EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT (this "AGREEMENT"), made as of this 11th day of June
2003, between ODC Partners LLC ("PURCHASER"), a Delaware Limited Liability
Company, with offices located at 444 Madison Avenue, 18th Floor, New York, N.Y.
10022, and Xxxxxxx X. Xxxxxx, Xx. ("XXXXXX"), Xxxxxx Xxxxx ("MARKS"), Xxxxxxx
Xxxxxxxxxxx ("MAKROPOLOUS"), Xxxxxxx Xxxxx ("XXXXX"), and Xxxxxxxx Xxxxxx ("X.
XXXXXX" and together with GENOVA, MARKS, MAKROPOLOUS and XXXXX the "SELLERS").
The parties referred to hereinabove are sometimes together referred to herein as
the "Parties."
WHEREAS, Sellers own in the aggregate 21,431,000 shares of the common stock, par
value $0.0001 ("COMMON STOCK") of Xxxxxxxxxxxxx.xxx, Inc., a publicly-held
Nevada Corporation (the "COMPANY"); and
WHEREAS, Sellers desire to sell to Purchaser, and Purchaser desires to purchase
from Sellers, 19,931,000 shares of Common Stock (the "SHARES") to be allocated
among the Sellers as set forth in Schedule A hereto.
NOW THEREFORE, for and in consideration of the mutual promises and covenants
hereinafter contained, and other good and valuable consideration, the receipt
and legal sufficiency of which is hereby acknowledged, the Parties agree to the
following:
ARTICLE I
SALE AND PURCHASE OF SHARES
(a) TRANSFER. On and subject to the terms and conditions of this Agreement,
at the Closing, the Sellers shall sell, assign, transfer convey and deliver
("TRANSFER") to Purchaser and Purchaser shall purchase from Sellers, the Shares
free and clear of any liens, pledge, mortgage, deed of trust, security interest,
claim, lease, charge, option, right of first refusal, easement, servitude,
transfer restriction under any shareholder or voting agreement, encumbrance or
any other restriction or limitation whatsoever ("LIEN(S)") in the amounts set
forth opposite their respective names on Schedule A hereto, for the
consideration set forth in Article I (b) below. Item 2.
(b) PURCHASE PRICE. At the Closing, Purchaser shall pay to Sellers in the
aggregate, Sixty Nine Thousand Seven Hundred and Three ($69,793.00) Dollars (the
"PURCHASE PRICE") payable by Bank Check or other delivery of readily available
funds. The Purchase Price shall be paid by Purchaser and allocated among Sellers
and Consultants in the manner specified on Schedule A to this Agreement. Item 3.
(c) CLOSING. The closing of the transactions contemplated by this Agreement
(the "CLOSING") shall take place by exchange of documents among the Parties by
fax or courier, as appropriate, following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as
Purchaser and Sellers may mutually determine (the "CLOSING DATE"); PROVIDED,
HOWEVER, that the Closing Date shall not be later than 5:00 p.m. (Eastern Time)
on June 16, 2003, unless extended by written agreement of all Parties. Once
Purchaser and Sellers each have made the respective deliveries called for
herein, the Closing shall be deemed to have occurred. Item 4.
Item 5. (d) DELIVERIES AT CLOSING. At the Closing, (i) Sellers shall
deliver to Purchaser the various certificates, instruments, and documents
referred to in Article VII (g) below; (ii) Purchaser shall deliver to
Sellers the various certificates, instruments, and documents referred to in
Article VI below, if any; (iii) Sellers shall deliver to Purchaser either
(x) stock certificates representing all of the Shares registered in the
names of Purchaser, or (y) stock certificates endorsed in blank or
accompanied by duly executed assignment documents and including a Medallion
Guarantee together with direction letters to the Company's transfer agent,
or any representation letters to the Company's counsel, necessary to effect
the transfer of the Shares; and (iv) Purchaser shall deliver to Sellers the
Purchase Price.
Item 6.
(e) PROCEEDINGS AT CLOSING. All proceedings to be taken and all documents
to be executed and delivered by all Parties at the Closing shall be deemed to
have been taken, executed and delivered simultaneously,
and no proceedings shall be deemed taken nor documents executed or delivered
until all have been taken, executed and delivered. Item 7.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
In order to induce Purchaser to execute, and perform its obligations
under this Agreement, Sellers, jointly and severally, hereby represent, warrant,
covenant and agree (which representations, warranties, covenants and agreements
shall be, and be deemed to be, continuing and survive the execution and delivery
of this Agreement and the Closing) as follows:
(a) Each of the Sellers has full power and authority to execute and
deliver this Agreement and to perform his obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of each of the Sellers,
enforceable against each of them in accordance with its terms and conditions. No
Seller need give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any federal, state, municipal or other
governmental department, commission, board, bureau, agency, or instrumentality,
or any court of the United States of America or any political subdivision
thereof, or of any other country ("GOVERNMENTAL AUTHORITY") in order to
consummate the transactions contemplated by this Agreement.
