REORGANIZATION AGREEMENT
This Reorganization Agreement ("Agreement") is made and entered into this 15th
day of June, 1999, between and among (i) National Air Corporation, a Nevada
corporation, which is referred to herein as "Company," (ii) Berensgallery.com,
Inc., a Nevada corporation, which is referred to herein as "BGC," and (iii)
those persons identified in Schedule A attached hereto, who are the beneficial
owners of 2,900,000 shares of common stock of BGC, $.001 par value per share,
which constitutes 100% of the issued and outstanding capital stock of BGC (the
"BGC Shareholders").
WHEREAS, the BGC Shareholders, as set forth in Schedule A-1 hereto, own and
have the right to sell, transfer and convey, 2,900,000 shares of BGC's common
stock which constitutes one hundred percent (100%) of the issued and
outstanding capital stock of BGC; and
WHEREAS, the BGC Shareholders have agreed to deliver 2,900,000 shares of BGC's
common stock which constitutes one hundred percent (100%) of the issued and
outstanding shares of common stock of BGC to the Company in exchange for
2,900,000 newly issued shares of the Company's $.001 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 AND WARRANTIES BY BGC AND THE BGC SHAREHOLDERS. BGC and the
BGC Shareholders, hereby jointly and severally make the following express
representations and warranties to the Company:
A. BGC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada and has the corporate
power to own its property and carry on its business in the State of
Nevada. Copies of BGC's Certificate of Incorporation and By-Laws
have heretofore been furnished to the Company by BGC and/or the BGC
Shareholders, and all such copies are true, correct and complete
copies of the original Articles of Incorporation and By-Laws
including all amendments thereto.
B. BGC has the corporate authority to issue a total of 50,000,000
shares of common stock, of which 2,900,000 shares have been issued
and are outstanding.
C. The BGC Shareholders have full power and authority to exchange the
2,900,000 shares of BGC's common stock which are held by them 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.
D. The BGC balance sheet dated May 31, 1999 (the "Balance Sheet")
contain substantially true and correct statements concerning BGC and
the financial condition of BGC's assets and liabilities as of such
date. Except as described in this Agreement or disclosed to the
Company in writing, BGC 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; or
(3) entered into any other transaction or agreement which would,
or might, materially impair the shareholder's equity of BGC.
E. Since May 31, 1999, and except as provided herein or disclosed to
the Company in writing, BGC 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 BGC as reflected in the Balance Sheet.
F. BGC 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 Balance Sheet, or
(2) disclosed to the Company in writing.
G. BGC 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 in the
ordinary course of business; and
(2) easements or other minor restrictions with respect to its
property which do not materially affect the present use of
such property.
H. There are no unpaid assessments or proposed assessments of State or
Federal income taxes pending against BGC and all liabilities for
Federal and State income or franchise taxes, as shown on the tax
returns filed, or to be filed, by BGC, have been paid or the
liability therefor has been provided for 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; except where the failure to pay would not have a material
adverse effect on the business of BGC.
I. The BGC Shareholders are acquiring the common stock of the Company,
solely for their own accounts, for investment, and not with a view
to any subsequent "distribution" thereof within the meaning of the
Act. The BGC Shareholders understand that the Company's common
stock has 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.
J. The BGC Shareholders hereby acknowledge that:
(1) They are an "Accredited Investor" as such term is defined in
Regulation D promulgated under the Act, or they have such knowledge
and experience in financial and business matters that they are
capable of evaluating the merits and risks of the proposed exchange
of BGC's securities for securities of the Company, and
(2) They are able to bear the economic risks of the investment in
the Company's securities and they are able to protect their own
interests in an investment of this nature.
BGC and the BGC Shareholders 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 the Closing for a
period of one year from the Closing Date.
2. REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company hereby makes
the following express representations and warranties to BGC and the BGC
Shareholders:
A. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada and Utah and has
the corporate power to own its properties and carry on its business
as now being conducted. Certified copies of the Company's Articles
of Incorporation and By-Laws have heretofore been furnished to BGC
by the Company, and all such copies are true, correct and complete
copies of the original Articles of Incorporation and By-Laws
including all amendments thereto.
