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)
April 24, 1998
GREEN CAPITAL GROUP, INC.
(Formerly known as Pacific Forest Corporation)
----------------------------------------------
(Exact name of registrant as specified in charter)
Nevada
------
(State or Other Jurisdiction of Incorporation)
33-55254-14 87-0438451
----------- ----------
(Commission file number) (IRS employer identification no.)
1221 Brickell Avenue, Suite 900, Miami, FL 33131
- ------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
(305) 377-8796
--------------
(Registrant's telephone number, including area code)
This document contains a total of 64 pages.
1
<PAGE>
Item 1. Changes in Control of Registrant.
Effective April 14, 1998, the Registrant acquired all of the
outstanding capital stock of Green Capital N.V., a Netherlands Antilles
corporation, which with its subsidiaries, is hereafter referred to as "Green",
through an exchange of shares of the Registrant for all the outstanding capital
stock of Green (the "Acquisition"). The Registrant issued 11,925,000 shares of
restricted common stock, $.001 ("Common Stock") to the former stockholder of
Green in exchange for his 6,000 shares of Green stock. The Acquisition closed in
escrow until April 24, 1998 to allow for the receipt of certain documentation
from overseas.
Pursuant to an Agreement and Plan of Reorganization effective as of
April 14,1998 among the Registrant, Green and the sole stockholder of Green (the
"Agreement"), the sole officer and director of the Registrant resigned upon
consummation of the Acquisition. The persons serving as directors and officers
of Green immediately prior to the Acquisition were elected to the same offices
with the Registrant and retained their positions as directors and officers of
Green.
Upon consummation of the Acquisition, Oscar S. Christian beneficially
owned approximately 90.2% of the voting securities of the Registrant. The
Registrant will also issue shares of Common Stock to reduce certain long-term
debt in the amount of $4,200,000, which will, upon issuance, reduce Mr.
Christian's beneficial ownership to a to-be-determined percentage. As a result
of the Acquisition, Mr. Christian acquired control of the Registrant. The source
of the consideration used in the Acquisition of control of the Registrant were
the shares of Green Capital stock owned prior to the Acquisition that were
acquired by the Registrant upon consummation of the Acquisition in exchange for
the Common Stock issued by the Registrant.
The Registrant is not aware of any arrangements which may at a
subsequent date result in a change of control of the Registrant.
Item 2. Acquisition or Disposition of Assets.
As a result of the Acquisition effective as of April 14, 1998,
the Registrant acquired all of the assets and liabilities of Green, which assets
were used prior to the Acquisition in Green's teak tree plantations and related
businesses. Such assets include five (5) teak tree plantations and conservation
areas comprising an aggregate of 9,000 acres located on the Pacific Coast of
Costa Rica, including structures located thereon, livestock, horses, boats and
timber. As a result of the Acquisition, Green is now a wholly-owned subsidiary
of the Registrant. The Registrant intends to operate Green in the same manner
and to continue in the business that Green engaged in prior to the Acquisition.
Prior to the Acquisition, no material relationship existed between Green and/or
any of its affiliates and the Registrant and/or any of its affiliates, any
director or officer of the Registrant or any associate of any such director or
officer. The amount of consideration given by the Registrant for the stock of
Green was determined by the respective management of the Registrant and Green.
2
<PAGE>
Item 3. Bankruptcy or Receivership.
Not applicable
Item 4. Changes in Registrant's Certifying Accountant.
Not applicable
Item 5. Other Events.
By consent of a majority of the stockholders of the
Registrant, the following was approved:
(A) an amendment to the Registrant's Articles of Incorporation
(which became effective on April 15, 1998) to change its corporate name from
Pacific Forest Corporation to Green Capital Group, Inc;
(B) the Acquisition, pursuant to which the Registrant agreed
to issue the following securities: (i) 11,925,000 shares of Common Stock to the
historical stockholder of Green; and (ii) an aggregate of 265,000 shares of
Common Stock to certain consultants in connection with the Acquisition all as
more fully described in the Information Statement mailed to all stockholders of
record of the Registrant as of March 18, 1998.
(C) the election of the following nominees to serve as
directors of the Registrant upon consummation of the Acquisition: (i) Oscar S.
Christian, (ii) Rafael O. Robert, and (iii) Antoine Knipping; and
(D) the adoption of the Registrant's 1998 Stock Option Plan.
Item 6. Resignation of Registrant's Directors.
Pursuant to the terms of the Agreement, the sole director of
the Registrant resigned as a director upon consummation of the Acquisition. The
resignation was tendered in recognition of the issuance of a majority of the
Registrant's voting securities to the sole stockholder of Green Capital N.V. The
resigning director did not resign due to a disagreement with the Registrant on
any matter relating to Registrant's operations, policies or practices.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Business Acquired.
The Registrant has determined to file reports as a "small
business issuer" as defined in Regulation S-B for its 1998 fiscal year and
accordingly, will be complying with the
3
<PAGE>
financial statement requirements of Item 310 of Regulations S-B. Required
financial statements included herein are:
Description
-----------
Independent Auditor's Report
Consolidated Balance Sheet of Green Capital N.V. and Subsidiaries
as of September 30, 1997
Consolidated Statement of Results of Green Capital N.V.
and Subsidiaries for the period from June 1, 1996
(inception) to September 30, 1997
Consolidated Statement of Cash Flow of Green Capital N.V. and
subsidiaries for the period from June 1, 1996 (inception) to
September 30, 1997
Notes to Financial Statements
(b) Pro Forma Financial Information.
It is impractical to provide all of the required Pro Forma
financial information for the acquired business at the time that this Report is
due to be filed. All such required Pro Forma financial information will be filed
as soon as practicable, but not later than 60 days after this Report is filed.
(c) Exhibits.
2.1 Agreement and Plan of Reorganization dated as of April 14,
1998, among Registrant, Green Capital N.V. and the sole
stockholder of Green Capital N.V.
3.1 Amendment to Articles of Incorporation of Registrant.
10.1 1998 Stock Option Plan
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREEN CAPITAL GROUP, INC.
Date: April 27, 1998 By: /s/ Oscar S. Christian
----------------------------------
Oscar S. Christian, President
5
<PAGE>
GREEN CAPITAL N.V. AND SUBSIDIARIES
Report on the Consolidated Financial Statements
As of September 30, 1997
6
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholder of
Green Capital N.V. and Subsidiaries
We have audited the consolidated balance sheet of Green Capital N.V. and its
Subsidiaries as of September 30, 1997, and the related consolidated statements
of results, changes in stockholder's equity and cash flows for the period of
sixteen months then ended. These consolidated financial statements are the
responsibility of the Company's Management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in those consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Green Capital N.V.
and its Subsidiaries as of September 30, 1997, and the results of its
operations, changes in stockholder's equity and cash flows for the period of
sixteen months then ended, in conformity with generally accepted accounting
principles.
As it is indicated in note 4 to the consolidated financial statements, as of
September 30, 1997, the trust created by the company is insufficient to fund the
estimated costs necessary for future maintenance of plantations related to units
sold. Management's plans to cover such insufficiency are also described in such
note.
COOPERS & LYBRAND
Law 663 stamp for
(cent) 1,000 adhered and
cancelled in the original
Insurance Policy R-1153
Expires:
September 30, 1998
March 6, 1998, except for
notes dated March 23, 1998
F-1
<PAGE>
GREEN CAPITAL N.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
as of September 30, 1997
(amounts expressed in US Dollars)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS Note
Current assets: ----
Cash on hand and in banks $ 27,627
Accounts receivable 3 955,974
Receivable from stockholder 30,831
Other assets 4 137,417
Total current assets 1,151,849
----------------------
Property, machinery and equipment, net 5 8,016,535
Plantations under development 6 4,996,425
Other assets 5 3,368,880
----------------------
Total assets $ 17,533,689
======================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Notes payable 7 $ 387,000
Current portion of long term-debt 8 320,000
Accounts payable to suppliers 34,143
Provision for future plantations' maintenance costs 9 147,756
Accrued expenses and others liabilities 33,139
----------------------
Total current liabilities 922,038
Long term-debt 8 14,799,766
Provision for future plantations' maintenance costs 9 457,694
Other liabilities 48,844
----------------------
Total liabilities 16,228,342
Stockholder's equity:
Capital stock 10 6,000
Additional capital contributions 216,397
Retained earnings 1,018,715
Currency translation adjustment 64,235
----------------------
Total stockholder's equity 1,305,347
----------------------
Total liabilities and stockholders' equity $ 17,533,689
======================
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements
F-2
<PAGE>
GREEN CAPITAL N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RESULTS
for the period of sixteen months ended of September 30, 1997
(amounts expressed in US Dollars)
<TABLE>
<CAPTION>
<S> <C> <C>
Note
----
Income from sales of teakwood contracts $ 3,508,478
----------------------
Operating expenses and costs:
Maintenance costs of teakwood plantations (936,057)
Marketing and selling (183,459)
General and administrative (903,148)
----------------------
Total operating expenses and costs (2,022,664)
----------------------
Operating profit 1,485,814
Other expenses, net (467,099)
----------------------
Net profit of the period $ 1,018,715
======================
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements
F-3
<PAGE>
GREEN CAPITAL N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
for the period of sixteen months ended of September 30, 1997
(amounts expressed in US Dollars)
<TABLE>
<CAPTION>
<S> <C>
Cash flows of the operating activities:
Net profit of the period $ 1,018,715
------------------
Adjustments to reconcile net profit of the period to net cash provided by
operating activities:
Depreciation 38,060
Goodwill amortization (3,488)
Provision for future plantations' maintenance costs 605,450
Allowance for doubtful receivables 220,928
Increase in assets:
Accounts receivable (1,207,733)
Other assets (137,417)
Increase in liabilities:
Accounts payable 34,143
Payable to stockholder 216,397
Accrued expenses and others liabilities 33,139
------------------
Total adjustments (200,521)
------------------
Net cash provided by operating activities 818,194
------------------
Cash flows of the investing activities:
Acquisition of fixed assets (1,244,954)
Increase in other assets (2,848)
------------------
Net cash used by investing activities (1,247,802)
------------------
Cash flows of the financing activities:
Notes payable 387,000
Capital stock 6,000
------------------
Net cash provided by financing activities 393,000
------------------
Net decrease in cash and cash equivalents (36,608)
Cash on hand and in banks at beginning of period --
Effect of currency translation adjustments 64,235
------------------
Cash on hand and in banks at end of period $ 27,627
==================
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements
F-4
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(amounts expressed in US Dollars)
1. Domicile, Activities, Accounting Records, and Currency:
------------------------------------------------------
Green Capital N.V. (the holding company) is domiciled in Curacao, as
well as its subsidiary Green Capital Management (Capital Management),
which is the parent company of Promociones Capital Verde S.A. and
Bosque Teca Verde S.A. (BTV). The subsidiary of El Reino de Papa Juan
S.A. is domiciled in the Republic of Costa Rica. Promociones Capital
Verde S.A. as well as its wholly owned subsidiary Reforestadora Capital
Verde S.A. are domiciled in Costa Rica. Bosque Teca Verde S.A. is
domiciled in The Netherlands. All the companies are referred herein as
the Company. Their main line of business is the development of teakwood
plantations and the sale of teakwood contracts, for which they count
with 322 hectares planted of teakwood out of a total of 3,085 hectares
of land. The holding company and its subsidiary Green Capital
Management, as well as BTV, keep their accounting records in US
dollars. The other companies keep their accounting records in colones
((cent)), the official currency of Costa Rica (note 13).
