BUSINESS COMBINATION AGREEMENT
This agreement is entered into the 19th day of April, 2000 between
TIDELANDS OIL & GAS CORPORATION, a Nevada corporation, (herein, "Company") and
LONG LANE CAPITAL, INC. and XXXXXXX X. XXXXXX (herein, collectively, Sellers)
and OMNI ACQUISITION CORPORATION, a Nevada corporation, (herein, "Omni). The
Company , Sellers and Omni desire to enter into a business combination
transaction whereby the Company will issue shares to Sellers in exchange for
their shares of Omni.
For good and valuable consideration, receipt of which is acknowledged
the parties agree, represent and warrant the following:
Agreement
A. Exchange of Shares. The Company and Sellers agree to exchange shares
whereby the Company will acquire all of the issued and outstanding stock of
Omni. The Company will issue Company shares to Sellers in exchange for their
shares. The Company will issue one (1) share of Company stock for each twenty
(20) shares of Sellers' Omni stock. The Company will acquire the Sellers' shares
and issue to Sellers a total of Two Hundred Fifty Thousand (250,000) shares
Company common stock to Sellers. The shares will be issued from the Company's
treasury pursuant to the securities transaction exemption afforded by Section
4(2) of the Securities Act of 1933, as amended. The shares will be restricted
securities bearing the Company's standard restrictive legend.
B. Representations, Warranties and Covenants of the Company: The
Company represents and warrants to Sellers as of the date hereof and as of the
Closing Date:
SECTION 1. Enforceability of Agreement Against the Company. The Company
has all necessary power and authority to enter into this Agreement to which it
is a party, to carry out the obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement constitutes the legal, valid
and binding obligations of the Company enforceable against it in accordance with
the respective terms.
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SECTION 2. Shares. The shares when issued will be free and clear of all
liens, charges, demands or adverse claims or other restrictions on the exercise
of any of the attributes of ownership. There are no contracts, arrangements,
commitments or restrictions relating to the issuance, sale, transfer or purchase
or obtaining of shares or other ownership interests in the Shares, except for
this Agreement.
SECTION 3. Incorporation, Authority and Qualification of The Company.
The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada. The Company has all necessary
corporate power and authority to carry on the business now being conducted by
it. The Company is duly qualified to do business, and is in good standing, in
each jurisdiction, if any, where the character of its properties owned, operated
or leased or the nature of its activities makes such qualification necessary.
The Company is authorized to issue 100,000,000 common shares, par value $0.001
per share. The company has 17,240,489 common shares issued and outstanding. No
other classes of stock are authorized or issued. There are no outstanding
options, warrants, rights or otherwise, other than those disclosed in the
financial statements.
SECTION 4. No Conflict. The execution and delivery by the Company of
this Agreement and each Related Document to which the Company are parties have
been obtained and all filings and notifications required by law, agreement or
otherwise have been made, the performance by the Company of this Agreement and
each Related Document to which they are parties will not:
(a) Violate or conflict with any term or provision of the articles
or certificate of incorporation (or other charter documents)
of the Company;
(b) Conflict with or violate any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award
applicable to Company;
(c) Conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or
both, would become a default) under, give to others any rights
of termination, amendment, acceleration or cancellation of, or
result in the creation of any lien on any of the assets
pursuant to, any assigned contract or any licenses;
(d) Without limiting the generality of the foregoing, result in
the termination, denial or impairment of any material
contract, arrangement or benefit granted with respect to the
Company's business, or require the payment of any fees, taxes
or assessments, pursuant to any federal, state or local
program relating to minority-owned businesses.
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SECTION 5. Consents, Approvals and Notifications. The execution and
delivery by the Company of this Agreement and each Related Document to which it
is a party does not, and the performance by it of this Agreement and such
Related Documents will not, require any consent, approval, authorization or
other action by, or filing with or notification to, any Governmental Authority
or any other Person.
SECTION 6. Financial Statements.
6.1 The Company has furnished to Sellers copies of (a) audited
balance sheets of the Company and audited statements of income, changes in
shareholders' equity and statements of cash flow for the period ending December
31, 1999, together with the reports and notes thereon, independent certified
public accountants (collectively, the "Audited Financial Statements").
6.2 The Audited Financial Statements (a) have been prepared in
conformity with GAAP applied on a consistent basis from year to year (except as
noted otherwise therein); and (b) assuming the Company will continue as a going
concern, are true and correct and present fairly in all material respects the
financial condition of the Company and the results of operations and changes in
cash flow of the Company for the periods to which each relates.
