United States 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 12(g) of the Securities Exchange Act of 1934
Worldwide E Commerce, Inc.
(formerly Worldwide Energy, Inc.)
---------------------------------------------
(Name of Small Business Issuer in its Charter)
OKLAHOMA 75-5555555
-------------------------- ----------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3168 Bel Air Drive
Las Vegas, NV 89109
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(Address of Principal Executive Offices)
Issuer's Telephone Number, including area code: (702) 792-8404
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Securities Registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
NONE NONE
---------------- -----------------------------
Securities Registered under Section 12(g) of the Exchange Act:
$0.001 Par Value Common Voting Stock
---------------------------------------
(Title of Class)
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Table of Contents
PART I
ITEM 1. DESCRIPTION OF BUSINESS
ITEM 2. PLAN OF OPERATION
ITEM 3. DESCRIPTION OF PROPERTY
ITEM 4. SECURITY OWNERSHIP OF BENEFICIAL OWNERS
ITEM 5. DIRECTORS, EXECUTIVE, OFFICERS, PROMOTERS AND CONTROL PERSONS
ITEM 6. EXECUTIVE COMPENSATION
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 8. DESCRIPTION OF SECURITIES
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND DIVIDENDS OF WORLDWIDE E
COMMERCE, INC. AND OTHER SHAREHOLDER MATTERS
ITEM 2. LEGAL PROCEEDINGS
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 4. RECENT SALE OF UNREGISTERED SECURITIES
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
PART F/S
PART III
ITEM 1. INDEX TO EXHIBITS
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Overview
- ---------
During the past eighteen months, Worldwide E Commerce, Inc. (formerly "World
Wide Energy, Inc."), an Oklahoma corporation ("the Company"), has redirected
its business focus from holding leases for the mining of low-sulfur coal from
proven reserves located in Wayne County, Utah to becoming a holding company
for Internet and e-commerce subsidiaries. The Company's primary asset is its
rights in and to three (3) leases from the State of Utah's Trust Lands
Administration (hereinafter the Company's Coal Leases") to extract coal from
proven reserves encompassed by the Company's Coal Leases.
On September 8, 1999, the Company entered into an Asset Purchase Agreement
(hereinafter "the World Link Asset Purchase Agreement") with World Link
Capital, L.L.C., a Nevada limited liability company (hereinafter "World
Link"). Under the World Link Asset Purchase Agreement, the Company will
convey to World Link its rights in and to the Company's Coal Leases. The
transactions contemplated by the World Link Asset Purchase Agreement are
sometimes hereinafter referred to as the "World Link Asset Purchase". The
World Link Asset Purchase Agreement was an arms-length transaction; World Link
is not in any way related to or affiliated with the Company or any of the
Company's affiliates. To the best of the Company's knowledge and information,
World Link's members or managers are not shareholders of the Company. None of
the Company's affiliates are directors or principals of World Link.
The World Link Asset Purchase Agreement provides that World Link will pay the
Company $200 million, less commission and fees (which total approximately $30
million), for the rights in and to the identified leases and contract. The
World Link Asset Purchase has not yet closed. The primary reason it has not
closed is that World Link's lender has asked to have the down payment amount
reduced so that World Link will have more capital available for operations.
The Company's management believes that the World Link Asset Purchase will
close before June 30, 2000. In the alternative, the Company has had several
inquiries from several additional third parties interested in acquiring the
Company's Coal Leases on terms attractive to the Company.
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The Company's management has determined that upon closing the World Link Asset
Purchase, it is in the Company's best interest to no longer operate in the
coal industry in any manner, and to apply the proceeds from the World Link
Asset Purchase to make equity investments in entities selling products and/or
services via the Internet. The Company's management intends to achieve this
end by (i) establishing wholly or majority-owned subsidiaries offering
services and/or products via the Internet or "e-commerce"; and/or (ii)
acquiring equity positions in other entities providing products and/or
services via the Internet or "e-commerce." Under either scenario, the
Company's cash reserves from the World Link Asset Purchase would be applied to
one or more of the following:(i)developing and/or acquiring the rights or
licenses to products and/or services for Internet delivery; (ii) developing or
acquiring the servers, hardware, networks and other technology necessary to
make the products and/or services deliverable over the Internet; (iii)
marketing the selected products and/or services to the general public; (iv)
hiring experienced management and other key personnel; and (v) providing seed
money to defray general operating costs until such time as the entities are
independently viable.
History of the Company
- ----------------------
The Company was originally incorporated under the Laws of the State of
Oklahoma as "River Rouge Corporation" on April 7, 1987. The Company
remained dormant until 1996. On April 11, 1996, River Rouge Corporation
obtained an Amended and Restated Certificate of Incorporation from the State
of Oklahoma, changing the Company's name to "C/Grip: Inc.".
From April 11, 1996 through June 24, 1998, the Company was engaged in
developing a business locating lost or missing children as well as providing
safeguards against kidnapping. On June 24, 1998 the board of directors of the
Company authorized the creation of a new Oklahoma Corporation, Advanced
Concept Technologies, Inc. ("ACT") that was not a subsidiary of or associated
in any way with the Company. The Company then transferred all of its assets
relating to locating lost or missing children to ACT in exchange for all of
ACT's outstanding shares of capital stock. In addition, ACT assumed sole
responsibility for all of the Company's debts and liabilities relating to the
business of locating lost or missing children. The Company then distributed
all of
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ACT's capital stock to its shareholders in a spin-off distribution.
On September 15, 1998 the Company and Green River Coal, Inc., a Utah
Corporation (hereinafter "Green River Coal"), entered into a Tax Free Exchange
and Reorganization (hereinafter "the Green River Reorganization"). Pursuant
to the Green River Reorganization, the Company exchanged 13,216,448 of its
common shares for 100,000 outstanding shares of Green River Coal's common
stock, which constituted one hundred percent (100%) of Green River Coal's
outstanding shares of common stock. The shares issued in the Green River
Reorganization were exempt from registration with the Securities and Exchange
Commission ("the SEC"). See, Part II, Item 4 ("Recent Sales of Unregistered
Securities"). Green River Coal owned all of the assets that were later
conveyed under the World Link Asset Purchase Agreement. This transaction is
accounted for as a reverse acquisition.
Concurrent with the Green River Reorganization, the Company changed its name
from "C/Grip: Inc." to "World Wide Energy, Inc." On December 16, 1999, the
Company obtained an Amended and Restated Certificate of Incorporation from the
State of Oklahoma, changing the Company's name to "Worldwide E Commerce, Inc."
The World Link Asset Purchase Agreement
- ---------------------------------------
On September 8, 1999, the Company entered into the World Link Asset Purchase
Agreement, which calls for the Company to transfer its coal leases to World
Link for $200 million, less commission and fees, to net $169,925,000. Terms
of payment under the World Link Asset Purchase Agreement call for the Company
to receive $100,000,000 as a down payment and the remaining $100,000,000 to
be paid $75,000,000 one year from the date of the original down payment, and
$25,000,000 to be paid two years from the date of the original down payment.
World-Link is a Nevada limited liability company and is in Joint Venture with
Barnett Group Holdings, LLC, Golden Burro Minerals, CA. (located in Falcon
State, Venezuela), TransMar Coal, Inc. South American Coal Sales and Venezuela
Coal Terminal in Venezuela. World Link holds
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contracts for shipping coal to the Pacific Rim. World Link intents for the
Utah low sulfur coal to be used to blend with coal World Link is mining in
Venezuela in order to meet the Clean Air Act requirements. World Link's
Managing Director, Mr. H. Van Hoose, has over 30 years of experience managing
coal businesses. Pacific International Capital Corporation, a well-known
international lender, has approved a loan to World Link for the purchase of
the assets identified in the World Link Asset Purchase Agreement.
The World Link Asset Purchase has not yet closed. The primary reason it has
not closed is that World Link's lender has asked to have the down payment
amount reduced so that World Link will have more capital available for
operations. The Company's management believes that the World Link Asset
Purchase will close before June 30, 2000. In the alternative, the Company has
had several inquiries from several additional third parties interested in
acquiring the Company's Coal Leases on terms attractive to the Company.
The transactions contemplated by the World Link Asset Purchase Agreement are
sometimes hereinafter referred to as the "World Link Asset Purchase". The
World Link Asset Purchase Agreement was an arms-length transaction; World Link
is not in any way related to or affiliated with the Company or any of the
Company's affiliates. To the best of the Company's knowledge and information,
World Link's members or managers are not shareholders of the Company. None of
the Company's affiliates are directors or principals of World Link.
Green River Coal, Inc., a Utah corporation incorporated on October 1, 1990,
has owned the following coal leases since October 1, 1990: 6 sections totaling
3,712.72 acres of Emery Seam coal and 3,712.72 acres of Ferron Seam coal, both
located in or near the recognized Henry Mountain coalfield in Wayne County,
Utah.
Mr. Winfield Moon, the former Chairman of the Company, acquired the leases in
1988 for approximately $1.6 million. In 1990 he transferred the leases into
Green River Coal, Inc., of which his wife, Theolene D. Moon, was the sole
shareholder. Ms. Moon is the President of the Company. In 1988 when Mr. Moon
acquired the leases, the leases had no proven reserves. As evidenced by 240
core holes drilled and proven, it is now known that these properties contain
47,105,000 tons of low-sulfur coal
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reserves. These proven coal reserves were appraised to have a market value
of $174,288,000 as reported in an appraisal report on Green River Coal, Inc.,
prepared by Guy L. Wiggs, a registered professional engineer, dated February
28, 1996. Mr. Wiggs's report is consistent with the Utah Geological and
Mineralogical Survey, affiliated with the College of Mines and Mineral
Industries at the University of Utah, Salt Lake City, Utah.
The coal reserves were appraised again in March 2000 by John S. Berge of the
American Association of Petroleum Geologists. In that appraisal, dated March
11, 2000, the proven coal reserves were appraised to have a market value of
$266,863,000.
Effective in January 1995, the Clean Air Act imposed a maximum sulfur content
of 1.2% on all coal used in the United States. Many domestic utility companies
with coal-fired plants are burning coal gleaned from the Eastern United States
with a sulfur content of between 4% to 6%. The sulfur content of the Green
River coal is below 1%. Under the Clean Air Act, low sulfur coal can be
blended with high sulfur coal and thus meet the emission requirements of the
Clean Air Act. The lower sulfur content provisions of the Clean Air Act
greatly enhance the value of the Green River Coal leases.
Internet Strategy
- -----------------
The Company's new business focus calls for the Company to identify emerging
companies and/or technologies that meet its investment criteria and use the
proceeds from the World Link Asset Purchase to invest in these companies. The
target companies will be evaluated based on the type of technology they offer,
the potential market for the technology, the feasibility of making its goods
and/or services accessible to the general public via the Internet, financial
history and overall viability, its business plan (short and long range),
trends in the relevant market, the management team's experience and overall
acumen, and the company's overall operations. If the Company's goals and
interests are mutually compatible with the target company's, the Company will,
in exchange for an equity position in the target company, provide funding to
assist the target company in its operations. The Company would likewise
anticipate assisting the target company with marketing, management, and
research and development. The Company may also purchase or otherwise acquire
on its own accord the rights to technology that is compatible with Internet
delivery to the general public.
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The Company's management will classify all target companies as either "Level
One" or "Level Two." Level One companies are those that generate real pre-tax
profits, have a minimum of $2 million in annual revenues, and need an infusion
of capital and/or management to reach a higher level of revenues and profits.
Level Two companies are those that have sales of at least $1 million annually
but are not quite running at a profit, but could become profitable with an
infusion of capital and/or management.
The Company's financial and technical management team will determine the
target company's needs. It is anticipated that no entity will receive more
than approximately one third of its allocated investment funds until it meets
certain performance gates established pursuant to its written agreement with
the Company. Upon each infusion of subsequent capital, new guidelines and
goals will be established.
The Company has also established an investment methodology that the Company's
management believes will greatly enhance its ability to identify desirable
target companies. This methodology is a simple but very effective money
management program. Level One enterprises should offer a reasonable return
with relatively small risk. Accordingly, most of the Company's investment
capital will be reserved for these companies. Level Two enterprises have a
higher level of risk but also offer a commensurately higher prospective
return; thus, they will receive the second highest pool of capital.
Additionally, no more than ten percent of the total finds allocated to either
Level One or Level Two enterprises will be invested in any single enterprise.
At the discretion of the Company's management, the Company may also invest in
public companies or other companies.
The Company's management believes that there exist very few holding companies
specializing in Internet/technology enterprises that have the internal
capability to evaluate the target company's technology/service, provide
management talent, and assist in marketing and financing the target company's
efforts.
On December 13, 1999 the Company entered into a binding letter of intent with
Usetheexpert.com. On December 22, 1999, the Company rescinded the letter of
intent when Usetheexpert.com failed to provide the financial documentation
necessary to finalize the transaction. This rescission was amicable and both
parties executed mutual releases.
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Risk Factors
- -------------
Lack of Operating History
-------------------------
The Company has no history of operations, making it difficult to assess the
Company's future operating performance or future financial results or
condition.
Unpredictability of Future Revenues
-----------------------------------
The Company expects to derive its revenues from the sale of advertising on Web
sites controlled by the Company and from commissions on electronic commerce
transactions between the Company's viewers and its advertisers. The Company
does not believe that it will be able to attract advertisers to its Web sites
unless it can develop and maintain a viewer base of sufficient size and
economic means to offer prospective advertisers meaningful exposure of their
products and/or services. The Company cannot ensure investors that viewers
generally will be receptive to its proposed programming content, in which
event the Company's future revenue generation capabilities will be materially
impaired.
Unpredictability of the Internet and Web Traffic
-------------------------------------------------
The Company's success will depend on market acceptance of the Company's Web
sites. Without viewers accepting the sites' themes and the content, the
Company will be unable to attract sufficient visitors to sustain
profitability. Internet advertising is a new and rapidly evolving industry
whose demand and market acceptance has yet come to full fruition. The
Company's ability to generate revenue will depend on a number of factors,
including pricing or advertising of other Web sites, the amount of traffic on
the Company's Web sites, the Company's ability to demonstrate user demographic
characteristics that are attractive to advertisers, and establishing desirable
advertising agency relationships.
Accessibility to Web Sites
--------------------------
The Company will rely on telecommunication carriers to provide accessibility
to the Company's Web sites over the Internet. Since the Company will not own
and/or control accessibility, it will have to compete with others for
information and data transmission.
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It is possible that telecommunication carriers will not be able to keep up
with the demand for Internet access. Further, it is possible that
telecommunication carriers can experience equipment and technology failures
resulting in the slowly down or interruption of service in whole or in part.
The Company will advertise its Home Page Portal using "banner ads" to attract
new visitors. It will be necessary for the Company to place these banner ads
in sufficient number and duration to be successful. In addition, the Company's
banner ads must be sufficiently attractive and unique in form and content to
attract visitors' attention. Further, the banner ads will be dependent on the
quality and volume of visitors to third party web sites that the Company will
not control. The Company's projected revenues are based on advertising and
electronic commerce, and therefore assume sufficient visitor traffic to the
Home Page Portal and related Web Sites.
Key Personnel
-------------
The Company's success depends on its key personnel and their staying with the
Company or, in the event they do not, retaining replacement personnel with the
commensurate experience and acumen. The explosive growth in the Internet has
created a huge demand on the talent and time of knowledgeable Internet
programmers, web page designers, graphic artists, and other professionals
integral to building commercial web sites. The Company will be competing with
many other web site providers for desirable personnel.
Dependence on Additional Qualified Personnel
--------------------------------------------
The Company is dependent on its ability to attract and retain qualified
personnel in product development, sales, accounting and management. Although
at present there is no shortage of qualified personnel, at times, there is
intense competition for qualified personnel in the areas of the Company's
business. While the Company will endeavor to offer such key personnel as
attractive a working environment and compensation as reasonable, it cannot
guarantee success in recruiting and retaining such personnel. Such failure
could have a materially adverse effect on the Company.
Competition
-----------
There are numerous Web sites already established on the Internet, many of
which are highly capitalized by large public companies or
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liquid privately held companies. The Company will compete with many of these
web sites for viewers and advertisers. The Company will have to establish its
ability to attract sufficient viewers to entice advertisers to pay for time
and space on its Home Page Portal and related Web sites.
International
-------------
The Company intends to establish operations and links with other Web sites
that are located in foreign countries. The laws of these foreign countries may
regulate directly or indirectly the international operations of the Company's
Web sites. The international regulation, laws, taxation and other issues
relating to the Internet are in a rapid state of evolution. The Company will
be required to operate within these evolving and undetermined parameters.
Uncertainty Over the Company's Ability to Guard its Proprietary Rights
----------------------------------------------------------------------
Although the creative imagery and content of the Company's Web sites will be
copyrighted and protected to the fullest extent of federal law governing
trademarks, there can be no assurance that others will not infringe on those
rights. The Company is newly formed with limited resources and, therefore, may
not be able to adequately protect its intellectual property rights from
commercial piracy, both in the United States and internationally.
Potential Legal Liabilities
---------------------------
The regulation of the Internet is in a state of evolution. It is possible that
the Company could be held responsible for its content as a "publisher" in the
event of injury or loss experienced by a viewer. The Company will implement
compliance measures to minimize this derivative liability, but cannot ensure
that events occasioning liability will not arise. The Company is currently
self-insured, but intends on maintaining an all-risk insurance policy to the
extent that said policy reasonable protects it from such legal liability.
Control by Officers and Directors
---------------------------------
As of April 25, 2000, approximately 87.7% of the Company's outstanding shares
of common stock were owned by officers and directors of the Company. The
Company's Certificate of Incorporation does not provide for cumulative voting
and, as a result, management is able to control or exert significant
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influence over the outcome of fundamental corporate transactions requiring
stockholder approval, including, but not limited to, mergers and sales of
assets, the election of the Company's Board of Directors, and the general
control of the Company. Such concentration of ownership could also have the
effect of delaying, deterring, or preventing a change in control of the
Company that might otherwise be beneficial to stockholders.
Technological Changes
---------------------
The Internet is a highly technical field with numerous and frequent changes
taking place at a rapid pace. The Company is attempting to keep in step with
such changes by reviewing new technologies, software, and hardware
configurations. However, the Company's business may be adversely affected by
its competitors' development of enhanced (e.g., faster delivery, superior
video resolution or sound quality). The Company may lack sufficient financial
resources to undertake the revamping of its existing technology and equipment
to stay in competition with others.
Ability to Manage Growth
------------------------
The Company believes that continued growth may strain its management,
operations, sales and administrative personnel. In order to serve the needs of
its existing and future customers, the Company has increased, and intends to
continue to increase, its workforce, which requires the Company to attract,
train, motivate, manage and retain qualified employees. The Company's ability
to manage further growth depends in part on its ability to expand its
operating, management, informational systems and distribution capacity, which
may significantly increase its future operating expenses. No assurance can be
given that the Company's business will grow in the future or that the Company
will be able to effectively manage such growth. The Company's inability to
manage its growth successfully could have a materially adverse effect on the
Company.
Unspecified Acquisitions
------------------------
The Company may acquire other companies and businesses and may use its stock
as consideration for those acquisitions. Such acquisitions may involve
speculative and risky undertakings. There are presently no plans, negotiations
or understandings regarding acquisitions of other companies, businesses or
assets, nor are any such discussions probable in the immediate future. In the
event that the Company acquires other companies or businesses, the Company may
need additional financing. Such need may require the
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Company to seek capital through the sale of additional shares of its common or
preferred stock. Such sales, if consummated, may be at prices below the then
current book value of the Company, thereby diluting the equity of the then
common or preferred stockholders.
Number of Employees
---------------------
The Company currently has no employees other than its executive officers, who
serve without salary and/or other remuneration. As the Company implements its
business strategy, it intends to hire a Chief Operating Officer, Chief
Financial Officer, and Chief Technology Officer. The terms of employment,
salary, benefits, and share bonus participation programs are to be negotiated
on a case-by-case basis.
ITEM 2. PLAN OF OPERATION
On September 8, 1999, the Company entered into the World Link Asset Purchase
Agreement, which calls for the Company to transfer its coal leases to World
Link for $200 million less commission and fees to net $169,925,000. Terms of
payment under the World Link Asset Purchase Agreement call for the Company to
receive $100,000,000 as a down payment and the remaining $100,000,000 to be
paid $75,000,000 one year from the date of the original down payment, and
$25,000,000 to be paid two years from the date of the original down payment.
This transaction has not yet closed.
