-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PpF0UpT8BIOJEtWbUxVLGvM16/E6g+5xc4wsqL5V6/iEsnOnfk2AD6p0FrNt4jy9 FSv29qh1/QkMLKkdDhEUng== 0000950123-00-000528.txt : 20000203 0000950123-00-000528.hdr.sgml : 20000203 ACCESSION NUMBER: 0000950123-00-000528 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000127 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL INTERNET INC CENTRAL INDEX KEY: 0001088787 STANDARD INDUSTRIAL CLASSIFICATION: [9995] IRS NUMBER: 522175532 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-57079 FILM NUMBER: 514258 BUSINESS ADDRESS: STREET 1: 1504 R STREET NW CITY: WASHINGTON STATE: DC ZIP: 20009 BUSINESS PHONE: 2023875400 FORMER COMPANY: FORMER CONFORMED NAME: CAPROCK CORP/DE/ DATE OF NAME CHANGE: 19990615 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SCHULTHEIS GARY CENTRAL INDEX KEY: 0001104217 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 6413 CONGRESS AVENUE STREET 2: SUITE 230 CITY: BOCA RATON STATE: FL ZIP: 33487 MAIL ADDRESS: STREET 1: 6413 CONGRESS AVENUE STREET 2: SUITE 230 CITY: BOCA RATON STATE: FL ZIP: 33487 SC 13D 1 SCHEDULE 13D ORIGINAL FILING 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 INTERNATIONAL INTERNET, INC. NAME OF ISSUER COMMON STOCK $.00001 PAR VALUE TITLE OF CLASS OF SECURITIES 459700100 CUSIP NUMBER GARY SCHULTHEIS 6413 CONGRESS AVENUE SUITE 230 BOCA RATON, FL 33487 (561) 988-0819 NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS DECEMBER 4, 1999 ---------------------------------------------------- DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ] Check the following box if a fee is being paid with this statement. [ ] 2 CUSIP NO. 459700100 1. Name of Reporting Persons Gary Schultheis Tax Identification Number ###-##-#### 2. Check the Appropriate Box if a Member (a){ } of a Group. (See instructions) (b){ } 3. SEC Use Only 4. Source of Funds OO 5. Check if Disclosure of Legal Proceedings is Required pursuant to Items 2(d) or 2(e) { } 6. Citizenship or Place of Organization United States (7) Sole Voting Power 252,269,000 Number of Shares Beneficially (8) Shared Voting Power Owned by Each Reporting Person (9) Sole Dispositive Power 252,269,000 With: (10) Shared Dispositive Power 11. Aggregate Amount Beneficially Owned 252,269,000 By Each Reporting Person 12. Check if the Aggregate Amount in Row 11 Excludes Certain Shares { } 13. Percent of Class Represented 32.83% by Amount in Row 11 14. Type of Reporting Person IN ITEM 1. SECURITY AND ISSUER. The class of equity securities to which this statement relates is the common stock, $0.00001 par value (the "Stock"), of International Internet, Inc., a Delaware corporation ("IINN"). The executive offices of International Internet are located at 6413 Congress Avenue, Suite 230, Boca Raton, FL 33487. ITEM 2. IDENTITY AND BACKGROUND. This statement is filed by Gary Schultheis ("Schultheis"). The business address of Schultheis is 6413 Congress Avenue, Suite 230, Boca Raton, Florida. Schultheis is president and CEO of IINN, and has served in that capacity since January 14, 1998. During the last five years, Schultheis has not been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or 3 CUSIP NO. 459700100 mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. On January 17, 1998, Schultheis acquired 2,680,190 pre-split shares (the "Shares") of the Company's Common Stock pursuant to the terms of that certain Stock Purchase Agreement dated January 13, 1998, between the Company and Schultheis, a copy of which is filed herewith as Exhibit 7.2. Pursuant to the Stock Purchase Agreement, Schultheis received the Shares in exchange for 38.52% of the outstanding capital stock of Mr. Cigar, Inc., a Delaware corporation which Schultheis had owned. The Shares were subsequently subject to a 100 for 1 forward split in August, 1998. ITEM 4. PURPOSES OF TRANSACTION. The acquisition of Stock reported herein was made to obtain an equity interest in International Internet, Inc. Schultheis intends from time to time, depending upon market conditions, the state of affairs of IINN and of the business in which it is engaged and other factors, to acquire additional shares of Stock subject to applicable laws, but Schultheis may determine to sell all or a portion of the shares of Stock that he now owns or hereafter may acquire. Schultheis intends to continue to consider his equity interests in IINN and reserve the right to formulate such plans or proposals, and to take such action, as may seem appropriate in the circumstances existing at any future date. Except as set forth above, Schultheis has no present plans or proposals which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) At the close of business on November 30,1999, Schultheis beneficially owned 252,269,000 shares of Stock, or approximately 32.83% of the 768,446,187 outstanding shares of Stock of IINN as reported by IINN in its Form 8-K filing for the period ended 12/8/99. (b) Schultheis has sole voting and dispositive power with respect to 252,269,000 of the shares of Stock disclosed in Item 5(a) above. (c) Schultheis has not sold any shares of Stock during the past sixty days. (d) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. There are no securities that are pledged or otherwise subject to a contingency, the occurrence of which would give another person voting power or investment power over such securities. 