2. Principal Accounting Policies:
-----------------------------
The principal accounting policies followed by the Company are in
conformity with generally accepted accounting principles:
Consolidation:
The consolidated financial statements include the accounts of Green
Capital N.V. and its wholly owned subsidiaries, as well as those of the
other companies mentioned in note 1. All significant intercompany
balances and transactions have been eliminated in consolidation.
Translation of the Financial Statements into US Dollars:
The financial statements of El Reino de Papa Juan S.A., Promociones
Capital Verde S.A., and Reforestadora Capital Verde S.A., have been
translated into US dollars on the basis of the Costa Rican colon as the
functional currency, as follows:
a. Monetary and non-monetary assets and liabilities, at the
exchange rate in force at the end of the period.
b. Equity accounts, at the historical exchange rates.
c. The adjustment resulting from translation is included as part
of the stockholder's equity, in an account denominated
"Currency translation adjustment".
F-5
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
2. Principal Accounting Policies, continued:
-----------------------------
Property, Machinery, and Equipment:
These are recorded at cost. Repairs that do not extend the useful life
of the asset are charged to the results of the period. Depreciation is
recorded at the rates required to amortize the cost over its estimated
useful life (10 years for vehicles, machinery, furniture and office
equipment, between 12 and 50 years for buildings and similar ones),
using the straight-line method. Depreciation expense is charged to the
results of the period.
Plantations Under Development:
These are recorded at cost. Costs are accumulated in order to be
transferred to results as soon as the rights of usufruct on teakwood
plantation (units) are sold, since the production belongs to the
investor. Future maintenance costs of plantations are estimated and
charged to results when the units are sold. Actual maintenance costs of
units sold are charged to the provision as incurred.
Goodwill:
It is amortized during a 20-year period, using the straight-line
method.
Sale of Teakwood Contracts:
Income from the sale of teakwood contracts is recognized when the
contract is signed.
Employees' Legal Benefits:
These are recognized when the payment is made.
3. Accounts Receivable:
-------------------
(A) Contracts $ 578,803
Others 598,099
------------
Total 1,176,902
Less: Allowance for doubtful accounts (220,928)
-----------
Net $ 955,974
===========
(A) They correspond to teakwood contracts pending of collection,
for an amount of $524,410 and $54,393, which were signed in
the periods of 1997 and 1996, respectively (note 14).
F-6
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
4. Other Assets:
------------
It corresponds to funds transferred to a "trust" (note 11) in order to
cover teakwood plantations' maintenance costs over the units sold. A
unit corresponds to a half planted hectare, but a portion of a unit can
also be sold (i.e. a quarter, a half, etc.). Funds are invested at
sight, with variable interest rates depending on term.
Due to inadequate maintenance practices followed by former owner of
Bosque Teca Verde's teakwood plantations and subsequent improvement of
infrastructures, in line with Green Capital's high maintenance and
quality standards, as well as due to further financing of the Company's
expansion, part of the trust's funds were used to finance such
activities. Consequently, as of September 30, 1997, the funds held in
trust are insufficient in the amount of approximately US$468,033, to
cover estimated future maintenance costs of plantations. Management's
plan is to cover such insufficiency with future sales of units
corresponding to teakwood plantations to be developed in the new lands
acquired (note 5).
Management's intention is to create a trust for each plantation in
order to control its costs separately according to the auditors'
recommendation.
5. Property, Machinery, and Equipment:
----------------------------------
(A) Facilities $ 207,887
(A) Boats 91,500
Furniture and equipment 35,564
(A) Others 18,868
--------------
Total 353,819
Accumulated depreciation (38,060)
--------------
Net 315,759
(A) (B) Land 7,700,776
--------------
Total $ 8,016,535
==============
(A) It includes assets with a market value of $9,049,406, which
were acquired through the purchase of 100% shares of El Reino
de Papa Juan S.A. in September, 1997. Such assets were
recorded at purchase cost (note 8), allocated according to
their market value. Market value was determined based on an
appraisal made by an independent appraiser in December 1995,
detailed as follows:
F-7
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
5. Property, Machinery, and Equipment, continued:
----------------------------------
Location Description Appraisal value
-------- ----------- ---------------
Salma Farm Land $ 1,476,480
Facilities 159,160
Teakwood plantation 546,042
Dominical Farm Land 147,955
Teakwood plantation 109,720
La Florida Farm Land $ 1,469,397
Facilities 48,727
Boats 91,500
Communication 4,000
equipment
Timber (woods 4,996,425
other than teak
-------------------
Total 9,049,406
===================
Since the rights of usufruct on acquired teakwood plantations
were already sold to investors, their market value was
adjusted to zero. Consequently, a goodwill of US$473,022 arose
from this transaction. This was charged to other assets and
will be amortized during a 20 year period.
(B) In September, 1997, the holding company acquired 80% of the
shares of Compania Ganadera Internacional S.A., for a total of
$7,500,000 (note 8), which main asset is land comprising 2,500
hectares located in the Pacific coast of Costa Rica with a
market value of $5,758,680, according to an appraisal made by
an independent appraiser in March 23, 1998. This transaction
generated a goodwill of US$2,893,056, which was charged to
other assets and is amortized during a 20 year period.
Depreciation expense of $38,060 was charged to the results of the
period.
F-8
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
6. Plantations Under Development:
-----------------------------
The Company developed its teakwood plantations in five phases, which
were described as follows:
Phase 1: Began in 1987 and 1988, covering an extension of 37
hectares planted in a total of 70 hectares of land.
Phase 2: Began in 1992, covering an extension of 60 hectares
planted in a total of 95 hectares of land.
Phase 3: Began in 1993 and 1994, covering an extension of
35 and 90 hectares planted, respectively, in a total
of 188 hectares of land.
Phase 4: Began in 1995, covering an extension of 60 hectares
planted in a total of 232 hectares of land.
Phase 5: Began in 1997, covering an extension of 40 hectares
planted in a total of 2,500 hectares of land.
In general, teakwood exploitation is expected to begin in the fourth
year after the trees are planted. Subsequently, intermediate thinnings
every three years are planned; however, the main harvest is expected to
be done 20 years after planting.
At the balance sheet's date, teakwood plantations' accumulated costs
correspond to a secondary forest and a natural reserve planted of trees
other than teak. Value of standing timber was determined based on an
appraisal made by an independent appraiser as of December 31, 1995.
Exploitation of timber must be made according to a forestry plan
approved by the government.
7. Notes Payable:
(A) Investor $ 180,000
(B) John William Kramer and De Leede Investment B.V. 190,000
Other 17,000
----------
Total $387,000
==========
(A) It corresponds to an advance received from a Company's
investor for the purchase of "units", which was not completed.
The Company's management is entitled to file a claim or a
lawsuit against the investor for not fulfilling his
contractual obligations and consequently, to compensate the
Company for the damages caused. It does not bear any interest,
it is not documented, nor does it have a maturity or a
guarantee.
F-9
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
7. Notes Payable, continued:
-------------
(B) Amount owed for the purchase of 100% of Bosque Teca Verde's
shares. It does not bear any interest rate nor has a maturity
date. It is guaranteed by Bosque Teca Verde's shares.
8. Long-term Debt:
--------------
(A) Gambordela Enterprises Inc. $ 8,109,766
(B) Maria Marta Batalla G. 7,010,000
---------------
Total 15,119,766
Less: Current portion (320,000)
---------------
Total long-term $ 14,799,766
===============
(A) On September 12, 1997 the holding company and Gambordela
Enterprises Inc. signed a agreement for the purchase of El
Reino de Papa Juan S.A.'s shares (note 5).
This agreement establishes the following:
a. The purchase price to acquire 100% of the shares is
$8,866,666 payable as follows:
i. $866,666 payable by February 28, 1998,
which at the auditors' report date were paid
in full.
ii. Immediately following consummation of a
transaction between the holding company and
a publicly-traded U.S. "shell" corporation
expected to occur by April 17, 1998, whereby
the holding company becomes a wholly-owned
subsidiary of the U.S. corporation through
an exchange of shares, and the U.S.
corporation becomes the holding company and
changes its name to Green Capital Group,
Inc. The holding company will issue that
number of shares of its restricted common
stock equal in market value to $4,200,000
(but in no event more than 4,200,000 shares
in the aggregate), which represents partial
payment of the balance of $8,000,000 owed.
The holding company will be required to
repurchase all these shares within 18 months
from the date of issuance at a purchase
price of $4,200,000 in the aggregate. The
agreement provides for additional shares to
be issued, if any, to maintain the aggregate
market value of such shares at $4,200,000.
iii. The balance of $3,800,000 will be paid
in weekly installments of $10,000 each from
February, 1998 for a five-year period at 9%
F-10
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
interest rate per annum. The remaining
balance due at the end of this five-year
period will be paid in a single payment.
b. The shares of El Reino de Papa Juan S.A. are pledged
as a collateral guarantee until paid in full.
8. Long-term Debt, continued:
--------------
c. The holding company has the obligation to repurchase
the shares mentioned in paragraph ii, during a term
of one year and a half from the completion of the
acquisition transaction.
(B) On September 16, 1997, the holding company and Mrs. Maria
Marta Batalla G. signed a contract (note 5), which establishes
the following clauses:
a. Mrs. Batalla sells and transfers 80% of Ganadera's
capital stock. The main asset of the company is a
farm called "Rancho Nuevo" with and area of 2,500
hectares.
b. Mrs. Batalla will be appointed as president of the
company during the term of the contract; however,
during such term, she will not be able to dispose of
the company's assets.
c. The purchase price of the company's shares is
$7,500,000 which must be paid as follows:
March 1999 $ 1,000,000
March 2000 1,500,000
March 2001 2,000,000
March 2002 2,000,000
(A) March 2003 1,000,000
(A) In September, 1997, $500,000 were paid, which will be
deducted from the last payment.
Nevertheless, the holding company must pay to the seller
$1,500 for each unit (1/2 hectare) planted of teak.
Additionally, it must pay $2,500 for each unit sold during the
first year, $2,250 in the second year, $1,700 in the third and
fourth year, and $166 in the last year. Such payments will be
deducted from the annual payments stated above.
a. Ganadera's shares will be pledged as collateral
guarantee.
