EXHIBIT 2(a)
SHELL ACQUISITION AND STOCK PURCHASE AGREEMENT
This SHELL ACQUISITION AND STOCK PURCHASE AGREEMENT dated as of March 3,
2000 (this "Agreement") is by and between MAS Acquisition XIX Corp., an Indiana
corporation ("MAS XIX"), MAS Capital Inc., a shareholder of MAS XIX which is the
beneficial owner of 8,250,000 of the issued and outstanding common stock (the
"Shareholder") and MRC Legal Services Corporation ("Acquiring Shareholder").
The respective Boards of Directors of MAS XLIX, the Shareholder and the
Acquiring Shareholder deem it advisable and in the best interests of their
corporations and the respective shareholders of their corporations that
Acquiring Shareholder acquire securities of MAS XIX in accordance with the terms
and conditions of this Reorganization and Stock Purchase Agreement.
1. Acquisition of Shares. The Shareholder is the beneficial owner of
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8,250,000 shares of the issued and outstanding shares of common stock of MAS XIX
consisting of approximately 96.8% of the issued and outstanding Shares. At the
Closing, (i) the Shareholder shall deliver to the Acquiring Shareholder or
assigns an aggregate of 8,250,000 shares (the '~MAS XIX Shares"), together with
medallion guaranteed stock powers and any and all other documents required to
transfer the MAS XIX Shares to the Acquiring Shareholder or assigns; (ii) the
Acquiring Shareholder shall deliver by wire transfer to MAS Capital Inc. an
aggregate of $80,000 in immediately available funds for delivery at closing to
the Shareholders (the "Cash Proceeds"); (iii) the Acquiring Shareholder shall
deliver by wire transfer to MAS Acquisition XIX Corp. an aggregate of$ 1,000 in
immediately available funds for delivery to the remaining shareholders of MAS
XIX upon completion of the Reverse Stock Split (defined below); (iv) the
Acquiring Shareholder shall cause to be delivered to the Shareholder as a
consulting fee an aggregate of 300,000 restricted shares and 100,000
free-trading shares of Pinnacle Business Management, Inc. ("PCBM"); and (v) the
Acquiring Shareholder shall deliver $5,000 to Jim Stubler as a finders fee. On
or before the Closing Date, the Board of Directors of MAS XIX and the
Shareholder will deliver to Acquiring Shareholder (i) authorized minutes of
their respective board of directors authorizing this transaction; and (ii) the
corporate records of MAS XIX, including without limitation all stockholder
records, board minutes, minute books and other records.
2. Reverse Stock Split. Within seven calendar days of the Closing, the
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Shareholder shall cause the directors of MAS XIX to complete a I share for 8,250
shares reverse stock split (the "Reverse Stock Split") of its common stock in
accordance with Section 23-1-38-2(4) of the Indiana Corporation Code. The
Shareholder shall pay $.00 1927 per share for all fractional shares of MAS XIX
remaining in the Reverse Stock Split (an aggregate of $1,000 for all of the
remaining shareholders of MAS XIX). Subsequent to the reverse stock split, MAS
XIX will have one remaining shareholder with 1,000 shares outstanding.
Immediately subsequent to the Reverse Stock Split, the Shareholder shall resign
as an officer and director of MAS XIX in accordance with Section 7 hereto.
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3. Closing. The Closing shall occur upon the satisfaction of the
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conditions set forth in this Agreement. The Closing Date shall occur on or
before March 10,2000 (the 'Target Closing Date") unless the conditions set forth
herein have not occurred.
4. Representations of Shareholders. The Shareholder represents and
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warrants as follows:
(a) Ownership of Shares. As of the Closing Date the Shareholder will
be sole owners of the MAS XIX Shares appearing of record in its name. The
MAS XIX Shares will be free from claims, liens or other encumbrances and,
they will have the unqualified and unrestricted right to transfer such MAS
XIX Shares except as provided under applicable federal and state securities
laws;
(b) Fully paid and Nonassessable. The MAS XIX Shares constitute duly
and validly issued shares of MAS XIX, and are fully paid and nonassessable,
and they further represent that they have the power and the authority to
execute this Agreement and to perform the obligations contemplated hereby;
(c) Organization of MA S XIX; Authorization. MAS XIX is a corporation
duly organized, validly existing and in good standing under the laws of
Indiana with full corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The execution, delivery
and performance of this Agreement have been duly authorized by all
necessary corporate action of MAS XI1X and this Agreement constitutes a
valid and binding obligation of MAS XIX; enforceable against it in
accordance with its terms.
