STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
BRIDGEPORT COMMUNICATIONS, INC.
a Florida Corporation
and
WEALTHHOUND, INC.
a Florida Corporation
effective as of July 9, 1999
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STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and entered into
this 9th day of July, 1999, by and among Bridgeport Communications, Inc., a
Florida corporation with its principal place of business located at 444 Brickell
Avenue, Suite 51-483, Miami, Florida 33131 ("Bridgeport"), WealthHound, Inc., a
Florida Corporation with its principal place of business at 701 Brickell Avenue,
Suite 3120, Miami, Florida 33131 ("WealthHound") and the individual listed on
Exhibit "A" attached hereto and specifically incorporated herein by this
reference (the "WealthHound Shareholder"), (WealthHound and WealthHound
Shareholder jointly referred to as the "WealthHound").
PREMISES
A. This Agreement provides for the acquisition of WealthHound by
Bridgeport whereby WealthHound shall become a wholly owned subsidiary of
Bridgeport and in connection therewith, the issuance of 60,000,000 ($0.001 par
value per share) shares of restricted common stock of Bridgeport to the
WealthHound Shareholder as designated on Exhibit "A" and other consideration.
B. The boards of directors of Bridgeport and WealthHound have
determined, subject to the terms and conditions set forth in this Agreement,
that the transaction contemplated hereby is desirable and in the best interests
of their stockholders, respectively. This Agreement is being entered into for
the purpose of setting forth the terms and conditions of the proposed
acquisition.
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
BRIDGEPORT
As an inducement to and to obtain the reliance of WealthHound,
Bridgeport represents and warrants as follows:
SECTION 1.1 ORGANIZATION. Bridgeport is a corporation duly organized,
validly existing, and in good standing under the laws of Florida and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign corporation in the jurisdiction in which the character and
location of the assets owned by it or the nature of the business
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transacted by it requires qualification. Included in the Bridgeport Schedules
(as hereinafter defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto of Bridgeport as in effect on the
date hereof. The execution and delivery of this Agreement does not and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not violate any provision of Bridgeport's articles of
incorporation bylaws. Bridgeport has full power, authority and legal right and
has taken all action required by law, its articles of incorporation, its bylaws
or otherwise to authorize the execution and delivery of this Agreement.
SECTION 1.2 CAPITALIZATION. The authorized capitalization of Bridgeport
consists of 200,000,000 Common Shares, $0.001 par value per share. As of the
date hereof, Bridgeport has 11,502,528 common shares issued and outstanding, of
which 3,493,640 are unrestricted. Bridgeport is presently a public company
listed on the NASDAQ OTC Bulletin Board.
As of the Closing Date hereof, no shares of Preferred Stock will be issued or
outstanding. All issued and outstanding shares are legally issued, fully paid
and nonassessable and are not issued in violation of the preemptive or other
rights of any person. Bridgeport has no other securities, warrants or options
authorized or issued.
SECTION 1.3 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Bridgeport does
not have any other subsidiaries and does not own, beneficially or of record, any
shares of any other corporation.
SECTION 1.4 OPTIONS AND WARRANTS. There are no existing options,
warrants, calls or commitments of any character to which Bridgeport is a party
and by which it is bound
SECTION 1.5 FINANCING. Bridgeport undertook Regulation D 504 Offerings,
whereby Bridgeport raised $ and issued shares of Bridgeport to such investors.
Such shares are included in the issued and outstanding shares as set forth in
Section 1.2 hereinabove.
SECTION 1.6 LITIGATION AND PROCEEDINGS. To the best of Bridgeport's
knowledge and belief, there are no material actions, suits, proceedings or
investigations pending or threatened by or against Bridgeport or affecting
Bridgeport or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before any
arbitrator of any kind that would have a material adverse affect on the
business, operations, financial condition or income of Bridgeport. Bridgeport
does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default. Bridgeport is subject to certain liens and
liabilities which WealthHound has acknowledged and agreed to accept.