(b) Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any Governmental Authority to which any
of the Seller is subject, (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
any of the Sellers is a party or by which any of them is bound or to which any
of their assets is subject, (C) result in any violation of the Certificate of
Incorporation or By-Laws of the Company or (C) result in a breach of, or a
conflict with, any of the terms or provisions of, or constitute a default under,
or result in the modification or termination of, or result in the creation or
imposition of any Lien upon any of the properties or assets of Sellers pursuant
to, any indenture, mortgage, note, contract, commitment or other agreement or
instrument to which Sellers are a party or by which it is, or any of its
respective properties or assets are, or may be, bound or affected.
(c) Except for the $10,000.00 consulting fee that is due and payable to
Xxxxxxx Xxxxxxxx, which is the sole and exclusive responsibility of Sellers,
Sellers do not have any liability or obligation to pay any fees or commissions
to any broker, finder, or agent with respect to the transactions contemplated by
this Agreement for which Purchaser or the Company could become liable or
obligated. Sellers specifically represent and warrant to Purchaser that neither
Purchaser nor the Company is or will become obligated to Xxxxxxx Xxxxxxxx or any
other finder, broker or agent, by reason of any actions taken or to be taken by
Sellers or the Company.
(d) Each Seller is the owner of record and the beneficial owner of the
number of Shares set forth opposite his name on Schedule A, free and clear of
any Liens or other restrictions on transfer (other than any restrictions under
the Securities Act and state securities laws), taxes, options, warrants,
purchase rights, contracts, commitments, equities, claims, and demands. None of
the Sellers is a party to any option, warrant, purchase right, or other contract
or commitment that could require any Seller to sell, transfer, or otherwise
dispose of any capital stock of the Company (other than this Agreement). No
Seller is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of the Company.
The Shares were duly and validly issued and are fully-paid and non-assessable.
Upon delivery of the Shares to Purchaser pursuant to this Agreement, Purchaser
will acquire valid title thereto, free and clear of any Liens.
(e) The Company is a corporation duly organized and validly existing
under the laws of the State of Nevada and has all requisite power and authority
to own, lease and operate its properties and assets and to conduct the business
as now conducted and as proposed to be conducted. A true, complete and correct
copy of each of the Certificates of Incorporation, By-laws and other governing
documents of the Company has in effect on the date of this Agreement, including
all amendments thereto, have been delivered to Purchaser.
(f) The Company is duly qualified to do business as a foreign
corporation, and is in good standing, in all jurisdictions, if any, wherein such
qualification is necessary and where failure so to qualify would have a material
adverse effect on the business, properties, liabilities, assets, operations,
results of operations, condition (financial or otherwise) or affairs of the
Company.
(g) The Company has never had, nor does it have, any subsidiaries, nor
has it ever owned, nor does it currently own, any capital stock or other
proprietary interest, directly or indirectly, in any corporation, association,
trust, partnership, joint venture or other entity.
(h) The Company owns, possesses or has obtained all governmental and
other licenses, permits, certifications, registration, approvals or consents and
other authorizations necessary to own or lease, as the case may be, and to
operate its properties and to conduct its business or operations as presently
conducted and all such governmental and other licenses, permits, certifications,
registrations, approvals, consents and other authorizations are outstanding and
in good standing and there are no proceedings pending or, to the best of its
knowledge, threatened or any basis therefore existing, seeking to cancel,
terminate or limit such licenses, permits, certifications, registrations,
approvals or consents or authorizations.
(i) There are no claims, actions, suits, proceedings, arbitrations,
investigations or inquiries before any court or governmental agency, court or
tribunal, domestic or foreign, or before any private arbitration tribunal,
pending or, to the best of the knowledge of Sellers, threatened against the
Company or involving its assets which, if determined adversely to the Company,
would, individually or in the aggregate, result in a material adverse change in
the financial position, shareholders' equity, results of operations, properties,
business, management or affairs of the Company, or which question the validity
of this Agreement or of any action taken, or to be taken, by the Company
pursuant to, or in connection with, this Agreement; nor, to the best of the
knowledge of Sellers, is there any basis for any such claim, action, suit,
proceeding, arbitration, investigation or inquiry to be
made by any person and/or entity. There are no outstanding orders, judgments or
decrees of any court, governmental agency or other tribunal specifically naming
the Company or Sellers and/or enjoining the Company or Sellers from taking, or
requiring the Company or Sellers to take, any action, and/or by which the
Company or Sellers are, and/or its assets are, bound or subject.
(j) The Company owns all trademarks, service marks, tradenames, copyrights,
similar rights and their registrations, trade secrets, methods, practices,
systems, ideas, know how and confidential materials used or proposed to be used
in the conduct of its business as conducted as of the date hereof (collectively
the "COMPANY INTANGIBLES") free and clear of all Liens (including, without
limitation, former or current officers, directors, shareholders, employees and
agents).