Upon closing the World Link Asset Purchase, the Company will utilize the
proceeds generated thereby to identify emerging companies and/or technology
that meet its investment criteria and invest in these companies. The target
companies will be evaluated based on the type of technology they offer, the
potential market for the technology, the feasibility of making its goods
and/or services accessible to the general public via the Internet, financial
history and overall viability, its business plan (short and long range),
trends in the relevant market, the management team's experience and overall
acumen, and the company's overall operations. If the Company's goals and
interests are mutually compatible with the target company's, the Company will,
in exchange for an equity position in the target company, provide funding to
assist the target company in its operations. The Company would likewise
anticipate assisting the target company with marketing, management, and
research and development.
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The Company may also purchase or otherwise acquire on its own accord the
rights to technology that is compatible with Internet delivery to the general
public.
Liquidity
- ---------
The Company currently has no income or expense. Funding of its business
operations will come from the sale of coal assets as described herein.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company occupies at no cost approximately 1,000 square feet consisting of
executive space at the same address of its principal executive office. This
location is the primary residence of the Company's Chairman.
Mining Properties
-----------------
The Company holds coal leases ML 43952, ML 43955 and ML 43963 from the State
of Utah School and Institutional Trust Lands Administration. The coal mining
leases consist of a total of 3,717.72 acres of low-sulfur coal in Wayne
County, Utah. Such leases are renewable annually so long as the Company
diligently engages in activity to bring the coal into commercial production.
The lease renewal rates consist of an annual royalty of $3.00 per acre, plus
an annual rent of $1.00 per acre. The next reassessment date for the leases
is May 31, 2008. Lease expenses for 1999 were $14,871.00.
The Company's mining operations are in the developmental stage and are under
contract for sale to World Link Capital, L.L.C. as described in Part 1, Item 1
("World Link Asset Purchase Agreement").
The Company's Coal Leases are located in or near the Henry Mountain coalfield
in Wayne County, Utah. The property covered under the Company's leases has
never been mined. All mining operations at the property would be underground,
not open-pit.
The properties contain a total of 47,105,000 tons of low-sulfur coal reserves,
drilled and proven by Mr. Guy L. Wiggs, a registered professional engineer.
As of February 28, 1996, the properties' market value was $174,288,000. Mr.
Wiggs is an independent third party, not affiliated with the Company or any of
its affiliates. As of March 11, 2000 the properties' market value
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was $266,863,000, as appraised by Mr. John S. Berge of the American
Association of Petroleum Geologists. Mr. Berge is an independent third party,
not affiliated with the Company or any of the Company's affiliates.
Since January 1995, the "Clean Air Act" has required all end-users of coal in
the United States to use only coal with a sulfur content lower than 1.2%. The
sulfur content of the coalfields covered under the Company's leases is below
1.0%. The establishment of proven reserves, and the low sulfur content of
those reserves, are the two factors most responsible for the dramatic increase
in the market value of the coal properties since they were acquired in 1988.
ITEM 4. SECURITY OWNERSHIP OF BENEFICIAL OWNERS.
The following table sets forth, as of April 25, 2000, the beneficial ownership
of the Company's outstanding common stock of; (i) each person or group known
by the Company to own beneficially more than 5% of the Company's outstanding
common stock; (ii) each of the Company's executive officers; (iii) each of the
Company's directors; and, (iv) all executive officers and directors as a
group. Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. Except as indicated by footnote, the persons named in the table
below have sole voting power and investment power with respect to all shares
of common stock shown as beneficially owned by them. The percentage of
beneficial ownership is based on 15,058,031 shares of common stock outstanding
as of this date.
CERTAIN BENEFICIAL OWNERS
Common Stock Beneficially Owned
- --------------------------------
Name and Address of Number of Shares Percentage
Beneficial Owners of of Common Stock of Class
Common Stock
- ----------------- ------------ -------
Sunstar Holdings 12,216,448* 81.0%
Theolene D. Moon
3168 Bel Air Drive
Las Vegas, NV
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Wall Street Trading Group 1,000,000** 6.6%
465 California Street
Suite 433
San Francisco, CA 94104
Amber Holdings, Inc. 763,248*** 5.1%
1404 Michell Road
Cullman, AL 35055
Notes:
* Sunstar Holdings, Inc. (a Nevada corporation) is owned 100% by Theolene
D. Moon, the Company's Chairman and President.
** The beneficial owner of Wall Street Trading Group is Bruce Dorfman.
*** The beneficial owners of Amber Holdings, Inc. (a Nevada Corporation) are
Debbie Shear, 901 Rosemont, N.W., Cullman, AL and Kathy Davis, 211 3rd
Avenue, N.W., Cullman, AL. Ms. Shear and Ms. Davis are the adult
daughters of Theolene D. Moon and Winfield Moon.
Security Ownership of Management
- --------------------------------
The following table sets forth the share holdings of the Company's directors
and executive officers as of the date hereof:
Number of Shares Percentage
Name and Address Beneficially Owned of Class
- ---------------- ------------------ -----------
Theolene D. Moon 12,216,448* 81.0%
3168 Bel Air Drive
Las Vegas, NV 89109
Fred Young 2,000 0.01%
3168 Bel Air Drive
Las Vegas, NV 89109
All Executive Officers 12,218,448 81.0%
and Directors as a Group
* Beneficial owner of the shares is Sunstar Holdings, Inc. (a Nevada
corporation) that is owned 100% by Theolene D. Moon, the Company's
Chairman and President.
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Changes In Control
- ------------------
There are no present arrangements or pledges of the Company's securities that
may result in a change of control of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Identification of Directors and Executive Officers.
- ---------------------------------------------------
The Company's directors, and executive officers and their respective ages and
positions are set forth below along with certain biographical information.
The Company's executive officers are appointed by our Board of Directors and
serve at its discretion. Winfield Moon and Theolene D. Moon are husband and
wife.
Directors and Officers
Name Age Position Held
- ---- --- -------------
Theolene D. Moon 70 Chairman and President
Fred Young 67 Secretary/Treasurer/and
Director
Business Experience
- -------------------
Theolene D. Moon, 70, has been President and a Director of the Company since
1998. Her term expires August 2000. Mrs. Moon has been President of
Birmingham Terminal (a "REIT") for over 20 years and was involved in the
day-to-day operations of the business. The Trust manages over 40 properties
in Real Estate investments in Alabama, California, Utah and Nevada, leasing,
buying, selling and managing investments. Mrs. Moon is the wife of Winfield
Moon, the former Chairman and Chief Executive Officer of the Company.
Fred Young, 67, has been the Secretary/Treasurer, Chief Financial Officer and
a Director of the Company since 1998. His term expires August 2000. Mr. Young
is a retired banker of 35 years and has significant experience in Senior
Management. He has served as president, CEO, and director of numerous banks,
financial institutions and privately held companies. Additionally, he has
extensive consulting experience in Europe and the United States. Mr. Young is
President and founder of CMF International, Inc.; he formed
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the company as an International consulting firm in 1987 and provides business
and investment advisory services to startup and emerging growth companies,
wealthy individuals, and the brokerage community.
ITEM 6. EXECUTIVE COMPENSATION.
The following table sets forth the aggregate compensation paid by the Company
for services rendered during the periods indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation
- -------------------
Name and Principal Position Year Salary ($) Bonus
- ---------------------------- ---- --------- -----
Winfield Moon 1999 $0 $0
Chairman and CEO*
Theolene D. Moon** 1999 $0 $0
Chairman and President
Fred Young 1999 $0 $0
Chief Financial Officer
and Secretary
* Mr. Moon resigned as Chairman and Chief Executive Officer of the Company
as of December 31, 1999.
** Ms. Moon became Chairman of the Company as of January 1, 2000.
Family Relationships
- --------------------
Winfield Moon and Theolene D. Moon are husband and wife. There are no other
family relationships between any director or executive officer. Amber
Holdings, Inc. is 100% owned by Debbie Shear and Kathy Davis, who are the
adult daughters of Theolene D. Moon and Winfield Moon. Neither Ms. Shear nor
Ms. Davis shares a common residence with Winfield Moon or Theolene Moon.
Compensation of Directors
- -------------------------
The Company does not have any standard arrangement for compensation of our
directors for any services provided as
Page 18
<PAGE>
director, including services for committee participation or for special
assignments.
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements
- --------------------------------
To date, there are no employment contracts, compensatory plans or
arrangements, including payments to be received from the Company, with respect
to any director or executive officer of the Company which would in any way
result in payments to any such person because of his or her resignation,
retirement or other termination of employment with the Company or its
subsidiaries, any change in control of the Company, or a change in the
person's responsibilities following a change of control of the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There are no relationships or related transactions with executive officers of
the Company.
Item 8. DESCRIPTION OF SECURITIES
Common Stock
------------
The Company is authorized to issue 40,000,000 shares of common stock, par
value $.001. As of April 25, 2000, 15,058,031 shares were issued and
outstanding. All shares of common stock have equal rights and privileges with
respect to voting, liquidation and dividend rights. Each share of common
stock entitles the holder thereof (i) to one non-cumulative vote for each
share held of record of all matters submitted to a vote of the stockholders,
(ii) to participate equally and to receive any and all such dividends as may
be declared by the Board of Directors out of funds legally available; and
(iii) to participate pro rata in any distribution of assets available for
distribution upon our liquidation. Our stockholders have no preemptive rights
to acquire additional shares of common stock or any other securities. All
outstanding shares of common stock are fully paid and non-assessable.
Preferred Stock
---------------
The Company has not authorized or issued any preferred stock.
Page 19
<PAGE>
PART II
ITEM 1: MARKET PRICE FOR COMMON EQUITY AND DIVIDENDS OF WORLDWIDE E COMMERCE,
INC. AND OTHER SHAREHOLDER MATTERS
The Company's common stock is traded over-the-counter and quoted on the OTC
NASDAQ Electronic Bulletin Board under the symbol "WEWC". The following table
represents the range of the high and low bid prices of the Company's stock as
reported by the Nasdaq Trading and Market Services for each calendar quarter
for 1998, 1999 and 2000 through April 25, 2000. Such quotations represent
prices between dealers and may not include retail markups, markdowns, or
commissions and may not necessarily represent actual transactions. As of
April 25, 2000, there were 38 record shareholders of the Company's common
stock.
Price Range
-------------
High Low
------ ----
1998:
1st Quarter $ .90625 $ .09375
2nd Quarter $ .6875 $ .09
3rd Quarter $ 1.4375 $ .3125
4th Quarter $ 1.25 $ .25
1999:
1st Quarter $ 6.00 $ .40625
2nd Quarter $10.125 $2.00
3rd Quarter $ 7.4375 $3.625
4th Quarter $ 6.50 $2.75
2000:
1st Quarter $ 4.4375 $1.875
2nd Quarter $ 2.71875 $2.1875
(through April 25)
Dividends
---------
The Company has not declared dividends on its common stock and does not
anticipate paying dividends on its common stock in the foreseeable future.
Stock Splits
------------
The Company has not declared any stock splits in its common stock.
Page 20
<PAGE>
ITEM 2: LEGAL PROCEEDINGS
None.
ITEM 3: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES
The following discussion describes all securities sold by the Company within
the past three fiscal years without registration:
1997
- -----
Effective January 1, 1997, the Company had 1,206,533 shares issued and
outstanding. During the calendar year ending December 31, 1997, the Company
issued an additional 215,050 shares pursuant to an exemption provided by
Sections 3(b) and 4(2) of the Securities Act of 1933 and Regulation D
promulgated thereunder, and the corresponding exemptions available under state
securities laws with a total of 1,421,583 shares issued and outstanding.
* 60,550 shares were issued at a deemed value of $2.00 per share for total
proceeds to the Company of $58,750.
* 44,500 shares were issued to consultants for services at a deemed value
of $1.25 per share for total proceeds to the Company of $56,626.
* 35,000 shares were issued to consultants for services at a deemed value
of $1.50 per share for total proceeds to the Company of $52,500.
* 75,000 shares were issued to consultants for services at a deemed value
of $2.00 per share for total proceeds to the Company of $150,000.
1998
- ----
Effective January 1, 1998, the Company had 1,421,583 shares issued and
outstanding. During the calendar year ending December 31, 1998, the Company
issued an additional 13,636,448 shares pursuant to an exemption provided by
Sections 3(b) and 4(2) of the Securities Act of 1933 and Regulation D
promulgated thereunder, and the corresponding exemptions available under state
securities laws with a total of 15,058,031 shares issued and outstanding.
Page 21
<PAGE>
* 235,000 stock warrants were exercised at a deemed value of $.25 per
share for total proceeds to the Company of $58,750.
* 10,000 stock warrants were exercised at a deemed value of $.50 per share
for total proceeds of $5,000.
* 175,000 shares were issued to consultants for services at a deemed value
of $1.50 per share in satisfaction for past services rendered.
* 13,216,448 shares were issued as part of the acquisition of Green River,
Inc.
1999
- ----
Effective January 1, 1999, the Company had 15,058,031 shares issued and
outstanding. During the calendar year ending December 31, 1999, the Company
issued no additional shares of the common stock.
In each of the private transactions above, the Company believes that each
purchaser (i) was aware that the securities had not been registered under
federal securities laws; (ii) acquired the securities for his/her/its own
account for investment purposes of the federal securities laws; (iii)
understood that the securities would need to be indefinitely held unless
registered or an exemption from registration applied to a proposed
disposition; and (iv) was aware that the certificate representing the
securities would bear a legend restricting its transfer. The Company believes
that, in light of the foregoing, the sale of securities to the respective
acquirers did not constitute the sale of an unregistered security in violation
of the federal securities laws and regulations by reason of the exemptions
provided under Sections 3(b) and 4(2) of the Securities Act, and the rules and
regulations promulgated thereunder.
These shares were issued in reliance upon Section 4(2) of the Securities Act
of 1933 as amended as a "transaction not involving a public offering."
ITEM 5: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Chapter 18
Oklahoma General Corporation Act
Section 1031. Indemnification of Officers, Directors, Employees and Agents;
Insurance
A. A corporation shall have power to 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,
Page 22
<PAGE>
whether civil, criminal, administrative or investigative, other than an action
by or in the right of the corporation, by reason of the fact that the person
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 attorneys' fees, judgments,
fines, and amounts paid in settlement actually and reasonably incurred by the
person in connection with the action, suit, or proceeding if the person acted
in good faith and in a manner the person 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 the 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, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which the person 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 reasonable cause to believe that the
conduct was unlawful.
B. A corporation shall have the power to 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 the person 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 attorneys' fees, actually and reasonably incurred
by the person in connection with the defense or settlement of an action or
suit if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which the person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which the 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,
the person is fairly and reasonably entitled to indemnity for expenses which
the court shall deem proper.
C. To the extent that a present or former director, or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in
Page 23
<PAGE>
subsection A or B of this section, or in defense of any claim, issue or matter
therein, the person shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred by the person in connection
therewith.
D. Any indemnification under the provisions of subsection A or B of this
section, unless ordered by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the present or former director or officer is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsection A or B of this section. This determination shall be made, with
respect to a person who is a director or officer at the time of the
determination:
1. By a majority vote of the directors who are not parties to the
action, suit, or proceeding, even though less than a quorum;
2. By a committee of directors designated by a majority vote of
directors, even though less than a quorum;
3. If there are no such directors, or if such directors direct, by
independent legal counsel in a written opinion; or
4. By the shareholders.
E. Expenses incurred by an officer or director in defending a civil or
criminal action, suit, or proceeding may be paid by the corporation in advance
of the final disposition of the action, suit, or proceeding upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if
it shall ultimately be determined that the person is not entitled to be
indemnified by the corporation as authorized by the provisions of this
section. Expenses incurred by former directors or officers or other employees
and agents may be paid upon the terms and conditions, if any, as the
corporation deems appropriate.
F. The indemnification and advancement of expenses provided by or granted
pursuant to the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in
the person's official capacity and as to action in another capacity while
holding an office.
Page 24
<PAGE>
G. A corporation shall have power to purchase and maintain insurance on behalf
of any person who 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 any liability asserted
against the person and incurred by the person in any such capacity, or arising
out of the person's status as such, whether or not the corporation would have
the power to indemnify the person against liability under the provisions of
this section.
H. For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation, including any constituent of a constituent, absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and
employees, or agents, so that any person who is or was a director, officer,
employee, or agent of a constituent corporation, or is or was serving at the
request of a constituent corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
section with respect to the resulting or surviving corporation as the person
would have with respect to the constituent corporation if its separate
existence had continued.
I. For purposes of this section, references to "other enterprises" shall
include, but are not limited to, employee benefit plans; references to "fines"
shall include, but are not limited to, any excise taxes assessed on a person
with respect to an employee benefit plan; and references to "serving at the
request of the corporation" shall include, but are not limited to, any service
as a director, officer, employee, or agent of the corporation which imposes
duties on, or involves services, by the director, officer, employee, or agent
with respect to an employee benefit plan, its participants, or beneficiaries;
and a person who acted in good faith and in a manner the person 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 section.
J. The indemnification and advancement of expenses provided by or granted
pursuant to this section, unless otherwise provided when authorized or
ratified, shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall
Page 25
<PAGE>
inure to the benefit of the heirs, executors and administrators of the person.
K. The district court is vested with exclusive jurisdiction to hear and
determine all actions for advancement of expenses or indemnification brought
under this section or under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise. The court may summarily determine a
corporation's obligation to advance expenses including attorney's fees.
PART F/S
INDEX TO FINANCIAL STATEMENTS
The following is a list of the financial statements filed herewith:
Audited Financial Statements of the Company, as of December 31, 1999 and for
the twelve month period then ended:
Independent Accountants Report F-1
Consolidated Balance Sheets F-2
Consolidated Statement of Operations F-3
Consolidated Statement of Stockholders Equity F-4
Consolidated Statement of Cash Flow F-5
Notes to Financial Statements F-6-7
Page 26
<PAGE>
WORLDWIDE E COMMERCE, INC.
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(With Report of Independent Certified Public Accountants Thereon)
L.L. Bradford & Company
Certified Public Accountants
<PAGE> 27
TABLE OF CONTENTS
PAGE NO.
Report of Independent Certified Public Accountants 1
Financial Statements
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6 - 7
<PAGE> 28
<Letterhead of L.L. Bradford & Company>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Worldwide E Commerce, Inc.
Las Vegas, Nevada
We have audited the accompanying consolidated balance sheet of Worldwide E
Commerce, Inc. as of December 31, 1999 and the related consolidated statements
of operations, stockholders' equity and cash flows for the years ended
December 31, 1999 and 1998. 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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those 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.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Worldwide
E Commerce, Inc. as of December 31, 1999 and the results of its operations and
its cash flows for the years ended December 31, 1999 and 1998 in conformity
with generally accepted accounting principles.
/s/ L.L. Bradford & Company
L.L. Bradford & Company
March 17, 2000
Las Vegas, Nevada
F-1
<PAGE> 29
WORLDWIDE E COMMERCE, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Coal mining leases $ 1,602,056
---------------
Total assets $ 1,602,056
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ -
---------------
Stockholders' equity
Preferred stock, $.001 par value, 10,000,000
shares authorized, no shares issued -
Common stock, $.001 par value, 40,000,000
shares authorized, 15,058,031 shares issued
and outstanding 15,058
Additional paid-in capital 2,506,632
Accumulated deficit (919,634)
---------------
Total stockholders' equity 1,602,056
---------------
Total liabilities and stockholders' equity $ 1,602,056
===============
See Accompanying Notes to Consolidated Financial Statements.
F-2
<PAGE> 29
WORLDWIDE E COMMERCE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
For the Years Ended December 31,
--------------------------------
1999 1998
---------------- ---------------
Revenues $ - $ -
General and administrative expenses 18,381 420,529
---------------- ---------------
Net loss before other income (expense)
and provision for income taxes (18,381) (420,529)
Other income (expense)
Loss on sale of assets - (8,728)
Interest - 114
---------------- ---------------
- (8,614)
Net loss before provision for income taxes (18,381) (429,143)
Provision for income taxes - -
---------------- ---------------
Net loss $ (18,381) $ (429,143)
================ ===============
Basic and diluted loss per common share $ (0.001) $ (0.073)
================ ===============
Weighted average number of common shares
used for basic and diluted per share
calculations 15,058,031 5,844,357
================ ===============
See Accompanying Notes to Consolidated Financial Statements.
