Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2 Spongetech Registration Statement 44 201K
3: EX-3 Certificate of Amendment 1 7K
4: EX-3 Spongetech Bylaws 12± 45K
2: EX-3.(I) Certificate of Incorporation 7± 27K
5: EX-4 Common Stock Certificate 2 8K
6: EX-10 Share Exchange Agreement 20 78K
8: EX-23 Auditor's Consent 1 5K
7: EX-23 Consent of Counsel 1 5K
STOCK PURCHASE
AGREEMENT
As of
JULY 15, 2002
By and Between
NEXGEN ACQUISITIONS VIII, INC.
RSI ENTERPRISES INTERNATIONAL, INC.
and
RSI ENTERPRISES, INC.
STOCK PURCHASE AGREEMENT
This agreement (the "Agreement") is made as of the July 15, 2002, by and
between Nexgen Acquisitions VIII, Inc., a Delaware Corporation ("Nexgen"), RM
Enterprises International, Inc., a Delaware corporation, ("RME") and RSI
Enterprises, Inc., a New York corporation ("RSI").
WHEREAS, RME is the sole stockholder of RSI; and
WHEREAS, Nexgen desires to acquire RSI, and RME desires to sell RSI through
the acquisition of all the capital stock of RSI by Nexgen pursuant to the terms
hereinafter set forth (the "Acquisition") with Nexgen being the holding company
and RSI, the operating company; and
WHEREAS, Nexgen, RME and RSI each intend, for Federal income tax purposes,
that the Acquisition contemplated hereby constitutes a tax-free exchange under
Internal Revenue Code of 1986, as amended; and
WHEREAS, the Board of Directors of Nexgen has resolved that it is advisable
and in the best interest of Nexgen that the capital stock of RSI be acquired by
Nexgen upon the terms and conditions hereinafter specified and has empowered its
officers to execute the Agreement and to take any action necessary or desirable
to carry out its terms and conditions; and
WHEREAS, the Board of Directors of RME and RSI have resolved that it
advisable and in the best interest of RME and RSI that its capital stock be
acquired by Nexgen upon the terms and conditions hereinafter specified and has
empowered its officer(s) to execute the Agreement and to take any action
necessary or desirable to carry out its terms and conditions; and
WHEREAS, Nexgen has authorized common stock consisting of 50,000,000 shares
of common stock, $.001 par value per share (the "Nexgen Common Stock"), of which
6,985,000 shares are issued and outstanding and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth and intending to be legally bound, the parties hereto (the
"Parties") agree as follows:
ARTICLE I
THE TRANSACTION
1.1 The Acquisition. At the Closing Date, the capital stock of RSI shall be
acquired by Nexgen.
1.2 Stockholder Approval. The Agreement shall be submitted to the stockholders
of Nexgen for approval as soon as practicable after the execution of the
Agreement.
1.3 Holding Corporation/Operating Corporation. Following the Acquisition,
Nexgen shall continue to exist under, and be governed by, the laws of the
State of Delaware, and the certificate of incorporation and the by-laws of
Nexgen will be the constituent documents of Nexgen as the holding company.
RSI will continue to exist and be governed by the laws of the State of
Delaware and the certificate of incorporation and the by-laws of RSI will
be the constituent documents of RSI as the operating company.
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1.4 Directors and Officers. The directors and officers of the Surviving
Corporation immediately following the Acquisition shall be as follows:
Name Positions
-------------- ------------------------
Michael Metter President and a Director
Steven Moskowitz Secretary and a Director
Jerry Schlanger Treasurer and a Director
Frank Lazauskas A Director
Such directors and officers shall continue to hold office until the next
annual or special meeting of the stockholders of Nexgen and until their
successors shall have been duly elected and shall have qualified.
1.5 Plan of Acquisition. The method of effecting the Acquisition and the basis
for exchanging and converting the outstanding RSI capital stock into shares
of Common Stock of Nexgen, shall be as follows:
In exchange for all the RSI capital stock, Nexgen shall issued an aggregate
of 12,000,000 shares of its x common stock all of which will be deemed
"restricted stock" as that term is defined in the regulations of the
Securities and Exchange Commission, (the "Commission') promulgated under
the Securities Act of 1933, as amended (the "Securities Act"). Prior to
issuance, Nexgen shall have outstanding 6,985,000 shares of common stock.
1.6 Restrictions on Sale. RME represents and warrants that the Nexgen Stock to
be acquired by it pursuant to the terms of Section 1.2 hereof is being
acquired for its own account, with no intention of assigning any
participation or interest therein (except to its stockholders), and without
a view to the distribution of any portion thereof, except in accordance
with the Securities Act. RME will not sell, assign, transfer or encumber
any of such shares unless (i) a registration statement under the Securities
Act with respect thereto is in effect and the prospectus included therein
meets the requirements of Section 10 of the Securities Act, or (ii) a
no-action letter is obtained from the staff of the Commission in respect of
such proposed sale, assignment, transfer or encumbering, or (iii) Nexgen
has received a written opinion of counsel reasonably satisfactory to it
that, after an investigation of the relevant facts, such counsel is of the
opinion that such proposed sale, assignment, transfer or encumbering does
not require registration under the Securities Act.
RME further acknowledges that the Nexgen Stock is not being registered
under the Securities Act and must be held indefinitely unless it is
subsequently registered thereunder or an exemption from such registration
is available. RME understands that the Nexgen Stock is not being registered
under the Securities Act in part on the ground that the issuance thereof is
exempt under Section 4(2) of the Securities Act as a transaction by an
issuer not involving any public offering; that Nexgen's reliance on such
exemption is predicated in part on the foregoing representation and
warranty of RME and that in the view of the Commission, the statutory basis
for the exemption claimed would not be present if, notwithstanding such
representation and warranty, RME contemplates acquiring any of the Nexgen
Stock for sale upon the occurrence or nonoccurrence of some predetermined
event.