F-11
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
b. The holding company commits to constitute a "trust"
to cover all maintenance costs of all units sold
until they are ready for commercial exploitation.
c. The term of the contract is for 5 years from
March 1, 1998.
d. The holding company has the option to purchase the
additional 20% of Ganadera's shares at any time
during the term of the contract for amount of
$200,000.
As of September 30, 1997, the maturities of the long-term debt are as
follow:
Year Amount
---- ------
1999 $ 5,720,000
2000 2,020,000
2001 2,520,000
2002 2,520,000
2003 2,019,766
-------------
$ 14,799,766
=============
9. Provision for Future Plantations' Maintenance Cost:
--------------------------------------------------
It corresponds to an estimation of future maintenance costs on units
sold. The holding company is responsible for maintenance costs of
plantations until the main harvest of timber is done (note 6). Rights
of usufruct on plantations corresponding to units sold belong to
investors through a foundation domiciled in Curacao (note 11).
10. Capital Stock:
-------------
It is constituted by an authorized capital stock of $30,000, divided
into 30,000 shares with a par value of $1.00 each. Of those shares, a
total of 6,000 are subscribed, issued and fully paid.
11. Contracts:
---------
Teakwood:
These were entered into by Green Capital N.V., Stichting Green Capital,
a Foundation established in accordance with Dutch Antilles law, and
investors who desire to participate in the right to usufruct teakwood
plantations owned by the former. Through such contracts, investors
acquire a participation in the Foundation for a minimum period of 20
years, who in turn, receive the full rights of usufruct over the
aforementioned surface areas.
F-12
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
11. Contracts, continued:
---------
Consequently, the investor acquires the full rights over all teakwood
proceeds for a period of no less than 20 years. The most important
clauses of the contracts are the following:
a. The Foundation is obliged to look after the interests of the
investors, and for that purpose, it shall exercise its rights
of usufruct over each of the teakwood plantations' surface
areas, in accordance with the instructions and for the benefit
of the investor.
b. The price of the right of usufruct per unit is as follows:
Area Price
---- -----
5,000 SQ. M. (1/2 hectare) $ 18,000
2,500 SQ. M. (1/4 hectare) 10,000
1,250 SQ. M. (1/8 hectare) 5,750
625 SQ. M. (1/16 hectare) 3,500
The amount obtained from the investors will be deposited in an
escrow account of Green Capital with the ABN AMRO Bank N.V.,
in order to be distributed pursuant to the escrow agreement
described below.
c. At the conclusion of the agreement, the investor has all
rights to the usufruct on the participation's surface area at
the Foundation, less five percent of the sales resulting
therefrom, which will be income of the holding company.
d. Green Capital N.V. commits to render to the investor the
following services during the term of the agreement:
i. Weeding of the ground
ii. Pruning of the teak trees
iii. Maintenance of fences, internal roads, drainage
ditches and bridges
iv. General guarding, protecting and supervising of the
plantation
v. Intermediate thinning of inferior quality trees
and/or cutting of trees in accordance with a forestry
schedule, as well as the required re-planting
vi. Issuance of written reports to investors regarding
the progress and growth of the teak trees, at least
twice yearly
vii. Access to and guidance over the plantation in order
to show progress
F-13
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
11. Contracts, continued:
--------------------
viii. Collection of the sales result and the distribution
thereof to the investor, accompanied by a certified
accountant attestation regarding the result of the
sale.
Trust Agreement (Fideicomiso B.T.V. or Green Capital Trust):
It was signed between Bosque Teca Verde S.A. (Trustee) and K.P.M.G.
Servicios Legales S.A. (the trustee) in March 1994, in order to
guarantee the maintenance of teakwood plantations owned by Cabsa Dos
S.A., a wholly-owned subsidiary of El Reino de Papa Juan S.A. The most
important clauses of this contract are:
a. The sole beneficiary of 100% of the profits earned by this trust is
B.T.V.
b. The creation of this trust originates in a covenant
executed among the following entities: Stichting Bosque Teca
Verde (Stichting), Bosque Teca Verde S.A. and Cabsa Dos S.A.
(Cabsa), which establishes that Cabsa has assigned and
transferred to Stichting, a company domiciled in The
Netherlands, the right of usufruct over all teak trees planted
and that B.T.V. is in charge of the marketing and sale of the
"Units" (corresponding to 1/2, 1/4, 1/8 or 1/16 of hectare
planted) on behalf and in representation of Cabsa, with the
prior authorization by Stichting Bosque Teca Verde.
c. B.T.V. shall place in the trust with K.P.M.G., a portion of
the proceeds coming from the sale of the "Units".
Additionally, B.T.V. shall specifically instruct K.P.M.G. to
transfer to Cabsa an adequate amount of funds to cover all
maintenance costs of "Units" sold in order to guarantee to the
participants that the "Units" so acquired shall be adequately
and timely maintained and taken care of through appropriate
and professional assistance.
d. Trust funds will be used to pay maintenance cost of the
"Units" sold, professional services rendered and other
corresponding payments, upon instructions of BTV and according
to the trust agreement.
e. If the funds of the trust are insufficient for any reasons,
B.T.V., from time to time, will increase it to a reasonable
amount so that the maintenance of the "Units" is duly covered
as well as the corresponding payments.
f. The trust deed shall be in force for a term of twenty-three
years.
Escrow Agreement (ABN):
F-14
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
11. Contracts, continued:
--------------------
It was signed in November 1996, between ABN AMRO Bank N.V. (Escrow
Agent), Green Capital Foundation, and Green Capital N.V., for the
purpose of receiving and holding funds (selling of participation) to be
delivered to Green Capital N.V., the Escrow Agent, Green Capital Trust
and Green Capital Management N.V., upon receipt of the written approval
and instructions of both the investor and Green Capital N.V.
During the period, distribution of funds coming from participation's
sales was carried out in a way different than the one stated in the
agreement, upon instructions received from Green Capital N.V.
Consequently, as of September 30, 1997, funds deposited in the trust
are insufficient for the adequate future maintenance of the "Units"
sold (note 4).
Forestry Contracts:
They were signed between the Ministry of Natural Resources, Energy and
Mining, the Ministry of Finance, and three of the wholly-owned
subsidiaries of El Reino de Papa Juan S.A., detailed as follows:
a. Forestal Baru Teca S.A.: It was signed in July 1990. The
company commits to develop a reforestation project in an area
of 73 hectares. There is no term for wood's exploitation.
b. Inversiones Forestales de Dominical S.A.: It was signed in
October 1991. Through this contract, the company commits to
handle a reforestation project in an area of 53.5 hectares.
There is no term for wood's exploitation.
c. Cabsa: It was signed in July 1995. The company committed to
develop the reforestation project in an area of 110 hectares.
This contract shall be in force for a twenty year-term.
Principal commitments of the companies are:
i. Fulfill the technical plan of forestry handling
approved by the General Office of Forestry (DGF, for
its name in Spanish), as well as to follow any
technical recommendation given by such entity.
ii. Contract a forestry technician who will have to
inform DGF on a quarterly basis about the project's
progress.
F-15
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
11. Contracts, continued:
--------------------
iii. Inform promptly the General Office of Forestry as to
any use of the wood extracted from the reforestation
project, which must be made according to the forestry
plan approved by such organization. Likewise, the
company must pay the corresponding tax established by
the Forestry Law, before extracting or
industrializing the wood from the project.
iv. Obtain a previous authorization from the General
Office of Forestry in order to get a tax duty's
exoneration over the import of equipment, machinery,
and supplies, which will be required for carrying out
the forestry plan.
12. Contingent Liabilities:
----------------------
Fiscal:
In Costa Rica, the income tax returns for the last four fiscal periods
are open for examination by fiscal authorities. Consequently, the
Company is contingently liable for potential claims of additional
taxes; however, any claims that could arise from tax assessment
corresponding to periods previous to the companies' acquisition are the
responsibility of former management, according to the purchase
contracts signed by the parties. Management considers that returns for
96 and 97 fiscal years, just as same were filed, would not be
substantially adjusted as a result of any future review.
Additionally, an assets tax return for 1997 of a company domiciled in
Costa Rica has not been filed, situation which could be sanctioned by
fiscal authorities with a penalty of $2,116, plus interests and
surcharges.
Employees' Legal Benefits:
In Costa Rica, the payment of severance benefits, equivalent to one
month's salary for each year worked, is limited to a maximum payment of
eight months, effective at death, retirement with pension, or
separation of the employee without just cause. This benefit is not
applicable when the employee voluntarily resigns or is separated with
just cause. As of September 30, 1997, the maximum exposure for this
concept amounts to $18,166.
Other:
During the period, the Company has not reported to welfare institutions
certain salaries of employees. Consequently, it si contingently liable
for the payment of withholding taxes and social contributions for an
amount of approximately $35,000, which does not include penalties and
surcharges.
F-16
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, continued
(amounts expressed in US Dollars)
13. Exchange Rate Regulations and Restrictions on Foreign Currencies:
----------------------------------------------------------------
In Costa Rica, transactions related with the exchange of foreign
currencies must be carried out through the banks authorized for this
purpose by the Central Bank, whereby each bank is authorized to
establish the exchange rate for the purchase and sale of foreign
currencies.
As of September 30, 1997, the reference exchange rate for selling
transactions, fixed by the Central Bank, was of (cent)238.77 for $1.00.
For purchasing transactions, a difference of (cent)0.44 less is
applicable.
As of the date of the independent auditors' report, the reference
selling exchange rate was of (cent)248.76 for $1.00.
F-17
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
This Agreement (hereinafter the "Agreement") is entered into effective
as of this 14th day of April, 1998, by and among Pacific Forest Corporation, a
Nevada corporation (hereinafter "PFC"); Roger Tichenor, the sole officer and
director of PFC, (hereinafter "PFC Management"); Green Capital N.V., a
Netherlands Antilles corporation (hereinafter "Green "), and Oscar Christian
(hereinafter the "Green Stockholder"), the present owner of all the outstanding
ordinary shares of Green.
RECITALS:
WHEREAS, the Green Stockholder owns all of the issued and outstanding
ordinary shares of Green which comprises 6,000 ordinary shares. PFC desires to
acquire all of the outstanding ordinary shares of Green (the "Green Ordinary
Shares") solely in exchange for common stock of PFC, making Green a wholly-owned
subsidiary of PFC; and
WHEREAS, the Green Stockholder (as set forth on the attached Exhibit
"B") desires to acquire common stock of PFC in exchange for the Green Ordinary
Shares, as more fully set forth herein.
NOW, THEREFORE, for the mutual consideration set out herein, and other
good and valuable consideration, the receipt and legal sufficiency of which is
hereby acknowledged, the parties agree as follows:
AGREEMENT
---------
1. Share Exchange. The Green Stockholder is the present owner of all of
the issued and outstanding ordinary shares of Green. It is hereby agreed that
all of the Green Ordinary Shares shall be acquired by PFC in exchange solely for
PFC common stock, $.001 par value per share (the "PFC Shares").
