SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No.___)
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SKINTEK LABS, INC.
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(Name of Issuer)
Common Stock, par value $.001 per share
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(Title of Class of Securities)
830702 10 6
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(CUSIP Number)
Jane M. Harm, Esq., Lohf Shaiman PC, 900 Cherry Towers,
950 S. Cherry St., Denver CO 80246, 303.753.9000
.
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 13, 2000
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If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(3), 13d-1(f) or 13d-1(g), check the
following box |_|.
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Note. Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
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The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
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The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the Notes)
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CUSIP No.: 830702 10 6
1. Name of Reporting Persons
I.R.S. Identification Nos. of Above Persons (Entities Only)
Carter Read
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2. Check the Appropriate Box if a Member of a Group.
a. |_|
b. |X|
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3. SEC Use Only
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4. Source of Funds
00
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5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e)
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6. Citizenship or Place of Organization
USA
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7. Sole Voting Power
602,169
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Number of 8. Shared Voting Power
Shares
Beneficially 0
Owned by -----------------------------------------------------
Each 9. Sole Dispositive Power
Reporting
Person 602,169
With -----------------------------------------------------
10. Shared Dispositive Power
0
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
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13. Percent of Class Represented by Amount in Row (11)
6.39
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14. Type of Reporting Person*
IN
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*See Instructions Before Filling Out!
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Schedule 13D
Item 1. Security and Issuer
This statement relates to the shares of common stock, par value $.001
per share, of Skintek Labs, Inc., a Delaware corporation (the "Issuer").
The address of the principal executive offices of the Issuer is 959 Shotgun
Road, Sunrise, FL 33326.
Item 2. Identity and Background
(a) Name
Carter Read (the "Reporting Person")
(b) Address
1250 Webb Circle
Corona, CA 91719
(c) Present Principal Occupation or Employment
President of Ultimate Warlock, Inc. with principal executive
offices located at 1250 Webb Circle, Corona, CA 91719.
(d) The Reporting Person has not, during the past five years, been
convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) The Reporting Person has not, during the past five years, been a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction as a result of which he was or is
subject to a judgment, decree or final orderb enjoining future
violations of, prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
(f) Citizenship or Place of Organization
U.S. Citizen
Item 3. Source and Amount of Funds or Other Consideration
The responses to Item 4 are incorporated herein by this reference.
The Reporting Person acquired the shares of the common stock, par value
.001 per share, of the Issuer (the "Issuer Common Stock") referred to on the
cover page of this statement pursuant to the terms of an Agreement by and
between the Issuer, Ultimate Warlock, Inc. ("Warlock") and certain shareholders
of Warlock (the "Warlock Shareholders"), dated August 15, 2000, as amended (the
"Agreement"). In accordance with the terms of the Agreement, Warlock
Shareholders received 2.9408 shares of Issuer Common Stock in exchange for each
share of common stock of Warlock ("Warlock Common Stock") held by them.
Pursuant to the Agreement, the Reporting Person exchanged 200,000 shares of
Warlock Common Stock for 558,169 shares of Issuer Common Stock. The closing
price of the Issuer Common Stock on the National Association of Securities
Dealers, Inc.'s OTC Bulletin Board on September 13, 2000, the effective date
of the exchange, was 2.8125 per share.
This response is qualified in its entirety by reference to the
Agreement, the full text of which is filed as Exhibit 1 hereto and incorporated
herein by this reference.
Item 4. Purpose of the Transaction
The closing of the Agreement occurred on September 13, 2000. Pursuant
to the Agreement, the Issuer purchased 91% of the Warlock Common Stock from
the Warlock Shareholders, in exchange for 3,400,000 shares of Issuer Common
Stock. The amount of stock exchanged represents approximately 36% of the total
issued and outstanding shares of Issuer Common Stock. Warlock is a private
company engaged in the manufacture and sale of powerboats. The shares of Issuer
Common Stock acquired by the Warlock Shareholders were not registered under the
Securities Act of 1933, as amended ("Act") and thus are "restricted shares" as
defined in the Act.
Pursuant to the Agreement, at closing, the existing board of directors
and officers of the Issuer resigned. They were replaced by officers and
directors designated by Warlock and the Warlock Shareholders. The Reporting
Person was elected a director and officer of the Issuer.
The Reporting Person presently intends to review the operations of the
Issuer and will evaluate whether to sell off some of the Issuer's assets and/or
to amend the certificate of incorporation of the Issuer to change its name,
subject to all necessary approvals from the board of directors and/or
shareholders.
Except as set forth above, the Reporting Person presently has no plans
or proposals that relate to or would otherwise result in:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or
any of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure, including, but not limited to, if the Issuer is a registered
closed-end investment company, any plans or proposals to make any changes in
its investment policy for which a vote is required by section 13 of the
Investment Company Act of 1940;
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) Any action similar to those enumerated above.
This response is qualified in its entirety by reference to the
Agreement, the full text of which is filed as Exhibit 1 hereto and incorporated
herein by this reference.
