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
September 25, 1996
Date of Report
(Date of Earliest Event Reported)
G/O INTERNATIONAL, INC
(Exact Name of Registrant as Specified in its Charter)
Colorado 0-24688 76-0025986
(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
11849 Wink
Houston, Texas 77024
(Address of Prinicpal Executive Offices)
Registrant's Telephone Number
(713) 783-1204
N/A
(Former Name or Former Address if changed Since Last Report)
Item 1. Changes in Control of Registrant.
None; not applicable.
Item 2. Acquisition or Disposition of Assets.
Pursuant to a Reorganization Plan and Agreement ("Plan") dated September 17,
1996, between and among: (i) the Company, (ii) G/O International Group (USA)
Inc., a Delaware corporation, that, prior to the Reorganization described
herein, was the Company's wholly owned subsidiary ("G/O Group"), (iii)
Leather Leather, Inc., a Texas corporation, ("LLI") and (iv) Kent Bouldin, the
beneficial owner of 10,000 shares of capital stock of LLI which constitutes
100% of the issued and outstanding capital stock of LLI ("LLI Shareholders"),
G/O Group exchanged, in a stock for stock exchange, a total of 8,000,000
shares of its $0.0001 par value per share common stock for a total of 10,000
shares or 100% of the issued and outstanding shares of capital stock of LLI,
making LLI a wholly owned subsidiary of G/O Group. No cash or other
consideration was tendered in connection with the Reorganization.
Upon completion of the Reorganization, G/O Group had a total of 10,000,000 of
its $0.0001 par value per share common stock issued and outstanding, of
which a total of 8,000,000 shares or 80% are held by the LLI Shareholder and
2,000,000 shares or 20% are held by the Company.
In connection with the completion of the Plan:
1. G/O Group changed its name to "Leather Leather, Inc."
2. John L. Burns, one of G/O Group's two directors, resigned, and the other
member of the Board of Directors were replaced by the following five person
Board of Directors who were nominated to serve until the next election of
directors or until their replacement is duly qualified:
Name
Kent Bouldin
Samuel Bono
Ray Wilkins
Bill Rodgers
Anthony Lynn
3. The Company distributed a total of 2,000,000 of the $0.0001 par value per
share common stock of G/O Group held by it to Thomas Pritchard, Esq. of the
Law Firm of Brewer & Pritchard, as escrow agent, ("Escrow Agent"), who,
according to the terms of a Dividend Escrow Agreement entered into between the
Company and the Escrow Agent, will in turn distribute such shares of G/O
Group to the shareholders of the Company, and/or their assigns as of July 17,
1996 (the "Dividend Record Date"), upon registration of such class of shares
by G/O Group with the United States Securities Exchange Commission
("SEC")either pursuant to the Securities Act of 1933, as amended, or pursuant
to registration under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Dividend Escrow").
As the result of the Reorganization, the Company divested a total of 80% of
its interest in G/O Group through the issuance of 8,000,000 shares of the
$0.0001 par value per share of G/O Group to the LLI Shareholder in exchange
for 100% interest in LLI. Further, such 20% interest, represented by 2,000,000
of the $0.0001 par value per share common stock of G/O Group, have been
distributed to the Company's shareholders as of July 17, 1996, subject to G/O
Group's registering its shares of par value $0.0001 par value per share
common stock with the SEC pursuant the 1933 Act, or pursuant to Section 12(g)
of the 1934 Act.
To the best knowledge of the Company's management, no LLI Shareholder and no
member of the management of LLI are the holders of any shares of the Company's
$0.01 par value per share common stock and the only interest held by the LLI
Shareholder in G/O Group was acquired under the Plan. The following table
sets forth the name and address of the LLI Shareholder and his respective
interest acquired in G/O Group pursuant to the Plan, to wit:
Number of
Name and Address of LLI Shareholder G/O Group Shares Acquired
Kent Bouldin
6724 Pebble Beach Drive
Plano, Texas 75043 8,000,000 Shares
G/O Group now known as "Leather Leather, Inc.," through its subsidiary Leather
Leather, Inc., a Texas corporation, is a vertically integrated manufacturer
and retailer of high quality leather specialty furniture, employing a strategy
of distinguishing itself from other leather furniture stores by offering
customers a larger selection of leather furniture products, at affordable
prices, utilizing its state-of-the-art manufacturing facility.
Item 3. Bankruptcy or Receivership.
None; not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
None; not applicable.
Item 5. Other Events.
None; not applicable.
Item 6. Resignations of Registrant's Directors.
See Item 2 above.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
See description below under paragraph (e) of this Item.
(b) Pro-forma Financial Information.
Proforma financial information will be viled with the SEC not leter than 75
days from the date of this Report.
(c) Exhibits.
Description of Exhibit* Exhibit
Number
Agreement and Plan of Merger 2
* Schedule A-G/O International, Inc.-subsidiaries
* Schedule B-G/O Internaitonal, Inc.-documents
filed with the Securities and
Exchange Commission and changes
Exhibit 1-Leather Leather, Inc. Financial Statements
Six Months Ended June 30, 1996 and the
Period from Inception (April 1, 1995) to
December 31, 1995
Exhibit 2-Investment Letter
Exhibit 3-Finders
Dividend Escrow Agreement 10.1
Closing Certificate of G/O International, Inc.,
a Colorado corporation and G/O International
Group (USA) Inc., a Delaware corporation
Closing Certificate of Leather Leather, Inc. and
Kent Bouldin
*Incorporated by reference from the Company's 10-KSB Annual Report for the
year ended December 31, 1995.
Item 8. Changes in Fiscal Year.
None; not applicable.
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.
G/O INTERNATIONAL, INC.
Date: October 2,1996 By:/ss/ M. L. Caswell
------------------
Michael L. Caswell
Secretary/Treasurer and Director
REORGANIZATION PLAN AND AGREEMENT
This Reorganization Plan and Agreement ("Agreement") is made and entered
into this 17th day of September, 1996, between and among: (i) G/O
International Group (U.S.A.), Inc., a Delaware corporation, which is referred
to herein as the "Company," (ii) G/O International, Inc., a Colorado
corporation, which is referred to herein as "G/O Colorado", (iii) Leather
Leather, Inc., a Texas corporation, which is referred to herein as "LLI," and
(iv) Kent Bouldin, an individual residing in Dallas Texas, who is the
beneficial owner of 10,000 shares of common stock of LLI, which constitutes
one hundred percent (100%) of the issued and outstanding capital stock of LLI
who is referred to herein as the "LLI Shareholder" or "Shareholder").
WHEREAS, the LLI Shareholder, owns and has the right to sell, transfer
and convey, 10,000 shares of LLI's common stock which constitutes one hundred
percent (100%) of the issued and outstanding capital stock of LLI; and
WHEREAS, the Company wishes to acquire one hundred percent (100%) of the
issued and outstanding capital stock of LLI, through exchanging for the 10,000
shares of LLI's common stock held by the LLI Shareholder, 8,000,000 shares of
the Company's $0.0001 par value per share common stock; and
WHEREAS, the LLI Shareholder has agreed to deliver 10,000 shares of
LLI's common stock which constitutes one hundred percent (100%) of the issued
and outstanding shares of common stock of LLI to the Company in exchange for
8,000,000 newly issued shares of the Company's $0.0001 par value per share
common stock; and
WHEREAS, the parties hereto wish to formalize the above mentioned
agreements and thereafter accomplish such exchange on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties hereto have agreed and by these
presents do hereby agree as follows:
1. REPRESENTATIONS WARRANTIES AND COVENANTS BY LLI AND THE LLI
SHAREHOLDER. LLI and the LLI Shareholder hereby jointly and severally
make the following express representations warranties and covenants to
the Company and to G/O Colorado:
A. LLI is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas and has
the corporate power to own its property and carry on its
business in the State of Texas. Copies of LLI's Articles of
Incorporation and By-laws have heretofore been furnished to
the Company by LLI and/or the LLI Shareholder, and all such
copies are true, correct and complete copies of the original
Articles of Incorporation and by-laws including all
amendments thereto.
B. LLI has the corporate authority to issue a total of 100,000
shares of common stock each with a par value of $0.01, of
which 10,000 shares have been issued in the name of Kent
Bouldin and are outstanding.
C. LLI has no subsidiaries.
D. The LLI Shareholder has full power and authority to exchange
the 10,000 shares of LLI's common stock which are held by
him upon the terms and conditions provided for in this
Agreement, and said shares of common stock have been duly
and validly issued and will be free and clear of any lien or
other encumbrance on the Closing Date specified herein.
E. The audited financial statements of LLI for the six months
ended June 30, 1996 and for the nine months ended December
31, 1995, attached hereto as Exhibit 1, constitute
substantially true and correct statements of the financial
condition of LLI's assets, liabilities and income as of such
dates. Except as described in this Agreement or disclosed
to the Company in writing, LLI has not:
(1) issued any additional shares of its capital stock, or
any options to acquire such stock, to any person;
(2) paid or declared any dividends or distributions of
capital, surplus, or profits with respect to any of
its issued and outstanding shares of capital stock;
(3) entered into any other transaction or agreement which
would, or might, materially impair the shareholder's
equity of LLI.