B. The Company has the corporate authority to issue a total of
20,000,000 shares of $.001 par value per share common stock, of
which 737,505 shares are presently issued and outstanding, and an
aggregate of 862,495 shares will be issued at or prior to the
Closing Date to the persons and in the amounts set forth on
Schedules B and C. The Company has the corporate authority to issue
a total of 1,000,000 shares of $.25 par value per share Class A
preferred stock, of which 0 shares are presently issued and
outstanding. The Company has the corporate authority to issue a
total of 1,000,000 shares of $.10 par value per share Class B
preferred stock, of which 0 shares are presently issued and
outstanding. As of the date of Closing, there are not any
outstanding or authorized options, warrants, rights, subscriptions,
claims of any character, agreements, obligations, convertible or
exchangeable securities, or other commitments, contingent or
otherwise, relating to the Company's capital stock, pursuant to
which the Company is or may become obligated to issue shares of the
Company's common stock, any other shares of its capital stock or any
securities convertible into, exchangeable for, or evidencing the
right to subscribe for, any shares of the capital stock of the
Company. All of the shares of the Company's common stock have the
same voting and other rights.
C. On June 17, 1997, the Company filed a registration statement with
the Securities and Exchange Commission ("SEC") on Form 10-SB. As of
August 16, 1997, the Company has been a reporting company pursuant
to Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). With respect to the above filing, as well as
any amendments to the above filing, the Company has received
comments from the SEC and has responded to such comments to the
satisfaction of the SEC.
D. Since the conclusion of such public registration, the Company has
continued to report under Section 13 of the Exchange Act. On or
about the Closing date hereunder, the Company will have filed forms
necessary to make it current in all reporting requirements under the
Exchange Act. The Company has not received any comments from the SEC
with respect to any of the Company's filings under the Exchange Act,
with the exception of the Form 10-SB (and any amendments thereto).
The Company is not now, and has never been subject to, any formal or
informal SEC enforcement proceedings.
E. Subsequent to the Closing Date of this Reorganization Agreement, the
Company will file an amendment to its Articles of Incorporation and
adopt such resolutions as
necessary for the purpose of changing the name of the Company to
"Berensgallery.com, Inc."
F. The audited Financial Statements of the Company which are set forth
in the Company's most recent filings on Form 10-KSB for the period
ended December 31, 1998 and on Form 10-QSB for the period ended
March 31, 1999 (the "Financial Statements") 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 March 31, 1999:
(1) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of the
Company; or (ii) any damage, destruction, or loss to the
Company (whether or not covered by insurance) materially and
adversely affecting the business, operations, properties,
assets, or condition of the Company;
(2) the Company has not (i) amended its certificate of
incorporation or bylaws; (ii) declared or made, or agreed to
declare or make, any payment of dividends or distributions of
any assets of any kind whatsoever to stockholders or purchased
or redeemed, or agreed to purchase or redeem, any of its
capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the
business of the Company; (iv) made any material change in its
method of management, operation, or accounting; (v) entered
into any other material transaction; (vi) made any accrual or
arrangement for payment of bonuses or special compensation of
any kind or any severance or termination pay to any present or
former officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its
officers or directors or any of its employees whose monthly
compensation exceeds $1,000; or (viii) made any increase in
any profit sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment,
or arrangement made to, for, or with its officers, directors,
or employees;
(3) the Company has not (i) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or
liability (absolute or contingent); (ii) paid any material
obligation or liability (absolute or contingent) other than
current liabilities reflected in or shown on the most recent
Company balance sheet; (iii) sold or transferred, or agreed to
sell or transfer, any of its assets, properties, or rights
(except assets, properties, or rights not used or useful in
its business which, in the aggregate have a value of less than
$1,000), or canceled, or agreed to cancel, any debts or claims
(except debts or claims which in the aggregate are of a value
of less than $1,000); (iv)
made or permitted any amendment or termination of any
contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business
of the Company; or (v) issued, delivered, or agreed to issue
or deliver any stock, bonds or other corporate securities
including debentures (whether authorized and unissued or held
as treasury stock); and
(4) to the best knowledge of the Company, has not become subject
to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business,
operations, properties, assets, or condition of the Company.
G. The Company, subject to obtaining shareholder approval of the
proposed amendments to its Articles of Incorporation, as
contemplated hereby, which the Company hereby agrees to faithfully
undertake and complete, has the corporate power and authority to
execute and perform all of its duties and obligations under the
terms of this Agreement and to issue and deliver to the BGC
Shareholders, those shares of its $.001 par value per share common
stock that are required to be issued and delivered under the terms
of this Agreement.
