-----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, KYBL9Qb7ah2qNM1aMn6izuC0G3UutpAzYxvoVZvH3di2nDkE+iT5hzdKQD8aD9+H 7heWLArb04ZCwZIE1gIPCQ== 0000898432-04-000243.txt : 20040309 0000898432-04-000243.hdr.sgml : 20040309 20040308190730 ACCESSION NUMBER: 0000898432-04-000243 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040309 GROUP MEMBERS: KEVIN B. KIMBERLIN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TREASURE MOUNTAIN HOLDINGS INC CENTRAL INDEX KEY: 0001139950 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-CHEMICALS & ALLIED PRODUCTS [5160] IRS NUMBER: 841394211 STATE OF INCORPORATION: NV FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-79731 FILM NUMBER: 04655796 BUSINESS ADDRESS: STREET 1: 1390 SOUTH 1100 EAST SUITE 204 CITY: SALT LAKE CITY STATE: UT ZIP: 84105-2463 BUSINESS PHONE: 8013220253 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KIMBERLIN KEVIN CENTRAL INDEX KEY: 0000904841 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: SPENCER TRASK SECURITIES INC STREET 2: 535 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2123555565 SC 13D 1 st-13d.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 NAME OF ISSUER: Treasure Mountain Holdings, Inc. TITLE OF CLASS OF SECURITIES: Common Stock, $.001 par value per share. CUSIP NUMBER: 894631 209 NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS: Kevin B. Kimberlin c/o Spencer Trask & Co. 535 Madison Avenue, 18th Floor New York, NY 10022 Tel: (212) 355-5565 Fax: 212-751-3483 DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT: February 26, 2004 If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO.: 894631 209 1. NAME OF REPORTING PERSON: Kevin B. Kimberlin 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) (b) x 3. SEC USE ONLY 4. SOURCE OF FUNDS: AF 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e): Yes No X 6. CITIZENSHIP OR PLACE OF ORGANIZATION: UNITED STATES 7. SOLE VOTING POWER: 2,781,640 shares 8. SHARED VOTING POWER: 0 shares 9. SOLE DISPOSITIVE POWER: 2,781,640 shares 10. SHARED DISPOSITIVE POWER: 0 shares 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 2,781,640 shares 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: Yes No x 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 82.2% 14. TYPE OF REPORTING PERSON: IN ITEM 1. SECURITY AND ISSUER This statement relates to the common stock, $.001 par value per share (the "Common Stock"), of Treasure Mountain Holdings, Inc., a Nevada corporation (the "Company"), whose principal executive offices are located at 1390 South 1100 East #204, Salt Lake City, UT 84111. ITEM 2. IDENTITY AND BACKGROUND (a) This statement is filed by Kevin B. Kimberlin. (b) The business address of Mr. Kimberlin is c/o Spencer Trask & Co., 535 Madison Avenue, New York, NY 10022. (c) Mr. Kimberlin's present principal occupations are Chairman of Spencer Trask & Co. and a private investor. (d) Mr. Kimberlin has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Mr. Kimberlin has not, during the last five years, been 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 mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Kimberlin is a United States citizen. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION On February 26, 2004, certain then holders of the Common Stock entered into a Common Stock Purchase Agreement (the "Stock Purchase Agreement") with Scimitar Holdings, LLC ("Scimitar"), a New York limited liability company. Scimitar is a wholly-owned subsidiary of Spencer Trask & Co., a Delaware corporation, of which the reporting person is the controlling stockholder and Chairman. Pursuant to the Stock Purchase Agreement, Scimitar acquired an aggregate of 2,781,640 shares of the Common Stock for the cash purchase price of $270,000 ($0.097 per share). The amount of such purchase price was contributed to Scimitar by Spencer Trask & Co. as capital. ITEM 4. PURPOSE OF TRANSACTION The Company was organized in 1954 to engage in the development and operation of mining properties. After a period of time, its operations were abandoned and the Company became inactive. Subsequent thereto, the Company has been in the developmental stage, including considering mergers with one or more business ventures. Through the purchase of Common Stock by Scimitar, Mr. Kimberlin has indirectly purchased majority ownership and control of the Company. Although Scimitar presently has made no change to the board of directors or management of the Company, it has entered into an Administrative Services Agreement with the Company and certain officers/directors of the Company, pursuant to which Scimitar may exercise certain control over the composition of the board of directors and management of the Company (see Item 6 below). Scimitar will explore acquiring, through the Company, or merging with the Company, other businesses. While it is uncertain at this time what the specific nature and terms of any such a transaction would be, such a transaction could result in: (a) The acquisition by a person of additional securities of the Company, or the disposition of securities of the Company; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company, which could include a merger with a business in which Mr. Kimberlin has an ownership position; (c) A sale or transfer of a material amount of assets of the Company; (d) A further change in the present board of directors or management of the Company; (e) A material change in the present capitalization or dividend policy of the Company; (f) Other material changes in the Company's business or corporate structure; and/or (g) Changes in the Company's charter and by-laws or other actions that may impede the acquisition of control of the Company by any other person. Mr. Kimberlin does not have any present plans or proposals that relate to or would result in the following: (h) A class of securities of the Company being de-listed from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; or (i) A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act. Mr. Kimberlin does not have the present intention to cause the Company to file a Form 15 to de-register the Company under the Exchange Act. Mr. Kimberlin will amend this Schedule 13D if the Company shall enter into any transaction that has any of the effects described above. Such amendment will disclose the material terms, conditions and effects of such transaction. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Mr. Kimberlin is the beneficial owner of 2,781,640 shares of Common Stock, which represented approximately 82.2% of the issued and outstanding shares of Common Stock as of February 26, 2004. The percentage of shares of Common Stock reported beneficially owned by Mr. Kimberlin is based upon 3,382,117 shares outstanding, which is the total number of shares of Common Stock outstanding as of February 26, 2004 based on a certified shareholder list of the Company from the Company's transfer agent. Beneficial ownership has been determined in accordance with the rules of the Securities and Exchange Commission. (b) Mr. Kimberlin has the sole power to vote and dispose of all shares of Common Stock beneficially owned by him. (c) See Items 3 and 7 hereof. (d) No person other than Mr. Kimberlin and Spencer Trask & Co. is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such shares of Common Stock. