Submission to Shareholders
Section 3.19 GV shall cause a majority of its shareholders to approve this
agreement in accordance with the laws of its jurisdiction of incorporation,
and the laws of any other jurisdiction to which it is subject.
Satisfy Conditions Precedent
Section 3.20 GV will use its best efforts to cause the satisfaction of all
conditions precedent contained in this agreement.
Manner of Exchange Solicitation
Section 3.21. Each of the Shareholders is an Accredited Investor as defined
in Exhibit D hereto.
Section 3.22 The exchange offer embodied in this Agreement was presented
solely by GV and its officers and directors, to Shareholders, and neither
Xxxx nor its officers, directors, or advisers had a hand in the offer of
exchange or the decision by the Shareholders to enter into this Agreement and
exchange their shares for Xxxx shares.
ARTICLE 4.
CONDUCT OF BUSINESS OF
XXXX AND GV PENDING CLOSING
Preservation of and Access to Properties, Information,
and Documents
Section 4.01. From the date of this agreement until the Closing Date, Xxxx
and GV will:
(a) Except for depreciation through ordinary wear and tear, maintain and
keep its properties in as good condition and working order as at present.
(b) Preserve in full force to the extent consistent with best industry
practices all its leases.
(c) Operate or cause to be operated all of the properties in accordance with
best industry practices.
(d) Use its best efforts to perform all its obligations under contracts
relating to or affecting the properties.
(e) Exercise all due diligence in safeguarding and maintaining secure all
trademarks, copyrights, formulas, trade secrets, confidential reports and
data, and all other confidential data in its possession relating to its
properties and business.
(f) Confer with the other party regarding all significant developments and
transactions
17
relating to its business and give to the other party full access at any time
to all the properties, books, records, tax returns, contracts, and documents
of the other party
(g) Promptly after execution of this agreement, upon request of the other
party, furnish to the other party any and all detailed information upon
request.
(h) Permit the other party and its representatives to examine such
agreements, leases, abstracts of title, title policies, title opinions, title
files, trade marks, copyrights, studies, business plans and proprietary
information, which relate to the other party's business, as the other party
may request.
(i) Use its best efforts to cure all title or other defects of any of the
properties or intangible assets of the other party as requested by the other
party.
ARTICLE 5.
CONDITIONS PRECEDENT
TO OBLIGATIONS OF GV TO CLOSE
Section 5.01. The obligations of GV and its shareholders hereunder are
subject to the conditions that on or before the Closing Date:
Opinion of Counsel for Xxxx
(a) GV and shareholders shall have received an opinion of counsel for Xxxx,
dated the Closing Date, in form and substance satisfactory to GV and its
counsel, to the effect that:
(i) Xxxx is duly incorporated, validly existing, and in good standing under
the laws of its state of incorporation; and is duly qualified to do business
in each jurisdiction in which the character and location of its properties
make such qualification necessary.
(ii) Xxxx is a fully reporting company under the Securities Exchange Act of
1934, is current in the filing of all 1934 Act Reports, and has been so
current for at least the last 9 months, and its shares of Common Stock are
currently listed on the over-the-counter Bulletin Board market.
(iii) Xxxx has an authorized capitalization of $200,000, divided into
200,000,000 shares of Common Stock, par value $0.001, of which 5,617,500
shares are validly issued and outstanding (after giving effect to 1.01(a)
herein), and are fully paid and nonassessable immediately prior to Closing
Date.
(iv) Xxxx has complied with all laws, regulations, and orders applicable to
its business.
(v) Xxxx is not in default under any order, writ, injunction, or decree of
any court or of any
18
commission or other administrative agency, nor under any agreement or
obligation to which it is a party or by which it is bound or may be subject.
(vi) Except as set forth in the list of properties as of March 30, 2000
(Schedule 2.05), Xxxx does not have any lease, contract, or commitment,
written or oral, which relates to any of the properties, and it has duly
complied with all provisions of such lease, contract, or commitment set forth
in the list and is not in default with respect to any of them.
(vii) Except for matters disclosed in Schedule 2.07(4), such counsel does
not know or have reason to believe that there is any litigation, proceeding,
or investigation pending or threatened which might result in any material
adverse change in the properties, business, or prospects or in the condition,
financial or otherwise, of Xxxx, or which questions the validity of this
agreement or of any action taken or to be taken by Xxxx or its shareholders,
or by GV pursuant to or in connection with the provisions of this agreement.
(viii) All corporate acts and other proceedings required to be taken by or on
the part of Xxxx to authorize it to carry out this agreement have been duly
and properly taken, and this agreement has been duly executed by Xxxx and is
the valid and binding obligation of Xxxx enforceable in accordance with its
terms.
