<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 14(d) of the Securities Exchange Act of 1934
Date of Report: August 20, 1999
WHITEHALL LIMITED, INC.
(F/K/A CAMBRIDGE UNIVERSAL CORPORATION)
---------------------------------------
(Exact name of Registrant as specified in its charter)
Florida* 33-24387 84-1092599
-------- -------- ----------
State of other jurisdic- (Commission (IRS Employer
tion of incorporation File Number) Identification No.)
290 Cocoanut Avenue
Sarasota, Florida 34236
-----------------------
(Address of principal executive offices, including zip code)
941/954-1181
------------
(Registrant's telephone number, including area code)
* initially formed under the laws of the State of Colorado
===============================================================================
<PAGE> 2
Item 1. Changes in Control of Registrant.
Pursuant to an agreement styled "Agreement Providing for the Exchange
of Capital Stock" (the "Agreement") dated as of June 17, 1999 the Registrant,
then known as Cambridge Universal Corporation (the "Company"), a corporation
formed and existing pursuant to the laws of the State of Colorado, acquired all
of the issued and outstanding voting Common Stock of a Florida corporation
known as Whitehall Homes II, Inc. ("Whitehall") from the record and beneficial
holders thereof, Ronald and Joanne Mustari, husband and wife. All of the voting
common stock of Whitehall was acquired by the Company for a consideration
constituted by the issuance of 4,608,268 shares of the Common Stock, $.10 par
value. Such shares constitute Restricted Securities. As a result of the
completion of this transaction, Ronald and Joanne Mustari hold of record and
beneficially 52% of the Common Stock of the Company outstanding as of June 17,
1999. The Company is continuing the business activities conducted by Whitehall
and Whitehall is now a wholly owned subsidiary of the Company.
Prior to this exchange transaction, the Company conducted no business
activity and could be characterized as a "public shell". The Company conducted
a public offering of 2,000 units, each unit comprised of one share of its
Common Stock and Class A and Class B Common Stock Purchase Warrants pursuant to
a Registration Statement which contained a definitive Prospectus dated December
8, 1988.
For accounting purposes, the exchange transaction will be deemed to
have occurred on January 1, 1999.
In connection with the exchange transaction between the Company and
Mr. and Mrs. Mustari, the Company became domesticated under the Florida
Business Corporation Act and is now a Florida corporation and changed its name
to Whitehall Limited, Inc. The Company also effected a reverse split of its
outstanding Common Stock whereby each three shares of outstanding Common Stock
of the Company became one Share. Such corporate action was effected by virtue
of the filing of Articles of Incorporation of the Company with the Department
of State, State of Florida. Shareholder action with respect to these matters
was taken at a special meeting of the shareholders of the Company noticed,
convened and held on June 17, 1999. A copy of the Articles of Incorporation of
the Company is included with this Report as an Exhibit. As indicated, the
Company is continuing the business of Whitehall which relates to the
development, construction and marketing of moderately priced housing
communities and single family homes in the Florida counties of Sarasota,
Manatee and Charlotte, all of which are located on the central west coast of
Florida. Whitehall has conducted such business activities directly and by
virtue of subsidiaries or affiliated entities known as Windtree Development
Corporation, Whitehall Homes @ Maple Hammock, Inc., Whitehall Homes @ Avalon,
Inc., Bermuda Development Corporation, Governors Grove Development Corporation,
Inc., U-Store-It, Inc. and Whitehall Associates, Inc., all of which entities
have been consolidated into Whitehall. The principal of Whitehall and
affiliated entities was Ronald Mustari who now serves as a director, President
and Chief
2
<PAGE> 3
Executive Officer of the Company. Mr. Mustari has approximately 30 years
experience in the home building business.
Developments undertaken by Whitehall and which will be continued by
the Company to the extent that such developments are not completed include
Forty-three West, Bradenton, Florida; Fairmont Park and Triangle Park, Oneco,
Florida; Forty-three West, Sarasota, Florida; The Treetops at North 50, Manatee
County, Florida; Whitehall Homes located in the Sarabay area of Bradenton,
Florida; Forty-three Waterside Lane in Perico, Manatee County, Florida; and The
Grove at Beekman Place, Sarasota, Florida. Current activities of the Company
include the development of the residential dwelling communities known as The
Village at Beekman Place and The Estates at Beekman Place, both of which are
located in the greater Sarasota, Florida metropolitan area; Governor's Green
and Bermuda Club at the Plantation Golf & Country Club located in the greater
Venice, Florida metropolitan area; and Avalon at the Villages of Palm Aire
located in the greater Sarasota, Florida metropolitan area.
The Company provides quality homes with custom features designed
principally for the entry level or "moving up" home buyer's market, as well as
the retirement segment of such market. Residences usually range in size from
1,200 to 3,500 square feet and have purchase prices ranging from $95,000 to
$400,000. As a general practice, the Company endeavors to acquire developed
building lots after all zoning and other governmental entitlements and
approvals have been attained. By conducting business in this fashion, the
Company believes that it can create finished residential dwellings and present
same to the available market more quickly than if the Company engaged in the
necessary land development activities in order to bring lots to a completely
developed status. In conducting business on this basis, the Company utilizes
and will continue to utilize lot options and similar contractual arrangements
to secure adequate inventories of developed lots.
The Company markets its residential dwelling inventories through
commissioned employees and independent real estate brokers. Residential
dwelling sales are typically conducted from sales offices located in furnished
models used in each subdivision where the Company is active. The Company
typically also builds a limited number of speculative homes in each residential
subdivision in which it is active in order to enhance its marketing and sales
activities.
The facilities of the Company are constituted by those facilities of
Whitehall which in turn are comprised of its inventory of residential dwellings
under construction and in completed state, as well as investments in land which
is in various stages of development. The Company, through Whitehall, has a
nominal investment in support equipment, including its executive headquarters,
which it owns, office furniture and fixtures, construction equipment and
vehicles. On a pro forma basis, at March 31, 1999 the Company, through
Whitehall, had approximately $3.99 million invested in land and development
costs and approximately $3.43 million invested in homes under construction and
furnished models.
3
<PAGE> 4
As a result of the completion of the transaction described in this
Item 1, the Company has provided to interested broker-dealers a current Form
15c2-11 which is also included herewith as an Exhibit. It is the Company's
understanding that one or more broker-dealers effecting transactions in the
Company outstanding Common Stock have effected the filing of such 15c2-11 with
NASD Regulation, Inc.
As a result of the exchange transaction herein described there were
outstanding as of the close of business on July 1, 1999 8,862,043 shares of
Common Stock of the Company. The Transfer Agent for the outstanding Common
Stock of the Company is American Securities Transfer & Trust, Inc., 12039 West
Alameda Parkway, Lakewood, Colorado 80228.
The Company now known as Whitehall Limited, Inc., having changed its
corporate name from Cambridge Universal Corporation, also has previously
utilized the corporate names Otisco Corporation, Income Impact Investments,
Inc. and Financial Freedom Enterprises, Inc.
The Company maintains its principal executive offices at 290 Cocoanut
Avenue, Sarasota, Florida 34236.
Item 2. Acquisition or Disposition of Assets.
See Item 1 above.
Item 3. Bankruptcy or Receivership.
Not Applicable.
Item 4. Changes in Registrant's Certifying Accountants.
Not Applicable.
Item 5. Other Events.
See Item 1 above.
Item 6. Resignations of Registrant's Directors.
As of the date of the exchange transaction described in Item 1 above,
all of the members of the Board of Directors of the Company, with the exception
of Robert Ground, submitted their resignations, which became effective upon the
appointment of new directors. Accordingly, the members of the Board of
Directors of the Company are now Harry Van Der Noord, who serves as Chairman;
Ronald Mustari, who is also the President and Chief
4
<PAGE> 5
Executive Officer of the Company; and Robert Ground, who continues to serve as
a director and who also serves as Vice President and Secretary of the Company.
Item 7. Financial Statements and Exhibits.
(a) Included with this Report on Form 8-K are the financial
statements of Whitehall reflecting its condition and results of
operation for the fiscal years ended December 31, 1997 and 1998.
Also included with this Report is the pro forma consolidated
statement of financial condition of Whitehall at March 31, 1999,
the pro forma consolidated statement of income and expenses and
retained earnings for the three month period ended March 31, 1999
and the pro forma consolidated statement of cash flows for the
three months ended March 31, 1999, all of which pro forma
consolidated financial statements reflect the exchange
transaction herein described.
(b) See Item 7(a) above.
(c) Included with this Report on Form 8-K are the following Exhibits:
(1) Articles of Incorporation and Certificate of Domestication
of the Company.
(2) Form 15c2-11 of the Company.
(3) Form of Agreement Providing for the Exchange of Capital
Stock.
Item 8. Change in Fiscal Year.
Not Applicable
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
WHITEHALL LIMITED, INC.
August 20, 1999 By /s/ Ronald Mustari
--------------------------------------
Ronald Mustari, President and Chief
Executive Officer
5
<PAGE> 6
WHITEHALL HOMES, INC.
AND AFFILIATED COMPANIES
COMBINING FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998
TOGETHER WITH
ACCOUNTANT'S REPORT
<PAGE> 7
DONALD A. BYRD
CERTIFIED PUBLIC ACCOUNTANT
A PROFESSIONAL ASSOCIATION
2119 KENNEN DRIVE
VALRICO, FLORIDA 33594
(813) 654-7871
To the Board of Directors
Whitehall Homes, Inc. and Affiliated Companies
I have reviewed the accompanying combining balance sheet of Whitehall
Homes, Inc. and Affiliated Companies as of December 31, 1998 and the related
combining Statements of income and retained earnings and cash flows for the
year then ended, in accordance with Statements of Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is the
representation of the management of Whitehall Homes, Inc. and Affiliated
Companies.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective
of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
June 24, 1999
<PAGE> 8
WHITEHALL HOMES, INC. AND AFFILIATED COMPANIES
COMBINING BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<CAPTION>
WHITEHALL
WHITEHALL BERMUDA WHITEHALL FAIRWAY HOMES AT
WHITEHALL U-STORE IT HOMES AT DEVELOPMENT ASSOCIATES LAKES HOMES MAPLE
ASSETS HOMES INC INC AVALON, INC. CORPORATION INC INC HAMMOCK INC
- ------ --------- ---------- ------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CASH......................... 9,683 19,540 100,874 29,249 6,673 39,182 15,961
ACCOUNTS AND NOTES
RECEIVABLE:
Affiliates................. (81,494) 64,000 27,307 12,805 287,480 26,385
Others.....................
Stockholders............... 78,833 200,000
LAND & DEVELOPMENT COST...... 603,212 114,981 681,941 12,992
HOMES UNDER CONSTRUCTION AND
FURNISHED MODELS........... 687,623 524,097 11,664
INVESTMENTS IN JOINT
VENTURES................... 2
PROPERTY & EQUIPMENT, at
cost:
Office furniture and
equipment................ 51,919 3,634 1,700
Construction equipment..... 78,880
Vehicles................... 13,713
Buildings.................. 398,144
Land....................... 68,097
-------- ------- --------- --------- ------- ------ ------
610,753 0 0 3,634 1,700 0 0
Less accumulated
depreciation............. (214,776) (3,023) (659)
-------- ------- --------- --------- ------- ------ ------
395,977 0 0 611 1,041 0 0
-------- ------- --------- --------- ------- ------ ------
OTHER ASSETS................. 403,607 106,381 3,735 1,795
-------- ------- --------- --------- ------- ------ ------
727,775 765,585 1,237,168 1,248,703 298,929 39,182 68,797
======== ======= ========= ========= ======= ====== ======
<CAPTION>
BECKMAN
WHITEHALL VILLAGE
MANAGEMENT DEVELOPMENT ELIMINATIONS COMBINED
ASSETS INC. CORPORATION ADD (DEDUCT) TOTALS
- ------ ---------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
CASH......................... 47,302 8,049 276,513
ACCOUNTS AND NOTES
RECEIVABLE:
Affiliates................. 30,039 (306,383) 60,139
Others.....................
Stockholders............... 278,833
LAND & DEVELOPMENT COST...... 1,413,126
HOMES UNDER CONSTRUCTION AND
FURNISHED MODELS........... 732,823 1,956,207
INVESTMENTS IN JOINT
VENTURES................... 2
PROPERTY & EQUIPMENT, at
cost:
Office furniture and
equipment................ 67,253
Construction equipment..... 78,880
Vehicles................... 13,713
Buildings.................. 398,144
Land....................... 68,097
------ ------- -------- ---------
0 0 0 616,087
Less accumulated
depreciation............. (218,458)
------ ------- -------- ---------
0 0 0 397,629
------ ------- -------- ---------
OTHER ASSETS................. 615,518
------ ------- -------- ---------
47,302 770,911 (306,383) 4,897,967
====== ======= ======== =========
</TABLE>
See accompanying notes and accountant's review report.
<PAGE> 9
WHITEHALL HOMES, INC. AND AFFILIATED COMPANIES
COMBINING BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<CAPTION>
WHITEHALL
WHITEHALL WHITEHALL BERMUDA WHITEHALL FAIRWAY HOMES AT
LIABILITIES AND HOMES U-STORE IT HOMES AT DEVELOPMENT ASSOCIATES LAKES HOMES MAPLE
STOCKHOLDERS' EQUITY INC. INC. AVALON, INC. CORPORATION INC. INC. HAMMOCK INC.
- -------------------- --------- ---------- ------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES:
Accounts payable and accrued
liabilities...................... 48,984 177,598 184,432 2,416 14,421
Customer deposits................. 45,000 208,323
Due to stockholders............... 171,250 100,000 54,385 6,372
Due to affiliates................. 396,102 188,383
Land and development loans........ 81,100 310,000
Construction and model loans...... 616,892 362,645
Notes payable..................... 461,831 300,000 300,000
-------- ------- -------- --------- ------- ------ ------
510,815 516,250 1,371,692 1,308,148 308,372 2,416 14,421
-------- ------- -------- --------- ------- ------ ------
STOCKHOLDERS' EQUITY
Controlling Interest:
Common stock, $1 par value....... 1,000 50 100 250 1,000 1,000 50
Paid-in capital.................. 679,726 332,500 59,900 164,374 4,826 66,693
Retained earnings................ (483,766) 61,282) (127,263) (209,433) (11,040) 35,768 (2,895)
-------- ------- -------- --------- ------- ------ ------
216,980 271,268 (67,283) (44,836) (5,214) (36,766 63,848
-------- ------- -------- --------- ------- ------ ------
Non-Controlling Interest:
Common stock, $1 par value......... 50 100 250 1,000 50
Paid-in capital.................... 64,500 59,900 145,124 7,810
Retained earnings.................. (86,483) (127,263) (159,983) (11,039) (9,522)
-------- ------- -------- --------- ------- ------ ------
(21,933) (67,263) (14,609) (2,229) (9,472)
-------- ------- -------- --------- ------- ------ ------
727,776 765,586 1,237,166 1,248,703 288,929 39,182 68,797
======== ======= ======== ========= ======= ====== ======
<CAPTION>
BEEKMAN
WHITEHALL VILLAGE
LIABILITIES AND MANAGEMENT DEVELOPMENT ELIMINATIONS COMBINED
STOCKHOLDERS' EQUITY INC. CORPORATION ADD(DEDUCT) TOTALS
- -------------------- ---------- ----------- ------------- ---------
<S> <C> <C> <C> <C>
LIABILITIES:
Accounts payable and accrued
liabilities...................... 116,881 543,732
Customer deposits................. 20,340 463,300 736,963
Due to stockholders............... 331,987
Due to affiliates................. 21,295 (306,383) 299,397
Land and development loans........ 391,100
Construction...................... 188,888 1,168,203
Notes payable..................... 1,061,831
------- ------- -------- ---------
41,635 767,847 (306,383) 4,533,213
------- ------- -------- ---------
STOCKHOLDERS' EQUITY
Controlling Interest:
Common stock, $1 par value....... 1,000 1,000 5,450
Paid-in capital.................. 84,310 8,512 1,400,814
Retained earnings................ (79,643) (6,448) (926,004)
------- ------- -------- ---------
5,667 3,064 480,260
------- ------- -------- ---------
Non-Controlling Interest:
Common stock, $1 par value......... 1,450
Paid-in capital.................... 277,334
Retained earnings.................. (394,290)
------- ------- -------- ---------
(115,506)
------- ------- -------- ---------
47,302 770,911 (306,383) 4,897,967
======= ======= ======== =========
</TABLE>
<PAGE> 10
WHITEHALL HOMES, INC. AND AFFILIATED COMPANIES
COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
WHITEHALL
WHITEHALL WHITEHALL BERMUDA WHITEHALL FAIRWAY HOMES AT
HOMES U-STORE IT HOMES AT DEVELOPMENT ASSOCIATES LAKE HOMES MAPLE
INC. INC. AVALON, INC. CORPORATION INC. INC. HAMMOCK INC.
--------- ---------- ------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME:
Home and lot sales 759,072 366,700 1,340,196
Management fees 475,722
Real estate commissions 177,060
Interest income 7,668 52 10
Joint venture earnings (loss)
Other 34,339 5,000 21,734 7,055
-------- -------- -------- -------- ------- -------- ---------
TOTAL INCOME 694,789 5,000 52 759,072 21,744 373,755 1,340,196
-------- -------- -------- -------- ------- -------- ---------
EXPENSES:
Cost of home and lot sales 689,094 70,856 1,079,156
Selling & general operating
expense 183,021 155,151 5,943 147,776
General and administrative --
Personnel costs 583,447
Office and all other expenses 69,345 13,628 6,029
Real estate commissions 147,989
Interest expense 58,640 36,000 15,517 4,722 30,339
-------- -------- -------- -------- ------- -------- ---------
TOTAL EXPENSES 859,421 49,628 198,538 848,967 36,368 76,799 1,226,932
-------- -------- -------- -------- ------- -------- ---------
NET INCOME (LOSS) (164,632) (44,628) (198,486) (89,895) (14,624) 296,956 113,264
RETAINED EARNINGS -- beginning (299,134) (103,137) (56,040) (279,521) (1,455) 16,702 121,495
DISTRIBUTIONS (6,000) (277,892) (247,176)
-------- -------- -------- -------- ------- -------- ---------
RETAINED EARNINGS -- ending (463,766) (147,765) (264,526) (369,416) (22,079) 35,766 (12,417)
======== ======== ======== ======== ======= ======== =========
<CAPTION>
BEEKMAN
WHITEHALL VILLAGE
MANAGEMENT DEVELOPMENT ELIMINATIONS COMBINED
INC. CORPORATION ADD(DEDUCT) TOTALS
---------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
INCOME:
Home and lot sales 824,518 3,290,486
Management fees (226,594) 249,128
Real estate commissions (101,369) 76,691
Interest income
Joint venture earnings (loss)
Other 140,510 208,638
-------- ------- -------- ----------
TOTAL INCOME 140,510 824,518 (327,963) 3,831,673
-------- ------- -------- ----------
EXPENSES:
Cost of home and lot sales 738,055 (327,963) 2,247,198
Selling & general operating
expense 84,698 576,689
General and administrative --
Personnel costs 583,447
Office and all other expenses 112,083 201,085
Real estate commissions 147,989
Interest expense 145,218
-------- ------- -------- ----------
TOTAL EXPENSES 112,083 820,753 (327,963) 3,901,526
-------- ------- -------- ----------
NET INCOME (LOSS) 28,427 3,765 0 (69,853)
RETAINED EARNINGS -- beginning (108,070) 14,787 (694,373)
DISTRIBUTIONS (25,000) (556,068)
-------- ------- -------- ----------
RETAINED EARNINGS -- ending (79,643) (6,448) 0 (1,320,294)
======== ======= ======== ==========
</TABLE>
See accompanying notes and accountant's review report.