Item 5. Interest in Securities of the Issuer
The responses to Item 4 are incorporated herein by this reference.
(a) The Reporting Person beneficially owns 602,169 shares of the
Issuer Common Stock, or 6.39% of the total number of outstanding shares of the
Issuer Common Stock on September 13, 2000.
(b) The number of shares of the Common Stock as to which there is sole
power to vote or to direct the vote, shared power to vote or direct the vote,
sole power to dispose or direct the disposition, or shared power to dispose
or direct the disposition for the Reporting Person is set forth on the cover
page of the statement, and such information is incorporated herein by this
reference.
(c) In addition to the transactions disclosed in this statement,
the Reporting Person has effected through a broker dealer the following
purchases in shares of the Issuer Common Stock during the preceding 60 days.
Date Number of Shares Price per Share
07.17.00 2,000 $ 1.8125
07.20.00 2,000 1.9375
08.22.00 10,000 2.76560
(d) The Reporting Person has the sole right to receive the dividends
from, or the proceeds from the sale of shares reported on the cover page of
this statement.
(e) Not applicable.
Item 6. Contracts, Arrangements, understandings or Relationships with Respect to
Securities of the Issuer
The responses to Item 4 are incorporated herein by this reference.
Item 7. Material to be filed as Exhibits
1. Agreement by and between Skintek Labs, Inc. and Ultimate Warlock,
Inc. and certain of its shareholders, dated as of August 15, 2000,
and amendment thereto.
Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Date: September 22, 2000 /s/ Carter Read_______
Carter Read
(c) Exhibits.
The following exhibits are filed herewith:
Exhibit No. Description
2.1 Agreement among Registrant, Ultimate Warlock, Inc., and certain
shareholders of Ultimate Warlock, Inc. and amendment thereto.
AGREEMENT
AGREEMENT, made this 15th day of August, 2000, by and among SKINTEK
LABS, INC., a Delaware corporation, ("Buyer"), the persons executing this
agreement (referred to collectively as "Shareholders" and individually as
"Shareholder") who own at least 90% of the outstanding shares of ULTIMATE
WARLOCK, INC., a California corporation (the "Company")and the Company.
WHEREAS, Buyer desires to acquire all of the issued and outstanding
shares of common stock of the Company in exchange for up to 3,500,000 unissued
shares of the common stock of Buyer (the "Buyer Common Stock"); and
WHEREAS, Shareholders executing this Agreement desire to exchange their
shares of Company common stock for the Buyer Common Stock.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, the parties hereto agree as follows:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 Issuance of Shares. Subject to all of the terms and conditions of
this Agreement, Buyer agrees to exchange the Buyer Common Stock in exchange for
at least 90% of the outstanding Company common stock (the "Company Common
Stock") with the Shareholders as set forth in Exhibit l.l hereto.
1.2 Exemption from Registration. The parties hereto intend that the
Common Stock to be issued by the Company to the Shareholders shall be exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), and pursuant to applicable state statutes.
1.3 Tax Free Exchange. The parties hereto intend that the exchange
herein be tax-free pursuant to Section 368 of the Internal Revenue Code of 1986.
No revenue ruling or opinion of counsel is being sought in this regard and such
tax treatment is not a condition to closing herein.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDERS AND THE COMPANY
The Shareholders and the Company hereby represent and warrant to Buyer that:
2.1 Organization. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of California, has all
necessary corporate powers to own its
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properties and to carry on its business as now owned and operated by it, and is
duly qualified to do business and is in good standing in each of the states and
other jurisdictions where its business requires qualification.
2.2 Capital. The authorized capital stock of Company consists of
25,000,000 shares of Common Stock of which 1,190,067 shares are currently issued
and outstanding. The shares currently outstanding are owned by the Shareholders
of Company as set forth in Exhibit 1.1 hereto. All of the issued and outstanding
shares of Company are duly and validly issued, fully paid, and nonassessible.
There are no outstanding subscriptions, options, rights, warrants, debentures,
instruments, convertible securities, or other agreements or commitments
obligating Company to issue transfer from treasury any additional shares of its
capital stock of any class or repurchase any such shares.
2.3 Subsidiaries. Company does not have any subsidiaries or own any
interest in any other enterprise (whether or not such enterprise is a
corporation).
2.4 Directors and Officers. Exhibit 2.4 to this Agreement, the text
of which is hereby incorporated herein by reference, contains the names and
titles of all directors and officers of Company as of the date of this
Agreement.
2.5 Financial Statements. Marked as Exhibit 2.5 hereto and delivered
to Buyer is a copy of the balance sheets of Company as at December 31, 1999 and
1998, together with the notes thereto and income statement of Company for the
fiscal years then ended, and the report of Hoffski & Pisano pertaining thereto.
These financial statements have been prepared from the books and records of
Company, present fairly the financial position of Seller as at December 31,
1999 and the results of operation of Company for the fiscal year then ended,
and have been prepared in accordance with generally accepted accounting
principles consistently applied with those used in preparing financial
statements of Company during prior fiscal periods.
