STOCK PURCHASE AGREEMENT
FOR OUTSTANDING COMMON STOCK
OF
RAKO CAPITAL CORPORATION
December 18, 2002
STOCK PURCHASE AGREEMENT
Agreement, dated as of December 18, 2002, by and between
Osprey Investments II, Inc., a Florida corporation with offices at 0000
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 (the "Purchaser"); the persons listed
on Exhibit A (collectively, the "Stockholders"); and RAKO Capital Corporation, a
Nevada corporation with offices at 00 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx,
Xxxx 00000 (hereinafter referred to as "Rako" or the "Company").
RECITAL
The Purchaser desires to acquire from the Stockholders the number of
shares of the outstanding capital stock of Rako set forth next to the
Stockholder's name on Exhibit A, all of which are owned of record and/or
beneficially by the Stockholders, and the Stockholders desire to effect such
sale on the terms and conditions set forth in this Agreement.
I. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Section 1:
"BREACH" -- a "breach" of any representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or violation or default of, or any failure to perform
or comply with, such representation, warranty, covenant, obligation, or other
provision, or (b) any claim (by any person) or other occurrence or circumstance
that is or was inconsistent with such representation, warranty, covenant,
obligation, or other provision, and the term "breach" means any such inaccuracy,
violation, default, failure, claim, occurrence, or circumstance.
"CLOSING" - as defined in Section 5.2.
"CLOSING DATE" -- as December 13, 2002 or such other date as of which
the Closing actually takes place.
"CONSENT" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS" - all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Rako Shares by the Stockholders to Purchaser;
(b) the execution, delivery, and performance of the Stockholder's Release;
(c) the performance by Rako, Stockholders and Purchaser of their respective
covenants and obligations under this Agreement; and
(d) Purchaser's acquisition and ownership of the Rako Shares.
"CONTRACT" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"ENCUMBRANCE" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
"ERISA" -- as defined in Section 2.15.
"IRS OR A INTERNAL REVENUE SERVICE" -- The United States Internal
Revenue Service or any successor agency, and, to the extent relevant, the United
States Department of the Treasury.
"KNOWLEDGE" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other matter; or
(b) a prudent individual could be expected to discover or otherwise become
aware of such fact or other matter in the course of conducting a reasonably
comprehensive investigation concerning the existence of such fact or other
matter.
A person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director, officer, partner, executor, or trustee of such
Person (or in any similar capacity) has, or at any time had, Knowledge of such
fact or other matter.
"PERSON" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"PROCEEDING" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"SECURITIES ACT" -- The Securities Act of 1933, as amended or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"RAKO SHARES" -- the shares of Rako Common Stock which are being sold
by the Stockholders to the Purchaser.
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"TAKE-OVER PROPOSAL" -- as defined in Section 6.6.
"TAX RETURN" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
II. REPRESENTATIONS AND WARRANTIES OF XXXX
Xxxx hereby represents, warrants and agrees that:
2.1 Organization, Good Standing and Corporate Power of Rako. Rako is a
corporation duly organized, validly existing and presently in good standing
under the laws of the State of Nevada, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which such
qualification is necessary, and has the corporate power and authority to own its
properties and assets and to transact the business in which it is engaged. There
are no corporations or other entities with respect to which (a) Rako owns any of
the outstanding stock or other interest, or (b) Rako may be deemed to be in
control because of factors or relationships other than the quantity of stock or
other interest owned.
2.2 Capitalization of Rako. The authorized capital stock of Rako
consists of 50,000,000 shares of common stock, par value $.001 per share, of
which 5,025,030 shares are issued and outstanding and 20,000,000 shares of
preferred stock, par value $.001 per share, none of which are outstanding. All
shares of Rako common stock currently issued and outstanding have been duly
authorized, validly issued and are fully paid and non-assessable. There are no
preemptive rights, or other outstanding rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights, calls,
agreements or commitments of any character obligating Rako to issue any shares
of its capital stock or any security representing the right to acquire, purchase
or otherwise receive any such stock. Shares of Rako common stock to be sold
pursuant to this Agreement, have been duly authorized, validly issued, fully
paid and non-assessable.
2.3 Charter Documents. Certified copies of the Rako Articles of
Incorporation and By-Laws and all amendments thereto, have been or will be
delivered to Centra prior to the Closing.
2.4 Corporate Documents. The most recent Rako shareholders' list and
corporate minute books, which have been made available to the Purchaser, are
complete and accurate as of the date hereof, and the corporate minute books
contain the recorded minutes of all corporate meetings of shareholders and
directors. There are no shareholder agreements, voting agreements, registration
right agreements or other such agreement among Rako's shareholders or with Rako.
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2.5 Financial Statements. Rako's financial statements for the periods
ended September 30, 2002 and December 31, 2001, as filed with the SEC, are true
and complete in all material respects, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis for the
periods covered by such statements, and fairly present, in accordance with
generally accepted accounting principles, the financial condition of Rako and
results of its operations for the periods covered thereby. Except as otherwise
disclosed to the Purchaser in writing, and other than according to the ordinary
and usual course of Rako's business consistent with such practice, (a) Rako has
not engaged in any material transaction since the date of its financial
statements, and (b) there has not been any material adverse change in the
business operations, assets, properties, prospects or condition (financial or
otherwise) of Rako, taken as a whole, from that reflected in the financial
statements referred to in this Section 2.5.
2.6 Absence of Certain Changes or Events. Since the date of the Rako
financial statements set forth in Exhibit 2.5 and except as disclosed otherwise
herein, Rako has not (a) issued or sold any promissory note, stock, bond, option
or other corporate security of which it was an issuer or other obligor, (b)
discharged or satisfied any lien or encumbrance or paid any obligation or
liability, absolute or contingent, direct of indirect, (c) incurred or suffered
to be incurred any liability or obligation other than in the ordinary and usual
course of business, (d) caused or permitted any lien, encumbrance or security
interest to be created or arise on or in any of its properties or assets, (e)
declared, set aside or made any dividend, payment or other distribution to any
shareholder or purchased or redeemed or agreed to purchase or redeem any shares
of its capital stock, (f) reclassified its shares of capital stock, or (g)
entered into any agreement or transaction except in the ordinary and usual
course of business or in connection with the execution and performance of this
Agreement.