<PAGE> 11
WHITEHALL HOMES, INC. AND AFFILIATED COMPANIES
COMBINING STATEMENT OF CASH FLOWS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
WHITEHALL
WHITEHALL WHITEHALL BERMUDA WHITEHALL FAIRWAY HOMES AT
HOMES U-STORE IT HOMES AT DEVELOPMENT ASSOCIATES LAKES HOMES MAPLE
INC INC AVALON, INC. CORPORATION INC INC HAMMOCK INC
--------- ---------- ------------ ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)................ (164,632) (44,628) (198,486) (89,895) (14,624) 296,956 113,264
-------- ------- -------- -------- ------- -------- --------
Adjustments to reconcile net
income (loss) to net cash
proved by operating
activities --
Depreciation................... 38,819 385 416
Amortization................... 165 562 1,027
Increase/decrease in --
Land and development costs... (934) (114,981) 83,022 64,100 168,901
Homes under construction and
furnished models........... (642,297) (191,049) 259,501
Customer deposits............ 45,000 208,323 (137,943)
Accounts payable and accrued
liabilities................ 12,066 101,867 109,404 (10,074) (228,914)
Property and equipment....... (6,270)
Other assets................. (67,578) 50,108
Due from affiliates.......... 88,504 13,000 (27,307) (12,805) (91,960) 20,316
Accounts
receivable -- other........ 500
Due to affiliates............ 361,490 63,472 (69,505)
-------- ------- -------- -------- ------- -------- --------
Total adjustments............ 133,119 57,066 (388,806) 250,917 (40,854) (15,479) 283,388
-------- ------- -------- -------- ------- -------- --------
Net cash provided (used) by
operating activities........... (31,513) 12,438 (587,292) 161,022 (55,478) 281,477 396,652
-------- ------- -------- -------- ------- -------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net (increase) decrease in
investments in joint venture... (402,857) (3,735)
-------- ------- -------- -------- ------- -------- --------
Net cash provided (used) by
investing activities........... (402,857) 0 0 0 (3,735) 0 0
-------- ------- -------- -------- ------- -------- --------
Net borrowings under --
Land and development loans..... 81,100 (243,672)
Construction loans............. 616,892 10,817 (156,500)
Notes payable.................. (172,714) 19,923
Stockholders' loans............ 1,264 (100,000) 26,500 25,000
Proceeds (distributions) from
(to) Stockholders'........... 602,443 70,000 53,107 6,636 (277,892) (247,176)
-------- ------- -------- -------- ------- -------- --------
Net cash provided (used) by
financing activities........... 429,729 1,264 667,992 (153,248) 51,569 (277,892) (413,676)
-------- ------- -------- -------- ------- -------- --------
NET INCREASE IN CASH.............. (4,641) 13,702 80,700 7,774 (7,654) 3,585 (17,024)
NET CASH AT BEGINNING OF YEAR..... 14,324 5,838 20,174 21,475 14,327 35,597 32,985
-------- ------- -------- -------- ------- -------- --------
CASH AT END OF YEAR............... 9,683 19,540 100,874 29,249 6,673 39,182 15,961
======== ======= ======== ======== ======= ======== ========
<CAPTION>
BEEKMAN
WHITEHALL VILLAGE
MANAGEMENT DEVELOPMENT ELIMINATIONS COMBINED
INC. CORPORATION ADD (DEDUCT) TOTALS
---------- ----------- ------------ --------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)................ 28,427 3,765 0 (69,853)
------ -------- ------- --------
Adjustments to reconcile net
income (loss) to net cash
proved by operating
activities --
Depreciation................... 39,620
Amortization................... 1,774
Increase/decrease in --
Land and development costs... 200,108
Homes under construction and
furnished models........... (402,003) (976,848)
Customer deposits............ (3,100) 185,753 298,033
Accounts payable and accrued
liabilities................ 67,384 261,733
Property and equipment....... (6,270)
Other assets................. 230 (17,240)
Due from affiliates.......... 39,466 29,214
Accounts
receivable -- other........ 224 724
Due to affiliates............ 345,457
------ -------- ------- --------
Total adjustments............ (3,100) (108,946) 0 167,305
------ -------- ------- --------
Net cash provided (used) by
operating activities........... 25,327 (105,181) 0 97,452
------ -------- ------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net (increase) decrease in
investments in joint venture... (405,692)
------ -------- ------- --------
Net cash provided (used) by
investing activities........... 0 0 0 (406,692)
------ -------- ------- --------
Net borrowings under --
Land and development loans..... (162,672)
Construction loans............. 148,352 609,561
Notes payable.................. (152,791)
Stockholders' loans............ (47,236)
Proceeds (distributions) from
(to) Stockholders'........... (71,973) 136,145
------ -------- ------- --------
Net cash provided (used) by
financing activities........... 0 76,379 0 382,107
------ -------- ------- --------
NET INCREASE IN CASH.............. 25,327 (26,802) 0 72,967
NET CASH AT BEGINNING OF YEAR..... 21,975 36,851 0 203,646
------ -------- ------- --------
CASH AT END OF YEAR............... 47,302 8,049 0 276,613
====== ======== ======= ========
</TABLE>
See accompanying notes and accountant's review report.
<PAGE> 12
WHITEHALL HOMES, INC.
AND AFFILIATED COMPANIES
NOTES TO COMBINING FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE (1)-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A summary of the Companies' significant accounting policies consistently
applied in the preparation of the accompanying financial statements is as
follows:
(a) Combining Entities-The combining financial statements include the
financial statements of the following entities which are related through
common ownership and management:
Whitehall Homes, Inc. 100.00%
U-Store-It, Inc. 50.00
Beekman Village Development Corp. 100.00
Bermuda Development Corporation 50.00
Whitehall Associates, Inc. 50.00
Fairway Lakes Homes, Inc. 100.00
Whitehall Homes at Maple Hammock, Inc. 50.00
Whitehall Homes at Avalon, Inc. 50.00
Whitehall Management, Inc. 100.00
All significant intercompany transactions and balances are eliminated in
the accompanying financial statements.
In addition to the above, the controlling stockholders or certain of the
above entities own an interest in the following entities not included in
the combining financial statements.
Whitehall Development Corporation 100.00%
Preserves at Palm Aire Construction Company 100.00
Beekman Place Development Corp. 100.00
Clubside Development Corporation 50.00
Windtree Development Corporation 50.00
Governors Green Development Corp. 50.00
Treetops at North Forty Development Corp. 100.00
Preserve at Palm Aire Development Corp. 50.00
Beekman Place Utility Corp. 50.00
Treetops Joint Venture of Charlotte County 50.00
Owned by Whitehall Development Corp.
Beekman Village Joint Venture 50.00
Owned by Beekman Village Development Corp.
Governor's Green Joint Venture 50.00
Owned by Governor's Green Development Corp.
Greens of Peridia Joint Venture 50.00
Owned by Whitehall Homes, Inc.
<PAGE> 13
The following is a summary of financial information related to the non-combined
entities as of December 31, 1998 and for the year then ended:
<TABLE>
<S> <C>
Assets $2,263,191
==========
Liabilities $1,889,595
Equity 373,596
----------
$2,263,191
==========
Sales $3,257,924
==========
Net income (loss) $ (305,182)
==========
</TABLE>
(b) Nature of Business-Whitehall Development Corporation was formed in 1985
to develop land and to construct single family or multi-family housing.
Subsequently, the Company has become the managing arm of the affiliates
described in (a) above. Effective January 1, 1996, construction and sales
management for all affiliates was assumed by Whitehall Homes, Inc. This
change more accurately reflects the nature of the business. The Company
and its Affiliates recognize revenue from the sale of real estate at time
of closing, i.e., when sufficient down payment has been made, any
financing arranged, title, possession and other attributes of ownership
have been transferred to the buyer and the Companies are not obligated to
perform additional significant activities after the sale.
Certain of the Affiliated Companies are involved in joint ventures to
develop land and to construct residential housings. The Companies follow
the equity method of accounting for such investments in joint ventures.
Under this method of accounting, the Companies' cash investments in the
joint ventures are increased by the earnings or reduced by the losses and
cash distributions of the joint venture.
(c) Capitalization Period-Interest is capitalized on land in process of
development, finished building lots, and residential housing construction
costs during the development and construction period. Interest on debt
directly related to specific land parcels is capitalized using the
specific
<PAGE> 14
identification method, and interest for the remaining eligible assets, if
any, is capitalized using an allocation method based on the Company's
actual interest cost. During the year ended December 31, 1998, the
following was paid or accrued and capitalized:
<TABLE>
<CAPTION>
Entity Paid or Accrued Capitalized
------ --------------- -----------
<S> <C> <C>
Whitehall Homes, Inc. $ 58,640 $ --
U-Store-It, Inc. 36,000 --
Whitehall Homes at Avalon, Inc. 42,874 27,357
Bermuda Development Corporation 31,784 27,062
Whitehall Associates, Inc. 30,339 --
Whitehall Homes at Maple Hammock 10,290 10,290
Beekman Village Development Corp. 14,238 14,238
--------------- -----------
$224,165 $ 78,947
=============== ===========
</TABLE>
(d) Land Cost Allocation and Inventory Valuation-The cost of acquiring and
developing land and constructing certain amenities is allocated to the
related parcels. Other direct construction costs are recorded on a
specific job basis. Certain overhead costs are allocated to development
costs and specific jobs based on current period direct costs. All such
properties are carried at the lower of cost or net realizable value.
(e) Income Taxes-The stockholders of the Companies have elected to be taxed
under the provisions of subchapter S of the Internal Revenue Code. Under
those provisions, the Companies do not pay Federal corporate income taxes
on their taxable income. Instead, the stockholders are liable for
individual Federal income taxes on their respective shares of the
Companies' taxable income.
Certain items of income and expense may be recognized for income tax
purposes in different periods from those in which such items are
recognized for financial reporting purposes. These amounts represent
taxable income (loss) that will be allocated to stockholders, in future
years and result primarily from capitalization policies on homes and land
and Revenue Recognition policies. Such differences, if any, are
accounted for as tax timing adjustments in retained earnings.
(f) Property, Equipment and Depreciation-Property and Equipment are carried
at cost. The Companies compute depreciation at rates calculated to
amortize the cost of such assets over their estimated useful lives.
<PAGE> 15
Depreciation was as follows for the year ended December 31, 1998:
<TABLE>
<S> <C>
Whitehall Homes, Inc. $38,819
Bermuda Development Corporation 385
Whitehall Associates, Inc. 416
-------
$39,620
=======
</TABLE>
(g) Customer Deposits-Customers are required to make certain escrow deposits
at the time a contract for sale of real estate is entered into between the
parties. The cash deposits are not available for the Companies' use until
the sale is "closed". The Companies' escrow agents receive such cash
deposits which are paid to the Companies upon "closing" of the sale.
NOTE (2) - RELATED PARTY TRANSACTIONS:
Information regarding transactions with all related parties for the year
ended December 31, 1998 is as follows:
<TABLE>
<S> <C>
Receivable from affiliates -
Due Whitehall Homes, Inc. -from-
Beekman Village Develop. Corp. $(30,039)
Bermuda Development Corp. (12,805)
Whitehall Management, Inc. 21,295
Whitehall Homes at Avalon, Inc. (27,307)
Beekman Place Development Corp. (29,981)
Governor's Green Development Corp. 236
Whitehall Homes at Maple Hammock 232
Windtree Development Corp. (5,705)
Whitehall Associates, Inc. 2,580
Due U-Store-It, Inc.
Whitehall Homes at Avalon, Inc. 20,000
Governor's Green Development Corp. 14,000
Bermuda Development Corp. 30,000
Due Whitehall Homes at Maple Hammock
Bermuda Development Corp. 15,385
Governor's Green Development Corp. 11,000
Due Whitehall Homes At Avalon, Inc.
Whitehall Homes, Inc. 27,307
Due Bermuda Development Corp.
Whitehall Homes, Inc. 12,805
Due Beekman Village Development Corp.
Whitehall Homes, Inc. 30,039
</TABLE>
<PAGE> 16
<TABLE>
<S> <C>
Due Whitehall Associates, Inc.
Whitehall Homes at Avalon, Inc. 26,705
Whitehall Homes at Maple Hammock, Inc. 50,000
Bermuda Development Corp. 142,998
Whitehall Homes, Inc. (2,580)
Whitehall Realty, Inc. 522
Governor's Green Development Corp. 69,835
--------
$366,522
Combining Eliminations (306,383)
--------
$ 60,139
========
Payable to Affiliates-
Bermuda Development Corp.
Whitehall Associates, Inc. 142,998
U-Store-It, Inc. 30,000
Whitehall Homes at Maple Hammock 15,385
Whitehall Homes at Avalon, Inc.
Whitehall Group, Inc. 299,397
Whitehall Associates, Inc. 76,705
U-Store-It, Inc. 20,000
Whitehall Management, Inc.
Whitehall Homes, Inc. 21,295
--------
605,780
Combining Eliminations (306,383)
--------
$299,397
========
Revenues:
Management fees-
The Beekman Village Joint Venture $ 64,573
Preserves at Palm Aire Develop Corp. 8,426
Treetops Joint venture of Charlotte Cty. 6,000
Beekman Place Development Corp. 88,592
Bermuda Development Corp. 58,847
Windtree Development Corp. 131,110
Whitehall Homes at Maple Hammock, Inc. 103,174
Governors Green Development Corp. 15,000
--------
475,722
Combining eliminations (226,594)
--------
$249,128
========
</TABLE>
<PAGE> 17
<TABLE>
<S> <C>
Real estate commissions-
Beekman Place Development Corp. $ 46,411
The Beekman Village Joint Venture 35,526
Treetops Joint Venture of Charlotte City 2,000
Bermuda Development Corp. 34,693
Windtree Development Corp. 21,130
Governors Green Development 6,150
Whitehall Homes at Maple Hammock 31,150
--------
177,060
Combining eliminations (101,369)
--------
$ 75,691
========
</TABLE>
The amounts due to or from related parties are unsecured, bear no interest and
are due on demand.
NOTE (3) -DEBT:
The Companies' debt consisted of the following at December 31, 1998:
<TABLE>
<S> <C>
Notes Payable-
Whitehall Homes, Inc.
Installment notes payable to banks
with interest ranging from 9.00% to 10.08%.
Due in monthly installments totalling
$1,807 through April 2002 and secured by
computer equipment and a loader. $ 52,269
Mortgage note payable to a bank with
interest at Prime plus 1.50% and
secured by land and buildings. Maximum
borrowings under the notes was $450,000
of which $69,791 is still available
for further construction. Principal
payments are based on a 20 year amortization
with the entire unpaid principal and
interest due on February 26, 2006. 367,744
</TABLE>
<PAGE> 18
<TABLE>
<S> <C>
Unsecured note payable to a Bank with interest
at prime plus 1.5% due monthly. The note
matured June 1, 1999 and is currently a demand
note. This note is personally guaranteed by the
stockholders of the Company. 41,818
Whitehall Associates, Inc. Unsecured note
payable to a bank with interest at prime plus
2.25% due monthly. Principal balance is due
September 2, 1999. 100,000
Unsecured line of credit payable to a bank with
interest at prime plus 1% due monthly. The note
matured on February 11, 1999 and is currently a
demand note. Maximum borrowing may not exceed
$200,000 200,000
U.Stor-It, Inc. Mortgage notes payable to
individuals with interest at 12.00% due
monthly. Principal is due on the sale of the
land securing the note 300,000
----------
$1,061,831
==========
Construction and Model Loans-
Whitehall Homes at Avalon, Inc.
construction line of credit secured by
specific homes under construction, with
interest at Prime plus 1.0% and is due
September 1, 1999. Maximum borrowings
under this line of credit may not exceed
$2,000,000. $ 596,892
Amenities construction loan payable to a
bank, secured by the improvements, with
interest at Prime plus 1.00% and is due
October 1, 2000. Maximum borrowings under
this loan may not exceed $114,000. 20,000
</TABLE>
<PAGE> 19
<TABLE>
<S> <C>
Beekman Village Development Corp.
Payable to a bank, secured by a specific
homes under construction with interest at
Prime +1.50% and is due December 1, 2000
or when the home is sold if sooner.
Maximum borrowings under these loans may
not exceed $506,000 188,666
Bermuda Development Corp.
Payable to banks, secured by specific
homes under construction, with interest
ranging from Prime plus 1.00% to Prime plus
1.50% and maturities extending through
June 15, 2000. Maximum borrowings
under these loans may not exceed $581,400 362,645
----------
$1,168,203
==========
</TABLE>
The construction and model loans require that funds advanced for
construction be repaid when the home is sold. The bank loans are also
personally guaranteed by the majority stockholders of the Companies.
LAND AND DEVELOPMENT LOANS
<TABLE>
<S> <C>
Whitehall Homes at Avalon, Inc.
Payable to a bank, secured by land and
improvements thereon, with interest at
Prime plus 1.00% and matured October 1, 2000 $ 81,100
Bermuda Development Corp.
Payable to a bank, secured by land and
improvements thereon, with interest
at Prime plus 1.00% and maturing
August, 1999 310,000
----------
$ 391,100
==========
</TABLE>
The above notes due to banks contain release provisions which require
specific repayment as lots and/or units are sold. The bank loans are also
personally guaranteed by the majority stockholders of the Companies.
<PAGE> 20
NOTE (4) COMMITMENTS AND CONTINGENCIES:
Whitehall Homes, Inc. has a line of credit with a bank for the purpose of
acquiring lots and constructing single family homes. The line of credit is
for $700,000 with interest at prime plus 1.50% and is due December 1, 2000. All
advances are secured by the specific home under construction and is guaranteed
by the stockholders of Whitehall Homes, Inc. At December 31, 1998, $292,916 was
outstanding under this line and is included in construction and model loans on
the respective affiliates books and records.
NOTE (5) SUBSEQUENT EVENTS:
Subsequent to December 31, 1998, the controlling stockholder of the
Companies purchased all of the outstanding capital stock of all entities from
the non-controlling stockholder. As this transaction was between the
stockholders, there was no effect on the value of the assets or liabilities of
the Companies.
In addition, all of the assets of the combined Companies were sold to
Whitehall Homes II, Inc. for fair market value of such assets. Consideration
was the assumption of all outstanding liabilities of the combined Companies
plus notes receivable from Whitehall Homes II, Inc. In June 1999, the sole
stockholder of Whitehall Homes II, Inc. swapped all of the outstanding stock of
Whitehall Homes II, Inc. for a controlling interest in Cambridge Universal
Corporation whose name was subsequently changed to Whitehall LTD, Inc.
Whitehall Homes II, Inc. became a wholly owned operation subsidiary of
Cambridge Universal Corporation. The effect of these transactions are not
reflected in the accompanying financial statements.
<PAGE> 21
WHITEHALL HOMES, INC.
AND AFFILIATED COMPANIES
COMBINING FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997
TOGETHER WITH
ACCOUNTANT'S REPORT
<PAGE> 22
DONALD A. BYRD
CERTIFIED PUBLIC ACCOUNTANT
A PROFESSIONAL ASSOCIATION
2119 Kennen Drive
Valrica, Florida 33594
(813) 654-7871
To the Board of Directors
Whitehall Homes, Inc. and Affiliated Companies
I have reviewed the accompanying combining balance sheet of Whitehall Homes,
Inc. and Affiliated Companies as of December 31, 1997 and the related combining
Statements of income and retained earnings and cash flows for the year then
ended, in accordance with Statements of Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of Whitehall Homes, Inc. and Affiliated Companies.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be
made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
June 3, 1998
June 24, 1999 The accompanying combining financial statements have been
re-issued to include only certain affiliated companies for comparative
purposes. These combined financial statements should be read in conjunction
with the combined financial statements for the period ended December 31, 1998.
