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UNITED STATES
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): February 12, 1997
CAPITAL 2000, INC.
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(Exact name of registrant as specified in its charter)
Colorado 33-11062-D 84-1049047
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) file number) Identification No.)
P.O. Box 460363, Aurora, Colorado 80015
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(Address of principal executive offices)
Registrant's telephone number, including area code (303) 690-6787
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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Effective February 12, 1997 Capital 2000, Inc. (the "Company")
acquired all of the outstanding shares of United Shields Corporation ("USC")
in exchange for restricted shares of the Company's common stock (the "Common
Stock") (the "Exchange") pursuant to a Share Exchange Agreement between the
Company and USC. After the Exchange, USC's shareholders own approximately 90%
of the of the outstanding Common Stock. In connection with the Exchange, the
directors and officers of USC became the directors and officers of the Company.
The directors and officers of USC, and the Company as of the effective date of
the Exchange, are T. J. Tully, Anthony G. Covatta and James J. Carroll.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(a) Financial Statements of Business Acquired
It is not practical to file the required financial statements
for USC at this time. The required financial statements will
be filed on or before April 28, 1997.
(b) Pro Forma Financial Information
It is not practical to file the required pro form financial
information at this time. The required pro forma information
will be filed on or before April 28, 1997.
(c) Exhibits
<TABLE>
<CAPTION>
Filed
Herewith
(Page No.)
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Exhibit
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<S> <C> <C>
10.1 Share Exchange Agreement by and
between Capital 2000, Inc. and United
Shields Corporation dated February 12,
1997 E-1 to E-16
</TABLE>
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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, thereunto duly authorized.
CAPITAL 2000, INC.
By: /s/ T. J. Tully
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T. J. Tully, CEO and President
Date: April 1, 1997
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SHARE EXCHANGE AGREEMENT
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THIS SHARE EXCHANGE AGREEMENT is made this 12th day of February 1997,
by and between CAPITAL 2000, INC., a Colorado corporation ("Capital 2000"), and
UNITED SHIELDS CORPORATION, a Nevada corporation ("USC").
WHEREAS, Capital 2000 desires to acquire all of the issued and
outstanding shares of common stock of USC in exchange for an aggregate of
9,540,000 authorized but unissued restricted shares of the common stock, no par
value, of Capital 2000 (the "Common Stock") the "Exchange Offer"); and
WHEREAS, USC desires to assist Capital 2000 in a business combination
which will result in the shareholders of USC owning approximately 90% of the
then issued and outstanding shares of Capital 2000's Common Stock, and Capital
2000 holding 100% of the issued and outstanding shares of USC's common stock;
and
WHEREAS, the share exchange contemplated hereby will result in the USC
shareholders tendering all of the outstanding common stock of USC to Capital
2000 in exchange SOLELY for the Common Stock and no other consideration, which
the parties hereto intend to treat as a reorganization under I.R.C. Section
368(a)(1)(B).
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
representations contained herein, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1
EXCHANGE OF SECURITIES
1.1 ISSUANCE OF SHARES. Subject to all of the terms and conditions of
this Agreement, Capital 2000 agrees to offer 1.59 shares of Common Stock for
each share of USC common stock issued and outstanding, or a total of 9,540,000
shares of Capital 2000's Common Stock. The Common Stock will be issued directly
to the shareholders of USC which accept the Exchange Offer.
1.2 EXEMPTION FROM REGISTRATION. The parties hereto intend that the
Common Stock to be issued by Capital 2000 to USC shareholders shall be exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), pursuant to Section 4(2) of the Act and the rules and regulations
promulgated thereunder.
1.3 INVESTMENT INTENT. Prior to the consummation of the Exchange Offer,
the shareholders of USC accepting the Exchange Offer shall execute Letters of
Acceptance and such other documents containing, among other things,
representations and warranties relating to investment intent and investor
status, restrictions on transferability and restrictive legends such that the
counsel for both Capital 2000 and USC shall be satisfied that the exchange of
shares as contemplated by this Agreement shall be exempt from the registration
requirements of the Act and any applicable state blue sky laws.
