SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
------------
For the Fiscal Years Ended May 31, 1993 and 1992
Commission file number 33-23430-D
------------
THE TOEN GROUP, INC.
(Exact name of registrant as specified in its charter)
Nevada
--------------------------------------------------------------
(State of other jurisdiction of incorporation or organization)
84-1091271
------------------------------------
(I.R.S. Employer Identification No.)
2 Park Plaza, Suite 470, Irvine, California
---------------------------------------------
(Address of Principal Executive Offices)
92614
----------
Zip Code
Registrant's telephone number, including area code: (714) 833-2094
------------------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
----------------------------------------------------------
None
Securities registered pursuant to Section 12(g) of the Act:
----------------------------------------------------------
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
At June 30, 1996, 799,372 shares of Registrant's no par value common
stock were issued and outstanding. There were also outstanding warrants to
purchase up to 668,000 shares of the Registrant's common stock. There has been
no bid or asked prices of the Registrant's common stock quoted in any market
since September 6, 1990.
Documents Incorporated by Reference:
-----------------------------------
None
Total Pages including cover
-----
[TOEN\10K:TG53193.10K]-4
<PAGE>
TABLE OF CONTENTS
Page
PART I
Item 1. Business ........................................................1
Item 2. Properties ......................................................2
Item 3. Legal Proceedings ...............................................2
Item 4. Submission of Matters to a Vote of Security Holders .............2
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder matters ...........................................3
Item 6. Selected Financial Data .........................................4
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations .....................................5
Item 8. Financial Statements and Supplementary Data .....................5
Item 9. Change in and Disagreements With Accountants ....................6
PART III
Item 10. Directors and Executive Officers ................................6
Item 11. Management Remuneration and Transactions ........................8
Item 12. Security Ownership of Certain Beneficial Owners and Management
as of May 31, 1993 ............................................10
Item 13. Certain Relationships and Related Transactions ..................11
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K ......................................................12
Index to Consolidated Financial Statements and Schedules ........F-1
[TOEN\10K:TG53193.10K]-4
<PAGE>
PART I
ITEM 1. BUSINESS
The Toen Group, Inc. (the Registrant" or the "Company") was
incorporated in the State of Colorado on June 10, 1988 for the purpose of
searching for, evaluating and organizing an interest in or more business
opportunities. On December 3, 1989, the Company completed a public offering of
its stock pursuant to a registration statement on Form S-18 filed with the
Denver Regional Office of the Securities and Exchange Commission. The Company,
through an underwriter, sold a total of 50,000,000 shares of the Company's no
par value common stock and 5,000,000 warrants for the purchase of 5,000,000
shares of common stock.
On March 9, 1990, the Company completed an agreement to exchange its
common stock for all of the issued and outstanding capital stock of Sunbelt
Media Group Inc. ("Sunbelt"). Pursuant to the terms of the agreement with the
shareholders of Sunbelt, the Company issued 278,400,000 shares of its common
stock in exchange for all the outstanding shares of common stock of Sunbelt and
Sunbelt became a wholly-owned subsidiary of the Company. From March 1990 to
October 1992 Sunbelt owned and operated low power television stations and
related businesses, and provided programming to those stations. The Company
discontinued the Sunbelt business in October 1992 and sold all the assets
associated with the operation of Sunbelt, including all contracts and lease
agreements necessary for its operations to William J. Kitchen ("Kitchen") in
consideration of 1) Kitchen's forgiveness of notes and other obligations owed to
Kitchen by the Registrant; and 2) Kitchen's assumption of miscellaneous debts of
Sunbelt. Pursuant to the sale, Kitchen also delivered 98,795,000 shares of the
Registrant's common stock to the Registrant for cancellation. Since October 1992
the Company has not had any revenues or operations.
Accordingly, Toen is currently in the process of seeking a merger or
acquisition with a business entity or entities expected to be private companies,
partnerships or sole proprietorships. Management believes the Registrant can
offer owners of potential merger or acquisition candidates the opportunity to
acquire a controlling interest in a public company at substantially less cost
than is required to conduct an initial public offering.
On August 31, 1992 Jeffrey Paul Stroud ("Stroud") acquired 173,995,000
shares of the Registrant's common stock, representing 51% of the then issued and
outstanding shares, from Kitchen. Stroud also acquired from Kitchen 162,000,000
warrants to acquire 162,000,000 shares of the Registrant's common stock. On
March 31, 1993 Stroud entered into a Stock Purchase Agreement with New World
Capital Markets, Ltd. under which he sold 173,995,000 shares of the Registrant's
common stock and 162,000,000 warrants to acquire an additional 162,000,000
shares of common stock.
On June 17, 1993 the Registrant's then existing Board of Directors
resigned and Fred G. Luke and Jon L. Lawver were appointed as replacement
Directors. The outgoing Board also elected Fred G. Luke as President of the
Registrant and Jon L. Lawver as Secretary, Treasurer and Chief Financial
Officer.
The Registrant's day-to-day business affairs are handled by three
directors and two officers. No cash compensation has been paid to any officers
or directors during the fiscal year ended May 31, 1992 or 1993. As of the filing
date of this Report, the Registrant had no operations. Current management is
pursuing business opportunities, but no assurance can be given that the
Registrant will be successful in acquiring any business opportunities, or if
acquired, what revenues might be provided from such operations.
[TOEN\10K:TG53193.10K]-4
1
<PAGE>
As used herein, the term "Company" or the "Registrant" refers to The
Toen Group Inc. The Registrant currently maintains its executive offices at 2
Park Plaza, Suite 470, Irvine, California 92714. The telephone number is
(714)833-2094.
ITEM 2. PROPERTIES
As of the filing date of this Report, the Registrant's principal
executive offices are located in leased premises of approximately 3,000 square
feet in Irvine, California. These premises are occupied by the Registrant under
an Advisory and Management Agreement with NuVen Advisors, Inc., ("NuVen"), an
affiliate.
ITEM 3. LEGAL PROCEEDINGS
As of the filing date of this report there are no legal proceedings to
which the Registrant is a party, or of which any of the Registrant's properties
is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) MARKET INFORMATION
Following the completion of the public offering on November 30, 1989
and until September 6, 1990, the Company's common stock was traded on the
over-the-counter market and reported by the National Quotation Bureau. Trading
ceased on September 6, 1990. The Registrant's outstanding securities, consist of
no par value common stock and Redeemable Common Stock Purchase Warrants
("Warrants"). The Registrant's Board of Directors and shareholders approved a
1:1000 reverse split of its common stock on September 28, 1994 decreasing the
number of issued and outstanding common stock from 249,371,667 to 249,372. The
Registrant's board of directors, shareholders and warrantholders approved a
1:250 reverse split of the Warrants decreasing the number of issued and
outstanding Warrants from 167,000,000 to 668,000 and increasing the exercise
price from $.02 per Warrant to $5.00 per Warrant. Additionally, the expiration
date of the Warrants was extended to December 31, 1996. Each Warrant entitles
the holder to purchase at a price of $5.00, one share of the Company's common
stock.
There has been no market for the Registrant's Common Stock since
September 6, 1990. Prior to such date the closing bid and ask price for the
Company's common stock has been reported by the National Quotation Bureau Inc.
as follows:
[TOEN\10K:TG53193.10K]-4
2
<PAGE>
BID PRICE OF
COMMON STOCK
---------------------
HIGH LOW
---- ----
.01 .01
(b) Holders
The approximate number of holders of record of each class of equity
securities of the Registrant as of the filing date of this report, was as
follows:
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- ----------------------------------------- --------------
Common Stock No Par Value 40
Redeemable Common Stock Purchase Warrants 30
(c) DIVIDENDS
The Registrant has never declared or paid a cash dividend on
its common stock. The Registrant does not intend to pay a cash dividend in the
foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
The Registrant's consolidated financial data presented below
has been derived from the consolidated financial statements of the Registrant.
It should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements, including the Notes thereto, appearing elsewhere herein.
