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
June 15, 1999
Date of Report
(Date of Earliest Event Reported)
WESTFORD ACQUISITION CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-24839 52-2102435
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
5969 Cattleridge Road, Suite 201
Sarasota, Florida 34232
(Address of principal executive offices)
941/377-7225
Registrant's telephone number
1504 R Street, N.W.
Washington, D.C. 20009
Former address
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization (the
"Exchange Agreement") dated April 14, 1999 between Baja Food
Concepts, Inc., a Florida corporation ("Baja Food"), its
shareholders, and Westford Acquisition Corporation, a Delaware
corporation (hereinafter referred to either as the "Registrant" or
the "Company"), all the outstanding shares of common stock of Baja
Food were exchanged for shares of common stock of the Registrant
(the "Exchange").
The Exchange Agreement was adopted by the unanimous consent of
the Board of Directors of the Registrant and approved by the
unanimous consent of the shareholders of the Registrant on April 14,
1999. The Exchange Agreement was adopted by the unanimous consent of
the Board of Directors of Baja Food and by the written unanimous
consent of the shareholders of Baja Food on April 14, 1999.
Prior to the Exchange, the Registrant had 5,000,000 shares of
common stock outstanding. Pursuant to the Exchange Agreement, the
Registrant redeemed and retired 4,650,000 shares of its outstanding
common stock and issued 4,300,000 shares of its common stock to the
holders of the outstanding common stock of Baja Food, consisting of
12,200,000 shares, on a pro rata basis, for an aggregate of
4,650,000 shares of common stock outstanding after effect of the
Exchange.
As a result of the Exchange, the former shareholders of Baja
Food hold 92.5% of the outstanding shares of the common stock of the
Registrant (without giving effect to exercise of any warrants held
by them). The sole source of consideration used by the shareholders
of Baja Food to acquire their respective interest in the Registrant
was the exchange of their shares held in Baja Food.
On the effective date of the Exchange, the officer and
director of Westford Acquisition Corporation resigned and new
officers of the Registrant were appointed. See "Management" below.
A copy of the Exchange Agreement is filed as an exhibit to
this Form 8-K and is incorporated in its entirety herein. The
foregoing description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of the Registrant's current directors and executive
officers and those persons or entities who beneficially own more
than 5% of the Registrant's common stock (giving effect to the
exercise of the warrants held by each such person or entity):
Amount of Common Percent of
Stock Beneficially Common Stock
Name Owned (1) Beneficially Owned(2)
Thomas N. Burnham (3) 12,800,000 97.3%
Director, President
5125 Willow Leaf Drive
Sarasota, Florida 34232
Pamela H. Burnham (4) 0 0%
Director, Vice President, Treasurer
5125 Willow Leaf Drive
Sarasota, Florida 34232
Keith Pratt, Director (5) 0 0%
4075 Joanne Court
Ann Arbor, Michigan 48103
All directors and 12,800,000 97.3%
executive officers as
a group (5 persons)
Texas International Group,
Inc. (6) 3,360,000 46.9%
5969 Cattleridge Boulevard
Suite 201
Sarasota, Florida 34232
Mosby Investments, Inc.(7) 4,720,000 62.1%
5969 Cattleridge Boulevard
Suite 201
Sarasota, Florida 34232
(1) Based upon 4,650,000 outstanding shares of common stock
and assumes exercise of warrants held by named shareholder.
(2) Assumes exercise of warrants, options or other rights to
purchase securities held by the named shareholder exercisable
within six months of the date hereof.
(3) Includes 4,300,000 shares of common stock of which
Thomas H. Burnham owns 1,720,000 shares directly and may
be deemed to be the beneficial owner of the 1,720,000
shares owned by Mosby Investments, Inc. and the 860,000
shares owned by Texas International Group, Inc. over
which he has voting control. Also includes warrants to
purchase 8,500,000 shares of common stock at an exercise
price of $.0001 per share exercisable for a exercise
period of twelve months from the date of grant thereof
of which Thomas H. Burnham owns 3,000,000 directly and
may be deemed to the beneficial owner of the 3,000,000
owned by Mosby Investments, Inc. and the 2,500,000 owned
by Texas International Group, Inc. over which he has
voting control.
(4) Pamela Burnham is the spouse of Thomas Burnham.
(5) South Beach Concepts, Plc is a public company in the
United Kingdom whose shares are traded on the
Alternative Investment Market of the London Stock
Exchange. Until April, 1999, Thomas Burnham was
Chairman of the Board, managing director and a
shareholder of South Beach Concepts, Plc.
(6) Includes 860,000 shares of common stock and warrants to
purchase 2,500,000 shares of common stock over which
Thomas H. Burnham has voting control and may be deemed
to be the beneficial owner.
(7) Includes 1,720,000 shares of common stock and warrants
to purchase 3,000,000 shares of common stock of which
Thomas H. Burnham may be deemed to be the beneficial owner.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Exchange
Agreement was negotiated between the Registrant and Baja Food.
Prior to the Exchange, no relationship existed between any officer
or director of the Registrant or any officer, director or
shareholder of Baja Food.
In evaluating Baja Food as a candidate for the proposed
Exchange, the Registrant used criteria such as value of the assets
of the Registrant and value of the assets of Baja Food, the business
operations and the business potential of Baja Food, and the benefit
to the Registrant of such Exchange. The Registrant determined that
the consideration for the Exchange was reasonable.
(b) The Registrant intends to develop the fast food themed
restaurant business and to begin franchise operations of its fast
food restaurant concept.
BUSINESS
Westford Acquisition Corporation was formed to provide a
method for a foreign or domestic private company to become a
reporting company whose securities would be qualified for trading in
the United States secondary market. Westford Acquisition
Corporation has no operations, revenues or liabilities.
Baja Food Concepts, Inc. is an existing company with one
operating themed fast food restaurant, "Cisco & Pancho", located in
Sarasota, Florida. Cisco & Pancho specializes in gourmet burritos,
tacos and empanadas served with homemade salsa. The store colors
and design have Mexican accents. During peak hours, a Cisco &
Pancho restaurant requires approximately three to five employees.
The Cisco & Pancho restaurant opened in February, 1999, and has not
yet had significant operations.
Management anticipates that it will open additional Cisco &
Pancho restaurants and will begin franchise development of Cisco &
Pancho restaurants in 1999.
Management of Baja Food are also officers, directors and
shareholders of South Beach Concepts, Inc., a theme-based fast food
restaurant and franchise company. Westford Acquisition has entered
into a letter of intent with South Beach Concepts, Inc. to merge
Westford Acquisition into South Beach Concepts. There is no
assurance that such merger will occur.