F-3
<PAGE> 30
WORLDWIDE E COMMERCE, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Common Stock
---------------------- Additional Total
Number of Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
----------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Balance, January 1, 1998 1,421,583 $ 1,422 $ 523,581 $ (472,110) $ 52,893
Stock warrants exercised
at $.25 per share 235,000 235 58,515 - 58,750
Stock warrants exercised
at $.50 per share 10,000 10 4,990 - 5,000
Shares issued to consultants
for services at $1.50
per share 175,000 175 262,325 - 262,500
Shares issued to acquire
Green River, Inc. 13,216,448 13,216 1,588,840 - 1,602,056
Capital contribution by
stockholder - - 50,000 - 50,000
Net loss - - - (429,143) (429,143)
----------- ---------- ------------- ----------- -------------
Balance, December 31, 1998 15,058,031 15,058 2,488,251 (901,253) 1,602,056
Capital contribution by
stockholder - - 18,381 - 18,381
Net loss - - - (18,381) (18,381)
----------- ---------- ------------- ----------- -------------
Balance, December 31, 1999 15,058,031 $ 15,058 $ 2,506,632 $ (919,634) $ 1,602,056
=========== ========== ============= =========== =============
See Accompanying Notes to Consolidated Financial Statements.
F-4
</TABLE>
<PAGE> 31
WORLDWIDE E COMMERCE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
For the Years Ended
December 31,
------------------------------
1999 1998
--------------- --------------
Cash flows from operating activities:
Net loss $ (18,381)$ (429,143)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation - 6,004
Loss on sale of assets - 8,728
Services paid for with common stock - 262,500
Changes in operating assets and liabilities:
Decrease in other assets - 29,480
Decrease in accrued liabilities - (9,082)
--------------- --------------
Net cash used by operating activities (18,381) (131,513)
--------------- --------------
Cash flows from investing activities:
Proceeds from sale of property and equipment - 17,763
--------------- --------------
Net cash provided by investing activities - 17,763
--------------- --------------
Cash flows from financing activities:
Issuance of common stock - 63,750
Capital contributed by stockholder 18,381 50,000
--------------- --------------
Net cash provided by financing activities 18,381 113,750
--------------- --------------
Net change in cash - -
Cash, beginning of period - -
--------------- --------------
Cash, end of period $ - $ -
=============== =============
Supplemental schedule on non-cash financing activities:
13,216,448 shares of common stock issued to
acquire all outstanding common stock of
Green River, Inc. $ - $ 1,602,056
=============== =============
See Accompanying Notes to Consolidated Financial Statements.
F-5
<PAGE> 32
WORLDWIDE E COMMERCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. Organization and summary of significant accounting policies
-----------------------------------------------------------
Organization - Worldwide E Commerce, Inc., formerly Worldwide Energy, Inc.,
was incorporated in the state of Oklahoma on April 7, 1987.
Effective September 15, 1998, Worldwide Energy, Inc. consummated an agreement
and plan of reorganization with Green River Coal, Inc. (GRCI) whereby
Worldwide Energy, Inc. acquired all the outstanding common stock of GRCI in
exchange for 13,216,448 shares of Worldwide Energy, Inc. common stock
(referred to as the "GRCI Transaction"). The GRCI Transaction has been
accounted for under the pooling of interest method. Effective as of the date
of consummation of the GRCI Transaction, the Company changed its name from
"C:\Grip" to "Worldwide Energy, Inc."
Under generally accepted accounting principles, the acquisition of Green River
Coal, Inc. is considered to be a reverse acquisition since Worldwide Energy,
Inc. was a shell entity with no assets, liabilities, or operations.
Accordingly, no goodwill was recorded. The post-reverse acquisition financial
statements consists of Green River Coal, Inc.'s historical financial
statements.
On December 16, 1999, Worldwide Energy, Inc. changed its name to Worldwide E
Commerce, Inc.
Worldwide E Commerce, Inc., including the assets from the outstanding common
stocks acquired from GRCI, is collectively referred to herein as the "Company"
subsequent to the transaction discussed above.
The Company owns rights to 3,717.72 acres of Low Sulfur coal mining leases in
Wayne County, Utah through Green River Coal, Inc., a wholly owned subsidiary.
Management believes that such acreage contains 47,105,000 tons of low sulfur
coal (high in BTU's ranging from 8,000 to 13,000), and meets the
specifications of the Clean Air Act. Congress passed the Clean Air Act, which
requires very low sulfur emissions by end users of coal, beginning in 1995.
The maximum sulfur allowed to be burned after the effective date is 1.2%
sulfur. Management believes that the coal on this land has a sulfur content
below 1% and is one of the large areas remaining where low sulfur coal can be
found in the United States.
The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary. All significant inter-company
transactions have been eliminated.
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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Comprehensive income - The Company has no material components of other
comprehensive income, and accordingly, comprehensive income is the same as net
loss for the period.
Income taxes - The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards (SFAS) No. 109, which requires
recognition of deferred tax assets and liabilities for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
F-6
<PAGE> 33
WORLDWIDE E COMMERCE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. Organization and summary of significant accounting policies (continued)
-----------------------------------------------------------------------
Impairment of long-lived assets to be disposed - The Company continually
monitors events and changes in circumstances that could indicate carrying
amounts of long-lived assets may not be recoverable. When such events or
changes in circumstances are present, the Company assesses the recoverability
of long-lived assets by determining whether the carrying value of such assets
will be recovered through undiscounted expected future cash flows. If the
total of the future cash flows is less than the carrying amount of those
assets, the Company recognizes an impairment loss based on the excess of the
carrying amount over the fair value of the assets. Assets to be disposed of
are reported at the lower of the carrying amount or the fair value less costs
to sell.
Loss per share - Basic earnings per share excludes any dilutive effects of
options, warrants and convertible securities. Basic earnings per share is
computed using the weighted-average number of outstanding common shares during
the applicable period. Diluted earnings per share is computed using the
weighted average number of common and common stock equivalent shares
outstanding during the period. Common equivalent shares are excluded from the
computation if their effect is antidilutive.
2. Coal mining leases
------------------
Coal mining leases consist of 3,717.72 acres of Low Sulfur coal mines in Wayne
County, Utah, as discussed in Note 1 and are recorded at the historical cost.
Such leases are renewable on an annual basis at $3.00 per acre plus an annual
rent of $1.00 per acre. Lease expense totaled $14,871 for each of the years
ended December 31, 1999 and 1998. The future minimum royalties and rentals
total $14,871 annually through 2008. The Company has not yet commenced
activity to bring the coal resources into commercial production.
3. Income taxes
------------
The Company did not record any current or deferred income tax provision or
benefit for any of the periods presented because of continuing net losses and
nominal differences.
4. Related party transactions
--------------------------
For the years ended December 31, 1999 and 1998, all activities of the Company
have been conducted from the corporate officers' residences at no charge.
There are no current or future agreements for the use of these facilities nor
are there any liabilities for the past use of these facilities.
5. Purchase agreement with World Link Capital, LLC
------------------------------------------------
On September 9, 1999, the Company entered into a purchase payment agreement
(the "Agreement") to sell its low sulfur coal leases to World Link Capital,
LLC for $200,000,000. The Agreement requires an initial installment of
$100,000,000 at the close of escrow and the remaining balance to be paid over
a two-year period from the close of escrow. The Agreement also has a
provision giving the Company the option to acquire 25% of the equity of World
Link Capital, LLC. As of the date of this report, the Agreement has not been
finalized or any installment payments made.
F-7
<PAGE> 34
PART III
ITEM 1: INDEX TO AND DESCRIPTION OF EXHIBITS
Exhibit
Number Description
- -------- -----------
2.1.1 Certificate of Incorporation of River Rouge Corporation, dated
April 7, 1987
2.1.2 Amended Certificate of Incorporation of River Rouge Corporation,
dated April 28, 1987
2.1.3 Amended & Restated Certificate of Incorporation of C/Grip: Inc.,
dated April 11, 1996
2.1.4 Amended Certificate of Incorporation of C/Grip:Inc.
2.1.5 Amended Certificate of Incorporation Worldwide E Commerce, Inc.,
dated December 15, 1999
2.2 Bylaws
6.1 Asset Purchase Agreement by and among Worldwide Energy, Inc. and
World Link Capital, LLC, dated September 8, 1999
8.1 Agreement and Plan of Reorganization between Green River Coal,
Inc. and Worldwide Energy, Inc., dated August 25, 1998
27.1 Financial Data Schedule
<PAGE> 36
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
Worldwide E Commerce, Inc. has caused this registration statement to be signed
on its behalf by the undersigned, each of whom is duly authorized.
Date April 27, 2000. Worldwide E Commerce, Inc.
By: /s/ Theolene D. Moon
-------------------------
Theolene D. Moon
Chairman and President
By: /s/ Fred Young
--------------------------
Fred Young
Secretary/Treasurer and Director
OFFICE OF THE SECRETARY OF STATE
STATE OF OKLAHOMA
CERTIFICATE OF INCORPORATION
To all to Whom these Presents shall Come, Greetings:
WHEREAS, The Certificate of Incorporation, duly signed and verified, of
RIVER ROUGE CORPORATION
has been filed in the office of the Secretary of State as provided by the Laws
of the State of Oklahoma.
NOW THEREFORE, I, the undersigned, Secretary of State of the State of
Oklahoma by virtue of the powers vested in me by law, do hereby issue this
Certificate of Incorporation.
IN TESTIMONY WHEREOF, I hereunto set my hand and cause to be affixed the
Great Seal of the State of Oklahoma.
Filed at the City of Oklahoma City this 7th
day of April, A.D. 1987.
/s/ Jeannette B. Edmonson
<GREAT SEAL OF THE STATE OF Secretary of State
OKLAHOMA APPEARS HERE>
By: <signature illegible>
SOS Corp Key: DB 00455179
<PAGE>
F I L E D
CERTIFICATE OF INCORPORATION APR 7 1987
OF
RIVER ROUGE CORPORATION OKLAHOMA SECRETARY
OF STATE
Thomas J. Kenan, as an incorporator of a corporation pursuant to the
provisions of the Oklahoma General Corporation Act, sets forth the following:
1. The name of the Corporation is:
River Rouge Corporation
2. The address of the Corporation's registered office is Suite 202, 511
Couch Drive, Oklahoma City, Oklahoma County, Oklahoma 73102. The name of the
Corporation's registered agent at such address is Thomas J. Kenan.
3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Oklahoma General
Corporation Act.
4. The Corporation is authorized to issue only one class of stock,
Common. The total number of shares of stock which the Corporation shall have
authority to issue and the par value of each of such shares are as follows:
Total Number of
Authorized Shares Par Value Total
- ------------------ ---------- --------
50,000,000 $0.001 $50,000
5. The name and mailing address of the Corporation's incorporator are
Thomas J. Kenan, P. 0. Box 2036, Oklahoma City, Oklahoma 73101.
6. The power to adopt, amend or repeal bylaws of the Corporation is
conferred upon the directors.
Dated: April 7, 1987.
/s/ Thomas J. Kenan
------------------------------
Thomas J. Kenan, Incorporator
OFFICE OF THE SECRETARY OF STATE
STATE OF OKLAHOMA
AMENDED
CERTIFICATE OF INCORPORATION
To all Whom these Presents shall Come, Greetings:
W H E R E A S, The Certificate of Incorporation, duly signed and
verified, of
RIVER ROUGE CORPORATION
has been filed in the office of the Secretary of State as provided by the Laws
of the State of Oklahoma.
NOW THEREFORE, I, the undersigned, Secretary of State of the State of
Oklahoma by virtue of the powers vested in me by law, do hereby issue this
Certificate of Incorporation.
IN TESTIMONY WHEREOF, I hereunto set my hand and cause to be affixed the
Great Seal of the State of Oklahoma.
Filed at the City of Oklahoma City this 28th
day of April, A.D., 1987.
<GREAT SEAL OF THE STATE /s/ Jeannette B. Edmondson
OF OKLAHOMA APPEARS HERE> ----------------------------
Secretary of State
By: Cheryl E. Bradley
----------------------
SOS Corp. Key: DB 455179
<PAGE>
Amendment No. One F I L E D
to APR 28 1987
Certificate of Incorporation
of
River Rouge Corporation OKLAHOMA SECRETARY
Of STATE
Thomas J. Kenan, the sole incorporator of River Rouge Corporation, a
corporation incorporated on April 7, 1987 pursuant to the provisions of the
Oklahoma General Corporation Act, certifies that River Rouge Corporation has
not received any payment for any of its stock and that the following amendment
to its certificate of incorporation was duly adopted in accordance with the
provisions of Section 1076 of the Oklahoma General Corporation Act.
Paragraph 4 of the Certificate of Incorporation is amended to provide as
follows:
4. The Corporation is authorized to issue two classes of stock, both of
which shall be voting. One class of stock shall be Common Stock, par value
$0.001. The second class of stock shall be Preferred Stock, par value $0.001.
The Preferred Stock, or any series thereof, shall have such designations,
preferences and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof as shall be expressed in
the resolution or resolutions providing for the issue of such stock adopted by
the board of directors and may be made dependent upon facts ascertainable
outside such resolution or resolutions of the board of directors, provided
that the manner in which such facts shall operate upon such designations,
preferences, rights and qualifications, limitations or restrictions of such
class or series of stock is clearly and expressly set forth in the resolution
or resolutions providing for the issuance of such stock by the board of
directors.
The total number of shares of stock of each class which the Corporation
shall have authority to issue and the par value of each share of each class of
stock are as follows:
No. of
Par Authorized
Class Value Shares Total
- ------ ----- ------------- -------
Common $0.001 40,000,000 $40,000
Preferred $0.001 10,000,000 10,000
----------- --------
Totals: 50,000,000 $50,000
Dated: April 18, 1987
/S/ Thomas J. Kenan
--------------------------------
Thomas J. Kenan, Incorporator
OFFICE OF THE SECRETARY OF STATE
STATE OF OKLAHOMA
AMENDED & RESTATED
CERTIFICATE OF INCORPORATION
WHEREAS, the Amended & Restated Certificate of Incorporation of
C/GRIP: INC.
has been filed in the office of the Secretary of State as provided by the laws
of the State of Oklahoma.
NOW THEREFORE, I, the undersigned, Secretary of State of the State of
Oklahoma, by virtue of the powers vested in me by law, do hereby issue this
certificate evidencing such filing.
IN TESTIMONY WHEREOF, I hereunto set my hand and cause to be affixed the
Great Seal of the State of Oklahoma.
Filed in the City of Oklahoma City this 11th
<GREAT SEAL OF THE date of April, 1996.
STATE OKLAHOMA APPEARS HERE>
/s/ <signature illegible>
Secretary of State
By: /s/ <signature illegible>
<PAGE>
F I L E D
APR 11 1996
OKLAHOMA SECRETARY
OF STATE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
RIVER ROUGE CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF OKLAHOMA:
The undersigned corporation ("the Corporation"), an Oklahoma corporation,
for the purposes of adopting an Amended and Restated Certificate of
Incorporation pursuant to the Section 1080 of the Oklahoma General Corporation
Act ("the Act"), hereby certifies:
1. The name of the Corporation is "River Rouge Corporation"
2. The name under which the Corporation was originally incorporated was
"River Rouge Corporation"
3. The Certificate of Incorporation of the Corporation was filed with the
Oklahoma Secretary of State on April 7, 1987.
4. The amendments to the Certificate of Incorporation effected by this
Certificate are: (a) to change the name of the Corporation to "C/Grip: Inc.";
(b) to revise the provisions relating to the regulation of the internal
affairs of the Corporation, and (c) to add provisions relating to compromises
or arrangements with creditors.
5. This Amended and Restated Certificated of Incorporation was duly
adopted in accordance with Act Section 1080, after being proposed by the
directors and adopted by the shareholders in the manner and by the vote
prescribed in Act Section 1077, and restates, integrates and further amends
the Certificate of Incorporation.
6. The Certificate of Incorporation of River Rouge Corporation is hereby
restated as further amended by this Certificate, to read in full, as follows:
<PAGE>
CERTIFICATE OF INCORPORATION
OF
C/Grip: Inc.
FIRST: Name. The name of the corporation is C/Grip: Inc. (hereinafter the
"Corporation").
SECOND: Registered Office. The name and street address of the registered
agent of the Corporation in the State of Oklahoma and the street address of
the registered office of the Corporation in the State of Oklahoma, which
office address is the same as the street address of its registered agent, are:
Thomas J. Kenan
800 Bank of Oklahoma Plaza
201 Robert S. Kerr Avenue
Oklahoma City, OK 73102
THIRD: Term. The term of the Corporation shall be perpetual.
FOURTH: Purpose. The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the Act.
FIFTH: Capital Stock. The Corporation is authorized to issue two classes
of stock, both of which shall be voting. One class of stock shall be Common
Stock, par value $0.001. The second class of stock shall be Preferred Stock,
par value $0.001. The Preferred Stock, or any series thereof, shall have such
designations, preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions thereof as
shall be expressed in the resolution or resolutions providing for the issue of
such stock adopted by the board of directors and may be made dependent upon
facts ascertainable outside such resolution or resolutions of the board of
directors, provided that the manner in which such facts shall operate upon
such designations, preferences, rights and qualifications, limitations or
restrictions of such class or series of stock is clearly and expressly set
forth in the resolution or resolutions providing for the issuance of such
stock by the board of directors.
<PAGE>
The total number of shares of stock of each class which the Corporation
shall have authority to issue and the par value of each share of each class of
stock are as follows:
No. of
Par Authorized
Class Value Shares Total
- ------ ------ --------- --------
Common $0.001 40,000,000 $ 40,000
Preferred $0.001 10,000,000 10,000
---------- ---------
Totals: 50,000,000 $ 50,000
SIXTH: Directors. The number of directors of the Corporation shall be
such as from time to time shall be fixed by, or in the manner provided in, the
Bylaws.
SEVENTH: Bylaws. The Bylaws for the governing of the Corporation may be
adopted, amended, altered, repealed or readopted by the Board of Directors at
any stated or special meeting of such board, but the powers of such directors
in this regard shall at all times be subject to the rights of the shareholders
to alter or repeal such Bylaws at any annual meeting of shareholders.
EIGHTH: Amendment. The Corporation reserves the right at any time and
from time to time to amend, alter, change or repeal any provision contained in
this Certificate of Incorporation, and other provisions authorized by the laws
of the State of Oklahoma at the time may be added or inserted in this
Certificate of Incorporation, in the manner now or hereafter prescribed by
law; and all rights, preferences and privileges of whatsoever nature conferred
upon shareholders, directors or any other persons by and pursuant to this
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the right reserved in this Section EIGHTH.
NINTH: Compromise or Arrangement by Corporation with Creditors or
Shareholders. Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them or between the Corporation
and its shareholders or any class of them, any court of equitable jurisdiction
within the State of Oklahoma, on the application in a summary way of the
Corporation or of any creditor or shareholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions
of Section 106 of the Act or on the application of trustees in dissolution or
of any receiver or receivers appointed for the Corporation under the
provisions of Section 100 of the Act, may order a meeting of the creditors or
class of creditors, or of the shareholders or class of shareholders of the
Corporation, as the case may be, to be summoned in such manner as the court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, or of the shareholders or class of
shareholders of the Corporation, as the
<PAGE>
case may be, agree to any compromise or arrangement and to any reorganization
of the Corporation as a consequence of such compromise or arrangement, the
compromise or arrangement and the reorganization, if sanctioned by the court
to which the application has been made, shall be binding on all the creditors
or class of creditors, or on all the shareholders or class of shareholders, of
the Corporation, as the case may be, and also on the Corporation.
IN WITNESS WHEREOF, this Corporation has caused this Certificate to be
signed by its President and attested by its secretary this 10th day of April,
1996.
C/Grip: Inc., an Oklahoma corporation
By: /s/ Thomas J. Kenan
---------------------------
Thomas J. Kenan, President
ATTEST:
/s/ Thomas J. Kenan
- -------------------------
Thomas J. Kenan, Secretary
FILED
SEP 15 1998
OKLAHOMA SECRETARY
OF STATE
RESTATED
CERTIFICATE OF INCORPORATION
OF
C/GRIP: INC.
TO THE SECRETARY OF STATE OF THE STATE OF OKLAHOMA,
The undersigned corporation ("the Corporation"), an Oklahoma corporation,
for the purposes of adopting an Amended and Restated Certificate of
Incorporation pursuant to the Section 1080 of the Oklahoma General corporation
Act ("the Act"), hereby certifies:
1. The name of the Corporation is "C/Grip: Inc."
2. The name under which the Corporation was originally incorporated was
"River Rouge Corporation."
