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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
General Form For Registration of Securities
Of Small Business Issuers Under
Section 12(b) or (g) of
The Securities Exchange Act of 1934
Mighty Mack USA, Ltd.
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(Exact Name of Small Business Issuer as specified in its charter)
Colorado 84-1378045
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(State or other (IRS Employer File Number)
Jurisdiction of
Incorporation)
1700 West Government, Suite 102
Brandon, Mississippi 39042
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(Address of principal executive offices) (Zip code)
(601) 825-2220
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(Registrant's telephone number, including area code)
Securities to be Registered Pursuant to Section 12(b) of the Act:
None
Securities to be Registered Pursuant to Section 12(g) of the Act:
Common Stock, no par per share par value
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References in this document to "us," "we," or "the Company" refer to Mighty Mack
USA, Ltd., its predecessor and its subsidiaries.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
(a) General Development of Business
We are a Colorado corporation. Our principal business address is 1700
West Government, Suite 102, Brandon, Mississippi 39042. Our telephone number at
that address is (601) 825-2220.
We were originally incorporated under the laws of the State of Colorado
on July 19, 1996. Our original name was Oxford Financial Holdings, LTD. Since
inception, our primary activity had been directed towards organizational
efforts.
In June, 1999, we acquired all of the issued and outstanding common
shares of Mighty Mack USA, Ltd., a Mississippi corporation (we will refer in
this document specifically to this corporation as the "Mississippi
corporation"). We issued 0.2640366 restricted shares of our common stock for
each share of the Mississippi Corporation. Since a total of 53,022,950 shares of
the Mississippi Corporation were exchanged, we issued 14,000,000 shares in this
transaction. As a part of this transaction, the Mississippi Corporation canceled
all of its outstanding Preferred Stock.
In July 1999, we changed our name from Oxford Financial Holding, Ltd.
to Mighty Mack USA, Ltd.
We have not been subject to any bankruptcy, receivership or similar
proceeding.
(b) Narrative Description of the Business
General
From our original date of incorporation until our transaction with the
Mississippi Corporation, we had no activities and carried no inventories or
accounts receivable. Also, during this period, we carried on no operations and
generated no revenues. Our fiscal year end is June 30th.
Organization
Our Company presently comprises one corporation with one wholly owned
subsidiary.
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(c) Operations
General
Our Company was founded to manufacture, disseminate and further develop
efficient and cost-effective solutions to worldwide environmental pollution
problems. We are committed to the development, manufacture and distribution of
higher quality absorbent technology, developed from recycled, renewable,
agricultural waste materials. In addition, we are committed to the
implementation of cost effective, efficient solutions to industrial
environmental problems.
We manufacture and distribute a line of twelve oil absorbents and
associated products made from non-toxic agricultural waste. These absorbents and
associated products are used for the remediation of hydrocarbons and acids and
effectively absorb and bioremediate oil, grease, and antifreeze, turning
hazardous hydrocarbons into safe, clean byproducts.
Mighty Mack USA, Ltd., our subsidiary, was incorporated in Mississippi
in November 1998. The technology it is utilizing has been prevalent since its
inception in the early 1990's. The products and technology have been used in the
United States as well as in many foreign countries where it has been utilized in
numerous industrial and governmental applications.
Product Services Co., Inc., a Mississippi-based company, originally
developed the technology which we are now manufacturing and utilizing pursuant
to a Purchase and Sale Agreement, with Addenda which we originally entered into
on February 1, 1999. In 1990, the founder of Product Service Co., Inc. had begun
searching for a cost effective and efficient hydrocarbon absorbent and began
experimenting with various cellulose materials and evaluating their use as
absorbents. Product Service Co., Inc. developed and patented a process utilizing
a by-product, which was at the time, considered a waste material, from an
agricultural processing plant. The resulting technology yielded a chemically
modified cellulose fiber material with greater absorption and hydrocarbon
bio-remediation properties than the calcined clay products then and currently on
the market. Further development led to the on-site application of the technology
for hydrocarbon bio-remediation of contaminated soil. Product Services
manufactured and distributed this technology in the United States as well as in
other countries.
We acquired certain, defined assets of Products Services Co., Inc. in
1999, subject to final payment and currently have patent usage rights and the
rights to manufacture and sell certain proprietary products associated with the
assets used to manufacture and develop this technology. Upon full payment
pursuant to the Purchase and Sale Agreement, the full consideration of which has
not yet been fully paid to Product Services Co., Inc, the Mississippi
corporation will have obtained title to the patents, raw materials, equipment,
and other assets of Product Services Co., Inc. We have not been able pay the
purchase price to date but have received an extension under Addenda to the
Purchase and Sale Agreement until March 1, 2000 to make this payment. We
continue to operate under these Addenda to the Purchase and Sale Agreement.
Plan of Business
Our goal is to gain brand name recognition and product confidence in
the global retail and industrial markets for our environmental remediation and
hydrocarbon absorption products and
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to develop and manufacture ecologically sound and cost-effective solutions to
industrial/environmental problems faced by our world today.
We plan to achieve our goal by focusing on retail and industrial sales
of our products and by establishing a network of manufacturer's representatives
and distributors who will market our products, in addition to making direct
sales initiated by us.
(d) Markets
Our initial marketing plan will be focused on two market segments: the
retail market; and the industrial wholesale market. The marketing plan has been
developed and is currently being implemented. We are currently marketing our
products through manufacturer's representatives in several parts of the United
States. We are currently seeking distributors with warehouse capabilities.
Manufacturer's representatives and distributors are chosen based on their
business contacts as well as being highly motivated and showing a strong
commitment to our Company and our product line. We also make direct sales and
conduct ongoing marketing efforts to retail stores and industrial users by
attending trade shows, generating publicity, calling and meeting with customers
as well as demonstrating proper usage and providing technical assistance with
respect to our product line.
The Retail Market
We estimate the retail market to be the largest individual market for
oil absorbent products throughout the world. Calcined Clay absorbents can absorb
up to 50% of their weight in oil and the byproduct is a toxic waste that must be
disposed of in accordance with local laws.
All of our products are nontoxic, environmentally clean and a safe
agricultural byproduct that can absorb up to six times their own weight in oil
or other contaminants. Our products are nontoxic, biodegradable, safe to humans,
and are environmentally friendly. The market for oil absorbent products has a
large range of distribution in retail automotive part's stores in the United
States. The current market is presently dominated by calcined clay products,
which are strip mined and contain crystalline silica, a known carcinogen.
The Wholesale Market
The U.S. and Canada will be divided into regions. The U.S. will be
divided into multiple regions, with Master Distributors and subdistributors in
each area. Master Distributors work with sub-distributors, making calls, giving
demonstrations, and also giving product familiarization and usage classes. The
Master Distributor will be compensated based on volume of sales. The
sub-distributors deal with the end users; these customers may be oil field
supply houses, environmental clean up companies, military, paper mills and other
various industries. The sub-distributors will be compensated percentage wise,
based on volume of sales by the Master Distributor.
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We also plan to use manufacturer's representatives in those areas which
we do not consider to be suitable for Distributors or subdistributors. We will
compensate manufacturer's representatives on a commission basis to be negotiated
with each manufacturer's representative.
We currently have no Master Distributors or subdistributors but are
generating sales internally and through manufacturer's representatives.
(e) Raw Materials
The use of raw materials is a material factor in our operations. We
believe that there is an adequate supply of raw materials to meet all of our
requirements under our plan of operation. We do not expect this situation to
change in the near future. Our products are produced from raw materials, which
are generally readily available from a number of suppliers. The main component
for its oil absorbent products are agricultural waste and byproducts obtained
from a major supplier in the southern United States. We believe that the loss of
this major supplier would have a material effect on our operations. The loss of
this major supplier may cause an increase in incoming freight costs, the amount
of which would depend on the distance to the alternative source and which source
is utilized. Our operations could be adversely affected if a general shortage of
raw material was to occur and persist, but the likelihood of this happening is
believed to be remote. To date, we have not experienced any serious production
delay because of failure of our supplier to provide raw materials.
We utilize raw materials from Delta and Pine Land Company through an
arrangement with Product Services Co., Inc. Although there are other sources of
raw materials, we believe that the inability to utilize raw materials from Delta
and Pine Land Company could have a materially adverse effect upon our ability to
produce finished product. At the present time, Product Services Co., Inc. has a
stockpile of raw materials which we are utilizing and plan to utilize for the
near future. However, over the long term, Delta and Pine Land Company will
remain a significant source of raw materials.
(f) Customers and Competition
The current market is presently dominated by calclined clay products,
which are strip mined and contain crystalline silica, a known carcinogen. In
1986, the State of California enacted the Safe Drinking Water and Toxic
Enforcement Act of 1986, Cal. Health & Safety Code ss.25249.5 et seq., most
commonly known as Proposition 65, listing a number of chemicals, including
crystalline silica, which are known to cause cancer. The calcined clay products
therefore must comply with the requirements of Proposition 65. Proposition 65
requires any consumer products containing one of the listed chemicals to contain
the following message: "WARNING: This product contains a chemical known to the
State of California to cause cancer." Similarly, the language for occupational
exposure warning signs where employees are
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working with such products must read as follows: "WARNING: This area contains a
chemical known to the State of California to cause cancer." We believe that we
have a competitive advantage because our products do not require hazardous
warning labels. According to the Centers for Disease Control and Prevention,
overexposure to crystalline silica can cause lung disease known as silicosis and
inhalation has been associated with other diseases such as bronchitis and
tuberculosis.
Calcined clay products are the primary competition in the industrial
and retail marketplace. These Calcined clay products are manufactured from
non-renewable resources and generate unwanted waste streams in both manufacture
and use. Our products are derived from renewable resources and utilize
agricultural waste and byproducts that would otherwise create a disposal volume.
We believe that this environmental sensitivity coupled with our products' better
performance in use will take on more importance as environmental groups and
state and local agencies increase environmental regulation and accountability.
At the present time, the industry in which we are competing is broad
and fragmented, with no single company or groups of companies dominating. We
estimate that there are over fifteen companies whose products are in direct or
indirect competition to our products. There are a number of established
companies that are larger and better capitalized than our Company and/or have
greater personnel, resources and technical expertise. In view of our combined
extremely limited financial resources and limited management availability, we
believe that we will be subject to intense competition for market share.
However, while we may have competitive disadvantages compared to many of our
competitors, we believe that we can successfully compete. There can be no
guarantee, however, that we will be able to successfully compete or to become
profitable.
(g) Backlog
At June 30, 1999, we had no backlogs.
(h) Employees
As of the date hereof, we had six (6) employees. We plan to hire
additional employees in the future as our business requirements may necessitate.
(i) Proprietary Properties
Our product line constitutes our primary properties, which includes a
line of twelve oil absorbents and associated products made from non-toxic
agricultural waste and byproducts. We have patent and trademark usage rights,
pursuant to the Purchase and Sale Agreement with Product Services Co., Inc. to
manufacture and sell these absorbents and associated products and to use the
"Gator" trade name. Payment of the full consideration to Product Services Co.,
Inc. has not yet been fully made under the terms of that Purchase and Sale
Agreement and addenda thereto. These products are as follows:
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<TABLE>
<CAPTION>
PRODUCT PRIMARY APPLICATION
------- -------------------
<S> <C>
Oil Gator soil cleanup/bioremediation; hydrocarbon
spills
Floor Gator spills on hard surfaces
Cell-u-sorb spills on water
Acid Gator acid spills
Gator Booms containment on water or land
Gator Socks containment on water or land
Cellulose Pads spills on hard surfaces
1%Poly/Cell Pads spills on water or land
Gator Wash industrial all-purpose cleaner
Gator Wash H.D. Heavy duty industrial cleaner
Gator Trap grease trap/waste water applications
Emergency Response Kits oil spills
</TABLE>
(j) Government Regulation
We are not subject to any material governmental regulation or
approvals.
(k) Research and Development
Our current research and development activities include the refining of
current, as well as the development of new, sorbent and bioremediation products
and related manufacturing processes, for both the industrial and retail markets.
Analyzing and testing competitive products, and determining new applications and
uses for our products, are also functions of our research and development
department. We will expense general research. Development costs will be
expensed, unless certain criteria are met, in which case they are capitalized.
All expenditures incurred for the acquisition of license rights, patents and
trademarks, development of sorbent and bioremediation processes and products
costs are capitalized. When technology is no longer in use, related unamortized
costs are written off. During the fiscal year ended June 30, 1999, we incurred
no material research and development costs.
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(l) Environmental Compliance
At the present time, we are not subject to any material costs for
compliance with any environmental laws.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
Forward-Looking Statements
The following discussion contains forward-looking statements regarding
our Company, its business, prospects and results of operations that are subject
to certain risks and uncertainties posed by many factors and events that could
cause our actual business, prospects and results of operations to differ
materially from those that may be anticipated by such forward-looking
statements. Factors that may affect such forward-looking statements include,
without limitation: our ability to successfully develop new products for new
markets; the impact of competition on our revenues, changes in law or regulatory
requirements that adversely affect or preclude customers from using our products
for certain applications; delays our introduction of new products or services;
and our failure to keep pace with emerging technologies.
When used in this discussion, words such as "believes", "anticipates",
"expects", "intends" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. Our Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business.
Results of Operations
With the acquisition of the Mississippi Corporation, we have begun
generating revenues from its operations. As of our fiscal year end, June 30,
1999, these revenues have been minimal. We had total revenues for the fiscal
year of $4,736. Our total operating expenses were $263,754. As a result, we had
a net loss of $260,192 for the fiscal year. This was a loss of $0.10 per share.
Our revenues as of the period ended September 30, 1999 were $12,825. Our total
operating expenses were $679,638. As a result, we had an net loss of $670,738,
or $.03 per share for the quarter. Since the last fiscal year was our first year
of operations, we have no comparable figures for the previous year.
Assuming that we can finally acquire all of the rights and assets under
the Purchase and Sale Agreement which we have entered into, we believe that the
revenues from operations will remain relatively constant during the coming
fiscal year as we implement our business plan.
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However, if we are unable to complete the Purchase and Sale Agreement, our
future operations may be seriously impaired. In any case, we believe that we
will not be profitable during the current fiscal year. Our primary focus for
this fiscal year will be to complete the acquisition under the Purchase and Sale
Agreement and to build brand name recognition and product loyalty.
Liquidity and Capital Resources
As of the end of the fiscal year and the first quarter, we had no cash
or cash equivalents. There was no significant change in working capital during
the fiscal year. In August 1999, we completed a private placement and raised
$691,000 and received loans from two of our affiliates of an additional
$100,000, all of which will be used to fund our operations.
We believe that we still have inadequate working capital to pursue all
of our planned activities other than to internally expand the operations. We
plan to raise additional capital during the coming fiscal year.
We do not intend to pay dividends in the foreseeable future.
Year 2000 Compliance
Background
In the past, many computers, software programs, and other information
technology ("IT systems"), as well as other equipment relying on microprocessors
or similar circuitry ("non-IT systems"), were written or designed using two
digits, rather than four, to define the applicable year. As a result,
date-sensitive systems (both IT systems and non-IT systems) may recognize a date
identified with "00" as the Year 1900, rather than the year 2000. This is
generally described as the Year 2000 issue. If this situation occurs, the
potential exists for system failures or miscalculations, which could impact
business operations.
The Securities and Exchange Commission ("SEC") has asked public
companies to disclose four general types of information related to Year 2000
preparedness: our Company's state of readiness, costs, risks, and contingency
plans. See SEC Release No. 33-7558 (July 29, 1998). Accordingly, we have
included the following discussion in this report, in addition to the Year 2000
disclosures previously filed with the SEC.
State of Readiness
We believe that we have identified and completed all significant IT
systems and non-IT systems that require modification in connection with Year
2000 issues. Internal and external resources have been used and are continuing
to be used, to make the required modifications and test Year 2000 readiness. The
required modifications are complete.
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In addition, we have been communicating with customers, suppliers,
banks, vendors and others with whom it does significant business (collectively)
its "business partners") to determine their Year 2000 readiness and the extent
to which we are vulnerable to any other organization's Year 2000 issues. Based
on these communications and related responses, we are monitoring the Year 2000
preparations and state of readiness of our business partners. Although we are
not aware of any significant Year 2000 problems with our business partners,
there can be no guarantee that the systems of other organizations on which our
system relies will be converted in a timely manner, or that a failure to convert
by another organization, or a conversion that is incompatible with our systems,
would not have a material adverse effect on us.
Costs
The total cost Year 2000 activities has not been and is not anticipated
to be material to our financial position or results of operations in any given
year. Our total costs of addressing Year 2000 issues are estimated to be less
than $10,000. These total costs, as well as the date on which we plan to
complete the Year 2000 modification and testing processes, are based on
management's best estimates. However, there can be no guarantee that these
estimates will be achieved, and actual results could differ from those
estimates.
Risks
We utilize IT systems and non-IT systems in various aspects of our
business. Year 2000 problems in some of our systems could possibly disrupt
operations, but we do not expect that any such disruption would have a material
adverse impact on our operating results. We are also exposed to the risk that
one or more of its customers, suppliers or vendors could experience Year 2000
problems that could impact the ability of such customers to transact business or
such suppliers or vendors to provide goods and services. Although this risk is
lessened by the availability of alternative suppliers, the disruption of certain
services, such as utilities, could, depending upon the extent of the disruption,
potentially have a material adverse impact on our operations.
Contingency Plans
We are in the process of developing contingency plans for our IT
systems and non-IT systems requiring Year 2000 modification. In addition, we are
developing contingency plans to deal with the possibility that some suppliers or
vendors might fail to provide goods and services on a timely basis as a result
of Year 2000 problems. These contingency plans will include the identification,
acquisition and/or preparation of backup systems, suppliers and vendors.
ITEM 3. DESCRIPTION OF PROPERTIES
As of December 1, 1999, our business office was located at 1700 West
Government, Suite 102, Brandon Mississippi 39042. We pay $600 per month in rent
for this office space to an unaffiliated third party under a two year lease
ending November, 2002. Our manufacturing plant
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is located in Flora, Mississippi, which is not currently being utilized.
Finally, we own the office furniture, computer system all manufacturing and
packaging equipment in our business. Otherwise, we own no other properties.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth the number of our shares of no par value
common stock beneficially owned by (i) each person who, as of September 30,
1999, was known by us to own beneficially more than five percent (5%) of our
common stock; (ii) our individual Directors and (iii) our Officers and Directors
as a group. On September 30, 1999, there were a total of 16,400,262 Common
shares issued and outstanding.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1)(2) CLASS
- ------------------- -------------------------- ----------
<S> <C> <C>
Robert C. Furrer 6,908,335(3) 42%
1700 West Government
Suite 102
Brandon, Mississippi 39042
Martin F. Schneider 6,656,795(4) 40.5%
1700 West Government
Suite 102
Brandon, Mississippi 39042
Charles K. Washburn 28,000 .2%
1700 West Government
Suite 102
Brandon, Mississippi 39042
Joseph B. LaRocco 150,000(5) .9%
149 Locust Ave.
Suite 107
New Canaan, Connecticut 06840
Theodore H. Dickerson -0- -0-
1700 West Government
Suite 102
Brandon, Mississippi 39042
Billie C. Furrer -0-(4) -0-
1700 West Government
Suite 102
Brandon, Mississippi 39042
All Officers and Directors
as a Group (Six persons) 13,743,130 83.6%
</TABLE>
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(1) All ownership is beneficial and on record, unless indicated otherwise.
(2) Beneficial owners listed above have sole voting and investment power
with respect to the shares shown, unless otherwise indicated.
(3) Owned of record by Mr. Furrer. Does not include 66,010 shares owned of
record by Mr. Richard W. Furrer, for which Mr. Robert C. Furrer and
Mrs. Billie C. Furrer disclaim any beneficial ownership.
(4) Owned of record by Mr. Schneider. Does not include 26,404 shares owned
by Marilyn Schneider, 13,202 shares owned in Joint Tenancy by Marilyn
Schneider and Jeremy Blaufarb, and 13,202 shares owned in Joint Tenancy
by Marilyn Schneider and Jason Blaufarb, for which Mr. Martin Schneider
disclaims any beneficial ownership.
(5) Mr. LaRocco resigned from all offices on December 7, 1999.
ITEM 5 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Our Directors and Executive Officers, their ages and present positions
held in the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION HELD
---- --- -------------
<S> <C> <C>
Robert C. Furrer 53 Chairman, CEO, and Director
Martin F. Schneider 48 Vice Chairman, CFO, and Director
Charles K. Washburn 29 President and Director
Theodore Dickerson 60 Director
Billie C. Furrer 53 Secretary-Treasurer
</TABLE>
Our Directors will serve in such capacity until the next annual meeting
of our Company's shareholders and until their successors have been elected and
qualified. The officers serve at the discretion of our Directors. Robert C.
Furrer and Billie C. Furrer are husband and wife. Otherwise, there are no family
relationships among our officers and directors, nor are there any arrangements
or understandings between any of the directors or officers of the Company and
any other person pursuant to which any officer or director was or is to be
selected as an officer or director.
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Robert C. Furrer has been the Chief Executive Officer since June, 1999.
Mr. Furrer is the former CEO of Furrer and Associates Consolidated Services,
Inc. an insurance marketing and development company. Mr. Furrer has over 20
years in market development and sales. He is a member of the Permanent President
Club and recipient of the 10th degree Grand Diamond award in sales marketing and
is a member of the Million Dollar Round Table. Mr. Furrer was the CEO and owner
of Lake Slip Away Raceway and Resort, a two hundred-acre facility in Lena, MS.
On May 14, 1998, Mr. Furrer filed for reorganization under Chapter 11 of the
Bankruptcy Code in the U.S. District Court for the Southern Mississippi, Case
#98-02448JEE. The United States Bankruptcy Court of the Southern District of
Mississippi has confirmed the plan of reorganization for Mr. Furrer..
Charles K. Washburn has been our President since June, 1999. Mr.
Washburn is an Environmental / Industrial Microbiologist and a graduate of
Mississippi State University, where he received a Bachelor of Science in Applied
Microbiology and a minor in Chemistry. Immediately following graduation, he
dedicated two years of postgraduate research, focused primarily around the
microbial utilization of hydrocarbons and the bioremediation of hydrocarbons in
soils, towards completion of a Masters of Science degree at Mississippi State
University. From 1994 to 1997 Mr. Washburn was employed by Environmental
Remediation Technology as an Environmental Microbiologist and Director of
Technical Services where he developed and implemented applications for the
implementation of the products developed by Mr. Dickerson, specializing in
"in-situ" biological remediation of contaminated soils, bio-augmentation, land
farming and other bioremediation technologies. He was formerly employed by
Pfizer Pharmaceuticals as a Sales Representative from 1997 to 1998. From 1998 to
June, 1999, Mr. Washburn was employed by Companion Technologies as a Computer
Systems Sales Representative.
Martin F. Schneider has been the Chief Financial Officer since June,
1999. Mr. Schneider, in addition to having a Ph.D. Degree from Columbia
University in Economics, taught Economics at the London School of Economics in
1977 through 1978. Mr. Schneider has extensive merger and acquisition and
investment banking experience and was employed by Smith Barney as a Vice
President from 1994 to 1996. From 1996 to 1997 PaineWeber employed him as a Vice
President. Mr. Schneider left PaineWeber to form Trans-Global Financial
Holdings, LLC. , a private investment company, where he served as its President
and CEO until he joined us.
Theodore "Ted" Dickerson has been one of our Directors since June,
1999. He is the original inventor of the process by which our products for the
remediation of hydrocarbons and acids are manufactured. Under the terms of a
Purchase and Sale Agreement, with Addenda, we are purchasing the patent, land,
buildings, raw materials and trademarks from Mr. Dickerson and his company,
Product Services Company, Inc. Mr. Dickerson received a Bachelor of Science in
Chemical Engineering from The University of Mississippi in 1961. He was employed
by Colombian Carbon Company / Cities Service Company and worked twenty-three
years in various managerial positions. He retired in 1984 as Senior
Vice-president of worldwide manufacturing operations to pursue his private
business. He holds both product and process patents in fields of electromagnetic
separation, carbon blacks, iron oxides, drilling mud additives and a line of
environmentally friendly products produced from agricultural by-product streams.
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Billie C. Furrer has been our Secretary since June, 1999. Mrs. Furrer
has over twenty years experience in bookkeeping and office management. Prior to
her appointment as Secretary, she served as Vice-president and General Manager
for Furrer & Associates Consolidated Services, Inc. Mrs. Furrer was the General
Manager of Lake Slip Away Raceway and Resort, a two hundred-acre facility in
Lena, MS. On May 14, 1998, Mrs. Furrer filed for reorganization under Chapter 11
of the Bankruptcy Code in the U.S. District Court for the Southern Mississippi,
Case #98-02448JEE. The United States Bankruptcy Court of the Southern District
of Mississippi has confirmed the plan of reorganization for Mrs. Furrer..
ITEM 6. EXECUTIVE COMPENSATION
None of our executive officers received compensation in excess of
$100,000 during the fiscal years ended June 30, 1998 or 1999. Compensation does
not include minor business-related and other expenses paid by us. Such amounts
in the aggregate do not exceed $10,000. None of our executive officers received
any compensation for the fiscal year ended June 30, 1998. For the fiscal year
ended June 30, 1999, Our Chairman, Robert C. Furrer, received a salary of
$24,000 per annum. For the fiscal year ended June 30, 1999, Martin F. Schneider,
our Vice-Chairman and Director, received a salary of $24,000 per annum, Charles
K. Washburn, our President and Director, received a salary of $28,461.52 per
annum, Billie C. Furrer, our Secretary, received a salary of $12,000 per annum,
and Joseph Brown, a former Officer and Director, received a salary of $40,384.57
per annum.
We have granted no shares of our capital stock as additional
compensation for the fiscal years ended 1998 and 1999.
For the fiscal years 1998 and 1999, we did not pay our health care for
our officers and directors. We have no pension plan. We have no plans or
agreements which provide compensation on the event of termination of employment
or change in our control.
We do not pay members of our Board of Directors any fees for attendance
or similar remuneration, but reimburse them for any out-of-pocket expenses
incurred by them in connection with our business. We may compensate them in the
future with common stock, but have no definite plans at this time.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of September 30, 1999 we were renting our office space from Robert
C. Furrer and Billie C. Furrer. Robert C. Furrer is the CEO and a Director.
Billie C. Furrer is the Secretary -Treasurer. We no longer rent our office space
from Robert C. Furrer and Billie C. Furrer.
As of September 30, 1999, we have a Note Payable to Robert C, Furrer,
an Officer & Director, at an annual rate of 8% interest for compensation owed in
the amount of $100,000.
As of September 30, 1999, we have a Note Payable to Robert C. Furrer,
Officer & Director, at an annual rate of 8% interest for money put into the
Company from the sale of personal stock in the amount of $50,000.
As of September 30, 1999, we had a Note Payable to Martin F. Schneider,
Officer and Director, at an annual rate of 8% interest for money put into the
Company from the sale of personal stock in the amount of $50,000.
As of September 30, 1999, we have a Note Payable to Martin F.
Schneider, Officer & Director, at an annual rate of 8% interest for compensation
owed in the amount of $100,000.
As of September 30, 1999, we have a Note payable to Theodore H.