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SECTION 1.7 MATERIAL CONTRACT DEFAULTS. To the best of Bridgeport's
knowledge and belief, Bridgeport is not in default in any material respect under
the terms of any outstanding contract, agreement, lease or other commitment
which is material to the business, operations, properties, assets or condition
of Bridgeport, and there is no event of default in any material respect under
any such contract, agreement, lease or other commitment in respect of which
Bridgeport has not taken adequate steps to prevent such a default from
occurring.
SECTION 1.8 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Bridgeport is
a party or to which any of its properties or operations are subject.
SECTION 1.9 GOVERNMENTAL AUTHORIZATIONS. To the best of Bridgeport's
knowledge, Bridgeport has all licenses, franchises, permits or other
governmental authorizations legally required to enable Bridgeport to conduct its
business in all material respects as conducted on the date hereof. Except for
compliance with federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent or order of, or
registration, declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by Bridgeport of this
Agreement and the consummation of Bridgeport of the transactions contemplated
hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
WEALTHBOUND
As an inducement to, and to obtain the reliance of Bridgeport,
WealthHound represents and warrants as follows:
ARTICLE III
SECTION 3.1 ORGANIZATION. WealthHound is a corporation duly organized,
validly existing and in good standing under the laws of Florida and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign entity in the country or stales in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the WealthHound Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation,
bylaws and amendments thereto of WealthHound as in effect on the date hereof.
The execution and delivery of this Agreement does not and the consummation of
the transactions contemplated by this Agreement in accordance with the terms
hereof will not, violate any provision of WealthHound's certificate of
incorporation or bylaws.
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WealthHound has full power, authority and legal right and has taken all action
required by law, its articles of incorporation, bylaws or otherwise to authorize
the execution and delivery of this Agreement. In addition WealthHound maintains
a corporate office in New York, New York.
SECTION 3.2 CAPITALIZATION. The authorized capitalization of
WealthHound consists of 200.000,000 shares, .001 par value. As of the date
hereof, there are 5,000,000 shares issued and outstanding to the following:
Rebecca Jane Brock-2,125,000; First Security Investments-1,250,000; Mathew
Charles Sher-625,000; Eric Todd Seiden-625,000; Scott Brian Mager-250,000; and
Quentin Road Productions, Inc.-125,000. All issued and outstanding WealthHound
shares have been legally issued, partially paid, are nonassessable
SECTION 3.3 SUBSIDIARIES. WealthHound has no subsidiary companies
SECTION 3.4 TAX MATTERS; BOOKS & RECORDS.
(a) The books and records, financial and others, of WealthHound are in
all material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) WealthHound has no liabilities with respect to the payment of any
country, federal, state, county, local or other taxes (including any
deficiencies, interest or penalties).
SECTION 3.5 INFORMATION. The information concerning WealthHound as set
forth in this Agreement and in the WealthHound Schedules is complete and
accurate in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact required to make the statements
made, in light of the circumstances under which they were made, not misleading.
SECTION 3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as described
herein or in the WealthHound Schedules, since April 27, 1999:
(a) WealthHound has not: (i) amended its certificate of incorporation
or bylaws; (ii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of WealthHound;
(iii) made any material change in its method of management, operation
or accounting; or (iv) made any accrual or arrangement for or payment
of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee;
(b) WealthHound has not: (i) granted or agreed to grant any options,
warrants or other rights for its certificates, bonds or other corporate
securities calling for the issuance thereof, which option, warrant or
other right has not been canceled as of the Closing Date; (ii) borrowed
or agreed to borrow any funds or incurred or
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become subject to, any material obligation or liability (absolute or
contingent) except liabilities incurred in the ordinary course of
business; and
(c) (C)to the best knowledge of WealthHound, it has not become subject
to any law or regulation which materially and adversely affects, or in
the future may adversely affect, the business, operations, properties,
assets or condition of WealthHound.