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER See Item 3 above. In addition, Scimitar has entered into an Administrative Services Agreement with the Company and certain officers/directors of the Company, pursuant to which, among other things, the officers/directors have agreed to (a) obtain the approval of Scimitar before entering into certain types of transactions on behalf of the Company, (b) appoint designees of Scimitar to fill vacancies on the board of directors when and as requested by Scimitar, and (c) resign their positions as officers and/or members of the board of directors of the Company, if so requested by Scimitar. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS 99.1 Common Stock Purchase Agreement, dated February 26, 2004. 99.2 Administrative Services Agreement, dated February 26, 2004 After reasonable inquiry and to the best of his knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. March 8, 2003 /s/ -------------------------------- Kevin B. Kimberlin EXHIBIT INDEX 99.1 Common Stock Purchase Agreement, dated February 26, 2004. 99.2 Administrative Services Agreement, dated February 26, 2004 EX-99 3 ex-1.txt EXHIBIT 99.1 Exhibit 99.1 COMMON STOCK PURCHASE AGREEMENT This AGREEMENT, entered into as of the 26th day of February, 2004(the "Agreement"), by and among the sellers listed on SCHEDULE 1.1 annexed hereto (collectively referred hereto as the "Sellers"), the purchaser listed on SCHEDULE 1.1 annexed hereto (the "Purchaser") and Treasure Mountain Holdings, Inc., a Nevada corporation ("Treasure Mountain" or the "Company"). WHEREAS, the Sellers collectively own an aggregate of 3,239,570 shares of common stock, par value $.001 per share (the "Common Stock"), of the Company, representing approximately 95% of the issued and outstanding shares of Common Stock of Treasure Mountain; and WHEREAS, the Purchaser desires to purchase from the Sellers, and the Sellers desire to sell to the Purchaser an aggregate of 2,781,640 shares of the Company's Common Stock (the "Shares") in the amounts set forth in SCHEDULE 1.1 hereto, and upon the terms and conditions hereof. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Purchasers and the Sellers hereby agree as follows: ARTICLE 1 SALE OF THE SHARES Section 1.1 SALE OF THE SHARES. Subject to the terms and conditions hereof, each Seller hereby agrees severally and not jointly to sell, transfer and assign to the Purchaser, and the Purchaser hereby agrees to purchase from the Sellers, the Shares, for an aggregate purchase price of $270,000 (the "Purchase Price"), in the amounts and for the consideration set forth opposite each Purchaser's name on SCHEDULE 1.1 hereto. Certain capitalized terms used herein are defined in Section 9.12 hereof. ARTICLE 2 CLOSING AND DELIVERY Section 2.1 CLOSING DATE. Upon the terms and subject to the conditions set forth herein, the consummation of the purchase and sale of the Shares (the "Closing") shall be held at such a date (the "Closing Date") and time as determined at the mutual discretion of the Sellers and the Purchaser; PROVIDED, HOWEVER, that the Closing shall occur no later than 30 days after the conditions precedent contained in Article 7 herein have been satisfied (which the parties hereto agree shall not be later than February 29, 2004). The Closing shall take place at the offices of Feldman Weinstein LLP, located at 420 Lexington Avenue, Suite 2620, New York, NY 10170, or by the exchange of documents and instruments by mail, courier, telecopy and wire transfer to the extent mutually acceptable to the parties hereto. Section 2.2 DELIVERY AT CLOSING. At the Closing: (a) each of the Sellers shall deliver to each of the Purchasers stock certificates representing the number of shares that the Purchaser is purchasing hereunder, duly endorsed for transfer to the Purchaser, in the amounts set forth on SCHEDULE 1.1 hereto, or, accompanied by stock powers or other instruments of transfer duly executed to the Purchaser, and with all requisite documentary or transfer tax stamps affixed; and (b) the Purchaser shall transfer the Purchase Price to Sellers in the form of certified bank checks or wire transfers pursuant to the instructions on 1 SCHEDULE 1.1 hereto, in the amounts and in the names as set forth on SCHEDULE 1.1 hereto. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY Except as set forth under the corresponding section of the disclosure schedules (the "DISCLOSURE SCHEDULES") attached hereto as EXHIBIT A, which Disclosure Schedules shall be deemed a part hereof, each Seller and the Company, hereby jointly and severally represent and warrant to the Purchaser that: Section 3.1 EXISTENCE AND POWER. Treasure Mountain is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted. Treasure Mountain has heretofore delivered to the Purchaser true and complete copies of the Articles of Incorporation, as amended, and By-laws, each as currently in effect. Section 3.2 AUTHORIZATION; NO AGREEMENTS. The execution, delivery and performance by Sellers of this Agreement, the performance of their obligations hereunder, and the consummation of the transactions contemplated hereby are within the Sellers' powers. This Agreement has been duly and validly executed and delivered by each of the Sellers and is a legal, valid and binding obligation of each of the Sellers, enforceable against them in accordance with its terms. The execution, delivery and performance by the Sellers of this Agreement do not violate any contractual restriction contained in any agreement which binds or affects or purports to bind or affect any of the Sellers. The Sellers are not parties to any agreement, written or oral, creating rights in respect of any of such Shares in any third party or relating to the voting of the Shares. Sellers are the lawful owners of the Shares, free and clear of all security interest, liens, encumbrances, equities and other charges. Sellers represent that they do not beneficially own any other shares of Common Stock other than (i) those Shares being sold hereby and (ii) an aggregate of 457,930 shares of Common Stock. Sellers further represent that they do not beneficially own any options or warrants or other rights to purchase shares of Common Stock. There are no outstanding or authorized options, warrants, rights, calls, commitments, conversion rights, rights of exchange or other agreements of any character, contingent or otherwise, providing for the purchase, issuance or sale of any of the Shares, or any arrangements that require or permit any of the Shares to be voted by or at the discretion of anyone other than the Sellers, and there are no restrictions of any kind on the transfer of any of the Shares other than (a) restrictions on transfer imposed by the Securities Act of 1933, as amended (the "Securities Act"), (b) restrictions on transfer imposed by applicable state securities or "Blue Sky" laws and (c) or as set forth by footnote to Schedule 1.1. Each Seller acquired its respective