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1.8 Restrictive Legend. RME understands that in connection with the shares of
Nexgen Common Stock issued pursuant to this section, Nexgen will have an
appropriate stop order placed on its stock records indicating the existence
of the terms of the Agreement, and that the certificates representing the
Nexgen common Stock shall bear a legend in substantially the following
form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE SOLD,
TRANSFERRED OR ENCUMBERED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THAT ACT, PURSUANT TO A NO-ACTION LETTER FROM THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION OR PURSUANT TO AN
OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS UNNECESSARY."
1.9 Names of Holding Corporation/Operating Corporation
As soon as possible after the execution of this Agreement, Nexgen will file
a certificate of amendment with the Secretary of State of Delaware changing
its name to Spongetech Delivery Systems, Inc.; and RSI, a New York
Corporation will change its name to Spongetech International
Industries, Ltd.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF RSI
RSI represents and warrants to Nexgen the following, each of which
representations and warranties shall be deemed material (and Nexgen, in
executing, delivering and consummating the Agreement, has relied and will rely
upon the correctness and completeness of each of them):
2.1 Valid Corporate Existence; Qualification. RSI is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. It has the corporate power to carry on its business as
now conducted and to own its assets. RSI is not qualified to conduct
business in any jurisdiction in which failure to qualify would have a
material adverse effect on it, and its assets, properties or business; and
there has not been any claim by any other jurisdiction to the effect that
RSI is required to qualify or otherwise be authorized to do business as a
foreign corporation therein. The copy of RSI's certificate of incorporation
(certified by the appropriate official of the State of Delaware) and
by-laws (certified by RSI's Secretary), as amended to date, which will be
delivered to Nexgen at or prior to the Closing Date, if requested, are true
and complete copies of those documents as now in effect. The minute books
of RSI contain accurate records of all meetings of its Board of Directors,
and stockholders since its incorporation, and accurately reflect all
transactions referred to therein.
2.2 Capitalization. The authorized capital stock of RSI consists of 5,000
shares of voting common stock, without par value, all of which shares of
common stock are issued and outstanding. All such shares are duly
authorized and validly issued and outstanding, fully paid and
nonassessable. There are no subscriptions, options, warrants, rights or
calls or other commitments or agreements to which RSI is a party or by
which it is bound, calling for the issuance, transfer, sale or other
disposition of any class of securities of RSI There are no outstanding
securities of RSI convertible or exchangeable, actually or contingently,
into shares of RSI Common Stock or any other securities of RSI.
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2.3 Subsidiaries. RSI has no subsidiaries.
2.4 Consents. There are no consents of governmental and other regulatory
agencies, foreign or domestic, and of other parties required to be received
by or on the part of RSI, to enable it to enter into and carry out the
Agreement.
2.5 Corporate Authority; Binding Nature of Agreement; Title to RSI Stock, etc.
RSI has the power to enter into the Agreement and to carry out its
obligations hereunder. The execution and delivery of the Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of RSI and no other corporate
proceedings on the part of RSI are necessary to authorize the execution and
delivery of the Agreement and the consummation of the transactions
contemplated hereby. The Agreement constitutes the valid and binding
obligation of RSI and is enforceable in accordance with its terms. RME
represents and warrants to Nexgen that it is, and, at the closing of the
transactions contemplated by the Agreement (the "Closing"), will be the
sole record and beneficial owner of the capital stock of RSI, free and
clear of all liens, charges, encumbrances and claims. RME further
represents and warrants to Nexgen that it has, and at the Closing will
have, good and marketable title to its shares of RSI Common Stock and
subject to pertinent federal and state rules and regulations, pertaining to
the sale of unregistered securities, the absolute and unqualified right to
sell, transfer and deliver RSI Common Stock to Nexgen. The delivery of RSI
Common Stock to Nexgen at the Closing pursuant to the provisions of the
Agreement will transfer valid title thereto, free and clear of all manner
of liens, pledges, encumbrances, charges and claims.
2.6 Financial Statements, etc. The unaudited financial statements for the
twelve months ended May 31, 2001 and 2002 of RSI (the "RSI Financial
Statements"), copies of which have been or will be be delivered to Nexgen,
fairly present the financial position of RSI as of said dates, and, except
as set forth therein, were prepared in conformity with generally accepted
accounting principles consistently applied throughout the periods covered
thereby.
2.7 Liabilities. As at May 31, 2002 (the "RSI Balance Sheet Date") and as of
the date hereof, RSI has had no material debts, liabilities or obligations,
contingent or absolute, other than those debts, liabilities and obligations
reflected or reserved against it in the RSI Balance Sheets at the RSI
Balance Sheet Date, except those arising in the ordinary and usual course
of its business.
2.8 Actions Since RSI Balance Sheet Date. Except as otherwise expressly
provided or set forth in, or required by the Agreement, since the RSI
Balance Sheet Date, RSI has not: (i) issued or sold, or agreed to issue or
sell any of its capital stock or options, warrants, rights or calls to
purchase such stock, any securities convertible or exchangeable into such
capital stock or other corporate securities, or effected any subdivision or
other recapitalization affecting its capital stock; (ii) incurred any
material obligation or liability, absolute or contingent, except those
arising in the ordinary and usual course of its business; (iii) discharged
or satisfied any lien or encumbrance, except in the ordinary and usual
course of business, or paid or satisfied any liability, absolute or
contingent, other than liabilities as at the RSI Balance Sheet Date and
current liabilities incurred since the RSI Balance Sheet Date in the
ordinary and usual course of business; (iv) made any wage or salary
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increases or granted any bonuses other than wage and salary increases and
bonuses granted in accordance with its normal salary increase and bonus
policies; (v) mortgaged, pledged or subjected to any lien, pledge, charge
or other encumbrance any of its properties or assets, or permitted any of
its property or assets to be subjected to any lien or other encumbrance,
except in the ordinary and usual course of business; (vi) sold, assigned or
transferred any of its properties or assets, except in the ordinary and
usual course of business; (vii) entered into any transaction or course of
conduct not in the ordinary and usual course of business; (viii) waived any
rights of substantial value, or canceled, modified or waived any
indebtedness for borrowed money held by it, except in the ordinary and
usual course of business; (ix) declared, paid or set aside any dividends or
other distributions or payments on its capital stock, or redeemed or
repurchased, or agreed to redeem or repurchase, any shares of its capital
stock; (x) made any loans or advances to any person, or assumed,
guaranteed, endorsed or otherwise became responsible for the obligations of
any person; or (xi) incurred any indebtedness for borrowed money (except
for endorsement, for collection or deposit of negotiable instruments
received in the ordinary and usual course of business).