2.7 Tax Returns and Payments. Rako has filed with the appropriate
governmental authority, all tax returns, whether based upon income, sales or
franchise, as required by law to be filed on or before the date of this
Agreement, and Rako has paid all taxes to be due on said returns, any
assessments made against Rako and all other taxes, fees and similar charges
imposed on Rako by any governmental authority. No tax liens have been filed and
no claims are being assessed and no returns are under audit with respect to any
such taxes, fees or other similar charges.
2.8 Contracts. Rako is not a party to or bound by any material contract
or commitment, including guaranty whether written or oral, except as may
otherwise be disclosed in Schedule 2.8, annexed hereto and, by this reference,
made a part hereof.
2.9 Compliance with Law and Government Regulations. Rako is in
compliance with and is not in violation of applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business. Rako is not subject to any order,
decree, judgment or other sanction of any court, administrative agency or other
tribunal.
2.10 Litigation. There is no material litigation, arbitration,
proceeding or investigation pending or threatened to which Rako is a party or
which may result in any material adverse change in the business or condition,
financial or otherwise, of Rako or in any of its properties or
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assets, or which might result in any liability on the part of Rako, or which
questions the validity of this Agreement or of any action taken or to be taken
pursuant to or in connection with the provisions of this Agreement and, to the
best knowledge of Rako, there is no basis for any such litigation, arbitration,
proceeding or investigation.
2.11 Trade Names and Rights. Rako does not use any trade xxxx, service
xxxx, trade name, or copyright in its business, nor does it own any trade marks,
trade xxxx registrations or application, trade name, service marks, copyrights,
copyright registrations or application. No person owns any trade xxxx, trade
xxxx registration or application, service xxxx, trade name, copyright, or
copyright registration or application, the use of which is necessary or
contemplated in connection with the operation of Rako's business.
2.12 Environmental Matters. There are no actions, proceedings or
investigations pending or threatened before any federal or state environmental
regulatory body, or before any federal or state court, alleging noncompliance by
Rako with the Comprehensive Environmental Response, Compensation and Liability
Act of 1990 ("CERCLA") or any other Environmental Laws. To Rako's knowledge
(after due investigation): (a) there is no reasonable basis for the institution
of any action, proceeding or investigation against Rako under any Environmental
Law; (b) Rako is not responsible under any Environmental Law for any release by
any person at or in the vicinity of real property of any hazardous substance (as
defined by CERCLA), caused by the spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of
any such hazardous substance into the environment; (c) Rako is not responsible
for any costs of any remedial action required by virtue of any release of any
toxic or hazardous substance, pollutant or contaminant into the environment
including, without limitation, costs arising from security fencing, alternative
water supplies, temporary evacuation and housing and other emergency assistance
undertaken by any environmental regulatory body; (d) Rako is in material
compliance with all applicable Environmental Laws; and (e) no real property
used, owned, managed or controlled by Rako contains any toxic or hazardous
substance including, without limitation, any asbestos, PCBs or petroleum
products or byproducts in any form, the presence, location or condition of which
(i) violates any Environmental Law, or (ii) cannot be cleaned by ordinary
reclamation procedures customary in the oil and gas industry. For purposes of
this Agreement, "Environmental Laws" will mean any federal, state, local or
municipal statute, ordinance or regulation, or order, ruling or other decision
of any court, administrative agency or other governmental authority pertaining
to the release of hazardous substances (as defined in CERCLA) into the
environment.
2.13 Governmental Consent. No notices, reports or other filings are
required to be made nor are any consents, registrations, approvals, permits,
authorizations or designations required to be obtained by Rako from any court,
governmental or regulatory authority, agency, commission, body or other
governmental entity, in connection with the execution and delivery of this
Agreement by Rako or the carrying out and consummation of any transactions
contemplated hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a material adverse
effect or prevent, materially delay or materially impair the ability of Rako to
consummate the transactions contemplated by this Agreement.
2.14 Corporate Authority. Rako has all requisite corporate power and
authority and has taken all corporate actions necessary in order to execute,
deliver and perform its obligations
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under this Agreement and to consummate the transactions contemplated herein,
subject to approval of this Agreement by its Board of Directors and by the
unanimous written consent of its shareholders. The execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby and
compliance by Rako with the provisions hereof will not:
(a) Conflict with or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) under, or result in the creation
of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Rako under, any of the terms, conditions or
provisions of the Articles of Incorporation or By-Laws of Rako, or any
note, bond, mortgage, indenture, license, lease, agreement or any
instrument or obligation to which Rako is a party or by which it is
bound; or
(b) Violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Rako or any of its properties or assets.
Assuming due execution and delivery by the parties hereto, this
Agreement is the valid and binding agreement of Rako enforceable
against Rako in accordance with its respective terms, except as such
enforceability may be limited by applicable bankruptcy laws or
creditors' rights generally or by general principles of equity.
2.15 Employee Benefit Plans. Rako is not a party to, or bound by, any
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance or termination pay, hospitalization or other medical, life or
other insurance, supplemental unemployment benefits, profit-sharing, pension, or
retirement plan, program, agreement or arrangement, other employee benefit plan,
program, agreement or arrangement (other than arrangements involving the payment
of wages), sponsored, maintained or contributed to or required to be contributed
to by Rako or any of its subsidiaries or by any trade or business, whether or
not incorporated (an "ERISA Affiliate") that together with Rako or any of its
subsidiaries would be deemed a "single employer" within the meaning of Section
4001(a)(14) of the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder ("ERISA"), for the benefit
of any current or former employee, director or officer of Rako or any of its
subsidiaries or any ERISA Affiliate whether formal or informal and whether
legally binding or not with respect to which Rako or any of its subsidiaries or
any ERISA Affiliate has or may in the future have any liability or obligation to
contribute or make payments or any kind.