shares of Common Stock on such date as set forth in Schedule 1.1 attached hereto. Section 3.3 CAPITALIZATION. (a) The number of shares and type of all authorized, issued and outstanding capital stock of the Company is set forth in the Disclosure Schedules attached hereto. All of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassesasable. All of the issued and outstanding shares of capital stock of the Company have been offered, issued and sold by the Company in compliance with all applicable federal and state securities laws. No securities of the Company are entitled to preemptive or similar rights, and no Person (as defined in Section 9.12 herein) has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated hereby. Except as a result of the purchase and sale of 2 the Shares, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser) and shall not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. (b) There are no outstanding obligations, contingent or otherwise, of Treasure Mountain to redeem, purchase or otherwise acquire any capital stock or other securities of Treasure Mountain. (c) There are no shareholder agreements, voting trusts or other agreements or understandings to which Treasure Mountain or any Seller is a party or by which it is bound relating to the voting of any shares of the capital stock of Treasure Mountain. (d) The Shares shall be duly authorized for issuance, when delivered in accordance with the terms of this Agreement, and shall be validly issued, fully paid and non-assessable and the transfer thereof shall not be subject to any preemptive or other similar right. Section 3.4 SUBSIDIARIES. Treasure Mountain has no subsidiaries and does not own or control, directly or indirectly, any shares of capital stock of any other corporation or any interest in any partnership, limited liability company, joint venture or other non-corporate business enterprise. Section 3.5 FINANCIAL STATEMENTS. (a) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed all reports required to be filed by it under the Securities Act and the Securities Exchange Act (the "Exchange Act") of 1934, as amended, including pursuant to Section 13(a) or 15(d) thereof, since May 2001 (the foregoing materials being collectively referred to herein as the "SEC Reports") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. The Sellers have identified and made available to the Purchaser a copy of all SEC Reports filed within the 10 days preceding the date hereof. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 3 (b) Except as set forth in its Form 10-QSB for the period ended September 30, 2003, Treasure Mountain has not been engaged in any other business activity since at least January 1, 1998. (c) Since the date of the filing of its quarterly report on From 10-QSB for the period ended September 30, 2003, except as specifically disclosed in the SEC Reports: (i) there has been no event, occurrence or development that has had or that could result in a Material Adverse Effect (as defined in Section 9.12 herein); (ii) the Company has not incurred any liabilities (contingent or otherwise) or amended of any material term of any outstanding security; (iii) the Company has not altered its method of accounting or the identity of its auditors; (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock; (v) the Company has not issued any equity securities to any officer, director or Affiliate (as defined in Section 9.12 herein) of the Company, any creation or other incurrence by Treasure Mountain of any lien on any material asset; (vi) the Company has not made any loan, advance or capital contributions to or investment in any Person; (vii) the Company has not entered into any transaction or commitment made, or any contract or agreement entered into, by Treasure Mountain relating to its business or any of its assets (including the acquisition or disposition of any assets) or any relinquishment by Treasure Mountain of any contract or other right; (viii) the Company has not granted any severance or termination pay to any current or former director, officer or employee of Treasure Mountain, or increased the benefits payable under any existing severance or termination pay policies or employment agreements or entered into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any current or former director, officer or employee of Treasure Mountain; (ix) the Company has not established, adopted or amended (except as required by applicable law) any collective bargaining, bonus, profit sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any current or former director, officer or employee of Treasure Mountain; (x) increased the compensation, bonus or other benefits payable or otherwise made available to any current or former director, officer or employee of Treasure Mountain; (xi) the Company has not made any tax election or any settlement or compromise of any tax liability, in either case that is material to Treasure Mountain; or (xii) entered into any transaction by the Company not in the ordinary course of business. Section 3.6 NO LIABILITIES OR DEBTS. As of the date hereof, there are no liabilities or debts of Treasure Mountain of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in such a liability or debt. Section 3.7 LITIGATION. There is no action, suit, investigation, audit or proceeding pending against, or to the best knowledge of Treasure Mountain threatened against or affecting, Treasure Mountain or any of its assets or properties before any court or arbitrator or any governmental body, agency or official. The Company is not subject to any outstanding judgment, order or decree. Neither the Company, nor any officer, key employee or 5% stockholder of the Company in his, her or its capacity as such, is in default with respect to any order, writ, injunction, decree, ruling or decision of any court, commission, board or any other government agency. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act. Section 3.8 TAXES. (a) Treasure Mountain has (i) duly filed with the appropriate taxing authorities all tax returns required to be filed by or with respect to its business, or are properly on extension and all such duly filed tax returns are true, correct and complete in all material respects, and (ii) 4 paid in full or made adequate provisions for on its balance sheet (in accordance with GAAP) all Taxes (as defined in Section 9.12 herein) shown to be due on such tax returns. There are no liens for Taxes upon the assets of Treasure Mountain except for statutory liens for current Taxes not yet due and payable or which may thereafter be paid without penalty or are being contested in good faith. Treasure Mountain has not received any notice of audit, is not undergoing any audit of its tax returns, or has received any notice of deficiency or assessment from any taxing authority with respect to liability for Taxes of its business which has not been fully paid or finally settled. There have been no waivers of statutes of limitations by Treasure Mountain with respect to any tax returns. Treasure Mountain has not filed a request with the Internal Revenue Service for changes in accounting methods within the last three years which change would effect the accounting for tax purposes, directly or indirectly, of its business. Treasure Mountain has not executed an extension or waiver of any statute of limitations on the assessment or collection of any Taxes due (excluding such statutes that relate to years currently under examination by the Internal Revenue Service or other applicable taxing authorities) that is currently in effect. Section 3.9 INTERNAL ACCOUNTING CONTROLS; SARBANES-OXLEY ACT OF 2002. The Company is in compliance with the requirements of the Sarbanes-Oxley Act of 2002 applicable to it as of the date hereof. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosures controls and procedures to ensure that material information relating to the Company, is made known to the certifying officers by others within those entities, particularly during the period in which the Company's Form 10-KSB or 10-QSB, as the case may be, is being prepared. The Company's certifying officers have evaluated the effectiveness of the Company's controls and procedures as of the date of its most recently filed periodic report (such date, the "Evaluation Date"). The Company presented in its most recently filed periodic report the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company's internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company's knowledge, in other factors that could significantly affect the Company's internal controls. Section 3.10 SOLVENCY; INDEBTEDNESS. Based on the financial condition of the Company as of the Closing Date: (i) the fair saleable value of the Company's assets exceeds the amount that will be required to be paid on or in respect of the Company's existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company's assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization 5 laws of any jurisdiction within one (1) year from the Closing Date. The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company, or for which the Company has commitments. For the purposes of this Agreement, "INDEBTEDNESS" shall mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations, whether or not the same are or should be reflected in the Company's balance sheet or the notes thereto, except guaranties by endorsement of negotiable instruments for deposit or collection in the ordinary course of business, and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. The Company is not in default with respect to any Indebtedness. At the Closing, there will be no outstanding liabilities, obligations or indebtedness of the Company whatsoever. Section 3.11 NO BROKERS. No brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement, and the Company has not taken any action that would cause any Purchaser to be liable for any such fees or commissions. The Company agrees that the Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of any Person for fees of the type contemplated by this Section with the transactions contemplated by this Agreement. Section 3.12 DISCLOSURE. The Company and each Seller confirms that neither it nor any other Person acting on its behalf has provided any of the Purchaser or its agents or counsel with any information that constitutes or might constitute material, nonpublic information. The Company and each Seller understand and confirm that the Purchaser will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Purchaser regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, furnished by or on behalf of the Company with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company and each Seller acknowledge and agree that the Purchaser has not made, nor is the Purchaser making any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth herein. Section 3.13 NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers. Section 3.14 NO CONFLICTS. The execution, delivery and performance of this Agreement and the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company's Certificate or Articles of Incorporation, By-laws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) result, in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or 6 governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or result in a Material Adverse Effect. Section 3.15 FILINGS, CONSENTS AND APPROVALS. Neither the Sellers, nor the Company is required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance of this Agreement. Section 3.16 COMPLIANCE. The Company: (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is not in violation of any order of any court, arbitrator or governmental body, or (iii) is not and has not been in violation of any statute, rule or regulation of any governmental authority, except in each case as could not, individually or in the aggregate, have or result in a Material Adverse Effect. Section 3.17 TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as required to be set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Sellers, none of the Affiliates or employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. Section 3.18 ASSETS. Except as set forth in the SEC Reports, the Company has no assets, including, without limitation, goodwill, assets, real property, tangible personal property, intangible personal property, rights and benefits under contracts and cash. All Company leases for real or personal property, are in good standing, valid and effective in accordance with their respective terms, and there is not under any of such leases, any existing material default or event of default (or event which with notice or lapse of time, or both, would constitute a material default). The Company is not a guarantor of any indebtedness of any other person, firm or corporation. Except as set forth in the SEC Reports, the Company has not had engaged in any other business operations since at least January 1, 1998. Section 3.19 INVESTMENT COMPANY/INVESTMENT ADVISOR. The business of the Company does not require it to be registered as an investment company or investment advisor, as such terms are defined under the Investment Company Act and the Investment Advisors Act of 1940. Section 3.20 ENVIRONMENTAL MATTERS. The Company has complied with all applicable Environmental Laws (as defined below) except for violations of Environmental Laws that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. There is no pending or threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving the Company. For purposes of this Agreement, "Environmental Law" shall mean any federal, state or local law, statute, rule or regulation or the common law 7 relating to the environment or occupational health and safety, including any statute, regulation, administrative decision or order pertaining to: (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous materials or substances, or solid or hazardous waste, including emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including all endangered and threatened species; (vi) storage tanks, vessels, containers, abandoned or discarded barrels and other closed receptacles; (vii) health and safety of employees and other persons; and (viii) manufacturing, processing, using, distributing, treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste. As used above, the terms "release" and "environment" shall have the meaning set forth in the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (CERCLA). Section 3.21 INFORMED DECISION. Each Seller is aware of the Company's business affairs and financial condition and has reached an informed and knowledgeable decision to sell its respective portion of the Shares. Section 3.22 TRADING WITH THE ENEMY ACT; PATRIOT ACT. No sale of the Company's securities nor the Company's use of the proceeds from such sale has violated the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. Without limiting the foregoing, the Company (a) is not a person whose property or interests in property are blocked pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) and (b) does not engage in any dealings or transactions, or be otherwise associated, with any such person. The Company is in compliance with the USA Patriot Act of 2001 (signed into law October 26, 2001). Section 3.23 LISTING ON THE OTCBB. The capital stock of the Company has been approved for listing on the Over -The-Counter Bulletin Board (the "OTCBB") and the Company has and continues to satisfy all of the requirements of the OTCBB for such listing and for the trading of its capital stock thereunder. ARTICLE 4 REPRESENTATIONS OF THE PURCHASER The Purchasers represents and warrants to the Sellers, as follows: Section 4.1 EXECUTION AND DELIVERY. The execution, delivery and performance by the Purchasers of this Agreement are within the Purchaser's powers and do not violate any contractual restriction contained in any agreement which binds or affects or purports to bind or affect the Purchaser. Section 4.2 BINDING EFFECT. This Agreement, when executed and delivered by the Purchaser shall be irrevocable and will constitute the legal, valid and binding obligations of the Purchaser enforceable against the Purchasers in accordance with its terms, except as may be limited by applicable bankruptcy, 8 insolvency, moratorium and other laws of general application affecting enforcement of creditors' rights generally. Section 4.3 INVESTMENT PURPOSE. The Purchaser understands that no federal or state agency has made any finding or determination regarding the fairness of the Shares for investment, or any recommendation or endorsement of an investment in the Shares. Thee Purchaser hereby represents that it is purchasing the Shares for their own account, with the intention of holding the Shares, with no present intention of dividing or allowing others to participate in this investment or of reselling or otherwise participating, directly or indirectly, in a distribution of the Shares, and shall not make any sale, transfer, or pledge thereof without registration under the Securities Act and any applicable securities laws of any state unless an exemption from registration is available under those laws. Section 4.4 INVESTMENT REPRESENTATION. The Purchaser represents that it has adequate means of providing for its current needs and has no need for liquidity in this investment in the Shares. Each Purchaser represents that it is an "Accredited Investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Purchaser has no reason to anticipate any material change in its financial condition for the foreseeable future. The Purchaser is financially able to bear the economic risk of this investment, including the ability to hold the Shares indefinitely or to afford a complete loss of his, her or its investment in the Shares. The Purchaser represents that the Purchaser's overall commitment to investments which are not readily marketable is not disproportionate to the Purchaser's net worth, and the Purchaser's investment in the Shares will not cause such overall commitment to become excessive. Section 4.5 NO INTENT TO RESELL. The Purchaser understands that the statutory basis on which the Shares are being sold to the Purchaser would not be available if the Purchaser's present intention were to hold the Shares for a fixed period or until the occurrence of a certain event. The Purchaser realizes that in the view of the Commission, a purchase now with a present intent to resell by reason of a foreseeable specific contingency or any anticipated change in the market value, or in the condition of the Company, or that of the industry in which the business of the Company is engaged or in connection with a contemplated liquidation, or settlement of any loan obtained by the Purchaser for the acquisition of the Shares, and for which such Shares may be pledged as security or as donations to religious or charitable institutions for the purpose of securing a deduction on an income tax return, would, in fact, represent a purchase with an intent inconsistent with the Purchaser's representations and the Commission would then regard such sale as a sale for which the exemption from registration is not available. Section 4.6 INVESTMENT EXPERIENCE. The Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares. Section 4.7 OPPORTUNITY TO ASK QUESTIONS. The Purchaser has had a full and fair opportunity to make inquiries about the terms and conditions of this Agreement, to discuss the same and all related matters with his own independent counsel, his own accountants and tax advisers. The Purchasers has been given the opportunity to ask questions of, and receive answers from Sellers concerning the terms and conditions of this Agreement and to obtain such additional written information about Treasure Mountain to the extent that Sellers possesses such information or can acquire it without unreasonable effort or expense. Notwithstanding the foregoing, the Purchaser has had the opportunity to conduct its own independent investigation. The Purchaser acknowledges that it has received no representations or warranties from the Sellers or Treasure Mountain in making this investment decision other than as expressly set forth herein. 9 Section 4.8 LEGENDS. The Purchaser acknowledges that the certificates for the securities comprising the Shares which Purchaser will receive will contain the following legends substantially as follows, but only if such certificates currently contain such a legend: "THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE." ARTICLE 5 COVENANTS OF THE COMPANY Section 5.1 PUBLIC COMPANY STATUS. The Company shall make any and all necessary filings under the Exchange Act so that it remains a reporting company under the Exchange Act and its Common Stock continues to be a publicly-traded security. Section 5.2 LISTING OF COMMON STOCK. The Company shall cause the Common Stock of Treasure Mountain to continue to be approved for listing on the OTCBB. ARTICLE 6 COVENANTS OF THE PARTIES The parties hereto agree that: Section 6.1 PUBLIC ANNOUNCEMENTS. The Sellers and the Purchaser shall consult with each other before issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except as may be required by applicable law, will not issue any such press release or make any such public statement prior to such consultation and without the consent of the other party. Section 6.2 NOTICES OF CERTAIN EVENTS. In