2.09 Adverse Developments. Since the RSI Balance Sheet Date, there have been no
material adverse changes in the assets, properties, operations or financial
condition of RSI, and no event has occurred other than in the ordinary and
usual course of business which could be reasonably expected to have a
materially adverse effect upon the business of RSI; and RME, after
reasonable inquiry, does not know of any development of a nature that is,
or which could be reasonably expected to have a materially adverse effect
upon the respective business of RSI or upon any of its assets, properties,
operations or financial condition, including, without limitation, the loss
of any licenses or permits, suppliers, customers or employees, which loss
would be of a materially adverse nature.
2.10 Taxes. A true and complete copy of the Federal income tax return for RSI as
filed with the Internal Revenue Service for the fiscal year ending November
31, 2001, will be delivered to Nexgen if requested, prepared was in
conformity with information contained in the books and records of RSI and
containing no untrue statement of a material fact or omitting to state any
fact required to make any such return not materially misleading. All taxes,
including, without limitation, income, property, sales, use, franchise,
capital stock, excise, added value, employees' income withholding, social
security and unemployment taxes imposed by the United States, any state or
any foreign country, or by any other taxing authority, which have or may
become due or payable by RSI and all interest and penalties thereon,
whether disputed or not, have been paid in full or adequately provided for
by reserves shown in its books of account; all deposits required by law to
be made by RSI with respect to estimated income, franchise and employees'
withholding taxes have been duly made; and all tax returns, including
estimated tax returns, required to be filed have been duly filed. No
extension of time for the assessment of deficiencies for any year is in
effect. No deficiency is proposed or, to the knowledge of RSI and RSI
shareholders after reasonable inquiry, threatened against RSI. Except as
may be set forth in Exhibit 2.10, the federal and state income tax returns
of RSI have not been audited.
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2.11 Ownership of Assets; Trademarks, etc. Schedule 2.11 is a true and complete
list of all of all of the United States and foreign material patents,
patents pending, patent applications, trademarks, trade names, service
marks and rights used by RSI in the conduct of its business. Except as set
forth therein or in the RSI Balance Sheets, RSI owns outright, and has good
and marketable title to all of its assets, properties and businesses
(including all assets reflected in the RSI Balance Sheets, except as the
same may have been disposed of in the ordinary course of business since the
RSI Balance Sheet Date), free and clear of all liens, mortgages, pledges,
conditional sales agreements, restrictions on transfer or other
encumbrances or changes.
2.12 Insurance. Schedule 2.12 sets forth a list and brief description of all
polices of fire, liability and other forms of insurance held by RSI. Such
polices are valid, outstanding and enforceable policies, as to which
premiums have been paid currently, are with reputable insurers believed by
RSI, after reasonable inquiry, to be financially sound and are consistent
with the practices of similar concerns engaged in substantially similar
operations as are those currently conducted by RSI. RSI, after reasonable
inquiry, does not know of any state of acts, or the occurrence of any event
which might reasonably (i) form the basis for any claim against RSI not
fully covered by insurance for liability on account of any express or
implied warranty or tortious omission or commission, or (ii) result in
material increase in insurance premiums of RSI.
2.13 Litigation; Compliance with Law. There are no actions, suits, proceedings
or governmental investigations relating to RSI or its properties, assets or
business pending or, to the knowledge of RSI and after reasonable inquiry,
threatened, or any order, injunction, award or decree outstanding, against
RSI or against or relating to its properties, assets or business; and
neither RSI, nor after reasonable inquiry, knows of any basis for any such
actions, suits or proceedings within the past two years or any such
governmental investigations, orders, injunctions or decrees at any time in
the past except for those disclosed in Schedule 2.13. To the best of its
knowledge, RSI is not in violation of any law, regulation, ordinance,
order, injunction, decree, award, or other requirement of any governmental
body, court or arbitrator relating to its properties, assets or business,
the violation of which would have a material adverse effect on RSI.
2.14 Real Property. Schedule 2.14 sets forth a list of all real property owned
by RSI. Except as set forth in Schedule 2.14, RSI has good and marketable
title in said property, free and clear of any lien.