F. Since June 30, 1996, and except as provided herein or
disclosed to the Company in writing, LLI has not engaged in
any material transactions other than transactions in the
normal course of the operation of its business, which would,
or might, materially impair the shareholder's equity of LLI
as reflected in the financial statements.
G. LLI is not involved in any pending or threatened litigation
which would, or might, materially affect its financial
condition and which has not been:
(1) disclosed in the financial statements, or
(2) disclosed to the Company in writing.
H. LLI has good and marketable title to all of the property and
assets free and clear of any and all liens, encumbrances or
restrictions, except for:
(1) taxes and assessments which may become due and payable
after the date of this Agreement; and
(2) easements or other minor restrictions with respect to
its property which do not materially affect the
present use of such property.
I. There are no unpaid assessments or proposed assessments of
State or Federal income taxes pending against LLI. All
liabilities for Federal and State income or franchise taxes,
as shown on the tax returns filed, or to be filed, by LLI,
have been paid or the liability therefor has been noted in
the LLI Financial Statements, and all Federal and State
income or franchise taxes for periods subsequent to the
periods covered by said returns likewise have been paid or
adequately accrued.
J. The LLI Shareholder is acquiring the common stock of the
Company solely for his own account, for investment, and not
with a view to any subsequent "distribution" thereof within
the meaning of the Act. The LLI Shareholder understands that
the Company's common stock issuable to him hereunder or
thereunder have not been registered under the Act or
securities laws of any State ("State Act") by reason of the
specific exemptions therefrom, which exemptions depend in
part upon their subjective investment intent as expressed
herein.
K. The LLI Shareholder hereby acknowledges that:
(1) he is an "Accredited Investor" as such term is defined
in Regulation D promulgated under the Act, or he has such
knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of
the proposed exchange of LLI's securities for securities of
the Company, and
(2) he is able to bear the economic risks of the investment
in the Company s shares of $0.0001 par value per share
common stock and he is able to protect his own interests in
an investment of this nature.
L. The LLI Shareholder will take any and all actions necessary
to file and use its best efforts to get effective the
registration of the Company s shares of $0.0001 par value
per share common stock for distribution to the G/O Colorado
Shareholders under either the Securities Act of 1933, as
amended or under the Section 12(g) of the Securities and
Exchange Act of 1934, as amended, on such timing as the
parties shall mutually agree.
LLI and the LLI Shareholder further represent and warrant that all of
the representations and warranties set forth above are true as of the date of
this Agreement, shall be true at the Closing Date and shall survive for a
period of two years from the Closing Date. Further, the Exhibits and Schedules
hereto and all other documents and information furnished to the Company and to
G/O Colorado and the Company's and G/O Colorado's representatives by LLI and
the LLI Shareholder pursuant hereto do not and will not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements made and to be made not misleading.
2. REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND BY G/O COLORADO.
The Company and G/O Colorado hereby make the following express representations
and warranties to LLI and the LLI Shareholder:
A. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and G/O
Colorado is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado and each has
the corporate power to own its properties and carry on its
business as now being conducted. Copies of the Company's
Certificate of Incorporation and By-Laws and G/O Colorado's
Articles of Incorporation and By-Laws have heretofore been
furnished to LLI and the LLI Shareholder by the Company and by G/O
Colorado, and all such copies are true, correct and complete
copies of the original Certificate of Incorporation and Articles
of Incorporation and By-Laws including all amendments thereto.
B. The Company has the corporate authority to issue a total of
50,000,000 shares of $0.0001 par value per common stock, of which
2,000,000 shares are presently issued and outstanding and
10,000,000 shares of $0.0001 par value per share Preferred Stock
none of which are outstanding. The Company has no warrants or
other rights or options outstanding. G/O Colorado has the
corporate authority to issue a total of 20,000,000 shares of $0.01
par value per share common stock, of which 5,985,372 shares are
presently issued and outstanding.
C. The Company has no subsidiaries. G/O Colorado has those
subsidiaries set forth in Schedule A hereto.
D. Attached hereto as Schedule B is a list of all documents filed by
G/O Colorado with the United States Securities & Exchange
Commission for the past twelve months as of the date of this
Agreement (the "Disclosure Information"). The Company has provided
to the LLI Shareholder copies of each item set forth on Schedule
B.
E. The audited Financial Statements of G/O Colorado contained in the
G/O Colorado Form 10KSB included in the Disclosure Information
described in Schedule B hereto (the "Company's Financial
Statements"), except as further described in Schedule B hereto,
constitute substantially true and correct statements of the
financial condition of the Company and the Company's assets,
liabilities and income as of such date. Since the date of the
Balance Sheet contained in the Financial Statements, except as
described in Schedule B the Company has not:
(i) issued any additional shares of its common stock to
any person;
(ii) paid or declared any dividends or distributions of
capital, surplus, or profits with respect to any of its
issued and outstanding shares of common stock;
(iii)paid or agreed to pay any consideration in redemption of
any of its issued and outstanding shares of common
stock; or
(iv) entered into any other transaction or agreement which
would, or might, materially impair the shareholder's
equity of the Company as reflected in such Balance
Sheet.
F. The execution and delivery of this Agreement, and issuance of
the Company's Shares required to be issued hereunder, will
have been duly authorized by all necessary corporate action
and neither the execution nor delivery of this Agreement nor
issuance of the Company's Shares, nor the performance,
observance or compliance with the terms and provisions of this
Agreement will violate any provision of law, any order of any
court or other governmental agency, the Certificate of
Incorporation or By-Laws of the Company or the Articles of
Incorporation or By-Laws of G/O Colorado or any indenture,
agreement or other instrument to which the Company or G/O
Colorado is a party, or by which either is bound or by which
their property is bound.
G. Neither the Company nor G/O Colorado is involved in any
pending or threatened litigation which would, or might,
materially affect its financial condition and which has not
been:
(i) provided for in the G/O Colorado Financial Statements,
and
(ii) disclosed to LLI, and/or the LLI Shareholder in
writing.
H. There are no unpaid assessments or proposed assessments of
income taxes pending against the Company or G/O Colorado. All
liabilities for Federal and State income or franchise taxes,
as shown on the tax returns filed, or to be filed, by the
Company and G/O Colorado, have been paid or the liability
therefor has been provided for in the Balance Sheet contained
in the Disclosure Information set forth in Schedule B hereto
and all Federal and State income or franchise taxes for
periods subsequent to the periods covered by said returns
likewise have been paid or adequately accrued.
I. The Company's 8,000,000 shares of common stock, $0.0001 par
value per share, which will be delivered by the Company to the
LLI Shareholder pursuant to the terms of this Agreement, will,
on delivery in accordance with the terms hereof, be duly
authorized, validly issued and fully paid and non assessable.
J. The Company and G/O Colorado, upon execution and delivery of
this Agreement among the parties shall commence to take any
and all actions necessary to distribute to the shareholders of
G/O Colorado a total of 2,000,000 shares of the Company's
currently issued and outstanding $0.0001 par value per share
common stock held by G/O Colorado. In connection therewith G/O
Colorado, through its directors shall immediately distribute
the Company's 2,000,000 shares of $0.0001 par value per share
common stock to an escrow to be held by such escrow agent for
further distribution to those G/O Colorado Shareholders, or
their assigns, determined as of a dividend date selected by
G/O Colorado, upon registration by the Company of its, $0.0001
par value per share common stock, either pursuant to a
registration statement filed under the Securities Act of 1933,
as amended (the "Act") or pursuant to a registration statement
under Section 12(g) of the Securities Exchange Act of 1934, as
amended, all pursuant to a mutually satisfactory escrow
agreement to be executed among the G/O Colorado and the Escrow
Agent.
The Company further represents and warrants that all of the representations
and warranties set forth above are true as of the date of this Agreement,
shall be true Closing Date and shall survive for a period of two years from
the Closing Date.
3. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND G/O COLORADO. The
obligations of the Company and G/O Colorado hereunder shall be subject to the
following conditions:
A. The Company shall not have discovered any material error,
misstatement or omission in any of the representations and
warranties made by LLI or the LLI Shareholder herein and all
the terms and conditions of this Agreement to be performed and
complied with have been performed and complied with.
B. There shall have been no substantial adverse changes in the
financial condition, business or operations of LLI from the
date of this Reorganization Agreement, until the Closing Date,
except for changes resulting from operations in the usual and
ordinary course of its business, and between such dates no
business and assets of LLI shall have been materially
adversely affected as the result of any fire, explosion,
earthquake, flood, accident, strike, lockout, combination of
the workmen, taking over of any such assets by any
governmental authorities, riot, activities of armed forces, or
Acts of God or of the public enemies.