2.16 Legal Proceedings and History. Except as otherwise disclosed
herein or by a written attachment hereto, no officer, director or affiliate of
Rako, will have been, within the past five years; a party to any bankruptcy
petition against such person or against any business of which such person was
affiliated; convicted in a criminal proceeding or subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses; subject to
any order, judgment or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting their involvement in any type of
business, securities or banking activities; or found by a court of competent
jurisdiction in a civil action, by the Securities Exchange Commission or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed, suspended
or vacated.
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2.17 Accuracy of Information Furnished. No representation, statement,
or information contained in this Agreement (including the schedules) or any
contract or document executed in connection herewith or delivered pursuant
hereto or thereto or made available or furnished to the Purchaser or its
representatives by Rako or its representatives contains or will contain any
untrue statement of a material fact or omits or will omit any material fact
necessary to make the information contained therein not misleading. Rako has
provided to the Purchaser correct and complete copies of all documents listed or
described in the Schedules provided by Rako hereunder. All writings for which
Rako is responsible for filing with respect to the Contemplated Transactions
with any regulatory authority will comply as to form with the provisions of
applicable law and the applicable rules and regulations thereunder.
2.18 SEC Documents; Undisclosed Liabilities. Other than as referenced
on Schedule 2.18, since September 30, 2002 Rako has filed with the Securities
and Exchange Commission ("SEC") on a timely basis all reports, schedules, forms,
statements and other documents (including exhibits and all other information
incorporated therein) required to be filed under the Securities Act and the
Securities and Exchange Act of 1934, as amended (the "1934 Act") (the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1933 Act or the 1934 Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents. The Rako financial statements included in the
SEC Documents comply as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto.
2.19 Absence of Certain Changes. Except for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby or
thereby and except as disclosed in the SEC Documents filed and publicly
available prior to the date of this Agreement (the "FILED SEC DOCUMENTS"), since
September 30, 2002 Rako has conducted its business only in the ordinary course,
and there has not been (i) any event or occurrence which could have a material
adverse effect on Rako's business or assets, (ii) except insofar as may have
been or required by a change in GAAP, any change in accounting methods,
principles or practices by Rako materially affecting its assets, liabilities or
business or (iii) any tax election that individually or in the aggregate could
reasonably be expected to have a material adverse effect on Rako's business or
assets, or any of its tax attributes or any settlement or compromise of any
material income tax liability.
2.20 Tax Issues. Rako has not taken any action or failed to take any
action on which would reasonably be expected to make Rako's loss carry forwards
unavailable after the Closing.
2.21 Questionable Payments. Neither Rako, nor any director, officer,
agent, employee, or other person associated with or acting on behalf of the
Rako, has, directly or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to
political activity; made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; established or maintained any unlawful or unrecorded
fund of corporate monies or other assets; made any false or fictitious entry on
the books or records of the Company; made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment; given any favor or gift
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which is not deductible for federal income tax purposes; or made any bribe,
kickback, or other payment of a similar or comparable nature, whether lawful or
not, to any person or entity, private or public, regardless of form, whether in
money, property, or services, to obtain favorable treatment in securing business
or to obtain special concessions, or to pay for favorable treatment for business
secured or for special concessions already obtained.
III. REPRESENTATIONS OF THE STOCKHOLDER
Each of the Stockholders severally, and not jointly, represent and
warrant to the Purchaser as follows:
3.1 Authority: No Conflict. (a) This Agreement constitutes the legal,
valid, and binding obligation of the Stockholder, enforceable against
Stockholder in accordance with its terms (subject to applicable bankruptcy,
insolvency and other laws affecting the enforceability of creditors' rights
generally and equitable remedies). The Stockholder has the absolute and
unrestricted right, power, and authority to execute and deliver this Agreement
and to perform its obligations under this Agreement and the Stockholder's
Closing Documents.
(b) Neither the execution and delivery of this Agreement, nor the
consummation or performance of any of the Contemplated Transactions, will give
any Person the right to prevent, delay, or otherwise interfere with any of the
transactions pursuant to:
(i) any legal requirement or order to which the Stockholder
may be subject; or
(ii) any Contract to which the Stockholder is a party or to
which the assets of the Stockholder are subject.
The Stockholders are not and will not be required to obtain any consent
from any person in connection with the execution and delivery of this Agreement
or the consummation or performance of any of the Contemplated Transactions.
3.2 Certain Proceedings. There is no Proceeding pending or, to the
knowledge of the Stockholder, threatened against the Stockholder and that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions.
3.3 Brokers or Finders. The Stockholder will indemnify and hold the
Purchaser and Rako harmless from any obligation or liability, contingent or
otherwise, for brokerage or finder's fees or agent's commissions or other
similar payment in connection with this Agreement alleged to be due by or
through the Stockholder as a result of the action of the Stockholder.
3.4 Completeness of Disclosure. No representation or warranty by the
Stockholder in this Agreement contains or on the Closing Date will contain an
untrue statement of material fact or omits or on the Closing Date will omit to
state a material fact required to be stated therein or necessary to make the
statements made therein not misleading. None of the information supplied or to
be supplied by the Stockholder for inclusion in any document to be filed with
any
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regulatory authority or governmental authority in connection with the
Contemplated Transactions will be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements therein not misleading or omit to state any material fact required to
be stated in order to correct any earlier misstatement. All writings for which
the Stockholder is responsible for filing with respect to the Contemplated
Transactions with any regulatory authority will comply as to form with the
provisions of applicable law and the applicable rules and regulations
thereunder.
IV. REPRESENTATIONS OF THE PURCHASER
The Purchaser represents and warrants to the Stockholders as follows:
4.1 Organization. The Purchaser is a Florida corporation, duly
organized, validly existing, and in good standing under the laws of the state of
Florida, with all requisite power and authority to enter into this Agreement and
comsummate the Contemplated Transactions.
4.2 Authority: No Conflict. (a) The Purchaser's Board of Directors has
duly authorized the purchase of the Rako Shares and consummation of the
Contemplated Transactions. This Agreement constitutes the legal, valid, and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms (subject to applicable bankruptcy, insolvency and other laws
affecting the enforceability of creditors' rights generally and equitable
remedies). Purchaser has the absolute and unrestricted right, power, and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement and the Purchaser's Closing Documents.
