SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): December 31, 1996
Am-Pac International, Inc.
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(Exact name of Registrant as specified in its charter)
33-8964
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(Commission file number)
Nevada 22-7374801
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(State or other jurisdiction of
incorporation) (I.R.S. Employer Identification No.)
431 East N. Central Blvd., Suite 900, Orlando, Florida, 32801
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(Address of principal executive offices) (Zip code)
(407) 841-1350
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
As a result of the acquisitions described in Item 2, control of the
Registrant passed to the former shareholders of Pacific Foods Limited, T&P
Investments, Inc., Am-Pac Investments, Inc. and Leisureshare International PLC.
The new controlling shareholders are:
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of Class
<S> <C> <C>
Sharron C. Martin 3,500,000 36.3%
2440 South Progress Dr.
Salt Lake City, Utah 84119
Thomas L. Tedrow 3,500,000 (1) 36.3%
431 East Central Blvd., Suite 900
Orlando, Florida 32801
Arvimex, Inc. (2) 1,723,272 17.9%
Union House
St. Helier, Jersey
Channel Islands JB4 8TQ
Thomas Sweeney 517,196 (3) 5.4%
11599 Colonial Drive East
Orlando, Florida 32817
</TABLE>
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(1) Thomas Tedrow holds 1,500,000 shares in his name following the
acquisitions. Mr. Tedrow may also be deemed to be the beneficial owner
of 2,000,000 shares held in the name of Shipwright Assets Limited.
Shipwright Assets Limited is a corporation organized under the laws of
the British Virgin Islands, and is owned entirely by Lillian Wai, who
holds the shares in trust for the benefit of Thomas Tedrow.
(2) Arvimex, Inc. is a corporation organized under the laws of Panama and is
owned entirely by Distola Reg Trust (the "Trust"), a trust existing
under the laws of Liechenstein. The sole beneficiary of the Trust is the
Red Cross; however the trustee has discretionary powers to make
distributions to the minor children of Malcolm Wright. Because Malcolm
Wright is the childrens' legal guardian, he may be deemed to control
Arvimex, Inc. Malcolm Wright disclaims any beneficial ownership in the
shares held by Arvimex, Inc.
(3) The shares indicated as being owned by Thomas Sweeney are subject to
offset and cancellation, based on the average fair market value of the
shares during the five trading days preceding December 31, 1996, to
the extent of defined costs in connection with the transfer of certain
real property plus one-half of the cost of the title policy issued in
connection with the transfer of property.317,196 of the shares indicated
as being owned by Mr. Sweeney are being held in escrow pending a
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determination of the final costs of transferring the real property in
question after which time a portion of such shares shall be canceled and
the balance will be released from escrow to Mr. Sweeney.
In addition, the Shareholders of Leisureshare International PLC were
issued the following Series A Convertible Preferred Shares ("Preferred Shares")
which have no voting rights other than those imposed by Nevada State law, and
which are entitled to cumulative dividends at the rate of $50.00 per annum per
share, and for a three-year period, are convertible on the basis of 500 shares
of the Registrant's common stock for each Preferred Share.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of Class
<S> <C> <C>
Arvimex, Inc. (1) 15,528 100%
Union House
St. Helier, Jersey
Channel Islands JB4 8TQ
</TABLE>
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(1) Arvimex, Inc. is a corporation organized under the laws of Panama and is
owned entirely by Distola Reg Trust (the "Trust"), a trust existing
under the laws of Liechenstein. The sole beneficiary of the Trust is the
Red Cross; however the trustee has discretionary powers to make
distributions to the minor children of Malcolm Wright. Because Malcolm
Wright is the childrens' legal guardian, he may be deemed to control
Arvimex, Inc. Malcolm Wright disclaims any beneficial ownership in the
shares held by Arvimex, Inc.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As of the close of business December 31, 1996, the Registrant consummated
three separate acquisitions as follows:
(1) The Registrant acquired all of the issued and outstanding capital stock
of Pacific Foods Limited ("Foods"), a British Virgin Island corporation, in
exchange for 7,000,000 shares of the Registrant's common stock, $.001 par value.
Foods is a development stage company which intends to source, license, finance
and promote U.S. fast food franchises and other products in China.
(2) The Registrant acquired all of the outstanding shares of T&P
Investments, Inc. ("T&P"), a Florida corporation, which owns and operates a
restaurant and bar, commonly known as the "Frat House", in East Orlando,
Florida. The sole shareholder of T&P, Thomas Sweeney ("Sweeney"), received
200,000 shares of the Registrant's common stock, $.001 par value, in exchange
for all of the issued and outstanding shares of T&P stock. Pursuant to an
additional Exchange Agreement with Sweeney ("Real Estate Agreement"), the
Registrant also acquired Am-Pac Investments, Inc., a corporation which owns the
real property upon which the Frat House is located, as well as additional
acreage adjacent thereto, in exchange for 317,196 shares of the Registrant's
common stock.
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Pursuant to the Real Estate Agreement, the Registrant may deduct certain
costs and expenses relating to the transfer of the real property from the
consideration which Sweeney is to receive. Pending a final determination these
costs, certain shares issued to Sweeney will be held in escrow subject to
cancellation.
(3) The Registrant (through its wholly owned subsidiary Leisureshare
International Limited) acquired a 98.5% interest in Leisureshare International
PLC ("PLC"), a corporation organized and existing under the laws of Great
Britain. PLC is engaged in developing real estate in Spain. The shareholders of
PLC received an aggregate of 2,475,039 shares of the Registrant's common stock,
$.001 par value and 15,528 shares of the Registrant's Series A Convertible
Preferred Stock ("Preferred Stock"). The Preferred Stock may, for a period of
three years, be exchanged for common stock on the basis of 500 shares of common
stock for each share of Preferred Stock. The Preferred Stock has no voting
rights, other than those required by law, and has a three-year liquidation
preference of $1,000 per share. The Preferred Stock is entitled to cumulative
dividends at the rate of $50.00 per annum per share, and the Registrant, at its
option, may pay such dividends in cash, stock or property.
Although the Registrant owns 98.5% of PLC, it has agreed, pursuant to a
Standstill Agreement, that PLC's current Board of Directors shall maintain
control of PLC until the Registrant has redeemed $5,500,000 worth of common
stock issued to PLC's largest shareholder, Arvimex, Inc., at a price equal to
the greater of $3.33 per share or two-thirds of the then current Market Price.
The Standstill Agreement defines Market Price as the average of the closing bid
and ask prices of the Am-Pac common stock for the five consecutive trading days
immediately prior to the date which the Registrant gives notice of its right to
redeem the shares.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
PACIFIC FOODS, LIMITED
It is impractical to provide the required financial statements
for Pacific Foods, Limited at the time this report is being
filed. The required financial statements for Pacific Foods
Limited will be filed under cover of Form 8K/A as soon as
practical but not later than 60 days after the date this report
must be filed.
LEISURESHARE INTERNATIONAL PLC
It is impractical to provide the required financial statements
for Leisureshare International PLC at the time this report is
being filed. The required financial statements for Leisureshare
International PLC will be filed under cover of Form
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8K/A as soon as practical but not later than 60 days after the
date this report must be filed.
T&P INVESTMENTS, INC.
It is impractical to provide the required financial statements
for T&P Investments, Inc. at the time this report is being filed.
The required financial statements for T&P Investments, Inc. will
be filed under cover of Form 8K/A as soon as practical but not
later than 60 days after the date this report must be filed.
REAL PROPERTY TRANSFERRED TO AM-PAC INVESTMENTS, INC.
It is impractical to provide the required financial statements
for the Real Property Transferred to Am-Pac Investments, Inc. at
the time this report is being filed. The required financial
statements for the Real Property Transferred to Am-Pac
Investments, Inc. will be filed under cover of Form 8K/A as soon
as practical but not later than 60 days after the date this
report must be filed.
(b) Pro Forma Financial Information
It is impractical to provide the required Pro Forma Financial
Information at the time this report is being filed. The required
Pro Forma Financial Statements will be filed under cover of Form
8K/A as soon as practical but not later than 60 days after the
date this report must be filed.
(c) Exhibits
2.1 Acquisition Agreement with the Shareholders of Leisureshare
International PLC
2.2 Exchange Agreement with the Shareholder of T&P Investments,
Inc.
2.3 Exchange Agreement with the Shareholder of Am-Pac
Investments, Inc.
3.1 By-Laws, as amended
4.1 Certificate of Designation of Series A Cumulative
Convertible Preferred Stock
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AM-PAC INTERNATIONAL, INC.
By:/S/ Thomas Tedrow
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Thomas Tedrow
President
Date: January 15, 1997
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ACQUISITION AGREEMENT
AGREEMENT, dated as of December 12, 1996 by and between Am-Pac
International, Inc. a Nevada corporation (hereinafter "Am-Pac"), and Am-Pac's
wholly owned subsidiary, Leisureshare International Limited, (hereinafter
"Limited,") and all of the shareholders (hereinafter "Shareholders") of
Leisureshare International PLC, (hereinafter "PLC.")
RECITALS WHEREAS, the Shareholders own or control in their respective
capacities and have the right to sell, transfer and exchange all of the shares
of the capital stock of PLC, and
WHEREAS, Am-Pac, through its wholly owned subsidiary Limited, wishes to
acquire all of the issued and outstanding capital stock of PLC in exchange for
2,500,000 shares of Am-Pac common stock, par value $.001 per share (hereinafter
referred to as the "Am-Pac Common Stock") and 15,528 shares of Series A
Convertible Preferred Stock , (hereinafter called "Preferred Stock" or "Series A
Preferred Stock"), and collectively referred to as "Exchanged Am-Pac Stock";
WHEREAS, the Shareholders wish to exchange their shares of PLC for Am-Pac
Common Stock and/or Preferred Stock;
NOW THEREFORE, in consideration of the premises herein contained, and the
mutual covenants hereinafter set forth, the parties hereto have agreed, and by
these presents, do hereby contract as follows:
I. EXCHANGE OF SECURITIES
Subject to the terms and conditions hereinafter set forth, at the time of
the closing referred to in Article VI hereof (hereinafter the "Closing Date"),
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Limited will issue and deliver to the Shareholders, collectively, 2,500,000
shares of Am-Pac's Common Stock, and 15,528 shares of Series A Preferred Stock
in exchange for which the Shareholders will deliver, to Limited, all of the
issued and outstanding Share Capital of PLC. The Preferred Stock shall have no
voting rights, except as provided by law; shall have a liquidation preference of
$1,000 per share, expiring 36 months from the date of issuance; shall be
entitled to a 5% cumulative dividend, (payable at Am-Pac's option in Am-Pac
common stock); and shall for a period of three years, be convertible into Am-Pac
common stock at the rate of 500 shares of Am-Pac Common stock for each Series A
Convertible Preferred Share, at the option of the shareholder. Immediately
following the exchange, Limited will own 100% of PLC.
II. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
Except as otherwise disclosed in the "Disclosure Letter," attached hereto
as Exhibit A, and incorporated herein, the Shareholders represent and warrant to
Am-Pac, and Limited, all of which representations and warranties shall be true
and complete in all material respects, at the Closing Date, and shall survive
the Closing Date for a period of three (3) years except those set forth in
subsection 2.07 which shall survive the later of twelve months from the Closing
Date, or twelve months from the date the accounts receivable become due and
payable, that:
2.01 Organization. PLC is a corporation duly organized and validly existing
and in good standing under the laws of Great Britain and has the corporate power
to own its property and carry on its businesses and activities as and where they
are now being conducted. Certified copies of the Memorandum and Articles of
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Association of PLC and each subsidiary of PLC are attached hereto as Exhibit 1
and constitute true and correct copies of the Memorandum and Articles of
Association of each subsidiary and include all amendments thereto to the date
hereof.
2.02 Capital. The authorized share capital of PLC was duly and validly
increased to 50,000,000 ordinary shares of 10 pence of which 15,516,600 such
shares have been validly authorized and issued.
2.03 Authority. The Shareholders have the full power and authority to
exchange the shares of PLC upon the terms and conditions provided for in this
Agreement, and all such shares are duly and validly issued and are free and
clear of any and all liens or other encumbrances. The directors and shareholders
of PLC have agreed to the terms of this Agreement; and have resolved that
execution of this Agreement is in PLC's best interest.
2.04 Subsidiaries. PLC owns the following subsidiaries: Inversora Tetuan,
S.A. ("Tetuan") and Leisureshare International Espanol S.A., ("Liesa") and
together shall be referred to as the PLC Group. Each member of the PLC Group is
a corporation duly organized and validly existing and in good standing under the
laws of the jurisdiction of its respective incorporation and each has the
corporate power to its property and carry on its businesses and activities as
and where it is now being conducted. PLC also owned the following subsidiaries:
International Hospitality Marketing, Inc.; Prestige Properties of Orlando, Inc.;
Tillie the Turtle, Inc.; Osccola Business Managers, Inc.; Pool Homes, Inc.; and
M.J. Wright Productions, Inc.. However these subsidiaries, and all other assets
of PLC, and the corresponding debts, were validly and legally transferred to
Arvimex, Inc. ("Arvimex") to pay down Arvimex's shareholder loan account.
2.05 Financials. The combined financial statements of PLC audited by Spiro
Tett & Co., registered auditors in England, at and for the year ended December
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31, 1995, attached hereto as Exhibit 2, are true and correct statements as
of the date thereof of the financial condition of PLC and of its assets and
liabilities prepared in accordance with generally accepted accounting principles
consistently applied. Except as set forth in the Disclosure Letter, from January
1, 1996, and until the Closing Date, no dividends or distributions of capital,
surplus, or profits shall be paid or declared by PLC or any subsidiary or member
thereof; nor will there be any redemption of its outstanding shares nor has any
additional debt or equity securities been issued by PLC or any subsidiary or
member thereof.
2.06 Inventories. The inventories of PLC as shown in Exhibit 2, and as
specifically set forth in separate schedules dated as of January 1, 1996
attached hereto as Exhibit 3 are valued at the lower of cost or net realizable
value.
2.07 Accounts
(a) Receivable. The accounts receivable of PLC, shown in Exhibit 2, and
detailed on a separate schedule as of December 31, 1995, specifically set forth
in Exhibit 4, are those which have been accrued as of the Closing Date and which
shall be valid and collectible pursuant to their terms, and can reasonably be
anticipated to be paid within 12 months after the Closing Date or the date when
the accounts receivable are due and payable.
(b) Shareholder Loan accounts. The Shareholders represent and warrant that
all PLC shareholder loan accounts, except Arvimex, have been paid in full
whether by funds or shares received, or otherwise; and the Shareholders have no
claims, whether from monies loaned or otherwise, against PLC, except the Arvimex
account as described herein. Furthermore, the Arvimex shareholder account has
been paid down by transferring the following assets to Arvimex: (i) shares and
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loan accounts in: International Hospitality Marketing, Inc.; Prestige Properties
of Orlando, Inc.; Tillie the Turtle, Inc.; Osccola Business Managers Inc.; Pool
Homes, Inc.; and M.J. Wright Productions, Inc.; and (ii) PLC's equipment. Prior
to such transfer, PLC obtained the written opinion of counsel that such transfer
of assets and issuance of PLC shares in satisfaction of any shareholder loan
account debt shall not be in violation of any law governing PLC or of any law of
the jurisdiction governing the properties and/or assets to be transferred.
Pursuant to such transfer and by execution hereof, Arvimex's agrees to assume
all debts associated with each such asset or company and to pay all taxes
associated with this transfer. Arvimex hereby agrees to indemnify and hold
harmless PLC, its successors and assigns including but not limited to Am-Pac and
Limited from any and all taxes, debts and claims related to this transfer of
property. Furthermore the transfer of assets resulted in paying down Arvimex's
loan account, and leaving a balance of no more than Lbs.1,507,776. The
Shareholders agree to pay any and all taxes, fees, or dues associated with PLC's
payment on each of their respective loan accounts, whether the means of
repayment was by transfer of assets, or recapitalization, issuance of shares in
lieu of debt or any other means, and shall indemnify Am-Pac and Limited from any
any all claims related thereto. The Shareholder loan accounts of PLC, shown in
Exhibit 2, and specifically set forth in Exhibit 5, are an approximation of all
shareholder loan accounts for the preceding 12 month period and within 3 months
from execution hereof, will be amended to reflect a true and accurate
reconciliation and accounting of such accounts as of the date of Closing.
However, in no event shall Arvimex's loan account balance exceed Lbs.
1`,507,776, nor shall any other shareholder be owed anything as of closing date.
2.08. Financials of Tetuan and Liesa. The individual financial
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statements of Tetuan audited by Coopers and Lybrand, Certified Public
Accountants, at January 1, 1996, attached hereto as Exhibits 6 , are true and
correct statements as of the date thereof of the financial condition of Tetuan
and its respective assets and liabilities prepared in accordance with generally
accepted accounting principles consistently applied. The individual financial
statements of Liesa prepared but not audited by Costa, Certified Public
Accountants, at December 31, 1995, attached hereto as Exhibit 7 , are true and
correct statements as of the date thereof of the financial condition of Liesa
and its respective assets and liabilities prepared in accordance with generally
accepted accounting principles consistently applied.
2.09. Other transactions. Except as set forth in the Disclosure Letter or
as approved by prior written consent of Am-Pac, neither PLC, nor any of its
subsidiaries or members have engaged in any transaction other than transactions
in the normal course of the operations of their businesses, since January 1,
1996. Additionally, neither PLC nor any subsidiary or member of the PLC Group
has sold, assigned, or transferred any patent rights, formulas, trademarks,
trade names, copyrights, licenses or other intangible assets since January 1,
1996. PLC and Tetuan and Liesa shall not enter into any agreements, contracts or
the like for the sale of any real property, until the Closing, or until this
Agreement is terminated according to its terms, unless approved in writing prior
thereto, by Am-Pac or Limited.
2.10 Litigation. Neither PLC nor any subsidiary nor members of the PLC
Group is involved in any pending or threatened litigation which would materially
affect the consolidated financial condition as shown by the balance sheets of
January 1, 1996, shown on Exhibit 2 hereto, or the Tetuan and Liesa financial
statements shown in Exhibits 6 and 7, which has not been provided for on such
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balance sheet, or referred to in such balance sheet or footnotes attached
thereto, or disclosed to Am-Pac or Limited in writing.
2.11 . Title. PLC has and will have at the Closing Date, good and
marketable title to all of its respective property and assets shown on Exhibit 2
hereto, free and clear of any and all liens or encumbrances or restrictions,
except as shown on Exhibit 2 hereto, and except for taxes and assessments due
and payable after the Closing Date and easements or minor restrictions which do
not materially affect the present value or use of such real property.
Additionally, each member of the PLC Group has and will have at the Closing
Date, good and marketable title to all of its property and assets shown on
Exhibits 6 and 7 hereto, free and clear of any and all liens or encumbrances or
restrictions, except as shown on Exhibit 6 and 7 hereto, and except for taxes
and assessments due and payable after the Closing Date and easements or minor
restrictions which do not materially affect the present value or use of such
real property.
2.12. Compliance with Securities Laws. In connection with their acquisition
of shares of Am-Pac, each of the Shareholders makes the representations and
warranties set forth in Article VII, and such are incorporated herein.
2.13. Taxes. PLC and each member of the PLC Group have filed all federal or
similar income tax returns and, in each state or country where qualified or
doing business, or incorporated, all state income tax and franchise tax returns
which are required to be filed under applicable law. PLC and each member have
paid all taxes as shown on the returns as have become due, and have paid all
assessments received that have become due. Each shareholder has paid any and all
taxes or duties due as a result of payment on its respective shareholder loan
account.
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2.14. Brokers Fees. PLC has not retained or otherwise utilized the services
of any broker or finder in connection with the transaction contemplated by this
Agreement. No member of the PLC Group has retained or otherwise utilized the
services of any broker or finder in connection with the transaction contemplated
by this Agreement. Furthermore, neither PLC nor any of its members have done
anything to give rise to any valid claims against Am-Pac or Limited for a
brokerage commission, finder's fee or similar charge.