4 CUSIP NO. 459700100 ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The following exhibit is attached: 7.2. Stock Purchase Agreement dated January 13, 1998, between Schultheis and International Industries, Inc. 5 CUSIP NO. 459700100 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. DATED: January 17, 2000 /s/ GARY SCHULTHEIS --------------------------------- GARY SCHULTHEIS EX-99.7.2 2 STOCK PURCHASE AGREEMENT 1 EXHIBIT 7.2 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 13th day of January, 1998, by and among INTERNATIONAL INDUSTRIES, INC., Inc. a Delaware corporation (hereinafter referred to as "Buyer"); and GARY SCHULTHEIS, and HERBERT TABIN (hereinafter collectively referred to as "Seller"), being a majority of the shareholders of MR. CIGAR, INC., a Delaware corporation (hereafter referred to as "Company"). WHEREAS, Seller is the owner of record and beneficially owns Five Million One Hundred Sixty Thousand Three Hundred Eighty (5,160,380) shares of the issued and outstanding shares of Common Stock of the Company and Five Million (5,000,000) preferred shares of the Company (the "Shares"); and WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer desires to purchase the Shares, upon the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, and subject to the accuracy of the representations and warranties of the parties, the parties hereto agree as follows: I. SALE AND PURCHASE OF THE SHARES 1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign, transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller, the Shares listed in Exhibit "A", attached hereto, which together constitute 77.04% of the issued and outstanding Shares of Common Stock of the Company and 100% of the issued and outstanding shares of the Preferred Stock of the Company. 1.2 CLOSING. The purchase shall be consummated at a closing ("Closing") to take place at 9:00 o'clock a.m., at the offices of Buyer's counsel on January 17, 1998 ("Closing Date"). 1.3 PURCHASE PRICE. The aggregate purchase price ("Purchase Price") for the Shares shall be Five Million Three Hundred Sixty Thousand Three Hundred Eighty, (5,360,380) shares of Common Stock of the Buyer ("Buyer's Shares"). This portion of the Purchase Price shall be paid at Closing, by issuance and delivery of Buyer's Shares to Seller against receipt of certificates representing the Shares, duly endorsed for transfer to Buyer. 1.4 ALLOCATION OF SHARES. All shares of stock of Buyer to be issued to Seller pursuant to this Agreement shall be issued to the respective Sellers in proportion to their respective ownership of stock of the Company as described in Exhibit "A" hereto. 1.5 OTHER AGREEMENTS. At the Closing, the indicated parties shall execute and deliver the following additional agreements in substantially the form attached hereto: (a) Employment Agreements between the Company and Gary Schultheis and Herbert Tabin attached hereto as Exhibits "B" and "C". (b) Stock certificates representing all of the Shares, duly endorsed to Buyer and in blank or assignments separate from the certificates, transferring the Shares from Seller to Buyer. 1.6 BASIC AGREEMENTS AND TRANSACTIONS DEFINED. This Agreement and other agreements listed in paragraph 1.5, are sometimes referred to as the "Basic Agreement". The transactions contemplated by the Basic Agreement are sometimes referred to as the "Transactions". 2 II. REPRESENTATIONS AND WARRANTIES 2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represent and warrant to Buyer as follows: (a) TITLE TO THE SHARES. At Closing, Seller shall own of record and beneficially the number of the Shares listed in Exhibit "A", of the Company, free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the Shares to Buyer. No person has any preemptive rights or rights of first refusal with respect to any of the Shares. There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the Shares. There are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the Shares. (b) ORGANIZATION. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware. The Company has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business. The Company is duly qualified and in good standing as a foreign corporation in each jurisdiction where its ownership of property or operation of its business requires qualification. (c) AUTHORIZED CAPITALIZATION. The authorized capitalization of the Company consists of Twenty Million (20,000,000) shares of Common Stock, of which Six Million Six Hundred Ninety Eight Thousand Twenty Five (6,698,025) shares have been issued and are outstanding and Six Million (6,000,000) Shares, Series A Preferred of which Five Million (5,000,000) shares are outstanding. The Shares have been duly authorized, validly issued, are fully paid and nonassessable with no personal liability attaching to the ownership thereof and were offered, issued, sold and delivered by the Company in compliance with all applicable state and federal laws. Except as set forth in Exhibit "F" attached hereto, the Company does not have any outstanding rights, options, warrants, calls, commitments, conversion or any other agreements of any character, whether oral or written, obligating it to issue any shares of its capital stock, whether authorized or not. Except as set forth in Exhibit "D" attached hereto, the Company is not a party to and are not bound by any agreement, contract, arrangement or understanding, whether oral or written, giving any person or entity any interest in, or any right to share, participate in or receive any portion of, the Company's income, profits or assets, or obligating the Company to distribute any portion of its income, profits or assets. (d) AUTHORITY. Seller has full power and lawful authority to execute and deliver the Basic Agreements and to consummate and perform the Transactions contemplated thereby. The Basic Agreements constitute (or shall, upon execution, constitute) valid and legally binding obligations upon Seller, enforceable in accordance with their terms. Neither the execution and delivery of the Basic Agreements by Seller, nor the consummation and performance of the Transactions contemplated thereby, conflicts with, requires the consent, waiver or approval of, results in a breach of or default under, or gives to others any interest or right of termination, cancellation or acceleration in or with respect to, any agreement by which Seller or the Company is a party or by which Seller or the Company or any of their respective properties or assets are bound or affected. (e) COMPANY FINANCIAL STATEMENTS. The Company Financial Statements are complete, were prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior periods and fairly present the financial position of the Company as of October 31, 1997. (f) NO UNDISCLOSED LIABILITIES. Except as set forth in the Company Financial Statements previously delivered to Buyer and as set forth on Exhibit "E, Seller is not aware of any liabilities for which the Company is liable or will become liable in the future. -2- 3 (g) TAXES. The Company has filed all federal, state, local tax and other returns and reports which were required to be filed with respect to all taxes, levies, imposts, duties, licenses and registration fees, charges or withholdings of every nature whatsoever ("Taxes"), and their exists a substantial basis in law and fact for all positions taken in such reports. No waivers of periods of limitation are in effect with respect to any taxes arising from and attributable to the ownership of properties or operations of the business of the Company. (h) PROPERTIES. The Company has good and marketable title to all its personal property, equipment, processes, patents, copyrights, trademarks, franchises, licenses and other properties and assets (except for items leased or licensed to the Company), including all property reflected in the Company Financial Statements (except for assets reflected therein which have been sold in the normal course of its business where the proceeds from such sale or other disposition have been properly accounted for in the financial statements of the Company), in each case free and clear of all liens, claims and encumbrances of every kind and character, except as set forth in Exhibit "F. The Company has no ownership interest in any real property. The assets and properties owned, operated or leased by the Company and used in its business are in good operating condition, reasonable wear and tear excepted, and suitable for the uses for which intended. (i) BOOKS AND RECORDS. The books and records of the Company are complete and correct in all material respects, have been maintained in accordance with good business practices and accurately reflect in all material