(b) Neither the execution and delivery of this Agreement, nor the
consummation or performance of any of the Contemplated Transactions, will give
any Person the right to prevent, delay, or otherwise interfere with any of the
transactions pursuant to:
(i) any provision of Purchaser's organizational documents;
(ii) any resolution adopted by the Purchaser's board of
directors or shareholders;
(iii) any legal requirement or order to which Purchaser may
be subject; or
(iv) any Contract to which Purchaser is a party or to which
the assets of Purchaser are subject.
The Purchaser is not and will not be required to obtain any
other consent from any person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the Contemplated
Transactions.
4.3 Certain Proceedings. There is no Proceeding pending or, to the
knowledge of the Purchaser, threatened against Purchaser and that challenges, or
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions.
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4.4 Brokers or Finders. Purchaser will indemnify and hold the
Stockholders harmless from any obligation or liability, contingent or otherwise,
for brokerage or finder's fees or agent's commissions or other similar payment
in connection with this Agreement alleged to be due by or through Purchaser as a
result of the action of Purchaser.
4.5 Compliance with Law. Purchaser is in compliance in all material
respects with all applicable laws and regulations.
4.6 Completeness of Disclosure. No representation or warranty by the
Purchaser in this Agreement contains or on the Closing Date will contain an
untrue statement of material fact or omits or on the Closing Date will omit to
state a material fact required to be stated therein or necessary to make the
statements made therein not misleading. None of the information supplied or to
be supplied by Purchaser for inclusion in any document to be filed with any
regulatory authority or governmental authority in connection with the
Contemplated Transactions will be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements therein not misleading or omit to state any material fact required to
be stated in order to correct any earlier misstatement. All writings for which
Purchaser is responsible for filing with respect to the Contemplated
Transactions with any regulatory authority will comply as to form with the
provisions of applicable law and the applicable rules and regulations
thereunder.
4.7 Purchaser Due Diligence. Purchaser has performed certain due
diligence in connection with the execution and delivery of this Agreement and
has no knowledge of facts or circumstances which, independently or in connection
with other facts or circumstances known to Purchaser, (i) would render any of
the representations or warranties of the Stockholders or Rako herein to be
untrue, inaccurate or incomplete in any material respect; (ii) would render any
of the covenants of the Stockholders or Rako herein to be incapable of
performance; or (iii) would render any conditions to the performance of any
obligations hereunder incapable of fulfillment prior to the Closing Date.
V. SALE AND PURCHASE OF THE RAKO SHARES
5.1 Terms of the Sale. On the basis of the representations, warranties,
covenants, and agreements contained in this Agreement and subject to the terms
and conditions of this Agreement:
(a) At the Closing, the Stockholders shall sell, assign, transfer, and
convey to the Purchaser and the Purchaser shall acquire from the
Stockholders, the Rako Shares in the amounts set forth on Exhibit A in
consideration of payment of the aggregate purchase price of $300,000.00
(the "Purchase Price"). The Stockholder shall deliver at the Closing
certificate or certificates representing the Rako Shares, duly endorsed
in blank or accompanied by stock powers duly endorsed in blank, in each
case in proper form for transfer, with signatures guaranteed by a
commercial bank or a member firm of the New York Stock Exchange, Inc.,
and with all stock transfer and any other required documentary stamps
affixed thereto.
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(b) The Purchase Price for the Rako Shares shall be paid by wire
transfer or good check according to the instructions of the
Representative pursuant to Section 10.6.
5.2 The Closing. The closing of the acquisition and sale of the Rako
Shares (the "Closing") shall take place at the offices of Reitler Xxxxx LLC, 000
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., local time,
on December 13, 2002. ("Closing Date"). The Closing may occur at such different
place, such different time, or such different date or a combination thereof as
the Purchaser and the Stockholder may agree.
VI. COVENANTS AND AGREEMENTS OF RAKO AND THE STOCKHOLDERS
Rako and the Stockholders covenant and agree as follows:
6.1 Access. (a) Until the earlier of the Closing and the abandonment or
termination of this Agreement pursuant to Article V (the "Release Time"), Rako
will afford, and the Stockholders will cause Rako to afford, the officers,
employees, counsel, agents, investment bankers, accountants, and other
representatives of the Purchaser and its lenders, investors, and prospective
lenders or investors free and full access to the plants, properties, books, and
records of Rako, will permit them to make extracts from and copies of such books
and records, and will from time to time furnish the Purchaser with such
additional financial and operating data and other information as to the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Rako as the Purchaser from time to time may
request. Until the Release Time, Rako and the Stockholders will cause the
independent certified public accountants of Rako to make available to the
Purchaser and its independent certified public accountants the work papers
relating to the financial statement of Rako referred to in Section 2.5.
(b) Non-public information obtained by Purchaser in the course of
the investigation set forth above will be used solely for purposes of the
Contemplated Transactions and, in the event this Agreement terminates and the
Contemplated Transactions are not consummated, all information so obtained will
be returned to Rako. If such return is not possible or practicable under the
circumstances, all copies thereof, and all summaries or abstracts made therefrom
shall be destroyed or irretrievably erased from all storage media and devices.