2.15 Agreements and Obligations; Performance. Schedule 2.15 sets forth a list of
agreements to which RSI is a party (the "Listed Agreements"). Other than
the Listed Agreements, RSI is not party to, or bound by any: (i) written or
oral agreement or other contractual commitment, understanding or obligation
which involved aggregate payments or receipts in excess of $25,000 (except
for open purchase and sales orders in the ordinary course of business);
(ii) contract, arrangement, commitment or understanding which involves
aggregate payments or receipts in excess of $25,000 that cannot be canceled
on thirty (30) days or less notice without penalty or premium or any
continuing obligation or liability (except for open purchase and sales
orders in the ordinary course of business); (iii) contract, arrangement,
commitment or understanding with its customers or any officer, employee,
stockholder, director, representative or agent thereof for the repurchase
of products, sharing of fees, the rebating of charges to such customers,
bribes, kickbacks from such customers or other similar arrangements; (iv)
contract for the purchase or sale of any materials, products or supplies
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which contain, or which commits or will commit it for a fixed term; (v)
contract of employment with any officer or employee not terminable at will
without penalty or premium or any continuing obligation or liability; (vi)
deferred compensation, bonus or incentive plan or agreement not cancelable
at will without penalty or premium or any continuing obligation or
liability; (vii) management or consulting agreement not terminable at will
without penalty or premium or any continuing obligation or liability;
(viii) lease for real or personal property (including borrowings thereon),
license or royalty agreement; (ix) union or other collective bargaining
agreement; (x) agreement, commitment or understanding relating to
indebtedness for borrowed money; (xi) contract which, by its terms,
requires the consent of any party thereto to the consummation of the
transactions contemplated hereby; (xii) contract containing covenants
limiting the freedom of RSI to engage or compete in any line or business or
with any person in any geographical area; (xiii) contract or option
relating to the acquisition or sale of any business; (xiv) voting trust
agreement or similar stockholders' agreement; (xv) option for the purchase
of any asset, tangible or intangible; or (xvi) other contract, agreement,
commitment or understanding which materially affects any of its properties,
assets or business, whether directly or indirectly, or which was entered
into other than in the ordinary course of business. A true and correct copy
of each of the written Listed Agreements has been delivered to Nexgen. RSI
has, in all material respects, performed all obligations required to be
performed by it to date under all of the Listed Agreements, is not in
default in any material respect under any of the Listed Agreements and has
received no notice of any default or alleged default thereunder which has
not heretofore been cured or which notice has not heretofore been
withdrawn. Neither RSI, after reasonable inquiry, knows of any material
default under any of the Listed Agreements by any other party thereto or by
any other person, firm or corporation bound thereunder.
2.16 Condition of Assets. Except for normal breakdowns and servicing
requirements, all machinery and equipment regularly used by RSI in the
conduct of its business are in good operating condition and repair,
ordinary wear and tear excepted.
2.17 Accounts Receivable. To the knowledge of RSI and, after reasonable inquiry,
all of the accounts receivable reflected in the books of account of RSI in
the ordinary course of its business (net of reserves for bad debts, if any)
are from the sale of services or goods, and neither RSI after reasonable
inquiry, knows or has reason to know, of any valid defense or right of
setoff to the rights of RSI to collect such accounts receivable in the full
amounts shown on such books of account. The inventories of RSI are and will
be substantially in usable and salable condition.
2.18 Permits and Licenses. RSI believes that it has all permits, licenses,
orders and approvals of all federal, state, local and foreign governmental
or regulatory bodies required of it to carry on its business as presently
conducted; all such other permits, licenses, orders, franchises and
approvals are in full force and effect, and, after reasonable inquiry, no
suspension or cancellation of any of such other permits, licenses, orders,
franchises and approvals is threatened. RSI is in compliance in all
material respects with all requirements, standards and procedures of the
federal, state, local and foreign governmental bodies which have issued
such permits, licenses, orders, franchises and approvals.
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2.19 Banking Arrangements. Schedule 2.19 sets forth the name of each bank in or
with which RSI has an account, credit line or safety deposit box, and a
brief description of each such account, credit line or safety deposit box,
including the names of all persons currently authorized to draw thereon or
having access thereto; and the names of all persons, if any, now holding
powers of attorney from RSI and a summary statement of the terms thereof.
2.20 Interest in Assets. No affiliate owns any property or rights, tangible or
intangible, used in or related, directly or indirectly, to the business of
RSI.
2.21 Salary Information. Schedule 2.21 contains a list of the names and current
salary rates of and bonus commitments to all present officers of RSI, and
the names and current annual salary rates of all other persons employed by
RSI whose annual salaries exceed $100,000.
2.22 Employee Benefit Plans. RSI does not maintain or make any employer
contributions under any "pension" or "welfare" benefit plans, as such term
is defined by the Employee Retirement Income Security Act of 1974, as
amended.
2.23 No Breach. Neither the execution and delivery of the Agreement nor
compliance by RSI with any of the provisions hereof, nor the consummation
of the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the certificate of
incorporation or by-laws of RSI;
(b) violate or, alone or with notice or the passage of time, result in the
material breach or termination of, or otherwise give any contracting
party the right to terminate, or declare a default under, the terms of
any agreement or other document or undertaking, oral or written to
which RSI is a party or by which any of its properties or assets may
be bound (except for such violations, conflicts, breaches or defaults
as to which required waivers or consents by other parties have been,
or will, prior to the Closing, be obtained);
(c) result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of RSI pursuant to
the terms of any such agreement or instrument;
(d) violate any judgment, order, injunction, decree or award against, or
binding upon, RSI, or upon its respective properties or assets; or
(e) violate any law or regulation of any jurisdiction relating to RSI, its
securities, assets or properties.
2.24 Brokers. All negotiations relative to the Agreement and the transactions
contemplated hereby have been carried on directly with Nexgen and by RSI
and/or RSI shareholders, without the intervention of any broker, finder,
investment banker or other third party. RSI has not engaged, consented to,
or authorized any broker, finder, investment banker or other third party to
act on its behalf, directly or indirectly, as a broker or finder in
connection with the transactions contemplated by the Agreement, and RSI
will indemnify Nexgen against, and to hold it harmless from any claim for
brokerage or similar commissions or other compensation which may be made
against Nexgen by any third party in connection with any of the
transactions contemplated hereby which claim is based upon any action by
RSI.
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2.25 Untrue or Omitted Facts. No representation, warranty or statement by RSI in
the Agreement contains any untrue statement of a material fact, or omits to
state a fact necessary in order to make such representations, warranties or
statements not materially misleading. Without limiting the foregoing, there
is no fact known to RSI, after reasonable inquiry, that has had, or which
may be reasonably expected to have, a materially adverse effect on RSI or
any of its assets, properties, operations or businesses that has not been
disclosed in writing to Nexgen.