addition to any other notice required to be given by the terms of this Agreement, each of the parties shall promptly notify the other party hereto of: (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement; (b) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; and (c) any actions, suits, claims, investigations or proceedings commenced or, to its knowledge threatened against, relating to or involving or otherwise affecting such party that, if pending on the date of this Agreement, would have 10 been required to have been disclosed pursuant to Section 3 or Section 4 (as the case may be) or that relate to the consummation of the transactions contemplated by this Agreement. Section 6.3 ACCESS TO INFORMATION. Following the date hereof, until consummation of all transactions contemplated hereby, the Sellers shall give to the Purchaser, its counsel, financial advisers, auditors and other authorized representatives reasonable access to the offices, properties, books and records, financial and other data and information as the Purchaser and its representatives may reasonably request. ARTICLE 7 CONDITIONS PRECEDENT Section 7.1 CONDITIONS OF OBLIGATIONS OF THE PURCHASERS. The obligations of the Purchaser are subject to the satisfaction of the following conditions, any or all of which may be waived in whole or in part by the Purchaser: (a) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of the Sellers and the Company set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date) as of the Closing Date as though made on and as of the Closing Date. (b) COMPLIANCE CERTIFICATE. The Chief Executive Officer of Treasure Mountain shall deliver to the Purchasers at the Closing a certificate certifying: (i) that there has been no material adverse change in the business, affairs, prospects, operations, properties, assets or conditions of the company since the date of this Agreement; (ii) that attached thereto is a true and complete copy of Treasure Mountain's Articles of Incorporation, as amended, as in effect at the Closing; and (iii) that attached thereto is a true and complete copy of its By-laws as in effect at the Closing; (c) GOOD STANDING CERTIFICATES. The Company shall have furnished the Purchaser with good standing and existence certificates for Treasure Mountain in its jurisdiction of incorporation and such other jurisdictions as the Purchaser reasonably requests. (d) CERTIFIED LIST OF RECORD HOLDERS. The Purchaser shall have received a current certified list from the Treasure Mountain's transfer agent of the holders of record of Treasure Mountain's Common Stock. (e) BOARD OF DIRECTORS RESOLUTIONS. The Purchaser shall have received executed resolutions of the Board of Directors of Treasure Mountain approving the transactions contemplated herein. (f) PERFORMANCE. The Sellers shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. Section 7.2 CONDITIONS OF OBLIGATIONS OF THE SELLERS. The obligations of the Sellers to effect the sale of the Shares are subject to each of the representations and warranties of the Purchaser set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date) as of the Closing Date as though made on and as of the 11 Closing Date. Such condition may be waived in whole or in part by all of the Sellers. ARTICLE 8 TERMINATION Section 8.1 TERMINATION. This Agreement may be terminated and the purchase and sale of the Shares may be abandoned at any time prior to the Closing: (a) by mutual written consent of the parties hereto; (b) by either the Sellers or the Purchaser if the Closing shall not have occurred on or before February 29, 2004 (unless the failure to consummate the transactions by such date shall be due to the action or failure to act of the party seeking to terminate this Agreement); (c) by the Purchaser if (i) Sellers shall have failed to comply in any material respect with any of the covenants or agreements contained in this Agreement to be complied with or performed by Sellers; or (ii) any representations and warranties of Sellers and the Company contained in this Agreement shall not have been true when made or on and as of the Closing Date as if made on and as of Closing Date (except to the extent it relates to a particular date); or (iii) they are not satisfied with their due diligence review of the Sellers and the Company; or (d) by Sellers if (i) the Purchaser shall have failed to comply in any material respect with any of the covenants or agreements contained in this Agreement to be complied with or performed by them; or (ii) any representations and warranties of the Purchaser contained in this Agreement shall not have been true when made or on and as of the Closing Date. Section 8.2 EFFECT OF TERMINATION. In the event of the termination of this Agreement pursuant to this Article 8, all further obligations of the parties under this Agreement shall forthwith be terminated without any further liability of any party to the other parties. Nothing contained in this Section 8.2 shall relieve any party from liability for any breach of this Agreement. ARTICLE 9 MISCELLANEOUS Section 9.1 NOTICES. All notices, requests and other communications to any party hereunder shall be in writing and either delivered personally, telecopied or sent by certified or registered mail, postage prepaid, If to the Sellers: George I. Norman III c/o Treasure Mountain Holdings, Inc 1390 South 1100 East Suite 204 Salt Lake City, Utah 84111 Facsimile: 801-583-5424 Lane Clissold c/o Treasure Mountain Holdings, Inc 1390 South 1100 East Suite 204 12 Salt Lake City, Utah 84111 Facsimile: 801-583-5424 Raven Clissold 2129 East Wilson Avenue Salt Lake City, UT 84108 With a copy to: Leonard E. Neilson Attorney at Law 8160 South Highland Drive Suite 209 Sandy, UT 84093 Facsimile: 801-733-0808 If to Purchasers: Scimitar Holdings, LLC c/o Spencer Trask & Co., Inc. 535 Madison Avenue New York, New York 10022 Attn: President Facsimile: 212-319-8457 With a copy to: Feldman Weinstein LLP 420 Lexington Avenue, Suite 2620 New York, New York 10170 Attn: David N. Feldman Facsimile: 212-997-4242 If to the Company: Treasure Mountain Holdings, Inc 1390 South 1100 East Suite 204 Salt Lake City, Utah 84111 Attn: George I. Norman III Facsimile: 801-583-5424 With a copy to: Leonard E. Neilson Attorney at Law 8160 South Highland Drive Suite 209 Sandy, UT 84093 Facsimile: 801-733-0808 or such other address or fax number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date delivered personally, telecopied or, if mailed, five business days after the date of mailing if received prior to 5 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt. Section 9.2 AMENDMENTS; NO WAIVERS. 13 (a) Any provision of this Agreement with respect to transactions contemplated hereby may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by the Sellers and Purchasers; or in the case of a waiver, by the party against whom the waiver is to be effective. (b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Section 9.3 FEES AND EXPENSES. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense. Section 9.