<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 8, 2000
THE SOUTHSHORE CORPORATION
-------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 0-19949 84-1153522
- -------------------- --------------------- --------------------
(State or other (Commission file number) (IRS Employer
jurisdiction of Identification No.
incorporation or organization)
5373 North Union Boulevard, Suite 100, Colorado Springs, Colorado 80918
- ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (719) 590-4900
-------------------------------------------------------------------
-------------------------------------------------
(Former name or former address and telephone number, if changed since last
report)
<PAGE>
<PAGE>
ITEM 2: ACQUISITION OF ASSETS
- ------- ---------------------
On March 8, 2000, Southshore Corporation, a Colorado corporation, (the
"Company") through its wholly owned subsidiary iRV Dealerships, Inc., a
Colorado corporation, ("iRV Dealerships"), and through iRV Knoxville, Inc., a
wholly owned subsidiary of iRV Dealerships, ("iRV Knoxville") closed upon and
consummated a definitive Asset and Purchase and Sale Agreement (the
"Agreement") between and among iRV Dealerships, iRV Knoxville, Coach &
Campers, Ltd., a Tennessee corporation, ("Coach & Campers") and Donald C.
Hanney II, the sole shareholder of Coach & Campers (hereafter the "Sellers")
pursuant to which iRV Knoxville acquired substantially all of the assets and
properties, both tangible and intangible, used by Coach & Campers, Inc. in
connection with its ownership and operation of an RV dealership in Knoxville,
Tennessee (the "Business"). The assets of the Business included inventories,
accounts receivable, furniture, fixtures, office machinery and equipment, and
other tangible property, prepaid expenses, contracts and licenses and other
intangible assets.
The purchase price paid for the assets of the Business consisted of (i)
an aggregate of $179,500 in cash, which was paid at the time of closing, (ii)
7,500 shares of Southshore Corporation common stock, which shares are
"restricted securities" under the Securities Act of 1933, as amended, and
(iii) the assumption of debt in the aggregate principal amount of $120,000
(the "Purchase Price").
The source of funds used by the Company to pay the cash portion of the
Purchase Price was a private placement of equity completed by iRV, Inc., a
subsidiary of the Company.
The Company, through iRV Knoxville, will continue to operate the Business
from its principal facilities in the Knoxville, Tennessee area.
Concurrently with the closing of the Asset Purchase and Sale Agreement,
the Company completed the placement of a floor financing agreement with
Deutsche Financial Services pursuant to which the Company may draw up to
$2,000,000 to purchase inventory in connection with the operation of the
dealership. In connection with obtaining the floor financing, The Rockies
Fund, Inc. provided an irrevocable letter of credit in favor of Deutsche Bank
in the principal amount of $300,000. In consideration of providing the
irrevocable letter of credit, Southshore Corporation agreed to grant to The
Rockies Fund, Inc. warrants exercisable to purchase 2,500 shares of the
Company's common stock at an exercise price of $2.00 per share for each month
that the letter of credit is issued and outstanding.
As part of the transaction, the Company entered into a verbal consulting
agreement with Donald Hanney pursuant to which it has agreed to pay Mr. Hanney
for consulting services $1,000 per week for 26 weeks following the closing.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
- ------- ---------------------------------
(a) Financial Statements
--------------------
Pursuant to Item 7(a)(4), the Registrant declares that it is
impracticable to provide the required audited financial statements relative to
the acquired business at the time of this Report. Such audited financial
statements required by Item 7(a) shall be filed not later than sixty (60) days
after the due date of this Current Report on Form 8-K.
(b) Pro Forma Financial Information
-------------------------------
Pursuant to Item 7(b) and Item 7(a)(4), the Registrant declares it
is impracticable to provide the required pro forma financial information
relative to the acquired business at the time of this Report. Such pro forma
financial information required by Item 7(b) shall be filed not later than
sixty (60) days after the due date of this Current Report on Form 8-K.
(c) Exhibits
--------
Item Title
---- ------------------
1.1 Agreement for Purchase and Sale of Assets
1.2 Articles of Incorporation of Innovative Recreational
Dealerships, Inc.
1.3 Articles of Amendment to the Articles of Incorporation of
Innovative Recreational Dealerships, Inc. changing its
name to iRV Dealerships, Inc.
1.4 Articles of Incorporation of iRV Knoxville, Inc.
<PAGE>
<PAGE>
SIGNATURE
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.
SOUTHSHORE CORPORATION
Date: March 22, 2000 By: /s/ John H. Deufel
-------------------------- ----------------------------------
John H. Deufel, President
<PAGE>
ASSET PURCHASE AND SALE AGREEMENT
Dated as of
March 8, 2000
between
COACH & CAMPERS, INC.
and
iRV DEALERSHIPS, INC.
and
iRV - KNOXVILLE, INC.
<PAGE>
<PAGE>
TABLE OF CONTENTS
SECTION 1: GENERAL DEFINITIONS. . . . . . . . . . . . . . . . .1
1.1 Best Knowledge. . . . . . . . . . . . . . . . . . . . . . .1
1.2 Effective Date. . . . . . . . . . . . . . . . . . . . . . .1
1.3 Governmental Authority. . . . . . . . . . . . . . . . . . .1
1.4 Governmental Requirement. . . . . . . . . . . . . . . . . .1
1.5 Legal Requirements. . . . . . . . . . . . . . . . . . . . .2
1.6 Person. . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.7 Section.. . . . . . . . . . . . . . . . . . . . . . . . . .2
1.8 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 2: PURCHASE AND SALE OF ASSETS. . . . . . . . . . . . .2
2.1 Description of Assets . . . . . . . . . . . . . . . . . . .2
2.2 Excluded Assets.. . . . . . . . . . . . . . . . . . . . . .3
2.3 Allocation of Purchase Price. . . . . . . . . . . . . . . .4
2.4 No Assumption of Liabilities. . . . . . . . . . . . . . . .4
2.5 Labor Matters . . . . . . . . . . . . . . . . . . . . . . .5
2.6 Consulting Agreement. . . . . . . . . . . . . . . . . . . .5
2.7 Fraudulent Transfers. . . . . . . . . . . . . . . . . . . .5
SECTION 3. PURCHASE PRICE. . . . . . . . . . . . . . . . . .5
SECTION 4: CLOSING. . . . . . . . . . . . . . . . . . . . . . .5
4.1 General Procedure.. . . . . . . . . . . . . . . . . . . . .5
4.2 Time and Place. . . . . . . . . . . . . . . . . . . . . . .5
4.3 Effective Date of Closing.. . . . . . . . . . . . . . . . .5
4.4 Covenants Regarding Closing.. . . . . . . . . . . . . . . .5
4.5 Conditions to Obligation of Buyer.. . . . . . . . . . . . .6
4.6 Conditions to Obligation of Seller. . . . . . . . . . . . .8
4.7 Specific Items to be Delivered at the Closing.. . . . . . .8
SECTION 5: REPRESENTATIONS AND WARRANTIES OF SELLER AND
SHAREHOLDERS. . . . . . . . . . . . . . . . . . 10
5.1 Organization and Standing.. . . . . . . . . . . . . . . . 10
5.2 Subsidiaries, etc.. . . . . . . . . . . . . . . . . . . . 10
5.3 Qualification . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Corporate Authority . . . . . . . . . . . . . . . . . . . 10
5.5 Financial Statements. . . . . . . . . . . . . . . . . . . 11
5.6 No Defaults.. . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Financial Information.. . . . . . . . . . . . . . . . . . 11
5.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.9 No Actions, Proceedings, etc. . . . . . . . . . . . . . . 12
5.10 Post Balance Sheet Changes. . . . . . . . . . . . . . . . 12
5.11 No Breaches . . . . . . . . . . . . . . . . . . . . . . . 12
5.12 Condition of the Corporation's Accounts . . . . . . . . . 13
5.13 Inventory.. . . . . . . . . . . . . . . . . . . . . . . . 13
5.14 Accounts Receivable.. . . . . . . . . . . . . . . . . . . 13
5.15 Corporate Accounts and Proceedings. . . . . . . . . . . . 13
5.16 Registration Rights and Proprietary Information . . . . . 13
5.17 Changes in Suppliers and Customers. . . . . . . . . . . . 15
5.18 No Liens or Encumbrances. . . . . . . . . . . . . . . . . 15
5.19 Employee Matters. . . . . . . . . . . . . . . . . . . . . 15
5.20 Legal Proceedings and Compliance with Law . . . . . . . . 15
5.21 Contract Schedules. . . . . . . . . . . . . . . . . . . . 16
5.22 Labor Matters . . . . . . . . . . . . . . . . . . . . . . 17
5.23 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 17
5.24 Environmental . . . . . . . . . . . . . . . . . . . . . . 17
5.25 Obligations and Liabilities . . . . . . . . . . . . . . . 19
5.26 Representations and Warranties. . . . . . . . . . . . . . 19
SECTION 6: REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . 19
6.1 Organization and Standing.. . . . . . . . . . . . . . . . 19
6.2 Corporate Acts and Proceedings. . . . . . . . . . . . . . 19
SECTION 7: COVENANTS OF SELLER. . . . . . . . . . . . . . . . 19
7.1 Preservation of Business. . . . . . . . . . . . . . . . . 19
7.2 Ordinary Course . . . . . . . . . . . . . . . . . . . . . 20
7.3 Negative Covenants. . . . . . . . . . . . . . . . . . . . 20
7.4 Access to Books and Records, Premises, etc. . . . . . . . 21
7.5 Compensation . . . . . . . . . . . . . . . . . . . . . . 21
7.6 Taxes and Other Liabilities . . . . . . . . . . . . . . . 21
7.7 No Solicitation . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8: TERMINATION. . . . . . . . . . . . . . . . . . . . 22
8.1 Termination.. . . . . . . . . . . . . . . . . . . . . . . 22
8.2 Effect of Termination.. . . . . . . . . . . . . . . . . . 22
SECTION 9: INDEMNIFICATION. . . . . . . . . . . . . . . . . . 22
9.1 Indemnification Covenants of Seller and Shareholders. . . 22
9.2 Indemnification Covenants of Buyer. . . . . . . . . . . . 23
9.3 Method of Asserting Claims . . . . . . . . . . . . . . . 23
9.4 Survival. . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 10: CONFIDENTIAL INFORMATION AND RELATED MATTERS. . . 25
SECTION 11: EXPENSES. . . . . . . . . . . . . . . . . . . . . 26
SECTION 12: MISCELLANEOUS . . . . . . . . . . . . . . . . . . 26
12.1 Incorporation by Reference. . . . . . . . . . . . . . . . 26
12.2 Parties in Interest.. . . . . . . . . . . . . . . . . . . 26
12.3 Amendments and Waivers. . . . . . . . . . . . . . . . . . 26
12.4 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.5 Governing Law - Construction. . . . . . . . . . . . . . . 27
12.6 Limitation of Actions.. . . . . . . . . . . . . . . . . . 27
12.7 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . 27
12.8 Fax/Counterparts. . . . . . . . . . . . . . . . . . . . . 28
12.9 Captions.. . . . . . . . . . . . . . . . . . . . . . . . 28
12.10 Severability.. . . . . . . . . . . . . . . . . . . . . . 28
12.11 Jurisdiction and Venue.. . . . . . . . . . . . . . . . . 29
12.12 Good Faith Cooperation and Additional Documents. . . . . 29
12.13 Assignment.. . . . . . . . . . . . . . . . . . . . . . . 29
12.14 Entire Agreement - Amendment.. . . . . . . . . . . . . . 29
12.15 Authority to Sign. . . . . . . . . . . . . . . . . . . . 29
12.16 Execution of Documents.. . . . . . . . . . . . . . . . . 29
12.17 Time . . . . . . . . . . . . . . . . . . . . . . . . . . 30
<PAGE>
<PAGE>
ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into effective this 8th
day of March, 2000, by iRV DEALERSHIPS, INC., a Colorado
corporation, and iRV - KNOXVILLE, INC., its wholly-owned
subsidiary to be formed ("Buyer") and COACH & CAMPERS, LTD., a
Tennessee corporation, ("Seller"), and DONALD C. HANNEY II
(hereafter "Shareholder").
WITNESSETH
WHEREAS, Seller is the owner of certain tangible and
intangible properties and assets (the "Assets") used in
connection with the operation of a recreational vehicle ("RV")
dealership (the "Business"); and
WHEREAS, Buyer desires to purchase and Seller desires to
sell the Assets used in connection with such Business effective
as of the Closing Date (the "Effective Date"), subject to the
terms and conditions hereinbelow set forth.
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties contained in this
Agreement, and other good and valuable consideration, the receipt
and adequacy whereof is hereby acknowledged, the parties agree as
follows:
SECTION 1: GENERAL DEFINITIONS
For purposes of this Agreement, the following terms shall
have the respective meanings set forth below:
1.1 Best Knowledge. "Best Knowledge" shall mean both what
a Person knew as well as what the Person should have known had
the Person exercised reasonable diligence. When used with
respect to a Person other than a natural person, the term "Best
Knowledge" shall include matters that are known to the current
directors and executive officers of the Person.
1.2 Effective Date. "Effective Date" shall mean the
Closing Date.
1.3 Governmental Authority. "Governmental Authority" shall
mean any and all foreign, federal, state or local governments,
governmental institutions, public authorities and governmental
entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including, but not limited to,
departments, boards, bureaus, commissions, agencies, courts,
administrations and panels, and any division or instrumentalities
thereof, whether permanent or ad hoc and whether now or hereafter
constituted or existing.
1.4 Governmental Requirement. "Governmental Requirement"
shall mean any and all laws (including, but not limited to,
applicable common law principles), statutes, ordinances, codes,
rules regulations, interpretations, guidelines, directions,
orders, judgments, writs, injunctions, decrees, decisions or
similar items or pronouncements, promulgated, issued, passed or
set forth by any Governmental Authority.