Dickerson, a Director, at an annual rate of 8% interest for an Asset Purchase
Agreement in the amount of $2,700,000. Mr. Dickerson is the person who sold us
our assets under the Purchase and Sale Agreement, dated February 1, 1999. Under
Addenda, the latest of which is dated December 1, 1999, we have until March 1,
2000 to pay for the acquisition.
ITEM 8. DESCRIPTION OF SECURITIES.
We are authorized to issue 50,000,000 shares of Common Stock, par value
no par per share, and 5,000,000 shares of non-voting Preferred Stock, par value
no par per share. As of September 30, 1999, 16,400,262 shares of Common Stock
were outstanding. As of the same date, no Preferred Stock was issued or
outstanding.
COMMON STOCK
The holders of Common Stock have one vote per share on all matters
(including election of Directors) without provision for cumulative voting. Thus,
holders of more than 50% of the shares voting for the election of directors can
elect all of the directors, if they choose to do so. The Common Stock is not
redeemable and has no conversion or preemptive rights.
The Common Stock currently outstanding is validly issued, fully paid
and non-assessable. In the event of liquidation of our Company, the holders of
Common Stock will share equally in any balance of our Company's assets available
for distribution to them after satisfaction of creditors and the holders of our
Company's senior securities, whatever they may be. We may pay dividends, in cash
or in securities or other property when and as declared by the Board of
Directors from funds legally available therefor, but has paid no cash dividends
on its Common Stock.
15
<PAGE> 16
PREFERRED STOCK
Under the Articles of Incorporation, the Board of Directors has the
authority to issue non-voting Preferred Stock and to fix and determine its
series, relative rights and preferences to the fullest extent permitted by the
laws of the State of Colorado and such Articles of Incorporation. As of the date
of this Registration Statement, no shares of Preferred Stock are issued or
outstanding. The Board of Directors has plans to issue Preferred Stock in the
foreseeable future pursuant to its capital raising efforts in its 2000 fiscal
year, although no specific plans have been finalized at this time.
DEBENTURES
We authorized a total of $2,000,000 worth of 10% Convertible Debentures
and have issued a total of $691,000 for a minimum of $25,000 per Debenture. The
Debentures bear interest at the rate of 10% per annum, payable at the time of
each conversion into cash or our common shares, at our option. The Debentures
mature one year after date of issuance, subject to prior conversion. We may
convert the Debentures into our common shares under terms established by us. We
may also redeem the Debentures at any time under terms established by us.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON SHARES AND
OTHER SHAREHOLDER MATTERS.
(a) Principal Market or Markets
Our common shares began trading under the symbol "MMUS" in July 1999.
Prior to that time, the securities traded under the name of Oxford Financial
Holdings, Ltd. "OXFH." There are no quotes available for this period. Market
makers and other dealers provide bid and ask quotations of our Common Stock
under the symbol "MMUS". Trading is conducted in the over-the-counter market on
the NASD's "Electronic Bulletin Board,"
The table below represents the range of high and low bid quotations of
our common shares as reported during the reporting period herein. The following
bid price market quotations represent prices between dealers and does not
include retail markup, markdown, or commissions; hence, they may not represent
actual transactions.
Fiscal Year 1999 High Low
---------------- ---- ---
Third Quarter $1.01 $0.25
Common Shares
Fourth Quarter $3.125 $0.78125
Common Shares
16
<PAGE> 17
(b) Approximate Number of Holders of Common Stock
As of September 30, 1999, a total of 16,400,262 of our Common Shares
were outstanding and the number of holders of record of the Company's Common
Stock at that date was approximately 45.
However, we estimate that it has a significantly greater number of
shareholders because a substantial number of our shares are held in nominee
names by our market makers.
(c) Dividends
Holders of common stock are entitled to receive such dividends as may
be declared by our Board of Directors. We paid no dividends on the common stock
during the periods reported herein nor do we anticipate paying dividends in the
foreseeable future.
ITEM 2. LEGAL PROCEEDINGS;
Our subsidiary, Mighty Mack USA, Ltd., a private Mississippi
Corporation, was recently named a defendant in a lawsuit commenced in Louisiana
by Alpha Distributing Company, Inc. The lawsuit claims breach of contract
concerning certain sales and distribution rights of the Mississippi company's
products, which rights were set forth in a written contract. The case has been
continued without a date for further proceedings. This case was pending in the
22nd Judicial District Court, Parish of St. Tammany, State of Louisiana.
Otherwise, we know of no legal proceedings of a material nature pending
or threatened or judgments entered against any director or officer of our
Company in his/her capacity as such.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We did not have any disagreements on accounting and financial
disclosures with our accounting firm during the reporting period.
17
<PAGE> 18
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
The following shareholders acquired their respective shares in our
Company in June 1999 as a result of our acquisition of Mighty Mack USA, Ltd., a
Mississippi corporation.
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
ROBERT C. FURRER 6,881,931
MARTIN F. SCHNEIDER 6,656,795
JOSEPH M. BROWN 26,404
CHARLES WASHBURN 28,000
WINSTON WOOD 28
GARY JOHNSON 112
JOHN G. WILLIAMS 50,000
ROBERT LEVENTHAL 6,608
STACEY SCHNEIDER 100,000
RICHARD BELL 266
PAUL P. LIUCCI 798
RICHARD W. FURRER 66,010
ROBERT T. FURRER 26,404
HELEN ANN MILES 266
DEBBIE RUSK 266
MICHAEL LOUVIER 56
LYNN & HOWARD KLEIN 56
MARILYN SCHNEIDER 26,404
MARILYN SCHNEIDER & JEREMY BLAUFARB 13,202
MARILYN SCHNEIDER & JASON BLAUFARB 13,202
DAVID W. COOK 2,898
RUBIN ACKMAN 28
KAREN OWENS 266
JOSEPH B. LA ROCCO 100,000
TOTAL SHARES 14,000,000
</TABLE>
All of the issued and outstanding shares of our common stock were
issued in accordance with the exemption from registration afforded by Section
4(2) of the Securities Act of 1933, as amended. All of the investors are
considered to be sophisticated investors because of their previous investment
experience and access to information on us necessary to make an informed
investment decision.
In September, 1999, we sold $691,000 worth of 10% Convertible
Debentures for $25,000 per Debenture to the entities indicated below:
Name Amount
Calp II Limited Partnership $250,000
Moro, Inc. $50,000
John F. Marsden $100,000
Norman Goldstein $66,000
Barry Allan Fleck $75,000
Gary Fleck $50,000
Arab Commerce Bank, Ltd. $75,000
Lufeng Investments, Ltd. $25,000
18
<PAGE> 19
All of the Debentures were issued in accordance with the exemption from
registration afforded by Sections 4(2) and 4(6) of the Securities Act of 1933,
as amended and Rule 506 thereunder. All of the investors are considered to be
sophisticated and/or accredited investors because of their previous investment
experience and access to information on us necessary to make an informed
investment decision.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our Articles of Incorporation authorize the Board of Directors, on
behalf of us and without shareholder action, to exercise all of our powers of
indemnification to the maximum extent permitted under the applicable statute.
Title 7 of the Colorado Revised Statutes, 1986 Replacement Volume ("CRS"), as
amended, permits us to indemnify its directors, officers, employees,
fiduciaries, and agents as follows:
Section 7-109-102 of CRS permits a corporation to indemnify such
persons for reasonable expenses in defending against liability incurred in any
legal proceeding if:
(a) The person conducted himself or herself in good faith;
(b) The person reasonably believed:
(1) In the case of conduct in an official capacity with the
corporation, that his or her conduct was in the corporation's best interests;
and
(2) In all other cases, that his or her conduct was at least not
opposed to the corporation's best interests; and
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe that his or her conduct was unlawful.
A Corporation may not indemnify such person under this Section
7-109-102 of CRS:
(a) In connection with a proceeding by or in the right of the
corporation in which such person was adjudged liable to the corporation; or
(b) In connection with any other proceeding charging that such person
derived an improper benefit, whether or not involving action in an official
capacity, in which proceeding such person was adjudged liable on the basis that
he or she derived an improper personal benefit.
Unless limited by the Articles of Incorporation, and there are not such
limitations with respect to the Company, Section 7-109-103 of CRS requires that
the corporation shall indemnify such a person against reasonable expenses who
was wholly successful, on the merits or
19
<PAGE> 20
otherwise, in the defense of any proceeding to which the person was a party
because of his status with the corporation.
Under Section 7-109-104 of CRS, the corporation may pay reasonable fees
in advance of final disposition of the proceeding if:
(a) Such person furnishes to the corporation a written affirmation of
the such person's good faith belief that he or she has met the Standard of
Conduct described in Section 7-109-102 of CRS;
(b) Such person furnishes the corporation a written undertaking,
executed personally or on person's behalf, to repay the advance if it is
ultimately determined that he or she did not meet the Standard of Conduct in
Section 7-109-102 of CRS; and
(c) A determination is made that the facts then known to those making
the determination would not preclude indemnification.
Under Section 7-109-106 of CRS, a corporation may not indemnify such
person, including advanced payments, unless authorized in the specific case
after a determination has been made that indemnification of such person is
permissible in the circumstances because he met the Standard of Conduct under
Section 7-109-102 of CRS and such person has made the specific affirmation and
undertaking required under the statute. The required determinations are to be
made by a majority vote of a quorum of the Board of Directors, utilizing only
directors who are not parties to the proceeding. If a quorum cannot be obtained,
the determination can be made by a majority vote of a committee of the Board,
which consists of at least two directors who are not parties to the proceeding.
If neither a quorum of the Board nor a committee of the Board can be
established, then the determination can be made either by the Shareholders or by
independent legal counsel selected by majority vote of the Board of Directors.
The corporation is required by Section 7-109-110 of CRS to notify the
shareholders in writing of any indemnification of a director with or before
notice of the next shareholders' meeting.
Under Section 7-109-105 of CRS, such person may apply to any court of
competent jurisdiction for a determination that such person is entitled under
the statute to be indemnified from reasonable expenses.
Under Section 7-107(1)(c) of CRS, a corporation may also indemnify and
advance expenses to an officer, employee, fiduciary, or agent who is not a
director to a greater extent than the foregoing indemnification provisions, if
not inconsistent with public policy, and if provided for in the corporation's
bylaw, general or specific action of the Board of Directors, or shareholders, or
contract.
20
<PAGE> 21
Section 7-109-108 of CRS permits the corporation to purchase and
maintain insurance to pay for any indemnification of reasonable expenses as
discussed herein.
The indemnification discussed herein shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under the Articles
of Incorporation, any Bylaw, agreement, vote of shareholders, or disinterested
directors, or otherwise, and any procedure provided for by any of the foregoing,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of
heirs, executors, and administrators of such a person.
Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expense incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE> 22
Part F/S
MIGHTY MACK USA, INC.
(UNAUDITED) BALANCE SHEET
For The Period Ending September 30, 1999
<TABLE>
<S> <C>
ASSETS:
Accounts Receivable $ 674
Escrow Account 392
Employee Advances 1,400
Inventory 4,662,000
-----------
CURRENT ASSETS 4,664,466
PROPERTY/EQUIPMENT
Transportation, net of Depreciation $200 11,800
Buildings/Homes, net of Depreciation $6,105 974,000
Furniture/Fixtures, net of Depreciation $1,997 53,922
Office Equipment, net of Depreciation $591 16,591
Plant Equipment, net of Depreciation $24,398 590,109
-----------
TOTAL PROPERTY/EQUIPMENT 1,646,422
OTHER ASSETS
Trade Names, Patent, net of Amortization $625 99,375
-----------
TOTAL OTHER ASSETS 99,375
TOTAL ASSETS $ 6,410,263
===========
LIABILITIES/STOCKHOLDERS' EQUITY
Accounts Payable $ 69,362
Accrued Expenses 89,054
Debentures Payable (10% convertible) 691,000
Notes Payable 2,990,112
Royalty Fee Payable 3,000,000
-----------
TOTAL CURRENT LIABILITIES 6,839,528
STOCKHOLDERS' EQUITY
Preferred Stock, Class A, 5,000,000
shares authorized, no par value,
none outstanding --
Common Stock, no par value, 50,000,000
shares authorized, issued and
outstanding 16,400,262 507,015
Retained Earnings (Deficit) (936,280)
-----------
TOTAL STOCKHOLDERS' EQUITY (429,265)
-----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 6,410,263
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 23
MIGHTY MACK USA, INC.
(UNAUDITED) STATEMENT OF OPERATIONS
9/30/99
<TABLE>
<CAPTION>
AMOUNT
------------
<S> <C>
REVENUES:
Product Sales $ 9,725
Other Income 3,100
TOTAL REVENUES 12,825
Cost of Goods Sold (3,925)
------------
GROSS MARGIN 8,900
------------
OPERATING EXPENSES
Interest Expense 21,334
Operating Costs 416,169
General & Administrative 242,135
------------
TOTAL OPERATING EXPENSES 679,638
------------
NET INCOME (LOSS) $ (670,738)
============
BASIC (LOSS) PER SHARE (0.03)
============
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 16,400,262
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 24
MIGHTY MACK USA, INC.
(UNAUDITED) STATEMENT OF CASH FLOW
9/30/99
<TABLE>
<S> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income (Loss) $(670,738)
Reconciliation of Net Income (Loss) to Net Cash
Provided by (Used In) Operating Activities
Depreciation and Amortization 33,916
(Increase) Decrease In:
Accounts Receivable (1,792)
Increase (Decrease) In:
Accounts Payable 1,018
Accrued Expenses 56,168
---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (581,428)
CASH FLOWS USED FOR INVESTING ACTIVITIES
Investment in Property & Equipment (199,684)
---------
NET CASH PROVIDED BY INVESTING ACTIVITIES (199,684)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Notes Payable 90,112
Debentures Payable 691,000
---------
NET CASH PROVIDED BY FINANCING ACITIVITIES 781,112
NET INCREASE IN CASH AND CASH EQUIVALENTS --
Cash and Cash Equivalents - Beginning of Period $ --
Cash and Cash Equivalents - End of Period $ --
=========
SUPPLEMENTAL DISCLOSURE
CASH PAID DURING THE YEAR FOR:
Interest --
Income Taxes --
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 25
MIGHTY MACK USA, INC.
(UNAUDITED) STOCKHOLDERS' EQUITY
9/30/99
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK RETAINED TOTAL
-------------------------- ------------------------- EARNINGS/ STOCKHOLDERS'
DESCRIPTION SHARES AMOUNT SHARES AMOUNT (DEFICIT) EQUITY
- ----------- ---------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE - JUNE 30, 1998 335,000 $ 3,350 2,400,000 $ 2,000 $ (5,350) $ --
Cancellation and Issuance (335,000) $ (3,350) 14,000,262 $ 505,015 $ -- $ 501,665
of Stock for Acquisition
Net Loss June 30, 1999 -- $ -- -- $ -- $ (260,192) $ (260,192)
---------- ---------- ---------- ---------- ---------- ----------
Balance - June 30, 1999 -- $ -- 16,400,262 $ 507,015 $ (265,542) $ 241,473
Net Loss September 30, 1999 -- $ -- -- $ -- $ (670,738) $ (670,738)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE - SEPTEMBER 30, 1999 -- $ -- 16,400,262 $ 507,015 $ (936,280) $ (429,265)
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 26
MIGHTY MACK USA, LTD
NOTES TO (UNAUDITED) FINANCIAL STATEMENTS
September 30, 1999
NOTE 1 - ORGANIZATION AND PRESENTATION:
Organization:
On July 19, 1996, Oxford Financial Holdings, Ltd. (the Company) was
incorporated under the laws of Colorado to engage in all aspects of
business consulting and information retrieval. Mighty Mack USA, LTD was
incorporated in the state of Mississippi on November 9, 1998. Mighty Mack
USA, LTD, a Mississippi Company, and Oxford Financial Holdings, LTD., a
Colorado corporation, merged on June 15, 1999. The merger was treated as
a reverse acquisition for accounting purposes with Mighty Mack USA, LTD.
as the acquirer and Oxford Financial Holdings, LTD as the acquiree based
upon Mighty Mack USA, LTD then current officers and directors assuming
management control of the resulting entity and the value and ownership
interest being received by current Mighty Mack USA, LTD. stockholders
exceeding that received by Oxford Financial Holdings, LTD stockholders.
The Company changed its name to Mighty Mack USA, LTD.
The Mississippi Corporation, Mighty Mack exchanged 53,022,950 shares or
100% of its common stock for 14,000,000 shares of common stock in the
Company. The Company may be issuing 1,600,000 additional shares to
various consultants as part of the transaction. Also the Company canceled
the 335,000 shares of preferred stock that was outstanding leaving no
shares of preferred stock outstanding after the consummation of the
merger.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
These financial statements are presented on the accrual method of
accounting in accordance with generally accepted accounting principles.
Significant principles followed by the Company and the methods of
applying those principles, which materially affect the determination of
financial position and cash flows, are summarized below:
DESCRIPTION OF BUSINESS
Mighty Mack USA, LTD markets, manufactures & wholesales HydroCarbon
Absorbents & Environmental Remediation Products. The Company develops
marketing and distribution outlets for its' products through established
retail and wholesale distributors through out the country.
REVENUE RECOGNITION
Product Sales are sales of bag and bulk product manufactured by the
company. Revenue is recognized at the time of sale.
INVENTORY
Inventory at September 30, 1999 by major classification is:
<TABLE>
<S> <C>
Raw Materials and Work-in-Process $ 4,176,020
Finished Goods $ 485,980
------------
Total Inventory $ 4,662,000
============
</TABLE>
<PAGE> 27
MIGHTY MACK USA, LTD
NOTES TO (UNAUDITED) FINANCIAL STATEMENTS
September 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments, purchased
with an original maturity of three months or less, to be cash
equivalents.
ACCOUNTING FOR IMPAIRMENTS IN LONG-LIVED ASSETS:
Long-lived assets and identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that
the carrying amounts of assets may not be recoverable. Management
periodically evaluates the carrying value and the economic useful life
of its long-lived assets based on the Company's operating performance
and the expected future undiscounted cash flows and will adjust the
carrying amount of assets which may not be recoverable. Management
believes that long-lived assets in the balance sheet are appropriately
valued.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. The cost of ordinary
maintenance and repairs is charged to operations while renewals and
replacements are capitalized. Depreciation is computed on the
straight-line method over the following estimated useful lives:
Furniture and fixtures 7 years
Computer equipment and software 3- years
Plant equipment 5 year
Buildings 40 years
FEDERAL INCOME TAX:
The Company accounts for income taxes under SFAS No. 109, which
requires the asset and liability approach to accounting for income
taxes. Under this approach, deferred income taxes are determined based
upon differences between the financial statement and tax bases of the
Company's assets and liabilities and operating loss carryforwards using
enacted tax rates in effect for the years in which the differences are
expected to reverse. Deferred tax assets are recognized if it is more
likely than not that the future tax benefit will be realized.
USE OF ESTIMATES:
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
TRADE NAMES AND PATENTS
The Company has valued its trade names and patents at $100,000. These
items are being amortized over a forty-year period.
<PAGE> 28
MIGHTY MACK USA, LTD
NOTES TO (UNAUDITED) FINANCIAL STATEMENTS
September 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments include cash, cash equivalents and
notes payable. Estimates of fair value of these instruments are as
follows:
Cash and cash equivalents - The carrying amount of cash and
cash equivalents approximates fair value due to the relatively
short maturity of these instruments.
Notes payable - The carrying amount of the Company's notes
payable approximate fair value based on borrowing rates
currently available to the Company for borrowings with
comparable terms and conditions.
NOTE 3 - PROPERTY AND EQUIPMENT:
Property and equipment consist of the following as of September 30,
1999.
<TABLE>
<S> <C>
Land $ 105,000
Furniture and fixtures 55,919
Computer equipment and software 17,182
Plant equipment 614,507
Transportation 12,000
----------
Building 875,105
----------
Subtotal 1,679,713
Less: Accumulated depreciation (33,291)
----------
$1,646,422
==========
</TABLE>
NOTE 4 - INCOME TAXES
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred taxes related primarily to differences between the recorded
book basis and tax basis of assets and liabilities for financial and
income tax reporting. The deferred tax assets and liabilities represent
the future tax return consequences of those differences, which will
either be taxable or deductible when the assets and liabilities are
recovered or settled. Deferred taxes are also recognized for operating
losses that are available to offset future taxable income and tax
credits that are available to offset federal income taxes. Due to the
Company's net operating loss there are no income taxes currently due.
Also, there were no material differences between recorded book basis
and tax basis at September 30, 1999.
The Company follows Financial Accounting Standards Board Statement No.
109, "Accounting for Income Taxes" (SFAS #109), which requires, among
other things, an asset and liability approach to calculating deferred
income taxes. As of September 30, 1999, the Company has a net operating
loss carry forward of $836,280 which has been fully reserved through a
valuation allowance.
<PAGE> 29
MIGHTY MACK USA, LTD
NOTES TO (UNAUDITED) FINANCIAL STATEMENTS
September 30, 1999
NOTE 4 - INCOME TAXES (CONT.)
As of September 30, 1999, the Company had a net operating loss carry forward for
federal income tax purposes approximately equal to the accumulated deficit
recognized for book purposes, which will be available to reduce future taxable
income. The full realization of the tax benefit associated with the carry
forward depends predominantly upon the Company's ability to generate taxable
income during the carry forward period. Because of the current uncertainty of
realizing such tax assets in the future, a valuation allowance has been recorded
equal to the amount of the net deferred tax asset, which caused the Company's
effective tax rate to differ from the statutory income tax rate. The net
operating loss carry forward, if not utilized, will begin to expire in the year
2010.
NOTE 5 - NOTES PAYABLE
Notes payable consist of the following at September 30, 1999:
<TABLE>
<S> <C>
Note - Robert C. Furrer, Officer & Director, at 8% annual interest rate. $ 140,112
Note - Martin F. Schneider, Officer & Director, at 8% annual interest rate. $ 150,000
Note - Product Services Co., Inc. for assets purchase agreement
at 8% annual interest rate, remaining balance $2,700,000
----------
$2,990,112
==========
</TABLE>
NOTE 6 - PRODUCT AND ASSET PURCHASE AGREEMENT
The Company entered into an agreement on February 1, 1999 to acquire
substantially all of the products of Product Services Co., Inc. a
Mississippi Corporation and Theodore Dickerson. This purchase also
includes the real estate items of a storage plant and land at Valley
Park, Mississippi. This purchase includes certain intellectual property
assets made up of patents, trademarks, trade names and security
interests. This purchase agreement is for $6,000,000 made up of
$3,000,000 due up front and $3,000,000 due as a royalty payment
comprised of three percent of the wholesale price of product up to a
maximum of $3,000,000. The total balance of the royalty payment is due
and payable by January 31, 2002 no matter whether the sales have
occurred or not.
NOTE 7 - REALIZATION OF ASSETS
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. However, the Company
has sustained a substantial operation loss this year. As shown in the
financial statements, the Company incurred a net loss of $936,280 for
1999. At September 30, 1999, current liabilities exceed current assets
by $2,175,062. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets,
or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue in existence.
In view of these matters, realization of a major portion of the assets
in the accompanying balance sheet is dependent upon continued
operations of the Company, which in turn is dependent upon the
Company's ability to meet its financial requirements, and the success
of its future operations. Management believes that actions presently
being taken to revise the Company's operating and financial
requirements provide the opportunity for the Company to continue as a
going concern.
<PAGE> 30
MIGHTY MACK USA, LTD
NOTES TO (UNAUDITED) FINANCIAL STATEMENTS
September 30, 1999
NOTE 8 - RELATED PARTY TRANSACTION
The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting between the
Company and their other business interests. The Company is formulating
a policy for the resolution of such conflicts.
NOTE 9 - DEBENTURES
In September, 1999 the Company sold $691,000 worth of 10% Convertible
Debentures for $25,000 per Debenture. All of the Debentures were issued
in accordance with the exemption from registration afforded by Sections
4(2) and 4(6) of the Securities Act of 1933, as amended and Rule 506
thereunder.
<PAGE> 31
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of
Mighty Mack USA, LTD
Lena, MS
We have audited the accompanying balance sheet of Mighty Mack USA, LTD as of
June 30, 1999 and the related statements of operations, stockholders' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
As shown in the financial statements, the company incurred a net loss of
$260,192 for 1999. At June 30, 1999, current liabilities exceed current assets
by $1,338,556. The financial statements do not include any adjustments relating
to the recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the company
cannot continue in existence.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mighty Mack USA, LTD as of June
30, 1999, and the results of their operations and their cash flows for the year
then ended in conformity with generally accepted accounting principles.
Denver, Colorado
August 11, 1999
<PAGE> 32
MIGHTY MACK USA, LTD
Balance Sheet
June 30, 1999
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Accounts Receivable $ 674
Inventory 4,662,000
-----------
TOTAL CURRENT ASSETS 4,662,674
PROPERTY AND EQUIPMENT:
Property and Equipment, Net of Accumulated 1,480,237
-----------
Depreciation of $10,232
OTHER ASSETS:
Trade Names, Patents, Net of Accumulated
Amortization of $208 99,792
-----------
TOTAL ASSETS $ 6,242,703
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 68,344
Accrued Expenses 32,886
Notes Payable 2,900,000
Royalty Fee Payable 3,000,000
-----------
TOTAL CURRENT LIABILITIES 6,001,230
TOTAL LIABILITIES 6,001,230
STOCKHOLDERS' EQUITY:
Preferred Stock, Class A Preferred, 5,000,000
Shares Authorized, No Par Value, None Outstanding --
Common Stock, No Par Value, 50,000,000 Shares
Authorized, No Par Value, Issued and Outstanding 16,400,262 507,015
Retained Earnings (Deficit) (265,542)
-----------
TOTAL STOCKHOLDERS' EQUITY 241,473
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,242,703
===========
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE> 33
MIGHTY MACK USA, LTD
Statement of Operations
June 30, 1999
<TABLE>
<CAPTION>
REVENUE: 1999
----------
<S> <C>
Product Sales $ 4,736
COST OF GOODS SOLD (1,174)
----------
GROSS MARGIN 3,562
----------
OPERATING EXPENSES
Interest Expense 21,334
Operating Costs 170,804
General and Administrative 71,616
----------
TOTAL OPERATING EXPENSES 263,754
----------
NET INCOME (LOSS) $ (260,192)
==========
BASIC (LOSS) PER SHARE $ (0.10)
==========
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 2,600,011
==========
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE> 34
MIGHTY MACK USA, LTD
Stockholders' Equity
June 30, 1999
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK RETAINED TOTAL
-------------------------- ------------------------- EARNING STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT (DEFICIT) EQUITY
----------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE-JUNE 30, 1998 335,000 $ 3,350 $ 2,400,000 $ 2,000 $ (5,350) $ --
Cancellation and Issuance
of Stock for Acquisition (335,000) (3,350) 14,000,262 505,015 -- 501,665
Net Loss June 30, 1999 -- -- -- -- (260,192) (260,192)
----------- ----------- ----------- ----------- ----------- -------------
BALANCE-JUNE 30, 1999 -- $ -- $16,400,262 $ 507,015 $ (265,542) $ 241,473
=========== =========== =========== =========== =========== =============
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE> 35
MIGHTY MACK USA, LTD
Statement of Cash Flow
June 30, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
<TABLE>
<S> <C>
NET INCOME (LOSS) $ (260,192)
Reconciliation of Net Income (Loss) to Net Cash
Provided by (Used In) Operating Activities
Depreciation and Amortization 10,440
(INCREASE) DECREASE IN:
Accounts Receivable (674)
INCREASE (DECEASE) IN:
Accounts Payable 65,844
Accrued Expenses 29,537
-----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (155,045)
CASH FLOWS USED FOR INVESTING ACTIVITIES
Investment in Property & Equipment (549,970)
-----------
NET CASH PROVIDED BY INVESTING ACTIVITIES (549,970)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds From Notes Payable 200,000
Common Stock 505,015
-----------
Net Cash Provided by Financing Activities 705,015
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS -0-
Cash and Cash equivalents - Beginning of Period -0-
Cash and Cash Equivalents - End of Period $ -0-
===========
SUPPLEMENTAL DISCLOSURE
CASH PAID DURING THE YEAR FOR:
Interest $ -0-
Income Taxes $ -0-
Inventory Acquisition Through Notes and Royalty Fee Payable 4,362,000
Property and Equipment Acquisition Through Notes Payable 1,190,469
Trade Names and Patents Acquisition Through Notes Payable 100,000
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE> 36
MIGHTY MACK USA, LTD
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 1 - ORGANIZATION AND PRESENTATION:
Organization:
On July 19, 1996, Oxford Financial Holdings, Ltd. (the Company) was
incorporated under the laws of Colorado to engage in all aspects of
business consulting and information retrieval. Mighty Mack USA, LTD was
incorporated in the state of Mississippi on November 9, 1998. Mighty Mack
USA, LTD, a Mississippi Company, and Oxford Financial Holdings, LTD., a
Colorado corporation, merged on June 15, 1999. The merger was treated as
a reverse acquisition for accounting purposes with Mighty Mack USA, LTD.
as the acquirer and Oxford Financial Holdings, LTD as the acquiree based
upon Mighty Mack USA, LTD then current officers and directors assuming
management control of the resulting entity and the value and ownership
interest being received by current Mighty Mack USA, LTD. stockholders
exceeding that received by Oxford Financial Holdings, LTD stockholders.