South Beach Concepts. Through its subsidiaries, South Beach
Concepts develops, operates, and franchises take-out and eat-in
restaurants with specific and consistent themes, logos, and menus
(i.e. "chains") and roasts, produces and markets coffee beans and
teas. It has two theme restaurant chains, Pizza World Gourmet Pizza
and South Beach Cafe.
South Beach Cafe. South Beach Cafe is a casual sit-down,
eat-in cafe serving premium coffee and espresso drinks, fresh fruit
smoothies and vegetable drinks, bagels, cream cheese spreads,
croissants, gourmet sandwiches, frozen yogurt, soups, salads, fresh
pastries and other baked goods. Through its subsidiary, South Beach
Concepts has three South Beach Cafe company stores and has entered
into non-binding agreements for 11 South Beach Cafe franchises.
Pizza World Gourmet Pizza. Pizza World offers traditional and
gourmet pizzas for carry-out, delivery and, in certain stores,
sit-down capacity. The specialty gourmet pizza menu ranges from
the "Bacon Cheeseburger American" with a mustard glaze to the
"Grecian Gourmet" combining feta cheese, black olives, spinach,
green peppers and tomatoes on a bed of mozzarella with red sauce.
Through its subsidiaries, South Beach Concepts directly owns and
operates three Pizza World Gourmet Pizza stores and has 14 operating
franchised Pizza World Gourmet Pizza stores.
Cafe Society Coffee Company. The Cafe Society Coffee Company
is a wholly-owned subsidiary of South Beach Concepts which roasts
and packages high-end specialty coffees which are sold and
distributed under its own label and private labels. The Cafe
Society Coffee Company offers a full line of specialty coffees
including varietals, blends, flavored, organic and naturally
flavored coffees as well as specialty teas, gourmet syrups and hot
chocolates.
Westford will file a Form 8-K if the transaction with South
Beach Concepts, Inc. is effected.
PROPERTY
Baja Food Concepts maintains its administrative offices
at 5969 Cattleridge Boulevard, Suite 201, Sarasota, Florida 34232
under a monthly lease of approximately $4,880 per month for
approximately 4,000 square feet.
MANAGEMENT
Name Age Title
Thomas N. Burnham 52 President, Director
Pamela H. Burnham 52 Vice President, Director
Keith Pratt 56 Director
THOMAS N. BURNHAM is the President, sole director and
controlling shareholder of Baja Food Concepts and, effective with
the Exchange, is a director and President of the Registrant. Mr.
Burnham has served as the President and Director of South Beach
Concepts, Inc. since its inception in July 1998, and serves as an
officer and director of its subsidiaries. From April, 1996 until
April, 1999, Mr. Burnham was Chairman and Chief Executive Officer of
South Beach Cafe, Plc (London, England) and from November, 1996 to
December, 1998, he was a director of South Beach Cafe-London, Ltd.
Mr. Burnham also serves a director, president and has voting control
of the following entities: Burnham International Group, Inc.,
Sarasota Investment Group, Inc., Dallas Investment Group, Inc.,
International Restaurant Concepts, Inc., London Ventures, LC, Mosby
Investments, Inc., Texas International Group, Inc., The Northgate
Group, L.C., 100 Degrees East, Inc., Thomas N. Burnham Associates,
Inc., and International Franchise Group, Inc.
From October, 1993 to August, 1994, Mr. Burnham was president
and director of Clucker's International Franchise Corporation,
Miami, Florida; from October, 1990 to May, 1993, Mr. Burnham was
president and director of Ho-Lee-Chow, Inc., Ann Arbor, Michigan.
Mr. Burnham served in the following capacities for Domino's Pizza
International, Inc.: Executive Vice President, December, 1989 to
May, 1990; Vice President, Administration and Development, May, 1989
to May, 1990; Director, June, 1986 to May, 1990; and General Counsel
from September, 1986 to May, 1990. From September, 1984 to
September, 1986, Mr. Burnham served as outside General Counsel for
Domino's Pizza International, Inc. Mr. Burnham has been the
principal of the law firm of Thomas N. Burnham International Law
Offices from January 1990 to the present. Mr. Burnham received his
Bachelor of Business Administration degree in 1969, a Masters in
Business Administration in 1970 and a Juris Doctor in 1973 from the
University of Michigan, Ann Arbor, Michigan. Mr. Burnham currently
serves as Program Director of Franchising and Entrepreneurism at the
University of Dallas and is the founder and director of the
Institute of International Enterpreneurship.
PAMELA H. BURNHAM has served as Vice President, Secretary and
Treasurer of Baja Foods and, effective with the Exchange, is a
director of the Registrant. Ms. Burnham has served as Vice
President and Treasurer and a director of South Beach Concepts, Inc.
since its inception in July, 1998 and serves as an officer of
several of its subsidiaries. From April, 1996 to April, 1999, Ms.
Burnham served as a director of South Beach Cafe, Plc (London,
England). She also served as a director for South Beach
Cafe-London., Ltd. from November, 1996 to December, 1998. Ms.
Burnham also serves a director and vice president of the following
entities: Burnham International Group, Inc., Sarasota Investment
Group, Inc., Dallas Investment Group, Inc., International Restaurant
Concepts, Inc., Mosby Investments, Inc., Texas International Group,
Inc., 100 Degrees East, Inc., Thomas N. Burnham Associates, Inc.,
and International Franchise Group, Inc.
From October, 1993 to August, 1994, Ms. Burnham was a
Franchise Sales Consultant for Clucker's International Franchise
Corporation, Miami, Florida. From February, 1991 through May, 1993,
she was Vice President of Ho-Lee-Chow, Inc., Ann Arbor, Michigan.
Ms. Burnham was President of International Pizza Ventures, Inc.
Toronto, Canada from October, 1989 through February, 1991. She
served as Director of Real Estate for Domino's Pizza International,
Inc. from August, 1989 to May, 1990. Ms. Burnham attended Crowan
College in North Carolina from 1965 to 1967 and University of
California at Los Angeles in 1979.
KEITH PRATT, effective with the Exchange, serves as a director
of the Registrant. Mr. Pratt was one of the founders of South
Beach Cafe, Inc. and has served as a consultant to it in the areas
of restaurant and office site selection, lease negotiation, store
design, software and implementation since its inception. From 1976
to present, Mr. Pratt has been a commercial real estate broker with
Gary Lillie & Associates, Inc. located in Ann Arbor, Michigan. Mr.
Pratt also serves as the president of Cafe Development Group,
founded in 1996 a consulting firm that assists in restaurant site
selection, design, equipping and staffing. Mr. Pratt received his
Bachelor of Science in Engineering from the University of Michigan
in 1969.
RELATED TRANSACTIONS
Thomas N. Burnham, President of the Company, is the principal
of the law firm of Thomas N. Burnham International Law Offices and
performs legal services for Baja Food.