2.15. Subsequent Actions. Between the date hereof and the Closing Date, PLC
and its subsidiaries and each member of PLC Group shall conduct its respective
business in the same manner in which it has heretofore been conducted and the
Shareholders will not permit PLC or any subsidiary or member of PLC to (1) enter
into any contract, etc., other than in the ordinary course of business, or (2)
declare or make any distribution of any kind to the Shareholders, or PLC without
first obtaining the written consent of Am-Pac or Limited.
2.16. Shareholders
(a) Ownership interests. The list of shareholders set forth in Exhibit 8 is
a true and correct designation of each and every shareholder of PLC. Exhibit 8
further reflects the number of shares each holds as of the Closing Date, and
correctly represents the number of Exchanged Am-Pac Stock which each such
shareholder is to receive upon closing.
(b) Power of Attorney for Closing. Each Shareholder hereby authorizes
Malcolm Wright to act as his or her representative and attorney-in-fact to
execute any further documents or certificates in accordance with this agreement,
including but not limited to any documents required for Closing.
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III. REPRESENTATIONS AND WARRANTIES BY AM-PAC AND LIMITED
Am-Pac and Limited represent and warrant to the Shareholders, all of which
representations and warranties shall be true at the Closing Date, and shall
survive the closing for a period of three (3) years from the Closing Date as
follows:
3.01 - Organization Am-Pac is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Nevada 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. Included in the Am-Pac
Schedules (as hereinafter defined) are complete and correct copies of the
articles of incorporation of Am-Pac as in effect on the date hereof. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Am-Pac's
articles of incorporation or bylaws. Am-Pac has taken all action required by
law, its articles of incorporation, its bylaws, or otherwise to authorize the
execution and delivery of this Agreement, and Am-Pac has full power, authority,
and legal right and has taken all action required by law, it articles of
incorporation, bylaws, or otherwise to consummate the transactions herein
contemplated.
3.02 - CapitalizationAm-Pac's authorized capitalization consists of
149,900,000 shares of common stock, and 100,000 shares of Preferred Stock, par
value $.001, of which 406,583 common shares are issued and outstanding. All
issued and outstanding shares are legally issued, fully paid, non-assessable and
not issued in violation of the pre-emptive or other rights of any person.
3.03 - Subsidiaries and Predecessor Corporation. Am-Pac is a newly formed
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company whose sole purpose was to merge with Captain Tony's Pizza, Inc.,
(Captain Tony's) a New York Company whose shareholders and directors elected to
reincorporate in the state of Nevada. Articles of Merger have been, or are
concurrently being filed with the appropriate state authorities. Pursuant to the
plan of merger, Am-Pac shall succeed to all the assets and liabilities of
Captain Tony's. Additionally, Captain Tony's executed an Acquisition Agreement
with the Shareholders of Pacific Foods Limited, a BVI corporation, to acquire
all of the shares of that company. Pursuant to that agreement, Am-Pac is
obligated to issue 7,000,000 shares of its common stock to the Pacific Foods
shareholders; and Michael Martella is granted an option to purchase 100,000
shares of Am-Pac common stock. Am-Pac is negotiating with Martella for an option
to purchase another 250,000 shares. Am-Pac is also negotiating the acquisition
of two Florida based companies, which, if consummated would require the issuance
of approximately $2,690,000 worth of Am-Pac common stock; the number of shares
shall be determined by dividing the dollar number by Am-Pac's market price which
is defined as the average of the closing bid and ask prices for the 5
consecutive trading days immediately preceding the closing of that exchange.
3.04 - Financial Statements.
(a) Included in the Am-Pac Schedule are the audited balance sheets of its
predecessor company Captain Tony's Pizza, Inc. as of June 30, 1996, and the
related audited statements of operations, stockholders' equity and changes in
financial position for the fiscal year ended June 30, 1996, together with the
notes to such statements and the opinion of certified public accountants. Also
included is Captain Tony's most recently prepared quarterly report; and the
unaudited financial statements as of September 30, 1996.
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(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved. The Am-Pac balance sheets present fairly, as of their
respective dates, the financial condition of Am-Pac. Am-Pac did not have as of
the date of any such Am-Pac balance sheet, except as and to the extent reflected
or reserved against therein, any liabilities or obligations (absolute or
contingent) which should be reflected in a balance sheet or the notes thereto.
All assets reflected therein are properly reported and present fairly the value
of the assets of Am-Pac, in accordance with generally accepted accounting
principles, consistently applied. The statements of operations, stockholders'
equity and changes in financial position reflect fairly the information required
to be set forth therein by generally accepted accounting principles.
(c) Am-Pac has no liabilities with respect to the payment of any federal,
state, county, local or other taxes (including any deficiencies, interest or
penalties), except for taxes accrued but not yet due and payable.
(d) Am-Pac has filed all state, federal or local income and/or franchise
tax returns required to be filed by it from inception to the date hereof. None
of such federal income tax returns have been examined by the Internal Revenue
Service. Each of such income tax return reflects the taxes due for the period
covered thereby, except for amounts which, in the aggregate, are immaterial.
(e) Am-Pac's books and records, are in all material aspects complete,
correct and have been maintained in accordance with good business and accounting
practices.
3.05 - Information. The information concerning Am-Pac set forth in this
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Agreement and the Am-Pac Schedules are complete and accurate in all material
respects and do not contain any untrue statements 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.
3.06 - Options or Warrants. There are no existing options, warrants, calls,
or commitments of any character relating to the authorized and unissued stock of
Am-Pac, except options, warrants, calls or commitments, if any, to which Am-Pac
is not a party and by which it is not bound; or the obligations described
herein.
3.07 - Title and Related Matters. Am-Pac has good and marketable title to
all of its properties, inventory, interest in properties, and assets, real and
personal, which are reflected in Am-Pac's most recent balance sheet or acquired
after that date (except properties, interest 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 (a) statutory
liens or claims not yet delinquent; (b) such imperfections of title and
easements as do not and will not materially detract from or interfere with the
present or proposed use of the properties subject thereto or affected thereby or
otherwise materially impair present business operations on such properties; or
(c) as described in the Am-Pac Schedules.
3.08 - Litigation and Proceedings. Am-Pac is involved as a claimant and
defendant in arbitration proceedings in Cleveland Ohio regarding claims of
approximately $50,000.
3.09 - Compliance With Laws and Regulations. To the best of its knowledge,
Am-Pac has complied with all applicable statutes and regulations of all federal,
state, or other applicable governmental entity or agency thereof, except to the
extent that noncompliance would not materially and adversely affect the
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<PAGE>
business, operations, properties, assets or conditions of Am-Pac or except to
the extent that noncompliance would not result in the occurrence of any material
liability, and except certain filing reports with the Securities and Exchange
Commission, as noted in the attached schedules.
3.10 - Approval of Agreement. The board of directors of Am-Pac has
authorized the execution and delivery of this Agreement by Am-Pac and has
approved this Agreement and the transactions contemplated hereby.
3.11 - Continuity of Business Enterprises. Am-Pac has no commitment or
present intention to liquidate Tetuan or Liesa or sell or otherwise dispose of a
material portion of their business or assets following the consummation of the
transactions contemplated hereby.
3.12 - Am-Pac Schedules. Am-Pac has delivered to PLC the following
schedules, which are collectively referred to as the "Am-Pac Schedules" and
which consist of separate schedules, which are dated the date of this Agreement,
all certified by the chief executive officer of Am-Pac to be complete, true, and
accurate:
(a) a schedule containing complete and accurate copies of the articles of
incorporation of Am-Pac as in effect as of the date of this
Agreement;es of
(b) a schedule containing a complete and accurate copy of the Am-Pac or
Captain Tony's quarterly report on Form 10QSB for the three month
period ending September 30, 1996, including the audited and unaudited
financial statements identified in section 3.04(a)
(c) a schedule containing a copy of the Captain Tony annual report on Form
10-KSB for the fiscal year ended June 30, 1996 which complies in all
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material respects with the applicable requirements of the Securities
Act of 1934, as amended;
(d) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed to the Exchange
in the Am-Pac Schedules by Article III.;
(e) a schedule setting forth or copies of any pending, executed
acquisition or exchange agreements involving the issuance of Am-Pac
stock.
Am-Pac shall cause the Am-Pac Schedules and the instruments and data
delivered to PLC; and hereunder to be updated after the date hereof up to and
including the Closing Date.
3.13 Private Placement. Am-Pac intends to issue a private placement of its
securities in an amount of approximately $5,000,000. However, this intent is
subject to change based upon Am-Pac's Board's ongoing analysis of Am-Pac's
financial condition, and any other considerations the Board or Am-Pac's
management deem relevant. The Shareholders may not rely on this representation
as a commitment, promise or obligation.
IV. CONDITIONS TO THE OBLIGATIONS OF AM-PAC AND LIMITED
The obligations of Am-Pac and Limited hereunder shall be subject to the
conditions that:
4.01. REPRESENTATIONS. All representations and warranties of the
Shareholders and/or PLC shall be true and materially correct as of the date made
and as of the Closing Date, and all the terms and conditions of this Agreement
to be performed and complied with by the Shareholders on or prior to the Closing
Date shall have been performed and complied by the Closing Date;
4.02. CHANGES. Subject to the matters disclosed in the Disclosure Letter,
there shall have been no substantial adverse changes in the conditions,
financial, business or otherwise of either PLC or any subsidiary or any member
of the PLC Group from January 1, 1996, to the Closing Date, and between such
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<PAGE>
dates the business and assets of PLC or any member of the PLC group shall not
have been materially adversely affected as the result of any fire, explosion,
earthquake, flood, accident, strike, lockout, combination or workmen,
environmental concerns, taking over of any such assets by any governmental
authorities, riot, activities or armed forces, or acts of God or of the public
enemies.
4.03. Legal Opinions. Am-Pac and Limited shall have received the opinion of
Messrs. Downs, legal counsel for PLC, and legal counsel for the other members of
the PLC Group to the effect that (a) PLC and its subsidiaries are duly organized
and validly existing under the laws of the jurisdiction of their incorporation
and have the power and authority to own their properties and to carry on their
respective business wherever the same may be located and operated as of the
Closing Date, (b) the Agreement has been duly executed, and when delivered by
the Shareholders is enforceable in accordance with its terms, subject to the
general principles of equity and the valid exercise of police power; (c) the
exchange of shares made the subject of this Agreement and Limited's acquisition
of PLC shares, will not violate any securities laws of any country or state
which may have jurisdiction over the parties of this Agreement; (d) the exchange
of the stock herein contemplated does not require the registration of the PLC
Ordinary Shares pursuant to any law dealing with the issuance, sale, transfer,
and/or exchange of corporate securities, of any country or state which has
jurisdiction over the parties of this Agreement.
V. CONDITIONS TO THE OBLIGATIONS OF THE SHAREHOLDERS.
The obligations of the Shareholders hereunder are subject to the conditions
that:
5.01. Representations. All representations or warranties of Am-Pac and
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Limited shall be true and correct as of the date made and as of the Closing
Date, and all the terms and conditions of this Agreement to be performed and
complied with by Am-Pac and/or Limited on or prior to the Closing Date shall
have been performed and complied by the Closing Date;
5.02. Changes. Except as otherwise disclosed herein, there shall have been
no substantial adverse changes in the conditions, financial, business or
otherwise of either Am-Pac or Limited from September 30, 1996, to the Closing
Date, and between such dates the business and assets of Am-Pac and Limited shall
not have been materially adversely affected as the result of any fire,
explosion, earthquake, flood, accident, strike, lockout, combination of workmen,
environmental concerns, taking over of any such assets by any governmental
authorities, riot, activities or armed forces, or acts of God or of the public
enemies.
5.03. Legal Opinion. The Shareholders shall have received the opinion of
Vanderkam and Sanders, counsel for Am-Pac and Limited, to the effect that (a)
Am-Pac and Limited are corporations duly organized and validly existing under
the laws of their respective jurisdiction, and each has the power to own and
operate its properties wherever the same shall be located as of the Closing
Date; (b) the execution, delivery and performance of Am-Pac and Limited has been
duly authorized by all necessary corporate action and such constitutes a legal,
valid and binding obligation of Am-Pac and Limited and is enforceable in
accordance with its terms; (c) the stock to be delivered to the Shareholders
pursuant to the terms of this Agreement has been validly issued, is fully paid
and nonassessable; and (d) the exchange of the stock herein contemplated does
not require the registration of the Am-Pac's Common Stock pursuant to any
Federal law dealing with the issuance, sale, transfer, and/or exchange of
corporate securities.
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<PAGE>
VI. CLOSING
6.01. Closing Date. The closing shall take place at 10:00 A.M. Central
Standard Time, on December 20, 1996, at the offices of Am-Pac International,
Inc. in Orlando, Florida, or at such other time and place as the parties hereto
shall agree upon.
6.02. Actions at Closing. At the closing, Am-Pac, Limited and the
Shareholders of PLC will each deliver, or cause to be delivered to the other,
the securities to be exchanged in accordance with Section 1 of this Agreement
and each party shall pay its own Federal, State or other governmental or
jurisdictional taxes required to be paid in connection with the issuance,
delivery and receipt of such. Am-Pac shall issue the shares in accordance with
Section 1, to each shareholder listed in Exhibit 8, in the number set forth
opposite his or her name. In addition, the following transactions will take
place.
(a) Am-Pac and Limited will deliver to the Shareholders:
(i) Duly certified copies of all corporate resolutions and other
corporate proceedings taken by Am-Pac and Limited to authorize the
execution, delivery and performance of this Agreement.
(ii) The opinion of Vanderkam and Sanders, counsel for Am-Pac and
Limited, as provided in Article V of this Agreement.
(iii) A Certificate executed by principal officers of Am-Pac and
Limited attesting to the fact that all of the representations and
warranties of Am-Pac and Limited, respectively, are true and correct as of
the Closing Date, and that all of the conditions to the obligations of the
Shareholders to be performed by Am-Pac and Limited, respectively have been
performed as of the Closing Date.
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<PAGE>
(iv) A Certificate of Incumbency and Signatures of the officers of
Am-Pac and Limited dated as of the date of this Agreement.
(v) Stock certificates in an aggregate amount of 2,500,000 of Am-Pac
common stock, $.001 par value and stock Certificates in an aggregate amount
of 15,528 shares of Class A Convertible Preferred Stock, as set forth in
Article I.
(vi) A Stand Still agreement in accordance with Article IX
(b) The Shareholders will deliver to Am-Pac and Limited:
(i) The opinions of Downs counsel for the Shareholders, and the
opinion of other counsel for the Members of the PLC Group , as provided for
in Article IV hereof.
(ii) A Certificate of corporate good standing from the jurisdiction of
incorporation as a recent date for PLC and each subsidiary and each member
of the PLC Group;
(iii) A certificate of the Shareholders signed by their representative
that each of the representations and warranties of the Shareholders are
true and correct as of the Closing Date, subject to the matters contained
in the disclosure letter; and that all of the conditions to the obligations
of both Am-Pac and Limited to be performed by the Shareholders have been
performed as of the Closing Date;
(iv) All of the issued common share certificates of PLC, duly endorsed
to Limited.
VII. COMPLIANCE WITH SECURITIES LAWS
7.01. Shareholder representations. Each shareholder agrees not to transfer
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<PAGE>
the shares of Am-Pac to be delivered to them pursuant to this Agreement for a
period of one year from the actual closing date. Each shareholder acknowledges
that the shares of Am-Pac to be delivered to each shareholder pursuant to this
Agreement have not been registered under the Securities Act of 1933 as amended,
referred to in this Agreement as the "Securities Act," or the laws of any other
jurisdiction, and that therefore the stock is not fully transferable except as
permitted under various exemptions, if any contained in the act and the rules of
the Securities and Exchange Commission interpreting the act. The provisions
contained in this paragraph are intended to ensure compliance with the
Securities Act. The shareholders represent and warrant that their acquisition of
Am-Pac shares does not and will not violate the laws of any country or state
which has or may have jurisdiction over this Agreement. Under US law, Am-Pac
Common Stock cannot be sold or transferred by the shareholder unless they are
subsequently registered under applicable law or an exemption from registration
is available. Am-Pac is not required to register or assist in the registration
of the Am-Pac Common Stock or to make any exemption from registration available.
Each Shareholder represents and warrants to Am-Pac that:
(a) the Shareholder is acquiring the shares of Am-Pac common stock under
this Agreement for the Shareholder's own account for investment, and not for the
purpose of resale or any other distribution of such shares;
(b) the Shareholder has no present intention of disposing of all or any
part of such shares at any particular time, for any particular price or on the
happening of any particular circumstances;
(c) the Shareholder has such knowledge and experience in financial and
business matters that the Shareholder is capable of evaluating the merits and
risks of an investment in Am-Pac;
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<PAGE>
(d) the Shareholder acknowledges that Am-Pac is relying on the truth and
accuracy of these warranties and representations in issuing the shares without
first registering the shares under the Securities Act;
(e) none of the shares of Am-Pac capital stock to be issued to the
shareholder pursuant to this Agreement, will be offered, sold, assigned,
pledged, transferred, or otherwise disposed of except after full compliance with
all of the applicable provisions of the Securities Act and the rules and
regulations of the Securities and Exchange Commission under the Securities Act;
(f) the Shareholder agrees not to sell or otherwise dispose of any of
the shares of Am-Pac's common stock received pursuant to this Agreement unless
the shareholder: (i) has delivered to Am-Pac a written legal opinion in form and
substance satisfactory to counsel for Am-Pac to the effect that the disposition
is permissible under the terms of the Securities Act and regulations
interpreting the act; (ii) has complied with the registration and prospectus
requirements of the Securities Act relating to such disposition; or (iii) has
presented Am-Pac satisfactory evidence that such a disposition is exempt from
registration under the act;
(g) the Shareholder understands and agrees that Am-Pac shall place a
stop transfer order against transfers of shares until one of the conditions set
forth in this paragraph have been met; and
(h) the certificates evidencing the shares that the shareholder will
receive under this Agreement will contain the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR
INVESTMENT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A
REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED IS IN EFFECT FOR THE SECURITIES, OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS IN FACT APPLICABLE TO SUCH
OFFER OR SALE, AND SUCH EXEMPTION IS EVIDENCED BY AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER.
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<PAGE>
VIII. ACCESS TO THE PROPERTIES AND BOOKS
The Shareholders hereby grant to both Am-Pac and Limited and their duly
authorized representatives and during normal business hours between the date
hereof and the Closing Date, the right of full and complete access to the
properties of PLC, and each member of the PLC Group, and full opportunity to
examine such entities' books and records. A similar access to Am-Pac and
Limited's properties, books and records in likewise granted to the Shareholders,
and their duly authorized representatives.
IX. OFFICERS AND DIRECTORS
9.01 Directors. At Closing, all current directors of PLC, Tetuan and Liesa,
with the exception of Malcolm Wright, shall resign by tendering written
resignations in accordance with the terms of a separate Stand Still agreement,
which the parties agree to execute at closing. The Stand Still agreement shall
provide for Am-Pac or Limited's control of PLC, Tetuan and Liesa's boards upon
Am-Pac's redemption of $5,500,000 worth of the Shareholder's common shares of
Am-Pac.
9.02. Management Agreement. Limited agrees to negotiate in good faith with
Malcolm Wright to provided management and marketing services to Liesa and Tetuan
for $35,000 annually.
X. CONFIDENTIAL MATTERS
Each party hereto agrees with the other parties that, unless and until the
transactions contemplated by this Agreement have been consummated, it and its
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, as such other party, and shall not use such disclosure data or
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<PAGE>
information or disclose the same to others, except (i) to the extent such data
or information is published, is a matter of public knowledge, or is required by
law to be published; and (ii) to the extent that such disclosure data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
workpapers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
XI. COSTS, DAMAGES AND ATTORNEY'S FEES
11.01 Costs Each party hereto shall pay its own expenses and costs incident
to the preparation of this Agreement and to the consummation of the transaction
contemplated herein.