The Company changed its name to Mighty Mack USA, LTD.
The Mississippi Corporation, Mighty Mack exchanged 53,022,950 shares or
100% of its common stock for 14,000,000 shares of common stock in the
Company. The Company may be issuing 1,600,000 additional shares to
various consultants as part of the transaction. Also the Company canceled
the 335,000 shares of preferred stock that was outstanding leaving no
shares of preferred stock outstanding after the consummation of the
merger.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
These financial statements are presented on the accrual method of
accounting in accordance with generally accepted accounting principles.
Significant principles followed by the Company and the methods of
applying those principles, which materially affect the determination of
financial position and cash flows, are summarized below:
DESCRIPTION OF BUSINESS
Mighty Mack USA, LTD markets, manufactures & wholesales HydroCarbon
Absorbents & Environmental Remediation Products. The Company develops
marketing and distribution outlets for its' products through established
retail and wholesale distributors through out the country.
REVENUE RECOGNITION
Product Sales are sales of bag and bulk product manufactured by the
company. Revenue is recognized at the time of sale.
INVENTORY
Inventory at June 30, 1999 by major classification is:
<TABLE>
<S> <C>
Raw Materials and Work-in-Process $ 4,176,020
Finished Goods $ 485,980
------------
Total Inventory $ 4,662,000
============
</TABLE>
<PAGE> 37
MIGHTY MACK USA, LTD
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments, purchased
with an original maturity of three months or less, to be cash
equivalents.
ACCOUNTING FOR IMPAIRMENTS IN LONG-LIVED ASSETS:
Long-lived assets and identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that
the carrying amounts of assets may not be recoverable. Management
periodically evaluates the carrying value and the economic useful life
of its long-lived assets based on the Company's operating performance
and the expected future undiscounted cash flows and will adjust the
carrying amount of assets which may not be recoverable. Management
believes that long-lived assets in the balance sheet are appropriately
valued.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. The cost of ordinary
maintenance and repairs is charged to operations while renewals and
replacements are capitalized. Depreciation is computed on the
straight-line method over the following estimated useful lives:
<TABLE>
<S> <C>
Furniture and fixtures 7 years
Computer equipment and software 3- years
Plant equipment 5 year
Buildings 40 years
</TABLE>
FEDERAL INCOME TAX:
The Company accounts for income taxes under SFAS No. 109, which
requires the asset and liability approach to accounting for income
taxes. Under this approach, deferred income taxes are determined based
upon differences between the financial statement and tax bases of the
Company's assets and liabilities and operating loss carryforwards using
enacted tax rates in effect for the years in which the differences are
expected to reverse. Deferred tax assets are recognized if it is more
likely than not that the future tax benefit will be realized.
USE OF ESTIMATES:
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
TRADE NAMES AND PATENTS
The Company has valued its trade names and patents at $100,000. These
items are being amortized over a forty-year period.
<PAGE> 38
MIGHTY MACK USA, LTD
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments include cash, cash equivalents and
notes payable. Estimates of fair value of these instruments are as
follows:
Cash and cash equivalents - The carrying amount of cash and
cash equivalents approximates fair value due to the relatively
short maturity of these instruments.
Notes payable - The carrying amount of the Company's notes
payable approximate fair value based on borrowing rates
currently available to the Company for borrowings with
comparable terms and conditions.
NOTE 3 - PROPERTY AND EQUIPMENT:
Property and equipment consist of the following as of June 30, 1999.
<TABLE>
<S> <C>
Land $ 105,000
Furniture and fixtures 55,919
Computer equipment and software 7,102
Plant equipment 453,448
Building 869,000
----------
Subtotal 1,490,469
Less: Accumulated depreciation (10,232)
----------
$1,480,237
==========
</TABLE>
NOTE 4 - INCOME TAXES
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred taxes related primarily to differences between the recorded
book basis and tax basis of assets and liabilities for financial and
income tax reporting. The deferred tax assets and liabilities represent
the future tax return consequences of those differences, which will
either be taxable or deductible when the assets and liabilities are
recovered or settled. Deferred taxes are also recognized for operating
losses that are available to offset future taxable income and tax
credits that are available to offset federal income taxes. Due to the
Company's net operating loss there are no income taxes currently due.
Also, there were no material differences between recorded book basis
and tax basis at June 30, 1999.
The Company follows Financial Accounting Standards Board Statement No.
109, "Accounting for Income Taxes" (SFAS #109), which requires, among
other things, an asset and liability approach to calculating deferred
income taxes. As of June 30, 1999, the Company has a deferred tax asset
of $62,500 primarily for its net operating loss carry forward which has
been fully reserved through a valuation allowance.
<PAGE> 39
MIGHTY MACK USA, LTD
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 4 - INCOME TAXES (CONT.)
As of June 30, 1999, the Company had a net operating loss carry forward for
federal income tax purposes approximately equal to the accumulated deficit
recognized for book purposes, which will be available to reduce future taxable
income. The full realization of the tax benefit associated with the carry
forward depends predominantly upon the Company's ability to generate taxable
income during the carry forward period. Because of the current uncertainty of
realizing such tax assets in the future, a valuation allowance has been recorded
equal to the amount of the net deferred tax asset, which caused the Company's
effective tax rate to differ from the statutory income tax rate. The net
operating loss carry forward, if not utilized, will begin to expire in the year
2010.
NOTE 5 - NOTES PAYABLE
Notes payable consist of the following at June 30, 1999:
<TABLE>
<S> <C>
Note - Robert C. Furrer, Officer & Director, at 8% annual interest rate. $ 100,000
Note - Martin F. Schneider, Officer & Director, at 8% annual interest rate. $ 100,000
Note - Product Services Co., Inc. for assets purchase agreement
at 8% annual interest rate, remaining balance $ 2,700,000
-----------
$ 2,900,000
===========
</TABLE>
NOTE 6 - PRODUCT AND ASSET PURCHASE AGREEMENT
The Company entered into an agreement on February 1, 1999 to acquire
substantially all of the products of Product Services Co., Inc. a
Mississippi Corporation and Theodore Dickerson. This purchase also
includes the real estate items of a storage plant and land at Valley
Park, Mississippi. This purchase includes certain intellectual property
assets made up of patents, trademarks, trade names and security
interests. This purchase agreement is for $6,000,000 made up of
$3,000,000 due up front and $3,000,000 due as a royalty payment
comprised of three percent of the wholesale price of product up to a
maximum of $3,000,000. The total balance of the royalty payment is due
and payable by January 31, 2002 no matter whether the sales have
occurred or not.
NOTE 7 - REALIZATION OF ASSETS
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. However, the Company
has sustained a substantial operation loss this year. As shown in the
financial statements, the Company incurred a net loss of $260,192 for
1999. At June 30, 1999, current liabilities exceed current assets by
$1,338,556. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets,
or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue in existence.
In view of these matters, realization of a major portion of the assets
in the accompanying balance sheet is dependent upon continued
operations of the Company, which in turn is dependent upon the
Company's ability to meet its financial requirements, and the success
of its future operations. Management believes that actions presently
being taken to revise the Company's operating and financial
requirements provide the opportunity for the Company to continue as a
going concern.
<PAGE> 40
MIGHTY MACK USA, LTD
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE 8 - RELATED PARTY TRANSACTION
The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting between the
Company and their other business interests. The Company is formulating
a policy for the resolution of such conflicts.
<PAGE> 41
PART III
ITEM 1. INDEX TO EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Page or
Number Description Cross Reference
------- ----------- ---------------
<S> <C> <C>
3A Articles of Incorporation
3B Amendment to Articles of Incorporation
3C Bylaws
10A Stock Purchase Agreement
10B Purchase and Sale Agreement, with Addenda
27 Financial Data Schedule
</TABLE>
ITEM 2. DESCRIPTION OF EXHIBITS.
<TABLE>
<S> <C> <C>
3A Articles of Incorporation filed on July 19, 1996.
3B Amendment to Articles of Incorporation filed on July 16, 1999.
3C Bylaws approved on June 5, 1997.
10A Stock Purchase Agreement dated June, 1999.
10B Purchase and Sale Agreement dated February 1, 1999, with Addenda
dated June 2, 1999, August 3, 1999, September 17, 1999, October 11,
1999, and December 1, 1999
</TABLE>
22
<PAGE> 42
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Mighty Mack USA, Ltd.
Dated: 12/20/99 By: /s/
---------------- -------------------------------
Robert C. Furrer
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
CHIEF FINANCIAL OFFICER
Dated: 12/20/99 By: /s/
---------------- -------------------------------
Martin F. Schneider
Chief Financial Officer
Dated: 12/20/99 By: /s/
---------------- -------------------------------
Charles K. Washburn
Director
Dated: 12/20/99 By: /s/
---------------- -------------------------------
Theodore H. Dickerson
Director
23
<PAGE> 43
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page or
Number Description Cross Reference
------- ----------- ---------------
<S> <C> <C>
3A Articles of Incorporation
3B Amendment to Articles of Incorporation
3C Bylaws
10A Stock Purchase Agreement
10B Purchase and Sale Agreement, with Addenda
27 Financial Data Schedule
</TABLE>
<PAGE> 1
ARTICLES OF INCORPORATION
OF
OXFORD FINANCIAL HOLDINGS, LTD.
KNOW ALL MEN BY THESE PRESENTS that the undersigned Incorporator, being a
natural person of the age of eighteen years of age or older and desiring to form
a body corporate under the laws of the State of Colorado, does hereby sign,
verify and deliver in duplicate to the Secretary of State of the State of
Colorado these Articles of Incorporation:
ARTICLE I
NAME
The name of the Corporation is OXFORD FINANCIAL HOLDINGS
ARTICLE II
PURPOSES
This Corporation is organized for the purpose of transacting any and all lawful
activities or business for which corporations may be formed under Articles 10 1
to 117 of Title 7 of the Colorado Revised Statues, as designated by the board of
directors of the corporation.
ARTICLE III
CAPITAL STRUCTURE
The maxim number of shares of stock which this Corporation is authorized to
issue or to have outstanding at any time shall be 55,000,000 shares, of which
50,000,000 shares shall be common stock, no par value per share, and of which
5,000,000 shares shall be preferred stock, no par value per share.
The holders of common stock shall have one vote for each share of such stock
held.
The holders of record of the preferred stock shall be entitled to cash dividends
when, as and if declared by the Board of Directors at the time, in the manner
and at the rate per share determined by the Board of Directors in the resolution
authorizing each series of preferred stock. Dividends payable on the preferred
stock must be paid or set apart for payment before any dividends may be declared
and paid on the common stock with respect to the same time period.
In the event of any voluntary or involuntary liquidation, dissolution or winding
up of this Corporation, the holders of record of the outstanding preferred stock
shall be entitled to the amount payable upon their shares as determined by the
Board of Directors in the resolution authorizing each series of preferred stock.
After payment
<PAGE> 2
to the holders of the preferred stock of the amount payable to them as above set
forth, the remaining assets of this Corporation shall be payable to, and
distributed ratably among, the holders of record of the common stock.
The common stock may also be subject to other rights and preferences that the
Board of Directors may give to any series or classes of the preferred stock.
The Board of Directors is hereby expressly authorized to issue the common or
preferred stock of this Corporation in one or more series or classes as it. may
determine by resolution from time to time. In the resolution establishing a
series or class, the Board of Directors shall give to the series or class a
distinctive designation so as to distinguish it from all other series and
classes of stock, shall determine the number of shares in such series and shall
fix the preferences, limitations and relative rights thereof All of the shares
of any one series shall be alike in every particular.
All stock of this Corporation, whether common stock or preferred stock, shall be
issued only upon the 'receipt of the full consideration fixed for the issuance
of such stock- Such stock once issued, shall be fully paid and nonassessable.
No holder of shares of any class of this Corporation shall have (1) any
preemptive right to subscribe for or acquire additional shares of this
Corporation of the same or any other class, whether such shares shall be hereby
or hereafter authorized, or (2) any right to acquire any shares which may be
held in the treasury of this Corporation. All such additional or treasury shares
may be issued or reissued for such consideration, at such time, and to such
persons as the Board of Directors may from time to time determine.
ARTICLE IV
NO CUMULATIVE VOTING BY SHAREHOLDERS
Cumulative voting shall, not be allowed in the election of Directors of this
Corporation and every shareholder entitled to vote at such election shall have
the right to vote the number of shares owned by him for as many persons as there
are Directors to be elected, and for whose election he has a right to vote.
ARTICLE V
REGISTERED AND INITIAL PRINCIPAL OFFICE AND REGISTERED AGENT
The registered office and initial principal office of the Corporation is located
at 4155 E. Jewell Avenue, Suite 909, Denver, Colorado 80222, and the name of the
registered agent of the Corporation at such address is Edward H. Hawkins.
ARTICLE VI
INCORPORATOR
The name and address of the Incorporator is Edward H. Hawkins, 4155 E. Jewell
Avenue, Suite 909, Denver, CO 80222.
ARTICLE VII
BOARD OF DIRECTORS
The number of individuals to serve on the Board of Directors shall be set forth
in the Bylaws of the Corporation; provided, however, that the Initial Board of
Directors shall consist of one person below-named:
Name of Director Address
Edward H. Hawkins 4155 E. Jewell Ave., Suite 909 Denver, CO 80222
<PAGE> 3
ARTICLE VII
CORPORATE OPPORTUNITY
The Directors, officers and other member of management of this Corporation shall
be subject to. the doctrine of "corporate opportunities only insofar as it
applied to business opportunities in which this Corporation has expressed an
interest as determined from time to time by this Corporation"s Board of
Directors as evidenced by resolutions appearing in this Corporation's minutes.
Once such areas of interest are delineated, all such business opportunities
within such areas of interest which come to the attention of the Directors,
officers and other members of management of this Corporation shall be disclosed
promptly to this Corporation and made available to it. The Board of Directors
may reject any business opportunity presented to it and thereafter any Director,
officer or other member of management may avail himself of such opportunity.
Until such time as this Corporation, through its Board of Directors, has
designated an area of interest, the Directors, officers and other members of
management of this Corporation shall be free to engage in such areas of interest
on their own and this doctrine shall not limit the right of any Director,
officer or other member of management of this Corporation to continue a business
existing prior to the time that such area of interest is designated by the
Corporation. This provision shall not be construed to release any employee of
this Corporation (other than a Director, an officer or member of management)
from any duties which he may have to this Corporation.
ARTICLE IX
INDEMNIFICATION OF ]DIRECTORS, OFFICERS AND -0THERS
This Corporation shall:
A. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and, with
respect to any criminal action or proceedings, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent is not, of itself, determinative that such person
did not meet the foregoing standard of conduct.
B. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of the Corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he
<PAGE> 4
reasonably believed to be in the best interests of the Corporation; but no
indemnification shall be made in respect of any claim, issue or matter as to
which such person has been adjudged liable to the Corporation.
C. Indemnify a Director, officer, employee or agent of the Corporation who has
been wholly successful, on the merits or otherwise, in defense of any action,
suit or proceeding referred to in Subparagraph A or B of this Article against
expenses (including attorney's fees) actually and reasonably incurred by him in
connection therewith.
D. Authorize payment of expenses (including attorney's fees) incur-red in
defending a civ. il or criminal action, suit or proceeding in advance of the
final disposition of such action, suit or proceeding as authorized in
Subparagraph E of this Article if
1. The Director, officer, employee or agent furnishes to this Corporation a
written affirmation of such person's good faith belief that he has met the
applicable standard of conduct required to receive indemnification;
2. Such person furnishes to this Corporation an undertaking, executed personally
or on behalf of such person to repay such amount if it is ultimately determined
that he did not meet the applicable standard of conduct; and
3. determination is made that the facts then known to those making the
determination would not preclude indemnification pursuant to this Article.
E. Authorize indemnification under Subparagraph A or B of this Article (unless
ordered by a court) in the specific case upon a determination that
indemnification of the Director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Subparagraph A or B.
Such determination shall be made:
1. By the Board of Directors by a majority vote of those present at a meeting at
which a quorum is present, and only those Directors not parties to such action,
suit or proceeding shall be counted in satisfying the quorum requirement; or
2. If such a quorum cannot be obtained, by a majority vote of a committee of the
Board of Directors designated by the Board of Directors, which committee shall
consist of two or more Directors not parties to such action, suit or proceeding;
except that Directors who are parties to such action, suit or proceeding may
participate in the designation of Directors for the committee; or
3. If such a quorum cannot be obtained, and such a committee cannot be
established, or even if such quorum is obtained or such a committee is
designated, if a majority of the Directors constituting such quorum or such
committee so directs, either.
(a) By independent legal counsel selected by a vote of the Board of
Directors or such committee in the manner specified in Subparagraph E. 1. or
E.2. of this Article or, if a quorum of the full Board of Directors cannot be
obtained and such a committee cannot be established, by independent legal
counsel selected by a majority vote of the full Board of Directors; or
(b) By the shareholders.
<PAGE> 5
Authorization of indemnification and advance of expenses shall be made in the
same manner as the determination that indemnification or advance of expenses is
permissible; except that, if such determination is made by independent legal
counsel, authorization of indemnification and advance of expenses shall be made
by the body the selected such counsel.
F. Purchase and maintain insurance, if economically feasible for the Corporation
to do so in the sole judgment of the Corporation's Board of Directors, on behalf
of any person who is or was a director, officer, employee or agent of the
Corporation or who is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him,
incurred by him in any such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provision of this Article. The indemnification provided
by this Article shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under these Articles of Incorporation, the Bylaws,
or any agreement, vote of shareholders or disinterested directors or otherwise,
and any procedure provided for by any of the foregoing, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of heirs, executors
and administrators of such a person.
ARTICLE X
Amendment
This Corporation reserves the right to amend or repeal any provision
contained in these Articles of Incorporation or any amendment to them, and all
right and privileges conferred upon the shareholders, directors and officers are
subject to this reservation. The Articles of Incorporation may be amended in
accordance with the provisions of the laws of the State of Colorado, as amended
from time to time, unless more specific provisions for amendments are adopted by
this Corporation pursuant to law.
IN WITNESS WHEREOF, the undersigned has set his hand and seal this 19th
Day of July 1996.
/s/ Edward H. Hawkins
------------------------------------
Edward H. Hawkins, Incorporator
CONSENT OF REGISTERED AGENT
The undersigned hereby consents to the appointment as registered agent for the
above named corporation under Article 105 of the Colorado Business Corporation
Act, until such time as he resigns such position.
/s/ Edward H. Hawkins
------------------------------------
Edward H. Hawkins
<PAGE> 1
MAIL TO: SECRETARY OF STATE
CORPORATIONS SECTION
1560 BROADWAY, SUITE 200
DENVER, CO 80202
(303) 894-2251
FAX (303) 894-2242
MUST BE TYPED
FILING FEE: $25.00
MUST SUBMIT TWO COPIES
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
PURSUANT TO THE PROVISIONS OF THE COLORADO BUSINESS CORPORATION ACT, THE
UNDERSIGNED CORPORATION ADOPTS THE FOLLOWING ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION:
FIRST: THE NAME OF THE CORPORATION IS OXFORD FINANCIAL HOLDINGS, LTD.
------------------------------------
SECOND: THE FOLLOWING AMENDMENT TO THE ARTICLES OF INCORPORATION WAS ADOPTED ON
JULY 9, 1999, AS PRESCRIBED BY THE COLORADO BUSINESS CORPORATION ACT, IN THE
MANNER MARKED WITH AN X BELOW,
NO SHARES HAVE BEEN ISSUED OR DIRECTORS ELECTED - ACTION BY INCORPORATION
- -----
NO SHARES HAVE BEEN ISSUED BUT DIRECTORS ELECTED - ACTION BY DIRECTORS
- -----
SUCH AMENDMENT WAS ADOPTED BY THE BOARD OF DIRECTORS WHERE SHARES HAVE
- ----- BEEN ISSUED AND SHAREHOLDER ACTION WAS NOT REQUIRED.
XX SUCH AMENDMENT WAS ADOPTED BY A VOTE OF THE SHAREHOLDERS. THE NUMBER OF
- ----- SHARES VOTED FOR THE AMENDMENT WAS SUFFICIENT FOR APPROVAL.
THIRD: IF CHANGING CORPORATE NAME, THE NEW NAME OF THE CORPORATION IS
MIGHTY MACK USA, LTD.
- ---------------------
FOURTH: THE MANNER, IF NOT SET FORTH IN SUCH AMENDMENT, IN WHICH ANY EXCHANGE,
RECLASSIFICATION, OR CANCELLATION OR ISSUED SHARES PROVIDED FOR IN THE AMENDMENT
SHALL BE AFFECTED, IS AS FOLLOWS:
IF THESE AMENDMENTS ARE TO HAVE A DELAYED EFFECTIVE DATE, PLEASE LIST THAT DATE:
- ----------------------------------
(NOT TO EXCEED NINETY (90) DAYS FROM THE DATE OF FILING)
SIGNATURE /s/ CHARLES X. WASHBURN
--------------------------------
TITLE CHARLES X. WASHBURN,
ITS PRESIDENT
<PAGE> 1
BYLAWS
OF
OXFORD FINANCIAL HOLDINGS, LTD.
ARTICLE I
Offices
The principal office of the Corporation in Colorado shall initially be
located in Denver, Colorado. The Corporation may have such other offices, either
within or outside the State of Colorado, as the Board of Directors may
designate, or as the business of the Corporation may require from time to time.
The registered office of the Corporation required by the Colorado
Business Corporation Act to be maintained in the State of Colorado may be, but
need not be, identical with the principal office, and the address of the
registered office may be changed from time to time by the Board of Directors.
ARTICLE II
Shareholders
Section 1. Annual Meeting.
Thee annual meeting of the shareholders' shall be held pursuant to
notice given by the Board of Directors for the purpose of electing directors and
for the transaction of such other business as may come before the meeting.
Section 2. Special Meetings.
Special meetings of the shareholders, for any purpose, unless otherwise
prescribed by statute, may be called by the President or by the Board of
Directors, and shall be called by the President at the request of the holders of
not less than ten (10%) percent of all the outstanding shares of the Corporation
entitled to vote at the meeting. Such request shall state the purposes of the
proposed meeting.
Section 3. Adjournment.
When the annual meeting is convened, or when any special meeting is
convened, the presiding officer may adjourn it for such period of time as may be
reasonably necessary to reconvene the meeting at another place and another time.
b. The presiding officer shall have the power to adjourn any meeting of
the shareholders for any proper purpose, including, but not limited to, lack of
a quorum, to secure a more adequate meeting place, to elect officials to count
and tabulate votes, to review any shareholder proposals or to pass upon any
challenge which may properly come before the meeting.
C. When a meeting is adjourned to another time or place, it shall not
be necessary to give any notice of the adjourned meeting if the time and place
to which the meeting is adjourned are announced at the meeting at which the
adjournment is TAKEN, AND ANY BUSINESS MAY BE TRANSACTED AT THE ADJOURNED
MEETING that might have been transacted on the original date of the meeting. If,
however, after the adjournment the Board fixes a
<PAGE> 2
new record date for the adjourned meeting, a notice of the adjourned meeting
shall be given in compliance with Subsection (4)(a) of this Article 11 to each
shareholder of record on the new record date entitled to vote at such meeting.
Section 4. Notice of Meeting-, Purpose of Meeting Waive
a. Each shareholder of record entitled to vote at any meeting shall be
given in person, or by first class mail, postage prepaid, written notice of such
meeting which, in the case of a special meeting, shall set forth the purpose(s)
for which the meeting is called, not less than ten (10) or more then fifty (50)
days before the date of such meeting. If mailed, such notice is to be sent to
- -the shareholder's address as it appears on the stock transfer books of the
Corporation unless the shareholder shall have requested of the Secretary in
writing at least fifteen (15) days prior to the distribution of any required
notice that any notice intended for him to be sent to some other address, in
which case the notice may be sent to the address so designated. Notwithstanding
any such request by a shareholder, notice sent to a shareholder's address as it
appears on the stock transfer books of this Corporation as of the record date
shall be deemed properly given. Any notice of a meeting sent by the United
States mail shall be deemed delivered when deposited with proper postage thereon
with the United States Postal Service or in any mail receptacle under its
control.
b. A shareholder waives notice of any meeting by attendance, either in
person or by proxy, at such meeting or by waiving notice in writing either
before, during or after such meeting. Attendance at a meeting for the express
purpose of objecting that the meeting was not lawfully called or convened,
however, will not constitute a waiver of notice by a shareholder stating at the
beginning of the meeting, his objection that the meeting is not lawfully called
or convened.
c. Whenever the holders of at least eighty (80%) percent of the capital
stock of the Corporation having the right to vote shall be present at any annual
or special meeting of shareholders, however called or notified, and shall sign a
written consent thereto on the minutes of such meeting, the meeting shall be
valid for all purposes.
d. A Waiver of Notice signed by all shareholders entitled to vote at a
meeting of shareholders may also be used for any other proper purpose including,
but not limited to, designating any place within or without the State of
Colorado as the place for holding such a meeting.
e. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of shareholders need be specified in any written
Waiver of Notice.