(k) Sellers have previously delivered to Purchaser a copy of the financial
statements as they were filed in the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2001 accompanied by the audit report of Van
Buren & Xxxxx LLC, Sellers's independent auditors, and as were filed in the
Company's quarterly financial statements on Form 10-QSB for the quarters ended
March 31, 2002, June 30, 2002, and September 30, 2002 (the "Company's Financial
Statements"). The Company's Financial Statements are, and will be, true and
accurate, in accordance with the books and records of the Company and are, and
will, present fairly in all material respects the financial position and results
of operations of the Company as of the times and for the periods referred to
therein, in each case in accordance with generally accepted accounting
principles under current United States accounting rules and regulations,
consistently applied ("GAAP"). All of the financial books and records of the
Company have been made available to Purchaser, and such books and records
completely and fairly record in all material respects the Company's financial
affairs which would normally be recorded in financial books and records.
Except as will be set forth on the Company's Financial Statements and
Schedule II (m), the Company has no debt, liability or obligations of any
nature, whether accrued, absolute, contingent or otherwise, whether due or to
become due and whether or not the amount hereof is readily ascertainable, that
is not reflected as a liability in the Company's Financial Statements or except
for liabilities incurred by the Company in the ordinary course of business,
consistent with past practices which are not otherwise prohibited by, or in
violation of, or which will not result in a breach of, the representations,
warranties and covenants of Sellers contained in this Agreement. There will be
no material loss contingencies (as such term is used in Statement of Financial
Accounting Standards No. 5 ("FAS No. 5") issued by the Financial Accounting
Standards Board (the "FASB") which will not be adequately provided for in the
Company's Financial Statements as required by FAS No. 5.
(l) The Company does not currently own, nor has it ever owned, any real
property. The Company has no written leases or subleases with respect to real
property. The Company owns or has good and marketable title to its assets,
properties and interests in properties and/or are utilized in connection with
the operation of the business of the Company, in all cases free and clear of all
Liens.
(m) Schedule II (m) contains a list of all liabilities (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due) (collectively a "LIABILITY" or "LIABILITIES"). The Company
has not, except as set forth on Schedule II (m) hereto or in the Financial
Statements, (i) incurred any obligation (absolute or contingent, secured or
unsecured) (collectively an "OBLIGATION" or "OBLIGATIONS") ) or Liability; (ii)
cancelled, without payment in full, any notes, loans or other obligations
receivable or other debts or claims held by it; (iii) sold, assigned,
transferred, abandoned, mortgaged, pledged or subjected to lien or security
interest any of its material properties, tangible or intangible, or rights under
any contract, permit, license, franchise or other agreement other than sales or
other dispositions of goods or services in the ordinary course of business at
customary prices; or (v) declared, made or paid, or set aside for payment, any
cash or non-cash dividends or other distribution on any shares of its capital
stock.
(n) The Company is not in default, in any respect, under the terms of
any outstanding agreement which is material to the business, operations,
properties, assets or condition of the Company and there exists no event of
default or event which, with notice and/or the passage of time, or both, would
constitute any such default.
(o) The Company has filed all federal, state, municipal and local tax
returns (whether relating to income, sales, franchise, withholding, real or
personal property or otherwise) required to be filed under the laws of the
United States and all applicable states and has paid in full all taxes which are
due pursuant to such returns or claimed to be due by any taxing authority or
otherwise due and owing. No penalties or other charges are, or will become, due
with respect to the late filing of any such return. To the best of the knowledge
of Sellers, after due investigation, each such tax return heretofore filed by
the Company correctly and accurately reflects the amount of its tax liability
thereunder. The Company has withheld, collected and paid all other levies,
assessments, license fees and taxes to the extent required and, with respect to
payments, to the extent that the same have become due and payable.
(p) The authorized capital stock, as of the date of this Agreement,
consists of 50,000,000 shares of Common Stock, of which 26,530,000 shares are
issued and outstanding. No preferred stock is issued and outstanding. As of the
date hereof and the Closing Date, except as set forth or contemplated herein,
there shall not be authorized and/or issued and outstanding any shares of
capital stock of the Company and there shall not be outstanding any rights to
purchase shares of capital stock of the Company. The issued and outstanding
shares of the Company's Common Stock have been duly authorized and validly
issued. All outstanding shares of the Company's Common Stock are fully paid and
nonassessable. There are no outstanding warrants, options, or similar rights to
purchase or convert into the Company's Common Stock. There are no preemptive
rights with respect to the Company's Common Stock. Sellers have no reason to
believe that any holder of such outstanding shares of the company's Common Stock
is subject to personal liability solely by reason of being such a holder. The
offers and sales of such outstanding shares of the Company's Common Stock were,
at all relevant times, exempt from the registration or prospectus delivery
requirements of the Securities Act and any applicable state securities laws
pursuant to an exemption for which Sellers and/or such offering or sale fully
qualified. No dividends, redemptions or other distributions of the assets of the
Company have been, or will be, declared and/or paid prior to the Closing Date on
or with respect to the Company's Common Stock.
(q) The Company has filed all reports, registration statements,
definitive proxy statements and other documents and all amendments thereto and
supplements thereof required to be filed by it with the U.S. Securities and
Exchange Commission since March 7, 2000 (the "SEC Reports"), all of which have
complied in all material respects with the applicable requirements of the
Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations promulgated thereunder. As of the respective dates of filing in
final or definitive form (or, if amended or superseded by a subsequent filing,
then on the date of such subsequent filing), none of the Company's SEC Reports
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 in which they were made, not misleading.