11.02 Attorneys fees. In the event that any party institutes any action or
suit or proceedings to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the breaching party or parties shall
reimburse the nonbreaching party or parties for all costs, including reasonable
attorney's fees, incurred in connection therewith and in enforcing or collecting
any judgment or decision rendered therein.
11.03 Damages. In the event that any shareholder representation made in
this Agreement or Exhibit hereto, is proven to be a mistake which results in
damages to Am-Pac or Limited, then the parties agree that each individual
shareholder's liability shall be limited to the value of each shareholder's
Exchanged Am-Pac Stock at the time of exchange. In the event that a shareholder
has transferred his or her respective Exchanged Am-Pac Stock, then that
shareholder's liability shall be limited to (i) the market price of such
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shareholder's Exchanged Am-Pac Stock; or (ii) the amount of proceeds which such
shareholder received from such transfer of Exchanged Am-Pac Stock whichever is
less. For purposes of this Article, Market Price shall mean the average of the
closing bid and ask prices of the Am-Pac common stock for the five consecutive
trading days immediately preceding the date that Am-Pac or Limited gives notice
of its claim hereunder. In the event that Am-Pac or Limited seek damages in
accordance herewith, each shall give the Shareholders written notice, and 30
days to cure such claim. In the event that a shareholder pays any claim brought
by Am-Pac or Limited then Am-Pac or Limited shall assign any of its respective,
corresponding claim to such shareholder. Should Am-Pac or Limited subsequently
receive payment towards a claim already paid in full by a shareholder pursuant
to the terms hereof, then Am-Pac and/or Limited agree to reimburse shareholder
for such amount, paid, and subsequently received. Furthermore, Am-Pac and
Limited agree that they will not seek to recover damages from the Shareholders
pursuant to this section 11.03 until Am-Pac and/or Limited shall have
accumulated an aggregate amount of $25,000 worth of such claims (each of which
shall be in a minimum amount of $2,500.)
XII. MISCELLANEOUS
12.01. Choice of Law. This Agreement shall be controlled, construed and
enforced in accordance with the laws of the State of Florida.
12.02. Assignment. This Agreement shall not be assignable by either party
without the prior written consent of the other.
12.03. Headings. All paragraph headings herein are inserted for the parties
convenience in identifying the provisions of this Agreement, and shall not
effect the construction or interpretation of the provisions of this Agreement.
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<PAGE>
12.04. Entire Agreement. This Agreement sets forth the entire understanding
between the parties, there being no terms, conditions, warranties or
representations other than those contained herein, and no amendments hereto
shall be valid unless made in writing and signed by the parties hereto.
12.05. Binding Successors. This Agreement shall be binding upon and shall
inure to the benefit of the heirs, executors, administrators and assigns of all
parties.
12.06. Notices. All notices, requests, instructions, or other documents to
be given hereunder shall be in writing and sent by registered mail:
<TABLE>
<S> <C>
If to Shareholders: Downs
156 High Street
Dorking, Surred, England RHH 1BQ
If to Am-Pac: Thomas Tedrow
or Limited: 431 East Central Blvd., Suite 900
Orlando, Florida 32801
with copies to: Messrs. Vanderkam & Sanders
440 Louisiana, Suite 475
Houston, Texas 77002
</TABLE>
12.07. Signatures. For purposes of this Agreement only, facsimile
signatures shall be considered original signatures.
12.08. Multiple Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original, and all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date and year first above written.
Page 24
<PAGE>
AM-PAC, INTERNATIONAL, INC
/s/ Thomas Tedrow
---------------------------
Thomas Tedrow, President
LEISURESHARE INTERNATIONAL LIMITED
/s/ Thomas Tedrow
---------------------------
Thomas Tedrow, President
SHAREHOLDERS OF PLC
/s/ Malcolm Wright
--------------------------
Malcolm Wright, representative
Page 25
<PAGE>
SHAREHOLDERS OF PLC
/s/ illegible /s/ illegible
- ------------------- ----------------------------------
Malcolm Wright Witness; By: /s/ illegible
----------------------
/s/ illegible /s/ illegible
- ------------------- ----------------------------------
Peter Michael Webb Witness: By: /s/ illegible
----------------------
- ------------------- ----------------------------------
David Jobbins Witness; By:
----------------------
- ------------------- ----------------------------------
Rosemary Jobbins Witness; By:
----------------------
/s/ illegible /s/ illegible
- ------------------- ----------------------------------
Virginia Webb Witness; By: /s/ illegible
----------------------
/s/ illegible /s/ Francisca Poch
- ------------------- ----------------------------------
Tony Woodward Witness; By: /s/ Francisca Poch
----------------------
/s/ Hazel Adams /s/ illegible
- ------------------- ----------------------------------
Hazel Adams Witness; By: /s/ illegible
----------------------
Samantha Wright
/s/ illegible
- ------------------------- /s/ illegible
By: Malcolm Wright ----------------------------------
Guardian and Legal Custodian Witness; By:
----------------------
/s/ illegible /s/ illegible
- -------------------------- ----------------------------------
Thomas Albert Lee, Successor in Witness; By:
interest to Rossignol Corp., Inc. ----------------------
Webb Hop Warehousing Limited
/s/ illegible /s/ illegible
- -------------------------- ----------------------------------
By: /s/ illegible Witness; By: /s/ illegible
Title: illegible ----------------------
--------------------
Page 26
<PAGE>
SHAREHOLDERS OF PLC continued Signed for and on Behalf of:
Roger Maddock, Personally /s/ illegible
-------------------------
Arvimex, Inc. /s/ illegible
-------------------------
By: R. Maddock
Title: President
Cap Ferat NV: /s/ illegible
By: R. Maddock
Title: Chairman
Life & Pensions (Jersey) Ltd /s/ illegible
-------------------------
By: R. Maddock
Title: Chairman
Worthy Securities, Ltd. /s/ illegible
-------------------------
By: R. Maddock
Title: Chairman
Worthy Trust Company Ltd: /s/ illegible
-------------------------
By: R. Maddock
Title: Chairman
Page 27
<PAGE>
State of FLORIDA }
}
County of ORANGE }
On December 21, 1996, before me the undersigned authority personally
appeared Malcolm Wright who, after being sworn, on oath did state that he was
the duly authorized representative for all of the shareholders attached and
incorporated herein; and that he was executing this Agreement upon such
authority, and individually as a Shareholder, for the considerations therein
stated.
/s/ Cheryl L. Piper
--------------------------
Notary Public
Commission #CC452632
Expires April 13, 1999
STATE OF FLORIDA }
}
COUNTY OF ORANGE }
On December 21, 1996 personally appeared before me, a Notary Public, Thomas
Tedrow, who acknowledged that he executed the above document, and that he is the
President of Am-Pac International and duly authorized to execute this document
on its behalf.
/s/ Cheryl L. Piper
----------------------------------
Notary Public
Commission #CC452632
Expires April 13, 1999
STATE OF FLORIDA }
}
COUNTY OF ORANGE }
On December 21, 1996 personally appeared before me, a Notary Public, Thomas
Tedrow, who acknowledged that he executed the above document, and that he is the
President of Leisureshare International, Limited and duly authorized to execute
this document on its behalf.
/s/ Cheryl L. Piper
---------------------------------
Notary Public
Commission #CC452632
Expires April 13, 1999
Page 28
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement"), is
entered into as of this 17 day of December 1996, by and among Am-Pac
International, Inc., a Nevada corporation (hereinafter referred to as "Am-Pac");
T&P Investments, Inc., a Florida corporation (hereinafter referred to as "T&P");
and Thomas Sweeney, an individual, (hereinafter referred to as "Sweeney.")
Sweeney may also be referred to hereafter as the "Shareholder."
Premises
This Agreement provides for the acquisition by Am-Pac of 100% of the issued
and outstanding shares of T&P in exchange for $1,000,000 worth of Am-Pac common
stock, as defined herein, on the terms and conditions hereinafter provided, all
for the purpose of effecting a so-called "tax-free" reorganization pursuant to
Sections 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
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 here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF T&P AND SWEENEY
As an inducement to, and to obtain the reliance of Am-Pac, T&P and Sweeney
represent and warrant as follows:
Section 1.01 - Organization.T&P 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 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 or countries in which the
character and location of the assets owned by it or the nature of the business
transacted by it required qualification except where failure to be so qualified
would not have a material adverse effect on its business. Included in the T&P
Schedules (as hereinafter defined) are complete and correct copies of the
articles of incorporation, as amended, and bylaws of T&P as in effect on the
date hereof. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of T&P's articles of incorporation or bylaws. T&P has taken all
actions required by law, its articles of incorporation, or otherwise to
authorize the execution and delivery of this Agreement.
1
<PAGE>
T&P has full power, authority, and legal right and has taken all action
required by law, its bylaws, articles of incorporation, memorandum and articles
of association, and otherwise to consummate the transactions herein
contemplated.
Section 1.02 - Capitalization and Outstanding Shares. The authorized
capitalization of T&P consists of 1000 shares of stock, par value of $10.00 per
share, of which Sweeney owns 50 shares, which constitutes all of the outstanding
and issued shares of T&P to date of closing. Such shares are legally issued,
fully paid, and non-assessable and not issued in violation of the pre-emptive or
other rights of any person.
Section 1.03 - Subsidiaries and Predecessor Corporations. T&P does not have
any subsidiaries and does not own, beneficially or of record, any shares of any
other corporation.
Section 1.04 - Financial Statements.
(a) Included in the T&P Schedules is the audited balance sheet of T&P
as of years end December 31, 1994, 1995 and 1996, and the related audited
combined statements of profit and loss account and combined statement of
cash flows for the years ended December 31, 1994, 1995 and 1996, together
with notes to such statements and the opinion of H.J. Swart & Co.
independent certified public accountant, with respect thereto. Also
included is the unaudited balance sheet and related financials as of
September 30, 1996. The costs of these audits will be paid by Am-Pac.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles generally accepted and
conforming to United States GAAP. The T&P balance sheet presents a true and
fair view as of its date of the financial condition of T&P. T&P did not
have, as of the date of such balance sheet, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in a balance sheet or
the notes thereto, prepared in accordance with accounting principles
generally accepted in the United States, and all assets reflected therein
are properly reported and present fairly the value of the assets of T&P in
accordance with accounting principles generally accepted in United States.
The statements of profit and loss account and statement of cash flow
reflect fairly the information required to be set forth therein by United
States GAAP.
(c) T&P has filed all income and/or franchise tax returns required to
be filed by it from inception to the date hereof. Included in the T&P
Schedules are true and correct copies of the income tax returns of T&P
filed for the prior three years. None of such income tax returns have been
examined by the appropriate tax authorities. Each of such income tax
returns reflects the taxes due for the period covered thereby, except for
amounts which, in the aggregate, are immaterial.
2
<PAGE>
(d) T&P does not owe any unpaid taxes (including any deficiencies,
interest, or penalties) through September 30, 1996, for which T&P may be
liable in its own right or as a transferee of the assets of, or as a
successor to, any other corporation or entity. Furthermore, except as
accruing in the normal course of business, T&P does not owe any accrued and
unpaid taxes to date of this Agreement.
(e) The books and records, financial and otherwise, of T&P are in all
material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) T&P has good and marketable title to its assets and, except as set
forth in the T&P Schedules or the financial statements of T&P or the notes
thereto, has no material contingent liabilities, direct or indirect,
matured or unmatured.
Section 1.05 - Information. The information concerning T&P set forth in
this Agreement and in the T&P 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 1.06 - Options or Warrants or Subscriptions. There are no existing
options, warrants, calls, subscriptions or commitments of any character relating
to the authorized and unissued T&P common stock, except options, warrants, calls
or commitments, if any, to which T&P is not a party and by which it is not
bound.
Section 1.07 - Absence of Certain Changes or Events. Except as set forth in
this Agreement or the T&P Schedules, since June 30, 1996:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of T&P; or (ii) any
damage, destruction, or loss to T&P (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties,
assets, or condition of T&P.
(b) T&P has not (i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of T&P;
(iv) made any material change in its method of management, operation or
accounting; (v) entered into any other material transaction other than
sales in the ordinary course of its business; (vi) made any accrual or
arrangement for payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or
employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its employees
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whose monthly compensation exceeds $1,000; or (viii) made any increase in
any profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made
to, for, or which its officers, directors, or employees;
(c) T&P has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course
of business; (ii) paid or agreed to pay any material obligations or
liability (absolute or contingent) other than current liabilities reflected
in or shown on the most recent T&P balance sheet, and current liabilities
incurred since that date in the ordinary course of business and
professional and other fees and expenses in connection with the preparation
of this agreement and the consummation of the transactions contemplated
hereby; (iii) sold or transferred, or agreed to sell or transfer, any of
its assets, properties, or rights (except assets, properties, or rights not
used or useful in its business which, is the aggregate have a value of less
than $1,000), or canceled, or agreed to cancel, any debts or claims (except
debts or claims which in the aggregate are of a value of less than $1,000);
(iv) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or
termination is material, considering the business or T&P; or (v) issued,
delivered, or agreed to issue or deliver any stock, bonds or other
corporate securities including debentures (whether authorized and unissued
or held as treasury stock); and
(d) to the best knowledge of T&P and Sweeney, T&P 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 T&P.
Section 1.08 - Title and Related Matters. T&P has good and marketable title
to all of its properties, inventory, interests in properties, and assets, real
and personal, which are reflected in the most recent T&P balance sheet 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
(a) statutory liens or claims not yet delinquent; (b) such imperfections of
title and easements as do not and will not materially detract from or interfere
with the present or proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties; and (c) as described in the T&P Schedules.
Section 1.09 - Litigation and Proceedings. Except as set forth in the T&P
Schedules, and the lawsuit brought by Mary Jean Hannah against T&P as a wrongful
death action, Cause no. c195/515 in Orange County, Florida, ("Hannah lawsuit")
there are no actions, suits, proceedings, or investigations pending or, to the
knowledge of T&P after reasonable investigation, threatened by or against T&P or
affecting T&P or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
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arbitrator of any kind. Because all parties acknowledge the potential cost
and inconvenience involved with litigation, and the potential liability
involved, Sweeney and T&P agree that Am-Pac may unilaterally terminate this
contract in accordance with section 4.07(c), after its investigation of the
claims and defenses associated with the Hannah lawsuit. Neither Sweeney nor T&P
has any knowledge of any material default on its part with respect to any
judgment, order, injunction, decree, award, rule, or regulation or 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. Additionally, there are no actions, suits, proceedings, or
investigations pending or, to the knowledge of Sweeney after reasonable
investigation, threatened by or against Sweeney or affecting Sweeney or his
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.
Sweeney does not have any knowledge of any material default on his part with
respect to any judgment, order, injunction, decree, award, rule, or regulation
or 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.
Section 1.10 - Contracts.
(a) Except as included or described in the T&P Schedules, there are no
material contracts, agreements, franchises, license agreements, or other
commitments to which T&P is a party or by which it or any of its assets,
products, license, or properties are bound other than those incurred in the
ordinary course of business;
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which T&P is a party or by which its properties are
bound and which are material to the operations of T&P taken as a whole are
valid and enforceable by T&P in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) T&P is not a party to or bound by, and the properties of T&P are
not subject to any contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment order, writ,
injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of T&P; and
(d) Except as included or described in the T&P Schedules or reflected
in the most recent T&P balance sheet, T&P is not a party to any oral or
written (i) contract for the employment of any officer or employee which is
not terminable on 30 days or less notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension benefit or
retirement plan, agreement, (iii) agreement, contract, or indenture
relating to the borrowing or money, (iv) guaranty of any obligation, other
than one on which T&P is a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for collection and other guaranties
of obligations which, in the aggregate do not exceed more than one year or
providing for payments in excess of $1,000 in the aggregate; (vi)
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collective bargaining agreement; (vii) agreement with any present or former
officer or director of T&P, other than as provided in this Agreement; or
(viii) contract, agreement, or other commitment involving payments by it of
more than $1,000 in the aggregate.
Section 1.11 - Material Contract Defaults. T&P 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 T&P and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which T&P has not taken adequate steps to prevent such a default from
occurring.
Section 1.12 - 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 T&P or
Sweeney are a party or to which any of their properties or operations are
subject.
Section 1.13 - Governmental Authorizations. Except as set forth in the T&P
Schedules, T&P has all licenses, franchises, permits, and other governmental
authorizations that are legally required to enable it 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 T&P of this Agreement and the consummation by
T&P of the transaction contemplated hereby.
Section 1.14 - Compliance With Laws and Regulations. Except as set forth in
the T&P Schedules, to the best of its knowledge, T&P has complied with all
applicable statues 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 T&P or except to the extent that noncompliance would not result in
the occurrence of any material liability for T&P.
Section 1.15 - Liquor License. In order for T&P to operate as a club, it
obtained a liquor license from the Florida Alcoholic Beverage Committee, number
4 COP #5800254. This is the only license necessary for T&P to conduct its
present business; and T&P and Sweeney warrant that this license is freely
transferrable or assignable; and will be so assigned or transferred to Am-Pac or
its designee upon closing. Furthermore T&P represents and warrants that it has
paid all fees necessary to the maintenance of such license, and that no liens
have been filed against such license.
Section 1.16 - Approval of Agreement. The board of directors and sole
shareholder of T&P has authorized the execution and delivery of this Agreement
by T&P and has approved the agreement and the transactions contemplated hereby.
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Section 1.17 -- Labor Relations. T&P has not had work stoppage resulting
from labor problems. To the knowledge of T&P, no union or other collective
bargaining organization is organizing or attempting to organize any employee of
T&P.
Section 1.18 - T&P Schedules. Within 20 days after execution hereof, T&P
will deliver to Am-Pac the following schedules, which are collectively referred
to as the "T&P Schedules" and which consist of separate schedules dated as of
the date of execution of this Agreement, all certified by the chief executive
officer of T&P as complete, true, and correct as of the date of this Agreement
in all material respects:
(a) a schedule containing complete and correct copies of the
certificate and articles of incorporation, as amended, and bylaws of T&P in
effect as of the date of this Agreement;
(b) a schedule containing the financial statements of T&P identified
in paragraph 1.04(a);
(c) a schedule containing a list indicating the name and address of
each Shareholder of T&P together with the number of shares owned by him,
her or it;
(d) a schedule containing all material contracts necessary to the
operation of its business
(e) copies of all licenses, permits, and other governmental
authorization (or requests or applications therefor) pursuant to which T&P
carries on or proposes to carry on its business (except those which, in the
aggregate, are immaterial to the present or proposed business of T&P),
including but not limited to liquor license no. 4 COP #5800254;
(f) a schedule listing the accounts receivable and notes and other
obligations receivable of T&P as of September 30, 1996, or thereafter other
than in the ordinary course of business of T&P, indicating the debtor and
amount, and classifying the accounts to show in reasonable detail the
length of time, if any, overdue, and stating the nature and amount of any
refunds, set offs, reimbursements, discounts, or other judgments which are
in the aggregate material and due to or claimed by such creditor;
(g) a schedule listing the accounts payable and notes and other
obligations payable of T&P as of September 30, 1996, or that arose
thereafter indicating the creditor and amount, classifying the accounts to
show in reasonable detail the length of time, if any, overdue, and stating
the nature and amount of any refunds, set offs, reimbursements, discounts,
or other adjustments, which in the aggregate are material and due or
payable to T&P respecting such obligations (It is the parties intent that
Am-Pac understand the full monthly costs of operating the business as T&P
is currently so doing);
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(h) a schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
conditions of T&P since June 30, 1996, required to be provided pursuant to
section 1.07 hereof;
(i) a schedule setting forth all funds in the operating cash bank; and
(j) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the T&P Schedules
by sections 1.01 through 1.19.