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1.4 REGISTRATION RIGHTS. Capital 2000 will agree to include in any
registration statement which Capital 2000 files during the next two years all
shares issued pursuant to this Agreement provided that all persons receiving
such shares will agree to execute any reasonable and customary lockup letters
required by the underwriter of any public offering so as to not impede the
offering.
ARTICLE 2
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REPRESENTATIONS AND WARRANTIES OF USC
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Except as disclosed in Schedule 2 which is attached hereto and
incorporated herein by reference, USC hereby represents and warrants to Capital
2000 that:
2.1 ORGANIZATION. USC is a corporation duly organized, validly
existing, and in good standing under the laws of Nevada, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the jurisdictions where its business requires qualification.
2.2 CAPITAL. The authorized capital stock of USC consists of 6,000,000
shares of Common Stock, no par value, of which 6,000,000 are currently issued
and outstanding. All of the issued and outstanding shares of USC are duly
authorized, validly issued, fully paid, and nonassessable. There are no
outstanding subscriptions, options, rights, warrants, debentures, instruments,
convertible securities, or other agreements or commitments obligating USC to
issue or to transfer from treasury any additional shares of its capital stock of
any class.
2.3 SUBSIDIARIES. USC does not have any subsidiaries or own any
interest in any other enterprise (whether or not such enterprise is a
corporation).
2.4 DIRECTORS AND OFFICERS. Schedule 2 contains the names and titles of
all directors and officers of USC as of the date of this Agreement.
2.5 FINANCIAL STATEMENTS. USC has delivered to Capital 2000 its
unaudited balance sheet as of January 31, 1997 (the "Financial Statements"). The
Financial Statements are complete and correct in all material respects and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, however, the
financials are not presented in accordance with generally accepted accounting
principles. The Financial Statements accurately set out and describe the
financial condition of the Company as of January 31, 1997.
2.6 ABSENCE OF CHANGES. Since January 31, 1997, except for changes in
the ordinary course of business which have not in the aggregate been materially
adverse, to the best of USC's knowledge, USC has conducted its business only in
the ordinary course and has not experienced or suffered any material adverse
change in the condition (financial or otherwise), results of operations,
properties, business or prospects of USC or waived or surrendered any claim or
right of material value.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. Neither USC nor any of its
properties or assets are subject to any material liabilities or obligations of
any nature, whether absolute,
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accrued, contingent or otherwise and whether due or to become due, that are not
reflected in the financial statements presented to Capital 2000 or have
otherwise been disclosed to Capital 2000.
2.8 TAX RETURNS. Within the times and in the manner prescribed by law,
USC has filed all federal, state and local tax returns required by law, or has
filed extensions which have not yet expired, and has paid all taxes, assessments
and penalties due and payable.
2.9 INVESTIGATION OF FINANCIAL CONDITION. Without in any manner
reducing or otherwise mitigating the representations contained herein, Capital
2000 and/or its attorneys shall have the opportunity to meet with accountants
and attorneys to discuss the financial condition of USC. USC shall make
available to Capital 2000 and/or its attorneys all books and records of USC.
2.10 TRADE NAMES AND RIGHTS. Schedule 2 sets forth a complete and
accurate schedule of (i) all registered trademarks and service marks and all
trademark and service mark applications, including country of filing, filing
number, date of issue and expiration date used in the business of USC; and (ii)
all registered copyrights of property owned by USC. Except as set forth in such
schedule, to USC's knowledge, no third party has asserted, or threatened to
assert against USC or any of its officers or directors any conflicting rights to
any such intellectual property and USC has no knowledge of facts that USC
believes could reasonably be expected to give rise to such a claim.
2.11 COMPLIANCE WITH LAWS. USC has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning or other law,
ordinance or regulation) affecting its properties or the operation of its
business, except for matters which would not have a material affect on USC or
its properties.