ARTICLE III
REPRESENTATION AND WARRANTIES OF NEXGEN
Nexgen makes the following representations and warranties to RSI and, each
of which shall be deemed material (and RSI and RSI shareholders, in executing,
delivering and consummating the Agreement, have relied and will rely upon the
correctness and completeness of each of such representations and warranties):
3.1 Valid Corporate Existence; Qualification. Nexgen is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. Nexgen has the corporate power to carry on its business
as now conducted and to own its assets. Nexgen is not qualified to conduct
business as a foreign corporation in any jurisdiction, there being no
jurisdiction in which failure to qualify would have a material adverse
effect on Nexgen and its assets, properties or business; and there has not
been any claim by any jurisdiction to the effect Nexgen is required to
qualify or otherwise be authorized to do business as a foreign corporation
therein. Copies of its certificate of incorporation (as certified by the
Secretary of the State of Delaware) and by-laws (as certified by the
Secretary of Nexgen, as the case may be) of Nexgen, as amended to date,
which will be delivered to Nexgen at or prior to the Closing, if requested,
are true and complete copies of those documents as now in effect.
3.2 Consents. No consents of governmental and other regulatory agencies,
foreign or domestic, and of other third parties is required to be received
by or on the part of Nexgen to enable it to enter into and carry out the
Agreement in all material respects.
3.3 Capitalization. The authorized capital stock of Nexgen consists of
55,000,000 shares of common stock, $.001 par value each, of which 6,485,000
shares of Nexgen Common Stock are issued and outstanding and 5,000,000
shares of preferred stock, $.001 par value each, of which no shares are
issued and outstanding. All of the issued shares of Nexgen Common Stock are
duly authorized and validly issued and outstanding, fully paid and
nonassessable. There are no subscriptions, options, warrants, rights or
calls or other commitments or agreements to which Nexgen is a party or by
which it is bound, calling for the issuance, transfer, sale or other
disposition of any class of securities of Nexgen. There are no outstanding
securities of Nexgen convertible or exchangeable, actually or contingently,
into shares of Nexgen Common Stock or any other securities of Nexgen.
3.4 Corporate Authority; Binding Nature of Agreement; etc. Nexgen has the
corporate power to enter into the Agreement and to carry out its
obligations hereunder. The execution and delivery of the Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Nexgen prior to the Closing. No
other corporate proceedings on the part of Nexgen are necessary to
authorize the execution and delivery of the Agreement and the consummation
of the transactions contemplated hereby. The Agreement constitutes the
valid and binding obligation of each of Nexgen and is enforceable in
accordance with its terms.
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3.5 No Breach. Neither the execution and delivery of the Agreement nor
compliance by Nexgen with any of the provisions hereof nor the consummation
of the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the certificate of
incorporation or by-laws of Nexgen;
(b) violate or, alone or with notice or the passage of time, result in the
material breach or termination of, or otherwise give any contracting
party the right to terminate, or declare a default under, the terms of
any agreement or other document or undertaking, oral or written to
which Nexgen or any of Nexgen stockholders is a party or by which any
of them or any of their respective properties or assets may be bound
(except for such violations, conflicts, breaches or defaults as to
which required waivers or consents by other parties have been, or
will, prior to the Closing, be obtained);
(c) result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Nexgen pursuant to
the terms of any such agreement or instrument;
(d) violate any judgment, order, injunction, decree or award against, or
binding upon, Nexgen or upon their respective properties or assets; or
(e) violate any law or regulation of any jurisdiction relating to Nexgen,
its securities, assets or properties.
3.6 Brokers. All negotiations relative to the Agreement and the transactions
contemplated hereby have been carried on directly by Nexgen with RSI and
RME, without the intervention of any broker, finder, investment banker or
other third party. Nexgen has not engaged, consented to, or authorized any
broker, finder, investment banker or other third party to act on its
behalf, directly or indirectly, as a broker or finder in connection with
the merger and the transactions contemplated by the Agreement, and Nexgen
agrees to indemnify and to hold harmless RSI from and against any claim for
brokerage or similar commission or other compensation which may be made
against RSI by any third party in connection with any of the transactions
contemplated hereby, which claim is based upon any action by Nexgen.
3.7 Untrue or Omitted Facts. To the knowledge of Nexgen, after reasonable
inquiry, no representation, warranty or statement by Nexgen in the
Agreement contains any untrue statement of a material fact, or omits or
will omit to state a fact necessary in order to make such representations,
warranties or statements not materially misleading.
3.8 Necessary Filings or Exemptions. Nexgen represents that all of its
outstanding shares of common stock have been issued pursuant to exemptions
under Federal Securities Laws; all state filings, if required, have been
made and Negen will supply a copy of such filings as well as copies of any
subscriptions agreements and evidence of payment for such shares upoe
notice by RSI.
3.9 No Liabilities. Nexgen warrants that there are no liabilities not disclosed
on Nexgen's financial statements or as an attachment to thie Agreement.
3.10 Resignation of Officers and Directors. Nexgen warrants that its officer(s)
and director(s) shall resign at the Closing of the acquisition contemplated
by this Agreement.
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3.11 Delivery of Shares of Common Stock. Nexgen warrants that it will deliver
the shares of stock to RME pursuant to this Agreement at the Closing
thereof.
3.12.President's Warranty. Guy Cohen, President of Nexgen warrants that all of
the above representations and warrants in this Section 3 are accurate.
ARTICLE IV
POST CLOSING EVENTS
4.1 Nexgen will, at the Closing, and Nexgen and its shareholders, thereafter,
until such time as a annual meeting of the shareholders of Nexgen is held,
shall cause the election of those individuals above stated in this
Agreement as directors and the directors will elect those officers whose
titles are printed after their names.