SECTION 3.7 TITLE AND RELATED MATTERS. WealthHound has good and
marketable title to and is the sole and exclusive owner of all of its
properties, inventory, interests in properties and assets, real and personal
(collectively, the "Assets") which are reflected in the most recent WealthHound
balance sheet and the WealthHound Schedules or acquired after that date (except
properties, interests in properties and assets sold or otherwise disposed of
since such date in the ordinary course of business), free and clear of all
liens, pledges, charges or encumbrances. Except as set forth in the WealthHound
Schedules, WealthHound owns free and clear of any liens, claims, encumbrances,
royalty interests or other restrictions or limitations of any nature whatsoever
and all procedures, techniques, marketing plans, business plans, methods of
management or other information utilized in connection with WealthHound's
business. Except as set forth in the WealthHound Schedules, no third party has
any right to, and WealthHound had not received any notice of infringement of or
conflict with asserted rights of others with respect to any product, technology,
data, trade secrets, know-how, proprietary techniques, trademarks, service
marks, trade names or copyrights which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a materially
adverse affect on the business, operations, financial conditions or income of
WealthHound or any material portion of its properties, assets or rights.
SECTION 3.8 LITIGATION AND PROCEEDINGS. There are no actions, suits or
proceedings pending or, to the best of WealthHound's knowledge and belief,
threatened by or against or affecting WealthHound, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign
or before any arbitrator of any kind that would have a material adverse effect
on the business, operations, financial condition, income or business prospects
of WealthHound. WealthHound does not have any knowledge of any default on its
part with respect to any judgment, order, writ, injunction, decree, award, rule
or regulation of any court, arbitrator or governmental agency or
instrumentality,
SECTION 3.9 CONTRACTS. On the Closing Date:
(a) There are no material contracts, agreements, franchises, license
agreements, or other commitments to which WealthHound is a party or by
which it or any of its properties are bound;
(b) WealthHound is not a party to any contract, agreement, commitment
or instrument or subject to any charter or other corporate restriction
or any judgment, order, writ, injunction, decree or award which
materially and adversely affects, or in the future may (as far as
WealthHound can now foresee) materially
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and adversely affect, the business, operations, properties, assets or
conditions of WealthHound; and
(c) (C)WealthHound is not a party to any material oral or written: (i)
contract for the employment of any officer or employee; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay,
pension, benefit or retirement plan, agreement or arrangement covered
by Title IV of the Employee Retirement Income Security Act, as amended;
(iii) agreement, contract or indenture relating to the borrowing of
money; (iv) guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate exceeds $1,000; (v)
consulting or other contract with an unexpired term of more than one
year or providing for payments in excess of $10,000 in the aggregate;
(vi) collective bargaining agreement; (vii) contract, agreement, or
other commitment involving payments by it for more than $10,000 in the
aggregate.
SECTION 3.10 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which WealthHound
is a party or to which any of its properties or operations are subject.
SECTION 3.11 MATERIAL CONTRACT DEFAULTS. To the best of WealthHound's
knowledge and belief, WealthHound is not in default in any material respect
under the terms of any outstanding contract, agreement, lease or other
commitment which is material to the business, operations, properties, assets or
condition of WealthHound, and there is no event of default in any material
respect under any such contract, agreement, lease or other commitment in respect
of which WealthHound has not taken adequate steps to prevent such a default from
occurring.
SECTION 3.12 GOVERNMENTAL AUTHORIZATIONS. To the best of WealthHound's
knowledge, WealthHound has all licenses, franchises, permits and other
governmental authorizations that are legally required to enable it to conduct
its business operations in all material respects as conducted on the date
hereof. Except for compliance with federal and state securities or corporation
laws, no authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is required in
connection with the execution and delivery by WealthHound of the transactions
contemplated hereby.
SECTION 3.13 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of
WealthHound's knowledge and belief, WealthHound has complied with all applicable
statutes and regulations of any federal, state or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business; operations, properties, assets or condition of
WealthHound or would not result in WealthHound's incurring any material
liability.
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SECTION 3.14 APPROVAL OF AGREEMENT. The holders of a majority of the
Common Voting Shares outstanding of WealthHound have authorized the execution
and delivery of the Agreement by WealthHound and have approved the transactions
contemplated hereby.