2.12 LITIGATION. USC is not a party to any suit, action, arbitration or
legal, adminis trative or other proceeding, or governmental investigation
pending or, to the best knowledge of USC, threatened against or affecting USC or
its business, assets or financial condition, except for matters which would not
have a material affect on USC or its properties. USC is not in default with
respect to any order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality applicable to it. USC is
not engaged in any lawsuit to recover any material amount of monies due to it.
2.13 AUTHORITY. USC has full corporate power and authority to enter
into this Agreement. The board of directors of USC has taken all action required
to authorize the execution and delivery of this Agreement by or on behalf of USC
and the performance of the obligations of USC under this Agreement. No other
corporate proceedings on the part of USC are necessary to authorize the
execution and delivery of this Agreement by USC in the performance of its
obligations under this Agreement. This Agreement is, when executed and delivered
by USC, and will be a valid and binding agreement of USC, enforceable against
USC in accordance with its terms, except as such enforceability may be limited
by general principles of equity, bankruptcy, insolvency, moratorium and similar
laws relating to creditors' rights generally.
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2.14 ABILITY TO CARRY OUT OBLIGATIONS. Neither the execution and
delivery of this Agreement, the performance by USC of its obligations under this
Agreement, nor the consummation of the transactions contemplated under this
Agreement will to the best of USC's knowledge: (a) materially violate any
provision of USC's articles of incorporation or bylaws; (b) with or without the
giving of notice or the passage of time, or both, violate, or be in conflict
with, or constitute a material default under, or cause or permit the termination
or the acceleration of the maturity of, any debt, contract, agreement or
obligation of USC, or require the payment of any prepayment or other penalties;
(c) require notice to, or the consent of, any party to any agreement or
commitment, lease or license, to which USC is bound; (d) result in the creation
or imposition of any security interest, lien, or other encumbrance upon any
material property or assets of USC; or (e) violate any statute or law or any
judgment, decree, order, regulation or rule of any court or governmental
authority to which USC is bound or subject.
2.15 FULL DISCLOSURE. None of the representations and warranties made
by USC herein, or in any schedule, exhibit or certificate furnished or to be
furnished in connection with this Agreement by USC, or on its behalf, contains
or will contain any untrue statement of material fact.
2.16 ASSETS. USC has good and marketable title to all of its tangible
properties and such tangible properties are not subject to any material liens or
encumbrances.
2.17 MATERIAL CONTRACTS AND OBLIGATIONS. Attached hereto on Schedule 2
is a list of all agreements, contracts, indebtedness, liabilities and other
obligations to which USC is a party or by which it is bound that are material to
the conduct and operations of its business and properties, which provide for
payments to or by the Company in excess of $10,000; or which involve
transactions or proposed transactions between the Company and its officers and
directors. Copies of such agreements and contracts and documentation evidencing
such liabilities and other obligations have been made available for inspection
by Capital 2000 and its counsel. All of such agreements and contracts are valid,
binding and in full force and effect in all material respects, assuming due
execution by the other parties to such agreements and contracts.
2.18 CONSENTS AND APPROVALS. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority is required to be made or obtained by USC in connection with: (a) the
execution and delivery by USC of this Agreement; (b) the performance by USC of
its obligations under this Agreement; or (c) the consummation by USC of the
transactions contemplated under this Agreement.
ARTICLE 3
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REPRESENTATIONS AND WARRANTIES OF CAPITAL 2000
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Except as disclosed in Schedule 3 which is attached hereto and
incorporated herein by reference, Capital 2000 represents and warrants to USC
that:
3.1 ORGANIZATION. Capital 2000 is a corporation duly organized, valid
existing, and in good standing under the laws of Colorado, has all necessary
corporate powers to own properties and to carry on business, and it is not now
conducting any business, except to the
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extent to which the effecting of the transaction contemplated by this Agreement
constitutes doing business.