4.2 Piggyback Registration Rights. Annexed as Schedule 4.2 is a list of certain
current shareholders of Nexgen. If at any time or from time to time
following the closing of the Agreement as set forth below, Nexgen shall
determine to register any of its securities, either for its own account or
the account of a security holder or holders other than a registration
relating solely to employee benefit plans, or a registration relating
solely to employee benefit plans, then Nexgen shall:
Promptly give written notice of such proposed registration to all of the
shareholders listed on Schedule 4.2, which shall offer such holders the
right to request inclusion of any of the shares held by said shareholders
in the proposed registration;
Each of the shareholders listed on Schedule 4.2 shall have ten (10) days or
such longer period as shall be set forth in the notice from the receipt of
the notice to deliver to Nexgen a written request specifying the number of
shares such shareholder intends to sell;
If the registration of which the Nexgen gives notice is for a registered
public offering involving an underwriting, Nexgen shall so advise each
shareholder listed on Schedule 4.2 as a part of the written notice given
pursuant to Section 4.2(b). In such event, the right of the shareholder to
registration pursuant to the Agreement shall be conditioned upon the
underwriter's consent as embodied in written agreements(s) with such
underwriter.
4.3 Demand Registration Rights. If the shareholders listed on Schedule 4.2 have
not been offered the opportunity to have their shares of Nexgen Common
Stock registered pursuant to Section 4.2, above, within six (6) months of
the closing of the Agreement, then Nexgen, if requested by such
shareholders listed on Schedule 4.2 as represent a majority of the shares
listed on said schedule to effect the registration of said shares, shall
promptly give written notice of such proposed registration to all of the
shareholders listed on Schedule 4.2, and thereupon Nexgen shall promptly
use its best efforts to effect the registration of the shares of Nexgen
Common stock listed on Schedule 4.2 on an applicable Commission form
provided, however, that:
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(a) Nexgen shall not be required to file and cause to become effective
more that one registration statement pursuant to this provision;
(b) Nexgen may include in such registration requested pursuant to this
provision, any authorized but unissued shares of Nexgen common stock
for sale by Nexgen, or any issued and outstanding shares of Nexgen
common stock for sale by others, provided that the inclusion of any of
these shares shall not effect the ability of the shareholders listed
on Schedule 4.2 from registering the entire amount of their shares of
Nexgen Common Stock.
4.4 Registration Procedures. In the case of each registration pursuant to
paragraphs 4.2 and 4.3 above, Nexgen will:
(a) Prepare and file with the Commission a registration statement with
respect to such securities, and use its best efforts to cause such
registration statement to become and remain effective for at least one
hundred eighty (180) days or until the distribution described in the
registration statement has been completed.
(b) Furnish to the shareholders listed on Schedule 4.2 participating in
such registration and to the underwriters of the securities being
registered, if any, such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and
such other documents as such underwriters may reasonably request in
order to facilitate the public offering of such securities;
(c) Use its best efforts to register and qualify the securities covered by
the registration statement under the securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the
shareholders listed on Schedule 4.2 participating in such
registration, provided that Nexgen shall not be required in connection
therewith or as a condition thereto to qualify to do business or to
file a general consent to services of process in any such states or
jurisdictions;
(d) In the event of any underwritten public offering, enter into and
perform all its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering.
Each shareholder listed on Schedule 4.2 participating in such
underwriting shall also enter into and perform its obligations under
such an agreement.
4.5 Expenses. All expenses incurred in connection with Nexgen's performance of
or compliance with the terms of paragraphs 4.2, 4.3 and 4.4 of the
Agreement shall be borne by Nexgen.
ARTICLE V
PRE-CLOSING COVENANTS
5.1 RSI Covenants. RSI, hereby covenants that, from and after the date hereof
and until the Closing or earlier termination of the Agreement (the
"Pre-Closing Period"):
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(a) Access. RSI shall afford to the officers, attorneys, accountants and
other authorized representatives of Nexgen free and full access,
during regular business hours and upon reasonable notice, to all of
its books, records, personnel and properties so that Nexgen, at its
own expense, may have full opportunity to make such review,
examination and investigation as Nexgen may desire of RSI's business
and affairs. RSI will cause its employees, accountants and attorneys
to cooperate fully with said review, examination and investigation and
to make full disclosure to Nexgen of all material facts affecting its
financial condition and business operations.
(b) Liabilities. RSI shall not incur any obligation or liability, absolute
or contingent, except for those incurred in the ordinary and usual
course of its business.
(c) Preservation of Business. RSI will use its best efforts to preserve
its business organization intact, to keep available the services of
its present officers, employees and consultants and to preserve its
good will.
(d) No Breach. RSI will (i) use its best efforts to assure that all of its
representations and warranties contained herein are true in all
material respects as of the closing as if repeated at and as of such
time, and that no material breach or default shall occur with respect
to any of its covenants, representations or warranties contained
herein that has not been cured by the Closing; (ii) not voluntarily
take any action or do anything which will cause a breach of or default
respecting such covenants, representations or warranties; and (iii)
promptly notify Nexgen of any event or fact which represents or is
likely to cause such a breach or default.
(e) No Negotiations. For so long as the Agreement shall remain in effect,
neither RSI nor any of its officers or directors nor any of their
respective affiliates, employees, agents or representatives shall
enter into or conduct negotiations, or enter into any agreement or
understanding, for the sale or possible sale of any of RSI's
securities or business or all or substantially all of its assets with
anyone other than Nexgen.
5.2 Nexgen Covenants. Nexgen, hereby covenants that, during the Pre-Closing
Period:
(a) Access. Nexgen shall afford to the officers, attorneys, accountants
and other authorized representatives of RSI free and full access,
during regular business hours and upon reasonable notice, to all of
its books, records, personnel and properties so that any of such
persons, at their own expense, may have full opportunity to make such
review, examination and investigation as any of them may desire of the
business and affairs of Nexgen. Nexgen will cause its employees,
accountants and attorneys to cooperate fully with said review,
examination and investigation and to make full disclosure to each of
RSI and RSI shareholders of all material facts affecting their
respective financial conditions and business operations.
(b) Conduct of Business. Nexgen shall conduct its business only in the
ordinary and usual course and make no material change in any of its
business practices and policies without the prior written consent of
RSI, which shall not be unreasonably withheld or delayed.