2. Delivery of Shares. PFC and the Green Stockholder agree that on the
Closing Date or at the Closing as hereinafter defined, all outstanding Green
Ordinary Shares shall be delivered to PFC in exchange for PFC Shares.
(a) The PFC Shares will, on the Closing Date or at the
Closing, be delivered to the Green Stockholder in exchange for his Green
Ordinary Shares on the basis of 1,987.5 PFC Shares for each one Green Ordinary
Share.
(b) At Closing, PFC shall, subject to the conditions set forth
herein, issue 11,925,000 PFC Shares to the Green Stockholder.
(c) Unless otherwise agreed by PFC and the Green Stockholder,
this transaction shall close only in the event PFC is able to acquire all of the
outstanding Green Ordinary Shares.
<PAGE>
3. Outstanding Securities. As of the Closing Date each of the
following shall occur:
(a) Each of the Green Ordinary Shares issued and outstanding
immediately prior to the Closing Date shall be exchanged for 1,987.5 PFC Shares.
Thereafter, all such Green Ordinary Shares shall be deemed to be owned by PFC.
The holder of such certificates previously evidencing the Green Ordinary Shares
outstanding immediately prior to the Closing Date shall cease to have any rights
with respect to such Green Ordinary Shares except as otherwise provided herein
or by law.
(b) The 1,325,000 shares of PFC common stock previously issued
and outstanding prior to the Closing will remain outstanding.
4. Post-Acquisition Events. Upon Closing, the following shall
be accomplished:
(a) PFC shall promptly fulfill its responsibility to file a
Current Report on Form 8-K with the Securities and Exchange Commission ("SEC").
(b) The resignation of the existing PFC sole officer and
director and appointment of new officers and directors as described in Section
12.(f) hereof.
5. Other Matters.
(a) Prior to Closing, there shall be no stock dividend, stock
split, recapitalization, or exchange of shares with respect to or rights issued
in respect of, PFC's capital stock after the date hereof and there shall be no
dividends paid on PFC's capital stock.
(b) PFC shall have received all requisite stockholder
approval of the matters set forth herein.
6. Surrender and Issuance of Securities. On or as soon as
practicable after the Closing Date:
(a) The Green Ordinary Shares shall be transferred and
delivered to PFC by the execution of a Deed of Transfer, in the form as set
forth in Exhibit "A" attached hereto and made a part hereof, between the Green
Stockholder as transferor and PFC as transferee, and the acknowledgment thereof
by Green, against delivery of certificates representing the PFC Shares for which
the Green Ordinary Shares are to be exchanged at Closing.
(b) PFC acknowledges that subsequent to the Closing, its board
of directors will issue an aggregate of 265,000 shares of PFC Common Stock to
certain consultants involved in the transactions contemplated herein.
7. Representations of the Green Stockholder. The Green Stockholder
hereby represents and warrants effective this date and the Closing Date as
follows:
(a) Except as may be set forth in Exhibit "B" attached hereto
and made a part hereof, the Green Ordinary Shares are free from claims, liens,
or other encumbrances, and the Green Stockholder has good title and the
unqualified right to transfer and dispose of such Green Ordinary Shares.
<PAGE>
(b) The Green Stockholder, is the sole registered holder of
the issued and outstanding Green Ordinary Shares as set forth in Exhibit "B";
(c) The Green Stockholder has no present intent to sell or
dispose of the PFC Shares and is under no binding obligation, formal commitment,
or existing plan to sell or otherwise dispose of the PFC Shares.
8. Representations Regarding Green. Green hereby represents and
warrants to the best of its knowledge and belief as follows, which warranties
and representations shall also be true as of the Closing Date:
(a) Except as noted on Exhibit "B", the Green Stockholder
listed on the attached Exhibit "B" is the sole owner of record and beneficially
owns all of the issued and outstanding Green Ordinary Shares.
(b) Green has no outstanding or authorized capital shares,
warrants, options or convertible securities other than as described in Exhibit
"B", attached hereto.
(c) The audited financial statements as of and for the period
ending September 30, 1997, of Green which have been delivered to PFC
(hereinafter referred to as the "Green Financial Statements") present fairly, in
all material respects, the financial condition of Green as of the date thereof
and the results of its operations for the period covered. Green has good title
to all assets shown on the Green Financial Statements subject only to
dispositions and other transactions in the ordinary course of business, the
disclosures set forth therein and liens and encumbrances of record. The Green
Financial Statements have been prepared in accordance with generally accepted
accounting principles, in the United States, consistently applied (except as may
be indicated therein or in the notes thereto).
(d) Since September 30, 1997 there have not been any material
adverse changes in the financial position of Green except changes arising in the
ordinary course of business, which changes will in no event materially and
adversely affect the financial position of Green.
(e) Green is not a party to any material litigation or any
governmental investigation or proceeding, not reflected in the Green Financial
Statements.
(f) Green is in good standing in its jurisdiction of
incorporation.
(g) Green has (or, by the Closing Date, will have filed) all
material tax, governmental and/or related forms and reports (or extensions
thereof) due or required to be filed and/or has (or will have) paid or made
adequate provisions for all taxes or assessments which have become due as of the
Closing Date.
(h) Except as disclosed in the Information Statement, Green
has not breached, and there is no pending or threatened claim that Green has
breached any of the terms or conditions of any agreements, contracts or
commitments to which it is a party or its properties is bound. Green has
previously given PFC copies or access thereto of all material contracts,
commitments and/or agreements to which Green is a party including all
relationships or dealings with related parties or
<PAGE>
affiliates. The execution and performance hereof will not violate any provision
of applicable law or any agreement to which Green or any of the Green
Subsidiaries (as defined in 9.(a) below) is a party or by which it or its
properties is bound.
(i) Green has no subsidiary corporations except as set forth
on Exhibit "C" attached hereto and made a part hereof.
(j) Green has made its corporate financial records, minute
books, and other corporate documents and records available for review to present
management of PFC prior to the Closing Date, during reasonable business hours
and on reasonable notice.
(k) The performance of this Agreement does not materially
violate or breach any material agreement or contract to which Green is a party.
(l) All information regarding Green which has been provided to
PFC is true and accurate in all material respects.
9. Representation Regarding Green Subsidiaries. Green, to its best
knowledge and belief, hereby represents and warrants as follows, which
warranties and representations shall also be true as of the Closing Date:
(a) Green is the owner of record and beneficially of the
issued and outstanding securities of those subsidiary corporations (the "Green
Subsidiaries") set forth on Exhibit "C" in the percentages set forth on such
"Exhibit "C".
(b) The financial statements of the Green Subsidiaries which
are included in the Green Financial Statements and hereafter collectively
referred to as the "Green Subsidiaries Financial Statements" reasonably reflect
in all material respects the financial condition of the Green Subsidiaries as of
the dates thereof and the results of their operations for the periods covered.
The Green Subsidiaries' Financial Statements have been prepared, and do not
require material modification to be, in accordance with generally accepted
accounting principles consistently applied (except as may be indicated therein
or in the notes thereto).
(c) Since the date of the Green Subsidiaries Financial
Statements, there have not been any material adverse changes in the financial
position of the Green Subsidiaries except changes arising in the ordinary course
of business, which changes will in no event materially and adversely affect the
financial position of any of such Green Subsidiaries.
(d) None of the Green Subsidiaries is a party to any material
pending litigation or any governmental investigation or proceeding, not
reflected in the Green Subsidiaries Financial Statements.
(e) Each of the Green Subsidiaries has (or, by the Closing
Date, will have filed) all material tax, governmental and/or related forms and
reports (or extensions thereof) due or required to be filed and/or has (or will
have) paid or made adequate provisions for all taxes or assessments which have
become due as of the Closing Date.
<PAGE>
(f) None of the Green Subsidiaries has materially breached any
material agreement to which it is a party. Each of the Green Subsidiaries has
previously given PFC copies or access thereto of all material contracts,
commitments and/or agreements to which any of the Green Subsidiaries is a party
including all relationships or dealings with related parties or affiliates.
(h) None of the Green Subsidiaries has any subsidiary
corporations, except as set forth on Exhibit "C".
(i) Each of the Green Subsidiaries has made its corporate
financial records, minute books, and other corporate documents and records
available for review to present management of PFC prior to the Closing Date,
during reasonable business hours and on reasonable notice.
(j) The performance of this Agreement does not materially
violate or breach any material agreement or contract to which any of the Green
Subsidiaries is a party.
10. Representation Regarding PFC. PFC Management, to the best of his
knowledge and belief, hereby represents and warrants as follows, each of which
representations and warranties shall continue to be true as of the Closing Date:
(a) As of the Closing Date, the PFC Shares, to be issued and
delivered to all of the holders of Green Ordinary Shares hereunder will, when so
issued and delivered, constitute, duly authorized, validly and legally issued
PFC Shares, fully-paid and nonassessable.
(b) PFC has the corporate power to enter into this Agreement
and to perform its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by the board of directors of PFC. The execution and performance
of this Agreement will not constitute a breach of any material agreement,
indenture, mortgage, license or other instrument or document to which PFC is a
party and will not violate any judgment, decree, order, writ, rule, statute, or
regulation applicable to PFC. The execution and performance of this Agreement
will not violate or conflict with any provision of the certificate of
incorporation or by-laws of PFC.
(d) PFC has delivered to Green a true and complete copy of its
(i) Annual Report on Form 10-KSB for the year ended December 31, 1997, as filed
with the SEC, and (ii) its report on Form 10-QSB for the periods ended March 31,
1997, June 30, 1997 and September 30, 1997, as filed with the SEC. As of their
respective dates, such reports did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstance under
which they are made, not misleading. The audited financial statements and
unaudited interim financial statements included in such reports have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and fairly present the financial position of PFC as of the dates thereof and the
results of its operations and changes in financial position for the periods then
ended subject, in the case of the unaudited interim financial statements, to
normal year-end audit adjustments. PFC has no subsidiaries as of the date
hereof.
(e) Since December 31, 1997, there have not been any material
adverse changes in the financial condition of PFC.
<PAGE>
(f) PFC is not a party to or the subject of any pending
litigation, claims, or governmental investigation or proceeding not reflected in
the PFC Financial Statements or otherwise disclosed herein, and there are no
lawsuits, claims, assessments, investigations, or similar matters, to the best
knowledge of PFC Management, threatened or contemplated against or affecting PFC
or its properties.
(g) PFC is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; and presently
has and at Closing shall have the corporate power to own its property and to
carry on its business as then being conducted and shall be duly qualified to do
business in any jurisdiction where so required except where the failure to so
qualify would have no material negative impact.