Section 5. Closing of Transfer Books- Record Date, Shareholders' List
a. In order to determine the holders of record of the capital stock of
the Corporation who are entitled to notice of meetings, to vote at a meeting or
adjournment thereof, or to receive payment of any dividend, or for any other
purpose, the Board o f Directors may fix a date not more than fifty (50) days
prior to the date set for any of the abovementioned activities for such
determination of shareholders.
b. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting.
<PAGE> 3
c. In lieu of closing the stock transfer books, the Board of Directors
may fix in advance a date as the date for such determination of shareholders,
such date in any case to be not more than fifty (50) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the date on which
the particular action, requiring such determination of shareholders, is to be
taken
d. If the stock transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice 'or to vote at a
meeting of shareholders, or to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the Board
of Directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders.
e. .When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section. such
determination shall apply to any adjournment thereof, unless the Board of
Directors fixes a new record date under this section for the adjourned meeting.
f. The officer or agent having charge of the stock transfer books of
the Corporation shall make, as of a date at least ten (10) days before each
meeting of shareholders, a complete list of the shareholders entitled to vote at
such meeting or any adjournment thereof, with the address of each shareholder
and the number and class and series, if any, of shares held by each shareholder.
Such list shall be kept on file at the registered office of the Corporation or
at the office of the transfer agent or registrar of the Corporation for a period
of ten (10) days prior to such meeting and shall be available for inspection by
any shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of any meeting of shareholders and
shall be subject to inspection by any shareholder at the meeting. any time
during the meeting.
g. The original stock transfer books shall be prima facie evidence as
to the shareholders entitled to examine such list or stock transfer books or to
vote at any meeting of shareholders.
h. If the requirements of Subsection S(f) of this Article 11 have not
been substantially complied with then, on the demand of any shareholder in
person or by proxy, the meeting shall be adjourned until such requirements are
complied with.
i. If no demand pursuant to Section 5(h) is made, failure to comply
with the requirements of this Section shall not affect the validity of any
action taken at such meeting.
j. Subsection 5( g) of this Article II shall be operative only at such
time(s) as the Corporation shall have six (6) or more shareholders.
Section 6. Quorum.
a. At any meeting of the shareholders of the Corporation. the presence,
in person or by proxy, of shareholders owning a majority of the issued and
outstanding sham of the capital stock of the Corporation entitled to vote
thereat shall be necessary to constitute a quorum for the transaction of any
business. If a quorum is present the affirmative vote of a majority of the
shares represented at such meeting and entitled to vote on the subject matter
shall be the act of the shareholders. If there shall not be a quorum at any
meeting of the shareholders of the Corporation, then the holders of a majority
of the shares of the capital stock of the Corporation who shall be present at
such meeting. in person or by proxy, may adjourn such meeting from time to time
until holders of a majority of the shares of the capital stock shall attend. At
any such adjourned meeting
<PAGE> 4
at which a quorum shall be present, any business may be transacted which might
have been transacted at the meeting as originally scheduled.
b. The shareholders at a duly organized meeting having a quorum may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
Section 7. Presiding Officer-, Order of Business,
a. Meetings of the shareholders shall be presided over by the Chairman
of the Board, or, if he is not present, by the President or, if he is not
present, by a Vice President or, if none of the Chairman of the Board, the
President, or a Vice President is present, the meeting shall be presided over by
a Chairman to be chosen by a plurality of the shareholders entitled to vote at
the meeting who are present, in person or by proxy. The presiding officer of any
meeting of the shareholders may delegate the duties and obligations of the
presiding officer of the meeting as he sees fit.
b. The Secretary of the Corporation, or, in his absence, an Assistant
Secretary shall act as Secretary of every meeting of shareholders, but if
neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall choose any person present to act as Secretary of
the meeting.
c. The order of business shall be as follows:
1. Call of meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous shareholders meeting or a
Waiver thereof.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Regular and miscellaneous business.
8. Special matters.
9. Adjournment.
d. Notwithstanding the provisions of Article II, Section 7, Subsection
c, the order and topics of business to be transacted at any meeting shall be
determined by' the presiding officer of the meeting in his sole discretion. In
no event shall any variation in the order of business or additions and deletions
from the order of business as specified in Article 11, Section 7, Subsection c,
invalidate any actions properly taken at any meeting.
Section 8. Voting,
a. Unless otherwise provided for in the Certificate of Incorporation,
each shareholder shall be entitled, at each meeting and upon each proposal to be
voted upon, to one vote for each share of voting stock recorded in his name on
the books of the Corporation on the record date fixed as provided for in Article
II, Section 5.
b. The presiding officer at any meeting of the shareholders shall have
the power to determine the method and means of voting when any matter is to be
voted upon. The method and means of voting may include, but shall not be limited
to, vote by ballot, vote by hand or vote by voice. However, no method of voting
may be adopted which fails to take account of any shareholder's right to vote by
proxy as provided for in Section 10
<PAGE> 5
of this Article 11. In no event may any method of voting be adopted which would
prejudice the outcome of the vote.
Section 9. Action Without Meeting,
a. Any action required to be taken at any annual or special meeting of
shareholders of the Corporation, or any action which may be taken at any annual
or special meeting of such shareholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. If any class of shares is
entitled to vote thereon as a class, such written consent shall be required of
the holders of a majority of the shares of each class of shares entitled to vote
thereon
b. Within ten (10) days after obtaining such authorization by written
consent, notice must be given to those shareholders who have not consented in
writing. The notice shall fairly summarize the material features of the
authorized Action and, if the action be a merger, consolidation or sale or
exchange of assets for which dissenters' rights are provided under the Colorado
Business Corporation Act, the notice shall contain a clear statement of the
right of the shareholders dissenting therefrom to be paid the fair value of
their shares upon compliance with further provisions of the Colorado Business
Corporation Act regarding the rights of dissenting shareholders.
c. In the event that the action to which the shareholders' consent is
such as would have required the filing of a certificate under the Colorado
Business Corporation Act if such action had been voted on by shareholders at a
meeting thereof, the certificate filed under such other section shall state that
written consent has been given in accordance with the provisions of this Article
II, Section 9.
Section 10. Proxies.
a. Every shareholder entitled to vote at a meeting of shareholders or
to express consent or dissent without a meeting, or his duty authorized
attorney-in-fact may authorize another person or persons to act for him by proxy
b. Every proxy must be signed by the shareholder or his
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the shareholder executing it, except as
otherwise provided in this Article 11, Section 10.
c. The authority of the holder of a proxy to act shall not be revoked
by the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
d. Except when other provisions shall have been made by written
agreement between the parties, the record holder of shares held as pledges or
otherwise as security or which belong to another, shall issue to the pledgor or
to such owner of such shares, upon demand therefor and payment of necessary
expenses thereof, a proxy to vote or take other action thereon.
<PAGE> 6
c. A proxy which states that it is irrevocable is irrevocable when it
is held by any of the following or a nominee of any of the following: (1) a
pledgee; (ii) a person who has purchased or agreed to purchase the shares; (iii)
a creditor or creditors of the Corporation who extend or continue to extend
credit to the Corporation in consideration of the proxy, if the proxy states
that it was given in consideration of such extension or continuation of credit,
the amount thereof, and the name of the person extending or continuing credit;
(iv) a person who has contracted to perform services as an officer of the
Corporation, if a proxy is required by the contract of employment, if the proxy
states that it was given in consideration of such contract of employment and
states the name of the employee and the period of employment contracted for, and
(v) a person designated by or under an agreement as provided in Article XI
hereof
f. Notwithstanding a provision in a proxy stating that it is
irrevocable, the proxy becomes revocable after the pledge is redeemed, or the
debt of the Corporation is paid, or the period of employment provided for in the
contract of employment has terminated, or the agreement under Article XII
hereof, has terminated and, in a case provided for in Subsection I O(e)(iii) or
Subsection I O(e)(iv) of this Article II becomes irrevocable three years after
the date of the proxy or at the end of the period, if any, specified therein,
whichever period is less, unless the period of irrevocability is renewed from
time to time by the execution of a new irrevocable proxy as provided in this
Article 11, Section 10. This Subsection 10(f) does not affect the duration of a
proxy under Subsection 10(b) of this Article 11.
g. A proxy may be revoked, notwithstanding a provision making it
irrevocable, by a purchaser of shares without knowledge of the existence of the
provision unless the existence of the proxy and its irrevocability is noted
conspicuously on the face or back of the certificate representing such shares.
h. If a proxy for the same shares confers authority upon two (2) or
more persons and does not otherwise provide a majority of such persons present
at the meeting, or if only one is present, then that one may exercise all the
powers conferred by the proxy. If the proxy holders present at the meeting are
equally divided as-to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
i. If a proxy expressly so provides, any proxy holder may appoint in
writing a substitute to act in his place.
Section 11. Voting of Shares by Shareholders.
a. Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer. agent, or proxy designated by the Bylaws
of the corporate shareholder; or, in the absence of any applicable Bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the Bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the Chairman of the Board. President, any vice president,
secretary and treasurer of the corporate shareholder, in that order shall be
presumed to possess authority to vote such shares.
b. Shares held by an administrator, executor, guardian or conservator
may be voted by him, either in person or by proxy without a transfer of such
shares into his name. Shares standing in the name of a trustee may be voted by
him, either in person or by proxy, but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his name.
c. Shares standing in the name of a receiver may be voted by such
receiver. Shares held by or under the control of a receiver but not standing in
the name of such receiver, may be voted by such receiver without
<PAGE> 7
the transfer thereof into his name if authority to do so is contained in an
appropriate order of the court by which such receiver was appointed.
d. A shareholder whose shares are pledged shalt be entitled to vote
such shares until the shares have been transferred into the name of the pledge.
e. Shares of the capital stock of the Corporation belonging to the
Corporation or held by it in a fiduciary capacity shall not be voted, directly
or indirectly, at any meeting, and shall not be counted in determining the total
number of outstanding shares.
ARTICLE III
Directors
Section 1. Board of Directors, Exercise of Corporate Powers.
a. All corporate powers shall be exercised by or under the authority
of, and the business and affairs of the Corporation shall be managed under the
direction of the Board of Directors except as may be otherwise provided in the
Articles of Incorporation. If any such provision is made in the Articles of
Incorporation, the powers and duties conferred or imposed upon the Board of
Directors shall be exercised or performed to such extent and by such person or
persons as shall be provided in the Articles of Incorporation.
b. Directors need not be residents of the state of incorporation unless
the Articles of Incorporation so require.
c. The Board of Directors shall have authority to fix the compensation
of Directors unless otherwise provided in the Articles of Incorporation.
d. A Director shall perform his duties as a Director, including his
duties as a member of any committee of the Board upon which he may serve, in
good faith, in a manner be reasonably believes to be in the best interests of
the Corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.
e. In performing his duties, a Director shall be entitled to rely on
information, opinions, reports or statements, including financial data, in each
case prepared or presented by: (I) one or more officers or employees of the
Corporation whom the Director reasonably believes to be reliable and competent
in the matters presented-, (ii) counsel, public accountants or other persons as
to matters which the Director reasonably believes to be within such persons'
professional or expert competence; or (iii) a committee of the Board upon which
he does not serve, duly designated in accordance with a provision of the
Articles of Incorporation or the Bylaws, as to matters within its designated
authority which committee the Director reasonably believes to merit confidence.
f. A Director shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause such reliance
described in Subsection I (e) of this Article III to be unwarranted.
g. A person who performs his duties in compliance with this Article
III, Section 1 shall have no liability by reason of being or having been a
Director of the Corporation.
<PAGE> 8
h. A Director of the Corporation who is present at a meeting of the
Board of Directors at which action on any corporate matter is taken consents
thereto unless he votes against such action or abstains from voting in respect
thereto because of an asserted conflict of interest.
Section 2. Number, Election: Classification of Directors-. Vacancies.
a. The Board of Directors of this Corporation shall consist of not less
than two (2) nor more than seven (7) members, unless the number of shareholders
is less than two, in which the Corporation shall one director until such time as
the number of shareholders increase to two or more. The number of directors
shall be fixed by the initial Board of Directors. The number of directors
constituting the initial Board of Directors shall be fixed by the Articles of
Incorporation. The number of directors may be increased from time to time by the
Board of directors, but no decrease shall have the effect of shortening the term
of any incumbent director.
b. Each person named in the Articles of Incorporation as a member of
the initial Board of Directors, shall hold office until the first annual meeting
of shareholders, and until his successor shall have been elected and qualified
or until his earlier resignation, removal from office or death.
c. At the first annual meeting of shareholders and at each annual
meeting thereafter the shareholders shall elect directors to hold office until
the next succeeding annual meeting, except in case of the classification of
directors as permitted by the Colorado Business Corporation Act. Each director
shall hold office for the term for which he is elected and until his successor
shall have been elected and qualified or until his earlier resignation, removal
from office or death.
d. The shareholder, by amendment to these Bylaws, may provide that the
directors be divided into not more than four classes, as nearly equal in number
as possible, whose terms of office shall respectively expire at different times,
but no such term shall continue longer than four (4) years, and at least
one-fifth (1/5) in number of the directors shall be elected annually.
e. If directors are classified and the number of directors is
thereafter changed, any increase or decrease in directorships shall be so
apportioned among the classes as to make all classes as nearly equal in number
as possible.
f. Any vacancy occurring in the Board of Directors including any
vacancy created by reason of an increase in the number of directors, may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors. A director elected to fill a
vacancy shall hold office only until the next election of directors by the
shareholders.
Section 3. Removal of Directors.
a. At a meeting of shareholders called expressly for that purpose,
directors may be removed in the manner provided in this Article III, Section 3.
Any director or the entire -Board of Directors may be removed, with or without
cause, by a vote of the holders of a majority of the shares then entitled to
vote at an election of directors.
<PAGE> 9
b. If the Corporation has cumulative voting, if less than the entire
Board is to be removed, no one of the directors may be removed if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which he is a member.
Section 4. Director Quorum and Voting.
a. A majority of the number of directors fixed in the manner provided
in these Bylaws shall constitute a quorum for the transaction of business unless
a greater number if required elsewhere in these Bylaws.
b. A majority of the members of an Executive Committee or other
committee shall constitute a quorum for the transaction of business at any
meeting of such Executive committee or other committee.
c. The act of the majority of the directors present at a Board meeting
at which a quorum is present shall be the act of the Board of Directors.
d. The act of a majority of the members of an Executive Committee
present at an Executive Committee meeting at which a quorum is present shall be
the act of the Executive Committee.
c. The act of a majority of the members of any other committee present
at a committee meeting at which a quorum is present shall be the act of the
committee.
Section 5. Director Conflicts of Interest.
a. No contract or other transaction between this Corporation and one or
more of its directors or any other Corporation, firm, association or entity in
which one or more of its directors are directors or officers or are financially
interested, shall be either void or voidable because of a relationship or
interest or because such director or directors are present at the meeting of the
Board of Directors or a committee thereof which authorizes, approves or ratifies
such contract or transaction or because his or their votes are counted for such
purpose, if:
(i) The fact of such relationship or interest is disclosed or
known to the Board of Directors or committee which authorizes, approves or
ratifies the contract or transaction by a vote or consent sufficient for the
purpose without counting the votes or consents of such interested directors; or
(ii) The fact of such relationship or interest is disclosed or
known to the shareholders entitled to vote and they authorize, approve or ratify
such contract or transaction by vote or-written consent; or
(iii) The contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board, a committee or the
shareholders.
<PAGE> 10
b. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 6. Executive and Other Committees: Designation-. Authority,
a. The Board of Directors, by resolution adopted by a majority of the
full Board of Directors, may designate fro -in among its members an Executive
Committee and one or more other committees each of which, to the extent provided
in such resolution or in the Articles of Incorporation or these Bylaws, shall
have and may exercise all the authority of the Board of Directors, except that
no such c committee shall have the authority to: (i) approve or recommend to
shareholders actions or proposals required by the Colorado Business Corporation
Act to be approved by shareholders; (ii) designate candidates for the office of
director for purposes of proxy solicitation or otherwise; (iii) fill vacancies
on the Board of Directors or any committee thereof, (iv) amend the Bylaws; or
(v) authorize or approve the issuance or sale of, or any contract to issue or
sell, shams or designate the terms of a series of class of shares, unless the
Board of Directors, having acted regarding general authorization for the
issuance or sale of shares, or any contract therefor, and in the case of a
series, the designation thereof, has specified a general formula or method by
resolution or by adoption of a stock option or other plan, authorized a
committee to fix the terms upon which such shares may be issued or sold,
including, without limitation, the price, the rate or manner of payment of
dividends, provisions for redemption, sinking fund, conversion, and voting
preferential rights, and provisions for other features of a class of shares, or
a series of class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the Secretary of State under
the Colorado Business Corporation Act.
b. The Board, by resolution adopted in accordance with Article III,
Subsection 6(a) may designate one or more directors as alternate members of any
such committee, who may act in the place and stead of any absent member or
members at any meeting of such committee.
c. Neither the designation of any such committee, the delegation
thereto of authority, nor action by such committee pursuant to such authority
shall alone constitute compliance by any member of the Board of Directors, not a
member of the committee in question, with his responsibility to act in good
faith, in a manner he reasonably believes to be in the best interests of the
Corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.
Section 7. Place. Time, Notice, end Call of Directors' Meeting as.
a. Meetings of the Board of Directors, regular or special, may be held
either within or without this state.
b. A regular meeting of the Board of Directors of the Corporation shall
be held for the election of officers of the Corporation and for the transaction
of such other business as may come before such meeting as promptly as
practicable after the annual meeting of the shareholders of this Corporation
without the necessity of other notice than this Bylaw. Other regular meetings of
the Board of Directors of the Corporation may be held at such times and at such
places as the Board of Directors of the Corporation may from time to time
resolve without other notice than such resolution. Special meetings of the Board
of Directors may be held at any time upon call of the Chairman* of the Board or
the President or a majority of the Directors of the Corporation, at such time
and at such place as shall be specified in the call thereof Notice of any
special meeting of the Board of Directors must be given at least two (2) days
prior thereto, if by written notice delivered personally-, or at least
<PAGE> 11
five (5) days prior thereto, if mailed; or at least two (2) days prior thereto,
if by telegram; or at least two (2) days prior thereto, if by telephone. If such
notice is given by mail, such notice shall be deemed to have been delivered when
deposited with the United States -Postal Service addressed to the business
address of such director with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed delivered when the telegram is delivered
to the telegraph company. If notice is given by telephone, such notice shall be
deemed delivered when the call is completed.
c. Notice of a meeting of the Board of Directors need not be given to
any director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which -it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
d. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
e. A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
f. Members of the Board of Directors may participate in a meeting of
such Board by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other at the same time. Participation by such means shall constitute
presence in person at a meeting.
Section 8. Action by Directors Without a Meeting.
Any action required by the Colorado Business Corporation Act to be
taken at a meeting of the directors of the Corporation, or a committee thereof,
may be taken without a meeting if a consent in writing, setting forth the action
so to be taken, signed by all of the directors, or all of die members of the
committee, as the case may be, is filed in the minutes of the proceedings of the
Board or of the committee. Such consent shall have the same effect as a
unanimous vote.
Section 9. Compensation.
The directors and members of the Executive and any other committee of
the Board of Directors shall be entitled to such reasonable compensation for
their services and on such basis as shall be fixed from time to time by
resolution of the Board of Directors. The Board of Directors and members of any
committee of the Board of Directors shall be entitled to reimbursement for any
reasonable expenses incurred in attending any Board or committee meeting. Any
director receiving compensation under this section shall not be prevented from
serving the Corporation in any other capacity and shall not be prohibited from
receiving reasonable compensation for such other services.
<PAGE> 12
Section 10. Resignation
Any Director of the Corporation may resign at any time without
acceptance by the Corporation. Such resignation shall be in writing and may
provide that such resignation shall take effect immediately or on any future
date stated in such notice.
Section 11. Removal.
Any Director of the Corporation may be removed for cause by a majority
vote of the other members of the Board of Directors as then Constituted or with
or without cause by the vote of the holders of a majority of the outstanding
shares of capital stock shareholders of the Corporation called for such purpose.
Section 12. Vacancies.
In the event that a vacancy shall occur on the Board of Directors of
the Corporation whether because of death, resignation, removal, an increase in
the number of directors or any other reason, such vacancy may be filled by the
vote of a majority of the remaining directors of the Corporation even though
such remaining directors represent less than a quorum. An increase in the number
of directors shall create vacancies for the purpose of this section. A director
of the Corporation elected to fill a vacancy shall hold office for the unexpired
term of his predecessor, or in the case of an increase in the number of
directors, until the election and qualification of directors at the next annual
meeting of the shareholders.
ARTICLE IV
Officers
Section 1. Election-, Number-, Terms of Office.
a. The officers of the Corporation shall consist of a Chairman of the
Board, a President, a Secretary and a Treasurer, each of whom shall be elected
by the Board of Directors at such time and in such manner as may be prescribed
by these Bylaws. Such other officers and assistant officers and agents as may be
deemed necessary may be elected or appointed by the Board of Directors.
b. As officers and agents, as between themselves and the Corporation,
shall have such authority and perform such duties in the management of the
Corporation as are provided in these Bylaws, or as may be determined by
resolution of the Board of Directors not inconsistent with these Bylaws.
c. Any two (2) or more offices may be held by the same person except
the offices of the President and Secretary.
d. A failure to elect a Chairman of the Board, President, a Secretary
and a Treasurer shall not affect the existence of the Corporation.
Section 2. Removal.
An officer of the Corporation shall hold office until the election and
qualification of his successor, however, any officer of the Corporation may be
removed from office by the Board of Directors whenever in its judgment the best
interests of the Corporation will be served thereby Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of any officer shall not of itself create any contract
right to employment or compensation.
<PAGE> 13
Section 3. Vacancies.
Any vacancy in any office from any cause may be filled for the
unexpired portion of the term of such office by the Board of Directors.
Section 4. Powers and Duties.
a. The (Chairman of the Board shall be the Chief Executive Officer of
the Corporation. The Chairman of the Board shall preside at all meetings of the
shareholders and of the Board of Directors. Except where by la w the signature
of the President is required or unless the Board of Directors shall rule
otherwise, the Chairman of the Board shall possess the same power as the
President to sign all certificates, contracts and other instruments of the
Corporation which may be authorized by the Board of Directors. Unless a Chairman
of the Board is specifically elected, the President shall be deemed to be the
Chairman of the Board.
b. The President shall be the Chief Operating Officer of the
Corporation. He shall be responsible for the general day-to-day supervision of
the business and affairs of the Corporation. He shall sign or countersign all
certificates, contracts or other instruments of the Corporation as authorized by
the Board of Directors. He may, but need not, be a member of the Board of
Directors. In the absence of the Chairman of the Board, the President shall be
the Chief Executive Officer of the Corporation and shall preside at all meetings
of the shareholders and the Board of Directors. He shall make reports to the
Board of Directors and shareholders. He shall perform such other duties as are
incident to his office or are properly required of him by the Board of
Directors. 'Me Board of Directors will at all times retain the power to
expressly delegate the duties of the President to any other officer of the
Corporation.
c. The Vice-President(s). if any, in the order designated by the Board
of Directors, shall exercise the functions of the President during the absence,
disability, death, or refusal to act of the President. During the time that any
Vice-president is properly exercising the functions of the President, such
Vice-President shall have a the powers of and be subject to all the restrictions
upon the President. Each Vice-President shall have such other duties as are
assigned to him from time to time by the Board of Directors or by the President
of the Corporation.
d. The Secretary of the Corporation shall keep the minutes of the
meetings of the shareholders of the Corporation and, if so requested, the
Secretary shall keep the minutes of the meetings of the Board of Directors of
the Corporation. The Secretary shall be the custodian of the minute books of the
Corporation and such other books and records of the Corporation as the Board of
Directors of the Corporation may direct. The Secretary shall make or cause to be
made all proper entries in all corporate books that the Board of Directors of
the Corporation may direct. The Secretary shall have the general responsibility
for maintaining the stock transfer books of the Corporation, or of supervising
the maintenance of the stock transfer books of the Corporation by the transfer
agent, if any, of the Corporation- The Secretary shall be the custodian of the
corporate seal of the Corporation and shall affix the corporate seal of the
Corporation on contracts and other instruments as the Board of Directors of the
Corporation may direct. The Secretary shall perform such other duties as are
assigned to him from time to time by the Board of Directors or the President of
the Corporation.
e. The Treasurer of the Corporation shall have custody of all funds and
securities owned by the Corporation.' The Treasurer shall cause to be entered
regularly in the proper books of account of the Corporation full and accurate
accounts of the receipts and disbursements of the Corporation. The Treasurer of
the Corporation shall render a statement of cash, financial and other accounts
of the Corporation whenever he is directed to render such a statement by the
Board of Directors or by the President of the Corporation. The Treasurer shall
at all reasonable times make available the Corporation's books and financial
accounts to any
<PAGE> 14
Director of the Corporation during normal business hours. The Treasurer shall
perform all other acts incident to the office of the Treasurer of the
Corporation, and he shall have such other duties as are assigned to him from
time to time by the Board of Directors or the President of the Corporation.
f Other subordinate or assistant officers appointed by the Board of
Directors or by the President, if such authority is delegated to him by the
Board of Directors, shall exercise such powers and perform such duties as may be
delegated to them by the Board of Directors or by the President, as the case may
be.
g. In case of the absence or disability of any officer of the
Corporation and of any person authorized to act in his place during such period
of absence or disability, the Board of Directors may from time to time delegate
the powers and duties of such officer to any other officer or any director or
any other person whom it may select.
Section 5. Salaries
The salaries of all Officers of the Corporation shall be fixed by the
Board of Directors. No officer shall be ineligible to receive such salary by
reason of the fact that he is also a Director of the Corporation and receiving
compensation therefor.
ARTICLE V
LOANS TO EMPLOYEES AND OFFICERS:
GUARANTY OF OBLIGATIONS OF EMPLOYEES AND OFFICERS
This Corporation may lend money to, guarantee any obligation of, or
otherwise assist any officer or other employee of the. Corporation or of a
subsidiary, including any officer or employee who is a Director of the
Corporation or of a subsidiary, whenever, in the judgment of the Directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
Corporation. The loan, guaranty or other assistance may be with or without
interest, and may be unsecured, or secured in such manner as the Board of
Directors shall approve including, without limitation, a pledge of shares of
stock of the Corporation. Nothing in this Article shall be deemed to deny, limit
or restrict the powers of guaranty or warranty of this Corporation at common law
or under any statute.
ARTICLE VI
STOCK CERTIFICATES- VOTING TRUSTS- TRANSFERS
Section 1. Certificates Representing Shares
a. Every holder of shares in this Corporation shall be entitled to one
or more certificates, representing all shares to which he is entitled and such
certificates shall be signed by the President or a Vice President and the
Secretary or an Assistant Secretary of the Corporation and may be sealed with
the seal of the Corporation or a facsimile thereof The signatures of the
President or Vice President and the Secretary or Assistant Secretary maybe
facsimiles if the certificate is manually signed on behalf of a transfer agent
or a registrar, other than the Corporation itself or an employee of the
Corporation. In case any officer who signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such officer before
such certificate is issued, it may be used by the Corporation with the same
effect as if he were such officer at the date of its issuance.
<PAGE> 15
b. Each certificate representing shares shall state upon the face
thereof. (i) the name of the Corporation; (ii) that (he Corporation is organized
under the laws of this state; (iii) the name of the person or persons to whom
issued; (iv) the numb& and class of shares, and the designation of the series,
if any, which such certificate represents; and (v) the par value of each share
represented by such certificate, or a statement that the shares are without par
value.
c. No certificate shall be issued for any shares until such shares are
fully paid.
