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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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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): March 31, 2000
Sunderland Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-24803 52-210214
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(Commission File Number) (IRS Employer Identification No.)
2901 El Camino Avenue, Las Vegas, Nevada 89102
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(Address of Principal Executive Offices, Including Zip Code)
(702) 227-0965
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(Registrant's Telephone Number, Including Area Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On March 31, 2000, pursuant to an Agreement and Plan of
Reorganization among Sunderland Corporation ("Sunderland," or the "Company") and
L.L, Bradford & Company, a Nevada professional corporation ("LLB"), and the
shareholders of LLB, Lance Bradford, Leilani Bradford, David Hall, and Arthur de
Joya, Sunderland acquired all of the outstanding capital stock of LLB in
exchange for eight hundred thousand (800,000) shares of restricted common stock,
par value $.001, of Sunderland. LLB was majority owned by Lance Bradford, the
Chief Financial Officer, a director and shareholder of the Company, and Leilani
D. Bradford, his spouse. Simultaneously with the execution of the Agreement,
Lance Bradford entered into an Employment Agreement with the Company and the
other three shareholders of L.L. Bradford entered into employment agreements
with it. The employment agreement with Lance Bradford is for 3 years to serve as
the Company's Chief Financial Officer at an annual salary of $296,000 and
includes non-competition and confidentiality provisions. The acquisition
transaction is more fully set forth in the agreement that is attached hereto as
an exhibit to this Report.
(b) LLB is a public accounting and consulting firm located in Las Vegas,
Nevada, specializing in business consulting, corporate financial assessments,
tax planning, and accounting services. It has a client base of over 1,000. The
Company intends to integrate the financial services offered by LLB into The
Company's recently developed Financial Services Division.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit Number Description
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2.1 Agreement and Plan of Reorganization among Sunderland
Corporation, L.L. Bradford & Company, and the other
parties named therein, dated as of March 31, 2000.
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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.
Dated: April 14, 2000 SUNDERLAND CORPORATION
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(Registrant)
/s/ Lance Bradford
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Lance Bradford
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
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2.1 Agreement and Plan of Reorganization among Sunderland
Corporation, L.L. Bradford & Company, and
the other parties named therein, dated of
March 31, 2000.
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made and
entered into this 31st day of March, 2000, by and between SUNDERLAND
CORPORATION, a Delaware corporation ("Sunderland"), L.L. BRADFORD & COMPANY, a
Nevada professional corporation ("LLB") and the Shareholders of "LLB"
("Shareholders").
WITNESSETH:
WHEREAS, Sunderland is a Delaware corporation authorized to issue
100,000,000 shares of common stock, par value $.001 per share, of which
6,189,270 shares are outstanding; and
WHEREAS, LLB is a Nevada professional corporation authorized to issue
2,500 shares of common stock no par value per share, of which 2,500 shares of
stock are currently outstanding; and
WHEREAS, the board of directors of Sunderland and the Shareholders of
LLB have deemed it advisable and in the best interests of Sunderland and LLB
that LLB be acquired by Sunderland pursuant to the terms and conditions set
forth in this Agreement; and
WHEREAS, Sunderland and LLB propose to enter into this Agreement which
provides among other things, that one hundred percent (100%) of the outstanding
shares of LLB be acquired by Sunderland, in exchange for shares of Sunderland
and such items all as more fully described in this Agreement; and
WHEREAS, the parties desire the transaction to qualify as a tax-free
reorganization pursuant to the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties hereinafter set forth, and other good and
valuable consideration, Sunderland and LLB intending to be legally bound, hereby
agree as follows:
ARTICLE I
ACQUISITION
1.01 At the Closing, as hereinafter defined, a total of Two Thousand
Five Hundred (2,500) shares of LLB common stock which represents one hundred
percent (100%) of the outstanding capital stock of LLB, shall be acquired by
Sunderland in exchange for Eight Hundred Thousand (800,000) common shares of
Sunderland ("Sunderland Shares") which shall be issued to the LLB Shareholders.
1.02 At the Closing, the LLB Shareholders will deliver certificates for
the outstanding shares of LLB, duly endorsed so as to make Sunderland the sole
holder thereof, free and clear of all
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claims and encumbrances and Sunderland shall deliver certificates for the
Sunderland Shares, free and clear of all claims and encumbrances.
1.03 Following the transactions contemplated by this Agreement, there
will be a total of 6,989,270 shares of Sunderland common stock, par value $.001
per share issued and outstanding.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Berkley, Gordon,
Levine, Goldstein & Garfinkel, LLP, 2700 W. Sahara Ave., 5th Floor, Las Vegas,
Nevada 89102 within ten (10) days after all condition precedents are either
satisfied or waived or at such other place or date and time as may be agreed to
in writing by the parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SUNDERLAND
3.01 Sunderland and its officers and directors hereby represent and
warrant to LLB as follows:
(a) Organization, Qualification, and Corporate Power.
Sunderland is a corporation duly organized, validly
existing, and in good standing under the laws of the
State of Delaware. Sunderland is duly authorized to
conduct business and is in good standing under the laws
of each jurisdiction where such qualification is
required. Sunderland has full corporate power and
authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is
engaged and in which it presently proposes to engage and
to own and use the properties owned and used by it.
Notwithstanding the foregoing, Sunderland makes no
representations and warranties with respect to the
effect or implementation of any AICPA or state public
accounting regulatory provision, regulation or law.
Sunderland has delivered to LLB correct and complete
copies of the charter and bylaws of Sunderland (as
amended to date). Sunderland is not in default under or
in violation of any provision of its charter or bylaws.
(b) Capitalization. The entire authorized capital stock of
Sunderland consists of 100,000,000 shares of common
stock, par value $.001 per share, of which 6,189,270
shares of common stock are issued and outstanding. All
of the issued and outstanding shares have been duly
authorized, are validly issued, fully paid, and
nonassessable. Except as set forth in Sunderland's
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publicly filed documents, there are no (i) outstanding
or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights,
or other contracts or commitments that could require
Sunderland to issue, sell, or otherwise cause to become
outstanding any of its capital stock, (ii) outstanding
or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to
Sunderland or (iii)voting trusts, proxies, or other
agreements or understandings with respect to the voting
of the capital stock of Sunderland.
(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or
court to which Sunderland is subject or any provision of
the charter or bylaws of Sunderland or (ii) conflict
with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which
Sunderland is a party or by which it is bound or to
which any of its assets is subject (or result in the
imposition of any security interest upon any of its
assets). Except as set forth in Section 3.01 (c) of the
Disclosure Schedule, Sunderland does not need to give
any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order for the parties to
consummate the transactions contemplated by this
Agreement.