SECTION 3.15 MATERIAL TRANSACTIONS OR AFFILIATIONS. As of the Closing
Date, there will exist no material contract, agreement or arrangement between
WealthHound and any person who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or known by
WealthHound to own beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of WealthHound and which is to be performed in whole
or in part after the date hereof. WealthHound has no commitment, whether written
or oral, to lend any funds to, borrow any money from or enter into any other
material transactions with, any such affiliated person.
SECTION 3.16 LABOR RELATIONS. WealthHound has never had a work stoppage
resulting from labor problems.
SECTION 3.17 WEALTHHOUND SCHEDULES. Upon execution hereof, WealthHound
shall deliver to Bridgeport the following schedules, which are collectively
referred to as the "WealthHound Schedules" which are dated the date of this
Agreement, all certified by an officer of WealthHound to be complete, true and
accurate:
(a) complete and correct copies of the certificate of incorporation,
bylaws and amendments thereto of WealthHound as in effect as of the
date of this Agreement;
(b) copies of financial statement of WealthHound since incorporation of
WealthHound in April, 1999;
(c) copies of income and any other tax returns of WealthHound since
incorporation of WealthHound in April, 1999 ;
(d) all contracts of WealthHound presently in effect;
(e) the description of any material adverse change in the business,
operations, property, assets, or condition of WealthHound since April
27, 1999 required to be provided pursuant to Section 2.5; and
(f) any other information, together *with any required copies of
documents, required to be disclosed in the WealthHound Schedules by
Sections 3.1 through 3.17.
WealthHound shall cause the WealthHound Schedules and the instruments
to be delivered to Bridgeport hereunder to be updated after the date hereof up
to and including the Closing Date.
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ARTICLE IV
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
SECTION 4.1 SHARE EXCHANGE/DELIVERY OF WEALTHHOUND SECURITIES. On the
Closing Date, the holders of WealthHound Common Shares shall deliver to
Bridgeport (i) certificates or other documents evidencing all of the issued and
outstanding WealthHound Common Shares, duly endorsed in blank or with executed
power attached thereto in transferrable form. On the Closing Date, all
previously issued and outstanding Common Shares of WealthHound shall be canceled
and all rights in respect thereof shall cease and Bridgeport shall receive such
shares in WealthHound, so that WealthHound shall become a wholly owned
subsidiary of Bridgeport. WealthHound's legal counsel shall take all appropriate
action in Florida to confirm such transaction.
SECTION 4.2 ISSUANCE OF WEALTHHOUND COMMON SHARES. In exchange for all
of the WealthHound Common Shares tendered pursuant to Section 4.1, Bridgeport
shall issue an aggregate of 60,000,000 "restricted" Bridgeport Common Shares to
the WealthHound Shareholders. Such shares shall be "restricted" in accordance
with Rule 144.
SECTION 4.3 OTHER CONSIDERATION. WealthHound shall receive the
following additional consideration:
(a) Any and all shareholders of Bridgeport with more than 100,000
shares shall be restricted pursuant to a lock up agreement to be
executed simultaneously with this agreement.
(b) Both Bridgeport and WealthHound acknowledge and agree that Atlas
Equity Group, In. Shall receive $250,000 as a fee for consulting
services rendered in the execution of this Agreement.
SECTION 4.4 EVENTS PRIOR TO CLOSING. Upon execution hereof or as soon
thereafter as practical, management of WealthHound and Bridgeport shall execute,
acknowledge and deliver (or shall cause lo be executed, acknowledged and
delivered) any and all certificates, opinions, financial statements, schedules,
agreements, resolutions rulings or other instruments required by this Agreement
to be so delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel in order to
effectuate or evidence the transactions contemplated hereby, subject only to the
conditions to Closing referenced hereinbelow.
SECTION 4.5 CLOSING. The closing ("Closing")of the transactions
contemplated by this Agreement shall be on or about July 9, 1999 ("Closing
Date").
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SECTION 4.6 TERMINATION.