Section 2. Transfer Book
The Corporation shall keep at its registered office or principal place
of business or in the office of its transfer agent or registrar, a book (or
books where more than one kind, class, or series of stock is outstanding) to be
known as the Stock Book, containing the names, alphabetically arranged,
addresses and Social Security numbers of every shareholder, and the number of
shares of each kind, class or series of stock held of record. Where the Stock
Book is kept in the office of the transfer agent, the Corporation shall keep at
its office in the State of Colorado copies of the stock lists prepared from said
Stock Book and sent to it from time to time by said transfer agent. Ile Stock
Book or stock lists shall show the current status of the ownership of shares of
the Corporation provided, if the transfer agent of the Corporation be located
elsewhere, a reasonable time shall be allowed for transit or mail.
Section 3. Transfer of Shares.
a. The name(s) and address(s) of the person(s) to whom shares of stock
of this Corporation are issued, shall be entered on the Stock Transfer Books of
the Corporation, with the number of shares and date of issuance.
b. Transfer of shares of the Corporation shall be made on the Stock
Transfer Books of the Corporation by the Secretary or the transfer agent only
when the holder of record thereof or the legal representative of such holder of
record or the attorney-in-fact of such holder of record, authorized by power of
attorney duly executed and filed with the Secretary or transfer agent of the
Corporation, shall surrender the Certificate representing such shares for
cancellation. Lost, destroyed or stolen Stock Certificates shall be replaced
pursuant to Section 5 of this Article VI.
c. The person or persons in whose names shares stand on the books of
the Corporation shall be deemed by the Corporation to be the owner of such
shares for all purposes. except as otherwise provided pursuant to Section 10 and
I I of Article IL or Section 4 of this Article VI
Section 4. Voting Trusts.
a. Any number of shareholders of the Corporation may create a voting
trust for the purpose of conferring upon a trustee or trustees the right to vote
or otherwise represent their shares, for a period not to exceed ten (10) years,
by- (1) entering into a written voting trust; (ii) depositing a counterpart of
the agreement with the Corporation at its registered office; and (iii)
transferring their shares to such trustee or trustees for the purposes of this
Agreement. Prior to the recording of the Agreement, the shareholder concerned
shall tender the stock certificate(s) described therein to the corporate
secretary who shall note on each certificate:
"This Certificate is subject to the provisions of a voting trust agreement dated
recorded in Minute Book of the Corporation Secretary"
<PAGE> 16
b. Upon the transfer of such shares, voting trust certificates shall be
issued by the trustee or trustees to the shareholders who transfer their share
in trust Such trustee or trustees shall keep a record of the holders of the
voting trust certificates evidencing a beneficial interest in the voting trust,
giving the names and addresses of all such holders and the number and class of
the shares in respect of which the voting trust certificates held by each are
issued, and shall deposit a copy of such record with the Corporation at its
registered office.
b. Upon the transfer of such shares, voting trust certificates shall be
issued by the trustee or trustees to the shareholders who transfer their shares
in trust. Such trustee or trustees shall keep a record of the holders of the
voting trust certificates evidencing a beneficial interest in the voting trust,
giving the names and addresses of all such holders and the number and class of
the shares in respect of which the voting trust certificates held by each are
issued, and shall deposit a copy of such record with the Corporation at its
registered office.
c. The counterpart of the voting trust agreement and the copy of such
record so deposited with the Corporation shall be subject to the same right of
examination by a shareholder of the Corporation, in person or by agent or
attorney, as are the books and records of the Corporation, and such counterpart
and such copy of such record shall be subject to examination by any holder of
record of voting trust certificates either in person or by agent or attorney, at
any reasonable time for any proper purpose.
d. At any time before the expiration of a voting trust agreement as
originally fixed or as extended one or more times under this Article VI,
Subsection 4(d) one or more holders of voting trust certificates may, by
agreement in writing, extend the duration of such voting trust agreement,
nominating the same or substitute trustee or trustees, for an additional period
not exceeding ten (10) years. Such extension agreement shall not affect the
rights or obligations of persons not parties to the agreement, and such persons
shall be entitled to remove their shares from the trust and promptly to have
their stock certificates reissued upon the expiration date of the original term
of the voting trust agreement. Ile extension agreement shall in every respect
comply with and be subject to all the provisions of this Article V1, Section 4
applicable to the original voting trust agreement except that the ten (10) year
maximum period of duration shall commence on the date of adoption of the
extension agreement.
c. The trustees under the terms of the agreements entered into under
the provisions of this Article VI, Section 4 shall not acquire the legal title
to the shares but shall be vested only with the legal right and title to the
voting power which is incident to the ownership of the shares.
Section 5. Lost- Destroyed. or Stolen Certificates.
No certificate representing shares of the stock in the Corporation
shall be issued in place of any Certificate alleged to have been lost,
destroyed, or stolen except on production of evidence, satisfactory to the Board
of Directors, of such loss, destruction or theft and, if the Board of Directors
so requires, upon the furnishing of an indemnity bond in such amount (but not to
exceed twice the fair market value of the shares represented by the Certificate)
and with such terms and with such surety as the Board of Directors may, in its
discretion, require.
<PAGE> 17
ARTICLE VII
BOOKS AND RECORDS
a. The Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders, Board of
Directors and committees of Directors.
b. Any books, records and minutes may be in written form or in any
other form capable of being converted into written form within a reasonable
time.
c. Any person who shall have been a holder of record of one quarter of
one percent of all shares or of voting trust certificates therefor at least six
months immediately preceding his demand or shall be the holder of record of, or
the holder of record of voting trust certificates for, at least five (5%)
percent of the outstanding shares of any class Or series of the Corporation,
upon written demand stating the purpose thereof, shall have the right to
examine, in person or by agent or attorney, at any reasonable time or times, for
any proper purpose, its relevant books and records of account. minutes and
record of shareholders and to make extracts therefrom.
d. No shareholder who within two (2) years has sold or offered for sale
any list of shareholders or of holders of voting trust certificates for shares
of this Corporation or any other Corporation; has aided or abetted any person in
procuring any list of shareholders or of holders of voting trust certificates
for any such purpose; or has improperly used any information secured through any
prior examination of the books and records of account, minutes, or record of
shareholders or of holders of voting trust certificates for shares of the
Corporation or any other Corporation; shall be entitled to examine the documents
and records of the Corporation as provided in Subsection 0 of this Article VII.
No shareholder who does not act in good faith or for a proper purpose in making
his demand shall be entitled to examine the documents and records of the
Corporation as provided in Subsection 0 of this Article VII.
e. Unless modified by resolution of the shareholders, this Corporation
shall prepare not later than four (4) months after the close of each fiscal year
(i) A balance sheet showing in reasonable detail the financial
conditions of the Corporation as of the date of its fiscal year.
(ii) A profit and loss statement showing the results of its
operation during its fiscal year.
f. Upon the written request of any shareholder or holder of voting
trust certificates for shares of the Corporation, the Corporation shall mail to
such shareholder or holder of voting trust certificates a copy of its most
recent balance sheet and profit and loss statement.
g. Such balance sheets and profit and loss statements shall be filed
and kept for at least five (5) years in the. registered office of the
Corporation in this state and shall be subject to inspection during business
hours by any shareholder or holder of voting trust certificates.
ARTICLE VIII
DIVIDENDS
The board of Directors of the Corporation may, from time to time,
declare and the Corporation may pay dividends on its shares in cash, property or
its own shares, except when the Corporation is insolvent or when the payment
thereof would render the Corporation insolvent subject to the following
provisions:
a. Dividends in cash or property may be declared and paid, except as
otherwise provided in this Article VIII only out of the unreserved and
unrestricted earned surplus of the Corporation or out of capital surplus,
<PAGE> 18
however arising, but each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share paid
from such capital surplus shall be disclosed to the shareholders receiving the
same concurrently with the distribution.
b. Dividends may be declared and paid in the Corporation's treasury
shares.
c. Dividends may be declared and paid in the Corporation's authorized
but unissued shares out of any unreserved and unrestricted surplus of the
Corporation upon the following conditions:
(i) If a dividend is payable in the Corporation's own shares
having a par value, such shares shall be issued at not less than the par value
thereof and there shall be transferred to stated capital at the time such
dividend is paid an amount of surplus equal to the aggregate par value of the
shares to be issued as a dividend.
(ii) If a dividend is payable in the Corporation's own shares
without par value, such shares shall be issued at such stated value as shall be
fixed by the Board of Directors by resolution adopted at the time such dividend
is declared, and there shall be transferred to stated capital at the time such
dividend is paid an amount of surplus equal to the aggregate stated value so
fixed in. respect of such shares; and the amount per share so transferred to
stated capital shall be disclosed to the shareholders receiving such dividend
concurrently with the payment thereof.
d. No dividend payable in shares briny class shall be paid to the
holders of shares of any other class unless the Articles of Incorporation so
provide or such payment is authorized by the affirmative vote or written consent
of the holders of at least a majority of the outstanding shares of the class in
which the payment is to be made.
c. A split up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the Corporation shall not be construed to be a stock dividend within the
meaning of this Article VIII.
ARTICLE IX
INDEMNIFICATION
Section 1. Action. etc. Other Than by or in the Right of the
Corporation.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding or investigation. whether civil, criminal or administrative,
and whether external or internal to the Corporation, (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or dint, being or having been such a director, officer, employee or
agent, he is or was serving at the request of the Corporation as a director,
officer, employee, or trustee or agent of another corporation partnership, joint
venture, trust or other enterprise (all such persons being referred to hereafter
as an "Agent"), against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, or any appeal therein, if such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe such conduct
was unlawful. The termination of any action, suit or proceeding whether by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent -- shall not, of itself, create a
<PAGE> 19
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding. that such
person had reasonable cause to believe that his conduct was unlawful.
Section 2. Action. etc.. by or in the Right of the Corporation
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed judicial
action or suit brought by or in the right o f the Corporation to procure a
judgment in its favor by reason of the fact that he is or was an Agent (as
defined above) against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense, settlement or appeal
of such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation -on,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for gross
negligence or willful misconduct in the performance of his or her duty to the
Corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which die court
shall deem proper.
Section 3. Determination of Right of Indemnification,
Any indemnification under Section I or 2 (unless ordered by a court) shall be
made by die Corporation unless a determination is reasonably and promptly made
(I) by the Board by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders, that such person acted in bad faith and in a manner that such
person did not believe to be in Or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent
that an Agent has been successful an the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice or the settlement of an
action without admission of liability, in defense of any proceeding or in
defense of any claim, issue or matter therein, or on appeal from any such
proceeding, action, claim or matter, such Agent shall be indemnified against all
expenses incurred in connection therewith.
Section 5. Advances of Expenses.
Except as limited by Section 6 of this Article, costs, charges and
expenses (including attorneys' fees) incurred in any action, suit, proceeding or
investigation or any appeal therefrom shall be paid by the Corporation in
advance e of the final disposition of such matter, if the Agent shall undertake
to repay such amount in the event that it is ultimately determined, as provided
hereir4 that such person is not entitled to indemnification. Notwithstanding the
foregoing. no advance shall be made by the Corporation if a determination is
reasonably and promptly made by the Board of Directors or if a majority vote of
a quorum of disinterested directors cannot be obtained, then by independent
legal counsel in a written opinion, that, based upon the facts known to the
Board or counsel at the time such determination is made, such person acted in
bad faith and in a manner that such person did not believe to be in or not
opposed to the best interest of the Corporation, or, with respect to any
<PAGE> 20
criminal proceeding, that such person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any advance be made in
instances where the Board or independent legal counsel reasonably determines
that such person deliberately breached his duty to the Corporation or its
shareholders.
Section 6. Right of Agent to Indemnification Upon Application Procedure
Upon Application.
Any indemnification under Sections 1, 2 and 4 or advance under Section
5 of this Article, shall be made promptly, and in any event within ninety (90)
days, upon the written request of the Agent~ unless with respect to applications
under Sections 1, 2 or 5, a determination is reasonably and promptly made by the
Board of Directors by a majority vote of it quorum of disinterested directors
that such Agent acted in a manner set forth in such Sections as to justify the
Corporation's not indemnifying or making an advance to the Agent. Jn the event
no quorum of disinterested directors is obtainable, the Board of Directors shall
promptly direct that independent legal counsel shall decide whether the Agent
acted in the manner set forth in such Sections as to justify the Corporation's
not indemnifying or making an advance to the Agent. The right to indemnification
or advances as granted by this Article shall be enforceable by the Agent in any
court of competent jurisdiction, if the Board or independent legal counsel
denies the claim, in whole or in part, or if no disposition of such claim is
made within ninety (90) days. The Agent's costs and expenses incurred in
connection with successfully establishing his right to indemnification, in whole
or in part, in any such proceeding shall also be indemnified by the Corporation.
Section 7. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Article is held
by a court of competent jurisdiction to be unavailable to an indemnity in whole
or part, the Corporation shall, in such- an event, after taking into account,
among other things, contributions by other directors and officers of the
Corporation pursuant to indemnification agreements or otherwise, and, in the
absence of personal enrichment, acts of intentional fraud or dishonesty or
criminal conduct on the part of the Agent~ contribute to the payment of Agent's
losses to the extent that, after other contributions are taken into account,
such losses exceed: (1) in the ease of a director of the Corporation or any of
its subsidiaries who is *not an officer of the Corporation or any of such
subsidiaries, the amount of fees paid to him for serving as a director during
the 12 months preceding the commencement of the suit, proceeding or
investigation; or (ii) in the case of a director of the Corporation or any of
its subsidiaries who is also an officer of the Corporation or any of such
subsidiaries, the amount set forth in clause (I) plus 5% of the aggregate cash
compensation paid to said director for service in such office(s) during the 12
months preceding the commencement of the suit, proceeding or investigation; or
(iii) in the case of an officer of the Corporation or any of its subsidiaries,
5% of the aggregate cash compensation paid to such officer of service in such
office(s) during the 12 months preceding the commencement of such suit,
proceeding or investigation.
Section 8. Other Rights and Remedies.
The indemnification provided by this Article shall not be deemed
exclusive of, and shall not affect, any other rights to which an Agent seeking
indemnification may be entitled under any law, Bylaw, or charter provision,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be an
Agent and shall inure to the benefit of the heirs, executors and administrators
of such a person. All rights to indemnification under this Article shall be
deemed to be provided by a contract between the Corporation and the Agent who
serves in such capacity at any time while these Bylaws and other relevant
provisions of the general corporation law and other applicable law, if any are
in effect. Any repeal or modification thereof shall not affect any rights or
obligations then existing.
<PAGE> 21
Section 9. Insurance
Upon resolution passed by the Board, the Corporation may purchase and
maintain insurance on behalf of any person who is or was an Agent against any
liability asserted against such person and incurred by him in any such capacity;
or arising out of his status as such, whether or not the Corporation would have
the power to indemnify such person against such liability under the provisions
of this Article. The Corporation may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
Section 10. Constituent Corporation.
For the purposes of this Article, references to the "Corporation"
include all constituent corporations absorbed in a consolidation or merger as
well as the resulting or surviving corporation, so that any person who is or was
a director, officer, employee, agent or trustee of such a constituent
corporation or who, being or having been such a director, officer, employee or
trustee, is or was serving at the request of such constituent corporation as a
director, officer, employee, agent or trustee of another corporation,
partnership, joint venture, trust or other enterprise shall stand in the same
position under the provisions of Us Article with respect to the resulting or
surviving corporation as such person would if he had served the resulting or
surviving corporation in the same capacity.
Section 11. Other Enterprises. Fines and Serving at Corporation's
Request.
For purposes of this Article, references to "other enterprise" in
Sections I and 10 shall include employee benefit plans; references to "plans"
shall include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service by Agent as director, officer, employee, trustee or
agent of the Corporation which imposes duties on, or involves services by, such
Agent with I respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
Section 12. Savings Clause.
If this Article or any portion thereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify each Agent as to expenses (including attorneys fees).
judgments, fines and amounts paid in settlement with respect to any action,
suit, appeal, proceeding or investigation, whether civil, criminal or
administrative, and whether internal or external, including a grand jury
proceeding and an action or suit brought by or in the right of the Corporation,
to the full extent permitted by any applicable portion of this Article that
shall not have been invalidated, or by any other applicable law.
ARTICLE X
AMENDMENT OF BYLAWS
a. The Board of Directors shall have the power to amend, alter, or
repeal these Bylaws, and to adopt new Bylaws, from time to time.
<PAGE> 22
b. The shareholders of the Corporation, may, at any annual meeting of
the shareholders of the Corporation or at any special meeting of the
shareholders of the Corporation called for the purpose of amending these Bylaws,
amend. alter, or repeal these Bylaws, and adopt new Bylaws, from time to time.
c. The Board of Directors shall not have the authority to adopt or
amend any Bylaw if such new Bylaw of such amendment would be inconsistent with
any Bylaw previously adopted by the shareholders of the Corporation. The
shareholders may prescribe in any bylaw made by them that such Bylaw shall not
be altered, amended or repealed by the Board of Directors.
ARTICLE XI
SHAREHOLDER AMENDMENTS
Unless the shares of this Corporation are listed on a national
securities exchange or are regularly quoted by licensed securities dealers and
brokers, all the shareholders of this Corporation may enter into agreements
relating to any phase of business and affairs of the Corporation and which may
provide for, among other things, the election of directors of the Corporation in
a manner determined without reference to the number of shares of capital stock
of the Corporation owned by its shareholders, the determination of management
policy, and division of profits, Such agreement may restrict' the discretion of
the Board of Directors and its management of the business of the Corporation or
may treat the, Corporation as if it were a partnership or may arrange the
relationships of the shareholders in a manner that would be appropriate only
among partners. In the event such agreement shall be inconsistent in whole or in
part with the Articles of Incorporation and/or Bylaws of the Corporation, the
terms of such agreement shall govern. Such agreement shall be binding upon any
transferee of shares of the corporation provided such transferee has actual
notice thereof or a legend referring to such agreement is noted on the face or
back of the certificate or certificates representing the shares transferred to
such transferee.
ARTICLE XII
FISCAL YEAR
The Fiscal Year of this Corporation shall be determined by the Board of
Directors.
Date: 6/5/97
/s/
---------------------------------
Secretary
[S E A L]
<PAGE> 1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated June .... . 1999 by and among Oxford Financial
Holdings, Ltd., a Colorado corporation (the "Company"), Mighty Mack USA, Ltd., a
Mississippi corporation ("Mighty Mack"), and the persons listed on Schedule A
hereto, being the holders of all of the outstanding shares of the capital stock
of Mighty Mack (each of whom may sometimes herein be referred to individually as
a "Stockholder" and collectively as the "Stockholders").
This Agreement sets forth the terms and conditions upon which the Stockholders
will sell to the Company, and the Company will purchase from the Stockholders,
53,022,950 shares of the common stock of Mighty Mack, no par value per share
(the Mighty Mack Stock"), representing all of the outstanding shares of capital
stock of Mighty Mack.
In consideration of the mutual agreements contained herein, intending to be
legally bound hereby, the parties hereto agree as follow:
ARTICLE I
SALE OF STOCK
1.01. Stock to be Sold. Upon the execution and delivery hereof (the date upon
which this Agreement is executed is sometimes herein referred to as the
"Closing"), subject to the terms and conditions of this Agreement, the
Stockholders will sell, assign, transfer and deliver the Mighty Mack Stock to
the Company free and clear of all liens, charges, options or encumbrances of
whatsoever nature.
1.02. Consideration. Subject to the terms and conditions of this Agreement, in
reliance on the representations, warranties and agreements of Mighty Mack and
the Stockholders contained herein, and in consideration of tile sale,
assignment, transfer and delivery of the Mighty Mack Stock, referred to in
Section 1.0 1. hereof upon the execution and delivery hereof, the Company Will
issue I to the Stockholders 0.3075 restricted shares of the Company's Common
Stock, no par value ("Stock") for each share of Mighty Mack Stock tendered by
them in collection herewith all as set forth in Schedule A. The Common Stock
shall have the rights and qualifications or restrictions as set forth in the
Company's Certificate of Incorporation, a copy of which is attached hereto as
Exhibit A (the "Certificate of Incorporation").
1.03. Additional Documents to be Delivered. At the Closing, the parties shall
deliver the documentation set forth below:
(a) The Stockholders will deliver to the Company certificates representing
53,022,950 shares of Mighty Mack Stock, along with stock powers with respect to
said shares endorsed in blank.
(b) The Company will deliver to Mighty Mack and the Stockholders (1) executed
copies of the consents if any referred to in Section 7.14 hereof-, (ii) the
opinion of counsel substantially in the form attached hereto as Exhibit B, (iii)
the resignations of the officers and directors of the Company dated the date of
the Closing, (iv) resolutions of the Board of Directors of the Company and the
holders of a majority of the outstanding shares of the Company's Common Stock
approving the certain amendments to the Company's Certificate of Incorporation
and authorizing the filing of the Certificate of Amendment, (y) the cold comfort
letter of the Companys certified public accountants, and (vi) all other
previously undelivered documents required to be delivered by the Company to
Mighty Mack at or prior to the Closing in connection with the transactions
contemplated by this Agreement.
1.04. Further Assurances. After the execution hereof, Mighty Mack and the
Stockholders shall from time to time, at the request of the Company and without
further cost or expense to the Company, execute and deliver such other
instruments of conveyance and transfer and take such other actions as the
Company may reasonably request, in order to more effectively consummate the
transactions contemplated hereby AND TO VEST IN THE COMPANY GOOD AND marketable
title to the shares of Mighty Mack Stock being transferred hereunder and the
current members of the Board of Directors and the current officers of the
Company shall from time to time, at the request of the Stockholders and without
further cost or
<PAGE> 2
expense to the Stockholders, execute and deliver such other documents and
instruments and take such other actions as the Stockholders may reasonably
request, in order to more effectively consummate the transactions contemplated
hereby.
ARTICLE II
CANCELLATION OF CERTAIN SHARES OF PREFERRED STOCK AND COMMON
STOCK BY THE COMPANY AND THE PRINCIPALS
2.01. On the Closing Date, simultaneously with the consummation of the
transactions contemplated hereby, the Company shall immediately thereafter
cancel and retire 335,000 shares of the Preferred Stock. After the cancellation
of said shares, there will be no shares of Preferred Stock issued and
outstanding and 2,400,000 shares of Common Stock issued and outstanding in the
Company. The number of shares of Company Stock to be issued to Mighty Mack
shareholders on the Closing Date is set forth opposite his respective name on
Schedule A attached hereto.
2.02. Change of Name. The Company's Board of Directors shall have approved a
name change to Mighty Mack USA, Ltd.
2.03. Resignation of Directorships and Officership of the Company at Closing.
Ross Peterson and Irma Gonzalez agree that at the time of Closing, each of them
will resign their respective officerships and directorships with the Company,
effective as of the Closing Date.
ARTICLE III
SHAREHOLDER APPROVALS AND INFORMATION STATEMENT
3.01. Shareholder Approvals. A meeting of the shareholders of the Company shall
be held on or before the Closing Date, to consider and act upon the transactions
contemplated by this Agreement. Completion of the transactions set forth herein
is contingent upon approval of this 51 % Agreement and those transactions
contemplated herein by the holders of not less than 51% of the outstanding
Company Stock, or by any larger number of shares required by and in accordance
with applicable law.
3.02. Information Statement. Company has prepared (or will prepare) an
Information Statement and related materials to be used in connection with a
special meeting of shareholders of Company pursuant to Section 3.0 1. above,
which meeting shall be held no later than June ..., 1999 unless all parties
hereto unanimously consent in writing to hold such meeting at a mutually agreed
upon later date.
3.03. Company shall not be obligated to conclude the acquisition of Mighty Mack
Securities unless there shall be delivered to it at the closing all of the
shares of Mighty Mack Securities as listed on Schedule A hereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MIGHTY MACK
MIGHTY Mack hereby make the following representations and warranties to Company,
each of which is true and correct on the date hereof and shall be true and
correct at Closing:
4.01. Due Incorporation. Good Standing and Qualification. Mighty Mack is a
corporation duty organized, validly existing and in good standing under the laws
of the state of Mississippi with all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as it is now
being conducted. The copies of the Certificate of Incorporation and By-Laws
heretofore delivered to the Company are complete and correct copies of such
instruments as presently in effect.
4.02. Corporate Authority. Mighty Mack has the full corporate power and
authority to enter into this Agreement and (subject to any requisite approval by
the Shareholders of Mighty Mack) to carry out the transactions contemplated by
this
<PAGE> 3
Agreement, and this Agreement is a valid and binding Agreement of Mighty Mack
enforceable in accordance with the terms, except that (i) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors rights, and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefore may be brought. The Board of Directors of
Mighty Mack has unanimously and duly authorized the execution, delivery and
performance of this Agreement.
4.03. Capital Structure. As of the date of this Agreement, the authorized
Capital Stock of Mighty Mack consists of (i) 75,000,000 shares of Common Stock
with no par value, of which 53,022,950 shares are issued and outstanding and no
shares are held in the treasury of Mighty Mack and (ii) 2,000,000 shares of
Preferred Stock none of which shares are issued. Except as may be specifically
described herein or in Mighty Mack's Certificate of Incorporation and/or in the
Company's Information Statement, there are no options, warrants, rights,
stockholder agreements or other agreements or instruments outstanding giving any
person and/or firm the right to acquire any shares of Mighty Mack securities and
there are no commitments to issue any options, warrants or rights to acquire
shares of Mighty Mack Securities except as set forth in Section 4.03. of the
Disclosure Schedule.
4.04. Subsidiaries. Except as set forth in Section 4.04. to the Disclosure
Schedule Mighty Mack has no subsidiaries.
4.05. Litigation. To the best of its knowledge there are no pending or
threatened material suits, legal proceedings, claims or governmental
investigations of any kind against or with respect to Mighty Mack, the Might
Mack Shareholders and/or Mighty Mack's assets or any basis for any such material
suit, legal proceeding, claim or governmental investigation which would
individually, or in the aggregate, have a materially adverse effect on the
business or properties of Mighty Mack, except as may be set forth herein and/or
in Schedule 4.05. of the Disclosure Statement hereto.
4.06. Taxes. Mighty Mack has filed all applicable federal, state, local and
foreign tax returns required to be filed to date in accordance with the
provisions of law pertaining thereto, and has paid all taxes, interest,
penalties and assessments (including, without limitation, income, withholding,
excise, unemployment, social security, occupation, transfer, Franchise,
property, sales and use taxes, and all penalties and interest in respect
thereof) required to have been paid to date.
4.07. Governmental Consent. To the best of Mighty Mack's knowledge, no permit,
consent, approval or authorization or filing with, any governmental regulatory
authority or agency is required of Mighty Mack in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
4.08. Compliance with Laws. Mighty Mack has not received any notice that it is
not in compliance with all material applicable existing requirements of laws,
(foreign, federal, state and local) and all existing applicable material
requirements of governmental bodies or agencies having jurisdiction over it and
to the best of its knowledge has all necessary licenses (foreign, federal, state
and/or local) required of it in order to conduct its current business
activities.