3. The Certificate of Incorporation of the corporation was filed with the
Oklahoma Secretary of State on April 7, 1987, and the Amended and Restated
Certificate of Incorporation was filed with the Oklahoma Secretary of State on
April 11, 1996.
4. The amendments to the Certificate of Incorporation effected by this
Certificate are: (a) to change the name of the Corporation to "Worldwide
Energy, Inc.", and (b) to change the address of the registered agent and
office.
5. This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with Act Section 1080, after being proposed by the
directors and adopted by the shareholders in the manner and by the vote
prescribed in Act Section 1077, and restates, integrates and further amends
the Certificate of Incorporation.
6. The Amended and Restated Certificate of Incorporation of C/Grip: Inc.
is hereby restated as further amended by this Certificate, to read in full, as
follows:
<PAGE>
FILED
CERTIFICATE OF INCORPORATION SEP 15 1998
OF OKLAH0MA SECRETARY
OF OF STATE
WORLDWIDE ENERGY, INC.
FIRST: Name. The name of the corporation is Worldwide Energy, Inc.
(hereinafter the "Corporation")
SECOND: Registered Office. The name and street address of the registered
agent of the Corporation in the State of Oklahoma and the street address of
the registered office of the Corporation in the State of Oklahoma, which
office address is the same as the street address of its registered agent, are:
Thomas J. Kenan
Suite 3300
100 North Broadway
Oklahoma City, OK 73102-8805.
THIRD: Term. The term of the Corporation shall be perpetual.
FOURTH: Purpose. The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the Act.
FIFTH: Capital Stock. The Corporation is authorized to issue two classes
of stock, both of which shall be voting. One class of stock shall be Common
Stock, par value $0.001. The second class of stock shall be Preferred stock,
par value $0.001. The Preferred Stock, or any series thereof, shall have such
designations, preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions thereof as
shall be expressed in the resolution or resolutions providing for the issue of
such stock adopted by the board of directors and may be made dependent upon
facts ascertainable outside such resolution or resolutions of the board of
directors, provided that the manner in which such facts shall operate upon
such designations, preferences, rights and qualifications, limitations or
restrictions of such class or series of stock is clearly and expressly set
forth in the resolution or resolutions providing for the issuance of such
stock by the board of directors.
<PAGE>
The total number of shares of stock of each class which the Corporation
shall have authority to issue and the par value of each share of each class of
stock are as follows;
No. of
Par Authorized
Class Value Shares Total
- ------------- ----------- ---------------- ---------
Common $0.001 40,000,000 $40,000
Preferred $0.001 10,000,000 10,000
---------------- --------
Totals: 50,000,000 $50,000
SIXTH: Directors. The number of directors of the Corporation shall be
such as from time to time shall be fixed by, or in the manner provided in, the
Bylaws.
SEVENTH: Bylaws. The Bylaws for the governing of the Corporation may be
adopted, amended, altered, repealed or readopted by the Board of Directors at
any stated or special meeting of much board, but the powers of such directors
in this regard shall at all times be subject to the rights of the shareholders
to alter or repeal such Bylaws at any annual meeting of shareholders.
EIGHTH: Amendments. The corporation reserves the right at any time and
from time to time to amend, alter, change or repeal any provision contained in
this Certificate of Incorporation, and other provisions authorized by the laws
of the State of Oklahoma at the time may be added or inserted in this
Certificate of Incorporation, in the manner now or hereafter prescribed by
law; and all rights, preferences and privileges of whatsoever nature conferred
upon shareholders, directors or any other persons by and pursuant to this
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the right reserved in this Section EIGHTH.
NINTH: Compromise or Arrangement by Corporation with Creditors or
Shareholders. Whenever a compromise or arrangement is proposed between the
corporation and its creditors or any class of them or between the corporation
and its shareholders or any class of them, any court of equitable jurisdiction
within the State of Oklahoma, on the application in a summary way of the
Corporation or of any creditor or shareholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions
of Section 106 of the Act or on the application of trustees in dissolution or
of any receiver or receivers appointed for the Corporation under the
provisions of Section 100 of the Act, may order a meeting of the creditors or
class of creditors, or of
<PAGE>
the shareholders or class of shareholders of the corporation, as the case may
be, to be summoned in such manner as the court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, or of the shareholders or class of shareholders of the Corporation,
as the case may be, agree to any compromise or arrangement and to any
reorganization of the Corporation an a consequence of such compromise or
arrangement, the compromise or arrangement and the reorganization, if
sanctioned by the court to which the application has been made, shall be
binding on all the creditors or class of creditors, or on all the shareholders
or class of shareholders, of the Corporation, an the case may be, and also on
the Corporation.
IN WITNESS WHEREOF, this Corporation has caused this Certificate to be
signed by its chief executive officer and attested by its secretary this 28
day of August, 1998.
WORLDWIDE ENERGY, INC,
By /s/ Richard S. Cohen
--------------------
Richard S. Cohen
Chief Executive officer
Attest
/s/ Richard S. Cohen
- ------------------------
Richard S. Cohen, Secretary
OFFICE OF THE SECRETARY OF STATE
STATE OF OKLAHOMA
AMENDED
CERTIFICATE OF INCORPORATION
WHEREAS, The Amended Certificate of Incorporation of
WORLDWIDE E COMMERCE, INC.
has been filed in the office of the Secretary of State as provided by the laws
of the State of Oklahoma.
NOW THEREFORE, I, the undersigned, Secretary of State of the State of
Oklahoma, by virtue of the powers vested in me by law, do hereby issue this
certificate evidencing such filing.
IN TESTIMONY WHEREOF, I hereunto set my hand and cause to be affixed the
Great Seal of the State of Oklahoma.
Filed at the City of Oklahoma this 15th
<GREAT SEAL OF THE STATE OF day of December, 1999.
OKLAHOMA APPEARS HERE>
/s/Mike Hunter
Secretary of State
By: <signature illegible>
<PAGE>
FILED
DEC 15 1999
OKLAHOMA SECRETARY
OF STATE
AMENDED
CERTIFICATE OF INCORPORATION
(AFTER RECEIPT OF PAYMENT OF STOCK)
TO: OKLAHOMA SECRETARY OF STATE
2300 N. Lincoln Blvd, Room 101, State Capitol Building
Oklahoma City, Oklahoma 73105-4497
(403)-522-4560
PLEASE NOTE: This form MUST be filed with a letter from the Oklahoma Tax
Commission, Franchise Tax Department, stating that the franchise tax, due
yearly, has been paid for the current fiscal year.
The undersigned Oklahoma corporation, for the purpose of amending its
certificate of incorporation as provided by Section 1077 of the Oklahoma
General Corporation Act, hereby certifies:
1. A. The name of the corporation is:
Worldwide Energy, Inc.
____________________________________________________________________________
B. As amended: The name of the corporation has been changed to:
Worldwide E Commerce, Inc.
_____________________________________________________________________________
(Please Note: The new name of the corporation MUST contain one of the
following words: association, company, corporation, club, foundation, fund,
incorporated, institution, society, union, syndicate, or limited or one of the
abbreviations co., corp., inc., or ltd.)
2. The name of the registered agent and the street address of the
registered office in the State of Oklahoma is:
_____________________________________________________________________________
Name of Agent Street Address City County ZIP Code
(P.O. BOXES ARE NOT ACCEPTABLE)
3. The duration of the corporation is: perpetual.
_______________________________
<PAGE>
4. The aggregate number of the authorized shares, itemized by class, par
value of shares, shares without par value, and series, if any, within a class
is:
SERIES PAR VALUE PER SHARE
NUMBER OF SHARES (if any) (Or, if without par value, to state)
COMMON_________________ ___________________________________
PREFERRED______________ ___________________________________
5. Set forth clearly any and all amendments to the certificate of
incorporation which are desired to be made:
The name of the corporation shall be changed to Worldwide E Commerce, Inc.
That at a meeting of the Board of Directors, a resolution was duly
adopted setting forth the foregoing proposed amendment(s) to the Certificate
Incorporation of said corporation, declaring said amendment(s) to be advisable
and calling a meeting of the shareholders of said corporation for
consideration thereof.
That thereafter, pursuant to said resolution of its Board of Directors, a
meeting of the shareholders of said corporation was duly called and held, at
which meeting the necessary number of shares as required by statute were voted
in favor of the amendment(s).
IN WITNESS WHEREOF said corporation has caused this certificate to be
signed by its President or Vice President and attested by its Secretary or
Assistant Secretary, this ___ day of ___________________, 19__.
By /s/ Winfield Moon Sr.
______________________
President
WINFIELD MOON SR PRESIDENT
(PLEASE PRINT NAME )
ATTEST:
/s/F.W. Young
_____________________________
Secretary
F.W. YOUNG, Secretary
(PLEASE PRINT NAME)
BY-LAWS
OF
RIVER ROUGE CORPORATION
ARTICLE I. OFFICES
The principal office of the corporation shall be at Suite 202, 511 Couch
Drive, Oklahoma City, Oklahoma 73102. The corporation may have such other
offices, either within or without the State of Oklahoma, as the Board of
Directors may designate or as the business of the corporation may require from
time to time.
ARTICLE II. SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the shareholders shall
be held on the first Tuesday in the month of April in each year, beginning
with the year 1988, at the hour of two o'clock p.m., for the purpose of
electing directors and for the transaction of such other business as may come
before the meeting. If the day fixed for the annual meeting shall be a legal
holiday in the State of Oklahoma, such meeting shall be held on the next
succeeding business day. If the election of directors shall not be held on the
day designated herein for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter as
conveniently may be.
SECTION 2. Special Meeting. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise
1
<PAGE>
prescribed by statute, may be called by the President or by the Board of
Directors.
SECTION 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Oklahoma, unless otherwise
prescribed by statute, as the place of meeting for any annual meeting or for
any special meeting called by the Board of Directors. A waiver of notice
signed by all shareholders entitled to vote at a meeting may designate any
place, either within or without the State of Oklahoma, unless otherwise
prescribed by statute, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called, the place of
meeting shall be the principal office of the corporation in the State of
Oklahoma.
SECTION 4. Notice of Meeting. Written or printed notice stating the
place, day and hour of the meeting and, in case of a special meeting or if
otherwise required by law, the purpose or purposes for which the meeting is
called, shall be delivered not less than three nor more than fifty days before
the day of the meeting, either personally or by mail, by or at the direction
of the President, or the Secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at his address as it appears
on the stock transfer books of the corporation, with postage thereon prepaid.
2
SECTION 5. Fixing of-Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may fix a time, not exceeding 60 days
nor less than 10 days preceding the date of any meeting of shareholders or the
day fixed for the payment of any dividend or distribution or the date for the
allotment of rights or the date when any change or conversion or exchange of
shares shall be made or go into effect, as a record date for the determination
of the shareholders entitled to notice of and to vote at such meeting or
entitled to receive payments of any such dividend, distribution, or allotment
of rights, or to exercise rights in respect to any such change, conversion, or
exchange of shares. In the event a record date shall have been fixed as
aforesaid for any specified purpose, the stock transfer books of the
corporation shall not be closed in connection therewith.
SECTION 6. Voting Lists. The officer or agent having charge of the stock
ledger of the corporation shall make, at least ten full days before each
meeting of the shareholders, a complete list of the shareholders entitled to
vote at such meeting, or any adjournment thereof, arranged in alphabetical
order, with the address of and the number of shares held by each shareholder,
which list, together with the stock ledger, or a duplicate thereof, shall be
kept at the place of such meeting for
3
a period of ten full days prior to the convening of such meeting, and shall be
subject to inspection at any time during such period by any shareholder or
person representing any shareholder. Notwithstanding the foregoing, in the
event the original or duplicate stock ledger reasonably shows in
understandable form all persons entitled to represent shares at such meeting
with the number of shares entitled to be voted by each shareholder, it shall
not be necessary to prepare and produce the list of shareholders hereinabove
referred to.
SECTION 7. Quorum. One-third of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. If less than one-third of the outstanding shares
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time for not more than a total of 30 days
without further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified. The shareholders present at
a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
SECTION 8. Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy in a dated, written appointment signed by the
shareholder, which appointment shall be
4
filed with the Secretary of the corporation at or before the meeting at which
the shares are to be voted.
SECTION 9. Voting of Shares. Each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders. The voting of shares held otherwise than by an
individual shall be governed by the provisions of the Oklahoma General
Corporation Act.
SECTION 10. Consent and Waiver of Notice. (a) Any transaction of the
shareholders of the corporation at any meeting thereof, regardless how or
whether call was made or notice given, shall be as valid as though transacted
at a meeting duly held after regular call and notice: (i) if such transactions
have been or are thereafter approved and ratified at a regular or special
shareholders' meeting held upon regular call or notice; or (ii) if a quorum be
present either in person or by proxy and if, either before or after the
meeting, each of the shareholders entitled to vote and not present in person
or by proxy sign a written waiver of notice, or a consent to the holding of
such meeting, or an approval of the minutes thereof. All such waivers,
consents or approvals shall be filed with the Secretary or made a part of the
records of the meeting.
(b) A waiver of notice, in writing, signed by the person or persons
entitled to such notice, whether signed before or after the time stated
therein, shall be deemed equivalent to the actual giving of any such notice
required by the Oklahoma
5
<PAGE>
General Corporation Act, the Certificate of Incorporation of this corporation
or by these By-Laws.
(c) Any action which pursuant to the Oklahoma General Corporation
Act, the Certificate of Incorporation of this corporation or these By-Laws
might be taken at a meeting of the shareholders, may be taken without a
meeting if a record or memorandum thereof be made in writing and signed by all
of the holders of shares who would be entitled to vote at a meeting for such
purpose and such record or memorandum be filed with the Secretary of the
corporation and made a part of the corporate records.
ARTICLE III. BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the corporation
shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number of directors of
the corporation initially shall be three but may be increased by a vote of the
Board of Directors. Each director shall hold office until the next annual
meeting of shareholders and until his successor shall have been elected and
qualified.
SECTION 3. Regular Meeting. A regular meeting of the Board of Directors
shall be held without other notice than this by-law immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place for the holding of additional
regular meetings without other notice than such resolution.
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SECTION 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of
Directors may fix the place for holding any special meeting of the Board of
Directors called by them.
SECTION 5. Notice. Notice of any special meeting shall be given at, least
three days prior thereto by written notice delivered personally or mailed to
each director at his business address, or by telegram. Such notice shall
specify the time, place and purpose of the meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Any director may waive notice of any meeting. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express
purpose of objecting to the transaction of any business because the meeting is
not lawfully called or convened.
SECTION 6. Quorum. A majority of the number of directors fixed by Section
2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
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SECTION 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors.
SECTION 8. Vacancies. Any vacancy occurring in the Board of Directors may
be filled by the affirmative vote or a majority of the remaining directors
though less than a quorum of the Board of Directors, unless otherwise provided
by law. A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office.
SECTION 9. Compensation. By resolution of the Board of Directors, the
Directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
SECTION 10. Presumption of Assent. 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 shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary of the corporation
within two days after the adjournment of the
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meeting. No director who voted in favor of such action at the meeting shall
have any right to dissent from such action.
SECTION 11. Executive Committee. The Board of Directors, by resolution
adopted by a majority of the entire board, may designate one or more directors
to constitute an Executive Committee, which committee shall have and exercise
all of the authority of the Board of Directors in the management of the
corporation, subject only to such limitations as may be provided by the Board
of Directors or by Section 1027C of the Oklahoma General Corporation Act.
SECTION 12. Action Without Meeting. Any action which might be taken at a
meeting of the Board of Directors or of the Executive Committee may be taken
without a meeting if a record or memorandum thereof be made in writing and
signed by all of the members of the Board of Directors or the Executive
Committee, as the case may be, and such record or memorandum is filed with and
made a part of the permanent records of the corporation.
ARTICLE IV. OFFICERS
SECTION 1. Number. The officers of the corporation shall be a President,
a Vice-President, a Secretary, and such additional Vice-Presidents, other
officers, assistant officers and agents as the Board of Directors may
designate, deeming the same necessary for the transactions of the business of
the corporation.
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SECTION 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the Board of Directors at the first meeting of
the Board of Directors held after each annual meeting of the shareholders. If
the election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be. Each officer shall
hold office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall have been
removed in the manner hereinafter provided.
SECTION 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the corporation would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
SECTION 5. President. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall, when present, preside at all meetings of
the shareholders and of the Board of Directors, unless the Board of Directors
shall
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designate another person to so preside. He may sign, with the Secretary or any
other proper officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation, any deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these By-
Laws to some other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 6. Vice-President. In the absence of the President or in event of
his death, inability or refusal to act, the VicePresident shall perform the
duties of the President, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the President. The Vice-President
shall perform such other duties as from time to time may be assigned to him by
the President or by the Board of Directors. If there be more than one Vice-
President, this Section shall apply to such Vice-Presidents in the same order
in which they appear in the list of officers last elected by the Board of
Directors, unless the Board of Directors shall otherwise specifically provide
by resolution.
SECTION 7. Secretary. The Secretary shall (a) keep the minutes of the
shareholders' and of the Board of Directors'
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meetings in one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these By-Laws or
as required by law; (c) be custodian of the corporate records and of the seal
of the corporation and see that the seal of the corporation is affixed to all
documents the execution of which on behalf of the corporation under its seal
is duly authorized; (d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by, such shareholder;
(e) have general charge of the stock transfer books of the corporation; and
(f) in general perform all duties incident to the office of Secretary and such
other duties as from time to time may be assigned to him by the President or
by the Board of Directors.
SECTION 8. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be
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issued in its name unless authorized by a resolution of the Board of
Directors. Such authority may be general or confined to specific instances.
SECTION 3. Checks, drafts, etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by the Board of
Directors so to do and shall bear the impression of the Corporate Seal
provided for in Article IX of these By-Laws; provided, however, that in the
event the Board of Directors has appointed a Transfer Agent or Registrar, or
both, for its shares, the certificates for shares shall bear the name of such
Transfer Agent or Registrar, or both, and bear the manual signature of an
authorized person of such
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Transfer Agent or Registrar, or both of them, prior to issuance and the
delivery, then and in that event, the signatures and impression of the
Corporate Seal referred to hereinabove may be placed upon such certificates by
facsimile. All certificates for shares shall be consecutively numbered or
otherwise identified and each certificate shall bear the name or names of the
registered owner or owners thereof and the number of shares represented
thereby. The certificate number, the date of its issue, the number of shares
represented thereby and the name and address of the person or persons to whom
the shares were issued, shall be entered on the share ledger of the
corporation. All certificates surrendered to the corporation or its authorized
agent for transfer shall be cancelled and no new certificate shall be issued
until the former certificate for a like number of shares shall have been
surrendered and cancelled, except that in the case of a lost, destroyed or
mutilated certificate, a new certificate may be issued therefor upon such
terms and indemnity to the corporation and its agents or agents as the Board
of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the
holder of record thereof or by his legal representative, who shall furnish
proper evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the corporation, and on surrender for cancellation of the certificate
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for such shares. The person in whose name shares stand on the books of the
corporation shall be deemed by the corporation to be the owner thereof for all
purposes.
ARTICLE VII. FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of January and
end the last day of December in each year.
ARTICLE VIII. DIVIDENDS
The Board of Directors may from time to time declare, and the corporation may
pay, dividends on its outstanding shares in the manner and upon such terms and
conditions as may be provided by law.
ARTICLE IX. SEAL
The Board of Directors shall provide a corporate seal which shall be circular
in form and shall have inscribed thereon the name of the corporation and the
state of incorporation and the words, "Corporate Seal."
ARTICLE X. AMENDMENTS
The Board of Directors shall have the power to adopt, alter or repeal these
By-Laws subject to the power of the shareholders to alter or repeal such By-
Laws. These By-Laws may be altered, amended or repealed and new By-Laws may be
adopted by a vote of the shareholders representing a majority of all shares
entitled
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to vote, at any annual or special shareholders' meeting when the proposed
amendment has been set out in the notice of such meeting.
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ASSET PURCHASE AGREEMENT
BY AND AMONG
WORLDWIDE ENERGY INC.
