UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 30, 1999
COMPOSITE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
Florida 0-2455 65-0790758
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) file number) Identification No.)
7777 Fay Avenue, Suite 112, LaJolla, CA 92037
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 459-4843
JS BUSINESS WORKS, INC.
(Former name or former address, if changes since last report)
219 Almeria
West Palm Beach, FL 33401
Copy of Communications to:
Donald F. Mintmire
Mintmire & Associates
265 Sunrise Avenue
Suite 204
Palm Beach, FL 33480
(561) 832-5696
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ITEM 5. OTHER EVENTS.
On June 30, 1999, JS Business Works, Inc. (the "Company"), a Florida
corporation, and Composite Solutions, Inc. ("CSI"), a Nevada corporation, and
the individual holders of all of the outstanding capital stock of CSI (the
"Holders") consummated a reverse acquisition (the "Reorganization") pursuant to
a certain Share Exchange Agreement ("Agreement") of such date. Pursuant to the
Agreement, the Holders tendered to the Company all issued and outstanding
100,000 shares of common stock of CSI in exchange for 1,000,000 Shares of common
stock of the Company. The reorganization is being accounted for as a reverse
acquisition.
Simultaneously with the closing of the Reorganization, all of the then
officers and directors of the Company tendered their respective resignations in
accordance with the terms of the Agreement. Thomas Burke and Gilbert A. Hegemier
were elected to serve on the Board of Directors of the Company (the "Board").
The Board subsequently appointed Gilbert A. Hegemier as Chairman of the Board;
Thomas Burke as the President and Chief Executive Officer of the Company; Donald
Nicholson as the Vice President and Chief Operating Officer of the Company;
Eileen Beattie as the Treasurer of the Company; and, Herbert M. Brugh as the
Secretary of the Company.
The Company also announced it had amended its Articles of Incorporation
in order to change the name of the Company from JS Business Works, Inc. to
Composite Solutions, Inc. Immediately following the name change, the Company
effected a forward split of its common stock at the rate of 9.229876 to 1, for
holders of record on June 21, 1999, with distribution effective June 28, 1999.
Total issued and outstanding stock following the forward split and after
effecting the Share Exchange Agreement is 14,300,000.
Copies of the Agreement are filed herewith as Exhibit 2.1, and are
incorporated herein by reference. The foregoing descriptions are qualified in
their entirety by reference to the full text of such agreements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
(4) Financial statements of Composite Solutions, Inc., a Nevada
corporation, will be filed by amendment to this Form 8-K not later than sixty
(60) days from the filing of this report.
(d) Pro forma financial information.
(2) Pro forma financial information regarding the Reorganization will
be filed by amendment to this Form 8-K not later than sixty (60) days from the
filing of this report.
(c) Exhibits
Exhibit 2.1 Share Exchange Agreement between JS Business Works, Inc.
and Composite Solutions, Inc. dated June 17, 1999.
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Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned duly authorized.
COMPOSITE SOLUTIONS, INC.
(Registrant)
Date: June 30, 1999 By: /s/ Thomas Burke
----------------
Thomas Burke
President and Director
Exhibit 2.1
SHARE EXCHANGE AGREEMENT
THIS AGREEMENT & PLAN FOR MERGER ("Agreement") is made and executed by
and between JS BUSINESS WORKS, INC., a Florida corporation, (herein referred to
as "JSBW") and COMPOSITE SOLUTIONS, INC., a Nevada corporation, (herein referred
to as "CSI").
ARTICLE I
EXCHANGE OF STOCK
1.01. Conveyance of Stock of CSI: At the closing of this Agreement, CSI
shall cause to be duly endorsed and delivered to JSBW certificates for One
Hundred Percent of the issued and outstanding shares of stock of CSI as legally
held by all shareholders of CSI. Those assignments shall effect total, complete,
absolute and unconditional conveyance of those shares in a manner which will
entitle JSBW to receive those shares in its own name, free and clear of any
liens, encumbrances, assessments, restrictions, covenants or obligations
whatsoever.
