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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 2, 1998
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ENTER TECH CORP.
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(Exact name of registrant as specified in its charter)
Nevada 0-21275 84-1349553
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State or other jurisdiction Commission (I.R.S. Employer
of incorporation File Number Identification No.)
430 East 6th Street, Loveland, Colorado 80537
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (970) 669-5292
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Walnut Capital, Inc.
5770 South Beach Court, Greenwood Village, CO 80121
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(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant
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On June 2, 1998, Enter Tech Corp. (formerly Walnut Capital, Inc.) (the
"Company") completed a merger of the Company and Links, Ltd., a Wyoming
corporation, whereby the Company was the survivor. Pursuant to the Articles
of Merger filed in the respective States of Nevada and Wyoming, the Company's
name was changed from Walnut Capital, Inc. to Enter Tech Corp. to more
accurately describe the proposed business of the Company. Pursuant to the
Agreement and Plan of Merger, the Company issued 3,235,000 shares of its
common stock to the sole shareholder of Links, Ltd., Mach One Corporation, 430
East 6th Street, Loveland, Colorado. Prior to the merger transaction the
Company had 1,250,000 shares of its common stock issued and outstanding, of
which 835,000 shares were cancelled as part of the merger transaction. On the
effective date of the merger transaction the Company had 3,650,000 shares of
its common stock issued and outstanding. Thus, Mach One Corporation currently
owns 72.1% of the issued and outstanding common stock of the Company and it is
essentially a majority-owned subsidiary of Mach One Corporation.
As part of the merger transaction officers of the Company resigned, a
new board of directors was appointed and new officers were elected. The
Company's officers and directors are as follows:
Name and Address Position
---------------- --------
Josh Foss President
1800 South State Street
Orem, Utah 84097
Mike Handy Secretary
1947 South Columbia Lane
Orem, Utah 84097
David Matus Director
8854 Coneflower Place
Parker, Colorado 80134
A. W. Hogan Director
705 West 2nd Street
Gordon, Nebraska 69343
Gene Gregory Director
561 Red Deer Road
Franktown, Colorado 80116
Mach One Corporation is a Nevada corporation with offices at 430 East
6th Street, Loveland, Colorado 80337, Telephone No. (970) 669-5292. Its
officers and directors are as follows:
Name and Address Position
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D. William Thomas President/Chief Executive Officer/
Director
George Beros Secretary/Chief Financial Officer
Tom Montano Director
Cliff Pettee Director
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Mach One Corporation ("Mach One") has 6,144,225 shares of its common
stock issued and outstanding with a total of approximately 400 shareholders of
record. Mach One is not a reporting company under the Securities Exchange Act
of 1934.
The Company is informed that there are no beneficial holders of 5% or
more of the outstanding common stock of Mach One.
Item 2. Acquisition on Disposition of Assets
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Pursuant to the Agreement and Plan of Merger the Company was the
survivor of a merger with Links, Ltd. whereby 72.1% of the Company's
outstanding common stock was issued to the parent, Links, Ltd. The
acquisition of Links, Ltd. by the Company is a capital transaction accounted
for as a reverse acquisition. The fiscal year of Links, Ltd. is December 31,
1998. The Company intends to continue to use December 31 as its fiscal year
end for reporting purposes. Prior to the merger transaction the Company was a
non-operating shell.
Description of Links, Ltd. and its Proposed Business
----------------------------------------------------
Until its merger into the Company, Links, Ltd., a Wyoming corporation,
incorporated on August 18, 1997, was a wholly-owned subsidiary of Mach One and
was a development stage company for accounting purposes. It had no revenues
from operations from its inception. Links, Ltd. was incorporated for the
purpose of developing kiosks, or vending machines, through which to market
computer software, music and possibly digital video products. As conceived,
each kiosk vending machine would have software, music and eventually digital
video stored on disks or hard drives and potential customers would place an
order into the machine to purchase software, music and eventually digital
television from a menu, triggering the machine to imprint the product on a
compact disk ("CD"). As conceived, the CD imprint time is expected to take
approximately 3 to 4 minutes, at which time the CD would be ejected from the
kiosk to the waiting customer. Purchases would be made by use of credit cards
or so-called smart cards read by the kiosk. As conceived, each kiosk would be
linked by telephone line and computer modem to the Company's administrative
offices to permit monitoring, performance analysis, addition and subtraction
of software and music selections and eventually digital television selections.
Further the telephone and computer modem would permit confirmation of credit
card and smart card purchases.