AND
World Link Capital LLC
Dated as of September 8th, 1999
<PAGE>
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................. 1
SECTION 1.1 ACCOUNTING, TERMS........................................ 1
SECTION 1.2 DEFINED TERMS............................................ 1
ARTICLE II CLOSING .................................................... 2
SECTION 2.1 CLOSING ................................................. 2
ARTICLE III PURCHASE, SALE AND DELIVERY................................ 2
SECTION 3.1 ACQUISITION ASSETS....................................... 2
SECTION 3.2 PURCHASE PRICE .......................................... 2
SECTION 3.3 PURCHASE AGREEMENT ...................................... 3
ARTICLE IV LIABILITIES AND OBLIGATIONS ................................ 3
SECTION 4.1 LIABILITIES NOT ASSUMED BY PURCHASER .................... 3
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER..................... 4
SECTION 5.1 ORGANIZATIONS; QUALIFICATION ............................ 4
SECTION 5.2 AUTHORITY ENFORCEABILITY ................................ 4
SECTION 5.3 BINDING AGREEMENT ....................................... 4
SECTION 5.4 SINGLE-PURPOSE ENTITY ................................... 4
SECTION 5.5 No DEFAULT; COMPLIANCE WITH LAWS AND REGULATIONS ........ 5
SECTION 5.6 ABSENCE OF CERTAIN CHANGES ............................. 5
SECTION 5.7 ACTIONS PENDING ......................................... 5
SECTION 5.8 ENVIRONMENTAL .......................................... 5
SECTION 5.9 TITLE TO PROPERTIES . ................................... 6
SECTION 5.10 SOLVENCY ............................................... 6
SECTION 5.11 CONDITION OF ACQUISITION ASSETS ........................ 6
SECTION 5.12 COPIES OF DOCUMENTS .................................... 7
SECTION 5.13 DISCLOSURE ............................................. 7
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER ................ 7
SECTION 6.1 CORPORATE EXISTENCE ..................................... 7
SECTION 6.2 AUTHORITY; ABSENCE OF CONFLICTS; ENFORCEABILITY ......... 7
SECTION 6.3 BINDING AGREEMENT ....................................... 9
SECTION 6.4 REGULATORY APPROVALS .................................... 8
SECTION 6.5 ACKNOWLEDGMENT........................................... 8
ARTICLE VII COVENANTS ................................................. 8
SECTION 7.1 SELLER'S AND SELLER'S COVENANTS 8
SECTION 7.2 PURCHASER'S COVENANTS ................................... 9
ARTICLE VIII CONDITIONS TO CLOSING..................................... 9
SECTION 8.1 CONDITIONS TO OBLIGATIONS OF PURCHASER . ................ 9
SECTION 8.2 CONDITIONS TO OBLIGATIONS OF SELLER ..................... 11
ARTICLE IX TERMINATION................................................. 11
SECTION 9.1 GROUNDS FOR TERMINATION ................................. 11
SECTION 9.2 EFFECTS OF TERMINATION .................................. 12
ARTICLE X INDEMNIFICATION ............................................. 12
<PAGE>
SECTION 10.1 SELLER'S INDEMNITY OBLIGATIONS.......................... 13
SECTION 10.2 PURCHASER'S INDEMNITY OBLIGATIONS ...................... 13
SECTION 10.3 INDEMNIFICATION PROCEDURES . ........................... 13
SECTION 10.4 DETERMINATION OF INDEMNIFIED AMOUNTS ................... 15
ARTICLE XI MISCELLANEOUS............................................... 15
SECTION 11.1 COMMISSIONS ............................................ 15
SECTION 11.2 SURVIVAL ............................................... 16
SECTION 11.3 EXPENSES ................ .............................. 16
SECTION 11.4 NOTICE ................................................. 16
SECTION 11.5 ENTIRE A ............................................... 17
SECTION 11.6 GOVERNING LAW; VENUE .... .............................. 17
SECTION 11.7 ASSIGNMENTS AND THIRD PARTIES .......................... 17
SECTION 11.8 SEVERABILITY ........................................... 17
SECTION 11.9 AMENDMENTS; No WAIVER . ............................... 17
SECTION 11.10 NO THIRD PARTY BENEFICIARIES .......................... 18
SECTION 11.11 HEADINGS; USE OF CERTAIN TERMS ........................ 18
SECTION 11.12 COUNTERPARTS .......................................... 18
SECTION 11.13 ARMS-LENGTH TRANSACTION ............................... 18
SECTION 11.14 ANCILLARY DOCUMENTS SIMULTANEOUSLY EXECUTED ........... 18
EXHIBIT A.............................................................. 1
BILL OF SALE AND ASSIGNMENT ......................................... 1
iii
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") dated September 8th
1999 is entered into by and among Worldwide Energy, Inc., a Oklahoma
corporation ("Seller"),World-Link Capital LLC a Nevada Limited Liability
Company ("Purchaser").
WHEREAS, Seller is a publicly held corporation disposing of the Assets,
as herein defined; and
WHEREAS, Purchaser wishes to purchase from Seller and Seller wishes to
sell, transfer, assign and deliver to Purchaser all of the State of Utah,
Trust Lands Administration Coal Leases owned by Seller as follows: ML43955,
ML43952 and ML45963 (the "Acquisition Assets"); and a Coal Sales Contract of
300,000 ton per month for a period of ten years from the Government of Mexico.
The purchase price shall be in the range of $44.00 fob at unloading port,
Mexico. The Purchaser understands that the Coal Purchase contract may be in
the form of an acceptable Letter of Intent. Acquisition Assets on the terms
and subject to the conditions set forth herein; and
WHEREAS, Seller desires to sell, transfer, assign and deliver to
Purchaser the Acquisition Assets on the terms and subject to the conditions
set forth herein and Purchase Agreement the obligations of the Purchaser
hereunder; and
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements stated herein, the parties hereto
covenant and agree as follows:
ARTICLE I DEFINITIONS
Section 1.1 Accounting Terms.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles and on a
basis not inconsistent with those applied in the preparation of the financial
statements referred to in Sections 5.6 and 5.7 hereof.
Section 1.2 Defined Terms.
As used in this Agreement, the following terms have the meanings
specified in this Section 1.2. Other capitalized terms have the meanings
assigned to them elsewhere in this Agreement.
Escrow Agent: means Wells Fargo Bank
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Governmental Authority: means any nation or government, any state or
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
Lien: means any mortgage, pledge, hypothecation, security interest,
encumbrance, right of first refusal, option, lien, charge, condition,
restriction or burden of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code of any jurisdiction).
Material Adverse Effect: means any material adverse effect on the
assets, or on the business, financial condition, properties, prospects, net
worth or results of operations of the Person with respect to which such term
is used.
Person: means any individual, partnership, joint venture, corporation,
limited liability company, association, trust, unincorporated organization,
government or agency or subdivision thereof or any other entity.
ARTICLE II CLOSING
Section 2.1 Closing.
The closing of the purchase and sale provided for herein (the
"Closing") shall take place at the offices of Seller at 3168 Bel Air Dr., Las
Vegas, Nevada 89109, on September 8th 30, 1999, or at such other place, time
or date as may be agreed upon in writing by the parties hereto (the "Closing
Date").
ARTICLE III PURCHASE, SALE AND DELIVERY
Section 3.1 Acquisition Assets.
Subject to the terms and conditions of this Agreement, and on the basis of
the representations and warranties hereinafter set forth, at the Closing
Seller shall sell, transfer, convey, assign and deliver to Purchaser, and
Purchaser shall acquire from Seller, all of the State of Utah, Trust Lands
Administration Coal Leases owned by Seller as follows: ML43955, ML43952 and
ML45963 (the "Acquisition Assets"), and the Purchaser understands that the
Coal Purchase contract may be in the form of an acceptable Letter Of Intent;
Section 3.2 Purchase Price.
The consideration for the purchase of the Acquisition Assets is
$200,000,000 (the "Purchase Price"). The final Purchase price will be
determined subject to World - Link's Lender's Appraisal and final Loan
Agreement. The final Loan Agreement must be acceptable to
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both Purchaser and Seller. Purchaser shall pay the Seller initial payment of
one hundred million dollars ($100,000,000) on/or before, as defined herein; to
Seller at Closing by wire transfer to an account designated in writing by
Seller or by a bank cashier's check made payable to Seller consistent with the
terms of the Purchase (the "Purchase Agreement") between World-Link Capital,
LLC.
Section 3.3 Purchase Agreement
The terms of the Purchase Agreement between Seller and Purchaser, the
initial proceeds from the Purchaser contemplated hereunder shall first be
applied to the purchase of Acquisition Assets, any unpaid balance, and any
other amounts owed Seller by Purchaser under the purchase agreement for the
Acquisition Assets. Term of and amount of such payments shall be consistent
with the Purchase Payment Agreement by and between World-Link's Purchase and
Lender and agreed to as follows: 1st payment seventy five million dollars
($75,000,000) one year from date of close of purchase escrow. 2nd payment
twenty five million dollars ($25,000,000) two (2) years from date of close of
purchase escrow by a bank cashier's check made payable to Seller consistent
with the terms of the Purchase (the "Purchase Agreement") between Worldwide
Energy, Inc. and World-Link Capital, LLC. funds shall be wire transferred as
per instruction given in writing by Seller.
ARTICLE IV LIABILITIES AND OBLIGATIONS
Section 4.1 Liabilities Not Assumed by Purchaser.
Purchaser does not assume or agree to pay, perform or discharge, and
shall not be responsible for, any liabilities or obligations of Seller,
whether accrued, absolute, contingent or otherwise (collectively, the
"Excluded Liabilities"), including, without limitation, liabilities or
obligations based on, arising out of or in connection with the following:
(a) any indebtedness (whether short-term or long-term) for borrowed
money of Seller, and any liability or obligation of Seller under any
contracts;
(b) any taxes for which Seller is liable, including, without
limitation, any taxes owned or payable on or as a result of the original
purchase of the Acquisition Assets by Seller, and any taxes incurred with
respect to the Acquisition Assets since their acquisition by Seller;
(c) any liability or obligation (contingent or otherwise) of Seller
arising out of any claim, litigation or proceeding threatened or pending on or
before the Closing Date or any claim, litigation or proceeding threatened or
initiated after the Closing Date, to the extent based on an act or omission of
Seller occurring before the Closing Date.
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represent, warrant and agree to and with Purchaser as follows,
which representations and warranties shall be true also as of the Closing Date
and deemed made as of such date as a result of consummation of the Closing;
Section 5.1 Organizations; Qualification.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Oklahoma. Seller has heretofore
delivered to Purchaser true, correct and complete copies of the Coal Leases of
Seller.
Section 5.2 Authority; Enforceability.
Seller has all requisite corporate power and authority to own and sell
its asset/coal leases, to enter into this Agreement and to perform under this
Agreement. The execution, delivery and performance of this Agreement and the
transactions contemplated hereby have been duly and validly authorized by all
requisite corporate action on the part of Seller (including approval by Seller
as such shareholder thereof). This Agreement has been duly and validly
executed and delivered by Seller. There is no action, claim, suit,
arbitration, investigation or proceeding pending or threatened against Seller
which purports to affect the validity or enforceability of this Agreement or
that seeks to prohibit, restrict or delay the consummation of the transaction
contemplated hereby.
Section 5.3 Binding Agreement.
This Agreement constitutes, a general Agreement that will be subject to
terms and conditions of final Loan Agreement by both parties as of the date
hereof, and this Agreement and all documents and instruments required
hereunder to be executed and delivered by Seller at Closing will constitute,
on the Closing Date, legal, valid and binding obligations of Seller
enforceable against Seller in accordance with their respective terms. This
Agreement also constitutes, as of the date hereof, and this Agreement and all
documents and instruments required hereunder to be executed and delivered by
Seller at Closing will constitute, on the Closing Date, legal, valid and
binding obligations of Seller enforceable against Seller in accordance with
their respective terms unless amended and agreed to by both parties in
writing.
Section 5.4 Single-Purpose Entity.
Seller is a publicly traded entity that was purchased solely for the
purpose acquiring the Acquisition and then selling Assets and of further
acquiring, holding and disposing of other Assets, and accordingly, it has no
other material assets besides the Acquisition Assets, and no material
liabilities. It is not a party to any other material contract.
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Section 5.5 No Default, Compliance with Laws and Regulations.
(a) Seller is not in default under, and no condition exists that
with notice or lapse of time or both would constitute a default under, (i) any
Purchase or credit agreement, indenture, evidence or indebtedness or other
instrument evidencing borrowed money to which Seller is a party or by which
Seller or any of their respective properties is bound, (ii) any judgment,
order or injunction of any court or Governmental Authority or (iii) any other
material agreement, contract, lease or license.
(b) Seller is not in violation of any law, regulation, order,
judgment or decree of any federal or state court or Governmental Authority
applicable to its assets, properties, business or operation.
(c) No taxes or assessments are or, based on events or occurrences
through the Closing, will be, payable in connection with or related to the
Acquisition Assets (other than sales taxes, if any, payable in connection with
the sale and purchase contemplated herein, which sales taxes Seller agrees to
pay) that could in any way become a liability of Purchaser or create a Lien
against the Acquisition Assets.
Section 5.6 Absence of Certain Changes.
Since August 31, 1999 there has not been:
(a) any material damage, destruction or loss to any of the
Acquisition Assets, whether covered by insurance or not;
(b) any write-up or write-down of the value of any of Seller's
assets, except for write-ups or write-downs in accordance with generally
accepted accounting principles and in the ordinary course of business and
consistent with past practice;
(c) seller has not received communications from the Mexican
Government that would indicate that the proposed Letter of Intent or contract
would not be executed in the form and substance as indicated in letter dated
June 23, 1995.
Section 5.7 Actions Pending.
There is no action, claim, suit, investigation or proceeding pending or
threatened against Seller or involving any properties or rights of Seller by
or before any court, arbitrator or Governmental Authority.
Section 5.8 Environmental
Seller has not conducted any business therefor is in compliance with all
Environmental Laws. None of the operations of Seller or the Acquisition Assets
are the subject of federal, state or local investigation evaluating whether
any remedial action is needed to respond to a release of
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<PAGE>
any Hazardous Substance or toxic waste or constituent into the environment.
Seller has not (and no other Person has) filed any notice under any federal,
state or local law indicating that Seller is responsible for the release into
the environment or the improper storage of any amount of any Hazardous
Substance or toxic waste or constituent, or that any such substance, waste or
constituent has been released from or is improperly stored upon the
Acquisition Assets or the land on which they are situated. To Seller's
knowledge, Seller does not otherwise have any liability or contingent
liability in connection with any violation of Environmental Laws or in
connection with the release or threatened release into the environment or the
improper storage of any Hazardous Substance or toxic waste or constituent
related to the Acquisition Assets. All notices, permits, licenses or similar
authorizations, if any, required to be obtained or filed in connection with
the operations of Seller related to the Acquisition Assets, including, without
limitation, present or past treatment, storage, disposal or release of a
Hazardous Substance or toxic waste into the environment, have been duly
obtained or filed, and Seller is in compliance with the terms and conditions
of all such notices, permits, licenses and similar authorizations. To Seller's
knowledge, there has been no release or threatened release of any Hazardous
Substances or toxic waste on or from the Acquisition Assets or the land on
which they are situated that either (a) is not in compliance with
Environmental Laws or (b) could create an obligation or liability of Seller
under Environmental Laws, and there are no storage tanks or other containers
on or under any from the Acquisition Assets or the land on which they are
situated from which Hazardous Substances or other contaminants may be released
into the surrounding environment. No claims, are pending or threatened by
third parties against Seller alleging liability for exposure to Hazardous
Substances in connection with the Acquisition Assets. There have been no
environmental investigations, studies, audits, reviews or other analyses
conducted by or which are in the possession of Seller regarding from the
Acquisition Assets which have not been delivered to Purchaser.
Section 5.9 Title to Properties.
Seller has good and marketable title to the Acquisition Assets and the
Acquisition Assets are not subject to any Lien.
Section 5.10 Solvency.
Seller is not insolvent and neither will be rendered insolvent by the
occurrence of the transactions contemplated by this Agreement. In addition,
immediately after giving effect to the consummation of the transactions
contemplated by this Agreement, (a) As used in this Section, (x) "insolvent"
means, for any Person, that such Person is unable to pay its obligations as
they become due in the usual course of its affairs, and that the sum of the
present fair saleable value of its assets does not and/or will not exceed its
debts and other probably liabilities, and (y) the term "debts" includes any
legal liability, whether matured or unmatured, liquidated or unliquidated,
absolute, fixed or contingent, disputed or undisputed or secured or unsecured.
Section 5.11 Condition of Acquisition Assets.
Seller has no knowledge of any problems with the Acquisition Assets.
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Section 5.12 Copies of Documents.
Seller has provided Purchaser with true, complete and correct copies of
as attached hereto are true, complete and correct copies of such documents;
and all documents furnished by Seller in connection with Purchaser's due
diligence activities related to the purchase and sale contemplated herein,
including all documents listed in Schedule 5.15 are true, correct and
complete. Documents.
Section 5.13 Disclosure.
Seller has provided Purchaser with Appraisal report on Green River Coal,
Inc. prepared by Guy L. Wiggs, a Registered Professional Engineer February 26,
1996, Seller relies solely on reports made by Guy L. Wiggs and makes no
representation other than those reports.
There is no fact known to Seller that has specific application to Seller,
or the Acquisition Assets (other than general economic or industry conditions)
that would have a Material Adverse Effect with respect to any of the foregoing
that has not been set forth in this Agreement or in the schedules attached
hereto. Seller is not aware of any document or information other than as
disclosed in Schedule 5.13 that contains information relevant to the condition
of or title to the Acquisition Assets or any of the transactions or activities
related thereto described in the documents referred to in Section 5.13.
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents, warrants and agrees to and with Seller as
follows:
Section 6.1 Limited Liability Company Existence.
Purchaser is a Limited Liability company duly organized, validly existing
and in good standing under the laws of the State of Nevada. Purchaser is duly
licensed or qualified as a foreign entity to do business, and, is in good
standing, in Nevada.
Section 6.2 Authority; Absence of Conflicts; Enforceability.
Purchaser has all requisite corporate power and authority to carry on its
business as presently conducted, to enter into this Agreement and to perform
its obligations under this Agreement. The execution, delivery and performance
of this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all requisite corporate action on the part of Purchaser.
This Agreement has been duly and validly executed and delivered by Purchaser.
The consummation of the transactions contemplated by this Agreement will not
violate, or be in conflict with, any provision of Purchaser's charter, bylaws,
any agreement or instrument to which Purchaser is a party or by which
Purchaser is bound or any law applicable to Purchaser. There is no action,
claim, suit, arbitration, Investigation of proceeding pending or
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threatened against Purchaser which purports to affect the validity or
enforceability of this Agreement or that seeks to prohibit, restrict or delay
the consummation of the transactions contemplated hereby.
Section 6.3 Binding Agreement.
This Agreement constitutes, as of the date hereof, and this Agreement and
all documents and instruments required hereunder to be executed and delivered
by Purchaser at Closing will constitute, on the Closing Date, legal, valid and
binding obligations of Purchaser enforceable against Purchaser, as the case
may be, in accordance with their respective terms.
Section 6.4 Regulatory Approvals.
No filings or other regulatory approvals are required to be filed or
obtained by Purchaser in connection with the execution, delivery and
performance by Purchaser of this Agreement or Purchase Payment Agreement prior
to the consummation of the transactions contemplated herein.
Section 6.5 Acknowledgment
Purchaser acknowledges that Seller has no right to purchase the site on
which the Acquisition Assets are situated and that the Acquisition Assets
consist solely all of the State of Utah, Trust Lands Administration Coal
Leases owned by Seller as follows: ML43955, ML43952 and ML45963 (the
"Acquisition Assets").
ARTICLE VII COVENANTS
Section 7.1 Seller Covenants.
Seller jointly and severally covenant and agree with Purchaser as follows:
(a) Access. Except as permitted hereunder or contemplated hereby or
as consented to in writing by Purchaser, through the Closing Date Seller will
permit Purchaser to have full access to the Acquisition Assets.
(b) Public Announcements and Disclosure of Company Information.
Subject to applicable law, at all times until the Closing. Seller will
promptly advise of Purchaser before issuing, or permitting any of Seller's
directors, officers, representatives or agents to issue any press release with
respect to this Agreement or the transactions contemplated hereby.
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(c) Other Officers. Except in connection with the transactions
contemplated by this Agreement, from and after the date hereof, Seller shall
not, knowingly permit any of its officers, directors, representatives or
agents to, directly or indirectly, solicit, initiate or knowingly encourage
any offer or proposal for, or any indication of interest in, a merger or
business combination involving Seller or the acquisition of an equity interest
in Seller, or all or any a substantial portion of the Acquisition Assets.