<PAGE> 23
WHITEHALL HOMES, INC. AND AFFILIATED COMPANIES
COMBINING BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
WHITEHALL
WHITEHALL FAIRWAY HOMES AT
WHITEHALL U-STORE HOMES AT BERMUDA WHITEHALL LAKE MAPLE
HOMES IT AVALON, DEVELOPMENT ASSOCIATES HOMES HAMMOCK
ASSETS INC. INC. INC. CORPORATION INC. INC. INC.
- ------ --------- ---------- ------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CASH 14,324 5,838 20,174 21,475 14,327 35,597 32,985
ACCOUNTS AND NOTES RECEIVABLE:
Affiliates 7,010 77,000 195,520 46,701
Others 500
Stockholders 80,097 18,628
LAND & DEVELOPMENT COST 602,278 764,963 64,100 181,893
HOMES UNDER CONSTRUCTION AND
FURNISHED MODELS 45,326 333,048 271,165
INVESTMENTS IN JOINT VENTURES 752
PROPERTY & EQUIPMENT, at cost:
Office furniture and equipment 51,919 3,634 1,700
Construction equipment 78,880
Vehicles 17,976
Buildings 398,144
Land 68,097
-------- ------- -------- --------- ------- -------- ---------
615,016 0 0 3,634 1,700 0 0
Less accumulated depreciation (186,490) (2,638) (243)
-------- ------- -------- --------- ------- -------- ---------
428,526 0 0 996 1,457 0 0
-------- ------- -------- --------- ------- -------- ---------
OTHER ASSETS 38,803 165 50,690 2,822
-------- ------- -------- --------- ------- -------- ---------
450,612 785,213 104,303 1,120,647 280,622 99,697 536,066
======== ======= ======== ========= ======= ======== =========
<CAPTION>
BEEKMAN
WHITEHALL VILLAGE ELIMINATIONS
MANAGEMENT DEVELOPMENT ADD COMBINED
ASSETS INC. CORPORATION (DEDUCT) TOTALS
- ------ ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
CASH 21,976 36,851 203,648
ACCOUNTS AND NOTES RECEIVABLE:
Affiliates 69,505 (260,323) 135,413
Others 224 724
Stockholders 98,725
LAND & DEVELOPMENT COST 1,613,234
HOMES UNDER CONSTRUCTION AND
FURNISHED MODELS 330,820 980,359
INVESTMENTS IN JOINT VENTURES 752
PROPERTY & EQUIPMENT, at cost:
Office furniture and equipment 67,253
Construction equipment 78,880
Vehicles 17,976
Buildings 398,144
Land 68,097
-------- ------- -------- ----------
0 0 0 620,350
Less accumulated depreciation (189,371)
-------- ------- -------- ----------
0 0 0 430,978
-------- ------- -------- ----------
OTHER ASSETS 230 92,710
-------- ------- -------- ----------
21,975 437,630 (260,323) 3,556,442
======== ======= ======== ==========
</TABLE>
See accompanying notes and accountant's review report.
<PAGE> 24
WHITEHALL HOMES, INC. AND AFFILIATED COMPANIES
COMBINING BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
WHITEHALL
WHITEHALL WHITEHALL BERMUDA WHITEHALL FAIRWAY HOMES AT
LIABILITIES AND HOMES U-STORE IT HOMES AT DEVELOPMENT ASSOCIATES LAKES HOMES MAPLE
STOCKHOLDERS' EQUITY INC. INC. AVALON, INC. CORPORATION INC. INC. HAMMOCK INC.
- ---------------------------------- --------- ---------- ------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES:
Accounts payable and accrued
liabilities................... 36,918 75,731 75,028 12,490 43,335
Customer deposits............... 137,943
Due to stockholders............. 171,250 27,865
Due to affiliates............... 34,612 134,911 69,605
Land and development loans...... 553,672
Construction and model loans.... 351,828 166,600
Notes payable................... 634,545 300,000 280,077
-------- ------- ------- --------- ------- ------ -------
671,463 471,250 110,343 1,143,304 280,077 81,995 347,778
-------- ------- ------- --------- ------- ------ -------
STOCKHOLDERS' EQUITY
Controlling interest:
Common stock, $1 par value.... 1,000 50 100 250 1,000 1,000 50
Paid-in capital............... 77,283 332,500 24,900 140,340 66,693
Retained earnings............. (299,134) (38,968) (28,020) (164,486) (727) 16,702 64,061
-------- ------- ------- --------- ------- ------ -------
(220,851) 293,582 (3,020) (23,896) 273 17,702 130,804
-------- ------- ------- --------- ------- ------ -------
Non-Controlling Interest:
Common stock, $1 par value.... 50 100 250 1,000 50
Paid-in capital............... 64,500 24,900 116,024
Retained earnings............. (64,169) (28,020) (115,035) (728) 54,434
-------- ------- ------- --------- ------- ------ -------
381 (3,020) 1,239 272 57,484
-------- ------- ------- --------- ------- ------ -------
450,612 765,213 104,303 1,120,647 280,622 99,697 536,066
======== ======= ======= ========= ======= ====== =======
<CAPTION>
BEEKMAN
WHITEHALL VILLAGE
LIABILITIES AND MANAGEMENT DEVELOPMENT ELIMINATIONS COMBINED
STOCKHOLDERS' EQUITY INC. CORPORATION ADD(DEDUCT) TOTALS
- ---------------------------------- ---------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
LIABILITIES:
Accounts payable and accrued
liabilities................... 48,497 291,339
Customer deposits............... 23,440 277,547 438,930
Due to stockholders............. 199,116
Due to affiliates............... 21,295 (260,323)
Land and development loans...... 553,672
Construction and model loans.... 40,314 558,642
Notes payable................... 1,214,622
-------- ------- -------- ---------
44,735 366,358 (260,323) 3,266,980
-------- ------- -------- ---------
STOCKHOLDERS' EQUITY
Controlling interest:
Common stock, $1 par value.... 1,000 1,000 6,450
Paid-in capital............... 84,310 55,485 781,611
Retained earnings............. (108,070) 14,787 (543,855)
-------- ------- -------- ---------
(22,760) 71,272 243,106
-------- ------- -------- ---------
Non-Controlling Interest:
Common stock, $1 par value.... 1,450
Paid-in capital............... 205,424
Retained earnings............. (150,518)
-------- ------- -------- ---------
56,356
-------- ------- -------- ---------
21,975 437,630 (260,323) 3,666,442
======== ======= ======== =========
</TABLE>
See accompanying notes and accountant's review report.
<PAGE> 25
WHITEHALL HOMES, INC. AND AFFILIATED COMPANIES
COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
WHITEHALL
WHITEHALL WHITEHALL BERMUDA WHITEHALL FAIRWAY HOMES AT
HOMES U-STORE IT HOMES AT DEVELOPMENT ASSOCIATES LAKES HOMES MAPLE
INC. INC. AVALON, INC. CORPORATION INC. INC. HAMMOCK INC.
--------- ---------- ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME:
Home and lot sales.............. 1,010,256 1,076,506 2,804,255
Management fees................. 658,451
Real estate commissions......... 196,459
Interest income................. 168 65 108
Joint venture earnings (loss)... (249)
Other........................... 35,246 9,038
--------- --------- -------- ---------- --------- ---------- ----------
TOTAL INCOME...................... 888,907 0 0 1,010,256 168 1,085,609 2,804,363
--------- --------- -------- ---------- --------- ---------- ----------
EXPENSES:
Cost of home and lot sales...... 1,028,774 906,184 2,331,884
Selling & general operating
expense....................... 56,040 155,718 120,251 278,606
General and administrative --
Personnel costs............... 692,615
Office and all other
expenses.................... 50,054 5,027 42,590
Real estate commissions......... 167,441
Interest expense................ 65,369 36,000 10,676 5,744
--------- --------- -------- ---------- --------- ---------- ----------
TOTAL EXPENSES.................... 975,479 41,027 56,040 1,184,492 53,266 1,026,435 2,616,234
--------- --------- -------- ---------- --------- ---------- ----------
NET INCOME (LOSS)................. (86,572) (41,027) (56,040) (174,236) (53,098) 59,174 188,129
RETAINED EARNINGS -- beginning.... (212,562) (62,110) 0 (105,285) 124,297 1,755 (60,007)
DISTRIBUTIONS..................... (72,654) (44,227) (6,627)
--------- --------- -------- ---------- --------- ---------- ----------
RETAINED EARNINGS -- ending....... (299,134) (103,137) (56,040) (279,521) (1,456) 16,702 121,496
========= ========= ======== ========== ========= ========== ==========
<CAPTION>
BOOKMAN
WHITEHALL VILLAGE
MANAGEMENT DEVELOPMENT ELIMINATIONS COMBINED
INC. CORPORATION ADD (DEDUCT) TOTALS
---------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
INCOME:
Home and lot sales.............. 871,254 6,762,271
Management fees................. (387,048) 271,403
Real estate commissions......... (116,755) 78,704
Interest income................. 841
Joint venture earnings (loss)... 110,205
Other........................... 117,626 110,454 161,810
--------- --------- --------- ----------
TOTAL INCOME...................... 117,626 981,708 (503,803) 6,384,834
--------- --------- --------- ----------
EXPENSES:
Cost of home and lot sales...... 748,428 (503,803) 4,511,467
Selling & general operating
expense....................... 60,755 671,370
General and administrative --
Personnel costs............... 692,615
Office and all other
expenses.................... 119,058 216,729
Real estate commissions......... 167,441
Interest expense................ 117,789
--------- --------- --------- ----------
TOTAL EXPENSES.................... 119,058 809,183 (503,803) 6,377,411
--------- --------- --------- ----------
NET INCOME (LOSS)................. (1,432) 172,525 0 7,423
RETAINED EARNINGS -- beginning.... (106,638) (157,738) (578,288)
DISTRIBUTIONS..................... (123,508)
--------- --------- --------- ----------
RETAINED EARNINGS -- ending....... (108,070) 14,787 0 (694,373)
========= ========= ========= ==========
</TABLE>
See accompanying notes and accountant's review report.
<PAGE> 26
WHITEHALL HOMES, INC. AND AFFILIATED COMPANIES
COMBINING STATEMENT OF CASH FLOWS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
FAIRWAY
WHITEHALL WHITEHALL BERMUDA WHITEHALL LAKES HOMES AT
HOMES U-STORE IT HOMES AT DEVELOPMENT ASSOCIATES HOMES MAPLE
INC. INC. VALON INC. CORPORATION INC. INC. HAMMOCK INC.
--------- ---------- ---------- ----------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) (86,672) (41,027) (56,040) (174,236) (53,098) 59,174 188,129
--------- ------- -------- --------- --------- --------- ---------
Adjustments to reconcile net
income (loss to
net cash proved by operating
activities -
Depreciation 34,881 385 243
Amortization 180 998 1,028
Increase/decreases in -
Land and development costs (2,278) 192,174 134,240 423,993
Homes under construction and
furnished models (45,326) 46,091 209,700 177,096
Customer deposits (124,067) 114,611 (235,283)
Accounts payable and accrued
liabilities (64,563) 75,731 18,775 (154,211) (92,528)
Property and equipment (69,749) (1,700)
Other assets (38,803) 7,000 27,372
Due from affiliates 151,295 (6,462) (169,257) (46,701)
Accounts receivable-other (500)
Due to affiliates 34,612 102,385 53,890 (68,949)
Total Adjustments 51,884 (8,740) 26,214 242,923 (142,344) 129,008 160,156
--------- ------- -------- --------- --------- --------- ---------
Net cash provided (used) by
operating activities (34,708) (49,767) (29,826) 68,687 (195,442) 188,182 348,285
--------- ------- -------- --------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net (increase) decrease in
investments in joint vent 250
--------- ------- -------- --------- --------- --------- ---------
Net cash provided (used) by
investing activities 250 0 0 0 0 0 0
--------- ------- -------- --------- --------- --------- ---------
Net borrowings under-
Land and development loans 81,065 (256,850)
Construction loans (150,932) (253,943) (28,790)
Notes payable 139,003
Stockholders' loans 1,257 280,077
--------- ------- -------- --------- --------- --------- ---------
Proceeds (distributions) from
(to) Stockholders' (153,325) 32,000 50,000 4,000 (91,282) (44,227) (37,257)
--------- ------- -------- --------- --------- --------- ---------
Net cash provided (used) by
financings activities (14,322) 33,257 50,000 (65,867) 188,795 (298,170) (322,897)
--------- ------- -------- --------- --------- --------- ---------
NET INCREASE IN CASH (48,780) (16,510) 20,174 2,820 (6,647) (109,988) 25,388
NET CASH AT BEGINNING OF YEAR 63,104 22,348 0 18,655 20,974 145,585 7,697
--------- ------- -------- --------- --------- --------- ---------
CASH AT END OF YEAR 14,324 6,838 20,174 21,476 14,327 35,597 32,985
========= ======= ======== ========= ========= ========= =========
<CAPTION>
BEEKMAN
WHITEHALL VILLAGE
HOMES DEVELOPMENT ELIMINATIONS COMBINED
INC. CORPORATION ADD(DEDUCT) TOTALS
---------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) (1,432) 172,525 0 7,423
------- --------- --------- ---------
Adjustments to reconcile net
income (loss to
net cash proved by operating
activities -
Depreciation 35,509
Amortization 2,206
Increase/decreases in -
Land and development costs 748,129
Homes under construction and
furnished models (223,609) 163,952
Customer deposits (905) 225,815 (249,051)
Accounts payable and accrued
liabilities (8,242) (225,038)
Property and equipment (71,449)
Other assets 100 (4,331)
Due from affiliates 25,750 (45,375)
Accounts receivable-other (224) (724)
Due to affiliates 123,938
Total Adjustments (905) 19,590 0 477,766
------- --------- --------- ---------
Net cash provided (used) by
operating activities (2,337) 192,115 0 485,189
------- --------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net (increase) decrease in
investments in joint vent 159,108 0 159,358
------- --------- --------- ---------
Net cash provided (used) by
investing activities 0 159,108 159,358
------- --------- --------- ---------
Net borrowings under- 0
Land and development loans 0 (175,785)
Construction loans 40,314 (393,351)
Notes payable 139,003
Stockholders' loans 281,334
------- --------- --------- ---------
Proceeds (distributions) from
(to) Stockholders' 0 (362,234) (602,325)
------- --------- --------- ---------
Net cash provided (used) by
financings activities 0 (321,920) 0 (751,124)
------- --------- --------- ---------
NET INCREASE IN CASH (2,337) 29,313 0 (106,577)
NET CASH AT BEGINNING OF YEAR 24,312 7,538 0 310,113
------- --------- --------- ---------
CASH AT END OF YEAR 21,975 36,851 0 203,536
======= ========= ========= =========
</TABLE>
See accompanying notes and accountant's review report.
<PAGE> 27
WHITEHALL HOMES, INC.
AND AFFILIATED COMPANIES
NOTES TO COMBINING FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE (1) - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A summary of the Companies' significant accounting policies consistently
applied in the preparation of the accompanying financial statements is as
follows:
(a) Combining Entities - The combining financial statements include the
financial statements of the following entities which are related through
common ownership and management:
<TABLE>
<S> <C>
Whitehall Homes, Inc. 100.00%
U-Store-It, Inc. 50.00
Beekman Village Development Corp. 100.00
Bermuda Development Corporation 50.00
Whitehall Associates, Inc. 50.00
Fairway Lakes Homes, Inc. 100.00
Whitehall Homes at Maple Hammock, Inc. 50.00
Whitehall Homes at Avalon, Inc. 50.00
Whitehall Management, Inc. 100.00
</TABLE>
All significant intercompany transactions and balances are eliminated in
the accompanying financial statements.
In addition to the above, the controlling stockholders or certain of the
above entities own an interest in the following entities not included in
the combining financial statements.
<TABLE>
<S> <C>
Whitehall Development Corporation 100.00%
Preserves at Palm Aire Construction Company 100.00
Beekman Place Development Corp. 100.00
Clubside Development Corporation 50.00
Windtree Development Corporation 50.00
Governors Green Development Corp. 50.00
Treetops at North Forty Development Corp. 100.00
Preserve at Palm Aire Development Corp. 50.00
Beekman Place Utility Corp. 50.00
Treetops Joint Venture of Charlotte Country 50.00
Owned by Whitehall Development Corp.
Beekman Village Joint Venture 50.00
Owned by Beekman Village Development Corp.
Governor's Green Joint Venture 50.00
Owned by Governor's Green Development Corp.
Greens of Peridia Joint Venture 50.00
Owned by Whitehall Homes, Inc.
</TABLE>
<PAGE> 28
The following is a summary of financial information related to the non-
combined entities as of December 31, 1997 and for the year then ended:
<TABLE>
<S> <C>
Assets $3,970,156
==========
Liabilities $2,660,263
Equity 1,309,893
----------
$3,970,156
==========
Sales $4,577,805
==========
Net income (loss) $ (94,810)
==========
</TABLE>
During 1997, Treetops Joint Venture of Charlotte County wrote down the cost
of land and development to the estimated current value. This resulted in a
loss of $291,954.
(b) Nature of Business-Whitehall Development Corporation was formed in 1985 to
develop land and to construct single family or multi-family housing.
Subsequently, the Company has become the managing arm of the affiliates
described in (a) above. Effective January 1, 1996, construction and sales
management for all affiliates was assumed by Whitehall Homes, Inc. This
change more accurately reflects the nature of the business. The Company
and its Affiliates recognize revenue from the sale of real estate at time
of closing, i.e., when sufficient down payment has been made, any
financing arranged, title, possession and other attributes of ownership
have been transferred to the buyer and the Companies are not obligated to
perform additional significant activities after the sale.
Certain of the Affiliated Companies are involved in joint ventures to
develop land and to construct residential housings. The Companies follow
the equity method of accounting for such investments in joint ventures.
Under this method of accounting, the Companies' cash investments in the
joint ventures are increased by the earnings or reduced by the losses and
cash distributions of the joint ventures.
<PAGE> 29
(c) Capitalization Period-Interest is capitalized on land in process of
development, finished building lots, and residential housing construction
costs during the development and construction period. Interest on debt
directly related to specific land parcels is capitalized using the
specific identification method, and interest for the remaining eligible
assets, if any, is capitalized using an allocation method based on the
Company's actual interest cost. During the year ended December 31, 1997,
the following was paid or accrued and capitalized:
<TABLE>
<CAPTION>
Entity Paid or Accrued Capitalized
------ --------------- -----------
<S> <C> <C>
Whitehall Homes, Inc $ 65,369 $ --
U-Store-It, Inc. 36,000 --
Bermuda Development Corporation 64,728 64,728
Whitehall Associates, Inc. 10,676 --
Fairway Lakes Homes, Inc. 5,990 5,990
Whitehall Homes at Maple Hammock 42,355 36,611
Beekman Village Development Corp. 3,175 3,175
-------- --------
$228,293 $110,504
======== ========
</TABLE>
(d) Land Cost Allocation and Inventory Valuation - The cost of acquiring and
developing land and constructing certain amenities is allocated to the
related parcels. Other direct construction costs are recorded on a
specific job basis. Certain overhead costs are allocated to development
costs and specific jobs based on current period direct costs. All such
properties are carried at the lower of cost or net realizable value.