(d) Capitalization. The authorized capital stock of MAS XIX consists
of 80,000,000 shares of common stock, and 20,000,000 shares of preferred
stock. As of the date of this Agreement, MAS XIX has 8,519,900 shares of
common stock issued and outstanding and no shares of preferred stock issued
and outstanding. No shares have otherwise been issued or registered under
state or federal securities laws. As of the Closing Date, all of the issued
and outstanding shares of common stock of MAS XIX are validly issued, ably
paid and non-assessable and they are not and as of the Closing Date there
will not be outstanding any warrants, options or other agreements on the
part of MAS XIX obligating MAS XIX to issue any additional shares of common
or preferred stock or any of its securities of any kind. MAS XIX will not
issue any shares of capital stock from the date of this Agreement through
the Closing Date. MAS XIX is a "reporting company" in accordance with
Section 12(g) of the Securities Act of 1934, as amended (the "Exchange
Act"), and has filed all required and/or appropriate annual, periodic and
other reports required under the Exchange Act with the Securities and
Exchange Commission. The Form 10-SB/A filing of MAS XIX filed on October
28, 1999 has been reviewed the Securities and Exchange Commission ("SEC"),
and the SEC has advised MAS XIX that they have no further comments on that
filing.
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(e) Ownership of MAS XIX Shares. The delivery of certificates to the
Acquiring Shareholder provided in Section 1 will result in the Acquiring
Shareholder's or assigns immediate acquisition of record and beneficial
ownership of the MAS XIX Shares, free and clear of all Encumbrances other
than as required by Federal and State securities laws. There are no
outstanding options, tights, conversion rights, agreements or commitments
of any kind relating to the issuance, sale or transfer of any Equity
Securities or other securities of MAS XIX.
(f) No Conflict as to MAS XlX and Subsidiaries. Neither the execution
and delivery of this Agreement nor the consummation of the sale of the MAS
XIX Shares will (a) violate any provision of the certificate of
incorporation or by-laws (or other governing instrument) of MAS XIX or any
of its Subsidiaries or (b) violate, or be in conflict with, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate
the performance required by, or excuse performance by any Person of any of
its obligations under, or cause the acceleration of the maturity of any
debt or obligation pursuant to, or result in the creation or imposition of
any Encumbrance upon any property or assets of MAS XIX or any of its
Subsidiaries under, any material agreement or commitment to which MAS XIX
or any of its Subsidiaries is a party or by which any of their respective
property or assets is bound, or to which any of the property or assets of
MAS XIX or any of its Subsidiaries is subject, or (c) violate any statute
or law or any judgment, decree, order, regulation or rule of any court or
other Governmental Body applicable to MAS XIX or any of its Subsidiaries
except, in the case of violations, conflicts, defaults, terminations,
accelerations or Encumbrances described in clause (b) of this Section for
such matters which are not likely to have a material adverse effect on the
business or financial condition of MAS XIX and its Subsidiaries, taken as a
whole.
(g) Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with,
any Governmental Body is required to be made or obtained by MAS XIX or any
of either of their Subsidiaries in connection with the execution, delivery
and performance of this Agreement by MAS XIX or the consummation of the
sale of the MAS XIX Shares.
(h) Other Consents. No consent of any Person is required to be
obtained by MAS XIX to the execution, delivery and performance of this
Agreement or the consummation of the sale of the MAS XIX Shares, including,
but not limited to, consents from parties to leases or other agreements or
commitments, except for any consent which the failure to obtain would not
be likely to have a material adverse effect on the business and financial
condition of MAS XIX.
(i) Financial Statements. MAS XIX has delivered to the Acquiring
Shareholders consolidated balance sheets of MAS XIX and its Subsidiaries as
at June 30, 1998 and June 30, 1999, and statements of income and changes in
financial position for fiscal years then ended as well as for the period
from inception on January 6, 1997 to June 30, 1999, together with the
report
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thereon of MAS XIX's Tubbs & Bartnik, P.A., independent accountant, and the
interim financial statements of MAS XIX as of December 31, 1999 (the "MAS
XIX Financial Statements"). Such MAS XIX Financial Statements and notes
fairly present the consolidated financial condition and results of
operations of MAS XIX and its Subsidiaries as at the respective dates
thereof and for the periods therein referred to, all in accordance with
generally accepted United States accounting principles consistently applied
throughout the periods involved, except as set forth in the notes thereto,
and shall be utilizable in any SEC filing in compliance with Rule 310 of
Regulation S-B promulgated under the Securities Act. MAS XIX has delivered
to the Acquiring Shareholders copies of all annual, quarterly and other
periodic reports filed by MAS XIX with the SEC in accordance with the
Exchange Act. MAS XIX and the Shareholders will cause an appointee consent
from its accountant to be available for any subsequent SEC filing in which
the MAS XIX Financial Statements are required. Such filings will be
consistent with SEC filing requirements, contain any and all material
information required by such forms and will include financial statements
accurate and complete in accordance with generally accepted accounting
principles.
