UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
of the
SECURITIES EXCHANGE ACT OF 1934
Date of event requiring report: March 14, 2000
Score One, Inc.
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(Exact name of registrant as specified in its charter)
Nevada
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(State or other jurisdiction of incorporation or organization)
0-26717 88-0409164
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(Commission File Number) (IRS Employer Identification Number)
2133 East 9400 South, Suite 151, Sandy, Utah, 84093
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(Registrant's address)
(801) 274-6415
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER
Forward Split
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On March 4, 2000, the Board of Directors of Score One, Inc. (the
"Corporation") declared a forward stock split to be effective March 14, 2000.
The forward stock split will be on a 1.65 for one basis on both the
Corporation's authorized and issued and outstanding $0.001 par value common
stock ("Common Stock"). Every holder of record of the Corporation's Common
Stock, as of March 14, 2000 (the "Record Date"), shall be entitled to .65
additional shares of the Corporation's Common Stock for each share of Common
Stock held. Any fractional shares shall be rounded up to the nearest whole
number. There shall be no change in par value of the Corporation's Common
Stock, which shall remain at $0.001. New shares reflecting post-split amounts
are being issued under a mandatory exchange. All shareholders of the
Corporation's Common Stock, as of the Record Date, are required to surrender
their current Common Stock share certificates representing the pre-split share
amounts in exchange for new Common Stock share certificates representing the
post-split share amounts. All certificates must be surrendered to the
Corporation's transfer agent by person or by mail to Signature Stock Transfer,
Inc., 14675 Midway Road, Suite 221, Addison, Texas 75244; (972) 788-4193.
Certificates must be accompanied by a check in the amount of $22.00 ($20 fee
for each certificate being issued and $2 fee for each certificate being
canceled). A replacement certificate representing the post-split share amount
will be returned within 7 to 10 days of receipt by the transfer agent. All
shares will be reissued in the name as they appear on the certificates
surrendered, unless specific instructions are provided and the certificates
are also accompanied by a signature guaranteed medallion guaranteed stock
power.
As a result of the 1.65-for-one forward stock split, the Corporation
shall have 3,630,000 post forward-split shares of Common Stock issued and
outstanding instead of 2,200,000 pre forward-split shares. Correspondingly,
the Corporation shall have 41,250,000 post forward-split shares of Common
Stock authorized instead of 25,000,000 pre forward-split shares. A copy of
the Corporation's Certificate of Change filed with the State of Nevada on
March 9, 2000 is attached as an exhibit hereto and incorporated herein by
reference.
As a result of the forward stock split, the Corporation has received a
new CUSIP number and will receive a new stock symbol. The new CUSIP number of
the Corporation is 80917T 20 9 which replaces the old CUSIP number of 80917T
10 0.
The forward stock split was effected in anticipation of a share exchange
between the Corporation and Advanced Technology International Holdings Limited
("ATIH"), a British Virgin Islands corporation, pursuant to a Share Exchange
Agreement entered into by and between the Corporation, Ken Kurtz who is the
Corporation's majority shareholder, and ATIH dated February 1, 2000
("Exchange").
Pursuant to the Exchange, at closing, which is expected to occur on or
about March 24, 2000, the Corporation will purchase all of the issued and
outstanding common stock of ATIH in exchange for 16,300,000 post-split shares
of the Corporation's Common Stock.
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After giving effect to the forward stock split discussed herein, the
Corporation is presently authorized to issue 41,250,000 shares of Common Stock
of which, 3,630,000 shares are presently issued and outstanding. The Exchange
contemplates that, after the closing, there will be approximately 19,930,000
shares of the Corporation's Common Stock issued and outstanding.
The 3,630,000 shares of Common Stock of the Corporation held by the
shareholders prior to the closing of the Exchange will represent approximately
18.2% of the post-closing 19,930,000 Common Stock shares expected to be issued
outstanding, and the 16,300,000 Common Stock shares to be issued to the
shareholders of ATIH will represent approximately 72.8% of the post-closing
19,930,000 Common Stock shares expected to be issued and outstanding.
Also pursuant to the Exchange, the Corporation will appoint Mr. Wing
Cheong HO, Mr. Wing Hung HO and Mr. Wing Bun LI Michael to the Corporation's
Board of Directors to serve until their respective successors are elected and
qualify. Immediately after such appointments, the Corporation will accept the
resignation of Ken Kurtz, a current member of the Board of Directors who will
resign subject to closing. The closing will not occur, and the new directors
will not begin their term, until after the expiration of the ten-day period
beginning on the later of the date of the filing of an Information Statement
with the SEC pursuant to Rule 14f-1 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the date of mailing of the Information
Statement to the Corporation's stockholders. More information about the
expected new directors and the expected composition of the Company's ownership
after closing of the expected Exchange will be provided in the Information
Statement which will be filed with the Securities and Exchange Commission and
mailed to all shareholders of record as of the Record Date.
ATIH was incorporated in the British Virgin Islands on November 18,
1998, under the name of Modern Frame International Ltd. On December 23, 1999,
ATIH changed its name from Modern Frame International Ltd. to Advanced
Technology International Holdings Limited.
Through its wholly owned subsidiaries, ATIH is engaged in the
manufacturing and sale of printed circuit boards for telecommunication
systems, scientific calculators and audiovisual equipment.
Because of the change in the composition of the Board and because of the
share issuances under the Exchange Agreement, there will be a change in
control of the Corporation on the closing date, which is expected to be on or
about March 24, 2000. However, there are no assurances that closing will
occur.
Additional information about the Exchange will be contained in the
Company's Report on Form 8-K which is expected to be filed with the Securities
and Exchange Commission ("SEC") after closing of the expected Exchange.
Pursuant to the requirement of the Securities Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED: March 14, 2000
Score One, Inc.
By: /s/ Ken Kurtz
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Name: Ken W. Kurtz
Title: President
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INDEX TO EXHIBITS
Sec Ref. Page
No. No. Description
- -------- ---- -----------
Ex-3(i) 5 Certificate of Change filed with the Nevada
Secretary of State on March 9, 2000 reflecting
the 1.65-for-one forward stock split.
Ex-10 7 Share Exchange Agreement dated February 1, 2000
between the Corporation and Advanced Technology
International Holdings Limited.
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CERTIFICATE OF CHANGE IN NUMBER OF
AUTHORIZED SHARES OF CLASS AND SERIES
SCORE ONE, INC.
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Name of Corporation
I, the undersigned president and secretary of Score One, Inc., do hereby
certify that the Board of Directors of the Corporation adopted a resolution by
written consent on March 4, 2000, pursuant to NRS 78.207, to amend the
Corporation's Articles of Incorporation as follows:
Article IV, Section 4.01 - is hereby amended as follows:
ARTICLE IV
SHARES OF STOCK
Section 4.01 Number and Class. The total number of shares of
authorized capital stock of the Corporation shall consist of two classes:
Common Stock in the amount of forty one million two hundred fifty thousand
(41,250,000), at $0.001 par value; and Preferred Stock in the amount of five
million (5,000,000), at $0.001 par value.
The Common and Preferred Stock may be issued from time to time without
action by the stockholders. The Common and Preferred Stock may be issued for
such consideration as may be fixed from time to time by the Board of
Directors.
The Board of Directors may issue such shares of Common and Preferred
Stock in one or more series, with such voting powers, designations,
preferences and rights or qualifications, limitations or restrictions thereof
as shall be stated in the resolution or resolutions adopted by them.
I further certify the following:
(a) The current number of authorized shares and the par value of each class
and series of the shares before the change (1.65-for-one forward stock
split on the Common Stock) is:
Common Stock: 25,000,000 shares, $0.001 par value.
Preferred Stock: 5,000,000 shares, at $0.001 par value.
(b) The number of authorized shares and the par value of each class and
series of the shares after the change (1.65-for-one forward stock split
on the Common Stock) is:
Common Stock: 41,250,000 shares, $0.001 par value.