Links, Ltd. had, through outside vendors and some in-house expertise,
constructed a prototype of a proposed kiosk at the time of the merger
transaction. Since that time the prototype has undergone further refinement
and modification. At this time additional modification and testing is being
undertaken by an outside vendor/engineering firm located at Broomfield,
Colorado. The Company has no firm date as to when it will be able to begin
mass producing the kiosk; however, management is hopeful such production will
commence in the next few months. It currently has orders for the purchase of
thirty units at $50,000 per unit from Dr. A. W. Hogan, who is also a member of
the Company's board of directors. The Company, as a successor to Links, Ltd.,
has a contract with Dr. Hogan for the marketing and administration of sales
through certain identified locations and the division of profits after Dr.
hogan has recovered his cost. Obviously there is no assurance that the kiosks
will function as planned, be manufactured at a unit cost as anticipated nor be
ready for delivery within the next few months. All of these factors will bear
on the Company's ability to generate revenues from any projected sales.
The Company is currently seeking funding in the form of equity and debt
financing from independent sources. The initial funding is for $500,000 which
is expected to be utilized over a period of six months for research and
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development, manufacturing, if appropriate, marketing and administration. The
company has not finalized the terms of such funding nor located purchasers
committed to such funding.
The area of business in which the Company intends to engage is crowded
with many vendors and marketers, ranging from small to some of the largest
retail companies. The Company is not aware of any entity which is currently
marketing computer software, music or digital television in the manner in
which the Company is proposing, through kiosks.
Employees
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As of July 1, 1998 the Company had one full time employee, of which one
was an officer.
Item 7. Financial Statements and Exhibits
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(a) Financial Statements of Business Acquired.
The financial statements of Link, Ltd. for the periods specified
in Section 210.305(b) of Regulation S-X will be filed not later
than 60 days after this initial report on Form 8-K is filed with
the Commission.
(b) Pro Forma Financial Information.
Pro forma financial information relating to the business acquired
by the Registrant as required by Article 11 of Regulation S-X will
be filed not later than 60 days after this initial report on Form
8-K is filed with the Commission.
(c) Exhibits.
Exhibit 10-A - Agreement and Plan of Merger of May 28, 1998
between Links, Ltd. and Walnut Capital, Inc.
Exhibit 10-B - Joint Venture Agreement between Links, Ltd. and
A.W. Hogan dated September 1, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
(Registrant) ENTER TECH CORP.
(Date) July 28, 1998
BY(Signature) /s/ Josh Foss
(Name and Title) Josh Foss, President
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of May 28, 1998, by and between
Links, Ltd., a corporation organized under the laws of the State of Wyoming
("Links"), and Walnut Capital, Inc., a corporation organized under the laws of
the State of Nevada ("Walnut").
WHEREAS, the respective Boards of Directors of Links and Walnut have
approved the merger of Links with and into Walnut (the "Merger"), pursuant to
which Walnut will be the surviving corporation and the holders of Links Common
Stock (as herein defined) will be entitled to receive the consideration
provided for in this Agreement, all upon the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements set forth herein, and intending to
be legally bound hereby, the parties hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 Surviving Corporation. In accordance with the provisions of this
Agreement, the Wyoming Business Corporation Act (the "Wyoming Act") and the
Nevada General Corporation Law (the "Nevada Act"), at the Effective Time (as
that term is hereinafter defined in Section 1.6 hereof) Links shall be merged
with and into Walnut, with Walnut being the surviving corporation in the
Merger (hereinafter sometimes called the "Surviving Corporation"). At the
Effective Time, the separate existence of Links shall cease and the Surviving
Corporation shall continue its corporate existence under the laws of the State
of Nevada. Without limiting the generality of the foregoing, from and after
the Effective Time the Surviving Corporation shall possess all of the rights,
privileges, immunities, powers and purposes, and shall assume and be liable
for all of the liabilities, obligations and penalties, of each of Walnut and
Links, and the Merger shall have all of the effects provided for in the
Wyoming Act and the Nevada Act.
1.2 Articles of Incorporation. At the Effective Time, the Articles of
Incorporation of Walnut as in effect at the Effective Time shall be the
Articles of Incorporation of the Surviving Corporation until thereafter
amended as provided by law, except that the name of the Corporation shall be
changed to "Enter Tech Corp."
1.3 By-Laws. At the Effective Time, the By-Laws of Walnut as in
effect at the Effective Time shall be the By-Laws of the Surviving Corporation
until thereafter amended as provided by law.
1.4 Directors. On and after the Effective Time, the directors of the
Surviving Corporation shall be those persons who are listed on Schedule 1.4,
all such directors to hold office until their respective successors are duly
elected and qualified in the manner provided in the Articles of Incorporation
and Bylaws of the Surviving Corporation, or as otherwise provided by law.