(j) Title to Properties. Either MAS XIX or one of its Subsidiaries
owns all the material properties and assets that they purport to own (real,
personal and mixed, tangible and intangible), including, without
limitation, all the material properties and assets reflected in the MAS XIX
Financial Statements and all the material properties and assets purchased
or otherwise acquired by MAS XIX or any of its Subsidiaries since the date
of the MAS XIX Financial Statements. All properties and assets reflected in
the MAS XIX Financial Statements are free and clear of all material
Encumbrances and are not, in the case of real property, subject to any
material rights of way, building use restrictions, exceptions, variances,
reservations or limitations of any nature whatsoever except, with respect
to all such properties and assets, (a) mortgages or security interests
shown on the MAS XIX Financial Statements as securing specified liabilities
or obligations, with respect to which no default (or event which, with
notice or lapse of time or both, would constitute a default) exists, and
all of which are listed in the MAS XIX Disclosure Letter, (b) mortgages or
security interests incurred in connection with the purchase of property or
assets after the date of the MAS XIX Financial Statements (such mortgages
and security interests being limited to the property or assets so
acquired), with respect to which no default (or event which, with notice or
lapse of time or both, would constitute a default) exists, (c) as to real
property, (i) imperfections of title, if any, none of which materially
detracts from the value or impairs the use of the property subject thereto,
or impairs the operations of MAS XIX or any of its Subsidiaries and (ii)
zoning laws that do not impair the present or anticipated use of the
property subject thereto, and (d) liens for current taxes not yet due. The
properties and assets of MAS XIX and its Subsidiaries include all tights,
properties and other assets necessary to permit MAS XIX and its
Subsidiaries to conduct MAS XIX's business in all material respects in the
same manner as it is conducted on the date of this Agreement.
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(k) Buildings, Plants and Equipment. The buildings, plants, structures
and material items of equipment and other personal property owned or
leased by MAS XIX or its Subsidiaries are, in all respects material to the
business or financial condition of MAS XIX and its Subsidiaries, taken as a
whole, in good operating condition and repair (ordinary wear and tear
excepted) and are adequate in all such respects for the purposes for which
they are being used. MAS XIX has not received notification that it or any
of its Subsidiaries is in violation of any applicable building, zoning,
anti-pollution, health, safety or other law, ordinance or regulation in
respect of its buildings, plants or structures or their operations, which
violation is likely to have a material adverse effect on the business or
financial condition of MAS XIX and its Subsidiaries, taken as a whole or
which would require a payment by MAS XIX or any of its subsidiaries in
excess of $2,000 in the aggregate, and which has not been cured.
(l) No Condemnation or Expropriation. Neither the whole nor any
portion of the property or leaseholds owned or held by MAS XIX or any of
its Subsidiaries is subject to any governmental decree or order to be sold
or is being condemned, expropriated or otherwise taken by any Governmental
Body or other Person with or without payment of compensation therefor,
which action is likely to have a material adverse effect on the business or
financial condition of MAS XIX and its Subsidiaries, taken as a whole.
(m) Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any court or Governmental Body pending or
threatened in writing against or involving MAS XIX or any of its
Subsidiaries which is likely to have a material adverse effect on the
business or financial condition of MAS XIX and any of its Subsidiaries,
taken as whole, or which would require a payment by MAS XIX or its
subsidiaries in excess of $2,000 in the aggregate or which questions or
challenges the validity of this Agreement. Neither MAS XIX nor any or its
Subsidiaries is subject to any judgment, order or decree that is likely to
have a material adverse effect on the business or financial condition of
MAS XIX or any of its Subsidiaries, taken as a whole, or which would
require a payment by MAS XIX or its subsidiaries in excess of $2,000 in the
aggregate.