6.3 To the knowledge of the Company, the Interim Financial
Statements, if prepared, (a) have been prepared in conformity with GAAP applied
on a consistent basis from year to year (except as noted otherwise therein),
subject to normal recurring year-end adjustments (the effect of which will not,
individually or in the aggregate, be material) and the absence of notes (which,
if presented, would not differ materially from those included in the Audited
Financial Statements), and (b) assuming the Company will continue as a going
concern, are true and correct and present fairly in all material respects the
financial condition of the Company and the results of operations and changes in
cash flow of the Company for the periods to which each relates.
SECTION 7. Litigation. There is no claim, action, investigation,
arbitration or proceeding pending or, threatened against the Company, or against
or relating to any of the assets or the ability of the Company to perform its
obligations hereunder, before any arbitrator, judge, court or governmental
authority. Company is not subject to any order, writ judgment, injunction,
decree, determination or award of any arbitrator, judge, court or governmental
authority.
SECTION 8. Contracts. To the extent applicable, Exhibit "A" contains an
accurate and complete list of all written and oral agreements and contracts in
effect on the date of this Agreement to which the Company is a party in
connection with the business operations or by which any of the Company's
properties or assets relating to the operation are bound. The are no contracts
in formation or which are capable of subsequent formation as a result of future
satisfied conditions. The Company has made available to Sellers true and
complete copies of the contracts (including any amendments or modifications
thereto).
SECTION 9. Environmental Matters. The Company has not used any
property, real or personal to generate, manufacture, refine, transport, treat,
store, handle, or dispose of any hazardous substances except in accordance with
all applicable federal and state environmental laws.
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SECTION 10. Taxes. The Company has or will duly file or caused to be
filed all federal income tax returns and all other federal, state, county, local
or city tax returns which are required to be filed, including, but not limited
to, income and employee withholding taxes, and the Company has paid or caused to
be paid all taxes shown on said returns or on any tax assessment received by it
to the extent that such taxes have become due, or has set aside on its books
reserves (segregated to the extent required by sound accounting practice)
reasonably deemed by the Company to be adequate with respect thereto. No events
have occurred which could impose upon Sellers, any transferee liability for any
taxes, penalties, or interest due or to become due from the Company.
SECTION 11. Absence of Changes. Since the date of the Audited Financial
Statements, the Company has operated its business in the ordinary course
consistent with past practices and there has not been, except as disclosed in
this Agreement or the Exhibits attached hereto:
i. any Material Adverse Effect;
ii. any damage, destruction or loss (whether or not covered by
insurance) affecting any tangible asset or property used or useful in the
business operations, normal wear and tear excepted;
iii. any payments, discharges or satisfactions by the Company of any
liens, claims, charges or liabilities (whether absolute, accrued, contingent or
otherwise and whether due or to become due) relating to the business operations,
other than in the ordinary course of the business and consistent with past
practice;
iv. any licenses, sales, transfers, pledges, mortgages or other
dispositions of any tangible or intangible assets having a value over $1,000 (in
the aggregate) used or held for use in connection with the operation of the
business, other than in the ordinary course of business and consistent with past
practice;
v. any write-offs as uncollectible of any accounts receivable or notes
receivable of the operations, or any portion thereof, not provided for in the
allowance for uncollectible accounts in the Interim Financial Statements;
vi. any cancellations of any material debts or claims of, or any
amendments, terminations or waivers of any rights of material value to, the
business operations;
vii. any general uniform increase in or change in the method of
computing the compensation of employees of the Company who perform services for
the benefit of the business operations;
viii. any material changes in the manner in which the Company extends
discount or credits to customers or otherwise deals with customers of its
business;
ix. any material changes in the accounting methods or practices
followed by the Company and or any changes in depreciation or amortization
policies or rates theretofore adopted;
x. any capital commitments by the Company and for additions to
property, plant or equipment of the business operations;
xi. any agreements or commitments to merge or consolidate with or
otherwise acquire any other corporation, association, firm or other business
organization or division thereof;
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xii. any declarations of dividend, payment of any dividend, issuance of
any securities, purchase or redemption of any securities, commitments or
authorizations for any changes to its Articles of Incorporation or amendments to
any by-laws, conversions of any options, warrants or otherwise into common
shares, and except as disclosed in paragraph B.3. relating to the total shares
issued and outstanding which resulted from a corporate reorganization;
xiii. any other material transaction relating to the Company other than
in the ordinary course of the business and consistent with past practice;
or
xiv. any agreements or understandings, whether in writing or otherwise,
for the Company to take any of the actions specified in items i. through xii.
above.