(a) This Agreement may be terminated by the board of directors or
majority interest of Shareholders of either Bridgeport or WealthHound,
respectively, at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any court
or any governmental body which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this
Agreement and which, in the judgement of such board of
directors, made in good faith and based on the advice of its
legal counsel, makes it inadvisable to proceed with the
exchange contemplated by this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions.
In the event of termination pursuant to this paragraph (a) of this
Section 4.5, no obligation, right, or liability shall arise hereunder and each
party shall bear all of the expenses incurred by it in connection with the
negotiation, drafting and execution of this Agreement and the transactions
herein contemplated;
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of Bridgeport if WealthHound
shall fail to comply in any material respect with any of its covenants
or agreements contained in this Agreement or if any of the
representations or warranties of WealthHound. If this Agreement is
terminated pursuant to this paragraph (b)of this Section 4.5, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
SECTION 4.7 DIRECTORS OF BRIDGEPORT AFTER ACQUISITION. Upon the
Closing, Richard Herbst shall be removed from Board of Directors of Bridgeport
and the following shall be named to the Board of Directors: Rebecca Brock. Each
director shall hold office until his successor shall have been duly elected and
shall have qualified or until his earlier death, resignation or removal.
SECTION 4.7 OFFICERS OF BRIDGEPORT. Upon the closing, the following
persons shall be elected as officers of Bridgeport in accordance with procedures
set forth in the Bridgeport bylaws:
NAME OFFICE
---- ------
Rebecca Brock President, Secretary and Treasurer
SECTION 4.8 POST CLOSING REQUIREMENTS OF SURVIVING COMPANY. Subsequent
to closing of this transaction, the surviving company (wholly-owned subsidiary
of Bridgeport) shall undertake the following: (i) change the name of
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Bridgeport to WealthHound.com and obtain a new trading symbol and CUSlP number
and (ii) Bridgeport's past management will cooperate and assist in the
preparation cf all registration statements to be filed with the Securities and
Exchange Commission
ARTICLE V
SPECIAL COVENANTS
SECTION 5.1 ACCESS TO PROPERTIES AND RECORDS. Prior to closing,
WealthHound and Bridgeport will each afford to the officers and authorized
representatives of the other full access to the properties, books and records of
WealthHound, Bridgeport and as the case may be, in order that each may have full
opportunity to make such reasonable investigation as it shall desire to make of
the affairs of the other and each will furnish the other with such additional
financial and operating data and other information as to the business and
properties of WealthHound, Bridgeport and as the case may be, as the other shall
from time to time reasonably request.
SECTION 5.2 AVAILABILITY OF RULE 144. Each of the parties acknowledge
that the stock of both Bridgeport and to be issued pursuant to this Agreement
will be "restricted securities, " as that term is defined in Rule 144
promulgated pursuant to the Securities Act. Bridgeport is under no obligation to
register such shares under the Securities Act, or otherwise. The stockholders of
Bridgeport and holding restricted securities of Bridgeport as of the date of
this Agreement and their respective heirs, administrators, personal
representatives, successors and assigns, are intended third party beneficiaries
of the provisions set forth herein. The covenants set forth in this Section 5.2
shall survive the Closing and the consummation of the transactions herein
contemplated. All "restricted" shares issued in accordance with this Agreement
shall be restricted in accordance with Rule 144.
SECTION 5.3 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE
WEALTHHOUND COMMON SHARES TO BE ISSUED IN THE EXCHANGE. The consummation of this
Agreement, including the issuance of the Bridgeport and Common Shares to the
Shareholders of WealthHound as contemplated hereby, constitutes the offer and
sale of securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes which depend, inter alia,
upon the circumstances under which the WealthHound Shareholders acquire such
securities.
SECTION 5.4 THIRD PARTY CONSENTS. WealthHound and Bridgeport agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein contemplated.
SECTION 5.5 ACTIONS PRIOR AND SUBSEQUENT TO CLOSING.