4. CONDITIONS TO THE OBLIGATIONS OF THE LLI SHAREHOLDER AND LLI. The
obligations of the LLI Shareholder and LLI hereunder are subject to the
following conditions:
A. The Shareholder and LLI shall not have discovered any material
error or misstatement in any of the representations and
warranties made by the Company herein and all the terms and
conditions of this Agreement to be performed and complied with
by the Company have been performed and complied with.
B. There shall have been no substantial adverse changes in the
financial condition, business or operations of the Company,
except for changes resulting from those operations in the
usual ordinary course of the business, and no business and
assets of the Company shall have been materially adversely
affected as the result of any fire, explosion, earthquake,
flood, accident, strike, lockout, combination of the workmen,
taking over of any such assets by any governmental
authorities, riot, activities of armed forces, or Acts of God
or of the public enemies.
C. G/O Colorado s board of directors shall have:
(i) adopted a resolution approving the distribution of a total
of 2,000,000 shares of the Company s $0.0001 par value per
share common stock to its shareholders.
(ii) distributed the Company's 2,000,000 shares of $0.0001
par value per share common stock to an escrow agent to be held
by such escrow agent for further distribution to those G/O
Colorado Shareholders or their assigns, determined as of a
dividend date selected by G/O Colorado, upon registration of
its $0.0001 par value per share common stock, either under the
Securities Act of 1933, as amended or under Section 12(g) of
the Securities Exchange Act of 1934, as amended.
5. CONDITION SUBSEQUENT. The following conditions shall occur within a
reasonable time after the Closing contemplated hereby:
A. G/O Colorado shall distribute 2,000,000 shares of the Company
$0.0001 par value per share common stock to its shareholders.
B. The Company shall prepare and file with the SEC a registration
statement, thereby registering its $0.0001 par value per share
common stock, either pursuant to the Securities Act of 1933,
as amended or pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended,
6. CLOSING DATE. The Closing of this Agreement ("Closing Date") shall
take place on or before September 18, 1996.
7. EXCHANGE OF SECURITIES. Subject to the terms and conditions set forth
herein, at the time of the Closing referred to in Section 6 hereof, the
Company will issue and deliver, or cause to be issued and delivered to the LLI
Shareholder, certificates evidencing the ownership of the securities as
designated therein and concurrently therewith the LLI Shareholder shall
directly or through his agent deliver or cause to be delivered to the Company,
certificates evidencing the ownership of securities as designated therein, all
duly endorsed to the Company.
8. ACTIONS AT THE CLOSING. At the Closing of this Agreement, the Company
and the LLI Shareholder will each deliver, or cause to be delivered to the
other, the securities to be exchanged in accordance with Section 7 of this
Agreement and each party shall pay any and all Federal and State taxes
required to be paid in connection with the issuance and the delivery of their
own securities. All stock certificates shall be in the name of the party to
which the same are deliverable. In addition to the above mentioned exchange
of certificates, the following transactions will take place at the Closing.
The Company and G/O Colorado will deliver to the LLI Shareholder and LLI:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by the Company and G/O Colorado to
authorize the execution, delivery and performance of this
Agreement;
B. A certificate executed by a principal officer of the Company
and G/O Colorado attesting to the fact that all of the
foregoing representations and warranties of the Company and
G/O Colorado are true and correct as of the Closing Date and
that all of the conditions to the obligations of the LLI
Shareholder which are to be performed by the Company and G/O
Colorado have been performed as of the Closing Date; and
The LLI Shareholder and LLI will deliver to the Company:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by LLI to authorize the execution,
delivery and performance of this Agreement;
B. A certificate by a principal officer of LLI and by the LLI
Shareholder that each of the representations and warranties of
the LLI Shareholder and LLI are true and correct as of the
Closing Date and that all of the conditions to the obligations
of the Company and G/O Colorado which are to be performed by
LLI and the Shareholder have been performed as of the Closing
Date.
9. CONDUCT OF BUSINESS. Between the date hereof and the Closing Date,
LLI shall conduct its business in the same manner in which it has heretofore
been conducted and the Shareholder will not permit LLI to: (1) enter into any
contract, other than in the ordinary course of business, or (2) declare or
make any distribution in the nature of a dividend or return of capital to the
LLI Shareholder, without first obtaining the written consent of the Company.
10. CLOSING DATE. The Closing of this Agreement (the "Closing Date")
shall take place on or before September 18, 1996.
11. BOARD OF DIRECTORS. Immediately prior to the Closing, the Boards of
Directors of G/O Colorado, the Company and LLI shall hold a meeting at which
the Company's John L. Burns, one of the Company's members of its Board of
Director will resign and will be replaced by designees of the LLI Shareholder.
12. FUTURE REGISTRATION. The LLI Shareholder understands that because
the Company's share of $0.0001 par value per share common stock to be
delivered to him hereunder have not been registered under the Act or any State
Act, he must hold the Company's Shares indefinitely, and cannot dispose of any
or all of them unless such they are subsequently registered under the Act and
any applicable State Act, or exemptions from registration are available. The
LLI Shareholder acknowledges and understands that, except as provided herein,
he has no independent right to require the Company to register the Shares. The
LLI Shareholder further understands that the Company may, as a condition to
the transfer of any of the Shares, require that the request for transfer be
accompanied by an opinion of legal counsel, in form and substance satisfactory
to the Company, provided at such LLI Shareholder's expense, to the effect that
the proposed transfer does not result in violation of the Act or any
applicable State Act, unless such transfer is covered by an effective
registration statement under the Act and is in compliance with all applicable
State Acts.
13. TRANSFERABILITY. All Shares which are issued to the LLI Shareholder
pursuant to the terms of this Agreement shall be "restricted securities"
within the meaning of Rule 144 of the Act. The Company shall issue stop
transfer instructions to the transfer agent for its common stock and with
respect to the Shares and shall place the following legend, or one
substantially similar thereto, on the certificates representing such Shares:
"The securities represented by this certificate have been acquired
pursuant to a transaction effected in reliance upon an exemption
under the Securities Act of 1933, as amended (the "Act"), and have
not been the subject to a Registration Statement under the Act or
any state securities act. The securities may not be sold or
otherwise transferred in the absence of such registration or
applicable exemption therefrom under the Act or any applicable state
securities act."
14. ACCESS TO INFORMATION. Concurrently herewith, the Company and G/O
Colorado have delivered to the LLI Shareholder and his respective
representatives those materials set forth in Schedule B hereto along with
correct and complete copies of all documents and records requested by them.
In addition, the LLI Shareholder has had the opportunity to ask questions of,
and received answers from, officers and directors of the Company and G/O
Colorado, and persons acting on its behalf concerning such information and the
terms and conditions of the Agreement, and have received sufficient
information relating to the Company and to G/O Colorado to enable them to make
an informed decision with respect to the acquisition of the Company's common
stock.
15. NO SOLICITATION. At no time was the LLI Shareholder presented with
or solicited by any leaflet, public promotion meeting, circular, newspaper or
magazine article, radio or television advertisement, or any other form of
general advertising in connection with his acquisition of shares of the
Company's $0.0001 par value per share common stock to be issued hereunder.
16. EXPENSES. The LLI Shareholder and LLI and the Company and G/O
Colorado shall each pay their respective expenses incident to this Agreement
and the transactions contemplated hereby, including all fees of their counsel
and accountants, whether or not such transactions shall be consummated.
17. FINDERS. The LLI Shareholder and LLI shall indemnify and hold the
Company and G/O Colorado harmless against and with respect to all claims or
brokerage or other commissions relative to this Agreement or the transactions
contemplated hereby, based on any agreements, arrangements, or understandings
claimed to have been made by the LLI Shareholder and LLI with any third
party. The Company and G/O Colorado shall indemnify and hold the LLI
Shareholder and LLI harmless against and with respect to all claims for
brokerage or other commissions relative to this Agreement or the transactions
contemplated hereby, based in any agreements, arrangements, or understandings
claimed to have been made by the Company and/or G/O Colorado with any third
party. Except as provided in Exhibit 3, each party to this Agreement
represents and warrants to each other party that it has not dealt with and
does not know of any person, firm or corporation asserting a brokerage,
finder's or similar claim in connection with the making or negotiation of this
Agreement or the transactions contemplated hereby.
18. MISCELLANEOUS.
A. Each Exhibit, Certificate and Schedule to this Agreement shall
be considered a part hereof as if set forth herein in full.
Notwithstanding any other provision herein to the contrary,
all Exhibits, Certificates, Schedules or other instruments
provided for herein and not delivered at the time of execution
of this Agreement shall be delivered or completed on or before
Closing; and it shall be deemed a condition precedent to the
Closing hereunder that each such Exhibit, Certificate,
Schedule or other instrument shall meet with the approval of
the party to whom such Exhibit, Certificate, Schedule or other
instrument is to be delivered hereunder.