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(c) No Breach. Nexgen will (i) use its best efforts to assure that all of
its representations and warranties contained herein are true in all
material respects as of the closing as if repeated at and as of such
time, and that no material breach or default shall occur with respect
to any of its covenants, representations or warranties contained
herein that has not been cured by the Closing; (ii) not voluntarily
take any action or do anything which will cause a breach of or default
respecting such covenants, representations or warranties; and (iii)
promptly notify Nexgen of any event or fact which represents or is
likely to cause such a breach or default.
5.3 Legal Fees. RSI and Nexgen shall each bear their own costs and expenses if
this transaction is abandoned at any time.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATION
OF NEXGEN TO CLOSE
The obligation of Nexgen to enter into and complete the Closing is subject
to the fulfillment, prior to or on the Closing Date, of each of the following
conditions, any one or more of which may be waived by Nexgen
(except when the fulfillment of such condition is a requirement of law).
6.1 Representations and Warranties. All representations and warranties of RSI
contained in the Agreement and in any written statement (except financial
statements), exhibit, certificate, schedule or other document delivered
pursuant hereto or in connection with the transactions contemplated hereby
shall be true and correct in all material respects as at the Closing Date,
as if made at the Closing.
6.2 Covenants. RSI shall have performed and complied in all material respects
with all covenants and agreements required by the Agreement to be performed
or complied with by each of them prior to or at the Closing.
6.3 No Actions. No action, suit, proceeding or investigation shall have been
instituted, and be continuing before a court or before or by a governmental
body or agency, or shall have been threatened and be unresolved, to
restrain or to prevent or to obtain damages in respect of, the carrying out
of the transactions contemplated hereby, or which might materially affect
the right of Nexgen to own RSI Stock or to operate or control the assets,
properties and business of RSI after the Closing Date as sole stockholder,
or which might have a materially adverse effect thereon.
6.4 Consents; Licenses and Permits. RSI and Nexgen shall have each obtained all
consents, licenses and permits of third parties, if any, necessary for the
performance by each of them of all of their respective obligations under
the Agreement.
6.5 Certificate. Nexgen shall have received a certificate dated the Closing
Date, signed by the President and Secretary of RSI as to the satisfaction
of the conditions contained in Sections 6.1 and 6.2.
6.6 Additional Documents. RSI and Nexgen shdcedall have delivered all such
other certificates and documents as may have reasonably been requested by
the other Party, including a certificate of the secretary of Nexgen
certifying resolutions of the Board of Directors authorizing the execution,
delivery and performance of the Agreement.
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6.7 Approval of Counsel. All actions, proceedings, instruments and documents
required to carry out the Agreement, or incidental thereto, and all other
related legal matters shall have been approved as to the form and substance
by counsel to Nexgen, which approval shall not be unreasonably withheld or
delayed.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION
OF RSI AND RM TO CLOSE
The obligation of RSI to complete the Closing is subject to the
fulfillment, prior to or on the closing Date, of each of the following
conditions, any one or more of which may be waived by RSI (except when the
fulfillment of such condition is a requirement of law).
7.1 Representations and Warranties. All representations and warranties of
Nexgen and contained in the Agreement and in any written statement,
schedule or other document delivered pursuant hereto or in connection with
the transactions contemplated hereby shall be true and correct in all
material respects as at the Closing Date, as if made at the Closing and as
of the Closing Date.
7.2 Covenants. Nexgen shall have performed and complied in all material
respects with all covenants and agreements required by the Agreement to be
performed or complied with by each of them prior to or at the Closing.
7.3 No Actions. No action, suit, proceeding, or investigation shall have been
instituted, and be continuing, before a court or before or by a
governmental body or agency, or have been threatened, and be unresolved, by
any governmental body or agency to restrain or prevent, or obtain damages
in respect of, the carrying out of the transactions contemplated hereby.
7.4 Certificate. RSI and shall have received a certificate dated the Closing
Date, signed by the President and Secretary of Nexgen as to the
satisfaction of the conditions contained in Sections 7.1 and 7.2.
7.5 Additional Documents. Nexgen shall have delivered all such certified
resolutions, certificates and documents with respect to Nexgen as RSI, RSI
may have reasonably requested, including a certificate of the secretary of
RSI certifying resolutions of the Board of Directors authorizing the
execution, delivery and performance of the Agreement.
7.6 Approval of Counsel. All actions, proceedings, instruments and documents
required to carry out the Agreement or incidental thereto, and all other
related legal matters, shall have been approved as to form and substance by
counsel to RSI, which approval shall not be unreasonably withheld or
delayed.
15
ARTICLE VIII
CLOSING
8.1 Location. The Closing provided for herein shall take place at the offices
of Nexgen, 410 Park Avenue (Suite 1530), New York, New York 10022, at 10:00
a.m. on July 22, 2002, or at such other time and place as may be mutually
agreed to by the parties hereto. Such date is referred to in the Agreement
as the "Closing Date."
8.2 Items to be Delivered by RSI and RME. At the Closing, RSI will deliver or
cause to be delivered to Nexgen:
(a) Certificates representing RSI Stock in accordance with Section 1.1
hereof, accompanied by all instruments and documents as in the opinion
of Nexgen's counsel shall be necessary to effect the transfer of and
to vest title in and to RSI Stock in Nexgen, free and clear of all
liens, pledges, encumbrances, charges and claims thereon;
(b) The certificates required by Section 7.5; and
(c) Such other certified resolutions, documents and certificates as are
required to be delivered by RSI and RSI pursuant to the provisions of
the Agreement.
8.3 Items to be Delivered by Nexgen. At the Closing, Nexgen will deliver or
cause to be delivered to RSI such certified resolutions, documents and
certificates as are required to be delivered by Nexgen pursuant to the
provisions of the Agreement.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS
9.1 Survival. The Parties acknowledge that their respective representations,
warranties, covenants and agreements contained in the Agreement, including
the rights provided for in Article IV, shall survive the Closing for a term
of twenty-four (24) months with the exception of those regarding taxes set
forth in Section 2.10 which shall survive until the expiration of the
period within which such taxes may be assessed.