(r) Except as set forth in Schedule II (r), or as contemplated by this
Agreement, since the date of the Company's Financial Statements, there has not
been with respect to the Company:
(i) Any loan to any person or entity and/or the issuance of any
guaranty for, or with respect to, its or another's obligations;
(ii) Any waiver or release of any material right or claim;
(iii) Any incurrence of any material obligation or liability,
absolute or contingent;
(iv) Any payment of any material obligation or liability, absolute
or contingent, except for current liabilities reflected in, or shown on, the
most recent balance sheet of the Comapny and/or incurred subsequent to the date
thereof in the ordinary course of business and/or in connection with the
transactions contemplated by this Agreement; and
(v) Any material adverse change in the business, assets,
properties, liabilities, operations, results of operations, condition (financial
or otherwise) or affairs of the Company;
(vi) Any damage, destruction or loss, whether or not covered by
insurance, having or which could reasonably be expected to have a material
adverse effect on the Company;
(vii) (A) Any liability created, assumed, guaranteed or incurred,
or (B) any transaction, contract or commitment entered into, by the Company, in
the case of either clause (A) or (B) other than in the ordinary course of
business;
(viii) Any payment, discharge or satisfaction of any material
encumbrance by the Company or any cancellation by the Company of any material
debts or claims or any amendment, termination or waiver of any rights of
material value to the Company;
(ix) Any direct or indirect redemption, purchase or other
acquisition of any such shares of the capital stock of the Company;
(x) Any stock split, reverse stock split, combination,
reclassification or recapitalization of the Company's Common Stock, or any
issuance of any other security in respect of, or in exchange for, any shares of
the Company's Common Stock;
(xi) Any issuance by the Company of any shares of its capital
stock or any debt security or any subscription or similar right to acquire any
shares of the Company's capital stock;
(xii) Any license, sale, transfer, pledge, mortgage or other
disposition of any material tangible or intangible asset (including any Company
Intangibles) of the Company;
(xiii) Any termination of, or written indication of an intention
to terminate or not renew, any material contract, license, commitment or other
agreement between the Company and any other person;
(xiv) Any material write-down or write-up of the value of any
asset of the Company, or any material write-off of any accounts receivable or
notes receivable of the Company or any portion thereof;
(xv) Any increase in, or modification of, compensation payable, or
to become payable, to any director, officer, employee, consultant or agent of
the Company, or the entering into of any employment contract with any officer or
employee;
(xvi) Any increase in, or modification or acceleration of, any
benefits payable, or to become payable, under any bonus, pension, severance,
insurance or other benefit plan, payment or arrangement (including, but not
limited to, the granting of stock options, restricted stock awards or stock
appreciation rights) made to, for or with any director, officer, employee,
consultant or agent of the Company other than as described in Schedule II (r)
hereto;
(xvii) The making of any loan, advance or capital contribution to,
or investment in, any person or the engagement in any transaction with any
employee, officer, director or security holder of the Company, other than
advances to employees in the ordinary course of business for travel and similar
business expenses;
(xviii) Any change in the accounting methods or practices followed
by the Company or any change in depreciation or amortization policies or rates
theretofore adopted;
(xix) Any forward sales commitments at a price less than the
Company's cost of sales for such commitments;
(xx) Any termination of employment of any officer or key employee
of the Company or any expression of intention by any officer or key employee of
the Company to resign from such office or employment with the Company;
(xxi) Any amendments or changes in the Company's Certificate of
Incorporation or By-Laws;
(xxii) Any agreement, understanding, authorization or proposal,
whether in writing or otherwise, for the Company to take any of the actions
described in this Section II (r).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
In order to induce Sellers to execute, and perform their obligations
under this Agreement, Purchaser hereby represents, warrants, covenants and
agrees (which representations, warranties, covenants and agreements shall be,
and be deemed to be, continuing and survive the execution and delivery of this
Agreement and the Closing) as follows:
(a) Purchaser has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, and the execution, delivery
and performance of this Agreement has been authorized by all requisite corporate
action on the part of any corporate Purchaser. This Agreement constitutes the
valid and legally binding obligation of Purchaser, enforceable against it in
accordance with its terms and conditions. Purchaser need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
Governmental Authority in order to consummate the transactions contemplated by
this Agreement.
(b) Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any Governmental Authority to which any
Purchaser is subject, or (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
any Purchaser is a party or by which it is bound or to which any of its assets
are subject.
(c) The Purchaser has no Liability or Obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which any of the Sellers could become liable
or obligated.
(d) Purchaser represents and warrants that (A) such Purchaser is
acquiring the Shares for its own account for investment and not for the account
of any other person and not with a view to or for distribution, assignment or
resale in connection with any distribution within the meaning of the Securities
Act, (B) such Purchaser agrees not to sell or otherwise transfer the Shares
unless they are registered under the Securities Act and any applicable state
securities laws, or an exemption or exemptions from such registration are
available, (C) such Purchaser represents that it has knowledge and experience in
financial and business matters such that it is capable of evaluating the merits
and risks of acquiring the Shares, (D) such Purchaser has had access to all
documents, records, and books of the Company pertaining to the investment and
was provided the opportunity ask questions and receive answers regarding the
terms and conditions of the acquisition of the Shares and to obtain any
additional information which the Company possesses or was able to acquire
without unreasonable effort and expense, and such Purchaser received information
concerning the Company, Sellers and the Shares equivalent to that which would
have been included in a registration statement prepared under the Securities Act
of 1933, as amended, and (E) such Purchaser has no need for the liquidity in its
investment in the Company and could afford the complete loss of such investment.
