Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Registration Statement 93 448K
2: EX-1 Form of Underwriting Agreement 61 179K
3: EX-1.1 Form of Escrow Agreement 13 23K
4: EX-1.2 Underwriter's Warrant Agreement 39 99K
5: EX-5 Opinion of Doros & Brescia, P.C. 1 8K
7: EX-10.11 Share Exchange Agreement 17 34K
6: EX-10.7 Stock Option Plan 20 59K
8: EX-22.1 Consent of Eichler, Bergsman & Co., LLP 1 6K
9: EX-22.2 Consent of Lilling & Company 1 6K
10: EX-22.3 Consent of Hagan & Burns CPAs, Pc 1 6K
EX-10.11 — Share Exchange Agreement
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EXCHANGE AGREEMENT
EXCHANGE AGREEMENT, dated as of the 3rd day of December, 1997, by
and between Sureal International, Inc. (formerly known as Legacy Export, Inc.
prior to adopting its current style) ("SUREAL"), a Delaware corporation with
offices at 829 South 220 East, Orem, Utah 84058, R. Bret Jenkins with an office
at 829 South 220 East, Orem, Utah 84058 ("JENKINS"), Richard Wogksch with an
office at 829 South 220 East, Orem, Utah 84058 ("WOGKSCH"), Glen Jensen with an
office at 829 South 220 East, Orem, Utah 84058 ("JENSEN"), Edward A. Heil with
an office at c/o Independent Network Group, Inc., Atrium Executive Center, 80
Orville Drive, Bohemia, New York 11716 ("HEIL"), John Dello-Iacono with an
office at c/o Independent Network Group, Inc., Atrium Executive Center, 80
Orville Drive, Bohemia, New York 11716 ("DELLO-IACONO), and Ronald J. Brescia
with offices at c/o Doros & Brescia, P.C., 1140 Avenue of the Americas
("BRESCIA") (Jenkins, Wogksch, Jensen, Heil, and Dello-Iacono, and Brescia
being collectively referred to as the "SUREAL SHAREHOLDERS") and United States
Financial Group, Incorporated ("USFG"), a Delaware corporation with offices at
110 Wall Street, New York, N.Y.
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W I T N E S S E T H
WHEREAS, Sureal is a corporation duly organized and in good
standing under the laws of the State of Delaware having been incorporated on
August 10, 1995; and,
WHEREAS, the number of authorized shares of capital stock of Sureal
is fifteen thousand (15,000), consisting of ten thousand (10,000) shares of
common stock (the "SUREAL COMMON SHARES") and five thousand (5,000) shares of
preferred stock, of which three thousand (3,000) shares of Sureal Common Shares
(the "SUREAL OUTSTANDING COMMON SHARES") are presently issued and outstanding;
and,
WHEREAS, USFG is a corporation duly organized and in good standing
under the laws of the State of Delaware having been incorporated on December
17, 1996; and,
WHEREAS, the number of authorized shares of capital stock of USFG
is forty million (40,000,000), consisting of (i) thirty million (30,000,000)
shares of common stock, par value $.0001 per share (the "USFG COMMON SHARES"),
of which 19,889,267 USFG Common Shares (the "USFG OUTSTANDING COMMON SHARES")
are presently issued and outstanding and (ii) ten million (10,000,000) shares
of "blank check" preferred stock, par value $.0001 per share (the "USFG
PREFERRED SHARES"); and,
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WHEREAS, the Sureal Shareholders collectively own all three
thousand (3,000) shares of Sureal Common Shares which are issued and
outstanding; and,
WHEREAS, it is the desire of each of the parties hereto that after
the consummation of the transactions contemplated herein USFG become the parent
of Sureal with Sureal as a wholly-owned subsidiary of USFG; and,
WHEREAS, the Sureal Shareholders desire to exchange their three
thousand (3,000) Sureal Common Shares for the number of USFG Common Shares
determined by a formula set forth herein so that after the consummation of such
share exchange USFG will own three thousand (3,000) Sureal Common Shares
constituting all of the issued and outstanding shares of capital stock of
Sureal, USFG will be the parent of Sureal with Sureal as a wholly-owned
subsidiary of USFG and the Sureal Shareholders will own the number of USFG
Common Shares having an aggregate market valuation of $11,250,000 immediately
upon the completion of the public offering of USFG's securities (the
"OFFERING") contemplated by the parties to this Exchange Agreement. The parties
agree that the Offering will be completed as soon as possible.