(d) Brokers' Fees. Sunderland has no liability or obligation
to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by
this Agreement.
(e) Title to Assets. Sunderland has good and marketable
title to, or a valid leasehold interest in, the
properties and assets used by them, located on their
premises, or shown on the Most Recent Balance Sheet, as
defined herein, or acquired after the date thereof, free
and clear of all security interests, except for
properties and assets disposed of in the ordinary course
of business since the date of the Most Recent Balance
Sheet.
(f) Financial Statements. Attached hereto as Exhibit A are
the following financial statements (collectively the
"Financial Statements"): (i) audited balance sheet and
statements of income, changes in stockholders' equity,
and cash flow as of and for the fiscal year ended
December 31,1999 (the "Most Recent Fiscal Year End") for
Sunderland. The Financial Statements (including the
notes thereto) have been prepared in accordance with
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GAAP applied on a consistent basis throughout the
periods covered thereby, present fairly the financial
condition of Sunderland as of such dates and the results
of operations of Sunderland for such periods, are
correct and complete, and are consistent with the books
and records of Sunderland (which books and records are
correct and complete).
(g) Events Subsequent to Most Recent Fiscal Year End. Since
the Most Recent Fiscal Year End, there has not been any
adverse change in the business, financial condition,
operations, results of operations, or future prospects
of Sunderland.
(h) Undisclosed Liabilities. Sunderland does not have any
liability (and there is no basis for any present or
future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them
giving rise to any liability), except for (i)
liabilities set forth on the face of the Most Recent
Balance Sheet and (ii) liabilities which have arisen
after the Most Recent Fiscal Month End in the ordinary
course of business (none of which results from, arises
out of, relates to, is in the nature of, or was caused
by any breach of contract, breach of warranty, tort,
infringement, or violation of law).
(i) Legal Compliance. Sunderland, and their respective
predecessors and affiliates has complied with all
applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), and no
action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any
failure so to comply.
(j) Tax Matters.
(i) Sunderland has filed all tax returns (the
"Tax Returns") that it was required to file.
All such Tax Returns were correct and
complete in all respects. All taxes owed by
Sunderland (whether or not shown on any Tax
Return) have been paid. Sunderland is not
the beneficiary of any extension of time
within which to file any Tax Return. No
claim has ever been made by an authority in
a jurisdiction where Sunderland does not
file Tax Returns that it is or may be
subject to taxation by that jurisdiction.
There are no security interests on any of
the assets of Sunderland that arose in
connection with any failure (or alleged
failure) to pay any tax.
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(ii) Sunderland has withheld and paid all taxes
required to have been withheld and paid in
connection with amounts paid or owing to any
employee, independent contractor, creditor,
stockholder, or other third party.
(k) Real Property.
(i) With respect to all real property owned by
Sunderland:
(A) Sunderland has good and marketable
title to each parcel of real
property, free and clear of any
security interest, easement,
covenant, or other restriction,
except for installments of special
assessments not yet delinquent and
recorded easements, covenants, and
other restrictions which do not
impair the current use, occupancy,
or value, or the marketability of
title, of the property subject
thereto;
(B) there are no pending or, to the
knowledge of Sunderland and the
directors and officers (and
employees with responsibility for
real estate matters) of Sunderland
and its subsidiaries, threatened
condemnation proceedings, lawsuits,
or administrative actions relating
to the property or other matters
affecting adversely the current use,
occupancy, or value thereof;
(C) the legal description for the
parcel contained in the deed
thereof describes such parcel
fully and adequately, the
buildings and improvements are
located within the boundary
lines of the described parcels
of land, are not in violation of
applicable setback requirements,
zoning laws, and ordinances (and
none of the properties or
buildings or improvements
thereon are subject to
"permitted non-conforming use"
or "permitted non-conforming
structure" classifications), and
do not encroach on any easement
which may burden the land, and
the land does not serve any
adjoining property for any
purpose inconsistent with the
use of the land, and the
property is not located within
any flood plain or subject to
any similar type restriction for
which any permits or licenses
necessary to the use thereof
have not been obtained;
(D) all facilities have received all
approvals of governmental
authorities (including licenses and
permits) required in connection with
the ownership or operation thereof
and
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have been operated and maintained
in accordance with applicable laws,
rules, and regulations;
(E) there are no leases, subleases,
licenses, concessions, or other
agreements, written or oral,
granting to any party or parties the
right of use or occupancy of any
portion of the parcel of real
property;
(F) there are no outstanding options or
rights of first refusal to purchase
the parcel of real property, or any
portion thereof or interest therein;
(G) there are no parties (other than
Sunderland) in possession of the
parcel of real property, other than
tenants under any leases who are in
possession of space to which they
are entitled;
(H) all facilities located on the parcel
of real property are supplied with
utilities and other services
necessary for the operation of such
facilities, including gas,
electricity, water, telephone,
sanitary sewer, and storm sewer, all
of which services are adequate in
accordance with all applicable laws,
ordinances, rules, and regulations
and are provided via public roads or
via permanent, irrevocable,
appurtenant easements benefitting
the parcel of real property; and
(I) each parcel of real property abuts
on and has direct vehicular access
to a public road, or has access to a
public road via a permanent,
irrevocable, appurtenant easement
benefitting the parcel of real
property, and access to the property
is provided by paved public
right-of-way with adequate curb cuts
available.
(ii) With respect to all real property leased or
subleased to Sunderland:
(A) the lease or sublease is legal,
valid, binding, enforceable, and in
full force and effect;
(B) the lease or sublease will continue
to be legal, valid, binding,
enforceable, and in full force and
effect on identical terms following
the consummation of the transactions
contemplated hereby;
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(C) no party to the lease or sublease is
in breach or default, and no event
has occurred which, with notice or
lapse of time, would constitute a
breach or default or permit
termination, modification, or
acceleration thereunder;
(D) no party to the lease or sublease
has repudiated any provision
thereof;
(E) there are no disputes, oral
greements, or forbearance programs
in effect as to the lease or
sublease;
(F) with respect to each sublease, the
representations and warranties set
forth in subsections (A) through (E)
above are true and correct with
respect to the underlying lease;
(G) Sunderland has not assigned,
transferred, conveyed, mortgaged,
deeded in trust, or encumbered any
interest in the leasehold or
subleasehold;
(H) all facilities leased or subleased
thereunder have received all
approvals of governmental
authorities (including licenses and
permits) required in connection with
the operation thereof and have been
operated and maintained in
accordance with applicable laws,
rules, and regulations;
(I) all facilities leased or subleased
thereunder are supplied with
utilities and other services
necessary for the operation of said
facilities; and
(J) the owner of the facility leased or
subleased has good and marketable
title to the parcel of real
property, free and clear of any
security interest, easement,
covenant, or other restriction,
except for installments of special
easements not yet delinquent and
recorded easements, covenants, and
other restrictions which do not
impair the current use, occupancy,
or value, or the marketability of
title, of the property subject
thereto.