T&P shall cause the T&P Schedules and the instruments and data delivered to
Am-Pac hereunder to be updated after the date hereof up to and including the
Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by T&P. T&P shall have a
period of twenty (20) days after the date hereof to provide such schedules. If
T&P cannot or fails to do so, or if Am-Pac finds the schedules unacceptable,
Am-Pac may terminate this agreement by giving written notice to T&P within
thirty (30) days after the schedules were due to be produced or were provided.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF THE SHAREHOLDER
As an inducement to, and to obtain the reliance of Am-Pac, the T&P
Shareholder represents and warrants as follows:
Section 2.01 - Ownership of T&P Shares by Sweeney. Sweeney hereby
represents and warrants with respect to himself that he is the legal and
beneficial owner of 50 T&P shares (which constitute 100% of all of T&P's
outstanding shares), free and clear of any claims, charges, equities, liens,
security interests, and encumbrances whatsoever, including but not limited to
any marital or community property interest) and that he has full right, power,
and authority to transfer, assign, convey, and deliver its T&P shares; and
delivery of such shares at the closing will convey to Am-Pac good and marketable
title to such shares and clear of any claims, charges, equities, liens, security
interests and encumbrances whatsoever.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF AM-PAC
As an inducement to, and to obtain the reliance of T&P and the T&P
Shareholder, Am-Pac represents and warrants as follows:
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Section 3.01 - Organization.Am-Pac is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Nevada 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 to carry on its business in
all material respects as it is now being conducted, and there is no jurisdiction
in which it is not qualified 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 Am-Pac Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation of Am-Pac as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Am-Pac's articles of incorporation or bylaws. Am-Pac
has taken all action required by law its articles of incorporation, its bylaws,
or otherwise to authorize the execution and delivery of this Agreement, and
Am-Pac has full power, authority, and legal right and has taken all action
required by law, it articles of incorporation, bylaws, or otherwise to
consummate the transactions herein contemplated.
Section 3.02 - CapitalizatioAm-Pac's authorized capitalization consists of
149,900,000 shares of common stock, and 100,000 shares of Preferred Stock, par
value $.001, of which 406,583 common shares are issued and outstanding. All
issued and outstanding shares are legally issued, fully paid, non-assessable and
not issued in violation of the pre-emptive or other rights of any person.
Section 3.03 - Subsidiaries and Predecessor Corporation. Am-Pac
International is a newly formed company whose sole purpose was to merge with
Captain Tony's Pizza, Inc., (Captain Tony's) a New York Company whose
shareholders and directors elected to reincorporate in the state of Nevada.
Articles of Merger have been, or are concurrently being filed with the
appropriate state authorities. Pursuant to the plan of merger, Am-Pac shall
succeed to all the assets and liabilities of Captain Tony's. Am-Pac owns one
subsidiary, Leisureshare International Limited,. a British Virgin Island company
which is currently negotiating an acquisition with a Spanish land development
company. In the event that the acquisition of the Spanish company is
consummated, Am-Pac will be obligated to issue approximately 16,000 Series A
Convertible Preferred Shares, which shall be convertible at a rate of one
preferred share for 500 common shares, and approximately 2,500,000 shares of
Am-Pac common stock. Additionally, Captain Tony's executed an Acquisition
Agreement with the Shareholders of Pacific Foods Limited, a BVI corporation, to
acquire all of the shares of that company. Pursuant to that agreement, Am-Pac is
obligated to issue 7,000,000 shares of its common stock to the Pacific Foods
shareholders; and Michael Martella is granted an option to purchase an 100,000
shares of Am-Pac common stock. Am-Pac is negotiating with Martella for an option
to purchase another 250,000 shares.
Section 3.04 - Financial Statements.
(a) Included in the Am-Pac Schedule are the audited balance sheets of
its predeccesor company Captain Tony's Pizza, Inc. as of December 31,
1995, and the related audited statements of operations, stockholders'
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equity and changes in financial position for the fiscal year ended
December 31, 1995, together with the notes to such statements and the
opinion of certified public accountants. Also included are Captain
Tony's most recently prepared quarterly report.
(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved. The Am-Pac balance sheets present fairly as of
their respective dates the financial condition of Am-Pac. Am-Pac did not
have as of the date of any such Am-Pac balance sheet, except as and to
the extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in a
balance sheet or the notes thereto. All assets reflected therein are
properly reported and present fairly the value of the assets of Am-Pac,
in accordance with generally accepted accounting principles. The
statements of operations, stockholders' equity and changes in financial
position reflect fairly the information required to be set forth therein
by generally accepted accounting principles.
(c) Am-Pac has no liabilities with respect to the payment of any
federal, state, county local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and
payable.
(d) Am-Pac has filed all state, federal or local income and/or franchise
tax returns required to be filed by it from inception to the date
hereof. None of such federal income tax returns have been examined by
the Internal Revenue Service. Each of such income tax return reflects
the taxes due for the period covered thereby, except for amounts which,
in the aggregate, are immaterial.
(e) Am-Pac's books and records, are in all material aspects complete,
correct and have been maintained in accordance with good business and
accounting practices.
Section 3.05 - Information. The information concerning Am-Pac set forth in
this Agreement and the Am-Pac Schedules is complete and accurate in all material
respects and does not contain any untrue statements 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 3.06 - Opinions or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of Am-Pac, except options, warrants, calls or commitments, if
any, to which Am-Pac is not a party and by which it is not bound.; and the
abovementioned obligations described in section 3.03.
Section 3.07 - Title and Related Matters. Am-Pac has good and marketable
title to all of its properties, inventory, interest in properties, and assets,
real and personal, which are reflected in Am-Pac's most recent balance sheet or
acquired after that date (except properties, interest in properties, and assets
sold or otherwise disposed of since such date in the ordinary course of
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business), free and clear of all liens, pledges, charges, or encumbrances except
(a) statutory liens or claims not yet delinquent; (b) such imperfections of
title and easements as do not and will not materially detract from or interfere
with the present or proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties; (c) as described in the Am-Pac Schedules.
Section 3.08 - Litigation and Proceedings. Am-Pac is involved as a
defendant in litigation with a plaintiff in Cleveland Ohio regarding claims in
excess of $25,000.
Section 3.09 - Compliance With Laws and Regulations. To the best of its
knowledge, Am-Pac has complied with all applicable statutes and regulations of
any federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets or conditions of Am-Pac or
except to the extent that noncompliance would not result in the occurrence of
any material liability, except certain filing reports with the Securities and
Exchange Commission, as noted in the attached schedules.
Section 3.10 - Approval of Agreement. The board of directors of Am-Pac has
authorized the execution and delivery of this Agreement by Am-Pac and has
approved this Agreement and the transactions contemplated hereby.
Section 3.11 - Continuity of Business Enterprises. Am-Pac has no commitment
or present intention to liquidate T&P or sell or otherwise dispose of a material
portion of T&P's business or assets following the consummation of the
transactions contemplated hereby.
Section 3.12 - Am-Pac Schedules. Am-Pac has delivered to T&P the following
schedules, which are collectively referred to as the "Am-Pac Schedules" and
which consist of separate schedules, which are dated the date of this Agreement,
all certified by the chief executive officer of Am-Pac to be complete, true, and
accurate:
(a) a schedule containing complete and accurate copies of the
articles of incorporation of Am-Pac as in effect as of the date
of this Agreement;
(b) a schedule containing a complete and accurate copy of the
Am-Pac quarterly report on Form 10QSB for the three month period
ending September 30, 1996, including the unaudited financial
statements identified in section 3.04(a)
(c) a schedule containing a copy of the Am-Pac annual report on
Form 10-KSB for the year ended December 31, 1995 which complies
in all material respects with the applicable requirements of the
Securities Act of 1934, as amended;
(d) a schedule setting forth any other information, together with
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any required copies of documents, required to be disclosed to the
Exchange in the Am-Pac Schedules by Article III.
Am-Pac shall cause the Am-Pac Schedules and the instruments and data
delivered to T&P hereunder to be updated after the date hereof up to and
including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by Am-Pac. Am-Pac shall
have a period of twenty (20) days after the date hereof to provide such
schedules. If Am-Pac cannot or fails to do so, or if T&P finds the schedules
unacceptable, and after T&P gives Am-Pac written notice of such failure or
unacceptability and a 10 day period to cure, T&P may terminate this agreement by
giving written notice to T&P within thirty (30) days after the schedules were
due to be produced or were provided.
ARTICLE IV
PLAN OF EXCHANGE
Section 4.01 - The Exchange. On the terms and subject to the conditions set
forth in this Agreement, Sweeney hereby agrees to assign, transfer, and deliver
to Am-Pac, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature, or description, the following
number of shares of common stock of T&P: 50 shares from Sweeney, constituting
100% of the issued and outstanding shares of common stock of T&P, and Am-Pac
agrees to acquire such shares on such date by issuing and delivering in exchange
therefor shares of Am-Pac restricted common stock, par value $0.001, in the
amount of $1,000,000 worth of such shares as follows:
The number of Am-Pac shares to be received shall be determined by dividing
the dollar number by the Market Price at which Am-Pac shares are trading. Market
Price is defined as the average of the closing bid and ask prices of the Am-Pac
common stock for the five consecutive trading days immediately prior to the
Closing Date as reported by NASDAQ.
The $1,000,000 worth of Am-Pac shares to be received in accordance herewith
shall be referred to as the "Exchanged Am-Pac Stock." At the Closing, Sweeney
shall, on surrender of its certificate or certificates, representing such 100%
of T&P shares to Am-Pac, be entitled to receive a certificate or certificates
evidencing $1,000,000 worth of Am-Pac stock as determined in accordance with
this section 4.01.
Section 4.02 - Registration Rights. The Exchanged Am-Pac Stock shall have
no registration rights.
Section 4.03 - Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time and place as
the parties may mutually agree ("Closing Date".)
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Section 4.05 - Closing Events. At the Closing, each of the respective
parties hereto shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, ruling or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, 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. Am-Pac agrees that Sweeney may
retain all funds in T&P's operating cash bank not to exceed $30,000.
Section 4.06 - Finder's Fees. Sweeney has agreed to pay a finder's fee to
Matt Gillio and Carl Miller pursuant to the closing of the acquisition of
another company, Am-Pac Investments, which shall own certain real property
commonly described as 11599 Colonial Drive and 11637 Orpington Street, both in
Orlando, Florida 32817. There shall be no payment of any Finder's fees in
conjunction with this agreement. In the event that Matt Gillio or Carl Miller
assert claims for such, Sweeney agrees to indemnify and hold harmless Am-Pac and
its proeprties from and against all such claims.
Section 4.07 - Termination.
(a) This Agreement may be terminated by the board of directors of either
Am-Pac or T&P at any time prior to the Closing Date if:
(i) there shall be any additional, i.e. actual or threatened
action or proceeding before any court or any governmental body
which has not been disclosed in this agreement and which shall
seek to restrain, prohibit, or invalidate the transactions
contemplated by this Agreement and which, in the judgment of such
board of directors, made in good faith and based upon the advice
of its legal counsel, makes it inadvisable to proceed with the
exchange contemplated by this Agreement;
(ii) any of the transactions contemplated hereby are disapproved
by any regulatory authority whose approval is required to
consummate such transactions or in the judgment of such board of
directors, made in good faith and based on the advice of counsel,
there is substantial likelihood that any such approval will not
be obtained or will be obtained only on a condition or conditions
which would be unduly burdensome, making it inadvisable to
proceed with the exchange; or
(iii) there shall have been any change after the date of the
latest balance sheets of T&P, and Am-Pac, respectively, in the
assets, properties, business, or financial condition of Am-Pac or
T&P, which could have a materially adverse affect on the value of
the business of Am-Pac or T&P, respectively, except any changes
disclosed in the Am-Pac or T&P Schedules, as the case may be,
dated as of the date of the execution of this Agreement; or
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(iv) the Board of Directors of Am-Pac or T&P or the Shareholder
determine in good faith that a condition to closing has not
occurred, including but not limited to:
(a) the liquor license also made subject to this agreement
shall be found to be ineffective, nontransferable or the
like.
In the event of termination pursuant to this paragraph (a) of Section 4.06,
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 by
action of the board of directors of Am-Pac, if T&P 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 T&P contained herein
shall be inaccurate in any material respect. If this Agreement is terminated
pursuant to this paragraph (b) of Section 4.06, this Agreement shall be of no
further force or effect, and no obligation, right or liability shall arise
hereunder, except that T&P shall bear its own costs as well as the reasonable
costs of Am-Pac in connection with the negotiations, preparation, and execution
of this Agreement, and matters connected therewith; and qualifying the offer and
sale of securities contemplated hereby for execution from the registration
requirements of state and federal securities laws.
(c) The Board of Directors of Am-Pac may unilaterally terminate this
contract if in their sole judgment, they determine that the potential liability
of T&P in conjunction with the litigation involving Page Hannah, and/or wrongful
death claims does not justify the economic risk of Am-Pac's investing in T&P. In
the event of termination pursuant to this paragraph (c) of Section 4.06, 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.
(d) This Agreement may be terminated at any time prior to the Closing by
action of the board of directors of T&P or by the Shareholder if Am-Pac 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
Am-Pac contained herein shall be inaccurate in any material respect. If this
Agreement is terminated pursuant to this paragraph (d) of Section 4.06, this
Agreement shall be of no further force or effect, and no obligation, right or
liability shall arise hereunder, except that Am-Pac shall bear its own costs as
well as the reasonable costs of T&P incurred in connection with the negotiation,
preparation and execution of this Agreement.
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ARTICLE V
SPECIAL COVENANTS
Section 5.01 - Access to Properties and Records. Am-Pac and T&P will each
afford to the officers and authorized representatives of the other full access
to the properties, books and records of Am-Pac or T&P 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 Am-Pac or T&P, as the case may
be, as the other shall from time to time reasonably request.
Section 5.02 - Delivery of Books and Records. At the Closing, T&P shall
deliver to Am-Pac the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of T&P now in the
possession of T&P or its representatives.
Section 5.03 - Special Covenants and Representations Regarding the
Exchanged Am-Pac Stock. The consummation of this Agreement and the transactions
herein contemplated, including the issuance of the Exchanged Stock to the
Shareholder of T&P as contemplated hereby, constitutes the offer and sale of
securities under the Securities and Exchange Act and applicable state statutes.
Sweeney acknowledges that the shares of Am-Pac to be delivered to him pursuant
to this Agreement have not been registered under the Securities Act of 1993 as
amended, referred to in this Agreement as the "Securities Act," or the laws of
any other jurisdiction, and that therefore the stock is not fully transferable
except as permitted under various exemptions, if any contained in the Securities
Act and the rules of the Securities and Exchange Commission interpreting the
act. Under US law, Am-Pac Common Stock cannot be sold or transferred by the
shareholder unless they are subsequently registered under applicable law or an
exemption from registration is available. Am-Pac is not required to register or
assist in the registration of the Am-Pac Common Stock. The provisions contained
in this paragraph are intended to ensure compliance with the Securities Act..
Sweeney represents and warrants to Am-Pac that he is acquiring the shares of
Am-Pac common stock under this Agreement for his own account for investment, and
not for the purpose of resale or any other distribution of such shares. Sweeney
also represents and warrants that he has no present intention of disposing of
all or any part of such shares at any particular time, for any particular price
or on the happening of any particular circumstances. Sweeney further represents
that he has such knowledge and experience in financial and business matters that
he is capable of evaluating the merits and risks of an investment in Am-Pac.
Sweeney acknowledges that Am-Pac is relying on the truth and accuracy of these
warranties and representations in issuing the shares without first registering
the shares under the Securities Act. Sweeney covenants and represents that none
of the shares of Am-Pac capital stock to be issued to him pursuant to this
Agreement, will be offered, sold, assigned, pledged, transferred, or otherwise
disposed of except after full compliance with all of the applicable provisions
of the 1933 act and the rules and regulations of the Securities and Exchange
Commission under the 1933 act. Therefore Sweeney agrees not to sell or otherwise
15
<PAGE>
dispose of any of the shares of Am-Pac common stock received pursuant to this
agreement unless such is done pursuant to section 4.02 or Sweeney: 1. has
delivered to Am-Pac a written legal opinion in form and substance satisfactory
to counsel for Am-Pac to the effect that the disposition is permissible under
the terms of the Securities Act and regulations interpreting the act; 2. has
complied with the registration and propectus requirements of the 1933 act
relating to such disposition; or 3. has presented Am-Pac satisfactory evidence
that such a disposition is exempt from registration under the act. Am-Pac shall
place a stop transfer order against transfers of shares until one of the
conditions set forth in this paragraph have been met. Furthermore Sweeney agrees
that the certificates evidencing the shares that he will receive under this
agreement will contain the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION STATEMENT UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED IS IN EFFECT FOR THE SECURITIES, OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS IN FACT
APPLICABLE TO SUCH OFFER OR SALE, AND SUCH EXEMPTION IS EVIDENCED BY AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER.
Section 5.04 - Third Party Consents and Certificates. Am-Pac and T&P agree
to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein and therein contemplated.
Section 5.06 - Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the Am-Pac or T&P Schedules or as
permitted or contemplated by this Agreement, Am-Pac and T&P
respectively, will each:
(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) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to
maintain its relationship with its material suppliers and
customers; and
16
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(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, neither Am-Pac nor T&P will:
(i) make any changes in their articles of incorporation or
bylaws;
(ii) take any action described in Section 1.07 in the case of
T&P, or in Section 3.07, in the case of Am-Pac (except as
permitted therein or as disclosed in the applicable party's
schedules); or
(iii)enter into or amend any contract, agreement, or other
instruments of any of the types described in such party's
schedules, except that a party may enter into or amend any
contract, agreement, or other instrument in the ordinary
course of business involving the sale of goods or services;
and Am-Pac may execute the exchange agreement with the
Spanish development company referenced herein and may
continue to negotiate and seek opportunities to acquire
business, and enter contracts accordingly.
Section 5.07 - Sales Under Rule 144 or 145, if Applicable.
(a) Am-Pac will use its best efforts to at all times comply with the
reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and NASD, including timely filing of all
periodic reports required under the provisions of the Exchange Act and
the rules and regulations promulgated thereunder.
(b) Upon being informed in writing by any such person holding restricted
stock of Am-Pac as of the date of this Agreement that such person
intends to sell any shares under Rule 144 or Rule 145 promulgated under
the Securities Act (including any rule adopted in substitution or
replacement thereof), Am-Pac will certify in writing to such person that
it has filed all of the reports required to be filed by it under the
Exchange Act to enable such person to sell such person's restricted
stock under Rule 144 or 145, as may be applicable in the circumstances,
or will inform such person in writing that it has not filed any such
report or reports.
(c) If any certificate representing any such restricted stock is
presented to Am-Pac's transfer agent for registration of transfer in
connection with any sale theretofore made under Rule 144 or 145,
17
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provided such certificate is duly endorsed for transfer by the appropriate
person(s) or accompanied by a separate stock power duly executed by the
appropriate person(s) in each case with reasonable assurances that such
endorsements are genuine and effective, and is accompanied by an opinion of
counsel satisfactory to Am-Pac and its counsel that stock transfer has
complied with the requirements of Rule 144 or 145, as the case may be,
Am-Pac will promptly instruct its transfer agent to register such shares
and to issue one or more new certificates representing such shares to the
transferee and, if appropriate under the provisions of Rule 144 or 145, as
the case may be, free of any stop transfer order or restrictive legend. The
provisions of this Section 5.07 shall survive the Closing and the
consummation of the transactions contemplated by this Agreement.
Section 5.08 - Indemnification.
(a) T&P and the T&P Sweeney hereby agree to indemnify Am-Pac and each of
the officers, agents and directors of Am-Pac as of the date of execution of
this Agreement 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
misrepresentations made under Articles I and II of this Agreement. In the
event that any person or entity, including but not limited to Matt Gillio
or Carl Miller, assert claims as brokers or finders, Sweeney agrees to
indemnify and hold harmless Am-Pac and its proeprties from and against all
such claims. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated
hereby and termination of this Agreement.
(b) Am-Pac hereby agrees to indemnify T&P and each of the officers, agents,
and directors of T&P as of the date of execution of this Agreement 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 under
Article III of this Agreement. The indemnification provided for in this
paragraph shall survive the Closing and consummation of the interactions
contemplated hereby and termination of this Agreement.