Preferred Stock: 5,000,000 shares, at $0.001 par value.
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(c) The number of shares of each affected class and series to be issued and
outstanding after the change (1.65-for-1 forward stock split on the
Common Stock) in exchange for each issued share of the same class and
series is:
Common Stock: 3,630,000 shares, at $0.001 par value.
(d) All fractional shares will be rounded up to the nearest whole number.
(e) The change (1.65-for-one forward stock split on the Common Stock) was
only approved by the Board of Directors, thus stockholder approval is
not required under NRS 78.207.
(f) The change (1.65-for-one forward stock split on the Common Stock) shall
be effective on March 4, 2000.
/s/ Ken Kurtz
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Ken Kurtz, President and Secretary
State of Utah )
) ss.
County of Salt Lake )
On the 8th day of March, 2000, personally appeared before me, a Notary
Public, Ken Kurtz, who acknowledged that he executed the above instrument.
/s/ Tammy Gehring
S --------------------------------
E Notary Public
A
L
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SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT, dated as of February 1, 2000, is by and
among Score One, Inc., a Utah corporation (the "Company"); Ken Kurtz
(the"Shareholder"), Advanced Technology International Holdings Limited, a
British Virgin Islands corporation ("ATHI"); and shareholders of ATHI listed
on the signature page (the "Sellers").
W I T N E S S E T H:
WHEREAS, the Sellers own 100% of the shares of common stock of ATHI, in
the denominations as set forth opposite their respective names on Schedule I
to this Agreement which shares constitute all of the issued and outstanding
shares of capital stock of ATHI (the "ATHI Shares"); and
WHEREAS, the Company desires to acquire from the Sellers, and the
Sellers desire to sell to the Company, all of the ATHI Shares in exchange for
the issuance by the Company of an aggregate of 16,300,000 post forward-split
shares (the "Company Shares") of the Company's common stock, par value $.001
per share (the "Company Common Stock"), on the terms and conditions set forth
below;
WHEREAS, the Shareholder of the Company will benefit from the
transactions contemplated herein,
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and agreements set forth herein, the parties
hereto agree as follows:
ARTICLE I
EXCHANGE OF SHARES
1.1 Exchange of Shares. Subject to the terms and conditions of this
Agreement, on the Closing Date (as hereinafter defined):
(a) the Company shall issue and deliver to each of the Sellers the
number of authorized but unissued shares of Company Common Stock set forth
opposite such Seller's name set forth on Schedule I hereto, and
(b) each Seller agrees to deliver to the Company, the number of
authorized but unissued shares of Common Stock, par value $1.00 per share, of
ATHI set forth opposite such Seller's name on Schedule I hereto along with an
appropriately executed stock power endorsed in favor of the Company; and
(c) the Company currently has 2,200,000 shares of its $.001 par value
common stock issued and outstanding. The parties hereto further anticipate a
1.65:1 forward split on the Company's common stock thereby resulting in
3,630,000 shares issued and outstanding. After giving effect to the exchange
of shares herein, the Company shall have 19,930,000 post forward-split common
stock shares issued and outstanding.
1.2 Time and Place of Closing. The closing of the transactions
contemplated hereby (the "Closing") shall take place at the offices of
Advanced Technology International Holdings, Inc's. counsel on March 10, 2000
(the "Closing Date") at 10:00 A.M., Los Angeles time, or at such other place
as the Company and the Sellers may agree.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDER
The Company and the Shareholder represent and warrant to the best of
their knowledge, to each of the Sellers that now and/or as of the Closing:
2.1 Due Organization and Qualification; Subsidiaries; Due
Authorization.
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of formation, with
full corporate power and authority to own, lease and operate its respective
business and properties and to carry on its respective business in the places
and in the manner as presently conducted or proposed to be conducted. The
Company is in good standing as a foreign corporation in each jurisdiction in
which the properties owned, leased or operated, or the business conducted, by
it requires such qualification except for any such failure, which when taken
together with all other failures, is not likely to have a material adverse
effect on the business of the Company and its Subsidiaries taken as a whole.
(b) The Company does not own, directly or indirectly, any capital
stock, equity or interest in any corporation, firm, partnership, joint venture
or other entity.
(c) The Company has all requisite corporate power and authority to
execute and deliver this Agreement, and to consummate the transactions
contemplated hereby and thereby. The Company has taken all corporate action
necessary for the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and this Agreement
constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its respective terms, except as may be
affected by bankruptcy, insolvency, moratoria or other similar laws affecting
the enforcement of creditors' rights generally and subject to the
qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefore may be brought.
2.2 No Conflicts or Defaults. The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby do not and shall not (a) contravene the Certificate of Incorporation or
By-laws of the Company or (b) with or without the giving of notice or the
passage of time (i) violate, conflict with, or result in a breach of, or a
default or loss of rights under, any material covenant, agreement, mortgage,
indenture, lease, instrument, permit or license to which the Company is a
party or by which the Company is bound, or any judgment, order or decree, or
any law, rule or regulation to which the Company is subject, (ii) result in
the creation of, or give any party the right to create, any lien, charge,
encumbrance or any other right or adverse interest ("Liens") upon any of the
assets of the Company, (iii) terminate or give any party the right to
terminate, amend, abandon or refuse to perform, any material agreement,
arrangement or commitment to which the Company is a party or by which the
Company's assets are bound, or (iv) accelerate or modify, or give any party
the right to accelerate or modify, the time within which, or the terms under
which, the Company is to perform any duties or obligations or receive any
rights or benefits under any material agreement, arrangement or commitment to
which it is a party.
2.3 Capitalization. The authorized capital stock of the Company
immediately prior to giving effect to the transactions contemplated hereby
consists of 25,000,000 shares of Common Stock of which 2,200,000 shares of
$.001 par value Common Stock are issued and outstanding as of the date hereof
and 5,000,000 shares of $.001 par value Preferred Stock authorized of which no
shares are issued or outstanding. All of the outstanding shares of Common
Stock are, and the Company Shares when issued in accordance with the terms
hereof, will be, duly authorized, validly issued, fully paid and
nonassessable, and have not been or, with respect to the Company Shares, will
not be issued in violation of any preemptive right of stockholders. The
Company Shares are not subject to any preemptive or subscription right, any
voting trust agreement or other contract, agreement, arrangement, option,
warrant, call, commitment or other right of any character obligating or
entitling the Company to issue, sell, redeem or repurchase any of its
securities, and there is no outstanding security of any kind convertible into
or exchangeable for Common Stock. The Company has not granted registration
rights to any person.
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2.4 Financial Statements. Exhibit 2.4-EX to the Disclosure Schedule
contains copies of the consolidated balance sheets of the Company at May 31,
1999, 1998, 1997 and from inception on June 7, 1996, and the related
statements of operations, stockholders' equity and cash flows for the fiscal
years then ended, including the notes thereto, as audited by Jones Jensen and
Company, certified public accountants (all such statements being the "Company
Financial Statements"). Exhibit 2.4-EX to the Disclosure Schedule also
contains copies of the consolidated balance sheets of the Company at November
30, 1999, and 1998 and from inception on June 7, 1996, and the related
statements of operations, stockholders' equity and cash flows for the six
month period then ended prepared by the Company's management. The Financial
Statements, together with the notes thereto, have been prepared in accordance
with U.S. generally accepted accounting principles applied on a basis
consistent throughout all periods presented, subject to audit adjustments,
which are not expected to be material. Such statements present fairly the
financial position of the Company as of the dates and for the periods
indicated. The books of account and other financial records of the Company
have been maintained in accordance with good business practices.
2.5 Further Financial Matters. The Company does not have any
liabilities or obligations, whether secured or unsecured, accrued, determined,
absolute or contingent, asserted or unasserted or otherwise, which are
required to be reflected or reserved in a balance sheet or the notes thereto
under generally accepted accounting principles, but which are not reflected in
the Financial Statements.