1.5 Officers. On and after the Effective Time, the officers of the
Surviving Corporation shall be those persons who are listed on Schedule 1.5,
each to hold the office(s) set forth opposite their respective names on such
Schedule, all such officers to hold office until their respective successors
are duly elected and qualified in the manner provided in the Articles of
Incorporation and By-Laws of the Surviving Corporation, respectively, or as
otherwise provided by law.
1.6 Effective Time. As soon as practicable following the Closing (as
that term is hereinafter defined in Article 8 hereof), Articles of Merger or
any similar document required by state law to effect the Merger (the
"Certificates of Merger") shall be filed with the Secretaries of State of the
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States of Wyoming and Nevada. The Merger shall become effective upon the
filing of the last of such certificates. The time when the Merger shall
become effective is herein referred to as the "Effective Time."
ARTICLE 2
CONSIDERATION; CONVERSION OF SHARES
2.1 Merger Consideration. The consideration payable in the Merger to
holders of shares of Links Common Stock, no par value per share ("Links Common
Stock"), shall consist solely of shares of Common Stock, $.0001 par value, of
Walnut ("Walnut Common Stock"), such shares of Walnut Common Stock to have
such rights as are set forth in the Articles of Incorporation of Walnut and to
be issuable in accordance with the terms of this Agreement. The existing
holders of shares of Walnut Common Stock shall continue to hold such shares.
2.2 Conversion of Shares. Each share of Links Common Stock issued and
outstanding as of the Effective Time shall, by virtue of the Merger and
without any action on the part of the holders thereof, automatically be
converted into 323.5 shares of Walnut Common Stock.
2.3 Cancellation of Certificates. From and after the Effective Time,
all such outstanding shares of Links Common Stock when so converted shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist. From and after the Effective Time, each certificate or
instrument which prior to the Effective Time represented shares of Links
Common Stock shall be deemed to represent only the right to receive the
certificates of Walnut Common Stock or the right to acquire shares of Walnut
Common Stock contemplated by Section 2.2 hereof, and the holder of each such
certificate or instrument shall cease to have any rights with respect to the
shares of Links Common Stock formerly represented thereby, except as otherwise
provided by law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LINKS
Except as disclosed in Schedule 3 which is attached hereto and
incorporated herein by reference, Links hereby represents and warrants to
Walnut that:
3.1 Organization. Links is a corporation duly organized, validly
existing, and in good standing under the laws of Wyoming, has all necessary
corporate powers to own its properties and to carry on its business as now
owned and operated by it, and is duly qualified to do business and is in
good standing in each of the jurisdictions where its business requires
qualification.
3.2 Capital. The authorized capital stock of Links consists of 100,000
shares of Common Stock, no par value, of which 10,000 are currently issued and
outstanding. All of the issued and outstanding shares of Links are duly
authorized, validly issued, fully paid, and nonassessable. There are no
outstanding subscriptions, options, rights, warrants, debentures, instruments,
convertible securities, or other agreements or commitments obligating Links to
issue or to transfer from treasury any additional shares of its capital stock of
any class.
3.3 Subsidiaries. Links does not have any subsidiaries or own any
interest in any other enterprise (whether or not such enterprise is a
corporation) except as disclosed in Schedule 3.
3.4 Directors and Officers. Schedule 3 contains the names and titles of
all directors and officers of Links as of the date of this Agreement.
3.5 Financial Statements. Links has delivered to Walnut an unaudited
balance sheet and statement of operations as of and for the year ended
December 31, 1997 (the "Financial Statements"). The Financial Statements
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are complete and correct in all material respects and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated. The Financial Statements
accurately set out and describe the financial condition of the Company as of
December 31, 1997.
3.6 Absence of Changes. Since December 31, 1997, except for changes in
the ordinary course of business which have not in the aggregate been
materially adverse, to the best of Links' knowledge, Links has conducted its
business only in the ordinary course and has not experienced or suffered any
material adverse change in the condition (financial or otherwise), results of
operations, properties, business or prospects of Links or waived or
surrendered any claim or right of material value.
3.7 Absence of Undisclosed Liabilities. Neither Links nor any of its
properties or assets are subject to any material liabilities or obligations of
any nature, whether absolute, accrued, contingent or otherwise and whether due
or to become due, that are not reflected in the financial statements presented
to Walnut or have otherwise been disclosed to Walnut.
3.8 Tax Returns. Within the times and in the manner prescribed by law,
Links has filed all federal, state and local tax returns required by law, or
has filed extensions which have not yet expired, and has paid all taxes,
assessments and penalties due and payable.