2.6 Absence of Changes. Since the date of the most recent financial
statements included in Exhibit 2.5, there has not been any change in the
financial condition or operations of Company, except for changes in the ordinary
course of business, which changes have not in the aggregate been materially
adverse.
2.7 Absence of Undisclosed Liabilities. As of the date of its most
recent balance sheet included in Exhibit 2.5, Company did not have any material
debt, liability, or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, that is not reflected
in such balance sheet or incurred in the ordinary course of business following
the date of the last balance sheet included in Exhibit 2.5.
2.8 Tax Returns. Within the times and in the manner prescribed by law,
Company hasfiled all federal, state and local tax returns required by law and
has paid all taxes, assessments and penalties due and payable in accordance with
such returns. The provisions for taxes, if any,
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reflected in the balance sheet included in Exhibit 2.5 are adequate for any and
all federal, state, county and local taxes for the periods ending on the date of
the balance sheet and for all prior periods, whether or not disputed. There are
no present disputes as to taxes of any nature payable
by Company.
2.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, Buyer
and/or its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of Company. Company shall make
available to Buyer and/or its attorneys all books and records of Company.
If the transaction contemplated hereby is not completed, all documents received
by Buyer and/or its attorneys shall be returned to Company and all information
so received shall be treated as confidential.
2.10 Compliance with Laws. Company has substantially complied with,
and is not in violation of, all applicable federal, state or local statutes,
laws and regulations, including, without limitation, any applicable building,
zoning, environmental, employment or other law, ordinance or regulation
affecting its properties, products or the operation of its business except where
such non-compliance would not have a materially adverse effect on the business
or financial condition of the Company. Company has all licenses and permits
required to conduct its business as now being conducted which is the design,
manufacture and sale of powerboats except where such non-compliance would not
have a materially adverse effect on the business or financial condition of
the Company.
2.11 Litigation. Company is not a party to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation pending or, to the best knowledge of Company, threatened against
or affecting Company or its business, assets or financial condition, except for
matters which would not have a material affect on Company or its
properties. Company is not in default with respect to any order, writ,
injunction or decree of any federal, state, local or foreign court, department,
agency or instrumentality applicable to it.Company is not engaged in any
lawsuits to recover any material amount of monies due to it.
2.12 Ownership of Shares. The delivery of the Company Common Stock
as contemplated herein will result in Buyer's immediate acquisition of record
and beneficial ownership of at least 90% of the Company's capital stock, free
and clear of all liens and encumbrances. Such shares were duly and validly
issued, fully paid and non-assessable.
2.13 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by the Shareholders and the Company and the performance by the
Shareholders of the obligations hereunder in the time and manner contemplated
will not cause, constitute or conflict with or result in (a) any material breach
or violation of any of the provisions of or constitute a material default
under any license, indenture, mortgage, charter, instrument, articles of
incorporation, by-laws, or other agreement or instrument to which Company is a
party, or by which it may be bound, nor will any consents or authorizations of
any party other than those hereto be required, (b) an event
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that would permit any party to any material agreement or instrument to terminate
it or to accelerate the maturity of any indebtedness or other obligation of
Company, or (c) an event that would result in the creation or imposition of any
material lien, charge, or encumbrance on any asset of Company.
2.13 Insurance. Company has in force and effect or is covered under
policies of insurance covering such risks, including products liability, and in
amounts adequate for the size and scope of the business conducted by the
Company.
2.14 Assets. Company has good and marketable title to all of the
properties and assets reflected on its latest balance sheet included in Exhibit
2.5 (except for property and assets disposed of in the ordinary course of
business after the date thereof), free and clear of all liens and encumbrances,
except as noted therein, and except for liens of taxes not delinquent.
2.15 Indemnification. Shareholders (severally in proportion to their
shares in the Company as set forth in Exhibit 1.1) and the Company agree to
defend and hold Buyer harmless against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities, damages, recoveries
and deficiencies, including interest, penalties, and reasonable attorney fees,
that it shall incur or suffer, which arise out of, result from or relate to any
breach of, or failure by Shareholders to perform any of its respective
representations, warranties, covenants and agreements in this Agreement or in
any exhibit or other instrument furnished or to be furnished by Shareholders
under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Company and the Shareholders that:
3.1 Organization. Buyer and Subsidiary are corporations duly
organized, validly existing, and in good standing under the laws of Delaware
(Company) and Florida (Subsidiary), have all necessary corporate powers to own
properties and to carry on business.
3.2 Capital. The authorized capital stock of Buyer consists of
25,000,000 shares of $.001 par value Common Stock of which 5,921,271 shares of
Common Stock are currently issued and
outstanding and no shares of Preferred Stock. All of the issued and outstanding
shares are duly and validly issued, fully paid and nonassessible. There are no
outstanding subscriptions, options, rights, warrants, convertible securities,
or other agreements or commitments obligating Buyer or Subsidiary to issue or to
transfer from treasury any additional shares of its capital stock of any
class or repurchase any such shares.