(e) Purchaser is not insolvent or bankrupt and will not be insolvent or
bankrupt after purchasing the Shares, and Closing of the transactions herein
contemplated will constitute Purchaser's acknowledgment that the Shares' value
are equal to the Purchase Price. Purchaser is an "Accredited Investor" (as such
term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933).
(f) Purchaser was not solicited by any Seller or anyone else on any
Seller's behalf to enter into any transaction whatever by any form of general
solicitation or general advertising, as those terms are defined in Regulation D
under the Securities Act.
(g) Purchaser acknowledges that the Shares are speculative and involve
a high degree of risk, including among many other risks that the Shares will be
restricted as elsewhere described in this Agreement and will not be transferable
unless first registered under the Securities Act or pursuant to an exemption
from such act's registration requirements.
(h) The Shares when delivered to Purchaser will not be registered under
the Securities Act or applicable state laws, but shall be transferred in
reliance upon the exemptions from registration provided by Section 4(1) of the
Securities Act and under analogous state securities laws, on the grounds that
the sale of the Shares does not involve any public offering and that Sellers are
not thereby acting as an issuer, underwriter or dealer. The Shares are
"restricted securities" as that term is defined in Rule 144(a) of the General
Rules and Regulations under the Securities Act and must be held indefinitely,
and the prior written consent of the Company will be necessary for their resale
or other transfer, unless they are subsequently registered under the Act or an
exemption from the Act's registration requirements is available for their resale
or transfer. All certificates delivered evidencing the Shares shall bear a
restrictive legend that refers to the Securities Act.
4.
ARTICLE IV
COVENANTS OF PURCHASER PRIOR TO CLOSING
5.
6.
Sellers shall, during the period commencing on the date hereof and
terminating immediately following the close of business on the Closing Date:
(a) Take and perform any and all actions necessary to render accurate,
and/or maintain the accuracy of, all of the representations and warranties of
Sellers herein contained and/or satisfy each covenant or condition required to
be performed or satisfied by Sellers at or prior to the Closing and/or to cause
or permit the implementation of this Agreement;
(b) Not take or perform any action which would or might cause any
representation or warranty made by Sellers herein to be rendered inaccurate, in
whole or in part, and/or which would prevent, inhibit or preclude the
satisfaction, in whole or in part, of any covenant required to be performed or
satisfied by Sellers at or prior to the Closing;
(c) Perform, in all material respects, all of its obligations under all
material agreements, leases and documents relating to or affecting its assets or
properties;
(d) Not make any announcement to the public in general and/or within
its industry and/or otherwise with respect to this Agreement, and the current or
future business or operations of any party hereto without the prior written
consent of Purchaser or, in the case of an announcement required by applicable
securities laws, prior consultation with Purchaser;
(e) Immediately advise Purchaser of any event, condition or occurrence
which constitutes, or may, with the passage of time and/or giving of notice,
constitute, a breach of any representation or warranty of Sellers herein
contained and/or which prevents, inhibits or limits or may prevent, inhibit or
limit Sellers from satisfying, in full and on a timely basis, any covenant, term
or condition herein contained and/or implementing this Agreement.
(f) Sellers will not (and the Sellers will not cause or permit the
Company to) (i) solicit, initiate, or encourage the submission of any proposal
or offer from any person, company or entity ("PERSON"), relating to the
acquisition of any capital stock or other voting securities, or any assets of
the Company (including any acquisition structured as a merger, consolidation, or
share exchange) or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing. Sellers will not vote the Shares in favor of, or otherwise
participate in, any such acquisition structured as a merger, consolidation, or
share exchange. Sellers and the Company will notify Purchaser immediately of any
written proposal or offer respecting the Shares or the Company received by
Sellers of the types covered by this paragraph.
ARTICLE V
COVENANTS POST-CLOSING
The Parties agree as follows with respect to the period following the
Closing.
(a) The Parties acknowledge that SEC Rule 14f-1 under the Act requires
that an information statement containing certain specified disclosures be filed
with the SEC and mailed to the Company's shareholders at least 10 days before
any change in control of the Board of Directors can be effectuated. Sellers
agree to cooperate fully with the Company and Purchaser in the preparation and
filing of such information statement and to provide all information therefor
respectively needed from them in a timely manner, so as not to cause undue delay
in the filing of the information statement or any amendment thereto.
(b) In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party may reasonably
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Article VIII
below). Sellers acknowledge and agree that from and after the Closing Purchasers
will be entitled to possession of all documents, books, records (including tax
records), agreements, and financial data of any sort relating to the Company.