<TABLE>
<CAPTION>
Year Ended May 31,
-----------------
<S> <C> <C> <C>
1993 1992 1991
-------------------- ------------------ ------------------
Income $ - $ 148,988 $ 62,553
Cost of Sales - 79,567 48,940
-------------------- ------------------ ------------------
Gross Profit - 69,421 13,613
General and Administrative
Expenses 57,448 84,715 118,617
-------------------- ------------------ ------------------
Net Loss from Operations (57,448) (15,294) (105,004)
Other Income (Expense):
Interest Income - - 1,434
Interest Expense (344) (865) (216)
-------------------- ------------------ -------------------
Total Other Income (Expense) (344) (865) 1,218
-------------------- ------------------ -------------------
Net Loss Before Provision for
Federal Income Tax and
Discontinued Operations (57,792) (16,159) (103,786)
Provision for Federal Income Tax:
Current - - -
Deferred - - -
-------------------- ------------------ ------------------
Total Income Taxes - - -
-------------------- ------------------ ------------------
Net Loss Before Discontinued
Operations (57,792) (16,159) (103,786)
Income From Discontinued
Operations, net of tax 29,889 - -
-------------------- ------------------ ------------------
Net Loss $ (27,903) $ (16,159) $ (103,786)
==================== ================== ===================
Net Loss Per Share:
Income Before Provision For
Federal Income Tax $ (.00) $ (.00) $ (.00)
Provision For Federal Income Tax - - -
Income from Discontinued
Operations - - -
-------------------- ------------------ ------------------
Net Loss Per Share $ (.00) $ (.00) $ (.00)
==================== ================== ===================
Weighted Average Number of
Shares Outstanding 298,769,167 348,166,66 348,166,66
</TABLE>
[TOEN\10K:TG53193.10K]-4
3
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
The Registrant's total revenues for the year ended May 31, 1993
decreased $148,988 over the same period ended May 31, 1992, since the Registrant
had no operations and no revenues during the year ended May 31, 1993.
The Registrant has incurred recurring net losses and negative cash
flows from operating activities since its inception in 1989. As of May 31, 1993,
the Registrant had no cash and cash equivalents and had negative working capital
of $14,285. As of the date of this report, the Registrant had no current
material commitments for capital expenditures.
As a result of the drain on the Registrant's working capital due to the
discontinuance of Sunbelt, the Registrant had no cash and cash equivalents
remaining as of May 31, 1993 to finance future operations. Considering the
Registrant's operating losses, negative cash flows from operating activities,
management cannot assure that such limited liquid resources will be sufficient
to sustain the Registrant's operations and its other development activities. The
Registrant's plan is to keep searching for additional sources of capital and new
operating opportunities. In the interim, the Registrant's existence is dependent
on continuing financial support from NuVen which is estimated to be
approximately $146,000 for the next fiscal year based upon current agreements
and obligations the Registrant has at May 31, 1993.
[TOEN\10K:TG53193.10K]-4
4
<PAGE>
As of the filing date of this Report, Sunbelt's operations had
discontinued and been sold October, 1992. As such, all Sunbelt operations
through October, 1992 has been accounted for as a discontinued operation. The
total gaming revenues in the amount of $148,988 for the year ended May 31, 1992
from Sunbelt are not expected to recur in future years due to the discontinuance
and sale. The Registrant is also pursuing other joint venture, merger or
acquisition opportunities which may provide additional capital resources during
fiscal 1996.
As of the filing date of this report, the Registrant has no commitments
for capital expenditures, equity or debt financing and no assurances can be made
that its working capital needs can be met.
<TABLE>
<CAPTION>
Cash Flows For the Year Ended May 31,
- -------------------------------------------- ---------------------------------------
1993 1992
------------------ -------------------
<S> <C> <C>
Cash provided (used) in operating activities $ 7,360 $ 117,289
Cash provided (used) by investing activities $ 6,354 $ (120,506)
Cash provided (used) by financing activities $ (13,747) $ 640
Net increase (decrease) in cash $ (33) $ (2,577)
</TABLE>
Cash provided by operating activities decreased to $7,360 for the year
ended May 31, 1993 from $117,289 for the comparable period last year which was
primarily attributable to the sale of the Registrant's Sunbelt operating
division on October, 1992.
Cash provided by investing activities increased to $6,354 for the year
ended May 31, 1993 from $120,506 cash used by investing activities for the
comparable period last year which was primarily attributable to proceeds
received from the sale of the Sunbelt division.
RESULTS OF OPERATIONS
There were no revenue producing operations since October, 1992 at which
time the Registrant sold its operating division Sunbelt. Sunbelt's operations
are shown as discontinued operations for the year ended May 31, 1993, and as a
result there were no operating revenues or operating costs and expenses from
continuing operations.
YEAR ENDED MAY 31, 1993 COMPARED TO YEAR ENDED MAY 31, 1992
The Registrant has had no operations since October 1992 when the
Sunbelt Assets, constituting the Registrant's sole operations and substantially
all of the Registrant's assets were sold to William J.
Kitchen.
The operating loss increased to $57,448 from $15,294 in fiscal 1992 due
to the loss of operating revenues. General and administrative expenses declined
to $57,448 in fiscal 1993 from $84,715 in fiscal 1992 due to the discontinuance
and sale of the Sunbelt division.
[TOEN\10K:TG53193.10K]-4
5
<PAGE>
YEAR ENDED MAY 31, 1992 COMPARED TO YEAR ENDED MAY 31, 1991
The Registrant incurred significant losses from its inception through
May 31, 1992. Net revenue for 1992 increased to $148,988 from $62,553 in 1991.
The loss from operations decreased to $15,294 in 1992 from $105,004 in 1991. Net
loss decreased to $16,159 in 1992 from $103,786 in 1991.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements are filed as a part of this Annual
Report on Form 10-KSB and are included immediately following the signature page.
INDEX TO FINANCIAL STATEMENTS PAGE
Report of Independent Certified Public Accountants ..............F-2/3
Balance Sheets for May 31, 1993 and 1992 ........................F-4
Statements of Operations for the years ended
May 31, 1993 and 1992 ..........................................F-5
Statements of Stockholders' Equity for May 31, 1993 and 1992 ....F-6
Statements of Cash Flows for May 31, 1993 and 1992 ..............F-7
Notes to Financial Statements ...................................F-8/9
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Following May 31, 1990, Jerome W. Karsh & Co. resigned as the
Registrant's principal accountants. In April, 1993, the Registrant notified
O'Neal & White of its appointment as the Registrant's principal independent
accountants. On July 19, 1995, C. Williams & Associates replaced O'Neal & White
as the Registrant's principal accountants. However, due to the revocation of C.
Williams' license (discussed below), on April, 24 1996 Spurgeon, Kang &
Associates replaced C. Williams & Associates as the Registrant's principal
accountants.
The firm of O'Neal & White performed an audit of the Registrant's
financial statements for the years ended May 31,1993, 1992 and 1991 and issued
its reports on those audits on July 12, 1993. O'Neal & White voluntary dissolved
on April 15, 1995.
The shareholders of the Registrant continue to retain legal rights to
sue and recover damages from O'Neal & White, and its directors, officers and
shareholders for material misstatements or omissions, if any, in the fiscal
1993, 1992 and 1991 financial statements, in accordance with the laws of the
State of Texas governing the dissolution of Texas professional corporations.
[TOEN\10K:TG53193.10K]-4
6
<PAGE>
In connection with the audits for the fiscal 1993, 1992 and 1991, there
were no disagreements between the Registrant and O'Neal & White on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedures, which disagreements, if not resolved to the satisfaction of
O'Neal & White would have caused to make reference in connection with its
report.
None of the reports of O'Neal & White on the Registrant's financial
statements contained an adverse opinion or a disclaimer of opinion or was
qualified as to uncertainty, audit scope, or accounting principles except that
the opinion was qualified by the assumption that the Registrant would continue
as a going concern.
Mr. Charles R. Williams, one of the principals of C. Williams, was
advised by the Texas State Board of Public Accountancy in a letter dated January
29, 1996, addressed to the Chief Accountant of the Division of Corporation
Finance of the Securities and Exchange Commission (the "Commission"), that his
certificate as a Certified Public Accountant was revoked effective as of May 18,
1995, which was subsequently revised to provide for a revocation date as of
March 2, 1995. The Chief Accountant of the Division of Corporation Finance
advised Mr. Williams by means of a letter dated February 7, 1996, that the
Commission does not recognize any person as a certified public accountant who is
not duly registered and in good standing as such under the laws of the place of
his residence or principal office as of March 2, 1995.
In connection with the audit for the fiscal year ended May 31, 1990,
and for the period from June 10, 1988, to May 31, 1990, there were no
disagreements between the Registrant and Jerome W. Karsh & Co. on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedures, which disagreements, if not resolved to the satisfaction of
Jerome W. Karsh & Co. would have caused it to make reference in connection with
its report.
None of the reports of Jerome W. Karsh & Co. on the Registrant's
financial statements contained an adverse opinion or a disclaimer of opinion or
was qualified as to uncertainty, audit scope, or accounting principles except
that the opinion was qualified by the assumption that the Registrant would
continue as a going concern.