(l) Intellectual Property.
(i) Sunderland owns or has the right to use
pursuant to license, sublicense, agreement,
or permission all intellectual property
("Intellectual Property") necessary or
desirable for the operation of
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the businesses of Sunderland as presently
conducted and as presently proposed to be
conducted. Sunderland has taken all
necessary and desirable action to maintain
and protect each item of Intellectual
Property that it owns or uses.
(ii) With respect to each item of Intellectual
Property:
(A) Sunderland possess all right, title,
and interest in and to the item,
free and clear of any security
interest, license, or other
restriction;
(B) the item is not subject to any
outstanding injunction, judgment,
order, decree, ruling, or charge;
(C) no action, suit, proceeding,
hearing, investigation, charge,
complaint, claim, or demand is
pending or, to the knowledge of
Sunderland and the directors and
officers (and employees with
responsibility for Intellectual
Property matters) of Sunderland, is
threatened which challenges the
legality, validity, enforceability,
use, or ownership of the item; and
(D) Sunderland has never agreed to
indemnify any Person for or against
any interference, infringement,
misappropriation, or other conflict
with respect to the item.
(m) Tangible Assets. Sunderland owns or leases all
buildings, machinery, equipment, and other tangible
assets necessary for the conduct of their businesses as
presently conducted and as presently proposed to be
conducted. Each such tangible asset is free from defects
(patent and latent), has been maintained in accordance
with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear),
and is suitable for the purposes for which it presently
is used and presently is proposed to be used.
(n) Inventory. The inventory of Sunderland consists of raw
materials and supplies, manufactured and purchased
parts, goods in process, and finished goods, all of
which is merchantable and fit for the purpose for which
it was procured or manufactured, and none of which is
slow-moving, obsolete, damaged, or defective.
(o) Contracts. All material contracts to which Sunderland is
a party have
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been reviewed by the Shareholders of LLB.
(p) Notes and Accounts Receivable. All notes and accounts
receivable of Sunderland are reflected properly on their
books and records, are valid receivables subject to no
setoffs or counterclaims, are collectible, and will be
collected in accordance with their terms at their
recorded amounts subject to a reserve for doubtful
accounts.
(q) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of Sunderland.
(r) Insurance. ss.3.01(r) of the Disclosure Schedule sets
forth each insurance policy (including policies
providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements)
to which Sunderland has been a party, a named insured,
or otherwise the beneficiary of coverage at any time.
(s) Litigation.ss.3.01(s) of the Disclosure Schedule sets
forth each instance in which Sunderland (i) is subject
to any outstanding injunction, judgment, order, decree,
ruling, or charge or (ii) is a party or, to the
knowledge of Sunderland and the directors and officers
(and employees with responsibility for litigation
matters) of Sunderland, is threatened to be made a party
to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any
arbitrator. None of the actions, suits, proceedings,
hearings, and investigations set forth inss.3.01(s) of
the Disclosure Schedule could result in any material
adverse change in the business, financial condition,
operations, results of operations, or future prospects
of Sunderland. Neither Sunderland nor the directors and
officers (and employees with responsibility for
litigation matters) of Sunderland has any reason to
believe that any such action, suit, proceeding, hearing,
or investigation may be brought or threatened against
Sunderland.
(t) Employees. To the knowledge of Sunderland and the
directors and officers (and employees with
responsibility for employment matters) of Sunderland, no
executive, key employee, or group of employees has any
plans to terminate employment with Sunderland.
Sunderland has not committed any unfair labor practice.
(u) Employee Benefits.
(i) ss.3.01(u) of the Disclosure Schedule lists
each employee benefit plan that Sunderland
maintains or to which Sunderland
contributes.
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(ii) Sunderland does not maintain or ever has
maintained or contributes, ever has
contributed, or ever has been required to
contribute to any Employee Welfare Benefit
Plan providing medical, health, or life
insurance or other welfare-type benefits for
current or future retired or terminated
employees, their spouses, or their
dependents (other than in accordance with
Code Sec. 4980B).
(v) Guaranties. Except as set forth on the Most Recent
Financial Statements, Sunderland is not a guarantor or
otherwise is liable for any liability or obligation
(including indebtedness) of any other person.
(w) Environment, Health, and Safety.
(i) Sunderland and its respective predecessors
and affiliates has complied with all
Environmental, Health, and Safety Laws, and
no action, suit, proceeding, hearing,
investigation, charge, complaint, claim,
demand, or notice has been filed or
commenced against any of them alleging any
failure so to comply. Without limiting the
generality of the preceding sentence,
Sunderland and its respective predecessors
and affiliates has obtained and been in
compliance with all of the terms and
conditions of all permits, licenses, and
other authorizations which are required
under, and has complied with all other
limitations, restrictions, conditions,
standards, prohibitions, requirements,
obligations, schedules, and timetables which
are contained in, all Environmental, Health,
and Safety Laws.
(ii) Sunderland has no liability for any illness
of or personal injury to any employee or
other individual, or for any reason under
any Environmental, Health, and Safety Law.
(iii) All properties and equipment used in the
business of Sunderland, and its respective
predecessors and affiliates have been free
of asbestos, PCB's, methylene chloride,
trichloroethylene,
1,2-trans-dichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous
Substances.
(x) Improper Paymants. Neither Sunderland, nor any person
acting on behalf of Sunderland has made any payment or
otherwise transmitted anything of value, directly or
indirectly to any official or any government or agency
or political subdivision thereof for the purpose of
influencing any decision affecting the business of
Sunderland.
(y) Copies of Documents. Sunderland has made available for
inspection and
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copying by LLB and its duly authorized representatives,
and will continue to do so at all times, true and
correct copies of all documents which it has filed with
the Securities and Exchange Commission and all other
governmental agencies which are material to the terms
and conditions contained in this Agreement. Furthermore,
all filings by Sunderland with the Securities and
Exchange Commission, and all other governmental
agencies, have contained information which is true and
correct in all material respects and did not contain any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements made
therein not misleading or which could have any material
adverse affect upon the financial condition or
operations of Sunderland or adversely affect the
objectives of this Agreement. Sunderland has filed with
the Securities and Exchange Commission and each state
securities regulator, on a timely basis, all statements,
applications, reports and filings required under the
Securities Act of 1933 and the Exchange Act of 1934, as
amended.