RISK FACTORS
Westford Acquisition Corporation has no operations and Baja
Food Concepts has limited operations and history. Effective with
the Exchange, Baja Food Concepts has become a wholly-owned
subsidiary of Westford Acquisition. Westford Acquisition
Corporation and Baja Food Concepts are referred to collectively as
the "Company".
OPERATING LOSS. Revenues from operations to date have not
been sufficient to cover the costs of such operations and Baja Food
borrowed funds to maintain its operations. The Company's ability to
develop operations is dependent upon its ability to sell its
franchise stores and to operate its company store at a profit. If
the Company is unable to sell sufficient franchise stores or to
operate its company store at a sufficiently profitable level, the
Company will need to raise additional capital through the placement
of its securities or from other debt or equity financing. If the
Company is not able to raise such financing or to obtain alternative
sources of funding, management will be required to curtail
operations and there is no assurance that the Company will be able
to continue to operate.
LIMITED OPERATING HISTORY. The Company has insignificant
operating histories and to date has not been profitable. The
Company's operations are subject to all the risks inherent in the
establishment of a relatively new business enterprise, including the
lack of significant operating history. There can be no assurance
that future operations will be profitable. The Company's operations
are in part dependent on the establishment of, and profitability of
new restaurants, which are subject to all of the risks inherent in a
new business venture with limited operating history. Revenues and
profits of the Company, if any, will depend upon various factors,
including market acceptance of the Company's concepts,
attractiveness and quality of the menu, restaurant service, location
of the restaurants and general economic conditions. The growth of
the Company will depend on a number of factors, including the
availability of suitable locations, the negotiation of favorable
lease or site acquisition terms, the identification, training and
retention of skilled management personnel and franchisees, the
availability of adequate capital, general economic and business
conditions, and others, some of which are beyond the control of the
Company. There is no assurance that the Company will achieve its
expansion goals and the failure to achieve such goals would have an
adverse impact on the Company.
DEPENDENCE ON FRANCHISEES. The Company anticipates that it
will realize a portion of its revenues from franchise fees,
including the initial franchise fees and continuing royalty
payments. If franchisees encounter business or operational
difficulties, revenues from royalties and supplies sales would be
adversely affected. Such difficulties would also negatively impact
the Company's ability to sell new franchises. Consequently, the
Company's financial prospects are significantly related to the
success of its franchised stores, over which it has limited direct
operational control. There can be no assurance that the Company
will be able to successfully attract new franchisees or that
franchisees, if any, will be able to successfully operate stores.
FRANCHISE COMPETITION. The competition to sell franchises
is very intense and the Company will have to compete against many
well-established, better-known and better financed companies selling
franchises. Potential franchisees will compare the costs and
benefits offered by the Company's franchise program against those
offered by other franchise companies which may have been in business
longer and shown consistent positive economic returns. The market
for selling the franchises is limited and the Company may suffer
adverse consequences from its possible inability to attract new
franchisees.
FRANCHISE REGULATIONS. The Company will be subject to
federal regulation and certain state laws which govern the offer and
sale of franchises. Many state franchise laws impose substantive
requirements on franchise agreements, including limitations on
non-competition provisions and termination or non-renewal of a
franchise. Some states require that certain franchise offering
materials be registered before franchises can be offered or sold in
that state. The failure to obtain or retain food licenses or
approvals to sell franchises could adversely affect the Company's
and its franchisees', if any, results of operations. The future
enactment, adoption or amendment of laws or regulations, such as
establishing basic franchisee rights, increasing the minimum wage or
other costs associated with employees, could adversely affect the
Companys results of operations. Federal and state franchise laws
provide franchisees, either singly or as a group, the right to bring
an action against the franchisor in regard to actions arising from
the franchise agreement, the franchise operations and other matters.
EFFECTIVENESS OF FRANCHISE ADVERTISING. The success of the
Company will be substantially dependent on the effectiveness of the
advertising programs and the overall success of franchises. The
Company anticipates it will advertise in franchise and business
opportunity publications and exhibits at franchise fairs worldwide.
However, future success in attracting franchisees will be dependent
not only on the Company's promotional program but also on the
success of its franchisees' existing restaurants that cannot be
guaranteed.
COMPETITION. The competition in the fast food and pizza
industry is intense. There are numerous well-established
competitors, including national, regional and local chains,
possessing substantially greater financial, marketing, personnel and
other resources than the Company. The competition includes such
well-known chains as McDonald's, Burger King, Wendy's, Domino's
Pizza, Pizza Hut, Blimpies, and numerous others. The Company will
also face competition in its dual-concept stores from such large
well-known dual-concept stores as Kentucky Fried Chicken and Taco
Bell.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS SHARE VALUE.
The Certificate of Incorporation of the Company authorizes the
issuance of a maximum of 100,000,000 shares of common stock and
20,000,000 shares of preferred stock. The future issuance of all or
part of the remaining authorized common stock may result in
substantial dilution in the percentage of the Company's common stock
held by the Company's then existing shareholders. Moreover, any
common stock issued in the future may be valued on an arbitrary
basis by the Company. The issuance of the Company's shares for
future services or acquisitions or other corporate actions may have
the effect of diluting the value of the shares held by investors,
and might have an adverse effect on any trading market, should a
trading market develop for the Company's common stock.
POTENTIAL ADVERSE EFFECTS OF AUTHORIZATION OF PREFERRED STOCK.
The Company may, without further action or vote by shareholders of
the Company, designate and issue shares of preferred stock. The
terms of any series of preferred stock, which may include priority
claims to assets and dividends and special voting rights, could
adversely affect the rights of holders of the common stock and
thereby reduce the value of the common stock. The designation and
issuance of preferred stock favorable to current management or
shareholders could make the possible takeover of the Company or the
removal of management of the Company more difficult and discourage
hostile bids for control of the Company which bids might have
provided shareholders with premiums for their shares.
NO CURRENT TRADING MARKET FOR THE COMPANY'S SECURITIES. There
is currently no established public trading market for the securities
of the Company. No assurance can be given that an active trading
market in the Company's securities will develop or, if developed,
that it will be sustained.
PENNY STOCK REGULATION. Upon commencement of trading in the
Company's stock, if such occurs (of which there can be no assurance)
the Company's common stock may be deemed a penny stock. Penny
stocks generally are equity securities with a price of less than
$5.00 per share other than securities registered on certain national
securities exchanges or quoted on the Nasdaq Stock Market, provided
that current price and volume information with respect to
transactions in such securities is provided by the exchange or
system. The Company's securities may be subject to "penny stock
rules" that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000
or $300,000 together with their spouse). For transactions covered
by these rules, the broker-dealer must make a special suitability
determination for the purchase of such securities and have received
the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the "penny stock rules" require the delivery,
prior to the transaction, of a disclosure schedule prescribed by the
Commission relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer
and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing
recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of
broker-dealers to sell the Company's securities. The foregoing
required penny stock restrictions will not apply to the Company's
securities if such securities maintain a market price of $5.00 or
greater. There can be no assurance that the price of the Company's
securities will reach or maintain such a level.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000. Many existing
computer programs use only two digits to identify a year in such
program's date field. These programs were designed and developed
without consideration of the impact of the change in the century for
which four digits will be required to accurately report the date.