H. The execution and delivery of this Agreement, and the issuance of
the Company's $.001 par value per share common stock 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 the issuance of the Company's $.001 par value per
share common stock, 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 Articles of Incorporation or By-Laws of the Company or
any indenture, agreement or other instrument to which the Company is
a party, or by which it is bound or by which any of its property is
bound.
I. The Company is not involved in any pending or threatened litigation
which would, or might, materially affect its financial condition and
which has not been:
(1) provided for in the Financial Statements filed with the SEC,
or
(2) disclosed to BGC and the BGC Shareholders in writing.
J. The Company has duly and timely filed or prior to Closing will file
with any federal, state, local or foreign governmental taxing
authority, body or agency, all federal, state, local and foreign tax
returns, declarations, reports estimates, informational returns and
statements (collectively ("Returns") required to be filed or sent by
or on behalf of the Company, at or prior to the date of Closing, and
all such Returns are or will be true,
correct and complete. There are no unpaid assessments or proposed
assessments of State or Federal income taxes pending against the
Company. All liabilities for Federal and State income or franchise
taxes, as shown on the tax returns filed, or to be filed, by the
Company, have been paid or the liability therefor has been provided
for in the attached Balance Sheet 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; except
where the failure to pay would not have a material adverse effect on
the business of the Company.
K. The shares of the Company's $.001 par value per share common stock
which will be delivered to the BGC Shareholders 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.
L. On the Closing Date, the Company will cause the following
individuals to be elected to the Company's Board of Directors: Marc
I. Berens, Yolana Berens and William Ranshaw.
M. The consummation of the transaction contemplated hereby will not:
(i) violate any provision of the charter, By-laws or other
organizational documents of the Company, (ii) Violate in any
material respect any statute, ordinance, rule, regulations, order or
decree of any court of any governmental or regulatory body, agency
or authority applicable to the Company, (iii) require the filing
with, or the obtaining of any permit, consent or approval of, or the
giving of any notice to, any governmental or regulatory body, agency
or authority; or (iv) result in a material violation, termination or
breach of, conflict with, constitute (with or without the giving of
notice or lapse of time or both ) a default (or give rise to any
right of termination, cancellation, payment or acceleration) under,
result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company,
result in the forfeiture of any rights, entitlements or privileges
under, create any right or entitlement including without limitation,
to employment or compensation) not expressly provided for herein, or
require the consent or approval of any party under, any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, license, franchise, permit agreement, lure, agreement or
other instrument or obligation to which the Company is a party,
except for such violations, filings, consents, approvals, notices,
terminations, breaches, conflicts, defaults, security interests,
charges, encumbrances, forfeitures, rights and entitlements that
would not, individually or in the aggregate, have a materially
adverse effect on the condition of the Company taken as a whole.
N. Except as set forth in the audited balance sheet of the Company as
set forth in the Company's SEC filings, the Company has no material
claims against it, liabilities or indebtedness, contingent or
otherwise. The Company does not know or have reason to know of any
basis for the assertion against the Company of any liability of any
material nature or in any material amount not fully reflected or
reserved against in the Company's audited balance sheet.
O. There is no legal, administrative, arbitral or other proceedings
claim, action, cause of action or governmental investigation of any
nature seeking to impose, or that could result in the imposition, on
the Company of any liability easing under any local, state or
federal environmental statute, regulation or ordinance, including,
without
limitation, the Comprehensive Environmental Response Compensation
and Liability Act of 1980, as amended, pending or threatened against
the Company, which would be required to be disclosed pursuant to
Item 103 or 303 of Regulation SK (17 CFR 229). To the best knowledge
of the Company there is no reasonable basis for any such proceeding,
claim action, or governmental investigation that would impose any
such liability; and the Company is not subject to any agreement
order, judgment, decree or memorandum by or with any court,
governmental authority, regulatory agency third party imposing any
such liability.