(c) Sweeney agrees to provide Am-Pac with a Release and Indemnification,
prior to Closing, and in a form satisfactory to Am-Pac which shall provide
that upon Closing, Sweeney shall fully indemnify and hold harmless T&P, and
Am-Pac from and against any and all claims, demands, or causes of action,
arising from the death of Paige Michelle Hannah, including but not limited
to any claims, judgments or settlements in Cause no. CI 95 515, styled Mary
Jean Hannah as Personal representative of the Estate of Paige Michelle
Hannah, vs. T&P Investments Inc, et. al. In the Circuit Court of the Ninth
Judicial Circuit in and for Orange County, Florida. Furthermore, Am-Pac may
18
<PAGE>
require Sweeney to pledge all or a portion of his acquired Am-Pac shares as
security for this indemnification agreement, pending the determination of
the above-referenced lawsuit. It is the parties intent to settle the
lawsuit, if possible and practical; however any settlement will require the
prior written consent of Am-Pac. As part of the settlement procedures, the
parties may,by mutual prior written consent, modify and/or discharge
Sweeney's obligations under the Indemnification agreement. This
Indemnification requirement (provided in Section 5.08) shall in no way
limit Am-Pac's rights to terminate the Agreement in accordance Article IV,
Section 4.07(c). The parties understand and agree that upon further due
diligence, Am-Pac may determine that despite Sweeney's obligation to
provide an indemnification agreement as provided above, the risks do not
justify the acquisition, and consequently it may terminate the Agreement as
provided in Section 4.07(c).
Section 5.09 Marketing. After closing, the parties agree to use their best
efforts to negotiate a management contract between Sweeney and T&P, to help
organize and market the concept "Headlightz." The parties agree that such name
and concept is a proprietary right belonging to Am-Pac, and Sweeney agrees that
any and all disclosures regarding same are confidential and proprietary in
nature.
Section 5.10 Short Positions Prohibited. For a period beginning from the
closing date and ending on the second anniversary of the closing date neither
Sweeney nor any of his affiliates, subsidiaries, officers, directors or agents,
shall directly or indirectly maintain, or assist in maintaining any short
position in the securities of Am-Pac.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF AM-PAC
The obligations of Am-Pac under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 - Accuracy of Representations. The representations and
warranties made by T&P and the T&P Shareholder 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 and as of the Closing Date
(except for changes therein permitted by this Agreement), T&P and the T&P
Shareholder shall have performed or complied with all covenants and conditions
required by this Agreement to be performed or complied with by T&P and the T&P
Shareholder prior to or at the Closing. Am-Pac shall be furnished with a
certificate, signed by a duly authorized executive officer of T&P and dated the
Closing Date, to the foregoing effect.
Section 6.02 - Officer's Certificate. Am-Pac shall have been furnished with
a certificate dated the Closing Date and signed by a duly authorized officer of
T&P to the effect that no litigation, proceeding, investigation, or inquiry is
pending, or to the best knowledge of T&P 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 T&P Schedules, by or
19
<PAGE>
against T&P, which might result in any material adverse change in any of the
assets, properties, business, or operations of T&P.
Section 6.03 - 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 T&P 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 of T&P.
Section 6.04 - Good Standing. Am-Pac shall have received a certificate of
good standing from the Secretary of the State of Florida, dated as of a date
within ten days prior to the Closing Date certifying that T&P is in good
standing as a corporation in Florida.
Section 6.05 - License. Am-Pac shall have received evidenced that the
liquor license made a subject of this agreement is freely transferrable to
Am-Pac.
Section 6.06 - Other Items.
(a) Am-Pac shall have received a Shareholder list of T&P containing the
name, address, and number of shares held by each T&P Shareholder, certified
by an executive officer of T&P as being true, complete and accurate,
(b) Am-Pac shall have received such further documents, certificates or
instruments relating to the transactions contemplated hereby as Am-Pac may
reasonably request.
6.07. Indemnification. Am-Pac shall have received a Release and
Indemnification from Sweeney in accordance with section 5.08(c).
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF T&P
AND THE T&P SHAREHOLDERS
The obligations of T&P and the T&P Shareholder under this Agreement are
subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section 7.01 - Accuracy of Representations. The representations and
warranties made by Am-Pac 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 Am-Pac shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Am-Pac prior to or at the Closing,
T&P shall have been furnished with a certificate, signed by a duly authorized
executive officer of Am-Pac and dated the Closing Date, to the foregoing effect.
20
<PAGE>
Section 7.02 - Officer's Certificate. T&P shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized executive
officer of Am-Pac, to the effect that no litigation, proceeding, investigation
or inquiry is pending, other than those disclosed herein, or to the best
knowledge of Am-Pac threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 - Brokers. T&P and Sweeney agree that there were no finders or
brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution or consummation of this Agreement, other than Matt
Gillio and Carl Miller; and that Sweeney has reached an agreement with them for
payment from him upon closing of the Am-Pac Investments acquisition.
Section 8.02 - Governing Law. This Agreement shall be governed by, enforce,
and construed under and in accordance with the laws of the United States of
America and, with respect to the matters of state law, with the laws of Florida.
Section 8.03 - Notices. Any notice 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 Am-Pac, to: Thomas Tedrow.
431 E. Central Blvd., Suite 900
Orlando, Florida 32801
With copies to: Vanderkam and Sanders
Hank Vanderkam
440 Louisiana, Suite 475
Houston, Texas 77002
If to T&P, to: T&P Corp.
Thomas Sweeney
11599 Colonial Drive East
Orlando, Florida 32817
If to Thomas Thomas Sweeney
Sweeney: 11599 Colonial Drive East
Orlando, Florida 32817
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 been given as of the date so delivered, mailed or telegraphed.
21
<PAGE>
Section 8.04 - Attorney's 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 parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorney's
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 8.05 - Confidentiality. Each party hereto agrees with the other
parties that, unless and until the transactions contemplated by this Agreement
have been consummated, it and its 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, as such other party, and
shall not use such disclosure data or information or disclose the same to
others, except (i) to the extent such data or information is published, is a
matter of public knowledge, or is required by law to be published; and (ii) to
the extent that such disclosure data or information must be used or disclosed in
order to consummate the transactions contemplated by this Agreement. In the
event of the termination of this agreement, each party shall return to the other
party all documents and other materials obtained by it or on its behalf and
shall destroy all copies, digests, workpapers, abstracts or other materials
relating thereto, and each party will continue to comply with the
confidentiality provisions set forth herein.
Section 8.06 - 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 8.07 - Third Party Beneficiaries. This contract is strictly between
Am-Pac and T&P, and the T&P Shareholder 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 8.08 - Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof.
Section 8.09 - 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 a period of three
months. All rights and obligations under this entire agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators and
assigns of the parties.
Section 8.10 - Counterparts. This Agreement 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 enforced concurrently herewith, and no waiver by
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<PAGE>
any party of the performance of any obligation by the other shall be construed
as a waiver of the same of any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
by amended by a writing signed by all parties hereto, with respect to any of the
terms contained herein, and say term or condition of this Agreement may be
waived or the time for performance may be extended by a writing signed by the
party or parties for whose benefit the provision in intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be extended by their respective officers, hereunto duly authorized, as of the
date first-above written.
ATTEST: Am-Pac International, Inc.
/s/ illegible /s/ illegible
- ------------------- -----------------------
Secretary or Assistant Secretary By: Thomas Tedrow, President
/s/ Zebin Xu
- -------------------
Zebin Xu
ATTEST: T&P Investments, Inc.
/s/ illegible /s/ illegible
- --------------------- ------------------------
Secretary of Assistant Secretary By: Thomas Sweeney, President
The T&P Shareholder
/s/ illegible
-------------------------
Thomas Sweeney
23
<PAGE>
State of FLORIDA }
}
County of ORANGE }
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, for the above
stated purposes by Thomas Sweeney, the President of T&P Investments, Inc., to
certify which witness my hand and seal of office on this the 17th of December,
1996.
/s/ Cheryl L. Piper
---------------------------
Cheryl L. Piper
Notary Public in and for the
State of Florida
Commission #CC452632
Expires April 13, 1999
State of FLORIDA }
}
County of ORANGE }
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, for the
above stated purposes by Thomas Tedrow, the President of "Am-Pac", to certify
which witness my hand and seal of office on this the 17th of December, 1996.
/s/ Cheryl L. Piper
---------------------------
Cheryl L. Piper
Notary Public in and for the
State of Florida
Commission #CC452632
Expires April 13, 1999
State of FLORIDA }
}
County of ORANGE }
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, for the above
stated purposes by Thomas Sweeney, to certify which witness my hand and seal of
office on this the 17th of December, 1996.
/s/ Cheryl L. Piper
---------------------------
Cheryl L. Piper
Notary Public in and for the
State of Florida
Commission #CC452632
Expires April 13, 1999
24
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement"), is
entered into as of this 17 day of December 1996, by and among Am-Pac
International, Inc., a Nevada corporation (hereinafter referred to as "Am-Pac");
Am-Pac Investments, Inc., a Florida corporation (hereinafter referred to as
"Investments"); and Thomas Sweeney, an individual, (hereinafter referred to as
"Sweeney.") Sweeney may also be referred to hereafter as the "Shareholder."
Premises
Whereas, Sweeney owns certain real property and improvements described in
Exhibit 1, attached hereto and incorporated herein, (hereinafter referred to as
the "Commercial Lot") and commonly described as 11599 Colonial Drive East,
Orlando, Florida, 32817, which is comprised of approximately 5 acres divided
into three parcels, including a building currently operated by T&P Investments,
Inc. (T&P) as a restaurant/club called the "Frat House;"
Whereas, Sweeney also owns additional land and a residence adjacent to the
Commercial Lot, consisting of approximately three acres, and commonly referred
to as 11637 Orpington Street, Orlando, Nevada 32817 (This real property and all
improvements thereon will hereinafter be referred to as the "Residential Lot,"
and is more particular described in Exhibit 2, attached hereto and incorporated
herein.)
Whereas Am-Pac desires to acquire, and Sweeney wishes to transfer, both the
Commercial Lot and the Residential Lot, collectively referred to as the "Real
Property,"
Whereas this Agreement contemplates that Sweeney will transfer the Real Property
to Investments at or near the time of execution hereof, or as soon thereafter as
practical;
Whereas this Agreement provides for the acquisition by Am-Pac of 100% of the
issued and outstanding shares of Investments in exchange for $1,690,000 worth of
Am-Pac common stock, as defined herein, less the amount of a first lien mortgage
on the Residential Lot and certain title policy costs, on the terms and
conditions hereinafter provided, all for the purpose of effecting a so-called
"tax-free" reorganization pursuant to Sections 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
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:
1
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ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF INVESTMENTS AND SWEENEY
As an inducement to, and to obtain the reliance of Am-Pac, Investments and
Sweeney represent and warrant as follows:
Section 1.01 - Organization.Prior to Closing, Investments shall be a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and shall have the corporate power and be 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 to carry on the business of real estate development and
investment, and shall include qualification to do business as a foreign
corporation in the states or countries in which the character and location of
the assets owned by it or the nature of the business transacted by it required
qualification except where failure to be so qualified would not have a material
adverse effect on its business. Included in the Investments Schedules (as
hereinafter defined) are complete and correct copies of the articles of
incorporation, as amended, and bylaws of Investments as in effect on the date
hereof. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of Investments's articles of incorporation or bylaws. Investments has
taken, or will have taken prior to Closing, all actions required by law, its
articles of incorporation, or otherwise to authorize the execution and delivery
of this Agreement. Investments has, or will have prior to Closing, full power,
authority, and legal right and has, or will have prior to Closing, taken all
action required by law, its bylaws, articles of incorporation, memorandum and
articles of association, and otherwise to consummate the transactions herein
contemplated.
Section 1.02 - Capitalization and Outstanding Shares. The authorized
capitalization of Investments consists or will consist of ________ shares of
stock, par value of $____ per share, of which Sweeney owns or will ______shares,
and which constitutes or shall constitute all of the outstanding and issued
shares of Investments to date of closing. Such shares are legally issued, fully
paid, and non-assessable and not issued in violation of the pre-emptive or other
rights of any person.
Section 1.03 - Subsidiaries and Predecessor Corporations. Investments does
not have any subsidiaries and does not own, beneficially or of record, any
shares of any other corporation.
Section 1.04 - Financial Statements.
(a) As a newly formed company, Investments has no prepared financials.
Investments only assets consist or will consist of the Real Property
to be transferred therein.
(b) Investments has or will have filed all income and/or franchise tax
returns required to be filed by it from inception to the date of
Closing.
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(c) Investments does not or will not owe any unpaid taxes (including
any deficiencies, interest, or penalties) through the date of
execution, for which Investments may be liable in its own right or as
a transferee of the assets of, or as a successor to, any other
corporation or entity.
(d) The books and records, financial and otherwise, of Investments are
in all material respects complete and correct; and Investments hereby
grants Am-Pac the full right of access to any and all of these books
or records.
(e) Investments has or will have good and marketable title to its
assets and, except as described herein, has or will have no material
contingent liabilities, direct or indirect, matured or unmatured.
Section 1.05 - Information. The information concerning Investments set
forth in this Agreement 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 1.06 - Options or Warrants or Subscriptions. There are no existing
options, warrants, calls, subscriptions or commitments of any character relating
to the authorized and unissued Investments common stock, except options,
warrants, calls or commitments, if any, to which Investments is not a party and
by which it is not bound.
Section 1.07 - Absence of Certain Changes or Events. Except as set forth in
this Agreement or the Investments Schedules, since its incorporation:
(a) there has not been or will there be to the Date of Closing (i) any
material adverse change in the business, operations, properties, assets,
or condition of Investments; or (ii) any damage, destruction, or loss to
Investments (whether or not covered by insurance) materially and
adversely affecting the business, operations, properties, assets, or
condition of Investments.
(b) Investments has not or will have not prior to Closing (i) amended
its articles of incorporation or bylaws; (ii) declared or made, or
agreed to declare or make, any payment of dividends or distributions of
any assets of any kind whatsoever to stockholders or purchased or
redeemed, or agreed to purchase or redeem, any of its capital stock;
(iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of Investments; (iv)
made any material change in its method of management, operation or
accounting; (v) entered into any other material transaction other than
sales in the ordinary course of its business; (vi) made any accrual or
arrangement for payment of bonuses or special compensation of any kind
or any severance or termination pay to any present or former officer or
employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its
employees whose monthly compensation exceeds $1,000; or (viii) made any
increase in any profit sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or
arrangement made to, for, or which its officers, directors, or
employees;
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(c) Except liabilities incurred in the transfer of the Real Property
from Sweeney, Investments has not, nor will it have (i) borrowed or
agreed to borrow any funds or incurred, or become subject to, any
material obligation or liability (absolute or contingent);ordinary
course of business; (ii) paid or agreed to pay any material
obligations or liability (absolute or contingent) other than current
liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses in connection
with the preparation of this agreement and the consummation of the
transactions contemplated hereby; (iii) sold or transferred, or agreed
to sell or transfer, any of its assets, properties, or rights (except
assets, properties, or rights not used or useful in its business
which, is the aggregate have a value of less than $1,000), or
canceled, or agreed to cancel, any debts or claims (except debts or
claims which in the aggregate are of a value of less than $1,000);
(iv) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or
termination is material, considering the business or Investments; or
(v) issued, delivered, or agreed to issue or deliver any stock, bonds
or other corporate securities including debentures (whether authorized
and unissued or held as treasury stock); and
(d) to the best knowledge of Investments and Sweeney, Investments 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 Investments.
Section 1.08 - Title and Related Matters. Investments has, or will have
upon Closing, good and marketable title to all of its properties, inventory,
interests in properties, and assets, real and personal, including but not
limited to the Real Property, free and clear of all liens, pledges, charges, or
encumbrances except (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties and (c) as described below.
Section 1.09 - Real Property.
(a) Transfer to Investments. It is the parties intent, and a condition
to the closing herein, that Sweeney transfer the Real Property to
Investments prior to closing, by warranty deed, free and clear of all
encumbrances except a first lien mortgage on the Commercial Lot of
approximately $387,000 held by Murdock Savings & Loan Mortgage (or
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successor or assign); and a first lien mortgage on Residential Lot of
approximately $55,000, held by Midland Mortgage (or successor or
assign.).
(b) Discharge of first mortgages. In order to discharge either or both
of the first mortgages set forth above, Am-Pac may:
1. Lend Investments, at the rate of ____%, the amount necessary to
discharge the mortgages, estimated to be $387,000, and $55,000,
and in such event shall receive a first lien on the Real Property
in the amount necessary to discharge said mortgages, and all of
the assets and accounts of Investments;
2. Obtain third party financing to discharge both first lien
mortgages on the Real Property, i.e. the Murdock Savings & Loan
Mortgage, and the Midland Mortgage, and in such event shall have
the right to mortgage the property in favor of the financing
source; or
3. Assume all financial obligations pursuant to both first lien
notes on the Real Property, i.e. held by Murdock Savings & Loan
Mortgage, and Midland Mortgage.
In any event, Am-Pac shall use its best efforts to relieve Sweeney,
individually from liability under the first lien notes of the Real Property.
(c) Title Policy. Additionally, and regardless of which, if any, of the
above options which Am-Pac may choose to refinance the Real Property,
Sweeney shall provide an Owner's Policy of Title Insurance, or in the
event that Am-Pac opts to refinance through third parties, a Lenders
Policy of Title Insurance, (title policy) issued by an authorized title
company in the amount of at least the appraised value(s), evidencing
clear title to the Real Property, prior to Closing, and which shall be
preceded by a Title Report or Commitment, accompanied by copies of all
recorded documents relating to easements, rights-of-way, etc., affecting
the Real Property. Am-Pac shall give Sweeney written notice on or before
the expiration of ten (10) days after it receives the Title Report or
Commitment that the condition of title as set forth therein is or is not
satisfactory. Therefore, Sweeney and Investments shall promptly
undertake to eliminate or modify all unacceptable matters to the
reasonable satisfaction of Am-Pac. In the event they are unable to do so
within ten (10) days after receipt of written notice, Am-Pac may
terminate this agreement; otherwise, this condition shall be deemed to
be acceptable and any objection thereto shall be deemed to have been
waived for all purposes. The costs of the title report,commitment and
policy shall be paid one-half by Am-Pac and one-half by Sweeney and
deducted from the total amount of consideration provided in Article IV,
i.e. the $1,690,000. Sweeney and Investments hereby authorize and
instruct Am-Pac to deduct such amount from the consideration set forth
in Article IV, issue a corresponding reduced number of Am-Pac shares to
Sweeney, upon Closing.
(d) Parties in PossessionThere are no parties in possession of any
portion of the Real Property as lessees, tenants at sufferance, or
trespassers other than T&P Investments, Inc, which operates a business
known as "the Frat House." A description of T&P's leasehold interest is
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as follows: ___________________________________________.Sweeney agrees
to transfer any such rights as Lessor to Investments prior to closing.
(e) Access. The Real Property has full and free access to and from
public highways, streets or roads and, there is no pending or threatened
governmental proceeding that would impair or result in the termination
of this access.
(f) Litigation or Proceedings. There is no pending or threatened
condemnation or similar proceeding or assessment affecting the Real
Property, or any part thereof, nor is any such proceeding or assessment
contemplated relating to the Real Property, or any part thereof.