1.5 Legal Requirements. "Legal Requirements" means
applicable common law and any statute, ordinance, code or other
laws, rule, regulation, order, technical or other standard,
requirement, judgment, or procedure enacted, adopted,
promulgated, applied or followed by any governmental authority,
including, without limitation, any order, decree, award, verdict,
findings of fact, conclusions of law, decision or judgment,
whether or not final or appealable, of any court, arbitrator,
arbitration board or administrative agency.
1.6 Person. "Person" shall mean any natural person, any
Governmental Authority and any entity the separate existence of
which is recognized by any Governmental Authority or Governmental
Requirement, including, but not limited to, corporations,
partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit
or otherwise.
1.7 Section. Unless otherwise stated herein, the term
"Section" when used in this Agreement shall refer to the Sections
of this Agreement.
1.8 Taxes. "Tax" and "Taxes" shall mean any and all
income, excise, franchise or other taxes and all other charges or
fees imposed or collected by any Governmental Authority or
pursuant to any Governmental Requirement, and shall also include
any and all penalties, interest, deficiencies, assessments and
other charges with respect thereto.
SECTION 2: PURCHASE AND SALE OF ASSETS
On the terms and subject to the conditions of this
Agreement, and in reliance upon the representations and
warranties of Seller and Buyer contained in this Agreement:
2.1 Description of Assets. Buyer agrees to acquire from
Seller and Seller agrees to transfer to Buyer, as of the
Effective Date, all of the properties and assets, both tangible
and intangible, owned by Seller and used by it in connection with
the operation of the Business, without limitation, the following:
(a) All inventories of the Business of every nature
whatsoever, including, but not limited to, parts
and accessories;
(b) All accounts receivable of the Business of every
nature whatsoever, including trade and other
receivables;
(c) Seller's furniture, fixtures, office machinery and
equipment and other tangible property used in the
operation of the Business, including, without
limitation, all computer systems, hardware and
software, and telephone systems;
(d) All mailing, client and customer lists used in the
conduct and operation of the Business;
(e) All leasehold improvements and fixtures located on
the business premises;
(f) All prepaid expenses of the Business including,
without limitation, royalty, contract, catalog
expense or lease advances or deposits and other
similar types of advances to vendors, suppliers,
lessors and others
(g) All contracts and licenses used solely in the
conduct of the Business and assumed by the Buyer
pursuant to Section 2.4, including, without
limitation, contracts and licenses with vendors,
suppliers, manufacturers, distributors,
publishers, programmers, consultants and
collaborators; all contracts and licenses, all
confidentiality, invention and similar contracts
with employees and consultants; all sales orders
and contracts and all contracts for the purchase
or sale of products;
(h) All of Seller's development assets used solely in
the conduct of the Business, including, without
limitation, all pre-publication, sales, marketing,
advertising and promotional materials,
transcripts, catalogs, brochures, mailers, edited
works in process, mechanicals, camera copy, flats,
plates, intermediate film, final plate-making
film, magnetic disks, artwork, photographs and
transparencies, and other sales, advertising and
promotional materials and rights associated
therewith;
(i) All intangible assets used solely in the conduct
of the Business including, without limitation, any
and all software, domain names, prospects lists,
databases, marketing scripts, procedures and
practices, copyrights, trademarks, trade names,
including registrations thereof and applications
for registration thereof, and all patents and
patent application for any and all of the
foregoing;
(j) All goodwill associated with the Business;
(k) The telephone numbers of Seller, including,
without limitation, all "800" numbers used in the
conduct of the Business; and
(l) All business, tax and accounting records.
2.2 Excluded Assets. The following assets owned by Seller
and used in the conduct of the Business shall not be included in
the properties and Assets to be purchased by Buyer from Seller on
the Closing Date:
(a) Cash and cash equivalents as of the Effective
Date.
2.3 Allocation of Purchase Price. The Purchase Price as
defined in Section 3 hereof shall be allocated among the Assets
purchased as set forth in this Section 2.3. The allocation shall
be binding on the parties in accordance with Section 1060 of the
Code for all purposes, including without limitation, the
appropriate tax treatment to be accorded to the transactions
contemplated by this Agreement. The Purchase Price shall be
allocated to accounts receivable and inventory as determined in
Section 3.1.
2.4 No Assumption of Liabilities. Except as expressly
provided for in this Section 2.4, Buyer will acquire the Assets
free and clear of all claims, liens or liabilities of Seller and
shall have no obligation to pay or otherwise discharge any
obligation or liability of Seller incurred in connection with its
operation of the Business or otherwise; and Seller agrees to
indemnify, defend and hold harmless Buyer with respect to any
claim, damage or liability for such obligations. Notwithstanding
the forgoing provisions, Buyer shall assume and agree to pay the
following obligations of Seller incurred in connection with the
operation of the Business:
(a) Any obligations incurred after the Effective Date
by virtue of the assignment by Seller to Buyer of certain
contracts and other agreements associated with the operation of
the Business; provided, however, that such obligations arise from
operations conducted by Buyer after the Effective Date. Those
contracts and agreements consist exclusively of:
(i) The premises lease covering the Business
facility;
(ii) Equipment leases set forth on Exhibit
2.4(a)(2) hereto;
(iii) Contracts and licenses set forth on
Exhibit 2.4(a)(3) hereto;
(iv) Two promissory notes each in the
principal amount of $25,000;
(v) Two promissory notes given in connection
with the ownership of two (2) rental
units included in the Assets.
2.5 Labor Matters. It is expressly understood and agreed
that Buyer is not assuming any union contracts, pension
liabilities, workman's compensation commitments or employee
obligations of Seller up to the Effective Date, and all such
matters shall be and remain Seller's sole responsibility and
obligation. Buyer shall be solely responsible for any and all
employee obligations of Buyer incurred in connection with the
operation of the Business on or after the Effective Date.
2.6 Consulting Agreement. At Closing, Buyer shall enter
into a Consulting Agreement with Donald C. Hanney II
substantially in the form of Exhibit 2.6 hereto.
2.7 Fraudulent Transfers. The parties acknowledge that the
statutes of the State of Tennessee governing fraudulent transfers
as currently in effect may apply to the transactions provided for
in this Agreement. Seller agrees to fully comply with the
requirements of any and all fraudulent transfer statutes
applicable to the transactions provided for herein. Seller
agrees to indemnify, defend and hold harmless Buyer from any
obligation or liability to the creditors of Seller, as well as
any other claims, demands or obligations based upon any failure
by Seller to comply with the provisions of this Section 2.7.
SECTION 3. PURCHASE PRICE
3.1 The Purchase Price for the Assets (the "Purchase
Price") shall be determined and paid as follows:
(a) The assumption by Buyer of two (2) promissory
notes, each in the amount of $25,000, more fully
described in Section 2.4(a)(iv) hereof;
(b) The issuance to Seller or, subject to appropriate
corporate approvals, to Donald C. Hanney I,
Seller's President, an aggregate of 7,500 shares
of Common Stock of Southshore Corporation, which
shares are "restricted securities" under the
Securities Act.
(c) An amount, in cash payable at closing equal to the
fair market value of Seller's inventory. For the
purposes of this Agreement, the Fair Market Value
of Seller's inventory shall be determined by
mutual agreement between Buyer and Seller.
(d) Buyer's assumption of two (2) rental unit
promissory notes more fully described in Section
2.4(a)(v).
SECTION 4: CLOSING
4.1 General Procedure. At the Closing each party shall
deliver such documents, instruments and materials as may be
reasonably required in order to effectuate the intent and
provisions of this Agreement, and all such documents, instruments
and materials shall be satisfactory in form and substance to
counsel for the other parties.
4.2 Time and Place. The Closing shall take place on
____________, 2000 or on such later date and at such place and in
such manner as the Buyer and Seller may agree, following the
satisfaction or waiver of all conditions precedent set forth in
Sections 4.5 and 4.6.
4.3 Effective Date of Closing. Notwithstanding the actual
time and place of Closing, the parties stipulate and agree that
the Effective Date of the sale and purchase of the Assets shall
be the Closing Date.
4.4 Covenants Regarding Closing. Buyer and Seller hereby
covenant and agree that they shall (i) use reasonable efforts to
cause each of their respective Exhibits to be prepared and
exchanged with the other party, and its legal counsel, within ten
(10) business days following the execution of this Agreement,
except to the extent the express terms of this Agreement provide
for a different time period for such delivery to be accomplished,
(ii) use reasonable efforts to cause all of their respective
representations and warranties set forth in this Agreement, and
Exhibits hereto, to be true on and as of the Closing, (iii) use
reasonable efforts to cause all of their respective obligations
that are to be fulfilled on or prior to the Closing to be so
fulfilled, (iv) use reasonable efforts to cause all conditions to
the Closing set forth in this Agreement to be satisfied on or
prior to the Closing, and (v) use reasonable efforts to deliver
to each other at the Closing the certificates, updated lists,
notices, consents, authorizations, approvals, agreements,
transfer documents, receipts and amendments contemplated hereby
(with such additions or exceptions to such items as are necessary
to make the statements set forth in such items accurate and
acceptable, provided that if any such additions or exceptions
cause any of the conditions to a party's obligations hereunder as
set forth hereinbelow not to be fulfilled, such additions and
exceptions shall in no way limit the rights of the other party
hereunder to terminate this Agreement or refuse to consummate the
transactions contemplated hereby).
4.5 Conditions to Obligation of Buyer. The obligation of
Buyer to complete the purchase of the Assets on the Closing date
on the terms set forth in this Agreement is, at the option of
Buyer, subject to the satisfaction or waiver by Buyer of each of
the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties made by Seller in this Agreement
shall be correct in all material respects on and as of the
Closing date with the same force and effect as though such
representations and warranties had been made on the Closing date.
(b) Compliance with Covenants. All covenants which
Seller is required to perform or comply with on or before the
Closing date shall have been fully complied with or performed in
all material respects.
(c) Corporate Approvals. The Board of Directors of
the Seller shall have approved and ratified, if necessary, this
Agreement and shall, if necessary, have authorized the
appropriate officers of the Seller to execute same and fully
perform its terms.
(d) Consents and Approvals. To the extent that any
material lease, mortgage, deed of trust, contract or agreement to
which Seller is a party shall require the consent of any person
to the purchase and sale of the Assets or any other transaction
provided for herein, such consent shall have been obtained;
provided, however, that the Seller shall not make, as a condition
for the obtaining of any such consent, any agreements or
undertakings not approved in writing by Buyer to the extent that
such condition otherwise has an effect on Buyer.
(e) No Governmental Actions. No action or proceeding
before any Governmental Authority shall have been instituted or
threatened to restrain or prohibit the transactions contemplated
by this Agreement, and the Buyer and Seller shall have delivered
to each other certificates dated as of the Closing and executed
by such parties, stating that to their Best Knowledge, no such
items exist. No Governmental Authority shall have taken any
other action as a result of which the management of any of the
Buyer and Seller, in its sole discretion, reasonably deems it
inadvisable to proceed with the transactions contemplated by this
Agreement.
(f) Other Documents. Seller shall have delivered or
caused to be delivered all other documents, agreements,
resolutions, certificates or declarations as Buyer or its
attorneys may have reasonably requested.
(g) Lease. Buyer shall have obtained an assignment or
consent to assumption of the Commercial Lease covering the
Business premises, substantially in the form of Exhibit 4.5(g)
hereto.
(h) No Adverse Information. The investigations with
respect to the Parties, the assets and the respective businesses
performed by each Company's respective professional advisors and
other representatives shall not have revealed any information
concerning the other Company, its assets or its business that has
not been made known to the discovering Company, in writing prior
to the date of this Agreement and that, in the opinion of such
party and its advisors, materially and adversely affects the
business or assets of the other party or the viability of the
transaction contemplated by this Agreement.
(i) Ordinary Course of Business. Until the Closing
Date, Seller shall have carried on its business in the ordinary
and usual course, and shall have delivered to Buyer a certificate
to that effect.
(j) Liens. Seller shall have delivered to Buyer a
reasonably current lien and judgment search (both state and
county levels in each jurisdiction where the party is qualified
to or is doing business or owns material assets) confirming the
absence of any judicial liens, security interests, tax liens and
similar such liens affecting any of its business or assets,
except for Permitted Liens as defined in Section . Each and
every lien or encumbrance of any nature, if any, relating to the
assets, business, or the shares of common stock of such Company
shall have been terminated and released, and proof thereof
delivered to the other (except for Permitted Liens).
(k) Other Documents. The parties shall have delivered
or caused to be delivered all other documents, agreements,
resolutions, certificates or declarations as each respective
party or its attorneys may have reasonably requested.
(l) Financial Statements. Prior to Closing, Seller
shall have delivered to Buyer its consolidated unaudited
financial statements containing unaudited balance sheets of
September 30, 1999, together with statements of operations for
the nine month period ending September 30, 1999 and for both
twelve (12) month periods ending December 31, 1998 and 1997, and
which financial statements shall be in all respects satisfactory
to Buyer and its legal counsel.
(m) Audit Completion. Prior to Closing, Buyer's
independent public accountants shall have completed the
preparation of Seller's Audited Financial Statements, together
with report of independent public accountant, in conformity with
generally accepted accounting principles consistently applied and
in compliance with all requirements of Regulation SB under the
Securities Act.
(n) Noncompetition Agreement. At Closing, Donald C.
Hanney II shall execute and deliver to Buyer a Noncompetition
Agreement substantially in the form of Exhibit 3.5(o) hereto.
(o) Other Obligations. Seller shall have delivered to
Buyer an accurate list, as of the Closing Date, showing all other
commitments and/or obligations of Seller not otherwise disclosed
to Buyer in writing, including, but not limited to, any and all
obligations to Shareholders and automobile leases. It is
understood that Buyer is not assuming any such commitments and/or
obligations, all of which shall be and remain the obligation of
Seller, and Seller agrees to indemnify and hold harmless Buyer,
Seller from any liability with respect thereto.