B. The provisions of this Agreement shall be self-operative and
shall not require further agreement by the parties except as
may be herein specifically provided to the contrary; provided,
however, at the request of either party, the other party shall
execute such additional instruments and take such additional
acts as the requesting party may deem necessary to effectuate
this Agreement.
C. Except as herein expressly provided to the contrary, whenever
this Agreement requires any consent or approval to be given by
either party or either party must or may exercise discretion,
the parties agree that such consent or approval shall not be
unreasonably withheld or delayed and such discretion shall be
reasonably exercised.
D. In the event either party elects to incur legal expenses to
enforce or interpret any provision of this Agreement, the
prevailing party will be entitled to recover such legal
expenses, including, without limitation, attorney's fees,
costs and necessary disbursements, in addition to any other
relief to which such party shall be entitled.
E. The parties agree that this Agreement shall be governed by and
construed in accordance with the laws of the State of Texas,
and that the courts of the State of Texas shall be the
exclusive courts of jurisdiction and venue for any litigation,
special proceeding or other proceeding as between the parties
that may be brought, or arise out of, in connection with or by
reason of this Agreement.
F. Subject to provisions herein to the contrary, this Agreement
shall inure to the benefit of and be binding upon the parties
hereto and their respective legal representatives, successors
and assigns; provided, however, that no party may assign this
Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld. All
provisions contained herein shall be binding upon the
respective parties their legal representatives, successors and
assigns unless otherwise explicitly stated; provided however
that the use of a party's name without more shall not be
deemed such an explicit statement.
G. The transactions contemplated hereby shall be effective for
accounting purposes as of the Closing Date, unless otherwise
agreed in writing by the LLI Shareholder and the Company and
G/O Colorado.
H. The LLI Shareholder and the Company and G/O Colorado mutually
agree that no party hereto shall release, publish or otherwise
make available to the public in any manner whatsoever any
information or announcement regarding the transactions herein
contemplated without the prior written consent of the LLI
Shareholder and the Company and G/O Colorado, except for
information and filings reasonably necessary to be directed to
governmental agencies to fully and lawfully effect the
transactions herein contemplated.
I. The waiver by either party of breach or violation of any
provision of this Agreement shall not operate as, or be
construed to be, a waiver of any subsequent breach of the same
or other provision hereof.
J. Any notice, demand or communication required, permitted, or
desired to be given hereunder shall be deemed effectively
given when personally delivered or mailed by prepaid certified
mail, return receipt requested, addressed as follows:
If to Shareholder or LLI:
Leather Leather, Inc.
13465 B. Inwood Rd.
Dallas, Texas 75244
With Copies to:
Brewer & Pritchard P.C.
Attention: Thomas Pritchard, Esq.
1111 Bagby Street
Suite 2450
Houston, Texas 77002
If to the Company:
G/O International, Inc.
11849 Wink
Houston, Texas 77042
With Copies to:
Leonard W. Burningham, Esq.
Hermes Building Suite 200
455 East Fifth South
Salt Lake City, Utah 84111-3323
or to such other address, and to the attention of such other
person or officer as any party may designate, with copies
thereof to the respective counsel thereof as notified by such
party.
K. In the event any provision of this Agreement is held to be
invalid, illegal or unenforceable for any reason and in any
respect, such invalidity, illegality, or un-enforceability
shall in no event affect, prejudice or disturb the validity of
the remainder of this Agreement, which shall be in full force
and effect, enforceable in accordance with its terms.
L. Whenever the context of this Agreement requires, the gender of
all words herein shall include the masculine, feminine and
neuter, and the number of all words herein shall include the
singular and plural.
M. The divisions of this Agreement into sections and subsections
and the use of captions and headings in connection therewith
are solely for convenience and shall have no legal effect in
construing the provisions of this Agreement.
N. This Agreement supersedes all previous contracts, and
constitutes the entire agreement of whatsoever kind or nature
existing between or among the parties respecting the within
subject matter and no party shall be entitled to benefits
other than those specified herein. As between or among the
parties, no oral statements or prior written material not
specifically incorporated herein shall be of any force and
effect; the parties specifically acknowledge that in entering
into and executing this Agreement, the parties rely solely
upon the representations and agreements contained in this
Agreement and no others. All prior representations or
agreements, whether written or verbal, not expressly
incorporated herein are superseded and no changes in or
additions to this Agreement shall be recognized unless and
until made in writing and signed by all parties hereto. The
provisions of this Agreement shall survive the Closing and
remain of full force and effect for a period of two years; All
other agreements described, referenced or contemplated herein
shall not be merged herewith. This Agreement may be executed
in two or more counterparts, each and all of which together
shall constitute but one and the same instrument.
REORGANIZATION PLAN AND AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Reorganization Plan and
Agreement among Leather Leather, Inc. a corporation formed under the laws of
Texas, G/O International, Inc., a corporation formed under the laws of
Colorado, its wholly owned subsidiary corporation G/O International Group
(USA), Inc. and Kent Bouldin, an individual residing in the Dallas Texas,
being the sole the shareholder Leather Leather, Inc. is executed by Leather
Leather, Inc. as of the date first written above.
Leather Leather, Inc., a Texas
corporation
By:/ss/Kent Bouldin
Its Chairman
REORGANIZATION PLAN AND AGREEMENT SIGNATURE PAGE
LEATHER LEATHER SHAREHOLDER
The undersigned, in his capacity as the beneficial owner of 10,000 shares
of the capital stock of Leather Leather, Inc., a corporation formed under the
State of Texas (the Company ) hereby joins in and executes the Reorganization
Plan and Agreement between and among the Company, G/O International, Inc., a
Colorado corporation, its wholly owned subsidiary G/O International Group
(USA) Inc., a Delaware corporation and those Kent Bouldin, an individual
residing in Dallas Texas, intending to be bound hereby to the terms and
conditions of such Reorganization Plan and Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature
Page on this 25th day of September, 1996.
/ss/:Kent Bouldin
Sole Shareholder
REORGANIZATION PLAN AND AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Reorganization Plan and
Agreement among Leather Leather, Inc. a corporation formed under the laws of
Texas, G/O International, Inc., a corporation formed under the laws of
Colorado, its wholly owned subsidiary corporation G/O International Group
(USA), Inc. and Kent Bouldin, an individual residing in the Dallas Texas,
being the sole the shareholder Leather Leather, Inc. is executed by G/O
International, Inc. as of the date first written above.
G/O International, Inc., a Colorado
corporation
By:/ss/John L. Burns
Its President
REORGANIZATION PLAN AND AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Reorganization Plan and
Agreement among Leather Leather, Inc. a corporation formed under the laws of
Texas, G/O International, Inc., a corporation formed under the laws of
Colorado, its wholly owned subsidiary corporation G/O International Group
(USA), Inc. and Kent Bouldin, an individual residing in the Dallas Texas,
being the sole the shareholder Leather Leather, Inc. is executed by G/O
International Group(USA) Inc. as of the date first written above.
G/O International Group (USA) Inc., a
Delaware corporation
By:/ss/Samuel Bono
Its Director
Schedule A G/O International, Inc.-Subsidiaries
1. G/O International (Cayman) Inc., a Cayman Island corporation
2. Waterbury Resources Inc., a Cayman Island corporation
3. Daimyo Industries Ltd., a Cayman Island corporation
4. Antares Trading Inc., a Cayman Island corporation
5. G/O International Group (USA), Inc., a Delaware corporation
Schedule B- G/O International, Inc.
Documents filed with the Securities & Exchange Commission
and changes
The Form 10-KSB for the fiscal year ending December 31, 1995 ("1995 10KSB").
The Form 8K dated August 7, 1996 ("8K").
Since the date of the G/O Colorado audited financial statements contained in
the Form 10KSB, G/O Colorado has:
1. Sold an additional 2,000,000 shares of its $$0.01 par value per share
common stock for total consideration of $20,000, which has been utilized to
defray expenses of the Company. Such shares of common stock were sold by G/O
Colorado to non U.S. Persons as such term is defined in Regulation S and
were sold pursuant to Rule 903(c)(2) of Regulation S as promulgated under the
Act.
2. Formed those wholly owned subsidiary corporations set forth in Schedule A
to this Reorganization Plan and Agreement.
3. Entered into the transaction disclosed in the Form 8K.
Exhibit 1- Leather Leather, Inc. Financial Statements
JAMES SMITH & COMPANY
[letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Stockholder of Leather Leather, Inc.
We have audited the accompaying balance sheet of Leather Leather, Inc.
(a Texas Corporation) as of June 30, 1996, and the related slatements of
operations, changes in stockholder's deficit and cash flows for the six
months then ended, and the period from inception (April 1, 1995) to
December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
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 financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes asseessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Leather
Leather, Inc. as of June 30, 1996, and the results of its operations and
its cash flows for the six months then ended and for the initial period
ended December 31,1995, in conformity with generally accepted accounting
principles.