(n) Absence of Certain Changes. Since the date of the MAS XIX
Financial Statements, neither MAS XIX nor any of its Subsidiaries has:
1. suffered the damage or destruction of any of its properties or
assets (whether or not covered by insurance) which is materially
adverse to the business or financial condition of MAS XIX and its
Subsidiaries, taken as a whole, or made any disposition of any of its
material properties or assets other than in the ordinary course of
business;
2. made any-change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
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3. issued or sold any Equity Securities or other securities, acquired,
directly or indirectly, by redemption or otherwise, any such Equity
Securities, reclassified, split-up or otherwise changed any such
Equity Security, or granted or entered into any options, warrants,
calls or commitments of any kind with respect thereto;
4. organized any new Subsidiary or acquired any Equity Securities of
any Person or any equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject to,
whether directly or by way of guarantee or otherwise, any obligation
or liability with respect to any such indebtedness for borrowed money;
6. paid, discharged or satisfied any material claim, liability or
obligation (absolute, accrued, contingent or otherwise), other than in
the ordinary course of business;
7. prepaid any material obligation having a maturity of more than 90
days from the date such obligation was issued or incurred;
8. canceled any material debts or waived any material claims or
rights, except in the ordinary course of business;
9. disposed of or permitted to lapse any rights to the use of any
material patent or registered trademark or copyright or other
intellectual property owned or used by it;
10. granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any employee
benefit plan);
11. purchased or entered into any contract or commitment to purchase
any material quantity of raw materials or supplies, or sold or entered
into any contract or commitment to sell any material quantity of
property or assets, except (i) normal contracts or communists for the
purchase of, and normal purchases of, raw materials or supplies, made
in the ordinary course business, (ii) normal contracts or commitments
for the sale of, and normal sales of, inventory in the ordinary course
of business, and (iii) other contracts, commitments, purchases or
sales in the ordinary course of business;
12. made any capital expenditures or additions to property, plant or
equipment or acquired any other property or assets (other than raw
materials and supplies) at a cost in excess of $2,000 in-the
aggregate;
13. written off or been required to write off any notes or accounts
receivable in an aggregate amount in excess of $2,000;
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14. written down or been required to write down any inventory in an
aggregate amount in excess of $ 2,000;
15. entered into any collective bargaining or union contract or
agreement; or
16. other than the ordinary course of business, incurred any liability
required by generally accepted accounting principles to be reflected
on a balance sheet and material to the business or financial condition
of MAS XIX and its subsidiaries taken as a whole.
(o) No Material Adverse Change. Since the date of the MAS XIX
Financial Statements, there has not been any material adverse change in the
business or financial condition of MAS XIX and its Subsidiaries taken as a
whole. The MAS XIX SEC filings contain all material information with
respect to the business, financial condition and operations of MAS XIX.
(p) Contracts and Commitments. Neither MAS XIX nor any of its
Subsidiaries is a party to any:
1. Contract or agreement (other than purchase or sales orders entered
into in the ordinary course of business) involving any liability on
the part of MAS XIX or one of its Subsidiaries of more than $2,000 and
not cancelable by MAS XIX or the relevant Subsidiary (without
liability to MAS XIX or such Subsidiary) within 60 days;
2. Lease of personal property involving annual rental payments in
excess of $2,000 and not cancelable by MAS XIX or the relevant
Subsidiary (without liability to MAS XIX or such Subsidiary) within 90
days;
3. Employee bonus, stock option or stock purchase, performance unit,
profit-sharing, pension, savings, retirement, health, deferred or
incentive compensation, insurance or other material employee benefit
plan (as defined in Section 2(3) of ERISA) or program for any of the
employees, former employees or retired employees of MAS XIX or any of
its Subsidiaries;
4. Commitment, contract or agreement that is currently expected by the
management of MAS XIX to result in any material loss upon completion
or performance thereof
5. Contract, agreement or commitment that is material to the business
of MAS XIX and its Subsidiaries- taken as a whole, with any officer,
employee, agent, consultant, advisor, salesman, sales representative,
value added reseller, distributor or dealer; or
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6. Employment agreement or other similar agreement that contains any
severance or termination pay, liabilities or obligations.
All such contracts and agreements are in full force and effect. Neither MAS XIX
nor any or its Subsidiaries is in breach of, in violation for in default under,
any agreement, instrument, indenture, deed of trust, commitment, contract or
other obligation of any type to which MAS XIX or any of its Subsidiaries is a
party or is or may be bound that relates to the business of MAS XIX or any of
its Subsidiaries or to which any of the assets or properties of MAS XIX or any
of its Subsidiaries is subject, the effect of which breach, violation or default
is likely to materially and adversely affect the business or financial condition
of MAS XIX and its Subsidiaries, taken as a whole.