respects the business, financial condition and results of operations of the Company as set forth in the Company Financial Statements. (j) INSURANCE. Exhibit "G contains an accurate and complete list and brief description of all performance bonds and policies of insurance, including fire and extended coverage, general liability, workers compensation, products liability, property, and other forms of insurance or indemnity bonds held by the Company. The Company is not in default with respect to any provisions of any such policy or indemnity bond and has not failed to give any notice or present any claim thereunder in due and timely fashion. All policies of insurance and bonds are: (1) in full force and effect; (2) are sufficient for compliance by the Company with all requirements of law and of all agreements and instruments to which the Company is a party; (3) are valid, outstanding and enforceable; (4) provide adequate insurance coverage for the assets, business and operations of the Company in amounts at least equal to customary coverage in the Company's industry; (5) will remain in full force and effect through the Closing; and (6) will not be affected by, and will not terminate or lapse by reason of, the transactions contemplated by this Agreement. (k) TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in Exhibit "H, the Company has no outstanding agreement, understanding, contract, lease, commitment, loan or other arrangement with any officer, director or shareholder of the Company or any relative of any such person, or any corporation or other entity in which such person owns a beneficial interest. (l) MATERIAL CONTRACTS. Except as set forth in Exhibit "I", the Company has no purchase, sale, commitment, or other contract, the breach or termination of which would have a materially adverse effect on the business, financial condition, results of operations, assets, liabilities, or prospects of the Company. (m) EMPLOYMENT MATTERS. Exhibit "J" contains a list of all officers, their base salaries, accrued vacation pay, sick pay, and severance pay through December 31, 1997. Except as set forth in Exhibit "K", the Company is not a party to any employment agreement, or any pension, profit sharing, retirement or other deferred compensation plan or agreement. The Company has not incurred any unfunded deficiency or liability within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), has not incurred any liability to the Pension Benefit Guaranty Corporation established under ERISA in connection with any employee benefit plan and has no outstanding obligations or liabilities under any employee benefit plan. The -3- 4 Company has not been a party to a "prohibited transaction," which would subject the Company to any tax or penalty. There is no collective bargaining agreement or negotiations therefor, labor grievance or arbitration proceeding against the Company pending or threatened, and to the knowledge of the Seller, there are no union organizing activities currently pending or threatened against or involving the Company. (n) AUTHORIZATIONS. The Company has no licenses, permits, approvals and other authorizations from any governmental agencies and any other entities that are necessary for the conduct of its business, except as set forth in Exhibit "L" which contains a list of all licenses, permits, approvals, and other authorizations, as well as a list of all copyrights, patents, trademarks, tradenames, servicemarks, franchises, licenses and other permits, each of which is valid and in full force and effect. (o) NO POWERS OF ATTORNEY. The Company has no powers of attorney or similar authorizations outstanding. (p) COMPLIANCE WITH LAWS. The Company is not in violation of any federal, state, local or other law, ordinance, rule or regulation applicable to its business, and have not received any actual or threatened complaint, citation or notice of violation or investigation from any governmental authority. (q) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company is in compliance with all applicable pollution control and environmental laws, rules and regulations. The Company has no environmental licenses, permits and other authorizations held by the Company relative to compliance with environmental laws, rules and regulations. (r) NO LITIGATION. There are no actions, suits, claims, complaints or proceedings pending or threatened against the Company, at law or in equity, or before or by any governmental department, commission, court, board, bureau, agency or instrumentality; and there are no facts which would provide a valid basis for any such action, suit or proceeding. There are no orders, judgments or decrees of any governmental