2.6 Taxes. The Company has filed all United States federal, state,
county, local and foreign national, provincial and local returns and reports
which were required to be filed on or prior to the date hereof in respect of
all income, withholding, franchise, payroll, excise, property, sales, use,
value-added or other taxes or levies, imposts, duties, license and
registration fees, charges, assessments or withholdings of any nature
whatsoever (together, "Taxes"), and has paid all Taxes (and any related
penalties, fines and interest) which have become due pursuant to such returns
or reports or pursuant to any assessment which has become payable, or, to the
extent its liability for any Taxes (and any related penalties, fines and
interest) has not been fully discharged, the same have been properly reflected
as a liability on the books and records of the Company and adequate reserves
therefore have been established. All such returns and reports filed on or
prior to the date hereof have been properly prepared and are true, correct
(and to the extent such returns reflect judgments made by the Company, as the
case may be, such judgments were reasonable under the circumstances) and
complete in all material respects. No tax return or tax return liability of
the Company has been audited or, presently under audit. The Company has not
given or been requested to give waivers of any statute of limitations relating
to the payment of any Taxes (or any related penalties, fines and interest).
There are no claims pending or, to the knowledge of the Company, threatened,
against the Company for past due Taxes. All payments for withholding taxes,
unemployment insurance and other amounts required to be paid for periods prior
to the date hereof to any governmental authority in respect of employment
obligations of the Company, including, without limitation, amounts payable
pursuant to the Federal Insurance Contributions Act, have been paid or shall
be paid prior to the Closing and have been duly provided for on the books and
records of the Company and in the Financial Statements.
2.7 Indebtedness; Contracts; No Defaults.
(a) Item 2.7 of the Disclosure Schedule sets forth a true, complete
and correct list of all material instruments, agreements, indentures,
mortgages, guarantees, notes, commitments, accommodations, letters of credit
or other arrangements or understandings, whether written or oral, to which the
Company or any Subsidiary is a party (collectively, the "Operating
Agreements").
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(b) Except as disclosed in Item 2.7 of the Disclosure Schedule,
neither the Company, any Subsidiary, nor, to the Company's knowledge, any
other person or entity is in breach in any material respect of, or in default
in any material respect under, any material contract, agreement, arrangement,
commitment or plan to which the Company is a party, and no event or action has
occurred, is pending or is threatened, which, after the giving of notice,
passage of time or otherwise, would constitute or result in such a material
breach or material default by the Company or, to the knowledge of the Company,
any other person or entity. The Company has not received any notice of
default under any contract, agreement, arrangement, commitment or plan to
which it is a party, which default has not been cured to the satisfaction of,
or duly waived by, the party claiming such default on or before the date
hereof.
2.8 Personal Property. The Company has good and marketable title to
all of its tangible personal property and assets, including, without
limitation, all of the assets reflected in the Financial Statements that have
not been disposed of in the ordinary course of business and such property is
free and clear of all Liens or mortgages.
2.9 Real Property. Item 2.9 of the Disclosure Schedule sets forth a
true and complete list of all real property owned by, or leased or subleased
by or to, the Company.
2.10 Compliance with Law. The Company is not conducting its respective
business or affairs in violation of any applicable federal, state or local
law, ordinance, rule, regulation, court or administrative order, decree or
process, or any requirement of insurance carriers. The Company has not
received any notice of violation or claimed violation of any such law,
ordinance, rule, regulation, order, decree, process or requirement.
(b) The Company is in compliance with all applicable federal, state,
local and foreign laws and regulations relating to the protection of the
environment and human health. There are no claims, notices, actions, suits,
hearings, investigations, inquiries or proceedings pending or, to the
knowledge of the Company, threatened against the Company that are based on or
related to any environmental matters or the failure to have any required
environmental permits, and there are no past or present conditions that the
Company has reason to believe are likely to give rise to any material
liability or other obligations of the Company or any Subsidiary under any
environmental laws.
2.11 Permits and Licenses. The Company has all certificates of
occupancy, rights, permits, certificates, licenses, franchises, approvals and
other authorizations as are reasonably necessary to conduct its respective
business and to own, lease, use, operate and occupy its assets, at the places
and in the manner now conducted and operated, except those the absence of
which would not materially adversely affect its respective business. The
Company has not received any written or oral notice or claim pertaining to the
failure to obtain any material permit, certificate, license, approval or other
authorization required by any federal, state or local agency or other
regulatory body, the failure of which to obtain would materially and adversely
affect its business.
2.12 Ordinary Course. The Company has conducted its business,
maintained its real property and equipment and kept its books of account,
records and files, substantially in the same manner as previously conducted,
maintained or kept and solely in the ordinary course.
2.13 No Adverse Changes. There have not been (a) any material adverse
change in the business, prospects, the financial or other condition, or the
respective assets or liabilities of the Company as reflected in the Financial
Statements, (b) any material loss sustained by the Company, including, but not
limited to any loss on account of theft, fire, flood, explosion, accident or
other calamity, whether or not insured, which has materially and adversely
interfered, or may materially and adversely interfere, with the operation of
the Company's business, or (c) to the best knowledge of the Company, any
event, condition or state of facts, including, without limitation, the
enactment, adoption or promulgation of any law, rule or regulation, the
occurrence of which materially and adversely does or would affect the results
of operations or the business or financial condition of the Company.
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2.14 Litigation. There is no claim, dispute, action, suit, proceeding
or investigation pending or, to the knowledge of the Company, threatened,
against or affecting the business of the Company, or challenging the validity
or propriety of the transactions contemplated by this Agreement, at law or in
equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to
the knowledge of the Company, has any such claim, dispute, action, suit,
proceeding or investigation been pending or threatened, during the 12-month
period preceding the date hereof; (b) there is no outstanding judgment, order,
writ, ruling, injunction, stipulation or decree of any court, arbitrator or
federal, state, local, foreign or other governmental authority, board, agency,
commission or instrumentality, against or materially affecting the business of
the Company ; and (c) the Company has not received any written or verbal
inquiry from any federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality concerning the
possible violation of any law, rule or regulation or any matter disclosed in
respect of its business.
2.15 Insurance. The Company does not currently maintain any form of
insurance.
2.16 Certificate of Incorporation and By-laws; Minute Books. The
copies of the Certificate of Incorporation and By-laws (or similar governing
documents) of the Company, and all amendments to each are true, correct and
complete. The minute books of the Company contains true and complete records
of all meetings and consents in lieu of meetings of their respective Board of
Directors (and any committees thereof), or similar governing bodies, since the
time of their respective organization. The stock books of the Company are
true, correct and complete.
2.17 Employee Benefit Plans. The Company does not maintain, nor has
the Company maintained in the past, any employee benefit plans ("as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), or any plans, programs, policies, practices, arrangements
or contracts (whether group or individual) providing for payments, benefits or
reimbursements to employees of the Company, former employees, their
beneficiaries and dependents under which such employees, former employees,
their beneficiaries and dependents are covered through an employment
relationship with the Company, any entity required to be aggregated in a
controlled group or affiliated service group with the Company for purposes of
ERISA or the Internal Revenue Code of 1986 (the "Code") (including, without
limitation, under Section 414(b), (c), (m) or (o) of the Code or Section 4001
of ERISA, at any relevant time ("Benefit Plans").
2.18 Patents. Trademarks and Intellectual Property Rights. The
Company does not own or possesses any patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information, Internet web
site(s) or proprietary rights of any nature.
2.19 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Company directly
with the Sellers without the intervention of any Person on behalf of the
Company in such a manner as to give rise to any valid claim by any Person
against any Seller for a finder's fee, brokerage commission or similar
payment.
2.20 Affiliate Transactions. Except as disclosed in Item 2.20 of the
Disclosure Schedule neither the Company nor any officer, director or employee
of the Company (or any of the relatives or Affiliates of any of the
aforementioned Persons) is a party to any agreement, contract, commitment or
transaction with the Company or affecting the business of the Company, or has
any interest in any property, whether real, personal or mixed, or tangible or
intangible, used in or necessary to the Company which will subject the Sellers
to any liability or obligation from and after the Closing Date.