(q) Labor Relations. Neither MAS XIX nor any of its Subsidiaries is a
party to any collective bargaining agreement. Except for any matter which is not
likely to have a material adverse effect on the business or financial condition
of MAS XIX and its Subsidiaries, taken as a whole, (a) MAS XIX and each of its
Subsidiaries is in compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
and is not engaged in any unfair labor practice, (b) there is no unfair labor
practice complaint against MAS XIX or any of its Subsidiaries pending before the
National Labor Relations Board, (c) there is no labor strike, dispute, slowdown
or stoppage actually pending or threatened against MAS XIX or any of its
Subsidiaries, (d) no representation question exists respecting the employees of
MAS XIX or any of its Subsidiaries, (e) neither MAS XIX nor any of its
Subsidiaries has experienced any strike, work stoppage or other labor
difficulty, and (1) no collective bargaining agreement relating to employees of
MAS XIX or any of its Subsidiaries is currently being negotiated.
(r) Employee Benefit Plans. No material employee pension and welfare
benefit plans covering employees of MAS XIX and its Subsidiaries is (1) a
multi-employer plan as defined in Section 3(37) of ERISA, or (2) a defined
benefit plan as defined in Section 3(35) ofERISA, any listed individual account
pension plan is duly qualified as tax exempt under the applicable sections of
the Code, each listed benefit plan and related funding arrangement, if any, has
been maintained in all material respects in compliance with its terms and the
provisions of ERISA and the Code.
(s) Compliance with Law. The operations of MAS XIX and its Subsidiaries
have been conducted in accordance with all applicable laws and regulations of
all Governmental Bodies having jurisdiction over them, except for violations
thereof which are not likely to have a material adverse effect on the business
or financial condition of MAS XIX and its Subsidiaries, taken as a whole, or
which would not require a payment by MAS XIX or its Subsidiaries in excess of
$2,000 in the aggregate, or which have been cured. Neither MAS XIX nor any of
its Subsidiaries has received any notification of any asserted present or past
failure by it to comply with any such applicable laws or regulations. MAS XIX
and its Subsidiaries have all material licenses, permits, orders or approvals
from the Governmental Bodies required for the conduct of their businesses,
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and are not in material violation of any such licenses, permits, orders and
approvals. All such licenses, permits, orders and approvals are in full force
and effect, and no suspension or cancellation of any thereof has been
threatened.
(t) Tax Matters.
1. MAS XIX and each of its Subsidiaries (1) has filed all Tax Returns
and all consolidated or combined Tax Returns that include only MAS XIX
and/or its Subsidiaries (for the purposes of this Section, such tax
Returns shall be considered Tax Returns) required to be filed through
the date hereof and has paid any Tax due through the date hereof with
respect to the time periods covered by such Tax Returns and shall
timely pay any such Taxes required to be paid by it after the date
hereof with respect to such Tax Returns and (2) shall prepare and
timely file all such Tax Returns required to be filed after the date
hereof and through the Closing Date and pay all Taxes required to be
paid by it with respect to the periods covered by such Tax Returns;
(B) all such Tax Returns filed pursuant to clause (A) after the date
hereof shall, in each case, be prepared and filed in a manner
consistent in all material respects (including elections and
accounting methods and conventions) with such Tax Return most recently
filed in the relevant jurisdiction prior to the date hereof, except as
otherwise required by law or regulation. Any such Tax Return filed or
required to be filed after the date hereof shall not reflect any new
elections or the adoption of any new accounting methods or conventions
or other similar items, except to the extent such particular
reflection or adoption is required to comply with any law or
regulation.