(ix) No provision of the articles of incorporation or the bylaws of Xxxx,
or of any indenture, mortgage, or other agreement known to such counsel,
prevents Xxxx from issuing the shares of Xxxx to Shareholders.
(x) Except as set forth in the list of properties as of March 30, 2000,
good and marketable title to all of the properties has been duly vested in
Xxxx, free of all claims, liens, and encumbrances.
(xi) Upon the issuance of the Xxxx shares to Shareholders, said Shares will
be duly authorized, fully paid and nonassessable.
Compliance With Terms, Conditions, and Covenants
(b) All the terms, conditions, and covenants of this agreement to be
complied with by Xxxx on or before the Closing Date shall have been complied
with, and Xxxx shall have delivered to GV a certificate signed by its
chairman and treasurer to such effect.
Truth of Representations and Warranties
(c) The representations and warranties by Xxxx herein shall be correct, as
of the Closing Date, with the same force as though such representations and
warranties had been made on the Closing Date, and Xxxx shall have delivered
to GV a certificate signed by its chairman and treasurer to such effect and
as to such other matters as GV may reasonably request.
19
Commitment as to Investment Purpose
(d) All holders or owners of shares of capital stock of GV shall have
delivered to Xxxx, agreements to the effect that (i) they are each Accredited
Investors, or otherwise sophisticated and able to fend for themselves under
applicable securities laws; (ii) they are taking the shares of Common Stock
of Xxxx to be delivered hereunder for purposes of investment; (iii) that they
will not sell or distribute any of the shares in a manner which would result
in a violation of the Securities Act of 1933 or the regulations thereunder;
and (iv) they acknowledge said shares will be "restricted shares" and will
bear a restricted legend.
No Substantial Adverse Change
(e) There shall have been no substantial adverse change in the financial
condition or operations of Xxxx.
ARTICLE 6.
CONDITIONS PRECEDENT
TO OBLIGATIONS OF XXXX TO CLOSE
Section 6.01. The obligations of Xxxx hereunder are subject to the conditions
that on or before the Closing Date:
Opinion of Counsel for GV
(a) Xxxx shall have received an opinion of counsel for GV, dated the
Closing Date, in form and substance satisfactory to Xxxx and its counsel, to
the effect that:
(i) GV is duly incorporated, validly existing, and in good standing under
the laws of its jurisdiction off incorporation; and is duly qualified to do
business in each jurisdiction in which the character and location of its
properties make such qualification necessary.
(ii) GV has an authorized capitalization of $ divided into 10,000,000 shares
of common stock, $.001 par value. As of the date of consummation of this
agreement 10,000,000 shares of GV's common stock were validly issued and
outstanding, fully paid and nonassessable.
(iii) GV has complied with all laws, regulations, and orders applicable to
its business.
(iv) GV is not in default under any order, writ, injunction, or decree of
any court or of any commission or other administrative agency, nor under any
agreement or obligation to which it is a party or by which it is bound or may
be subject.
(v) Except as set forth in the list of properties as of June 30, 2000
(Schedule 3.05), GV does not have any lease, contract, or commitment, written
or oral, which relates to any of the properties, and it has duly complied
with all provisions of such lease, contract, or commitment
20
set forth in the list and is not in default with respect to any of them.
(vi) Except for matters disclosed in Schedule 3.07(4), such counsel does
not know or have reason to believe that there is any litigation, proceeding,
or investigation pending or threatened which might result in any material
adverse change in the properties, business, or prospects or in the condition,
financial or otherwise, of GV, or which questions the validity of this
agreement or of any action taken or to be taken by GV or its shareholders, or
by Xxxx pursuant to or in connection with the provisions of this agreement.
(vii) All corporate acts and other proceedings required to be taken by or on
the part of GV to authorize it to carry out this agreement have been duly and
properly taken, including the approval and consent of shareholders, and this
agreement has been duly executed by GV and is the valid and binding
obligation of GV enforceable in accordance with its terms.
(viii) Except as set forth in the list of properties as of June 30, 2000,
good and marketable title to all of the properties has been duly vested in
GV, free of all claims, liens, and encumbrances.
(x) Upon the delivery of the GV shares by GV Shareholders to Xxxx, said
Shares will be duly authorized, fully paid and nonassessable.
Compliance With Terms, Conditions, and Covenants
(b) All the terms, conditions, and covenants of this agreement to be
complied with by GV on or before the Closing Date shall have been complied
with, and GV shall have delivered to Xxxx a certificate signed by its
chairman and treasurer to such effect.
Truth of Representations and Warranties
(c) The representations and warranties by GV herein shall be correct, as
of the Closing Date, with the same force as though such representations and
warranties had been made on the Closing Date, and GV shall have delivered to
Xxxx a certificate signed by its chairman and treasurer to such effect and as
to such other matters as Xxxx may reasonably request.