1.02. Issuance of JSBW Stock: Upon that closing, JSBW shall issue and
deliver to the current CSI shareholders certificates for a total of ONE HUNDRED
THOUSAND (100,000) shares of JSBW common stock. Those shares shall be issued so
that for each one (1) share of stock of CSI which the transferring CSI
shareholder now holds and is transferring to JSBW, that respective CSI
shareholder shall receive Ten (10) shares of JSBW common stock. Upon delivery,
the shares of JSBW stock represented by those certificates shall be deemed as
fully paid and nonassessable and shall be free and clear of any liens,
encumbrances and assessments and, except only as specifically provided in
Section 2.02 below, shall be free from any restrictions, covenants or other
obligations whatsoever.
ARTICLE II
NATURE OF THE JSBW SHARES
2.01 Nature of Stock: The parties hereto acknowledge that the shares of
JSBW stock to be issued under Sections 1.02 have not been, and upon issuance
will not be, registered with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, (the "Securities Act") nor will that stock
be registered with the securities agency of any state of the United States.
Instead, that stock shall be issued under an appropriate exemption from
registration under the Securities Act of 1933 as well as from qualification
under the California Corporate Securities Law.
2.02 Legends to Appear on Certificates: Each certificate for those
newly issued shares of JSBW stock will be issued under an appropriate exemption
from Regulation D of the Rules & Regulations of the Securities & Exchange
Commission and ss.25102(f) of the California Corporate Securities law and will
contain the following legend, or its equivalent, stamped prominently upon that
certificate:
The shares of stock represented by this certificate have not be
registered under the Securities Act of 1933, as amended and may not be
sold or otherwise transferred unless a compliance with the registration
provisions of such Act has been made or unless availability of an
exemption from such registration provisions has been established, or
unless sold pursuant to Rule 144 under the Securities Act of 1933.
It is unlawful to consummate a sale or transfer of these securities, or
any interest therein, or to receive any consideration therefore,
without the prior written consent of the commissioner of corporations
of the state of California, except as permitted in the commissioner's
rules.
2.03. Acknowledgments Under Regulation D: At the time of closing of
this agreement and as a condition precedent to the delivery of the JSBW stock
certificates under Sections 1.02, each of those persons or entities to receive
those respective certificate will be required to acknowledgment and represent as
follows:
A. That person is acquiring those shares for investment purposes only and
is not acquiring or receiving that stock with a view or intent or for
the purpose of the sale or alienation thereof except as provided and
permitted by applicable state and federal securities laws, rules and
regulations and particularly the Securities Act and the rules and
regulations promulgated thereunder.
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B. That person understands that those shares are not being registered
under the Securities Act of 1933, as amended, or any state securities
law.
C. That shareholder acknowledges that those securities have not been
registered under the U.S. Securities Act of 1933, as amended, or under
the securities laws of Florida or any other state and that, as
unregistered securities, the Common Stock acquired hereunder cannot be
resold inside the United States except when Registered with the
Securities & Exchange Commission or done in compliance with the
provisions of Rule 144 of the Rules & Regulations of the United States
Securities & Exchange Commission.
Additionally, such shareholder will be required to make such acknowledgment as
JSBW management shall deem appropriate with respect to the securities laws,
rules and regulations of the state within which such shareholder resides and/or
such stock is offered and delivered.
ARTICLE III
REPRESENTATION AND WARRANTIES BY JSBW
To induce CSI to enter into this Agreement, JSBW hereby represents and
warrants unto CSI as follows:
3.01 Organization: JSBW is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Florida. It has the
corporate power and authority to carry on its business as now being conducted
and as contemplated to be conducted upon the acquisition of controlling interest
in CSI.
3.02 Minute Books: The minute book of JSBW contains complete and
accurate records of all meetings and other corporate actions of the shareholders
and the Board of Directors (including any committees of the Board) or any
committee created pursuant to any employee benefit plan of JSBW. JSBW's files
which accompany those books and records contain all proxies filed at any meeting
of shareholders and copies of notices and, when required, proof of service of
such notices as required by applicable corporate law and JSBW's own By-Laws.
3.03 Capitalization: The authorized capital stock of JSBW consists of
50,000,000 shares of a common stock having a par value of $0.0001 and 10,000,000
shares of preferred stock having a par value of $0.0001. Prior to closing and
after a forward split of the stock, there will be 21,196,410 shares of common
stock issued and outstanding. JSBW has no preferred shares issued or outstanding
nor has it ever authorized the issuance of any such shares. Neither does JSBW
have any shares held by its treasury.