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6.2 Conduct of Business. Until the Closing, Rako will, and the
Stockholders will cause Rako to, conduct its affairs so that at the Closing no
representation or warranty of Rako or the Stockholders will be inaccurate, no
covenant or agreement of Rako or the Stockholders will be breached, and no
condition in this Agreement will remain unfulfilled by reason of the actions or
omissions of Rako or the Stockholders. Except as otherwise requested by the
Purchaser in writing, until the Closing or the Release Time, Rako will, and the
Stockholders will cause Rako to, use their best efforts to preserve the business
operations of Rako intact, to keep available the services of their present
personnel, to preserve in full force and effect the contracts, agreements,
instruments, leases, licenses, arrangements, and understandings of Rako, and to
preserve the good will of their suppliers, customers, and others having business
relations with any of them. In furtherance of the foregoing, Rako will, and the
Stockholders will cause Rako to, do the following:
(a) Conduct its business in the ordinary course and do all things
reasonably necessary to preserve all rights and permits necessary to
conduct such business;
(b) Keep its assets in good operating condition and repair and
make all normal and necessary repairs, replacements, renewals and
improvements thereto and comply with the provisions of all applicable
leases so as to prevent any default or breach thereunder;
(c) Collect its accounts receivable, pay its accounts payable and
manage its cash flow consistent with its normal business practices;
(d) Maintain its books, accounts and records in accordance with
Rako's practice;
(e) Comply in all material respects with all laws applicable to it
and all obligations by which it is bound;
(f) File when due all reports and returns required to be filed by
it by any governmental authority and pay or perform when due all taxes,
assessments and other liabilities and obligations in accordance with
their terms, except those which are contested in good faith;
(g) Take all reasonable actions to maintain their respective
customer relationships and volume of service and sales activity, vendor
and supplier relationships, banking lines of credit and relationships
with its workforce and relationships with its employees;
(h) Not make any dividends, redemptions, distributions or other
payments with respect to their respective shares of capital stock; and
(i) Not sell or otherwise dispose of any of their respective
material assets (other than inventory in the ordinary course of
business) or encumber any property or incur any debt other than trade
payables, accrued expenses and working capital financing in the
ordinary course of business and consistent with past practices.
13
6.3 Advice of Changes. Until the Closing or the Release Time, Rako and
the Stockholders will immediately advise the Purchaser in a detailed written
notice of any fact or occurrence or any pending or threatened occurrence of
which any of them obtains knowledge and which (if existing and known at the date
of the execution of this Agreement) would have been required to be set forth or
disclosed in or pursuant to this Agreement or an Exhibit hereto, which (if
existing and known at any time prior to or at the Closing) would make the
performance by any party of a covenant contained in this Agreement impossible or
make such performance materially more difficult than in the absence of such fact
or occurrence, or which (if existing and known at the time of the Closing) would
cause a condition to any party's obligations under this Agreement not to be
fully satisfied.
6.4 Confidentiality. Rako and each of the Stockholders shall insure
that all confidential information which the Company, any of its respective
officers, directors, employees, counsel, agents, investment bankers, or
accountants, or the Stockholders or their counsel, agents, investment bankers,
or accountants may now possess or may hereafter create or obtain relating to the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of Rako or the Purchaser, any affiliate of any
of them, or any customer or supplier of any of them or any such affiliate shall
not be published, disclosed, or made accessible by any of them to any other
person or entity at any time or used by any of them except, pending the Closing,
in the business and for the benefit of Rako, in each case without the prior
written consent of the Purchaser in each instance; provided, however, that the
restrictions of this sentence shall not apply (a) with respect to the
obligations of Rako after the Closing takes place, (b) with respect to the
obligations of all such persons and entities after this Agreement which are
rightfully terminated, but only to the extent such confidential information
relates to the financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of Rako, or any affiliate, or (insofar
as such confidential information was obtained directly by Rako or any such
affiliate from any customer or supplier of any of them) of any such customer or
supplier, (c) as may otherwise be required by law, (d) as may be necessary or
appropriate in connection with the enforcement of this Agreement, (e) to
disclosure by or on behalf of the Purchaser to existing or prospective lenders
or other investors or to others whose consent may be required or desirable in
connection with obtaining the financing or consents which are required or
desirable to consummate the Contemplated Transactions, or (f) to the extent such
information shall have otherwise become publicly available. Rako and the
Stockholders shall, and shall cause all other such persons and entities to,
deliver to the Purchaser all tangible evidence of such confidential information
to which the restrictions of the foregoing sentence apply at the Closing or the
earlier rightful termination of this Agreement.
6.5 Public Statements. Neither Rako nor any Stockholder shall release
any information concerning this Agreement or the Contemplated Transactions which
is intended for or may result in public dissemination thereof, without the prior
written consent of the Purchaser. Nothing contained herein shall prevent Rako or
any Stockholder from releasing any information to any governmental authority if
required to do so by law.
6.6 Other Proposals. Until the Release Time, Rako and the Stockholders
shall not, and shall neither authorize nor permit any officer, director,
employee, counsel, agent, investment banker, accountant, or other representative
of any of them, directly or indirectly, to: (a) initiate contact with any person
or entity in an effort to solicit any Takeover Proposal (as such term is
14
defined in this Section 6.6); (b) cooperate with, or furnish or cause to be
furnished any non-public information concerning the business, properties, or
assets of to, any person or entity in connection with any Takeover Proposal; (c)
negotiate with any person or entity with respect to any Takeover Proposal; or
(d) enter into any agreement or understanding with the intent to effect a
Takeover Proposal. Rako and the Stockholders will immediately give written
notice to the Purchaser of the details of any Takeover Proposal of which any of
them becomes aware. As used in this Section 6.6, "Takeover Proposal" shall mean
any proposal, other than as contemplated by this Agreement, for the purchase
from the Stockholders of any of the Rako Shares, a merger, consolidation,
reorganization, other business combination, or recapitalization involving Rako,
for the acquisition of any interest in the equity or in any class or series of
capital stock of Rako, for the acquisition of the right to cast any of the votes
on any matter with respect to, or for the acquisition of any of their respective
assets other than in the ordinary course of their respective businesses.
6.7 Consents Without Any Condition. Rako and the Stockholders shall not
make any agreement or reach any understanding not approved in writing by the
Purchaser as a condition for obtaining any consent, authorization, approval,
order, license, certificate, or permit required for the consummation of the
Contemplated Transactions.
6.8 Release by the Stockholders. If the Closing takes place, effective
immediately after the Closing, the Stockholders fully and unconditionally
release and discharge all claims and causes of action which he or his heirs,
personal representatives, successors, or assigns ever had, now have, or
hereafter may have against the Purchaser, Rako, and, when acting as such, their
respective officers, directors, employees, counsel, agents, and stockholders, in
each case past, present, or as they may exist at any time after the date of this
Agreement, and each person, if any, who controls, controlled, or will control
any of them within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, except claims and causes of action arising out of,
based upon, or in connection with this Agreement.