The decision to change principal independent accountants was made by
the Registrant's Board of Directors. Joel Ripmaster Director 1990 to September
25, 1992, James Wills Director 1990 to September 25, 1992.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
(a) IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS.
The following table furnishes the information concerning the directors
in office during fiscal years 1992 and 1993. The directors of the Registrant are
elected every year and serve until their successors are elected and qualified.
The officers of the Registrant are chosen by and serve at the pleasure of the
Board of Directors.
[TOEN\10K:TG53193.10K]-4
7
<PAGE>
<TABLE>
<CAPTION>
Present Positions Period
and Offices Held Served as
Name in the Company Director
---------------------- -------------------------- -----------------------------------
<S> <C> <C> <C>
William J. Kitchen President and Director 1989 to September 25, 1992
Todd E. Ficken Secretary 1989 to September 25,1992
Patricia L. Schonebaum Vice President, Secretary September 25, 1992 to June 17,993
Director
Jeffrey P. Stroud President and Director September 25, 1992 to June 17, 1993
Gregory Skufca Director September 25, 1992 to June 17, 1993
</TABLE>
The Registrant has no audit, compensation or nominating committees. No
family relationships exist between any of the officers or directors.
(b) Identification of Certain Significant Employees.
There are no employees other than the executive officers disclosed above
who make or are expected to make, significant contributions to the business of
the Registrant, the disclosure of which would be material.
(c) Family Relationships.
None.
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS
(a) CASH COMPENSATION.
None of the Registrant's executive officers received any cash
compensation during fiscal 1993 and 1992.
(b) STOCK OPTIONS
During fiscal year 1993 or 1992 there were no individual grants of stock
options made.
(c) AGGREGATED OPTION EXERCISES
During the fiscal 1993 and 1992, there were no exercises of stock
options.
[TOEN\10K:TG53193.10K]-4
8
<PAGE>
(d) LONG-TERM INCENTIVE PLANS
During the fiscal 1993 and 1992, there were no awards under any Long
Term Incentive Plan.
(e) COMPENSATION OF DIRECTORS
The Registrant has no standard arrangement for the compensation of
directors or their committee participation or special assignments.
(f) EMPLOYMENT CONTRACTS
During fiscal 1993 and 1992, there were no employment contracts.
(g) REPORT ON REPRICING OF OPTIONS
During fiscal year 1993 or 1992, the Registrant has not adjusted or
amended the exercise price of stock options.
(h) TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS.
On March 31, 1993 Jeffrey Paul Stroud entered into a Stock Purchase
Agreement with New World Capital Markets, Ltd. under which Stroud sold to New
World Capital Markets 173,995,000 shares of the Registrant's common stock and
162,000,000 warrants to acquire an additional 162,000,000 shares of common
stock, all of which Stroud had acquired from William J. Kitchen. At the closing
of the Agreement, on June 17, 1993 the Registrant's then existing Board of
Directors resigned and Fred G. Luke and Jon L. Lawver were appointed as
replacement Directors. The outgoing Board also elected Fred G. Luke as President
of the Registrant and Jon L. Lawver as Secretary, Treasurer and Chief Financial
Officer.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AS OF MAY 31, 1993
(a) BENEFICIAL OWNERS OF FIVE PERCENT (5%) OR GREATER OF THE REGISTRANT'S
OUTSTANDING VOTING SECURITIES.
The following sets forth information with respect to ownership by
holders of more than five (5%) of the Registrant's outstanding voting securities
known by the Registrant.
<TABLE>
<CAPTION>
Name and Address Amount and Nature
Title of Class of Beneficial Owner of Beneficial Interest Percent of Class
- -------------- ------------------------- ---------------------- ----------------
<S> <C> <C> <C>
No par value Jeffrey Paul Stroud
2064 East Chesapeake Lane
Highland Ranch, CO 80126 173,995,000 51%
</TABLE>
[TOEN\10K:TG53193.10K]-4
9
<PAGE>
The following sets forth information with respect to the Registrant's Common
Stock beneficially owned by each Officer and Director, and by all Officers and
Directors as a group. No officer or director personally owns any of the
Registrant's Redeemable Common Stock Purchase Warrants.
Amount and
Nature of
Name and Address Beneficial
Title of Class of Officers and Directors Interest Percent of Class
- -------------- ------------------------- ----------- ----------------
No par value Jeffrey Paul Stroud 173,995,000 51%
Common Stock 2064 East Chesapeake Lane
Highland Ranch, CO 80126
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) TRANSACTIONS WITH MANAGEMENT AND OTHERS.
The Toen Group, Inc. (the Registrant" or the "Company") was
incorporated in the State of Colorado on June 10, 1988 for the purpose of
searching for, evaluating and organizing an interest in or more business
opportunities. On December 3, 1989, the Company completed a public offering of
its stock pursuant to a registration statement on Form S-18 filed with the
Denver Regional Office of the Securities and Exchange Commission. The Company,
through an underwriter, sold a total of 50,000,000 shares of the Company's no
par value common stock and 5,000,000 warrants for the purchase of 5,000,000
shares of common stock.
On March 9, 1990, the Company completed an agreement to exchange its
common stock for all of the issued and outstanding capital stock of Sunbelt
Media Group Inc. ("Sunbelt"). Pursuant to the terms of the agreement with the
shareholders of Sunbelt, the Company issued 278,400,000 shares of its common
stock in exchange for all the outstanding shares of common stock of Sunbelt and
Sunbelt became a wholly-owned subsidiary of the Company. From March 1990 to
October 1992 Sunbelt owned and operated low power television stations and
related businesses, and provided programming to those stations. The Company
discontinued the Sunbelt business in October 1992 and soled all the assets
associated with the operation of Sunbelt, including all contracts and lease
agreements necessary for its operations to William J. Kitchen ("Kitchen") in
consideration of 1) Kitchen's forgiveness of notes an other obligations owed to
Kitchen by the Registrant; and 2) Kitchen's assumption of miscellaneous debts of
Sunbelt. Pursuant to the sale, Kitchen also delivered 98,795,000 shares of the
Registrant's common stock to the Registrant for cancellation. Since October 1992
the Company has not had any revenues or operations.
Accordingly, Toen is currently in the process of seeking a merger or
acquisition with a business entity or entities expected to be private companies,
partnerships or sole proprietorships. Management believes the Registrant can
offer owners of potential merger or acquisition candidates the opportunity to
acquire a controlling interest in a public company at substantially less cost
than is required to conduct an initial public offering.
[TOEN\10K:TG53193.10K]-4
10
<PAGE>
On August 31, 1992 Jeffrey Paul Stroud ("Stroud") acquired 173,995,000
shares of the Registrant's common stock representing 51% of the then issued and
outstanding shares from Kitchen. Stroud also acquired from Kitchen 162,000,000
warrants to acquire 162,000,000 shares of the Registrant's common stock.
On March 31, 1993 Stroud entered into a Stock Purchase Agreement with
New World Capital Markets, Ltd. under which he sold 173,995,000 shares of the
Registrant's common stock and 162,000,000 warrants to acquire an additional
162,000,000 shares of common stock. As discussed above, Stroud had acquired the
173,995,000 shares and 162,000,000 warrants from Kitchen. At the closing of the
Agreement on June 17, 1993 the Registrant's then existing Board of Directors
resigned and Fred G. Luke and Jon L. Lawver were appointed as replacement
Directors. The outgoing Board also elected Fred G. Luke as President of the
Registrant and Jon L. Lawver as Secretary, Treasurer and Chief Financial
Officer.
(b) CERTAIN BUSINESS RELATIONSHIPS.
There are no employees other than the executive officers disclosed
above who make, or are expected to make, significant contributions to the
business of the Registrant, the disclosure of which would be material.
(c) INDEBTEDNESS OF MANAGEMENT.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K.
(a) (1) FINANCIAL STATEMENTS: The Financial Statements included in
this Item are indexed on Page F-1, "Index to Financial
Statements."
(3) EXHIBITS:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3 Articles of Incorporation and Bylaws [incorporated herein by
reference to Exhibit 3.1 and 3.2 of Registrant's Registration
Statement on Form S-18 (No. 33-23430-D)].
4(a) Warrant Agreement and form of Warrant Certificate [incorporated
herein by reference to Exhibit 4.6 of Registrant's Registration
Statement on Form S-18 (No. 33-23430-D)].
4(b) Specimen Redeemable Common Stock Purchase Warrant
[incorporated herein by reference to Exhibit 4.2 of Registrant's
Registration Statement on Form S-18 (No. 33-23403-D)].
10(a) Underwriting Agreement with Tri-Bradley Investment, Inc.
[incorporated herein by reference as Exhibit 1.1 to Amendment
No. 5 to Form S-18 Registration Statement on Form S-18 (No. 33-
23430-D)].
