SOLE DISCRETION.
(F)
PRIOR TO CLOSING, HAPS SHALL OBTAIN
NECESSARY BOARD AND SHAREHOLDER APPROVAL TO (I) CHANGE THE NAME OF THE
CORPORATION TO PGMI USA, INC. OR SUCH OTHER SIMILAR NAME AS IS AVAILABLE IN THE
STATE OF UTAH, AND (II) DESIGNATE THE HAPS PREFERRED STOCK SUCH THAT SUFFICIENT
HAPS CLASS E STOCK IS AVAILABLE TO BE TO ISSUED TO THE SHAREHOLDERS AND TO
ANTAEUS CAPITAL PARTNERS LLC FOLLOWING THE EFFECTIVE TIME IN THE AMOUNTS
DESCRIBED IN SECTION 1.03 OF THIS AGREEMENT.
(G)
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM ENGAGED BY PGMI SHALL HAVE COMPLETED ITS AUDIT OF PGMI'S FINANCIAL
STATEMENTS FOR THE FISCAL YEARS ENDED JUNE 30, 2005 AND 2004, AND SHALL HAVE
DELIVERED TO THE BOARD OF DIRECTORS OF PGMI ITS REPORT THEREON.
3
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF HAPS
HAPS hereby represents and warrants to PGMI as follows:
3.01
ATTACHED HERETO IS EACH OF THE FOLLOWING:
(A)
FINANCIAL STATEMENTS.
AUDITED FINANCIAL
STATEMENTS OF HAPS INCLUDING, BUT NOT LIMITED TO, BALANCE SHEETS AND PROFIT AND
LOSS STATEMENTS FROM THE FISCAL YEARS ENDED DECEMBER 31, 2003 AND 2004, AND
QUARTERLY REVIEWED FINANCIAL STATEMENTS FOR THE QUARTERLY PERIODS ENDED
MARCH 31, 2005, AND JUNE 30, 2005, EACH PREPARED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES AND WHICH FAIRLY PRESENT THE FINANCIAL CONDITION
OF HAPS AT THE DATES THEREOF. (SCHEDULE A)
(B)
PROPERTY.
AN ACCURATE LIST AND DESCRIPTION
OF ALL PROPERTY, REAL OR PERSONAL, OWNED BY HAPS OF A VALUE EQUAL TO OR GREATER
THAN $1,000.00. (SCHEDULE B)
(C)
LIENS AND LIABILITIES. A COMPLETE AND
ACCURATE LIST OF ALL LIENS, ENCUMBRANCES, EASEMENTS, SECURITY INTERESTS OR
SIMILAR INTERESTS IN OR ON ANY OF THE ASSETS LISTED ON SCHEDULE A. (SCHEDULE C)
A COMPLETE AND ACCURATE LIST OF ALL DEBTS, LIABILITIES AND OBLIGATIONS OF HAPS
INCURRED OR OWING AS OF THE DATE OF THIS AGREEMENT. (SCHEDULE C.1)
(D)
LEASES AND CONTRACTS.
A COMPLETE AND
ACCURATE LIST DESCRIBING ALL MATERIAL TERMS OF EACH LEASE (WHETHER OF REAL OR
PERSONAL PROPERTY) AND EACH CONTRACT, PROMISSORY NOTE, MORTGAGE, LICENSE,
FRANCHISE, OR OTHER WRITTEN AGREEMENT TO WHICH HAPS IS A PARTY WHICH INVOLVES OR
CAN REASONABLY BE EXPECTED TO INVOLVE AGGREGATE FUTURE PAYMENTS OR RECEIPTS BY
HAPS (WHETHER BY THE TERMS OF SUCH LEASE, CONTRACT, PROMISSORY NOTE, LICENSE,
FRANCHISE OR OTHER WRITTEN AGREEMENT OR AS A RESULT OF A GUARANTEE OF THE
PAYMENT OF OR INDEMNITY AGAINST THE FAILURE TO PAY SAME) OF $1,000.00 OR MORE
ANNUALLY DURING THE TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2004 OR ANY
CONSECUTIVE TWELVE-MONTH PERIOD THEREAFTER, EXCEPT ANY OF SAID INSTRUMENTS WHICH
TERMINATE OR ARE CANCELABLE WITHOUT PENALTY DURING SUCH TWELVE-MONTH PERIOD.
(SCHEDULE D)
(E)
LOAN AGREEMENTS.
COMPLETE AND ACCURATE
COPIES OF ALL LOAN AGREEMENTS AND OTHER DOCUMENTS WITH RESPECT TO OBLIGATIONS OF
HAPS FOR THE REPAYMENT OF BORROWED MONEY. (SCHEDULE E)
(F)
CONSENTS REQUIRED.
A COMPLETE LIST OF
ALL AGREEMENTS WHEREIN CONSENT TO THE TRANSACTION HEREIN CONTEMPLATED IS
REQUIRED TO AVOID A DEFAULT THEREUNDER; OR WHERE NOTICE OF SUCH TRANSACTION IS
REQUIRED AT OR SUBSEQUENT TO CLOSING, OR WHERE