(d) Representations and Warranties. Seller will cause the
representations and warranties contained in Article V hereof to be true and
correct through the Closing Date and shall ensure the satisfaction of the
conditions to Closing set forth in Section 8.1 hereof (other than Section 8.1
(g)).
(e) Further Assistance. Seller shall execute and deliver to
Purchaser, at the Closing or promptly thereafter, any other instrument which
may be requested by Purchaser and which is reasonably appropriate to perfect
or evidence the sales, assignments, transfers or conveyances contemplated by
this Agreement.
(f) Actions Related to Acquisition Assets. Seller shall not disturb
the soil on the site on which the Acquisition Assets are situated.
Section 7.2 Purchaser's Covenants.
Purchaser covenants and agrees with Seller as follows:
(a) Public Announcements and Disclosure of Company Information.
Subject to applicable law, at all times until the Closing Purchaser will
promptly advise, and obtain the approval of, Seller before issuing, or
permitting any of Purchaser's directors, officers, employees, representatives,
agents or subsidiaries to issue, any press release with respect to this
Agreement or the transactions contemplated hereby.
(b) Representations and Warranties. Purchaser will cause the
representations and warranties contained in Article VI hereof to continue to
be true and correct through the Closing Date and ensure the satisfaction of
the conditions to Closing set forth in Section 8.2 hereof (other than Section
8.2(d)).
ARTICLE VIII CONDITIONS TO CLOSING
Section 8.1 Conditions to Obligations of Purchaser.
The obligations of Purchaser to consummate the transactions contemplated
herein are subject, at the option of Purchaser, to satisfaction of the
following conditions:
(a) Compliance. Seller shall have complied with their covenants and
agreements contained herein, and the representations and warranties contained
in Article
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V hereof shall be true and correct on the date hereof and as of the Closing
Date as if made on such date.
(b) Seller's Affidavits. Purchaser shall have received a sworn
affidavit, dated the Closing Date, of Seller and of an executive officer of
Seller certifying as to the matters specified in Section 8.1(a) hereof.
(c) Sellers Resolutions. Seller shall deliver to Purchaser certified
copies of resolutions duly adopted by the board of directors of Seller
authorizing and approving the execution and delivery of this Agreement,
including the exhibits and schedules hereto, and the consummation of the
transactions contemplated herein.
(d) Transfer Documents. Seller shall execute and deliver to
Purchaser such bills of sale and other instruments of sale, transfer,
conveyance, assignment and delivery covering the Acquisition Assets or any
part thereof, executed by Seller or other appropriate parties, as Purchaser
may reasonably require to secure the full and effective sale, transfer,
conveyance, assignment and delivery to Purchaser of the Acquisition Assets,
including, but not limited to, the following:
(i) a general conveyance (the "Bill of Sale and Assignment")
transferring to Purchaser good and marketable title to all of the Acquisition
Assets, substantially in the form of Exhibit A hereto;
(ii) such other instruments of transfer and assignment in
respect of the Acquisition Assets as Purchaser shall reasonably require and as
shall be consistent with the terms and provisions of this Agreement and The
Purchase Payment Agreement. Prior to the Closing Date, Seller will take such
reasonable steps as may be requisite or appropriate so that no later than the
close of business on the Closing Date, Purchaser will be in actual ownership
and control of all of the Acquisition Assets only subject to The Purchase
Payment Agreement.
(g) Orders, Etc. No action, suit or proceeding shall have been
commenced or shall be pending or threatened, and no statute, rule, regulation
or order shall have been enacted, promulgated, issued or deemed applicable to
the transactions contemplated by this Agreement, by any Governmental Authority
or court that reasonably may be expected to (i) prohibit Purchaser's ownership
or operation of all or a material portion of the Acquisition Assets as a
result of the transactions contemplated by this Agreement or (ii) prohibit
consummation of the transaction contemplated by this Agreement.
(h) Consents. All consents and approvals required in connection
with the execution, delivery and performance by Seller of this Agreement shall
have been obtained.
(i) Other Documents. Seller shall deliver to Purchaser such other
documents, instruments and certificates as may be reasonably requested by
Purchaser.
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(j) Condemnation; Condition. No condemnation proceedings shall have
been initiated or threatened with respect to any of the Acquisition Assets.
Section 8.2 Conditions to Obligations of Seller.
The obligations of Seller to consummate the transactions contemplated
herein are subject, at the option of Seller, to satisfaction of the fo1lowing
conditions:
(a) Compliance. Purchaser shall have complied with its covenants
and agreements contained herein, and the representations and warranties
contained in Article VI hereof shall be true and correct on the date hereof
and as of the Closing Date.
(b) Purchaser's Certificate. Seller shall have received a
certificate, dated the Closing Date, of an executive officer of Purchaser
certifying as to the matters specified in Section 8.2(a) hereof.
(c) Purchaser's Resolutions. Purchaser shall deliver to Seller
certified copies of resolutions duly adopted by the board of directors of
Purchaser authorizing and approving the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein.
(d) Orders, Etc. No action, suit or proceeding shall have been
commenced or shall be pending or threatened, and no statute, rule, regulation
or order shall have been enacted, promulgated, issued or deemed applicable to
the transactions contemplated by this Agreement, by any Governmental Authority
or court that reasonably may be expected to prohibit consummation of the
transactions contemplated by this Agreement.
(e) Consents. All consents and approvals required in connection
with the execution, delivery and performance by Purchaser of this Agreement
and Purchase Payment Agreement shall have been obtained.
(f) Other Documents. Purchaser shall deliver to Seller such other
documents, instruments and certificates as may be reasonably required by
Seller.
ARTICLE IX TERMINATION
Section 9.1 Grounds for Termination.
This Agreement may be terminated at any time prior to the Closing Date:
(a) By the mutual written agreement of Seller and Purchaser;
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(b) By Purchaser if any of the conditions set forth in Section 8.1
hereof shall have become incapable of fulfillment and shall not have been
waived by Purchaser;
(c) By Seller if any of the conditions set forth in Section 9.2
hereof shall have been incapable of fulfillment and shall not have been waived
by Seller;
(d) By Seller or Purchaser by written notice thereof to the other
if the transactions contemplated hereby shall not have been consummated on or
before September 8th 27, 1999, or such other date, if any, as Seller and
Purchaser shall agree upon in writing; or
(e) By Seller or Purchaser if the consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or Government Authority having competent jurisdiction
enjoining, restraining or otherwise preventing, or awarding substantial
damages in connection with, or imposing a material adverse condition upon, the
consummation of this Agreement or the transactions contemplated hereby;
provided, however, that a party shall not be allowed to exercise any right of
termination pursuant to this Section 9.1 if the event giving rise to such
termination right shall be due to the failure of the party seeking to
terminate this Agreement to perform or observe in any material respect any of
the covenants or agreements set forth herein to be performed or observed by
such party or the breach of warranty of such party.
Section 9.2 Effects of Termination.
The following provisions shall apply in the event of a termination of
this Agreement:
(a) Subject to subsections (b) and (c) of this Section 9.2, if
this Agreement is terminated by Seller or by Purchaser as permitted under
Section 9.1 hereof, such termination shall be without liability to any party
to this Agreement or any stockholder, director, officer, employee, agent or
representative of such party.
(b) If this Agreement is terminated as a result of breach of
warranty of Purchaser, or failure of Purchaser, to perform their respective
obligations hereunder, Seller shall have all available rights and remedies at
law and in equity, including the right to enforce specific performance.
(d) The parties hereto hereby agree that the provisions of
Sections 9.2, 11.1 and 11.5 and 11.7 hereof and Article X hereof shall survive
any termination of this Agreement.
ARTICLE X INDEMNIFICATION
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Section 10.1 Seller's Indemnity Obligations.
Seller, shall indemnify and hold Purchaser (including its affiliates and
their respective officers, directors, employees and agents) harmless from and
against any and all claims, actions, causes of action, arbitration's,
proceedings, losses, damages, liabilities, judgments and expenses (including,
without limitation, reasonable attorneys' fees) ("Indemnified Amounts")
incurred by Seller as a result of (a) any breach or misrepresentation in any
of the representations and warranties made by or on behalf of Seller in this
Agreement, (b) any violation or breach by Seller of or default by Seller under
the terms of this Agreement, (c) any act or omission by Seller, (d) any
action, claim, suit, arbitration, investigation or proceeding initiated by
Seller which purports to affect the validity or enforceability of this
Agreement or that seeks to prohibit, restrict or delay the consummation of the
transactions contemplated hereby, or (e) any liabilities or obligations of
Seller retained by Seller pursuant to this Agreement.
Section 10.2 Purchaser's Indemnity Obligations.
Purchaser shall indemnify and hold Seller (including its officers,
directors and agents) harmless from and against any and all Indemnified
Amounts incurred by Seller, as the case may be, as a result of (a) any breach
or misrepresentation in any of the representations and warranties made by or
on behalf of Purchaser in this Agreement, (b) any violation or breach by
Purchaser of or default by Purchaser under the terms of this Agreement, (c)
except for liabilities and obligations retained by Seller pursuant to this
Agreement, any act or omission occurring after the Closing Date by Purchaser
with respect to the Acquisition Assets.
Section 10.3 Indemnification Procedures.
All claims for indemnification under this Agreement shall be asserted and
resolved as follows:
(a) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall with reasonable promptness (i) notify the party
from whom indemnification is sought (the "Indemnifying Party") of any third-
party claim or claims asserted against the Indemnified Party ("Third Party
Claim") for which indemnification is sought and (ii) transmit to the
Indemnifying Party a copy of all papers served with respect to such claim (if
any) and a written notice ("Claim Notice") containing a description in
reasonable detail of the nature of the Third Party Claim, an estimate of the
amount of damages attributable to the Third Party Claim to the extent feasible
(which estimate shall not be conclusive of the final amount of such claim) and
the basis of the Indemnified Party's request for indemnification under this
Agreement.
Within 30 days after receipt of any Claim Notice (the "Election Period"),
the Indemnifying Party shall notify the Indemnified Party (i) whether the
Indemnifying Party disputes its potential liability to the Indemnified Party
with respect to such Third Party Claim and (ii) whether the Indemnifying Party
desires, at the sole cost and expense of Indemnifying Party, to defend the
Indemnified Party against such Third Party Claim.
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If the Indemnifying Party notifies the Indemnified Party within the
Election Period that the Indemnifying Party elects to assume the defense of
the Third Party Claim, than the Indemnifying Party shall have the right to
defend, at its sole cost and expense (if the Indemnified Party is entitled to
indemnification hereunder), such Third Party Claim by all appropriate
proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party in accordance with this Section 10.3(a). The Indemnifying
Party shall have full control of such defense and proceedings. The Indemnified
Party is hereby authorized, at the sole cost and expense of the Indemnifying
Party (but only if the Indemnified Party is entitled to indemnification
hereunder), to file, during the Election Period, any motion, answer or other
pleadings that the Indemnified Party shall reasonably deem necessary or
appropriate to protect its interests or those of the Indemnifying Party and
not prejudicial to the Indemnifying Party (it being understood and agreed that
if an Indemnified Party takes any such action that is materially prejudicial
and causes a final adjudication that is adverse to the Indemnifying Party, the
Indemnifying Part shall be relieved of its obligations hereunder with respect
to such Third Party Claim). If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any Third Party Claim that the Indemnifying Party elects
to contest, including, without limitation, the making of any related
counterclaim against the person asserting the Third Party Claim or any cross-
complaint against any person. Except as otherwise provided herein, the
Indemnified Party may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the Indemnifying Party
pursuant to this Section 10.3 and shall bear its own costs and expenses with
respect to such participation.
If the Indemnifying Party fails to notify the Indemnified Party within
the Election Period that the Indemnifying Party elects to defend the
Indemnified Party pursuant to the preceding paragraph, or if the Indemnifying
Party elects to defend the Indemnified Party but fails to prosecute or settle
the Third Party Claim as herein provided, then the Indemnified Party shall
have the right to defend, at the sole cost and expense of the Indemnifying
Party (if the Indemnified Party is entitled to indemnification hereunder), the
Third Party Claim by all appropriate proceedings, which proceedings shall be
promptly and vigorously prosecuted by the Indemnified Party to a final
conclusion or settled. The Indemnified Party shall have full control of such
defense and proceedings. Notwithstanding the foregoing, if the Indemnifying
Party has delivered a written notice to the Indemnified Party to the effect
that the Indemnifying Party disputes its potential liability to the
Indemnified Party under this Article X and if such dispute is resolved in
favor of the Indemnifying Party, the Indemnifying Party shall not be required
to beat the costs and expenses of the Indemnified Party's defense pursuant to
this Section 10.3 or of the Indemnifying Party's participation therein at the
Indemnified Party's request, and the Indemnified Party shall reimburse the
Indemnifying Party in full for all costs and expenses of such litigation. The
Indemnifying Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to this Section 10.3,
and the Indemnifying Party shall bear its own costs and expenses with respect
to such participation.
The Indemnifying Party shall not settle or compromise any Third Party
Claim unless (i) the terms of such compromise or settlement require no more
than the payment of money (i.e., such compromise or settlement does not
require the Indemnified Party to admit any wrongdoing
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or take or refrain from taking any action), (ii) the full amount of such
monetary compromise or settlement will be paid by the Indemnifying Party, and
(iii) the Indemnified Party receives as part of such settlement a legal,
binding and enforceable unconditional satisfaction and/or release, in form and
substance reasonably satisfactory to it, providing that such Third Party Claim
and any claimed liability of the Indemnified Party with respect thereto is
being fully satisfied by reason of such compromise or settlement and that the
Indemnified Party is being released from any and all obligations or
liabilities it may have with respect thereto. The Indemnified Party shall not
settle or admit liability to any Third Party Claim without the prior written
consent of the Indemnifying Party.
(b) In the event any Indemnified Party should have a claim against any
Indemnifying Party hereunder that does not involve a Third Party Claim, the
Indemnified Party shall transmit to the Indemnifying Party a written notice
(the "Indemnity Notice") describing in reasonable detail the nature of the
claim, an estimate of the amount of damages attributable to such claim to the
extent feasible (which estimate shall not be conclusive if the final amount of
such claim) and the basis of the Indemnified Party's request for
indemnification under this Agreement.
Section 10.4 Determination of Indemnified Amounts.
The Indemnified Amounts payable by an Indemnifying Party hereunder shall
be determined (i) by the written agreement of the parties, (ii) by a final
judgment or decree of any court of competent jurisdiction, or (iii) by any
other means agreed to in writing by the parties. A judgment or decree of a
court shall be deemed final when the time for appeal, if any, shall have
expired and no appeal shall have been taken or when all appeals taken have
been fully determined. The Indemnified Party shall have the burden of proving
the Indemnified Amounts suffered by the Indemnified Party.
ARTICLE X1 MISCELLANEOUS
Section 11.1 Commissions.
Seller and Purchaser each represent and warrant that it has done nothing
to create any liability for the payment of any commission or compensation in
the nature of a finder's fee or similar fee to any broker or any other Person
in connection with this Agreement and the transactions contemplated hereby.
Seller, shall indemnify and hold Purchaser harmless from and against any and
all claims for finders' fees, brokers' commissions or similar fees made by any
party as a result of this Agreement and the transactions contemplated
hereunder to the extent that any such commission or fee was incurred, or
alleged to have been incurred, by, through or under Seller. Purchaser shall
indemnify and hold Seller harmless from and against any and all claims for
finders' fees, brokers' commissions or similar fees made by any party as a
result of this Agreement and transactions contemplated hereunder to the extent
that any such commission was incurred, or alleged to have been incurred, by,
through or under Purchaser.
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Section 11.2 Survival.
Except as otherwise provided herein, the representations and warranties
set forth in this Agreement and in any certificate or instrument delivered in
Connection herewith shall be continuing and shall survive the Closing for a
period of four (4) years, notwithstanding any investigation at any time made
by or on behalf of Purchaser, but shall thereafter terminate and be of no
further force or effect; provided, however, that in the case of all
representations and warranties, there shall be no such termination with
respect to any such representation or warranty as to which a bona fide claim
has been asserted by written notice of such claim delivered to the party or
parties making such representation or warranty prior to the expiration of the
survival period.
Section 11.3 Expenses.
Except as other expressly provided herein, each party shall bear its own
expenses incurred in connection with the negotiation, preparation and
execution of this Agreement and the transactions contemplated hereby,
including its own consultant's fees, attorneys' fees, accountants' fees,
Purchase fees and other similar costs and expenses.
Section 11.4 Notice.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been received only if and when (i) personally
delivered or (ii) on receipt after mailing, by United States mail, first
class, postage prepaid, by certified mail return receipt requested, or by
facsimile transmission to the respective parties, addressed in each case as
follows (or to such other address as may be specified by like notice):
(1) If to Seller, to:
Worldwide Energy, Inc.
3168 Bel Air Drive
Las Vegas Country Club
Las Vegas, Nevada 89109
Fax No.: 702-360-4566
with a copy to:
F. W. Young
P.O. B 29225
Las Vegas, Nevada 89126
Fax No. 702-360-4566
(2) If to Purchaser, to
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World-Link Capital, LLC.
3240 Cameron St. Suite "A"
Las Vegas, Nevada 89102
Section 11.5 Entire Agreement.
This Agreement, including all schedules and exhibits hereto, which
schedules or exhibits are incorporated herein by reference and deemed to be a
part of this Agreement, constitutes the entire agreement of the parties with
respect to the subject matter hereof, and may not be modified, amended or
terminated except by a written instrument specifically referring to this
Agreement signed by all the parties hereto.
Section 11.6 Governing Law; Venue.
This Agreement shall be governed, construed and enforced in accordance
with the laws of the State of Nevada without giving effect to the principles
of conflicts of laws thereof. Any legal action or proceeding with respect to
this Agreement shall be brought in the federal district courts located in Las
Vegas, Nevada. The parties waive any objection to jurisdiction or venue in
such jurisdiction.
Section 11.7 Assignments and Third Parties.
Except as otherwise provided herein, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. No party hereto shall assign this Agreement or any part hereof
without the prior written consent of the other party. No assignment shall
release a party of any of its obligations under this Agreement.
Section 11.8 Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any of the parties hereto. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
Section 11. 9 Amendments; No Waiver.
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Any provision of this Agreement may be amended or waived prior to the
Closing Date if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by all parties hereto, or in the case of
a waiver, by the party against whom the waiver is to be effective. No failure
or delay by any party to exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
Section 11.10 No Third Party Beneficiaries.
Nothing in this Agreement shall entitle any Person other than the parties
hereto or their respective successors and assigns permitted hereby to any
claim, cause of action, remedy or right of any kind.
Section 11.11 Headings; Use of Certain Terms.
The headings and table of contents herein are for convenience only and
shall have no significance in the interpretation hereof. Unless the context
shall otherwise require, the singular shall include the plural and vice versa,
and each pronoun in any gender shall include all other genders.
Section 11.12 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed for all purposes to be as original, but all of which
together shall constitute one and the same agreement.
Section 11.13 Arms-Length Transaction.
Seller acknowledges that this Agreement and the transactions contemplated
hereby constitute arms-length transactions and that Seller is receiving
reasonably equivalent value in exchange for the transfers contemplated by this
Agreement.
Section 11.14 Ancillary Documents Simultaneously Executed.
Simultaneously with the execution and deliver of this Agreement, the
parties and Escrow Agent are executing and delivering to one another an Escrow
Agreement providing for the handling of the escrow agent of the deposit. In
addition, Seller is delivering a Guaranty Agreement guaranteeing the
performance of the obligations of Seller under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement oil
the date first above written.
PURCHASER: SELLER:
WORLD LINK CAPITAL, LLC. WORLDWIDE ENERGY, INC.
By:/s/Harold Van Housan By:/s/Winfield Moon, Sr.
Sept 8, 1999 9/8/99
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("the Agreement"), dated as of
August 25, 1998 by and among C/Grip: Inc., an Oklahoma corporation ("C/GRIP");
Green River Coal, Inc., a Nevada Corporation ("Green River"); and the
shareholders of Green River ("Shareholders"), who execute this Agreement and
the Purchase Agreement set forth as Exhibit A of this Agreement, with
reference to the following:
A. C/GRIP is an Oklahoma corporation organized on April 7, 1987. C/GRIP
has authorized common stock of 40 million shares, $0.001 par value, of which
1,841,583 shares are outstanding, and 10 million shares of preferred stock,
$0.001 par value, of which no shares are outstanding.