3.2 CAPITALIZATION. The authorized capital stock of Capital 2000
consists of 500,000,000 shares of no par value Common Stock of which 1,900,000
shares of Common Stock are currently issued and outstanding. All of the issued
and outstanding shares of Common Stock are duly authorized, validly issued,
fully paid and nonassessable. There are no outstanding subscriptions, options,
rights, warrants, convertible securities, or other agreements or commit ments
obligating Capital 2000 to issue or to transfer from treasury any additional
shares of its capital stock of any class.
3.3 SUBSIDIARIES. Capital 2000 does not presently have any subsidiaries
or own any interest in any other enterprise (whether or not such enterprise is a
corporation).
3.4 DIRECTORS AND OFFICERS. Schedule 3 contains the names and titles of
all directors and officers of Capital 2000 as of the date of this Agreement.
3.5 FINANCIAL STATEMENTS. Capital 2000 has delivered to USC its audited
balance sheet and statements of operations and cash flows as of and for the
period ended December 31, 1995, and its unaudited financial statements as of and
for the period ended September 30, 1996, and an unaudited balance sheet as of
December 31, 1996 (the "Financial Statements"). The Financial Statements are
complete and correct in all material respects and have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated. The Financial Statements accurately set
out and describe the financial condition and operating results of the Company as
of the dates, and for the periods, indicated therein. As of the Closing, the
total liabilities of Capital 2000 shall not exceed $50,000.
3.6 ABSENCE OF CHANGES. Since September 30, 1996, except for changes in
the ordinary course of business which have not in the aggregate been materially
adverse, to the best of Capital 2000's knowledge, Capital 2000 has not
experienced or suffered any material adverse change in its condition (financial
or otherwise), results of operations, properties, business or prospects or
waived or surrendered any claim or right of material value.
3.7 ABSENCE OF UNDISCLOSED LIABILITIES. To the best of Capital 2000's
knowledge, neither Capital 2000 nor any of its properties or assets are subject
to any liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due, that are not reflected
in the financial statements presented to USC.
3.8 TAX RETURNS. Within the times and in the manner prescribed by law,
Capital 2000 has filed all federal, state and local tax returns required by law
and has paid all taxes, assessments and penalties due and payable.
3.9 INVESTIGATION OF FINANCIAL CONDITION. Without in any manner
reducing or otherwise mitigating the representations contained herein, USC shall
have the opportunity to meet with Capital 2000's accountants and attorneys to
discuss the financial condition of Capital 2000. Capital 2000 shall make
available to USC all books and records of Capital 2000.
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3.10 TRADE NAMES AND RIGHTS. Capital 2000 does not use any trademark,
service mark, trade name, or copyright in its business, or own any trademarks,
trademark registrations or applications, trade names, service marks, copyrights,
copyright registrations or applications.
3.11 COMPLIANCE WITH LAWS. To the best of Capital 2000's knowledge,
Capital 2000 has complied with, and is not in violation of, applicable federal,
state or local statutes, laws and regulations (including, without limitation,
any applicable building, zoning, or other law, ordinance, or regulation)
affecting its properties or the operation of its business.
3.12 LITIGATION. Capital 2000 is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or governmental
investigation pending or, to the best knowledge of Capital 2000, threatened
against or affecting Capital 2000 or its business, assets, or financial
condition. Capital 2000 is not in default with respect to any order, writ,
injunction, or decree of any federal, state, local, or foreign court, department
agency, or instrumentality. Capital 2000 is not engaged in any legal action to
recover moneys due to it.
3.13 NO PRIOR OR PENDING INVESTIGATION. Capital 2000 is not aware of
any prior or pending investigations or legal proceedings by the SEC, any state
securities regulatory agency, or any other governmental agency regarding Capital
2000 or any officers or directors of Capital 2000 or any shareholders or
controlling persons of such shareholders.