(e) Income Taxes - The stockholders of the Companies have elected to be taxed
under the provisions of subchapter S of the Internal Revenue Code. Under
those provisions, the Companies do not pay Federal corporate income taxes
on their taxable income. Instead, the stockholders are liable for
individual Federal income taxes on their respective shares of the
Companies' taxable income.
Certain items of income and expense may be recognized for income tax
purposes in different periods from those in which such items are
recognized for financial reporting purposes. These amounts represent
taxable income (loss) that will be allocated to stockholders in future
years and result primarily
<PAGE> 30
from capitalization policies on homes and land and Revenue Recognition
policies. Such differences, if any, are accounted for as tax timing
adjustments in retained earnings.
(f) Property, Equipment and Depreciation-Property and Equipment are carried at
cost. The Companies compute depreciation at rates calculated to amortize
the cost of such assets over their estimated useful lives. Depreciation
was as follows for the year ended December 31, 1997:
<TABLE>
<S> <C>
Whitehall Homes, Inc. $34,881
Bermuda Development Corporation 385
Whitehall Associates, Inc. 243
-------
$35,509
=======
</TABLE>
(g) Customer Deposits - Customers are required to make certain escrow deposits
at the time a contract for sale of real estate is entered into between the
parties. The cash deposits are not available for the Companies' use until
the sale is "closed". The Companies' escrow agents receive such cash
deposits which are paid to the Companies upon "closing" of the sale.
NOTE (2) - RELATED PARTY TRANSACTIONS:
Information regarding transactions with all related parties for the year
ended December 31, 1997 is as follows:
<TABLE>
<S> <C>
Receivable from affiliates-
Due Whitehall Homes, Inc. - from -
Whitehall Management, Inc. $21,295
Whitehall Homes at Avalon, Inc. 1,710
Beekman Place Development Corp. (3,000)
Governor's Green Development Corp. (5,772)
Whitehall Homes at Maple Hammock (9,088)
Windtree Development Corp. 5
Whitehall Associates, Inc. 1,860
Due U-Store-It, Inc.
Whitehall Homes at Avalon, Inc. 20,000
Windtree Development Corp. 10,000
Governor's Green Development Corp. 14,000
Bermuda Development Corp. 33,000
Due Whitehall Homes at Maple Hammock
Bermuda Development Corp. 15,385
Windtree Development Corp. 20,316
Governor's Green Development Corp. 11,000
</TABLE>
<PAGE> 31
<TABLE>
<S> <C>
Due Beekman Village Development Corp.
Fairway Lakes Homes, Inc. 69,505
Due Whitehall Associates, Inc.
Whitehall Homes at Avalon, Inc. 12,102
Windtree Development Corp 62,606
Bermuda Development Corp 86,526
Whitehall Homes, Inc. (1,860)
Whitehall Realty, Inc. 522
Governor's Green Development Corp. 35,626
--------
$395,736
Combining Eliminations (260,323)
--------
$135,413
========
Payable to Affiliates-
Bermuda Development Corp.
Whitehall Associates, Inc. 86,526
U-Store-It, Inc. 33,000
Whitehall Homes at Maple Hammock 15,385
Fairway Lakes Homes, Inc.
Beekman Village Development Corp. 69,505
Whitehall Homes at Avalon, Inc.
Whitehall Homes, Inc. 1,710
Whitehall Associates, Inc. 12,902
U-Store-It, Inc. 20,000
Whitehall Management, Inc.
Whitehall Homes, Inc. 21,295
--------
260,323
Combining Eliminations (260,323)
--------
$ 0
========
Revenues:
Management fees-
The Beekman Village Joint Venture $ 55,243
Preserves at Palm Aire Develop Corp. 47,374
Fairway Lakes Homes, Inc. 73,892
Beekman Place Development Corp. 114,232
Bermuda Development Corp. 57,775
Windtree Development Corp. 109,797
Whitehall Homes at Maple Hammock, Inc. 200,138
--------
658,451
Combining eliminations (387,048)
--------
$271,403
========
</TABLE>
<PAGE> 32
<TABLE>
<S> <C>
Real estate commissions -
Beekman Place Development Corp. $ 42,642
The Beekman Village Joint Venture 23,009
Fairway Lakes Homes, Inc. 19,452
Bermuda Development Corp. 17,612
Windtree Development Corp. 27,181
Preserves at Palm Aire Develop Corp 8,881
Whitehall Homes at Maple Hammock 56,682
---------
195,459
Combining eliminations (116,755)
---------
$ 78,704
=========
</TABLE>
The amounts due to or from related parties are unsecured, bear no interest
and are due on demand.
NOTE (3) - DEBT:
The Companies' debt consisted of the following at December 31, 1997:
NOTES PAYABLE -
<TABLE>
<S> <C>
Whitehall Homes, Inc.
Installment notes payable to banks
with interest ranging from 8.75% to 10.08%.
Due in monthly installments totalling
$2,279 through April 2002 and secured by a
vehicle computer equipment, and a loader. $ 73,503
Mortgage note payable to a bank with
interest at Prime plus 1.50% and
secured by land and buildings. Maximum
borrowings under the note was $450,000
of which $69,791 is still available
for further construction. Principal
payments are based on a 20 year amortization
with the entire unpaid principal and
interest due on February 26, 2006. 377,393
Unsecured Line of Credit payable to
a bank with interest at prime plus
1.50% due monthly. The note matures
July 1, 1998 and is personally
guaranteed by the stockholders
of the Company. Maximum borrowings
may not exceed $250,000. 183,649
</TABLE>
<PAGE> 33
<TABLE>
<S> <C>
Whitehall Associates, Inc.
Unsecured note payable to a bank with
interest at prime plus 2.25% due monthly.
Principal balance is due September 2, 1998. 100,000
Unsecured line of credit payable to
a bank with interest at prime plus 1%
due monthly. The note matured on
February 11, 1998 and is currently
a demand note. Maximum borrowing
may not exceed $200,000. 180,077
U-Store-It, Inc.
Mortgage notes payable to individuals
with interest at 12.00% due monthly.
Principal is due October 31, 1998. 300,000
----------
$1,214,622
==========
Construction and Model Loan
Beekman Village Development Corp.
Payable to a bank, secured by a specific
home under construction with interest at
Prime +1.50% and is due December 1, 1998
or when the home is sold if sooner. 40,314
Bermuda Development Corp.
Payable to banks, secured by specific
homes under construction, with interest
ranging from Prime plus 1.00% to Prime plus
1.50% and maturities extending through
July 2, 1998. Maximum borrowings
under these loans may not exceed $488,306. 351,828
Whitehall Homes at Maple Hammock, Inc.
Payable to a bank, secured by specific
homes under construction, with interest
at Prime plus 1.00% and matures in
November, 1998. Maximum borrowings under
this line may not exceed $300,000. 166,500
----------
$ 558,642
==========
</TABLE>
The construction and model loans require that funds advanced for construction
be repaid when the home is sold. The bank loans are also personally guaranteed
by the majority stockholders of the Companies.
<PAGE> 34
<TABLE>
<S> <C>
Land and Development Loans
Bermuda Development Corp.
Payable to banks, secured by land and
improvements thereon, with interest
ranging from Prime plus 1.00% to Prime
plus 1.50% and maturities extending
through August 1999 553,672
----------
$ 553,672
==========
</TABLE>
The above notes due to banks contain release provisions which require
specific repayment as lots and/or units are sold. The bank loans are also
personally guaranteed by the majority stockholders of the Companies.
NOTE (4) COMMITMENTS AND CONTINGENCIES:
Whitehall Homes, Inc. has a line of credit with a bank for the purpose of
acquiring lots and constructing single family homes. The line of credit is for
$1,000,000 with interest at prime plus 1.50% and is due on demand. All advances
are secured by the specific home under construction and is guaranteed by the
stockholders of Whitehall Homes, Inc. At December 31, 1997, $538,618 was
outstanding under this line and is included in construction and model loans
on the accompanying balance sheet.
<PAGE> 35
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
MARCH 31, 1999
Alex N. Chaplan & Associates
<PAGE> 36
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditor's Report 1
Pro forma Consolidated Statement of Financial Condition 2-3
Pro forma Consolidated Statement of Income and
Expenses and Retained Earnings 4
Pro forma Consolidated Statement of Cash Flows 5
Notes to Pro forma Consolidated Financial Statements 6-12
</TABLE>
ALEX N. CHAPLAN & ASSOCIATES
<PAGE> 37
ALEX N. CHAPLAN & ASSOCIATES
CERTIFIED PUBLIC ACCOUNTANT
23622 CALABASAS ROAD, SUITE 107A
CALABASAS, CALIFORNIA 91308
(818)891-1901 FAX (818)222-0727
Cambridge Universal Corporation
(AKA - Whitehall Limited, Inc.)
Sarasota, Florida
We have examined the pro forma adjustments reflecting the merger of
Cambridge Universal and Whitehall Limited, Inc. as more fully described in
Notes VIII and the application of those adjustments to the historic amounts in
the accompanying pro forma consolidated financial statements as of March 31,
1999. Our examination was made to effect the adjustments for the period and
accordingly included such procedures as we considered necessary in the
circumstances.
The objective of this pro forma consolidated financial information is to
show what the significant effects on the historical financial might have been
had the transaction occurred on its effective date.
In our opinion, management's assumptions provide a reasonable basis for
presenting the significant effects directly attributable to the above-mentioned
merger as described in Note VIII and the application of those adjustments to
the historical statement amounts in the pro forma consolidated statement of
financial condition as of March 31, 1999 and consolidated statement of income
and expenses for the three months ended March 31, 1999.
/S/ Alex N. Chaplan & Associates
Alex N. Chaplan & Associates
Calabasas, CA
June 21, 1999
<PAGE> 38
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED., INC.)
PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
AS OF MARCH 31, 1999
ASSETS
<TABLE>
<S> <C> <C>
ASSETS
Cash in Banks $ 149,101
Due from affiliated companies 132,381
Investments - (at cost) 407,342
----------
TOTAL CURRENT ASSETS $ 688,824
CONSTRUCTION COSTS IN PROGRESS
Land and development costs $3,988,956
Homes under construction and furnished models 3,430,033
----------
TOTAL CONSTRUCTION COSTS IN PROGRESS $7,418,989
PROPERTY AND EQUIPMENT
Office land and building $ 866,241
Office furniture and fixtures 57,253
Construction equipment 78,880
Vehicles 13,713
----------
TOTAL 1,016,087
Less: Depreciation 13,748
----------
TOTAL PROPERTY AND EQUIPMENT $1,002,339
OTHER ASSETS
Deposit on lot $ 50,000
Prepaid model lease 79,922
Miscellaneous 2,154
----------
TOTAL OTHER ASSETS $ 132,076
----------
TOTAL ASSETS $9,242,228
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE> 39
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
AS OF MARCH 31, 1999
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
LIABILITIES
Accounts payable-trade $ 488,618
Notes payable to banks 389,942
Note payable (secured by office building) 364,480
Notes payable - other 300,000
Land and development loans 487,500
Construction loans payable 1,534,437
Due to affiliated companies 299,619
Customers' deposits 533,679
Due to stockholder 69,354
----------
TOTAL LIABILITIES $4,467,629
NOTES PAYABLE TO STOCKHOLDER $2,500,000
STOCKHOLDERS' EQUITY
Preferred stock $.10 par value authorized
and issued shares $0
Common stock; no par value authorized
500,000,000 shares; issued and
outstanding 7,100,000 shares 190,448
Paid in capital 2,302,098
Retained earnings (deficit) (217,947)
----------
TOTAL STOCKHOLDERS' EQUITY $2,274,599
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,242,228
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 40
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED., INC.)
PRO FORMA CONSOLIDATED STATEMENT OF INCOME AND EXPENSES
AND RETAINED EARNINGS
FOR THE PERIOD JANUARY 1, 1999 TO MARCH 31, 1999
<TABLE>
<S> <C> <C>
INCOME
Sales of homes and lots $1,599,051
Management fees 62,691
Real estate commissions 12,354
Interest income 2,292
Other 32,650
----------
TOTAL INCOME $1,709,038
COST OF HOMES AND LOTS $1,238,536
----------
NET INCOME (BEFORE OPERATING EXPENSES) $470,502
OPERATING EXPENSES
Selling and General $226,839
Personnel 102,107
Office 73,773
Real estate commissions 21,653
----------
TOTAL OPERATING EXPENSES $424,372
----------
NET INCOME (BEFORE DEPRECIATION
AND INTEREST $46,130
OTHER EXPENSE
Interest $59,881
Depreciation 13,748
----------
TOTAL OTHER EXPENSE $73,629
----------
NET (LOSS) FOR THE PERIOD ($27,499)
RETAINED EARNINGS (DEFICIT)
Balance - December 31, 1998 ($190,448)
----------
RETAINED EARNINGS (DEFICIT) - MARCH 31, 1998 ($217,947)
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE> 41
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED., INC.)
PRO FORMA CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD JANUARY 1, 1999 TO MARCH 31, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) ($27,499)
Adjustments to reconcile net (loss) to net
cash provided by operating activities 13,748
Increase/(decrease) in:
Land and development costs (31,267)
Homes under construction and furnished models (162,049)
Customer deposits (203,284)
Accounts payable and accrued liabilities (55,113)
Other assets (85,677)
Due from affiliates (57,342)
Due to affiliates (14,678)
---------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES ($623,161)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided by investing activities $ 0
Net cash from borrowings:
Land and development loans 96,400
Construction loans 366,234
Notes payable (7,408)
Stockholder loans 40,523
----------
NET CASHFLOWS FROM
BORROWING $ 495,749
---------
NET CASH (DECREASE) $(127,412)
CASH IN BANK - JANUARY 1, 1999 $ 276,513
---------
CASH IN BANK - MARCH 31, 1999 $ 149,101
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE> 42
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND LINE OF BUSINESS
History:
The Company was incorporated in 1989 under the name Otisco. In January
1992, the company changed its name to Impact Income Investments. The Company
was inactive through May 1996 and the Company name was changed to Financial
Freedom Enterprises, Inc.
Early in 1997 the name was changed to Cambridge Universal Corporation and
a new board of directors were elected.
NOTE II - CAPITALIZATION PERIOD
Interest is capitalized on land in process of development, finished
building lots, and residential housing construction costs during the
development and construction period. Interest on debt directly related to
specific land parcels is capitalized using the specific identification method
and interest for the remaining eligible assets, if any, is capitalized using
an allocation method based on the Company's actual interest cost.
NOTE III - LAND COST ALLOCATION AND INVENTORY VALUATION
The cost of acquiring and developing land and constructing certain
amenities is allocated to the related parcels. Other direct construction costs
are recorded on a specific job basis. Certain overhead costs are allocated to
development costs and specific jobs based on current period direct costs. All
such properties are carried at the lower of cost or net realizable value.
NOTE IV - PROPERTY, EQUIPMENT AND DEPRECIATION
Property and Equipment are carried at cost. The Company computes
depreciation at rates calculated to amortize the cost of such assets over their
estimated useful lives.
-6-
<PAGE> 43
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(Continued)
NOTE V - CUSTOMER DEPOSITS
Customers are required to make certain escrow deposits at the time a
contract for sale of real estate is entered into between the parties. The cash
deposits are not available for the Company's use until the sale is "closed".
The company's escrow agents receive such cash deposits which are paid to the
company upon closing of the sale.
NOTE VI - COMMITMENTS AND CONTINGENCIES
The Company has a line of credit with a bank for the purpose of acquiring
lots and constructing single family homes. The line of credit is for $2,000,000
with interest at prime plus 1.50% and is due on demand. All advances are
secured by the specific home under construction and is guaranteed by the
stockholder of the Company.
NOTE VII - DEBT
The Company's debt consisted of the following at March 31, 1999:
<TABLE>
<S> <C>
Notes Payable-
Mortgage payable, Sarasota Bank, Interest at
9.25% at 1284./mo. $364,480
Huntington National Bank-Commercial Loan at
9.25%-uninsured interest due 41,818
Sarasota Bank-Commercial Loan-9% loan secured
by computer equipment-principal at 458/mo.
plus interest 8,507
Provident Bank-Due 4/9/02 - 10.08% loan secured
by Loader 1,281.62/mo. principal and interest 39,617
Individual notes payable-12% interest only 300,000
Bank Provident - due 9/2/99 100,000
Northern Trust - 10% 200,000
Huntington National Bank-Land and development loan
(as part of $2,000,000 loan commitment per above) 487,500
</TABLE>
-7-
<PAGE> 44
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(Continued)
NOTE VIII - SUBSEQUENT EVENTS
A meeting of the holders of the outstanding Common Stock, no par value, of
the Company was held at 10:00 A.M., Eastern Standard Time, on June 17, 1999 for
stockholders of record dated June 3, 1999.
Those matters considered at the meeting are as follows:
1. To authorize the Board of Directors of the Company as presently
constituted to take such action as is necessary to permit the Company to
be domiciled and subject to the Florida Business Corporation Act (the
"Florida Act"), which action is expected to involve action by the Board
of Directors of the Company to qualify the Company as a foreign
corporation authorized to do business in Florida and thereafter the
adoption of the Florida Act pursuant to the provisions of the Florida
Act.
2. To cause to be prepared and filed under the Florida Act and such
statutes of Colorado as are still applicable Amended and Restated
Articles of Incorporation of the Company pursuant to which the name of
the Company will be changed to WHITEHALL LIMITED, INC. and the
outstanding Common Stock of the Company will be reclassified whereby
each three Shares presently outstanding will become one outstanding
Share. The number of authorized shares of Common Stock and Preferred
Stock to be set forth in such Amended and Restated Articles shall remain
the same.
3. To authorize the Board of Directors to initiate and consummate a
business combination between the Company and a Florida corporate entity
known as Whitehall Homes II, Inc. pursuant to which combination
Whitehall Homes II, Inc. is expected to become a wholly-owned operating
subsidiary of the Company and the former shareholders of Whitehall Homes
II, Inc. will be issued Shares which will constitute, upon issuance
thereof, of not more than 61% of shares then outstanding as adjusted for
such issuance.
-8-
<PAGE> 45
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(Continued)
4. To ratify the adoption of new and successor Bylaws for the Company.
Presently, the principal executive offices of the Company are maintained at
the offices of McFarland consulting Services, 3296 Osceola Street, Denver,
Colorado 80212. On and subsequent to May 21, 1999, however, such offices are
also being maintained at Andrews & Associates, Inc., 7669 Fairway Woods Drive,
Sarasota, Florida 34238. It is anticipated that prior to the Special Meeting,
the utilization of the Denver, Colorado office facilities will be discontinued.
CONTROL SHARE ACQUISITION TRANSACTION
Pursuant to an Agreement Providing for the Purchase of Capital Stock dated
February 18, 1999 with Addendums thereto (collectively the "Acquisition
Agreement"), Andrews & Associates, Inc., a Florida corporation domiciled and
maintaining its principal place of business in Sarasota, Florida ("Andrews"),
has acquired in accordance with the terms of the Acquisition Agreement 2,290,000
Shares, as well as the voting power represented by granted Proxies for
approximately 2,319,000 outstanding Shares.
Accordingly, as a result of the consummation of the Acquisition Agreement,
which occurred on or about May 20, 1999, Andrews is vested with voting control
of the Company and such is expected to be the case in the foreseeable future
time until the consummation of the transaction with Whitehall Homes II, Inc.
("Whitehall Homes"), a described subsequently in this Information Statement.