NOW, THEREFORE, in consideration of the above premises and the
agreements set forth below, the parties hereto hereby agree
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as follows:
ARTICLE I
EXCHANGE OF SECURITIES
1.1 Exchange of Securities. In reliance on the representations and
warranties contained herein, and subject to the terms and conditions
hereinafter set forth, the Sureal Shareholders hereby agrees to deliver to USFG
three thousand (3,000) shares of Sureal Common Shares on a date to be
determined by the parties, which date shall be December 17, 1997, (the "CLOSING
DATE") and USFG hereby agrees to accept delivery on the Closing Date of three
thousand (3,000) Sureal Common Shares owned by the Sureal Shareholders
constituting all of the issued and outstanding shares of the capital stock of
Sureal for and against delivery on the Closing Date concurrently therewith of
750,000 shares of USFG's Common Stock. The parties to this Exchange Agreement
agree that the USFG shares held by the Sureal Shareholders and Officers and
Directors of USFG after the closing of this Agreement, shall be subject to
certain lock up provisions. The Shareholders effected thereby agree to take the
necessary actions to insure that a lock up agreement will be entered into that
will set forth the specific terms of the agreement. The terms of the lock up
agreement shall include, but not be limited to, a provision that all
shareholders of USFG shares will not transfer, hypothecate, sell or pledge any
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USFG shares for periods ranging from one to two years from the date of this
Exchange Agreement without the prior written consent of the Sureal Shareholders
and a majority of the board of directors of USFG.
1.2 Initial Public Offering. It is intended by the parties hereto
that immediately after the closing of this Exchange Agreement, the parties will
begin the preparation of a Registration Statement on Form S-1 (or other
appropriate Form prescribed by the Securities and Exchange Commission) to be
filed with the Securities and Exchange Commission to offer for sale USFG
securities. The gross proceeds of the Offering will not be less than $10
million. Concurrent with the closing of the Offering, USFG will transfer $2.5
million from the proceeds to Sureal, without reduction, and an additional
deposit of $2.5 million, without reduction, will be placed in an escrow account
to be released to Sureal as soon as Sureal has reported three consecutive
months in which sales of Sureal products are not less $1 million per month.
1.3 Other Matters. Effective upon the Closing of the Exchange
Contemplated hereby, USFG shall cause Jenkins and Heil to be appointed to its
Board of Directors and to be set forth as Directors in the Registration
Statement associated with the Offering.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF USFG
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USFG hereby represents and warrants to the Sureal Shareholders as follows:
2.1 Organization and Good Standing. USFG is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
2.2 Authorization. (a) The issuance of USFG's Common Shares to the
Sureal Shareholders is in accordance with the provisions of this Agreement and
has been duly authorized by all necessary corporate action of USFG. USFG's
Common Shares, when issued to the Sureal Shareholders in accordance with the
provisions hereof, will be duly authorized and validly issued, fully paid and
nonassessable.
(b) USFG has full corporate power and authority to enter
into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement by USFG has been duly
authorized by all necessary corporate action, and this Agreement constitutes a
legal, valid and binding obligation of USFG, enforceable against USFG in
accordance with its terms, subject to the effect of equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application relating to or affecting the enforcement of creditors'
rights.
2.3 Capitalization. The authorized capital stock of USFG consists
of thirty million (30,000,000) shares of USFG's common
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stock, $.0001 par value per share and ten million (10,000,000) shares of "blank
check" preferred stock, of which 19,889,267 USFG Common Shares are presently
issued and outstanding. All of the outstanding USFG Common Shares are duly
authorized, have been validly issued and are fully paid and nonassessable.