2. All consolidated or combined Tax Returns (except those described in
subparagraph (1) above) required to be filed by any person through the
date hereof that are required or permitted to include the income, or
reflect the activities, operations and transactions, of MAS XIX or any
of its Subsidiaries for any taxable period have been timely filed, and
the income, activities, operations and transactions of MAS XIX and
Subsidiaries have been properly included and reflected thereon. MAS
XIX shall prepare and file, or cause to be prepared and filed, all
such consolidated or combined Tax Returns that are required or
permitted to include the income, or reflect the activities, operations
and transactions, of MAS XIX or any Subsidiary, with respect to any
taxable year or the portion thereof ending on or prior to the Closing
Date, including, without limitation, MAS XIX's consolidated federal
income tax return for such taxable years. All Tax Returns filed
pursuant to this subparagraph (2) after the date hereof shall, in each
case, to the extent that such Tax Returns specifically relate to MAS
XIX or any of its Subsidiaries and do not generally relate to matters
affecting other members of MAS XIX's consolidated group, be prepared
and filed in a manner consistent in all material respects (including
elections and accounting methods and conventions) with the Tax Return
most recently filed in the relevant jurisdictions prior to the date
hereof, except as otherwise required by law or
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regulation. MAS XIX has paid or will pay all Taxes that may now or
hereafter be due with respect to the taxable periods covered by such
consolidated or combined Tax Returns.
3. Neither MAS XIX nor any of its Subsidiaries has agreed, or is
required, to make any adjustment (x) under Section 481(a) of the Code
by reason of a change in accounting method or otherwise or (y)
pursuant to any provision of the Tax Reform Act of 1986, the Revenue
Act of 1987 or the Technical and Miscellaneous Revenue Act of 1988.
4. Neither MAS XIX nor any of its Subsidiaries or any predecessor or
Affiliate of the foregoing has, at any time, a consent under Section
341(f)(1) of the Code, or agreed under Section 341(0(3) of the Code,
to have the provisions of Section 341(0(2) of the Code apply to any
sale of its stock.
5. There is no (nor has there been any request for an) agreement,
waiver or consent providing for an extension of time with respect to
the assessment of any Taxes attributable to MAS XIX or its
Subsidiaries, or their assets or operations and no power of attorney
granted by MAS XIX or any of its Subsidiaries with respect to any Tax
matter is currently in force.
6. There is no action, suit, proceeding, investigation, audit, claim,
demand, deficiency or additional assessment in progress, pending or
threatened against or with respect to any Tax attributable to MAS XIX,
its Subsidiaries or their assets or operations.
7. All amounts required to be withheld as of the Closing Date for
Taxes or otherwise have been withheld and paid when due to the
appropriate agency or authority.
8. No property of MAS XIX is "tax-exempt use property within the
meaning of Section 168(h) of the Code nor property that MAS XIX and/or
its Subsidiaries will be required to treat as being owned by another
person pursuant to Section 168(0(8) of the Internal Revenue Code of
1954, as amended and in effect immediately prior to the enactment of
the Tax Reform Act of 1986.
9. There have been delivered or made available to the Acquiring
Shareholders true and complete copies of all income Tax Returns (or
with respect to consolidated or combined returns, the portion thereof)
and any other Tax Returns requested by the Acquiring Shareholders as
maybe relevant to MAS XIX, its Subsidiaries, or their assets or
operations for any and all periods ending after December 31, 1998, or
for any Tax years which are subject to audit or investigation by any
taxing authority or entity.
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10. There is no contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering any
employee or former employee of MAS XIX or its Subsidiaries that,
individually or collectively, could give rise to the payment of any
amount that would not be deductible pursuant to Section 280G or 162 of
the Code.
(t) Environmental Matters.
1. At all times prior to the date hereof, MAS XIX and its Subsidiaries
have complied in all material respects with applicable environmental
laws, orders, regulations, rules and ordinances relating to the
Properties (as hereinafter defined), the violation of which would have
a material adverse effect on the business or financial condition of
MAS XIX and its Subsidiaries, taken as a whole, or which would require
a payment by MAS XIX or its Subsidiaries in excess of $2,000 in the
aggregate, and which have been duly adopted, imposed or promulgated by
any legislative, executive, administrative or judicial body or officer
of any Governmental Body.
2. The environmental licenses, permits and authorizations that are
material to the operations of MAS XIX and its Subsidiaries, taken as a
whole, are in full force and effect.
3. Neither MAS XIX nor any of its Subsidiaries has released or caused
to be released on or about the properties currently owned or leased by
MAS XIX or any of its Subsidiaries (the "Properties") any (i)
pollutants, (ii) contaminants, (iii) "Hazardous Substances," as that
term is defined in Section 101(14) of the Comprehensive Environmental
Response Act, as amended or (iv) "Regulated Substances," as that term
in defined in Section 9001 of the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq., as amended, which would be
required to be remediate by any governmental agency with jurisdiction
over the Properties under the authority of laws, regulations and
ordinances as in effect and currently interpreted on the date hereof,
which remediation would have a material adverse effect on the business
or financial condition of MAS XIX and its Subsidiaries, taken as a
whole.