3.14 AUTHORITY. Capital 2000 has full corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated by
this Agreement. The Board of Directors of Capital 2000 has taken all action
required to authorize the execution and delivery of this Agreement by or on
behalf of Capital 2000, the performance of the obligations of Capital 2000 under
this Agreement and the consummation by Capital 2000 of the transactions
contemplated under this Agreement. No other corporate proceedings on the part of
Capital 2000 are necessary to authorize the execution and delivery of this
Agreement by Capital 2000 in the performance of its obligations under this
Agreement. This Agreement is, and when executed and delivered by Capital 2000,
will be a valid and binding agreement of Capital 2000, enforceable against
Capital 2000 in accordance with its terms, except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors rights generally.
3.15 ABILITY TO CARRY OUT OBLIGATIONS. Neither the execution and
delivery of this Agreement, the performance by Capital 2000 of its obligations
under this Agreement, nor the consummation of the transactions contemplated
under this Agreement will, to the best of Capital 2000's knowledge: (a) violate
any provision of Capital 2000's articles of incorporation or bylaws; (b) with or
without the giving of notice or the passage of time, or both, violate, or be in
conflict with, or constitute a default under, or cause or permit the termination
or the acceleration of the maturity of, any debt, contract, agreement or
obligation of Capital 2000, or require the payment of any prepayment or other
penalties; (c) require notice to, or the consent of, any party to any agreement
or commitment, lease or license, to which Capital 2000 is bound; (d) result in
the creation or imposition of any security interest, lien or other encumbrance
upon any property or assets of Capital 2000; or (e) violate any statute or law
or any judgment, decree, order, regulation or rule of any court or governmental
authority to which Capital 2000 is bound or subject.
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3.16 VALIDITY OF CAPITAL 2000 SHARES. The shares of Capital 2000 Common
Stock to be delivered pursuant to this Agreement, when issued in accordance with
the provisions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable.
3.17 FULL DISCLOSURE. None of the representations and warranties made
by Capital 2000 herein, or in any exhibit, certificate or memorandum furnished
or to be furnished by Capital 2000, or on its behalf, contains or will contain
any untrue statement of material fact, or omit any material fact the omission of
which would be misleading.
3.18 ASSETS. Capital 2000 does not have any assets.
3.19 MATERIAL CONTRACTS AND OBLIGATIONS. Except for its agreement with
Corporate Stock Transfer, Inc., Capital 2000 has no material contracts to which
it is a party or by which it is bound.
3.20 CONSENTS AND APPROVALS. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority is required to be made or obtained by Capital 2000 in connection with:
(a) the execution and delivery by Capital 2000 of its obligations under this
Agreement; (b) the performance by Capital 2000 of its obligations under this
Agreement; or (c) the consummation by Capital 2000 of the transactions
contemplated by this Agreement.
3.21 REAL PROPERTY. Capital 2000 does not own, use or claim any
interest in any real property, including without limitation any license,
leasehold or any similar interest in real property.
ARTICLE 4
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COVENANTS
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4.1 INVESTIGATIVE RIGHTS. From the date of this Agreement until the
Closing Date, each party shall provide to the other party, and such other
party's counsels, accountants, auditors, and other authorized representatives,
full access during normal business hours and upon reasonable advance written
notice to all of each party's properties, books, contracts, commitments, and
records for the purpose of examining the same. Each party shall furnish the
other party with all information concerning each party's affairs as the other
party may reasonably request. If the transaction contemplated hereby is not
completed, all documents received by each party and/or its attorneys and
accountants, auditors or other authorized representatives shall be returned to
the other party who provided same upon request. The parties hereto, their
directors, employees, agents and representatives shall not disclose any of the
information described above unless such information is already disclosed to the
public, without the prior written consent of the party to which the confidential
information pertains. Each party shall take such steps as are necessary to
prevent disclosure of such information to unauthorized third parties.
4.2 CONDUCT OF BUSINESS. Prior to the Closing, Capital 2000 and USC
shall each conduct its business in the normal course, and shall not sell,
pledge, or assign any assets, without the prior written approval of the other
party, except in the regular course of business. Neither Capital 2000 nor USC
shall amend its Articles of Incorporation or Bylaws, declare dividends,
<PAGE> 8
redeem or sell stock or other securities, incur additional or newly-funded
liabilities, acquire or dispose of fixed assets, change employment terms, enter
into any material or long-term contract, guarantee obligations of any third
party, settle or discharge any balance sheet receivable for less than its stated
amount, pay more on any liability than its stated amount, or enter into any
other transaction other than in the regular course of business except as
otherwise contemplated herein.