If not corrected, many computer applications could fail or create
erroneous results by or following the year 2000 (the "Year 2000
problem"). Many of the computer programs containing such date
language problems have been corrected by the companies or
governments operating such programs. The Company's operations are
dependent upon the timely delivery of supplies which deliveries may
be delayed or canceled because of such Year 2000 problem computer
failures. The Company does not know what steps, if any, have been
taken by any of its suppliers. The Company's operations will be
severally curtailed if one or more of its suppliers were to suffer
Year 2000 problems. Furthermore, it is impossible to predict if the
basic utilities serving the company and franchise stores will
continue uninterrupted. A prolonged disruption in the service of
any utility will prohibit the stores from operating.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
As a result of the Exchange, the accountant to the Registrant
was replaced with the accountant for Baja Food Concepts. The
financial statements for the Registrant since inception and prior to
the change in such accountants have not contained any adverse
opinion or disclaimer or were modified as to any uncertainty, audit
scope or accounting principles and there were not any disagreements
or "reportable events" with such former accountant.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the Exchange Agreement, the sole director and
officer of the Registrant resigned and the officers and directors of
Baja Food Concepts were designated to serve for the Registrant until
the next annual meeting of stockholders and until their respective
successors are elected and qualified or until their prior
resignation or termination.
ITEM 7. FINANCIAL STATEMENTS
The consolidated financial statements for the fiscal year
ended December 31, 1998, for Baja Food Concepts, Inc. prepared by
the independent public accounting firm of McManus & Co., P.C. are
filed herewith.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
Not applicable.
INDEPENDENT ACCOUNTANT'S REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF BAJA FOOD CONCEPTS, INC.:
We have audited the accompanying balance sheet of Baja Food
Concepts, Inc. as of December 31, 1998 and the related statements of
operations, stockholders' equity, and cash flows for the period
March 4, 1998 (Date of Inception) to December 31, 1998. These
financial statements are the responsibility of Baja Food Concepts,
Inc.'s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, based on our audit, the financial statements
referred to above present fairly, in all material respects, the
financial position of Baja Food Concepts, Inc. as of December 31,
1998 and the results of their operations, stockholders' equity, and
their cash flows for the period March 4, 1998 (Date of Inception) to
December 31, 1998 are in conformity with generally accepted
accounting principles.
MCMANUS & CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
MORRIS PLAINS, NEW JERSEY
April 26, 1999
BAJA FOOD CONCEPTS, INC. BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Current Assets:
Cash $ 681
Total Current Assets 681
Total Assets $ 681
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes Payable (Note 2) $ 15,100
Total Liabilities 15,100
Stockholders' Equity:
Common Stock - $.001 stated value
Authorized 20,000,000 shares
Issued and Outstanding 260,000 shares 260
Paid In Capital 12,740
Retained Earnings (27,419)
Total Stockholders' Equity (14,419)
Total Liabilities and
Stockholders' Equity $ 681
BAJA FOOD CONCEPTS, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD MARCH 4, 1998 (Date of Inception)
TO DECEMBER 31, 1998
Revenues: $ ---
Expenses:
Consulting Fees 6,614
Start-up Costs 19,200
Office Expense 119
Professional Fees 1,486
________
Total Expenses $ 27,419
Net Loss $ (27,419)
__________
Net Earnings/(Loss) Per Share:
Net Earnings/(Loss) Per Share:
Primary (Note 1) $ (0.158)
Diluted (Note 1) (0.158)
Weighted Average Number of
Common Shares Outstanding 173,333
See accompanying accountant's report and notes to the financial statements.
BAJA FOOD CONCEPTS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD MARCH 4, 1998 (Date of Inception) TO DECEMBER 31, 1998
Total
March 4, 1998 Additional Stock-
(date of Inception) Common Paid In Retained holders'
to December 31, 1998 Stock Capital Earnings Equity
January 1, 1998 $ --- $ --- $ --- $ ---
Capital Investment 260 12,740 --- 13,000
Net Loss 1998 --- --- (27,419) (17,419)
_____ ______ ________ _______
Total Stockholders'
Equity As Of
December 31, 1998 $ 260 $12,740 $(27,419) $(14,419)
BAJA FOOD CONCEPTS, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD MARCH 4, 1998 (Date of Inception)
TO DECEMBER 31, 1998
Cash Flow from Operating Activities:
Net Income / (Loss) $ (27,419)
Adjustments To Reconcile Net Income to
Net Cash Provided / (Used) in
Operating Activities: --
_____________
Net Cash Provided / (Used) by Operating
Activities: (27,419)
Cash Flow from Financing Activities:
Issuance of Common Stock - net 13,000
Increase in Notes Payable 15,100
___________
Net Cash Provided/ (Used) by
Financing Activities 28,100
Net Increase/ (Decrease) in Cash 681
Cash at the Beginning of the Period ---
-----------
Cash at the End of the Period $ 681
BAJA FOOD CONCEPTS, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998
NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:
Baja Food Concepts, Inc. (the Company) was incorporated as a
Florida corporation on March 4, 1998. The Company developed a
restaurant concept that features Baja style burritos, tacos,
and empanadas all served with freshly made gourmet salsas.
There is currently one operating store located in Sarasota,
Florida. The Company intends to operate, franchise, and service
restaurants with consistent themes, logos and signs, menus,
and food quality.
A) Income Taxes
The Company adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes", which requires a change from the deferral method to the
assets and liability method of accounting for income taxes.
Timing differences do not currently exist between book income
and income for tax purposes.
B) Net Earnings Per Common Share
Net earnings per common share shown as both primary and fully
diluted. Primary earnings per common share are computed by
dividing net earnings less any preferred stock dividends (if
applicable) by the weighted average number of shares of
common stock outstanding. Fully diluted earnings per
common share are computed by dividing net income less any
preferred stock dividends (if applicable) by the weighted average
number of shares of common stock outstanding plus any
dilutive common stock equivalents.
C) Organization Costs
The Company adopted the provisions of the AICPA's Statement of
Position (SOP) No. 98-5 "Reporting on the Costs of Start-Up
Activities", which requires that all costs related to a
companies start-up activities should now be expensed during the
period incurred rather than capitalized and amortized over a
period of time. As a result, all start-up costs have been
expensed in the current period.
D) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ
from those estimates.
NOTE 2 - RELATED PARTY TRANSACTIONS:
During 1998, T. Burnham, president, advanced the Company
$15,100. This advance is considered payable upon demand.