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto, but any such transfer or assignment will not relieve the appropriate party of its obligations hereunder. Section 9.5 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. Section 9.6 JURISDICTION. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the City of New York, Borough of Manhattan, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 9.1. shall be deemed effective service of process on such party. Section 9.7 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. No provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. Section 9.8 ENTIRE AGREEMENT. This Agreement and the Exhibits and Schedules hereto constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof. 14 Section 9.9 CAPTIONS. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. Section 9.10 SEVERABILITY. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any parties. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. Section 9.11 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof in addition to any other remedy to which they are entitled at law or in equity. Section 9.12 DEFINITION AND USAGE. For purposes of this Agreement: "Affiliate" means, with respect to any Person, any other Person, or indirectly controlling, controlled by, or under common control with such Person. "Material Adverse Effect" means any effect or change that is or would be materially adverse to the business, operations, assets, prospects, condition (financial or otherwise) or results of operations of an entity and any of its subsidiaries, taken as a whole. "Person" means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Taxes" means any and all federal, state, local, foreign or other taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any taxing authority, including, without limitation, taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation, or net worth, and taxes or other charges in the nature of excise, withholding, ad valorem or value added. Section 9.13 SURVIVAL. The representations and warranties herein shall survive the Closing and delivery of the Shares. [REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK] 15 IN WITNESS WHEREOF, each of the following individuals has caused this Agreement to be signed, and each party that is not an individual has caused this Agreement to be duly executed under seal by its respective authorized officers, all as of the day and year first above written. SELLERS: - ------------------------------------ George I. Norman III 479,980 Shares ALEWINE LIMITED LIABILITY COMPANY By: -------------------------------- Name: Title: 391,668 Shares - ------------------------------------ Lane Clissold 1,879,992 Shares - ------------------------------------ Raven Clissold 30,000 Shares THE COMPANY: TREASURE MOUNTAIN HOLDINGS, INC. By: -------------------------------- Name: Title: [SIGNATURE PAGE CONTINUES] 16 [PURCHASERS' SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT] PURCHASER: SCIMITAR HOLDINGS, LLC By: Spencer Trask & Co., Inc., its Member Manager By: --------------------------------- Name: Title: 17 EX-99 4 ex-2.txt EXHIBIT 99.2 Exhibit 99.2 Lane Clissold 135 West 900 South Salt Lake City, UT 84101 George I. Norman III c/o Treasure Mountain Holdings, Inc 1390 South 1100 East Suite 204 Salt Lake City, Utah 84111 February 26, 2004 Re: Administrative Services Agreement (the "Agreement") --------------------------------------------------- Gentlemen: This letter shall set forth our agreement with respect to services to be provided by George Norman and Lane Clissold (the "EXECUTIVES", individually, each an "EXECUTIVE") to Treasure Mountain Holdings, Inc., a Nevada corporation (the "COMPANY"). Defined terms not otherwise defined herein shall have the meanings ascribed to such terms in the Common Stock Purchase Agreement, dated as of the 26th day of February 2004, as amended to date (the "PURCHASE AGREEMENT"), by and among the Company, the sellers listed on SCHEDULE 1.1 annexed thereto and the purchasers listed on SCHEDULE 1.1 annexed thereto (collectively referred to herein as the "PURCHASERS"). We hereby agree as follows: 1. SERVICES. The Executives shall remain officers and directors of the Company in their current positions for the primary purpose of performing administrative duties and tasks consistent with the way such tasks and duties were carried out in 2002 and 2003. These duties and tasks shall include, but are not limited to, the following: a. Overseeing that all filings with the Securities and Exchange Commission (the "COMMISSION") are accurately and timely filed with the Commission; b. Assisting the Company's counsel in the preparation and filing of the Company filings required by the Securities Exchange Act of 1934, as amended; c. Maintaining accurate books and records of the Company, including financial statements in GAAP format consistent with prior practice; d. Preparing the general journal and trial balance required for the Company's auditors to complete the Company's audit for the fiscal year ended December 31, 2003 and financial statements for the fiscal quarters ending March 31, 2004 and June 30, 2004 (and any subsequent periodic reports); e. Assisting the Company's auditors in the execution and filing of the Company's audit confirmation letters and representation letters; f. Preparing board resolutions and board minutes for all board actions, subject to review by the Company's counsel, which shall be a firm designated by the Purchasers; g. Attending to any and all issues that arise with respect to shareholders, the Company's transfer agent, and any other matter requiring the Executives' attention; h. The availability of the Executives to discuss and confer with any key shareholders with respect to that key shareholder's questions; i. Use without charge of George Norman's office as the Company's headquarters at 1390 South 1100 East Suite 204 Salt Lake City, Utah 84111, for receipt of mail delivery and the continuation of local telephone service listing in all local phone directories; j. Such other matters as shall be consistent with their titles, their previous responsibilities and incident to the foregoing. 2. COMPENSATION. As compensation for the duties and tasks described above, the Company agrees to provide the Executives with the following compensation during the term hereof: (i) the Company will pay the Executives $1,000 per month, in the aggregate, commencing on May 15, 2004, and on the 15th day of each month (the "Issuance Date") during the term hereof, in the form of common stock of the Company ("Common Stock") of which the Executives will each receive an equal amount, to be valued at the greater of (x) $.10 per share or (y) the average of the closing prices of the Common Stock during the five trading days immediately prior to the Issuance Date and (ii) cash compensation of $1,000 per month, payable to George Norman on the 15th of each month, commencing on March 15, 2004. If the 15th day of any month falls on a Saturday, Sunday or a legal holiday, then the foregoing compensation payments shall be paid on the next succeeding day not a Saturday, Sunday or legal holiday. Such shares of Common Stock issued pursuant to (i) above shall be "restricted securities" and may only be disposed of pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act") or pursuant to an available exemption from the registration requirements of the Securities Act, and in compliance with any applicable state securities laws. The Executives acknowledge that any certificates evidencing shares of Common Stock issued hereunder shall contain the following or similar legend: 2 "These securities have not been registered with the securities and exchange commission or the securities commission of any state in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, may not be offered or sold except pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as evidenced by a legal opinion, the substance of which shall be reasonably acceptable to the Company." 