The 2,290,000 Shares acquired by Andrews were acquired for a consideration
constituted by cash and promissory notes from the following record and
beneficial holders of Shares and in the Share amounts indicated:
<TABLE>
<CAPTION>
Number of Cambridge
Shares Held of Record
Holder and Beneficially
- ------ ---------------------
<S> <C>
Howard P. Carroll 445,000
First Development Investment Corp. 645,000
McFarland Consulting Services, Inc. 500,000
</TABLE>
-9-
<PAGE> 46
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(Continued)
Number of Cambridge
Shares Held of Record
Holder and Beneficially
- ------ ---------------------
Craig Graham 25,000
Allan Land & Cattle, Inc. 675,000
Certain of the above-identified sellers of Shares to Andrews remain Shareholders
of the Company, including, without limitation, Allan Land & Cattle, Inc.
In accordance with the Acquisition Agreement, certificates representing
1,717,500 Shares of the 2,290,000 Shares acquired by Andrews, are being held by
an Escrow Agent designated in the Acquisition Agreement and such certificates
will be released by the Escrow Agent on each instance of retirement of remaining
consideration to be paid for the Shares acquired by Andrews in accordance with
the promissory notes given in partial payment of such consideration. The voting
power with respect to such 1,717,500 Shares is vested in Andrews, however,
unless an event of default occurs with respect to any or all of the promissory
notes delivered by Andrews to the above-identified Shareholders.
The described Proxies vesting additional voting power in Andrews are also
held by the Escrow Agent but are available to Andrews on each and every instance
where the holders of the Company's outstanding shares are called upon to vote on
any matter, again, unless and until an event of default occurs with respect to
the outstanding promissory notes. Andrews, as indicated, is a corporation formed
and existing under Florida law and having its principal place of business in
Sarasota, Florida. Andrews engages in the providing of consulting services
principally to business entities engaged in residential dwelling construction
with an emphasis on single family dwellings constructed in planned residential
developments containing a number of structures. Andrews has acted as a
consultant to Whitehall Homes, which will be a constituent entity to the
business combination described below in this Information Statement.
-10-
<PAGE> 47
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(Continued)
The outstanding voting common stock of Andrews is owned of record by
Patrick J. Andrews, Gregory M. Andrews and Jerome S. Andrews, who are brothers.
Patrick, Gregory and Jerome Andrews serve as members of the Board of Directors
and Jerome Andrews serves as President of Andrews. Patrick Andrews serves as
Vice President of Andrews and Gregory M. Andrews serves as Vice President,
Secretary-Treasurer of Andrews.
The father of Patrick, Gregory and Jerome Andrews, J. S. Andrews, is a key
managerial consultant of Andrews and such is expected to be the case subsequent
to the business combination with Whitehall Homes.
At the time that the business transaction with Whitehall Homes is
consummated, Andrews will no longer be vested with voting control of the
Company.
TRANSACTION WITH WHITEHALL HOMES II, INC.
-----------------------------------------
At a time contemporaneous with the Special Meeting of the Shareholders of
the Company held June 7, 1999, a business combination between the Company and
the holders of all of the outstanding voting securities of Whitehall Homes will
be consummated whereby not more than 61% of the shares of the Company
outstanding at the time subsequent to the consummation of such combination
transaction will be held by the holders of such voting securities of Whitehall
Homes. The Company will at that time be the corporate parent of Whitehall Homes
and Whitehall Homes will be operated as a wholly owned corporate subsidiary of
the Company.
As provided in the Amended and Restated Articles of Incorporation
described in the accompanying Meeting Notice and below in this Information
Statement, the Company's name will be changed to Whitehall Limited, Inc. On and
subsequent to the business combination between the Company and Whitehall Homes,
the business of the Company will become that of Whitehall Homes and the
Company, accordingly, will eliminate the inactive status which has
characterized the Company for some period of time.
-11-
<PAGE> 48
CAMBRIDGE UNIVERSAL CORPORATION
(AKA WHITEHALL LIMITED, INC.)
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(Continued)
Whitehall Homes has engaged in the residential home construction business
directly or through affiliated entities since approximately 1985 and has
constructed more than 1,000 single family residences and approximately 360
multi-family homes. The activities of Whitehall Homes have been largely
concentrated in the State of Florida. All of the outstanding voting common stock
of Whitehall Homes is presently owned by Ronald Mustari and members of his
family, either of record or beneficially.
The Company will be the surviving entity in the business combination with
Whitehall Homes, although its name will be changed from its present name to that
of WHITEHALL LIMITED, INC. pursuant to the preparation and filing of the Amended
and Restated Articles of Incorporation.
-12-
<PAGE> 1
[STATE OF FLORIDA; DEPARTMENT OF STATE CERTIFICATE]
I certify the attached is a true and correct copy of the Certificate of
Domestication and Articles of Incorporation for WHITEHALL LIMITED, INC., filed
on June 24, 1999 effective July 12, 1988, as shown by the records of this
office.
The document number of this corporation is P99000057455.
[STATE OF FLORIDA SEAL] Given under my hand and the
Great Seal of the State of Florida
at Tallahassee, the Capitol, this the
Twenty-fourth day of June, 1999
/s/ Katherine Harris
-----------------------------------
Katherine Harris
Secretary of State
<PAGE> 2
CERTIFICATE OF DOMESTICATION
The undersigned, Gregory M. Andrews, Vice President, of Cambridge Universal
__________________ ______________ ___________________
(Name) (Title) (Corporation Name)
Corporation, a foreign Corporation, in accordance with Florida Statutes,
___________
section 607.1801 does hereby certify:
1. The date on which corporation was first formed was July 12, 1988.
_______ ____
2. The jurisdiction where the above named corporations was first formed,
incorporated, or otherwise came into being was Colorado.
________
3. The name of the corporation immediately prior to the filing of this
Certificate of Domestication was Cambridge Universal Corporation.
_______________________________
4. The name of the corporation, as set forth in its articles of incorporation,
to be filed pursuant to ss. 607.0202 and 607.0401 with this certificate is
Whitehall Limited, Inc.
______________________
5. The jurisdiction that constituted the seat, siege, social principal place of
business or central administration of the corporation, or any other
equivalent thereto under applicable law immediately prior to the filing of
the Certificate of Domestication was Colorado.
________
I am Vice President, of Cambridge Universal Corporation and am authorized to
______________ _______________________________
sign this certificate of Domestication on behalf of the corporation and have
done so this the _______ day of June 1999.
/s/ Gregory M. Andrews
__________________________________________________
(Authorized Signature)
Filing Fee:
Certificate of Domestication $ 50.00
Articles of Incorporation and Certified Copy $ 78.75
-------
Total to domesticate and file $126.75
<PAGE> 3
ARTICLES OF INCORPORATION
OF
WHITEHALL LIMITED, INC.
ARTICLE I - Name
The name of the corporation is:
WHITEHALL LIMITED, INC.
ARTICLE II - Mailing Address
The mailing address of the corporation shall be:
290 Cocoanut Avenue
Sarasota, Florida 34236
ARTICLE III - Capital Stock
Section 1. The total number of shares of all classes of stock which the
corporation shall have authority to issue is six hundred million (600,000,000)
shares.
The corporation shall have authority to issue two (2) classes of stock.
Five hundred million (500,000,000) shares shall be common stock having a par
value of $.10 (hereinafter referred to as "Common Stock") and one hundred
million (100,000,000) shares shall be preferred stock issuable in series and
having a par value of $.10 (hereinafter referred to as "Preferred Stock").
Section 2. Statement of Preferences, Limitations and Relative Rights in
Respect of Shares of Each Class. A description of the different classes of stock
and a statement of the
<PAGE> 4
designation, preferences, voting rights, limitations and relative rights of the
holders of stock of such classes are as follows:
A. Preferred Stock.
(1) Shares of Preferred Stock may be issued from time to time in one or
more series. The preferences and relative, participating, optional and other
special rights of each of such series and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other series
already outstanding; and the Board of Directors of the corporation is hereby
expressly granted authority to fix, by resolution or resolutions adopted prior
to the issuance of any shares of a particular series of Preferred Stock,the
designations, preferences and relative, participating, optional and other
special rights, or the qualifications, limitations or restrictions thereof, of
such series, including without limiting the generality of the foregoing, the
following:
(a) The rate, if any, and times at which, and the terms and
conditions on which, dividends on the Preferred Stock of such series shall be
paid;
(b) The redemption price or prices, if any, and the times at which,
Preferred Stock of such series may be redeemed;
(c) The rights of the holders of Preferred Stock of such series upon
the voluntary or involuntary liquidation, distribution or sale of assets,
dissolution or winding up of the corporation;
(d) The terms of the sinking fund or redemption of purchase account,
if any, to be provided for the Preferred Stock of such series;
2
<PAGE> 5
(e) The right, if any, of the holders of Preferred Stock of such
series to convert the same into, or exchange the same for, other classes of
stock of the corporation and the terms and conditions of such conversion or
exchange; and
(f) The voting powers, if any, of the holders of the Preferred Stock
of such series
(2) All shares of a particular series shall be identical in all respects.
The rights of the Common Stock of the corporation may be subject to the
preferences and relative, participating, optional and other special rights of
the Preferred Stock or each series as fixed from time to time by the Board of
Directors as aforesaid.
(3) The holders of the Preferred Stock, in preference to the holders of
the Common Stock of the corporation, may be entitled to receive, if and when
declared by the Board of Directors, dividends at the rate established by the
Board of Directors at the time of the issuance of the shares of each series.
Such dividends, when and if declared, may be cumulative so that if dividends in
respect to any dividend period shall not have been paid upon, or declared and
set apart for, the Preferred Stock the deficiency shall be fully paid or
declared and set apart before any dividends shall be paid upon, or declared or
set apart for the Common Stock.
B. Common Stock.
(1) After the requirements with respect to preferential dividends upon the
Preferred Stock shall have been met, if such preference be established by the
Board of Directors of the corporation, and after the corporation shall have
complied with all requirements, if any, with respect to the setting aside of
sums as a sinking fund or redemption or purchase
3
<PAGE> 6
account for the benefit of any series of Preferred Stock, then and not
otherwise, the holders of the Common Stock shall be entitled to receive such
dividends as may be declared from time to time by the Board of Directors.
(2) After distribution in full of the preferential amount to be
distributed to the holders of all series of the Preferred Stock then
outstanding in the event of voluntary or involuntary liquidation, dissolution
or winding up of the corporation, the holders of the Common Stock shall be
entitled to receive all the remaining assets of the corporation available for
distribution to its stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.
(3) Each holder of Common Stock shall have one (1) vote for each share of
Common Stock held by him in all matters submitted to a vote of the
stockholders. Cumulative voting in the election of directors will not be
allowed.
Section 3. There are 7,100,000 shares of common stock of the corporation
presently outstanding, no par value, which, with the filing of these Articles
of Incorporation shall be reclassified into 2,366,667 shares, $.10 par value.
ARTICLE IV - Registered Office and Agent
The street address of the registered office of this corporation is 290
Cocoanut Avenue and the name of the registered agent of this corporation at
that address is J.S. ANDREWS.
4
<PAGE> 7
ARTICLE V - Incorporator
The name and address of the person signing these Articles is: J. S.
ANDREWS, 290 Cocoanut Avenue, Sarasota, Florida 34236.
ARTICLE VI - Officers
The following persons shall be the officers of the Company:
President Robert Ground
290 Cocoanut Avenue
Sarasota, Florida 34236
Vice President, Secretary and Gregory M. Andrews
Treasurer 290 Cocoanut Avenue
Sarasota, Florida 34236
ARTICLE VII - Bylaws
The power to adopt, alter, amend or repeal Bylaws of this corporation
shall be vested in either the Board of Directors or shareholders; provided;
however, that the Board of Directors may not alter, amend or repeal any Bylaws
adopted by the shareholders if the shareholders specifically provide that the
Bylaw is not subject to alteration, amendment or repeal by the Board of
Directors.
ARTICLE VIII - Indemnification
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
5
<PAGE> 8
ARTICLE IX - Affiliated Transactions
The provisions of Chapter 607.0901, Florida Statutes, as amended, shall NOT
apply to this corporation.
WITNESS my hand and seal at Sarasota, Florida this 23 day of June, 1999.
/s/ J.S. Andrews
--------------------------
J.S. ANDREWS, Incorporator
The undersigned, having been designated in the foregoing Articles of
Incorporation as Registered Agent, hereby agrees to accept said designation.
/s/ J.S. Andrews
--------------------------
J.S. ANDREWS
6
<PAGE> 1
WHITEHALL LIMITED, INC.
a Florida corporation
(formerly known as CAMBRIDGE UNIVERSAL CORPORATION)
INFORMATION STATEMENT PURSUANT TO
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
RULE 15c2-11
The information set forth herein is intended to assist securities
broker-dealers who are submitting or publishing quotations with respect to the
publicly traded shares of common stock of WHITEHALL LIMITED, INC. (formerly
known as CAMBRIDGE UNIVERSAL CORPORATION) in connection with the providing of
current information concerning WHITEHALL LIMITED, INC. as set forth in paragraph
(a)(5) of Rule 15c2-11. Securities broker-dealers are reminded that subparagraph
(a) of the Rule also requires such securities broker-dealers publishing
quotations to have in its records the documents and information required by
paragraph (a), which documents and information are referred to in the Rule as
the "paragraph (a) information". A copy of Rule 15c2-11 is included with this
Information Statement.
<PAGE> 2
The information presented below is intended to comply with the information
providing requirements of United States Securities and Exchange Commission Rule
15c2-11. Unless otherwise indicated herein, the date of the information
presented is July 1, 1999. The information is presented under roman numeral
sections which correspond with the roman numeral information requirement
sections of paragraph (a)(5) of the Rule.
i. THE EXACT NAME OF THE ISSUER AND ITS PREDECESSORS (IF ANY):
The exact corporate name of the issuer is WHITEHALL LIMITED, INC.
WHITEHALL LIMITED, INC. is referred to in this Information Statement as
"WHITEHALL". The previous corporate name of WHITEHALL was CAMBRIDGE
UNIVERSAL CORPORATION and prior to the utilization of that name the
issuer utilized the corporate names OTISCO CORPORATION, INCOME IMPACT
INVESTMENTS, INC. and FINANCIAL FREEDOM ENTERPRISES, INC.
ii. ADDRESS OF THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER:
The issuer maintains its principal executive offices at 290 Cocoanut
Avenue, Sarasota, Florida 34236.
iii. STATE OF INCORPORATION:
WHITEHALL was originally incorporated under the laws of the State of
Colorado on July 12, 1988. Effective June 24, 1999, WHITEHALL adopted
the provisions of the Florida Business Corporation Act and is now a
corporate entity domesticated in Florida. At such time, WHITEHALL also
changed its name from CAMBRIDGE UNIVERSAL CORPORATION to WHITEHALL
LIMITED, INC. and effected a reverse three for one split of its
outstanding common stock.
iv. TITLE AND CLASS OF SECURITY:
The only equity security of WHITEHALL which is outstanding is common
stock.
v. PAR VALUE OF THE SECURITY:
The par value of the outstanding common stock of WHITEHALL is $.10.
vi. THE NUMBER OF SHARES OR TOTAL AMOUNT OF SECURITIES OUTSTANDING AS OF THE
CLOSE OF THE MOST RECENT FISCAL YEAR OF THE ISSUER (MARCH 31, 1999):
1
<PAGE> 3
As of the close of the most recent fiscal year of the Issuer (March 31,
1999), there were outstanding 2,366,667 shares of common stock (as
adjusted for the three for one reverse stock split effective June 24,
1999). On such date, no other class of equity securities of the issuer
was outstanding. As a result of the exchange transaction subsequently
described herein, there are outstanding, as of the close of business on
July 1, 1999, 8,862,043 shares of common stock. During the fiscal
quarter ended June 30, 1998, WHITEHALL, pursuant to contractual
arrangements, restored 18,500,000 shares of common stock (not adjusted
for the reverse stock split) to the status of authorized but unissued
shares. No consideration was paid by WHITEHALL to any person or entity
in such transaction.
vii. NAME AND ADDRESS OF TRANSFER AGENT:
The transfer agent for the outstanding common stock of WHITEHALL is
American Securities Transfer & Trust, Inc., 12039 West Alameda Parkway,
Lakewood, Colorado 80228.
viii. THE NATURE OF THE ISSUER'S BUSINESS:
WHITEHALL will continue the business previously conducted by WHITEHALL
HOMES II, INC. and affiliated entities (collectively the "Whitehall
Entities" and the "Whitehall Business"). The operations of the Whitehall
Entities were consolidated into WHITEHALL HOMES II, INC. during the
first calendar quarter of 1999. The Whitehall Business was formed in
1985 with a primary emphasis in the development and marketing of
moderately priced housing communities and single family homes in the
Florida counties of Sarasota, Manatee and Charlotte, which are located
in the Central West Coast of Florida. The principal of the Whitehall
Entities is Ronald Mustari who presently serves as President and Chief
Executive Officer of WHITEHALL. Mr. Mustari has approximately 30 years
of home building experience.
Developments undertaken by the Whitehall Entities include Forty-three
West, Bradenton, Florida; Fairmont Park and Triangle Park, Oneco,
Florida; Forty-three West, Sarasota, Florida; The Treetops at North 50,
Manatee County, Florida; Whitehall Homes located in the Sarabay area of
Bradenton, Florida; Forty-three Waterside Lane in Perico, Manatee
County, Florida; and The Grove at Beekman Place, Sarasota, Florida.
Currently, WHITEHALL, in the continuation of the business of the
Whitehall Entities, is engaged in the development of the residential
dwelling communities known as The Village at Beekman Place and The
Estates at Beekman Place, both of which are located in the greater
Sarasota, Florida metropolitan area; Governor's Green and Bermuda Club
at the Plantation Golf & Country Club located in the
2
<PAGE> 4
greater Venice, Florida metropolitan area; and Avalon at the Villages of
Palm Aire located in the greater Sarasota, Florida metropolitan area.
WHITEHALL offers home quality homes with custom features designed
principally for the entry level or move up home buyer's market, as well
as the retirement segment of the home buyers' market. Residences usually
range in size from 1,200 to 3,500 square feet and have purchase prices
ranging from $95,000 to $400,000. As a general practice, WHITEHALL
endeavors to acquire developed building lots after all zoning and other
governmental entitlements and approvals have been attained. By
conducting business in this fashion, WHITEHALL believes that it can
create finished residential dwellings and present same to the available
market more quickly than if WHITEHALL engaged in the necessary land
development activities in order to bring lots to a completely developed
status. In conducting business on this basis, WHITEHALL utilizes and
will continue to utilize lot options and similar contractual
arrangements to secure adequate inventories of developed lots.
WHITEHALL markets its residential dwelling inventories through
commissioned employees and independent real estate brokers. Residential
dwelling sales are typically conducted from sales offices located in
furnished models used in each subdivision where WHITEHALL is active.
WHITEHALL typically also builds a limited number of speculative homes in
each residential subdivision in which it is active in order to enhance
its marketing and sales activities.
ix. THE NATURE OF PRODUCTS AND SERVICES OFFERED:
SEE RESPONSE TO ITEM VIII. ABOVE.
x. THE NATURE AND EXTENT OF THE ISSUER'S FACILITIES:
The facilities of WHITEHALL are constituted by its inventory of
residential dwellings under construction and in completed state, as well
as its investment in land which is in various stages of development.
WHITEHALL has a nominal investment in support equipment, including its
executive headquarters, which it owns, office furniture and fixtures,
construction equipment and vehicles. The pro forma consolidated
statement of financial condition of WHITEHALL (which reflects the
combination with WHITEHALL HOMES II, INC.) at March 31, 1999 indicates
that WHITEHALL had approximately $3.99 million invested in land and
development costs and approximately $3.43 million invested in homes
under construction and furnished models.