(z) Disclosure. The representations and warranties contained
in this ss.3.01 do not contain any untrue statement of a
material fact or omit to state any material fact
necessary in order to make the statements and
information contained in this ss.3.01 not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LLB
4.01 LLB and its Shareholders hereby represent and warrant to Sunderland as
follows:
(a) Organization, Qualification, and Corporate Power. LLB is
a professional corporation duly organized, validly
existing, and in good standing under the laws of the
State of Nevada. LLB is duly authorized to conduct
business and is in good standing under the laws of each
jurisdiction where such qualification is required. LLB
has certificates of authority and public accounting
licenses required of a public accounting firm in all
jurisdictions in which it operates. LLB has full
corporate power and authority and all licenses, permits,
and authorizations necessary to carry on the businesses
in which it is engaged and in which it presently
proposes to engage and to own and use the properties
owned and used by it. LLB has delivered to Sunderland
correct and complete copies of the articles of
incorporation and bylaws of LLB (as amended to date).
LLB is not in default under or in violation of any
provision of its articles of incorporation or bylaws.
(b) Capitalization. The entire authorized number of shares
of LLB capital stock consists of 2,500 shares of common
stock, no par value per share, of which 2,500 shares are
issued and outstanding. All of the issued and
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outstanding shares have been duly authorized, are
validly issued, fully paid, and nonassessable. Except as
set forth in the Section 4.01 (b) of the Disclosure
Schedule attached hereto, there are no (i) outstanding
or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights,
or other contracts or commitments that could require LLB
to issue, sell, or otherwise cause to become outstanding
any of its capital stock, (ii) outstanding or authorized
stock appreciation, phantom stock, profit participation,
or similar rights with respect to LLB or (iii)voting
trusts, proxies, or other agreements or understandings
with respect to the voting of the capital stock of LLB.
(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or
court to which LLB is subject or any provision of the
articles of organization or operating agreement of LLB
or (ii) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other
arrangement to which LLB is a party or by which it is
bound or to which any of its assets is subject (or
result in the imposition of any security interest upon
any of its assets). Except as set forth in Section 4.01
(c) of the Disclosure Schedule, LLB does not need to
give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order for the parties to
consummate the transactions contemplated by this
Agreement.
(d) Brokers' Fees. LLB has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this
Agreement.
(e) Title to Assets. LLB has good and marketable title to,
or a valid leasehold interest in, the properties and
assets used by them, located on their premises, or shown
on the Most Recent Balance Sheet or acquired after the
date thereof, free and clear of all security interests,
except for properties and assets disposed of in the
ordinary course of business since the date of the Most
Recent Balance Sheet.
(f) Financial Statements. Attached hereto as Exhibit A are
the following financial statements (collectively the
"Financial Statements"): (i) unaudited balance sheet and
statements of income, changes in stockholders' equity,
and cash flow as of and for the fiscal year ended
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December 31, 1999 (the "Most Recent Fiscal Year End")
for LLB. The Financial Statements (including the notes
thereto) have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition
of LLB as of such dates and the results of operations of
LLB for such periods, are correct and complete, and are
consistent with the books and records of LLB (which
books and records are correct and complete). LLB shall
have an audit of its Most Recent Fiscal Year End
completed within Ninety (90) days of the Closing Date
which results shall be distributed to Sunderland. In the
event the audit discloses a material adjustment by the
auditors of more than five percent (5%) to the Financial
Statements then the Chief Executive Officer of
Sunderland shall have the right but not the obligation
to make an adjustment to the shares delivered to the LLB
Shareholders pursuant to this Agreement based on such
adjustment and the LLB Shareholders agree to the same.
(g) Events Subsequent to Most Recent Fiscal Year End. Since
the Most Recent Fiscal Year End, there has not been any
adverse change in the business, financial condition,
operations, results of operations, or future prospects
of LLB.
(h) Undisclosed Liabilities. LLB does not have any liability
(and there is no basis for any present or future action,
suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them giving
rise to any liability), except for (i) liabilities set
forth on the face of the Most Recent Balance Sheet and
(ii) liabilities which have arisen after the Most Recent
Fiscal Month End in the ordinary course of business
(none of which results from, arises out of, relates to,
is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or
violation of law).
(i) Legal Compliance. LLB, and their respective predecessors
and affiliates has complied with all applicable laws
(including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof including
but not limited to all agencies governing certified
public accounting firms), and no action, suit,
proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice has been filed or commenced
against any of them alleging any failure so to comply.
(j) Tax Matters.
(i) LLB has filed all tax returns (the "Tax
Returns") that it was required to file. All
such Tax Returns were correct and complete
in
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all respects. All taxes owed by LLB
(whether or not shown on any Tax Return)
have been paid. LLB is not the beneficiary
of any extension of time within which to
file any Tax Return. No claim has ever been
made by an authority in a jurisdiction where
LLB does not file Tax Returns that it is or
may be subject to taxation by that
jurisdiction. There are no security
interests on any of the assets of LLB that
arose in connection with any failure (or
alleged failure) to pay any tax.
(ii) LLB has withheld and paid all taxes required
to have been withheld and paid in connection
with amounts paid or owing to any employee,
independent contractor, creditor,
stockholder, or other third party.
(k) Real Property.
(i) Section 4.01(k)(i) of the Disclosure
Schedule lists and describes briefly all
real property that LLB owns. With respect to
each such parcel of owned real property:
(A) LLB has good and marketable title to
the parcel of real property, free
and clear of any security interest,
easement, covenant, or other
restriction, except for installments
of special assessments not yet
delinquent and recorded easements,
covenants, and other restrictions
which do not impair the current use,
occupancy, or value, or the
marketability of title, of the
property subject thereto;
(B) there are no pending or, to the
knowledge of LLB and the
Shareholders (and employees with
responsibility for real estate
matters) of LLB and its
subsidiaries, threatened
condemnation proceedings, lawsuits,
or administrative actions relating
to the property or other matters
affecting adversely the current use,
occupancy, or value thereof;
(C) the legal description for the
parcel contained in the deed
thereof describes such parcel
fully and adequately, the
buildings and improvements are
located within the boundary
lines of the described parcels
of land, are not in violation of
applicable setback requirements,
zoning laws, and ordinances (and
none of the properties or
buildings or improvements
thereon are subject to
"permitted non-
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conforming use" or "permitted
non-conforming structure"
classifications), and do not
encroach on any easement which
may burden the land, and the
land does not serve any
adjoining property for any
purpose inconsistent with the
use of the land, and the
property is not located within
any flood plain or subject to
any similar type restriction for
which any permits or licenses
necessary to the use thereof
have not been obtained;
(D) all facilities have received all
approvals of governmental
authorities (including licenses
and permits) required in
connection with the ownership or
operation thereof and have been
operated and maintained in
accordance with applicable laws,
rules, and regulations;
(E) there are no leases, subleases,
licenses, concessions, or other
agreements, written or oral,
granting to any party or parties the
right of use or occupancy of any
portion of the parcel of real
property;
(F) there are no outstanding options or
rights of first refusal to purchase
the parcel of real property, or any
portion thereof or interest therein;
(G) there are no parties (other than
LLB) in possession of the parcel of
real property, other than tenants
under any leases disclosed in
ss.4.01(k) of the Disclosure
Schedule who are in possession of
space to which they are entitled;
(H) all facilities located on the parcel
of real property are supplied with
utilities and other services
necessary for the operation of such
facilities, including gas,
electricity, water, telephone,
sanitary sewer, and storm sewer, all
of which services are adequate in
accordance with all applicable laws,
ordinances, rules, and regulations
and are provided via public roads or
via permanent, irrevocable,
appurtenant easements benefitting
the parcel of real property; and
(I) each parcel of real property abuts
on and has direct vehicular access
to a public road, or has access to a
public road via a permanent,
irrevocable, appurtenant easement
benefitting the parcel of real
property, and access to the property
is provided by paved public
right-of-way with adequate curb cuts
available.