9.2 Rights Without Prejudice. The rights of the Parties under this Article IX
are without prejudice to any other rights or remedies that they may have by
reason of the Agreement or as otherwise provided by law.
ARTICLE X
TERMINATION AND WAIVER
10.1 Termination. Anything herein or elsewhere to the contrary notwithstanding,
the Agreement may be terminated and the transactions provided for herein
abandoned at any time prior to the Closing Date:
(a) By mutual consent of the boards of directors of Nexgen and RSI;
(b) By Nexgen if any of the conditions set forth in Article VI shall not
have been fulfilled on or prior to June 30, 2002, or shall become
incapable of fulfillment, and shall not have been waived;
16
(c) By RSI or its shareholders if any of the conditions set forth in
Article VII shall not have been fulfilled on or prior to June 30,
2002, or shall become incapable of fulfillment, and shall not have
been waived.
In the event that the Agreement is terminated as described above, the
Agreement shall be void and of no force and effect, without any liability
or obligation on the part of any of the Parties.
10.2 Waiver. Any condition to the performance of RSI, or Nexgen which legally
may be waived on or prior to the Closing Date may be waived at any time by
the Party entitled to the benefit thereof by action taken or authorized by
an instrument in writing executed by the relevant Party or Parties. The
failure of either Party at any time or times to require performance of any
provision of the Agreement shall in no manner affect the right of such
Party as a later time to enforce the same. No waiver by any Party of the
breach of any term, covenant, representation or warranty contained in the
Agreement as a condition to such Party's obligations hereunder shall
release or affect any liability resulting from such breach, and no waiver
of any nature, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a further or continuing
waiver of any such condition or of any breach of any other term, covenant,
representation or warranty of the Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Expenses. Each of the Parties shall bear its own expenses in connection
herewith.
11.2 Confidential Information. Each Party and its representatives will hold in
strict confidence all information and documents received from the other
Party and, if the transactions herein contemplated shall not be
consummated, each Party will continue to hold such information and
documents in strict confidence and will return to the other Parties all
such documents (including the exhibits attached to the Agreement) then in
the receiving Party's possession without retaining copies thereof;
provided, however, that each Party's obligations under this Section 11.2 to
maintain such confidentiality shall not apply to any information or
documents that are in the public domain at the time furnished to it or that
become in the public domain thereafter through any means other than as a
result of any act of the receiving Party or of its agents, officers,
directors or stockholders, or that are required by applicable law to be
disclosed. The Parties acknowledge that remedies at law for any breach of
this Section 11.2 will be inadequate and a non-breaching Party will be
entitled to injunctive relief to compel the breaching Party to perform or
refrain from action required or prohibited hereunder.
11.3 Modification, Termination or Waiver. The Agreement may be amended,
modified, superseded or terminated, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, but only by
a written instrument executed by the Party waiving compliance. The failure
of any Party at any time or times to require performance of any provision
hereof shall in no manner affect the right of such Party at a later time to
enforce the same.
11.4 Publicity. No publicity, release or other public announcement concerning
the transactions contemplated by the Agreement shall be issued by either
Party without the advance approval of both the form and substance of the
same by the other Party and its counsel, which approval, in the case of any
publicity, release or other public announcement required by applicable law,
shall not be unreasonably withheld or delayed.
17
11.5 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and either be delivered personally or by
courier or be mailed, certified or registered mail, postage prepaid, and
shall be deemed given when so delivered personally or by courier, or if
mailed, three days after the date of mailing, as follows:
If to Nexgen, to:
Nexgen Acquisitions VII, Inc.
410 Park Avenue (Suite 1530)
New York, New York 10022
telephone (212) 971-9111
fax: (212) 971-9511
and if to RSI and/or RME, to:
RSI Enterprises, Inc.
50 20th street
Brooklyn, NY 11232
telephone (718) 788-4798
fax: (718) 481-5437.
The Parties may change the persons and addresses to which the notices or
other communications are to be sent by giving written notice of any such
change in the manner provided herein for giving notice.
11.6 Binding Effect and Assignment. The Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Parties;
provided, however, that no assignment of any rights or delegation of any
obligations provided for herein may be made by any Party without the
express written consent of the other Parties.
11.7 Entire Agreement. The Agreement contains the entire agreement between the
Parties with respect to the subject matter hereof and replaces any prior
oral and written understandings.
11.8 Exhibits. All exhibits annexed hereto and the documents and instruments
referred to herein or required to be delivered simultaneously herewith or
at the Closing are expressly made a part of the Agreement as fully as
though completely set forth herein, and all references to the Agreement
herein or in any of such exhibits, documents, or instruments shall be
deemed to refer to and include all such exhibits, documents and
instruments.
11.9 Governing Law. The Agreement shall be governed by, and construed in
accordance with the laws of the State of New York applicable to agreements
made and to be performed entirely within New York State.
11.10 Counterparts. The Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but which together shall constitute one
and the same instrument.
11.11 Section Headings. The section headings contained in the Agreement are
inserted for conveniences of reference only and shall not affect the
meaning or interpretation of the Agreement.
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WITNESS the execution of the Agreement as of the date first above written.
NEXGEN ACQUISITIONS VIII, INC.
By: /s/Guy Cohen
Name: Guy Cohen
its: President
RM ENTERPRISES INTERNATIONAL, INC.
By: /s/Steven Moskowitz
Name: Steven Moskowitz
its: President
RSI ENTERPRISES, INC.
By: /s/ Michael Metter
Name: Metter Metter
its: President
I hereby represent that the representations and warranties of Nexgen
Acquisitions VIII, Inc. as set forth in section 3 hereof are true.
/S/ Guy Cohen
--------------------
Guy Cohen, President
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Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘SB-2’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 11/1/02 | | | | | | | None on these Dates |
| | 7/22/02 | | 17 |
| | 7/15/02 | | 1 | | 2 |
| | 6/30/02 | | 17 | | 18 |
| | 5/31/02 | | 5 |
| | 5/31/01 | | 5 |
| List all Filings |
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