3.04 The Shares: All of JSBW's issued and outstanding shares of capital
stock have been duly authorized, are validly issued and outstanding, are fully
paid and non-assessable, and no liability attached to the holders thereof. Those
Company shares are legally and equitably owned by the persons set forth on
JSBW's Shareholder List as those appear in the offices of Interwest Transfer
Co., Inc., 1981 East Murray Holiday Road, Suite 100, Salt Lake City, Utah 84117,
which is JSBW's duly appointed stock registrar and transfer agent. Except for
restrictions required by applicable securities laws, all such shares are free
and clear of any and all restrictions, liens, claims, covenants or encumbrances
or rights of third parties of any nature whatsoever. The disclosed holders of
those shares hold marketable title to those respective shares and have the
authority and capacity to assign those. There are no restrictions contained in
the Articles of Incorporation or By-Laws of JSBW, or elsewhere, upon the rights
of its shareholders to sell or otherwise alienate their shares.
3.05 No Warrants, Options or Rights: Since its incorporation, JSBW has
not issued, delivered, or agreed to issue or deliver to any person any shares of
stock (except as set forth in the foregoing paragraph 2 of this opinion), bonds
or other corporate securities (whether authorized but unissued or held in
treasury) or granted to any person or entity any options, warrants or other
rights calling for the issuance thereof.
3.06 Calls or Commitments regarding Shares: There are no existing
options, warrants, calls or commitments on the part of JSBW or its shareholders
of any character relating to JSBW's common or preferred shares. No voting
agreements or restrictions of any kind affect the rights of any of JSBW shares
or the holders thereof. Except as herein specifically provided, no consent or
approval is necessary for the assignment and transfer of those shares and the
conveyance thereof.
<PAGE>
3.07 Securities Laws: All issuances of JSBW's shares were made in full
compliance with applicable federal and state securities laws, codes, rules and
regulations and all required filings were timely filed with the Securities &
Exchange Commission and applicable state securities commissions and agencies.
JSBW has also filed with the Securities & Exchange Commission a Form 10-SB, on
July 14, 1998, which filing became effective on September 16, 1998. The comment
period on that filing was completed on December 14, 1998. All Form 10-Q Filings,
as well as the annual 10-K filings have been timely filed, contain information
which is true, complete and accurate in every material respect and contained no
material omissions.
3.08 Financial Statements: JSBW's financial statement audited by
Durland & Company, for the period commencing with JSBW's inception and ended
September 30, 1998, together with its unaudited financial statement extended
from that date to March 15, 1999, consisting of JSBW's balance sheets, operating
statements and statements of retained earnings and loss, have been previously
furnished. All such financial statements, together with the notes thereto, (i)
are in accordance with JSBW's true books and records; (ii) present fairly the
financial position of JSBW as of such dates, and its results of operations and
changes in financial position for the respective periods indicated; and (iii)
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis, except as might be specifically indicated
therein.
3.09 Company's Operations: The only business activities in which JSBW
has ever engaged are those which are fully disclosed in JSBW's Form 10-SB
filings with the U.S. Securities & Exchange Commission. Since its incorporation,
JSBW has not (i) incurred any obligation or liability (absolute or contingent)
except minor obligations and liabilities incurred in the ordinary course of
business fully disclosed in its financial statements and not material to the
future operation of any business; (ii) declared or made any payment or
distribution to shareholders, or purchased or redeemed any shares of stock;
(iii) has not mortgaged, pledged or subjected to lien or any encumbrance, any
asset (tangible or intangible); (iv) sold or transferred, or contracted to sell
or transfer, any tangible assets or cancelled any debts or claims, except in the
ordinary course of business and in any event not in an aggregate amount which is
material; (v) sold, assigned or transferred, or contracted to sell, assign or
transfer, any patents, trademarks, trade names, copyrights, licenses, trade
secrets or other intangible assets; (vi) waived any right of substantial value;
(vii) entered into any transaction not fully disclosed in JSBW's Form 10-SB
filings with the U.S. Securities & Exchange Commission; or (viii) agreed to any
of the forgoing.
3.10 Payables: JSBW has no accounts payable due to any person or entity
whatsoever.