(u) Brokers or Finders. Other than MAS Capital, Inc., MAS XIX has not
employed any broker, finder or consultant or incurred any liability for any
brokerage or finder's fees or commissions or similar payments in connection
with the sale of the MAS XIX Shares to the Acquiring Shareholders.
(v) Absence of Certain Commercial Practices. Neither MAS XIX nor any
of its Subsidiaries has, directly or-indirectly, paid or delivered any fee,
commission or other sum of money or item of property, however
characterized, to any finder, agent, government official or other party, in
the United States or any other country, which is in any manner related to
the business or operations of MAS XIX or its Subsidiaries, which MAS XIX or
one of its
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Subsidiaries knows or has reason to believe to have been illegal under any
federal, state or local laws of the United States or any other country
having jurisdiction; and neither MAS XIX nor any of its Subsidiaries has
participated, directly or indirectly, in any boycotts or other similar
practices affecting any of its actual or potential customers in violation
of any applicable law or regulation.
(w) Transactions with Directors and Officers. MAS XIX and its
Subsidiaries do not engage in business with any Person in which any of MAS
XIX's directors or officers has a material equity interest. No director or
officer of MAS XIX owns any property, asset or right which is material to
the business of MAS XIX and its Subsidiaries, taken as a whole.
(x) Borrowing and Guarantees. MAS XIX and its Subsidiaries (a) do not
have any indebtedness for borrowed money, (b) are not lending or committed
to lend any money (except for advances to employees in the ordinary course
of business), and (c) are not guarantors or sureties with respect to the
obligations of any Person.
5. Representations of Acquiring Shareholder. Acquiring Shareholder
-----------------------------------------
represents and warrants as follows:
(a) Acquiring Shareholder has taken all necessary corporate action to
authorize the execution of this Agreement and the transactions contemplated
hereunder.
(b) Neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate any
provision of the Articles of Incorporation or Bylaws of Acquiring
Shareholder; will violate, conflict with or result in the breach or
termination of or otherwise give any contracting party the right to
terminate or constitute a default under the terms of any agreement or
instrument to which Acquiring Shareholder is a party or by which any of its
property or assets may be bound; will result in the creation of any lien,
charge or encumbrance upon the properties or assets of Acquiring
Shareholder, or will violate any judgment, order, injunction, decree or
award against or binding upon Acquiring Shareholder, or upon its
securities, property or business.
(c) Acquiring Shareholder is an "accredited investor" as defined by
Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended.
6. Prohibited Acts. The Shareholder agrees to cause MAS XIX not to
----------------
do any of the following things prior to the Closing Date, and the Shareholder
agrees that prior to the Closing Date it will not request or permit MAS XIX to
do any of the following things:
(a) Declare or pay any dividends or other distributions on its stock
or purchase or redeem any of its stock; or
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(b) Issue any stock or other securities, including any rights or
options to purchase or otherwise acquire any of its stock, and shall not
issue any notes or other evidences of indebtedness.
7. Resignation of Officers and Directors of MAS XIX. Immediately
-------------------------------------------------------
subsequent to the Reverse Stock Split, all but one officer and director of MAS
XIX will submit their resignations. Such remaining officer and director will
appoint new management as directed by Acquiring Shareholder or NIPR so as to
effect an orderly change of control. In connection therewith, such remaining
director shall appoint other directors to the Board of Directors of MAS XIX.
After such directors are appointed, the remaining officer and/or director of MAS
XIX will resign and the Shareholders will subsequently effectuate the transfer
of the Transferred MAS XIX Shares in accordance with the Closing.
8. Conditions to the Obligations of Acquiring Shareholder.
------------------------------------------------------------
(a) The obligations of Acquiring Shareholder to consummate the
transactions contemplated by this Agreement are subject to the fulfillment,
at or before the Closing Date of the following further conditions: (i) each
of the representations and warranties of the Shareholder and MAS XIX
contained in this Agreement, the Stock Exchange Agreement or in any written
statement, exhibit, addendum, financial statement or schedule or other
document delivered pursuant hereto or in connection with the transaction
contemplated hereby shall be true in all respects as at the Closing Date,
as required specifically herein, as if then made (except to the extent
waived hereunder or as affected by the transactions contemplated hereby);
(ii) the Shareholder and MAS XIX shall have performed and complied with all
covenants, agreements and conditions required by this Agreement to be
performed or complied with by them prior to at the Closing Date and
Acquiring Shareholder shall have been furnished with a certificate of the
President and Treasurer of MAS XIX dated the Closing Date certifying in
such details as Acquiring Shareholder may reasonably request to the
fulfillment of such conditions; and (iii) all documents and proceedings of
the Shareholder, MAS XIX and Acquiring Shareholder in connection with the
transactions contemplated hereby shall have been approved as to form and
substance by Acquiring Shareholder and its legal counsel
(b) All of the representations and warranties of the Shareholder
contained in this Agreement, or any exhibit thereto shall have been
acknowledged by MAS XIX and shall be true in all material respects on the
Closing Date as if then made. All such representations and warranties shall
survive the Closing Date of this transaction.