10(b) Agreement to Purchase Stock dated August 31, 1992 between The
Toen Group, Inc., Jeffrey Stroud and William J. Kitchen
[incorporated herein by reference to Exhibit "A" to Form 8-K
dated September 25, 1992, and filed October 9, 1992].
10(c) Stock Purchase Agreement dated March 31, 1993 between New
World Capital Markets, Ltd. and Jeffrey Paul Stroud. (1)
</TABLE>
- -------------------------------------------------
(1) Filed Herewith
[TOEN\10K:TG53193.10K]-4
11
<PAGE>
(b) Reports on Form 8-K
On October 9, 1992 the Registrant filed a current report on Form 8-K
dated September 25, 1992 reporting the sale to William J. Kitchen by the
Registrant of all assets owned by the Registrant associated with the operation
of Sunbelt, including all contracts and lease agreements necessary for its
operations (the "Sunbelt Assets"). In return for the Sunbelt Assets, Kitchen
forgave all notes and other obligations of the Registrant to Kitchen and/or all
entities owned or controlled by Kitchen, as well as Kitchen's assumption of
other miscellaneous debts of Sunbelt. Kitchen also returned to the Registrant of
98,795,000 shares of the Registrant's common stock as partial consideration for
the sale by the Registrant of the Sunbelt assets to Kitchen. The consideration
offered and accepted by the Registrant and Kitchen was the result of arms length
negotiations. The amounts were arbitrarily determined by the parties and bore no
relationship to assets, shareholders' equity, or any other recognized criteria
of value.
The sale of the trade name "Sunbelt Media Group" and all of the assets
owned by the Registrant associated with its Sunbelt operation constituted the
sale of substantially all of the Registrant's assets.
In the same Report on Form 8-K the Registrant reported that pursuant to
an Agreement to Purchase Stock dated as of August 31, 1992 (the "Sunbelt
Agreement"), Jeffrey Paul Stroud acquired 173,995,000 shares of the Registrant's
common stock (the "Stroud Shares") representing fifty-one percent (51%) of the
issued and outstanding shares of stock of the Registrant from Kitchen, a
shareholder of the Registrant who, prior to closing the Sunbelt Agreement, owned
272,790,000 shares of common stock of the Registrant (the "Kitchen Shares"),
said shares representing eighty percent (80%) of the issued and outstanding
shares of the Registrant at the time as set forth above. Under the terms of the
Agreement, Stroud also acquired from Kitchen, all other equity rights, options,
warrants and the like in and to the Registrant's shares owned by Kitchen, which
rights included Warrants representing the right to acquire an additional
162,000,000 shares of common stock of the Registrant. As partial consideration
for the sale of the Warrants and the Stroud
[TOEN\10K:TG53193.10K]-4
12
<PAGE>
Shares to Stroud by Kitchen, Stroud agreed to release Kitchen from any and all
claims which Stroud had against Kitchen as a result of Stroud's investment in
the registered securities of the Registrant prior to closing the Sunbelt
Agreement.
At closing of the Agreement, the Registrant's then existing Board of
Directors systematically resigned and were replaced by Jeffrey Paul Stroud,
Gregory Skufca and Patricia Schoenbaum. The newly reconstituted Board of
Directors then elected Stroud to serve as President of the Registrant, and
Gregory Skufca to serve as Secretary/Treasurer.
[TOEN\10K:TG53193.10K]-4
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on the day of ,1996.
THE TOEN GROUP, INC.
(Registrant)
By:/s/Jon L. Lawver
---------------------------------------
Jon L. Lawver Chief Financial Officer,
Secretary and Director
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on the day of September, 1996.
Signature Title
- -------------------- -----------------------------------------------
/s/ Fred G. Luke Chairman of the Board and President
/s/ Jon L. Lawver Chief Financial Officer, Secretary and Director
/s/ John D. Desbrow Director
[TOEN\10K:TG53193.10K]-4
14
<PAGE>
THE TOEN GROUP, INC.
INDEX TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS, FISCAL YEARS 1993 AND 1992 Page
Reports of Independent Public Accountants ...................F-2
Balance Sheets as of May 31, 1993, and 1992 .................F-3
Statements of Operations for the years
ended May 31, 1993 and 1992, ...............................F-4
Statements of Stockholders' Equity (Deficiency)
for the years Ended May 31, 1993 and 1992 ..................F-5
Statements of Cash Flows for the Years
Ended May 31, 1993 and 1992 ................................F-6
Notes to Financial Statements ...............................F-7-8
[TOEN\10K:TG53193.10K]-4
F-1
<PAGE>
O'NEAL AND WHITE, P.C.
Certified Public Accountants
17350 Tomball Parkway, Suite 300
Houston, Texas 77064
(7113) 890-2554
INDEPENDENT AUDITOR'S REPORT
July 12, 1993
Board of Directors
The TOEN Group, Inc.
Highlands Ranch, Colorado
We have audited the accompanying balance sheets of the TOEN Group, Inc. As of
May 31, 1993 and 1992, and the related statements of operations, stockholders'
equity and cash flows for the two years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The TOEN Group, Inc. As of May
31, 1993 and 1992, and the results of its operations and its cash flows for the
two years then ended, in conformity with generally accepted accounting
principles.
/S/O'NEAL AND WHITE, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Note:
The firm of O'Neal & White performed an audit of the Registrant's financial
statements for the year ended May 31, 1993 and 1992 and issued its report on
that audit on July 12, 1993. O'Neal & White voluntary dissolved on April 15,
1995
The shareholders of the Registrant continue to retain legal rights to sue and
recover damages from O'Neal & White, and its directors, officers and
shareholders for material misstatements or omissions, if any, in the fiscal 1993
and 1992 financial statements, in accordance with the laws of the State of Texas
governing the dissolution of Texas professional corporations.
[TOEN\10K:TG53193.10K]-4
F-2
<PAGE>
<TABLE>
<CAPTION>
THE TOEN GROUP, INC.
BALANCE SHEETS
May 31,
ASSETS
1993 1992
-------- -------
<S> <C> <C>
CURRENT ASSETS
Cash $ $
- 33
Inventory - 3,408
-------- -------
Total Current Assets - 3,441
FIXED ASSETS - NET (Notes 1 and 2) - 116,332
ORGANIZATION COSTS (NET) 739 2,595
OTHER ASSETS 23,786
-
TOTAL ASSETS $ $
======== =======
739 146,154
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts Payable $14,105 $17,505
Capital Lease Payable - 9,726
Payroll Taxes Payable 180 180
Notes Payable (Note 2) - 79,541
-------- -------
TOTAL CURRENT LIABILITIES 14,285 106,952
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY (DEFICIT):
Common Stock, No Par Value,
785,000,000 Shares Authorized
249,371,667 and 348,166,667
Shares Issued and Outstanding,
Respectively 408,442 408,442
Treasury Stock at Cost, 98,795,000
And 0 Shares, Respectively (Note (24,845) -
2) (397,143) (369,240)
Retained Earnings (Deficit)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (13,546) 39,202
-------- -------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 739 $
======== =======
146,154
</TABLE>
The accompanying notes are an integral part of these financial statements.
[TOEN\10K:TG53193.10K]-4
F-3
<PAGE>
THE TOEN GROUP, INC.
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED MAY 31,
1993 1992
------ -------
INCOME $ $
- 148,988
COST OF SALES - 79,567
------ ------
GROSS PROFIT - 69,421
GENERAL AND ADMINISTRATIVE EXPENSES 57,448 84,715
------ ------
NET LOSS FROM OPERATION (57,448) (15,294)
[TOEN\10K:TG53193.10K]-4
F-4
<PAGE>
OTHER INCOME (EXPENSE):
Interest Income - -
Interest Expense -------- --------
(344) (865)
-------- --------
TOTAL OTHER INCOME (EXPENSE)
NET LOSS BEFORE PROVISION FOR (344) (865)
-------- -------
FEDERAL INCOME TAX AND
DISCONTINUED OPERATIONS
PROVISION FOR FEDERAL INCOME TAX: (57,792) (16,159)
Current
Deferred
Total Income Taxes - -
-------- --------
NET LOSS BEFORE DISCONTINUED OPERATIONS - -
INCOME FROM DISCONTINUED OPERATIONS NET OF TAX (57,792) (16,159)
NET LOSS
NET LOSS PER SHARE: -------- --------
INCOME BEFORE PROVISION FOR 29,889 -
-------- --------
FEDERAL INCOME TAX $ $
======== ========
PROVISION FOR FEDERAL INCOME TAX (27,903) (16,159)
======== ========
INCOME FROM DISCONTINUED OPERATIONS
NET LOSS PER SHARE $(.00) $(.00)
- -
======== ========
$ $
======== ========
(.00) (.00)
======== ========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 298,769,167,348,166,667
The accompanying notes are an integral part of these financial statements.