3
<PAGE> 5
xi. THE NAME OF THE CHIEF EXECUTIVE OFFICER AND MEMBERS OF THE BOARD OF
DIRECTORS:
See forth below are the members of the Board of Directors and officers
of WHITEHALL at March 31, 1999:
Harry Van Der Noord, Chairman of the Board of Directors
Ronald Mustari, President, Chief Executive Officer and Director
Robert Ground, Vice President, Secretary and Director
Joanne Mustari, Treasurer and Chief Financial Officer
xii. THE ISSUER'S MOST RECENT BALANCE SHEET AND PROFIT AND LOSS AND RETAINED
EARNINGS STATEMENTS:
Included with this Information Statement are the pro forma consolidated
statement of financial condition of WHITEHALL at March 31, 1999, the pro
forma consolidated statement of income and expenses and retained
earnings for the three month period ended March 31, 1999 and the pro
forma consolidated statement of cash flows for the three months ended
March 31, 1999, all of which pro forma consolidated statements reflect
the exchange transaction which occurred between WHITEHALL and Ronald and
Joanne Mustari effective January 1, 1999 and governed by transactional
agreements dated June 17, 1999 whereby WHITEHALL exchanged 4,608,268 of
its common shares for all of the issued and outstanding voting common
stock of WHITEHALL HOMES II, INC. Such 4,608,268 shares of common stock
of WHITEHALL have been issued to Ronald and Joanne Mustari, Husband and
Wife, and such shares constitute 52% of WHITEHALL shares outstanding as
of the close of business on July 1, 1999. To the knowledge of WHITEHALL,
no other person beneficially owns 10% or more of the outstanding common
stock of WHITEHALL.
xiii. INCLUDED WITH THIS INFORMATION STATEMENT ARE THE ANNUAL REPORTS ON FORM
10-SBK AS FILED BY THE ISSUER (THEN KNOWN AS FINANCIAL FREEDOM
ENTERPRISES, INC.) FOR THE FISCAL YEARS ENDED MARCH 31, 1998 AND 1997.
xiv. AFFILIATION OF THE ISSUER WITH ANY BROKER OR DEALER OR ANY ASSOCIATED
PERSON OF ANY BROKER OR DEALER:
WHITEHALL is not affiliated with any broker or dealer or affiliated with
any associated person of any broker or dealer.
4
<PAGE> 6
xv. QUOTATION, PUBLICATION OR SUBMISSION ON BEHALF OF OTHER BROKERS OR
DEALERS:
To the best of the knowledge of WHITEHALL any quotation published or
submitted by any broker or dealer engaged in market making or other
transactions relating to WHITEHALL'S outstanding common stock are being
made solely by such broker or dealer and not on behalf of any other
broker or dealer.
xvi. QUOTATION, PUBLICATION OR SUBMISSION DIRECTLY OR INDIRECTLY FOR THE
BENEFIT OF THE ISSUER OR ANY DIRECTOR, OFFICER OR ANY PERSON DIRECTLY OR
INDIRECTLY THE BENEFICIAL OWNER OF MORE THAN 10% OF THE OUTSTANDING
SHARES OF COMMON STOCK OF WHITEHALL:
To the best of the knowledge of WHITEHALL, any submitted or published
quotation relating to its outstanding freely tradeable common stock is
not being submitted or published on behalf of WHITEHALL or any director
or officer thereof or any person directly or indirectly the beneficial
owner of more than 10% of the outstanding common stock of WHITEHALL.
END OF INFORMATION STATEMENT
5
<PAGE> 1
AGREEMENT PROVIDING FOR THE EXCHANGE
OF CAPITAL STOCK
BY AND BETWEEN
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC.
DATED AS OF JUNE 17, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
---
<S> <C>
BACKGROUND 1
ARTICLE I - Exchange of Common Stock 3
1.1 The Exchange Transaction 3
1.2 Reclassification of Acquiror Stock 3
1.3 Minimum Number of Shares of Acquiree Stock Exchanged 3
1.4 Issuance of Additional Acquiree Securities 4
ARTICLE II - Action Prior to Closing Date 4
2.1 Corporate Action of Acquiror 4
2.2 Corporate Action of Acquiree 4
2.3 Action by Holders 4
2.4 Acquiror Informational Filings 5
2.5 Financial Statements of Acquiree 5
2.6 Allocation and Responsibility of Transaction Costs and Expenses 5
2.7 Cooperation of Agreement Partes 5
ARTICLE III - Representations of Acquiree 6
3.1 Corporate Status 6
3.2 Corporate Action 6
3.3 Subsidiaries 6
3.4 Financial Condition 6
3.5 Capitalization of the Acquiree 7
3.6 Title to Properties 7
3.7 Business Activities of the Acquiree 7
3.8 Taxes and Tax Returns 7
3.9 Litigation 7
3.10 Material Contracts 8
3.11 Environmental Matters 8
3.12 Sale of Acquiree Securities 8
3.13 Accuracy of Provided Information 8
ARTICLE IV - Representations of the Acquiror 8
4.1 Corporate Status 8
4.2 Corporate Action 9
4.3 Subsidiaries 9
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
4.4 Financial Condition 9
4.5 Capitalization of the Acquiror 10
4.6 Title to Properties 10
4.7 Taxes and Tax Returns 10
4.8 Litigation 10
4.9 Material Contracts 10
4.10 Environmental Matters 11
ARTICLE V - Pre-Closing Covenants of the Acquiree 11
5.1 No Change in Business 11
5.2 No Contracts 11
5.3 Issuance of Additional Securities 11
5.4 In General 11
ARTICLE VI - Pre-Closing Covenants of Acquiror 12
6.1 Basic Documents 12
6.2 No Contracts 12
6.3 Directors and Officers of Acquiror 12
6.4 Utilization of Net Operating Loss 13
ARTICLE VII - Closing of Agreement Transactions 13
7.1 Closing of Exchange Transaction 13
7.2 Time and Place of Closing 13
7.3 Deliveries at Closing 13
ARTICLE VIII - Conditions Precedent to Obligations of the Acquiror 14
8.1 No Adverse Development 14
8.2 No Breach of Representations, Warranties or Covenants of the
Agreement 14
8.3 Treatment of Transaction 15
ARTICLE IX - Conditions Precedent to Obligation of the Acquiree and
the Holders 15
9.1 No Adverse Development 15
9.2 Time of Consummation 15
9.3 No Breach of Representations, Warranties and Covenants 15
9.4 Treatment of Transaction 15
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
9.5 Deliveries in Connection with Acquiror Share Listing 16
9.6 Appointment to Acquiror Board of Directors 16
9.7 Assumption of Acquiree Liabilities/Contracts 16
ARTICLE X - Action of the Acquiror/Acquiree Contemporaneous to
Closing Date 16
ARTICLE XI - Indemnification, Survival of Representations and Warranties 17
11.1 Indemnification by the Acquiree 17
11.2 Indemnification by the Acquiror 17
11.3 Limitations Regarding Indemnification 17
11.4 Procedures for Third Party Indemnification 17
11.5 Survival of Representations, Warranties and Indemnities 18
ARTICLE XII - Miscellaneous Provisions 18
12.1 Notices 18
12.2 Successors and Assigns 18
12.3 Background Statement and Schedules 18
12.4 Entire Agreement 18
12.5 Publicity 18
12.6 Attorneys' Fees in Connection with Litigation 19
12.7 Cooperation 19
12.8 Applicable Law 19
</TABLE>
iii
<PAGE> 5
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
THIS AGREEMENT PROVIDING FOR THE EXCHANGE OF CAPITAL STOCK (the
"Agreement") is made as of the 17th day of June, 1999 by and between the
following entities and natural persons:
<TABLE>
<CAPTION>
Agreement Party and Reference General Description of Agreement Party
- ------------------------------------- ------------------------------------------
<S> <C>
CAMBRIDGE UNIVERSAL CORPORA- A Colorado corporation presently having
TION ("Acquiror") its sole office in Denver, Colorado
WHITEHALL HOMES II, INC. ("Acquiree") A Florida corporation having its principal
office in Sarasota, Florida
RONALD and JOANNE MUSTARI, The record and beneficial holders of all of
Husband and Wife and residents of the outstanding Common Stock of Acquiree
Sarasota County, Florida ("Holders") $___ par value
</TABLE>
The foregoing-described entities and natural persons are sometimes described
herein collectively as the "Agreement Parties".
B A C K G R O U N D
Acquiror is a Colorado corporation intending to become domesticated
pursuant to the Florida Business Corporation Act which, as of the date of this
Agreement, is publicly held by virtue of the filing and processing to
effectiveness of a Registration Statement which contained a definitive
Prospectus, which Prospectus is dated December 8, 1998 and relates to the
public offer and sale of 2,000,000 units, each unit comprised of one share of
Acquiror's common stock and Class A and Class B Common Stock Purchase Warrants.
The Acquiror has used the previous corporate names of OTISCO, INC., INCOME
IMPACT INVESTMENTS, INC. and FINANCIAL FREEDOM ENTERPRISES, INC. Presently the
Acquiror files the periodic and annual reports required by the Securities
Exchange act of 1934, as amended to date (the "Exchange Act") and as
represented herein, all of such periodic and annual reports have been filed by
the Acquiror through the conclusion of its most recent fiscal year, March 31,
1999. The Acquiror could, as of the date of this Agreement, be characterized as
a public shell. The Acquiror desires to acquire from the Holders all of the
outstanding voting common stock, $________ par value of the Acquiree, which
consists of __________ shares which are owned of record and beneficially by the
Holders and no others.
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The Acquiree is a party to this Agreement with respect to the making
of certain representations, warranties and undertakings, all as is set forth
herein.
The Acquiree is a Florida corporation which was formed and which is
the entity into which the operations of various entities, corporate and
otherwise, have carried out activities which relate to the construction of
residential dwellings and the development of residential subdivisions on the
West Coast of Florida. The Acquiree is presently vested with all of the
proprietary interest in the business previously carried on by the several
Whitehall Entities, all of which have been consolidated with and into the
Acquiree. The Holders and the Acquiree desire to become a publicly held entity
and in order to accomplish such purpose, desire to effect the exchange
transaction provided for in this Agreement.
The respective managements of the Acquiror and the Acquiree have
determined that the business combination provided for herein and which will
occur as a result of the consummation of the exchange transaction provided for
herein, will accomplish, among others, the business purposes of (i) permitting
the Acquiror to continue the business activity of the Acquiree, thereby
eliminating its public shell status and (ii) result in the Acquiree becoming,
in effect, publicly held which is anticipated to enhance the future business
activities of the Acquiror and the Acquiree as combined, including, without
limitation, the acquisition capability of the Acquiror and the Acquiree as
combined.
Accordingly, the Acquiror, the Acquiree and the Holders wish to
provide by means of this Agreement for the terms and conditions whereby (i) the
Holders will exchange all of their shares of the voting common stock of the
Acquiree for not less than 4,608,268 shares of the outstanding voting common
stock of the Acquiror, as such shares are adjusted for a reverse stock split
whereby each outstanding three shares of common stock of the Acquiror shall
become one share (the "Acquiror Shares" and the "Stock Split" respectively) and
(ii) the Acquiror shall change its corporate name to a name to be designated by
the Holders, which is anticipated to be WHITEHALL LIMITED, INC. and shall
become a corporation domesticated under and subject to the Florida Business
Corporation Act and as such, shall continue the business previously conducted
by the Acquiree and the affiliated entities of the Acquiree now consolidated
with and into the Acquiree.
This Agreement is that agreement contemplated by the document styled
Memorandum of Agreement entered into between the Acquiror (identified as
Whitehall Ltd., Inc.) and the Holders (identified as the Sellers).
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Agreement Parties agree as
follows:
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ARTICLE I
EXCHANGE OF COMMON STOCK
Effective as of the Closing Date (which consummation of the
transactions on the Closing Date shall be deemed to have occurred for
accounting purposes on January 1, 1999), as established subsequently in this
Agreement, the following exchange transaction involving Acquiror Shares and
Acquiree Stock shall be consummated in conformance to the terms, conditions and
provisions of this Agreement.
1.1 The Exchange Transaction. On the Closing Date, as established
subsequently in this Agreement, the Acquiror will acquire all of the issued and
outstanding Acquiree Stock anticipated on the Closing Date to be __________
shares of the $_____ par value common stock of the Acquiree (the "Acquiree
Stock"). Such Acquiree Stock shall be acquired by the Acquiror from the Holders
in exchange for not less than 4,608,268 shares of Acquiror Stock which, upon
consummation of the exchange and other transactions contemplated by the
Agreement Parties with respect to the Acquiror, shall constitute not less than
52% of Acquiror Stock outstanding subsequent to the exchange transaction and
the contemplated transactions. The shares of Acquiror Stock delivered at the
Closing in exchange for the shares of Acquiree Stock shall constitute
Restricted Securities as that term is defined in Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Act"). It is intended that the
exchange transaction, as provided for in this Agreement, will constitute a
transaction exempt from the registration requirements of the Act and any state
securities statute, including, without limitation, the securities statutes of
Florida and Colorado, by reason of the provisions of Rule 506 as contained in
Regulation D and any other applicable Rules of such Regulation and to the
extent not pre-empted by section 18 of the Act, pursuant to the provisions of
any state securities statute and regulations and rules promulgated thereunder.
1.2 Reclassification of Acquiror Stock. In addition to effecting a
change of its corporate name from its present name to WHITEHALL LIMITED, INC.
and its domestication under the Florida Business Corporation Act, the Acquiror
shall initiate, conduct and conclude the requisite action required by Colorado
and/or Florida law in order to effect the reclassification of its outstanding
common stock, $.10 par value, whereby each three outstanding Acquiror Shares
shall become one Acquiror Share. The Acquiror Shares to be issued in the
exchange transaction between the Acquiror and the Holders shall reflect such
Stock Split.
1.3 Minimum Number of Shares of Acquiree Stock Exchanged. It is the
intent of the Acquiror, the Acquiree and the Holders that 100% of the
outstanding shares of Acquiree Stock outstanding on the Closing Date and as
adjusted for the reclassification described in Section 1.2 above, be exchanged
for 4,608,268 Acquiror Shares and such is a condition to the consummation of
the exchange transaction provided for herein. Such 4,608,268 Acquiror Shares
shall constitute not less than 52% of the Acquiror Shares
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outstanding subsequent to the consummation of the exchange transaction provided
for herein and the contemplated issuance of a maximum of 1,887,109 Acquiror
Shares (which shall be Restricted Stock) to certain individuals and/or entities
who have assisted the Agreement Parties in the transaction provided for herein
(herein sometimes referred to as the"Related Issuance Transactions"). Upon
consummation of the exchange transaction provided for herein and the Related
Issuance Transactions, there is anticipated to be outstanding 8,862,043
Acquiror Shares which reflects the Stock Split.
1.4 Issuance of Additional Acquiree Securities. The Agreement
Parties acknowledge that the Acquiror has initiated action which is intended to
result in the private offer, sale and issuance of additional securities of the
Acquiror, which additional issuances may occur prior to, on and subsequent to
the Closing Date. In such regard, the Acquiror contemplates privately offering
for sale to suitable and Accredited Investors its shares of convertible
preferred stock in maximum share amount of 1,000,000 shares, which shares of
convertible preferred stock are described in that certain Subscription
Agreement which is included with this Agreement as Exhibit A for informational
purposes. The Acquiree and the Holders acknowledge and agree that such capital
formation activity may take place in the immediate future time.
ARTICLE II
ACTION PRIOR TO CLOSING DATE
2.1 Corporate Action of Acquiror. From the date of this Agreement
to the Closing Date, the Acquiror shall undertake and complete all requisite
action, including all action required pursuant to the Colorado Corporation Act,
the Florida Business Corporation Act, the Act and applicable state securities
statutes, including, without limitation, the securities laws of Florida and
Colorado in order to permit the Acquiror to prepare for and to consummate the
action and transactions called for by this Agreement.
2.2 Corporate Action of Acquiree. From the date of this Agreement
to the Closing Date, the Acquiree shall undertake and complete all requisite
action, including all action required pursuant to the corporate law of Florida,
the Act and applicable state securities statutes including, without limitation,
the securities laws of Florida, in order to permit the Acquiree and the
Acquiror to consummate the transactions called for by this Agreement.
2.3 Action by Holders. From the date of this Agreement to the
Closing Date, the Holders, with the assistance of the Acquiree, shall undertake
all action as may be required under applicable law, including the laws of the
State of Florida, in order to permit Acquiree and the Holders to consummate the
transactions called for by this Agreement including, without limitation, the
conveyance of all of the outstanding shares of Acquiree Stock in exchange for
4,608,268 Acquiror Shares.
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2.4 Acquiror Informational Filings. In addition to the action
described and required by Section 2.1 of this Article II, the Acquiror, on and
before the Closing Date, shall effect such filings with the United States
Securities and Exchange Commission (the "Commission") in order to bring its
status as a voluntary reporting company under the provisions of the Exchange
Act current. In connection therewith, the Acquiror shall cause to be completed
its audited financial statements for the fiscal years ended March 31, 1999 and
March 31, 1998. Such financial statements will be prepared in accordance with
generally accepted accounting principles consistently applied and will meet, or
with minimal modification will meet, Commission financial reporting
requirements as set forth in Commission Regulation S-B. Such financial
statements shall be provided to the Holders immediately upon the availability
thereof as shall each of the informational filings made with the Commission
under the Exchange Act. In all events, the providing of such described filings
and financial statements shall occur on or before the Closing Date and the
receipt thereof by the Holders shall be a condition precedent to the
consummation of the exchange transaction herein provided for.
2.5 Financial Statements of Acquiree. On and before the Closing
Date, the Acquiree shall provide to the Acquiror its unaudited financial
statements for the fiscal year ended March 31, 1999. Such financial statements,
which may be prepared on a pro forma basis reflecting the combination of the
Acquiror and the Acquiree, will be prepared in accordance with generally
accepted accounting principles consistently applied and will meet, or with
minimal modification and upon audit (if necessary) will meet, Commission
financial reporting requirements as set forth in Commission Regulation S-B. The
providing of such Acquiree financial statements shall also be a condition
precedent to the consummation of the transactions provided for in this
Agreement.
2.6 Allocation and Responsibility of Transaction Costs and Expenses.
Unless otherwise agreed by the Agreement Parties, the Agreement Parties shall
bear their respective costs and expenses in connection with the preparation for
the consummation of the transactions provided for in this Agreement.
2.7 Cooperation of Agreement Parties. The Agreement Parties
acknowledge and agree that the consummation of the transactions called for by
this Agreement shall be subject and conditioned upon the completion of the
conduct of such due diligence procedures as determined necessary by the
Agreement Parties and their respective legal counsel. In that regard, the
Agreement Parties agree to cooperate with each other with respect to the
conduct of such due diligence activities from the date of this Agreement to the
Closing Date and to promptly furnish, upon request, such documents, records,
corporate paraphernalia and other materials as may be requested by the Acquiror
or the Acquiree. The Acquiror and the Acquiree also agree to make their
respective executive officers available to respective legal counsel or other
representatives of the Acquiror or the Acquiree for information gathering and
due diligence purposes.