3.9 Investigation of Financial Condition. Without in any manner reducing
or otherwise mitigating the representations contained herein, Walnut and/or
its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of Links. Links shall make
available to Walnut and/or its attorneys all books and records of Links.
3.10 Trade Names and Rights. Schedule 3 sets forth a complete and
accurate schedule of (i) all registered trademarks and service marks and all
trademark and service mark applications, including country of filing, filing
number, date of issue and expiration date used in the business of Links; and
(ii) all registered copyrights of property owned by Links. Except as set
forth in such schedule, to Links' knowledge, no third party has asserted, or
threatened to assert against Links or any of its officers or directors any
conflicting rights to any such intellectual property and Links has no
knowledge of facts that Links believes could reasonably be expected to give
rise to such a claim.
3.11 Compliance with Laws. To the best of Links' knowledge, Links has
complied with, and is not in violation of, applicable federal, state or local
statutes, laws and regulations (including, without limitation, any applicable
building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business, except for matters which would
not have a material affect on Links or its properties.
3.12 Litigation. Links is not a party to any suit, action, arbitration
or legal, administrative or other proceeding, or governmental investigation
pending or, to the best knowledge of Links, threatened against or affecting
Links or its business, assets or financial condition, except for matters
which would not have a material affect on Links or its properties. Links is
not in default with respect to any order, writ, injunction or decree of any
federal, state, local or foreign court, department, agency or instrumentality
applicable to it. Links is not engaged in any lawsuit to recover any
material amount of monies due to it.
3.13 Authority. Links has full corporate power and authority to enter
into this Agreement. The board of directors of Links has taken all action
required to authorize the execution and delivery of this Agreement by or on
behalf of Links and the performance of the obligations of Links under this
Agreement. No other corporate proceedings on the part of Links are necessary to
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authorize the execution and delivery of this Agreement by Links in the
performance of its obligations under this Agreement. This Agreement is, when
executed and delivered by Links, and will be a valid and binding agreement of
Links, enforceable against Links in accordance with its terms, except as such
enforceability may be limited by general principles of equity, bankruptcy,
insolvency, moratorium and similar laws relating to creditors' rights
generally.
3.14 Ability to Carry Out Obligations. Neither the execution and delivery
of this Agreement, the performance by Links of its obligations under this
Agreement, nor the consummation of the transactions contemplated under this
Agreement will to the best of Links' knowledge: (a) materially violate any
provision of Links' articles of incorporation or bylaws; (b) with or without
the giving of notice or the passage of time, or both, violate, or be in
conflict with, or constitute a material default under, or cause or permit
the termination or the acceleration of the maturity of, any debt, contract,
agreement or obligation of Links, or require the payment of any prepayment or
other penalties; (c) require notice to, or the consent of, any party to any
agreement or commitment, lease or license, to which Links is bound; (d)
result in the creation or imposition of any security interest, lien, or
other encumbrance upon any material property or assets of Links; or (e)
violate any material statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority to which Links is
bound or subject.
3.15 Full Disclosure. None of the representations and warranties made by
Links herein, or in any schedule, exhibit or certificate furnished or to be
furnished in connection with this Agreement by Links, or on its behalf,
contains or will contain any untrue statement of material fact.
3.16 Assets. Links has good and marketable title to all of its tangible
properties and such tangible properties are not subject to any material liens or
encumbrances.
3.17 Material Contracts and Obligations. Attached hereto on Schedule 3 is
a list of all agreements, contracts, indebtedness, liabilities and other
obligations to which Links is a party or by which it is bound that are
material to the conduct and operations of its business and properties, which
provide for payments to or by the Company in excess of $20,000; or which
involve transactions or proposed transactions between the Company and its
officers, directors, affiliates or any affiliate thereof. Copies of such
agreements and contracts and documentation evidencing such liabilities and
other obligations have been made available for inspection by Walnut and its
counsel. All of such agreements and contracts are valid, binding and in full
force and effect in all material respects, assuming due execution by the
other parties to such agreements and contracts.
3.18 Consents and Approvals. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority is required to be made or obtained by Links in connection with: (a)
the execution and delivery by Links of this Agreement; (b) the performance
by Links of its obligations under this Agreement; or (c) the consummation by
Links of the transactions contemplated under this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF WALNUT
Except as disclosed in Schedule 4 which is attached hereto and
incorporated herein by reference, Walnut represents and warrants to Links
that:
4.1 Organization. Walnut is a corporation duly organized, valid
existing, and in good standing under the laws of Nevada, has all necessary
corporate powers to own properties and to carry on business, and it is not now
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conducting any business, except to the extent to which the effecting of the
transaction contemplated by this Agreement constitutes doing business.