6.9 Voting by Stockholders. Rako agrees that prior to the Release Time
or the consummation of the Closing it will not, and each Stockholder agrees that
he will cause Rako not, to authorize, approve or effect, (a) any stock split,
stock dividend, or reverse stock split relating to any class or series of Rako's
stock, (b) any issuance of any shares of capital stock of Rako, any option,
warrant, or other right calling for the issuance of any such share of capital
stock, or any security convertible into or exchangeable for any such share of
capital stock, (c) any authorization of any other class or series of stock of
Rako, (d) any amendment of the certificate of incorporation (or other charter
document) or the by-laws of Rako, or (e) any proposition the effect of which may
be to prohibit, restrict, or delay the consummation of any of the transactions
contemplated by this Agreement or impair the contemplated benefits to the
Purchaser of the Contemplated Transactions.
15
VII. COVENANTS AND AGREEMENTS OF THE PURCHASER
The Purchaser covenants and agrees as follows:
7.1 Advice of Changes. Until the Closing or Release Time, Purchaser
will immediately advise the Stockholders in a detailed written notice of any
fact or occurrence or any pending or threatened occurrence of which Purchaser
obtains knowledge and which (if existing and known at the date of the execution
of this Agreement) would have been required to be set forth or disclosed in or
pursuant to this Agreement or an Exhibit hereto, which (if existing and known at
any time prior to or at the Closing) would make the performance by any party of
a covenant contained in this Agreement impractical or impossible or make such
performance materially more difficult than in the absence of such fact or
occurrence, or which (if existing and known at the time of the Closing) would
cause a condition to any party's obligations under this Agreement not to be
fully satisfied.
7.2 Confidentiality. Purchaser shall insure that all confidential
information which Purchaser, any of its officers, directors, employees, counsel,
agents, investment bankers, or accountants, may now possess or may hereafter
create or obtain relating to the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of Rako, any
affiliate, or any customer or supplier of Rako or any such affiliate shall not
be published, disclosed, or made accessible by any of them to any other person
or entity at any time or used by any of them except, pending the Closing, in the
business and for the benefit of Rako, in each case without the prior written
consent of the Stockholders; provided, however, that the restrictions of this
sentence shall not apply (a) with respect to the obligations of Purchaser after
the Closing, (b) with respect to the obligations of all such persons and
entities after this Agreement is rightfully terminated, but only to the extent
such confidential information relates to the financial condition, results of
operations, business, properties, assets, liabilities, or future prospects of
Rako, of any affiliate, or, insofar as such confidential information was
obtained directly by Purchaser from any customer or supplier of Rako, with
respect to such customer or supplier, (c) as may otherwise be required by law,
(d) as may be necessary or appropriate in connection with the enforcement of
this Agreement, or (e) to disclosure by or on behalf of the Purchaser to
existing or prospective lenders or other investors or to others whose consent
may be required or desirable in connection with obtaining the financing or
consents which are required or desirable to consummate the transactions
contemplated by this Agreement, or (f) to the extent such information shall have
otherwise become publicly available.
7.3 Notice of Breaches by Purchaser. The Purchaser shall give to the
Stockholders promptly after becoming aware of the occurrence or the pending
occurrence of any event that would cause or constitute a breach of any of
Purchaser's, Stockholder's or Rako's representations, warranties, covenants or
agreements set forth in this Agreement or that might result in the
non-fulfillment of any condition to the consummation of the transactions
contemplated by this Agreement.
7.4 Regulatory Filings. Purchaser shall provide the Stockholders with
copies of all non-confidential portions of its applications, if any, to all
regulatory authorities at the time such applications are filed with such
regulatory authorities.
16
7.5 Consummation of Agreement. Purchaser shall perform and fulfill all
conditions and obligations on its part to be performed or fulfilled by it under
this Agreement and to cause the Contemplated Transactions to be consummated as
expeditiously as reasonably practical.
VIII. CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser under this Agreement are subject, at
the option of the Purchaser, to the following conditions:
8.1 Accuracy of Representations and Compliance with Conditions. All
representations and warranties of Rako or the Stockholders contained in this
Agreement shall be accurate when made and, in addition, shall be accurate as of
the Closing as though such representations and warranties were then made in
exactly the same language by Rako or the Stockholders as of the Closing; Rako
and the Stockholders shall have performed and complied with all covenants and
agreements and satisfied all conditions required to be performed and complied
with by any of them at or before such time by this Agreement; and the Purchaser
shall have received certificates executed by the chief executive officer and the
chief financial officer of Rako, dated the Closing Date, to that effect,
substantially in the form of Exhibit B.
8.2 Review of Proceedings. All actions, proceedings, instruments, and
documents required to carry out this Agreement or incidental thereto and all
other related legal matters shall be subject to the reasonable approval of
Reitler Xxxxx LLC, counsel to the Purchaser, and Rako and the Stockholders shall
have furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.
8.3 Legal Action . There shall not have been instituted or threatened
any Proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
8.4 No Governmental Action . There shall not have been any action
taken, or any law, rule, regulation, order, judgment, or decree proposed,
promulgated, enacted, entered, enforced, or deemed applicable to the
transactions contemplated by this Agreement by any federal, state, local, or
other governmental authority or by any court or other tribunal, including the
entry of a preliminary or permanent injunction, which, in the sole judgment of
the Purchaser, (a) makes any of the transactions contemplated by this Agreement
illegal, (b) results in a delay in the ability of the Purchaser to consummate
any of the Contemplated Transactions, (c) requires the divestiture by the
Purchaser of any of the Rako Shares or of a material portion of the business of
the Purchaser, or of Rako, (d) imposes material limitations on the ability of
the Purchaser effectively to exercise full rights of ownership of the Rako
Shares including the right to vote such shares on all matters properly presented
to the stockholders of Rako, or (e) otherwise prohibits, restricts, or delays
consummation of any of the transactions contemplated by this Agreement or
impairs the contemplated benefits to the Purchaser of any of the transactions
contemplated by this Agreement.