(p) Leases. Seller shall have delivered to Buyer an
accurate list, together with copies thereof, showing any and all
premises or commercial leases to which Seller is a party or which
otherwise constitute a liability, obligation or commitment of
Seller. Such leases and commitments shall be subject in each
respect to the review and approval of Buyer.
(q) Net Worth. At the Closing Date, the Fair Market
Value of Seller's inventory as determined by agreement between
Buyer and Seller shall be equal to or greater than the
outstanding balance of Seller's floor plan financing, and Seller
shall deliver at closing a certificate of the president of Seller
certifying compliance with this condition.
(r) Business Premises. Prior to the Closing Date,
there shall have been obtained a lease or purchase agreement
covering the business premises of Seller on terms satisfactory to
Buyer and its legal counsel.
4.6 Conditions to Obligation of Seller. The obligations of
Seller to complete the Sale of Assets on the Closing date on the
terms set forth in this Agreement is, at the option of Seller
subject to the satisfaction or waiver by Seller of each of the
following conditions:
(a) Corporate Approvals. Buyer shall have approved
and ratified this Agreement and shall have authorized the
appropriate parties to execute same and fully perform its terms.
(b) Consents and Approvals. To the extent that any
material lease, mortgage, deed of trust, contract or agreement to
which Seller is a party shall require the consent of any person
to the purchase and sale of Assets or any other transaction
provided for herein, such consent shall have been obtained;
provided, however, that Seller shall not make, as a condition for
the obtaining of any such consent, any agreements or undertakings
not approved in writing by Buyer to the extent that such
condition otherwise has an effect on the Seller or Buyer.
4.7 Specific Items to be Delivered at the Closing. The
parties shall deliver the following items to the appropriate
party at the Closing of the transactions contemplated by this
Agreement.
(a) To be delivered by Seller (in duplicate original):
(i) Bills of Sale, assignments and other
documents of conveyance transferring to
Buyer the Assets with general warranty
of title.
(ii) Copy of corporate resolutions
authorizing the execution of this
Agreement, and the consummation by
Seller of the transactions contemplated
by this Agreement.
(iii) A certificate of the President of Seller
stating that the representations and
warranties of Seller set forth in this
Agreement are true and correct. Said
certificate shall further verify and
affirm that all consents or waivers, if
any, which may be necessary to execute
and deliver this Agreement have been
obtained and are in full force and
effect.
(iv) A certificate dated the Closing Date,
signed by the Chief Executive Officer
and the Chief Financial Officer of
Seller in form and substance
satisfactory to the other parties and
their legal counsel, certifying that all
conditions precedent set forth in this
Agreement to the obligations of Seller
to close, have been fulfilled, and that
no event of default hereunder and no
event which, with the giving of notice
or passage of time, or both, would be an
event of default, has occurred as of
such date.
(v) Certificates dated the Closing Date,
signed by the Secretary of Seller, (i)
certifying resolutions duly adopted by
the Board of Directors and Shareholders
of Seller, authorizing the execution of
this Agreement and all of the other
transactions to be consummated pursuant
thereto; (ii) certifying the names and
incumbency of the officers of Seller who
are empowered to execute the foregoing
documents for and on behalf of such
company; (iii) certifying the
authenticity of copies of the Articles
of Incorporation and Bylaws of Seller;
and (iv) certifying the authenticity of
a reasonably current Certificate of Good
Standing in New York.
(vi) All accounting books and records of
Seller and such other business records
as Buyer may reasonably request.
(b) To be delivered by Shareholder (in duplicate
original):
(i) Non-Competition Agreements substantially in
the form of Exhibit 3.5(o) hereto.
(ii) Certificate of the Shareholders stating that
the representations and warranties of Seller
set forth in this Agreement are true and
correct. Said Certificate shall further
verify and affirm that all consents or
waivers, if any, which may be necessary to
execute and deliver this Agreement have been
obtained and are in full force and effect.
(c) To be delivered by Buyer (in duplicate original):
(i) Cash or certified funds payable to
Seller in the amount of the Fair Market
Value of Seller's inventory;
(ii) Certificate representing 7,500 shares of
Common Stock of Southshore Corporation
with appropriate restrictive legends;
(iii) Copy of corporate resolution certified
by Buyer's Secretary authorizing the
execution of this Agreement and the
consummation by Buyer of the
transactions contemplated by this
Agreement.
SECTION 5: REPRESENTATIONS AND WARRANTIES OF SELLER AND
SHAREHOLDERS
As a material inducement to Buyer to enter into this
Agreement and with the understanding and expectations that Buyer
will be relying thereon in consummating the Asset Purchase
contemplated hereunder, Shareholders and Seller jointly and
severally hereby represent and warrant as follows:
5.1 Organization and Standing. Seller (hereafter the
"Corporation") for the purposes of this Section 5) is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Tennessee and has all requisite
power and authority to own its assets and properties and to carry
on its business as it is now being conducted.
5.2 Subsidiaries, etc. Except as set forth below, the
Corporation does not have any direct or indirect ownership
interest in any corporation, partnership, joint venture,
association or other business enterprise.
5.3 Qualification. The Corporation is qualified to engage
in business in Tennessee. There is no other jurisdiction wherein
the character of the properties presently owned by the
Corporation or the nature of the activities presently conducted
by the Corporation makes necessary the qualification, licensing
or domestication of the Corporation as a foreign corporation.
5.4 Corporate Authority. Except as set forth on Exhibit
hereto, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor
compliance by the Corporation with any of the provisions hereof
will:
(a) conflict with or result in a breach of any
provision of its Articles of Incorporation or By-Laws;
(b) result in a default (or give rise to any right of
termination, cancellation, or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation
to which either Corporation is a party, or by which any of its
properties or assets may be bound except for such default (or
right of termination, cancellation, or acceleration) as to which
requisite waivers or consents shall either have been obtained by
the Corporation prior to the Closing Date or the obtaining of
which shall have been waived by the other parties hereto; or
(c) violate any order, writ, injunction, decree or, to
the Corporation's Best Knowledge, any statute, rule or regulation
applicable to the Corporation or any of its properties or assets.
No consent or approval by any Governmental Authority is required
in connection with the execution and delivery by the Corporation
of this Agreement or the consummation by the Corporation of the
transactions contemplated hereby, except for possible notice
under plant closing laws.
5.5 Financial Statements. The following statements are
attached to this Agreement as Exhibit 5.5:
(a) Unaudited, consolidated financial statements of
the Corporation and its subsidiaries containing unaudited,
consolidated balance sheets as of December 30, 1999, together
with unaudited, consolidated statements of operations for the
years ended December 31, 1998 and 1999;
(b) Such financial statements, together with and
subject to the disclosures and notes thereto, (i) are in
accordance with the books and records of the Corporation; (ii)
present fairly and accurately the financial condition of the
Corporation as of the dates of the balance sheets; (iii) present
fairly and accurately the results of operations for the periods
covered by such statements; (iv) have been prepared in accordance
with generally accepted accounting principles applied on a
consistent basis; and (v) include all adjustments (consisting of
only normal recurring accruals) which are necessary for a fair
presentation, on a consolidated basis, of the financial condition
of the Corporation, and of the results of operations of the
Corporation for the periods covered by such statements.
(c) As of the date hereof, and as of Closing, the
Corporation does not have any liabilities or payables (absolute
or contingent, known or unknown) except for liabilities or
payables set forth on Seller's financial statements or otherwise
disclosed in writing to Buyer.
5.6 No Defaults. Except as set forth on the attached
Exhibit 5.6, each of the leases, contracts, agreements and
insurance policies to which Seller is a party is in full force
and effect as of the date hereof with no material defaults
existing thereunder.
5.7 Financial Information. In connection with the
investigations performed by an audit to be undertaken by Buyer,
Seller has furnished certain financial information and data
including, without limitation, tax and accounting records,
financial records, statements, worksheets and other information
requested by the Buyer and its auditors necessary to undertake
and complete the audited financial examinations. Seller
represents and warrants that any and all such information
furnished in connection with the conduct of such investigations
and audits shall be true, accurate and complete in all material
respects and shall not contain any material misstatements nor any
material omissions of fact or information respecting the
financial condition or results of operations of Seller for the
respective periods covered by the audits.
5.8 Taxes. Except as set forth in Exhibit 5.8:
(a) The Corporation has filed (or have obtained
extensions for filing) all income, excise, sales, corporate
franchise, property, payroll and other tax returns or reports
required to be filed by it, as of the date hereof by the United
States of America, any state or other political subdivision
thereof or any foreign country and has paid all Taxes or
assessments relating to the time periods covered by such returns
or reports;
(b) The Corporation has paid all tax liabilities
imposed or assessed by any governmental authority for all periods
prior to the Closing Date for which such taxes have become due
and payable and has received no notice from any such governmental
authority of any deficiency or delinquency with respect to such
obligation. The Corporation is not currently undergoing any
audit conducted by any taxing authority and have received no
notice of audit covering any prior period for which taxes have
been paid or are or will be due and payable prior to the Closing
Date. There are no present disputes as to taxes of any nature
payable by Seller.
5.9 No Actions, Proceedings, etc. Except as listed on the
attached Exhibit 5.9, there is no action or proceeding (whether
or not purportedly on behalf of the Corporation) pending or
threatened by or against the Corporation which might result in
any material adverse change in the condition, financial or
otherwise, of the Corporation's business or assets. No order,
writ or injunction or decree has been issued by, or requested of
any court or governmental agency which does nor may result in any
material adverse change in the Corporation's assets or properties
or in the financial condition or the business of the Corporation.
Except for liabilities referred to in attached Exhibit 4.10, the
Corporation are not liable for damages to any employee or former
employee as a result of any violation of any state, federal or
foreign laws directly or indirectly relating to such employee or
former employee.
5.10 Post Balance Sheet Changes. Except as set forth on the
attached Exhibit 5.10, since the date of the latest financial
statements through the date of this Agreement, the Corporation
has not (a) issued, bought, redeemed or entered into any
agreements, commitments or obligations to sell, buy or redeem any
shares of its capital stock; (b) incurred any obligation or
liability (absolute or contingent), other than current
liabilities incurred, and obligations under contracts entered
into, in the ordinary course of business; (c) discharged or
satisfied any lien or encumbrance or paid any obligation or
liability (absolute or contingent), other than current
liabilities incurred in the ordinary course of business; (d)
mortgaged, pledged or subjected to lien charges, or other
encumbrance any of its assets, other than the lien of current or
real property taxes not yet due and payable; (e) waived any
rights of substantial value, whether or not in the ordinary
course of business; (f) suffered any damage, destruction or loss,
whether or not covered by insurance, materially and adversely
affecting its assets or its business; (g) made or suffered any
amendment or termination of any material contract or any
agreement which adversely affects its business; (h) received
notice or had knowledge of any labor trouble other than routine
grievance matters, none of which is material; (i) increased the
salaries or other compensation of any of its directors, officers
or employees or made any increase in other benefits to which
employees may be entitled, other than employee salary increases
made in the ordinary course of business and reflected on an
Exhibit hereto; (j) sold, transferred or otherwise disposed of
any of its assets, other than in the ordinary course of business;
(k) declared or made any distribution or payments to any of its
shareholders, officers or employees, other than wages and
salaries made to employees in the ordinary course of business;
(l) revalued any of its assets; or (m) entered into any
transactions not in the ordinary course of business.
5.11 No Breaches. The Corporation is not in violation of,
and the consummation of the transactions contemplated hereby do
not and will not result in any material breach of, any of the
terms or conditions of any mortgage, bond, indenture, agreement,
contract, license or other instrument or obligation to which the
Corporation is a party or by which its assets are bound; nor will
the consummation of the transactions contemplated hereby cause
Seller to violate any statute, regulation, judgment, writ,
injunction or decree of any court, threatened or entered in a
proceeding or action in which the Corporation is, was or may be
bound or to which the Corporation's assets are subject.
5.12 Condition of the Corporation's Assets. Seller's assets
are currently in good and usable condition and there are no
defects or other conditions which, in the aggregate, materially
and adversely affect the operation or values of such assets.
Except as disclosed on the attached Exhibit 5.12, no third party
(including any officer or employee of the Corporation) has any
proprietary interest in any know-how or other intangible assets
used by the Corporation in the conduct of its business.
5.13 Inventory. Except as otherwise set forth on Exhibit
5.13, all inventories reflected in the Corporation's latest
financial statements in excess of the reserves for excess or
obsolete inventories are stated at the lowest of cost,
replacement cost or market, and, as so stated, are in good
condition and usable or salable in the category in which they are
inventoried, in the ordinary course of business of the
Corporation, without discounts other than normal trade discounts
regularly offered by the Corporation, for prompt payment or
quantity purchase.
5.14 Accounts Receivable. The accounts receivable of the
Corporation represent valid and enforceable obligations due to
the Corporation and its subsidiaries, and shall be collectible by
the Corporation and its subsidiaries in the ordinary course of
business. Except as set forth on the attached Exhibit 5.14, the
Corporations have not received any notice of any material
counterclaim or set-off with respect to such accounts receivable.
5.15 Corporate Acts and Proceedings. This Agreement has
been duly authorized by all necessary corporate action on behalf
of Seller, has been duly executed and delivered by authorized
officers of Seller, and is a valid and binding Agreement on the
part of Seller that is enforceable against Sellers and Seller in
accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and to judicial limitations on the
enforcement of the remedy of specific performance and other
equitable remedies.