4.2 Capitalization. The authorized capital stock of Walnut consists of
100,000,000 shares of $.0001 par value Common Stock of which 1,250,000 shares of
Common Stock are currently issued and outstanding, and 5,000,000 shares of
$.0001 par value preferred stock of which no shares are issued and
outstanding. All of the issued and outstanding shares of Common Stock are
duly authorized, validly issued, fully paid and nonassessable. There are no
outstanding subscriptions, options, rights, warrants, convertible securities,
or other agreements or commitments obligating Walnut to issue or to transfer
from treasury any additional shares of its capital stock of any class.
Simultaneously with the Closing, Walnut will cancel 835,000 shares of Common
Stock which are currently outstanding.
4.3 Subsidiaries. Walnut does not presently have any subsidiaries or own
any interest in any other enterprise (whether or not such enterprise is a
corporation).
4.4 Directors and Officers. Schedule 4 contains the names and titles of
all directors and officers of Walnut as of the date of this Agreement.
4.5 Financial Statements. Walnut has delivered to Links its audited
balance sheet and statements of operations and cash flows as of and for the
period ended December 31, 1997 (the "Financial Statements"). The Financial
Statements are complete and correct in all material respects and have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods indicated. The Financial
Statements accurately set out and describe the financial condition and
operating results of the Company as of the date, and for the period,
indicated therein. As of the Closing, the total liabilities of Walnut shall
not exceed zero exept for the legal fees for this transaction.
4.6 Absence of Changes. Since December 31, 1997, except for changes in
the ordinary course of business which have not in the aggregate been
materially adverse, to the best of Walnut's knowledge, Walnut has not
experienced or suffered any material adverse change in its condition
(financial or otherwise), results of operations, properties, business or
prospects or waived or surrendered any claim or right of material value.
4.7 Absence of Undisclosed Liabilities. Neither Walnut nor any of its
properties or assets are subject to any liabilities or obligations of any
nature, whether absolute, accrued, contingent or otherwise and whether due
or to become due, that are not reflected in the financial statements
presented to Links.
4.8 Tax Returns. Within the times and in the manner prescribed by law,
Walnut has filed all federal, state and local tax returns required by law
and has paid all taxes, assessments and penalties due and payable.
4.9 Investigation of Financial Condition. Without in any manner reducing
or otherwise mitigating the representations contained herein, Links shall have
the opportunity to meet with Walnut's accountants and attorneys to discuss the
financial condition of Walnut. Walnut shall make available to Links all books
and records of Walnut.
4.10 Trade Names and Rights. Walnut does not use any trademark, service
mark, trade name, or copyright in its business, or own any trademarks,
trademark registrations or applications, trade names, service marks,
copyrights, copyright registrations or applications.
4.11 Compliance with Laws. To the best of Walnut's knowledge, Walnut has
complied with, and is not in violation of, applicable federal, state or local
statutes, laws and regulations (including, without limitation, any applicable
building, zoning, or other law, ordinance, or regulation) affecting its
properties or the operation of its business or with which it is otherwise
required to comply.
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4.12 Litigation. Walnut is not a party to any suit, action, arbitration,
or legal, administrative, or other proceeding, or governmental investigation
pending or, to the best knowledge of Walnut, threatened against or affecting
Walnut or its business, assets, or financial condition. Walnut is not in
default with respect to any order, writ, injunction, or decree of any
federal, state, local, or foreign court, department agency, or
instrumentality. Walnut is not engaged in any legal action to recover
moneys due to it.
4.13 No Pending Investigation. Walnut is not aware of any pending
investigations or legal proceedings by the SEC, any state securities regulatory
agency, or any other governmental agency regarding Walnut or any officers or
directors of Walnut or any shareholders or controlling persons of such
shareholders.
4.14 Authority. Walnut has full corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement. The Board of Directors of Walnut has taken all action required to
authorize the execution and delivery of this Agreement by or on behalf of
Walnut, the performance of the obligations of Walnut under this Agreement
and the consummation by Walnut of the transactions contemplated under this
Agreement. No other corporate proceedings on the part of Walnut are
necessary to authorize the execution and delivery of this Agreement by
Walnut in the performance of its obligations under this Agreement. This
Agreement is, and when executed and delivered by Walnut, will be a valid and
binding agreement of Walnut, enforceable against Walnut in accordance with
its terms, except as such enforceability may be limited by general principles
of equity, bankruptcy, insolvency, moratorium and similar laws relating to
creditors rights generally.