B. Green River is a Nevada Corporation organized on October 22, 1990.
Green River has authorized common stock of 100,000 shares, no par value, of
which 100,000 shares are outstanding.
C. The respective Boards of Directors of C/GRIP and Green River have
deemed it advisable and in the best interests of C/GRIP and Green River that
Green River be acquired by C/GRIP pursuant to the terms and conditions set
forth in this Agreement.
D. C/GRIP and Green River propose to enter into this Agreement which
provides, among other things, that 100% of the outstanding shares of Green
River be acquired by C/GRIP, in exchange for shares of C/GRIP and such
additional items, all as more fully described in the Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization under Section 368 (a)(1)(B) of the Internal Revenue Code of
1986, as amended.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 At the Closing, a total of 100,000 common shares, which represents
100% of the outstanding shares of Green River, shall be acquired by C/GRIP in
exchange for 13,216,448 investment shares of C/GRIP, which shall be issued to
Green River shareholders as set forth on the signature page of this Agreement.
1.02 At the Closing, the Green River shareholders will deliver
certificates for the outstanding shares of Green River, duly endorsed so as to
make C/GRIP the sole holder thereof, free and clear of all claims and
encumbrances and C/GRIP shall deliver a transmittal letter directed to the
transfer agent of C/GRIP directing the issuance of shares to the shareholders
of Green River as set forth on the signature page of this Agreement.
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1.03 Following the reorganization, there will be a total of 15,058,031
shares of common stock, $0.001 par value, issued and outstanding in C/GRIP.
ARTICLE 2 THE CLOSING
2.01 The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place in the offices of Fuller Tubb Pomeroy
Kirschner Bickford & Stokes, 100 N. Broadway, Suite 3300, Oklahoma City,
Oklahoma 73102 at 11:00 a.m., on September 15, 1998 or at such other place or
date and time as may be agreed to in writing by the parties hereto.
ARTICLE 3
REPRESENTATION AND WARRANTIES OF C/GRIP
C/GRIP and its officers and directors hereby represent and warrant to
Green River as follows:
3.01 C/GRIP shall deliver to Green River, on or before Closing, each of
the following:
(a) Financial Statements. Audited financial statements of C/GRIP
including, but not limited to, balance sheets and profit and loss statements
as of July 31, 1998. (Schedule A).
(b) Property. An accurate list and description of all property, real
or personal, owned by C/GRIP of a value equal to or greater than $ 10,000.
(Schedule B).
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule A. (Schedule C). A
complete and accurate list of all debts, liabilities and obligations of C/GRIP
incurred or owing as of the date of this Agreement. (Schedule C.1).
(d) Leases and Contracts. A complete and accurate list describing all
material terms of each lease (whether of real or personal property) and each
contract, promissory note, mortgage, license, franchise, or other written
agreement to which C/GRIP is a party which involves or can reasonably be
expected to involve aggregate future payments or receipts by C/GRIP (whether
by the terms of such lease, contract, promissory note, license, franchise or
other written agreement or as a result of a guarantee of the payment of or
indemnity against the failure to pay same) of $1,000.00 or more annually
during the twelve-month period ended July 31, 1998, or any consecutive twelve
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month period thereafter, except any of said instruments which terminate or are
cancelable without penalty during such twelve-month period. (Schedule D).
(e) Loan Agreement. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of C/GRIP for the
repayment of borrowed money. (Schedule E).
(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid a default
hereunder; or where notice of such transaction is required at or subsequent to
closing, or where consent to an acquisition, consolidation, or sale of all or
substantially all of the assets is required to avoid a default thereunder.
(Schedule F).
(g) Articles and Bylaws. Complete and accurate copies of the
Certificate and Articles of Incorporation and Bylaws of C/GRIP together with
all amendments thereto to the date hereof. (Schedule G).
(h) Shareholders. A complete list of all persons or entities holding
capital stock of C/GRIP or any rights to subscribe for, acquire, or receive
shares of the capital stock of C/GRIP (whether warrants, calls, options, or
conversion rights), including copies of all stock option plans whether
qualified or non qualified, and other similar agreements. (Schedule H).
(i). Officers and Directors. A complete and current list of all
officers and Directors of C/GRIP. (Schedule I).
(j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate for each present employee
of C/GRIP who received $ 10,000 or more in aggregate compensation from C/GRIP
whether in salary, bonus or otherwise, during the year 1997, or who is
presently scheduled to receive from C/GRIP a salary in excess of $10,000
during the year December 31, 1998, including in each case the amount of
compensation received or scheduled to be received, and a schedule of the
hourly rates of all other employees listed according to departments. (Schedule
J).
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative, arbitration or
other such proceedings or investigations (including without limitations unfair
labor practice matters, labor organization activities, environmental matters
and civil rights violations) pending or, to the knowledge of C/GRIP
threatened, which may materially and adversely affect C/GRIP. (Schedule K).
(1) Tax Returns. Accurate copies of all Federal and State tax returns
for C/GRIP for the last fiscal year. (Schedule L).
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(m) Agency Reports. Copies of all material reports or filings (and a
list of the categories of reports or filings made on a regular basis) made by
C/GRIP under ERISA, EEOC, FDA and all other governmental agencies (federal,
state or local) during the last fiscal year. (Schedule M).
(n) Banks. A true and complete list (in all material respects), as of
the date of this Agreement, showing (1) the name of each bank in which C/GRIP
has an account or safe deposit box, and (2) the names and addresses of all
signatories. (Schedule N).
(o) Jurisdictions Where Qualified. A list of all jurisdictions wherein
C/GRIP is qualified to do business and is in good standing. (Schedule 0).
(p) Subsidiaries. A complete list of all subsidiaries of C/GRIP.
(Schedule P). The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint ventures, or
similar entities in which C/GRIP has an interest, direct or indirect.
(q) Union Matters. An accurate list and description (in all material
respects) of all union contracts and collective bargaining agreements of
C/GRIP, if any. (Schedule Q).
(r) Employee and Consultant Contracts. A complete and accurate list of
all employee and consultant contracts which C/GRIP may have, other than those
listed in the schedule on Union Matters. (Schedule R).
(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock option, bonus, incentive compensation, deferred compensation,
profit sharing, retirement, pension, group insurance, disability, death
benefit or other benefit plans, trust agreements or arrangements of C/GRIP in
effect on the date hereof or to become effective after the date thereof,
together with copies of any determination letters issued by the Internal
Revenue Service with respect thereto. (Schedule S).
3.02 Organization. Standing -and Power. C/GRIP is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Oklahoma with all requisite corporate power to own or lease its properties
and carry on its businesses as are now being conducted.
3.03 Qualification. C/GRIP is not qualified and is not licensed as a
foreign corporation.
3.04 Capitalization of C/GRIP The authorized capital stock of C/GRIP
consists of 40 million shares of Common Stock, $0.001 par value, of which the
only shares issued and outstanding are 1,841,583 issued to shareholders listed
on Schedule H as of the date thereof, which shares were duly authorized,
validly issued and fully paid
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and non assessable. There are no preferred shares currently outstanding. There
are no preemptive rights with respect to the C/GRIP stock.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action, including but not limited to duly and
validly authorized action and approval by the Board of Directors, on the part
of C/GRIP. This Agreement constitutes the valid and binding obligation of
C/GRIP enforceable against it in accordance with its terms, subject to the
principles of equity applicable to the availability of the remedy of specific
performance. This Agreement has been duly executed by C/GRIP and the execution
and transactions contemplated by this Agreement shall not result in any breach
of any terms or provisions of C/GRIP's Certificate and Articles of
Incorporation or Bylaws or of any other agreement, court order or instrument
to which C/GRIP is a party or bound by.
3.06 Absence of Undisclosed Liabilities. C/GRIP has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued,
which were not reflected on the financial statements set forth in Schedule A
nor otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
3.07 Absence of Changes. Since July 31, 1998, there has not been any
material adverse change in the condition (financial or other wise), assets,
liabilities, earnings or business of C/GRIP, except for changes resulting from
completion of those transactions described in Section 5.01.
3.08 Tax Matters. All taxes and other assessments and levies which C/GRIP
is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by C/GRIP in separate bank accounts for such payment or are represented
by depository receipts, and all such withholdings and collections and all
other payments due in connection therewith (including, without limitation,
employment taxes, both the employees' and employer's share) have been paid
over to the government or placed in a separate and segregated bank account for
such purpose. There are no known deficiencies in income taxes for any periods
and further, the representations and warranties as to the absence of
undisclosed liabilities contained in Section 3.06 includes any and all tax
liabilities of whatsoever kind or nature (including, without limitation, all
federal, state, local and foreign income, profit, franchise, sales, use and
property taxes) due or to become due, incurred in respect of or measured by
C/GRIP income or business prior to the Closing Date.
3.09 Options, Warrants, etc. Except as otherwise described in Schedule H,
there are no outstanding options, warrants, calls, commitments or agreements
of any character to which C/GRIP or its shareholders are a party or by which
C/GRIP or its shareholders are bound, or are a party, calling for the issuance
of shares of capital stock of C/GRIP or any securities representing the right
to purchase or otherwise receive any such capital stock of C/GRIP.
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3.10 Title. Assets. Except for liens set forth in Schedule C, C/GRIP is
the sole and unconditional owner of, with good and marketable title to, all
the assets listed in the schedules as owned by them and all other property and
assets are free and clear of all mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever; provided, however, that C/GRIP has
authorized the distribution to its shareholders of record as of September 15,
1998 of the 1,841,583 shares of common stock of Advanced Concept Technologies,
Inc. listed on Schedule P.
3.11 Agreements in Force and Effect. Except as set forth in Schedules D
and E, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, valid and in full force and effect on the date
hereof, and C/GRIP has not breached any material provision of, and is not in
default in any material respect under the terms of, any such contract,
agreement, plan, promissory note, mortgage, lease, policy, license, franchise
or similar instrument which breach or default would have a material adverse
effect upon the business, operations or financial condition of C/GRIP.
3.12 Legal Proceedings, Etc. Except as set forth in Schedule K, there are
no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of either C/GRIP or the
shareholders thereof, threatened, in which, individually or in the aggregate,
an adverse determination would materially and adversely affect the assets,
properties, business or income of C/GRIP. C/GRIP has substantially complied
with, and is not in default in any material respect under, any laws,
ordinances, requirements, regulations or orders applicable to its businesses.
3.13 Governmental Regulation. To the knowledge of C/GRIP and except as
set forth in Schedule K, C/GRIP is not in violation of or in default with
respect to any applicable law or any applicable rule, regulation, order, writ
or decree of any court or any governmental commission, board, bureau, agency
or instrumentality, or delinquent with respect to any report required to be
filed with any governmental commission, board, bureau, agency or
instrumentality which violation or default could have a material adverse
effect upon the business, operations or financial condition of C/GRIP.
3.14 Brokers and Finders. C/GRIP shall be solely responsible for payment
to any broker or finder retained by C/GRIP for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated herein.
3.15 Accuracy of Information. No representation or warranty by C/GRIP
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to Green River pursuant hereto
or in connection with the transactions contemplated hereby (including without
limitation all Schedules and exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
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3.16 Subsidiaries. C/GRIP does not have any other subsidiaries or own
capital stock representing ten percent (10%) or more of the issued and
outstanding stock of any other corporation.
3.17 Consents. Except as listed in Schedule F, no consent or approval of,
or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by C/GRIP or any
shareholder thereof in connection with the consummation of the transactions
contemplated hereby.
3.18 Improper Payments. Neither C/GRIP, nor any person acting on behalf of
C/GRIP has made any payment or otherwise transmitted anything of value,
directly or indirectly, to (a) any official or any government or agency or
political subdivision thereof for the purpose of influencing any decision
affecting the business of C/GRIP (b) any customer, supplier of competitor of
C/GRIP or employee of such customer, supplier or competitor, for the purpose
of obtaining, retaining C/GRIP's existing business for C/GRIP or (c) any
political party or any candidate for elective political office nor has any
fund or other asset of C/GRIP been maintained that was not fully and
accurately recorded on the books of account of C/GRIP.
3.19 Copies of Documents. C/GRIP has made available for inspection, and
copying by Green River and its duly authorized representatives, and will
continue to do so at all times, true and correct copies of all documents which
it has filed with the Securities and Exchange Commission and all other
governmental agencies which are material to the terms and conditions contained
in this Agreement. Furthermore, all filings by C/GRIP with the Securities and
Exchange Commission, and all other governmental agencies, including but not
limited to the Internal Revenue Service, have contained information which is
true and correct, to the best knowledge of the Board of Directors of C/GRIP,
in all material respects and did not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made therein not misleading or which could have any material
adverse effect upon the financial condition or operations of C/GRIP or
adversely effect the objectives of this Agreement with respect to Green River
including, but not limited to, the issuance and subsequent trading of the
shares of common stock of C/GRIP to be received hereby, subject to compliance
by the shareholders of Green River with applicable law. C/GRIP has filed with
the Securities and Exchange Commission and each state securities regulator, or
a timely basis, all statements, applications, reports and filings required
under the Securities Act of 1933 and the Exchange Act of 1934, as amended.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF GREEN RIVER COAL, INC.,
Green River and its president hereby represent and warrant to C/GRIP as
follows:
4.01 Green River shall deliver to C/GRIP, on or before Closing, the
following:
(a) Financial Statements. Audited financial statements of Green River
as of May 1, 1998. (Schedule AA).
(b) Property. An accurate list and description of all property, real
or personal, owned by Green River of a value equal to or greater than
$1,000,00. (Schedule BB).
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule AA. (Schedule CC). A
complete and accurate list of all debts, liabilities and obligations of Green
River incurred or owing as of the date of this Agreement. (Schedule CC.1).
(d) Leases and Contracts. A complete and accurate list describing all
material terms of each lease (whether of real or personal property) and each
contract, promissory note, mortgage, license, franchise, or other written
agreement to which Green River is a party which involves or can reasonably be
expected to involve aggregate future payments or receipts by Green River
(whether by the terms of such lease, contract, promissory note, license,
franchise or other written agreement or as a result of a guarantee of the
payment of or indemnity against the failure to pay same) of $1,000.00 or more
annually during the twelve-month period ended December 31, 1997, or any
consecutive twelve-month period thereafter, except any of said instruments
which terminate or are cancelable without penalty during such twelve-month
period. (Schedule DD).
(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of Green River for
the repayment of borrowed money. (Schedule EE).
(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid a default
hereunder; or where notice of such transaction is required at or subsequent to
closing, or where consent to an acquisition, consolidation, or sale of all or
substantially all of the assets is required to avoid a default thereunder.
(Schedule FF).
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(g) Articles and Bylaws. Complete and accurate copies of the
Certificate and Articles of Incorporation and Bylaws of Green River together
with all amendments thereto to the date hereof. (Schedule GG).
(h) Shareholders. A complete list of all persons or entities holding
capital stock of Green River or any rights to subscribe for, acquire, or
receive shares of the capital stock of Green River (whether warrants, calls,
options, or conversion rights), including copies of all stock option plans
whether qualified or non qualified, and other similar agreements. (Schedule
HH).
(i) Officers and Directors. A complete and current list of all
officers and Directors of Green River. (Schedule II).
(j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate for each present employee
of Green River who received $10,000 or more in aggregate compensation from
Green River whether in salary, bonus or otherwise, during the year 1997, or
who is presently scheduled to receive from Green River a salary in excess of
$10,000 during the year ending December 31, 1998, including in each case the
amount of compensation received or scheduled to be received, and a schedule of
the hourly rates of all other employees listed according to departments.
(Schedule JJ).
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative, arbitration or
other such proceedings or investigations (including without limitations unfair
labor practice matters, labor organization activities, environmental matters
and civil rights violations) pending or, to the knowledge of Green River
threatened, which may materially and adversely affect Green River. (Schedule
KK).
(l) Tax Returns. Accurate copies of all Federal and State tax returns
for Green River, if any. (Schedule LL).
(m) Agency Reports. Copies of all material reports or filings (and a
list of the categories of reports or filings made on a regular basis) made by
Green River under ERISA, EEOC, FDA and all other governmental agencies
(federal, state or local). (Schedule MM).
(n) Banks. A true and complete list (in all material respects), as of
the date of this Agreement, showing (1) the name of each bank in which Green
River has an account or safe deposit box, and (2) the names and addresses of
all signatories. (Schedule NN).
(o) Jurisdictions Where Qualified. A list of all jurisdictions
wherein Green River is qualified to do business and is in good standing.
(Schedule 00).
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(p) Subsidiaries. A complete list of all subsidiaries of Green River.
(Schedule PP). The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint ventures, or
similar entities in which Green River has an interest, direct or indirect.
(q) Union Matters. An accurate list and description (in all material
respects) of all union contracts and collective bargaining agreements of Green
River, if any. (Schedule QQ).
(r) Employee and Consultant Contracts. A complete and accurate list
of all employee and consultant contracts which Green River may have, other
than those listed in the schedule on Union Matters. (Schedule RR).
(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock option, bonus, incentive compensation, deferred compensation,
profit sharing, retirement, pension, group insurance, disability, death
benefit or other benefit plans, trust agreements or arrangements of Green
River in effect on the date hereof or to become effective after the date
thereof, together with copies of any determination letters issued by the
Internal Revenue Service with respect thereto. (Schedule SS).
(t) Insurance Policies. A complete and accurate list (in all
material respects) and description of all material insurance policies naming
Green River as an insured or beneficiary or as a loss payable payee or for
which Green River has paid all Or part of the premium in force on the date
hereof, specifying any notice or other information possessed by Green River
regarding possible claims thereunder, cancellation thereof or premium
increases thereon, including any policies now in effect naming Green River as
beneficiary covering the business activities of Green River. (Schedule TT).
(u) Licenses and Permits. A complete list of all licenses, permits
and other authorizations of Green River. (Schedule VV),
4.02 Organization, Standing and Power. Green River is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada with all requisite corporate power to own or lease its properties
and carry on its businesses as is now being conducted.
4.03 Qualification. Green River is qualified and is licensed as a foreign
corporation in the State of Utah.
4.04 Capitalization of Green River. The authorized capital stock of Green
River consists of 100,000 shares of Common Stock, no par value, which shares
are issued to shareholders listed on Schedule HH, which shares were duly
authorized, validly issued and fully paid and non assessable. There are no
preemptive rights with respect to the Green River stock.
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4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duty authorized
by all necessary corporate action, including but not limited to duly and
validly authorized action and approval by the Board of Directors, on the part
of Green River. This Agreement constitutes the valid and binding obligation of
Green River enforceable against it in availability of the remedy of specific
performance. This Agreement has been duly executed by Green River and the
execution and transactions contemplated by this Agreement shall not result in
any breach of any terms or provisions of Green River's Certificate and
Articles of Incorporation or Bylaws or of any other agreement, court order or
instrument to which Green River is a party or bound by.
4.06 Absence of Undisclosed Liabilities. Green River has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued,
which are not reflected on the financial statements set forth in Schedule AA
nor otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
4.07 Absence of Changes. Since May 1, 1998, there has not been any
material adverse change in the condition (financial or other wise), assets,
liabilities, earnings or business of Green River, except for changes resulting
from completion of those transactions described in Section 5.01.
4.08 Tax Matters. All taxes and other assessments and levies which Green
River is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by Green River in separate bank accounts for such payment or are
represented by depository receipts, and all such withholdings and collections
and all other payments due in connection therewith (including, without
limitation, employment taxes, both the employees' and employer's share) have
been paid over to the government or placed in a separate and segregated bank
account for such purpose. There are no known deficiencies in income taxes for
any periods and further, the representations and warranties as to the absence
of undisclosed liabilities contained in Section 4.06 includes any and all tax
liabilities of whatsoever kind or nature (including, without limitation, all
federal, state, local and foreign income, profit, franchise, sales, use and
property taxes) due or to become due, incurred in respect of or measured by
Green River income or business prior to the Closing Date.
4.09 Options, Warrants, etc. Except as otherwise described in Schedule
HH, there are no outstanding options, warrants, calls, commitments or
agreements of any character to which Green River or its shareholders are a
party or by which Green River or its shareholders are bound, or are a party,
calling for the issuance of shares of capital stock of Green River or any
securities representing the right to purchase or otherwise receive any such
capital stock of Green River.
4.10 Title to Assets. Except for liens set forth in Schedule CC, Green
River is the sole and unconditional owner of, with good and marketable title
to, all the assets
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listed in the schedules as owned by them and all other property and assets are
free and clear of all mortgages, liens, pledges, charges or encumbrances of
any nature whatsoever.