(c) In the event and for so long as any Party actively is contesting or
defending against any action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand in connection with (i) any transaction contemplated
under this Agreement or (ii) any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction on or prior to the Closing Date involving the
Company, the other Party will cooperate with him or it and his or its counsel in
the contest or defense, make available their personnel, and provide such
testimony and access to their books and records as shall be necessary in
connection with the contest or defense, all at the sole cost and expense of the
contesting or defending Party (unless the contesting or defending Party is
entitled to indemnification therefor under Article VIII below).
(d) Sellers will not take any action that is designed or intended to
have the effect of discouraging any lessor, licensor, customer, supplier, or
other business associate of the Company from maintaining the same business
relationships with the Company after the Closing as it maintained with the
Company prior to the Closing.
(e) Subject to Purchaser's fiduciary obligations to the Company, if
any, Purchaser shall cause the Company to pay in full, and will not negotiate,
the accounts payable held by (i) Capital Automotive in the amount of $10,000.00.
ARTICLE VI
CONDITONS PRECEDENT OF SELLERS TO CLOSE
The obligations of Sellers to implement this Agreement and close the
transaction, at their respective elections, are subject to, and conditioned
upon, Sellers satisfaction (and/or waiver) of each of the following conditions:
(a) the representations and warranties set forth in Article III above
shall be true and correct in all material respects at and as of the Closing
Date;
(b) Purchaser shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(c) No action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement
or (B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(d) All actions to be taken by Purchaser in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to Sellers.
ARTICLE VII
CONDITONS PRECEDENT OF PURCHESERS TO CLOSE
The obligations of Purchaser to implement this Agreement and close the
transaction, is subject to, and conditioned upon, Purchaser satisfaction (and/or
waiver) of each of the following conditions:
(a) The representations and warranties of Sellers contained in this
Agreement shall be true and correct in all material respects as of the Closing
Date with the same effect as if made on and as of the Closing Date and Sellers
shall have performed in all material respects all of its covenants and
obligations contemplated hereunder to be performed on or prior to the Closing
Date. At the Closing, Purchaser shall have received a certificate, executed by
the Chief Executive Officer and the Secretary of the Company (effective as of
the Closing Date) and in form reasonably acceptable to Purchaser, certifying as
of both the date of this Agreement and the Closing Date, the truth and accuracy
of (and the remaking of) the representations and warranties of Sellers herein
contained.
(b) Prior to the Closing, there shall not have occurred any material
adverse change in the financial condition, business or operations of the
Company, nor shall any event have occurred or condition exist which, with the
passage of time or the giving of notice, or both, may cause or create any such
adverse material change.
(c) Prior to the Closing, all corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be in form and
content reasonably satisfactory to Purchaser and its counsel and Purchaser and
its counsel shall have received all counterpart originals or certified or other
copies of such documents and instruments as they may reasonably request.
(d) No action or proceeding shall have been instituted and be pending
by any private party and/or governmental agency or authority challenging the
legality of this Agreement and/or seeking to prevent or delay consummation of
the transactions herein contemplated, which action or proceeding shall have
resulted in an order granting preliminary or permanent injunctive relief
prohibiting consummation of this Agreement and which order shall not have been
vacated as of the Closing.
(e) All statutory requirements for the valid consummation by Sellers of
the transactions herein described shall have been fully and timely satisfied;
all authorizations, consents and approvals of all federal, state and local
governmental agencies and authorities required to be obtained in order to permit
consummation by Sellers of the transactions herein described and/or to permit
the businesses currently carried on by Sellers to continue unimpaired in all
material respects immediately following the Closing Date shall have been
obtained and shall be in full force and effect; and no action or proceeding to
suspend, revoke, cancel, terminate, modify or alter any of such authorizations,
consents or approvals shall be pending or threatened.
(f) Xxxxxxx Xxxxxx, Xx. shall have converted $100,000.00 of the
$109,000.00 owed to him by the Company as accrued salaries into 100,000 shares
of Common Stock
(g) Sellers shall have delivered to Purchaser the following documents:
(i) (A) duly executed resignations of Marks, Makropolous,
Quinn, and X. Xxxxxx, effective upon Closing, and (B) a duly executed
resignation of Xxxxxxx Xxxxxx, Xx. with respect to his officerships (which is
effective immediately) and with respect to the Board of Directors which is
effective ten (10) days after the mailing of a Schedule 14-F1 notice to the
Company's stockholders in connection with the transactions contemplated by this
Agreement;
(ii) certified resolutions of the Company's Board of Directors
(A) increasing the size of the Board of Directors to six (6) members and
appointing one (1) individual to be designated by the Purchaser to fill the
vacancy created by the resignations described in the preceding clause (a); and
(B) appointing Xxx Xxxxx to be the Chief Executive Officer, Secretary and Chief
Financial Officer of the Company.
(iii) instruments in form and substance satisfactory to
Purchaser terminating all agreements, understandings and arrangements between
Sellers and the Company;
(iv) instruments in form and substance satisfactory to the
Purchaser releasing the Company from its obligations with respect to all
agreements, understandings and arrangements between Sellers and the Company
including, without limitation, any indebtedness owing to Sellers, except for the
indebtedness of $9,000.00 owed to Xxxxxxx Xxxxxx, Xx.;
(v) the certificate of the Chief Executive Officer, the Chief
Operations Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to Purchaser, with respect to the capitalization of the
Company (including options) immediately prior and immediately following the
Closing.