JAMES SMITH & COMPANY
A Professional Corporation
August l, 1996
Dallas, Texas
Leather Leather, Inc.
BALANCE SHEET
June 30, 1996
ASSETS
Current Assets
Cash $ 600
Accounts receivable:
Trade, net of S6,000 allowance for doubtfiul accounts 20,027
Stockholder (Note 6) 900
Employees 2,199
Notes receivable stockholder (current portion) (Note 6) 51,773
Inventory (Note 2) 599,655
Prepaid assets 9,635
Total Current Assets 684,789
Property and Equipment, net (Note 3) 186,846
Notes Receivable-Stockholder, less current portion (Note 6) 142,818
TOTAL ASSETS $ 1,014,453
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current Liabilities
Accounts payable $ 844,069
Customer deposit 319,509
Current portion of capital leases (Note 8) 3,503
Accrued liabilities (Note 9) 518,309
Total Current Liabilities 1,685,390
Capital leases long-term (Note 8) 1,632
Deferred rent (Note 4) 38,748
Total Liabilities 1,725,770
Stockholder's Deficit
Common stock - $0.01 par value; 100,000 shares
authorized, 10,000 shares issued and outstanding 100
Paid-in capital 900
Accumulated deficit (7l2,317)
Total Stockholder's Deficit (712,317)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT $ 1,014,453
The accompanying notes are an integral part of these financial statements.
<TABLE>
Leather Leather, Inc.
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996, and
For the Period From Inception (April 1, 1995) to December 31, 1995
<S> <C> <C>
1996 1995
Revenue $2,284,116 2,215,875
Cost of sales 1,444,351 1,838,235
Gross profit 839,765 377,640
General and Administrative Expenses 802,550 1,124,240
Income (loss) from operations 37,215 (746,600)
Other income (expense)
Other income 10,844 0
Interest expense (4,148) (9,628)
Total other income and (expense) 6,696 (9,628)
NET INCOME (LOSS) 43,911 (756,228)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
Leather Leather, Inc.
STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIT
For the Six Months Ended June 30, 1996, and
For the Period From Inception (April 1, 1995) to December 31, 1995
Common Common Paid-In Total
Stock, Stock, Capital Accumulated Stockholder's
# of shares $ value $ value Deficit Deficit
<S> <C> <C> <C> <C> <C>
Balance,
April 1, 1995 10,000 $100 $900 $0 $1,000
Net loss - - - (756,228) (756,228)
Balance,
December 31,
1995 10,000 $100 $900 $(756,228) $(756,228)
Net income - - - 43,911 43,911
Balance,
June 30,
1996 10,000 $100 $900 $(712,317) $(711,317)
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<TABLE>
Leather Leather, Inc
CASH FLOW STATEMENT
For the Six Months Ended June 30, 1996, and
For the Period From Inception (April 1, 1995) to December 31, 1995
<S> <C> <C>
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 43,911 $(756,228)
Adjustments to reconcile net income
to net cash provided by operating
actvities
Depreciation and amortization 17,874 18,877
(increase) decrease in:
Accounts receivable (16,415) (5,811)
Receivable from stockholder 59,197 (59,197)
Inventory (186,310) (413,344)
Prepaid expenses (8,232) (1,403)
Increase (decrease) in:
Accounts payable (71,268) 915,337
Customer deposits 62,630 256,879
Deferred rent 9,069 29,678
Accrued liabilities 270,926 247,383
NET CASH USED BY OPERATING ACTIVITIES 181,382 232,171
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (43,213) (180,384)
NET CASH USED BY INVESTING ACTIVITIES (43,213) (180,384)
CASH FLOWS FROM FINANCING ACTIVITIES
New borrowing 2,618 4,061
Debt reduction (103) (1,441)
Issuance of note receivable (194,541) 0
NET CASH PROVIDED BY FINANCING ACTIVITIES (192,076) 2,620
NET INCREASE IN CASH (53,907) 54,407
CASH AT BEGINNING OF PERIOD 54,507 100
CASH AT END OF PERIOD 600 54,507
</TABLE>
The accompanying notes are an integral part of these financia1
statements.
Leather Leather, Inc.
Notes to Financial Statement
June 30, 1996
Note 1- Summary of Significant Accounting Policies
Nature of Operations
Leather Leather, Inc., a Texas S-Corporation (the "Company") manufactures
and sells leather furniture, primarily within the Dallas-Fort Worth and
Houston areas. The Company was incorporated effective December 15, 1994.
Although some start-up costs were incurred during the first three months of
l995, the Company did not initiate operations until April 1, 1995.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenues and expenses during the
reported period. Actual results could differ from these estimates.
Inventory
Inventories are stated at the lower of cost determined by the first-in-
first-out method or market.
Depreciation
The cost of property and equipment is depreciated over the estimated useful
lives of the related assets. Leasehold improvements are amortized over the
lesser of the related lease or the estimated useful lives of the assets.
Depreciation is computed on the straight-line method used for financial
reporting purposes and on the accelerated method used for income tax
purposes.
Advertising Costs
Advertising costs are charged to operations when incurred. Advertising
expense charged to operations was $234,664 for the six months ended June 30,
1996, and $439,032 for the period from inception (April 1, 1995) to December
31, l995.
Income Taxes
The Company has elected to be taxed under the provisions of Subchapter S of
the Internal Revenue Code. Under those provisions, the Company does not pay
Federal corporate income taxes on its taxable income. Instead, the
stockholder is liable for individual Federal income taxes on the Company's
net income.
Cash
For purposes of reporting cash flows, cash refers to cash in banks
and/or on hand.
Note 2 - Inventories
Inventories at June 30, 1996, consist of:
Raw Materials $ 277,097
Work in process 15,150
Finished goods and floor samples 307,408
$ 599,655
Note 3 - Property and Equipment
Property and equipment at June 30, 1996, consist of the following:
Furniture and Fixtures $ 32,657
Equipment 71,778
Leasehold Improvements 119,162
223,597
Less Accumulated Depreciation (36,751)
$ 186,846
Depreciation expense charged to operations was $17,874 for the six
months ended June 30, 1996, and $18,877 for the period from
inception (April 1, l99S) to December 31,1995.
Note 4 - Deferred Rent
Ihe Company records its building rent expense using the straight-
line method. Using this method the Company has a defeferred rent
liability of $38,748 at June 30, 1996. This liability will become
due as higher lease terms become effective over the next five
years.
Note 5 - Operating Leases
The Company leases its facilities and equipment. Total rental expenses
under these leases were $61,136 and $53,981 for the six months ended
June 30, 1996, and for the period from inception (April 1, 1995)
through December 31,1995, respectively. Future minimum lease
commitments, for the years ended June 30, under these agreements are
as follows:
1997 $ 201,264
1998 313,104
1999 334,288
- 2000 301,652
2001 215,611
$ 1,365,919
In April, 1996, the Company entered into a lease agreement for
showroom space in Austin, Texas beginning September, 1996. The lease
is for ten years, and is included in schedule of future minimum lease
commitments.
Note C - Related Party Transactions
At June 30, 1996, the Company's sole stockholder and president owed
the Company $194,591, which represented cash advances of $135,394 and
$59,197 made during the six months ended June 30, 1996, and the period
from inception (April 1, 1995) to December 31, 1995, respectively.
No compensation to the Company's sole stockholder and president has
been accrued as of June 30,1996, nor expensed for the six months ended
June 30, 1996, and the period from inception (April 1, 1995) to
December 31, 1995.
On July 22, 1996, the stockholder signed a promissory note of $194,591
at 7% interest. Payments of $57,449 including interest will be due and
payable in four annual installments beginning December 31, 1996.
In addition, as of June 30, 1996, the sole stockholder owed the
Company $900 in capital surplus in accordance with the consent of the
sole director (who is also the Company's sole stockholder) on February
10, 1995.
Note 7 - Supplemental Cash Flow Information
Cash paid for interest for the six months ended June 30, 1996, and
for the period from inception (April 1, 1995) to December 31, 1995,
were as follows:
1996 1995
Interest $ 4,589 $ 9,483
Note 8 - Capital Leases
Following is a summary of property held under capital leases as of
June 30, 1996.
Office equipment $ 3,133
Manufacturing equipment 5,795
8,928
Less: accumulated depreciation (1,582)
7,346
Minimum future lease payments under capital leases as of June 30,
1996, for each of the next three years and in the aggregate are:
Year ended June 30,
1997 $ 4,147
1998 1,237
1999 927
Total Minimum lease payments 6,311
Less: amount representing interest (1,176)
Present value of net minimum lease payments $ 5,135
Interest rates on capitalized lease vary from 28.9 % to 32.7% and
are imputed based on the lower of the Company's incremental
borrowing rate at the inception of each lease or the lessor's
implicit rate of return.