3. TERM OF EMPLOYMENT; TERMINATION. The term of this agreement shall commence on the date hereof and shall terminate on July 31, 2004 (the "INITIAL TERM"). The term shall be automatically deemed renewed on a month to month basis thereafter (each a "RENEWAL TERM") on the same terms as shall have been effective at the end of the immediately preceding term, whether the Initial Term or a Renewal Term, if the Company or the Executive have not delivered written notice of non-renewal of this agreement at least 30 days prior to the expiration of the Initial Term or Renewal Term, as the case may be. Notwithstanding anything to the contrary herein, upon the request of the Purchasers, each of the Executive hereby agree to resign as officers of the Company. Such resignation shall be effective upon the delivery of such notice to the Executives. Upon such resignation, this Agreement shall be terminated. Each Executive may terminate this Agreement with respect to himself at any time upon 30 days' prior written notice to the Company and the Purchasers. Notwithstanding anything herein to the contrary, in their capacities as the only members of the board of directors of the Company, the Executives hereby agree to increase the size of the board of directors of the Company, and to appoint designees of the Purchasers to fill such vacancies when and as requested by the Purchasers, except to the extent their fiduciary duties require otherwise. Further, immediately following such appointments, the Executives hereby agree to immediately resign from all positions as officers and directors of the Company if requested by the Purchasers. 4. INDEMNIFICATION. The Executives shall jointly and severally indemnify the Company and its agents and hold them harmless from and against any and all losses, claims, damages, actions, expenses (including without limitation reasonable attorneys' fees and disbursements) and liabilities arising in any manner out of or in connection with the rendering by the Executives of services hereunder. 5. SHAREHOLDER APPROVAL. During the term of this agreement, the Executives must receive the written consent of all of the Purchasers to carry out the following actions: a. Any merger or consolidation involving the Company or any affiliate or subsidiary thereof; b. Any amendment or repeal of the Articles of Incorporation or by-laws of the Company; 3 c. Issuance of shares of any class or other rights relating to the issuance of shares of the Company except for shares to be issued as compensation to the Executives pursuant to the terms hereof; d. Transfer of all, or substantially all of, the assets of the Company; e. Amendment to this agreement; f. Voluntary dissolution of the Company; g. The expenditure of any monies for any purpose in excess of $250 individually or $500 in the aggregate; h. Any change in the number of members constituting the board of directors from that provided for in the by-laws of the Company (and any action which would derogate from the right of the shareholders to nominate members of the board of directors); i. The acquisition by the Company of any shares or securities of any other corporation or of any investment in any other business entity; j. The taking of any proceedings with a view to the dissolution, winding up, or termination of the corporate existence of the Company, or the merger or consolidation of the Company with or into another entity; k. The sale, lease or other disposition by the Company of any of its assets in any one transaction or a series of related transaction whether or not in the ordinary course of business, or the granting of an option or other right in respect of such sale, lease or disposition; l. The establishment or change of any dividend policy or other policy with respect to the distribution of any class of equity or the payment of any dividend or distribution; m. Any change in the nature of the business of the Company; n. The acquisition of all or substantially all of the assets of any other business entity or the entering into of any amalgamation, merger, partnership, joint venture or other combination with any other business entity; o. The payment or declaration of any bonuses, profit sharing, retirement allowances or other such distributions to directors, officers or employees of the Company or any increase in the compensation paid to any directors, officers or employees of the Company; p. Any guaranty of any liability of any other person or entity; and 4 q. The taking of any action which may lead to any of the foregoing. 6. MISCELLANEOUS. This Agreement constitutes the entire agreement among the Executives, the Company and the Purchasers relative to the subject matter hereof and supersedes in its entirety any and all prior agreements (written or oral), understandings and discussions with respect thereto, and the parties have made no agreements, representations or warranties relating to the subject matter of this agreement that are not set forth herein or therein. This Agreement may not be modified, amended or waived in any manner except by an instrument in writing signed by each of the parties hereto. It is hereby acknowledged that the Executives shall not be responsible for providing equity or debt financing to satisfy the Company's working capital needs during the term hereof. The waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this agreement, or of any other breach by such party of a provision of this Agreement. The Company and the Executives may not assign their respective rights or obligations hereunder. This agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of laws principles thereof. Neither party shall take any action with the intention or result that such action directly or indirectly circumvents the intentions or provisions hereof. 5 If the foregoing represents our agreement, please sign both copies of this agreement where indicated below and return them to me. Sincerely, TREASURE MOUNTAIN HOLDINGS, INC. By: ------------------------------- Name: Title: APPROVED AND ACCEPTED THIS DAY OF FEBRUARY 2004: ----- ---------------------------------- George Norman ---------------------------------- Lane Clissold APPROVED AND ACCEPTED THIS DAY OF FEBRUARY 2004: ----- SCIMITAR HOLDINGS, LLC By: Spencer Trask & Co., Inc., its Member Manager By: ------------------------------- Name: Title: 6 -----END PRIVACY-ENHANCED MESSAGE-----