NOTE 3 - INCOME TAXES:
As discussed in Note 1, the Company adopted the provisions of
Statement of Financial Standards (SFAS) No. 109 "Accounting for
Income Taxes". Implementation of SFAS 109 did not have a
material cumulative effect on prior periods, nor did it
result in a change in the current year's provision.
A) The effective tax rate for the Company is reconcilable to
statutory tax rates as follows:
December 31, 1998
%
________________
U.S. Federal Statutory Tax Rate 15
Valuation allowance for deferred tax assets
allocated to income tax expense. 15
Effective Tax Rate - 0 -
NOTE 4 - SUBSEQUENT EVENTS:
Subsequent to December 31, 1998, the Company has entered into a
reorganization agreement with Westford Acquisition Corporation.
EXHIBITS
1.1 Agreement and Plan of Reorganization among Westford Acquisition
Corporation, Baja Food Concepts, Inc. and the shareholders of Baja
Food Concepts, Inc. dated April 14, 1999.
16.1 Accountant's Letter
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BAJA FOOD CONCEPTS, INC.
By /s/ Thomas N. Burnham
Chief Executive Officer and Director
Date: June 17, 1999
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") among
WESTFORD ACQUISITION CORPORATION, a Delaware corporation
("Westford"), BAJA FOOD CONCEPTS, INC., a Florida corporation
("Baja") and the persons listed in Exhibit A hereof (collectively
the "Shareholders"), being the owners of record of all of the issued
and outstanding stock of Baja.
Whereas, Westford wishes to acquire and the Shareholders wish
to transfer all of the issued and outstanding securities of Baja in
a transaction intended to qualify as a reorganization within the
meaning of Section368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended;
Now, therefore, Westford, Baja, and the Shareholders adopt
this plan of reorganization and agree as follows:
1. EXCHANGE OF STOCK
1.1 Number of Shares. The Shareholders agree to transfer
to Westford at the Closing (defined below) the number of shares of
common stock of Baja, no par value per share, shown opposite their
names in Exhibit A, in exchange for an aggregate of 4,300,000 shares
of voting common stock of Westford, $.0001 par value per share.
1.2 Exchange of Certificates. Each holder of an
outstanding certificate or certificates theretofore representing
shares of Baja common stock shall surrender such certificate(s) for
cancellation to Westford, and shall receive in exchange a
certificate or certificates representing the number of full shares
of Westford common stock into which the shares of Baja common stock
represented by the certificate or certificates so surrendered shall
have been converted. The transfer of Baja shares by the
Shareholders shall be effected by the delivery to Westford at the
Closing of certificates representing the transferred shares endorsed
in blank or accompanied by stock powers executed in blank.
1.3 Fractional Shares. Fractional shares of Westford
common stock shall not be issued, but in lieu thereof Westford shall
round up fractional shares to the next highest whole number.
1.4 Change of Name. Immediately following the Closing,
Westford shall change its name to South Beach Concepts, Inc. or such
other name as may be available by filing with the Secretary of State
of the State of Delaware a certificate of amendment to its
Certificate of Incorporation.
1.5 Further Assurances. At the Closing and from time to
time thereafter, the Shareholders shall execute such additional
instruments and take such other action as Westford may request in
order more effectively to sell, transfer, and assign the transferred
stock to Westford and to confirm Westford's title thereto.
2. EXCHANGE OF OTHER SECURITIES
2.1 Securities Exchanged. All outstanding warrants,
options, stock rights and all other securities of Baja owned by the
Shareholders shall be exchanged and adjusted, subject to the terms
contained in such warrants, options, stock rights or other
securities, for similar securities of Westford.
2.2 Ratio of Exchange. The securities of Baja owned by
the Shareholders, and the relative securities of Westford for which
they will be exchanged, are set out opposite their names in Exhibit A.
2.3 Shares Outstanding. Immediately following the
Closing, there will be issued and outstanding in Westford, 350,000
common shares issued to TPG Capital Corporation or an affiliate and
4,300,000 common shares issued to the shareholders of Baja.
3. CLOSING. The Closing contemplated herein shall be
held on April 15, 1999, at the principal offices of Westford, at
1504 R Street, NW, Washington, D.C. 20009, unless another place or
time is agreed upon in writing by the parties without requiring the
meeting of the parties hereof. All proceedings to be taken and all
documents to be executed at the Closing shall be deemed to have been
taken, delivered and executed simultaneously, and no proceeding
shall be deemed taken nor documents deemed executed or delivered
until all have been taken, delivered and executed. The date of
Closing may be accelerated or extended by agreement of the parties.
Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission required by this
Agreement or any signature required thereon may be used in lieu of
an original writing or transmission or signature for any and all
purposes for which the original could be used, provided that such
copy, facsimile telecommunication or other reproduction shall be a
complete reproduction of the entire original writing or transmission
or original signature.
4. UNEXCHANGED CERTIFICATES. Until surrendered, each
outstanding certificate that prior to the Closing represented Baja
common stock shall be deemed for all purposes, other than the
payment of dividends or other distributions, to evidence ownership
of the number of shares of Westford common stock into which it was
converted. No dividend or other distribution shall be paid to the
holders of certificates of Baja common stock until presented for
exchange at which time any outstanding dividends or other
distributions shall be paid.
5. REPRESENTATIONS AND WARRANTIES OF BAJA
Baja represents and warrants as follows:
5.1 Corporate Status. Baja is a corporation duly
organized, validly existing, and in good standing under the laws of
the State of Florida and is licensed or qualified as a foreign
corporation in all states in which the nature of its business or the
character or ownership of its properties makes such licensing or
qualification necessary.
5.2 Capitalization. The authorized capital stock of Baja
consists of 20,000,000 shares of common stock, no par value per
share, of which 12,200,000 shares are issued and outstanding, all
fully paid and nonassessable. There are no shares of preferred
stock issued or authorized.
5.3 Subsidiaries. Baja has no subsidiaries.
5.4 Financial Statements. The audited financial
statements of Baja of December 31, 1998, or such other period as
acceptable to Westford ("Baja's Financial Statements") furnished to
Westford are correct and fairly present the financial condition of
Baja as of the dates and for the periods involved, and such
statements were prepared in accordance with generally accepted
accounting principles consistently applied.
5.5 Undisclosed Liabilities. Baja had no liabilities of
any nature except to the extent reflected or reserved against in
Baja's Financial Statements, whether accrued, absolute, contingent,
or otherwise, including, without limitation, tax liabilities and
interest due or to become due, and Baja's accounts receivable, if
any, are collectible in accordance with the terms of such accounts,
except to the extent of the reserve therefor in Baja's Financial
Statements.