[TOEN\10K:TG53193.10K]-4
F-5
<PAGE>
<TABLE>
<CAPTION>
THE TOEN GROUP, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED MAY 31,1993
RETAINED
SHARES COMMON TREASURY EARNINGS
AMOUNT STOCK STOCK (DEFICIT) TOTAL
------------ -------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
May 31, 1991 348,166,667 $408,442 $ - $(353,081) $ 55,361
Net Loss - - - ( 16,159) (16,159)
----------- --------- --------- ---------- ----------
May 31, 1992 348,166,167 408,442 - (369,240) 39,202
Exchange of Assets
and Liabilities for
Common Stock
(Note 2) (98,795,000) - (24,845) - (24,845)
Net Loss - - - ( 27,903) (27,903)
------------ --------- --------- ---------- ----------
May 31, 1993 249,371,667 $408,442 $(24,845) $(397,143) $(13,546)
============ ========= --------- ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
[TOEN\10K:TG53193.10K]-4
F-6
<PAGE>
<TABLE>
<CAPTION>
THE TOEN GROUP, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MAY 31,1993 AND 1992
1993 1992
--------- --------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH
USED BY OPERATING ACTIVITIES:
Net Income (Loss) $(27,903) $(16,159)
ADD: ITEMS NOT REQUIRING CASH:
Depreciation 25,399 28,499
Expiration of Construction Permits 8,000 -
Adjustments to reconcile net income (loss) To net cash provided by operating
activities:
(Increase) Decrease in Accounts Receivable - 120,243
(Increase) Decrease in Inventory 3,408 46,167
(Increase) Decrease in Other Assets 1,856 (17,277)
Increase (Decrease) in Accounts Payable (3,400) (41,757)
Payable - (961)
Increase (Decrease) in Capital Leases - (1,466)
--------- ---------
Net Cash Provided by Operating Activities 7,360 117,289
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Sale (Purchase) of Fixed Assets 6,354 (120,506)
--------- ---------
Net Cash Provided (Used) by
Investing Activities 6,354 (120,506)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of Common Stock - -
Net Borrowings From (Payments on)
Notes Payable and Capital Leases (13,747) 640
--------- ---------
Net Cash Provided by Financing Activities (13,747) 640
---------- ---------
Net Increase (Decrease) in Cash (33) (2,577)
CASH BALANCE AT BEGINNING OF YEAR 33 2,610
---------- ---------
CASH BALANCE AT END OF YEAR $ - $ 33
========== =========
SUPPLEMENTAL SCHEDULE OF NON-CASH
FINANCING AND INVESTING ACTIVITIES:
Retirement of Common Stock for Assets
and Liabilities $ 24,845 $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
[TOEN\10K:TG53193.10K]-4
F-7
<PAGE>
THE TOEN GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1993
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. BUSINESS AND ORGANIZATION
The Company was incorporated in June, 1989 as a Colorado corporation. The
Company has primarily been engaged in the acquisition, maintenance and
operation of television in various states.
In August, 1992, the Company sold its Sunbelt Media Group ("Sunbelt")
division, operating the television stations, to a majority stockholder of
the Company.
Currently, the Company is exploring companies with existing operations for
acquisitions.
B. REVENUES AND EXPENSES
The Company follows the accrual method of accounting. Revenues are
recognized when the service is provided and expenses are recognized when
incurred.
C. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an original
maturity of three months or less as cash equivalents.
D. INVENTORY
Inventories are valued at the lower of cost or market with substantially
all stated at the first-in, first-out (FIFO) method.
E. FURNITURE, FIXTURES AND EQUIPMENT
Furniture, fixtures and equipment are stated at cost. Depreciation is
computed using accelerated methods over the estimated useful lives of the
assets ranging from 3-5 years. The Company provides tax depreciation in
conformity with the provisions of applicable tax law. Cost and accumulated
depreciation of assets sold or retired are removed from the accounts and
the net amount applied against profit or loss in the year of the
transaction.
Depreciation expense for the years ended May 31, 1993 and 1992 was $25,399
and $28,499, respectively.
[TOEN\10K:TG53193.10K]-4
F-8
<PAGE>
THE TOEN GROUP, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1993
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
F. INCOME TAXES
The Company follows Statement of Financial Accounting Standards No. 96, as
amended, Accounting for Income Taxes ("FAS 96"), which requires that
deferred tax liabilities or assets be determined using tax rates and
limitations expected to be in effect under enacted tax law when the taxes
are actually paid or recovered.
In February 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes." This pronouncement requires an asset and liability approach
for financial accounting and reporting for income taxes to be adopted for
fiscal years beginning after December 15, 1992. The methods to be used to
adopt this new approach can either be a retroactive restatement of prior
year financial statements or cumulative adjustments as of the beginning of
the year of adoption. The Company has not yet determined the timing or
methods of adoption nor the impact on the Company's consolidated financial
statements with respect to deferred income taxes. However, the impact is
expected to be minimal as the Company follows FAS 96.
G. NET INCOME PER COMMON SHARE
Net income per common share is calculated by dividing net income by the
weighted average number of shares outstanding during each year.
NOTE 2. DISCONTINUED OPERATIONS
In August, 1992, the Company executed an agreement with an 80% shareholder of
the Company, whereby the Sunbelt Media Group ("Sunbelt") trade name and all
assets and debt related to Sunbelt, were sold to the majority shareholder. A
note due to the majority stockholder in the amount of $24,500 was outstanding at
the date of the agreement, and was forgiven as part of the payment price. In
exchange, the majority shareholder returned 98,795,000 shares of its common
stock holdings in the Company. No gain or loss was recognized on the
transaction, as the resulting value of assets sold over liabilities assumed was
assigned as the cost of the treasury stock acquired.
[TOEN\10K:TG53193.10K]-4
F-9
<PAGE>
EXHIBIT 10 C
STOCK PURCHASE AGREEMENT DATED MARCH 31, 1993
BETWEEN NEW WORLD CAPITAL MARKETS LTD.
AND JEFFREY PAUL STROUD
[TOEN\10K:TG53193.10K]-4
F-10
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made this 31st of March
1993 and among those individuals whose names appear on the signature page hereof
and who agree to be parties to this Agreement by their execution hereof, as
their interests are identified in Exhibit A attached hereto (individually
"Seller" and collectively "Sellers") being the owners of the majority of the
issued and outstanding shares of capital stock of THE TOEN GROUP INC., A
Colorado corporation ("Toen"), and NEW WORLD CAPITAL MARKETS LTD., a corporation
organized under the laws of the Republic of Ireland ("Purchaser").
WHEREAS, Sellers represent that they own 173,995,000 shares of common
stock of Toen (the"Stock") and 162,000,000 warrants to purchase common stock,
expiring June 15, 1993 the ("Warrants") collectively the "Toen Shares"; and,
WHEREAS, Sellers desire to sell and Purchaser desires to purchase the Toen
Shares under the terms set forth herein.
IN CONSIDERATION of the mutual promises contained herein, the benefits to
be derived by each party hereunder, and other good and valuable consideration,
the receipt and sufficiency of which are hereby expressly acknowledged, Sellers
and Purchaser agree as follows:
1. PURCHASE AND SALE
Sellers agree to sell, transfer, convey and assign to Purchaser all of
their right, title and interest in and to the Toen Shares for Twenty
Thousand Dollars ($20,000) in cash to be delivered to Sellers Closing (as
defined below).
2. REVIEW PERIOD
Sellers shall have sixty (60) business days from the date hereof to review
all available financial information related to Toen and the Toen Shares
which time Purchase may elect, in its discretion, to proceed with Closing
or terminate this Agreement
3. EFFECTIVE DATE AND CLOSING
Unless otherwise agreed between the parties, Closing (the "Closing") shall
occur at the office at of the Escrowholder (as defined below) on or before
the third (3rd) business day after notice of intent to Close is delivered
by Purchaser. Purchaser shall execute at Closing an assignment and such
further documentation as Purchaser may reasonably require to the transfer
Toen Shares pursuant to this Agreement, free and clear of liens,
encumbrances and adverse claims.
Notwithstanding the date of Closing, Purchaser shall be entitled to all
dividends, stock splits, distributions or other benefits attributable to
the Toen Shares up to and including the date of Closing.