4.15 Ability to Carry Out Obligations. Neither the execution and delivery
of this Agreement, the performance by Walnut of its obligations under this
Agreement, nor the consummation of the transactions contemplated under this
Agreement will, to the best of Walnut's knowledge: (a) violate any provision of
Walnut's articles of incorporation or bylaws; (b) with or without the giving of
notice or the passage of time, or both, violate, or be in conflict with, or
constitute a default under, or cause or permit the termination or the
acceleration of the maturity of, any debt, contract, agreement or obligation
of Walnut, or require the payment of any prepayment or other penalties; (c)
require notice to, or the consent of, any party to any agreement or
commitment, lease or license, to which Walnut is bound; (d) result in the
creation or imposition of any security interest, lien or other encumbrance
upon any property or assets of Walnut; or (e) violate any statute or law or
any judgment, decree, order, regulation or rule of any court or governmental
authority to which Walnut is bound or subject.
4.16 Validity of Walnut Shares. The shares of Walnut Common Stock to be
delivered pursuant to this Agreement, when issued in accordance with the
provisions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable.
4.17 Full Disclosure. None of the representations and warranties made by
Walnut herein, or in any exhibit, certificate or memorandum furnished or to be
furnished by Walnut, or on its behalf, contains or will contain any untrue
statement of material fact, or omit any material fact the omission of which
would be misleading.
4.18 Assets. Walnut does not have any assets.
4.19 Material Contracts and Obligations. Walnut has no material contracts
to which it is a party or by which it is bound.
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4.20 Consents and Approvals. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority is required to be made or obtained by Walnut in connection with: (a)
the execution and delivery by Walnut of its obligations under this Agreement;
(b) the performance by Walnut of its obligations under this Agreement; or (c)
the consummation by Walnut of the transactions contemplated by this Agreement.
4.21 Real Property. Walnut does not own, use or claim any interest in
any real property, including without limitation any license, leasehold or
any similar interest in real property.
ARTICLE 5
COVENANTS
5.1 Investigative Rights. From the date of this Agreement until the
Closing Date, each party shall provide to the other party, and such other
party's counsels, accountants, auditors, and other authorized
representatives, full access during normal business hours and upon reasonable
advance written notice to all of each party's properties, books, contracts,
commitments, and records for the purpose of examining the same. Each party
shall furnish the other party with all information concerning each party's
affairs as the other party may reasonably request. If the transaction
contemplated hereby is not completed, all documents received by each party
and/or its attorneys and accountants, auditors or other authorized
representatives shall be returned to the other party who provided same
upon request. The parties hereto, their directors, employees, agents and
representatives shall not disclose any of the information described above
unless such information is already disclosed to the public, without the
prior written consent of the party to which the confidential information
pertains. Each party shall take such steps as are necessary to prevent
disclosure of such information to unauthorized third parties.
5.2 Conduct of Business. Prior to the Closing, Walnut and Links shall
each conduct its business in the normal course, and shall not sell, pledge, or
assign any assets, without the prior written approval of the other party,
except in the regular course of business or as contemplated in previously
disclosed contractual obligations. Neither Walnut nor Links shall amend its
Articles of Incorporation or Bylaws, declare dividends, redeem or sell stock
or other securities, incur additional or newly-funded liabilities, acquire or
dispose of fixed assets, change employment terms, enter into any material or
long-term contract, guarantee obligations of any third party, settle or
discharge any balance sheet receivable for less than its stated amount, pay
more on any liability than its stated amount, or enter into any other
transaction other than in the regular course of business except as otherwise
contemplated herein.
ARTICLE 6
CONDITIONS PRECEDENT TO WALNUT'S PERFORMANCE
6.1 Conditions. The obligations of Walnut hereunder shall be subject to
the satisfaction, at or before the Closing, of all the conditions set forth in
this Article 6. Walnut may waive any or all of these conditions in whole or
in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by Walnut of any other condition of or
any of Walnut's other rights or remedies, at law or in equity, if Links shall
be in default of any of their representations, warranties, or covenants under
this Agreement.
6.2 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by Links in this Agreement or in
any written statement that shall be delivered to Walnut by Links under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
7
<PAGE>
6.3 Performance. Links shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to
be performed or complied with by it, on or before the Closing Date.
6.4 Approval by Walnut Shareholders. The holders of 100% of the shares
of Walnut shall have approved the Merger.
6.5 Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Links on or before the Closing Date.