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2.21 Trading. The Company Common Stock is currently listed for trading
on the OTC Bulletin Board, and the Company has received no notice that its
Common Stock is subject to being delisted there from.
2.22 Compliance. The Company and its Shareholder, have complied with
all applicable foreign, federal and state laws, rules and regulations,
including, without limitation, the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the Securities Act and is current
in its filings.
2.23 Filings. None of the filings made by the Company under the
Securities Act or the Exchange act make any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers represents and warrants, jointly and severally to
the Company that now and/or as of the Closing:
3.1 Due Organization and Qualification; Subsidiaries; Due
Authorization.
(a) ATHI and each Subsidiary of ATHI is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of formation, with full corporate power and authority to own,
lease and operate its respective business and properties and to carry on its
respective business in the places and in the manner as presently conducted or
proposed to be conducted. ATHI and each Subsidiary is in good standing as a
foreign corporation in each jurisdiction in which the properties owned, leased
or operated, or the business conducted, by it requires such qualification
except for any such failure, which when taken together with all other
failures, is not likely to have a material adverse effect on the business of
ATHI and its Subsidiaries taken as a whole.
(b) ATHI does not own, directly or indirectly, any capital stock,
equity or interest in any corporation, firm, partnership, joint venture or
other entity, other than those (each, a "Subsidiary" and together, the
"Subsidiaries") set forth in Item 2.1 of the Disclosure Schedule of even date
herewith, which accompanies this Agreement and is incorporated herein by
reference (the "Disclosure Schedule"). Except as set forth in Item 2.1 of the
Disclosure Schedule, each Subsidiary is wholly owned by ATHI, all the
outstanding shares of capital stock of each Subsidiary are owned free and
clear of all Liens (as hereinafter defined), there is no contract, agreement,
arrangement, option, warrant, call, commitment or other right of any character
obligating or entitling any Subsidiary to issue, sell, redeem or repurchase
any of its securities, and there is no outstanding security of any kind
convertible into or exchangeable for securities of any Subsidiary.
(c) Each of ATHI and the Sellers has all requisite power and authority
to execute and deliver this Agreement, and to consummate the transactions
contemplated hereby and thereby. Each of ATHI and the Sellers has taken all
corporate action necessary for the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby, and this
Agreement constitutes the valid and binding obligation of each of ATHI and the
Sellers, enforceable against each of ATHI and the Sellers in accordance with
its respective terms, except as may be affected by bankruptcy, insolvency,
moratoria or other similar laws affecting the enforcement of creditors' rights
generally and subject to the qualification that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefore may be brought.
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3.2 No Conflicts or Defaults. The execution and delivery of this
Agreement by each of ATHI and the Sellers and the consummation of the
transactions contemplated hereby do not and shall not (a) contravene the
Certificate of Incorporation or By-laws of ATHI or the governing documents of
any Seller, if applicable, or (b) with or without the giving of notice or the
passage of time, (i) violate, conflict with, or result in a breach of, or a
default or loss of rights under, any material covenant, agreement, mortgage,
indenture, lease, instrument, permit or license to which ATHI, any of the
Subsidiaries or any Seller is a party or by which ATHI, any of the
subsidiaries or any Seller or any of their respective assets are bound, or any
judgment, order or decree, or any law, rule or regulation to which ATHI, any
of the Subsidiaries or any Seller or any of their respective assets are
subject, (ii) result in the creation of, or give any party the right to
create, any Lien upon any of the assets of ATHI or any of the Subsidiaries,
(iii) terminate or give any party the right to terminate, amend, abandon or
refuse to perform, any material agreement, arrangement or commitment to which
ATHI or any of the Subsidiaries is a party or by which ATHI or any of the
Subsidiaries or any of their respective assets are bound, or (iv) accelerate
or modify, or give any party the right to accelerate or modify, the time
within which, or the terms under which, ATHI or any of the Subsidiaries is to
perform any duties or obligations or receive any rights or benefits under any
material agreement, arrangement or commitment to which it is a party.
3.3 Capitalization. The authorized capital stock of ATHI immediately
prior to giving effect to the transactions contemplated hereby consists of
50,000 shares of ATHI Common Stock, par value $1.00 per share of which as of
the date hereof 1000 shares of Common Stock are issued and outstanding. Set
forth in Item 2.3 of the Disclosure Schedule is a list of all Stockholders of
ATHI, setting forth their names, addresses and number of shares owned. All of
the outstanding shares of ATHI Common Stock are, and ATHI Shares when
transferred in accordance with the terms hereof, will be, duly authorized,
validly issued, fully paid and nonassessable, and have not been or, with
respect to ATHI Shares, will not be transferred in violation of any rights of
third parties. The ATHI Shares are not subject to any preemptive or
subscription right, any voting trust agreement or other contract, agreement,
arrangement, option, warrant, call, commitment or other right of any character
obligating or entitling ATHI to issue, sell, redeem or repurchase any of its
securities, and there is no outstanding security of any kind convertible into
or exchangeable for Common Stock.
3.4 Financial Statements. Exhibit 2 to the Disclosure Schedule
contains copies of the consolidated balance sheets of ATHI at September 30,
1999, and the related statements of operations, stockholders' equity and cash
flows for the period then ended, including the notes thereto, as audited by
BDO Siedman, certified public accountants (all such statements being the "ATHI
Financial Statements"). Such financial statements indicate that ATHI has
gross sales and net profits in excess of $16,000,000 and $2,600,000
respectively. The Financial Statements, together with the notes thereto, have
been prepared in accordance with U.S. generally accepted accounting principles
applied on a basis consistent throughout all periods presented, subject to
audit adjustments, which are not expected to be material. Such statements
present fairly the financial position of ATHI as of the dates and for the
periods indicated. The books of account and other financial records of ATHI
have been maintained in accordance with good business practices.
3.5 Further Financial Matters. Except as set forth in Item 3.5 to the
Disclosure Schedule, neither ATHI nor any of the Subsidiaries has any material
liabilities or obligations, whether secured or unsecured, accrued, determined,
absolute or contingent, asserted or unasserted or otherwise, which are
required to be reflected or reserved in a balance sheet or the notes thereto
under generally accepted accounting principles, but which are not reflected in
the Financial Statements.
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3.6 Taxes. Except as indicated in Item 3.6 of the Disclosure
Schedule, each of ATHI and the Subsidiaries has filed all United States
federal, state, county, local and foreign national, provincial and local tax
returns and reports which were required to be filed on or prior to the date
hereof, and has paid all Taxes (and any related penalties, fines and interest)
which have become due pursuant to such returns or reports or pursuant to any
assessment which has become payable, or, to the extent its liability for any
Taxes (and any related penalties, fines and interest) has not been fully
discharged, the same have been properly reflected as a liability on the books
and records of ATHI and adequate reserves therefore have been established.
All such returns and reports filed on or prior to the date hereof have been
properly prepared and are true, correct (and to the extent such returns
reflect judgments made by ATHI or a Subsidiary, as the case may be, such
judgments were reasonable under the circumstances) and complete in all
material respects. Except as indicated in 3.6 of the Disclosure Schedule, no
extension for the filing of any such return or report is currently in effect.
Except as indicated in Item 3.6 of the Disclosure Schedule, no tax return or
tax return liability of ATHI or any Subsidiary has been audited or, presently
under audit. All taxes and any penalties, fines and interest which have been
asserted to be payable as a result of any audits have been paid. Except as
indicated in Item 3.6 of the Disclosure Schedule, neither ATHI nor any
Subsidiary has given or been requested to give waivers of any statute of
limitations relating to the payment of any Taxes (or any related penalties,
fines and interest). There are no claims pending or, to the knowledge of
ATHI, threatened, against ATHI or any Subsidiary for past due Taxes. Except
as indicated in Item 3.6 of the Disclosure Statement, all payments for
withholding taxes, unemployment insurance and other amounts required to be
paid for periods prior to the date hereof to any governmental authority in
respect of employment obligations of ATHI and each Subsidiary, including,
without limitation, amounts payable pursuant to the Federal Insurance
Contributions Act, have been paid or shall be paid prior to the Closing and
have been duly provided for on the books and records of ATHI and in the
Financial Statements.