5.6 Absence of Material Changes. Between the date of
Baja's Financial Statements and the date of this Agreement, there
have not been, except as set forth in a list certified by the
president of Baja and delivered to Westford, (1) any changes in
Baja's financial condition, assets, liabilities, or business which,
in the aggregate, have been materially adverse; (2) any damage,
destruction, or loss of or to Baja's property, whether or not
covered by insurance; (3) any declaration or payment of any dividend
or other distribution in respect of Baja's capital stock, or any
direct or indirect redemption, purchase, or other Westford of any
such stock; or (4) any increase paid or agreed to in the
compensation, retirement benefits, or other commitments to
employees.
5.7 Litigation. There is no litigation or proceeding
pending, or to Baja's knowledge threatened, against or relating to
Baja, its properties or business, except as set forth in a list
certified by the president of Baja and delivered to Westford.
5.8 Contracts. Baja is not a party to any material
contract other than those listed as attachment hereto.
5.9 No Violation. Execution of this Agreement and
performance by Baja hereunder has been duly authorized by all
requisite corporate action on the part of Baja, and this Agreement
constitutes a valid and binding obligation of Baja, performance
hereunder will not violate any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgment,
decree, law, or regulation to which any property of Baja is subject
or by which Baja is bound.
5.10 Taxes. Baja has filed in correct form all federal,
state, and other tax returns of every nature required to be filed by
it and has paid all taxes as shown on such returns and all
assessments, fees and charges received by it to the extent that such
taxes, assessments, fees and charges have become due. Baja has also
paid all taxes which do not require the filing of returns and which
are required to be paid by it. To the extent that tax liabilities
have accrued, but have not become payable, they have been adequately
reflected as liabilities on the books of Baja and are reflected in
the financial statements furnished hereto.
5.11 Title to Property. Baja has good and marketable
title to all properties and assets, real and personal, reflected in
Baja's Financial Statements, except as since sold or otherwise
disposed of in the ordinary course of business, and Baja's
properties and assets are subject to no mortgage, pledge, lien, or
encumbrance, except for liens shown therein, with respect to which
no default exists.
5.12 Corporate Authority. Baja has full corporate power
and authority to enter into this Agreement and to carry out its
obligations hereunder, and will deliver at the Closing a certified
copy of resolutions of its board of directors authorizing execution
of this Agreement by its officers and performance thereunder.
5.13 Access to Records. From the date of this Agreement to
the Closing, Baja will (1) give to Westford and its representatives
full access during normal business hours to all of its offices,
books, records, contracts, and other corporate documents and
properties so that Westford may inspect and audit them and (2)
furnish such information concerning Baja's properties and affairs as
Westford may reasonably request.
5.14 Confidentiality. Until the Closing (and permanently
if there is no Closing), Baja and the Shareholders will keep
confidential any information which they obtain from Westford
concerning its properties, assets, and business. If the transactions
contemplated by this Agreement are not consummated, Baja and the
Shareholders will return to Westford all written matter with respect
to Westford obtained by them in connection with the negotiation or
consummation of this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, individually and separately, represent and
warrant as follows:
6.1 Title to Shares. The Shareholders, and each of them,
are the owners, free and clear of any liens and encumbrances, of the
number of Baja shares which are listed in the attached schedule and
which they have contracted to exchange.
6.2 Litigation. There is no litigation or proceeding
pending, or to each Shareholder's knowledge threatened, against or
relating shares of Baja held by the Shareholders.
7. REPRESENTATIONS AND WARRANTIES OF WESTFORD
The Westford represents and warrants as follows:
7.1 Corporate Status. Westford is a corporation duly
organized, validly existing, and in good standing under the laws of
the State of Delaware and is licensed or qualified as a foreign
corporation in all states in which the nature of its business or the
character or ownership of its properties makes such licensing or
qualification necessary.
7.2 Capitalization. The authorized capital stock of
Westford consists of 100,000,000 shares of common stock, $0001 par
value per share, of which 5,000,000 shares are issued and
outstanding, all fully paid and nonassessable and no shares of
non-designated preferred stock. There are no shares of preferred
stock issued or authorized. Prior to the Closing, Westford will
redeem 4,640,000 shares of its outstanding common stock from its
current shareholders.
7.3 Subsidiaries. Westford has no subsidiaries.
7.4 Public Company. Westford filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of
1934, a registration statement on August 27, 1998 registering its
common stock.
7.5 Public Filings. Westford has timely filed all
reports required to be filed by it under Section 13 of the
Securities Exchange Act of 1934.
7.6 Financial Statements. The audited financial
statements of Westford of December 31, 1998 or such other period as
acceptable Baja ("Westford's Financial Statements") furnished to
Baja are correct and fairly present the financial condition of
Westford as of the dates and for the periods involved, and such
statements were prepared in accordance with generally accepted
accounting principles consistently applied.
7.7 Undisclosed Liabilities. Westford had no liabilities
of any nature except to the extent reflected or reserved against in
Westford's Financial Statements, whether accrued, absolute,
contingent, or otherwise, including, without limitation, tax
liabilities and interest due or to become due, and Westford's
accounts receivable, if any, are collectible in accordance with the
terms of such accounts, except to the extent of the reserve therefor
in Westford's Financial Statements.
7.8 Absence of Material Changes. Between the of
Westford's Financial Statements and the date of this Agreement,
there have not been, except as set forth in a list certified by the
president of Westford and delivered to Baja, (1) any changes in
Westford's financial condition, assets, liabilities, or business
which, in the aggregate, have been materially adverse; (2) any
damage, destruction, or loss of or to Westford's property, whether
or not covered by insurance; (3) any declaration or payment of any
dividend or other distribution in respect of Westford's capital
stock, or any direct or indirect redemption, purchase, or other
Westford of any such stock; or (4) any increase paid or agreed to in
the compensation, retirement benefits, or other commitments to
employees.
7.9 Litigation. There is no litigation or proceeding
pending, or to the Company's knowledge threatened, against or
relating to Westford, its properties or business, except as set
forth in a list certified by the president of Westford and delivered
to Baja.
7.10 Contracts. Westford is not a party to any material
contract other than those listed as an attachment hereto.
7.11 No Violation. Execution of this Agreement and
performance by Westford hereunder has been duly authorized by all
requisite corporate action on the part of Westford, and this
Agreement constitutes a valid and binding obligation of Westford,
performance hereunder will not violate any provision of any charter,
bylaw, indenture, mortgage, lease, or agreement, or any order,
judgment, decree, law, or regulation to which any property of
Westford is Subject or by which Westford is bound.
7.12 Taxes. Westford has filed in correct form all
federal, state, and other tax returns of every nature required to be
filed by it and has paid all taxes as shown on such returns and all
assessments, fees and charges received by it to the extent that such
taxes, assessments, fees and charges have become due. Westford has
also paid all taxes which do not require the filing of returns and
which are required to be paid by it. To the extent that tax
liabilities have accrued, but have not become payable, they have
been adequately reflected as liabilities on the books of Westford
and are reflected in the financial statements furnished hereto.