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(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the WealthHound Schedules or as permitted or
contemplated by this Agreement, WealthHound will each use its best
efforts to:
(i) carry on its business in substantially the same manner as
it has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations
under material contracts, leases and instruments relating to or
affecting its assets, properties and business;
(v) maintain and preserve its business organization intact, to
retain its key employees and to maintain its relationship with its
material suppliers and customers; and
(vi) fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and state laws
and all rules, regulations and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
WealthHound will not, without the prior consent of Bridgeport:
(i) except as otherwise specifically set forth herein, make
any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding Common
Shares, except as may otherwise be required by law, or effect any stock
split or otherwise change its capitalization, except as provided
herein;
(iii) enter into or amend any employment, severance or
agreements or arrangements with any directors or officers;
(v) grant, confer or award any options, warrants, conversion
rights or other rights not existing on the date hereof to acquire any
Common Shares; or
(iv) purchase or redeem any Common Shares.
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SECTION 5.6 INDEMNIFICATION.
(a) WealthHound hereby agrees to indemnify Bridgeport and each of the officers,
agents and directors of Bridgeport as of the date of execution of this Agreement
including, but not limited to Richard Herbst, against any loss, liability,
claim, damage or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing or defending against
and litigation, commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy appearing in
or misrepresentation made in this Agreement, including, but not limited to,
misrepresentations. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement; and
(b) Bridgeport and its officers and directors hereby agrees to indemnify
WealthHound and each of the officers, agents, directors and current shareholders
of WealthHound as of the Closing Date against any loss, liability, claim, damage
or expense (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy appearing in
or misrepresentation made in this Agreement and particularly the representation
regarding no liabilities referred to in Section 3.4 (b). The indemnification
provided for in this Section shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF BRIDGEPORT
The obligations of Bridgeport under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
SECTION 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by WealthHound in this Agreement were true when made and shall
be true at the Closing Date with the same ' force and effect as if such
representations and warranties were made at the Closing Date (except for changes
therein permitted by this Agreement), and WealthHound shall have performed or
compiled with all covenants and conditions required by this Agreement to be
performed or complied with by WealthHound prior to or at the Closing. Bridgeport
shall be furnished with a certificate, signed by a duly authorized officer of
WealthHound and dated the Closing Date, to the foregoing effect.
SECTION 6.2 SHAREHOLDER APPROVAL. All of the Shareholders of
WealthHound shall have approved this Agreement and the transactions contemplated
herein.
SECTION 6.3 OFFICER'S CERTIFICATE. Bridgeport shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of WealthHound to the effect that: (a) the representations and
warranties of WealthHound
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set forth in the Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true and correct
as if made on the Effective Date; (b) WealthHound has performed all covenants,
satisfied all conditions, and complied with all other terms and provisions of
this Agreement to be performed, satisfied or complied with by it as of the
Effective Date; (c) since such date and other than as previously disclosed to
Bridgeport, and WealthHound have not entered into any material transaction other
than transactions which are usual and in the ordinary course if its business;
and (d) No litigation, proceeding, investigation or inquiry is pending or, to
the best knowledge of WealthHound, threatened, which might result in an action
to enjoin or prevent the consummation of the transactions contemplated by this
Agreement or, to the extent not disclosed in the WealthHound Schedules, by or
against WealthHound which might result in any material adverse change in any of
the assets, properties, business or operations of WealthHound.
SECTION 6.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations or
WealthHound.
SECTION 6.5 OPINION OF COUNSEL TO WEALTHHOUND. Bridgeport shall receive
an opinion dated the Closing date of July 9, 1999, counsel to WealthHound, in
substantially the following form:
(a) WealthHound is a corporation duly organized, validly existing, and
in good standing under the laws of Florida and has the corporate power
and is duly authorized, qualified, franchised and licensed under all
material applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to conduct its
business as now conducted, including qualification to do business as a
foreign corporation in the states in which the character and location
of the assets owned by it or the nature of the business transacted by
it requires qualifications;
(b) To the best knowledge of such legal counsel, the execution and
delivery by WealthHound of this Agreement and the consummation of the
transactions contemplated by this Agreement in accordance with the
terms hereof will not conflict with or result in the breach of any term
or provision of WealthHound's certificate of incorporation or Bylaws or
violate any court order, writ, injunction or decree applicable to
WealthHound, or its properties or assets;
(c) (C)All issued and outstanding Share Certificates are legally
issued, fully paid and nonassessable. Except as set forth in the
WealthHound Schedules, to the best knowledge of such legal counsel,
there are no outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or commitments obligating
WealthHound to issue any additional Share Certificates.