Section 1.10 - Litigation and Proceedings. There are no actions, suits,
proceedings, or investigations pending or, to the knowledge of Investments after
reasonable investigation, threatened by or against Investments or affecting
Investments 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. Neither Sweeney nor Investments has any knowledge of any
material default on its part with respect to any judgment, order, injunction,
decree, award, rule, or regulation or 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. Additionally,
there are no actions, suits, proceedings, or investigations pending or, to the
knowledge of Sweeney after reasonable investigation, threatened by or against
Sweeney or affecting Sweeney or his 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. Sweeney does not have any knowledge of any
material default on his part with respect to any judgment, order, injunction,
decree, award, rule, or regulation or 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. Sweeney and
Investments represent and warrant that there are no claims regarding payment on
any of the mortgages described above; and that such mortgages and related notes
are current. However, the parties acknowledge a lawsuit between Mary Jean Hannah
and T&P Investments, Inc., Cause no. C195/515 in Orange County, Florida,
alleging wrongful death claims. Since T&P investments may have been a lessee of
the Real Property transferred to Investments by Sweeney, the parties, while
denying any and all liability, recognize a potential for premises liability and
other litigation. Because all parties acknowledge the potential cost and
inconvenience involved with litigation, and that a serious potential risk may be
involved, Sweeney and Investments agree that Am-Pac may unilaterally terminate
this contract in accordance with section 4.07(c), after its investigation of the
claims and defenses associated with the Hannah lawsuit.
Section 1.11 - Contracts. There are no material contracts, agreements,
franchises, license agreements, or other commitments to which Investments is a
party or by which it or any of its assets, products, licenses, or properties are
bound other than the mortgages and related documents related to the financing
and leasing of the Real Property described herein.
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Section 1.12 - Material Contract Defaults. Investments is not, nor will it
be at the time of Closing, 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
Investments and there is no event of default in any material respect under any
such contract, agreement, lease, or other commitment in respect of which
Investments has not taken adequate steps to prevent such a default from
occurring.
Section 1.13 - 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 Investments
or Sweeney are a party or to which any of their properties or operations are
subject. In the event that the transfer of the Real Property to Investments
constitutes an event of default or triggers any acceleration or "Due on Sale"
clause, Am-Pac may unilaterally terminate this agreement.
Section 1.14 - Governmental Authorizations. Except as set forth in the
Investments Schedules, Investments has or will have upon Closing, all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted, and hold title to the Real Property 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 Investments of this
Agreement and the consummation by Investments of the transaction contemplated
hereby.
Section 1.15 - Compliance With Laws and Regulations. Investments has
complied with all applicable statues 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 Investments or except to the
extent that noncompliance would not result in the occurrence of any material
liability for Investments.
Section 1.16 - Approval of Agreement. The board of directors and sole
shareholder of Investments has authorized the execution and delivery of this
Agreement by Investments and has approved the agreement and the transactions
contemplated hereby.
Section 1.17 - Investments Schedules. Within 30 days after execution
hereof, Investments and Sweeney will deliver to Am-Pac the following schedules,
which are collectively referred to as the "Investments Schedules" and which
consist of separate schedules dated as of the date of execution of this
Agreement, all certified by the chief executive officer of Investments as
complete, true, and correct as of the date of this Agreement in all material
respects:
(a) a schedule containing complete and correct copies of the certificate
and articles of incorporation, as amended, and bylaws of Investments in
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effect as of the date of this Agreement;
(b) a schedule containing a list indicating the name and address of each
Shareholder of Investments together with the number of shares owned by
him, her or it;
(c) a schedule containing a description of all property owned by
Investments, and of the Real Property (which include the Commercial and
Residential Lots described above), together with a description of every
mortgage, deed of trust, pledge, lien, agreement, encumbrance, claim, or
equity interest of any nature whatsoever in such real property;
(d) copies of all licenses, permits, and other governmental
authorization (or requests or applications therefor) pursuant to which
Investments carries on or proposes to carry on its business (except
those which, in the aggregate, are immaterial to the present or proposed
business of Investments)
(e) proof, satisfactory to Am-Pac, that the Real Property has been
transferred to Investments,
(f) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the
Investments Schedules by sections 1.01 through 1.17.
Investments shall cause the Investments Schedules and the instruments and
data delivered to Am-Pac hereunder to be updated after the date hereof up to and
including the Closing Date. It is understood and agreed that not all of the
schedules referred to above have been completed or are available to be furnished
by Investments. Investments shall have a period of twenty (30) days after the
date hereof to provide such schedules. If Investments cannot or fails to do so,
or if Am-Pac finds the schedules unacceptable, Am-Pac may terminate this
agreement by giving written notice to Investments within thirty (30) days after
the schedules were due to be produced or were provided.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF THE SHAREHOLDER
As an inducement to, and to obtain the reliance of Am-Pac, Sweeney
additionally, represents and warrants as follows:
Section 2.01 - Ownership of Investments Shares by Sweeney. Sweeney hereby
represents and warrants with respect to himself that he is the legal and
beneficial owner of _____ Investment shares (which constitute 100% of all of
Investments's outstanding shares), free and clear of any claims, charges,
equities, liens, security interests, and encumbrances whatsoever, including but
not limited to any marital or community property interest) and that he has full
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right, power, and authority to transfer, assign, convey, and deliver its
Investments shares; and delivery of such shares at the closing will convey to
Am-Pac good and marketable title to such shares and clear of any claims,
charges, equities, liens, security interests and encumbrances whatsoever.
Section 2.02 - Title to Real Property. Sweeney owns good and marketable
title to the Real Property, excepting the first lien mortgages described in
section 1.09, and shall transfer the Real Property to Investments, subject to
those mortgages, within 30 days from execution hereof by Warranty Deed. Such
transfer 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 Investments
or Sweeney are a party or to which any of their properties or operations are
subject. In the event that the transfer of the Real Property to Investments
constitutes an event of default or triggers any acceleration or "Due on Sale"
clause, Am-Pac may unilaterally terminate this agreement. Additionally, Sweeney
shall provide title policy and the costs associated therewith shall be paid
one-half by Am-Pac and one-half by Sweeney as provided in Section 1.09.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF AM-PAC
As an inducement to, and to obtain the reliance of Investments and the
Investments Shareholder, Am-Pac represents and warrants as follows:
Section 3.01 - Organization.Am-Pac is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Nevada 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 to carry on its business in
all material respects as it is now being conducted, and there is no jurisdiction
in which it is not qualified 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 Am-Pac Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation of Am-Pac as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Am-Pac's articles of incorporation or bylaws. Am-Pac
has taken all action required by law its articles of incorporation, its bylaws,
or otherwise to authorize the execution and delivery of this Agreement, and
Am-Pac has full power, authority, and legal right and has taken all action
required by law, it articles of incorporation, bylaws, or otherwise to
consummate the transactions herein contemplated.
Section 3.02 - Capitalization. Am-Pac's authorized capitalization consists
of 149,900,000 shares of common stock, and 100,000 shares of Preferred Stock,
par value $.001, of which 406,583 common shares are issued and outstanding. All
issued and outstanding shares are legally issued, fully paid, non-assessable and
not issued in violation of the pre-emptive or other rights of any person.
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Section 3.03 - Subsidiaries and Predecessor Corporation. Am-Pac
International is a newly formed company whose sole purpose was to merge with
Captain Tony's Pizza, Inc., (Captain Tony's) a New York Company whose
shareholders and directors elected to reincorporate in the state of Nevada.
Articles of Merger have been, or are concurrently being filed with the
appropriate state authorities. Pursuant to the plan of merger, Am-Pac shall
succeed to all the assets and liabilities of Captain Tony's. Am-Pac owns one
subsidiary, Leisureshare International Limited,. a British Virgin Island company
which is currently negotiating an acquisition with a Spanish land development
company. In the event that the acquisition of the Spanish company is
consummated, Am-Pac will be obligated to issue approximately 16,000 Series A
Convertible Preferred Shares, which shall be convertible at a rate of one
preferred share for 500 common shares, and approximately 2,500,000 shares of
Am-Pac common stock. Additionally, Captain Tony's executed an Acquisition
Agreement with the Shareholders of Pacific Foods Limited, a BVI corporation, to
acquire all of the shares of that company. Pursuant to that agreement, Am-Pac is
obligated to issue 7,000,000 shares of its common stock to the Pacific Foods
shareholders; and Michael Martella is granted an option to purchase an 100,000
shares of Am-Pac common stock. Am-Pac is negotiating with Martella for an option
to purchase another 250,000 shares.
Section 3.04 - Financial Statements.
(a) Included in the Am-Pac Schedule are the audited balance sheets of
its predecessor company Captain Tony's Pizza, Inc. as of December 31,
1995, and the related audited statements of operations, stockholders'
equity and changes in financial position for the fiscal year ended
December 31, 1995, together with the notes to such statements and the
opinion of certified public accountants. Also included are Captain
Tony's most recently prepared quarterly report.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved. The Am-Pac balance sheets present
fairly as of their respective dates the financial condition of Am-Pac.
Am-Pac did not have as of the date of any such Am-Pac balance sheet,
except as and to the extent reflected or reserved against therein, any
liabilities or obligations (absolute or contingent) which should be
reflected in a balance sheet or the notes thereto. All assets
reflected therein are properly reported and present fairly the value
of the assets of Am-Pac, in accordance with generally accepted
accounting principles. The statements of operations, stockholders'
equity and changes in financial position reflect fairly the
information required to be set forth therein by generally accepted
accounting principles.
(c) Am-Pac has no liabilities with respect to the payment of any
federal, state, county local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued but not
yet due and payable.
(d) Am-Pac has filed all state, federal or local income and/or
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franchise tax returns required to be filed by it from inception to the
date hereof. None of such federal income tax returns have been
examined by the Internal Revenue Service. Each of such income tax
return reflects the taxes due for the period covered thereby, except
for amounts which, in the aggregate, are immaterial.
(e) Am-Pac's books and records, are in all material aspects complete,
correct and have been maintained in accordance with good business and
accounting practices.
Section 3.05 - Information. The information concerning Am-Pac set forth in
this Agreement and the Am-Pac Schedules is complete and accurate in all material
respects and does not contain any untrue statements 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 3.06 - Opinions or Warrants. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of Am-Pac, except options, warrants, calls or commitments, if
any, to which Am-Pac is not a party and by which it is not bound.; and the
obligations described herein.
Section 3.07 - Title and Related Matters. Am-Pac has good and marketable
title to all of its properties, inventory, interest in properties, and assets,
real and personal, which are reflected in Am-Pac's most recent balance sheet or
acquired after that date (except properties, interest 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
(a) statutory liens or claims not yet delinquent; (b) such imperfections of
title and easements as do not and will not materially detract from or interfere
with the present or proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties; (c) as described in the Am-Pac Schedules.
Section 3.08 - Litigation and Proceedings. Am-Pac is involved as a
defendant in litigation with a plaintiff in Cleveland Ohio regarding claims in
excess of $25,000.
Section 3.09 - Compliance With Laws and Regulations. To the best of its
knowledge, Am-Pac has complied with all applicable statutes and regulations of
any federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets or conditions of Am-Pac or
except to the extent that noncompliance would not result in the occurrence of
any material liability, except certain filing reports with the Securities and
Exchange Commission, as noted in the attached schedules.
Section 3.10 - Approval of Agreement. The board of directors of Am-Pac has
authorized the execution and delivery of this Agreement by Am-Pac and has
approved this Agreement and the transactions contemplated hereby.
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Section 3.11 - Continuity of Business Enterprises. Am-Pac has no commitment
or present intention to liquidate Investments or sell or otherwise dispose of a
material portion of Investments's business or assets following the consummation
of the transactions contemplated hereby.
Section 3.12 - Am-Pac Schedules. Am-Pac has delivered to Investments the
following schedules, which are collectively referred to as the "Am-Pac
Schedules" and which consist of separate schedules, which are dated the date of
this Agreement, all certified by the chief executive officer of Am-Pac to be
complete, true, and accurate:
(a) a schedule containing complete and accurate copies of the articles of
incorporation of Am-Pac as in effect as of the date of this Agreement;
(b) a schedule containing a complete and accurate copy of the Am-Pac
quarterly report on Form 10QSB for the three month period ending September
30, 1996, including the unaudited financial statements identified in
section 3.04(a)
(c) a schedule containing a copy of the Am-Pac annual report on Form 10-KSB
for the year ended December 31, 1995 which complies in all material
respects with the applicable requirements of the Securities Act of 1934, as
amended;
(d) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed to the Exchange in
the Am-Pac Schedules by Article III.
Am-Pac shall cause the Am-Pac Schedules and the instruments and data
delivered to Investments hereunder to be updated after the date hereof up to and
including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by Am-Pac. Am-Pac shall
have a period of twenty (20) days after the date hereof to provide such
schedules. If Am-Pac cannot or fails to do so, or if Investments finds the
schedules unacceptable, and after Investments gives Am-Pac written notice of
such failure or unacceptability and a 10 day period to cure, Investments may
terminate this agreement by giving written notice to Investments within thirty
(30) days after the schedules were due to be produced or were provided.
ARTICLE IV
PLAN OF EXCHANGE
Section 4.01 - The Exchange. Only after the Real Property has been
transferred to Investments, subject to the satisfaction of Am-Pac, and on the
terms and subject to the conditions set forth in this Agreement, Sweeney hereby
agrees to assign, transfer, and deliver to Am-Pac, free and clear of all liens,
pledges, encumbrances, charges, restrictions or known claims of any kind,
nature, or description, the following number of shares of common stock of
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Investments: ____ shares from Sweeney, constituting 100% of the issued and
outstanding shares of common stock of Investments, and Am-Pac agrees to acquire
such shares on such date by issuing and delivering in exchange therefor shares
of Am-Pac restricted common stock, par value $.001, in the amount of $1,690,000
less: (1) the amount of the first lien mortgage on the Residential Lot at
Closing, (2)one- half the amount of the title report and policy pursuant to
section 1.09, and (3) $100,000 in Finders Fees as set forth in section 4.06,
worth of such shares as follows:
The number of Am-Pac shares to be received shall be determined by dividing
the dollar number by the Market Price at which Am-Pac shares are trading. Market
Price is defined as the average of the closing bid and ask prices of the Am-Pac
common stock for the five consecutive trading days immediately prior to the
Closing Date as reported by NASDAQ.
The $1,690,000, less (1) the amount of the first lien mortgage on the
Residential Lot at Closing, (2)one-half the amount of the title report and
policy pursuant to section 1.09, and (3) $100,000 in Finders Fees as set forth
in section 4.06, worth of Am-Pac shares to be received in accordance herewith
shall be referred to as the "Exchanged Am-Pac Stock." At the Closing, Sweeney
shall, on surrender of its certificate or certificates, representing such 100%
of Investments shares to Am-Pac, be entitled to receive a certificate or
certificates evidencing $1,690,000 less (1) the amount of the first lien
mortgage on the Residential Lot at Closing, (2) the amount of the title report
and policy pursuant to section 1.09, and (3) $100,000 in Finders Fees as set
forth in section 4.06 by Am-Pac, worth of Am-Pac stock as determined in
accordance with this section 4.01.
Section 4.02 - Registration Rights.If at any time after the Closing Date,
Am-Pac files a registration statement (the "Registration Statement") with
respect to the sale of any of its shares of Common Stock, the Company shall give
written notice thereof to Sweeney. If Sweeney shall propose to offer or sell up
to $250,000 worth of his Exchanged Am-Pac Stock, (the number of such shares
shall be determined by dividing the dollar amount by the market price defined in
section 4.01), under circumstances requiring registration, Sweeney may, within
ten days after the date of its receipt of such notice from Am-Pac, request in
writing that Am-Pac include in the Registration Statements shares of the
Company's stock proposed to be offered or sold by Sweeney, which shall not
exceed the value of $250,000, as described herein, (hereinafter referred to as
the "Offered Securities") and Am-Pac shall use its best efforts to include the
Offered Securities in the registration.
Section 4.03 - Private Offering. If at any time for a period of one year
from the date of execution hereof, Am-Pac completes a Private Offering Placement
in excess of $2,500,000, then for a period not to exceed 30 days from the
receipt of the $2,500,000, Sweeney shall have an option to exchange $250,000
worth of his Exchanged Am-Pac shares (the number of such shares shall be
determined by dividing the dollar amount by the market price defined in section
4.01) for $250,000 cash.
Section 4.04 - Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time and place as
the parties may mutually agree ("Closing Date".)
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Section 4.05 - Closing Events. At the Closing, each of the respective
parties hereto shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, ruling or deeds or
other instruments required by this Agreement to be so delivered at or prior to
the Closing, 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. A Title policy shall issue as
provided herein.
Section 4.06 - Finder's Fees. Sweeney agrees to pay a finder's fee to Matt
Gillio and Carl Miller as follows: Upon closing, Sweeney authorizes Am-Pac to
reduce the total number of shares which he is to receive under this agreement by
$50,000 worth and to issue such $50,000 worth of its common stock, the total
number of which shall be determined by dividing $50,000 by the market price as
defined in section 4.01, to Matt Gillio. Additionally, Sweeney authorizes Am-Pac
to reduce the total number of shares which he is entitled to receive under this
agreement by another $50,000 worth, and to issue such $50,000 worth of its
common stock, the total number of which shall be determined by dividing $50,000
by the market price as defined in section 4.01 to Carl Miller. All shares issued
pursuant to this section shall be restricted and bear a restrictive legend as
required by Am-Pac.
Section 4.07 - Termination.
(a) This Agreement may be terminated by the board of directors of either
Am-Pac or Investments at any time prior to the Closing Date if:
(i) there shall be any additional, i.e. actual or threatened action or
proceeding before any court or any governmental body which has not
been disclosed in this agreement and which shall seek to restrain,
prohibit, or invalidate the transactions contemplated by this
Agreement and which, in the judgment of such board of directors, made
in good faith and based upon the advice of its legal counsel, makes it
inadvisable to proceed with the exchange contemplated by this
Agreement;
(ii) any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to consummate such
transactions or in the judgment of such board of directors, made in
good faith and based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will be
obtained only on a condition or conditions which would be unduly
burdensome, making it inadvisable to proceed with the exchange; or
(iii) there shall have been any change in the latest balance sheets of
Am-Pac, in the assets, properties, business, or financial condition of
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<PAGE>
Am-Pac, which could have a materially adverse affect on the value of
the business of Am-Pac, except any changes disclosed in the Am-Pac
Schedules, as the case may be, dated as of the date of the execution
of this Agreement; or
(iv) there shall have been any change in the assets, properties,
business, or financial condition of Investments, which could have a
materially adverse affect on the value of the business of Investments,
except any changes disclosed in the Investments Schedules, as the case
may be, dated as of the date of the execution of this Agreement; or
(v) the Board of Directors of Am-Pac or Investments or the Shareholder
determine in good faith that a condition to closing has not occurred
In the event of termination pursuant to this paragraph (a) of Section 4.06,
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 by
action of the board of directors of Am-Pac, if Investments or Sweeney shall
fail to comply in any material respect with any of their covenants or
agreements contained in this Agreement or if any of the representations or
warranties of Investments or Sweeney contained herein shall be inaccurate
in any material respect, including but not limited to:
(1) the real property to be transferred to Investments pursuant to
this agreement, shall be found to have additional encumbrances
other then those contemplated by this agreement; or
(2) a title policy shall fail to issue covering such real property.
If this Agreement is terminated pursuant to this paragraph (b) of Section
4.06, this Agreement shall be of no further force or effect, and no
obligation, right or liability shall arise hereunder, except that
Investments and Sweeney shall bear their own costs as well as the
reasonable costs of Am-Pac in connection with the negotiations,
preparation, and execution of this Agreement, and matters connected
therewith; and qualifying the offer and sale of securities contemplated
hereby for execution from the registration requirements of state and
federal securities laws.
(c) The Board of Directors of Am-Pac may unilaterally terminate this
contract if in their sole judgment, they determine that the potential
liability of Investments in conjunction with the litigation involving Page
Hannah, and/or wrongful death claims does not justify the economic risk of
Am-Pac's investing in Investments. In the event of termination pursuant to
15
<PAGE>
this paragraph (c) of Section 4.06, 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.
(d) This Agreement may be terminated at any time prior to the Closing by
action of the board of directors of Investments or by the Shareholder if
Am-Pac 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 Am-Pac contained herein shall be
inaccurate in any material respect. If this Agreement is terminated
pursuant to this paragraph (d) of Section 4.06, this Agreement shall be of
no further force or effect, and no obligation, right or liability shall
arise hereunder, except that Am-Pac shall bear its own costs as well as the
reasonable costs of Investments incurred in connection with the
negotiation, preparation and execution of this Agreement.