4.9. Conflict with Documents. Except as may be specifically provided for herein,
neither the execution, delivery and performance of this Agreement by Mighty
Mack, nor the consummation of the transactions contemplated hereby, either
immediately or with the passage of time or the giving of notice or both will:
(a) conflict with or cause a breach or default under any of the terms and
conditions of, or result in a termination or modification of or cause any
acceleration of any material obligations of Mighty Mack under any contract,
lease or other instrument to which Mighty Mack is bound; or
(b) conflict with any material provisions of Mighty Mack's Certificate of
Incorporation, By-Laws or any other laws or regulations by which Mighty Mack is
bound; or
(c) result in the creation or imposition of any liens, charges or encumbrances
against Mighty Mack or any of its assets.
<PAGE> 4
4.10. Absence of Material Changes. Except as specifically set forth herein or
in Section 4. 10. of the Disclosure Document hereto or in Mighty Mack's
Financial Statements since the date of the report referred to in Section 4
hereof
(a) There has not been any change materially adversely affecting the financial
condition of Mighty Mack;
(b) Mighty Mack has operated its business in the ordinary course of business;
(c) Mighty Mack has maintained its books, accounts and records in the usual,
customary and ordinary manner; and (d) Mighty Mack has not borrowed any money
outside the ordinary course of business other than as indicated in the Notes to
its aforesaid Financial Statements.
4.11. Statements and Other Documents Not Misleading. No provisions of this
Agreement relating to Mighty Mack or any other document, schedule or other
information furnished by Mighty Mack to Company in connection with the
execution, delivery and performance of this Agreement, or specifically being
identified as having been furnished by Mighty Mack in Company's Information
Statement, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact required to be stated in order to
make the statements, in light of the circumstances in which it is made, not
misleading.
4.12. Acknowledgment of Awareness of Mighty Mack of Company's Intent to Become a
12(g) Reporting Company. Mighty Mack acknowledges being advised by Company that:
(a) Company is not currently subject to the reporting requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, but was intending to file a
Form 10 (or if applicable Form 10-SB) so as to register its securities pursuant
to Section 12(g) of the 1934 Act, which filing shall now be undertaken by Mighty
Mack and its counsel after the Closing Date.
(b) After the Closing Date, Mighty Mack and its counsel shall file the aforesaid
Form 10 (or Form I O-SB).
(c) Mighty Mack shall be required to furnish such information concerning Mighty
Mack as may be required by applicable laws, rules and regulations, including but
not limited to, certified Financial Statements of Mighty Mack since its
inception through the close of its current fiscal (or calendar) year (or such
shorter period of time as may be necessary) and unaudited Financial Statements
for any interim periods as may be required.
4.13. Mighty Mack agrees that for one year following the Company's Closing Date
it shall not,
(a) reverse split its shares of common stock or
(b) issue by reclassification, reorganization or recapitalization of its Common
Stock any, shares of Common Stock or other securities of the Company; or
distribute, without receiving services or other consideration therefor,
evidences of its indebtedness or assets, or rights, options or warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock except that Mighty Mack may acquire other
entities as long as it remains in control of such merged entity or is the
successor thereof.
ARTICLE V
TITLE TO THE SHARES
Each of the Mighty Mack Shareholders shall represent and warrant to the Company
as follows:
5.01. Ownership of Company Stock. The Stockholder is the sole lawful,
beneficial, and record owner of the shares of Mighty Mack Stock listed on
Schedule and has good and marketable title to such shares.
<PAGE> 5
5.02. Power and Authority. The Stockholder has full right, power, and authority
to execute and deliver, and to perform his obligations under, this Agreement and
this Agreement has been duly executed and delivered by him and constitutes his
valid and binding obligation.
5.03. Restricted Stock: Investment Intent.
(a) The shares of Common Stock issuable to the Stockholders pursuant to the
terms hereof have not been registered under the Securities Act of 1933, as
amended (the "Act") or any state securities acts and is issued in reliance upon
certain exemptions contained in federal securities laws. There are substantial
restrictions on the transferability of the shares of Common Stock.
(b) The shares of Common Stock are being acquired solely for the account of the
Stockholder for investment and not with a view to or for the resale,
distribution, sub-division or fractionalization thereof, and the Stockholder has
no plans to enter into, and have not entered into, any contract, undertaking,
agreement or arrangement to such end.
(c) Each certificate representing the shares of Common Stock issuable hereunder
and any other securities issued in respect of the shares of Common Stock, upon
any stock split, stock dividend, recapitalization, merger, consolidation or
similar event, shall (unless otherwise permitted or unless the shares of Common
Stock evidenced by such certificate shall have been registered under the Act)
also be stamped or otherwise imprinted with a legend substantially in the
following form (in addition to any legend required under applicable state
securities laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATE- AS TO THE SECURITIES UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED"
(d) Upon request of the holder of such a certificate, the Company shall remove
the foregoing legend from the certificate or issue to such holder a new
certificate therefore free of any transfer legend, if, with such request, the
Company shall have received either (1) an opinion from, legal counsel to the
Stockholder, which such counsel shall be reasonably acceptable to the Company,
which approval shall not be unreasonably withheld nor unduly delayed or (ii) a
"no action" letter from the Securities and Exchange Commission ("SEC") to the
effect that any transfer by such holder of the securities evidenced by such
certificate will not violate the Act and applicable state securities laws.
(e) The Common Stock issuable to the Stockholders hereunder shall not be
transferable, except upon the conditions specified in this Article VI which
conditions are intended among other things, to insure compliance with the
provisions of the Act. The Stockholders agree to cause any proposed transferee
of the shares of Common Stock to agree to take and hold those securities subject
to the provisions and upon the conditions specified in this Article VI.
5.04. No Registration of Shares. The Stockholder acknowledges that the shares of
Common Stock issuable pursuant hereto have not been registered under the Act and
are being or will be issued by reason of an exemption from the registration
provisions of the Act which depends upon, among other things, the bona fide
nature of the investment intent as expressed herein; that the Company currently
is under no obligation to register any of said shares of Common Stock, and that
none of such shares may be resold unless subsequently registered under the Act
or unless an exemption from registration is available.
<PAGE> 6
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY,
THE MEMBERS OF COMPANY'S BOARD OF DIRECTORS
AND ITS OFFICERS IMMEDIATELY PRIOR TO THE CLOSING
The Company and each of the members of the Board of Directors and the
officers of the Company immediately prior to the Closing (which such persons are
herein referred to as "Company Management") hereby represent, covenant and
warrant to Mighty Mack and the Stockholders as follows:
6.0 1. Cooperate organization. Etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has Rill corporate power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now owns; is duly
qualified or licensed to do business as a foreign corporation in good standing
in the jurisdictions listed in Section 7.01 of the Disclosure Schedule, which
are all the jurisdictions in which such qualification is required. The copies of
the Certificate of Incorporation and By-Laws of the Company heretofore delivered
to Mighty Mack are complete and correct copies of such instruments as presently
in effect.
6.02. Capitalization of the Company. As of the date of this Agreement, the
authorized capital stock of the Company consists of (a) 50,000,000 shares of
common stock, no par value per share, of which 2,400,000 shares are issued and
outstanding and no shares are held in the treasury of the Company, and (b)
5,000,000 shares of preferred stock with no par value of which 335,000 shares
are issued and outstanding. All issued and outstanding shares of capital stock
of the Company are validly issued, fully paid and nonassessable. Except as
described in Section 7.02 of the Disclosure Schedule, there are no outstanding
(a) securities convertible into or exchangeable for capital stock of the
Company-, (b) options, warrants or other rights to purchase or subscribe to
capital stock of the Company or securities convertible into or exchangeable for
capital stock of the Company; or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any
capital stock of the Company, any such convertible or exchangeable securities or
any such options, wan-ants or rights.
6.03. Subsidiaries and Affiliates. The Company does not own, directly or
indirectly, any capital stock or other equity securities of any corporation or
have any direct or indirect equity or ownership interest in any business.
6.04. Authorization, Etc. The Company has full corporate power and authority to
enter into this Agreement and to carry out the transactions contemplated hereby.
The Board of Directors of the Company has taken all action required by law, the
Company's Certificate of Incorporation, its By-Laws or otherwise to be taken by
it to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and this Agreement is a
valid and binding agreement of the Company enforceable in accordance with its
terms, except that (a) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court which any proceeding
therefore may be brought.
6.05. No Violation. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate any provision
of the Certificate of incorporation or By-Laws of the Company, or violate, or
are 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 cause the
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any security interest, lien or other encumbrance
upon any property or assets of the Company under, any agreement or commitment to
which the Company is a party or by which the Company is bound, or to which the
property of the Company is subject, or violate any statute or law or any
judgement, decree, order, regulation or rule of any court or governmental
authority.
6.06. Financial Statements. The Company has heretofore delivered to Mickey Mack
an Audited Financial of the Company as at June 30 in each of the years 1997 and
1998, and through March 31, 1999 all certified by Kish, Leake & Associates,
P.C., independent certified public accountants, whose reports thereon are
included therein. Such balance sheets and the notes thereto are true, complete
and accurate and fairly present the assets, liabilities and financial condition
of the Company as at the respective dates thereof, and such statements of
operations, stockholders' equity and cash flows and the notes thereto are true,
complete and accurate and fairly present the results of operations for the
periods therein referred to; all in accordance with generally accepted
accounting principles consistently applied throughout the periods involved.
<PAGE> 7
6.07. No Undisclosed Liabilities, Etc. The Company has no liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) which
were not fully reflected or reserved against in the Company Balance Sheet,
including reserves for all federal income and other taxes and all other
liabilities of the Company at such dates, and the reserves reflected in the
Company Balance Sheet are adequate, appropriate and reasonable.
6.08. Interim Operations. Since the date of the Company Balance Sheet, the
business of the Company has been conducted only in the ordinary and usual course
consistent with past practice. Since the date of the Balance Sheet, there have
not been any material adverse changes in the financial condition of the Company.
Neither the Company nor Company Management is aware of any circumstances which
may cause the Company to suffer any material adverse change in its financial
condition.
6.09. Absence of Certain Changes. Except as and to the extent set forth in
Section 7.09. of the Disclosure Schedule, since the date of the Company Balance
Sheet, the Company has not:
(a) Suffered any material adverse change in its working capital, financial
condition, assets, liabilities (absolute, accrued, contingent or otherwise),
reserves, business, operations or prospects;
(b) Incurred any liabilities or obligations (absolute, accrued, contingent or
otherwise) or increased, or experienced any change in any assumptions underlying
or methods of calculating, any bad debt, contingency or other reserves;
(c) Paid, discharged or satisfied any claim, liabilities or obligations
(absolute, accrued, contingent or otherwise) other than the payment, discharge
or satisfaction in the ordinary course of business and consistent with past
practice of liabilities and obligations reflected or reserved against in the
Balance Sheet or incurred in the ordinary course of business and consistent with
past practice since the date of the Balance Sheet;
(d) Permitted or allowed any of its property or assets (real, personal or mixed,
tangible or intangible) to be subjected to any mortgage, pledge, lien, security
interest, encumbrance, restriction or charge of any kind;
(e) Declared, paid or set aside for payment any dividend or other distribution
in respect of its capital stock or redeemed, purchased or otherwise acquired,
directly or indirectly, any shares of capital stock or other securities of the
Company;
(f) Made any change in any method of accounting or accounting practice;
(g) Paid, loaned or advanced any amount to, or sold, transferred or leased any
properties or assets (real, personal or mixed, tangible or intangible) to, or
entered into any agreement or arrangement with, any of its officers or directors
or any affiliate or associate of any of its officers or directors; or
(h) Agreed, whether in writing or otherwise, to take any action described in
this Section.
6.10. Taxes. 'The Company has duly filed all tax reports and returns required
to be filed by it and has duly paid all taxes and other charges due or claimed
to be due from it by federal, state, local or foreign taxing authorities
(including, without limitation, those due in respect of the properties, income,
The licenses, sales or payrolls of any of it); the reserves for taxes reflected
in the Company Balance Sheet are adequate; and there are no tax liens upon any
property or assets of the Company. The federal income tax returns of the Company
have been examined by the Internal Revenue Service for all periods to and
including those set forth in Section 6. 1 0.(a) of the Disclosure Schedule; and,
except to the extent shown therein, all deficiencies asserted as a result of
such examinations have been paid or finally settled and no issue has been raised
by the Internal Revenue Service in any such examination which, by application of
the same or similar principles, reasonably could be expected to result in a
proposed deficiency for any other period not so examined. Further, no state of
facts exists or has existed which would constitute grounds for the assessment of
any tax liability with respect to the periods which have not been audited by the
Internal Revenue Service. Except to the extent set forth in Section 6. 10. of
the Disclosure Schedule, there are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any federal income
tax return for any period. Copies of all income tax returns for the Company in
respect of all years not barred by the statute of limitations have heretofore
been delivered by the Company to Mighty Mack and all such returns are listed in
Section 6. 1 0.(b) of the Disclosure Schedule.
<PAGE> 8
6.11. Contracts and Commitments. The Company is not a party to any agreements or
contracts from which any rights and privileges inure to or obligations which are
the responsibility of, tile Company.
6.12. Litigation. There is no action, suit, inquiry, proceeding or investigation
by or before any court or governmental or other regulatory or administrative
agency or commission pending, threatened against or involving the Company, or
which questions or challenges the validity of this Agreement or any action taken
or to be taken by the Company pursuant to this Agreement or in connection with
the transactions contemplated hereby, and the Company does not know or have any
reason to know of any valid basis for any such action, proceeding or
investigation. The Company is not in default under or in violation of, nor is
there nor does it know of any valid basis for any claim of default under or
violation of, any contract, commitment or restriction to which it is a party or,
by which it is bound. The Company is not subject to any judgement, order or
decree entered in any lawsuit or proceeding which may have an adverse effect on
its business practices or on its ability to acquire any property or conduct its
business in any area.
6.13. Consents and Approvals of Governmental
No consent, approval or authorization of or declaration, filing or registration
with, any governmental or regulatory authority is required in connection with
the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby.
6.14. Consents. No consent of any person is necessary to the consummation of the
transactions contemplated hereby, including, without limitation, consents from
parties to loans, contracts, leases or other agreements.
6.15. Compliance with Law. The operations of the Company have been conducted in
accordance with all applicable laws, regulations and other requirements of all
national governmental authorities, and of all states, municipalities and other
political subdivisions and agencies thereof, having jurisdiction over the
Company, including, without limitation, all such laws, regulations and
requirements relating to antitrust, consumer protection, currency exchange,
equal opportunity, health, occupational safety, pension, securities and
trading-with-the-enemy matters. The Company has not received any notification of
any asserted present or past failure by the Company to comply with such laws,
rules or regulations.
6.16. Environmental Protection. The operations of the Company have been
conducted in accordance with all laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or hazardous or
toxic materials or wastes into ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants, contaminants
or hazardous or toxic materials -or wastes. Neither the Company nor Company
Management is aware of nor has the Company received notice of any past, present
or future events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent continued compliance, or
which may give rise to any common law or legal liability, or otherwise form the
basis of any claim, action, suit, proceeding, hearing or investigation, based on
or related to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant, or
hazardous or toxic material or waste.
6.17. Brokers and Finders. Except for Intercontinental Holding Company, neither
the Company nor any of its officers or directors nor any of the Principals nor
any of their respective affiliates, has employed any broker or finder or
incurred any liability for any brokerage fees or commissions or the like in
connection with this Agreement and the transactions contemplated hereby, and the
principals jointly and severally shall indemnify and hold Mighty Mack, the
Company and the Mighty Mack Shareholders harmless from and against any liability
for any of the same, together with all costs of defending any claims or demands
for the same, including but not limited to reasonable attorney fees.
6.18. Disclosure. All information relating to or concerning the Company set
forth herein or provided to Mighty Mack and/or the Stockholders or their
respective representatives and counsel in connection with the transactions
contemplated
<PAGE> 9
hereby is true and correct in all material respects and does not fail to state
any material fact necessary in order to make the statements herein or therein,
in light of the circumstances under which they were made, not misleading. The
Company confirms that it has not provided to Mighty Mack or any of the
Stockholders or any of their representatives, agents or counsel any information
that constitutes or might constitute material nonpublic information. The Company
understands and confirms that the Stockholders shall be relying on the foregoing
representation in effecting transactions contemplated hereby.
6.19. Conflict With Documents. Neither the execution, delivery and performance
of this Agreement by Company nor the consummation of the transactions
contemplated hereby, either immediately or with the passage of time or the
giving of notice or both win:
(a) Conflict with or cause a breach or default under any of the terms and
conditions of or result in termination or modification of or cause any
acceleration of any obligations of Company under any contract, lease or other
instrument to which Company is bound; or
(b) Conflict with or violate the provisions of COMPANY'S Certificate of
Incorporation, as and if amended and By-Laws or any other laws or regulations by
which Company is bound; or
(c) Result in the creation or imposition of any lien, charge or encumbrance
against Company or any of its assets.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF MIGHTY MACK
Mighty Mack and the Stockholders hereby represent, covenant and wan-ant to the
Company as follows:
7.01. Corporate Organizations, Etc. Mighty Mack is a corporation duly organized,
validly existing and in good standing under the laws of the State of Mississippi
and has full corporate power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now owns. The copies of
the Certificate of Incorporation and By-Laws of Mighty Mack heretofore delivered
to the Company are complete and correct copies of such instruments as presently
in effect.
7.02. Capitalization of Mighty Mack. As of the date of this Agreement, the
authorized capital stock of Mighty Mack consists of 1,000,000 shares of Class A
Preferred Stock of which none are issued and outstanding, 1,000,000 shares of C
lass B Preferred Stock of which none are issued, and outstanding, and 75,000,000
shares of Common Stock with no par value, of which are issued and outstanding.
All issued and outstanding shares of capital stock of Mighty Mack are validly
issued, fully paid and nonassessable. There are no outs ding (a) securities
convertible into or exchangeable for capital stock of Mighty Mack; (b) option ,
warrant or other rights to purchase or subscribe to capital stock of Mighty Mack
or securities convertible into or exchangeable for capital stock of Mighty Mack;
or (c) contracts, commitments, agreements, understandings or arrangements of any
kind relating to the issuance of any capital stock of Mighty Mack, any such
convertible or exchangeable securities or any such options, warrants or rights.
7.03. Authorization, Etc. Mighty Mack has full corporate power and authority to
enter into this Agreement and to carry out the transactions contemplated hereby.
The Board of Directors of Mighty Mack has taken all action required by law,
Mighty Mack's Certificate of Incorporation, its By-Laws or otherwise to be taken
by them to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and this Agreement is a
valid and binding agreement of Mighty Mack enforceable in accordance with its
terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefore may be brought.
7.04. No Violation. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate any provision
of the Certificate of Incorporation or By-Laws of Mighty Mack, or
<PAGE> 10
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, any
agreement or commitment to which Mighty Mack is a party or by which Mighty Mack
is bound, or to which the property of Mighty Mack is subject, or violate any
statute or law or any judgement, decree, order, regulation or rule of any court
or governmental authority.
7.05. Subsidiaries and Affiliates. Except as described in Section 7.04. to the
Disclosure Schedule, the Company does not own, directly or indirectly, any
capital stock or other equity securities of any corporation or have any direct
or indirect equity or ownership interest in any business.
7.06. Financial Statements. Mighty Mack has heretofore delivered to the Company
an unaudited balance sheet of Mighty Mack as of November 1998 and for the 4
month period ended April 30, 1999 (the balance sheet for the period ended is
herein referred to as the "Mighty Mack Balance Sheet" ) prepared by management
of Mighty Mack. Such balance sheets and the notes thereto are true, complete and
accurate and fairly present the assets, liabilities and financial condition of
Mighty Mack as at the respective dates thereof, and such statements of
operations, stockholders' equity and cash flows and the notes thereto are true,
complete and accurate and fairly present the results of operations for the
period therein referred to; all in accordance with generally accepted accounting
principles consistently applied throughout the periods involved.
7.07. No Undisclosed Liabilities, Etc. The Company has no liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) which
were not fully reflected or reserved against in the Mighty Mack Balance Sheet,
including reserves for all federal income and other taxes and all other
liabilities of the Company at such dates, and the reserves reflected in the
Mighty Mack Balance Sheet are adequate, appropriate and reasonable.
7.08. Interim Operations. Since the date of the Mighty Mack Balance Sheet the
business of the Company has been conducted only in the ordinary and usual course
consistent with past practice. Since the date of the Mighty Mack Balance Sheet,
there have not been any material adverse changes in the financial condition of
the Company. Neither Mighty Mack nor its management is aware of any circum tan
es which may cause Mighty Mack to suffer any material adverse change in its
financial condition.
7.09. Absence of Certain Changes. Except as and to the extent set forth in
Section 7.09. of the Disclosure Schedule, since the date of the Mighty Mack
Balance Sheet, Might Mack has not:
(a) Suffered any material adverse change in its working capital, financial
condition, assets, liabilities (absolute, accrued, contingent or otherwise),
reserves, business, operations or prospects;
(b) Incurred any liabilities or obligations (absolute, accrued, contingent or
otherwise) or increased, or experienced any change in any assumptions underlying
or methods of calculating, any bad debt, contingency or other reserves; (c)
Paid, discharged or satisfied any claim, liabilities or obligations (absolute,
accrued, contingent or otherwise) other than the payment, discharge or
satisfaction in the ordinary course of business and consistent with past
practice of liabilities and obligations reflected or reserved against in the
Mighty Mack Balance Sheet or incurred in the ordinary course of business and
consistent with past practice since the date of the Mighty Mack Balance Sheet.
(d) Permitted or allowed any of its property or assets (real, personal or mixed,
tangible or intangible) to be subjected to any mortgage, pledge, lien, security
interest encumbrance, restriction or charge of any kind;
(e) Declared, paid or set aside for payment any dividend or other distribution
in respect of its capital stock or redeemed, purchased or otherwise acquired,
directly or indirectly, any shares of capital stock or other securities of
Mighty Mack;
(f) Made any change in any method of accounting or accounting practice;
<PAGE> 11
(g) Paid, loaned or advanced any amount to, or sold, transferred or leased any
properties or assets (real, personal or mixed, tangible or intangible) to, or
entered into any agreement or arrangement with, any of its officers or directors
or any affiliate or associate of any of its officers or directors; or
(h)Agreed, whether in writing or otherwise, to take any action described in this
Section. 7. 10. Taxes. Except as described in Section 7. 10. of the Disclosure
Schedule, Mighty Mack has duly filed all tax reports and returns required to be
filed by it and has duly paid all taxes or other charges due or claimed to be de
from it by federal, state, local or foreign taxing authorities (including,
without limitation, those due in respect of the properties, income, franchises,
licenses, sales or payrolls of any of it); the reserves for taxes reflected in
the Mighty Mack Balance Sheet are adequate; and there are no tax liens upon any
property or assets of Mighty Mack.
7.11. Patents, Trademarks, Trade Names, Etc. Mighty Mack owns, or is licensed or
otherwise has the full right to use, all patents, trademarks and trade names
used in or necessary for the conduct of the business as heretofore, or as may
hereafter be, conducted. Section 7.11. of the Disclosure Schedule contains an
accurate and complete description of all patents, trademarks, trade names and
copyrights used or proposed to be used by Mighty Mack. The consummation of the
transactions contemplated hereby will not alter or impair any such rights; no
claims have been. asserted by any person to the use of any such patents,
trademarks or trade names or challenging or questioning the validity or
effectiveness of any such license or agreement, and Mighty Mack does NOT KNOW OF
ANY VALID BASIS FOR any such claim; and the use of such patents, trademarks,
trade names or copyrights by Mighty Mack does not infringe on the rights of any
person.
7.12. Contracts and Commitments. Except as set forth in Section 7.12. of the
Disclosure Schedule:
(a) Mighty Mack is not party to any agreements, contracts, commitments or
restrictions which are material to its business, operations or prospects or
which require the making of any charitable contribution;
(b) No purchase contracts or commitments of Mighty Mack continue for a period of
more than 12 months or are in excess of the normal, ordinary and usual
requirements of business or at any excessive price; except for contracts between
Product Services Company, Inc. and Delta Pine and Land Company to be assigned to
Mickey Mack and on asset purchase contract with Ted Dickerson and Product
Services Co. Inc.
(c) There are no outstanding sales contracts, commitments or proposals of Mighty
Mack which continue for a period of more than 12 months or will result in any
loss to Mighty Mack on completion or performance thereof after allowance for
direct distribution expenses;
(d) Mighty Mack has no outstanding contracts with officers, employees, agents,
consultants, advisors, salesmen, sales representatives, distributors or dealers
that are not;
(e) Mighty Mack has no employment agreement, or any other agreement that
contains any severance or any severance or termination pay liabilities or
obligations;
(f) Mighty Mack is not party to any collective bargaining or union contracts or
agreements;
(g) Mighty Mack is not in default, nor is there any known basis for any valid
claim of default, under any contract made or obligation owed by it;
(h) Mighty Mack has no power of attorney outstanding or any obligations or
liabilities (whether absolute, accrued, contingent or otherwise), as guarantor,
surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the
obligation of any person, corporation, partnership, joint venture, association,
organization or other entity.
<PAGE> 12
7.13. Agreements in Full Force and Effect. All contracts, agreements, plans,
leases, policies and licenses referred to in the Disclosure Schedule are valid
and in full force and effect, and true copies thereof have been heretofore made
available to Acquiror.
7.14. Litigation. There is no action, suit, inquiry, proceeding or investigation
by or before any court or governmental or other regulatory or administrative
agency or commission pending or, to the best knowledge of Mighty Mack,
threatened against or involving Mighty Mack, or which questions or challenges
the validity of this Agreement or any action taken or to be taken by Mighty Mack
pursuant to this Agreement or in connection with the transactions contemplated
hereby-, and Mighty Mack does not know or have any reason to know of any valid
basis for any such action, proceeding or investigation. Mighty Mack is not
subject to any judgement, order or decree entered in any lawsuit or proceeding
which may have an adverse effect on its business practices or on its ability to
acquire any property or conduct its business in any area.
7.15. Consents and Approvals of Governmental Authorities. No consent, approval
or authorization of or declaration, filing or registration with, any
governmental or regulatory authority is required in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
ARTICLE VIII
COVENANTS OF MIGHTY MACK AND THE STOCKHOLDERS
Mighty Mack and the Stockholders hereby covenant and agree with the
Company as follows:
8.01 Full Access. MIGHTY Mack has afforded to the Company and its counsel,
accountants and other representatives full access to the offices, properties,
books and records of Mighty Mack in connection with the investigation into the
affairs of Mighty Mack as the Company has requested.
8.02. Supplements to Disclosure Schedule. From time to time prior to the
Closing, Mighty Mack will promptly supplement or amend the Disclosure Schedule
with respect to any matter hereafter arising which, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedule. No supplement or amendment of the
Disclosure Schedule made pursuant to this section shall be deemed to cure any
breach of any representation of or warranty made in this Agreement unless the
Company specifically agrees thereto in writing.
8.03. Certificates. At the Closing, Mighty Mack and the Stockholders will
furnish the Company with such certificates of its officers and others to
evidence compliance with the covenants set forth in this Article VIII as may be
reasonably requested by the Company.