3.11 Properties & Receivables: JSBW has no tangible personal property,
tangible assets, vehicles, supplies, machinery and equipment owned or held by
it, other than the cash assets disclosed on the attached balance sheet. JSBW has
no contracts with any party or entity whomsoever. JSBW has never entered into
any contracts, agreements or understandings in the past which it has, or may
have, breached. Neither does JSBW have any receivables due to it.
3.12 Employee Liability: JSBW has never had any employees. It has never
had any obligation to withhold any state or federal income taxes, FICA payments,
state unemployment taxes, or to make any filings therefor with any state agency.
It has never been subject to the workmen's compensation act of any state. It is
not subject by the operation of any employee benefit plan to the requirements of
the Employment Retirement Income Security Act of 1974, as amended.
3.13 Taxes: JSBW (i) has timely filed and duly filed all tax returns
and custom declarations required by any jurisdiction, domestic or foreign, to
which it or any of them is or has been subject; (ii) has paid in full all taxes
due and custom duties claimed to be due to each jurisdiction, and any interest
and penalties with respect thereto, and (iii) has adequately reflected as
liabilities on its books all taxes and custom duties that have accrued for any
period which are not yet due and payable. Said tax returns and custom
declarations for the years for which deficiencies could arise are true and
complete. The federal income tax returns of JSBW have never been audited by the
Internal Revenue Service. JSBW is not currently the subject of, nor has it been
notified that it will be the subject of, any tax audit by any governmental
agency. JSBW has not, and prior to the election of a new board will not have,
filed with the Internal Revenue Service (i) an election pursuant to Article 1372
of the Internal Revenue Code; or (ii) a consent pursuant to Article 341(f) of
the Internal Revenue Code. JSBW and/or its subsidiaries are not subject to the
filing of renegotiation reports with the United States Government as required by
the Renegotiation Act of 1951, as amended.
3.14 Agreements, Contracts and Commitments: JSBW is not a party to or
otherwise subject to any or written (i) collective bargaining agreement; (ii)
commitments for the employment of any officer or employee; (iii) profit sharing,
bonus, deferred compensation, stock option, severance pay, pension, retirement
or similar plans or agreements
<PAGE>
providing employee benefits; (iv) mortgages, indentures, notes or other
agreements, contracts commitments or instruments for or relating to any
borrowing of money on the deferred purchase price of property; (v) guarantees of
any obligations for the borrowing of money or otherwise, or any other agreement
of guarantee or indemnification, excluding endorsements made for collection in
the ordinary course of business; (vi) agreements, contracts or commitments for
the purchase or sale of any assets or for the grant of any preferential rights
to purchase any of its assets, properties or rights; (vii) agreements, contracts
or commitments or other instruments containing any covenant limiting the freedom
of JSBW to engage in any line of business in any area of the world or to compete
with any person or entity or which constitute an undue material burden on the
business, financial condition or properties of JSBW; (viii) continuing
agreements, contracts or commitments for future purchase of materials, supplies
or equipment, (ix) agreements, contracts or commitments relating to the issuance
of any securities or capital expenditures involving future payments; (x)
agreements, contracts or commitments relating to the acquisition of the assets
or a substantial part of the assets or capital stock of any business enterprise;
(xi) agreements, contracts or commitments with any officer, director, or
shareholder of JSBW or any "associate" or affiliate thereof as the term is
defined in Rule 405 of the Securities Act; (xii) continuing agreements,
contracts, or commitments for the future sale of products or rendering of
services by JSBW; or (xiii) agreements, contracts, commitments or other
instruments of any kind, type or nature. JSBW is not now, nor since its
inception has it ever become, a party to any franchise, contract, agreement,
lease or other document to which it is a party or by which its properties are
bound.
3.15 Absence of Other Liabilities: JSBW has no material liabilities or
obligations, either accrued, absolute, contingent or otherwise, including,
without limitation, liabilities for federal, state, local or foreign taxes or
custom duties. There are no reasonable grounds or any basis for the assertion
against JSBW of any claim of any nature or amount not fully reflected or
reserved against in the balance sheet of JSBW referred to above as the balance
sheet date.
3.16 Litigation-Claims: There are no claims, litigation, actions,
suits, investigations or proceedings pending or, to the knowledge of JSBW's
officers and directors, threatened against or affecting JSBW or its future
properties or business, at law or in equity, or before or by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign. Subject to compliance with the reporting requirements of the Securities
& Exchange Commission, a change in management of JSBW will not conflict with or
result in the breach or violation of any state or federal law, rule, regulation
or code or court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign order, decree, ruling or directive.