ARTICLE 5
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CONDITIONS PRECEDENT TO CAPITAL 2000'S PERFORMANCE
--------------------------------------------------
5.1 CONDITIONS. The obligations of Capital 2000 hereunder shall be
subject to the satisfaction, at or before the Closing, of all the conditions set
forth in this Article 5. Capital 2000 may waive any or all of these conditions
in whole or in part without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by Capital 2000 of any other condition
of or any of Capital 2000's other rights or remedies, at law or in equity, if
USC shall be in default of any of their representations, warranties, or
covenants under this Agreement.
5.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by USC in this Agreement or in any
written statement that shall be delivered to Capital 2000 by USC under this
Agreement shall be true and accurate on and as of the Closing Date as though
made at that time.
5.3 PERFORMANCE. USC shall have performed, satisfied, and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it, on or before the Closing Date.
5.4 ACCEPTANCE BY USC SHAREHOLDERS. The holders of not less than 90% of
the issued and outstanding shares of common stock of USC shall have agreed to
exchange their shares for shares of Capital 2000 Common Stock.
5.5 ABSENCE OF LITIGATION. No action, suit, or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against USC on or before the Closing Date.
5.6 OFFICER'S CERTIFICATE. USC shall have delivered to Capital 2000 a
certificate, dated the Closing Date, and signed by the Chief Executive Officer
of USC, certifying that each of the conditions specified in Sections 5.2 through
5.6 hereof have been fulfilled.
ARTICLE 6
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CONDITIONS PRECEDENT TO USC'S PERFORMANCE
-----------------------------------------
6.1 CONDITIONS. USC's obligations hereunder shall be subject to the
satisfaction, at or before the Closing, of all the conditions set forth in this
Article 6. USC may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
shall constitute a waiver by USC of any other condition of or any of USC's
<PAGE> 9
rights or remedies, at law or in equity, if Capital 2000 shall be in default of
any of its representa tions, warranties, or covenants under this Agreement.
6.2 ACCURACY OF REPRESENTATIONS. Except as otherwise permitted by this
Agreement, all representations and warranties by Capital 2000 in this Agreement
or in any written statement that shall be delivered to USC by Capital 2000 under
this Agreement shall be true and accurate on and as of the Closing Date as
though made at that time.
6.3 PERFORMANCE. Capital 2000 shall have performed, satisfied, and
complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by them, on or before the Closing
Date.
6.4 ABSENCE OF LITIGATION. No action, suit or proceeding before any
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened against Capital 2000 on or before the Closing Date.
6.5 DIRECTORS CAPITAL 2000. Effective on the Closing, Capital 2000
shall have fixed the size of its Board of Directors at three (3) persons, and
such Board of Directors shall include T. J. Tully, James J. Carroll and Anthony
G. Covatta. The current Officer and Director of Capital 2000 shall have
submitted his resignation as the sole Officer and Director of Capital 2000
effective on the Closing of this transaction.
6.6 OFFICERS OF CAPITAL 2000. Effective on the Closing, Capital 2000
shall have elected the following new Officers of Capital 2000:
T. J. Tully - CEO, Treasurer and Secretary
James J. Carroll - President
6.7 ACCEPTANCE BY USC SHAREHOLDERS. The holders of an aggregate of not
less than 90% of the issued and outstanding shares of common stock of USC shall
have agreed to exchange their shares for shares of Capital 2000 Common Stock.
6.8 OFFICERS' CERTIFICATE. Capital 2000 shall have delivered to USC a
certificate, dated the Closing Date and signed by the President of Capital 2000
certifying that each of the conditions specified in Sections 6.2 through 6.7
have been fulfilled.