(h) PFC has filed all federal, state, county and local income,
excise, property and other tax, governmental and/or related returns, forms, or
reports, which are due or required to be filed by it prior to the date hereof
and has paid or made adequate provision in the PFC Financial Statements for the
payment of all taxes, fees, or assessments which have or may become due pursuant
to such returns or pursuant to any assessments received. PFC is not delinquent
or obligated for any tax, penalty, interest, delinquency or charge.
(i) PFC's authorized capital stock shall, at Closing, consist
of: (i) 100,000,000 shares of common stock, $.001 par value, of which 1,325,000
shares shall be issued and outstanding. All outstanding shares of capital stock
of PFC are validly issued, fully paid and nonassessable. There are no existing
options, calls, warrants, preemptive rights or commitments of any character
relating to the issued or unissued capital stock or other securities of PFC.
(j) PFC has (and at the Closing will have) disclosed in
writing all events, conditions and facts materially affecting its business,
financial condition or results of operations.
(k) The corporate financial records, minute books, and other
documents and records of PFC have been made available to the Green Stockholder
prior to the Closing.
(l) PFC has not breached, and there is no pending or
threatened claim that PFC has breached any of the terms or conditions of any
agreements, contracts or commitments to which it is a party or by which it or
its properties is bound. The execution and performance hereof will not violate
any provisions of applicable law or any agreement to which PFC is subject. PFC
hereby represents that it is not a party to any material contract or commitment
other than appointment documents with its transfer agent, and that it has
disclosed to the Green Stockholder all relationships or dealings with related
parties or affiliates.
(m) The PFC common stock is currently quoted under the trading
symbol "PFSS" on the NASD Electronic Bulletin Board and there are no stop orders
in effect with respect thereto.
(n) All information regarding PFC which is set forth herein or
has otherwise been provided by PFC to Green and the Green Stockholder is true
and accurate in all material respects.
(o) PFC is current in all material respects with regard to its
reporting obligations with the SEC and all reports filed with the SEC within the
past two years are materially true, complete and accurate.
<PAGE>
11. Closing. The Closing of the transactions contemplated herein shall
take place on such date (the "Closing" or "Closing Date") as mutually determined
by the parties hereto when all conditions precedent have been met and all
required documents have been delivered, which Closing is expected to be on or
about April 14, 1998, but not later than April 17, 1998, unless extended by
mutual consent of all parties hereto.
12. Conditions Precedent to the Obligations of the Green Stockholder.
All obligations of the Green Stockholder under this Agreement are subject to the
fulfillment, prior to or as of the Closing and/or the Effective Date, as
indicated below, of each of the following conditions:
(a) The representations and warranties regarding PFC contained
in this Agreement or in any certificate or document delivered pursuant to the
provisions hereof shall be true in all material respects at and as of the
Closing as though such representations and warranties were made at and as of
such time.
(b) PFC shall have performed and complied, in all material
respects, with all covenants, agreements, and conditions set forth herein, and
shall have executed and delivered all documents required by this Agreement to be
performed or complied with or executed and delivered by it prior to or at the
Closing.
(c) On or before the Closing, the board of directors of PFC
shall have approved in accordance with applicable corporation law the execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein.
(d) On or before the Closing Date, PFC shall have delivered
certified copies of resolutions of the board of directors and shareholders of
PFC approving and authorizing the execution, delivery and performance of this
Agreement and authorizing all of the necessary and proper action to enable PFC
to comply with the terms of this Agreement including the election of Green's
nominees to the board of directors of PFC and all matters outlined herein.
(e) PFC's stockholders shall have duly approved all applicable
matters described in this Agreement in accordance with applicable law.
(f) At Closing, the sole existing officer and director of PFC
shall have resigned in writing from all positions as director and officer of PFC
upon the election and appointment of the Green nominees.
(g) At the Closing, all instruments and documents delivered to
the Green Stockholder pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for Green.
(h) At the Closing, upon consummation of the transactions, PFC
shall have the authorized capital as described in Section 10.(i) hereof.
(i) The PFC Shares to be issued to the Green Stockholder at
Closing will be validly issued, nonassessable and fully-paid under applicable
corporation law and will be issued in compliance with all federal, state and
applicable securities laws.
<PAGE>
(j) At the Closing, PFC shall have delivered to the Green
Stockholder an opinion of its counsel dated as of the Closing to the effect
that:
(i) PFC is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of
incorporation;
(ii) PFC has authorized the execution, delivery and
performance of this Agreement by all necessary corporate action, and subject to
certain limitations, the Agreement is a valid and binding obligation of PFC
enforceable in accordance with its terms.
(iii) The PFC Shares to be issued pursuant to Section
2 hereof, when issued, will be duly and validly issued, fully-paid and
nonassessable; and
(iv) PFC has the corporate power to execute, deliver
and perform under this Agreement.
13. Conditions Precedent to the Obligations of PFC. All obligations of
PFC under this Agreement are subject to the fulfillment, prior to or at the
Closing, of each of the following conditions:
(a) The representations and warranties regarding the Green
Stockholder and Green contained in this Agreement or in any certificate or
document delivered pursuant to the provisions hereof shall be true in all
material respects at and as of the Closing as though such representations and
warranties were made at and as of such time.
(b) The Green Stockholder shall have performed and complied
with, in all material respects, all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by him prior to or
at the Closing;
(c) The Green Stockholder shall deliver a letter commonly
known as an "Investment Letter," in substantially the form attached hereto and
made a part hereof as Exhibit "D", acknowledging that the PFC Shares are being
acquired for investment purposes.
14. Indemnification. For a period of two years from the Closing PFC
Management and PFC agree to jointly and severally indemnify and hold harmless
the Green Stockholder and Green, and the Green Stockholder and Green agree to
jointly and severally, indemnify and hold harmless PFC Management and PFC at all
times after the date of this Agreement against and in respect of any liability,
damage or deficiency, all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses including attorney's fees incident of any of the
foregoing, resulting from any material misrepresentations made by an
indemnifying party to an indemnified party, an indemnifying party's material
breach of covenant or warranty or an indemnifying party's nonfulfillment of any
agreement hereunder, or from any material misrepresentation in or omission from
any certificate furnished or to be furnished hereunder.
15. Nature and Survival of Representations. All representations,
warranties and covenants made by any party in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby for two
years from the Closing. All of the parties hereto are executing and carrying out
the provisions of this Agreement in reliance solely on the representations,
<PAGE>
warranties and covenants and agreements contained in this Agreement and not upon
any investigation upon which it might have made or any representation, warranty,
agreement, promise or information, written or oral, made by the other party or
any other person other than as specifically set forth herein.
16. Documents at Closing. At the Closing, the following documents
shall be delivered:
(a) The Green Stockholder will deliver, or will cause to be
delivered, to PFC the following:
(i) a certificate executed by Green to the effect
that to the best of his knowledge and belief all representations and warranties
made regarding Green and the Green Subsidiaries under this Agreement are true
and correct as of the Closing, the same as though originally given to PFC on
said date;
(ii) certificate from the jurisdiction of
incorporation of Green dated at or about the Closing to the effect that Green is
in good standing under the laws of said jurisdiction;
(iii) Investment Letter in the form attached hereto
as Exhibit "D" executed by the Green Stockholder;
(iv) corporate resolutions of Green authorizing the
transactions described in this Agreement;
(v) such other instruments, documents and
certificates, if any, as are required to be delivered pursuant to the provisions
of this Agreement;
(vi) all other items, the delivery of which is a
condition precedent to the obligations of PFC, as set forth herein; and
(b) PFC will deliver or cause to be delivered to the Green
Stockholder:
(i) stock certificates representing those securities
of PFC to be issued as a part of the exchange as described in Sections 2 and 6
hereof;
(ii) a certificate of the President/Secretary of PFC,
to the effect that all representations and warranties of PFC made under this
Agreement are true and correct as of the Closing, the same as though originally
given to the Green Stockholder on said date;
(iii) certified copies of resolutions adopted by
PFC's board of directors and PFC's stockholders authorizing the transactions
described herein and all related matters;
(iv) certificates from the jurisdiction of
incorporation of PFC dated at or about the Closing Date that said corporation is
in good standing under the laws of said jurisdiction;
(v) opinion of PFC's counsel as described in Section
12.(j) above;
<PAGE>
(vi) such other instruments and documents as are
required to be delivered pursuant to the provisions of this Agreement;
(vii) resignation of all of the officers and
directors of PFC; and
(viii) all other items, the delivery of which is a
condition precedent to the obligations of the Green Stockholder, as set forth in
Section 12 hereof.
17. Finder's Fees. PFC Management and PFC, jointly and severally,
represent and warrant to the Green Stockholder and Green, and the Green
Stockholder and Green, jointly and severally, represent and warrant to each of
the PFC Management and PFC, that none of them, or any party acting on their
behalf, has incurred any liabilities, either express or implied, to any "broker"
or "finder" or similar person in connection with this Agreement or any of the
transactions contemplated hereby except as set forth on Exhibit "E" attached
hereto and made a part hereof. In this regard, PFC Management and PFC, jointly
and severally, on the one hand, and the Green Stockholder and Green, jointly and
severally, on the other hand, will indemnify and hold the other harmless from
any claim, loss, cost or expense whatsoever (including reasonable fees and
disbursements of counsel) from or relating to any such express or implied
liability.
18. Miscellaneous.
(a) Further Assurances. At any time, and from time to time,
after the Closing Date, each party will execute such additional instruments and
take such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
(b) Waiver. Any failure on the part of any party hereto to
comply with any of its obligations, agreements or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
(c) Termination. All obligations hereunder may be terminated
at the discretion of either PFC's or Green's board of directors if (i) the
closing conditions specified in Sections 12 and 13 are not met by April 17,
1998, unless extended, or (ii) any of the representations and warranties made
herein have been materially breached.
(d) Amendment. This Agreement may be amended only in writing
as agreed to by all the parties hereto.
(e) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first class registered or certified mail, return
receipt requested, as follows:
If to PFC: 73 South Palm Avenue, Suite 223
---------- Sarasota, FL 34236
Attn: Roger Tichenor
<PAGE>
With a copy to: Edwin B. Kagan, Esq.
-------------- 2709 N. Rocky Point Drive, Suite 102
Tampa, FL 33607-1427
If to Green: Amicorp N.V.
----------- Caracasbaaiweg 199
Curacao, Netherlands Antilles
Attn: Toine Knipping
If to the Green Oscar Christian
Stockholder: Apdo 665-1007
------------ San Jose, Costa Rica
Edificio Centro Colon, 3er Piso
With a copy to: Michelle Kramish Kain, Esq.
--------------- 750 Southeast Third Avenue, Suite 100
Fort Lauderdale, FL 33316
(f) Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(h) Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
(i) Entire Agreement. This Agreement and the attached Exhibits
constitute the entire agreement of the parties covering everything agreed upon
or understood with respect to the subject matter hereof. There are no oral
promises, conditions, representations, understandings, interpretations or terms
of any kind as conditions or inducements to the execution hereof.