ARTICLE V
SPECIAL COVENANTS
Section 5.01 - Access to Properties and Records. Am-Pac and Investments
will each afford to the officers and authorized representatives of the other
full access to the properties, books and records of Am-Pac or Investments 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 Am-Pac or
Investments, as the case may be, as the other shall from time to time reasonably
request.
Section 5.02 - Delivery of Books and Records. At the Closing, Investments
shall deliver to Am-Pac the originals of the corporate minute books, books of
account, contracts, records, and all other books or documents of Investments now
in the possession of Investments or its representatives.
Section 5.03 - Special Covenants and Representations Regarding the
Exchanged Am-Pac Stock. The consummation of this Agreement and the transactions
herein contemplated, including the issuance of the Exchanged Stock to the
Shareholder of Investments as contemplated hereby, constitutes the offer and
sale of securities under the Securities and Exchange Act and applicable state
statutes. Sweeney acknowledges that the shares of Am-Pac to be delivered to him
pursuant to this Agreement have not been registered under the Securities Act of
1993 as amended, referred to in this Agreement as the "Securities Act," or the
laws of any other jurisdiction, and that therefore the stock is not fully
transferable except as permitted under various exemptions, if any contained in
the Securities Act and the rules of the Securities and Exchange Commission
interpreting the act. Under US law, Am-Pac Common Stock cannot be sold or
transferred by the shareholder unless they are subsequently registered under
applicable law or an exemption from registration is available. Am-Pac is not
required to register or assist in the registration of the Am-Pac Common Stock
except as provided in section 4.02 or to make any exemption from registration
16
<PAGE>
available. The provisions contained in this paragraph are intended to ensure
compliance with the Securities Act.. Sweeney represents and warrants to Am-Pac
that he is acquiring the shares of Am-Pac common stock under this Agreement for
his own account for investment, and not for the purpose of resale or any other
distribution of such shares. Sweeney also represents and warrants that he has no
present intention of disposing of all or any part of such shares at any
particular time, for any particular price or on the happening of any particular
circumstances. Sweeney further represents that he has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of an investment in Am-Pac. Sweeney acknowledges that
Am-Pac is relying on the truth and accuracy of these warranties and
representations in issuing the shares without first registering the shares under
the Securities Act. Sweeney covenants and represents that none of the shares of
Am-Pac capital stock to be issued to him pursuant to this Agreement, will be
offered, sold, assigned, pledged, transferred, or otherwise disposed of except
after full compliance with all of the applicable provisions of the 1933 act and
the rules and regulations of the Securities and Exchange Commission under the
1933 act. Therefore Sweeney agrees not to sell or otherwise dispose of any of
the shares of Am-Pac common stock received pursuant to this agreement unless
such is done pursuant to section 4.02 or Sweeney: 1. has delivered to Am-Pac a
written legal opinion in form and substance satisfactory to counsel for Am-Pac
to the effect that the disposition is permissible under the terms of the
Securities Act and regulations interpreting the act; 2. has complied with the
registration and propectus requirements of the 1933 act relating to such
disposition; or 3. has presented Am-Pac satisfactory evidence that such a
disposition is exempt from registration under the act. Am-Pac shall place a stop
transfer order against transfers of shares until one of the conditions set forth
in this paragraph have been met. Furthermore Sweeney agrees that the
certificates evidencing the shares that he will receive under this agreement
will contain the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION STATEMENT UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED IS IN EFFECT FOR THE SECURITIES, OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS IN FACT
APPLICABLE TO SUCH OFFER OR SALE, AND SUCH EXEMPTION IS EVIDENCED BY AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER.
Section 5.04 Short Positions Prohibited. For a period beginning from the
closing date and ending on the second anniversary of the closing date neither
Sweeney nor any of his affiliates, subsidiaries, officers, directors or agents,
shall directly or indirectly maintain, or assist in maintaining any short
position in the securities of Am-Pac.
Section 5.05 - Third Party Consents and Certificates. Am-Pac and
Investments agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein and therein
contemplated.
17
<PAGE>
Section 5.06 - Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date and
except as set forth in the Am-Pac or Investments Schedules or as
permitted or contemplated by this Agreement, Am-Pac, Investments and
Sweeney, respectively, will each:
(i) carry on their business in substantially the same manner as
they had heretofore;
(ii) maintain and keep their 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 them
including sufficient insurance to cover the Real Property and the
improvements thereon;
(iv) perform in all material respects all of their obligations
under material contracts, leases, and instruments relating to or
affecting their assets, properties, and business;
(v) use their best efforts to maintain and preserve their
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 them 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,
neither Am-Pac, Sweeney nor Investments will:
(i) make any changes in their articles of incorporation or
bylaws;
(ii) take any action described in Section 1.07 in the case of
Investments, or in Section 3.07, in the case of Am-Pac (except as
permitted therein or as disclosed in the applicable party's
schedules); or
(iii) enter into or amend any contract, agreement, or other
instruments of any of the types described in such party's
schedules, except that a party may enter into or amend any
contract, agreement, or other instrument in the ordinary course
of business involving the sale of goods or services; and Am-Pac
may execute the exchange agreement with the Spanish development
company referenced herein and may continue to negotiate and seek
opportunities to acquire business, and enter contracts
accordingly.
18
<PAGE>
Section 5.07 - Sales Under Rule 144 or 145, if Applicable.
(a) Am-Pac will use its best efforts to at all times comply with the
reporting requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and NASD, including timely filing of all periodic
reports required under the provisions of the Exchange Act and the rules and
regulations promulgated thereunder.
(b) Upon being informed in writing by any such person holding restricted
stock of Am-Pac as of the date of this Agreement that such person intends
to sell any shares under Rule 144 or Rule 145 promulgated under the
Securities Act (including any rule adopted in substitution or replacement
thereof), Am-Pac will certify in writing to such person that it has filed
all of the reports required to be filed by it under the Exchange Act to
enable such person to sell such person's restricted stock under Rule 144 or
145, as may be applicable in the circumstances, or will inform such person
in writing that it has not filed any such report or reports.
(c) If any certificate representing any such restricted stock is presented
to Am-Pac's transfer agent for registration of transfer in connection with
any sale theretofore made under Rule 144 or 145, provided such certificate
is duly endorsed for transfer by the appropriate person(s) or accompanied
by a separate stock power duly executed by the appropriate person(s) in
each case with reasonable assurances that such endorsements are genuine and
effective, and is accompanied by an opinion of counsel satisfactory to
Am-Pac and its counsel that stock transfer has complied with the
requirements of Rule 144 or 145, as the case may be, Am-Pac will promptly
instruct its transfer agent to register such shares and to issue one or
more new certificates representing such shares to the transferee and, if
appropriate under the provisions of Rule 144 or 145, as the case may be,
free of any stop transfer order or restrictive legend. The provisions of
this Section 5.07 shall survive the Closing and the consummation of the
transactions contemplated by this Agreement.
Section 5.08 - Indemnification.
(a) Investments and Sweeney hereby agree to indemnify Am-Pac and each of
the officers, agents and directors of Am-Pac as of the date of execution of
this Agreement 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
misrepresentations made under Articles I and II of this Agreement.
Additionally, if any government authority shall tax the transfer of the
19
<PAGE>
Real Property from Sweeney to Investments, Sweeney agrees to promptly pay
such tax and shall indemnify and hold Am-Pac and Investments harmless from
any liability resulting from said transfer. The indemnification provided
for in this paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
(b) Am-Pac hereby agrees to indemnify Investments and each of the officers,
agents, and directors of Investments as of the date of execution of this
Agreement 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 under Article III of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing
and consummation of the interactions contemplated hereby and termination of
this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF AM-PAC
The obligations of Am-Pac under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 - Accuracy of Representations. The representations and
warranties made by Investments and the Investments Shareholder 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 and as of the
Closing Date (except for changes therein permitted by this Agreement),
Investments and the Investments Shareholder shall have performed or complied
with all covenants and conditions required by this Agreement to be performed or
complied with by Investments and the Investments Shareholder prior to or at the
Closing. Am-Pac shall be furnished with a certificate, signed by a duly
authorized executive officer of Investments and dated the Closing Date, to the
foregoing effect.
Section 6.02 - Officer's Certificate. Am-Pac shall have been furnished with
a certificate dated the Closing Date and signed by a duly authorized officer of
Investments to the effect that no litigation, proceeding, investigation, or
inquiry is pending, or to the best knowledge of Investments 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 Investments Schedules, by or against Investments, which might result in any
material adverse change in any of the assets, properties, business, or
operations of Investments.
Section 6.03 - 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 Investments nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
20
<PAGE>
adverse change in the financial condition, business or operations of
Investments.
Section 6.04 - Good Standing. Am-Pac shall have received a certificate of
good standing from the Secretary of the State of Florida, dated as of a date
within ten days prior to the Closing Date certifying that Investments is in good
standing as a corporation in Florida.
Section 6.05 - Real estate. Am-Pac shall have received satisfactory
verification, that the Real Property has been transferred to Investments, in
accordance with this agreement, and that such Real Property, shall be subject
only to the first liens described in section 1.09. Am-Pac shall likewise have
received evidence that the lease agreement with T&P shall also have been
transferred to Investments. Subsequent to the transfer to Investments, and
before Closing, Am-Pac shall have received a title commitment ensuring good and
marketable title to the Real Property.
Section 6.06 - Other Items.
(a) Am-Pac shall have received a Shareholder list of Investments containing
the name, address, and number of shares held by each Investments
Shareholder, certified by an executive officer of Investments as being
true, complete and accurate,
(b) Am-Pac shall have received such further documents, certificates or
instruments relating to the transactions contemplated hereby as Am-Pac may
reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF INVESTMENTS
AND THE INVESTMENTS SHAREHOLDERS
The obligations of Investments and the Investments Shareholder under this
Agreement are subject to the satisfaction, at or before the Closing Date, of the
following conditions:
Section 7.01 - Accuracy of Representations. The representations and
warranties made by Am-Pac 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 Am-Pac shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Am-Pac prior to or at the Closing,
Investments shall have been furnished with a certificate, signed by a duly
authorized executive officer of Am-Pac and dated the Closing Date, to the
foregoing effect.
Section 7.02 - Officer's Certificate. Investments shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
executive officer of Am-Pac, to the effect that no litigation, proceeding,
investigation or inquiry is pending, other than those disclosed herein, or to
the best knowledge of Am-Pac threatened, which might result in an action to
21
<PAGE>
enjoin or prevent the consummation of the transactions contemplated by this
Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 - Brokers. Am-Pac, Sweeney and Investments agree that there
were no finders or brokers involved in bringing the parties together or who were
instrumental in the negotiation, execution or consummation of this Agreement,
other than Matt Gillio and Carl Miller.
Section 8.02 - Governing Law. This Agreement shall be governed by, enforce,
and construed under and in accordance with the laws of the United States of
America and, with respect to the matters of state law, with the laws of Florida.
Section 8.03 - Notices. Any notice 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 Am-Pac, to: Thomas Tedrow.
431 E. Central Blvd., Suite 900
Orlando, Nevada 32801
With copies to: Vanderkam and Sanders
Hank Vanderkam
440 Louisiana, Suite 475
Houston, Texas 77002
If to Investments, toAm-Pac Investments Corp.
Thomas Sweeney
11599 Colonial Drive East
Orlando, Nevada 32817
If to Thomas Thomas Sweeney
Sweeney: 11599 Colonial Drive East
Orlando, Nevada 32817
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 been given as of the date so delivered, mailed or telegraphed.
Section 8.04 - Attorney's 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 parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorney's
fees, incurred in connection therewith and in enforcing or collecting any
22
<PAGE>
judgment rendered therein.
Section 8.05 - Confidentiality. Each party hereto agrees with the other
parties that, unless and until the transactions contemplated by this Agreement
have been consummated, it and its 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, as such other party, and
shall not use such disclosure data or information or disclose the same to
others, except (i) to the extent such data or information is published, is a
matter of public knowledge, or is required by law to be published; and (ii) to
the extent that such disclosure data or information must be used or disclosed in
order to consummate the transactions contemplated by this Agreement. In the
event of the termination of this agreement, each party shall return to the other
party all documents and other materials obtained by it or on its behalf and
shall destroy all copies, digests, workpapers, abstracts or other materials
relating thereto, and each party will continue to comply with the
confidentiality provisions set forth herein.
Section 8.06 - 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 8.07 - Third Party Beneficiaries. This contract is strictly between
Am-Pac and Investments, and the Investments Shareholder 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 8.08 - Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof.
Section 8.09 - 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 a period of three
months. All rights and obligations under this entire agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators and
assigns of the parties.
Section 8.10 - Counterparts. This Agreement 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 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 of any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
by amended by a writing signed by all parties hereto, with respect to any of the
23
<PAGE>
terms contained herein, and say term or condition of this Agreement may be
waived or the time for performance may be extended by a writing signed by the
party or parties for whose benefit the provision in intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be extended by their respective officers, hereunto duly authorized, as of the
date first-above written.
ATTEST: Am-Pac International, Inc..
/s/ illegible /s/ illegible
- ------------------- -----------------------
Secretary or Assistant Secretary By: Thomas Tedrow
/s/ Zebin Xu President
- -------------------
Zebin Xu
ATTEST: Am-Pac Investments, Inc.
/s/ illegible /s/ Thomas Sweeney
- --------------------- ------------------------
Secretary of Assistant Secretary By: Thomas Sweeney
President
The Investments Shareholder
/s/ Thomas Sweeney
-------------------------
Thomas Sweeney
24
<PAGE>
State of FLORIDA }
}
County of ORANGE }
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, for the
above stated purposes by Thomas Sweeney, the President and/or Promoter of Am-Pac
Investments, Inc., to certify which witness my hand and seal of office on this
the 17th of December, 1996.
/s/ Cheryl L. Piper
---------------------------
Cheryl L. Piper
Notary Public in and for the
State of Florida
Commission #CC452632
Expires April 13, 1999
State of FLORIDA }
}
County of ORANGE }
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, for the
above stated purposes by Thomas Tedrow, the President of "Am-Pac", to certify
which witness my hand and seal of office on this the 17th of December, 1996.
/s/ Cheryl L. Piper
---------------------------
Cheryl L. Piper
Notary Public in and for the
State of Florida
Commission #CC452632
Expires April 13, 1999
State of FLORIDA }
}
County of ORANGE }
SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, for the
above stated purposes by Thomas Sweeney, to certify which witness my hand and
seal of office on this the 17th of December, 1996.
/s/ Cheryl L. Piper
---------------------------
Cheryl L. Piper
Notary Public in and for the
State of Florida
Commission #CC452632
Expires April 13, 1999
25
<PAGE>
EXHIBIT 1
Legal Description of all Real Property and improvements commonly described as
11599 Colonial Drive East, Orlando Florida 32817, including but not limited to
the Commercial Lot
26
<PAGE>
EXHIBIT 2
Legal Description of all Real Property and improvements commonly described as
11637 Orpington Street, Orlando, Florida, 32817, including but not limited to
the Residential Lot
27
AMENDED
BYLAWS
OF
AM-PAC INTERNATIONAL, INC.
ARTICLE I
OFFICES
1.01 REGISTERED OFFICE AND AGENT
The registered office of the Corporation shall be maintained at The
Corporation Trust Company in Nevada, One East First Street, Reno, Nevada 89501
in the State of Nevada. The registered office or the registered agent, or both,
may be changed by resolution of the Board of Directors, upon filing the
statement required by law.
1.02 PRINCIPAL OFFICE
The principal office of the Corporation shall be at Waterford & Sterling,
431 E. Central Blvd., Ste. 900, Orlando, Florida 32801 provided that the Board
of Directors shall have power to change the location of the principal office in
its discretion.
1.03 OTHER OFFICES
The Corporation may also maintain other offices at such places within or
without the State of Nevada as the Board of Directors may from time to time
appoint or as the business of the Corporation may require.
ARTICLE II
SHAREHOLDERS
2.01 PLACE OF MEETING
All meetings of shareholders, both regular and special, shall be held
either at the registered office of the Corporation, or at such other place as
shall be designated in the notice of the meeting.
<PAGE>
2.02 ANNUAL MEETING
The annual meeting of shareholders for the election of directors and for
the transaction of all other business which may come before the meeting shall be
held on the 30th day of April in each year (if not a legal holiday and, if a
legal holiday, then on the next business day following) at the hour specified in
the notice of meeting.
If the election of directors shall not be held on the day above designated
for the annual meeting, the Board of Directors shall cause the election to be
held as soon thereafter as conveniently may be at a special meeting of the
shareholders called for the purpose of holding such election.
The annual meeting of shareholders may be held for any other purpose in
addition to the election of director which may be specified in a notice of such
meeting. The meeting may be called by resolution of the Board of Directors or by
a writing filed with the secretary signed either by a majority of the directors
or by shareholders owning a majority in amount of the entire capital stock of
the Corporation issued and outstanding and entitled to vote at any such meeting.
2.03 NOTICE OF SHAREHOLDERS' MEETING
A written or printed notice stating the place, day and hour of the meeting,
and in case of a special meeting, the purpose or purposes for which the meeting
is called, shall be delivered not less than ten (10) nor more than sixty (60)
days before the date of the meeting, either personally or by mail, by or at the
direction of the president, secretary or the officer or person calling the
meeting, to each shareholders 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
share transfer books of the Corporation, with postage thereon prepaid.
2.04 VOTING OF SHARES
Each outstanding share, regardless of class, shall be entitled to one vote
on each matter submitted to a vote at a meeting of shareholders, except to the
extent that the voting rights of the shares of any class or classes are limited
or denied by the Articles of Incorporation or by law.
Treasury shares, shares of its own stock owned by another corporation the
majority of the voting stock of which is owned or controlled by this
Corporation, and shares of its own stock held by this Corporation in a fiduciary
capacity shall not be voted, directly or indirectly, at any meeting, and shall
-2-
<PAGE>
not be counted in determining the total number of outstanding shares at any
given time.
A shareholder may vote either in person or by proxy executed in writing by
the shareholder or by his duly authorized attorney-in-fact. No proxy shall be
valid after eleven (11) months from the date of its execution unless otherwise
provided in the proxy. Each proxy shall be revocable unless expressly provided
therein to be irrevocable, and in no event shall it remain irrevocable for a
period of more than eleven (11) months.
At each election for directors and every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected and
for whose election he has a right to vote, or unless prohibited by the Articles
of Incorporation, to cumulate his votes by giving one candidate as many votes as
the number of such directors multiplied by the number of his shares shall equal,
or by distributing such votes on the same principal among any number of such
candidates. Any shareholder who intends to cumulate his votes as herein
authorized shall give written notice of such intention to the secretary of the
Corporation on or before the day preceding the election at which such
shareholder intends to cumulate his votes.
2.05 CLOSING TRANSFER BOOKS AND FIXING 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 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 provide
that the share transfer books shall be closed for a stated period not exceeding
sixty (60) days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting. In lieu of closing the stock transfer books, the ByLaws
or, in the absence of an applicable ByLaw, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
not later than sixty (60) days and, in case of a meeting of shareholders, not
earlier than ten (10) days, prior to the date on which the particular action
requiring such determination of shareholders is to be taken. If the share
transfer books are not closed and no record date is fixed for the determination
of shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the Board
of Directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof, except where the determination has been made through the closing of
share transfer books and the stated period of closing has expired.
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2.06 QUORUM OF SHAREHOLDERS
Unless otherwise provided in the Articles of Incorporation, the holders of
a majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders, but in no event shall a
quorum consist of the holders of less than one-third (1/3) of the shares
entitled to vote and thus represented at such meeting. The vote of the holders
of a majority of the shares entitled to vote and thus represented at a meeting
at which a quorum is present shall be the act of the shareholders' meeting,
unless the vote of a greater number is required by law, the Articles of
Incorporation or the ByLaws.