8.5 Governmental Approval. The parties to this Agreement shall have
obtained at or prior to the Closing any required approval of any governmental
agency having jurisdiction to this
17
Agreement and to the execution, delivery, and performance of this Agreement by
each of the parties.
8.6 Contractual Consents Needed. The parties to this Agreement shall
have obtained at or prior to the Closing all consents required for the
consummation of the Contemplated Transactions from any party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
any of them is a party, or to which any of them or any of their respective
businesses, properties, or assets are subject.
8.7 Resignations. All directors of Rako shall have resigned at or prior
to the Closing as directors and members of all committees of the Board of
Directors in writing effective immediately after the Closing. All officers of
Rako shall have resigned at or prior to the Closing in writing effective
immediately after the Closing subject to acceptance by the Purchaser.
8.8 Releases. Rako shall have received at or prior to the Closing a
release from each person who is or who at any time during the one year period
ending with date of Agreement was, an officer or a director of Rako, dated the
Closing Date, substantially in the form of Exhibit C.
IX. CONDITIONS TO THE OBLIGATIONS OF THE STOCKHOLDERS
The obligations of the Stockholders under this Agreement are subject,
at the option of the Stockholder, to the following conditions:
9.1 Accuracy of Representations and Compliance with Conditions. All
representations and warranties contained in this Agreement shall be accurate
when made and, in addition, shall be accurate as of the Closing as though such
representations and warranties were then made in exactly the same language by
Purchaser; as of the Closing Purchaser shall have performed and complied with
all covenants and agreements and satisfied all conditions required to be
performed and complied with by it at or before such time by this Agreement; and
the Stockholders shall have received a certificate executed by the Purchaser,
dated the Closing Date, to that effect, substantially in the form of Exhibit D.
9.2 Review of Proceedings. All actions, proceedings, instruments, and
documents required to carry out this Agreement or incidental thereto and all
other related legal matters shall be subject to the reasonable approval of
Xxxxxxx Xxxxxxx, Esq., counsel to Rako and the Stockholders, and Purchaser shall
have furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.
9.3 Proceedings. There shall not have been instituted or threatened any
Proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the Contemplated Transactions, or to obtain substantial damages
with respect thereto.
9.4 No Governmental Action. There shall not have been any action taken,
or any law, rule, regulation, order, judgment, or decree proposed, promulgated,
enacted, entered, enforced, or deemed applicable to the transactions
contemplated by this Agreement by any federal, state, local, or other
governmental authority or by any court or other tribunal, including the entry of
a preliminary or permanent injunction, which, in the sole judgment of the
Stockholders, (a) makes
18
any of the transactions contemplated by this Agreement illegal, (b) results in a
delay in the ability of the Stockholders to consummate any of the transactions
contemplated by this Agreement, or (c) otherwise prohibits, restricts, or delays
consummation of any of the Contemplated Transactions or impairs the contemplated
benefits to the Stockholders of any of the Contemplated Transactions.
9.5 Governmental Approval. The parties to this Agreement shall have
obtained at or prior to the Closing any required approval of any governmental
agency having jurisdiction to this Agreement and to the execution, delivery, and
performance of this Agreement by each of the parties.
9.6 Contractual Consents Needed. The parties to this Agreement shall
have obtained at or prior to the Closing all consents required for the
consummation of the Contemplated Transactions from any party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
the Purchaser is a party, or to which it or any of its business, properties, or
assets are subject.
X. MISCELLANEOUS
10.1 Brokerage Fees. If any person shall assert a claim to a fee,
commission, or other compensation on account of alleged employment as a broker
or finder on behalf of Rako or the Stockholders, or alleged performance of
services as a broker or finder, in connection with or as a result of any of the
transactions contemplated by this Agreement, and the Stockholders shall have
knowledge of the same, the Stockholders shall (subject to the next sentence)
indemnify and hold harmless the Purchaser against any and all losses,
liabilities, claims, damages, and expenses whatsoever (as defined in Section
3.3) as and when incurred arising out of, based upon, or in connection with such
claim by such person, and the Stockholders shall at his sole expense defend any
and all suits, actions, proceedings (formal or informal), or investigations
involving such claim that may at any time be brought against the Purchaser and
satisfy promptly any settlement or judgment arising therefrom; but if the
Stockholders fail to defend such suit, action, proceeding, or investigation in a
timely manner, the Purchaser or any Indemnitee made a defendant therein or a
party thereto shall have the right to defend and settle the same and pay any
judgment or settlement pertaining thereto as it or he may reasonably deem
appropriate at the cost and expense of the Stockholders. If, however, it is
ultimately determined in any such suit, action, or proceeding (in which the
Purchaser and all Indemnitees made a defendant therein or a party thereto were
afforded the opportunity to have their counsel participate in the defense) that
the Purchaser or any Indemnitee (other than Rako) made a defendant therein or a
party thereto was the sole employer of such broker or finder or services were
performed solely for the Purchaser or any Indemnitee (other than Rako) made a
defendant therein or a party thereto, then the Stockholders shall not be
responsible under this Section 10.1 and amounts theretofore paid by him by
reason of this Section 9.1 shall be reimbursed by the Purchaser or the
Indemnitee, as the case may be, who was the sole employer.
10.2 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation,
19
execution, and performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of agents, representatives, counsel, and
accountants.
10.3 Further Actions. At any time and from time to time, each party
agrees, at its or his expense, to take such actions and to execute and deliver
such documents as may be reasonably necessary to effectuate the purposes of this
Agreement.
10.4 Availability of Equitable Remedies. Since a breach of the
provisions of this Agreement could not adequately be compensated by money
damages, any party shall be entitled, either before or after the Closing, in
addition to any other right or remedy available to it, to an injunction
restraining such breach or a threatened breach and to specific performance of
any such provision of this Agreement, and in either case no bond or other
security shall be required in connection therewith, and the parties hereby
consent to the issuance of such an injunction and to the ordering of specific
performance.