ARTICLE IX
COVENANTS OF COMPANY AND PRINCIPALS
From the date hereof until the Closing Date, Company shall and Principals shall
cause Company to:
9.01. File as promptly as practicable after the date of its special meeting of
shareholders referred to in Section 3 (a) hereof a Form 10 Registration
Statement describing the transactions contemplated by this Agreement, and
<PAGE> 13
shall have complied with all required SEC requirements in accordance with
applicable filings, rules and regulations in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby.
9.02. Conduct its business activities and affairs in the ordinary course of
business.
9.03. Use its best efforts to preserve its business organization intact.
9.04. Properly and promptly give Mighty Mack notice of any change in its
financial condition, business or affairs.
9.05. Not mortgage, pledge, transfer or assign any of its assets, nor dissolve,
liquidate, cease to do business as a going concern or. merge with any other
entity.
9.06. Maintain its books and records in a manner consistent with past practices.
9.07. Not incur any liabilities or contingent liabilities; and not enter into
any agreements (except as may be indicated in this Acquisition Agreement).
9.08. Make available for inspection all books and records or other information
which Mighty Mack may reasonably request from time to time as Mighty Mack deem
necessary or appropriate to evaluate the business, affairs and financial
condition of Company.
9.09. Company and Principals shall and Principals shall cause Company and their
respective representatives to: (i) retain as confidential and not to reveal to
any others for any reason whatsoever all information furnished by Mighty Mack or
at its request, concerning Mighty Mack, its present and proposed business, its
financial condition, and its officers, directors and Mighty Mack Shareholders;
and (ii) not, directly or indirectly, use any such information to compete in any
way with any present or presently contemplated business of Mighty Mack.
9.10. Company shall not issue any public statement, cause any press releases to
be issued or cause any mailings to its stockholders to be made regarding any of
the transactions contemplated herein without first providing and obtaining
Mighty Mack Principals Shareholders' written consent regarding publication of
such statements, which consent shall not be unreasonably withheld.
9.11. Company shall prepare and annex as Exhibit hereto a complete schedule of
all accounts payable, warrants and options and represents that same is wholly
accurate and complete in all material respects.
ARTICLE X
CONTINUATION AND SURVIVAL OF REPRESENTATION,
WARRANTIES AND COVENANTS
All representations, warranties and covenants made in this Agreement shall
continue to be true and correct at and as of the Closing Date and shall survive
the Closing and the consummation of the transactions contemplated by this
Agreement for two years from he Closing Date hereof unless otherwise expressly
provided herein.
<PAGE> 14
ARTICLE XI
CONDITIONS PRECEDENT TO THE OBLIGATION OF COMPANY
The obligation of Company under this Agreement are subject to the satisfaction
of the following conditions on or before the Closing Date.
11.0 1. Accuracy of Representations and Warranties. The representations and
warranties of Mighty Mack under Section VII hereof, and Mighty Mack Shareholders
under paragraph 6 hereof, herein contained shall have been true and correct in
all material respects when made, and, in addition, shall be true and correct in
all material respects on and as of the Closing Date with the same force and
effect as though made on the Closing Date.
11.02. Performance of Agreements Mighty Mack and Mighty Mack Shareholders shall
have in all material respects performed all obligations, agreements, covenants
and conditions contained in this Agreement to be performed and complied with by
them on or prior to the Closing Date.
11.03. Corporate Approvals. All necessary corporate action on the part of the
directors and holders of Mighty Mack Securities approving the transactions
contemplated by this Agreement shall have been taken.
11.04. Opinion of Counsel to Mighty Mack receini unse y Mack. Company sive an op
on of co to Mighty Mack, to the effect that:
(a) Mighty Mack is a corporation duly organized, validly existing and in good
standing under the laws of the state of Mississippi and has all requisite
corporate power under the laws of its jurisdiction of incorporation to carry on
its business as then being conducted and to consummate the transactions
contemplated hereby.
(b) All necessary corporate proceedings of the Board of Directors of Mighty Mack
and holders of Mighty Mack Securities to authorize the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly taken;
(c) This Agreement has been duly authorized, executed and delivered by Mighty
Mack and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms except as the enforcement thereof may be
limited by bankruptcy, insolvency and other similar laws relating to or
affecting the enforcement of creditors' rights generally, and except for
established equitable defenses;
(d) Such counsel (who need not make inquiry of others for such purpose) knows of
no actions, suits or proceedings pending or threatened against or affecting
Mighty Mack which would result in a breach of the representations and warranties
set forth in this Agreement, except as disclosed herein;
(e)The Mighty Mack Securities to be delivered to Company on the Closing Date
in accordance with the terms of this Agreement, shall vest in Company all right,
title and interest in 100% of the then issued and outstanding shares of Mighty
Mack Securities and said shares are duly and validly issued, fully paid and
non-assessable.
(f) Satisfactory to Counsel. All proceedings taken by Mighty Mack and all
instruments executed and delivered by Mighty Mack on or prior to the Closing
Date in connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to counsel for Company.
<PAGE> 15
(g) Absence of Prohibitions. No court order prohibiting the acquisition by
Company of the Mighty Mack Securities set forth herein shall be in effect in any
litigation described in Exhibit hereto as of the Closing Date.
ARTICLE XII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF MIGHTY MACK
AND MIGHTY MACK SHAREHOLDERS
The obligations of Mighty Mack and Mighty Mack Shareholders under this Agreement
are subject to the satisfaction of the following conditions on or before the
Closing Date;
12.0 1. Accuracy of Representations and Warranties. The representations and
warranties of Company and Principals herein contained shall have been true and
correct in all respects when made, and in addition, shall be true and correct in
all respects on and as of the Closing Date with the same force and effect as
though made on the Closing Date.
12.02. Performance and Agreements. Company shall have performed all obligations
and agreements and complied with all covenants and conditions contained in this
Agreement to be performed and complied with by it on or prior to the Closing
Date.
12.03. Corporate Approval. All necessary corporate action on the part of the
Board of Directors and Shareholders of Company approving the transactions
contemplated by this Agreement shall have been taken.
12.04. Cash of Company As of the time of the Closing, the Company shall have
cash and/or cash equivalents of not less than $ in excess of all liabilities
(accrued, contingent or otherwise) of Company at that time excepting for legal
and/or accounting expenses relating to the transactions contemplated herein and
in Section VIII hereof.
12.05. Opinion of Counsel to Company and Principals. Mighty Mack and Mighty Mack
Shareholders shall have received an opinion of Randall Lanham Esq., counsel to
Company and Principals, to the effect that:
(a) Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado, and has all requisite power
under the laws of its state of incorporation to carry on its business as then
being conducted and to consummate the transactions contemplated hereby;
(b) All necessary corporate proceedings of the Board of Directors and
Shareholders and Principals of Company to authorize the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly taken;
(c) This Agreement has been duly authorized, executed and delivered by Company
and Principals and constitutes its legal and valid binding obligation of Company
and Principals, enforceable against them in accordance with its terms, except as
the enforcement may be limited by bankruptcy, insolvency and other similar laws
relating to or affecting the enforcement of creditors' rights, generally;
(d) Such counsel (who need not make inquiry of others for such purpose) knows of
no actions, suits or proceedings pending or threatened against or affecting
Company or Principals which would result in a breach of the representations and
warranties set forth in a breach of the representations and warranties set forth
in this Agreement, except as disclosed herein;
<PAGE> 16
(e) The shares of Company Stock to be issued to the Mighty Mack Shareholders on
the Closing Date in accordance with this Agreement shall vest in each of them
all right, title and interest in and to said shares and said shares when issued
shall be duly and validly issued, fully paid and non-assessable; and
(f) Company has the legal right to consummate the transactions enumerated in
this Agreement subject to and contingent upon the timely obtaining of necessary
Company stockholder approval in ACCORDANCE WITH THE LAW OF THE STATE OF
Colorado, which requires approval 51% of the holders of no less than of all
outstanding shares entitled to vote thereon.
12.06. Proceedings Satisfactory to Counsel. All proceedings taken by Company and
all instruments executed and delivered by Company on or prior to the Closing
Date in connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to counsel for Mighty Mack.
12.07. Directors and Officers. Company and Principals shall cause all of
Company's Directors and Officers to remain as is until replaced as a result of a
Special Meeting of Company's Stockholders. Each of such officers and directors
shall execute written resignations, each resigning from their respective
positions with Company with such resignations to be tendered at closing and to
be deemed effective immediately upon acceptance by Mighty Mack.
12.08. No Obligations, etc. The Mighty Mack Shareholders shall have received
documentation establishing to their reasonable satisfaction and that of their
counsel that Company has no further obligations in respect of prior dealings
with anyone or any firm except as disclosed herein and/or in Company's
Information Statement, if any.
ARTICLE XIII
DELIVERIES TO COMPANY ON THE CLOSING DATE
On the Closing Date, Mighty Mack and Mighty Mack Shareholders shall deliver to
Company the following:
13.01. Two certificates (i) one of which is executed by the President of Mighty
Mack confirming that the representations and warranties made pursuant to Section
VIII of this Agreement, and (ii) the second of which is executed by Mighty Mack
Shareholders confirming that the representations and warranties made pursuant to
section 10 of this Agreement, are true and correct in all material respects when
first made and on the Closing Date.
13.02. Certified copies of resolutions duly adopted by the Board of Directors of
Mighty Mack authorizing the execution, delivery and performance of this
Agreement and the Consummation of the transactions contemplated hereby.
13.03. Good Standing Certificate or its equivalent issued by the appropriate
jurisdiction of incorporation authorities and dated on or before June 21, 1999.
13.04. Opinion of counsel to Mighty Mack in the form provided in Section.
13.05. Investment letters executed by all recipients of Company Stock in the
form of Exhibit D attached hereto.
13.06. Certificates for not less than all of the Mighty Mack Securities in form
satisfactory for transfer.
<PAGE> 17
13.07. Resignations of the present officers and directors of Company, and such
other documents as counsel of MIGHTY MACK shall reasonably request in writing.
13.08. Investment Letter executed by Company in the form of Exhibit attached
hereto.
ARTICLE XIV
DELIVERIES, TO MIGHTY MACK ON THE CLOSING DATE
On the Closing Date, Company shall deliver to Mighty Mack the following:
14.01. Certificate executed by the President and Principals of Company
confirming that the representations and warranties made pursuant to the
Agreement are true and correct when first made and on the Closing date and
confirming compliance with the provisions of Section hereof
14.02. Certified copies of resolutions duly adopted by the Board of Directors
and Shareholders of Company authorizing the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby.
14.03. Good Standing Certificates issued by the Secretary of State of the State
of Colorado and dated on or before June 21, 1999.
14.04. Opinion of special counsel of Company in the form provided in Section.
14.05. Stock certificates evidencing ownership of Company Stock registered in
the names of the holders of Mighty Mack Securities delivering their shares to
Company, issued pursuant to Section 2 hereof.
ARTICLE XV
CLOSING
The parties hereto agree that the closing hereunder (Closing) and the Closing
Date hereunder shall be held on or before July 1, 1999 unless the parties shall
otherwise unanimously agree in writing to a later date. In the event this
transaction has not closed by July 1, 1999, it may be abandoned by either party
pursuant to Section XVIII hereof.
ARTICLE XVI
REMEDIES FOR BREACH OF THIS AGREEMENT
16.01. Investigations-, Survival of Representations and Warranties. The
respective representations and warranties of the Company on the one hand, and
MIGHTY MACK and the Stockholders on the other, contained herein or in any
certificates or other documents delivered prior to or at the Closing shall not
be deemed waived or otherwise affected by any investigation make by any party
hereto. Each and every such representation and warranty shall survive the
Closing hereof (even if the party had reason to know of any misrepresentation or
breach of warranty at the time of Closing) and shall continue in full force and
effect for a period of three years thereafter (subject to any statutes of
limitations).
16.02. Indemnification.
(a) Indemnification by the Stockholders. The stockholders shall indemnify and
hold harmless the Company in respect of any and all claims, losses, damages,
liabilities and expenses (including, without limitation, settlement
<PAGE> 18
costs and any legal, accounting or other expenses for investigating or defending
any actions or threatened actions) reasonably incurred by MIGHTY MACK in
connection with each and all of the following:
(i) any breach of any representation or warranty made by the Company and/or the
Stockholders in this agreement;
(ii) the breach of any covenant, agreement or obligation of the Company
contained in this agreement or any other instrument contemplated by this
Agreement; and
(iii) any misrepresentation contained in any statement or certificate furnished
by the Company pursuant to this Agreement.
(b) Indemnification by MIGHTY MACK and the Stockholders MIGHTY MACK and the
Stockholders shall indemnify and hold harmless the Company in respect of any and
all claims, losses, damages, liabilities and expenses (including, without
limitation, settlement costs and any legal and accounting or other expenses for
investigating or defending any actions or threatened actions) reasonably
incurred by the Company, in connection with each and all of the following:
(i) any breach of any representation or warranty made by MIGHTY MACK and/or the
Stockholders in this Agreement;
(ii) the breach of any covenant, agreement or obligation of MIGHTY MACK and/or
the Stockholders contained in this Agreement or any other instrument
contemplated by this Agreement: and
(iii) any misrepresentation contained in any statement or certificate furnished
by MIGHTY MACK and/or the stockholders pursuant to this Agreement.
(c) Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder, the party entitled to indemnification (the
"indemnified party") shall promptly notify the other party (the" indemnifying
party") of the claim and, when known, the facts constituting the basis for such
claim. In the event of any claim by a third party the notice to the indemnifying
party shall specify, if known, a reasonable estimate of the amount of the
liability arising therefrom. The indemnified party shall not settle or
compromise any claim by the third party without the prior written consent of the
indemnifying party (which shall not be unreasonably withheld) unless suit shall
have been instituted against it and the indemnifying party shall not have taken
control of such suit in accordance with subsection (d), below.
(d) Defense by Indemnifying Party In connection with any claim by a third party
giving rise to indemnity hereunder, the indemnifying party at its sole cost and
expense may, upon written notice to the indemnified party, assume the defense of
such claim if it acknowledges to the indemnified party in writing its
obligations to indemnify the indemnified party with respect to all elements of
such a claim. The indemnified party shall be entitled to participate in (but not
control) the defense of any such action, with its counsel and at its own
expense. If the indemnifying party does not assume the defense of any such claim
or litigation resulting therefrom, (a) the indemnified party may defend against
such claim ro litigation, in such manner as it may deem appropriate, including
settling such claim or litigation, after giving notice of the same to the
indemnifying party, on such terms as the indemnified party may deem appropriate,
and (b) the indemnifying party shall be entitled to participate in (but not
control) the defense of such action, with its counsel and at its own expense.
<PAGE> 19
(e) Claims Subject to this Article. All claims by any party for any losses,
damages, liabilities and expenses reasonably incurred by such party hereto shall
be subject to the provision of this Article XVI.
ARTICLE XVII
WAIVER, MODIFICATION ABANDONMENT
17.01. Waivers. The failure of Company or the Principals to comply with any of
their obligations, agreements or conditions as set forth herein may be waived
expressly in writing by MIGHTY MACK, by action of its Board of Directors without
the requirement of a vote of holders of MIGHTY MACK Securities. The failure of
MIGHTY MACK and/or the MIGHTY MACK Shareholders to comply with any of their
obligations, agreements or conditions as set forth herein may be waived
expressly in writing by Company, by action of its Board of Directors, without
the requirement of a vote of Company Shareholders.
17.02. Modification. This Agreement may be modified (only in writing) at any
time in any respect by the unanimous consent of all of the parties hereto.
17.03. Abandonment. The transactions contemplated by this Agreement may be
abandoned on or before the Closing Date, notwithstanding approval of this
Agreement by the shareholders of any party but only:
(a) By the mutual agreement of the respective Boards of Directors of Company and
MIGHTY MACK;
(b) By the Board of Directors of Company if any of the conditions provided in
Section or Section shall not have been satisfied, complied with or performed in
any material respect, and the Board of Directors of Company shall not have
waived in writing such failure of satisfaction, non-compliance or
non-performance; or
(a) By the Board of Directors of MIGHTY MACK, if any of the conditions provided
in Section or Section shall not have been satisfied, complied with or performed
in any material respect, and the Board of Directors of MIGHTY MACK shall not
have waived in writing such failure of satisfaction, non-compliance or
non-performance.
17.04. Effect of Abandonment. If the transactions contemplated by this Agreement
are abandoned as provided for in Section 17 hereof, (i) this agreement shall
forthwith become wholly void and shall have no effect without liability to any
party to this Agreement (except as heretofore indicated in paragraph (c) above)
or to the directors, officers, representatives and agents of any such parties
and (ii) each party shall pay its own fees and expenses incident to the
negotiation, preparation, and execution of this Agreement and the obtaining of
the necessary approvals thereof, including fees and expenses of its counsel,
accountants, and other experts.
ARTICLE XVIII
EXECUTION
18.01. Execution. This Agreement shall become binding legally effective when it
has been executed by Company, the Principals, MIGHTY MACK and MIGHTY MACK
Shareholders.
<PAGE> 20
ARTICLE XIX
MISCELLANEOUS.
19.01. Finders. Except as may be specifically set forth herein or in Exhibit
hereto, the parties acknowledge that there are no persons entitled to receive
any finder's fee, brokerage or similar commission or fee in connection with the
transactions contemplated by this Agreement and each party hereto indemnifies
and holds the other parties harmless against any claim for any such finders fee
based on the alleged retention of a finder.
19.02. Controlling Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York notwithstanding any New York
or other conflict-of-law provisions to the contrary.
19.03. Notices. All notices, requests, demands and other communications required
or permitted under this Agreement shall be in writing and shall be deemed to
have been duly given, made and, received when delivered against receipt or when
deposited in the United States mails, first class, postage prepaid, addressed as
set forth below:
(a) If to Company:
Oxford Financial Holdings, Ltd.
5225 Collins Avenue Suite 1520
Miami Beach, Florida 33140
Attn.: Irma Gonzalez
with a copy, given in the manner prescribed above to:
Joseph B. LaRocco, Esq.
49 Locust Avenue, Suite 107
New Canaan, CT 06840
(b) if to MIGHTY MACK and MIGHTY MACK Shareholders:
MIGHTY MACK USA, LTD.
P.O. Box 198
624 Highway 487 South
Una, NIS 39094
Attn: Mr. Martin Schneider, CFO
With a copy, given in the manner prescribed above to:
Michael M. Louvier, Esq.
P.O. Box 1375
Brandon, MS 39043
Any party may alter the address to which communications are to be sent by giving
written notice of such change of address by conformity with the provisions of
this paragraph of the giving of notice.
19.04. Binding Nature of Agreements, No Assignments. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and their
respective successors and assigns, except that no party may assign or transfer
its rights or obligations under this Agreement without the prior written consent
of the other parties hereto.
<PAGE> 21
19.05. Entire Agreement, Amendment. This Agreement and Addendums hereto contains
the entire understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. This agreement may not be modified or amended other
than by an agreement in writing.
19.06. Further Assurances. At any time, and from time to time, after the Closing
Date, each party will execute such additional instruments and take such actions
as may be reasonably requested by any other party to carry out the intended
purposes of this Agreement.
19-07. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
19.08. Stockholders undertaking those persons and/or firms who have executed
this Agreement (other that MIGHTY MACK and MIGHTY MACK Shareholders) hereby
irrevocably agree to vote all shares owned by them in Company in favor of the
proposed acquisition..
19.09. Publicity. Neither the Company nor MIGHTY MACK shall make issue, or cause
to be made or issued, any announcement or written statement concerning this
Agreement provision of this Agreement is so broad as to be unenforceable, such
provision shall be construed to be only so broad as is enforceable.
19.10 Incorporation of Schedules and Exhibits. The Schedules and Exhibits
identified in this Agreement are incorporated herein by reference and made a
part hereof.
19.11. Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption shall arise favoring or
disfavoring any party by virtue of the authorship of any of the deemed to also
to refer to all the rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including without
limitation. The parties intend that each representation, warranty or covenant
contained herein shall have independent significance. If any party has breached
any representation, warranty or covenant herein in any respect, the fact that
there exists another representation, warranty or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
OXFORD FINANCIAL HOLDINGS, LTD.
By /s/ Ross Peterson
--------------------------------
Ross Peterson, President
MIGHTY MACK USA, LTD.
By /s/ Robert C. Furrer
--------------------------------
Robert C. Furrer, Chairman & CEO
By /s/ Martin F. Schneider
--------------------------------
Martin F. Schneider, Vice Chairman & CFO
MIGHTY MACK SHAREHOLDERS:
By /s/ Richard C.
--------------------------------
Richard C.
By
--------------------------------
By /s/ Joseph M. Brown
--------------------------------
Joseph M. Brown
<PAGE> 1
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
MIGHTY MACK USA, LTD.
AND
PRODUCT SERVICES CO, INC. AND/OR
THEODORE DICKERSON
<PAGE> 2
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT ("Agreement") is made as of February
1, 1999, by and between Mighty Mack USA, Ltd., a Mississippi corporation
("Purchaser") and PRODUCT SERVICES CO., INC., a Mississippi corporation ("Seller
A") and Theodore DICKERSON, a natural person residing in the state of
Mississippi ("Seller B").
RECITALS
WHEREAS, Sellers A & B posses agricultural by-products and recycled
commercial liquids, treats them and packages them as various products for
various applications in absorbing and encapsulating oil spills, gasoline, other
oil based products, acids and certain other organic compounds (collectively, the
"Products");
WHEREAS, Buyer is in the business of marketing, both nationally and
internationally, having simultaneously herewith, among other things, acquired
the rights to the patent and trade names listed on the attached Exhibit A (the
Trade Names"); and
WHEREAS, Sellers A & B have products in inventory with a value of Three
Million Dollars ($3,000,000.00); and
WHEREAS, BUYER has contracts for the sales of Products and contemplates
future contracts for the sales of Products, and accordingly desires to purchase
substantially all of the Products in Sellers A & B's inventory.
NOW, THEREFORE, the parties hereby agree as follows:
(a) SALE AND PURCHASE OF PRODUCTS
1.1 QUANTITY AND PRICE
Seller's A & B agree to sell to Buyer, and Buyer agrees to purchase
from Seller A & B, the Products more specifically described and identified on
Exhibit B hereto "Inventory of Environmental Remediation Products Purchased," in
the quantities therein specified, and at the prices therein set forth, which
shall not EXCEED Three Million Dollars ($3,000,000.00) ("Price") plus the
Additional Purchase Price as described in Section 1.2.5
1.2 PAYMENT
1.2.1 CLOSING DATE FOR THE PAYMENT
Closing is the full payment of Three Million Dollars ($3,000,000.00)
for the Products as identified on Exhibit B. Closing shall take place within one
hundred and twenty days (120) from the signing of this "Agreement". This time is
necessary for the "Purchaser" to conduct a full and thorough "Due Diligence" on
all aspects that pertain to representations contained in this "Agreement".
<PAGE> 3
1.2.2 DOWN PAYMENT
One Hundred Thousand Dollars ($100,000.00) will be delivered to Sellers
A & B within fourteen (14) days of the signing of this "Agreement". The One
Hundred Thousand Dollars ($ 100,000.00) shall be applied to the Three Million
Dollars ($3,000,000.00) due at closing. The new balance due at "Closing" will be
Two Million Nine Hundred Thousand Dollars ($2,900,000.00). In addition, the
"Purchaser" will not ship "Product" until the One Hundred Thousand Dollar ($100
0 .00) down Payment is delivered to Sellers A & B.
1.2.3 EXCLUSIVITY
The "Purchaser" shall have full and complete exclusivity in the
distribution of "Product" during the Due Diligence" time period. In addition,
the "Purchaser" shall have the right to negotiate and consummate any contracts
it deems appropriate to the continuance and enhancement of its business
operation during the "Due Diligence' time period and forever thereafter.
1.2.4 SELLERS A & B'S RIGHT TO INSPECT RECORDS
Sellers A & B shall have, upon reasonable written notice to Purchaser,
the right to inspect at Purchaser's place of business or other place designated
by Purchaser and during Purchaser's normal business hours Purchaser's records
pertaining to its sales of Products as defined in this Agreement.
1.2.5 ADDITIONAL PURCHASE PRICE
As additional consideration for Sellers A & B's agreement to sell
Products to the Purchaser and defer payment of the Price (without interest),
Purchaser agrees to pay the following to Sellers A & B from and after the date
of the Closing. A "royalty" of three percent (3%) of the wholesale price of
Product per 1.5 cubic foot bag (or equivalent) up to a maximum of Three Million
Dollars ($3,000,000.00). Payments shall be made to Sellers A & B within thirty
(30) days of Purchaser's receipt of payment for the portions of the Products so
sold.
Completion of the Additional Purchase Price must be no later than
thirty-six (36) months calculated from the day of Closing. If there is still a
balance due Sellers A & B at such time, it shall be deemed due and payable
immediately
1.3 REAL ESTATE
1.3.1 MANUFACTURING & STORAGE PLANT WITH ACREAGE AT VALLEY PARK, MS
To be fully & accurately described in EXH03IT D
1.3.2 MANUFACTURING & STORAGE PLANT WITH ACREAGE AT FLORA, MS
be fully & accurately described in EXHIBIT E
1.4 PRICING OF PRODUCTS BY SELLERS A & B TO MIGHTY MACK USA, LTD. DURING "DUE
DILIGENCE" PERIOD
1.4.1 As set forth in EXHIBIT C
<PAGE> 4
1.5 TRANSFER OF TITLE AND RISK
1.5.1 TRANSFER OF TITLE
At such time as Purchaser receives the Products from Sellers A & B,
Sellers A & B shall transfer all title to and interest in the Products to
Purchaser, free and clear of all liens and encumbrances of any kind, to
Purchaser.
1.5.2 TRANSFER OF RISK
Upon receipt of the Products by the Purchaser, Purchaser assumes
ownership, insurance responsibility, shipping responsibilities, and all
liabilities relating to the Products.
2. WARRANTY OF TITLE
Sellers A & B represent to Purchaser and warrants that it (Sellers)
holds good and marketable title to the Property, free and clear of restrictions
on or conditions to transfer or assignment, and free and clear of liens,
pledges, charges or encumbrances and further represents and warrants that there
are no claims, suits, or other proceedings pending or, to the best knowledge of
the Sellers A & B, threatened against or affecting the Property.
3. TRADE NAMES AND MARKS
Purchaser may authorize, and it is contemplated hereby that purchaser
win authorize, Sellers A & B to use, in connection with the packaging and
preparation of the Products for receipt by the Purchaser, the Trade Names, and
marks that the Purchaser is acquiring simultaneously herewith or may hereafter
acquire. Except as so expressly authorized, Seller A & B agree not to sell any
Products substantially the same as any of the Products to any person or entity
of whom Sellers A & B have knowledge that such person or entity intends to use
such Products for the purposes of absorption or other environmental remediation,
and Sellers A & B agree not to use any of the Trade Names and marks in any way
without authorization from Purchaser. Without in any way limiting the foregoing,
Sellers A & B may sell other environmental Products to other persons or
entities.
4. DEFAULT; FORCE MAJEURE
4.1 DEFAULT
Upon any breach or default under this Agreement by either party, the
non-defaulting party may give written notice to the other party, calling
attention to the specific breach or default. Unless such breach or default is
cured by the defaulting party within thirty (30) days after such notice is given
by the other party, or if the breach or default is such that it cannot be cured
within thirty (30) days, then within the shortest reasonable time after such
notice, the non-defaulting party may terminate this Agreement and/or may seek
damages resulting from such breach or default.