2.4 Securities Law. USFG's Common Shares and Sureal's Common Shares
being exchanged as provided in this Agreement are not being registered under
the Securities Act of 1933, as amended (the "Act"), or any other securities
laws but are being exchanged in reliance upon certain exemptions from the
registration requirements of the Act and such laws. USFG's reliance upon such
exemptions is predicated in large part upon the representations of the
Stockholder to USFG contained in Article III hereof.
2.5 Tax Free Reorganization. The transactions contemplated herein
are intended by the parties hereof as a tax free plan of reorganization
pursuant to the Internal Revenue Code of 1986, as amended.
2.6 Knowledge: Access to Information. USFG has knowledge of
Sureal's activities, financial condition, plans and prospects, and has
carefully reviewed the risks of, and other considerations relating to, the
transactions contemplated herein. USFG has been given an opportunity to ask
questions of and to receive answers from representatives of Sureal concerning
the terms and conditions of the transactions contemplated herein and has
received all
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information that USFG has requested from Sureal. Notwithstanding the foregoing,
the only information upon which USFG has relied is USFG's independent
investigation and that no representations or warranties of any kind have been
made by Sureal or its representatives or agents relating to such decisions
except as expressly set forth herein.
2.7 Officers and Directors of USFG. Prior to the closing of the
Exchange contemplated hereby, the Officers and Directors of USFG are as
follows: Ali Khan, President and Director
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SUREAL SHAREHOLDERS
The Sureal Shareholders represent and warrant to USFG as follows:
3.1 Ownership and Conveyance. The Sureal Shareholders are the sole
beneficial and record owners of three thousand (3,000) Sureal Common Shares
and each has the full right, and is duly authorized, to exchange such shares
which, upon conveyance, will be transferred to USFG free and clear of any and
all liens, claims, pledges, security interests or other encumbrance of any
kind.
3.2 Capitalization. The three thousand (3,000) shares of common
stock of Sureal owned by the Sureal Shareholders constitute all of the issued
and outstanding shares of capital stock of Sureal. All of the three thousand
(3,000) Sureal Common Shares
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owned by the Sureal Shareholders are duly authorized, have been validly issued
and are fully paid and nonassessable. There are no outstanding options,
warrants, rights (including preemptive rights and rights to demand registration
under the Act), calls, commitments, conversion rights, plans or other
agreements of any character providing for the purchase or issuance of any
shares of the capital stock of Sureal or any agreements or understandings to
issue any of the foregoing.
3.3 Purchase for Own Account. USFG's Common Shares are being
acquired by the Sureal Shareholders for each of such Shareholder's own account,
for investment and without any view to the distribution, assignment or resale
to others or fractionalization in whole or in part. The Stockholders agree not
to assign or in any way transfer such Shareholder's rights to USFG's Common
Shares or any interest therein. The Sureal Shareholders agree not to sell,
hypothecate or otherwise transfer USFG's common stock unless USFG's common
stock is registered under Federal and applicable state securities laws or
unless, in the opinion of counsel acceptable to USFG, an exemption from such
laws is available.
3.4 Accredited Investor. Each of the Sureal Shareholders is an
"Accredited Investor" as that term is defined in Regulation D promulgated under
the Securities Act of 1933, as amended ("THE ACT").
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3.5 Knowledge: Access to Information. The Sureal Shareholders have
knowledge of USFG's activities, financial condition, plans and prospects, and
have carefully reviewed the risks of, and other considerations relating to, the
transactions contemplated herein. The Sureal Shareholders have been given an
opportunity to ask questions of and to receive answers from representatives of
USFG concerning the terms and conditions of the transactions contemplated
herein and have received all information that the Sureal Shareholders have
requested from USFG. Notwithstanding the foregoing, the only information upon
which the Sureal Shareholders have relied is the Sureal Shareholders'
independent investigation and that no representations or warranties of any kind
have been made by USFG or its representatives or agents relating to such
decisions except as expressly set forth herein.