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<PAGE>
(ii) ss.4.01(k)(ii) of the Disclosure Schedule
lists and describes briefly all real
property leased or subleased to LLB. With
respect to each lease and sublease listed in
ss.4.01(k)(ii) of the Disclosure Schedule:
(A) the lease or sublease is legal,
valid, binding, enforceable, and
in full force and effect;
(B) the lease or sublease will continue
to be legal, valid, binding,
enforceable, and in full force and
effect on identical terms following
the consummation of the transactions
contemplated hereby;
(C) no party to the lease or sublease is
in breach or default, and no event
has occurred which, with notice or
lapse of time, would constitute a
breach or default or permit
termination, modification, or
acceleration thereunder;
(D) no party to the lease or sublease
has repudiated any provision
thereof;
(E) there are no disputes, oral
agreements, or forbearance programs
in effect as to the lease or
sublease;
(F) with respect to each sublease, the
representations and warranties set
forth in subsections (A) through (E)
above are true and correct with
respect to the underlying lease;
(G) LLB has not assigned, transferred,
conveyed, mortgaged, deeded in
trust, or encumbered any interest
in the leasehold or subleasehold;
(H) all facilities leased or subleased
thereunder have received all
approvals of governmental
authorities (including licenses and
permits) required in connection with
the operation thereof and have been
operated and maintained in
accordance with applicable laws,
rules, and regulations;
(I) all facilities leased or subleased
thereunder are supplied with
utilities and other services
necessary for the operation of said
facilities; and
(J) the owner of the facility leased or
subleased has good and marketable
title to the parcel of real
property, free and clear of any
security interest, easement,
covenant, or other restriction,
except for installments of special
easements not
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yet delinquent and recorded
easements, covenants, and other
restrictions which do not impair
the current use, occupancy, or
value, or the marketability of
title, of the property subject
thereto.
(l) Intellectual Property.
(i) LLB owns or has the right to use pursuant to
license, sublicense, agreement, or
permission all Intellectual Property
necessary or desirable for the operation of
the businesses of LLB as presently conducted
and as presently proposed to be conducted.
LLB has taken all necessary and desirable
action to maintain and protect each item of
Intellectual Property that it owns or uses.
(ii) ss.4.01(l)(ii) of the Disclosure Schedule
identifies each patent or registration which
has been issued to LLB with respect to any
of its Intellectual Property, identifies
each pending patent application or
application for registration which LLB has
made with respect to any of its Intellectual
Property, and identifies each license,
agreement, or other permission which LLB has
granted to any third party with respect to
any of its Intellectual Property (together
with any exceptions).ss.4.01(l)(ii) of the
Disclosure Schedule also identifies each
trade name or unregistered trademark used by
LLB in connection with any of its
businesses. With respect to each item of
Intellectual Property required to be
identified inss.4.01(l)(ii) of the
Disclosure Schedule:
(A) LLB possess all right, title,
and interest in and to the item,
free and clear of any security
interest, license, or other
restriction;
(B) the item is not subject to any
outstanding injunction, judgment,
order, decree, ruling, or charge;
(C) no action, suit, proceeding,
hearing, investigation, charge,
complaint, claim, or demand is
pending or, to the knowledge of LLB
and the directors and officers (and
employees with responsibility for
Intellectual Property matters) of
LLB, is threatened which challenges
the legality, validity,
enforceability, use, or ownership of
the item; and
(D) LLB has never agreed to indemnify
any Person for or against any
interference, infringement,
misappropriation, or other conflict
with respect to the item.
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<PAGE>
(iii) ss.4.01(l)(iii) of the Disclosure Schedule
identifies each item of Intellectual
Property that any third party owns and that
LLB uses pursuant to license, sublicense,
agreement, or permission.
(m) Tangible Assets. LLB owns or leases all buildings,
machinery, equipment, and other tangible assets
necessary for the conduct of their businesses as
presently conducted and as presently proposed to be
conducted. Each such tangible asset is free from defects
(patent and latent), has been maintained in accordance
with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear),
and is suitable for the purposes for which it presently
is used and presently is proposed to be used.
(n) Inventory. The inventory of LLB consists of raw
materials and supplies, manufactured and purchased
parts, goods in process, and finished goods, all of
which is merchantable and fit for the purpose for which
it was procured or manufactured, and none of which is
slow-moving, obsolete, damaged, or defective.
(o) Contracts and Records.ss.4.01(o) of the Disclosure
Schedule lists all material contracts to which LLB is a
party and all material books and records in LLB's
possession.
(p) Notes and Accounts Receivable. All notes and accounts
receivable of LLB are reflected properly on their books
and records, are valid receivables subject to no setoffs
or counterclaims, are collectible, and will be collected
in accordance with their terms at their recorded
amounts, subject to normal allowances for doubtful
accounts.
(q) Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of LLB.
(r) Insurance. ss.4.01(r) of the Disclosure Schedule sets
forth each insurance policy (including policies
providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements)
to which LLB has been a party, a named insured, or
otherwise the beneficiary of coverage at any time.
(s) Litigation.ss.4.01(s) of the Disclosure Schedule sets
forth each instance in which LLB (i) is subject to any
outstanding injunction, judgment, order, decree, ruling,
or charge or (ii) is a party or, to the knowledge of LLB
and the Shareholders (and employees with responsibility
for litigation matters) of LLB, is threatened to be made
a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or
quasi-judicial or
18
<PAGE>
administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator. None of
the actions, suits, proceedings, hearings, and
investigations set forth inss.4.01(s) of the Disclosure
Schedule could result in any material adverse change in
the business, financial condition, operations, results
of operations, or future prospects of LLB. Neither LLB
nor the Shareholders (and employees with responsibility
for litigation matters) of LLB has any reason to believe
that any such action, suit, proceeding, hearing, or
investigation may be brought or threatened against LLB.