10.5 Survival. The covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement shall survive the
Closing and the delivery of the Rako Shares to the Purchaser for one year after
the Closing, irrespective of any investigation made by or on behalf of any
party. The statements contained in any other document executed by Rako or the
Stockholders relating hereto or delivered to the Purchaser in connection with
the Contemplated Transactions or in any statement, certificate, or other
instrument delivered by or on behalf of Rako or the Stockholders pursuant hereto
or thereto or delivered to the Purchaser in connection with the Contemplated
Transactions shall be deemed representations and warranties, covenants and
agreements, or conditions, as the case may be, of the Stockholders hereunder for
all purposes of this Agreement (including all statements, certificates, or other
instruments delivered pursuant hereto or thereto or delivered in connection with
the Contemplated Transactions).
10.6 Appointment of Agent. H. Xxxxxxx Xxxxxxxx is hereby appointed as
the representative (the "Representative") of the interests of the Stockholders
for all purposes of this Agreement. Without giving notice to the Stockholders,
the Representative shall have full and irrevocable authority on behalf of the
Stockholders (a) to deal with the other parties to this Agreement, (b) to accept
and distribute the amounts payable to each Stockholder, (c) to accept and give
notices and other communications relating to this Agreement, (d) to settle any
dispute relating to the terms of this Agreement, (e) to waive any condition to
the obligations of the Stockholders found in this Agreement, (f) to modify or
amend this Agreement (except with respect to the Purchase Price to be received
by the Stockholders), (g) to execute any instrument or document that the
Representative may determine is necessary or desirable in the exercise of his
authority under this Section 10.6, and (h) to act in connection with all matters
arising out of, based upon, or in connection with this Agreement and the
transactions contemplated hereby or thereby. In the event of the refusal or
inability to serve, death, incapacity, or resignation for any reason of the
Representative, Xxxxxx X. Xxxxx will become his successor, with all the powers
and irrevocable authority of the Representative, and with full power of
substitution.
10.7 Modification. This Agreement and the Exhibits hereto set forth the
entire understanding of the parties with respect to the subject matter hereof
(except as provided in Section 10.6), supersede all existing agreements among
them concerning such subject matter,
20
and may be modified only by a written instrument duly executed by each party
(except as otherwise provided in Section 10.6).
10.8 Notices. Subject to Section 10.6, any notice or other
communication required or permitted to be given hereunder shall be in writing
and shall be (i) mailed by certified mail, return receipt requested (ii)
delivered or by Federal Express, Express Mail, or similar overnight delivery or
courier service, (iii) delivered in person or (iv) delivered by telecopy, telex,
or similar telecommunications equipment with a confirmation copy sent by First
Class Mail to the party to whom it is to be given at the address of such party
set forth in Exhibits A and E to this Agreement (or to such other address as the
party shall have furnished in writing in accordance with the provisions of this
Section 10.8) with a copy to each of the other parties hereto. Any notice given
to any corporate party shall be addressed to the attention of the Corporate
Secretary. Notice to the estate of any party shall be sufficient if addressed to
the party as provided in this Section 10.8. Any notice or other communication
given by certified mail (or by such comparable method) shall be deemed given at
the time of certification thereof (or comparable act), except for a notice
changing a party's address which will be deemed given at the time of receipt
thereof. Any notice given by other means permitted by this Section 10.8 shall be
deemed given at the time of receipt thereof.
10.9 Waiver. Any waiver by any party of a breach of any term of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that term or of any breach of any other term of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions will not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver must be in writing duly signed by the
waiving party.
10.10 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of the Purchaser and their respective successors
and assigns and the Stockholder and his assigns, heirs, and personal
representatives, and shall inure to the benefit of each Indemnitee and its
successors and assigns (if not a natural person) and his assigns, heirs, and
personal representatives (if a natural person).
10.11 No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.
10.12 Severability. If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
10.13 Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
10.14 Counterparts; Governing Law. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of Nevada,
without giving effect to conflict of laws. Any action, suit,
21
or proceeding arising out of, based on, or in connection with this Agreement or
the transactions contemplated hereby may be brought only in the United States
District Court for Nevada or if federal jurisdiction is not available, in the
State Courts of Nevada and each party covenants and agrees not to assert, by way
of motion, as a defense, or otherwise in any such action, suit, or proceeding,
any claim that it or he is not subject personally to the jurisdiction of such
court, that its or his property is exempt or immune from attachment or
execution, that the action, suit, or proceeding is brought in an inconvenient
forum, that the venue of the action, suit, or proceeding is improper, or that
this Agreement or the subject matter hereof may not be enforced in or by such
court.
10.15 No Assignment. This Agreement may not be assigned by any party,
in whole or in part, without the prior written consent of the other parties
except that the Purchaser may assign this Agreement and its rights and
obligations hereunder in connection with a transaction whereby it is merged
with, or acquired by, a third-party without regard to the form of any such
acquisition.
22
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
PURCHASER
Osprey Investments II, Inc.
By /s/ D. Xxxxxx Xxxxxx, Jr.
------------------------------
D. Xxxxxx Xxxxxx, Jr.
President
XXXX
XXXX Capital Corporation
By /s/ Xxxxx Xxxxxxxx,
------------------------
Xxxxx Xxxxxxxx, CEO
STOCKHOLDERS:
/s/H. Xxxxxxx Xxxxxxxx /s/ Xxxxxx Xxxxx
---------------------- -----------------------
H. Xxxxxxx Xxxxxxxx Xxxxxx X. Xxxxx
/s/ Xxx Xxxxxxx
-------------------
Xxx Xxxxxxx
i
EXHIBIT A
STOCKHOLDERS
NAME AND ADDRESS NO. OF SHARES SOLD
H. Xxxxxxx Xxxxxxxx 3,800,000
Xxxxxxxx Investment Company
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxx Xxxxxxx 363,234
Xxxxxxxx Investment Company
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxx X. Xxxxx 455,928
0 Xxxx 00 Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Total 4,619,162
ii