P. The Company has not established, maintained or contributed to any
employee benefit plans. As used herein, the term "Employee Benefit
Plans" means all employee benefit plans within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). As of the date of Closing all other plans,
including but not limited to, programs and arrangements providing
profit sharing, retirement, pension, savings, thrift, deferred
compensation, stock option, stock purchase, group insurance,
accident, sickness, medical, dental, disability, have been
terminated and there are no continuing obligations by the Company
pursuant to said plans. All vacation pay, severance pay, incentive
compensation and bonuses have been paid, and there are no continuing
obligations by the Company.
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 at the Closing Date and shall survive the closing for a period of one
year from the Closing Date.
3. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company 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 BGC, and/or the BGC Shareholders 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 BGC 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
BGC 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 BGC SHAREHOLDERS AND BGC. The
obligations of the BGC Shareholders and BGC hereunder are subject to the
following conditions:
A. The BGC Shareholders and BGC 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.
5. CLOSING DATE. The Closing of this Agreement ("Closing Date") shall take
place on or before June 15, 1999.
6. EXCHANGE OF SECURITIES. Subject to the terms and conditions set forth
herein, At the time of the Closing referred to in Section 5 hereof, the Company
will issue and deliver, or cause to be issued and delivered to the BGC
Shareholders identified in Schedule A-1 hereto certificates evidencing the
ownership of the securities as designated therein and concurrently therewith the
BGC Shareholders identified in Schedule A-1 hereto shall directly or through
their 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.
7. ACTIONS AT THE CLOSING. At the Closing of this Agreement, the Company and
the BGC Shareholders will each deliver, or cause to be delivered to the other,
the securities to be exchanged in accordance with Section 6 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 Date.
The Company will deliver to the BGC Shareholders and BGC:
A. Duly certified copies of corporate resolutions and other corporate
proceedings taken by the Company to authorize the execution, delivery
and performance of this Agreement;
B. A certificate executed by a principal officer of the Company attesting
to the fact that all of the foregoing representations and warranties
of the Company are true and correct as of the Closing Date and that
all of the conditions to the obligations of the BGC Shareholders,
which are to be performed by the Company have been performed as of the
Closing Date;
C. A certificate of corporate good standing for the Company from the State
of Nevada and Utah which shall be dated no more than 60 days prior to the
Closing Date; and
D. An incumbency certificate including the Company's Articles of
Incorporation (including any amendments thereto), By-Laws (including any
amendments thereto), and Corporate Resolutions.
E. A letter executed by Jeff Jensen, agreeing to "backup" the
representations made by the Company in Section 2 hereof, as well as a
lock up letter, and aggress to forgive his shareholder loan.
F. Delivery by Eurotrade of the following: (i) an escrow agreement
evidencing 200,000 shares of the Company common stock issued to Eurotrade
(or agents thereof) placed in escrow to be canceled by the Company unless
Eurotrade itself, or through third parties, introduced to BGC by
Eurotrade, shall raise gross proceeds of $1 million in equity financing
for BGC on or before December 31, 1999; and (ii) $73,501 of money
currently being held in escrow by Eurotrade or if such funds are not
delivered at Closing, an escrow agreement evidencing a total of 100,000
shares held by Eurotrade (or its agents) placed in escrow to be canceled
unless $73,501 dollars has been delivered to BGC within 1 month from the
date hereof.
The BGC Shareholders and BGC will deliver to the Company:
A. Duly certified copies of corporate resolutions and other corporate
proceedings taken by BGC to authorize the execution, delivery and
performance of this Agreement;
B. A certificate of corporate good standing for BGC from the Secretary of
State of the State of Nevada and Texas which shall be dated no more than
60 days prior to the Closing Date; and
C. A certificate by a principal officer of BGC that each of the
representations and warranties of the BGC are true and correct as of the
Closing Date and that all of the conditions to the obligations of the
Company which are to be performed by BGC and have been performed as of
the Closing Date.
D. An incumbency certificate including the Company's Articles of
Incorporation (including any amendments thereto), By-Laws (including any
amendments thereto), and Corporate Resolutions.
8. CONDUCT OF BUSINESS. Between the date hereof and the Closing Date, BGC
shall conduct its business in the same manner in which it has heretofore been
conducted and the Shareholders will not permit BGC 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 BGC
Shareholder's, without first obtaining the written consent of the Company.
9. BOARD OF DIRECTORS. On the Closing, the Board of Directors of the
Company shall have a meeting, at which all of the present directors of the
Company shall resign, and they shall fill the vacancies created by their
respective resignations, as members of the Company's Board of Directors, in
accordance with the By-Laws of the Company, with such individuals as set forth
in Section 2(L).