[TOEN\10K:TG53193.10K]-4
1
<PAGE>
4. Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Sellers that:
A. CORPORATE EXISTENCE. Purchaser is a privately held corporation
duly organized and valid existing and in good standing under the
laws of Republic of Ireland, and it has all corporate power
necessary to engage in the business in which it presently engages
and it has all corporate power necessary to engage in the
business in which it presently engages and it was not formed for
the sole purpose of this transaction.
B. AUTHORITY. This Agreement has been duly executed by Purchaser and
the execution and performance of this Agreement will not violate,
or result in a breach of, or constitute a default in any
agreement, instrument, judgement, order or decree to which
Purchaser is a party or to which Purchaser is subject nor will
such execution and performance constitute a violation of or
conflict with any fiduciary to which Purchaser is subject.
C. TAX RETURNS. Purchaser has filed, with the appropriate
governmental authorities, all tax and other returns required to
be filed by it. Such returns are true and complete and all taxes
shown thereon to be due have been paid.
D. NO DEFAULT. Purchaser is not in default with respect to any
order, writ, injunction, or decree of any court or federal,
state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, and there are no
actions, suits or claims, pending or, to the knowledge of
Purchaser, threatened against Purchaser at law or in equity, or
before or by any federal, state, municipal or other governmental
court, department, commission, board, bureau, agency or
instrumentality, domestic or foreign. Purchaser has complied in
all material respects with all laws, regulations and orders
applicable to its business.
E. INFORMATION. No representation or warranty contained herein, nor
statement in any document, certificate or schedule furnished or
to be furnished pursuant to this Agreement by Purchaser or in
connection with the transaction contemplated hereby, contains or
contained any untrue statement of a material fact, nor does or
will omit to state a material fact necessary to make any
statement of fact contained herein or therein not misleading.
5. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represents and warrants to Purchaser that:
A. ACTION OF SELLERS. All action required to be taken by or on the
part of Sellers to enter into and carry out this Agreement, and
to sell, transfer and convey the Toen Shares, hereunder, have
been or, prior to the Closing, will deliver the Toen Shares
hereunder, have been or, prior to the Closing, will be duly and
properly taken. This Agreement has been duly executed and
delivered by Sellers and is valid in accordance with its terms,
subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and the rules of law
governing specific performance, injunctive relief and other
equitable remedies.
[TOEN\10K:TG53193.10K]-4
2
<PAGE>
B. NO ENCUMBRANCES OR DEFAULTS. The Toen Shares, are free and clear
of any claims and all related contract rights and agreements, and
will be in full force and effect, and there have been no events
of default by Sellers under any contracts or agreements related
to the Toen Shares; there are no conditions or omissions existing
which will constitute an event or default by Sellers under any
contracts or agreements related to the Toen Shares after the
passage of time, and that any and all fees required by Sellers
have been paid.
C. AUTHORITY. This Agreement has been duly executed by Sellers and
the execution and performance of this Agreement will not violate,
or result in a breach of, or constitute a default in any
agreement, instrument, judgement, order or decree to which
Sellers are a party or to which Sellers are subject, nor will
such execution and performance constitute a violation of or
conflict with any fiduciary to which Sellers are subject.
D. COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Sellers are not in
default with respect to Toen Shares regarding any order, writ,
injunction, or decree of any court or federal, state, municipal
or other governmental department, commission, board, bureau,
agency or instrumentality, and there are no actions, suits,
claims, proceedings or investigations pending or, to the
knowledge of Sellers threatened against Sellers at law or in
equity, or before or by any federal, state, municipal or other
governmental court, department, commission, board, bureau, agency
or instrumentality, domestic or foreign. Any and all notices or
elections affecting the issuance of the Toen Shares, and all
applicable filings with the applicable regulatory bodies, will be
made by Sellers as of the date of Closing.
E. DISCLOSURE. That to the best of Sellers' knowledge, information
and belief, the financial condition of Toen have been completely
disclosed to Purchaser, including any and all informa tion
reasonably requested by Purchaser, relating or pertaining to
Toen, and any other matters known or reasonably available to
Sellers in any way relating or pertaining to Sellers' title and
ownership of the Toen Shares. In this regard Sellers, as
principal stockholders of Toen, represent as follows:
(1) Absence of Certain Changes or Events. Except as set forth in
this Agreement, since May 31, 1990:
(a) There has not been any material adverse change in the
financial conditions of the business, operations,
properties or assets of Toen;
(b) Toen 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 or
value which in the aggregate are extraordinary or
material considering the business of Toen; (iv) made
any material change in its method of management,
operation, or accounting; (v) entered into any other
material transactions; (vi) made any accrual or
arrangement for or payment of bonuses or special
compensation of any kind or any severance or
termination pay to any present or former officer or
employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its
officers or directors of any of its employees; or
(viii) established or 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 with its
officers, directors, or employees;
[TOEN\10K:TG53193.10K]-4
3
<PAGE>
(c) Toen has not (i) granted or agreed to grant any
options, warrants, or other rights for its stocks,
bonds, or other corporate securities calling for the
issuance except as disclosed in the financial
statements; (ii) 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; (iii) paid any material obligation or
liability (absolute or contingent) other than current
liabilities reflected in or shown on its balance sheet
as of May 31, 1990, and current liabilities incurred
since that date in the ordinary course of business;
(iv) sold or transferred, or agreed to sell or
transfer, any of its assets, property, or rights, (v)
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, or (vi)
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) except as contemplated herein; and
(d) To the best knowledge of Sellers, they have not become
subject to any law or regulation which materially or
adversely affects, or in the future may adversely
affect Toen's business, operations, properties, assets,
or financial condition.
(2) LITIGATION AND PROCEEDINGS. Other than those claims or
proceedings listed in Exhibit "B" attached hereto, Toen is
not involved in any pending litigation, claims, assessments,
investigations, or similar matters, nor are Sellers aware of
any threatened or contemplated against Toen or it's
management.
(3) ORGANIZATION. As of the date of Closing, Toen is and will be
duly organized, validly existing, and in good standing under
the laws of Colorado; it has the power to own its property
and to carry on its business as now being conducted and is
duly qualified to do business in any jurisdiction where the
failure to qualify would have a material adverse effect its
business or its assets.
(4) TAX RETURNS. To the best of Sellers' knowledge, Toen has
filed or will file all federal, state, county, and local
income, excise, property, and other tax returns, forms, or
reports, which are due or required to be filed by it prior
to the date of Closing. Toen has paid or made adequate
provisions for payment of all taxes, penalty fees, or
assessments which have or may become due pursuant to such
returns or pursuant to any assessments of which it is aware.
[TOEN\10K:TG53193.10K]-4
4
<PAGE>
(5) CONTRACTS.
(a) Except as identified in this Agreement or otherwise
disclosed to Purchaser, there are no material
contracts, agreements, franchises, license agreements,
or other commitments to which Toen or its assets are a
party or by which Toen or any of its assets are bound.
(b) Subject to the laws of bankruptcy, insolvency, general
creditor's rights and equitable principles, and to any
current litigation, all contracts, agreements,
franchises, license agreements, and other commitments
to which Toen is a party or by which it or its
properties are bound, and which are material to the
operations of its assets, are valid and enforceable by
Toen in all material respects.
(c) To the best of its knowledge, Toen is not a party to
any obligation or liability, or any contract,
agreement, commitment, or instrument or subject to any
charter or other corporate restriction or any judgment,
order, writ, injunction, decree which materially and
adversely affects, or in the future (as far as Sellers
can now foresee) may materially or adversely affect its
operations or the condition of its assets.
(d) Except as identified or referred to in this Agreement,
or reflected in the exhibits or schedules delivered or
supplied pursuant to this Agreement, neither Sellers
nor Toen are a party to any material oral or written
(i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension,
benefit, or retirement plan, agreement, or arrangement
covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract, or
indenture relating to the borrowing of money; (iv)
guaranty of any obligation, other than one which Toen
is a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for collection
and other guarantees of obligations, which, in the
aggregate do not exceed $1,000; (v) consulting or other
similar contract with an unexpired term of more than
one year or providing for payments in excess of $1,000
in the aggregate; (vi) collective bargaining agreement;
(vii) agreement with any present or former officer or
director of Toen; or (viii) contract, agreement or
other commitment involving payments by it of more than
$1,000 in the aggregate.
(e) To the best of Sellers' knowledge, Toen has not
breached, nor has it any knowledge of any pending or
threatened claims or any legal basis for a claim that
Toen has materially breached any of the terms of
conditions of any agreements, contracts, or commitments
to which it is a party or is bound, and the execution
and performance hereof will not violate any provisions
of applicable law of any agreement to which Toen is
subject.