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3.3 Subsidiaries. Buyer does not have any subsidiaries or own any
interest in any other enterprise except Performance Brands, Inc., a Florida
corporation (the 'Subsidiary'), of which it owns 100% of the outstanding
capital stock.
3.4 Directors and Officers. Exhibit 3.4, annexed hereto and hereby
incorporated herein by reference, contains the names and titles of all directors
and officers of Buyer and the Subsidiary as of the date of this Agreement.
3.5 Financial Statements. Marked as Exhibit 3.5A hereto and delivered
to Shareholders is a copy of the consolidated balance sheet of Buyer as at
December 31, 1999, together with the notes thereto and consolidated statement of
operations of Buyer for the fiscal year then ended, and the report of Grassano
Accounting, P.A. pertaining thereto. These financial statements have been
prepared from the books and records of Buyer for the fiscal year then ended, and
have been prepared in accordance with generally accepted accounting principles
consistently applied with those used in preparing financial statements of Buyer
during prior fiscal periods. Marked as Exhibit 3.5B hereto and delivered to
Buyer is the consolidated balance sheet of Seller as at March 31, 2000
(the "Balance Sheet") and statement of operations for the fiscal quarter then
ended. Such financial statements have been prepared from the books and records
of Buyer and present fairly the financial position of Buyer as at March 31, 2000
and the results of operations for the fiscal quarter then ended. Buyer's
balance sheet as at June 30, 2000 shall be the "Balance Sheet" when
filed by Buyer with its Form 10-QSB for the quarter ended June 30, 2000.
3.6 Absence of Changes. Since the date of the Balance Sheet there has
not been any change in the financial condition or operations of Buyer or the
Subsidiary, except for changes in the ordinary course of business, which changes
have not in the aggregate been materially adverse.
3.7 Absence of Undisclosed Liabilities. As of the date of the Balance
Sheet Buyer and Subsidiary did not have any material debt, liability, or
obligation of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that is not reflected in the Balance Sheet or
incurred in the ordinary course of business following the date of the Balance
Sheet.
3.8 Tax Returns. Within the times and the manner prescribed by law,
Buyer and Subsidiary has filed all federal, state and local tax returns required
by law and has paid all taxes, assessments and penalties due and payable. There
are no present disputes as to taxes of any nature payable by Buyer or
Subsidiary. Adequate provision has been made on the Balance Sheet for all
taxes of Buyer and Subsidiary as of the date thereof.
3.9 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein,
Shareholders shall have the opportunity to meet with Buyer's accountants to
discuss the financial condition of Buyer and Subsidiary. Buyer shall
make available to Shareholders all books and records of Buyer and Subsidiary.
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3.10 Compliance with Laws. Buyer and Subsidiary have complied with,
and are not in violation of, all applicable federal, state or local statutes,
laws and regulations (including, without limitation, any applicable building,
zoning, environmental or other law, ordinance, or regulation) affecting its
properties or the operation of its business, except where non-compliance would
not have a materially adverse effect on the business or operations of Buyer or
Subsidiary.
3.11 Litigation. Except as disclosed in Exhibit 3.11 or other exhibits
herein, Subsidiary and Buyer are not a party to any suit, action, arbitration,
or legal, administrative, or other proceeding, or governmental investigation
pending or, to the best knowledge of Buyer, threatened against or affecting
Buyer or Subsidiary or its business, assets, or financial condition. Buyer and
Subsidiary are not in default with respect to any order, writ, injunction, or
decree of any federal, state, local, or foreign court, department agency, or
instrumentality.
3.12 Authority. The Board of Directors of Buyer has authorized the
execution of this Agreement and the transactions contemplated herein, and Buyer
has full power and authority to execute, deliver and perform this Agreement and
this Agreement is the legal, valid and binding obligation of Buyer, is
enforceable in accordance with its terms and conditions, except as may be
limited by bankruptcy and insolvency laws and by other laws affecting the rights
of creditors generally. The approval of Buyer's shareholders is not necessary
for this transaction.
3.13 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by Buyer and the performance by Buyer do not or will not conflict
with or result in (a) any material breach or violation of any of the provisions
of or constitute a default under any license, indenture, mortgage, charter,
instrument, certificate of incorporation, bylaw, or other agreement or
instrument to which Buyer or Subsidiary is a party, or by which it may be bound,
nor will any consents or authorizations of any party other than those hereto be
required, (b) an event that would permit any party to any material agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of Buyer or Subsidiary, or (c) an event that would result in
the creation or imposition of any material lien, charge, or encumbrance on any
asset of Buyer or Subsidiary.
3.14 Validity of Buyer Shares. The shares of Buyer Common Stock to be
delivered pursuant to this Agreement, when issued in accordance with the
provisions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessible and none will have been issued in violation of any
pre-emptive or similar rights.
3.15 SEC Reporting. Buyer has filed all required reports, schedules,
forms, statements and other documents with the Securities and Exchange
Commission (the "SEC") since January 1, 2000 (collectively, the "SEC Reports").