3.7 Indebtedness; Contracts; No Defaults.
(a) Item 3.7 of the Disclosure Schedule sets forth a true, complete
and correct list of all material instruments, agreements, indentures,
mortgages, guarantees, notes, commitments, accommodations, letters of credit
or other arrangements or understandings, whether written or oral, to which
ATHI or any Subsidiary is a party (collectively, the "ATHI Operating
Agreements"). An agreement shall not be considered material for the purposes
of this Section 3.7(a) if it provides for expenditures or receipts of less
than $100,000 and has been entered into by ATHI or a Subsidiary in the
ordinary course of business. The ATHI Operating Agreements constitute all of
the contracts, agreements, understandings and arrangements required for the
operation of the business of ATHI and the Subsidiaries or which have a
material effect thereon. Copies of all such material written ATHI Operating
Agreements have previously been delivered or otherwise made available to the
Company and such copies are true, complete and correct as of the date hereof.
(b) Except as disclosed in Item 3.7 of the Disclosure Schedule,
neither ATHI, any Subsidiary, nor, to ATHI's knowledge, any other person or
entity is in breach in any material respect of, or in default in any material
respect under, any material contract, agreement, arrangement, commitment or
plan to which ATHI or any Subsidiary is a party, and no event or action has
occurred, is pending or is threatened, which, after the giving of notice,
passage of time or otherwise, would constitute or result in such a material
breach or material default by ATHI or any Subsidiary or, to the knowledge of
ATHI, any other person or entity. Neither ATHI nor any Subsidiary has
received any notice of default under any contract, agreement, arrangement,
commitment or plan to which it is a party, which default has not been cured to
the satisfaction of, or duly waived by, the party claiming such default on or
before the date hereof.
3.8 Personal Property. Except as set forth in Item 3.8 of the
Disclosure Schedule, each of ATHI and the Subsidiaries has good and marketable
title to all of its tangible personal property and assets, including, without
limitation, all of the assets reflected in the Financial Statements that have
not been disposed of in the ordinary course of business since September 30,
1999, free and clear of all Liens or mortgages, except for any Lien for
current taxes not yet due and payable and such restrictions, if any, on the
disposition of securities as may be imposed by federal or applicable state
securities laws.
3.9 Real Property. (a) Item 3.9 of the Disclosure Schedule sets forth
a true and complete list of all real property owned by, or leased or subleased
by or to, ATHI and its Subsidiaries (the "ATHI Real Property").
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(b) Except as set forth in Item 3.9 of the Disclosure Statement, each
lease to which ATHI is a party is valid, binding and in full force and effect
with respect to ATHI or a Subsidiary, as the case may be, and, to the
knowledge of ATHI, all other parties thereto; no notice of default or
termination under any such lease is outstanding.
3.10 Compliance with Law. (a) Except as set forth in Item 3.10 of the
Disclosure Schedule, neither ATHI nor any Subsidiary is conducting its
respective business or affairs in material violation of any applicable
federal, state or local law, ordinance, rule, regulation, court or
administrative order, decree or process, or any requirement of insurance
carriers. Neither ATHI nor any Subsidiary has received any notice of
violation or claimed violation of any such law, ordinance, rule, regulation,
order, decree, process or requirement.
(b) Each of ATHI and the Subsidiaries is in compliance in all material
respects with all applicable federal, state, local and foreign laws and
regulations relating to the protection of the environment and human health.
There are no claims, notices, actions, suits, hearings, investigations,
inquiries or proceedings pending or, to the knowledge of ATHI, threatened
against ATHI or any of the Subsidiaries that are based on or related to any
environmental matters or the failure to have any required environmental
permits, and there are no past or present conditions that ATHI has reason to
believe are likely to give rise to any material liability or other obligations
of ATHI or any Subsidiary under any environmental laws.
3.11 Permits and Licenses. Except as set forth in Item 3.11 of the
Disclosure Schedule, each of ATHI and the Subsidiaries has all certificates of
occupancy, rights, permits, certificates, licenses, franchises, approvals and
other authorizations as are reasonably necessary to conduct its respective
business and to own, lease, use, operate and occupy its assets, at the places
and in the manner now conducted and operated, except those the absence of
which would not materially adversely affect its respective business. Except
as set forth in Item 3.11 of the Disclosure Schedule, as of the date hereof,
neither ATHI nor any Subsidiary has received any written or oral notice or
claim pertaining to the failure to obtain any material permit, certificate,
license, approval or other authorization required by any federal, state or
local agency or other regulatory body, the failure of which to obtain would
materially and adversely affect its business.
3.12 Ordinary Course. Except as set forth in Item 3.12 of the
Disclosure Schedule, since December 31, 1999, each of ATHI and the
Subsidiaries has conducted its business, maintained its real property and
equipment and kept its books of account, records and files, substantially in
the same manner as previously conducted, maintained or kept and solely in the
ordinary course; it being understood and acknowledged that ATHI has been
substantially reducing its operations for some time.
3.13 No Adverse Changes. Except as set forth in Item 3.13 of the
Disclosure Schedule, since December 31, 1999, there has not been (a) any
material adverse change in the business, prospects, the financial or other
condition, or the respective assets or liabilities of ATHI and the
Subsidiaries as reflected in the Financial Statements, (b) any material loss
sustained by ATHI or any Subsidiary, including, but not limited to any loss on
account of theft, fire, flood, explosion, accident or other calamity, whether
or not insured, which has materially and adversely interfered, or may
materially and adversely interfere, with the operation of ATHI's or any
Subsidiary's business, or (c) to the best knowledge of ATHI, any event,
condition or state of facts, including, without limitation, the enactment,
adoption or promulgation of any law, rule or regulation, the occurrence of
which materially and adversely does or would affect the results of operations
or the business or financial condition of ATHI or any Subsidiary; it being
understood and acknowledged that ATHI has been substantially reducing its
operations for some time.
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3.14 Litigation. (a) Except as set forth in Item 3.14 of the
Disclosure Schedule, there is no claim, dispute, action, suit, proceeding or
investigation pending or, to the knowledge of ATHI, threatened, against or
affecting the business of ATHI or any Subsidiary, or challenging the validity
or propriety of the transactions contemplated by this Agreement, at law or in
equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to
the knowledge of ATHI, has any such claim, dispute, action, suit, proceeding
or investigation been pending or threatened, during the 12-month period
preceding the date hereof; (b) there is no outstanding judgment, order, writ,
ruling, injunction, stipulation or decree of any court, arbitrator or federal,
state, local, foreign or other governmental authority, board, agency,
commission or instrumentality, against or materially affecting the business of
ATHI or any Subsidiary; and (c) neither ATHI nor any Subsidiary has received
any written or verbal inquiry from any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality
concerning the possible violation of any law, rule or regulation or any matter
disclosed in respect of its business.
3.15 Insurance. ATHI and the Subsidiaries maintain insurance against
all risks customarily insured against by companies in its industry. All such
policies are in full force and effect, and neither ATHI nor any Subsidiary has
received any notice from any insurance company suspending, revoking, modifying
or canceling (or threatening such action) any insurance policy issued to ATHI.
3.16 Certificate of Incorporation and By-laws; Minute Books. The
copies of the Certificate of Incorporation and By-laws (or similar governing
documents) of ATHI and each Subsidiary, and all amendments to each are true,
correct and complete. The minute books of ATHI and each Subsidiary contain
true and complete records of all meetings and consents in lieu of meetings of
their respective Board of Directors (and any committees thereof), or similar
governing bodies, since the time of their respective organization. The stock
books of ATHI and each Subsidiary are true, correct and complete.