[TOEN\10K:TG53193.10K]-4
5
<PAGE>
(6) CAPITALIZATION. The capitalization of Toen is, as of the
date hereof, comprised of 15,000,000 shares of Preferred
Stock of which none is issued, and 785,000,000 shares of
authorized common stock, no par value, of which no more than
249,371,667 shares, on a fully diluted basis, are issued and
outstanding. All issued and outstanding shares are legally
issued, fully paid, and nonassessable, and are not issued in
violation of the preemptive or other right of any person.
Other than the Warrants more fully described and identified
in Exhibit "C" attached hereto and incorporated herein by
reference, there are no outstanding preferred, participating
or convertible securities, warrants, options, or commitments
of any nature which may cause authorized but unissued shares
to be issued to any person, or give any preference to title
to Toen's assets except as described herein or in the
schedules attached hereto.
(7) NO LIENS, ENCUMBRANCES OR CONTINGENT LIABILITIES. Other than
disclosed in Exhibit "D" hereto, Toen's assets are free and
clear of any liens, encumbrances, contingent liabilities or
claims and all related contract rights and agreements are in
full force and effect, and there have been no events of
default under any contracts or agreements related to Toen's
assets; there are no conditions or omissions existing which
will constitute an event of default under any contracts or
agreements related to Toen's assets after the passage of
time, and that all payments required to keep Toen's assets
and all related such contracts and agreements in full force
and effect have been paid.
(8) COMPLIANCE WITH LAWS, RULES AND REGULATIONS. Toen is not in
default with respect to any order, writ, injunction, or
decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency
or instrumentality, and there are no actions, suits, claims,
proceedings or investigations pending or, to the knowledge
of Sellers threatened against Toen at law or in equity, or
before or by any federal, state, municipal or other
governmental court, department, commission, board, bureau,
agency or instrumentality, domestic or foreign. Toen has
complied in all material respects with all laws,
regulations, orders and state and federal regulatory filings
applicable to its assets and business.
(9) NOTICES AND NOMINATIONS. Any and all notices, elections or
nominations under any agreements or contracts affecting
Toen's assets, and all applicable filings with the
applicable regulatory bodies, have been made as of the date
hereof, and such obligation to cause such filings shall rest
with Sellers until the Closing hereof.
(10) PRICE REGULATION. Neither Toen nor Sellers have received any
monies represented by the sale of oil, natural gas, natural
gas liquids or other minerals attributable to its assets
which were in excess of the amounts permitted under
applicable local, state or federal laws, rules and
regulations.
(11) OPERATION OF ASSETS. To the best of Sellers' knowledge,
Toen's assets have been operated with all applicable local,
state and federal laws, rules and regulations; and that its
assets are not the subject of any existing or contemplated
local, state or federal order to test, shut-in, cease
production, abandon or otherwise cease operation or modify
its operations.
[TOEN\10K:TG53193.10K]-4
6
<PAGE>
(12) NO CONFLICT WITH OTHER INSTRUMENT. The execution of this
Agreement will not violate or breach any document,
instrument, agreement, contract, or commitment material to
the business of Toen, or to which Toen is a party.
(13) SECURITIES LAWS. Toen is a publicly-held company and Sellers
represent that, to the best of Sellers' knowledge, Toen has
no existing or threatened liabilities, claims, lawsuits, or
basis for the same with respect to its original stock
issuance to its founders, or any dealings with its
stockholders or any federal, state regulatory agencies, or
other persons.
(14) SELLERS' SCHEDULES. Sellers shall deliver to Purchaser at
least five (5) days prior to Closing, the following
schedules which are collectively referred to as the
"Sellers' Schedules" and which consist of separate schedules
dated as of the date of Closing and instruments and data as
of such date, all certified as complete, true, and correct:
(a) A schedule containing complete and correct copies of
the Articles of Incorporation and Bylaws of Toen as of
the date of Closing;
(b) A schedule containing a description of all of the
assets of Toen, including but not limited to all real
property owned or leased, 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; all
material contracts, promissory notes, profit sharing
arrangements, options, warrants, employment agreements,
licenses, agreements and all governmental licenses,
permits, and other governmental authorizations (or
requests or applications therefor) pursuant to which
Toen carries on or propose to carry on its business
(except those which, in the aggregate, are immaterial
to the present or proposed operation of Toen's assets);
(c) A schedule setting forth a description of any material
adverse change in the operations or financial condition
of Toen since May 31, 1990;
(d) A schedule of all litigation or governmental
investigation or proceeding which is pending or which,
to the best knowledge of Sellers, is threatened or
contemplated.
F. CONSENT OF THIRD PARTIES. Sellers will obtain the consent and approval
of any and all third parties for the conveyance reflected by this
Agreement, if any, and that prior to Closing, Sellers will provide
Purchaser with written evidence of all such consents and approvals, to
the reasonable satisfaction of Sellers.
[TOEN\10K:TG53193.10K]-4
7
<PAGE>
G. INFORMATION. No representation or warranty contained herein, nor
statement in any document, certificate or schedule furnished or to be
furnished pursuant to this Agreement by Sellers or in connection with
the transaction contemplated hereby, contains or contained any untrue
statement of a material fact, nor does or will omit to state a
material fact necessary to make any statement of fact contained herein
or therein not misleading.
6. PRIVATE TRANSACTION
Purchaser and Sellers understand that the Toen Shares are being sold
hereunder pursuant to a "private transaction", and Purchaser's reliance on
such is predicted in part on the representations set forth herein.
7. ESCROW OF SHARES
The parties hereto agree to utilize a mutually acceptable third party as
agent ("Escrowholder") to hold and deliver the consideration, the
documents related to this transaction and the Toen Shares upon the general
terms and conditions of Escrow Instructions which shall be mutually agreed
between Escrowholder, Purchaser and Sellers simultaneously with the
execution hereof.
8. ACCESS TO INFORMATION
Purchaser represents that, by virtue of its economic bargaining power or
otherwise, it has had access to or has been furnished with, prior to or
concurrently with the execution hereof, all financial information related
to Toen's business and financial affairs as such is available to the
public, and that they have had the opportunity to ask questions of and
receive answers from Sellers and Toen or any party acting on their behalf,
concerning the business of Toen, and that Purchaser has had the
opportunity to obtain any additional information, to the extent that
Sellers possesses such information or can acquire it necessary to verify
the accuracy of information obtained or furnished by Sellers.
9. CONDITIONS PRECEDENT OF PURCHASER TO EFFECT CLOSING
All obligations of Purchaser under this Agreement are subject to each of
the following conditions being satisfied prior to Closing:
A. The representations and warranties by or on behalf of Sellers
contained in this Agreement or in any certificate or documents
delivered to Purchaser pursuant to the provisions hereof shall be
true in all material respects at and as of the time of Closing as
though such representations and warranties were made at and as of
such time.
B. Sellers shall have performed and complied with all covenants,
agreements, and conditions required by this Agreement.
C. Sellers shall take all necessary action to effect the transfer of
the Toen Shares to Purchaser pursuant to this Agreement.
D. All instruments and documents delivered to Purchaser pursuant to
the provisions hereof shall be reasonably satisfactory to legal
counsel for Purchaser.
[TOEN\10K:TG53193.10K]-4
8
<PAGE>
E. Toen shall have approved and effected a one-for-Five Hundred
(1:500) reverse split of its shares issued and outstanding common
stock.
F. Toen shall (a) have appointed three (3) nominees to assume the
seats on the Board of Directors of Toen as directed by Purchaser,
(b) caused certain of its existing officers to tender their
written resignations, and (c) have effected the transfer of its
Transfer Agent and its Register Agent in Colorado to such party
as designated by Purchaser.
G. The Board of Directors of Toen shall have approved a proposal to
amend Toen's Articles of Incorporation to change Toen's name to a
name to be designated by Purchaser, with such designation to be
made on or before Closing.
10. TERMINATION
This Agreement may be terminated any time prior to Closing:
A. By Purchaser or Sellers:
(1) With written notice prior to Closing if there shall
be any actual or threatened action or proceeding by
or before any court or any other governmental body
which shall seek to restrain, prohibit, or invalidate
the transactions contemplated by this Agree ment and
which, in the judgment of such party giving notice to
terminate and based upon the advice of legal counsel,
makes it inadvisable to proceed with the transactions
contemplated by this Agreement; or
(2) With written notice if the Closing shall not have
occurred prior to March 30, 1993, or such later date
as shall have been approved by parties hereto.
B. BY SELLERS:
With written notice prior to Closing if Purchaser fails to, or
does not appear in Sellers' sole discretion to be able to comply
with the covenants or agreements contained in this Agreement, or
if any of the representations or warranties of Purchaser
contained herein is, or becomes, false or misleading or
inaccurate in any material respect.