(j) Time. Time is of the essence.
(k) Severability. If any part of this Agreement is deemed to
be unenforceable the balance of the Agreement shall remain in full force and
effect.
(l) Responsibility and Costs. All fees, expenses and
out-of-pocket costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred by the
parties hereto shall be borne solely and entirely by the party that has incurred
such costs and expenses unless such party has agreed otherwise with any such
person.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
STOCKHOLDER OF GREEN PACIFIC FOREST CORPORATION
CAPITAL, N.V.
/s/Oscar Christian /s/Roger Tichenor
- ------------------------------- ------------------------------------
Oscar Christian Roger Tichenor, President/Secretary
/s/Roger Tichenor
------------------------------------
GREEN CAPITAL N.V. Roger Tichenor, individually
/s/Toine Knipping
- -------------------------------
Amicorp N.V., Managing Director
<PAGE>
EXHIBIT "A"
-----------
DEED OF TRANSFER
----------------
THIS DEED is made with effect from 14 April 1998 by and between:
1. OSCAR CHRISTIAN, a Netherlands citizen residing at Apdo
665-1007, Edificio Centro Colon, 3er Piso, San Jose, Costa
Rica ("Transferor"); and
2. PACIFIC FOREST CORPORATION, a Nevada corporation having its
registered office at 73 South Palm Avenue, Suite 223,
Sarasota, FL 34236, Florida, United States of America
("Transferee").
WHEREAS
(A) Transferor is the sole owner of all 6,000 issued common shares
(the "Shares") in the capital of GREEN CAPITAL N.V., a
Netherlands Antilles company, having its registered office at
Caracasbaaiweg 199, Curacao, Netherlands Antilles (the
"Company");
(B) Transferor and Transferee entered into an Agreement and Plan
of Reorganization (the "Reorganization Agreement") as per
today's date whereby Transferor agreed to transfer the Shares
to Transferee in exchange for 11,925,000 common shares in the
capital of Transferee (the "PFC Shares");
(C) Parties now wish to carry out the transfer of the Shares
contemplated in the Reorganization Agreement.
THIS DEED THEREFORE WITNESS as follows:
1. Subject to the terms and conditions of the Reorganization
Agreement, Transferor hereby transfers to Transferee and
Transferee hereby accepts from Transferor the full and free
ownership of the Shares.
2. Transferor acknowledges receipt of the PFC Shares as required
under the terms of the Reorganization Agreement and hereby
discharges Transferee with respect thereto.
3. This deed is governed by and construed in accordance with the
laws of the Netherlands Antilles and any dispute resulting
herefrom or relating hereto shall exclusively be settled
before the competent courts of Curacao, Netherlands Antilles.
IN WITNESS whereof this deed is signed in triplicate on the day and
year first above written.
/s/ Oscar Christian /s/ Roger Tichenor
--------------------- --------------------------
Oscar Christian Pacific Forest Corporation
<PAGE>
The Company hereby acknowledges the above-noted transfer of Shares and
represents and warrants to annotate the transfer in the shareholders
register of the Company and to provide Transferee with an extract
therefrom.
Signed in triplicate on the day and year first above written.
GREEN CAPITAL N.V.
/s/ Toine Knipping
--------------------------
By: Amicorp N.V.
Title: Managing Director
<PAGE>
EXHIBIT "B"
Green Historical Stockholder:
Name Number of Green Number of
---- Ordinary Shares PFC Exchange Shares
--------------- -------------------
Oscar Christian 6,000 11,925,000
There are no claims, liens or other encumbrances on the Green Ordinary
Shares.
<PAGE>
EXHIBIT "C"
GREEN CAPITAL N.V.
A. Subsidiary Corporations Percentage of Ownership
----------------------- -----------------------
Promociones Capital Verde S.A. 100%
(Costa Rica)
Green Capital Management N.V. 100%
(Netherlands Antilles)
Subsidiary of Promociones Capital Verde S.A.
--------------------------------------------
Reforestadora Capital Verde S.A. 100%
(Costa Rica)
Subsidiaries of Green Capital Management N.V.
---------------------------------------------
Green Capital Netherlands B.V. 50%
(Costa Rica)
* Save Our Planet S.A. 100%
(Costa Rica)
* Owned by El Reino De Papa Juan S.A., a holding company owned by Green
Capital N.V. which is currently inactive.
<PAGE>
EXHIBIT "D"
INVESTMENT LETTER
-----------------
TO THE BOARD OF DIRECTORS OF PACIFIC FOREST CORPORATION
The undersigned hereby represents to Pacific Forest Corporation (the
"Corporation"), that (1) the shares of the Corporation's common stock (the
"Securities") which are being acquired by the undersigned are being acquired for
his own account and for investment and not with a view to the public resale or
distribution thereof; (2) the undersigned will not sell, transfer or otherwise
dispose of the securities except in compliance with the Securities Act of 1933,
as amended (the "Act"); and (3) the undersigned is aware that the Securities are
"restricted securities" as that term is defined in Rule 144 or the General Rules
and Regulations under the Act.
The undersigned hereby agrees and acknowledges that he will not sell
the Securities outside of the United States in any manner which will allow the
Securities to become nonrestricted except upon registration in the United
States.
The undersigned further acknowledges that he or she has had an
opportunity to ask questions of and receive answers from duly designated
representatives of the Corporation concerning the terms and conditions pursuant
to which the Securities are being acquired. The undersigned acknowledges that he
has been afforded an opportunity to examine such documents and other information
which he or she has requested for the purpose of verifying the information set
forth in said documents.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned further acknowledges that he is fully aware of the
applicable limitations on the resale of the Securities. These restrictions for
the most part are set forth in Rule 144. The Rule permits sales of "restricted
securities" upon compliance with the requirements of such Rule. If the Rule is
available to the undersigned, the undersigned may make only routine sales of
securities, in limited amounts, in accordance with the terms and conditions of
that Rule.
Any and all certificates representing the Securities, and any and all
Securities issued in replacement thereof or in exchange therefor, shall bear the
following legend, which the undersigned has read and understands:
The Securities represented by this Certificate have not been registered
under the Securities Act of 1933 (the "Act") and are "restricted
securities" as that term is defined in Rule 144 under the Act. The
Securities may not be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under
<PAGE>
the Act or pursuant to an exemption from registration under the Act,
the availability of which is to be established to the satisfaction of
the Corporation.
The undersigned further agrees that the Corporation shall have the
right to issue stop-transfer instructions to its transfer agent and acknowledges
that the Corporation has informed the undersigned of its intention to issue such
instructions.
Very truly yours,
/s/ Oscar Christian
-----------------------
Oscar Christian
Date: April 14, 1998
<PAGE>
EXHIBIT "E"
FINDERS
- -------
M-Tech Corp., a Florida corporation
Jorge de Velasco
EXHIBIT 3.1
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
PACIFIC FOREST CORPORATION
Pursuant to the applicable provisions of the Nevada Business
Corporation Act, Pacific Forest Corporation (the "Corporation") adopts the
following Articles of Amendment to its Articles of Incorporation by stating the
following:
FIRST: The present name of the Corporation is Pacific Forest Corporation.
SECOND: The following amendment to its Articles of Incorporation were adopted
by majority vote of stockholders of the Corporation in the manner prescribed by
applicable law.
1. The Article entitled ARTICLE I, is amended to read as follows:
ARTICLE I
The name of this corporation is GREEN CAPITAL GROUP, INC.
THIRD: The number of shares of the Corporation outstanding and entitled to
vote at the time of the adoption of said amendment was 1,325,000.
FOURTH: The number of shares voted for such amendment by consent of a majority
of the stockholders was 707,300 shares ( 53.4% ) and no shares were voted
against such amendment.
DATED this 31st day of March, 1998.
PACIFIC FOREST CORPORATION
By: /s/ Roger Tichenor
------------------------------
Roger Tichenor, President
and Secretary
<PAGE>
VERIFICATION
------------
State of Florida )
) SS.
County of Broward )
The undersigned being first duly sworn, deposes and states: that the
undersigned is the Secretary of Pacific Forest Corporation, that the undersigned
has read the Articles of Amendment and knows the contents thereof and that the
same contain a truthful statement of the Amendment duly adopted by the sole
director and stockholders of the Corporation.
/s/Roger Tichenor
-------------------------
Roger Tichenor, Secretary
State of Florida )
) SS.
County of Broward )
The foregoing instrument was acknowledged before me this 14th day of
April, 1998 by Roger Tichenor, Secretary of Pacific Forest Corporation, a Nevada
corporation, on behalf of the corporation. He is personally known to me or has
produced a Florida Drivers License as identification and did/did not take an
oath.
Notary Public:
sign: /s/ Cynthia L. Brandes
-------------------------------
print: Cynthia L. Brandes
-------------------------------
State of Florida at Large (Seal)
My Commission Expires:
EXHIBIT 10.1
GREEN CAPITAL GROUP, INC.
-------------------------
1998 STOCK OPTION PLAN
----------------------
1. Grant of Options; Generally. In accordance with the provisions
hereinafter set forth in this Plan, the Stock Option Committee of the
Corporation is hereby authorized to issue from time to time on the Corporation's
behalf to any one or more Eligible Persons, as hereinafter defined, Stock
Options to acquire shares of Common Stock.
2. Definitions. For the purpose of this Plan, unless the context
requires otherwise, the following terms shall have the meanings indicated:
2.1 "Board" means the board of directors of the Corporation.
2.2 "Change in Control" means the occurrence of any of the
following events: (a) there shall be consummated (i) any consolidation or merger
of the Corporation in which the Corporation is not the continuing or surviving
corporation or pursuant to which shares of the Corporation's Common Stock would
be converted into cash, securities or other property, other than a merger of the
Corporation in which the holders of the Corporation's Common Stock immediately
prior to the merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (ii) any sale, lease,
exchange or other transfer (excluding transfer by way of pledge or
hypothecation), in one transaction or a series of related transactions, of all,
or substantially all, of the assets of the Corporation, (b) the stockholders of
the Corporation approve any plan or proposal for the liquidation or dissolution
of the Corporation, (c) any "person" (as such term is defined in Section 3(a)(9)
or Section 13(d)(3) under the 1934 Act) or any "group" (as such term is used in
Rule 13d-5 promulgated under the 1934 Act), other than the Corporation or any
successor of the Corporation or any Subsidiary of the Corporation or any
<PAGE>
employee benefit plan of the Corporation or any Subsidiary (including such
plan's trustee), becomes a beneficial owner for purposes of Rule 13d-3
promulgated under the 1934 Act, directly or indirectly, of securities of the
Corporation representing 50.1% or more of the Corporation's then outstanding
securities having the right to vote in the election of directors, or (d) during
any period of two consecutive years, individuals who, at the beginning of such
period constituted the entire Board, cease for any reason (other than death) to
constitute a majority of the directors, unless the election, or the nomination
for election, by the Corporation's stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.