authority outstanding which specifically apply to the Company or any of its assets. (s) VALIDITY. All contracts, agreements, leases and licenses to which the Company is a party or by which it or any of its properties or assets are bound or affected, are valid and in full force and effect; and no breach or default exists, or upon the giving of notice or lapse of time, or both, would exist, on the part of the Company or by any other party thereto. (t) NO ADVERSE CHANGES. Since October 31, 1997, there have been no actual or threatened developments of a nature that is materially adverse to or involves any materially adverse effect upon the business, financial condition, results of operations, assets, liabilities, or prospects of the Company. (u) FEES. All negotiations relating to the Basic Agreements and the Transactions have been conducted by the Seller in such a manner as not to give rise to any valid claim for any finder's fees, brokerage commission, financial advisory fee or related expense or other like payment for which the Company or Buyer are or may be liable. (v) FULL DISCLOSURE. All statements of Seller contained in the Basic Agreements and in any other written documents delivered by or on behalf of the Company or Seller to Buyer are true and correct in all material respects and do not omit any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made. There are no facts known to Seller which could have a materially adversely affect upon the business, financial condition, results of operations, assets, liabilities, or prospects of the Company, which have not been disclosed to Buyer in the Basic Agreements. -4- 5 2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Seller as follows: (a) ORGANIZATION. Buyer is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware. Buyer has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business. Buyer is duly qualified and in good standing as a foreign corporation in each jurisdiction where its ownership of property or operation of its business requires qualification. The Certificate of Incorporation and the Bylaws of Buyer presently provide that the number of members of the Board of Directors shall be five (5). (b) AUTHORITY. Buyer has full power and lawful authority to execute and deliver the Basic Agreements and to consummate and perform the Transactions contemplated thereby. The Basic Agreements constitute (or shall, upon execution, constitute) valid and legally binding obligations upon Buyer, enforceable in accordance with their terms. Neither the execution and delivery of the Basic Agreements by Buyer, nor the consummation and performance of the Transactions contemplated thereby, conflicts with, requires the consent, waiver or approval of, results in a breach of or default under, or gives to others any interest or right of termination, cancellation or acceleration in or with respect to, any agreement by which Buyer is a party or by which Buyer or any of its properties or assets are bound or affected. (c) INVESTMENT INTENT. Buyer is acquiring the Shares for its own account, for investment purposes only, and not with a view to the sale or distribution of any part thereof, and Buyer has no present intention of selling, granting participation in, or otherwise distributing the same. Buyer understands the specific risks related to an investment in the Shares, especially as it relates to the financial performance of the Company. III. COVENANTS 3.1 COVENANTS OF SELLER. Seller covenants and agrees that from the date hereof to the Closing without the prior written consent of Buyer: (a) ORDINARY COURSE OF BUSINESS. Seller will operate the business of the Company only in the ordinary course and will use their best efforts to preserve the Company's business, organization, goodwill and relationships with persons having business dealings with them. (b) MAINTAIN PROPERTIES. Seller will maintain all of the Company's properties in good working order, repair and condition (reasonable wear and use excepted) and cause the Company to take all steps reasonably necessary to maintain in full force and effect its patents, trademarks, servicemarks, trade names, brand names, copyrights and other intangible assets. (c) COMPENSATION. Seller will not permit the Company to (1) enter into or alter any employment agreements; (2) grant any increase in compensation other than normal merit increases consistent with the Company's general prevailing practices to any officer or employee; or (3) enter into or alter any labor or collective bargaining agreement or any bonus or other employee fringe benefit. (d) NO INDEBTEDNESS. Seller will not permit the Company to create, incur, assume, guarantee or otherwise become