C. BY PURCHASER:
With written notice prior to Closing if Sellers fail to comply
with the covenants or agreements contained in this Agreement; if
the financial condition of Toen is unacceptable to Purchaser, in
Purchaser's sole discretion; if Purchaser is not satisfied, in
Purchaser's sole discretion, as to the nature of Toen's
contingent liabilities, if any; or if any of the representations
or warranties of Sellers contained herein or in such related
agreements are, or becomes, false or misleading or inaccurate in
any material respect.
[TOEN\10K:TG53193.10K]-4
9
<PAGE>
11. INDEMNIFICATION OF PURCHASER
Purchaser will defend, indemnify and hold Sellers and Greg Skufca and
their employees, agents, successors, representatives and assigns of each
of them harmless against, and in respect of, any and all losses, claims,
damages, liabilities, deficiencies and expenses asserted against or
suffered by Sellers arising from any untrue representation or warranty
made by Purchaser in this agreement, or in any exhibit, schedule or
certificate or records, books, agreement, contract, lease, or other
document or item delivered by Purchaser to Sellers, or in connection with
the operation of Toen from date of Closing.
12. INDEMNIFICATION OF SELLERS
Sellers hereby agree to defend, indemnify and hold Purchaser harmless and
to indemnify it against, and respect of, any and all losses, claims,
damages incurred in investigating any threatened action or enforcing
rights under this paragraph or asserted against or suffered by Purchaser
in connection with or arising from any untrue representation or warranty
made by Sellers in this Agreement, or in any exhibit, schedule or
certificate, or other document or item delivered to Purchaser in
connection with this Agreement.
13. INDEMNIFICATION PROCEDURES
If any claim is made by a party which would give rise to a right of
indemnification under this Agreement, the party seeking indemnification
(Indemnified Party) will promptly cause notice thereof to be delivered to
the party from whom indemnification is sought (Indemnifying Party). The
Indemnified Party will permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting from the claims. Counsel for
the Indemnifying Party which will conduct the defense must be approved by
the Indemnified Party (whose approval will not be unreasonably withheld),
and the Indemnified Party may participate in such defense at the expense
of the Indemnified Party. The Indemnifying Party will not, in the defense
of any such claim or litigation, consent to entry of any judgment or enter
into any settlement without the written consent of the Indemnified Party
(which consent will not be unreasonably withheld.) The Indemnified Party
will not, in connection with any such claim or litigation, consent to
entry of any judgement or enter into any settlement without the written
consent of the Indemnifying Party (which consent will not be unreasonably
withheld). The Indemnified Party will cooperate fully with the
Indemnifying Party and make available to the Indemnifying Party all
pertinent information under its control relating to any such claim or
litigation.
If the Indemnifying Party refuses or fails to conduct the defense as
required in this Section, then the Indemnified Party may conduct such
defense at the expense of the Indemnifying Party and the approval of the
Indemnifying Party will not be required for any settlement or consent or
entry of judgment.
14. EXPIRATION OF OFFER
The offer set forth in this Agreement shall expire if this Agreement has
not been executed on or before March 15, 1993.
[TOEN\10K:TG53193.10K]-4
10
<PAGE>
15. COSTS AND EXPENSES
All costs and expenses in the proposed sale and transfer described in this
Agreement shall be borne by Purchaser and Sellers in the following manner:
A. ATTORNEYS FEES AND COSTS. Each party, Sellers and Purchaser,
having been represented by their own attorney in this
transaction, shall pay the fees of its attorney, except as may be
expressly set forth herein to the contrary;
B. RECORDING, PUBLISHING FEES. The cost of recording and publishing
any notice required by the Bulk Transfer Provisions of the
Uniform Commercial Code and all attorney's fees relating to
compliance with said provisions, shall be borne by Purchaser;
C. SALES TAXES. Any sales taxes and/or recording fees arising as a
result of the sale and transfer pursuant to this Agreement shall
be paid by Purchaser;
D. Other Costs. Each party shall bear its reasonable share of all
other Closing costs and expenses arising from this Agreement.
16. MISCELLANEOUS
A. AUTHORITY. The persons executing this Agreement are duly
authorized to do so and each party has taken all action required
by law or otherwise to properly and legally execute this
Agreement.
B. Notices. Any notice under this Agreement shall be deemed to have
been sufficiently given if sent by registered or certified mail,
postage prepaid, addressed as follows:
To Sellers: c/o Jeff Stroud
2064 East Chesapeake Lane
Highlands Ranch, Colorado 80120
Telephone: (303) 791-7178
Telefax: (303)
To Purchaser: New World Capital Markets Ltd.
Companies House
Ramsey, Isle of Man
Telefax: 011-44-624-815548
or to any other address which may hereafter be designated by
either party by notice given in such manner. All notices shall be
deemed to have been given as of the date of receipt.
C. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding between the parties hereto and no other prior
written or oral statement or agreement shall be recognized or
enforced.
[TOEN\10K:TG53193.10K]-4
11
<PAGE>
D. SEVERABILITY. If a court of competent jurisdiction determines
that any clause or provision of this Agreement is invalid,
illegal or unenforceable, the other clauses and provisions of the
Agreement shall remain in full force and effect and the clauses
and provision which are determined to be void, illegal or
unenforceable shall be limited so that they shall remain in
effect to the extent permissible by law.
E. ASSIGNMENT. Neither party may assign this Agreement without the
express written consent of the other party, however, any such
Assignment shall be binding on and inure to the benefit of such
successor, or, in the event of death or incapacity, on the heirs,
executors, administrators and successors of any party.
F. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado.
G. ATTORNEYS' FEES. If any legal action or other proceeding
(nonexclusively including arbitration) is brought for the
enforcement of or to declare any right or obligation under this
Agreement or as a result of a breach, default or
misrepresentation in connection with any of the provisions of
this Agreement, or otherwise because of a dispute among the
parties hereto, the prevailing party will be entitled to recover
actual attorneys' fees (including costs for appeals and
collection) and other costs incurred in such action or
proceeding, in addition to any other relief to which such party
may be entitled.
H. NO THIRD PARTY BENEFICIARY. Nothing in this Agreement, expressed
or implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under
or by reason of this Agreement, unless this Agreement
specifically states such intent.
I. COUNTERPARTS. It is understood and agreed that this Agreement may
be executed in any number of identical counterparts, each of
which may be deemed an original for all purposes.
J. FURTHER ASSURANCES. At any time, and from time to time after the
date of Closing, each party will execute such additional
instruments and take such action as may be reasonably requested
by the other party to confirm or perfect title to the Toen Shares
transferred hereunder or otherwise to carry out the intent and
purposes of this Agreement.
K. BROKER'S OR FINDER'S FEE. Purchaser and Sellers warrant that
neither has incurred any liability, contingent or otherwise, for
brokers' or finders' fees or commissions relating to this
Agreement for which the other shall have responsibility. Except
as otherwise provided herein, all fees, costs and expenses
incurred by either party relating to this Agreement shall be paid
by the party incurring the same.
L. AMENDMENT OR WAIVER. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether
conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the
performance of any obligation by the other shall be construed as
a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the
Effective Date, this Agreement may be amended by a writing signed
by all parties hereto, with respect to any of the terms contained
herein, and any term or condition of this Agreement may be waived
or the time for performance hereof may be extended by a writing
signed by the party or parties for whose benefit the provision is
intended.
[TOEN\10K:TG53193.10K]-4
12
<PAGE>
M. HEADINGS. The section and subsection headings in this Agreement
are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
N. SCHEDULES: KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's
exhibits delivered pursuant to this Agreement. Whenever any
negative representation is made to the "knowledge" of any party,
it shall be deemed to be a representation that no officer or
director of such party, after reasonable investigation, has any
knowledge of such matters.
O. FACSIMILE TRANSMISSION. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more
parties hereto and such executed copy may be delivered by
facsimile of similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can
be seen, and such execution and delivery shall be considered
valid, binding and effective for all purposes. At the request of
any party hereto, all parties agree to execute an original of
this Agreement as well as any facsimile, telecopy or other
reproduction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
"Purchaser"
NEW WORLD CAPITAL MARKETS LTD.
A corporation organized under the laws
of the Republic of Ireland
By: /s/ Phillip Mark Croshaw
------------------------------------
Name: Phillip Mark Croshaw
Title: Director
"Sellers"
/s/ Jeffrey P. Stroud
------------------------------------
------------------------------------
------------------------------------
[TOEN\10K:TG53193.10K]-4
13