2.3 "Code" means the Internal Revenue Code of 1986, as
amended.
2.4 "Common Stock" means the common stock which the
Corporation is currently authorized to issue or may in the future be authorized
to issue.
2.5 "Corporation" means Green Capital Group, Inc., a Nevada
corporation.
2.6 "Date of Grant" means the effective date on which a Stock
Option is awarded to an Eligible Person as set forth in the Stock Option
agreement.
2.7 "Eligible Person" means any employee of the Corporation or
any Subsidiary of the Corporation or any non-employee director of the
Corporation who is, or who is proposed to be, a recipient of a Stock Option as
further defined in Section 5 hereof.
2.8 "Fair Market Value" of the Corporation's shares of Common
Stock means whichever of the following is applicable: (i) the closing price per
share on any stock exchange on which the Common Stock is traded, (ii) the mean
between the closing or average (as the case may be) bid and asked prices per
share of Common Stock on the over-the-counter market, or (iii) in the event that
the Corporation's Common Stock is not publicly traded, (a) the price per share
at which
<PAGE>
the Corporation offered any securities for sale in a private offering exempt
from registration under the Securities Act of 1933, as amended, within 24 months
after such private offering of securities, or (b) as determined in the sole
discretion of the Stock Option Committee.
2.9 "ISO" is an Incentive Stock Option which means an option
to purchase shares of Common Stock granted to an Eligible Person pursuant to
Section 5 and which is intended to qualify as an Incentive Stock Option under
Section 422 of the Code.
2.10 "1934 Act" means the Securities Exchange Act of 1934, as
amended.
2.11 "NSO" is a Nonqualified Stock Option which means an
option to purchase shares of Common Stock granted to an Eligible Person pursuant
to Section 5 and which is not intended to qualify as an Incentive Stock Option
under Section 422 of the Code.
2.12 "Plan" means the Green Capital Group, Inc. 1998 Stock
Option Plan, as it may be amended from time to time.
2.13 "Reload Stock Option" means a Nonqualified Stock Option
or an Incentive Stock Option granted pursuant to Section 9 hereof.
2.14 "Restricted Stock" shall have the meaning set forth in
Section 9.1 hereof.
2.15 "Restriction Period" shall have the meaning set forth in
Section 9.1 hereof.
2.16 "Stock Dividend" means a dividend or other distribution
declared on the shares of Common Stock payable in (i) capital stock of the
Corporation or any Subsidiary of the Corporation, or (ii) rights, options or
warrants to receive or purchase capital stock of the Corporation or any
Subsidiary of the Corporation, or (iii) securities convertible into or
exchangeable for capital stock of the Corporation or any Subsidiary of the
Corporation, or (iv) any capital stock received upon the exercise, or with
respect to, the foregoing.
<PAGE>
2.17 "Stock Option" or "Stock Options" shall mean any and all
Incentive Stock Options, Nonqualified Stock Options and Reload Stock Options
granted pursuant to the Plan.
2.18 "Subsidiary" means any corporation in an unbroken chain
of corporations beginning with the Corporation if, at the time of granting of
the Stock Option, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain, and "Subsidiaries" means more than one of any such corporations.
3. Type of Options. The Stock Option Committee is authorized
to issue Stock Options which meet the requirements of the Code, which Stock
Options are hereinafter referred to collectively as ISOs, or singularly as an
ISO. The Stock Option Committee is also authorized to issue Stock Options which
are not ISOs, which Stock Options are hereinafter referred to collectively as
NSOs, or singularly as an NSO. The Stock Option Committee is also authorized to
issue Reload Stock Options in accordance with Section 9 herein, which Reload
Stock Options are hereinafter referred to collectively as Reload Stock Options,
or singularly as a Reload Stock Option.
4. Amount of Common Stock. The aggregate number of shares of Common
Stock which may be purchased pursuant to the exercise of Stock Options is
750,000 shares. Of this amount, 600,000 shares of Common Stock may be purchased
pursuant to the exercise of ISOs, and 150,000 shares of Common Stock may be
purchased pursuant to the exercise of NSOs. If a Stock Option ceases to be
exercisable, in whole or in part, the shares of Common Stock underlying such
Stock Option shall continue to be available under this Plan. If there is any
change in the number of shares of Common Stock on account of the declaration of
stock dividends, recapitalization resulting in stock split-ups, or combinations
or exchanges of shares of Common Stock, or otherwise, the number of shares of
Common Stock available for purchase by the exercise of Stock Options, the
<PAGE>
shares of Common Stock subject to any Stock Option and the exercise price of any
outstanding Stock Option shall be appropriately adjusted by the Stock Option
Committee. The Stock Option Committee shall give notice of any adjustments to
each Eligible Person granted a Stock Option under this Plan, and such
adjustments shall be effective and binding on all Eligible Persons. If because
of one or more recapitalizations, reorganizations or other corporate events, the
holders of outstanding Common Stock receive something other than shares of
Common Stock then, upon exercise of a Stock Option, the Eligible Person will
receive what the holder would have owned if the holder had exercised the Stock
Option immediately before the first such corporate event and not disposed of
anything the holder received as a result of the corporate event.
5. Eligible Persons.
5.1 With respect to ISOs, an Eligible Person means any
individual who has been employed by the Corporation or by any one or more
Subsidiary for a continuous period of at least 60 days.
5.2 With respect to NSOs, an Eligible Person means (1) any
individual who has been employed by the Corporation or by any Subsidiary for a
continuous period of at least 60 days, or (2) any director of the Corporation or
any Subsidiary even though said director is not employed by the Corporation or
by any Subsidiary.
6. Non-Employee Directors' Stock Options. The provisions of this
Section shall apply only to NSO'S granted under the Plan to non-employee
directors of the Corporation.
6.1 Eligibility. Only non-employee directors of the
Corporation shall be eligible to receive grants of NSO's under this Section 6.
6.2 Grant of Options. On September 15 of each year during the
term of this Plan (or if such date is not a business day, then on the next
succeeding business day thereafter), the
<PAGE>
Corporation shall grant to each non-employee director of the Corporation a NSO
to purchase that number of shares of Common Stock determined by dividing the
annual director's fee paid or accrued to be paid to that director with respect
to the 12 month period immediately preceding such Date of Grant, by the Fair
Market Value per share of the Common Stock on the Date of Grant. Each grant of
NSO's under this Section 6 shall be evidenced by a Stock Option agreement
setting forth the total number of shares subject to the NSO, the option exercise
price, the term of the NSO and such other terms and provisions as are consistent
with the Plan.
6.3 Option Price. The option exercise price for a NSO granted
under this Section 6 shall be equal to the Fair Market Value per share of Common
Stock on the Date of Grant. Notwithstanding anything to the contrary contained
in this Section 6, the option exercise price of each NSO pursuant to this
Section 6 shall not be less than the par value per share of the Common Stock.
6.4 Option Period. All NSO's granted under this Section 6
shall automatically vest and be exercisable in full after the expiration of six
months from the Date of Grant. The period during which a NSO granted under this
Section 6 may be exercised shall expire ten years from the Date of Grant, unless
sooner terminated in accordance with the terms of the Stock Option agreement. No
NSO granted under this Section 6 may be exercised at any time after its term.
7. Grant of Options. The Corporation grants to the Stock Option
Committee the right to issue the Stock Options established by this Plan to
Eligible Persons. The Stock Option Committee shall follow the procedures
prescribed for it elsewhere in this Plan. A grant of Stock Options shall be set
forth in a writing signed by a majority of the members of the Stock Option
Committee. The writing shall identify whether the Stock Option being granted is
an ISO or a NSO and shall set forth the terms which govern the Stock Option. The
terms shall be determined by the Stock Option
<PAGE>
Committee, and may include, among other terms, the number of shares of Common
Stock that may be acquired pursuant to the exercise of the Stock Options, when
the Stock Options may be exercised, the effect on the Stock Options if the
Eligible Person terminates the employment and whether the Eligible Person may
deliver shares of Common Stock to pay for the shares of Common Stock to be
purchased by the exercise of the Stock Option. However, no term shall be set
forth in the writing which is inconsistent with the terms of this Plan. The
terms of a Stock Option granted to an Eligible Person may differ from the terms
of a Stock Option granted another Eligible Person, and may differ from the terms
of an earlier Stock Option granted to the same Eligible Person.
8. Purchase of Shares. A Stock Option shall be exercised by the tender
to the Corporation of the full purchase price of the shares with respect to
which the Stock Option is exercised and written notice of the exercise. The
purchase price of the shares shall be in United States dollars, payable in cash
or by check, or in property or Corporation stock, if so permitted by the Stock
Option Committee in accordance with the discretion granted to the Stock Option
Committee in Paragraph 10 hereof, having a value equal to such purchase price.
The Corporation shall not be required to issue or deliver any certificates for
shares of Common Stock purchased upon the exercise of a Stock Option prior to
(i) if requested by the Corporation, the filing with the Corporation by the
Eligible Person of a representation in writing that it is the Eligible Person's
then present intention to acquire the shares of Common Stock being purchased for
investment and not for resale, and/or (ii) the completion of any registration or
other qualification of such shares by any government regulatory body, which the
Corporation shall determine to be necessary or advisable.
9. Reload Stock Options.
9.1 Grant of Reload Stock Options. Subject to the terms of
Section 9.2, in the event that shares are delivered by an Eligible Person in
payment of all or a portion of the exercise
<PAGE>
price of a Stock Option as set forth in Section 9.1 and/or shares are withheld
by the Corporation in satisfaction of the Corporation's tax withholding
obligations upon exercise, then an Eligible Person so exercising a NSO shall
automatically be granted a NSO and an Eligible Person so exercising an ISO shall
automatically be granted an ISO (in either case, a "Reload Stock Option"), to
purchase that number of shares so delivered to it or withheld by the
Corporation, as the case may be, at a Stock Option exercise price equal to the
Fair Market Value per share of the Common Stock on the date of exercise (subject
to the provisions of Section 12 regarding ISO's and, in any event not less than
the par value per share of the Common Stock). The option period for a Reload
Stock Option will expire on the expiration date of the Stock Option it replaces
(subject to the provisions in Section 12 regarding ISO's and the provisions
relating to termination in the Stock Option agreement), after which the Reload
Stock Option cannot be exercised. The Date of Grant of a Reload Stock Option
shall be the date that the Stock Option it replaces is exercised. A Reload Stock
Option shall automatically vest and be exercisable in full after the expiration
of six months from its Date of Grant. It shall be a condition to the grant of a
Reload Stock Option that promptly after its Date of Grant, a Stock Option
agreement shall be delivered to, and executed and delivered by, the Eligible
Person and the Corporation which sets forth the total number of shares subject
to the Reload Stock Option, the Stock Option exercise price, the term of the
Reload Stock Option and such other terms and provisions as are consistent with
the Plan.