SECTION 12. Undisclosed Liabilities. The Company does not have any
liabilities or obligations of any nature that would be required by GAAP to be
reflected in the Financial Statements (subject, in the case of unaudited
statements, to normal year-end audit adjustments), except: (a) such liabilities
and obligations which are reflected in the Financial Statements, or (b) such
liabilities or obligations which were incurred in the ordinary course of
business for normal trade or business obligations and are not individually or in
the aggregate in excess of $1,000.
SECTION 13. Compliance with Laws. Except as individually or in the
aggregate would not have a Material Adverse Effect, the Company has complied in
all respects with all laws of all Governmental Authorities (including all tariff
and reporting requirements) with respect to its business operations.
SECTION 14. Consents, Approvals and Notifications. The execution and
delivery by XXXXX of this Agreement to which she is a party does not, and the
performance by her of this Agreement will not, require any consent, approval,
authorization or other action by, or filing with or notification to, any
Governmental Authority or any other Person.
B. Representations, Warranties Covenants of Sellers and Omni: Omni and
Sellers represent and warrant to the Company as of the date hereof and as of the
Closing Date:
SECTION 1. Enforceability of Agreement Against the Sellers and Omni.
Omni and Sellers have all necessary power and authority to enter into this
Agreement to which each is a party, to carry out the obligations hereunder and
to consummate the transactions contemplated hereby. This Agreement constitutes
the legal, valid and binding obligations of the Sellers and Omni enforceable
against it in accordance with the respective terms.
SECTION 2. Shares. Sellers' shares have been validly issued and are
free and clear of all liens, charges, demands or adverse claims or other
restrictions on the exercise of any of the attributes of ownership. There are no
contracts, arrangements, commitments or restrictions relating to the issuance,
sale, transfer or purchase or obtaining of shares or other ownership interests
in the Shares, except for this Agreement and the Lock-Up Agreements attached to
Omni's Form 10-SB registration statement.
SECTION 3. Incorporation, Authority and Qualification of Omni. Omni is
a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada. Omni has all necessary corporate power and
authority to carry on the business now being conducted by it. Omni is duly
qualified to do business, and is in good standing, in each jurisdiction, if any,
where the character of its properties owned, operated or leased or the nature of
its activities makes such qualification necessary. Omni is authorized to issue
25,000,000 common shares, par value $0.001 per share. The company has 5,000,000
common shares issued and outstanding. No other classes of stock are authorized
or issued. There are no outstanding options, warrants, rights or otherwise,
other than those disclosed in the financial statements.
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SECTION 4. No Conflict. The execution and delivery by the Sellers and
Omni of this Agreement and each Related Document to which the each is a party
have been obtained and all filings and notifications required by law, agreement
or otherwise have been made, the performance by the Sellers and Omni of this
Agreement and each Related Document to which each is a party will not:
(3) Violate or conflict with any term or provision of the articles
or certificate of incorporation (or other charter documents)
of Omni;
(4) Conflict with or violate any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award
applicable to Omni or Sellers;
(5) Conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or
both, would become a default) under, give to others any rights
of termination, amendment, acceleration or cancellation of, or
result in the creation of any lien on any of the assets
pursuant to, any assigned contract or any licenses;
(6) Without limiting the generality of the foregoing, result in
the termination, denial or impairment of any material
contract, arrangement or benefit granted with respect to Omni
or Sellers' business, or require the payment of any fees,
taxes or assessments, pursuant to any federal, state or local
program relating to minority-owned businesses.
SECTION 5. Consents, Approvals and Notifications. The execution and
delivery by the Sellers and Omni of this Agreement and each Related Document to
which each is a party does not, and the performance by it of this Agreement and
such Related Documents will not, require any consent, approval, authorization or
other action by, or filing with or notification to, any Governmental Authority
or any other Person.
SECTION 6. Financial Statements.
6.1 Sellers and Omni have furnished to the Company copies of
(a) audited balance sheets of the Company and audited statements of income,
changes in shareholders' equity and statements of cash flow for the period
ending February 5, 2000, together with the reports and notes thereon,
independent certified public accountants (collectively, the "Audited Financial
Statements").