(c) Acquiring Shareholder shall have completed to its reasonable
satisfaction a due diligence investigation of the books, records, assets
and properties of MAS XIX and shall not have found anything which
would-materially impact on the financial condition, operations or status of
MAS XIX.
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(d) Acquiring Shareholder shall have entered into a Stock Exchange
Agreement and reached a closing with respect to the acquisition of the
shares held by the Acquiring Shareholder of MAS XIX by Pinnacle Business
Management, Inc. ("PCBM").
9. Conditions to the Obligations of the Shareholder and MAS XIX.
-------------------------------------------------------------------
(a) The obligations of the Shareholder and MAS XIX to consummate the
transactions contemplated by this Agreement are subject to the fulfillment,
at or before the Closing Date, of the following further conditions; (i)
each of the representations and warranties of Acquiring Shareholder
contained in this Agreement or in any written statement, exhibit, addendum,
financial statement or schedule or other document delivered pursuant hereto
or in connection with the transactions contemplated hereby shall be true in
all respects as at the Closing Date, as if then made (except to the extent
waived hereunder or as affected by the transactions contemplated hereby);
and (ii) Acquiring Shareholder shall have performed and complied with all
covenants, agreements and conditions required by this Agreement to be
performed or complied with by them prior to the Closing Date (including
without limitation the payment set forth herein).
(b) Acquiring Shareholder shall have entered into a Stock Exchange
Agreement and reached a closing with respect to the acquisition of the
Corporation by Pinnacle Business Management, Inc. ("PCBM").
10. Notices. Any notice which any of the parties hereto may desire to
-------
serve upon any of the other parties hereto shall be in writing and shall be
conclusively deemed to have been received by the party at its address, if
mailed, postage prepaid, United States mail, registered, return receipt
requested, to the following addresses:
If to MAS XIX or the Shareholders: MAS Acquisition XIX Corp.
1710 E. Division St.
Evansville, IN 47711
Facsimile No.: (812) 479-7267
Attn: Aaron Tsai
If to Acquiring Shareholder MRC Legal Services Corporation
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Facsimile No.: (949) 719-1988
Attn: M. Richard Cutler
11. Successors. This Agreement shall be binding upon and inure to the
----------
benefit of the heirs, personal representatives and successors and assigns of the
parties.
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12. Choice of Law. This Agreement shall be construed and enforced in
---------------
accordance with the laws of the State of California.
13. Counterparts. This Agreement may be signed in one or more
------------
counterparts, all of which taken together shall constitute an entire agreement.
14. Entire Agreement. This Agreement sets forth the entire agreement
-----------------
and understanding of the Parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any Party hereto which is not embodied in this Agreement or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set forth.
15. Dispute Resolution In the event of any dispute, controversy, or
-------------------
claim related to or arising from the terms of this Agreement, the parties hereto
hereby agree that any such dispute, controversy or claim shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and judgment upon the award rendered by the
arbitrator(s) maybe entered in any court having jurisdiction thereof Said
arbitration shall be conducted in Orange County, California. Such dispute
resolution shall be in accordance with the applicable substantive laws of the
state of California. The prevailing party shall be entitled to all fees and
costs arising therefrom, including, but not limited to, attorney's fees and
costs.
[Continued on next page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MAS ACQUISITION XIX CORP. MRC LEGAL SERVICES CORPORATION
an Indiana corporation a California corporation
By: /s/ Aaron Tsai By: /s/ M. Richard Cutler
---------------------------------- ---------------------------
Aaron Tsai, President M. Richard Cutler, President
SHAREHOLDERS (Owning OR REPRESENTING NOT LESS 8,250,000 OF THE SHARES):
MAS CAPITAL INC.
By: /s/ Aaron Tsai
--------------------------------
Aaron Tsai, President
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