Note 9 - Accrued Sales Taxes
At June 30, 1996, the Company owed $363,716 in sales taxes to the
Comptroller of Public Accounts, State of Texas, for the period
beginning January 1, 1995 through June 30, 1996. Such amount is
included in accrued liabilities on the accompanying balance sheet. On
July 23, 1996, the Company entered into a Voluntary Disclosure
Agreement with the Comptroller's Office which requires payment of the
sales tax liability over six months, with at least one equal payment
per month. As part of this agreement, all penalties will be waived and
interest will be waived on the uncollected taxes paid within ninety
days. On July 23, 1996, the Company made an initial payment of $75,000
to the Comptroller's Office.
The Company has recorded $1,299 in accrued interest as of June 30,
1996. This represents estimated interest at 9% due for the portion of
the liability which will not be paid within the prescribed ninety day
period.
Note 10- Going Concern
These statements are presented on the basis that the Company is a
going concern. Going concern contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business
over a reasonable length of time. Although the accompanying financial
statements show net income from operations for the six months ended
June 30, 1996, the Company has a stockholder's deficit of $711,317 and
current liabilities exceed current assets by $1,000,601.
Management plans a private placement equity offering of $1,000,000,
which will eliminate the stockholder's deficit and significantly
reduce the negative current ratio. Furthermore, the Company believa
that current market conditions, coupled with the anticipated expansion
of operations in Houston and Austin, will increase cash flow
suffficiently to fund current liabilities and expenses.
Exhibit 2-Investment Letter
G/O International Group (USA) Inc.
and
G/O International, Inc.
INVESTMENT LETTER
G/O International Group (USA), Inc.
and
G/O International, Inc.
11849 Wink
Houston, Texas 77024
Re: Acquisition of 8,000,000 shares of the $0.0001 par value per share common
stock of G/O International Group (USA), Inc., a Delaware corporation (the
"Company").
Gentlemen,
Pursuant to that certain Reorganization Plan and Agreement ("Plan") among
the Company, G/O International, Inc., a Colorado corporation, the Company s
parent ("G/O Colorado"), Leather Leather, Inc. a Texas corporation ("LLI") and
Kent Bouldin, an individual residing in Dallas Texas and the holder of 10,000
shares of the capital stock of LLI, which constitutes one hundred percent
(100%) of the issued and outstanding capital stock of LLI (the "LLI
Shareholder") the undersigned has agreed to exchange his shares of the capital
stock of LLI for 8,000,000 shares of the Company s $0.0001 par value per share
common stock as set forth in the Plan (the "Shares"). In connection therewith,
the undersigned hereby acknowledges that he has approved this exchange; that
he is aware of all of the terms and conditions of the Plan; that he has
received and personally reviewed a copy of any and all material documents
regarding the Company and G/O Colorado which have been delivered for his,
review, including those documents set forth in Schedule B of the Plan and,
based upon such review, desires to acquire the Company's Shares, upon the
terms set forth in the Plan. In connection therewith:
1. Representations and Warranties of the Undersigned.
(a) Respecting Offering Materials. The undersigned hereby represent and
warrant that he:
(1) has been furnished with those materials and documents set
forth in Schedule B to the Plan ("Disclosure Materials").
(2) has been given the opportunity to ask questions of and receive
answers from the officers and directors of the Company and G/O
Colorado with respect to the issuance of the Shares pursuant
to the Plan, the Shares, the business of the Company and G/O
Colorado and any other matters which he considered to be
material to his investment decision and all such questions
have been answered to his, her or its full satisfaction;
(3) has not relied on any information or representation other than
those set forth in the Company's and G/O Colorado s Disclosure
Materials and such other written information and
representations as have been provided by the officers and
directors of the Company and G/O Colorado pursuant to a
specific question or request for additional information;
(4) has not been presented with or solicited by any leaflet,
public promotional meeting, circular, newspaper or magazine
article, radio or television advertisement, or any other form
of general advertising.
(b) Respecting Investor Suitability. The undersigned hereby represents
and warrants that he:
(1) is an "Accredited Investors" as that term is defined in
Securities and Exchange Commission Regulation D, promulgated
under the Securities Act of 1933, as amended (the Act );
(2) is capable of bearing the high degree of economic risk
associated with this investment including, but not limited to,
the possibility of complete loss of all his investment
capital;
(3) has sufficient financial and other resources to provide for
anticipated financial needs, without taking into account any
income which may be generated as a result of his investment in
the Shares, and has no need for liquidity with respect to the
investment in the Shares;
(4) has total investments in illiquid investments that are
reasonable in relation to his net worth and can afford the
total loss of the investment in the Shares;
(5) has had substantial experience in the business of investments
in one or more of the following: (i) investment experience
with securities, such as stock and bonds; (ii) ownership of
interests in new ventures and start-up companies; and (iii)
experience in business and financial dealings; and
(6) can protect his interests in an investment of this nature and
does not have a "Purchaser Representative," as that term is
defined in Regulation D of the Act and does not need such
Representative.
(7) understands and agrees that the Shares acquired pursuant to
the Plan have not been and will not be registered under the
Act, that the Shares are being offered and sold in reliance
upon the exemption from registration afforded by Section 4(2)
and Rule 506 of Regulation D as promulgated under the Act and
that the Shares have not been registered with any state
securities commission or other governmental authority.
Undersigned hereby acknowledge that pursuant to the
requirements of Section 4(2) and Rule 506 or Regulation D, the
Shares acquired from the Company may not be transferred, sold
or otherwise exchanged unless registered or in transactions
that are exempt therefrom.
(8) undersigned acknowledges that the Company and G/O Colorado are
relying upon the representations made by him, herein in
issuing the Shares hereunder without registration under the
Act pursuant to an exemption therefrom as provided in Section
4(2) and Rule 506 of Regulation D promulgated thereunder.
Undersigned has consulted with legal counsel in connection
with this transaction.
(9) is acquiring the Shares exclusively for his own account and
not for the account or benefit or on behalf of another person.
(c) Respecting Investment Liquidity. The undersigned hereby represent
and warrant that he:
(1) has been advised that the Shares have not been registered
under the Securities Act of 1933 in reliance on the exemption
provided by Section 4(2) and Rule 506 of Regulation D of the
Act relating to transactions not involving a public offering;
(2) understands that the issuance of the Shares has not been
approved or disapproved by the Securities and Exchange
Commission or the securities regulatory authority of any
state;
(3) understands that the Shares, are, and will continue to be,
unregistered securities which may not be assigned, sold,
transferred, conveyed or hypothecated to any person unless
such are subsequently registered under applicable Federal and
state law, or unless an exemption from such registration is
available to both the undersigned and the proposed transferee
under such laws;
(4) understands that, the Company has no obligation or intention
to register the Shares for sale under the Act;
(5) understand that there is at present a limited public market
for the Shares and that the lack of a liquid market may make
it impossible to liquidate the Shares when desired or at then
current asking price, and there can be no assurances that an
active public market will ever develop; and
(6) understands and acknowledges that this investment may be long
term, must be held indefinitely, and is, by nature, highly
speculative.
Undersigned further represent and warrant that all of the representations and
warranties set forth above are true as of the date of this Investment Letter.
2. Representations and Warranties of the Company
a. The Company is a corporation organized under the laws of
the State of Delaware with full corporate authority to conduct its
business as now being conducted,
b. The issuance of the Shares required to be delivered by the
Company pursuant to this Agreement, will have been duly authorized
by all necessary corporate action by the Company and will not
violate any provision of the corporate statutes or similar organic
documents of the Company.
c. Neither the execution nor delivery of this Investment
Letter nor the issuance of Shares, nor the performance, observance
or compliance with the terms and provisions of this Investment
Letter by the Company will violate any provision of law, any order
of any court or other governmental agency, or any indenture,
agreement or other instrument to which the Company is a party or by
which the Company is bound. This Investment Letter, upon its
execution and delivery by the Company and assuming the due
authorization, execution and delivery by the other parties hereto,
will be the valid, binding, and legally enforceable obligation of
the Company.
d. The Shares, when issued to undersigned will be duly and
validly authorized and issued on a fully paid basis with no further
right of assessment by the Company. In order to further compliance
with the requirements of Regulation D, the Company shall cause the
certificates delivered by the Company's transfer agent for delivery
to the Purchaser to bear the following legend or one substantially
similar thereto, to be contained on the certificate representing
the Shares:
"The securities represented by this certificate have been
acquired pursuant to a transaction effected in reliance
upon an exemption under the Securities Act of 1933, as
amended (the "Act"), and have not been the subject to a
Registration Statement under the Act or any state
securities act. The securities may not be sold or
otherwise transferred in the absence of such registration
or applicable exemption therefrom under the Act or any
applicable state securities act."