7.13 Title to Property. Westford has good and marketable
title to all properties and assets, real and personal, reflected in
Westford's Financial Statements, except as since sold or otherwise
disposed of in the ordinary course of business, and Westford's
properties and assets are Subject to no mortgage, pledge, lien, or
encumbrance, except for liens shown therein, with respect to which
no default exists.
7.14 Corporate Authority. Westford has full corporate
power and authority to enter into this Agreement and to carry out
its obligations hereunder, and will deliver at the Closing a
certified copy of resolutions of its board of directors authorizing
execution of this Agreement by its officers and performance
thereunder.
7.15 Confidentiality. Until the Closing (and permanently
if there is no Closing), Westford and its representatives will keep
confidential any information which they obtain from Baja concerning
its properties, assets, and business. If the transactions
contemplated by this Agreement are not consummated, Westford will
return to Baja all written matter with respect to Baja obtained by
it in connection with the negotiation or consummation of this
Agreement.
7.16 Investment Intent. Westford is acquiring the Baja
shares to be transferred to it under this Agreement for investment
and not with a view to the sale or distribution thereof, and
Westford has no commitment or present intention to liquidate Baja or
to sell or otherwise dispose of its stock.
8. CONDUCT PENDING THE CLOSING
Westford, Baja and the Shareholders covenant that between the
date of this Agreement and the Closing as to each of them:
8.1 No change will be made in the charter documents,
by-laws, or other corporate documents of Westford or Baja.
8.2 This Agreement will be submitted for shareholder
approval with a favorable recommendation by the Board of Directors
of each of Baja and Westford and the Board of Directors of each will
use its best efforts to obtain the requisite shareholder approval.
8.3 Baja and Westford will use their best efforts to
maintain and preserve its business organization, employee
relationships, and goodwill intact, and will not enter into any
material commitment except in the ordinary course of business.
8.4 None of the Shareholders will sell, transfer, assign,
hypothecate, lien, or otherwise dispose or encumber the Baja shares
of common stock owned by them.
9. CONDITIONS PRECEDENT TO OBLIGATION OF BAJA AND THE
SHAREHOLDERS
Baja's and the Shareholder's obligation to consummate this
exchange shall be subject to fulfillment on or before the Closing of
each of the following conditions, unless waived in writing by Baja
or the Shareholders as appropriate:
9.1 Westford's Representations and Warranties. The
representations and warranties of Westford set forth herein shall be
true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
9.2 Westford's Covenants. Westford shall have performed
all covenants required by this Agreement to be performed by it on or
before the Closing.
9.3 Board of Director Approval. This Agreement shall
have been approved by the Board of Directors of Westford.
9.4 Supporting Documents of Westford. Westford shall
have delivered to Baja and the Shareholders supporting documents in
form and substance reasonably satisfactory to Baja and the
Shareholders, to the effect that:
(a) Westford is a corporation duly organized, validly
existing, and in good standing;
(b) Westford's authorized capital stock is as set
forth herein;
(c) Certified copies of the resolutions of the board
of directors of Westford authorizing the execution of
this Agreement and the consummation hereof;
(d) Secretary's certificate of incumbency of the
officers and directors of Westford;
(e) Westford's Financial Statement and unaudited
financial statement from January 1, 1998 to close of
most recent fiscal quarter; and
(f) Any document as may be specified herein or
required to satisfy the conditions, representations
and warranties enumerated elsewhere herein.
10. CONDITIONS PRECEDENT TO OBLIGATION OF WESTFORD
Westford's obligation to consummate this merger shall be
subject to fulfillment on or before the Closing of each of the
following conditions, unless waived in writing by Westford:
10.1 Baja's and the Shareholder's Representations and
Warranties. The representations and warranties of Baja and the
Shareholders set forth herein shall be true and correct at the
Closing as though made at and as of that date, except as affected by
transactions contemplated hereby.
10.2 Baja's and the Shareholders' Covenants. Baja and the
Shareholders shall have performed all covenants required by this
Agreement to be performed by them on or before the Closing.
10.3 Board of Director Approval. This Agreement shall
have been approved by the Board of Directors of Baja.
10.4 Shareholder Execution. This Agreement shall have
been executed by the required number of shareholders of Baja.
10.5 Supporting Documents of Baja. Baja shall have
delivered to Westford supporting documents in form and substance
reasonably satisfactory to Westford to the effect that:
(a) Baja is a corporation duly organized, validly
existing, and in good standing;
(b) Baja's capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board
of directors of Baja authorizing the execution of
this Agreement and the consummation hereof;
(d) Secretary's certificate of incumbency of the
officers and directors of Baja;
(e) Baja's Financial Statements and unaudited
financial statements for the period from the date of
the audited financial statements to the close of the
most recent fiscal quarter; and
(f) Any document as may be specified herein or
required to satisfy the conditions, representations
and warranties enumerated elsewhere herein.
11. INDEMNIFICATION
11.1 Indemnification of Westford. Baja and the
Shareholders severally (and not jointly) agree to indemnify Westford
against any loss, damage, or expense (including reasonable attorney
fees) suffered by Westford from (1) any breach by Baja or the
Shareholders of this Agreement or (2) any inaccuracy in or breach of
any of the representations, warranties, or covenants by Baja or the
Shareholders herein; provided, however, that (a) Westford shall be
entitled to assert rights of indemnification hereunder only if and
to the extent that it suffers losses, damages, and expenses
(including reasonable attorney fees) exceeding $50,000 in the
aggregate and (b) Westford shall give notice of any claims hereunder
within twenty-four months beginning on the date of the Closing. No
loss, damage, or expense shall be deemed to have been sustained by
Westford to the extent of insurance proceeds paid to, or tax
benefits realizable by, Westford as a result of the event giving
rise to such right to indemnification.
11.2 Proportionate Liability. The liability of each
Shareholder under this section shall be in the proportion that the
total number of Westford shares to be received by him bears to the
total number of Westford shares to be received by all the
Shareholders and shall in no event exceed 25 percent of the value of
the Westford shares received by such Shareholder. With respect to
Shareholders that are estates, trusts, or custodianships, the
executor, trustee, or custodian is a party to this Agreement only in
its fiduciary capacity and liability hereunder shall be limited to
the fiduciary assets and shall not extend to the assets of the
executor, trustee, or custodian.
11.3 Indemnification of Baja and the Shareholders.
Westford agrees to indemnify Baja and the Shareholders against any
loss, damage, or expense (including reasonable attorney fees)
suffered by Baja or by any of the Shareholders from (1) any breach
by Westford of this Agreement or (2) any inaccuracy in or breach of
any of Westford's representations, warranties, or covenants herein.