ARTICLE 7
CLOSING
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7.1 CLOSING. The Closing of this transaction shall be held at the
offices of Krys Boyle Freedman Scott & Sawyer, P.C., 600 Seventeenth Street,
Suite 2700 South Tower, Denver, Colorado 80202, or such other place as shall be
mutually agreed upon, on such date as shall be mutually agreed upon by the
parties. At the Closing:
(A) USC shall deliver Letters of Acceptance by the
shareholders of USC accepting the Exchange Offer ("Accepting Shareholders") to
Capital 2000.
<PAGE> 10
(B) Each Accepting Shareholder shall receive a certificate or
certificates representing the number of shares of Capital 2000 Common Stock for
which the shares of USC common stock shall have been exchanged.
(C) Capital 2000 shall deliver an officer's certificate, as
described in Section 6.8 hereof, dated the Closing Date, that all
representations, warranties, covenants and conditions set forth in this
Agreement on behalf of Capital 2000 are true and correct as of, or have been
fully performed and complied with by, the Closing Date.
(D) Capital 2000 shall deliver a signed Consent and/or Minutes
of the Directors of Capital 2000 approving this Agreement and each matter to be
approved by the Directors of Capital 2000 under this Agreement.
(E) USC shall deliver an officer's certificate, as described
in Section 5.6 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth in this Agreement on behalf of
USC are true and correct as of, or have been fully performed and complied with
by, the Closing Date.
(F) USC shall deliver a signed Consent or Minutes of the
Directors of USC approving this Agreement and each matter to be approved by the
Directors of USC under this Agreement.
(G) USC shall deliver a check or wire payable to Krys Boyle
Freedman Scott & Sawyer, P.C. Trust Account in an amount sufficient to pay the
outstanding liabilities of Capital 2000 as set forth on Schedule 3 (which shall
not exceed $50,000). The $10,000 which USC previously paid into this trust
account will be credited against this payment at Closing.
ARTICLE 8
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MISCELLANEOUS
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8.1 BLEU RIDGE CONSULTANTS, INC. CONSULTING AGREEMENT. USC agrees that
immediately after the Closing, it will cause Capital 2000 to enter into a twelve
month consulting agreement with Bleu Ridge Consultants, Inc. and as compensation
Bleu Ridge will be paid $3,500 per month.
8.2 REGISTRATION OF SHARES. USC agrees to include in any registration
statement which Capital 2000 files during the next 2 years a total of 250,000
shares held by current insiders of Capital 2000 with such shares to be
designated by Timothy J. Brasel. The selling shareholders will agree to execute
any reasonable and customary lockup letters required by the underwriter of any
public offering so as to not impede the offering.
8.3 CAPTIONS AND HEADINGS. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
8.4 NO ORAL CHANGE. This Agreement and any provision hereof, may not be
waived, changed, modified, or discharged orally, but it can be changed by an
agreement in writing signed
<PAGE> 11
by the party against whom enforcement of any waiver, change, modification, or
discharge is sought.
8.5 NON-WAIVER. Except as otherwise expressly provided herein, no
waiver of any covenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressly in writing and signed by the party
against whom such waiver is charged; and (i) the failure of any party to insist
in any one or more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any option herein
contained shall not be construed as a waiver or relinquishment for the future of
any such provisions, covenants, or conditions, (ii) the acceptance of
performance of anything required by this Agreement to be performed with
knowledge of the breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii) no waiver by
any party of one breach by another party shall be construed as a waiver with
respect to any other or subsequent breach.
8.6 TIME OF ESSENCE. Time is of the essence of this Agreement and of
each and every provision hereof.
8.7 ENTIRE AGREEMENT. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings.
8.8 CHOICE OF LAW. This Agreement and its application shall be governed
by the laws of the State of Colorado, except to the extent its conflict of laws
provisions would apply the laws of another jurisdiction.
8.9 NOTICES. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
Capital 2000:
-------------
Capital 2000, Inc.