Each SEC Report filed with the SEC complied in all material respects with the
then applicable requirements of the Securities Exchange Act of 1934 (the
"Exchange Act"), as amended, and the Act, and the rules and regulations of the
SEC promulgated thereunder and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
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circumstances under which they were made, not misleading. The Subsidiary is not
required to file any statements or reports with the SEC.
3.16 Insurance. Buyer and Subsidiary has in force and effect or is
covered under policies of insurance covering such risks, including products
liability, and in amounts adequate for the size and scope of the business
conducted by Buyer and Subsidiary.
3.17. Assets. Buyer has good and marketable title to all of the
properties and assets reflected on the Balance Sheet (except for property and
assets disposed of in the ordinary course of business after the date thereof),
free and clear of all liens and encumbrances, except as noted therein, and
except for liens of taxes not delinquent.
3.18 Employee List. Annexed as Exhibit 3.18 is a list of employees
of Buyer and Subsidiary along with position and current salary.
3.19 Indemnification. Buyer agrees to indemnify, defend and hold
Shareholders harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations,liabilities, damages, recoveries and
deficiencies, including interest, penalties, and reasonable attorney fees, that
they shall incur or suffer, which arise out of, result from or relate to any
breach of, or failure by Buyer to perform any of its representations,
warranties, covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument furnished or to be furnished by Buyer
under this Agreement.
ARTICLE 4
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1 Share Ownership. The Shareholders hold shares of Company Common
Stock as set forth in Exhibit 1.1 hereto. Such shares are owned of record and
beneficially by each holder thereof, and such shares are not subject to any
lien, encumbrance or pledge. Each Shareholder holds authority to exchange such
shares pursuant to this Agreement.
4.2 Investment Intent. Each Shareholder understands and acknowledges
that the shares of Buyer Common Stock (the "Buyer Shares") are being offered for
exchange in reliance upon the exemption provided in Section 4(2) of the
Securities Act of 1933 (the "Securities Act") for nonpublic offerings; and each
Shareholder makes the following representations and warranties with the intent
that the same may be relied upon in determining the suitability of each
Shareholder as a purchaser of securities.
(a) The Buyer Shares are being acquired solely for the account
of each Shareholder, for investment purposes only, and not with a view to, or
for sale in connection with, any distribution thereof and with no present
intention of distributing or reselling any part of the Buyer Shares.
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(b) Each Shareholder agrees not to dispose of his Buyer Shares
or any portion thereof unless and until counsel for Buyer shall have determined
that the intended disposition is permissible and does not violate the
Securities Act or any applicable state securities laws, or the rules and
regulations thereunder.
(c) Each Shareholder acknowledges that Buyer has made all
documentation pertaining to all aspects of the Buyer and the transaction herein
available to him and to his qualified representatives, if any, and has offered
such person or persons an opportunity to discuss the Buyer and the transaction
herein with the officers of Buyer.
4.3 Indemnification. Each Shareholder recognizes that the offer of the
Buyer shares to him is based upon his representations and warranties set forth
and contained herein and hereby agrees to indemnify and hold harmless Buyer
against all liability, costs or expenses (including reasonable attorney's fees)
arising as a result of any misrepresentations made herein by such Shareholder.
4.4 Legend. Each Shareholder agrees that the certificates evidencing
the Buyer Shares acquired pursuant to this Agreement will have a legend placed
thereon referring to the restrictions on sale herein.
4.5 Accredited Investor. Each Shareholder represents that he, she or
it is an Accredited Investor as defined in Rule 501(a) of Regulation D under the
Act.
ARTICLE 5
PRE-CLOSING COVENANTS
5.1 Investigative Rights. From the date of this Agreement each party
shall provide to the other party, and such other party's counsels, accountants,
auditors, and other authorized representatives, full access during normal
business hours to all of the Company's and the Buyer's and Subsidiary's
properties, books, contracts, commitments, and records for the purpose of
examining the same. Each party shall furnish the other party with all
information concerning the Company's and the Buyer's affairs as the other
party may reasonably request.
5.2 Conduct of Business. Prior to the Closing, Buyer, Subsidiary and
Company shall each conduct its business in the normal course, and shall not sell
, pledge, or assign any assets, without the prior written approval of the other
party, except in the regular course of business. Neither Buyer or Company shall
amend its Articles of Incorporation or Bylaws, declare dividends, redeem
or sell stock or other securities, incur additional or newly-funded liabilities,
acquire or dispose of fixed assets, change employment terms, enter into any
material or long-term contract, guarantee obligations of any third party, settle
or discharge any balance sheet receivable for less than its stated amount, pay
more on any liability than its stated amount, or enter into any other
transaction other than in the regular course of business.
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5.3 Compliance with Section 14(f). Buyer shall comply on a
timely basis with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. The Shareholders shall cooperate in effecting such compliance and
shall supply the Buyer with all information concerning the Company and its
designees on the Board of Directors of the Buyer required to be presented in
accordance with such rule. Shareholders represent and warrant that such
information which they supply to the Buyer shall be true and correct, will not
contain any untrue statement of a material fact or to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Shareholders and their counsel shall review and approve the information to be
filed with the SEC and transmitted to the Buyer's shareholders prior to such
filing and transmittal.