6.2 The Audited Financial Statements (a) have been prepared in
conformity with GAAP applied on a consistent basis from year to year (except as
noted otherwise therein); and are true and correct and present fairly in all
material respects the financial condition of Omni and the results of operations
and changes in cash flow of Omni for the periods to which each relates.
6.3 To the knowledge of the Sellers and Omni , the Interim
Financial Statements, if prepared, (a) have been prepared in conformity with
GAAP applied on a consistent basis from year to year (except as noted otherwise
therein), subject to normal recurring year-end adjustments (the effect of which
will not, individually or in the aggregate, be material) and the absence of
notes (which, if presented, would not differ materially from those included in
the Audited Financial Statements), and are true and correct and present fairly
in all material respects the financial condition of the Company and the results
of operations and changes in cash flow of Omni for the periods to which each
relates.
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SECTION 7. Litigation. There is no claim, action, investigation,
arbitration or proceeding pending or, threatened against Omni, or against or
relating to any of the assets or the ability of it to perform its obligations
hereunder, before any arbitrator, judge, court or governmental authority. Omni
is not subject to any order, writ judgment, injunction, decree, determination or
award of any arbitrator, judge, court or governmental authority.
SECTION 8. Contracts. To the extent applicable, Exhibit "B" contains an
accurate and complete list of all written and oral agreements and contracts in
effect on the date of this Agreement to which Omni is a party in connection with
the business operations or by which any of its properties or assets relating to
the operation are bound. The are no contracts in formation or which are capable
of subsequent formation as a result of future satisfied conditions. Omni has
made available to the Company true and complete copies of the contracts
(including any amendments or modifications thereto).
SECTION 9. Environmental Matters. Omni has not used any property, real
or personal to generate, manufacture, refine, transport, treat, store, handle,
or dispose of any hazardous substances except in accordance with all applicable
federal and state environmental laws.
SECTION 10. Taxes. Omni has or will duly file or caused to be filed all
federal income tax returns and all other federal, state, county, local or city
tax returns which are required to be filed, including, but not limited to,
income and employee withholding taxes, and it has paid or caused to be paid all
taxes shown on said returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books reserves
(segregated to the extent required by sound accounting practice) reasonably
deemed by it to be adequate with respect thereto.
SECTION 11. Absence of Changes. Since the date of the Audited Financial
Statements, Omni has operated its business in the ordinary course consistent
with past practices and there has not been, except as disclosed in this
Agreement or the Exhibits attached hereto:
i. any Material Adverse Effect;
ii. any damage, destruction or loss (whether or not covered by
insurance) affecting any tangible asset or property used or useful in the
business operations, normal wear and tear excepted;
iii. any payments, discharges or satisfactions by it of any liens,
claims, charges or liabilities (whether absolute, accrued, contingent or
otherwise and whether due or to become due) relating to the business operations,
other than in the ordinary course of the business and consistent with past
practice;
iv. any licenses, sales, transfers, pledges, mortgages or other
dispositions of any tangible or intangible assets having a value over $1,000 (in
the aggregate) used or held for use in connection with the operation of the
business, other than in the ordinary course of business and consistent with past
practice;
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v. any write-offs as uncollectible of any accounts receivable or notes
receivable of the operations, or any portion thereof, not provided for in the
allowance for uncollectible accounts in the Interim Financial Statements;
vi. any cancellations of any material debts or claims of, or any
amendments, terminations or waivers of any rights of material value to, the
business operations;
vii. any general uniform increase in or change in the method of
computing the compensation of employees of it who perform services for the
benefit of the business operations;
viii. any material changes in the manner in which Omni extends discount
or credits to customers or otherwise deals with customers of its business;
ix. any material changes in the accounting methods or practices
followed by Omni and or any changes in depreciation or amortization policies or
rates theretofore adopted;
x. any capital commitments by Omni and for additions to property, plant
or equipment of the business operations;
xi. any agreements or commitments to merge or consolidate with or
otherwise acquire any other corporation, association, firm or other business
organization or division thereof;
xii. any declarations of dividend, payment of any dividend, issuance of
any securities, purchase or redemption of any securities, commitments or
authorizations for any changes to its Articles of Incorporation or amendments to
any by-laws, conversions of any options, warrants or otherwise into common
shares, and except as disclosed in paragraph B.1. relating to the total shares
issued and outstanding which resulted from a corporate reorganization;
xiii. any other material transaction relating to Omni other than in the
ordinary course of the business and consistent with past practice; or
xiv. any agreements or understandings, whether in writing or otherwise,
for Omni to take any of the actions specified in items i. through xii. above.