3.17 Employee Benefit Plans. Except as set forth in Item 3.17 of the
Disclosure Schedule, neither ATHI nor any Subsidiary maintains, nor has ATHI
or any Subsidiary maintained in the past, any employee benefit plans ("as
defined in Section 3(3) of the "ERISA"), or any plans, programs, policies,
practices, arrangements or contracts (whether group or individual) providing
for payments, benefits or reimbursements to employees of ATHI or any
Subsidiary, former employees, their beneficiaries and dependents under which
such employees, former employees, their beneficiaries and dependents are
covered through an employment relationship with ATHI, any Subsidiary or any
entity required to be aggregated in a controlled group or affiliated service
group with ATHI for purposes of ERISA or the Internal Revenue Code of 1986
(the "Code") (including, without limitation, under Section 414(b), (c), (m) or
(o) of the Code or Section 4001 of ERISA, at any relevant time ("ATHI Benefit
Plans").
3.18 Patents; Trademarks and Intellectual Property Rights. Each of
ATHI and the Subsidiaries owns or possesses sufficient legal rights to all
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information, internet web site(s) proprietary rights and processes
necessary for its business as now conducted without any conflict with or
infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing, and neither ATHI
nor any Subsidiary is bound by, or a party to, any options, licenses or
agreements of any kind with respect to the patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information, proprietary
rights and processes of any other person or entity.
3.19 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by ATHI directly with
the Sellers without the intervention of any Person on behalf of ATHI in such a
manner as to give rise to any valid claim by any Person against any Seller for
a finder's fee, brokerage commission or similar payment.
3.20 Subsidiaries. Item 3.20 of the Disclosure Statements sets forth
all the Subsidiaries of ATHI. All the outstanding shares of capital stock of,
or other equity interests in, each such subsidiary have been validly issued
and are fully paid and nonassessable and are owned directly or indirectly by
ATHI, free and clear of all Liens and free of any other restriction (including
any restriction on the right to vote, sell or otherwise dispose of such
capital stock or other ownership interests). Each Subsidiary of ATHI is
wholly owned by ATHI.
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3.21 Purchase for Investment.
(a) Such Seller is acquiring the Company Shares for investment for
such Seller's own account and not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and such Seller has no
present intention of selling, granting any participation in, or otherwise
distributing the same. Such Seller further represents that it does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Company Shares.
(b) Such Seller understands that the Company Shares are not registered
under the Act on the ground that the sale and the issuance of securities
hereunder is exempt from registration under the Act pursuant to Section 4(2)
thereof, and that the Company's reliance on such exemption is predicated on
such Seller's representations set forth herein. Such Seller is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D under the
Act.
3.22 Investment Experience. Such Seller acknowledges that it can bear
the economic risk of its investment, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the investment in the Company Shares.
3.23 Information. The Sellers have carefully reviewed such
information, as each Seller deemed necessary to evaluate an investment in the
Company Shares. To the full satisfaction of each Seller, it has been
furnished all materials that it has requested relating to the Company and the
issuance of the Company Shares hereunder, and each Seller has been afforded
the opportunity to ask questions of representatives of the Company to obtain
any information necessary to verify the accuracy of any representations or
information made or given to the Sellers. Notwithstanding the foregoing,
nothing herein shall derogate from or otherwise modify the representations and
warranties of the Company set forth in this Agreement, on which each of the
Sellers has relied in making an exchange of the ATHI Shares of the Company
Shares.
3.24 Restricted Securities. Such Seller understands that the Company
Shares may not be sold, transferred, or otherwise disposed of without
registration under the Act or an exemption there from, and that in the absence
of an effective registration statement covering the Company Shares or any
available exemption from registration under the Act, the Company Shares must
be held indefinitely. Such Seller is aware that the Company Shares may not be
sold pursuant to Rule 144 promulgated under the Act unless all of the
conditions of that Rule are met. Among the conditions for use of Rule 144 may
be the availability of current information to the public about the Company.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnity of the Company and the Shareholder. The Company and the
Shareholder agree to defend, indemnify and hold harmless each Seller from and
against, and to reimburse each Seller with respect to, all liabilities,
losses, costs and expenses, including, without limitation, reasonable
attorneys' fees and disbursements, asserted against or incurred by such Seller
by reason of, arising out of, or in connection with any material breach of any
representation or warranty contained in this Agreement made by the Company or
the Shareholder or in any document or certificate delivered by the Company or
the Shareholder pursuant to the provisions of this Agreement or in connection
with the transactions contemplated thereby.
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4.2 Indemnity of the Company. Each of the Sellers agrees to jointly
and severally defend, indemnify and hold harmless the Company from and
against, and to reimburse the Company with respect to, all liabilities,
losses, costs and expenses, including, without limitation, reasonable
attorneys' fees and disbursements, asserted against or incurred by such Seller
by reason of, arising out of, or in connection with any material breach of any
representation or warranty contained in this Agreement and made by the Company
or in any document or certificate delivered by the Company pursuant to the
provisions of this Agreement or in connection with the transactions
contemplated thereby.
4.3 Indemnification Procedure.
A party (an "Indemnified Party") seeking indemnification shall give
prompt notice to the other party (the "Indemnifying Party") of any claim for
indemnification arising under this Article 4. The Indemnifying Party shall
have the right to assume and to control the defense of any such claim with
counsel reasonably acceptable to such Indemnified Party, at the Indemnifying
Party's own cost and expense, including the cost and expense of reasonable
attorneys' fees and disbursements in connection with such defense, in which
event the Indemnifying Party shall not be obligated to pay the fees and
disbursements of separate counsel for such in such action. In the event,
however, that such Indemnified Party's legal counsel shall determine that
defenses may be available to such Indemnified Party that are different from or
in addition to those available to the Indemnifying Party, in that there could
reasonably be expected to be a conflict of interest if such Indemnifying Party
and the Indemnified Party have common counsel in any such proceeding, or if
the Indemnified Party has not assumed the defense of the action or
proceedings, then such Indemnifying Party may employ separate counsel to
represent or defend such Indemnified Party, and the Indemnifying Party shall
pay the reasonable fees and disbursements of counsel for such Indemnified
Party. No settlement of any such claim or payment in connection with any such
settlement shall be made without the prior consent of the Indemnifying Party
which consent shall not be unreasonably withheld.
ARTICLE V
DELIVERIES
5.1 Items to be delivered to ATHI prior to or at Closing by the
Company.
(a) articles of incorporation and amendments thereto, bylaws and
amendments thereto, certificate of good standing in the Company's state of
incorporation;
(b) all applicable schedules hereto;
(c) all minutes and resolutions of board of director and shareholder
meetings in possession of the Company;
(d) shareholder list;
(e) all financial statements and tax returns in possession of the
Company;
(f) copies of all SEC filings;
(g) resolution from the Company's current directors appointing
designees of ATHI to the Company's Board of Directors;
(h) letters of resignation from the Company's current officers and
directors to be effective upon Closing and after the appointments described in
this section;
(i) certificates representing 16,300,000 post forward-split shares of
the Company's $.001 par value common stock issued in the denominations as set
forth opposite their respective names on Schedule I to this Agreement, duly
authorized, validly issued, fully paid for and non-assessable;
(j) copies of board, and if applicable, shareholder resolutions
approving this transaction and authorizing the issuances of the shares hereto;
(k) any other document reasonably requested by ATHI that it deems
necessary for the consummation of this transaction.
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5.2 Items to be delivered to the Company prior to or at Closing by
ATHI.