liable with respect to any obligation for borrowed money, indebtedness, capitalized lease or similar obligation, except in the ordinary course of business consistent with past practices where the entire net proceeds thereof are deposited with and used by and in connection with the business of the Company. -5- 6 (e) MAINTAIN BOOKS. Seller will cause the Company to maintain its books, accounts and records in the usual, regular ordinary and sound business manner and in accordance with generally accepted accounting principles applied on a basis consistent with past practices. (f) NO AMENDMENTS. Seller will not permit the Company to amend its corporate charter or bylaws (or similar documents) without prior consent of Buyer and will cause the Company to maintain their corporate existence, licenses, permits, powers and rights in full force and effect. (g) TAXES AND ACCOUNTING MATTERS. Seller will cause the Company to file when due all federal, state and local tax returns and reports which shall be accurate and complete, including but not limited to income, franchise, excise, ad valorem, and other taxes with respect to its business and properties, and to pay as they become due all taxes or assessments, except for taxes for which adequate reserves are established and which are being contested in good faith by appropriate proceedings. Seller will not permit the Company to change their accounting methods or practices or any depreciation, amortization or inventory valuation policies or practices. (h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary course of business consistent with past practice, Seller will not permit the Company to (1) dispose of or encumber any of its properties and assets, (2) discharge or satisfy any lien or encumbrance or pay any obligation or liability (fixed or contingent) except for previously scheduled repayment of debt, (3) cancel or compromise any debt or claim, (4) transfer or grant any rights under any concessions, leases, licenses, agreements, patents, inventions, proprietary technology or process, trademarks, servicemarks or copyrights, or with respect to any know-how, or (5) enter into or modify in any material respect or terminate any existing license, lease, or contract. (i) INSURANCE. Seller will cause the Company to maintain in effect all its current insurance policies. (j) NO SECURITIES ISSUANCES. Seller will not permit the Company to issue any shares of any class of capital stock, or enter into any contract, option, warrant or right calling for the issuance of any such shares of capital stock, or create or issue any securities convertible into any securities of the Company except for the transactions contemplated herein. (k) NO DIVIDENDS. Seller will not permit the Company to declare, set aside or pay any dividends or other distributions of any nature whatsoever. (l) CONTRACTS. Seller will not permit the Company to enter into or assume any contract, agreement, obligation, lease, license, or commitment except in the ordinary course of business consistent with past practice or as contemplated by this Agreement. (m) NO BREACH. Seller will not permit the Company to do any act or omit to do any act which would cause a breach of any contract, commitment or obligation of the Company. (n) DUE COMPLIANCE. Seller will cause the Company to comply with all laws, regulations, rules and ordinances applicable to it and to the conduct of its business. (o) NO WAIVERS OF RIGHTS. Seller will not permit the Company to amend, terminate or waive any material right whether or not in the ordinary course of business. (p) CAPITAL COMMITMENTS. Seller will not permit the Company to make or commit to make any capital expenditure, capital addition or capital improvement. -6- 7 (q) NO RELATED PARTY TRANSACTIONS. Seller will not permit the Company to make any loans to, or enter into any transaction, agreement, arrangement or understanding or any other nature with, any officer, director or employee of the Company. (r) NOTICE OF CHANGE. Seller will promptly advise Buyer in writing of any material adverse change, or the occurrence of any event which involves any substantial possibility of a material adverse change, in the business, financial condition, results of operations, assets, liabilities or prospects of the Company. (s) CONSENTS. Seller will use their, and will cause the Company to use its, best good faith efforts to obtain the consent or approval of each person or entity whose consent or approval is required for the consummation of the Transactions contemplated hereby and to do all things necessary to consummate the Transactions contemplated by the Basic Agreements. IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER TO CLOSE The obligation of Buyer to close the Transactions contemplated hereby is subject to the fulfillment by Seller prior to Closing of each of the following conditions, which may be waived in whole or in part by Buyer: 4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties of Seller contained in this Agreement shall have been true and correct when made and shall be true and correct as of the Closing with the same force and effect as if made at the Closing. Seller shall have performed all agreements, covenants and conditions required to be performed by Seller prior to the Closing. 