3.17 Insurance: JSBW presently has no insurance policies of any kind or
type.
3.18 Interest in JSBW's Assets: No person has any rights to any present
or future interest in any inventions, patents, copyrights, trademarks, trade
names, trade secrets, proprietary rights or processes or business lists used in
or pertaining to the business of JSBW.
3.19 Absence of Certain Payments: Neither JSBW nor any of its current
or past officers, agents, directors, employees or other persons associated with
or acting on behalf of any of it, has used any funds of JSBW for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activities, or made any direct or indirect unlawful payment to
government officials or employees (foreign or domestic) from corporate funds, or
established or maintained any unlawful or unreported funds.
3.20 Compliance with Laws: JSBW has complied with, and is not in
violation of any federal, state, local or foreign statute, law, code, rule or
regulation with respect to the conduct of its business, the ownership or
operation of its properties, or the sale or purchase of its securities or
disclosure to shareholders which violation might have a materially adverse
effect on the business, financial condition or earnings of JSBW.
3.21 Full Disclosure: As of the date of this Agreement, JSBW has, and
at the closing date will have, disclosed all events, conditions and facts which
either materially affect the business and/or prospects of JSBW or which could be
reasonably expect to affect CSI's decision to enter into and close this
Agreement, and JSBW's directors, officers, attorney, accountant and other agents
have not now, and will not have at the closing date, withheld from CSI any
knowledge of any such events, conditions and/or facts. None of the
representations and/or warranties made by JSBW, and no statement contained in
any exhibits, certificate or other instrument furnished or to be furnished by
JSBW pursuant hereto, contains any untrue statement of a material fact, or
omits, or will omit to state a material fact necessary in order to make
statements contained herein or therein not misleading.
<PAGE>
3.22. Accuracy at Closing: All representations and warranties of JSBW
herein made will be true and correct as of the closing date as though such
representations and warranties were then made in exactly the same language by
JSBW at that time.
ARTICLE IV
REPRESENTATION AND WARRANTIES BY CSI
To induce JSBW to execute this Plan and Agreement, CSI hereby
represents and warrants unto JSBW as follows:
4.01 Organization: CSI is a company duly organized, validly existing
and in good standing under the laws of the State of Nevada, has no restriction
on its corporate power and authority to own or lease its properties and to carry
on its business as contemplated in the further development and commercial
distribution of the CSI and related technologies.
4.02 Capitalization: CSI has issued and outstanding a total of 100,000
shares of its stock, all of which are duly authorized, validly issued, fully
paid and nonassessable, and no liability attaches to the holders thereof. Those
shares are held by those shareholders in such amounts as are set forth in the
attachment to this Agreement. There are no restrictions contained in the
Articles of Incorporation or By-Laws of CSI upon the rights of its shareholders
to sell or otherwise alienate their shares as herein contemplated. All of CSI's
issued and outstanding shares of capital stock have been duly authorized, are
validly issued and outstanding, are fully paid and non-assessable, and no
liability attached to the holders thereof. There are no other existing shares,
options, warrants or rights granted or authorized for CSI common or preferred
shares and there are no commitments to authorize or issue any options, warrants
or rights to such stock.
4.03 Minute Books: The minute book of CSI contains complete and
accurate records of meetings and other corporate actions of the shareholdings
and the Board of Directors.
4.04 Financial Statements: A copy of the unaudited financial statement
of CSI for the period ending January 31, 1999, consisting of CSI's balance
sheet, statement of income and shareholder's equity for the period then ended
have been previously furnished. All such financial statements, together with the
notes thereto, (i) are in accordance with CSI's true books and records; (ii)
present fairly the financial position of CSI as of such dates, and its results
of operations and changes in financial position for the respective periods
indicated; and (iii) have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, except as might be
specifically indicated therein.
4.05 Absence of Undisclosed Liabilities: CSI has no material
liabilities or obligations, either accrued, absolute, contingent or otherwise,
including, without limitation, liabilities for local or foreign taxes or custom
duties, except as reflected on the CSI balance sheet, including the notes
thereto. CSI does not know, nor has any reasonable grounds to know, of any basis
for the assertion against CSI of any claim of any nature or amount not fully
reflected or reserved against in the balance sheet of CSI referred to above as
the balance sheet date.