3.6 Risk of the Sureal Shareholders. The Sureal Shareholders,
either individually or together with the representative on which the Sureal
Shareholders have relied, has such knowledge and experience in financial and
business matters that the Sureal Shareholders are capable of evaluating the
merits and risks of an investment in USFG's Common Shares.
3.7 Securities Law. USFG's Common Shares are not being registered
under the Act, or any other securities laws but are being sold in reliance upon
certain exemptions from the registration requirements of the Act and such laws.
USFG's
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reliance upon such exemptions is predicated in large part upon the
representations of the Sureal Shareholders to USFG contained in Article III
hereof.
3.8 Restriction on Transfer. The Sureal Shareholders understand
that USFG's Common Shares have not been registered under the Act nor under any
other applicable securities laws in reliance on the representations and
warranties made by the Sureal Shareholders herein and that no securities
administrator of any state or jurisdiction or of the Federal government has
made any finding or determination relating to USFG's common stock. The Sureal
Shareholders further understand that, upon issuance hereunder, USFG's Common
Stock will constitute "restricted securities" within the meaning of Rule 144
under the Act and will be subject to a lock up agreement as more fully
described in paragraph 1.1. The Sureal Shareholders understand that USFG's
Common Shares may not be sold or otherwise transferred unless subsequently
registered under the Act or, in the opinion of counsel acceptable to USFG, an
exemption from registration is available; that, except pursuant to subsection
(k) of Rule 144, any routine sales of USFG's common stock made in reliance on
Rule 144 can only be made if current information about USFG is publicly
available and then only in limited amounts in accordance with that Rule; and
that there is presently neither any public market for USFG's Common Shares nor
current information publicly available with respect to
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USFG.
3.9 Restrictive Legends. Until such time as USFG's Common Shares
have been registered under the Act or until such time as USFG is provided by
the Sureal Shareholders with an opinion of counsel acceptable to USFG to the
effect that the transfer of USFG's Common Shares may be made without
registration, the certificates representing USFG's Common Shares shall be
imprinted with a legend in substantially the following form: "The shares
represented by this certificate have not been registered under the Securities
Act of 1933. These shares have been acquired for investment and not with a view
to distribution or resale and may not be mortgaged, pledged, hypothecated or
otherwise transferred without an effective registration statement for such
shares under the Act or an opinion of counsel for the corporation that
registration is not required under such Act."
3.10 Officers and Directors of Sureal. The existing Officers and
Directors of Sureal (the "Existing Sureal Directors") are as follows:
o R. Bret Jenkins, Chairman of the Board of Directors
o Richard Wogksch, President and Director
o Glen Jensen, CEO and Director.
Effective upon the Closing of the Exchange Agreement, USFG shall
have the right to designate three (3) members to the Sureal Board of Directors
(the "Sureal Directors") who shall serve as such
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Board Members at the sole discretion of USFG and may be substituted from time
to time by USFG. The Existing Sureal Board shall have the right to maintain
their Board membership as long as they are employed by Sureal. It is agreed
that a seventh member of the Sureal Board shall be elected, which member shall
be mutually agreeable to USFG and the Existing Sureal Board.
3.11 Authorization. Sureal has full power and authority to enter
into this Agreement and to fully perform the terms of this Agreement. The
execution, delivery and performance of this Agreement by Sureal and the Sureal
Shareholders have been duly authorized by all necessary action of Sureal and
the Sureal Shareholders, and this Agreement constitutes the legal, valid and
binding obligation of Sureal and the Sureal Shareholders, enforceable in
accordance with its terms, and the execution and delivery of this Agreement and
the receipt of USFG's Common Shares contemplated hereby by the Sureal
Shareholders will not violate any applicable law, regulation or rule or any
agreement or other document to which Sureal and the Sureal Shareholders are
bound.