5.16 Registered Rights and Proprietary Information.
(a) Exhibit 5.16 hereto contains a true and complete
list of all service marks, trademark and service mark
registrations and applications, copyright, copyright
registrations and applications, grants of licenses and rights to
the Corporation and its subsidiaries with respect to the
foregoing, both domestic and foreign, claimed by the Corporation
or its subsidiaries or used or proposed to be used by the
Corporation and/or its subsidiaries in the conduct of their
business including, without limitation, the name "Coach &
Campers," (collectively herein, "Registered Rights"). Exhibit
4.17 hereto also contains a true and complete list of all and
every trade secret, know-how, process, formula, discovery,
development, research, design, technique, customer and supplier
list, contracts, product development plans, product development
concepts, author contracts, marketing and purchasing strategy,
invention, and any other matter required for, incident to, or
related to the conduct of their businesses (hereafter
collectively the "Proprietary Information"). Except as described
in Exhibit 4.17 hereto, the Corporation and/or its subsidiaries
are not obligated or under any liability whatever to make any
payments by way of royalties, fees or otherwise to any owner or
licensor of, or other claimant to, any Registered Right or
Proprietary Information with respect to the use thereof in the
conduct of their businesses or otherwise.
(b) Except as described in Exhibit 5.16 hereto, to the
Corporation's Best Knowledge after reasonable inquiry, the
Corporation owns and has the unrestricted right to use the
Registered Rights and Proprietary Information required for or
incident to the design, development, manufacture, operation, sale
and use of all products and services sold or rendered or proposed
to be sold or rendered by the Corporation and/or its subsidiaries
or relating to the conduct or proposed conduct of their
businesses free and clear of any right, title, interest, equity
or claim of others. Except as described in Exhibit 5.16 hereto,
the Corporation and/or its subsidiaries have taken all necessary
steps (including without limitation entering into appropriate
confidentiality, assignment of rights and non-competition
agreements with all officers, directors, employees and
consultants of the Corporation and/or its subsidiaries and others
with access to or knowledge of the Proprietary Information) to
safeguard and maintain the secrecy and confidentiality of, and
its proprietary rights in, the Proprietary Information and all
related documentation and intellectual property rights therein
necessary for the conduct or proposed conduct of their
businesses.
(c) Except as described in Exhibit 5.16 hereto, the
Corporation and/or its subsidiaries have not sold, transferred,
assigned, licensed or subjected to any right, lien, encumbrance
or claim of others, any Proprietary Information, including
without limitation any Registered Right, or any interest therein,
related to or required for the design, development, manufacture,
operation, sale or use of any product or service currently under
development or manufactured, or proposed to be developed, sold or
manufactured, by them. Exhibit 4.17 contains a true and complete
list and description of all licenses of Proprietary Information
granted to the Corporation by others or to others by the
Corporation and/or its subsidiaries. Except as described in
Exhibit 4.17 hereto, there are no claims or demands of any person
pertaining to, or any proceedings that are pending or threatened,
which challenge the rights of the Corporation and/or its
subsidiaries in respect of any Proprietary Information used in
the conduct of their businesses.
(d) Except as described in Exhibit 5.16 hereto, the
Corporation and/or its subsidiaries own and on the Closing Date
shall own, have, and hold, exclusively all right, title and
interest in the Registered Rights, free and clear of all liens,
encumbrances, restrictions, claims and equities of any kind
whatsoever, has and shall have the exclusive right to use, sell,
license or dispose of, and has and shall have the exclusive right
to bring action for the infringement of the Registered Rights and
the Proprietary Information. To the Best Knowledge of
Corporation, the marketing, promotion, distribution or sale by
the Corporation and/or its subsidiaries of any products or
services subject to the Registered Rights or making use of
Proprietary Information shall not constitute an infringement of
any patent, copyright, trademark, service mark or
misappropriation or violation of any other party's proprietary
rights or a violation of any license or agreement by the
Corporation and/or its subsidiaries. Except as described in
Exhibit 5.16 hereto, to the knowledge of the Corporation after
due inquiry no facts or circumstances exist that could result in
the invalidation of any of the Registered Rights.
5.17 Changes in Suppliers and Customers. Except as
disclosed on Exhibit 5.17, the Corporation is not aware of any
fact which indicates that any of the suppliers supplying
products, services, components or materials to the Corporation or
its subsidiaries intends to cease selling such products or
providing such services to the Corporation or its subsidiaries
nor is the Corporation aware of any fact which indicates that any
major customer of the Corporation or its subsidiaries intends to
terminate its business relations with the Corporation or its
subsidiaries.
5.18 No Liens or Encumbrances. The Corporation and/or its
subsidiaries have good and marketable title to all of the
property and assets, tangible and intangible, employed in the
operations of their businesses, free of any material mortgages,
security interests, pledges, easements or encumbrances of any
kind whatsoever.
5.19 Employee Matters. Exhibit 5.19 attached hereto
contains a true, complete and accurate list of all employees of
the Corporation and its subsidiaries and the remuneration of each
(including wages, salaries and fringe benefits). The Corporation
has no information or facts indicating that any employee listed
on Exhibit 4.20 intends to terminate his/her employment
relationship with the Corporation or its subsidiaries prior or
subsequent to the Closing Date, except as may be required by this
Agreement. Except as specifically described on Exhibit 4.20, the
Corporation has no employee benefit plans (including, but not
limited to, pension plans and health or welfare plans),
arrangements or understandings, whether formal or informal. The
Corporation does not now and has never contributed to a "multi-
employer plan" as defined in Section 400(a)(3) of ERISA. The
Corporation has complied with all applicable provisions of ERISA
and all rules and regulations promulgated thereunder, and neither
the Corporation nor any trustee, administrator, fiduciary, agent
or employee thereof has at any time been involved in a
transaction that would constitute a "prohibited transaction"
within the meaning of Section 406 of ERISA as to any covered plan
of the Corporation. The Corporation is not a party to any
collective bargaining or other union agreement. The Corporation
has not, within the past five (5) years had, or been threatened
with, any union activities, work stoppages or other labor trouble
with respect to its employees which had or might have had a
material adverse effect on the Corporation, its business or
assets. Except as set forth in Exhibit 4.10, since the date of
the financial statements provided for in this Agreement, the
Corporation has not made any commitment or agreements to increase
the wages or modify the conditions or terms of employment of any
of the employees of the Corporation used in connection with its
business, and between the date of this Agreement and the Closing
Date, the Corporation will not make any agreement to increase the
wages or modify the conditions or terms of employment of any of
the employees of the Corporation used in the conduct of its
business, without the prior written consent of all parties
hereto.
5.20 Legal Proceedings and Compliance with Law. Except as
set forth in Exhibit 5.20, there is no legal, administrative,
arbitration or other proceeding or governmental investigation
pending or threatened (including those relating to the health,
safety, employment of labor, or protection of the environment)
pertaining to Seller or its subsidiaries which might result in
the aggregate in money damages payable by Seller or its
subsidiaries in excess of insurance coverage or which might
result in a permanent injunction against Seller or its
subsidiaries. Except as set forth in such Exhibit, Seller and
its subsidiaries have substantially complied with, and are not in
default in any respect under any laws, ordinances, requirements,
regulations, or orders applicable to the business of Seller or
its subsidiaries, the violation of which might materially and
adversely affect them. Except as set forth in such Exhibit,
Seller and its subsidiaries are not parties to any agreement or
instrument, nor are they subject to any charter or other
corporate restriction or any judgment, order, writ, injunction,
decree, rule, regulation, code or ordinance which materially and
adversely affects, or might reasonably be expected materially and
adversely to affect the business, operations, prospects,
property, assets or condition, financial or otherwise, of Seller
or its subsidiaries.
5.21 Contract Schedules. Attached as Exhibits 5.21 hereto
is an accurate list and summary description of the following:
(a) All contracts, leases, agreements, covenants,
licenses, instruments or commitments of Seller and its
subsidiaries pertaining to the business of Seller and its
subsidiaries calling for the payment of $5,000 or more or which
is otherwise material to the business of Seller and its
subsidiaries, including, without limitation, the following:
(i) Executory contracts for the sale of
products;
(ii) Executory contracts for the purchase,
sale or lease of any assets;
(iii) Management or consulting contracts;
(iv) Patent, trademark and copyright
applications, registrations or licenses,
and know-how, intellectual property and
trade secret agreements or other
licenses;
(v) Note agreements, loan agreements,
indentures and the like, other than
those entered into and executed in the
ordinary course of business;
(vi) All sales, agency, distributorship,
license or franchise agreements; and
(vii) Any other contracts not in the ordinary
course of business.
(b) There are no labor contracts, employment
agreements and collective bargaining agreements related to Seller
and its subsidiaries.
(c) All instruments evidencing any liens or security
interest securing any indebtedness of Seller and its subsidiaries
covering any asset of Seller and its subsidiaries.
(d) There are no obligations of Seller under any
profit sharing, pension, stock option, severance pay, retirement,
bonus, deferred compensation, group life and health insurance or
other employee benefit plans, agreements, arrangements or
commitments of any nature whatsoever, whether or not legally
binding, and there are no agreements with any present or former
officer, director or shareholder of Seller or its subsidiaries
save and except for those obligations set forth this Agreement.
It is understood that Seller shall be subject to, and Buyer is
not assuming, any such commitments and/or obligations, all of
which shall be and remain the obligation of Seller, and Seller
agrees to indemnify and hold harmless Buyer from any liability
with respect thereto.
(e) Any and all documents, instruments and other
writings not listed in any other schedule hereto which are
material to the business operations of Seller and/or its
subsidiaries.
Except as set forth in Exhibit 5.21, all of such
contracts, agreements, leases, licenses, plans, arrangements and
commitments and all other such items set forth above are valid,
binding and in full force and effect in accordance with their
terms and conditions, and there is no existing default thereunder
or breach thereof by the Corporation, or by any party to such
contracts, or any conditions which, with the passage of time or
the giving of notice or both, might constitute such a default by
the Corporation or by any other party to the contracts.
5.22 Labor Matters. There are no strikes, slowdowns,
stoppages, organizational efforts, discrimination charges or
other labor disputes pending or, to the knowledge of Shareholders
or any of its agent or employees, threatened against Seller or
its subsidiaries.
5.23 Insurance. Seller and its subsidiaries maintain in
full force and effect insurance coverage on their assets and
businesses in such amounts and against such risks and losses as
set forth in Exhibit 5.23.
5.24 Environmental. Except as disclosed on Exhibit 5.24,
and except for normal office and consumer products utilized in
the ordinary course of business, the conduct and operation of the
businesses of Seller and its subsidiaries have not and do not:
(a) Involve or require the storage, disposal,
generation, manufacture, refinement, transportation, production
or treatment of toxic wastes, hazardous wastes, or hazardous
substances;
(b) Resulted in any spill, discharge, leak, emission,
injection, escape, dumping, or release of any kind onto the
business premises, or into the environment surrounding the
business premises, of any toxic wastes or hazardous substances;
or
(c) Involve or require the treatment, collection,
storage or disposal of any refuse or objectionable wastes so as
to require a permit or approval from the United States
Environmental Protection Agency, or otherwise subject to the
regulation of the United States Environmental Protection Agency
or any state regulatory agency.
Seller represents and warrants that:
(d) to the Best Knowledge of Seller, no real property
(or the subsurface soil and the ground water thereunder) now or
previously owned or leased by Seller (the "Property") either
contains any Hazardous Substance (as hereinafter defined) or has
underneath it any underground fuel or liquid storage tanks;
(e) to the Best Knowledge of Seller, there has been no
generation, transportation, storage, treatment or disposal of any
Hazardous Substance on or beneath the Property, now or in the
past;
(f) Seller is not aware of any pending or threatened
litigation or proceedings before any court or administrative
agency in which any person alleges, or threatens to allege, the
presence, release, threat of release, placement on or in the
Property, or the generation, transportation, storage, treatment
or disposal at the Property, of any Hazardous Substance;
(g) Seller has not received any notice and has no
knowledge that any Governmental Authority or any employee or
agent thereof has determined or alleged, or is investigating the
possibility, that there is or has been any presence, release,
threat of release, placement on or in the Property, or any
generation, transportation, storage, treatment or disposal at the
Property, of any Hazardous Substance;
(h) To Seller's Best Knowledge, there have been no
communications or agreements with any Governmental Authority or
agency (federal, state or local) or any private person or entity
(including, without limitation, any prior owner of the Property
and any present or former occupant or tenant of the Property)
relating in any way to the presence, release, threat of release,
placement on or in the Property, or any generation,
transportation, storage, treatment or disposal at the Property,
of any Hazardous Substance. Seller further agrees and covenants
that Seller will not store or deposit on, otherwise release or
bring onto or beneath, the Property any Hazardous Substance prior
to the Closing Date; and
(i) there is no litigation, proceeding, citizen's suit
or governmental or other investigation pending, or, to Seller's
Best Knowledge, threatened, against Seller, and Seller knows of
no facts or circumstances which might give rise to any future
litigation, proceeding, citizen's suit or governmental or other
investigation, which relate to Seller's compliance with
environmental laws, regulations, rules, guidelines and
ordinances.
For purposes of this Section 5.24, "Hazardous
Substance" shall mean and include (1) a hazardous substance as
defined in 42 U.S.C. Section 9601(14), the Regulations at
40 C.F.R. Part 302, (2) any substance regulated under the
Emergency Planning and Community Right to Know Act (including
without limitation any extremely hazardous substances listed at
40 C.F.R. Part 355 and any toxic chemical listed at 40 C.F.R.
Part 372), (3) hazardous wastes and hazardous substances as
specified under any Tennessee state or local Governmental
Requirement governing water pollution, groundwater protection,
air pollution, solid wastes, hazardous wastes, spills and other
releases of toxic or hazardous substances, transportation of
hazardous substances, materials and wastes and occupational or
employee health and safety, and (4) any other material, gas or
substance known or suspected to be toxic or hazardous (including,
without limitation, any radioactive substance, methane gas,
volatile hydrocarbon, industrial solvent, and asbestos) or which
could cause a material detriment to, or materially impair the
beneficial use of the Property, or constitute a material health,
safety or environmental risk to any person exposed thereto or in
contact therewith. For purposes of this Section 5.24, "Hazardous
Substance" shall not mean and shall not include the following, to
the extent used normally and required for everyday uses or normal
housekeeping or maintenance: (A) fuel oil and natural gas for
heating, (B) lubricating, cleaning, coolant and other compounds
customarily used in building maintenance, (C) materials routinely
used in the day-to-day operations of an office, such as copier
toner, (D) consumer products, (E) material reasonably necessary
and customarily used in construction and repair of an office
project, and (F) fertilizers, pesticides and herbicides commonly
used for routine office landscaping.