ARTICLE 6
POST-CLOSING COVENANTS
6.1 Change of Shares. The Buyer will not decrease its outstanding
common stock by reverse stock split, combination, reclassification or other
similar event for 180 days following the Closing herein. Sales to affiliated
investors will be on the same terms as non-affiliated investors.
6.2 For the one year following the Closing herein:
(a) Continued trading of Shares. Shareholders shall cause the
Buyer to take commercially reasonable actions necessary to continue trading of
its common stock on the NASD OTC Bulletin Board, NASDAQ Stock Market or a
national stock exchange.
(b) Reporting under the Securities Act of 1934. Buyer shall
file on time (which means within all permitted extensions) all reports required
to be filed under the Securities Exchange Act of1934 (the "Act") and take no
action to terminate the registration of its common stock pursuant to Section 12
of the Act.
(c) Prompt registration of Transfer. Buyer shall register
transfer of the common stock of Buyer as required by the Uniform Commercial Code
within three (3) business days after receipt of proper documentation for such
transfer request. Restricted securities shall be transferred without
restrictive legend if supported by an opinion of counsel to the shareholder to
which Buyer's counsel has no reasonable objection.
6.3 Benefit for all Buyer Shareholders. The foregoing provisions of
this Article 6 are expressly set forth for the benefit of all shareholders of
Buyer and may not be amended or waived. Any shareholder damaged by a violation
of these provisions shall have the right to seek an injunction and/or damages
for such violation.
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ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
7.1 Conditions. Buyer's obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in this
Article 7. Buyer may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by Buyer of any other condition of or any of
Buyer's other rights or remedies, at law or in equity, if Shareholders shall be
in default of any of their representations, warranties, or covenants under this
Agreement.
7.2 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by Shareholders in this
Agreement or in any written statement that shall be delivered to Buyer by
Shareholders under this Agreement shall be true and accurate on and as of the
Closing Date as though made at that time.
7.3 Performance. Shareholders shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it, on or before the Closing Date.
7.4 Absence of Litigation. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Company on or before the Closing Date.
7.5 Acceptance by Company Shareholders. The holders of an aggregate
of not less than 90% of the issued and outstanding shares of common stock of
Company shall have agreed to exchange their shares for shares of Buyer Common
Stock.
7.6 Certificate. Shareholders shall have delivered to Buyer a
certificate, dated the Closing Date, certifying that each of the conditions
specified in Sections 7.2 through 7.5 hereof have been fulfilled.
ARTICLE 8
CONDITIONS PRECEDENT TO SHAREHOLDERS' PERFORMANCE
8.1 Conditions. Shareholders' obligations hereunder shall be subject
to the satisfaction, at or before the Closing, of all the conditions set forth
in this Article 8. Shareholders may waive any or all of these conditions in
whole or in part without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by Shareholders of any other condition
of or any of Shareholders' rights or remedies, at law or in equity, if Buyer
shall be in default of any of its representations, warranties, or covenants
under this Agreement.
10
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8.2 Accuracy of Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by Buyer in this Agreement
or in any written statement that shall be delivered to Shareholders by Buyer
under this Agreement shall be true and accurate on and as of the Closing Date
as though made at that time.
8.3 Performance. Buyer shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
8.4 Absence of Litigation. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Buyer on or before the Closing Date.
8.5 Changes in Management. The persons set forth on Exhibit 8.5 shall
have been appointed as directors and officers of Buyer effective as of the
Closing and the other directors of Buyer shall have resigned as of the closing.
8.6 Kaufman Agreement. The agreement annexed hereto as Exhibit 8.6
shall have been executed and delivered on or prior to the Closing.
8.7 Officers' Certificate. Buyer shall have delivered to Shareholders
a certificate, dated the Closing Date and signed by the President of Buyer
certifying that each of the conditions specified in Sections 8.2 through 8.5
have been fulfilled.
ARTICLE 9
CLOSING
9.1 Closing. The Closing of this transaction shall be held at the
offices of Buyer, or such other place as shall be mutually agreed upon, on such
date as shall be mutually agreed upon by the parties. In event the Closing
herein has not been completed by September 15, 2000 any party hereto may
terminate this agreement and in such event this agreement shall be null and
void.
At the Closing:
(a) Each Shareholder shall present the certificates
representing his shares of Company being exchanged to Buyer, and such
certificates will be duly endorsed.
(b) Each Shareholder shall receive a certificate or
certificates representing the number of shares of Buyer Common Stock for which
the shares of Company common stock shall have been exchanged.
11
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(c) Buyer shall deliver an officer's certificate, as described
in Section 8.7 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth in this Agreement on behalf of
Buyer are true and correct as of, or have been fully performed and complied with
by, the Closing Date.
(d) Buyer shall deliver a signed consent and/or Minutes of
the Directors of Buyer approving this Agreement and each matter to be approved
by the Directors of Buyer under this Agreement.