(t) Employees. To the knowledge of LLB and the Shareholders
(and employees with responsibility for employment
matters) of LLB, no executive, key employee, or group of
employees has any plans to terminate employment with
LLB. LLB has not committed any unfair labor practice.
(u) Employee Benefits.
(i) ss.4.01(u) of the Disclosure Schedule lists
each employee benefit plan that LLB
maintains or to which LLB contributes.
(ii) LLB does not maintain or ever has maintained
or contributes, ever has contributed, or
ever has been required to contribute to any
Employee Welfare Benefit Plan providing
medical, health, or life insurance or other
welfare-type benefits for current or future
retired or terminated employees, their
spouses, or their dependents (other than in
accordance with Code Sec. 4980B).
(v) Guaranties. Except as set forth on the Most Recent
Financial Statements, LLB is not a guarantor or
otherwise is liable for any liability or obligation
(including indebtedness) of any other person.
(w) Environment, Health, and Safety.
(i) LLB and its respective predecessors and
affiliates has complied with all
Environmental, Health, and Safety Laws, and
no action, suit, proceeding, hearing,
investigation, charge, complaint, claim,
demand, or notice has been filed or
commenced against any of them alleging any
failure so to comply. Without limiting the
generality of the preceding sentence, LLB
and its respective predecessors and
affiliates has obtained and been in
compliance with all of the terms and
conditions of all permits, licenses, and
other authorizations which are required
under, and has complied with all other
limitations, restrictions, conditions,
standards, prohibitions, requirements,
obligations, schedules, and timetables
19
<PAGE>
which are contained in, all Environmental,
Health, and Safety Laws.
(ii) LLB has no liability for any illness of or
personal injury to any employee or other
individual, or for any reason under any
Environmental, Health, and Safety Law.
(iii) All properties and equipment used in the
business of LLB, and its respective
predecessors and affiliates have been free
of asbestos, PCB's, methylene chloride,
trichloroethylene,
1,2-trans-dichloroethylene, dioxins,
dibenzofurans, and Extremely Hazardous
Substances.
(x) Improper Payments. Neither LLB, nor any person acting on
behalf of LLB has made any payment or otherwise
transmitted anything of value, directly or indirectly to
any official or any government or agency or political
subdivision thereof for the purpose of influencing any
decision affecting the business of LLB.
(y) Copies of Documents. LLB has made available for
inspection and copying by Sunderland and its duly
authorized representatives, and will continue to do so
at all times, true and correct copies of all documents
which it has filed with governmental agencies which are
material to the terms and conditions contained in this
Agreement. Furthermore, all filings by LLB with
governmental agencies, have contained information which
is true and correct in all material respects and did not
contain any untrue statement of a material fact or omit
to state any material fact necessary to make the
statements made therein not misleading or which could
have any material adverse affect upon the financial
condition or operations of LLB or adversely affect the
objectives of this Agreement.
(z) Investment Intent of Shareholders. Each shareholder of
LLB represents and warrants to Sunderland that the
shares of Sunderland being acquired pursuant to this
Agreement are being acquired for his own account and for
investment and not with a view to the public resale or
distribution of such shares and further acknowledges
that the shares being issued have not been registered
under the Securities Act and are "restricted securities"
as that term is defined in Rule 144 promulgated under
the Securities Act and must be held indefinitely unless
they are subsequently registered under the Securities
Act or an exemption from such registration is available.
(aa) Clients. LLB has previously furnished to Sunderland a
complete and accurate listing setting forth the identity
of the clients of LLB.
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<PAGE>
(bb) Outside Financial Interests. Except as set forth in
Section 4.01(bb) of the Disclosure Schedule, no
Shareholder has any direct or indirect financial
interest in any competitor with, or supplier or customer
of Sunderland: provided, however, that for this purpose
ownership of corporate securities having no more than
five percent (5%) of the outstanding voting power of any
competitor, supplier or customer, which securities are
listed on any national securities exchange or authorized
for quotation on the Nasdaq National Market or the
Nasdaq Small Cap Market, shall not be deemed to be such
a financial interest, provided such Shareholder has no
other connection or relationship with such competitor,
supplier or customer.
(cc) Affiliate and Network Relationships. Set forth in
Section 4.01(cc) of the Disclosure Schedule is a list of
the name, address and telephone number and contact
person for each accounting, consulting or other firm
with which LLB has an affiliate or network relationship.
(dd) Peer Review. LLB has previously provided to Sunderland
the most recent peer review provided by January 23,
1998, including any suggestions contained in any of such
reports for changes in the practices and methods of LLB.
(ee) Disclosure. The representations and warranties contained
in this ss.4.01 do not contain any untrue statement of a
material fact or omit to state any material fact
necessary in order to make the statements and
information contained in this ss.4.01 not misleading.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO
THE EFFECTIVE TIME OF THE ACQUISITION
5.01 Conduct and Transactions of Sunderland. During the period from the
date hereof to the date of Closing, Sunderland shall:
(a) Conduct its operations in the ordinary course of
business; and
(b) Maintain its records and books of account in a manner
that fairly and correctly reflect its income, expenses,
assets and liabilities.
5.02 Conduct and Transactions of LLB. During the period from the date
hereof to the date of Closing, LLB shall:
(a) Obtain an investment letter from each Shareholder of
LLB;
(b) Conduct the operations of LLB in the ordinary course of
business; and
21
<PAGE>
(c) Maintain its records and books of account in a manner
that fairly and correctly reflect its income, expenses,
assets and liabilities.
LLB shall not during such period, except in the ordinary course of
business, without the prior written consent of Sunderland:
(b) Sell, dispose of or encumber any of the properties or
assets of LLB;
(b) Declare or pay any distribution on its capital stock or
make any other distribution of assets to the holders
thereof;
(c) Issue, reissue or sell, or issue options or rights to
subscribe to, or enter into any contract or commitment
to issue, reissue or sell, any of its capital stock or
acquire or agree to acquire any of its capital stock;
(d) Except as otherwise contemplated and required by this
Agreement, amend its Articles of Incorporation or merge
or consolidate with or into any other corporation or
entity or sell all or substantially all of its assets or
change in any manner the rights of its capital stock or
other securities;
(e) Pay or incur any obligation or liability, direct or
contingent;
(f) Incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise become responsible for
obligations of any other party, or make loans or
advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or
indirect, of any of its employees, except in accordance
with existing employment contracts;
(i) Enter into any agreement or make any commitment to any
labor union or organization;
(j) Make any material capital expenditures; and
(k) Allow any of the foregoing actions to be taken by any
subsidiary of LLB.