(h) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to Purchaser.
ARTICLE VIII
INDEMNIFICATION
(a) (a) Purchaser agrees to indemnify and hold harmless Sellers and
their successors and assigns (the "Sellers Indemnitees") against and in respect
of any and all claims, suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages, settlements, liabilities,
losses, costs and legal and other expenses arising out of or based upon any
breach of any representation or warranty, covenant or agreement of Purchaser
contained in this Agreement or in any other agreement executed and delivered
hereunder or in connection herewith (referred to as "Sellers Losses").
(b)
(c) (b) Sellers jointly and severally, agree to indemnify and hold
harmless Purchaser its respective successors and assigns, shareholders,
employees, (the "Purchaser Indemnitees") against and in respect of any and all
claims, suits, actions, proceedings (formal and informal), investigations,
judgments, deficiencies, damages, settlements, liabilities, losses, costs and
legal and other expenses arising out of or based upon any breach of any
representation, warranty, covenant or agreement of Sellers contained in this
Agreement, or in any other agreement executed and delivered by Sellers (referred
to as the "Purchaser Losses").
(d)
(e) (c) Any Sellers Indemnitee or Purchaser Indemnitee (the
"Indemnified Party") seeking indemnification under this Agreement shall give to
the party obligated to provide indemnification to such Indemnified Party (the
"Indemnitor") a notice (a "Claim Notice") describing in reasonable detail the
facts giving rise to any claim for indemnification hereunder promptly upon
learning of the existence of such claim. Upon receipt by the Indemnitor of a
Claim Notice from an Indemnified Party with respect to any claim of a third
party, such Indemnitor may assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party and, in such event, shall agree to pay and
otherwise discharge with the Indemnitor's own assets all judgments,
deficiencies, damages, settlements, liabilities, losses, costs and legal and
other expenses related thereto; and the Indemnified Party shall cooperate in the
defense or prosecution thereof and shall furnish such records, information and
testimony and attend all such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested in connection therewith. If
the Indemnitor does not assume the defense thereof within ten days of its
receipt of the Claim Notice, the Indemnitor shall similarly cooperate with the
Indemnified Party in such defense or prosecution. The Indemnified Party shall
have the right to participate in the defense or prosecution of any lawsuit with
respect to which the Indemnitor has assumed the defense and to employ its own
counsel therein, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless (i) the Indemnitor shall not have
promptly employed counsel reasonably satisfactory to such Indemnified Party to
take charge of the defense of such action, (ii) such Indemnified Party shall
have reasonably concluded that there exists a significant conflict of interest
with respect to the conduct of such Indemnified Party's defense by the
Indemnitor, or (iii) the Indemnitor fails to provide reasonable insurance to the
Indemnified Party of its financial capacity to defend such action and provide
indemnification with respect to such action, in any of which events such
reasonable fees and expenses shall be borne by the Indemnitor and the Indemnitor
shall not have the right to direct the defense of any such action on behalf of
the Indemnified Party. The Indemnitor shall have the right, in its sole
discretion, to settle any claim (a) which is solely for monetary damages for
which indemnification has been sought and is available hereunder, and (b) where
there is no finding or admission of any violation of any legal requirements or
any violation of the rights of any Person and no effect on any other claims that
may be made against the indemnified party, provided that the Indemnitor shall
not agree to the settlement of any claim which constitutes the subject of a
Claim Notice which settlement in the reasonable opinion of the Indemnified Party
would have a material adverse continuing effect on the business of the
Indemnified Party without the prior written consent of the Indemnified Party.
The Indemnified Party shall give written notice to the Indemnitor of any
proposed settlement of any suit, which settlement the Indemnitor may, if it
shall have assumed the defense of the
suit, reject in its reasonable judgment within 10 days of receipt of such
notice. Notwithstanding the foregoing the Indemnified Party shall have the right
to pay or settle any suit for which indemnification has been sought and is
available hereunder, provided that, if the defense of such claim shall have been
assumed by the Indemnitor, the Indemnified Party shall automatically be deemed
to have waived any right to indemnification hereunder.
ARTICLE IX
TERMINATION
(a) This Agreement may be terminated at any time prior to the Closing
Date, either: (i) by mutual agreement of Sellers and Purchaser; or (ii) by
either Sellers or Purchaser if either (A) the Closing shall not have taken place
on or prior to June 16, 2003, or such later date as is mutually agreed (other
than by reason of the default hereunder by the terminating party) or (B) there
is any statute, rule or regulation which makes consummation of the transaction
illegal or otherwise prohibited or any order, decree, injunction or judgment
enjoining Purchaser or from consummating the transaction is issued by a court of
competent jurisdiction and such order, decree, injunction or judgment has become
final and non-appealable.
(b) In the event of the termination of this Agreement as provided in
subsection (a) of this Article IX, all of the obligations and liabilities of the
parties under this Agreement shall terminate; provided, however, that nothing in
this Article IX shall relieve any party from any liability for any breach of
this Agreement.