ARTICLE 7
CONDITIONS PRECEDENT TO LINKS' PERFORMANCE
7.1 Conditions. Links' obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in
this Article 7. Links may waive any or all of these conditions in whole or
in part without prior notice; provided, however, that no such waiver of a
condition shall constitute a waiver by Links of any other condition of or
any of Links' rights or remedies, at law or in equity, if Walnut shall be in
default of any of its representations, warranties, or covenants under this
Agreement.
7.2 Accuracy of Representations. Except as otherwise permitted by this
Agreement, all representations and warranties by Walnut in this Agreement or
in any written statement that shall be delivered to Links by Walnut under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
7.3 Performance. Walnut shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to
be performed or complied with by them, on or before the Closing Date.
7.4 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Walnut on or before the Closing Date.
7.5 Directors of Walnut. Effective on the Closing, Walnut shall have
fixed the size of its Board of Directors at three (3) persons, and such
Board of Directors shall include David Matus, A.W. Hogan and Gene Gregory.
The current Officers and Directors of Walnut shall have submitted their
resignations as the Officers and Directors of Walnut effective on the
Closing of this transaction.
7.6 Officers of Walnut. Effective on the Closing, Walnut shall have
elected the following new Officers of Walnut:
Josh Foss - President
Mike Handy - Secretary
7.7 Name Change. Walnut shall have changed its name to Entertech
Corp.
ARTICLE 8
CLOSING
8.1 Closing. The Closing of this transaction shall be held at the
offices of Krys Boyle Freedman Scott & Sawyer, P.C., 600 Seventeenth Street,
Suite 2700 South Tower, Denver, Colorado 80202, or such other place as shall
be mutually agreed upon, on such date as shall be mutually agreed upon by the
parties as soon as practicable after the shareholders of both corporations
have approved the merger.
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ARTICLE 9
MISCELLANEOUS
9.1 Captions and Headings. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall
in no way be deemed to define, limit, or add to the meaning of any provision
of this Agreement.
9.2 No Oral Change. This Agreement and any provision hereof, may
not be waived, changed, modified, or discharged orally, but it can be changed
by an agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, or discharge is sought.
9.3 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to
insist in any one or more cases upon the performance of any of the
provisions, covenants, or conditions of this Agreement or to exercise any
option herein contained shall not be construed as a waiver or relinquishment
for the future of any such provisions, covenants, or conditions, (ii) the
acceptance of performance of anything required by this Agreement to be
performed with knowledge of the breach or failure of a covenant, condition,
or provision hereof shall not be deemed a waiver of such breach or failure,
and (iii) no waiver by any party of one breach by another party shall be
construed as a waiver with respect to any other or subsequent breach.
9.4 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
9.5 Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
9.6 Choice of Law. This Agreement and its application shall be
governed by the laws of the State of Nevada, except to the extent its
conflict of laws provisions would apply the laws of another jurisdiction.
9.7 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
Walnut:
Walnut Capital, Inc.
5770 South Beech Court
Greenwood Village, Colorado 80121
with a copy to:
Jon D. Sawyer, Esq.
Krys Boyle Freedman & Sawyer, P.C.
600 Seventeenth Street, Suite 2700 South Tower
Denver, Colorado 80202
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Links:
Links, Ltd.
9815 South Parker Road, Suite 476
Parker, Colorado 80134
9.8 Binding Effect. This Agreement shall inure to and be binding
upon the heirs, executors, personal representatives, successors and assigns
of each of the parties to this Agreement.
9.9 Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other
and further documents and take such other and further actions as may be
necessary or convenient to effect the transaction described herein.
9.10 Brokers. The parties hereto represent and agree that no broker
has brought about the aforementioned transaction. Each of the parties hereto
shall indemnify and hold the other harmless against any and all claims,
losses, liabilities or expenses which may be asserted against it as a result
of its dealings, arrangements or agreements with any broker or person, except
as described in this paragraph.
9.11 Announcements. Walnut and Links will consult and cooperate
with each other as to the timing and content of any announcements of the
transactions contemplated hereby to the general public or to employees,
customers or suppliers.
9.12 Expenses. Links and Walnut agree that Links has deposited
$5,000 in the trust account of Krys Boyle Freedman Scott & Sawyer, P.C.
("Krys Boyle") and that these funds will be used to pay the legal fees of
Krys Boyle which is representing Walnut in this transaction. To the extent
Krys Boyle's fees are less than $5,000 the balance will be returned to Links.
Other than for these legal fees, Links and Walnut will pay their own expenses
reasonably incurred in connection with this transaction.
9.13 Exhibits. As of the execution hereof, the parties hereto have
provided each other with the Exhibits provided for herein above, including
any items referenced therein or required to be attached thereto. Any
material changes to the Exhibits shall be immediately disclosed to the
other party.