No Substantial Adverse Change
(d) There shall have been no substantial adverse change in the financial
condition or operations of GV.
ARTICLE 7.
CONDITIONS TO CLOSE
Resignations of Directors
Section 7.01. On the Closing Date, the Board of Directors of Xxxx shall act
to appoint the following individuals as successor directors to the Board of
Directors of Xxxx and shall
21
concurrently resign:
Xxxxxx Xxxx
Xxxx Xxxxx
The successor Board of Directors shall thereupon elect the following officers:
Xxxxxx Xxxx President
Xxxx Xxxxx Treasurer & Chief Financial Officer
Xxxx Xxxxx Secretary
Performance of Terms and Conditions
Section 7.02. All terms and conditions of this agreement to be performed by
Xxxx, XX and Shareholders on or before the Closing Date shall have been
performed.
ARTICLE 8.
CONSUMMATION OF TRANSACTION
Consideration of Xxxx
Section 8.01. On the Closing Date, Xxxx will deliver, or cause to be
delivered, to Shareholders the shares of Common Stock of Xxxx to which
shareholders are entitled, registered in the respective names of the
Shareholders.
Consideration of Shareholders
Section 8.02. On the Closing Date the Shareholders shall deliver to Xxxx or
its order, certificates for the shares of GV, duly endorsed in blank for
transfer or accompanied by stock powers or other appropriate instruments of
transfer duly executed in blank, with signatures guaranteed.
Expenses
Section 8.03 Each party hereto shall pay its own expenses incident to this
agreement and the transactions contemplated hereby, including all fees of its
counsel, accountants, and employees whether or not such transactions shall be
consummated, except that Xxxx shall contribute the sum of $3750 toward the
legal fees of GV.
ARTICLE 9.
INTERPRETATION AND
ENFORCEMENT
Indemnification
22
Section 9.01.
(a) Each party hereto agrees to protect, defend, indemnify, and hold
harmless the other party, its successors and assigns, against and in respect
of all loss, damage, or expense occasioned by any breach by such indemnifying
party of any of its representations, warranties, covenants, or agreements
contained herein.
(b) Each party hereto will indemnify and hold harmless the other party
against and in respect of any claim for brokerage or other commission
relative to this agreement or to the transactions contemplated hereby, based
in any way on agreements, arrangements, or understandings claimed to have
been made by such party with any third party.
Specific Performance
Section 9.02. Xxxx acknowledges that the benefits to GV of consummation of
this plan and agreement of reorganization are unique and that GV will have no
adequate remedy at law if Xxxx shall fail to perform any of its obligations
hereunder. In such event, GV shall have the right, in addition to all other
rights, and remedies, to specific performance of this plan and agreement of
reorganization.
Survival of Covenants, Representations, and Warranties
Section 9.03. All covenants, agreements, representations, and warranties made
hereunder and in any certificates delivered at the Closing Date shall be
deemed to be material and to have been relied upon by Xxxx and GV,
notwithstanding any investigation made by Xxxx and GV or on their respective
behalf, and shall survive the Closing Date.
Assignment
Section 9.04. Except with the written consent of the other party, the rights
and obligations under this agreement shall not be assignable by either party.
Nothing herein expressed or implied is intended to confer upon any person,
other than the parties hereto or their respective successors, assigns, heirs,
and legal representatives, any rights, remedies, or liabilities under or by
reason of this agreement.
Notices
Section 9.05. Any notice or other communication required or permitted
hereunder shall be deemed to be properly given when deposited in the United
States mails for transmittal by certified or registered mail, postage
prepaid, or when deposited with a public telegraph company for transmittal,
charges prepaid, if such communication is addressed:
(a) In the case of GV, to:
23
c/o Xxxxxx Xxxx
0000 Xxxxx Xxxxx
Xxxxxxx Xxxxxxx Xxxxxx X0X 0X0
or to such other person or address as GV may from time to time furnish to
Xxxx for the purpose.
(b) In the case of Xxxx, to:
Xxxxx Xxxx
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
or to such other person or address as Xxxx may from time to time furnish to
GV for the purpose.
(c) With respect to Shareholders, to the addresses set forth beside each of
their names on Schedule A hereto.
Entire Agreement; Counterparts
Section 9.06. This instrument and the exhibits hereto contain the entire
agreement between the parties with respect to the transaction contemplated
hereby. It may be executed in any number of counterparts, each of which shall
be deemed an original, but such counterparts together constitute only one and
the same instrument.
Controlling Law
Section 9.07. The validity, interpretation, and performance of this agreement
shall be controlled by and construed under the laws of the State of
California, the state in which this agreement is executed.
Executed on July 10, 2000, at Los Angeles, California.
GREEN VOLT, CORP. XXXX & CO.