2.07 VOTING LISTS
The officer or agent having charge of the share transfer books for the
shares of the Corporation shall make, at least ten (10) days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of
ten (10) days prior to such meeting, shall be kept on file at the registered
office of the Corporation and shall be subject to inspection by any shareholders
at any time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting. The original
share transfer books shall be prima-facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders.
2.08 ACTION BY CONSENT OF SHAREHOLDERS
In lieu of a formal meeting, action may be taken by written consent of such
number of the shareholders as is required by either State law or the
Corporation's Bylaws for passage of such corporate action.
ARTICLE III
DIRECTORS
3.01 BOARD OF DIRECTORS
The business and affairs of the Corporation shall be managed by a Board of
Directors. Directors need not be residents of the State of Nevada or
shareholders in the Corporation.
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3.02 NUMBER AND ELECTION OF DIRECTORS
The number of directors shall be five (5) provided that the number may be
increased or decreased from time to time by an amendment to these ByLaws, but no
decrease shall have the effect of shortening the term of any incumbent director.
At each annual election the shareholders shall elect directors to hold office
until the next succeeding annual meeting.
3.03 VACANCIES
Any vacancy occurring in the Board of Directors may be filled by the
affirmative vote of the remaining directors, though less than a quorum of the
Board. A director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors shall be filled by election at an annual
meeting or at a special meeting of shareholders called for that purpose.
3.04 QUORUM OF DIRECTORS
A majority of the Board of Directors shall constitute a quorum for the
transaction of business. 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.
3.05 ANNUAL MEETING OF DIRECTORS
Within thirty (30) days after each annual meeting of shareholders, the
Board of Directors elected at such meeting shall hold an annual meeting at which
they shall elect officers and transact such other business as shall come before
the meeting.
3.06 REGULAR MEETING OF DIRECTORS
A regular meeting of the Board of Directors may be held at such time as
shall be determined from time to time by resolution of the Board of Directors.
3.07 SPECIAL MEETINGS OF DIRECTORS
The secretary shall call a special meeting of the Board of Directors
whenever requested to do so by the President or by two directors. Such special
meeting shall be held at the time specified in the notice of meeting.
3.08 PLACE OF DIRECTORS MEETINGS
All meetings of the Board of Directors (annual, regular or special) shall
be held either at the principal office of the Corporation or at such other
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place, either within or without the State of Nevada, as shall be specified in
the notice of meeting.
3.09 NOTICE OF DIRECTORS MEETINGS
All meetings of the Board of Directors (annual, regular or special) shall
be held upon five (5) days written notice stating the date, place and hour of
meeting delivered to each director either personally or by mail or at the
direction of the president or the secretary or the officer or person calling the
meeting.
In any case where all of the directors execute a waiver of notice of the
time and place of meeting, no notice thereof shall be required, and any such
meeting (whether annual, regular or special) shall be held at the time and at
the place (either within or without the State of Nevada) specified in the waiver
of notice. Attendance of a director at any meeting shall constitute a waiver of
notice of such meeting, except where the directors attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any annual,
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
3.10 COMPENSATION
Directors, as such, shall not receive any stated salary for their services,
but by resolution of the Board of Directors a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each annual, regular or
special meeting of the Board, provided, that nothing herein contained shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
3.11 ACTION BY CONSENT OF DIRECTORS
In lieu of a formal meeting, action may be taken by written consent of such
number of the directors as is required by either State law or the Corporation's
Bylaws for passage of such corporate action.
ARTICLE IV
OFFICERS
4.01 OFFICERS ELECTION
The officers of the Corporation shall consist of a president, one or more
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vice presidents, a secretary, and a treasurer. All such officers shall be
elected at the annual meeting of the Board of Directors provided for in Article
III, Section 5. If any office is not filled at such annual meeting, it may be
filled at any subsequent regular or special meeting of the Board. The Board of
Directors at such annual meeting, or at any subsequent regular or special
meeting may also elect or appoint such other officers and assistant officers and
agents as may be deemed necessary. Any two or more offices may be held by the
same person, except the offices of president and secretary.
All officers and assistant officers shall be elected to serve until the
next annual meeting of directors (following the next annual meeting of
shareholders) or until their successors are elected; provided, that any officer
or assistant officer elected or appointed by the Board of Directors may be
removed with or without cause at any regular or special meeting of the Board
whenever in the judgment of the Board of Directors the best interests of the
Corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Any agent appointed
shall serve for such term, not longer than the next annual meeting of the Board
of Directors, as shall be specified, subject to like right of removal by the
Board of Directors.
4.02 VACANCIES
If any office becomes vacant for any reason, the vacancy may be filled by
the Board of Directors.
4.03 POWER OF OFFICERS
Each officer shall have, subject to these ByLaws, in addition to the duties
and powers specifically set forth herein, such powers and duties as are commonly
incident to his office and such duties and powers as the Board of Directors
shall from time to time designate. All officers shall perform their duties
subject to the directions and under the supervision of the Board of Directors.
The president may secure the fidelity of any and all officers by bond or
otherwise.
4.04 PRESIDENT
The president shall be the chief executive officer of the Corporation. He
shall preside at all meetings of the directors and shareholders. He shall see
that all orders and resolutions of the Board are carried out, subject however,
to the right of the directors to delegate specific powers, except such as may be
by statute exclusively conferred on the president, to any other officers of the
Corporation.
He or any vice president shall execute bonds, mortgages and other
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<PAGE>
instruments requiring a seal, in the name of the Corporation, and, when
authorized by the Board, he or any vice president may affix the seal to any
instrument requiring the same, and the seal when so affixed shall be attested by
the signature of either the secretary or an assistant secretary. He or any vice
president shall sign certificates of stock.
The president shall be ex-officio a member of all standing committees.
He shall submit a report of the operations of the Corporation for the year
to the directors at their meeting next preceding the annual meeting of the
shareholders and to the shareholders at their annual meeting.
4.05 VICE PRESIDENT
The vice president shall, in the absence or disability of the president,
perform the duties and exercise the powers of the president, and they shall
perform such other duties as the Board of Directors shall prescribe.
4.06. SECRETARY AND ASSISTANT SECRETARIES
The secretary shall attend all meetings of the Board and all meetings of
the shareholders and shall record all votes and the minutes of all proceedings
and shall perform like duties for the standing committees when required. He
shall give or cause to be given notice of all meetings of the shareholders and
all meetings of the Board of Directors and shall perform such other duties as
may be prescribed by the Board. He shall keep in safe custody the seal of the
Corporation, and when authorized by the Board, affix the same to any instrument
requiring it, and when so affixed, it shall be attested by his signature or by
the signature of an assistant secretary.
The assistant secretary shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the secretary, and they
shall perform such other duties as the Board of Directors shall prescribe.
In the absence of the secretary or an assistant secretary, the minutes of
all meetings of the Board and shareholders shall be recorded by such person as
shall be designated by the president or by the Board of Directors.
4.07 TREASURER AND ASSISTANT TREASURERS
The treasurer shall have the custody of the corporate funds and securities
and shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all moneys and other valuable
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<PAGE>
effects in the name and to the credit of the Corporation in such depositories as
may be designated by the Board of Directors.
The treasurer shall disburse the funds of the Corporation as may be ordered
by the Board of Directors, taking proper vouchers for such disbursements. He
shall keep and maintain the Corporation's books of account and shall render to
the president and directors an account of all of his transactions as treasurer
and of the financial condition of the Corporation and exhibit his books, records
and accounts to the president or directors at any time. He shall disburse funds
for capital expenditures as authorized by the Board of Directors and in
accordance with the orders of the president, and present to the president for
his attention any requests for disbursing funds if in the judgment of the
treasurer any such request is not properly authorized. He shall perform such
other duties as may be directed by the Board of Directors or by the president.
If required by the Board of Directors, he shall give the Corporation a bond
in such sum and with such surety or sureties as shall be satisfactory to the
Board for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
The assistant treasurers in the order of their seniority shall, in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer, and they shall perform such other duties as the Board
of Directors shall prescribe.
ARTICLE V
CERTIFICATES OF STOCK: TRANSFER, ETC.
5.01 CERTIFICATES OF STOCK
The certificates for shares of stock of the Corporation shall be numbered
and shall be entered in the Corporation as they are issued. They shall exhibit
the holder's name and number of shares and shall be signed by the president or a
vice president and the secretary or an assistant secretary or if the Board of
Directors determines, by any one of the afore named officers and shall be sealed
with the seal of the Corporation or a facsimile thereof. If the Corporation has
a transfer agent or a registrar, other than the Corporation itself or an
employee of the Corporation, the signatures of any such officer may be
facsimile. In case any officer or officers who shall have signed or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates shall cease to be such officer or officers of the Corporation,
whether because of death, resignation or otherwise, before said certificate or
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<PAGE>
certificates shall have been issued, such certificate may nevertheless be issued
by the Corporation with the same effect as though the person or persons who
signed such certificates or whose facsimile signature or signatures shall have
been used thereon had been such officer or officers at the date of its issuance.
Certificates shall be in such form as shall in conformity to law be prescribed
from time to time by the Board of Directors.
The Corporation may appoint from time to time transfer agents and
registrars, who shall perform their duties under the supervision of the
secretary.
5.02 TRANSFERS OF SHARES
Upon surrender to the Corporation or the transfer agent of the Corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction upon its books.
5.03 REGISTERED SHAREHOLDERS
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and, accordingly shall
not be bound to recognize any equitable or other claim to or interest in such
share on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by law.
5.04 LOST CERTIFICATE
The Board of Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the
Corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost. When
authorizing such issue of a new certificate or certificates, the Board of
Directors in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost or destroyed certificate or
certificates or his legal representative to advertise the same in such manner as
it shall require or to give the corporation a bond with surety and in form
satisfactory to the Corporation (which bond shall also name the Corporation's
transfer agents and registrars, if any, as obligees) in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
or other obligees with respect to the certificate alleged to have been lost or
destroyed, or to advertise and also give such bond.
ARTICLE VI
DIVIDEND
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<PAGE>
6.01 DECLARATION
The Board of Directors may declare at any annual, regular or special
meeting of the Board and the Corporation may pay, dividends on the outstanding
shares in cash, property or in the shares of the Corporation to the extent
permitted by, and subject to the provisions of, the laws of the State of Nevada.
6.02 RESERVES
Before payment of any dividend there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the directors from
time to time in their absolute discretion think proper as a reserve fund to meet
contingencies or for equalizing dividends or for repairing or maintaining any
property of the Corporation or for such other purpose as the directors shall
think conducive to the interest of the Corporation, and the directors may
abolish any such reserve in the manner in which it was created.
ARTICLE VII
MISCELLANEOUS
7.01 INFORMAL ACTION
Any action required to be taken or which may be taken at a meeting of the
shareholders, directors or members of the executive committee, may be taken
without a meeting if a consent in writing setting forth the action so taken
shall be signed by all of the shareholders, directors, or members of the
executive committee, as the case may be, entitled to vote with respect to the
subject matter thereof, and such consent shall have the same force and effect as
a unanimous vote of the shareholders, directors, or members of the executive
committee, as the case may be, at a meeting of said body.
7.02 SEAL
The corporate seal shall be circular in form and shall contain the name of
the Corporation, the year of its incorporation and the words "State of Nevada",
and "CORPORATE SEAL". The seal may be used by causing it or a facsimile to be
impressed or affixed or in any other manner reproduced. The corporate seal may
be altered by order of the Board of Directors at any time.
7.03 CHECKS
All checks or demands for money and notes of the Corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.
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<PAGE>
7.04 FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st day of January in
each and every year.
7.05 DIRECTORS ANNUAL STATEMENT
The Board of Directors shall present at each annual meeting of shareholders
a full and clear statement of the business and condition of the Corporation.
7.06 CLOSE CORPORATIONS: MANAGEMENT BY SHAREHOLDERS
If the Articles of Incorporation of the Corporation and each certificate
representing its issued and outstanding shares states that the business and
affairs of the Corporation shall be managed by the shareholders of the
Corporation rather than by the Board of Directors, then, whenever the context so
requires the shareholders of the Corporation shall be deemed the directors of
the Corporation for the purposes of applying any provision of these ByLaws.
7.07 AMENDMENTS
These ByLaws may be altered, amended or repealed in whole or in part by the
affirmative vote of the Board of Directors.
ARTICLE VIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. Every person who was or is a party to, or is threatened to be
made a party to, or is involved in any action, suit or proceedings, whether
civil, criminal,. administrative or investigative, by reason of the fact that he
or a person to whom he is the legal representative is or was a director or
officer of the corporation or is or was serving at the request of the
corporation as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless, to the fullest extent legally permissible
under the laws of the State of Nevada, against all expenses, liability and loss,
including attorney's fees, judgements, fines and amounts paid or to be paid in
settlement, reasonably incurred or suffered by him in connection therewith, all
pursuant to NRS 78.151. Such right of indemnification shall be a contract right
which may be enforced in any manner desired by such person.
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<PAGE>
Section 2. This indemnification is intended to provide at all times the
fullest indemnification permitted by the laws of the State of Nevada and the
corporation may purchase and maintain insurance on behalf of any person who is
or was serving at the request of the corporation as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise against any liability asserted against such person and
incurred in any such capacity or arising out of such status, whether or not the
corporation would have the power to indemnify such person.
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AM-PAC INTERNATIONAL, INC.
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF A SERIES OF 20,000 SHARES OF PREFERRED STOCK,
$.001 PAR VALUE, DESIGNATED
"SERIES A CONVERTIBLE PREFERRED STOCK"
---------------------
Am-Pac International, Inc., a Nevada Corporation (the "Corporation"), by
way of this Certificate of Designation, Preferences and Rights (as it may
hereafter be amended, modified or supplemented upon vote of the Board of
Directors of the Corporation and approval of all holders of Series A Preferred
Stock, as such term is hereinafter defined,) certifies that, pursuant to the
authority expressly vested in the Board of Directors by Article IV of the
Corporation's Articles of Incorporation, and in accordance with the provisions
of Section 78.195 of the Nevada Revised Statutes, the Board of Directors of the
Corporation has duly adopted the following resolutions creating a series of its
Preferred Stock designated as Series A Preferred Stock, as set forth herein
("Certificate"):
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation by the provisions of
Article IV of the Articles of Incorporation of the Corporation, this Board
of Directors hereby creates a series of Preferred Stock, $.001 par value,
and this Board of Directors hereby fixes the designation and the voting
power, preferences and rights, and the qualifications, limitations or
restrictions thereof, of the shares of such series (in addition to the
powers, preferences and rights, and the qualifications, limitations or
restrictions thereon, set forth in the Articles of Incorporation, which are
applicable to all series of Preferred Stock of the Corporation) as follows:
Twenty thousand (20,000) shares of Preferred Stock, par value $.001
per share, of the Corporation are hereby constituted as a series of
Preferred Stock designated as Series A Convertible Preferred Stock (the
"Series A Convertible Preferred Stock") with the voting powers and the
preferences and rights hereinafter set forth:
SECTION 1. DIVIDENDS. Dividends shall accrue at the cumulative rate of
$50.00 per annum per share, and shall be payable upon conversion in cash, stock
or property as the board of directors shall, in its discretion, declare from
time to time.
SECTION 2. LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, whether voluntary
or involuntary, the holders of the Series A Convertible Preferred Stock shall,
for a period of 36 months beginning from the date of issuance, be entitled to be
paid first out of the assets of the Corporation available for distribution to
holders of the Corporation's capital stock of all classes an amount equal to
$1,000.00 per share of Series A Convertible Preferred Stock, and no more, before
any distribution shall be made to the holders of the Common Stock or any other
class of capital stock or series thereof ranking junior to the Series A
Convertible Preferred Stock with respect to the distribution of assets. If the
<PAGE>
assets of the Corporation shall be insufficient to permit the payment in full to
the holders of the Series A Convertible Preferred Stock of the amounts thus
distributable, then the entire assets of the Corporation available for such
distribution shall be distributed ratably among the holders of the Series A
Convertible Preferred Stock in proportion to the full preferential amount each
such holder is otherwise entitled to receive. After the expiration of the
thirty-six month period set forth herein, the holders of the Series A
Convertible Preferred Stock shall share ratably with the holders of the common
stock in the event of any liquidation, dissolution or winding up of the affairs
of the Corporation.
SECTION 3. VOTING RIGHTS. The holders of the Series A Convertible Preferred
Stock shall have no voting rights, except as provided by law under the General
Corporation Law of the State of Nevada or existing under the Certificate of
Incorporation.
SECTION 4. REDEMPTION. Series A Convertible Preferred Stock shall not be
subject to redemption.
SECTION 5. CONVERSION. (a) Subject to the limitations set forth below, the
holder of any Series A Convertible Preferred Stock shall have the right, at his
option on delivery to the Corporation of written notice and upon surrender of
such shares to the Corporation, to convert part or all of the Series A
Convertible Preferred Stock held, into shares of Common Stock of the
Corporation. In the event the holder of any Series A Convertible Preferred Stock
has not notified the Corporation of his election to convert the Series A
Convertible Preferred Stock into Common Stock on the terms set forth herein on
or before December 31, 1999, the right of the holders of such Series A
Convertible Preferred Stock to convert the same into Common Stock shall expire,
provided, however, that on or after December 31, 1999, all Series A Convertible
Preferred Stock remaining outstanding shall, at the option of the Corporation,
be converted into Common Stock of the Corporation on the terms set forth herein.
(b) Conversion of the Preferred Shares shall be subject to the following
limitation: the outstanding Series A Convertible Preferred Stock will become
eligible for conversion on or after the date which is 30 days after the closing
date of the purchase of such Series A Convertible Preferred Stock (the "Closing
Date"). Each conversion shall be effected by surrendering the certificate(s)
evidencing the Series A Convertible Preferred Stock to be converted to the
Company with the form of conversion certificate executed by the holder thereof
as to all or a specified portion of the shares evidenced by such certificate
(subject to the limitations set forth above and provided that conversions will
not be permitted for Series A Convertible Preferred Stock having an aggregate
liquidation preference of less than $10,000 except as may be required by the
foregoing limitation on conversion) and accompanied, if required by the Company,
by proper assignment in blank. The date of execution of such certificate and
delivery by facsimile to the Company at (713) 547-8910, shall be deemed to the
be "conversion date", provided that certificates evidencing the shares so
converted are delivered within three (3) business days to the Company or its
designated agent.
(c) The number of shares of Common Stock issuable upon conversion of each
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<PAGE>
share of Series A Convertible Preferred Stock shall equal 500 shares of Common
Stock for every one share of Series A Convertible Preferred Stock.
(d) Neither fractional shares, nor scrip or other certificates evidencing
such shares, shall be issued by the Corporation on conversion of the Series A
Convertible Preferred Stock as herein provided, but the Corporation shall round
to the nearest whole number the number of shares issuable in such event.
(e) Series A Convertible Preferred Stock so converted shall be restored to
the status of authorized but unissued shares.
(f) The Corporation will reserve from its authorized and unissued shares of
Common Stock, and shall increase the number of reserved shares from time to
time, a number of shares sufficient to permit conversion of the Series A
Convertible Preferred Stock.
IN WITNESS WHEREOF, Am-Pac International, Inc. has caused this Certificate
to be duly executed and attested effective as of the 31st day of December, 1996.
AM-PAC INTERNATIONAL, INC.
/s/ illegible
------------------------------
Thomas Tedrow, President
ATTEST:
/s/ illegible
- --------------------
Lynda Xu, Secretary
/s/ Zebin Xu
- -------------------
Zebin Xu
State of FLORIDA }
}
County of ORANGE }
I, Cheryl L. Piper, a Notary Public, do hereby certify that on this 31st
day of December, 1996, personally appeared before me Thomas Tedrow, who, being
by me first duly sworn declared that he is the President of AM-PAC
INTERNATIONAL, INC., that he signed the foregoing document as President of the
corporation, and that the statements therein contained are true and correct.
/s/ Cheryl L. Piper
---------------------------
Cheryl L. Piper
Notary Public in and for the
State of Florida
Commission #CC452632
Expires April 13, 1999
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