ARTICLE 6
22
<PAGE>
RIGHTS OF INSPECTION
6.01 During the period from the date of this Agreement to the date of
Closing of the acquisition, Sunderland and LLB agree to use their best efforts
to give the other party, including its representatives and agents, full access
to the premises, books and records of each of the entities, and to furnish the
other with such financial and operating data and other information including,
but not limited to, copies of all legal documents and instruments referred to on
any schedule or exhibit hereto, with respect to the business and properties of
Sunderland or LLB, as the case may be, as the other shall from time to time
request; provided, however, if there are any such investigations: (1) they shall
be conducted in such manner as not to unreasonably interfere with the operation
of the business of the other parties and (2) such right of inspection shall not
affect in any way whatsoever any of the representations or warranties given by
the respective parties hereunder. In the event of termination of this Agreement,
Sunderland and LLB will each return to the other all documents, work papers and
other materials obtained from the other party in connection with the
transactions contemplated hereby, and will take such other steps necessary to
protect the confidentiality of such material.
ARTICLE 7
CONDITIONS TO CLOSING
7.01 Conditions to Obligations of LLB. The obligation of LLB to perform
this Agreement is subject to the satisfaction of the following conditions on or
before the Closing unless waived in writing by LLB:
(a) Representations and Warranties. There shall be no
information disclosed in the Schedules delivered by
Sunderland which in the opinion of LLB would materially
adversely affect the proposed transaction and intent of
the parties as set forth in this Agreement. The
representations and warranties of Sunderland set forth
in Article 3 hereof shall be true and correct in all
material respects as of the date of this Agreement and
as of the Closing as though made on and as of the
Closing, except as otherwise permitted by this
Agreement.
(b) Performance of Obligations. Sunderland shall have in all
material respects performed all agreements required to
be performed by it under this Agreement and shall have
performed in all material respects any actions
contemplated by this Agreement prior to or on the
Closing and Sunderland shall have complied in all
material respects with the course of conduct required by
this Agreement.
(c) Corporate Action. Minutes, certified copies of corporate
resolutions and/or other documentary evidence
satisfactory to counsel for LLB
23
<PAGE>
that Sunderland has submitted this Agreement and any
other documents required hereby to such parties for
approval as provided by applicable law.
(d) Consents. Execution of this Agreement and any consents
necessary for or approval of any party listed on any
Schedule delivered by Sunderland whose consent or
approval is required pursuant thereto shall have been
obtained.
(e) Financial Statements. LLB shall have been furnished with
audited financial statements of Sunderland including,
but not limited to, balance sheets and profit and loss
statements as of December 31, 1999. Such financial
statements shall have been prepared in conformity with
generally accepted accounting principles on a basis
consistent with those of prior periods and fairly
present the financial position of Sunderland as of
December 31, 1999.
(f) Statutory Requirements. All statutory requirements for
the valid consummation by Sunderland of the transactions
contemplated by this Agreement shall have been
fulfilled.
(g) Approvals. All authorizations, consents, approvals,
permits and orders of all federal and state governmental
agencies, banks, and other persons required to be
obtained by Sunderland for consummation of the
transactions contemplated by this Agreement shall have
been obtained.
(h) Employment Agreements. Existing Sunderland employment
agreements will have been delivered to counsel
for LLB.
(i) Changes in Financial Condition of Sunderland. There
shall not have occurred any material adverse change in
the financial condition or in the operations of the
business of Sunderland, except expenditures in
furtherance of this Agreement.
(j) Absence of Pending Litigation. Sunderland is not engaged
in or threatened with any suit, action, or legal,
administrative or other proceedings or governmental
investigations pertaining to this Agreement or the
consummation of the transactions contemplated hereunder.
(k) Authorization for Issuance of Stock. LLB shall have
received in form and substance satisfactory to counsel
for LLB a letter instructing and authorizing the
Registrar and Transfer Agent for the shares of common
stock of Sunderland to issue stock certificates
representing ownership of Sunderland common stock to the
Shareholders of LLB in accordance with the terms of this
Agreement and a letter from said Registrar and Transfer
24
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Agent acknowledging receipt of the letter of instruction
and stating to the effect that the Registrar and
Transfer Agent holds adequate supplies of stock
certificates necessary to comply with the letter of
instruction and the terms and conditions of this
Agreement.
7.02 Conditions to Obligations of Sunderland. The obligation of
Sunderland to perform this Agreement is subject to the satisfaction of the
following conditions on or before the Closing unless waived in writing by
Sunderland:
(a) Representations and Warranties. There shall be no
information disclosed in the Schedules delivered by LLB,
which in the opinion of Sunderland, would materially
adversely affect the proposed transaction and intent of
the parties as set forth in this Agreement. The
representations and warranties of LLB set forth in
Article 4 hereof shall be true and correct in all
material respects as of the date of this Agreement and
as of the Closing as though made on and as of the
Closing, except as otherwise permitted by this
Agreement.
(b) Performance of Obligations. LLB shall have in all
material respects performed all agreements required to
be performed by it under this Agreement and shall have
performed in all material respects any actions
contemplated by this Agreement prior to or on the
Closing and LLB shall have complied in all respects with
the course of conduct required by this Agreement.
(c) Shareholder Action. Minutes, certified copies of
corporate resolutions and/or other documentary evidence
satisfactory to counsel for Sunderland that LLB has
submitted this Agreement and any other documents
required hereby to such parties for approval as provided
by applicable law.
(d) Consents. Any consents necessary for or approval of any
party listed on any Schedule delivered by LLB, whose
consent or approval is required pursuant thereto, shall
have been obtained.
(e) Financial Statements. Sunderland shall have been
furnished with financial statements of LLB for the
period ended December 31, 1999. Such financial
statements shall fairly present the financial position
of LLB as of December 31, 1999.
(f) Statutory Requirements. All statutory requirements for
the valid consummation by LLB of the transactions
contemplated by this Agreement shall have been
fulfilled.
(g) Approvals. All authorizations, consents, approvals,
permits and orders of
25
<PAGE>
all federal and state governmental agencies, banks and
other entities required to be obtained by LLB for
consummation of the transactions contemplated by this
Agreement shall have been obtained.
(h) Employment Agreements. Existing LLB employment
agreements will have been delivered to counsel for
Sunderland.
(i) Changes in Financial Condition of LLB. There shall not
have occurred any material adverse change in the
financial condition or in the operations of the business
of LLB, except expenditures in furtherance of this
Agreement.