The terms "hazardous wastes" and "hazardous substances"
shall have the meaning specified by any applicable local, state,
or federal statute or regulation concerning or governing water
pollution, groundwater protection, air pollution, solid wastes,
hazardous wastes, spills, and other releases of toxic or
hazardous substances, transportation of hazardous substances,
materials, and wastes and occupational or employee health and
safety.
5.25 Obligations and Liabilities. All of the Assets to be
transferred and conveyed to Buyer pursuant to this Agreement
shall, on the Closing Date, be free and clear of any claim, lien,
encumbrance or any liability of Seller of whatsoever kind or
description. Except as provided in Sections 2.4 and 2.5 and
under no circumstance shall Buyer be liable or obligated to pay,
discharge or otherwise satisfy any indebtedness, liability or
obligation of Seller, whether incurred in connection with the
operation of the Business or otherwise; and Seller, for itself,
successors and assigns, agrees to indemnity and hold harmless
Buyer, its successors and assigns, from any such liability or
obligation.
5.26 Representation and Warranties. The representations and
warranties contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the
Closing Date. Such representations and warranties shall survive
the Closing Date and shall remain operative in full force and
effect for the period of time set forth in Section 12.6 hereof
regardless of any investigation at any time made by or on behalf
of Buyer and shall not be deemed merged in any document or
instruction so executed and/or delivered by Buyer or the Seller.
SECTION 6: REPRESENTATIONS AND WARRANTIES OF BUYER
6.1 Organization and Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Colorado and has all requisite corporate power
and authority to own its assets and properties and to carry on
its business as it is now being conducted.
6.2 Corporate Acts and Proceedings. This Agreement has
been duly authorized by all necessary corporate action on behalf
of Buyer, has been duly executed and delivered by authorized
officers of Buyer, and is a valid and binding Agreement on the
part of Buyer that is enforceable against Buyer in accordance
with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally and to judicial limitations on the enforcement of the
remedy of specific performance and other equitable remedies.
SECTION 7: COVENANTS OF SELLER
7.1 Preservation of Business. Until Closing, Seller shall
use its best efforts to:
(a) preserve intact the present business organization
of Seller;
(b) maintain its Property and assets, and those of its
subsidiaries, in their present state of repair, order and
condition, reasonable wear and tear excepted;
(c) preserve and protect the goodwill and advantageous
relationships of and its subsidiaries with their customers and
all other persons having business dealings with Seller and its
subsidiaries;
(d) preserve and maintain in force all licenses,
permits, registrations, franchises, patents, trademarks, trade
names, trade secrets, service marks, copyrights, bonds and other
similar rights of Seller and its subsidiaries; and
(e) comply with all laws applicable to the conduct of
its business.
7.2 Ordinary Course. Seller shall conduct its business
only in the usual, regular and ordinary course, in substantially
the same manner as previously, and shall not make any substantial
change to its methods of management or operation in respect of
such business or property. Without limiting the foregoing,
Seller shall not:
(a) sell, mortgage, pledge or encumber or agree to
sell, mortgage, pledge or encumber, any of its property or
assets, other than in the ordinary course of business;
(b) incur any obligation (contingent or otherwise) or
purchase, acquire, transfer, or convey, any material assets or
property or enter into any contract or commitment, except in the
ordinary course of business;
(c) discuss, solicit, negotiate or enter into an
agreement concerning any merger, consolidation or sale of all or
substantially all of its assets except as contemplated by this
Agreement.
7.3 Negative Covenants. Except as disclosed in Exhibits to
this Agreement, from the date hereof until the Closing Date,
unless and until Buyer otherwise consents in writing, Seller will
not (a) change or alter the physical contents or character of the
inventories of its business, so as to materially affect the
nature of Seller's business or materially and adversely change
the total dollar valuation of such inventories from that
reflected on the financial statements referred to in Section 5.5
other than in the ordinary course of business; (b) incur any
obligations or liabilities (absolute or contingent) other than
current liabilities incurred and obligations under contracts
entered into in the ordinary course of business; (c) mortgage,
pledge or voluntarily subject to lien, charge or other
encumbrance any assets, tangible or intangible, other than the
lien of current property taxes not due and payable; (d) sell,
assign or transfer any of its assets or cancel any debts or
claims, other than in the ordinary course of business; (e) waive
any right of any substantial value; (f) declare or make any
payment or distribution to shareholders or issue, purchase or
redeem any shares of its capital stock or other equity securities
or issue or sell any rights to acquire the same; (g) grant any
increase in the salary or other compensation of any of its
directors, officers, or employees or make any increase in any
benefits to which such employees might be entitled; (h) institute
any bonus, benefit, profit sharing, stock option, pension,
retirement plan or similar arrangement, or make any changes in
any such plans or arrangements presently existing; or (i) enter
into any transactions or series of transactions other than in the
ordinary course of business.
7.4 Access to Books and Records, Premises, etc. From the
date of this Agreement through the Closing Date, Seller and its
subsidiaries will grant Buyer and its authorized representatives
access to their books and records, premises, products, employees
and customers and other parties with whom they have contractual
relations during reasonable business hours and in a manner not to
disrupt or interfere with their business relationships for
purposes of enabling Buyer to fully investigate the business of
Seller and its subsidiaries.
7.5 Compensation. Seller shall not enter into or agree to
enter into any employment contract or agreement for consulting,
professional, or other services which will adversely and
materially affect the operation of Seller prior to the Closing
Date.
7.6 Taxes and Other Liabilities. Seller will promptly pay
and discharge before the same become delinquent and before
penalties accrue thereon, all lawful taxes, assessments and
governmental charges or levies imposed upon it or income or
profits, or upon or against any of its property, real, personal
or mixed, and all of its other liabilities except to the extent
that the same are being contested in good faith and by
appropriate proceedings in such manner as not to cause any
materially adverse affect upon its financial condition or the
loss of any right of redemption from any sale thereunder, and it
shall have set aside on its financial statements delivered to
Buyer, reserves (segregated to the extent required by sound
accounting principles) adequate with respect thereto; provided,
further, that Seller shall pay all such taxes, assessments,
charges or levies forthwith in excess of such reserves whenever
final judgment is entered thereon, or as the result of
proceedings to foreclose any lien which attached as security
therefor, foreclosure on such lien appears imminent, unless a
surety bond or such other measure can be taken to prevent such
foreclosure.
7.7 No Solicitation.
contemplated by this Agreement, Seller shall not, nor shall it
permit any of its subsidiaries to, nor shall it authorize or
permit any officer, director or employee of or any investment
banker, attorney or other advisor or representative of, Seller or
any of its subsidiaries to, (i) solicit, initiate or encourage
the submission of, any takeover proposal, (ii) enter into any
agreement with respect to any takeover proposal or
(iii) participate in any discussions or negotiations regarding,
or furnish to any person any information with respect to, or take
any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead
to, any takeover proposal. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in
the preceding sentence by any executive officer of Seller or any
of its subsidiaries or any investment banker, attorney or other
advisor or representatives of Seller or any of its subsidiaries
or otherwise, shall be deemed to be a breach of this Section by
Seller. For purposes of this Agreement, "takeover proposal"
means any proposal for a merger, consolidation or reorganization
or other business combination involving Seller or any of its
subsidiaries or any proposal or offer to acquire in any manner,
directly or indirectly, an equity interest in, any voting
securities of, or options, rights, warrants or other interests
convertible or exercisable for or into such voting securities, or
a substantial or material portion of the assets or business of
Seller or any of its subsidiaries, other than the transactions
contemplated by this Agreement.
(b) Except upon a material breach of this Agreement by
Buyer or following termination hereof, except for action
permitted or contemplated by this Agreement, including a party's
right to terminate this Agreement under certain circumstances,
neither the Board of Directors of Seller nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Buyer, the approval or
recommendation by such Board of Directors of any such committee
of this Agreement or (ii) approve or recommend, or propose to
approve or recommend, any takeover proposal.
(c) Seller promptly shall advise Buyer orally and in
writing of any takeover proposal or any inquiry with respect to
or which could lead to any takeover proposal and the identity of
the person making any such takeover proposal or inquiry. Seller
will keep Buyer fully informed of the status and details of any
such takeover proposal or inquiry.
(d) The provisions of this Section 7.7 shall not be
construed to prevent any investment banker, attorney or other
advisor or representative of Seller to engage in discussions with
third parties in the ordinary course of business with respect to
transactions not involving the parties to this Agreement.
SECTION 8: TERMINATION
8.1 Termination. This Agreement may be terminated and
abandoned solely as follows:
(a) At any time until the Closing Date by the mutual
agreement of the Seller and Buyer.
(b) By either Buyer or Seller, if for any reason the
parties have failed to close this Agreement on or before March
31, 2000, provided that neither Buyer nor Seller is then in
default thereunder.
In the event of any termination pursuant to this
Section 8.1 (other than pursuant to Subparagraph 8.1(a), written
notice setting forth the reasons therefor shall forthwith be
given by Seller, if it is the terminating party, to Buyer, or by
Buyer, if it is the terminating party, to the Seller.
8.2 Effect of Termination. If the sale and purchase of
Assets is terminated and abandoned as provided for in this
Section, this Agreement shall forthwith become wholly void and of
no effect without liability to any party to this Agreement except
for breach of this Agreement.
SECTION 9: INDEMNIFICATION
9.1 Indemnification Covenants of Seller and Shareholders.
Subject to the limitations set forth in this Section 9, Seller
and Shareholders shall defend, indemnify, save and keep harmless
the Buyer and its affiliates, directors, officers, agents or
representatives and their respective successors and permitted
assigns (the "Buyer Indemnitees"), against and from all
liability, demands, claims, actions or causes of action,
assessments, losses, fines, penalties, costs, damages and
expenses, including reasonable attorneys' fees (collectively the
"Damages") sustained or incurred by any of the Buyer Indemnitees
as a result of or arising out of or relating to:
(a) Any inaccuracy in a representation or breach of a
warranty made by the Seller or Shareholders in this Agreement or
in any document or instrument delivered to the Buyer in
connection with this Agreement; or
(b) The failure of the Seller or Shareholders to
comply with, or the breach by the Seller or Shareholders of, any
of the covenants contained in this Agreement or in any document
or instrument delivered to the Buyer in connection with this
Agreement, to be performed by the Seller or Shareholders; or
(c) Any liability now or subsequently existing arising
out of or in connection with the Business relating to periods
prior to the Effective Date, except to the extent that any such
liability is expressly assumed by the Buyer pursuant to this
Agreement.
9.2 Indemnification Covenants of Buyer. Subject to the
limitations set forth in this Section 9, the Buyer shall defend,
indemnify, save and keep harmless the Seller and its affiliates,
directors, officers, agents or representatives and their
respective successors and permitted assigns (the "Seller
Indemnitees"), against and from all Damages sustained or incurred
by any of the Seller Indemnitees as a result of or arising out of
or relating to:
(a) Any inaccuracy in a representation or breach of a
warranty made by the Buyer in this Agreement or in any document
or instrument delivered to the Seller in connection with this
Agreement; or
(b) The failure of the Buyer to comply with, or the
breach by the Buyer of, any of the covenants contained in this
Agreement or in any document or instrument delivered to the
Seller in connection with this Agreement, to be performed by the
Buyer; or
(c) Any liability now or subsequently existing arising
out of or in connection with the Business, solely to the extent
that such liabilities and/or obligations relate to the acts or
omissions of the Buyer subsequent to the Effective Date; except
to the extent that any such liability is expressly retained by
the Seller pursuant to this Agreement.
9.3 Method of Asserting Claims. For purposes of this
Section 9.3, the following terms shall be defined as follows:
(a) "Claims" shall mean all claims asserted pursuant
to this Section 9, whether or not arising as a result of a Third
Party Claim.
(b) "Indemnified Person" shall mean any Buyer
Indemnitee or any Seller Indemnitee, as the context requires.
(c) "Indemnifying Person" shall mean any person
obligated to indemnify an Indemnified Person pursuant to this
Section 9, as the context requires.
(d) "Third Party Claims" shall mean any Claim asserted
by any person not a party to this Agreement (including without
limitation any governmental authority), asserting that an
Indemnified Person is liable for monetary or other obligations
which may constitute or result in Damages for which such
Indemnified Person may be entitled to indemnification pursuant to
this Section 9.
(e) All Claims shall be made in writing and shall set
forth with reasonable specificity the facts and circumstances of
the Claim, as well as the basis upon which indemnification
pursuant to this Section 8 is sought. Notwithstanding the
foregoing, no delay or failure by any Indemnified Person to
provide notification of any Claim shall preclude any Indemnified
Person from recovering for Damages pursuant to this Section 8,
except to the extent that such delay or failure materially
compromises the rights of any Indemnifying Person under this
Section 8.
(f) Within ten (10) days after receipt by an
Indemnifying Person of any notification of a Claim, the
Indemnifying Person may, upon written notice thereof to the
Indemnified Person, assume (at the Indemnifying Person's expense)
control of the defense of such action, suit or proceeding with
counsel reasonably satisfactory to the Indemnified Person,
provided the Indemnifying Person acknowledges in writing to the
Indemnified Person that any Damages that may be assessed against
the Indemnified Person in connection with such action, suit or
proceeding constitute Damages for which the Indemnified Person
shall be entitled to indemnification pursuant to this Section 8.