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(d) This Agreement has been duly and validly authorized, executed and
delivered by WealthHound;
(e) To the best knowledge of such legal counsel, except as set forth in
the WealthHound Schedules, there are no actions, suits or proceedings
pending or threatened by or against or affecting WealthHound or its
properties, at laws or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before
any arbitrator of any kind;
(f) WealthHound has taken all actions required by the applicable laws
of Florida to permit the acquisition of the outstanding shares of
WealthHound into Bridgeport.
SECTION 6.6 OTHER ITEMS. Bridgeport shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as Bridgeport may reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF WEALTHHOUND
The obligations of WealthHound under this Agreement are subject to the
satisfaction, at or before the Closing date (unless otherwise indicated herein),
of the following conditions:
SECTION 7.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Bridgeport in this Agreement were true when made and shall be
true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Bridgeport shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Bridgeport prior to or at the
Closing. WealthHound shall have been furnished with a certificate, signed by a
duly authorized executive officer of Bridgeport and dated the Closing Date, to
the foregoing effect.
SECTION 7.2 OFFICER'S CERTIFICATE. WealthHound shall be furnished with
a certificate dated the Closing date and signed by a duly authorized officer of
Bridgeport to the effect that: (a) the representations and warranties of
Bridgeport set forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material respects true and
correct as if made on the Effective Date; and (b) Bridgeport had performed all
covenants, satisfied all conditions, and complied with all other terms and
provisions of the Agreement to be performed, satisfied or complied with by it as
of the Effective Date.
SECTION 7.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations or nor shall any event have occurred which,
with the lapse of time or the
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giving of notice, may cause or create any material adverse change in the
financial condition, business or operations of Bridgeport.
SECTION 7.4 OPINION OF COUNSEL TO BRIDGEPORT. WealthHound shall receive
an opinion dated the Closing Date of Richard I. Anslow &Associates, counsel to
Bridgeport, in substantially the following form:
(a) Bridgeport is a corporation duly organized, validly existing, and
in good standing under the laws of the state of Florida and has the
corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances and orders
of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being
conducted, including qualification to do business as a foreign
corporation in the states in which the character and location of the
assets owned by it or the nature of the business transacted by it
requires qualification;
(b) To the best knowledge of such legal counsel, the execution and
delivery by Bridgeport of this Agreement and the consummation of the
transactions contemplated by this Agreement in accordance with the
terms hereof will not conflict with or result in the breach of any term
or provision of Bridgeport's articles of incorporation or bylaws or
constitute a default or give rise to a right of termination,
cancellation or acceleration under any material mortgage, indenture,
deed of trust, license agreement or other obligation or violate any
court order, writ, injunction or decree applicable to Bridgeport or its
properties or assets;
(c) The authorized capitalization of Bridgeport consists of 200,000,000
shares of Common Stock, par value $0.001 per share. As of the Closing
Date, there will be the following issued and outstanding common shares
of Bridgeport: 11,502,528 common shares of which 8,008,888 are
"restricted" shares. In addition, in accordance with the terms of this
Agreement, the WealthHound Shareholder shall obtain 60,000,000
Bridgeport "restricted" common shares under Rule 144.