(e) Shareholders shall deliver a certificate, as described in
Section 7.6 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth in this Agreement on behalf of
Shareholders are true and correct as of, or have been fully performed and
complied with by, the Closing Date.
ARTICLE 10
MISCELLANEOUS
10.1 Captions. The Article and paragraph headings throughout this
Agreement are for convenience and reference only, and shall in no way be deemed
to define, limit, or add to the meaning of any provision of this Agreement.
10.2 No Oral Change. This Agreement and any provision hereof, may not
be waived, changed, modified, or discharged orally, but it can be changed by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought. After the Closing, this Agreement
may be amended only with the approval of 2/3 of the shareholders of Buyer's
common stock in attendance at a meeting of the shareholders (in person
or by proxy) specifically called to approve such amendment provided that the
shares voted at the meeting were issued without violation of this Agreement.
10.3 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future
of any such provisions,covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision
hereof shall not be deemed a waiver of such breach or failure, and (iii) no
waiver by any party of one breach by another party shall be construed as a
waiver with respect to any other or subsequent breach.
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10.4 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
10.5 Non-competition Agreement. Each of the Shareholders hereby
jointly and severally agree that for a period of three (3) years following the
Closing herein, that they will not, directly or indirectly:
(a) Own, operate, manage or be involved in any manner
with any business that competes in any way, either directly or indirectly,
with the Company;
(b) Solicit or contact any customers or former customers
of the Company in connection with a business in competition with the Company;
(c) Reveal, disclose or use for any purpose, any trade
secret, or other confidential or proprietary information concerning the Company,
or the identity or characteristics of any customer, former customer or customer
list; or
(d) Solicit the services in any manner, or employ any
employees of the Company for competing employment or otherwise.
10.6 Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, supersedes all prior agreements
and understandings, and constitutes a complete and exclusive statement of the
agreements, responsibilities, representations and warranties of the parties.
10.7 Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.8 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given or delivered by a national courier service, or on the third day
after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly addressed
as follows:
To Buyer: Skintek Labs, Inc.
To Company: Ultimate Warlock, Inc.
1250 Webb Circle
Corona, CA 91719
Attention: Carter Read, President
13
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With copy to: Jane M. Harm, Esq.
Lohf, Shaiman & Jacobs, P.C.
900 Cherry Towers
950 S. Cherry Street
Denver, CO 80246
To Shareholders: At the addresses set forth in
Exhibit 1.1 herein
10.9 Binding Effect. This Agreement shall inure to and be binding
upon the heirs, executors, personal representatives, successors and assigns of
each of the parties to this Agreement.
10.10 Mutual Cooperation. The parties hereto shall cooperate with
each other to achieve the purpose of this Agreement, and shall execute such
other and further documents and take such other and further actions as may be
necessary or convenient to effect the transaction described herein.
10.11 Announcements. Buyer and Shareholders will consult and
cooperate with each other as to the timing and content of any announcements of
the transactions contemplated hereby to the general public or to employees,
customers or suppliers.
10.12 Expenses. Each party will pay its own legal, accounting and any
other out-of- pocket expenses reasonably incurred in connection with this
transaction, whether or not the transaction contemplated hereby is consummated.
10.13 Survival of Representations and Warranties. The representations
and warranties of the parties set forth in this Agreement or in any instrument,
certificate, opinion, or other writing providing for in it, shall survive the
Closing irrespective of any investigation made by or on behalf of any party for
a period of one year.
10.14 Exhibits. As of the execution hereof, the parties hereto have
provided each other with the Exhibits provided for hereinabove, including any
items referenced therein or required to be attached thereto. Any material
changes to the Exhibits shall be immediately disclosed to the
other party.
10.15 Arbitration of Disputes Any dispute or controversy arising out
of or relating to this Agreement, any document or instrument delivered pursuant
to, in connection with, or simultaneously with this Agreement, or any breach of
this Agreement or any such document or instrument shall be settled by
arbitration to be held in Los Angeles, California in accordance with the rules
then in effect of the American Arbitration Association or any successor thereto.
The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitration shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction. Each party in such
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arbitration shall pay their respective costs and expenses of such arbitration
and all the reasonable attorneys' fees and expenses of their respective counsel.
10.16 Choice of Law. This Agreement and its application shall be
governed by the laws of the State of California.
AGREED TO AND ACCEPTED as of the date first above written.
THE COMPANY SHAREHOLDERS: SKINTEK LABS, INC.
__________________________________
Richard Granville
By: _______________________
__________________ President
Carter Read
Evansville, Ltd.
ULTIMATE WARLOCK, INC.