AGREED TO AND ACCEPTED as of the date first above written.
WALNUT CAPITAL, INC. LINKS, LTD.
By _______________________________ By _________________________________
Timothy J. Brasel, President David Matus, President
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SCHEDULE 1.4
DIRECTORS OF SURVIVING CORPORATION
David Matus
A. W. Hogan
Gene Gregory
<PAGE>
SCHEDULE 1.5
OFFICERS OF SURVIVING CORPORATION
Josh Foss - President
Mike Handy - Secretary
SCHEDULE 3
LINKS, LTD.
("Links")
3.4 The Officers and Directors of Links are as follows:
Name Position
---- --------
David Matus President and Director
George Beros Secretary and Director
Norm Schmidt Director
2.17 Material Contracts and Obligations.
<PAGE>
SCHEDULE 4
WALNUT CAPITAL, INC.
("Walnut")
4.2 Directors and Officers of Walnut:
Timothy J. Brasel - President, Secretary, Treasurer and
Director
James R. Sjoerdsma - Director
4.19 Material Contracts of Walnut
None
<PAGE>
JOINT VENTURE AGREEMENT
THIS AGREEMENT, made and entered into in the city of Denver, Colorado by
and between LINKS, LTD., hereinafter called "LINKS" wherever the context
hereof so requires or admits and; A. W. HOGAN hereinafter called "A.W. HOGAN"
wherever the context hereof so requires or admits and; _____________________
hereinafter called "_____________", wherever the context hereof so requires or
admits. Executed on this 1st day of SEPTEMBER 1, 1997.
WITNESSES
WHEREAS, LINKS has exclusive license rights, ideas, plans, concepts on a
Software Vending Center of a proprietary nature, and desires to market and
administer the sales of this proprietary product called "Kiosk", together with
_________________ upon the terms and conditions hereinafter.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, it is agreed as follows:
1. Plan of Marketing: The parties hereto will provide product sales
through the Software Centers located in specific approved retail sites
identified in Exhibit "A" hereto attached.
2. Administration: An office will be maintained in Denver, Colorado and
at all times will maintain computerized records of all business transactions
of the Joint Ventured products.
3. Earnings Dispersement: The parties hereto shall divide the profits
after expenses in equal percentages and will be dispersed when all product
sold have been paid for and within ten days from the date of the closing of
the calendar months business.
4. Equipment Charges: The total price for 10 Software Centers delivered
to the approved sites is Five hundred thousand dollars ($500,000.00). (The
final equipment to be delivered pursuant to this joint venture agreement may
change the price of each Individual Kiosk and will be determined by the final
Kiosk capability, i.e., CD Music Disk Duplication and vending capability.
However, the total dollar amount will not change but the amount of units
delivered may change based on the final price.)
5. Plan of Payment: The Principal Partner A.W. HOGAN to the Joint Venture
Agreement will pay $20,000 at the signing of this agreement. The Principal
Partner will sign a promissory note for $430,000 which is the balance owed
after the deposit. The note will be debt serviced during the first eighteen
months from the earnings in the amount of 80% of the profit after expenses
until the note is completely paid.
6. Tax Credit: LINKS will pass any tax credit that may be applicable
under IRC Section 179 to The Principal Partner (A.W. Hogan) to the Joint
Venture Agreement.
7. Location: The location for the Software Center will be at the
discretion of LINKS and will be considered a premium location by the standards
of previous beta testing that has been completed.
8. Construction: This agreement and all conditions hereto has been
executed in the state of Colorado and shall be construed pursuant to the laws
thereof.
9. Notices: Any notice which any of the parties hereto may desire to
serve upon any of the other parties hereto shall be in writing and shall be
conclusively deemed to have been received by the party to whom addressed if
<PAGE>
mailed, postage prepaid, United States Registered Mail, to the following
addresses:
__________________________________________________
__________________________________________________
__________________________________________________
10. Modification and Assignment: This agreement may not be amended,
modified or assigned, in whole or in part, except by an instrument in writing
executed by all of the parties hereto.
11. Successors in Interest: This agreement shall be binding upon and
inure to the benefit of the heirs, successors, representatives and assigns of
the parties hereto.
10. Counterparts: This agreement may be executed in multiple
counterparts, each of which shall be deemed a duplicate original.
11. Integration: This agreement represents the sole agreement of the
parties with respect to the subject matter hereof, and all other agreements,
written or oral, are hereby revoked
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and date first hereinbefore set forth
LINKS, LTD A.W. HOGAN
BY: /s/ D.William Thomas By: /s/ A.W. Hogan