(a) articles of incorporation and amendments thereto, bylaws and
amendments thereto, certificate of good standing in the Company's state of
incorporation;
(b) all applicable schedules hereto;
(c) all minutes and resolutions of board of director and shareholder
meetings in possession of the Company;
(d) shareholder list;
(e) all financial statements and tax returns in possession of the
Company;
(f) resolution from ATHI current directors appointing designees of
ATHI to the Company's Board of Directors;
(g) certificates representing 100% of ATHI's common stock as set forth
opposite their respective names on Schedule I to this Agreement, duly
authorized, validly issued, fully paid for and non-assessable;
(h) copies of board, and if applicable, shareholder resolutions
approving this transaction and authorizing the issuances of the shares hereto;
(i) any other document reasonably requested by the Company that it
deems necessary for the consummation of this transaction
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ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Closing. The obligations of the Parties
under this Agreement shall be and are subject to fulfillment, prior to or at
the Closing, of each of the following conditions:
(a) That each of the representations and warranties of the Parties
contained herein shall be true and correct at the time of the Closing date as
if such representations and warranties were made at such time;
(b) That the Parties shall have performed or complied with all
agreements, terms and conditions required by this Agreement to be performed or
complied with by them prior to or at the time of the Closing;
(c) That the Parties shall be satisfied with the results of their due
diligence and review of the other books and records.
6.2 Conditions to Obligations of Sellers. The obligations of Seller
shall be subject to fulfillment prior to or at the Closing, of each of the
following conditions:
(a) shall have paid all of the costs and expenses of the Company and
themselves associated with the acquisition of the ATHI Shares by the Company;
(b) As of the Closing, the Company shall have no assets and no
liabilities whatsoever, contingent or otherwise.
(c) The Company shall have entered into a registration rights
agreement with all the Sellers and the Financial Consultants (as hereinafter
defined), in the form attached as Exhibit 6.2(c) (the "Registration Rights
Agreement").
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ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated at any time before
or, at Closing, by:
(a) The mutual agreement of the Constituent Parties;
(b) Any party if:
(i) Any provision of this Agreement applicable to a party shall
be materially untrue or fail to be accomplished;
(ii) Any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the
consummation of this Agreement; or
(iii) The conditions precedence to Closing are not satisfied.
(c) Upon termination of this Agreement for any reason, in accordance
with the terms and conditions set forth in this paragraph, each said party
shall bear all costs and expenses as each party has incurred and no party
shall be liable to the other.
ARTICLE VIII
MISCELLANEOUS
8.1 Survival of Representations, Warranties and Agreements. All
representations and warranties and statements made by a party to in this
Agreement or in any document or certificate delivered pursuant hereto shall
survive the Closing Date for so long as the applicable statute of limitations
shall remain open. Each of the parties hereto is executing and carrying out
the provisions of this agreement in reliance upon the representations,
warranties and covenants and agreements contained in this agreement or at the
closing of the transactions herein provided for and not upon any investigation
which it might have made or any representations, warranty, agreement, promise
or information, written or oral, made by the other party or any other person
other than as specifically set forth herein.
8.2 Access to Books and Records. During the course of this
transaction through Closing, each party agrees to make available for
inspection all corporate books, records and assets, and otherwise afford to
each other and their respective representatives, reasonable access to all
documentation and other information concerning the business, financial and
legal conditions of each other for the purpose of conducting a due diligence
investigation thereof. Such due diligence investigation shall be for the
purpose of satisfying each party as to the business, financial and legal
condition of each other for the purpose of determining the desirability of
consummating the proposed transaction. The Parties further agree to keep
confidential and not use for their own benefit, except in accordance with this
Agreement any information or documentation obtained in connection with any
such investigation.
8.3 Further Assurances. If, at any time after the Closing, the
parties shall consider or be advised that any further deeds, assignments or
assurances in law or that any other things are necessary, desirable or proper
to complete the merger in accordance with the terms of this agreement or to
vest, perfect or confirm, of record or otherwise, the title to any property or
rights of the parties hereto, the Parties agree that their proper officers and
directors shall execute and deliver all such proper deeds, assignments and
assurances in law and do all things necessary, desirable or proper to vest,
perfect or confirm title to such property or rights and otherwise to carry out
the purpose of this Agreement, and that the proper officers and directors the
parties are fully authorized to take any and all such action.
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8.4 Notice. All communications, notices, requests, consents or
demands given or required under this Agreement shall be in writing and shall
be deemed to have been duly given when delivered to, or received by prepaid
registered or certified mail or recognized overnight courier addressed to, or
upon receipt of a facsimile sent to, the party for whom intended, as follows,
or to such other address or facsimile number as may be furnished by such party
by notice in the manner provided herein:
If to the Company:
2133 East 9400 South, Suite 151
Sandy, Utah 84093
Attention: Ken Kurtz, President
Tel: (801) 944-0701
Fax: (801) 944-0607
If to the Sellers:
At the respective addresses of the Sellers set forth
on Schedule 1 hereto.
David L. Ficksman, Esq.
Loeb & Loeb, LLP.
1000 Wilshire Boulevard
Los Angeles, California 90017
8.5 Entire Agreement. This Agreement, the Disclosure Schedule and any
instruments and agreements to be executed pursuant to this Agreement, sets
forth the entire understanding of the parties hereto with respect to its
subject matter, merges and supersedes all prior and contemporaneous
understandings with respect to its subject matter and may not be waived or
modified, in whole or in part, except by a writing signed by each of the
parties hereto. No waiver of any provision of this Agreement in any instance
shall be deemed to be a waiver of the same or any other provision in any other
instance. Failure of any party to enforce any provision of this Agreement
shall not be construed as a waiver of its rights under such provision.
8.6 Successors and Assigns. This Agreement shall be binding upon,
enforceable against and inure to the benefit of, the parties hereto and their
respective heirs, administrators, executors, personal representatives,
successors and assigns, and nothing herein is intended to confer any right,
remedy or benefit upon any other person. This Agreement may not be assigned
by any party hereto except with the prior written consent of the other
parties, which consent shall not be unreasonably withheld.
8.7 Governing Law. This Agreement shall in all respects be governed
by and construed in accordance with the laws of the State of California are
applicable to agreements made and fully to be performed in such state, without
giving effect to conflicts of law principles.
8.8 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.9 Construction. Headings contained in this Agreement are for
convenience only and shall not be used in the interpretation of this
Agreement. References herein to Articles, Sections and Exhibits are to the
articles, sections and exhibits, respectively, of this Agreement. The
Disclosure Schedule is hereby incorporated herein by reference and made a part
of this Agreement. As used herein, the singular includes the plural, and the
masculine, feminine and neuter gender each includes the others where the
context so indicates.
22
<PAGE>
8.10 Severability. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, this Agreement
shall be interpreted and enforceable as if such provision were severed or
limited, but only to the extent necessary to render such provision and this
Agreement enforceable.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first set forth above.
Score One, Inc.
By: /s/ Ken Kurtz
------------------------------
Ken Kurtz
President
By: /s/ Ken Kurtz
------------------------------
Ken Kurtz
The Shareholder
Advanced Technology International Holdings, Inc.
/s/ HO WING CHEONG
--------------------------------
Name: HO WING CHEONG
Title: President
Sellers:
/s/ HO WING CHEONG
--------------------------------
--------------------------------
--------------------------------
--------------------------------
HO WING CHEONG
--------------------------------
Shareholders:
/s/ HO WING CHEONG
--------------------------------
--------------------------------
--------------------------------
--------------------------------
HO WING CHEONG
--------------------------------
23
<PAGE>
SCHEDULE I
Number of Number of
Seller's Name and Address ATHI Shares Company Shares (1)
- ------------------------- ------------------- -------------------
I*World Limited
Blk.2, Flat 6, 3rd Floor
Tak Fung Industrial Centre
166-176 Texaco Road, Tsuen Road
Hong Kong 100% 16,300,000
(1) The denominations for the 16,300,000 shares shall be:
15 certificates for one million shares each, a total of 15,000,000
shares.