By: _________________________________
Title: _______________________________
____________________________________ By: _________________________
Karen Bircher Title: ________________________
______________________________________
Sami Beller
_______________________________________
John Brainard
_______________________________________
Farhad Behzadi
_______________________________________
Stuart Sundlin
15
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EXHIBIT 1.1
Company Shares Buyer Shares
Shareholder Owned to be Received
Richard Granville 590,000 1,735,098
Carter Read 200,000 588,169
Evansville, Ltd. 110,000 323,488
Karen Bircher 102,380 301,083
Sami Beller 100,000 294,084
John Brainard 40,136 118,034
Farjad Behzadi 35,714 105,029
Stuart Sundlin 11,905 35,011
SHAREHOLDERS' ADDRESSES AND TAXPAYER ID NUMBERS
Richard Granville Sami Beller
________________________________ ____________________________________
________________________________ ____________________________________
Tax ID No. ______________________ Tax ID NO. _________________________
Carter Read John Brainard
_________________________________ ____________________________________
_________________________________ ________________________________
Tax ID No. _______________________ Tax ID No. __________________________
Evansville, Ltd. Farjad Behzadi
_________________________________ ____________________________________
_________________________________ ____________________________________
Tax ID No. _______________________ Tax I.D. No. _________________________
Karen Bircher Stuart Sundlin
_________________________________ ___________________________________
_________________________________
___________________________________
Tax ID No. _______________________ Tax I.D. No. __________________________
C:\CLIENTS\Skintek\Agreements\ShareExch01-814.wpd
16
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AMENDMENT TO AGREEMENT
DATED AUGUST 15, 2000
THIS AMENDMENT is made this 8th day of September, 2000, by and among
Skintek Labs, Inc., a Delaware corporation ("Buyer"), and Ultimate Warlock, Inc.
, a California corporation (the "Company"), and certain shareholders of the
Company executing the Agreement (referred to collectively as "Shareholders" and
individually as "Shareholder").
A. The parties have entered into an Agreement, dated August 15,
2000 (the "Agreement"). Certain terms used herein and not defined herein shall
have the meaning set forth in the Agreement.
B. The parties desire to amend the Agreement as provided below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, the parties agree as follows:
1. Section 1.4 is added to the Agreement as follows:
1.4 Shareholders' Representative. The Shareholder hereby
irrevocably designate and appoint Richard Granville as their agent and
attorney in fact ("Shareholders' Representative") with full power and
authority until the Closing to execute, deliver and receive on their
behalf all notices, requests, certificates and other communications
under the Agreement; to fix and alter on their behalf the date, time
and place of the Closing; to waive, amend or modify any provisions of
the Agreement and to take such other action on their behalf in
connection with the Agreement, the Closing and the transactions
contemplated thereby as the Shareholders' Representative deems
appropriate; provided, however, that no such waiver, amendment or
modification may be made if it would decrease the number of shares to
be issued to the Shareholders as set forth in Exhibit 1.1 of the
Agreement or increase the extent of their obligation to indemnify Buyer
under Sections 2.15 and 4.3 of the Agreement.
2. The first sentence of Section 2.2 is amended to
read as follows:
The authorized capital stock of Company consists of 25,000,000
shares of Common Stock of which 1,190,135 shares are currently issued
and outstanding.
3. Section 2.5 of the Agreement is deleted in its entirety and
replaced with the following:
2.5 Financial Statements. Marked as Exhibit 2.5 hereto, and
delivered to Buyer, are copies of the balance sheets of Company as of
September 30, 1999 and 1998, together with the notes thereto and income
statement of Company for the years ended September 30, 1999 and 1998,
and the report of Hoffski and Pisano pertaining thereto. These
financial statements have been prepared from the books and records of
the Company, present fairly the financial position of Company as of the
dates thereof, and the results of operation of Company for the fiscal
periods indicated therein, and have bee prepared in accordance with
general accepted accounting principles
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consistently applied with those used in preparing financial statements
of Company during prior fiscal periods.
4. Section 10.5(a) of the Agreement is deleted in its entirety
and replaced with the following:
(a Own, operate, manage, or be involved in any manner with any
business that competes in any way, either directly or indirectly, with
the Company, in the counties of Riverside, San Bernadino, Orange, Los
Angeles, and San Diego, California.
5. Exhibit 1.1 is amended to reflect that the "Company Shares
Owned" and "Buyer Shares to be Received" by the Shareholders is as
follows:
EXHIBIT 1.1
Company Buyer Shares
Shareholder Shares Owned to be Received
Richard Granville 530,000 1,558,647
Carter Read 200,000 588,169
Evansville, Ltd. 170,000 499,943
Karen Bircher 102,380 301,083
Sami Beller 100,000 294,084
John Brainard 40,136 118,034
Farhad Behzadi 35,714 105,029
Stuart Sundlin 11,905 35,011
1,190,135 3.5 million
6. Except as set forth above, the Agreement shall remain in full force
and effect.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date specified above.
THE COMPANY SHAREHOLDERS:
SKINTEK LABS, INC.
________________________________
Richard Granville By:___________________________
Stacey Kaufman, President
________________________________
Carter Read
Evansville, Ltd.
ULTIMATE WARLOCK, INC.
By:______________________________
Title:_____________________________ By:___________________________
Carter Read, President
__________________________________
Karen Bircher
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Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Date: September 22, 2000 /s/ Carter Read_______
Carter Read