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ARTICLE III
REPRESENTATIONS OF ACQUIREE
The Acquiree represents to the Acquiror and all persons deemed to be
in a control relationship with the Acquiror, as such term is utilized in the
Act:
3.1 Corporate Status. As of the date of this Agreement and on the
Closing Date, the Acquiree is and will be a validly existing corporation
organized pursuant to the laws of the State of Florida and has and will have
all legal corporate authority and power to conduct its business activities, to
own its properties and possesses all necessary permits, licenses and other
documents or authorities required in connection with its business activities
and, assuming that the requisite corporate action contemplated by this
Agreement has been accomplished prior to the Closing Date, the consummation of
the transactions provided for by this Agreement will not constitute a violation
of any applicable law, including, without limitation, the Florida Business
Corporation Act or the securities statutes of Florida or a breach or event of
default under the terms of any contract or agreement to which the Acquiree is a
party or pursuant to which the Acquiree is bound or pursuant to which its
assets are subject or be in violation of its Articles of Incorporation as
amended to date or its Bylaws. The consummation of the transactions
contemplated and called for by this Agreement will not invalidate any required
permit, license or other document issued or to be issued to the Acquiree and
necessary for the conduct of its business activities as currently conducted or
as such business is contemplated to be conducted during the future time. Upon
consummation of the exchange transaction provided for in this Agreement, the
authority vested in the Acquiree by any of such licenses or permits shall be
transferrable or otherwise vested in the Acquiror. As used in this Article III,
the term "Acquiree" shall include all predecessor and affiliated entities and
persons of the Acquiree.
3.2 Corporate Action. Prior to the Closing Date, the Acquiree will
undertake and complete all required corporate action which may be required in
order to permit the consummation of the transactions called for by this
Agreement.
3.3 Subsidiaries. Except as indicated in Schedule I hereto, the
Acquiree has no corporate subsidiaries.
3.4 Financial Condition. The financial statements of the Acquiree
furnished to the Acquiror pursuant to the terms of this Agreement or which may
be furnished to the Acquiror in accordance with the terms of this Agreement or
for utilization or inclusion in any informational filing to be filed by the
Acquiror with the Commission pursuant to the provisions of the Exchange Act and
this Agreement at and for the fiscal years indicated or for such other periods
indicated, fairly present or will fairly present in all material respects the
financial condition of the Acquiree as of the date of such financial statements
(whether audited or unaudited), all to the best of the knowledge of the
Acquiree in accordance with generally accepted accounting principles
consistently applied except as may be indicated in
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such financial statements, the related notes thereto and other information
relating thereto. Except as set forth in Schedule II hereto, the Acquiree has
no liabilities or obligations of any nature which, in accordance with generally
accepted accounting principles, must be set forth in the described financial
statements except those liabilities which are incurred as a result of the
ordinary course of business of the Acquiree after the date of the most recent
financial statements furnished or to be furnished (which liabilities will be
reflected in an amendment to Schedule II on the Closing Date) or which are
incurred by the Acquiree in connection with the preparation undertaken by the
Acquiree to consummate the transaction provided for herein.
3.5 Capitalization of the Acquiree. Set forth as Schedule III to
this Agreement are the Articles of Incorporation of the Acquiree (as amended to
date), which reflect the capital structure of the Acquiree as of the date of
this Agreement. Schedule III also sets forth further information relating to
the capitalization of the Acquiree as of the date of this Agreement and as such
is contemplated to exist on the Closing Date. The shares of Acquiree Stock
outstanding as of the date of this Agreement and on the Closing Date constitute
the one class of voting securities of the Acquiree outstanding and to be
outstanding on the Closing Date.
3.6 Title to Properties. Except as indicated in the financial
statements described in Section 3.4 above, or in Schedule IV to this Agreement,
the Acquiree has good and valid title to the assets reflected in the financial
statements of the Acquiree at the periods indicated therein, as described in
this Article III.
3.7 Business Activities of the Acquiree. The business activities of
the Acquiree are and have been constituted by those business activities
described in the information providing documents which have been provided by
the Acquiree to the Acquiror prior to or as of the date of this Agreement and
as such may be provided to the Acquiror prior to the Closing Date.
3.8 Taxes and Tax Returns. Except as set forth in Schedule V to
this Agreement, the Acquiree has filed in a timely fashion all federal, state,
county and local tax returns relative to any taxes required to be paid by the
Acquiree and has timely paid any such taxes due pursuant to such returns, if
any, as of the date of this Agreement and on the Closing Date, is not and will
not be involved in any asserted contest with respect to any tax.
3.9 Litigation. Except as described on Schedule VI hereto, the
Acquiree and the members of the Board of Directors of the Acquiree are not, as
of the date of this Agreement by the Agreement Parties, involved as a party to,
nor are its assets the subject of, any judicial or administrative proceedings
before any court, governmental agency or other tribunal. Except as set forth
and described in such Schedule VI, the Acquiree is not aware of any factual
circumstances or situations which might reasonably be expected to result in the
assertion of any claim by way of litigation or administrative proceeding at any
time on and subsequent to the date of this Agreement and as of the Closing
Date.
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3.10 Material Contracts. Except as set forth in Schedule VII to this
Agreement, the Acquiree is not, with the exception of this Agreement, a party
to any material contract. The term "material contract" means any contract which
involves the future payment of a consideration by the Acquiree in an amount in
excess of $10,000 and a term of performance concluding 12 or more months from
the date of this Agreement. The Agreement parties acknowledge that the Acquiree
has or is expected to enter into one or more material contracts which will
govern and relate to the acquisition of various interests in real estate
properties, which properties will be utilized in the conduct of the business of
the Acquiree, which conduct shall be assumed and continued by the Acquiror and
that such material contracts are not required to be scheduled.
3.11 Environmental Matters. The Acquiree is not subject to any
governmental guidelines, laws or ordinances relating to hazardous materials as
of the date of this Agreement.
3.12 Sale of Acquiree Securities. All securities of the Acquiree
including, without limitation, shares of the Acquiree Stock and options and
warrants providing for the issuance of shares of Acquiree Stock, if any, which
have been privately offered and sold prior to the date of this Agreement, have
been offered and sold or will be offered and sold under circumstances which, to
the best of the knowledge of the Acquiree and based upon the receipt by the
Acquiree of advice believed expert by the Acquiree, have constituted or will
constitute transactions exempt from the registration requirements of the Act
and any state securities statute.
3.13 Accuracy of Provided Information. No representation or warranty
given or made by the Acquiree pursuant to this Agreement or any statement,
certificate or other document required to be furnished by the Acquiree to the
Acquiror pursuant to the terms of this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained therein not misleading.
ARTICLE IV
REPRESENTATIONS OF THE ACQUIROR
The Acquiror represents to the Acquiree and persons deemed to be in a
control relationship with the Acquiree as provided in the Act as follows:
4.1 Corporate Status. As of the date of this Agreement and on the
Closing Date, the Acquiror is and will be a validly existing corporation
organized pursuant to the laws of the State of Colorado (and has undertaken
action to become a corporation domesticated and existing under the Florida
Business Corporation Act) and has and will have all legal corporate authority
and power to conduct its business activities, to own its properties and
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possesses all necessary permits, licenses and other documents or authorities
required in connection with its business activities and, assuming that the
requisite corporate action contemplated by this Agreement has been accomplished
prior to the Closing Date, the consummation of the transactions provided for by
this Agreement will not constitute a breach or event of default under the terms
of any contract or agreement to which the Acquiror is a party or pursuant to
which the Acquiror is bound or by which its assets are subject or be in
violation of its Articles of Incorporation as amended to date and its Bylaws.
The consummation of the transactions contemplated and called for by this
Agreement will not invalidate any required permit, license or other document
issued or to be issued to the Acquiror and necessary for the conduct of its
business activities as currently conducted or as such business is contemplated
to be conducted during the future time.
4.2 Corporate Action. Prior to the Closing Date, the Acquiror will
undertake and complete all required corporate action which may be required in
order to permit the consummation of the transactions called for by this
Agreement.
4.3 Subsidiaries. The Acquiror has no corporate subsidiaries.
4.4 Financial Condition. The Acquiror has conducted no business
activities during the past approximate 48 months preceding the date of this
Agreement and may presently be described as a public shell entity. The present
business plan of the Acquiror provides for the investigation of various lines
of business to be initiated and/or the identification and consummation of a
business combination with an operating business entity such as the Acquiree.
The financial statements of the Acquiror, as certified by Chapman & Company,
independent certified public accountants, furnished to the Acquiree pursuant to
the terms of this Agreement or which may be furnished to the Acquiree in
accordance with the terms of this Agreement or for utilization in the annual
and current reports of the Acquiror to be filed with the Commission and
reflecting the financial conditions and results of operations of the Acquiror
at and for the fiscal years indicated or for such other periods indicated,
fairly present or will fairly present in all material respects the financial
condition of the Acquiror as of the date of such financial statements (whether
audited or unaudited), all to the best of the knowledge of the Acquiror in
accordance with generally accepted accounting principles consistently applied
except as may be indicated in such financial statements, the related notes
thereto and other information relating thereto. Except as set forth in Schedule
VIII hereto, the Acquiror has no liabilities or obligations of any nature
which, in accordance with generally accepted accounting principles, must be set
forth in the described financial statements except those liabilities which are
incurred as a result of the ordinary course of business of the Acquiror after
the date of the most recent financial statements (which liabilities will be
reflected in an amendment to Schedule VIII on the Closing Date), which are
incurred by the Acquiror in connection with the preparation and filing of the
annual and periodic reports to be filed by the Acquiror under the Exchange Act,
which are incurred in connection with the preparation of the Acquiror for the
consummation of the transaction provided for herein, or are liabilities which
would not either singularly or in the aggregate have a material adverse affect
on the Acquiror. Without the express written consent of the
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Acquiree, the Acquiror shall not incur any liability or obligation not
contemplated or permitted by this Agreement in excess of $20,000 from the date
of this Agreement to the Closing Date.
4.5 Capitalization of the Acquiror. Set forth as Schedule IX to
this Agreement are the Articles of Incorporation of the Acquiror intended to be
filed as the successor Articles of Incorporation of the Acquiror in connection
with its domestication under the Florida Business Corporation Act and which
reflect the capital structure of the Acquiror as of the date of this Agreement.
If provided with this Agreement, Schedule IX contains further information
relative to the capitalization of the Acquiror as of the date of this
Agreement. No changes shall occur with respect to such capital structure except
that on and after the Closing Date, the capitalization of the Acquiror shall be
as adjusted to reflect the exchange transaction with the Holders, the reverse
three for one stock split relating to the outstanding Acquiror Shares, and, on
a consolidated basis, the ownership of the Acquiree as a wholly or
substantially owned corporate subsidiary.
4.6 Title to Properties. Except as indicated in the financial
statements described in Section 4.4 above, or in Schedule X to this Agreement,
the Acquiror has good and valid title to the assets reflected in the financial
statements of the Acquiror at the periods indicated therein.
4.7 Taxes and Tax Returns. Except as set forth in Schedule XI to
this Agreement, the Acquiror has filed in a timely fashion all federal, state,
county and local tax returns relative to any taxes required to be paid by the
Acquiror and has timely paid any such taxes due pursuant to such returns. The
Acquiror, as of the date of this Agreement and on the Closing Date, is not and
will not be involved in any asserted contest with respect to any tax.
4.8 Litigation. Except as described on Schedule XII hereto, the
Acquiror and the members of the Board of Directors of the Acquiror are not, as
of the time of the complete execution of this Agreement by the Agreement
Parties, involved as a party to, nor are its assets the subject of, any
judicial or administrative proceedings before any court or governmental agency.
Except as set forth and described in such Schedule XII, the Acquiror is not
aware of any factual circumstances or situations which might reasonably be
expected to result in the assertion of any claim by way of litigation or
administrative proceeding at any time on and subsequent to the date of this
Agreement and as of the Closing Date. The prospectus contained in the
Registration Statement described in the Agreement section captioned BACKGROUND
did not contain as of the date thereof any misstatement of material fact or
information or fail to provide any material information necessary to be
provided in order that the information set forth in such prospectus be not
misleading.
4.9 Material Contracts. Except as set forth in Schedule XIII to
this Agreement, the Acquiror is not, with the exception of this Agreement, a
party to any material contract. The term "material contract" means any contract
which involves the future payment of a consideration by the Acquiror in an
amount in excess of $5,000 and a term of performance
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concluding 12 or more months from the date of this Agreement. The Acquiror and
the Acquiree acknowledged that the Acquiror has assumed and agreed to pay that
obligation undertaken by Andrews & Associates, Inc. as a result of the
consummation of the purchase of 2,290,000 Acquiror Shares (Pre-Stock Split) and
as governed by that certain agreement styled Agreement Providing for the
Purchase of Capital Stock which obligation is evidenced by promissory notes
given by Andrews & Associates, Inc. to the sellers of such 2,290,000 Acquiror
Shares. Other than those contracts described in Schedule XIII hereto, and with
the exception of any contractual arrangement existing between the Acquiror and
William T. Kirtley, P.A., any material contract intended to be created and of
which the Acquiror shall be a party shall be subject to the approval of the
Acquiree.
4.10 Environmental Matters. The Acquiror is not subject to any
governmental guidelines, laws or ordinances relating to hazardous materials as
of the date of this Agreement.
ARTICLE V
PRE-CLOSING COVENANTS OF THE ACQUIREE
5.1 No Change in Business. The Acquiree shall not materially modify
or change the operations or business as conducted by the Acquiree as of the
date hereof except as such changes are presently contemplated in the ordinary
course of business of the Acquiree and as is described in the Agreement section
captioned BACKGROUND and such other information documents as may be provided by
the Acquiree to the Acquiror.
5.2 No Contracts. Except as contemplated and described herein or
any Schedule hereto, the Acquiree shall not enter into any material agreement
or contract or make any material modifications to existing contracts or
agreements.
5.3 Issuance of Additional Securities. From the date of this
Agreement to the Closing Date, the Acquiree shall not undertake any action
which will cause the issuance of additional equity or debt securities of the
Acquiree.
5.4 In General. Except as otherwise provided for in this Agreement:
a. No change will be made in the basic documents which provide
for the formation and existence of the Acquiree;
b. No distributions shall be effected by the Acquiree except
as may be contemplated by this Agreement and as is set forth in a Schedule
hereto; and
c. The Acquiree shall use its best efforts to preserve intact
the business organization of the Acquiree, its business and goodwill, as well
as the availability to it of its
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executive management and other key employees and the goodwill of persons having
business relations with the Acquiree.
ARTICLE VI
PRE-CLOSING COVENANTS OF THE ACQUIROR
6.1 Basic Documents. Included herewith as Schedule IX are the
Articles of Incorporation (as earlier described) and Bylaws of the Acquiror as
presently in force. The Acquiror, by action of its Board of Directors and
shareholders, shall not effect any amendments to such Articles of Incorporation
or Bylaws from the date of this Agreement to the Closing Date without the
express written consent of the Holders. The Acquiror and the Acquiree
acknowledge that such Articles of Incorporation included herewith as Schedule
IX are those Articles intended to be filed with the Department of State, State
of Florida, in order to accomplish the domestication of the Acquiror under the
Florida Business Corporation Act. Such Articles of Incorporation also effect a
change of the name of the Acquiror to WHITEHALL LIMITED, INC. and effect the
reclassification of the outstanding Acquiror Shares whereby each outstanding
three Acquiror Shares becomes one Acquiror Share.
6.2 No Contracts. With the exception of this Agreement and those
contractual arrangements which must be established in order to facilitate and
consummate the transactions provided for in this Agreement, the Acquiror shall
not enter into any material contract as the term "material contract" is
described elsewhere in this Agreement. Excepted from this Section 6.2 will be
any contractual arrangements existing between the Acquiror and William T.
Kirtley, P.A. with respect to legal representation and services provided in
connection with the preparation by the Acquiror to consummate the transactions
provided for in this Agreement and other related professional services.
Excepted from this Section 6.2 is that action whereby the Acquiror will agree
to be obligated to pay jointly and severally with Andrews & Associates, Inc.
that obligation arising from the transaction between Andrews & Associates, Inc.
and certain sellers of Acquiror Shares as earlier described in Section 4.9 of
this Agreement.
6.3 Directors and Officers of Acquiror. From the date of this
Agreement to the Closing Date or until their resignations are accepted by the
Board of Directors of the Acquiror as constituted on and subsequent to the
Closing Date, those persons serving as members of the Board of Directors of the
Acquiror and as executive officers of the Acquiror shall remain in service and
shall use their best diligent efforts to facilitate the consummation of the
transactions provided for in this Agreement. No increase in any rate of
compensation shall occur with respect to the amount of director fees or officer
compensation presently being paid, if any, shall occur from the date of this
Agreement to the Closing Date.
12
<PAGE> 17
6.4 Utilization of Net Operating Loss. The Acquiror shall use its
best efforts to preserve intact and available for utilization by the Acquiror
and the Acquiree as combined the net operating losses which have been
experienced by the Acquiror and the Acquiree as a result of their respective
business operations as conducted since inception to the Closing Date and as
have been reported by the Acquiror and the Acquiree pursuant to the provisions
of the Internal Revenue Code of 1986, as amended to date.
ARTICLE VII
CLOSING OF AGREEMENT TRANSACTIONS
7.1 Closing of Exchange Transaction. The Acquiror and the Acquiree
agree that the exchange of the Acquiror Shares and the Acquiree Stock provided
for by Articles I of this Agreement shall be consummated at a closing, the time
of which shall be established pursuant to Section 7.2 of this Article VII. With
respect to the consummation of the Agreement transactions, the Acquiror and the
Acquiree agree that an escrow procedure may be utilized in connection with the
consummation of the transaction provided for in this Agreement and in the event
that an escrow procedure is used, the services of an escrow agent which is
mutually satisfactory to the Acquiror and the Acquiree shall be utilized. If
the exchange transaction provided for in Article I of this Agreement is unable
to be consummated on the Closing Date as established by Section 7.2 hereof,
none of the transactions provided for in this Agreement shall be consummated
and this Agreement shall be null and void and have no effect, and the Agreement
Parties shall be released from any further obligations hereunder.
7.2 Time and Place of Closing. The Acquiror and the Acquiree shall
mutually determine the date and time of closing for the transactions called for
by this Agreement (the "Closing Date"). The place at which such closing and
consummation of the transactions called for by this Agreement shall be
conducted shall also be determined by the mutual agreement of the Acquiror and
the Acquiree. In no event shall the Closing Date be established on a date
subsequent to June 18, 1999 unless this Agreement is amended by a written
Addendum executed and delivered by the Acquiror and the Acquiree. The
facilities of the United States mail or other acceptable, publicly available
means of delivery, may be utilized to effect the closing of the transactions
called for by this Agreement.
7.3 Deliveries at Closing.
a. On the Closing Date, the Holders shall deliver instruments
of conveyance in form and content satisfactory to counsel for the Acquiror
conveying to the Acquiror good and valid title to all of the outstanding shares
of Acquiree Stock. The Holders shall make such additional deliveries and
provide such additional documents as may be reasonably required in order to
facilitate the consummation of the transactions called for by this Agreement.