If the Indemnifying Person does not so assume control of such
defense, the Indemnified Person shall control such defense, but
in so doing shall not waive or limit its right to recover under
this Section 8 for any Damages that may be assessed against the
Indemnified Person in connection with such action, suit or
proceeding. The party not controlling such defense may
participate therein at its own expense; provided that if the
Indemnifying Person assumes control of such defense, and the
Indemnified Person has been advised in writing by outside legal
counsel that under the applicable standards of professional
conduct, the Indemnifying Person and the Indemnified Person may
not be represented by the same counsel with respect to such
action, suit or proceeding, the reasonable fees and expenses of
one law firm for the Indemnified Person shall be paid by the
Indemnifying Person. The party controlling such defense shall
keep the other party advised of the status of such action, suit
or proceeding and the defense thereof and shall consider in good
faith recommendations made by the other party with respect
thereto. The Indemnified Person shall not agree to any
settlement of such action, suit or proceeding without the prior
written consent of the Indemnifying Person, which (with respect
to an action, suit or proceeding as to which the Indemnifying
Person has not elected to assume control of the defense) shall
not be unreasonably withheld. The Indemnifying Person shall not
agree to any settlement of such action, suit or proceeding
without the prior written consent of the Indemnified Person,
which shall not be unreasonably withheld so long as the
settlement includes a complete release of the Indemnified Person
from all liability and does not contain or contemplate any
payment by, or injunctive or other equitable relief binding upon,
the Indemnified Person.
9.4 Survival. The representations, warranties, covenants,
agreements and indemnities of the parties set forth in this
Agreement shall survive the Closing and the consummation of the
transactions contemplated hereby and shall continue until the
first anniversary of the date hereof. If a notice is properly
given with respect to a Claim prior to the expiration of the
relevant survival period set forth in this Section 9.4, then
notwithstanding such expiration, the representation, warranty,
covenant, agreement or indemnity applicable to such Claim shall
survive until, but only for purposes of, the resolution of such
Claim.
SECTION 10: CONFIDENTIAL INFORMATION AND RELATED MATTERS
10.1 Each of the Buyer and Seller recognizes and
acknowledges that it has and will have access to certain non-
public information of the other which shall be deemed the
confidential information of the other party that is included in
the Assets (including, but not limited to, business plans, costs,
trade secrets, licenses, research projects, profits, markets,
sales, customer lists, strategies, plans for future development,
financial information and any other information of a similar
nature) that after the consummation of the transactions
contemplated hereby will be valuable, special and unique property
of the Buyer. Information shall not be deemed Confidential
Information and afforded the protections of this Section 9 if, on
the Closing Date, such information has been (i) developed by the
receiving party independently of the disclosing party, (ii)
rightfully obtained without restriction by the receiving party
from a third party, provided that the third party had full legal
authority to possess and disclose such information, (iii)
publicly available other than through the fault or negligence of
the receiving party, (iv) released without restriction by the
disclosing party to anyone, including the United States
government, or (v) properly and lawfully known to the receiving
party at the time of its disclosure, as evidenced by written
documentation conclusively established to have been in the
possession of the receiving party on the date of such disclosure.
Each of the Companies agrees that they will not disclose, and
that they will use their best efforts to prevent disclosure by
any other Person of, any such confidential information to any
Person for any purpose or reason whatsoever, except to authorized
representatives of the Companies. Notwithstanding, a party may
use and disclose any such confidential information to the extent
that a party may become compelled by Legal Requirements to
disclose any such information; provided, however, that such party
shall use all reasonable efforts and shall have afforded the
other Companies the opportunity to obtain an appropriate
protective order or other satisfactory assurance of confidential
treatment for any such information compelled to be disclosed. In
the event of termination of this Agreement, each party shall use
all reasonable efforts to cause to be delivered to the other
parties, and to retain no copies of, any documents, work papers
and other materials obtained by such party or on such party's
behalf during the conduct of the matters provided for in this
Agreement, whether so obtained before or after the execution
hereof. Each of the Companies recognizes and agrees that
violation of any of the agreements contained in this Section 10
will cause irreparable damage or injury to the Companies, the
exact amount of which may be impossible to ascertain, and that,
for such reason, among others, the Companies shall be entitled to
an injunction, without the necessity of posting bond therefor,
restraining any further violation of such agreements. Such
rights to any injunction shall be in addition to, and not in
limitation of, any other rights and remedies the Companies may
have against each other.
10.2 Seller further covenants with Buyer that all
information concerning the customers, clients, contracts, mailing
lists and business of the Business is confidential information,
is being acquired by Buyer and will be treated by Seller as such,
and that Seller will not hereafter, directly or indirectly, make
use of such information or divulge any such information nor
reveal any customer or mailing lists or other confidential
information to any other person except as provided for herein.
The foregoing restrictions on disclosure of information shall not
include (i) information that has properly come into the public
domain, (ii) information learned by Seller from a third party
without an obligation of confidentiality or (iii) information
gained or learned by Seller independent of and subsequent to the
closing of the transactions covered by this Agreement.
SECTION 11: EXPENSES
11.1 Each of the parties will pay all costs and expenses of
its or his performance and compliance with this Agreement.
Notwithstanding the foregoing, if the Agreement is not
consummated by reason of a default of one of the Companies, then
the expenses of each of the Companies in connection with the
transaction contemplated herein shall be paid by such defaulting
Company.
11.2 Seller and Buyer each covenant and agree that they have
not engaged the services of any broker or finder in connection
with the transactions provided for herein and that no brokers' or
finders' fees are payable hereunder.
SECTION 12: MISCELLANEOUS
12.1 Incorporation by Reference. All appendices to this
Agreement and all documents delivered pursuant to or referred to
in this Agreement are herein incorporated by reference and made a
part hereof.
12.2 Parties in Interest. Nothing in this Agreement,
whether express or implied, is intended to, or shall, confer any
rights or remedies under, or by reason of, this Agreement, on any
person other than the parties hereto and their respective and
proper successors and assigns. Nor shall anything in this
Agreement act to relieve or discharge the obligation or liability
of any third persons to any party to this Agreement.
12.3 Amendments and Waivers. This Agreement may not be
amended, nor may compliance with any term, covenant, agreement,
condition or provision set forth herein be waived (either
generally or in a particular instance and either retroactively or
prospectively) unless such amendment or waiver is agreed to in
writing by all parties hereto.
12.4 Waiver. No waiver of any breach of any one of the
agreements, terms, conditions, or covenants of this Agreement by
the parties shall be deemed to imply or constitute a waiver of
any other agreement, term, condition, or covenant of this
Agreement. The failure of any party to insist on strict
performance of any agreement, term, condition, or covenant,
herein set forth, shall not constitute or be construed as a
waiver of the rights of either or the other thereafter to enforce
any other default of such agreement, term, condition, or
covenant; neither shall such failure to insist upon strict
performance be deemed sufficient grounds to enable either party
hereto to forego or subvert or otherwise disregard any other
agreement, term, condition, or covenants of this Agreement.
12.5 Governing Law - Construction. This Agreement, and the
rights and obligations of the respective parties, shall be
governed by and construed in accordance with the laws of the
State of Colorado, excluding conflict of law provisions which
would act to apply the laws of another state. Notwithstanding
the preceding sentence, it is acknowledged that each party hereto
is being represented by, or has waived the right to be
represented by, independent counsel. Accordingly, the parties
expressly agree that no provision of this Agreement shall be
construed against any party on the ground that the party or its
counsel drafted the provision. Nor may any provision of this
Agreement be construed against any party on the grounds that
party caused the provision to be present.
12.6 Limitation of Actions. No action may be brought by any
party to this Agreement to enforce any covenant made by any party
hereto or to seek damages or equitable relief arising from any
claimed breach or nonperformance of a covenant, representation,
warranty or other performance provided for herein unless such
action is commenced within one (1) year of the date of Closing.
The parties hereto agree to be bound by the aforesaid limitation
of actions notwithstanding the provisions of any applicable
statutory limitation of actions to the contrary.
12.7 Notices. Any notice, communication, offer, acceptance,
request, consent, reply, or advice (herein severally and
collectively, for convenience, called "Notice"), in this
Agreement provided or permitted to be given, served, made, or
accepted by any party or person to any other party or parties,
person or persons, hereunder must be in writing, addressed to the
party to be notified at the address set forth below, or such
other address as to which one party notifies the other in writing
pursuant to the terms of this Section, and must be served by
(1) telefax or other similar electronic method, or (2) depositing
the same in the United States mail, certified, return receipt
requested and postage paid to the party or parties, person or
persons to be notified or entitled to receive same, or
(3) delivering the same in person to such party.
Notice shall be deemed to have been given immediately
when sent by telefax or other electronic method and seventy-two
hours after being deposited in the United States mail, or when
personally delivered in the manner hereinabove described. Notice
provided in any manner not specified above shall be effective
only if and when received by the party or parties, person or
persons to be, or provided to be notified.
All notices, requests, demands and other communications
required or permitted under this Agreement shall be addressed as
set forth below:
If Buyer, to: iRV Dealerships, Inc.
ATTN: John Deufel
5373 North Union Blvd., Suite 100
Colorado Springs, Colorado 80918
(719) 590-4888 (fax)
With copy to: Clifford L. Neuman, Esq.
Neuman & Drennen, LLC
1507 Pine Street
Boulder, Colorado 80302
(303) 449-1045 (fax)
If Seller, to: Coach & Campers, Inc.
ATTN: __________________________
10440 Lexington
Knoxville, Tennessee 37932
(____) ____________ (fax)
With copies to:________________________________
________________________________
________________________________
(____) ____________ (fax)
Any party receiving a facsimile transmission shall be entitled to
rely upon a facsimile transmission to the same extent as if it
were an original. Any party may alter the address to which
communications or copies are to be sent by giving notice of such
change of address in conformity with the provisions of this
Section for the giving of notice.
12.8 Fax/Counterparts. This Agreement may be executed by
telex, telecopy or other facsimile transmission, and such
facsimile transmission shall be valid and binding to the same
extent as if it were an original. Further, this Agreement may be
signed in one or more counterparts, all of which when taken
together shall constitute the same documents. For all
evidentiary purposes, any one complete counter set of this
Agreement shall be considered an original.
12.9 Captions. The caption and heading of various sections
and paragraphs of this Agreement are for convenience only and are
not to be construed as defining or limiting, in any way, the
scope or intent of the provisions hereof.
12.10 Severability. Wherever there is any conflict
between any provision of this Agreement and any statute, law,
regulation or judicial precedent, the latter shall prevail, but
in such event the provisions of this Agreement thus affected
shall be curtailed and limited only to the extent necessary to
bring it within the requirement of the law. In the event that
any part, section, paragraph or clause of this Agreement shall be
held by a court of proper jurisdiction to be invalid or
unenforceable, the entire Agreement shall not fail on account
thereof, but the balance of the Agreement shall continue in full
force and effect unless such construction would clearly be
contrary to the intention of the parties or would result in
unconscionable injustice.
12.11 Jurisdiction and Venue. Jurisdiction over any
action, proceeding or arbitration shall be proper only if filed
and maintained in Colorado, and venue shall be proper therefor
only in the County of Boulder as to state court proceedings or
the District Court for the District of Colorado as to federal
court proceedings.
12.12 Good Faith Cooperation and Additional Documents.
The parties shall use their reasonable good faith efforts to
fulfill all of the conditions set forth in this Agreement over
which it has control or influence. Each party covenants and
agrees to cooperate in good faith and to enter into and deliver
such other documents and papers as the other party reasonably
shall require in order to consummate the transactions
contemplated hereby, provided in each instance, any such document
is in form and substance approved by the parties and their
respective legal counsel.
12.13 Assignment. Neither party may directly or
indirectly assign or delegate, by operation of law or otherwise,
all or any portion of its/their/his rights, obligations or
liabilities under this Agreement without the prior written
consent of all other parties, which consent may be withheld in
their respective sole and absolute discretion.
12.14 Entire Agreement - Amendment. For purposes of
this Section, the term "Agreement" shall include this Agreement
and the Exhibits and other documents attached hereto. This
Agreement, and other documents delivered pursuant to this
Agreement, contain all of the terms and conditions agreed upon by
the parties relating to the subject matter of this Agreement and
supersede all prior and contemporaneous agreements, letters of
intent, representations, warranties, disclosures, negotiations,
correspondence, undertakings and communications of the parties,
oral or written, respecting that subject matter.
12.15 Authority to Sign. Each of the persons signing
below on behalf of any party hereby represents and warrants that
s/he or it is signing with full and complete authority to bind
the party on whose behalf of whom s/he or it is signing, to each
and every term of this Agreement.
12.16 Execution of Documents. The parties hereto agree
to execute and deliver any and all other documents necessary and
convenient to effectuate the exchange of stock herein provided
for, and Seller as an inducing condition, represent that it has
the authority to enter into this Agreement and to make the
foregoing commitments for itself.
12.17 Time. Time is of the essence of this Agreement
and each of its provisions.
IN WITNESS WHEREOF, the parties have signed the Agreement
the date and year first above written.
COACH & CAMPERS, LTD.
ATTEST:
-----------------------------------
- -------------------- By:
-------------------------------
Secretary Title:
-----------------------------
-----------------------------------
DONALD C. HANNEY II
ATTEST: iRV DEALERSHIPS, INC.
- --------------------- By:
-------------------------------
Secretary Title:
-----------------------------
<PAGE>
ARTICLES OF INCORPORATION
OF
INNOVATIVE RECREATIONAL DEALERSHIPS, INC.
The undersigned natural person of the age of eighteen years or more,
acting as incorporator of a corporation under the Colorado Business
Corporation Act, adopts the following Articles of Incorporation for such
corporation:
ARTICLE I
NAME
The name of the Corporation is to be Innovative Recreational Dealerships,
Inc.