16178 East Prentice Place
Aurora, Colorado 80015
with a copy to:
---------------
Jon D. Sawyer, Esq.
Krys Boyle Freedman Scott & Sawyer, P.C.
600 Seventeenth Street, Suite 2700 South Tower
Denver, Colorado 80202
<PAGE> 12
USC:
----
United Shields Corporation
602 Main Street, Suite 1102
Cincinnati, Ohio 45202
with a copy to:
---------------
Anthony G. Covatta, Esq.
Drew & Ward
5 West 4th Street, Suite 2400
Cincinnati, Ohio 45202
8.10 BINDING EFFECT. This Agreement shall inure to and be binding upon
the heirs, executors, personal representatives, successors and assigns of each
of the parties to this Agreement.
8.11 MUTUAL COOPERATION. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
8.12 BROKERS. Other than Corp-Link Corp., the parties hereto represent
and agree that no broker has brought about the aforementioned transaction and no
finder's fee has been paid or is payable by any party. Capital 2000 agrees that
its current shareholders will transfer 45,000 shares to Corp-Link Corp. in full
payment of its finder's fee. Each of the parties hereto shall indemnify and hold
the other harmless against any and all claims, losses, liabilities or expenses
which may be asserted against it as a result of its dealings, arrangements or
agreements with any broker or person, except as described in this paragraph.
8.13 ANNOUNCEMENTS. Capital 2000 and USC will consult and cooperate
with each other as to the timing and content of any announcements of the
transactions contemplated hereby to the general public or to employees,
customers or suppliers.
8.14 EXPENSES. Capital 2000 and USC will pay their own legal,
accounting and any other out-of-pocket expenses reasonably incurred in
connection with this transaction, whether or not the transaction contemplated
hereby is consummated.
8.15 EXHIBITS. As of the execution hereof, the parties hereto have
provided each other with the Exhibits provided for hereinabove, including any
items referenced therein or required to be attached thereto. Any material
changes to the Exhibits shall be immediately disclosed to the other party.
AGREED TO AND ACCEPTED as of the date first above written.
CAPITAL 2000, INC. UNITED SHIELDS CORPORATION
By Timothy J. Brasel By T. J. Tully
----------------------------- --------------------------------
Timothy J. Brasel, President T. J. Tully, Chief Executive Officer
<PAGE> 13
SCHEDULE 2
UNITED SHIELDS CORPORATION
("USC")
2.4 Directors and Officers of USC:
T. J. Tully - CEO, Treasurer, Secretary and Director
James J. Carroll - President and Director
Anthony G. Covatta - Director
2.17 Material Contracts of USC:
a) Assignment of Sales Agreement dated May 9, 1995, between Diverse
Products Incorporated and Health Shields Corporation.
b) Sales Agreement between In-Flo Liquid Dispensing Corporation and
Diverse Products Incorporated dated May 5, 1995.
c) Addendum to Assignment of Sales Agreement dated August 8, 1996.
This provides that USC must pay to Diverse Products $250,000 on
or before December 31, 2001, for the assignment.
d) Amending Agreement dated February 1, 1996, between Inflo North
America Limited and Health Shields Corporation.
e) Letter of Intent for acquisition of an Ohio-based plastic
injection molding company.
<PAGE> 14
SCHEDULE 3
CAPITAL 2000, INC.
("CAPITAL 2000")
3.2 Directors and Officers of Capital 2000:
Timothy J. Brasel - President, Secretary and Director
3.7 Liabilities of Capital 2000:
<TABLE>
<CAPTION>
<S> <C>
Schumacher & Associates $ 650.00
Corporate Stock Transfer 1,000.00
Ron Spector, Esq. 26,400.00
Brasel Family Partners 13,350.00
Paul Dragul 1,850.00
Krys Boyle Freedman 6,750.00
-----------
Total $50,000.00
</TABLE>
3.19 Material Contracts of Capital 2000
a) Transfer Agreement with Corporate Stock Transfer, Inc.