4.11 Agreements in Force and Effect. Except as set forth in Schedules DD
and EE, all material contracts, agreements, plans, promissory notes,
mortgages, leases, policies, licenses, franchises or similar instruments to
which Green River is a party are valid and in full force and effect on the
date hereof, and Green River has not breached any material provision of, and
is not in default in any material respect under the terms of, any such
contract, agreement, plan, promissory note, mortgage, lease, policy, license,
franchise or similar instrument which breach or default would have a material
adverse effect upon the business, operations or financial condition of Green
River.
4.12 Legal Proceedings, Etc. Except as set forth in Schedule KK, there
are no civil, criminal, administrative, arbitration or other such proceedings
or investigations pending or, to the knowledge of either Green River or the
shareholders thereof, threatened, in which, individually or in the aggregate,
an adverse determination would materially and adversely affect the Green
River, properties, business or income of Green River. Green River has
substantially complied with, and is not in default in any material respect
under, any laws. ordinances, requirements, regulations or orders applicable to
its businesses.
4.13 Governmental Regulation. To the knowledge of Green River and except
as set forth in Schedule KK, Green River is not in violation of or in default
with respect to any applicable law or any applicable rule, regulation, order,
writ or decree of any court or any governmental commission, board, bureau,
agency or instrumentality, or delinquent with respect to any report required
to be filed with any governmental commission, board, bureau, agency or
instrumentality which violation or default could have a material adverse
effect upon the business, operations or financial condition of Green River.
4.14 Brokers and Finders. Green River shall be solely responsible for
payment to any broker or finder retained by Green River for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated herein.
4.15 Accuracy of Information. No representation or warranty by Green
River contained in this Agreement and no statement contained in any
certificate or other instrument delivered or to be delivered to C/GRIP
pursuant hereto or in connection with the transactions contemplated hereby
(including without limitation all Schedules and exhibits hereto) contains or
will contain any untrue statement of material fact or omits or will omit to
state any material fact necessary in order to make the statements contained
herein or therein not misleading. Green River and its officers and directors
make no representation or warranty as to the quantity or quality or value of
the coal contained in the leases held by Green River and is relying
exclusively on the reports of Mr. Guy Wiggs and others, which have been
furnished to C/GRIP.
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4.16 Subsidiaries. Except as listed in Schedule PP, Green River does not
have any other subsidiaries or own capital stock representing ten percent
(10%) or more of the issued and outstanding stock of any other corporation.
4.17 Consents. Except as listed in Schedule FF, no consent or approval
of, or registration, qualification or filing with, any governmental authority
or other person is required to be obtained or accomplished by Green River or
any shareholder thereof in connection with the consummation of the
transactions contemplated hereby.
4.18 Improper Payments. No person acting on behalf of Green River has
made any payment or otherwise transmitted anything of value, directly or
indirectly, to (a) any official or any government or agency or political
subdivision thereof for the purpose of influencing any decision affecting the
business of Green River (b) any customer, supplier of competitor of Green
River, or employee of such customer, supplier or competitor, for the purposes
of obtaining or retaining business for Green River, or (c) any political party
or any candidate for elective political office nor has any fund or other asset
of Green River been maintained that was not fully and accurately recorded on
the books of account of Green River.
4.19 Copies of Documents. Green River has made available for inspection
and copying by C/GRIP and its duly authorized representatives, and will
continue to do so at all times, true and correct copies of all documents which
it has filed with governmental agencies which are material to the terms and
conditions contained in this Agreement. Furthermore, all filings by Green
River with governmental agencies, including but not limited to the Internal
Revenue Service, have contained information which is true and correct in all
material respects and did not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements made
therein not misleading or which could have any material adverse effect upon
the financial condition or operations of Green River or adversely effect the
objectives of this Agreement.
4.20 Investment Intent of Shareholders. Each shareholder of Green River
represents and warrants to C/GRIP that the shares of C/GRIP being acquired
pursuant to this Agreement are being acquired for his or her own account and
for investment and not with a view to the public resale or distribution of
such shares and further acknowledges that the shares being issued have not
been registered under the Securities Act and are "restricted securities" as
that term is defined in Rule 144 promulgated under the Securities Act and must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available.
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ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE EFFECTIVE TIME OF THE ACQUISITION
5.01 Conduct and Transactions of C/GRIP During the period from the date
hereof to the date of Closing, C/GRIP shall:
(a) Conduct its operations in the ordinary course of business,
including but not limited to, paying all obligations as they mature, complying
with all applicable tax laws, filing all tax returns required to be filed and
paying all taxes due;
(b) Maintain its records and books of account in a manner that
fairly and correctly reflect its income, expenses, assets and liabilities.
C/GRIP shall not during such period, except in the ordinary course of
business, without the prior written consent of Green River:
(a) Sell, dispose of or encumber any of its properties or assets
except for payment of brokers or finders fees;
(b) Declare or pay any dividends on shares of its capital stock or
make any other distribution of assets to the holders thereof other than the
distribution to its shareholders of record as of September 15, 1998 of the
1,841,583 shares of common stock of Advanced Concept Technologies, Inc. as
described in schedule P;
(c) Issue, reissue or sell, or issue options or rights to subscribe
to, or enter into any contract or commitment to issue, reissue or sell, any
shares of its capital stock or acquire or agree to acquire any shares of its
capital stock;
(d) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or into any
other corporation or sell all or substantially all of its assets or change in
any manner the rights of its capital stock or other securities;
(e) Pay or incur any obligation or liability, direct or contingent,
of more than $1,000;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other party, or
make loans or advances to any other party;
(g) Make any material change in its insurance coverage;
14
<PAGE>
(h) Increase in any manner the compensation, direct or indirect, of
any of its officers or executive employees; except in accordance with existing
employment contracts;
(i) Enter into any agreement or make any commitment to any labor
union or organization;
(j) Make any capital expenditures.
5.02 Conduct and Transactions of Green River. During the period from the
date hereof to the date of Closing, Green River shall:
(a) Obtain an investment letter from each shareholder of Green River
in a form substantially as that attached hereto as Exhibit A.
(b) Conduct the operations of Green River in the ordinary course of
business.
Green River shall not during such period, except in the ordinary course
of business, without the prior written consent of C/GRIP:
(a) Sell, dispose of or encumber any of the properties or assets of
Green River;
(b) Declare or pay any dividends on shares of its capital stock or
make any other distribution of assets to the holders thereof,
(c) Issue, reissue or sell, or issue options or rights to subscribe
to, or enter into any contract or commitment to issue, reissue or sell, any
shares of its capital stock or acquire or agree to acquire any shares of its
capital stock;
(d) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or into any
other corporation or sell all or substantially all of its assets or change in
any manner the rights of its capital stock or other securities;
(e) Pay or incur any obligation or liability, direct or contingent
other than to extinguish liabilities revealed on its financial statements
provided hereto;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other party, or
make loans or advances to any other party;
(g) Make any material change in its insurance coverage;
15
<PAGE>
(h) Increase in any manner the compensation, direct or indirect, of
any of its officers or executive employees, except in accordance with existing
employment contracts;
(i) Enter into any agreement or make any commitment to any labor
union or organization;
(j) Make any material capital expenditures.
(k) Allow any of the foregoing actions to be taken by any subsidiary
of Green River,
ARTICLE 6
RIGHTS OF INSPECTION
6.01 During the period from the date of this Agreement to the date of
Closing of the acquisition, C/GRIP and Green River agree to use their best
efforts to give the other party, including its representatives and agents,
full access to the premises, books and records of each of the entities, and to
furnish the other with such financial and operating data and other information
including, but not limited to, copies of all legal documents and instruments
referred to on any schedule or exhibit hereto, with respect to the business
and properties of C/GRIP or Green River, as the case may be, as the other
shall from time to time request; provided, however, if there are any such
investigations: (1) they shall be conducted in such manner as not to
unreasonably interfere with the operation of the business of the other parties
and (2) such right of inspection shall not affect in any way whatsoever any of
the representations or warranties given by the respective parties hereunder.
In the event of termination of this Agreement, C/GRIP and Green River will
each return to the other all documents, work papers and other materials
obtained from the other party in connection with the transactions contemplated
hereby, and will take such other steps necessary to protect the
confidentiality of such material.
ARTICLE 7
CONDITIONS TO CLOSING
7.01 Conditions to Obligations of Green River. The obligation of Green
River to perform this Agreement is subject to C/GRIP's performing its Closing
obligations, unless waived in writing by Green River.
(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by C/GRIP which in the opinion of Green
River,
16
<PAGE>
expressed in writing to C/GRIP within two weeks after delivery of the
schedules, would materially adversely affect the proposed transaction and
intent of the parties as set forth in this Agreement. The representations and
warranties of C/GRIP set forth in Article 3 hereof shall be true and correct
in all material respects as of the date of this Agreement and as of the
Closing as though made on and as of the Closing, except as otherwise permitted
by this Agreement.
(b) Performance of Obligations. C/GRIP shall have in all material
respects performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and C/GRIP shall
have complied in all material respects with the course of conduct required by
this Agreement.
(c) Corporate Action. There are minutes, certified copies of
corporate resolutions and/or other documentary evidence satisfactory to
counsel for Green River that C/GRIP has submitted this Agreement and any other
documents required hereby to such parties for approval as provided by
applicable law.
(d) Consents. Execution of this Agreement by the shareholders of
Green River and any consents necessary for or approval of any party listed on
any Schedule delivered by C/GRIP whose consent or approval is required
pursuant thereto shall have been obtained.
(e) Financial Statements. Green River shall have been furnished
audited financial statements of C/GRIP including, but not limited to, balance
sheets and profit and loss statements as of July 31, 1998. Such financial
statements shall have been prepared in conformity with generally accepted
accounting principles on a basis consistent with those of prior periods and
fairly present the financial position of C/GRIP as of July 31, 1998.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by C/GRIP of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals,
permits and orders of all federal and state governmental agencies required to
be obtained by C/GRIP for consummation of the transactions contemplated by
this Agreement shall have been obtained.
(h) Employment Agreements. Existing C/GRIP employment agreements
will have been delivered to Counsel for Green River.
(i) Changes in Financial Condition of C/GRIP There shall not have
occurred any material adverse change in the financial condition or in the
operations of the business of C/GRIP. except expenditures in furtherance of
this Agreement.
17
<PAGE>
(j) Absence of Pending Litigation. C/GRIP is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement or the
consummation of the transactions contemplated hereunder.
(k) Authorization for Issuance of Stock. Green River shall have
received in form and substance satisfactory to Counsel for Green River a
letter instructing and authorizing the Registrar and Transfer Agent for the
shares of common stock of C/GRIP to issue stock certificates representing
ownership of C/GRIP common stock to Green River in accordance with the terms
of this Agreement and a letter from said Registrar and Transfer Agent
acknowledging receipt of the letter of instruction and stating to the effect
that the Registrar and Transfer Agent holds adequate supplies of stock
certificates necessary to comply with the letter of instruction and the terms
and conditions of this Agreement.
7.02 Conditions to Obligations of C/GRIP. The obligation of C/GRIP to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing unless waived in writing by C/GRIP
(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by Green River, which in the opinion of
C/GRIP, would materially adversely affect the proposed transaction and intent
of the parties as set forth in this Agreement. The representations and
warranties of Green River set forth in Article 4 hereof shall be true and
correct in all material respects as of the date of this Agreement and as of
the Closing as though made on and as of the Closing, except as otherwise
permitted by this Agreement.
(b) Performance of Obligations. Green River shall have in all
material respects performed all agreements required to be performed by it
under this Agreement and shall have performed in all material respects any
actions contemplated by this Agreement prior to or on the Closing and Green
River shall have complied in all respects with the course of conduct required
by this Agreement.
(c) Corporate Action. There has been delivered to C/GRIP minutes,
certified copies of corporate resolutions and/or other documentary evidence
satisfactory to counsel for C/GRIP that Green River has submitted this
Agreement and any other documents required hereby to such parties for approval
as provided by applicable law.
(d) Consents. Any consents necessary for or approval of any party
listed on any Schedule delivered by Green River, whose consent or approval is
required pursuant thereto, shall have been obtained.
(e) Financial Statements. C/GRIP shall have been furnished with an
interim unaudited financial statement of Green River for the period from the
date of its
18
<PAGE>
last audited financial statements to the day of the month preceding the
Closing. Such financial statements shall fairly present the financial position
of Green River as of its date.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by Green River of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals,
permits and orders of all federal and state governmental agencies required to
be obtained by Green River for consummation of the transactions contemplated
by this Agreement shall have been obtained.
(h) Employment Agreements. Existing Green River employment
agreements will have been delivered to counsel for C/GRIP.
(i) Changes in Financial Condition of Green River. There shall not
have occurred any material adverse change in the financial condition or in the
operations of the business of Green River, except expenditures in furtherance
of this Agreement.
(j) Absence of Pending Litigation. Green River is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement or the
consummation of the transactions contemplated hereunder.
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such
further or other actions as the other party or parties to this Agreement may
reasonably deem necessary in order to carry out the purposes and intent of
this Agreement.
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.01 All statements contained in any written certificate, schedule,
exhibit or other written instrument delivered by C/GRIP or Green River
pursuant hereto, or otherwise adopted by C/GRIP, by its written approval, or
by Green River by its written
19
<PAGE>
approval, or in connection with the transactions contemplated hereby, shall be
deemed representations and warranties by C/GRIP or Green River as the case may
be. All representations, warranties and agreements made by either party shall
survive for the period of the applicable statute of limitations and until the
discovery of any claim, loss, liability or other matter based on fraud, if
longer.
ARTICLE 10
TERMINATION OF AGREEMENT AND ABANDONMENT OF REORGANIZATION
10. 1 Termination. Anything herein to the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the acquisition
contemplated hereby may be terminated at any time before the closing date as
follows:
(a) By mutual written consent of the Boards of Directors of C/GRIP
and Green River.
(b) By the Board of Directors of C/GRIP if any of the conditions set
forth in Section 7.02 shall not have been satisfied.
(c) By the Board of Directors of Green River if any of the
conditions set forth in Section 7.01 shall not have been satisfied.
10.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the acquisition are terminated and
abandoned pursuant to this Article 10 hereof, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of any
of the parties hereto, or their respective directors, officers, shareholders
or controlling persons to each other. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and any
of the documents evidencing the transactions contemplated hereby, including
fees, expenses and disbursements of counsel.
ARTICLE 11
THE CLOSING
11.01 Exchange of Shares. At the Closing, (1) C/GRIP shall issue a letter
to the transfer agent of C/GRIP with a copy of the resolution of the Board of
Directors of C/GRIP authorizing the issuance of C/GRIP shares as set forth on
the signature page of this Agreement, and (2) Green River shall deliver to
C/GRIP stock certificates, properly
20
<PAGE>
endorsed and with signatures guaranteed by a bank, assigning to C/GRIP the
shares of capital stock of Green River of each person who executes Exhibit A
attached hereto.
11.02 Restrictions on Shares Issued to Green River. Due to the fact that
Green River will receive shares of C/GRIP common stock in connection with the
acquisition which have not been registered under the 1933 Act by virtue of the
exemption provided in Section 4(2) of such Act, those shares of C/GRIP will
contain the following legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares
have been acquired for investment and may not be sold or
offered for sale in the absence of an effective Registration
Statement for the shares under the Securities Act of 1933
or an opinion of counsel to the Corporation that such
registration is not required.
ARTICLE 12
MISCELLANEOUS
12.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Oklahoma excluding the conflicts of
laws.
12.02 Notices. All notices necessary or appropriate under this Agreement
shall be effective when personally delivered or deposited in the United States
mail, postage prepaid, certified or registered, return receipt requested, and
addressed to the parties last known address which addresses are currently as
follows:
If to "C/GRIP"
C/GRIP Inc.
1026 E. 66th Place, No. 117
Tulsa, Oklahoma 74136
If to "Green River"
21
<PAGE>
Green River Coal, Inc.
3168 Bel Air Drive
Las Vegas Country Club
Las Vegas, NV 89109
With copies to:
Thomas J. Kenan
Fuller Tubb Pomeroy Kirschner Bickford & Stokes
100 N. Broadway, Suite 3300
Oklahoma City, OK 73102
12.03 Amendment and Waiver. The parties hereby may, by mutual agreement
in writing signed by each party, amend this Agreement in any respect. Any term
or provision of this Agreement may be waived in writing at any time by the
party which is entitled to the benefits thereof, such waiver right shall
include, but not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the obligations of
the other;
(b) Waive any inaccuracies of representations by the other contained
in this Agreement or in any document delivered pursuant hereto;
(c) Waive compliance by the other with any of the covenants
contained in this Agreement. and performance of any obligations by the other;
and
(d) Waive the fulfillment of any condition that is precedent to the
performance by the other party of any of its obligations under this Agreement.
Any writing on the part of a party relating to such amendment, extension or
waiver as provided in this Section 12.03 shall be valid if authorized or
ratified by the Board of Directors of such party.
12.04 Remedies not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by
C/GRIP or Green River shall not constitute a waiver of the right to pursue
other available remedies.
12.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument,
22
<PAGE>
12.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of C/GRIP and Green River.
12.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigned regarding
the subject matter hereof, and supersedes all prior written or oral
understandings or agreements between the parties.
12.08 Each Party to Bear its Own Expense. C/GRIP and Green River shall
each bear their own respective expenses incurred in connection with the
negotiation, execution, closing, and performance of this Agreement, including
counsel fees and accountant fees.
12.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning or
construction of any provisions of this Agreement.
Executed as of the date first written above.
Green River Coal, Inc. C/Grip: Inc.
By: /s/ William W Moon By: /s/ Richard Cohen
---------------------- -----------------------
William W. Moon, Sr. Sr. President Richard Cohen, President
23
<PAGE>
Schedules to Agreement and Plan of Reorganization
Among C/Grip: Inc., Green River Coal, Inc. and
Shareholders of Green River Coal, Inc.
Dated August 10, 1998
Schedule A
- -----------
Attached hereto are audited financial statements of C/Grip: Inc. as of July
31, 1998.
Schedule B
- ----------
1,841,583 shares of Common Stock of Advanced Concept Technologies, Inc., an
Oklahoma corporation.
Schedule C and C.1
- ------------------
None
Schedule D
- ----------
None
Schedule E
- ----------
None
Schedule F
- ----------
None
Schedule G
- -----------
Attached hereto are copies of the Certificate of Incorporation and all
amendments thereto and the Bylaws of C/Grip: Inc.
Schedule H
- ------------
List of all persons or entities holding capital stock of C/GRIP or any rights
to subscribe for, acquire, or receive shares of the capital stock of C/GRIP
(whether warrants, calls, options, or conversion rights), including copies of
all stock option plans whether qualified or non qualified, and other similar
agreement
Schedule I
- ----------
Richard Cohen is the sole officer and director of C/Grip: Inc.
Schedule J
- ----------
The only current employee of C/Grip: Inc. is Richard Cohen, who serves for no
salary at this time.
Schedule K
- ----------
Attached hereto is a copy of the plaintiff's Complaint filed "Bellatrix
International, Inc., a Delaware corporation, plaintiff, vs. Richard Cohen,
C/Grip: Inc., an Oklahoma corporation, and Does 1 - 50, defendants," in Case
no. 98K15971, Municipal Court of Los Angeles Judicial DIstrict, COunty of Los
Angeles, State of California.
Schedule L
- ----------
Attached hereto are copies of the federal and state tax returns for C/Grip:
Inc. for 1997
Schedule M
- -----------
None
Schedule N
- ----------
C/Grip: Inc. had a checking account in State Bank, Tulsa, Oklahoma. Richard
Cohen was the sole signatory on the account. The account has been closed.
Schedule O
- ----------
Oklahoma
Schedule P
- ----------
The sole subsidiary of C/Grip: Inc. is Advanced Concept Technologies, Inc.
("ACT"), a wholly owned Oklahoma corporation. C/Grip's board of directors has
declared that the 1,841,583 shares of ACT shall be distributed to the
shareholders of C/Grip as of August 10, 1998. These shares shall no longer be
assets of C/Grip at the time of the closing of the Agreement to which this
Schedule P is attached.
Schedule Q
- -----------
None
Schedule R
- ----------
None
Schedule S
- ----------
None
Schedule AA
- -----------
Attached hereto are the audited financial statements of Green River Coal, Inc.
as of May 1, 1998.
Att
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