SECTION 12. Undisclosed Liabilities. Omni does not have any liabilities
or obligations of any nature that would be required by GAAP to be reflected in
the Financial Statements (subject, in the case of unaudited statements, to
normal year-end audit adjustments), except: (a) such liabilities and obligations
which are reflected in the Financial Statements, or (b) such liabilities or
obligations which were incurred in the ordinary course of business for normal
trade or business obligations and are not individually or in the aggregate in
excess of $1,000.
SECTION 13. Compliance with Laws. Except as individually or in the
aggregate would not have a Material Adverse Effect, Omni has complied in all
respects with all laws of all Governmental Authorities (including all tariff and
reporting requirements) with respect to its business operations.
SECTION 14. Consents, Approvals and Notifications. The execution and
delivery by Omni and Sellers of this Agreement to which each is a party does
not, and the performance by each of this Agreement will not, require any
consent, approval, authorization or other action by, or filing with or
notification to, any Governmental Authority or any other Person.
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C. Miscellaneous Provisions.
SECTION 1. Conditions to Closing
1.1 Conditions to Obligations of the Company. The obligations of
the Company to consummate the sale of the shares shall be subject to the
fulfillment, at or prior to the Closing, of each of the following conditions,
any one of which may be waived by the Sellers without waiver of any other rights
or remedies which Sellers may have under this Agreement:
i. The Company's Closing Documents. At the Closing, Sellers shall
have executed and/or delivered the following Related Documents to which they are
parties or for which each is responsible: (1) This Agreement, and (2) the
exchange share certificates delivered to Sellers.
1.2 Conditions to Obligations of Sellers. The obligations of
Sellers to consummate the purchase of the shares contemplated by this Agreement
shall be subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, any one of which may be waived by the Company without
waiver of any other rights or remedies which the Company may have under this
Agreement.
i. Closing Documents. At the Closing, Sellers shall have executed
and/or delivered this Agreement and delivered the Omni shares to the Company.
SECTION 2. Indemnification.
2.1 Survival. All representations and warranties and covenants and
agreements contained herein shall survive the execution of hereof and the
Closing Date. Any investigations by or on behalf of any party shall not
constitute a waiver as to enforcement of any representation, warranty or
covenant contained in this Agreement. No notice or information delivered by one
party shall affect the other party's right to rely on any representation or
warranty made by the party delivering the notice or information or relieve that
party of any obligations under this Agreement as the result of a breach of any
of its representations and warranties.
SECTION 3. General Provisions.
3.1 Headings and Interpretation. The headings used in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any term or provision of this Agreement.
3.2 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party.
3.3 Entire Agreement. This Agreement represents the entire
understanding of the parties with reference to the matters set forth herein.
This Agreement supersedes all prior negotiations, discussions, correspondence,
communications and prior agreements among the parties relating to the subject
matter herein.
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3.4 Amendment. This Agreement may not be amended or modified
except by an instrument in writing signed by the parties hereto.
3.5 Applicable Law. This Agreement shall be governed by the
substantive laws of the State of Nevada, without regard to its conflict of laws
provisions.
3.6 Counterparts and Facsimile Transmission Copies of Originals.
This Agreement may be executed in several original or facsimile copy
counterparts and all so executed and transmitted shall constitute one Agreement,
binding on all the parties hereto even though all the parties are not
signatories to the original or the same counterpart. Facsimile transmitted
signatures shall be deemed valid as though they were originals and the parties
may perform any and all obligations and duties in reliance on the facsimile
copies.
3.7 Further Assurances, Additional Documents, Etc. The parties
will cooperate with each other to accommodate the intent of this agreement.
IN WITNESS WHEREOF, the parties hereto have executed, or caused
their duly authorized representatives to execute, this Stock Purchase Agreement
as of the date first written above.
LONG LANE CAPITAL, INC. TIDELANDS OIL & GAS CORPORATION
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx Xxxx
----------------------- ----------------
By: Xxxxxxx X. Xxxxxx By: Xxxxxxx Xxxx
Title:President Title: President
/s/ Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx,
Individually
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