3. Express Covenants of the Undersigned.
(a) Respecting Resales and Transfers. The undersigned
expressly represent, covenant and warrant that he:
(1) will not transfer or assign this Investment Letter
or any of his rights hereunder, and further agrees
that the assignment and transferability of the
Shares shall be made only in accordance with this
Investment Letter and the Plan; and
(2) will not, without the prior written consent of the
Company, assign, sell, transfer, convey or
hypothecate any interest in the Shares to any
person, unless the proposed transfer may be
lawfully completed without such consent under the
applicable provisions of the Securities and
Exchange Commission Rule 144 and/or Regulation D or
pursuant to a registration.
(b) Respecting Indemnification of the Company. The
undersigned represents, warrants and agrees that he will
indemnify and hold the Company and each of its officers,
directors and principal shareholders harmless from and
against all costs and expenses, including attorney's
fees, judgments and amounts paid in settlement, which may
be paid or incurred by any such person in connection with
or as a result of any claim, demand, action or right of
action which in anyway arises from or relates to any
breach by the undersigned of any representation, warranty
or covenant set forth in this Investment Letter or any
incomplete, evasive or misleading answer to any question
set forth in herein which has been completed by him and
submitted herewith.
4. Restrictive Legend. The Company intends to place the
following restrictive legend, or a legend similar thereto, on each
certificate representing the Shares:
"The securities represented by this certificate have
been acquired pursuant to a transaction effected in
reliance upon an exemption under the Securities Act of
1933, as amended (the "Act"), and have not been the
subject to a Registration Statement under the Act or any
state securities act. The securities may not be sold or
otherwise transferred in the absence of such registration
or applicable exemption therefrom under the Act or any
applicable state securities act."
5. Notices. All notices or other communications which are, or may
be, required or permitted to be given or made hereunder shall be in
writing and shall be delivered or mailed by registered or certified
mail, return receipt requested, postage prepaid, to the Company at
the address first above written and to the undersigned at the
address designated in undersigned's counterpart signature page to
this Investment Letter tendered herewith.
6. Governing Law. The offer and other transactions contemplated
under this Agreement shall be construed in accordance with the
governed by the laws of the Texas.
7. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject
matter hereof and may be amended only by a writing executed by all
parties.
IN WITNESS WHEREOF, the undersigned has executed this
Investment Letter on this ___ day of September, 1996.
/ss/Kent Bouldin
Signature of Subscriber
6724 Pebble Beach Drive
Plano, Texas 75043
8,000,000 shares
SUBSCRIPTION ACCEPTANCE
The subscription for Shares set forth in this Investment
Letter is accepted by the Company on this ___ day of September,
1996.
G/O International Group (USA) Inc.
By:/ss/Samuel Bono
Its President
Exhibit 3- Finders
DIVIDEND ESCROW AGREEMENT
THIS DIVIDEND ESCROW AGREEMENT is made and entered into as of the
17th day of September, 1996 between and among Thomas Pritchard,
Esq., of the law firm of Brewer & Pritchard P.C., 1111 Bagby
Street, Suite 2450, Houston, Texas 77002, as escrow agent,
("Escrow Agent"), and G/O International, Inc., a Colorado (the
"Company").
RECITALS
WHEREAS, the Company is the holder of a total of 2,000,000
shares of the $0.0001 par value per share common stock of G/O
International Group (USA) Inc., a Delaware corporation;
WHEREAS, the Company, pursuant to that certain Reorganization
Plan and Agreement dated September 17, 1996 among G/O International
Group (USA) Inc., a Delaware corporation ("G/O Group"), (ii) G/O
International, Inc., a Colorado corporation, (iii) Leather
Leather, Inc., a Texas corporation, and (iv) Kent Bouldin, an
individual residing in Dallas Texas (the "LLI Shareholder"), has
caused G/O Group to issue to the LLI Shareholder, in exchange for
10,000 shares of the capital stock of LLI tendered by such LLI
Shareholder, a total of 8,000,000 of the $0.0001 par value per
share common stock of G/O Group and, in addition, has agreed to:
(i) immediately distribute the 2,000,000 shares of $0.0001 par
value per share common stock of G/O Group held by the Company to an
escrow agent to be held by such escrow agent for further
distribution to those G/O Colorado Shareholders or their assigns,
determined as of a dividend date selected by G/O Colorado, upon
registration by G/O Group of its $0.0001 par value per share common
stock either pursuant to the Securities Act of 1933, as amended or
pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended;
WHEREAS, the parties to the Plan desire that Escrow Agent be
appointed for the purposes of receiving, holding and distributing
the 2,000,000 shares of the G/O Group $0.0001 par value per share
common stock to be distributed by the Company to the Company's
Shareholders based upon the terms stated herein.
NOW, THEREFORE, in consideration of the foregoing
premises and mutual covenants hereinafter expressed, the parties
hereto do hereby agree as follows:
1. Appointment of Escrow Agent. Escrow Agent is hereby
appointed by each of the signatories hereto as agent for the
purpose of receiving holding and distributing all Shares delivered
into escrow hereunder.
2. Deposit of Shares. Simultaneous with the execution and
delivery of this Escrow Agreement, the Company shall deliver to
Escrow Agent a share certificate representing a total of 2,000,000
of the $0.0001 par value per share common stock of G/O Group (the
"Shares"). The Shares shall be accompanied by: (1) a duly executed
irrevocable Assignment Separate From Certificate with executed, in
blank, by the Company with signatures guaranteed by a commercial
bank or trust company having an office or correspondent in New York
City or by a member of the New York Stock Exchange; and (2) a list
compiled, as of the dividend date established by the Company,
setting forth those shareholders of record of the Company that are
entitled to the receipt of the Shares deposited with Escrow Agent
and their respective shareholdings in the Company, as of such
dividend date ("Shareholders List").
3. Release of Escrow Shares. Upon receipt by the Escrow Agent
of a copy of the correspondence from the United States Securities
and Exchange Commission declaring the registration materials
respecting the $0.0001 par value per share common of G/O Group
effective, under either the Securities Act of 1933, as amended or
under Section 12(g) of the Securities Exchange Act of 1934, as
amended, Escrow Agent, shall release the Shares to the Company's
shareholders, set forth in the Shareholder List. Each of the
Company s shareholders shall receive that number of the G/O Group's
$0.0001 par value per share common stock as determined by
multiplying 2,000,000 by the fraction determined by dividing the
number of shares of each respective shareholder of the Company as
set forth in the Shareholder List by 5,985,372. Escrow Agent
shall maintain books and records of such Shares distributed, which
shall be available for inspection by the Company's shareholders at
the offices of the Escrow Agent upon 48 hours prior written
request.
4. Concerning The Escrow Agent. To induce the Escrow Agent
to act hereunder, it is further agreed by the Company, that:
(a) The Escrow Agent shall not be under any duty to give the
Shares (the Shares deposited by the Company hereunder shall
hereinafter be referred to collectively as the "Escrowed Property")
held by it hereunder any greater degree of care than it gives its
own similar property.
(b) This Escrow Agreement expressly sets forth all the duties
of the Escrow Agent with respect to any and all matters pertinent
hereto. No implied duties or obligations shall be read into this
Agreement against the Escrow Agent. The Escrow Agent shall not be
bound by the provisions of any agreement among the other parties
hereto except this Escrow Agreement.
(c) The Escrow Agent shall not be liable, except for its own
gross negligence or willful misconduct and, except with respect to
claims based upon such gross negligence or willful misconduct that
are successfully asserted against the Escrow Agent, the other
parties hereto shall jointly and severally indemnify and hold
harmless the Escrow Agent (and any successor Escrow Agent) from and
against any and all losses, liabilities, claims, actions, damages
and expenses, including reasonable attorneys' fees and
disbursements, arising out of and in connection with this Escrow
Agreement. Without limiting the foregoing, the Escrow Agent shall
in no event be liable in connection with its investment or
reinvestment of any cash held by it hereunder in good faith in
accordance with the terms hereof, including without limitation any
liability for any delays (not resulting from its gross negligence
or willful misconduct) in the investment or reinvestment of the
Escrowed Property, or any loss of interest incident to any such
delay.
(d) The Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other
writing delivered to it hereunder without being required to
determine the authenticity or the correctness of any fact stated
therein or the propriety or validity of the service thereof. The
Escrow Agent may act in reliance upon any instrument or signature
believed by it to be genuine and may assume that any person
purporting to give receipt or advice or make any statement or
execute any document in connection with the provisions hereof has
been duly authorized to do so.
(e) The Escrow Agent may act pursuant to the advice of counsel
with respect to any matter relating to this Escrow Agreement and
shall not be liable for any action taken or omitted in accordance
with such advice.
(f) The Escrow Agent does not have any interest in the Escrow
Property deposited hereunder but is serving as escrow holder only
and having only possession thereof. the Company shall pay or
reimburse the Escrow Agent upon request for any transfer taxes or
other taxes relating to the Escrowed Property incurred in
connection herewith and shall indemnify and hold harmless the
Escrow Agent from any amount that it is obligated to pay in the way
of such taxes. Any payments of income from this Escrow Account
shall be subject to withholding regulations then in force with
respect to United States taxes. The parties hereto will provide
the Escrow Agent with appropriate W-9 forms for tax I.D., number
certifications, or W-8 forms for non-resident alien certifications.