4.2 NO ADVERSE CHANGE. There shall have been no event which has had or may have a material adverse effect upon the business, financial condition, results of operation, assets, liabilities or prospects of the Company. 4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative proceeding before any court or other governmental agency shall be pending or threatened seeking to enjoin the consummation of the Transactions contemplated hereby. 4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered the following documents: (a) Stock certificates representing all of the Shares, duly endorsed to Buyer and in blank or accompanied by duly executed stock powers, copies of which are attached as Exhibit "M". (b) A copy of (i) the Certificate of Incorporation of the Company, certified as correct by the Company; and (ii) the Bylaws of the Company certified as correct by the Company; and (iii) a certificate from the Delaware Tax Commission, Franchise Tax Division, to the effect that the Company is in good standing and has paid all franchise taxes in such state, all as attached hereto as Exhibit "N"; (c) All agreements referred to in paragraph 1.5 above, executed by all parties thereto other than Buyer. (d) All corporate and other records of or applicable to the Company included but not limited to, current and up-to-date minute books, stock transfer books and registers, books of accounts, leases and material contracts. -7- 8 (e) Such other documents or certificates as shall be reasonably required by Buyer or its counsel in order to close and consummate this Agreement. V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE The obligation of Seller to close the Transactions is subject to the fulfillment prior to Closing of each of the following conditions, any of which may be waived in whole or in part by Seller: 5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties made by Buyer in this Agreement shall have been true and correct when made and shall be true and correct in all material respects at the Closing with the same force and effect as if made at the Closing, and Buyer shall have performed all agreements, covenants and conditions required to be performed by Buyer prior to the Closing. 5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative proceedings before any court or other governmental agency shall be pending or threatened seeking to enjoin the consummation of the Transactions contemplated hereby. 5.3 OTHER AGREEMENTS. All parties other than Seller and the Company shall have executed and delivered the Basic Agreements. 5.4 PAYMENTS. Seller shall have received from Buyer all Common Stock to be issued at the Closing by Buyer pursuant to all the Basic Agreements. VI. MODIFICATION, WAIVERS, TERMINATION AND EXPENSES 6.1 MODIFICATION. Buyer and Seller may amend, modify or supplement this Agreement in any manner as they may mutually agree in writing. 6.2 WAIVERS. Buyer and Seller may in writing extend the time for or waive compliance by the other with any of the covenants or conditions of the other contained herein. 6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated and the purchase of the Shares may be abandoned before the Closing: (a) By the mutual consent of Seller and Buyer; (b) By Buyer, if the representations and warranties of Seller set forth herein shall not be accurate, or the conditions precedent set forth in Article V shall have not have been satisfied, in all material respects; or (c) By Seller, if the representations and warranties of Buyer set forth herein shall not be accurate, or the conditions precedent set forth in Article V shall not have been satisfied in all material respects. Termination shall be effective on the date of receipt of written notice specifying the reasons therefor. -8- 9 VII. MISCELLANEOUS 7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise provided, all of the representations and warranties contained in this Agreement and in any certificate, exhibit or other document delivered pursuant to this Agreement shall survive the Closing for a period of two (2) years. No investigation made by any party hereto or their representatives shall constitute a waiver of any representation or warranty, and no such representation or warranty shall be merged into the Closing. 