ARTICLE II
TERMS OF EXISTENCE
The Corporation shall exist in perpetuity, from and after the date of
filing this Certificate of Incorporation with the Secretary of State of the
State of Colorado, unless sooner dissolved or disincorporated according to
law.
ARTICLE III
OBJECT, PURPOSES AND POWERS
Section 1. General Objects and Purposes. To engage in any lawful
activity as may from time to time be authorized by the Corporation's Board of
Directors, which is not prohibited by law or by these Articles of
Incorporation. To undertake such other activities as the Board of Directors
may deem reasonable or necessary in the furtherance of the general or specific
purposes and powers of the Corporation.
Section 2. General Powers. Further, the Corporation shall have and may
exercise all the rights, powers and privileges now or hereafter conferred upon
corporations organized under the laws of the State of Colorado and in addition
may do everything necessary, suitable, proper for, or incident to, the
accomplishment of any of these corporate purposes.
Section 3. Specific Purposes and Powers. Subject to any specific
written limitations or restrictions imposed by the Colorado Business
Corporation Act or by other law, or by these Articles of Incorporation, and
not in limitation of any of the statutory powers herein granted, the
Corporation shall have the following purposes and exercise the following
specific powers:
a. To Deal in Real Property. To acquire, hold, own, improve, manage,
operate, let as lessor, sell, convey or mortgage, or otherwise deal with,
either alone or in conjunction with others, real estate of every right, title
or interest, character and description whatsoever and wheresoever situated.
b. To Deal in Personal Property, Generally. To acquire, hold, own,
manage, operate, mortgage, pledge, hypothecate, exchange, sell, deal in and
dispose of, either alone or in conjunction with others, personal property and
commodities of every right, title or interest, character and description
whatsoever and wheresoever situated.
c. To Enter into Profit Sharing Arrangements and Partnerships. To
enter into any lawful arrangement for sharing profits, union of interest,
reciprocal association, or cooperative association with any corporation,
association, partnership, individual, or other legal entity for the carrying
on of any business, the purpose of which is similar to the Purposes set forth
in Section 1 of this Article, and to enter into any general or limited
partnership, the purpose of which is similar to such Purposes.
d. To Execute Guarantees. To make any guaranty respecting stocks,
dividends, securities, indebtedness, interest, contracts or other obligations
created by any individual, partnership, association, corporation, or other
entity, to the extent that such guaranty is made in pursuance to the Purposes
set forth in Section 1 of this Article.
e. To Borrow Funds. To borrow or raise monies for any of the Purposes
of the Corporation set forth in Section 1 of this Article, and, from time to
time, without limit as to amount, to execute, accept, endorse, and deliver as
evidence of such borrowing, all kinds of securities, including, but without
limiting the generality thereof, promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness; and to secure the payment and full performance
of such securities by mortgage on, or pledge, conveyance or assignment in
trust of, the whole, or any part of the assets of the Corporation.
f. To Lend Funds. To lend money to individuals or other business
entities and to charge interest for the same and to engage in the business,
buying, loaning money upon, selling, transferring, assigning, discounting,
borrowing money upon and pledging as collateral, and otherwise dealing as
principal agent or broker in bills of lading, warehouse receipts, evidence of
deposit and storage of personal property, bonds, stocks, promissory notes,
commercial paper account, invoices, choses in action, interest in estates,
contracts, mortgages on real or personal property, pledges of personal
property and other evidence of indebtedness of persons, firms or corporations,
and owning, holding or conveying such real estate as may be necessary in the
operating of its business, and purchasing, acquiring and holding shares of
stock in other corporations, domestic and foreign, and doing all things
incidental thereto; to do a general brokerage business, to buy, sell and deal
in all kinds of listed and unlisted stocks and bonds on commission; not for
the purpose of carrying on the business of banking, insurance or the operation
of railroads or the discounting of bills and notes, or the buying and selling
of bills of exchange.
Section 4. All the foregoing listed powers and/or purposes of the
Corporation are both purposes and powers of the Corporation and shall be
construed as such.
ARTICLE IV
CAPITAL STOCK
Section 1. The total number of shares of capital stock which the
Corporation shall have authority to issue is one hundred and fifty million
(150,000,000) shares of which one hundred million (100,000,000) shares shall
be designated common stock, having a par value of one tenth of one cent
($.001) each, and of which fifty million (50,000,000) shares shall be
designated preferred stock of the Corporation, having a par value of one cent
($.01) each. All or any part of the common stock may be issued by the
Corporation from time to time and for such consideration and on such terms as
may be determined and fixed by the Board of Directors, without action of the
stockholders, as provided by law, unless the Board of Directors deems it
advisable to obtain the advice of the stockholders. Said stock may be issued
for money, property, services or other lawful consideration, and when issued
shall be issued as fully paid and non-assessable. The private property of
stock holders shall not be liable for Corporation debts. Subject to the
preferences, rights and restrictions which may be ascribed to the preferred
stock of the Corporation by the Board of Directors, the preferences and
relative participating optional or other special rights and qualifications,
limitations or restrictions thereof of the common stock of the Corporation are
as follows:
a. Dividends. Dividends may be paid upon the common stock, as and when
declared by the Board of Directors, out of funds of the Corporation legally
available therefor.
b. Payment on Liquidation. Upon any liquidation, dissolution and
termination of the Corporation, and after payment or setting aside of any
amount sufficient to provide for payment in full of all debts and liabilities
of, and other claims against the Corporation, the assets shall be distributed
pro rata to the holders of the common stock.
c. Voting Rights. At any meeting of the stockholders of the
Corporation each holder of Common Stock shall be entitled to one vote for each
share outstanding in the name of such holder on the books of the Corporation
on the date fixed for determination of voting rights.
The stockholders, by vote or concurrence of a majority of the
outstanding shares of the Corporation entitled to vote on the subject matter,
may take any action which would otherwise require a two-thirds (2/3) vote
under the Colorado Business Corporation Act.
d. Cumulative Voting. Cumulative voting shall not be allowed in the
election of directors or for any other purpose.
e. Pre-Emptive Rights. Unless otherwise determined by the Board of
Directors, no stockholder of the Corporation shall have pre-emptive rights to
subscribe for any additional shares of stock, or for other securities of any
class, or for rights, warrants or options to purchase stock for the scrip, or
for securities of any kind convertible into stock or carrying stock purchase
warrants or privileges.
f. Restrictions on Sale or Disposition. All lawful restrictions on the
sale or other disposition of shares may be placed upon all or a portion or
portions of the certificates evidencing the Corporation's shares.
Section 2. The preferred stock of the Corporation shall be issued in
one or more series as may be determined from time to time by the Board of
Directors. In establishing a series the Board of Directors shall give to it a
distinctive designation so as to distinguish it from the shares of all other
series and classes, shall fix the number of shares in such series, and the
preferences, rights and restrictions thereof. All shares of any one series
shall be alike in every particular. All series shall be alike except that
there may be variation as to the following: (1) the rate of distribution, (2)
the price at and the terms and conditions on which shares shall be redeemed,
(3) the amount payable upon shares for distributions of any kind, (4) sinking
fund provisions for the redemption of shares, and (5) the terms and conditions
on which shares may be converted if the shares of any series are issued with
the privilege of conversion, and (6) voting rights except as limited by law.
ARTICLE V
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the Corporation will be
at 5373 North Union Boulevard, Suite 100, Colorado Springs, Colorado 80918.
The name of the initial registered agent at such address is Bradley Smith.
The principal office of this Corporation and its principal place of business
is the same address as that of the initial registered office. The Corporation
may conduct part or all of its business in the County of El Paso, or the State
of Colorado, or the United States, or of the world, and it may hold, purchase,
mortgage, lease and convey real and personal property in any of such places.
ARTICLE VI
DIRECTORS
The business and affairs of this Corporation and the management thereof
shall be vested in a Board of Directors consisting of not less than one (1)
nor more than ten (10) members. Directors need not be stockholders of the
Corporation. The persons, together with their addresses, who shall act as such
directors for the first year of existence of this Corporation and until their
successors shall be duly elected and qualified will be:
Bradley Smith
5373 North Union Boulevard, Suite 100
Colorado Springs, CO 80918
The number of directors may be increased from time to time, within the
limits stated above, by action of the majority of the whole Board of Directors
but the number of Directors may thereafter be decreased only by the
stockholders of the Corporation at an annual or special meeting thereof.
ARTICLE VII
RIGHTS OF DIRECTORS, OFFICERS AND MANAGEMENT
TO CONTRACT WITH CORPORATION
No contract or other transaction between the Corporation and any other
corporation whether or not a majority of the shares of capital stock of such
other corporation is owned by this Corporation, and no act of this Corporation
shall be in any way affected or invalidated by the fact that any of the
directors, officers or other members of the management of this Corporation are
pecuniarily or otherwise interested in or are directors, officers or members
of management of such other corporation. Any director, officer or other
member of management of this Corporation individually, or any firm of which
such director, officer or member of management may be a member, may be a party
to, or may be pecuniarily or otherwise interested in, any contract or
transaction of this Corporation, provided, however, that the fact that he or
such firm is so interested shall be disclosed or shall have been known to the
Board of Directors of this Corporation or a majority thereof. Any director of
this Corporation who is also a director, officer or member of management of
such other corporation, or who is so interested, may be counted in determining
the existence of a quorum at any meeting of the Board of Directors of this
Corporation that shall authorize such contract or transaction, and may vote at
any such meeting to authorize such contract or transaction, with like force
and effect as if he were not such director, officer or member of management of
such other corporation or not so interested.
ARTICLE VIII
INCORPORATOR
The name and address of the incorporator is:
Clifford L. Neuman, Esq.
Neuman & Drennen, LLC
Temple-Bowron House
1507 Pine Street
Boulder, Colorado 80302
ARTICLE IX
INDEMNIFICATION
The Corporation may and shall indemnify each director, officer and any
employee or agent of the Corporation, his heirs, executors and administrators,
against any and all expenses or liability reasonably incurred by him in
connection with any action, suit or proceeding to which he may be a party by
reason of his being or having been a director, officer, employee or agent of
the Corporation to the full extent required or permitted by the Colorado
Business Corporation Act.
ARTICLE X
CORPORATE OPPORTUNITIES
The officers, directors and other members of management of this
Corporation shall be subject to the Doctrine of Corporate Opportunities only
insofar as it applies to business opportunities in which this Corporation has
expressed an interest as determined from time to time by the Corporation's
Board of Directors as evidenced by resolutions appearing in the Corporation's
Minutes. When such areas of interest are delineated, all such business
opportunities within such areas or interests which come to the attention of
the officers, directors and other members of management of this Corporation
shall be disclosed promptly to this Corporation and made available to it. The
Board of Directors may reject any business opportunity presented to it and
therefore any officer, director or other member of management may avail
himself of such opportunity. Until such time as this Corporation, through its
Board of Directors, has designated an area of interest, the officers,
directors and other members of management of this Corporation shall be free to
engage in such areas of interest on their own and this Doctrine shall not
limit the rights of any officer, director or other member of this Corporation
to continue a business existing prior to the time that such area of interest
is designated by this Corporation, other than an officer, director or member
of management, from any duty which he may have to the Corporation.
ARTICLE XI
PARTIAL LIQUIDATION
The Board of Directors may, from time to time, distribute to the
Corporation's shareholders, in partial liquidation, out of stated capital or
capital surplus of the Corporation, a portion of its assets, in cash or
properties if (a) at the time the Corporation is solvent; (b) such
distribution would not render the Corporation insolvent; (c) all cumulative
dividends on all preferred or special classes of shares entitled to
preferential dividends shall have been paid fully; (d) the distribution would
not reduce the remaining net assets of the Corporation below the aggregate
preferential amount payable in the amount of voluntary liquidation to the
holders of shares having preferential rights to the assets of the Corporation
in the event of liquidation; (e) the distribution is not made out of capital
surplus arising from unrealized depreciation of assets of re-evaluation of
surplus; (f) the distribution is identified as a distribution in partial
liquidation and the amount per share is disclosed to the shareholders
receiving the same concurrently with the distribution thereof.
ARTICLE XII
DIRECTORS' LIABILITY
a. A director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent that such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Colorado as the same exists or may hereafter be amended.
b. Any repeal or modification of the foregoing paragraph A by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
IN WITNESS WHEREOF, the above-named incorporator has hereunto set his
hand and seal this 23rd day of November, 1999.
- ------------------------------- -----------------------------------
Bradley Smith, Registered Agent Clifford L. Neuman, Incorporator
STATE OF COLORADO )
) ss.
COUNTY OF BOULDER )
I, _____________________________, a Notary Public, hereby certify that on
the 23rd day of November, 1999, personally appeared before me Clifford L.
Neuman, who, being by me first duly sworn, declared that he was the person who
signed the foregoing document as the incorporator and that the statements
therein contained are true.
My commission expires:__________________
-----------------------------------------
Notary Public
<PAGE>
Mail to: Secretary of State
Corporations Section
1560 Broadway, Suite 200
Denver, CO 80202
(303) 894-2251
Fax (303) 894-2242
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is Innovative Recreational Dealerships,
--------------------------------------
Inc.
- ----
SECOND: The following amendment to the Articles of Incorporation was adopted
on January 7, 2000, as prescribed by the Colorado
----------------
Business Corporation Act, in the manner marked with an X below:
_________ No shares have been issued or Directors Elected -Action by
Incorporators
X
- --------- No shares have been issued but Directors Elected - Action by
Directors
- --------- Such amendment was adopted by the board of directors where
shares have been issued and shareholder action was not
required.
- --------- Such amendment was adopted by a vote of the shareholders. The
number of shares voted for the amendment was sufficient for
approval.
THIRD: If changing corporate name, the new name of the corporation is
iRV Dealerships, Inc.