It is understood that the Escrow Agent shall be responsible for
income reporting only with respect to income earned on investment
or funds which are part of the Escrowed Property and it is not
responsible for any other reporting. This paragraph and paragraph
(c) shall survive notwithstanding any termination of this Escrow
Agreement or the resignation of this Escrow Agent.
(g) The Escrow Agent makes no representations as to the
validity, value, genuineness or the collectability of any security
or other document or instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise any
party as to the wisdom in selling or retaining or taking or
refraining from any action with respect to any securities or other
property deposited hereunder.
(i) The Escrow Agent (and any successor Escrow Agent) may at
any time resign as such by delivering the Escrowed Property to any
successor Escrow Agent jointly designated by the other parties
hereto in writing, or to any court of competent jurisdiction,
whereupon the Escrow Agent shall be discharged of and from any an
all further obligations arising in connection with the Escrow
Agreement. The resignation of the Escrow Agent will take effect on
the earlier of (a) the appointment of a successor (including a
court of competent jurisdiction) or (b) the day which is 30 days
after the date of delivery of its written notice of resignation to
the other parties hereto. If at the time the Escrow Agent has not
received a designation of a successor Escrow Agent, the Escrow
Agents sole responsibility after that time shall be to safe keep
the Escrowed Property until receipt of a designation of successor
Escrow Agent or a joint written disposition instruction by the
other parties hereto or a Final Order of a Court of competent
jurisdiction.
(j) The Escrow Agent shall have no responsibility for the
contents of any writing of the arbitrators or any third party
contemplated herein as a means to resolve disputes and may rely
without any liability upon the content thereof.
(k) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made in
connection with the Escrowed Property, or in the event that the
Escrow Agent in good faith is in doubt as to what action it should
take hereunder, the Escrow Agent shall be entitled to retain the
Escrowed Property until the Escrow Agent shall have received (i) a
final non-appealable order of a Court of competent jurisdiction
directing delivery of the Escrowed Property or (ii) a written
agreement executed by the other parties hereto directing delivery
of the Escrowed Property, in which event the Escrow Agent shall
disburse the Escrowed Property in accordance with such order or
agreement. Any court order shall be accompanied by a legal opinion
by counsel for the presenting party satisfactory to the Escrow
Agent to the effect that said opinion is final and non-appealable.
The Escrow Agent shall act on such court order and legal opinions
without further question.
(l) The Company shall pay the Escrow Agent compensation (as
payment in full for the services to be rendered by the Escrow Agent
hereunder) in accordance with Schedule A attached hereto and
incorporated herein at the time of Closing as provided in this
Escrow Agreement and agree to reimburse the Escrow Agent for all
reasonable expenses, disbursements and advances incurred or made by
the Escrow Agent in performance of its duties hereunder (including
reasonable fees, expenses and disbursements for its counsel). It
is agreed that the Escrow Shares shall be held by Escrow Agent as
collateral for such payment of fees or expenses of the Escrow Agent
or its counsel which are not paid as provided for herein and Escrow
Agent may, after reasonable written notice to the Company liquidate
such number of Escrow Shares as is necessary and reasonable to
fully reimburse Escrow Agent for any fees or expenses due
hereunder. It is understood that the Escrow Agent's fees may be
adjusted from time to time to conform to its then-current
guidelines.
(m) The parties hereunder hereby irrevocably submit to the
jurisdiction of any court located in Arizona in any action or
proceeding arising out of or relating to this Escrow Agreement, and
the parties hereby irrevocably agree that all claims in respect of
any such action or proceeding shall be heard and determined in such
a Arizona court. The parties hereby consent to and grant to any
such court jurisdiction over the parsons of such parties and over
the subject matter of any such dispute and agree that delivery or
mailing of any process or other papers in the manner provided
herein above, or in such other manner as may be permitted by law,
shall be valid and sufficient service thereof.
(n) No printed or other matter in any language (including
without limitation prospectuses, notices, reports and promotional
material) which mention the name of Escrow Agent or the rights,
powers, or duties of the Escrow Agent shall be issued by the other
parties hereto or on such parties' behalf unless the Escrow Agent
shall first have given its specific written consent thereto.
(o) The Escrow Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and the respective
successors and assigns, heirs, administrators and representatives
and shall not be enforceable by or inure to the benefit of any
third party except as provided in paragraph 7(i) with respect to a
resignation by the Escrow Agent. No party may assign any of its
rights or obligations under this Escrow Agreement without the
written consent of the other parties. This Escrow Agreement shall
be construed in accordance with and governed by the internal law of
Texas (without reference to its rule as to conflicts of law). To
the best knowledge of the principals to this transaction, neither
the underlying transaction/purpose nor the Escrow Agreement violate
any law or regulation.
(p) This Escrow Agreement may only be modified by a writing
signed by all of the parties hereto, and no waiver hereunder shall
be effective unless in writing signed by the party to be charged.
(q) The Company authorizes the Escrow Agent, for any
securities held hereunder, to use the services of any United States
central securities depository it deems appropriate, including. but
not limited to the Depository Trust Company and the Federal Reserve
Book Entry System.
5. Effective Date and Termination. This Agreement shall
become effective on the date of execution by Escrow Agent. All of
the provisions of this Agreement shall be fully performed and the
escrow established hereunder shall terminate upon the distribution
of all Escrow Shares as contemplated hereby.
6. Paragraph Headings and Counterpart Signature. All
paragraph headings herein are inserted for convenience only. This
Agreement may be executed in several counterparts, each of which
shall be deemed an original, which together shall constitute one
and the same instrument.
7. Notices. All notices, requests, instructions, or other
documents to be given hereunder shall be in writing and sent by
registered mail:
If to the Escrow Agent:
Thomas Pritchard, Esq.
Brewer & Pritchard P.C.
1111 Bagby Street
Suite 2450
Houston, Texas 77002
If to the Company:
G/O International, Inc.
11849 Wink
Houston, Texas 77024
In Witness whereof, the undersigned have execute this Escrow
Agreement this 25th day of September 1996.
ESCROW AGENT
By:/ss/Thomas Pritchard, Esq.
Escrow Agent
G/O International, Inc.
By:/ss/John L. Burns
Its President
CLOSING CERTIFICATE
OF
G/O INTERNATIONAL, INC.
(a Colorado corporation)
AND
G/O INTERNATIONAL GROUP (USA) INC.
(a Delaware corporation)
The undersigned, John L. Burns, being the President of G/O
International, Inc., a corporation formed under the laws of the
State of Colorado ("G/O Colorado") and a Director of G/O
International Group (USA) Inc., a corporation formed under the laws
of the Delaware ("G/O Group") does hereby each certify that:
Each of the representations and warranties of G/O Colorado and G/O
Group as contained in that certain Reorganization Plan and
Agreement dated September 17, 1996 among Leather Leather, Inc., a
Texas corporation ("LLI"), Kent Bouldin, an individual residing in
Dallas Texas (the "LLI Shareholder"), G/O Colorado and G/O Group
are true and correct as of the date hereof and that all of the
conditions to the obligations of LLI and the LLI Shareholder which
are to be performed by the G/O Colorado and G/O Group pursuant to
the Reorganization Plan and Agreement have been performed as of
the Closing Date.
Dated: September 25, 1996
G/O International, Inc.,
a Colorado corporation
By:/ss/John L. Burns
Its President
G/O International Group (USA) Inc.,
a Delaware corporation
By:/ss/John L. Burns
Its Director
CLOSING CERTIFICATE
OF
LEATHER LEATHER, INC.
AND
KENT BOULDIN
The undersigned, Kent Bouldin, the President of Leather Leather,
Inc., a corporation formed under the laws of the State of Texas
("LLI") and an individual residing in Dallas Texas, as LLI's sole
shareholder (the "LLI Shareholder"), pursuant to that certain
Reorganization Plan and Agreement dated September 17, 1996 among
the LLI, G/O International, Inc., a Colorado corporation ("G/O
Colorado"), G/O International Group (USA) Inc., a Delaware
corporation ("G/O Group") and the LLI Shareholder (the
"Reorganization Plan and Agreement") hereby certifies that:
Each of the representations and warranties of the LLI Shareholder
and LLI as contained in the Reorganization Plan and Agreement are
true and correct as the date hereof and that all of the conditions
to the obligations of the G/O Colorado and G/O Group which are to
be performed by the LLI and the LLI Shareholder pursuant to the
Reorganization Plan and Agreement have been performed as of the
Closing Date.
Dated: September 25, 1996
Leather Leather, Inc.,
a Texas corporation
By:/ss/Kent Bouldin
President
By:/ss/Kent Bouldin
Individually as Shareholder