13
<PAGE> 18
b. On the Closing Date, the Acquiree shall deliver to the
Acquiror all of its records, files and corporate paraphernalia which is
required in connection with the entity existence and conduct of the business of
the Acquiree.
c. On the Closing Date, the Acquiror shall deliver an aggregate
4,608,268 Acquiror Shares in such individual share amounts and certificates as
shall be instructed by the Holders immediately prior to the Closing Date. With
respect to any share certificates evidencing Acquiror Shares delivered to the
Holders, such certificates shall bear an appropriate restrictive endorsement
indicating the such shares have not been registered under the Act or applicable
state securities statutes. At the closing, the Acquiror shall also deliver the
written resignations of all of the members of the Board of Directors of the
Acquiror and all of the executive officers of the Acquiror, together with
written action dated as of the Closing Date by the Board of Directors of the
Acquiror as constituted immediately prior to the Closing Date appointing the
designees of the Holders as the members of the Board of Directors of the
Acquiror on and subsequent to the Closing Date. The resignations of the
directors and officers of the Acquiror shall be effective upon the acceptance
thereof by the Board of Directors of the Acquiror as constituted on and
subsequent to the Closing Date.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIROR
The obligations of the Acquiror pursuant to the terms and provisions
of this Agreement and the consummation of the transactions called for by this
Agreement are subject to the following conditions:
8.1 No Adverse Development. There shall have occurred no material,
adverse change in the business, financial condition or composition of the
assets of the Acquiree since the date of this Agreement and the Acquiree shall
not have sustained since the date of this Agreement any loss on account of
fire, flood, accident, strike or other calamity of such a character as to
interfere materially with the continuous operation of the Acquiree's business
or which materially adversely affects the financial position or business of the
Acquiree, regardless of whether any such loss shall have been insured.
8.2 No Breach of Representations, Warranties or Covenants of the
Agreement. The representations and warranties made by the Acquiree, as set
forth in this Agreement, shall be correct and complete in all material respects
when made and shall be deemed to have been made again on and as of the Closing
Date and shall then be true and correct in all material respects on and as of
the Closing Date. Additionally, the Acquiree shall have performed all of the
obligations required to be performed by it under this Agreement prior to and as
of the Closing Date.
14
<PAGE> 19
8.3 Treatment of Transaction. On or before the Closing Date, the
Acquiror shall receive the advisement of its counsel or other source of expert
advice with respect to Federal income tax matters to the effect that the
exchange transaction provided for in this Agreement will satisfy the conditions
and will be eligible for the treatment afforded pursuant to Section 351 and/or
Section 368 of the Internal Revenue Code of 1986, as amended to date.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATION OF THE ACQUIREE AND THE HOLDERS
The obligations of the Acquiree to consummate the transactions called
for by this Agreement and the obligation of the Holders to exchange their
shares of Acquiree Stock for a like number of Acquiror Shares are subject to
the following conditions:
9.1 No Adverse Development. There shall have occurred no material,
adverse change in the status, financial condition or asset composition of the
Acquiror since the date of this Agreement except as contemplated by this
Agreement.
9.2 Time of Consummation. The transactions called for by this
Agreement, specifically those transactions enumerated in Article I hereof,
shall be scheduled for consummation and closing and shall be consummated and
closed no later than June 18, 1999.
9.3 No Breach of Representations, Warranties and Covenants. The
representations and warranties made by the Acquiror in this Agreement shall be
correct and complete in all material respects when made and shall be deemed to
have been made again at and as of the Closing Date and shall then be true and
correct in all material respects on and as of that date. The Acquiror shall
have performed in all material respects the obligations required to be
performed by it under this Agreement prior to and as of the Closing Date
including, without limitation, the obligation of the Acquiror to prepare and
file all informational reports with the Commission as required by the Exchange
Act. The Acquiror shall have delivered to the Acquiree a certificate to the
effect contemplated by this Section 9.3 signed by the Chief Executive Officer
of the Acquiree and dated immediately prior to the Closing Date.
9.4 Treatment of Transaction. Unless waived by the Holders on or
before the Closing Date, the Holders shall receive the advisement of their
counsel in form and content satisfactory to it that the transactions called for
by this Agreement will satisfy the conditions and will be eligible for the
treatment afforded pursuant to Section 351 and/or 368 of the Internal Revenue
Code of 1986, as amended to date.
15
<PAGE> 20
9.5 Deliveries in Connection with Acquiror Share Listing. On the
Closing Date, the Acquiror, with the cooperation and assistance of the
Acquiree, shall be qualified to prepare and file the form(s) and other
information required by Commission Rule 15c2-11 ("Form 15c2-11"), which shall
be filed with the National Association of Securities Dealers, Inc. for the
purpose of continuing the listing of the Acquiror's Shares on the NASDAQ OTC
Bulletin Board.
9.6 Appointment to Acquiror Board of Directors. Immediately prior
to the Closing Date, corporate and board of Director action of the Acquiror
shall be in place appointing the designees of the Holders as the members of the
Board of Directors of the Acquiror, effective on and subsequent to the Closing
Date. At such time, the resignations submitted by the present members of the
Board of Directors of the Acquiror and the present officers of the Acquiror
shall be deemed effective.
9.7 Assumption of Acquiree Liabilities/Contracts. On the Closing
Date, the Acquiror shall assume and agree to pay and be bound by in accordance
with their respective terms all obligations and liabilities of the Acquiree
existing on the Closing Date, including, without limitation, any employment
agreement or agreements existing between the Acquiree and any executive officer
or other employee of the Acquiree. Such undertaking of the Acquiror shall be by
written instrument in form and content satisfactory to counsel to the Acquiree.
ARTICLE X
ACTION OF THE ACQUIROR/ACQUIREE CONTEMPORANEOUS TO CLOSING DATE
On the Closing Date or as soon thereafter as practicably possible, the
Acquiror, with the assistance of the Acquiree and the Holders, shall, utilizing
deliberate and diligent procedures and action, cause to be prepared and
completed Commission Form 15c2-11 which shall be in compliance with Commission
Rule 15c2-11, which Form shall thereafter be promptly filed and amended as
necessary with the National Association of Securities Dealers, Inc. for the
purpose of accomplishing or continuing the listing of the Acquiror Shares
(which are not restricted) on the OTC Bulletin Board listing facilities of the
National Association of Securities Dealers, Inc. Upon the successful
accomplishment of the foregoing, the Acquiror and the Acquiree, shall undertake
and expend their best efforts, within a reasonable and appropriate period of
time as determined by the Board of Directors of the Acquiror as constituted on
and subsequent to the Closing Date, to cause the Acquiror Shares which are not
restricted to be listed on the NASDAQ SmallCap Market.
16
<PAGE> 21
ARTICLE XI
INDEMNIFICATION, SURVIVAL OF REPRESENTATIONS AND WARRANTIES
11.1 Indemnification by the Acquiree. The Acquiree agrees to and
does hereby indemnify and hold the Acquiror and persons controlling the
Acquiror harmless from and against any and all liability, loss, damage,
expense, cost or injury, including, without limitation, those resulting from
any and all actions, suits, proceedings, and judgments, together with
reasonable costs and expenses, including, without imitation, reasonable legal
expenses relating thereto (collectively "Losses") arising out of resulting from
any breach of the representations, warranties and covenants made by the
Acquiree in this Agreement.
11.2 Indemnification by Acquiror. The Acquiror agrees to and does
hereby indemnify and hold the Acquiree and the Holders harmless from and
against Losses arising out of or resulting from any breach of the
representations, warranties and covenants made by the Acquiror in this
Agreement.
11.3 Limitations Regarding Indemnification. The Acquiree shall not
be entitled to recover any Losses in respect of the representations and
warranties made by any Holder with respect to the sufficiency of the title
vested in any Holder and relating to such Holder's ownership of Acquiree Stock.
11.4 Procedures for Third Party Indemnification. If any action, suit
or proceeding shall be commenced against, or any claim or demand be asserted
against the Acquiror or its controlling persons or the Acquiree or its
controlling persons, as the case may be, in respect of which such party
proposes to demand indemnification under this Section 11.4, as a condition
precedent thereto, the party seeking indemnification ("Indemnitee") shall
promptly notify the other party ("Indemnitor") in writing to that effect, and
with reasonable particularity containing a reference to the provisions of this
Agreement. The Indemnitor shall have the right to assume the entire control of,
including the selection of counsel, subject to the right of the Indemnitee to
participate (at its expense and with the counsel of its choice) in the defense,
compromise or settlement thereof, and in connection therewith, the Indemnitee
shall cooperate fully in all respects with the Indemnitor in any such defense,
compromise or settlement thereof, and Indemnitee shall make available to
Indemnitor all pertinent information and documents under the control of the
Indemnitee. So long as the Indemnitor is defending in good faith any such claim
or demand asserted by a third party against the Indemnitee, the Indemnitee
shall not settle or compromise such claim or demand without the prior written
consent of the Indemnitor, which consent will not be unreasonably withheld or
delayed. If the Indemnitor shall fail to defend any such action, suit,
proceeding, claim or demand, then the Indemnitee may defend, through counsel of
its own choosing, such action, suit, proceeding, claim or demand and (so long
as Indemnitee gives the Indemnitor at least five (5) days written notice of the
terms of the proposed settlement thereof and permits the Indemnitor to then
undertake the defense thereof if
17
<PAGE> 22
Indemnitor objects to the proposed settlement) to settle such action, suit,
proceeding, claim or demand and to recover from the Indemnitor the amount of
such losses.
11.5 Survival of Representations, Warranties and Indemnities. The
representations and warranties of this Agreement, and indemnification in
respect of the same, shall survive the Closing Date for a period of two (2)
years, after which time such representations and warranties, and
indemnification in respect thereof, shall be of no further force and effect
unless prior to such time, the party claiming a breach has served on the other
written notice of such claim or breach.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Notices. All notices or other communications required or
permitted under this Agreement shall be in writing and shall be given by mail
or by facsimile transmission (in the event of facsimile transmission, a
conforming copy shall be mailed postage prepaid simultaneously therewith). If
notice is to be given to the Acquiror, such notice shall be deemed given when
provided in the manner provided herein to the Acquiror in care of William T.
Kirtley, Esq., William T. Kirtley, P.A., 2940 South Tamiami Trail, Sarasota,
Florida 34239, facsimile number 941/955-4027. If notice is to be given to the
Acquiree and the Holders, such notice shall be deemed given when provided in
the manner provided herein to the Acquiree in care of Ronald Mustari,
President, Whitehall Limited, Inc., 290 Cocoanut Avenue, Sarasota, Florida
34236, facsimile number 941/954-3676.
12.2 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors,
assigns, heirs and representatives.
12.3 Background Statement and Schedules. The BACKGROUND statement of
the Agreement and the Schedules shall be construed with and as an integral part
of this Agreement to the same extent as if such Background statement and
Schedules had been set forth verbatim herein.
12.4 Entire Agreement. This Agreement constitutes the entire
understanding on the part of the parties hereto, and all previous agreements
and understandings are superseded by this Agreement, including, without
limitation, that certain Memorandum of Agreement executed by the Agreement
Parties and dated June 17, 1999.
12.5 Publicity. No publicity, release or announcement concerning
this Agreement or the transactions contemplated hereby shall be issued without
advance approval of the form and substance thereof by the Acquiror, the
Acquiree and the Holders, which approval shall not be unreasonably withheld,
provided that this restriction shall not apply to normal
18
<PAGE> 23
communications of the parties with their employees. The Agreement Parties
shall, as soon as such is appropriate and in conformance with applicable law,
issue a notice or informational document to appropriate recipients, which shall
include the holders of Acquiror Shares as of the date of this Agreement, the
Holders and the public.
12.6 Attorneys' Fees in Connection with Litigation. In the event of
any litigation arising out of or in connection with this Agreement, the
prevailing party shall be entitled to recover from the other its reasonable
attorney's fees and costs.
12.7 Cooperation. The Acquiror and the Acquiree agree to execute
such instruments and take such other actions as contemplated by this Agreement
to effectuate closing.
12.8 Applicable Law. This Agreement shall be governed by the laws of
the State of Florida except in those instances where the laws of Colorado are
applicable to circumstances relating to the Acquiror or, with respect to the
informational filings to be prepared and filed with the Commission by the
Acquiror with respect to which the Act and the Exchange Act are applicable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
CAMBRIDGE UNIVERSAL CORPORATION,
a Colorado corporation
By
-----------------------------------
ATTEST: Robert Ground, President
- -----------------------------------
Gregory M. Andrews, Secretary
19
<PAGE> 24
WHITEHALL HOMES II, INC.,
a Florida corporation
By
-----------------------------------
ATTEST: Ronald Mustari, President
- -----------------------------------
Secretary
WITNESSES:
- ----------------------------------- -----------------------------------
RONALD MUSTARI
- ----------------------------------- -----------------------------------
JOANNE MUSTARI
20
<PAGE> 25
LIST OF SCHEDULES
Exhibit A - Subscription Agreement to Preferred Stock
<TABLE>
<CAPTION>
Agreement
Schedules Section
- --------- ---------
<S> <C> <C>
I Subsidiaries of Acquiree 3.3
II Acquiree Liabilities 3.4
III Articles of Incorporation of Acquiree 3.5
IV Acquiree exception to good title to assets 3.6
V Acquiree tax return filings 3.8
VI Acquiree litigation 3.9
VII Acquiree material contracts 3.10
VIII Acquiror Liabilities 4.4
IX Articles of Incorporation and Bylaws of Acquiror 4.5
X Acquiror exception to good title to assets 4.6
XI Acquiror tax returns 4.7
XII Acquiror litigation 4.8
XIII Acquiror material contracts 4.9
</TABLE>
<PAGE> 26
SCHEDULE I
PURSUANT TO SECTION 3.3 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below is a complete list of the corporate subsidiaries of
the Acquiree, indicating the state of domicile and formation for each such
corporate subsidiary. Also listed below is any other subsidiary entity of the
Acquiree which is an entity other than a corporation:
THE ACQUIREE HAS NO SUBSIDIARIES.
<PAGE> 27
SCHEDULE II
PURSUANT TO SECTION 3.4 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below are all liabilities and/or obligations of any kind or
nature which, in accordance with generally accepted accounting principles, are
required to be set forth in the financial statements furnished by the Acquiree
in connection with the above-referenced Agreement but which are not, for the
reasons set forth in this Schedule II, reflected in such financial statements:
THERE ARE NO LIABILITIES OF THE ACQUIREE REQUIRED TO BE SCHEDULED IN
ACCORDANCE WITH SECTION 3.4 OF THE AGREEMENT.
<PAGE> 28
SCHEDULE III
PURSUANT TO SECTION 3.5 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Included with this Schedule III are the Articles of Incorporation of
the Acquiree, as amended to date, which have been filed with the Department of
State, State of Florida. As of the date of the Agreement, there are outstanding
______ shares of Acquiree Stock, all of which is held of record and
beneficially by the Holders.
<PAGE> 29
SCHEDULE IV
PURSUANT TO SECTION 3.6 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below in this Schedule IV are each and every exception to
good and valuable title of the assets held by the Acquiree and as reflected in
the financial statements of the Acquiree at the periods indicated therein as
such financial statements have been provided by the Acquiree pursuant to the
referenced Agreement:
NO MATTERS AS DESCRIBED IN SECTION 3.6 ARE REQUIRED TO BE SCHEDULED IN
THIS SCHEDULE IV.
<PAGE> 30
SCHEDULE V
PURSUANT TO SECTION 3.8 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below in this Schedule V is complete information with
respect to any Federal income tax or other return required to be filed by the
Acquiree for any tax reporting period but which has not been filed as of the
date of this Schedule V with an explanation indicating why such required return
has not been filed:
NO MATTERS AS DESCRIBED IN SECTION 3.8 ARE REQUIRED TO BE SCHEDULED IN
THIS SCHEDULE V.
<PAGE> 31
SCHEDULE VI
PURSUANT TO SECTION 3.9 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below is complete information relating to any judicial or
any administrative proceeding pending before any court, governmental agency or
other tribunal to which the Acquiree is a party or to which its assets are
subject. Also set forth in this Schedule VI is complete information with
respect to the factual circumstances or situations which might reasonably be
expected by the Acquiree to result in the assertion of any claim by way of
litigation or administrative proceeding at any time on and subsequent to the
date of the Agreement and as of the Closing Date of the transactions provided
for in the Agreement.
NO MATTERS AS DESCRIBED IN SECTION 3.9 ARE REQUIRED TO BE SCHEDULED IN
THIS SCHEDULE VI.
<PAGE> 32
SCHEDULE VII
PURSUANT TO SECTION 3.10 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below is each material contract to which the Acquiree is a
party as the term "material contract" is described in the Agreement.
NO MATTERS AS DESCRIBED IN SECTION 3.10 ARE REQUIRED TO BE SCHEDULED IN
THIS SCHEDULE VII.
<PAGE> 33
SCHEDULE VIII
PURSUANT TO SECTION 4.4 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below are all liabilities and/or obligations of any kind or
nature which, in accordance with generally accepted accounting principles, are
required to be set forth in the financial statements furnished by the Acquiror
in connection with the above-referenced Agreement but which are not, for the
reasons set forth in this Schedule VIII, reflected in such financial
statements:
THERE ARE NO LIABILITIES OF THE ACQUIROR REQUIRED TO BE SCHEDULED IN
ACCORDANCE WITH SECTION 4.4 OF THE AGREEMENT.
<PAGE> 34
SCHEDULE IX
PURSUANT TO SECTION 4.5 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Included with this Schedule IX are the Articles of Incorporation of
the Acquiror, as filed with the Department of State, State of Florida and which
are the present Articles governing the Acquiror and which constitute its basic
document.
Also included are the Bylaws of the Acquiror, as currently in effect.
<PAGE> 35
SCHEDULE X
PURSUANT TO SECTION 4.6 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below in this Schedule X are each and every exception to
good and valuable title of the assets held by the Acquiror and as reflected in
the financial statements of the Acquiror at the periods indicated therein as
such financial statements have been provided by the Acquiror pursuant to the
referenced Agreement:
NO MATTERS AS DESCRIBED IN SECTION 4.6 ARE REQUIRED TO BE SCHEDULED IN
THIS SCHEDULE X.
<PAGE> 36
SCHEDULE XI
PURSUANT TO SECTION 4.7 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below in this Schedule XI is complete information with
respect to any Federal income tax or other return to be filed by the Acquiror
for any tax reporting period but which has not been filed as of the date of
this Schedule XI with an explanation indicating why such required return has
not been filed:
NO MATTERS AS DESCRIBED IN SECTION 4.7 ARE REQUIRED TO BE SCHEDULED IN
THIS SCHEDULE XI.
<PAGE> 37
SCHEDULE XII
PURSUANT TO SECTION 4.8 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below is complete information relating to any judicial or
any administrative proceeding pending before any court, governmental agency or
other tribunal to which the Acquiror is a party or to which its assets are
subject. Also set forth in this Schedule XII is complete information with
respect to the factual circumstances or situations which might reasonably be
expected by the Acquiror to result in the assertion of any claim by way of
litigation or administrative proceeding at any time on and subsequent to the
date of the Agreement and as of the Closing Date of the transactions provided
for in the Agreement.
NO MATTERS AS DESCRIBED IN SECTION 4.8 ARE REQUIRED TO BE SCHEDULED IN
THIS SCHEDULE XII.
<PAGE> 38
SCHEDULE XIII
PURSUANT TO SECTION 4.9 OF THE
AGREEMENT PROVIDING FOR THE
EXCHANGE OF CAPITAL STOCK
BY AND AMONG
CAMBRIDGE UNIVERSAL CORPORATION,
A COLORADO CORPORATION (THE "ACQUIROR")
AND
THE HOLDERS OF ALL OF THE OUTSTANDING VOTING COMMON STOCK
OF A FLORIDA CORPORATION KNOWN AS WHITEHALL HOMES II, INC.
AND
WHITEHALL HOMES II, INC. (THE "ACQUIREE")
Set forth below is each material contract to which the Acquiror is a
party as the term "material contract" is described in the Agreement.
NO MATTERS AS DESCRIBED IN SECTION 4.9 ARE REQUIRED TO BE SCHEDULED IN
THIS SCHEDULE XIII.