13 certificates for one hundred thousand shares each, a total of
1,300,000 shares
24
<PAGE>
DISCLOSURE SCHEDULE
2.4 Financial Statements attached as Exhibit 2.4-EX
2.7 The Company has two loans from a related party, which bear
interest at the rate of 10% per annum. The loans in the amount of
$5,000 each are due March 31, 2000 and January 1, 2001
respectively. The funds were loaned to the Company to fund its
revival and finance its becoming a reporting company under the
Securities Exchange Act of 1934.
2.9 Only asset is approximately $4,715 in cash held in account at
Zion's National Bank, Salt Lake City, Utah. It is anticipated
that all funds will be expended by Closing for expenses related to
this transaction.
2.20 Only those discussed in Item 2.7 of this schedule. However,
arrangements may be made for their payment or cancellation by
Closing.
25
<PAGE>
ITEM 2.1
----------
Subsidiaries
ATHI does not own, directly or indirectly, any capital stock, equity or
interest in any corporate, firm, partnership, or joint venture, other than the
wholly owned subsidiaries as shown below:
------------------------------
/ /
/ Advanced Technology /
/ International Holdings /
/ Limited /
/ (BVI) /
/ /
------------------------------
/
/
/
--------------------------------------------
/ /
/ /
100% / / 100%
/ /
-------------------------------- ---------------------------------
/ / / /
/ / / Fortune (Conducive Carbon) /
/ Ford Reach Limited / / PCB Factory Company /
/ (Hong Kong) / / Limited /
/ / / (BVI) /
/ / / /
-------------------------------- ---------------------------------
26
<PAGE>
ITEM 2.3
----------
Stockholders of ATHI
------------------------ 33.33%
/ Mr. Wing Chan LEE /-----------/
------------------------ /
/
/
------------------------ 33.33% /
/ Mr. Wing Bun LI /-----------/
------------------------ /
/
/
------------------------ 33.33% /
/ Mr. Wing Kan LEE /-----------/
------------------------ /
/
/
-------------------- --------------------
/ / / /
/ Public Minority / / Simply Noble /
/ / / Limited /
/ / / /
-------------------- --------------------
/ /
/ 64.2% / 35.8%
/ /
------------------------
/
/
-------------------- -------------------- --------------------
/ / / / / /
/ Mr. Wing / / Mr. Wing Hung / / Yue Fung Group /
/ Cheong HO / / HO / / Holding Limited /
/ (580 shares) / / (120 shares) / / (300 shares) /
/ / / / / /
-------------------- -------------------- --------------------
/ / /
58% / 12% / 30% /
/ / /
----------------------------------------------
/
------------------------------
/ /
/ I*WORLD /
/ Limited /
/ (1,000 shares) /
/ /
------------------------------
/
100% /
/
------------------------------
/ /
/ Advanced Technology /
/ International Holdings /
/ Limited /
/ /
------------------------------
27
<PAGE>
ITEM 3.5
----------
Liabilities
Neither ATHI nor any of the Subsidiaries has any material liabilities or
obligations, whether secured or unsecured, accrued, determined, absolute or
contingent, asserted or unasserted or otherwise, which are required to be
reflected or reserved in a balance sheet or the notes thereto under generally
accepted accounting principles, but which are not reflected in the Financial
Statements.
28
<PAGE>
ITEM 3.6
----------
Taxes
ATHI was established in late 1998 and has commenced its operations since
January 1999. All payments for withholding taxes, unemployment insurance and
other amounts required to be paid for the period prior to the date hereof to
any governmental authority in respect of employment obligations of ATHI and
each Subsidiary of ATHI have been duly provided for on the books and records
of ATHI and in the Financial Statements.
29
<PAGE>
ITEM 3.7
----------
Material agreements
Please refer to the attached agreements:
1. Subcontracting Agreement between Ford Reach Limited and Dongguan
Dailingshan Fuzhi Electronics Factory.
2. Subcontracting Agreement between Fortune (Conducive Carbon) PCB
Factory Company Limited and Dongguan Dailingshan Fuzhi Electronics
Factory.
3. Rental Agreement between Fortune (Conducive Carbon) PCB Factory
Company Limited and LEE WING CHAN
Except entered into in the ordinary course of business, ATHI or any
Subsidiary does not have or is in breach of or in default in any material
instruments, agreement, indentures, mortgages, guarantees, notes, commitments,
accommodations, letters of credit or other arrangements or understandings,
whether written or oral, to which ATHI or any Subsidiary is a party.
30
<PAGE>
ITEM 3.8
----------
Exceptions to title
Each of ATHI and the Subsidiaries has good and marketable title to all
of its tangible personal property and assets.
31
<PAGE>
ITEM 3.9
----------
Real Property
Please refer to ITEM 3.7 for the Rental Agreement as well as the
Subcontracting Agreement for the provision of free land and manufacturing
plant usage.
32
<PAGE>
ITEM 3.10
-----------
Compliance with Law
Neither ATHI nor any Subsidiary is conducting its respective business or
affairs in material violation of any applicable federal, state or local law,
ordinance, rule, regulation, court or administrative order, decree or process,
or any requirement of insurance carriers. Neither ATHI nor any Subsidiary has
received any notice of violation or claimed violation of any such law,
ordinance, rule, regulation, order, decree, process or requirement.
Each of ATHI and the Subsidiaries is in compliance in all respects with
all applicable laws and regulations relating the protection of the environment
and human health. There are no claims, notices, actions, suits, hearings,
investigations, inquires or proceedings pending or, to the knowledge of ATHI,
threatened against ATHI or any of the Subsidiaries that are based on or
related to any environmental matters under such applicable laws and
regulations.
33
<PAGE>
ITEM 3.11
-----------
Permits and licenses
Each of ATHI and the Subsidiaries has all certificates of occupancy,
rights, permits, certificates licenses, franchises, approvals and other
authorizations as are reasonably necessary to conduct its respective business.
34
<PAGE>
ITEM 3.12
-----------
Exception to the conduct of the business in the ordinary course
Each of ATHI and the Subsidiaries has conducted the business under the
ordinary course.
35
<PAGE>
ITEM 3.13
-----------
Exception to material adverse change
Since 31 December 1999, there has not been any material adverse change
in the business, prospects, the financial or other condition, or the
respective assets or liabilities of ATHI and the Subsidiaries as reflected in
the Financial Statements.
36
<PAGE>
ITEM 3.14
-----------
Litigation
Neither ATHI nor the Subsidiary is a party of litigation. There is no
claim, dispute, action, suit, proceeding or investigation pending or, to the
knowledge of ATHI, threatened, against or affecting the business of ATHI or
any Subsidiary. And there is no outstanding judgement, order, writ, ruling,
injunction, stipulation or decree of any court, government authority against
or materially affecting the business of ATHI or any Subsidiary. Neither ATHI
nor any Subsidiary has received any written or verbal inquiry from any
government authority concerning the possible violation of any law, rule or
regulation or any matter disclosed in respect of its business.
37
<PAGE>
ITEM 3.17
-----------
Employee benefit plans
Neither ATHI nor any Subsidiary maintains, nor has ATHI or any
Subsidiary maintained in the past, any employee benefit plans. However,
beginning December 2000, all Hong Kong companies and their respective
employees are required by the government to participate in the program of
Mandatory Providence Fund. Details of such program will be disclosed later
this year.
38
<PAGE>
ITEM 3.20
-----------
Subsidiaries
All the outstanding shares of capital stock of, or other equity
interests in, each such subsidiary have been validly issued and are fully paid
and non-assessable and are owned directly or indirectly by ATHI. As shown in
Item 2.1, each Subsidiary of ATHI is wholly owned by ATHI. The share
structures of each Subsidiary are shown as follows:
1. Ford Reach Limited
Total authorized common shares 10,000 shares of HK$1.00 each
Total outstanding, issued, and paid-up shares 100 shares
2. Fortune (Conducive Carbon) PCB Factory Company Limited
Total authorized common shares 50,000 shares of US$1.00 each
Total outstanding, issued, and paid-up shares 100 shares
39