- ---------------------
FOURTH: The manner, if not set forth in such amendment, in which any
exchange, reclassification, or cancellation of issued shares provided for in
the amendment shall be effected, is as follows:
If these amendments are to have a delayed effective date, please list that
date:
-------------------------------------
(Not to exceed ninety (90) days from the date of filing)
INNOVATIVE RECREATIONAL DEALERSHIPS, INC,
--------------------------------------------------
Bradley Smith, President
<PAGE>
ARTICLES OF INCORPORATION
OF
iRV - KNOXVILLE, INC.
The undersigned natural person of the age of eighteen years or more,
acting as incorporator of a corporation under the Colorado Business
Corporation Act, adopts the following Articles of Incorporation for such
corporation:
ARTICLE I
NAME
The name of the Corporation is to be iRV - Knoxville, Inc.
ARTICLE II
TERMS OF EXISTENCE
The Corporation shall exist in perpetuity, from and after the date of
filing this Certificate of Incorporation with the Secretary of State of the
State of Colorado, unless sooner dissolved or disincorporated according to
law.
ARTICLE III
OBJECT, PURPOSES AND POWERS
Section 1. General Objects and Purposes. To engage in any lawful
activity as may from time to time be authorized by the Corporation's Board of
Directors, which is not prohibited by law or by these Articles of
Incorporation. To undertake such other activities as the Board of Directors
may deem reasonable or necessary in the furtherance of the general or specific
purposes and powers of the Corporation.
Section 2. General Powers. Further, the Corporation shall have and may
exercise all the rights, powers and privileges now or hereafter conferred upon
corporations organized under the laws of the State of Colorado and in addition
may do everything necessary, suitable, proper for, or incident to, the
accomplishment of any of these corporate purposes.
Section 3. Specific Purposes and Powers. Subject to any specific
written limitations or restrictions imposed by the Colorado Business
Corporation Act or by other law, or by these Articles of Incorporation, and
not in limitation of any of the statutory powers herein granted, the
Corporation shall have the following purposes and exercise the following
specific powers:
a. To Deal in Real Property. To acquire, hold, own, improve, manage,
operate, let as lessor, sell, convey or mortgage, or otherwise deal with,
either alone or in conjunction with others, real estate of every right, title
or interest, character and description whatsoever and wheresoever situated.
b. To Deal in Personal Property, Generally. To acquire, hold, own,
manage, operate, mortgage, pledge, hypothecate, exchange, sell, deal in and
dispose of, either alone or in conjunction with others, personal property and
commodities of every right, title or interest, character and description
whatsoever and wheresoever situated.
c. To Enter into Profit Sharing Arrangements and Partnerships. To
enter into any lawful arrangement for sharing profits, union of interest,
reciprocal association, or cooperative association with any corporation,
association, partnership, individual, or other legal entity for the carrying
on of any business, the purpose of which is similar to the Purposes set forth
in Section 1 of this Article, and to enter into any general or limited
partnership, the purpose of which is similar to such Purposes.
d. To Execute Guarantees. To make any guaranty respecting stocks,
dividends, securities, indebtedness, interest, contracts or other obligations
created by any individual, partnership, association, corporation, or other
entity, to the extent that such guaranty is made in pursuance to the Purposes
set forth in Section 1 of this Article.
e. To Borrow Funds. To borrow or raise monies for any of the Purposes
of the Corporation set forth in Section 1 of this Article, and, from time to
time, without limit as to amount, to execute, accept, endorse, and deliver as
evidence of such borrowing, all kinds of securities, including, but without
limiting the generality thereof, promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable instruments
and evidences of indebtedness; and to secure the payment and full performance
of such securities by mortgage on, or pledge, conveyance or assignment in
trust of, the whole, or any part of the assets of the Corporation.
f. To Lend Funds. To lend money to individuals or other business
entities and to charge interest for the same and to engage in the business,
buying, loaning money upon, selling, transferring, assigning, discounting,
borrowing money upon and pledging as collateral, and otherwise dealing as
principal agent or broker in bills of lading, warehouse receipts, evidence of
deposit and storage of personal property, bonds, stocks, promissory notes,
commercial paper account, invoices, choses in action, interest in estates,
contracts, mortgages on real or personal property, pledges of personal
property and other evidence of indebtedness of persons, firms or corporations,
and owning, holding or conveying such real estate as may be necessary in the
operating of its business, and purchasing, acquiring and holding shares of
stock in other corporations, domestic and foreign, and doing all things
incidental thereto; to do a general brokerage business, to buy, sell and deal
in all kinds of listed and unlisted stocks and bonds on commission; not for
the purpose of carrying on the business of banking, insurance or the operation
of railroads or the discounting of bills and notes, or the buying and selling
of bills of exchange.
Section 4. All the foregoing listed powers and/or purposes of the
Corporation are both purposes and powers of the Corporation and shall be
construed as such.
ARTICLE IV
CAPITAL STOCK
Section 1. The total number of shares of capital stock which the
Corporation shall have authority to issue is one hundred and fifty million
(150,000,000) shares of which one hundred million (100,000,000) shares shall
be designated common stock, having a par value of one tenth of one cent
($.001) each, and of which fifty million (50,000,000) shares shall be
designated preferred stock of the Corporation, having a par value of one cent
($.01) each. All or any part of the common stock may be issued by the
Corporation from time to time and for such consideration and on such terms as
may be determined and fixed by the Board of Directors, without action of the
stockholders, as provided by law, unless the Board of Directors deems it
advisable to obtain the advice of the stockholders. Said stock may be issued
for money, property, services or other lawful consideration, and when issued
shall be issued as fully paid and non-assessable. The private property of
stock holders shall not be liable for Corporation debts. Subject to the
preferences, rights and restrictions which may be ascribed to the preferred
stock of the Corporation by the Board of Directors, the preferences and
relative participating optional or other special rights and qualifications,
limitations or restrictions thereof of the common stock of the Corporation are
as follows:
a. Dividends. Dividends may be paid upon the common stock, as and when
declared by the Board of Directors, out of funds of the Corporation legally
available therefor.
b. Payment on Liquidation. Upon any liquidation, dissolution and
termination of the Corporation, and after payment or setting aside of any
amount sufficient to provide for payment in full of all debts and liabilities
of, and other claims against the Corporation, the assets shall be distributed
pro rata to the holders of the common stock.
c. Voting Rights. At any meeting of the stockholders of the
Corporation each holder of Common Stock shall be entitled to one vote for each
share outstanding in the name of such holder on the books of the Corporation
on the date fixed for determination of voting rights.
The stockholders, by vote or concurrence of a majority of the
outstanding shares of the Corporation entitled to vote on the subject matter,
may take any action which would otherwise require a two-thirds (2/3) vote
under the Colorado Business Corporation Act.
d. Cumulative Voting. Cumulative voting shall not be allowed in the
election of directors or for any other purpose.
e. Pre-Emptive Rights. Unless otherwise determined by the Board of
Directors, no stockholder of the Corporation shall have pre-emptive rights to
subscribe for any additional shares of stock, or for other securities of any
class, or for rights, warrants or options to purchase stock for the scrip, or
for securities of any kind convertible into stock or carrying stock purchase
warrants or privileges.
f. Restrictions on Sale or Disposition. All lawful restrictions on the
sale or other disposition of shares may be placed upon all or a portion or
portions of the certificates evidencing the Corporation's shares.
Section 2. The preferred stock of the Corporation shall be issued in
one or more series as may be determined from time to time by the Board of
Directors. In establishing a series the Board of Directors shall give to it a
distinctive designation so as to distinguish it from the shares of all other
series and classes, shall fix the number of shares in such series, and the
preferences, rights and restrictions thereof. All shares of any one series
shall be alike in every particular. All series shall be alike except that
there may be variation as to the following: (1) the rate of distribution, (2)
the price at and the terms and conditions on which shares shall be redeemed,
(3) the amount payable upon shares for distributions of any kind, (4) sinking
fund provisions for the redemption of shares, and (5) the terms and conditions
on which shares may be converted if the shares of any series are issued with
the privilege of conversion, and (6) voting rights except as limited by law.
ARTICLE V
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the Corporation will be
at 5373 North Union Boulevard, Suite 100, Colorado Springs, Colorado 80918.
The name of the initial registered agent at such address is Bradley Smith.
The principal office of this Corporation and its principal place of business
is the same address as that of the initial registered office. The Corporation
may conduct part or all of its business in the County of El Paso, or the State
of Colorado, or the United States, or of the world, and it may hold, purchase,
mortgage, lease and convey real and personal property in any of such places.
ARTICLE VI
DIRECTORS
The business and affairs of this Corporation and the management thereof
shall be vested in a Board of Directors consisting of not less than one (1)
nor more than ten (10) members. Directors need not be stockholders of the
Corporation. The persons, together with their addresses, who shall act as such
directors for the first year of existence of this Corporation and until their
successors shall be duly elected and qualified will be:
Bradley Smith John Deufel
5373 North Union Boulevard 5373 North Union Boulevard
Suite 100 Suite 100
Colorado Springs, CO 80918 Colorado Springs, CO 80918
Windy Haddad
5373 North Union Boulevard
Suite 100
Colorado Springs, CO 80918
The number of directors may be increased from time to time, within the
limits stated above, by action of the majority of the whole Board of Directors
but the number of Directors may thereafter be decreased only by the
stockholders of the Corporation at an annual or special meeting thereof.
ARTICLE VII
RIGHTS OF DIRECTORS, OFFICERS AND MANAGEMENT
TO CONTRACT WITH CORPORATION
No contract or other transaction between the Corporation and any other
corporation whether or not a majority of the shares of capital stock of such
other corporation is owned by this Corporation, and no act of this Corporation
shall be in any way affected or invalidated by the fact that any of the
directors, officers or other members of the management of this Corporation are
pecuniarily or otherwise interested in or are directors, officers or members
of management of such other corporation. Any director, officer or other
member of management of this Corporation individually, or any firm of which
such director, officer or member of management may be a member, may be a party
to, or may be pecuniarily or otherwise interested in, any contract or
transaction of this Corporation, provided, however, that the fact that he or
such firm is so interested shall be disclosed or shall have been known to the
Board of Directors of this Corporation or a majority thereof. Any director of
this Corporation who is also a director, officer or member of management of
such other corporation, or who is so interested, may be counted in determining
the existence of a quorum at any meeting of the Board of Directors of this
Corporation that shall authorize such contract or transaction, and may vote at
any such meeting to authorize such contract or transaction, with like force
and effect as if he were not such director, officer or member of management of
such other corporation or not so interested.
ARTICLE VIII
INCORPORATOR
The name and address of the incorporator is:
Clifford L. Neuman, Esq.
Neuman & Drennen, LLC
Temple-Bowron House
1507 Pine Street
Boulder, Colorado 80302
ARTICLE IX
INDEMNIFICATION
The Corporation may and shall indemnify each director, officer and any
employee or agent of the Corporation, his heirs, executors and administrators,
against any and all expenses or liability reasonably incurred by him in
connection with any action, suit or proceeding to which he may be a party by
reason of his being or having been a director, officer, employee or agent of
the Corporation to the full extent required or permitted by the Colorado
Business Corporation Act.
ARTICLE X
CORPORATE OPPORTUNITIES
The officers, directors and other members of management of this
Corporation shall be subject to the Doctrine of Corporate Opportunities only
insofar as it applies to business opportunities in which this Corporation has
expressed an interest as determined from time to time by the Corporation's
Board of Directors as evidenced by resolutions appearing in the Corporation's
Minutes. When such areas of interest are delineated, all such business
opportunities within such areas or interests which come to the attention of
the officers, directors and other members of management of this Corporation
shall be disclosed promptly to this Corporation and made available to it. The
Board of Directors may reject any business opportunity presented to it and
therefore any officer, director or other member of management may avail
himself of such opportunity. Until such time as this Corporation, through its
Board of Directors, has designated an area of interest, the officers,
directors and other members of management of this Corporation shall be free to
engage in such areas of interest on their own and this Doctrine shall not
limit the rights of any officer, director or other member of this Corporation
to continue a business existing prior to the time that such area of interest
is designated by this Corporation, other than an officer, director or member
of management, from any duty which he may have to the Corporation.
ARTICLE XI
PARTIAL LIQUIDATION
The Board of Directors may, from time to time, distribute to the
Corporation's shareholders, in partial liquidation, out of stated capital or
capital surplus of the Corporation, a portion of its assets, in cash or
properties if (a) at the time the Corporation is solvent; (b) such
distribution would not render the Corporation insolvent; (c) all cumulative
dividends on all preferred or special classes of shares entitled to
preferential dividends shall have been paid fully; (d) the distribution would
not reduce the remaining net assets of the Corporation below the aggregate
preferential amount payable in the amount of voluntary liquidation to the
holders of shares having preferential rights to the assets of the Corporation
in the event of liquidation; (e) the distribution is not made out of capital
surplus arising from unrealized depreciation of assets of re-evaluation of
surplus; (f) the distribution is identified as a distribution in partial
liquidation and the amount per share is disclosed to the shareholders
receiving the same concurrently with the distribution thereof.
ARTICLE XII
DIRECTORS' LIABILITY
a. A director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent that such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Colorado as the same exists or may hereafter be amended.
b. Any repeal or modification of the foregoing paragraph A by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
IN WITNESS WHEREOF, the above-named incorporator has hereunto set his
hand and seal this 20th day of January, 2000.
- ------------------------------- ---------------------------------
Bradley Smith, Registered Agent Clifford L. Neuman, Incorporator
STATE OF COLORADO )
) ss.
COUNTY OF BOULDER )
I, Gini Goldstein, a Notary Public, hereby certify that on the 20th day
of January, 2000, personally appeared before me Clifford L. Neuman, who,
being by me first duly sworn, declared that he was the person who signed the
foregoing document as the incorporator and that the statements therein
contained are true.
My commission expires: 10/10/2003
/s/ Gini Goldstein
----------------------------------------
Notary Public