9.2 Restricted Stock. In the event that an Eligible Person exercises a
Stock Option and receives a Reload Stock Option under Section 9.1, the following
restrictions and conditions will apply to that number of the shares of Common
Stock (the "Restricted Stock") issued to the Eligible Person upon such exercise,
which is equal to one-half of the sum of (i) the number of shares of Common
Stock delivered by the Eligible Person to the Corporation in payment of the
exercise price,
<PAGE>
if any, plus (ii) the number of shares of Common Stock withheld by the
Corporation in satisfaction of the Corporation's tax withholding obligations, if
any:
(a) Restriction Period. Subject to the other provisions of
this Plan, each Eligible Person shall not be permitted to sell, assign,
transfer, pledge, exercise or place any encumbrance on, shares of Restricted
Stock and any Stock Dividends paid on or with respect to such Restricted Stock
until the earliest to occur of any of the following events (such period of
restriction being referred to herein as the "Restriction Period"):
(i) the expiration of one year from the date of issuance
of the Restricted Stock in the name of the Eligible
Person;
(ii) in the case of an employee of the Corporation or a
Subsidiary, the retirement of such Eligible Person
from the Corporation or the Subsidiary in accordance
with the standard retirement policies of the
Corporation or the Subsidiary, as the case may be;
(iii) in the case of a non-employee director of the
Corporation, the cessation of service of such
Eligible Person as a director of the Corporation;
(iv) the death of such Eligible Person;
(v) the total and permanent disability of such Eligible
Person; or (vi) a Change in Control of the
Corporation.
(b) Rights with Respect to Restricted Stock. Except as
otherwise provided in the Plan, the Eligible Person shall have, with respect to
his or her Restricted Stock (and any Stock Dividends paid on such Restricted
Stock), all of the rights of a stockholder of the Corporation, including the
right to vote the shares and the right to receive any dividends thereon. Each
Eligible Person who is to receive Restricted Stock shall be issued a stock
certificate in respect of such shares
<PAGE>
of Restricted Stock, registered in the name of the Eligible Person, which shall
bear an appropriate legend referring to the restrictions applicable to such
Restricted Stock, to read substantially in the following form:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions of the Green CapitalGroup, Inc. 1998 Stock Option
Plan. A copy of such Plan is on file in the offices of Green
Capital Group, Inc., Apdo 665-1007, San Jose, Costa Rica,
Edeficio Centro Colon, 3er Piso."
10. Stock Option Committee. The Stock Option Committee, shall be
appointed from time to time by the Corporation's Board. The Board may from time
to time remove members from or add members to the Stock Option Committee. The
Stock Option Committee shall be constituted so as to permit the Plan to comply
in all respects with the provisions set forth in Section 18 herein. The members
of the Stock Option Committee shall elect one of its members as its chairman.
The Stock Option Committee shall hold its meetings at such times and places as
its chairman shall determine. A majority of the Stock Option Committee's members
present in person shall constitute a quorum. All determinations of the Stock
Option Committee will be made by the majority vote of the members constituting
the quorum. The members may participate in a meeting of the Stock Option
Committee by conference telephone or similar communication equipment by means of
which all members participating in the meeting can hear each other.
Participation in a meeting in that manner will constitute presence in person at
the meeting. Any decision or determination reduced to writing and signed by all
members of the Stock Option Committee will be effective as if it had been made
by a majority vote of all members of the Stock Option Committee at a meeting
which is duly called and held.
<PAGE>
11. Administration of Plan. In addition to granting Stock Options and
to exercising the authority granted to it elsewhere in this Plan, the Stock
Option Committee is granted the full right and authority to interpret and
construe the provisions of this Plan, promulgate, amend and rescind rules and
procedures relating to the implementation of the Plan and to make all other
determinations necessary or advisable for the administration of the Plan,
consistent; however, with the intent of the Corporation that Stock Options
granted or awarded pursuant to the Plan comply with the provisions of Sections
18 and 19 herein. All determinations made by the Stock Option Committee shall be
final, binding and conclusive on all persons including the Eligible Person, the
Corporation and its stockholders, employees, officers and directors, No member
of the Stock Option Committee will be liable for any act or omission in
connection with the administration of this Plan unless it is attributable to
that member's willful misconduct.
12. Provisions Applicable to ISOs. The following provisions shall apply
to all ISOs granted by the Stock Option Committee and are incorporated by
reference into any writing granting an ISO:
(a) An ISO may only be granted within 10 years from March 31,
1998, the date that this Plan has been adopted by the Corporation's Board.
(b) An ISO may not be exercised after the expiration of ten
(10) years from the date the ISO is granted.
(c) The Stock Option exercise price is not less than the Fair
Market Value of the Common Stock at the time the ISO is granted.
(d) An ISO is not transferrable by the Eligible Person to whom
it is granted except by will, or the laws of descent and distribution, and is
exercisable during his or her lifetime only by the Eligible Person.
<PAGE>
(e) If the Eligible Person receiving the ISO owns at the time
of the grant stock possessing more than 10% of the total combined voting power
of all classes of stock of the employer corporation or of its parent or
subsidiary corporation (as those terms are defined in the Code), then the Stock
Option exercise price shall be at least 110% of the Fair Market Value of the
Common Stock, and the ISO shall not be exercisable after the expiration of five
years from the date the ISO is granted.
(f) The aggregate Fair Market Value (determined at the time
the ISO is granted) of the Common Stock with respect to which the ISO is first
exercisable by the Eligible Person during any calendar year (under this Plan and
any other incentive stock option plan of the Corporation) shall not exceed
$100,000.
(g) This Plan was adopted by the Corporation on March 31, 1998
by virtue of its approval by the Corporation's Board and was approved by the
stockholders of the Corporation on March 31, 1998.
(h) Even if the shares of Common Stock which are issued upon
exercise of an ISO are sold within one year following the exercise of such ISO
such that the sale constitutes a disqualifying disposition for ISO treatment
under the Code, no provision of this Plan shall be construed as prohibiting such
a sale.
13. Determination of Fair Market Value. In granting ISOs under the
Plan, the Stock Option Committee shall make a good faith determination as to the
Fair Market Value of the Common Stock at the time of granting the ISO.
14. Restrictions on Issuance of Common Stock. The Corporation shall not
be obligated to sell or issue any shares of Common Stock pursuant to the
exercise of a Stock Option unless the Common Stock with respect to which the
Stock Option is being exercised is at that time effectively
<PAGE>
registered or exempt from registration under the Securities Act of 1933, as
amended, and any other applicable laws, rules and regulations. The Corporation
may condition the exercise of a Stock Option granted in accordance herewith upon
receipt from the Eligible Person, or any other purchaser thereof, of a written
representation that at the time of such exercise it is his or her then present
intention to acquire the shares of Common Stock for investment and not with a
view to, or for sale in connection with, any distribution thereof; except that,
in the case of a legal representative of an Eligible Person, "distribution"
shall be defined to exclude distribution by will or under the laws of descent
and distribution. Prior to issuing any shares of Common Stock pursuant to the
exercise of a Stock Option, the Corporation shall take such steps as it deems
necessary to satisfy any withholding tax obligations imposed upon it by any
level of government.
15. Corporate Events. In the event of the proposed dissolution or
liquidation of the Corporation, or in the event of a proposed sale of
substantially all of the assets of the Corporation, the Board may declare that
each Stock Option granted under this Plan shall terminate as of a date to be
fixed by the Board; provided that not less than 30 days written notice of the
date so fixed shall be given to each Eligible Person holding a Stock Option, and
each such Eligible Person shall have the right, during the period of 30 days
preceding such termination to exercise his Stock Option as to all or any part of
the shares of Common Stock covered thereby, including shares of Common Stock as
to which such Stock Option would not otherwise be exercisable. Nothing set forth
herein shall extend the term set for purchasing the shares of Common Stock set
forth in the Stock Option.
16. No Guarantee of Employment. Nothing in this Plan or in any writing
granting a Stock Option will confer upon any Eligible Person the right to
continue in the employ of the Eligible Person's employer, or will interfere with
or restrict in any way the right of the Eligible Person's
<PAGE>
employer to discharge such Eligible Person at any time for any reason
whatsoever, with or without cause.
17. Amendment of Plan. The Corporation's Board may amend, suspend or
discontinue this Plan at any time; however, no such action may prejudice the
rights of any Eligible Person who has prior thereto been granted Stock Options
under this Plan. Further, no amendment to this Plan which has the effect of (a)
increasing the number of shares of Common Stock subject to this Plan (except for
adjustments pursuant to Section 3 herein), or (b) changing the definition of
Eligible Persons under this Plan, may be effective unless and until approval of
the stockholders of the Corporation is obtained in the same manner as approval
of this Plan is required. The Corporation's Board is authorized to seek the
approval of the Corporation's stockholders for any other changes it proposes to
make to this Plan which require such approval; however, the Board may modify the
Plan as necessary to effectuate the intent of the Plan as a result of any
changes in tax, accounting or securities laws treatment of Eligible Persons and
the Plan, subject to the provisions set forth in this Section 17, and Sections
18 and 19.
18. Compliance with Rule 16b-3. This Plan is intended to comply in all
respects with Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and
Exchange Commission under the 1934 Act with respect to participants who are
subject to Section 16 of the 1934 Act, and any provision(s) herein that is/are
contrary to Rule 16b-3 shall be deemed null and void to the extent deemed
appropriate by either the Stock Option Committee or the Corporation's Board.
19. Compliance with Code. The aspects of this Plan on ISOs is intended
to comply in every respect with Section 422 of the Code and the regulations
promulgated thereunder. In the event any future statute or regulation shall
modify the existing statute, the aspects of this Plan on ISOs shall be deemed to
incorporate by reference such modification. Any Stock Option agreement
<PAGE>
relating to any Stock Option granted pursuant to this Plan, outstanding and
unexercised at the time any modifying statute or regulation becomes effective,
shall also be deemed to incorporate by reference such modification and no notice
of such modification need to be given to the optionee.
If any provision of the aspects of this Plan on ISOs is determined to
disqualify the shares purchasable pursuant to the Stock Options granted under
this Plan from the special tax treatment provided by Section 422 of the Code,
such provision shall be deemed null and void and to incorporate by reference the
modification required to qualify the shares for said tax treatment.
20. Effective Date. This Plan was adopted by the Board on March 31,
1998, and was approved by the stockholders on March 31, 1998. The terms of the
Plan shall apply to all Stock Options that may be issued on or after the date
hereof.
GREEN CAPITAL GROUP, INC
By: /s/Oscar Christian
----------------------
Its : President
Date: As of April 14, 1998