4.06 Litigation-Claims: There are no claims, litigation, actions,
suits, investigations or proceedings pending or, to the knowledge of the CSI,
threatened against or affecting CSI or its properties or business, at law or in
equity, or before or by any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which if determined adversely
would have a material adverse effect on the business or financial condition of
CSI, or the ability of CSI to carry on its business as contemplated by this
transaction.
4.07 Accuracy at Closing: All representations and warranties of CSI
herein made will be true and correct as of the closing date as though such
representations and warranties were then made in exactly the same language by
CSI. As of the closing date, CSI will have performed and complied with all
covenants and conditions required to be performed or complied with by it at or
before such time by this Agreement.
<PAGE>
ARTICLE V
ACTIONS PENDING CLOSING OR TERMINATION
5.01 Access to Information: From the date of execution hereof until
closing, each party shall provide to the other sufficient and reasonable access
to any and all records, books, documents, instruments, financial accounts and
records, bank accounts, customer accounts, tax records, title documents and all
other information whatsoever, necessary to verify the representations and
warranties herein made. If requested, a certificate of authenticity of these
documents will be provided by the secretary or president of the respective
parties.
5.02 Audits and Examinations: Each party shall have the right, at its
own expense, to make all additional audits and examinations of any records of
the other party as it deems proper, reasonable and necessary to determine or
verify the conditions of the other and the warranties and representations herein
made.
5.03 Due Diligence Period: JSBW shall have a period of up to 30 days
from the date of this Agreement to perform such examination of CSI as it deems
necessary to determine whether that entity is suitable for the business plans
contemplated by JSBW. Should it determine, at any time within that period, that
it does not choose to go forward with this agreement, then it may notify CSI in
writing of its decision to cancel this agreement, in which event this agreement
shall be null and void and neither party shall have any further liability or
obligation to the other, except for the provisions of Section 5.04 hereof.
5.04 Actions of JSBW: JSBW, either before or simultaneously with
closing, obtain the agreement of one or more of its shareholders to surrender
for cancellation a sufficient number of shares to reduce the number of shares
outstanding (not including those JSBW shares to be issued to the shareholders of
CSI under Section 1.02 of this Agreement) to not more than 14,300,000 shares.
5.05 Confidentiality: Each party to this Agreement, together with their
respective attorneys, accountants, consultants and representatives throughout
the negotiations, investigations, execution and closing of this Agreement, and
continuing indefinitely into the future, shall treat as confidential and will
disclose to no one other than those persons who are a party to this Agreement
all information received about the other party to this Agreement, and have not
and will not use or knowingly permit others to use any such information in a
manner detrimental to the other, provided, however, that the foregoing shall not
apply to information from the time that such information becomes a matter of
public knowledge or is printed in any publication for public distribution or
information which is provided to the Securities and Exchange Commission or to
the public as required by law as it relates to a publicly registered or traded
entity.
5.06 Conduct of Business: Except as specifically contemplated or
permitted in this Agreement, from and after the execution and delivery of this
Agreement and until the closing date or the termination of this Agreement,
whichever shall first occur, neither party will engage in any activities or
transactions which shall be outside the ordinary course of its business without
the prior written consent of the other, which consent shall not be unreasonably
withheld.
5.07 Affirmative Actions of Each Party: Pending closing of this
Agreement, each party will take all actions reasonable and necessary to render
accurate as of the closing date the respective representations and warranties of
each contained herein, and each shall refrain from any actions which would
render inaccurate as of the closing date any such representations and
warranties.
5.08 Failure of Either Party to Comply: Should either party determine
that the other party has failed to comply with any of the terms of this
Agreement, that party shall give notice to the other party in writing of that
failure. The responsible party shall then take immediate steps to rectify that
defect prior to closing of this Agreement, provided, however that party shall be
provided sufficient time (but not more than 10 days from the date of notice) to
do so. If such party fails to so comply within that time, the other party shall
have the election to either declare this agreement to be null and void or, in
the alternative, to bring an action to force such compliance or for damages.
Should either party proceed to close this Agreement without a specific written
acknowledgment of obligation to complete any remedial actions, all requirements
of the opposite party not then fulfilled shall be considered as waived.