(j) Absence of Pending Litigation. LLB is not engaged in or
threatened with any suit, action, or legal,
administrative or other proceedings or governmental
investigations pertaining to this Agreement or the
consummation of the transactions contemplated hereunder.
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such further
or other actions as the other party or parties to this Agreement may reasonably
deem necessary in order to carry out the purposes and intent of this Agreement.
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.01 All statements contained in any written certificate, schedule,
exhibit or other written instrument delivered by Sunderland or LLB pursuant
hereto, or otherwise adopted by Sunderland, by its written approval, or by LLB
by its written approval, or in connection with the transactions contemplated
hereby, shall be deemed representations and warranties by Sunderland or LLB as
the case may be. All representations, warranties and agreements made by either
party shall survive for the period of the applicable statute of limitations and
until the discovery of any claim, loss, liability or other matter based on
fraud, if longer.
ARTICLE 10
TERMINATION OF AGREEMENT AND
ABANDONMENT OF REORGANIZATION
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10.1 Termination. Anything herein to the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the acquisition
contemplated hereby may be terminated at any time before the closing date as
follows:
(a) By mutual written consent of the Board of Directors of
Sunderland and the Shareholders of LLB.
(b) By the Board of Directors of Sunderland if any of the
conditions set forth in Section 7.02 shall not have been
satisfied.
(c) By the Shareholders of LLB if any of the conditions set
forth in Section 7.01 shall not have been satisfied.
10.2 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the acquisition are terminated and
abandoned pursuant to this Article 10 hereof, this Agreement shall become null
and void and of no force and effect and there shall be no liability on the part
of any of the parties hereto, or their respective directors, officers,
shareholders or controlling persons to each other. Each party hereto will pay
all costs and expenses incident to its negotiation and preparation of this
Agreement and any of the documents evidencing the transactions contemplated
hereby, including fees, expenses and disbursements of counsel.
ARTICLE 11
EXCHANGE OF SHARES: FRACTIONAL SHARES
11.01 Exchange of Shares. At the Closing, Sunderland shall issue a
letter to the transfer agent of Sunderland with a copy of the resolution of the
Board of Directors of Sunderland authorizing the issuance of Sunderland shares
as set forth on the signature page of this Agreement.
11.02 Restrictions on Shares Issued to LLB. Due to the fact that LLB
will receive shares of Sunderland common stock in connection with the
acquisition which have not been registered under the Securities Act of 1933 by
virtue of the exemption provided in Section 4(2) of such Act, those shares of
Sunderland will contain the following legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have
been acquired for investment and may not be sold or offered
for sale in the absence of an effective Registration Statement
for the shares under the Securities Act of 1933 or an opinion
of counsel to the Corporation that such registration is not
required.
11.03 Piggyback Registration Rights. In the event Sunderland proposes
to file
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a registration statement with the SEC with respect to an underwritten public
offering by Sunderland of Sunderland common stock for cash, during the period
commencing on the date hereof and ending on the first anniversary of the Closing
Date, Sunderland shall give written notice of such proposed filing to the
Shareholders at least fifteen (15) days before the anticipated filing date and
such notice shall offer each Shareholder the opportunity to register such number
of the Shareholder's share of Sunderland common stock as such Shareholder may
request in writing within ten (10) days after receipt of such notice.
Notwithstanding the foregoing, if the managing underwriter of such offering
advises Sunderland that the total numbers of shares of Sunderland common stock
which Sunderland, the Shareholders and any other persons intend to include in
such offering would adversely affect the success of such offering, then the
amount of shares of Sunderland common stock to be offered for the account of the
Shareholders shall be reduced to the extent necessary to reduce the total number
of shares of Sunderland common stock to be included in such offering to the
amount recommended by the managing underwriter; provided that if the shares of
Sunderland common stock are being offered for the account of other persons as
well as the Shareholders, such reduction shall not represent a greater fraction
of the number of shares of Sunderland common stock requested to be registered by
the Shareholders than the fraction of similar reductions imposed on such other
persons over the amount of securities requested to be registered by such other
persons. Nothing contained herein shall require Sunderland to (a) reduce the
amount of shares of Sunderland common stock to be offered by Sunderland in such
offering for any reason or (b) include any shares of Sunderland common stock of
any Shareholder if such shares are eligible to be sold under paragraph (k) of
Rule 144 under the Securities Act.
ARTICLE 12
MISCELLANEOUS
12.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada excluding the conflicts of laws.
12.02 Notices. All notices necessary or appropriate under this
Agreement shall be effective when personally delivered or deposited in the
United States mail, postage prepaid, certified or registered, return receipt
requested, and addressed to the parties last known address which addresses are
currently as follows:
If to Sunderland: 2901 El Camino Ave.
Suite 206
Las Vegas, Nevada 89102
If to LLB: 2901 El Camino Ave.
Suite 105
Las Vegas, Nevada 89102
or at such other address as a party may from time to time designate by notice
hereunder.
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12.03 Amendment and Waiver. The parties hereby may, by mutual agreement
in writing signed by each party, amend this Agreement in any respect. Any term
or provision of this Agreement may be waived in writing at any time by the party
which is entitled to the benefits thereof.
12.04 Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by
Sunderland or LLB shall not constitute a waiver of the right to pursue other
available remedies.
12.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of Sunderland and LLB.
12.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigned regarding the
subject matter hereof, and supersedes all prior written or oral understandings
or agreements between the parties.
12.08 Each Party to Bear Its Own Expense. Sunderland and LLB shall each
bear their own respective expenses incurred in connection with the negotiation,
execution, closing, and performance of this Agreement, including counsel fees
and accountant fees.
12.09 Captions and Section Headings. Captions and section headings
used herein are for convenience only and shall not control or affect the meaning
or construction of any provisions of this Agreement.
12.10 Attorneys' Fees. In the event any party hereto institutes an
action or proceeding to enforce any rights arising under this Agreement, the
party prevailing in such action or other proceeding shall be paid all reasonable
costs and attorneys' fees by the other party, such fees to be set by the court
and not by a jury and to be included in any judgment entered in such proceeding.
Executed as of the date first written above.
L.L. BRADFORD & COMPANY SUNDERLAND CORPORATION,
a Nevada professional corporation a Delaware corporation
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By:______________________________ By:________________________________
Dated:____________________________ Dated:_____________________________
- ---------------------------------
Lance K. Bradford, Shareholder
Dated:____________________________
- ----------------------------------
Leilani Bradford, Shareholder
Dated:_____________________________
- -----------------------------------
David Hall, Shareholder
Dated:______________________________
- -----------------------------------
Arthur de Joya, Shareholder
Dated:______________________________