ARTICLE IV
MANAGEMENT OF SUREAL
4.1 Management of Sureal. The parties agree that the existing
officers of Sureal (consisting of Messrs. Jenkins, Wogksch
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and Jensen), because of their experience in the industry, shall be employed to
supervise, direct and manage the entire operations of Sureal. Each will receive
a salary of $10,000 per month and will share in a bonus pool that will be
determined as 10% of Sureal's pretax income(determined in accordance with
accounting principles generally accepted in the United States of America and
before intercompany allocations of costs or fees) up to a maximum amount equal
to their base salaries and receive other benefits commensurate with the offices
held. Such other benefits shall include medical and dental insurance and a car
allowance or lease as has been provided previously. When the profitability of
the Sureal reaches levels where the 10% pool regularly exceeds the base salary
levels, such amount will be renegotiated based on Sureal's performance.
4.2 Financial Reports. Sureal shall provide financial information
and reports to USFG in the manner and format as shall reasonably be determined
by USFG's Board of Directors and in a manner consistent with the requirements
of a public company.
ARTICLE V
MISCELLANEOUS
5.1 Entire Agreement. This Agreement constitutes the entire
agreement between USFG, Sureal and the Sureal Shareholders with respect to the
subject matter hereof. There are no
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representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein. This
Agreement supersedes all prior agreements between the parties with respect to
the shares of common stock being exchanged hereunder and the subject matter
hereof.
5.2 Governing Law. This Agreement shall be construed and enforced
in accordance with and governed by the internal laws of the State of New York.
5.3 Notices. All notices, requests, demands and other
communications called for or contemplated hereunder shall be in writing and
shall be deemed duly given three (3) days from the date such notice is
deposited in the United States mail, postage-paid, or immediately if by hand
delivery or facsimile transmission addressed to the proper parties at the
addresses set forth in the first paragraph of this Agreement, or at such other
address as the parties may designate by written notice in the manner aforesaid,
with a copy in each case to Ronald J. Brescia, Esq., Doros & Brescia, P.C.,
1140 Avenue of the Americas, New York, New York 10036.
5.4 Survival of Representations and Warranties. All agreements,
representations and warranties contained herein shall survive the execution and
delivery of this Agreement.
5.5 Amendments and Waivers. Neither this Agreement nor any
provision hereof may be modified, changed, discharged, waived
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or terminated except by an instrument in writing signed by the party against
whom the enforcement of any such modification, change, discharge, waiver or
termination is sought.
5.6 Severability. If any provision of this Agreement or the
application thereof to any party or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to the other party or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by
applicable law.
5.7 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective legal
successors, assigns, heirs, executors and administrators, but may not be
assigned by the Sureal Shareholders without the express written consent of
USFG. Nothing contained herein, expressed or implied, is intended to confer
upon any person or entity other than the parties hereto and their legal
successors, any rights or remedies under or by reason of this Agreement unless
so stated herein to the contrary.
5.8 Further Actions. At any time and from time to time, each party
agrees at its expense, to take all actions and to execute and deliver all
documents as may be necessary to effectuate the purposes of this Agreement.
5.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original,
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and all of which together shall constitute one and the same.
5.10 Headings. The headings in the Agreement are for reference
purposes only and shall not be deemed to have any substantive effect. 5.11
Facsimile Signatures. A facsimile signature on this Agreement shall be binding
as if the signature were the original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
SUREAL INTERNATIONAL, INC. UNITED STATES FINANCIAL GROUP, INC.
BY:
--------------------- BY:-----------------------
ITS:
--------------------- ITS:----------------------
----------------------
R. BRET JENKINS
----------------------
RICHARD WOGKSCH
----------------------
GLEN JENSEN
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Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 7/31/98 | | | | | | | None on these Dates |
| | 12/17/97 | | 4 |
| | 12/17/96 | | 2 |
| | 8/10/95 | | 2 |
| List all Filings |
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