ARTICLE X
MISCELLANEOUS
(a) COSTS AND EXPENSES. Each Party shall pay their own costs and
expenses relating to the transactions contemplated by this Agreement, including,
without limitation, the costs and expenses relating to the preparation of this
Agreement, such as attorneys' fees, accounting fees, printing expenses and
consent solicitation expenses.
(b) NOTICES. Any and all notices, requests or instructions desired to
be given by any party hereto to any other party hereto shall be in writing and
shall be either be hand delivered, delivered by express courier or mailed to the
recipient first class, postage prepaid, certified, return receipt requested at
the following respective addresses:
To: Sellers: At the address set forth below their signature below;
With a copy to:
Xxxxxxx Xxxxxx Xx.
X.X. Xxx 000
Xxx Xxxxx, X.X. 00000
To: Purchaser: At the address set forth below its signature below
With a copy to:
Xxx Xxxxx
c/o ODC Partners, LLC
444 Madison Avenue, 18th Floor
New York, N.Y. 10022
or to such other address as any party hereto shall designate in a writing
complying with the provisions of this Section 10.
(c) WAIVER. Each of the parties hereto may, by written instrument, (a)
extend the time for the performance of any of the obligations or other acts of
any other party hereto; (b) waive any inaccuracies of such other party in the
representations and warranties contained herein or in any document delivered
pursuant to this Agreement; (c) waive compliance with any of the covenants of
such other party contained in this Agreement; (d) waive such other party's
performance of any of such other party's obligations set out in this Agreement;
and (e) waive any condition to such other party's obligation to effect the
transaction.
(d) AMENDMENTS. This Agreement may be amended at any time prior to the
Closing Date by a writing executed by an authorized officer of Purchaser and
Sellers.
(e) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
executed and to be fully performed therein and without regard to any principles
of conflicts of laws. Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement shall only be brought
against any of the parties in the state or federal courts of the State and
County of New York and each of the parties hereby consents to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein. The
parties hereto each waive any claim that such jurisdiction is not a convenient
forum for any such action; provided, however, that each party reserves the right
to seek to remove the action or proceeding from the state court to the federal
court in such jurisdiction or VICE VERSA.
(f) EFFECTIVENESS. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and any controlling person of any party hereof
as provided in Section 15 of the Securities Act and their respective successors,
transferees, heirs, assigns and beneficiaries.
(g) COUNTERPARTS. This Agreement may be executed in multiple copies,
each of which shall constitute an original, but all of which shall constitute
one and the same agreement.
(h) PARTIAL INVALIDITY. If any term, covenant or condition in this
Agreement, or the application thereof to any person or circumstance, shall be
invalid or unenforceable, the remainder of this Agreement or the application of
such term, covenant or condition to persons or circumstances, other than those
as to which it is held invalid, shall be unaffected thereby and each
term, covenant or condition of this Agreement shall be enforced to fullest
extent permitted by law.
(i) INTEGRATION. This Agreement (including the Schedules hereto, the
documents and instruments delivered by the parties hereto and any other
documents executed and delivered and/or to be executed and delivered pursuant to
the provisions of this Agreement as herein provided) sets forth the entire
agreement among the parties hereto with respect to the subject matter herein
contained. There are no covenants, promises, agreements, conditions or
understandings, either oral or written, between or among the parties hereto with
respect to the subject matter hereof except as herein and in such ancillary
documents provided. This Agreement can only be altered, amended, modified,
terminated or rescinded by a writing executed by the party to be charged.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLERS:
By:
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Xxxxxxx Xxxxxx, Xx.
Address:
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Fax No:
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By:
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Xxxxxxxx Xxxxxx
Address:
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Fax No:
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By:
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Xxxxxx Xxxxx
Address:
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Fax No:
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLERS:
By:
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Xxxxxxx Xxxxx
Address:
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Fax No:
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By:
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Xxxxxxx Xxxxxxxxxxx
Address:
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Fax No:
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PURCHASER:
ODC Partners, LLC
By:
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Name: Xxx Xxxxx
Title:
Address: 000 Xxxxxxx Xxxxxx
18th Floor
New York, N.Y. 10022
Fax No:
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LIST OF SCHEDULES
SCHEDULES
SCHEDULE A Seller Shareholdings Table
SCHEDULE II (m) Obligations or Contingencies of Sellers
SCHEDULE II (r) Subsequent Events of Sellers
SCHEDULE A
SELLING SHAREHOLDER TABLE
NAME SHARES OWNED SHARES BEING SOLD PURCHASE PRICE
Xxxxxxx Xxxxxx Xx. 16,081,000 14,981,000 $44,943.00
Xxxxxx Xxxxx 4,450,000 4,050,000 $12,150.00
Xxxxxxx Xxxxxxxxxxx 450,000 450,000 $1,350.00
Xxxxxxx Xxxxx 300,000 300,000 $900.00
Xxxxxxxx Xxxxxx 150,000 150,000 $450.00
Total 21,431,000 19,931,000 $59,793.00