7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and the certificates and other instruments delivered by or on behalf of the parties pursuant thereto, constitute the entire agreement between the parties. The terms and conditions of the Basic Agreements shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successor and assigns of the parties hereto. Nothing in the Basic Agreements, expressed or implied, confers any rights or remedies upon any party other than the parties hereto and their respective heirs, legal representatives and assigns. 7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will be construed under, the laws of the State of Oklahoma. 7.4 NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and will be deemed to have been duly given when delivered or mailed, first class postage prepaid: (a) If to Seller, to: Gary Schultheis Millennium Holdings Group, Inc. 2200 Corporate Blvd. N.W., Suite 311 Boca Raton, FL 33431 Telephone: (561) 988-2334 Fax: (561) 988-0815 (b) If to Buyer, to: Jesse A. Clayton, President 7633 East 63rd Place, Suite 210 Tulsa, OK 74133 Telephone: (918) 459-9689 Fax: (918) 254-2988 These addresses may be changed from time to time by written notice to the other parties. 7.5 HEADINGS. The headings contained in this Agreement are for reference only and will not affect in any way the meaning or interpretation of this Agreement. 7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of which will be deemed an original and all of which together will constitute one instrument. 7.7 SEVERABILITY. If any one or more of the provisions of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable under applicable law this Agreement shall be construed as if such invalid, illegal -9- 10 or unenforceable provision had never been contained herein. The remaining provisions of this Agreement shall be given effect to the maximum extent then permitted by law. 7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable remedy or right available to a party shall not constitute a waiver of such right, nor shall any such forbearance, failure or actual waiver imply or constitute waiver of subsequent default or breach. 7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal proceeding based upon this Agreement shall be entitled to reasonable attorneys' fees and expenses and court costs. 7.10 EXPENSES. Each party shall pay all fees and expenses incurred by it incident to this Agreement and in connection with the consummation of all transactions contemplated by this Agreement. 7.11 EXHIBITS. All of the following Exhibits to this Agreement are incorporated herein in the places referenced in this Agreement as if fully set forth herein:
EXHIBIT REFERENCE ITEM - ------- --------- ---- A 1.1 Shares of Common Stock of Company B 1.5(a) Employment Agreement between Buyer and Gary Schultheis C 1.5(a) Employment Agreement between Buyer and Herbert Tabin D 1.5(c) Stock Option Agreement E 2.1(c) Liabilities of Company F 2.1(f) Liens, Claims and Encumbrances on Property of Company and Leases G 2.1(h) Insurance of Company H 2.1(j) Transactions of Company with Officers I 2.1(k) Material Contracts of Company J 2.1(l) Employees, Salaries and Benefits of Company K 2.1(m) Licenses, Permits, etc. of Company L 2.1(n) Employees, Salaries and Benefits of Buyer M 4.4(a) Stock Certificates and Stock Powers N 4.4(b) Certificate of Company and Bylaws
7.12 INTEGRATION. This Agreement and all documents and instruments executed pursuant hereto merge and integrate all prior agreements and representations respecting the Transactions, whether written or oral, and constitute the sole agreement of the parties in connection therewith. This Agreement has been negotiated by and submitted to the scrutiny of both Seller and Buyer and their counsel and shall be given a fair and reasonable interpretation in accordance with the words hereof, without consideration or weight being given to its having been drafted by either party hereto or its counsel. IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this Agreement on the date first written above. -10- 11 "BUYER" INTERNATIONAL INDUSTRIES, INC. /s/ JESSE A. CLAYTON ------------------------------------------- JESSE A. CLAYTON, PRESIDENT "COMPANY" MR. CIGAR, INC. /s/ GARY SCHULTHEIS ------------------------------------------- GARY SCHULTHEIS, PRESIDENT "SELLER" /s/ GARY SCHULTHEIS ------------------------------------------- GARY SCHULTHEIS /s/ HERBERT TABIN ------------------------------------------- HERBERT TABIN -11- -----END PRIVACY-ENHANCED MESSAGE-----