By By
[signature] [signature]
[typed name and title] [typed name and title]
24
By By
[signature] [signature]
[typed name and title] [typed name and title]
Schedule 2.04
Financial Statements
1. Audited Balance Sheet, Income Statements, Statement of Cash Flows and
Shareholders Equity for years ended June 30, 1999 and 1998 Incorporated
herein by reference from the Company's Third Amendment to its Form 10SB
filing with the SEC filed February 11, 2000.
2. Reviewed Balance Sheet, Income Statements, Statement of Cash Flows for
quarter ended March 31, 2000 Incorporated herein by reference from the
Company's filing on Form 10-QSB with the SEC filed May 19, 2000.
Schedule 2.05
Properties
AS OF MARCH 30, 2000
(Reviewed)
Cash $3,422.00 *Approx $1,700 as of June 30
Inventory $5,651.00 *Approx $2,200 as of June 30
Item Estimated Cost
-------------------- ---------------
Gold Charms $1,600
Sterling Silver $300
Colored Stones $300
Loose Diamond $3,400 *Sold subsequent to March 30
Furniture & Equip $12,297.00
Less Accum Dep (981.00)
25
----------------
$11,316.00
Item Estimated Cost
---------------------------- --------------
(2) Office Desk $200
(3) Bookshelves $150
(2) Bookshelves $100
(4) Paintings $1,500 *Purchased after March 30
(2) Desk Lamps $200
(2) Office Chairs $400
Computer - Gateway $1,900 incl Scanner - HP, Printer - HP
Computer - Gateway $2,600 incl Printer - HP
Safe $700
Leather Sofa & Chair $3,000
Potted Plants $1,000
Digital Camera - Sony $600
(3) Diamond/Gold Scales $900
Tools (loops, etc.) $300
---------------
TOTAL PROPERTIES $20,389.00
---------------
---------------
Schedule 2.07(1)
Off-Balance Sheet Liabilities and Obligations
None
Schedule 2.07(2)
Guaranties
26
1. Promissory Note Between Xxxx & Co and Park Street Investments, Inc. Dated
March 1, 2000 in the amount of $2,500 due March 31, 2001 bearing interest at
10% per annum. (Note and accrued interest has been forgiven effective June
30, 2000).
2. Promissory Note Between Xxxx & Co and Xxxxx Xxxx Dated March 1, 2000 in
the amount of $10,746 due March 31, 2001 bearing interest at 10% per annum.
Schedule 2.07(3)
Certain Material Contracts
1. Lease Agreement between Xxxx & Co. And Xxxxx Xxxx (See Exhibit to
Ammendment #2 of Company's Form 10SB Page E-5 incorporated herein by
reference).
27
Schedule 2.07(4)
Pending Litigation
None
Schedule 2.07(5)
Restrictions on Transfer of Properties
None
Schedule 2.07(6)
Options, Warrants, or Other Stock Purchase Rights
28
None
Schedule 2.07(7)
Employment and Deferred Compensation Contracts
1. Employment Agreement between Xxxx & Co. And Xxxxx Xxxx (See Exhibit to
Ammendment #2 of Company's Form 10SB Page E-1 incorporated herein by
reference).
Schedule 2.07(8)
Insurance
None
Exhibit 2.16
Approval of Board
Schedule 3.04
Financial Statements
Schedule 3.05
29
Properties
Schedule 3.07(1)
Off-Balance Sheet Liabilities and Obligations
Schedule 3.07(2)
Guaranties
Schedule 3.07(3)
Certain Material Contracts
Schedule 3.07(4)
Pending Litigation
Schedule 3.07(5)
Restrictions on Transfer of Properties
Schedule 3.07(6)
Options, Warrants, or Other Stock Purchase Rights
Schedule 3.07(7)
Employment and Deferred Compensation Contracts
Schedule 3.07(8)
Insurance
30
Schedule 3.16
Approval of Board
31
Schedule A
No. Of Green No. Of Xxxx
Name and Volt Shares Shares to be Signature
Address Shares Tendered Issued And Date
Xxxxxx Xxxx 8,400,000 10,446,240
Xxxx Xxxxx 750,000 932,700
Xxxxxx Coventry 750,000 932,700
Xxxxxxx Xxxx 50,000 61,800
Xxxxxx Xxxxxxxxx 50,000 61,800
Total 10,000,000 12,435,240
32
Schedule B
No. Of Xxxx
Shares Owned and
Name and Subject to Signature
Address Lockup Agreement and Date
Park Street Investments, Inc. 200,000
Type Investment Holdings, Ltd. 460,000
Vantage Industries Inc. 150,000
Celebration Team Inc. 40,000
Diversified Consulting LLC 75,000
Network Marketing Resources Inc. 75,000
1,000,000
33