4.2 FORCE MAJEURE
If an event of Force Majeure occurs, a party's obligations under this
Agreement affected by such event shall be suspended during the period of delay
thereby caused and shall be automatically extended, without penalty, for a
period equal to such suspension. This provision, however, shall not relieve
either party of the responsibility to carry out all such obligations as are
within the party's control notwithstanding the event of Force Majeure.
<PAGE> 5
5. MISCELLANEOUS
5.1 SUCCESSORS AND ASSIGNS
Except as otherwise noted herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
5.2 GOVERNING LAW
This Agreement shall be governed by and construed under the laws of the
State of Mississippi as applied to agreements among Mississippi residents
entered into and to be performed entirely within Mississippi.
5.3 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
5.4 TITLE AND SUBTITLES
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
5.5 NOTICES
All notices required or permitted shall be in writing and shall be
deemed effectively given: (i) upon personal delivery to the party to be
notified; (ii) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient; if not, then on the next business day; (iii)
fifteen (15) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (iv) five days after deposit with an
internationally recognized overnight courier, specifying a next day delivery,
with written verification of receipt. All communications shall be sent to
Purchaser and Buyers A & B at their addresses as set forth on the signature page
hereof or at such other addresses as they may designate by twenty (20) days
advance written notice to the other party hereto.
5.6 EXPENSES
Each party shall pay its own expenses incurred with respect to this
Agreement and the transactions contemplated hereby. If any action at law or in
equity is instituted to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled recover from the losing party all fees, costs
and expenses of such enforcement or interpretation, including without
limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of
appeals.
<PAGE> 6
5.7 AMENDMENTS AND WAIVERS
Any terms of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the affected party. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each successor and assign. No delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring.
5.8 SEVERABILITY
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
5.9 LEGAL REPRESENTATION
Sellers A & B and Purchaser hereby acknowledge that they have the right
and duty to have this Agreement examined by legal representation. Both parties
further agree to that the legal representation for both parties will work
together in upholding the intent of this Agreement. Both parties further agree
that this Agreement is binding on both parties as this Agreement stands.
5.10 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties and
no party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Seller A: PRODUCT SERVICES CO., INC.
A Mississippi Corporation
/s/ THEODORE DICKERSON
------------------------------------
THEODORE DICKERSON, President
Address: 266 Upton Drive
Jackson, MS 39209
Seller B: THEODORE DICKERSON (Individually)
A Mississippi Natural Person
/s/ THEODORE DICKERSON
------------------------------------
THEODORE DICKERSON (Individually)
Address: 266 Upton Drive
Jackson, MS 39209
Purchaser: MIGHTY MACK USA, LTD.
By: /s/ ROBERT C. FURRER
--------------------------------
ROBERT C. FURRER
CHAIRMAN - CEO
Address. PO BOX 198
624 Highway 487 South
Lena, MS 39094
<PAGE> 7
EXHIBIT A
TRADE NAMES & SECURITY INTERESTS IN
2. U.S. Patent No. 5,609,667, issued for twenty (20) years commencing 10/19/95,
and all improvements thereto, no matter by whom or assigned to whom.
3. Australia Patent No. 687186, issued for twenty years commencing 3/20/95, and
all improvements thereto, no matter by whom or assigned to whom.
3. U.S. Trademark Registration No. 1,889,514 for Oil Gator.
4. Unregistered Trademarks as follows:
(a) Oil Gator
(b) Floor Gator
(c) Acid Gator
(d) Cell-U-Sorb
(e) Gator Wash and Gator Wash HD
(f) Gator Trap
(g) Oil Gator Stage H
(h) Gator Booms and Socks
(i) Gator Pads
(j) Spill Kits
(k) Enretech
(l) All logos relating to all of the foregoing.
5. Any and all other property, manuals, information, diagrams, schematics,
drawings, names, marks, improvements and modifications necessary or useful to
the use of the above itemized listing of Intellectual Property.
6. All of the Investor's right, title and interest in and to that certain
Cottonseed Lint Contract by and between Sellers A & B and Pacific Crest
Environmental, Inc. as buyers thereto and Delta and Pine Land Company as
Seller hereto, dated July 30,1998,
7. All of Sellers A & B rights, title, and. interest in Pacific Crest
Environmental, Inc. a/k/a Product Services Marketing Group.
8. All of Sellers A & B rights, title, and interest in both the "marketing " and
"manufacturing" divisions of the Australian Operation designated to Purchaser
as Enretech-Australia.
<PAGE> 8
EXHIBIT A
COTTONSEED LINT CONTRACT
BETWEEN
DELTA AND PINE LAND COMPANY
AND
PRODUCT SERVICES MARKETING GROUP
AND PRODUCT SERVICES COMPANY, INC.
<PAGE> 9
<TABLE>
<S> <C> <C> <C> <C> <C>
Contract Start Date 9/1/98 9/1/99 9/1/2000 9/1/2001 9/1/2002
- --------------------------------------------------------------------------------------------------------------------------------
Effective Through 8/31/99 8/31/2000 8/31/2001 8/31/2002 8/31/2003
- --------------------------------------------------------------------------------------------------------------------------------
Quantity Total Lint Total Lint produced Total Lint Total Lint Total Lint produced
produced from from produced from produced from from
Hollandale, Ms and Hollandale, Ms and Hollandale, Ms and Hollandale, MS and Hollandale, MS and
Scott Scott, Scott Scott Scott
Ms MS and Chandler, AZ MS and Chandler, AZ MS and Chandler, AZ MS and Chandler, AZ
- --------------------------------------------------------------------------------------------------------------------------------
Unit 30lb. Bags of Lint
- --------------------------------------------------------------------------------------------------------------------------------
Unit Load 60 Bags per pallet
- --------------------------------------------------------------------------------------------------------------------------------
Bag Specification 3-ply, Polilok
(plastic)
Valve, 2 color,
Perforated
- --------------------------------------------------------------------------------------------------------------------------------
Label Designation 1) Oil Gator
2) RamSorb I
3) Enretech I
- --------------------------------------------------------------------------------------------------------------------------------
Pallet Specification #1 Used Grade or
New; 4
- --------------------------------------------------------------------------------------------------------------------------------
QA Specifications for pH>or = 4.5
Quality Product
- --------------------------------------------------------------------------------------------------------------------------------
QA Specifications for pH< 4.5
"Off Quality" Product
- --------------------------------------------------------------------------------------------------------------------------------
Price/Unit Meeting QA $3.50 per 30 lb.
Bag
- --------------------------------------------------------------------------------------------------------------------------------
Price/Unit Not Meeting $0.30 per 30 lb.
QA Bag
- --------------------------------------------------------------------------------------------------------------------------------
Terms 50% within 45 Days
of Product Receipt; Balance Due in 6 Equal Monthly
Payments; Any monthly payments that extend beyond the
annual contract period are due in full on August 31,
1999.
- --------------------------------------------------------------------------------------------------------------------------------
Freight F.O.B. D&PL Site
- --------------------------------------------------------------------------------------------------------------------------------
Price Includes Bag, Pallet,
Stectchwrap,
Slipsheet, Lint
neutralized with
Anhydrous Ammonia
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
EXHIBIT B
INVENTORY OF ENVIRONMENTAL REMEDIATION PRODUCTS PURCHASED
Products Description/Identification Quantity
- ----------------------------------------------------------------------
Inventory to be Examined by all Parties
<PAGE> 10
EXHIBIT C
Wholesale Prices to Mighty Mack USA, Ltd.
During "Due diligence Period
F.O.B. Plant
<TABLE>
<CAPTION>
Prod # Name Est. Size Packaging Price
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GS-10 Oil Gator 30# Bag 50/Pallet $ 7.00
- -----------------------------------------------------------------------------------------------------------------
GS-15 Acid Gator 25# Bag 50/pallet $ 7.00
- -----------------------------------------------------------------------------------------------------------------
GS-20 Floor Gator 30# Bag 50/Pallet $ 4.50
- -----------------------------------------------------------------------------------------------------------------
GS-25 Cell-U-Sorb 20# Bag 30/Pallet $ 7.50
- -----------------------------------------------------------------------------------------------------------------
GS-50 Oil Only Broom 5" x 10' 4/Bale $
- -----------------------------------------------------------------------------------------------------------------
GS-31 Oil Only Broom 8" x 10' 4/Bale $
- -----------------------------------------------------------------------------------------------------------------
GS-32 Overlap w/clips 5" x 10' 4/Bale $
- -----------------------------------------------------------------------------------------------------------------
GS-35 Pillows 18"x 18" 5/Bale $
- -----------------------------------------------------------------------------------------------------------------
OS-40 Universal Stock .4" x 4' 15/Bale $
- -----------------------------------------------------------------------------------------------------------------
GS-41 Oil Only Sock 4" x 4' 15/Bale $
- -----------------------------------------------------------------------------------------------------------------
GS-42 Oil Only Sock 4" x 18' 2/Bale $
- -----------------------------------------------------------------------------------------------------------------
GS-43 Cellulose (punch hole) Sock 4" x 4' 15/Bale $
- -----------------------------------------------------------------------------------------------------------------
GS-44 Oil Only Sock 2" x 5' 25/Bale $
- -----------------------------------------------------------------------------------------------------------------
OS-45 Biodegradable pads 18" x 18" 450/Bale $16.00
- -----------------------------------------------------------------------------------------------------------------
GS-46 1% Poly/ Biodegradable pads 18" x 18" 450/Bale $
- -----------------------------------------------------------------------------------------------------------------
GS-51 Gator Wash 55 Gal 4/Pallet $ 4.50
- -----------------------------------------------------------------------------------------------------------------
GS-52 Gator Wash 2.5 Gal 60/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-53 Gator Wash 1 Gal 4/Case 45 Cs/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-54 Gator Wash 1 Qrt. 10/case $
- -----------------------------------------------------------------------------------------------------------------
GS-61 Gator Wash HD 55 Gal 4/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-62 Gator Wash HD 2.5 Gal 60/Pallet- $
- -----------------------------------------------------------------------------------------------------------------
GS-63 Gator Wash BD 1Gal 4/Case 45 Cs/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-64 Gator Wash HD 1Qrt. 10/Case $
- -----------------------------------------------------------------------------------------------------------------
GS-71 Oil Gator Stage II 55 Gal 4/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-72 Oil Gator Stage II 2.5 Gal 60/pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-73 Oil Gator Stage II 1 Gal 4/Case 45 Cs/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-74 Oil Gator Stage II 1Qrt. 10/case $
- -----------------------------------------------------------------------------------------------------------------
GS-81 Gator Trap 55 Gal 4/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-82 Gator Trap 2.5 Gal 60/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-83 Gator Trap 1 G-al 4/Case 45 Cs/Pallet $
- -----------------------------------------------------------------------------------------------------------------
GS-84 Gator Trap 1 Qrt 10/Case $
- -----------------------------------------------------------------------------------------------------------------
GS-85 Polymer w/ CeUulose $
- -----------------------------------------------------------------------------------------------------------------
SP-10 Small Spill Kit 25/Pallet $
- -----------------------------------------------------------------------------------------------------------------
SP-20 Large Spill Kit 25/Pallet $
- -----------------------------------------------------------------------------------------------------------------
SP-55 55 Gal Spill Kit
- -----------------------------------------------------------------------------------------------------------------
SP-56 55 Gal Deluxe Spill Kit
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 11
EXHIBIT D
REAL ESTATE & BUILDING DESCRIPTION-VALLEY PARK, MS
Copies of description have been received and due diligence can no be performed
on title search.
<PAGE> 12
EXHIBIT E
REAL ESTATE & BUILDING DESCRIPTION - FLORA, MS
Facility to be leased by Mighty Mack from MultiGraphic for $1.00 per month with
the understanding that MultiGraphics will be sharing facility.
<PAGE> 13
ADDENDUM TO PURCHASE AND SALE AGREEMENT
THIS DAY, June 2, 1999, the undersigned parties to the Purchase and
Sale Agreement (Hereinafter "the Agreement") between Mighty Mack USA, LTD and
Product Services Co., Inc., and/or Theodore Dickerson (Hereinafter "the Parties)
agree as follows:
THAT this addendum conforms to the provisions of paragraph 5.7 of the
Agreement by and between the parties.
THAT as there remain details and specific performances that are
mandated by the Agreement that have yet to be satisfied, by no fault of the
Parties. Each party agrees that the Closing Date shall be extended until July
31, 1999, or at any such time before that date as is agreeable to the Parties.
THAT the Parties hereby agree to this extension of time and hereby
abandon and relinquish any right to abandon or terminate the transaction and/or
consider the other party in default of the terms of the Agreement for failure to
close prior to June 1, 1999.
THAT, to date, Product Services Co., Inc. and/or Theodore Dickerson has
received down payments in an amount totaling three hundred thousand dollars
($300,000.00). The balance to be paid to Product Services Co., Inc. and/or
Theodore Dickerson at closing is two million seven hundred thousand dollars
($2,700,000.00). This amount shall be paid on or before July 31, 1999.
THAT all other terms of the Agreement remain unchanged.
THAT neither party relinquishes any other rights under the Agreement.
AGREED TO AND ENTERED INTO on this the 2 day of June, 1999.
BY:
/s/ Theodore Dickerson /s/ Theodore Dickerson
- ----------------------------------- --------------------------------------
Theodore Dickerson Theodore Dickerson
President Individually, as a Natural Person
Product Services Co., Inc. And an Adult Resident Citizen of
the State of Mississippi
/s/ Robert C. Furrer
- -----------------------------------
Robert C. Furrer
Chairman/CEO
Mighty Mack USA, LTD.
<PAGE> 14
CL-20: NOTE PAYABLE CONFIRMATION (TO PARTIES OTHER
THAN FINANCIAL INSTITUTIONS)
[Client's Letterhead]
Our auditors, Michael B. Johnson & Co.,LLC, are conducting an audit of our
financial statements. Please confirm directly to them the following information
relating to our note payable to you at February 1, 1999:
Date of note: 2/1/99
Original amount of note: $3,000,000.00
Unpaid principal balance: $2,700,000.00
Maturity date: Interest rate:
-------------
Date to which interest has been paid:
-------------
Description of collateral or personal guarantees
(if none, please so indicate): all assets listed in
The Purchase and Sale Agreement.
Please indicate in the space provided below whether the above is in agreement
with your records. If it is not, please furnish our auditors any information you
may have that will help them reconcile the difference.
After signing and dating your reply, please mail it directly to Michael B.
Johnson & Co, LLC, 9175 Kenyon Ave. Ste. 100, Denver, Colorado 80237 in the
enclosed return envelope.
Very truly yours,
Robert C. Furrer, CEO
- -----------------------------
Martin F. Schneider, CFO
- -----------------------------
Mighty Mack USA, LTD
To: Michael B. Johnson & Co. LLC
The above information regarding the obligation from Mighty Mack USA, Inc. agrees
with our records at June 30, 1999 with the following exceptions (if any):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
If there are any direct or contingent liabilities to you not otherwise indicated
above, please list:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature:
----------------------
Title:
---------------------------
Date:
----------------------------
<PAGE> 15
INTELLECTUAL PROPERTY ASSETS
1. U.S. Patent No. 5,609667, issued for twenty (20) years commencing 10/19/95,
and all improvements thereto no matter by whom or assigned to whom.
2. Australia Patent No. 687186, issued for twenty years commencing 3/20/95,
and all Improvements thereto, no matter by whom or assigned to whom.
3. U.S. Trademark Registration No. 1,889,514 for Oil Gator.
4. Unregistered Trademarks as follows:
(a) Oil Gator
(b) Floor Gator
(c) Acid Gator
(d) Cell-U-Sorb
(e) Gator Wash and Gator Wash HD
(f) Gator Trap
(g) Oil Gator Stage II
(h) Gator Booms and Socks
(i) Gator Pads
(j) Spill Kits
(k) Enretech
(l) All logos relating to all of the foregoing.
5. Any and all other property, manuals, information, diagrams, schematics,
drawings, names, marks, improvements and modifications necessary or useful
to the use of the above itemized listing of Intellectual Property.
6. All of Products Services Co., Inc.'s right, title and interest in an to
that certain Cottonseed Lint Contract by and between Products Services Co.,
Inc., as Buyer thereto and Delta and Pine Land Company (NYSE-DLP) as Seller
thereto, dated July 30, 1998.
7. All of Products Services Co., Inc.'s right, title and interest in the
manufacturing division of Enretech-Australia.
<PAGE> 16
ADDENDUM TO PURCHASE AND SALE AGREEMENT
THIS DAY, August 3,1999, the undersigned parties to the Purchase and Sale
Agreement (Hereinafter "the Agreement") between Mighty Mack USA LTD and Product
Services Co., Inc., and/or Theodore Dickerson (Hereinafter "the parties) agree
as follows:
THAT this addendum conforms to the provisions of paragraph 5.7 of the Agreement
by and between the parties.
THAT as there remain details and specific performances that are mandated by the
Agreement that have yet to be satisfied, by no fault of the Parties. Each party
agrees that the Closing Date shall be extended until August 17, 1999, or at such
time before that date as is agreeable to the Parties.
THAT the Parties hereby agree to this extension of time and hereby abandon and
relinquish any right to abandon or terminate the transaction and/or consider the
other party in default of the terms of the Agreement for failure to close prior
to June 1, 1990.
THAT, to date, Product Services, Co., Inc. and/or Theodore Dickerson has
received down payments In an amount totaling three hundred thousand dollars
($300,000.00). The balance to be paid to Product Services. Co., Inc. and/or
Theodore Dickerson at closing In two million seven hundred thousand dollars
($2,700,000). This amount shall be paid on or before August 17, 1999.
THAT all other terms of the Agreement remain unchanged.
THAT neither party relinquishes any other rights under the Agreement.
AGREED To AND ENTERED INTO on this the 3 day of August, 1999.
BY:
/s/ Theodore Dickerson /s/ Theodore Dickerson
- --------------------------------- ---------------------------------
Theodore Dickerson Theodore Dickerson
President Individually, as a Natural Person
Product Services Co., Inc. And an Adult Resident Citizen of
The State of Mississippi
/s/ Martin F. Schneider
-----------------------------
Martin F. Schneider
Vice Chairman/CFO
Mighty Mack USA, LTD.
<PAGE> 17
ADDENDUM TO PURCHASE AND SALE AGREEMENT
This Addendum is entered into the 17th day of September, 1999, by the
undersigned parties to the Purchase and Sale Agreement (the "Agreement") between
Mighty Mack USA, Ltd. ("Mighty Mack") and Product Services Co., Inc. and/or
Theodore Dickerson ("Dickerson") (collectively referred to as the "Parties").
WHEREAS, the Parties entered into a Purchase and Sale Agreement dated February
1, 1999, pursuant to which Dickerson has received $300,000 to date: and
WHEREAS, in consideration of free trading shares of Mighty Mack stock to be
delivered to Dickerson pursuant to the terms of this addendum, and in
consideration of other agreements of the Parties set forth herein, the parties
agree as follows:
THAT, each party agrees that the Closing Date for payment of the balance of the
$3,000,000 shall be extended until December 10,1999, but only if, Mighty Mack is
able to cause free trading shares of its common stock to be delivered to
Dickerson's brokerage account at Equitrade for the sale of approximately
$100,000 of stock per week (cash in his account) for three weeks commencing
September 20, 1999 and ending October 8, 1999, for a total sale of $300,000.
Mighty Mack may also meet this obligation in cash, if its anticipated financing
with May Davis Group, Inc., or any other financing, is received.
THAT, on December 10, 1999, l00% of any balance of the original $3,000,000 shall
be paid to Dickerson in cash.
THAT, subject to the $300,000 (US Dollars) being received by Dickerson on or
before October 8, 1999 as set forth above, Dickerson hereby grants and conveys
to Mighty Mack the right to Manufacture and sell products, under the Mighty Mack
Brand, under U.S. Patent No. 5,609,667 and Australia Patent No. 687186 as well
as the right to use U.S. Trademark Registration No. L889,514 for Oil Gator and
the unregistered Trademarks for all the Gator products set forth in Exhibit A of
the Agreement, up to the December 10, 1999 deadline.
THAT, the Parties hereby agree to a Drop Dead Extension until December 10, 1999.
If the balance of the $3,000,000 has not been deposited into Dickerson's account
by the deadline, all monies paid to Dickerson prior to the December 10, 1999
deadline are non-refundable. In addition, All manufacturing and marketing rights
set forth above will be forfeited by Mighty Mack USA, Ltd.
THAT, all other terms of the Agreement remain unchanged. THAT, neither party
relinquishes any other rights under the Agreement. AGREED TO AND ENTERED INTO
this 17th day of September, 1999.
PRODUCT SERVICES CO., INC
By: /s/ Theodore Dickerson
--------------------------------
Theodore Dickerson
its President
By: /s/ Theodore Dickerson
--------------------------------
Theodore Dickerson
individually as a Natural Person
and an Adult Resident Citizen of the
State of Mississippi
MIGHTY MACK USA, LTD.
By: /s/ Robert C. Furrer
--------------------------------
Robert C. Furrer
its CEO
<PAGE> 18
ADDENDUM TO PURCHASE AND SALE AGREEMENT
This Addendum is entered into the 11th day of October, 1999, by the undersigned
parties to the Purchase and Sale Agreement (the "Agreement') between Mighty Mack
USA, Ltd. (Mighty Mack') and Product Services Co., Inc. and/or Theodore
Dickerson ("Dickerson") (collectively referred to as the "Parties").
WHEREAS, the Parties entered into a Purchase and Sale Agreement dated February
1, 1999, pursuant to which Dickerson has received $300,000 to date: and
WHEREAS, in consideration of the failure of Mighty Mack to meet the required
conditions of the previous addendum dated September 17, 1999, and in
consideration of other agreements of the Parties set forth herein, the parties
agree as follows:
THAT, each party agrees that the Closing Date for payment of the balance of the
$3,000,000 shall be extended until December 10, 1999, but only if, Mighty Mack
is able to meet the required payment schedule. The required payment schedule is
as follows: Mighty -Mack will deposit $500,000 USD into Dickerson's bank account
on or before October 15th at 5:00pm CST. Mighty Mack will deposit three payments
thereafter of $500,000 USD each into Dickerson's banking account On or before
5:00pm CST every other Friday until December the 10th. The three dates for the
deposits are October 29th, 1999, November 11th, 1999 and November 25th, 1999.
The (final) December 10th payment will be made for the remaining balance of the
original $3,000,000 and will be due and deposited into Dickerson"s account by
5:00pm CST on the 10th of December.
THAT, subject to each of the payment dates being executed and payment received
by Dickerson on or before each of the deadlines as set forth above, Dickerson
hereby grants and conveys to Mighty Mack the right to Manufacture and sell
products, under the Mighty Mack Brand, under U.S. Patent No. 5,1609,667 and
Australia Patent No. 687186 as well as the right to use U.S. Trademark
Registration No. 1,889,514 for Oil Gator and the unregistered Trademarks for all
the Gator products set forth in Exhibit A of the Agreement, up to the December
10, 1999 deadline.
THAT, the Parties hereby agree to a Drop Dead Extension for each of the
above-mentioned dates until December 10, 1999. If any of the payments in this
schedule are not made to Dickerson within the specified dates, all monies paid
to Dickerson prior or to the December 10, 1999 deadline are non-refundable. In
addition, AE manufacturing and marketing rights set forth above will be
forfeited by Mighty Mack USA, Ltd.
THAT, all other terms of the Agreement remain unchanged. THAT, neither party
relinquishes any other rights under the Agreement. AGREED TO AND ENTERED INTO
this 11th day of October, 1999.
PRODUCT SERVICES CO., INC
Theodore Dickerson its President
By: /s/ Theodore Dickerson
--------------------------------
individually as a Natural Person
and an Adult Resident Citizen of the
State of Mississippi
MIGHTY MACK USA, LTD.
By: /s/ Robert C. Furrer
--------------------------------
Robert C. Furrer
its CEO
<PAGE> 19
ADDENDUM TO PURCHASE AND SALE AGREEMENT
This Addendum is entered into the 1st day of December, 1999, by the undersigned
parties to the Purchase and Sale Agreement (the "Agreement") between Mighty Mack
USA, Ltd. ("Mighty Mack") and Product Services Co., Inc. and/or Theodore
Dickerson ("Dickerson") (collectively referred to as the "Parties").
WHEREAS, The Parties entered into a Purchase and Sale Agreement dated February
1, 1999. Pursuant to which Dickerson has received $300,000.00 to date: and
WHEREAS, in consideration of the failure of Mighty Mack to meet the required
conditions of the previous addendum dated November 10, 1999, and in
consideration of other agreements of the Parties set forth herein, the Parties
agree as follows:
THAT, each party agrees that the Closing Date for payment of the balance of the
$3,000,000 shall be extended until March 1, 2000. The Parties grant this
extension so they may explore the feasibility of merging Product Services Co.,
Inc. with "Mighty Mack" or combing to do a Joint Venture together.
Dickerson hereby grants and conveys to Mighty Mack the right to Manufacture and
sell products, under the Mighty Mack Brand, under U.S. Patent No. 5,609,667 and
Australia Patent No. 687186 as well as the right to use U. S. Trademark
Registration No. 1,889,514 for Oil Gator and the unregistered Trademarks for all
the Gator Products set forth in Exhibit A of the Sale Purchase Agreement up to
the March 1, 2000 deadline.
THAT, the Parties hereby agree to an extension of March 1, 2000 for the balance
of the $3,000,000 to be paid or an acceptable acquisition program is set forth
by the Parties. If neither of these conditions is met by March 1, 2000, all
Moines paid to Dickerson prior to March 1, 2000 deadline are non-refundable. In
addition, Mighty Mack USA, LTD shall forfeit all manufacturing and marketing
rights set forth above.
THAT all other terms of the Agreement remain unchanged.
THAT, neither party relinquishes any other rights under this Agreement.
AGREED TO AND ENTERED INTO this 1st day of December, 1999
PRODUCT SERVICES CO., INC
By: /s/ Theodore Dickerson
--------------------------------
Theodore Dickerson
its President
By: /s/ Theodore Dickerson
--------------------------------
Theodore Dickerson
individually as a Natural Person
and an Adult Resident Citizen of the
State of Mississippi
MIGHTY MACK USA, LTD.
By: /s/ Robert C. Furrer
--------------------------------
Robert C. Furrer
its CEO
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
FINANCIALS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1,792
<ALLOWANCES> 0
<INVENTORY> 4,662,000
<CURRENT-ASSETS> 4,664,466
<PP&E> 1,779,713
<DEPRECIATION> (33,916)
<TOTAL-ASSETS> 6,410,263
<CURRENT-LIABILITIES> 6,839,528
<BONDS> 0
0
0
<COMMON> 507,015
<OTHER-SE> (936,280)
<TOTAL-LIABILITY-AND-EQUITY> 6,410,263
<SALES> 12,825
<TOTAL-REVENUES> 12,825
<CGS> (3,925)
<TOTAL-COSTS> (3,925)
<OTHER-EXPENSES> 679,638
<LOSS-PROVISION> (670,738)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (670,738)
<EPS-BASIC> (.03)
<EPS-DILUTED> 0
</TABLE>