All issued and outstanding shares are legally issued, fully paid and
nonassessable and issued in violation of the preemptive rights of any
person;
(d) The Bridgeport Common Shares to be issued to the WealthHound
Shareholders pursuant to the terms of this Agreement will be, when
issued in accordance with the terms hereof, legally issued, fully paid
and non-assessable;
(e) This Agreement has been duly and validly authorized, executed, and
delivered and constitutes the legal and binding obligation of
Bridgeport, except as limited by bankruptcy and insolvency laws and by
other laws affecting the rights of creditors generally;
(f) To the best knowledge of such counsel, there are no actions, suits
or proceedings pending or threatened by or against Bridgeport or
affecting
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Bridgeport's properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before
any arbitrator of any kind except as agreed to herein pursuant to
Section 1.6; and
(g) Bridgeport has taken all actions required by the applicable laws of
the state of Florida to permit the issuance of the Bridgeport Common
Shares to the WealthHound Shareholder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 BROKERS AND FINDERS. Each party hereto hereby represents
and warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person not listed in
Schedule 7.1 for any commission, brokerage or finder's fee or other payment with
respect to this Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party and such third
person, whether express or implied from the actions of the indemnifying party.
SECTION 8.2 LAW, FORUM AND JURISDICTION. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Florida,
United States of America.
SECTION 8.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Bridgeport : Richard I. Anslow & Associates
4255 Route 9, Suite D
Freehold, New Jersey 07728
If to WealthHound: Richard I. Anslow & Associates
4255 Route 9, Suite D
Freehold, New Jersey 07728
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have given as of the date so delivered, mailed or telegraphed.
SECTION 8.4 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parities shall reimburse the
non-breaching party or
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parties for all costs, including reasonable attorneys' fee, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
SECTION 8.5 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not used such data or information or disclose the same to others,
except: (i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
SECTION 8.6 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
SECTION 8.7 THIRD PARTY BENEFICIARIES. This contract is solely among
WealthHound, WealthHound Shareholders and Bridgeport and except as specifically
provided, no director, officer, stockholder, employee, agent, independent
contractor or any other person or entity shall be deemed to be a third party
beneficiary of this Agreement.
SECTION 8.8 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written or oral,
except a set forth herein. This Agreement may not be amended or modified, except
by a written agreement signed by all parties hereto.
SECTION 8.9 SURVIVAL; TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 18 months.
SECTION 8.10 COUNTERPARTS. This Agreements may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
SECTION 8.11 AMENDMENT OR WAIVER. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term
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or condition of this Agreement may be waived or the time for performance hereof
may be extended by a writing signed by the party or parties for whose benefit
the provision is intended.
SECTION 8.12 INCORPORATION OF RECITALS. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
SECTION 8.13 EXPENSES. Each party herein shall bear all of their
respective costs and expenses incurred in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation thereof.
SECTION 8.14 HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
SECTION 8.15 BENEFIT. This Agreement shall be binding upon and shall
insure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
SECTION 8.16 PUBLIC ANNOUNCEMENTS. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
SECTION 8.17 SEVERABILITY. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
SECTION 8.18 FAILURE OF CONDITIONS; TERMINATION. In the event of any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
SECTION 8.19 NO STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against wither party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
SECTION 8.20 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and
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carefully read and considered this Agreement; (b) has been or has had the
opportunity to be fully apprized of its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; and (c) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
and entered into as of the date first above written. .
ATTEST: BRIDGEPORT COMMUNICATIONS, INC.
________________________ By: /s/ Richard Herbst
----------------------------------
, Secretary Richard Herbst, President
ATTEST: WEALTHHOUND, INC.
/s/ Rebecca Brock By: /s/ Rebecca Brock
------------------------ ----------------------------------
Rebecca Brock, Secretary Rebecca Brock, President
WEALTHHOUND SHAREHOLDERS
WITNESS:
/s/ Rebecca Brock
------------------------ -------------------------------------
REBECCA BROCK
FIRST SECURITIES INVESTMENT
By: /s/ Illegible
------------------------ -----------------------------------
/s/ Matthew Sher
------------------------ -------------------------------------
MATTHEW SHER
/s/ Eric Seiden
------------------------ -------------------------------------
ERIC SEIDEN
/s/ Scott Mager
------------------------ -------------------------------------
SCOTT MAGER
QUENTIN ROAD PRODUCTIONS, INC.
By: /s/ Rebecca Brock
------------------------ -----------------------------------
Rebecca Brock, President
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