11.4 Defense of Claims. Upon obtaining knowledge thereof,
the indemnified party shall promptly notify the indemnifying party
of any claim which has given or could give rise to a right of
indemnification under this Agreement. If the right of
indemnification relates to a claim asserted by a third party against
the indemnified party, the indemnifying party shall have the right
to employ counsel acceptable to the indemnified party to cooperate
in the defense of any such claim. As long as the indemnifying party
is defending any such claim in good faith, the indemnified party
will not settle such claim. If the indemnifying party does not
elect to defend any such claim, the indemnified party shall have no
obligation to do so.
12. TERMINATION. This Agreement may be terminated (1) by
mutual consent in writing; (2) by either Baja, the Shareholders or
Westford if there has been a material misrepresentation or material
breach of any warranty or covenant by any other party; or (3) by
either Baja, the Shareholders or Westford if the Closing shall not
have taken place, unless adjourned to a later date by mutual consent
in writing.
13. SHAREHOLDERS' REPRESENTATIVE. The Shareholders hereby
irrevocably designate and appoint Thomas N. Burnham as their agent
and attorney in fact ("Shareholders' Representative") with full
power and authority until the Closing to execute, deliver, and
receive on their behalf all notices, requests, and other
communications hereunder; to fix and alter on their behalf the date,
time, and place of the Closing; to waive, amend, or modify any
provisions of this Agreement, and to take such other action on their
behalf in connection with this Agreement, the Closing, and the
transactions contemplated hereby as such agent or agents deem
appropriate; provided, however, that no such waiver, amendment, or
modification may be made if it would decrease the number of shares
to be issued to the Shareholders hereunder or increase the extent of
their obligation to indemnify Westford hereunder.
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Baja, the Shareholders and
Westford set out herein shall survive the Closing.
15. ARBITRATION.
SCOPE. The parties hereby agree that any and all claims
(except only for requests for injunctive or other equitable relief)
whether existing now, in the past or in the future as to which the
parties or any affiliates may be adverse parties, and whether
arising out of this agreement or from any other cause, will be
resolved by arbitration before the American Arbitration Association.
SITUS. The situs of arbitration shall be chosen by the party
against whom arbitration is sought, provided only that arbitration
shall be held at a place in the reasonable vicinity of such party's
place of business or primary residence and shall be within the
United States. The situs of counterclaims will be the same as the
situs of the original arbitration. Any disputes concerning situs
will be decided by the American Arbitration Association.
APPLICABLE LAW. The law applicable to the arbitration and
this agreement shall be that of the State of Delaware, determined
without regard to its provisions which would otherwise apply to a
question of conflict of laws. Any dispute as to the applicable law
shall be decided by the arbitrator.
DISCLOSURE AND DISCOVERY. The arbitrator may, in its
discretion, allow the parties to make reasonable disclosure and
discovery in regard to any matters which are the Subject of the
arbitration and to compel compliance with such disclosure and
discovery order. The arbitrator may order the parties to comply
with all or any of the disclosure and discovery provisions of the
Federal Rules of Civil Procedure, as they then exist, as may be
modified by the arbitrator consistent with the desire to simplify
the conduct and minimize the expense of the arbitration.
FINALITY AND FEES. Any award or decision by the American
Arbitration Association shall be final, binding and non-appealable
except as to errors of law. Each party to the arbitration shall pay
its own costs and counsel fees.
MEASURE OF DAMAGES. In any adverse action, the parties shall
restrict themselves to claims for compensatory damages and no claims
shall be made by any party or affiliate for lost profits, punitive
or multiple damages.
COVENANT NOT TO SUE. The parties covenant that under no
conditions will any party or any affiliate file any action against
the other (except only requests for injunctive or other equitable
relief) in any forum other than before the American Arbitration
Association, and the parties agree that any such action, if filed,
shall be dismissed upon application and shall be referred for
arbitration hereunder with costs and attorney's fees to the
prevailing party.
INTENTION. It is the intention of the parties and their
affiliates that all disputes of any nature between them, whenever
arising, from whatever cause, based on whatever law, rule or
regulation, whether statutory or common law, and however
characterized, be decided by arbitration as provided herein and that
no party or affiliate be required to litigate in any other forum any
disputes or other matters except for requests for injunctive or
equitable relief. This agreement shall be interpreted in
conformance with this stated intent of the parties and their
affiliates.
16. GENERAL PROVISIONS
16.1 Further Assurances. From time to time, each party
will execute such additional instruments and take such actions as
may be reasonably required to carry out the intent and purposes of
this Agreement.
16.2 Waiver. Any failure on the part of either party
hereto to comply with any of its obligations, agreements, or
conditions hereunder may be waived in writing by the party to whom
such compliance is owed.
16.3 Brokers. Each party agrees to indemnify and hold
harmless the other party against any fee, loss, or expense arising
out of claims by brokers or finders employed or alleged to have been
employed by the indemnifying party.
16.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been given
if delivered in person or sent by prepaid first-class certified
mail, return receipt requested, or recognized commercial courier
service, as follows:
If to Westford, to:
Westford Acquisition Corporation
1504 R Street, N.W.
Washington, DC 20009
If to Baja, to
Baja Food Concepts, Inc.
5969 Cattleridge Boulevard
Sarasota, Florida 34232
If to the shareholders in care of the Shareholder
Representative, at
Thomas N. Burnham
5969 Cattleridge Boulevard
Suite 201
Sarasota, Florida 34232
16.5 Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State
of Delaware.
16.6 Assignment. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their
successors and assigns; provided, however, that any assignment by
either party of its rights under this Agreement without the written
consent of the other party shall be void.
16.7 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Signatures sent by facsimile transmission
shall be deemed to be evidence of the original execution thereof.
16.8 Effective Date. This effective date of this
Agreement shall be April 14, 1999.
WESTFORD ACQUISITION CORPORATION
By /s/ James M. Cassidy
BAJA FOOD CONCEPTS, INC.
By Thomas N. Burnham
BAJA FOOD CONCEPTS, INC.
SHAREHOLDERS:
/s/ Thomas N. Burnham
/s/ Texas International Group, Inc.
/s/ Mosby Investments, Inc.
June 15, 1999
Securities and Exchange Commission
450 Fifth Street, NW
Washington DC 20549
Re: Westford Acquisition Corporation
File Ref. No. 0-24839
We were previously the principal accountant for Westford Acquisition
Corporation and, under the date of June 12, 1998, we reported on the
consolidated financial statements of Westford Acquisition
Corporation as of June 10, 1998. On June 15, 1999, our appointment
as principal accountant was terminated. We have read Westford
Acquisition Corporation's statements included under Item 4 of its
Form 8-K dated June 15, 1999, and we agree with such statements.
Very truly yours,
WEINBERG & COMPANY, PA
Certified Public Accountants