<PAGE>
ARTICLE VI
FINANCING & CHANGE OF MANAGEMENT
6.01 Resignation of Current Management: At closing, all present
officers and directors of JSBW shall submit to CSI their resignation, effective
upon such closing.
6.02 Election of New Directors: Prior to such resignation, the present
board of directors of JSBW shall have elected Gilbert A. Hegemier and Thomas
Burke as successor directors.
ARTICLE VII
CLOSING OF PLAN
7.01 Date of Closing: The parties hereto agree that this Agreement
shall be closed at the earliest convenient date mutually agreeable to the
parties, but unless some other time is mutually agreed, this closing shall occur
at 10:00 A.M. local time on June 30, 1999.
7.02 Place of Closing: Unless otherwise mutually agreed, this Agreement
shall be closed at the Board Room at 7777 Fay Avenue, Suite 112, LaJolla, CA
92039.
7.03 Actions by CSI at Closing: At closing, CSI shall cause to deliver
to JSBW the following:
A. CSI share certificate for those 1,000,000 issued and outstanding shares
of the CSI stock as set forth in Sec. 1.02 hereof which certificates
shall be duly endorsed by the respective persons in whose name each
such certificate is issued.
B. Letters of representation by each of the CSI Shareholders who is to
receive JSBW stock under Section 1.02 hereof which letters shall
contain those acknowledgments representations required under 2.03.
7.04. Actions of JSBW at Closing: At closing, JSBW shall cause to be
delivered to CSI the following:
A. The legal opinion of Mintmire & Associates satisfactory to CSI, dated
as of the date of closing.
B. Duly executed stock certificates for a total of 1,000,000 shares of
JSBW common stock to CSI shareholders.
C. A certificate of a resolution duly electing those members to the board
of JSBW as required under Section 6.02.
D. The written resignations of each of the present officers and directors
of JSBW, as required under Section. 6.01 above.
E. All of the books, records and other documents and other assets of JSBW.
ARTICLE VIII
TAX FREE REORGANIZATION
8.01 Intent of Agreement: Both parties hereto stipulate and acknowledge
that it is their mutual intent that this transaction for the exchange of stock
between the parties be a tax free reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of l954.
8.02 Restatement: Should either party, prior to closing hereof, receive
a reliable opinion of a qualified tax counsel that, for any reason, that this
Agreement or the manner of closing contemplated herein will not result in a tax
free exchange as intended, then this Agreement will be renegotiated between the
parties to affect such tax result.
<PAGE>
ARTICLE IX
GENERAL
9.01 Cooperation: In addition to the actions and documents specifically
discussed herein, each party hereby agrees to execute, acknowledgment and
deliver any and all documents and do any and all other acts which are necessary,
expedient, reasonable and appropriate requested by the other party to more fully
carry out the full intents and purposes of this Agreement.
9.02 Headings: The headings of the several sections of this Agreement
are inserted for convenience of reference only and are not intended to affect
the meaning or interpretation of this Agreement.
9.03 Amendments and Modifications: This Agreement may be modified,
amended or canceled only by a document signed by each of the parties to this
Agreement.
9.04 Binding Effect: The various terms and provisions hereof shall
inure to the benefit of, and the same shall be binding upon, the successors and
assigns of the respective parties.
9.05 Facsimile Signatures: This Agreement may be executed by telephonic
facsimile signatures in which case such signatures shall be treated for all
purposes as original signatures until such time as original signature pages are
substituted.
WITNESS the execution hereof on the 17th day of June, 1999.
COMPOSITE SOLUTIONS, INC. JS BUSINESS WORKS, INC.
a Nevada Corporation a Florida corporation
By /s/ Gilbert A. Hegemier By /s/ Charles Adams
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Gilbert A. Hegemier, President President
Personal Representations
As a further inducement to Composite Solutions, Inc., a Nevada
corporation, to execute the foregoing document, and in consideration of that
execution, the undersigned hereby personally represents, warrants and assures to
Composite Solutions, Inc. that the representations and warranties made by
Composite Solutions, Inc., a Florida Corporation, formerly JS Business Works,
Inc. in the foregoing Agreement are, and at closing will be, true and accurate.
/s/ Charles Adams
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Charles Adams