10. FUTURE REGISTRATION. The BGC Shareholders understand that because the
Company's common stock has not been registered under the Act or any State Act,
they must hold the Company's common stock for investment purposes, 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 BGC Shareholders further understand that the Company may, as a
condition to the transfer of any of the shares of the Company's common stock
requires that the request for transfer be accompanied by an opinion of counsel,
in form and substance satisfactory to the Company, provided at such BGC
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.
11. TRANSFERABILITY. All shares of the Company's common stock which are
issued to the BGC Shareholders, 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 shall place the following legend on the certificates
representing such stock.
"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."
12. ACCESS TO INFORMATION. Concurrently herewith, the Company has delivered
to the BGC Shareholders correct and complete copies of all documents and records
requested by the Shareholders. In addition, the BGC Shareholders have had the
opportunity to ask questions of, and received answers from, officers and
directors of the Company, 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 to enable them to make
an informed decision with respect to the acquisition of the common stock.
13. NO SOLICITATION. At no time were the BGC Shareholders 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 their acquisition of the Company's common
stock.
14. EXPENSES. The BGC Shareholders and BGC and the Company 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.
15. FINDERS. The BGC Shareholders and BGC shall indemnify and hold the
Company 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 BGC Shareholders and BGC with any third party. The Company shall
indemnify and hold the BGC Shareholders and BGC 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 with
any third party. Except as provided in Schedule C, 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.
16. ATTORNEY'S FEES. In the event of any litigation among the parties related
to this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees and costs to be fixed by the court, said fees to include appeal
and collection of judgment.
17. LIMITATION ON REVERSE SPLITS. Without the prior written consent of a
majority of the current Board of Directors of the Company, the Company may not
execute a reverse split of the outstanding voting securities of the Company for
a period of twenty-four (24) months from the execution of this Agreement.
18. LIMITATION ON ISSUANCE OF SHARES PURSUANT TO FORM S-8. Without the prior
written consent of a majority of the current Board of Directors of the Company,
the Company may not register the issuance or resale of more than 500,000 shares
of Company common stock, pursuant to registration on Form S-8, for a period of
twelve (12) months from the execution of this Agreement.
19. RULE 144 OPINION FOR SHARES ISSUED TO RECIPIENTS IN SCHEDULES B AND C.
The Company hereby acknowledges that it will accept the opinion of David Strawn,
Esquire, current counsel to the Company, that the shares of the common stock
issued to the recipients set forth in Schedules B and C were fully paid for on
or prior to Closing and the Company acknowledges that it will not delay or
hinder the processing of any Rule 144 opinion, provided that such subsequent
transfer complies with the rules and regulations set forth in Rule 144. In the
event the Company holds up the processing of such opinion in connection
therewith, and such sale comports with federal and state securities laws,
Company agrees to pay liquidated damages in the amount of $50,000 per
occurrence.
20. MISCELLANEOUS.
A. This Agreement shall be controlled, construed and enforced in
accordance with the laws of the State of Texas, excluding any
principle or provision thereof that would require application of the
laws of any other jurisdiction.
B. This Agreement shall not be assignable by either party without prior
written consent of the other.
C. 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.
D. This Agreement sets forth the entire understanding between the
parties, there being no terms, conditions, warranties or
representations other than those contained herein, and no amendments
hereto shall be valid unless made in writing and signed by the
parties hereto.
E. This Agreement shall be binding upon and shall inure to the benefit
of the heirs, executors, administrators and assigns of the BGC
Shareholders and BGC and upon the successors and assigns of the
Company.
F. All notices, requests, instructions, or other documents to be given
hereunder shall be in writing and sent by registered mail:
If to BGC Shareholders or BGC:
Marc Ivan Berens, President
Berensgallery.com, Inc.
701 N. Post Oak Rd, Suite 350
Houston, Texas 77024
With Copies to:
Brewer & Pritchard P.C.
Attention: Thomas Pritchard, Esq.
1111 Bagby Street
Suite 2450
Houston, Texas 77002
If to the Company:
David R. Strawn, Esquire
1922 East Salt Sage Drive
Phoenix, Arizona 85048
G. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which shall constitute the same
instrument.