EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into in
Broward County, Florida as of November 17, 1999, among HBOA. COM, INC..( the
"Buyer"), and XXXXXX X. XXXXX ("Xxxxx") and XXXX X. XXX ("Xxx") ("Xxxxx" and
"Xxx" shall sometimes be referred to individually as the "Seller" and
collectively as the "Sellers").
Preliminary Statements
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1.The Sellers collectively own 1,400,000 shares of common stock of Mizar
Energy Corporation, a Colorado corporation (the "Company").
B. The Sellers wish to sell 1,000,000 shares of the Company's common
stock to the Buyer.
2. The Buyer desires to acquire from the Seller, and the Sellers desires to
sell to the Buyer 1,000,000 shares of the Company's common stock (the
"Shares") on the terms and subject to the conditions set forth in this
Agreement.
Agreement
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In consideration of the preliminary statements and the respective
covenants, representations and warranties contained in this Agreement, the
parties agree as set forth below.
ARTICLE a.
Definitions
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Each term which is defined on Schedule 1 to this Agreement shall have
the meaning ascribed thereto on Schedule 1.
ARTICLE b.
Purchase of Shares; Consideration
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i. Shares to be Purchased. On the terms and subject o
the conditions set forth herein, on the Closing Date,
the Sellers shall sell, transfer, assign, convey and
deliver to the Buyer, all of Sellers' right, title
and interest in and to all of the Shares.
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ii. Consideration. The aggregate purchase price for
all of the Shares shall be Seventy Five Thousand
Dollars ($75,000) (the "Purchase Price"). The Buyer
will give the Sellers an amount equal to Seventy
Three Thousand Dollars ($73,0000) at the Closing by
bank check or certified check.
2.3 Security Deposit. On the date of the execution of this Agreement or
within two (2) business days thereafter, the Buyer shall deliver to the Seller
an amount equal to Three Thousand Dollar ($3,000) (the "Security Deposit"). This
Security Deposit shall be the property of the Sellers and shall be deducted from
the Purchase Price at the Closing (on the Closing Date ( as defined in Section
7.1) if the stock sale closes. If the stock sale fails to close due to any fault
of the Sellers or because the Sellers breached any of their representations,
warranties or covenants contained in this Agreement, the Sellers agree that they
will refund the Security Deposit to the Buyer.
ARTICLE c.
Representations and Warranties of the Buyer
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In order to induce the Sellers to enter into this Agreement and to
consummate the transactions contemplated hereby, as of the date hereof and as of
the Closing Date, Buyer makes the representations and warranties set forth below
to the Sellers.
i. Organization. Buyer has all requisite right, power
and authority to execute, deliver and perform this
Agreement and to consummate the transactions
contemplated hereby.
ii. Authorization; Enforceability. The execution,
delivery and performance of this Agreement by the
Buyer and the consummation by the Buyer of the
transactions contemplated hereby are duly authorized.
This Agreement and all other documents to be executed
by the Buyer pursuant to this Agreement have been and
will be duly authorized, executed and delivered by
it, and constitute, and upon execution will
constitute, the legal, valid and binding obligations
of the Buyer, as applicable, enforceable against it
in accordance with their respective terms, except to
the extent that their enforcement is limited by
bankruptcy, insolvency, reorganization or other laws
relating to or affecting the enforcement of
creditors' rights generally and by general principles
of equity.
iii. No Violation or Conflict. The execution, delivery
and performance of this Agreement by the Buyer and
the consummation by the Buyer of the transactions
contemplated hereby: (a) do not
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and will not violate or conflict with any provision
of law or regulation, or any writ, order, judgment or
decree of any court or governmental or regulatory
authority, or any provision of the Buyer's Articles
of Incorporation or Bylaws; and (b) do not and will
not, with or without the passage of time or the
giving of notice, result in the breach of, or
constitute a default, cause the acceleration of
performance, or require any consent under, or result
in the creation of any lien, charge or encumbrance
upon any property or assets of the Buyer pursuant to
any material instrument or agreement to which the
Buyer is a party or by which the Buyer or any of
their respective properties may be bound or affected.
iv. Brokers. The Buyer has not employed any financial
advisor, broker or finder and has not incurred and
will not incur any broker's, finder's, investment
banking or similar fees, commissions or expenses, in
connection with the transactions contemplated by this
Agreement.
v. Consents and Approvals. No consent, approval,
waiver or authorization of, or registration,
qualification or filing with or notice to any
federal, state or local governmental or regulatory
authority is required to be made by the Buyer in
connection with the execution, delivery or
performance of this Agreement by the Buyer or the
consummation by them of the transactions contemplated
hereby.
3.6 Representations and Warranties. The Buyer agrees to all of the
representations and warranties contained in Schedule 3.6 attached hereto and
incorporated herein by reference.
ARTICLE d.
Representations and Warranties of the Sellers
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In order to induce the Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, as of the date hereof and as of
the Closing Date, the Sellers, jointly and severally, makes the representations
and warranties set forth below to the Buyer.
i. Ownership of Shares. Each Seller is the record and
beneficial owner of 500,000 Shares of the Company's
common stock represented by the certificate numbers
set forth on Scheduled 4.1 attached hereto (which
Schedule will be completed on or before the Closing
Date). The Sellers represent and warrant that all of
the Shares are free and clear of any and all security
interests, encumbrances, and rights of any kind or
nature whatsoever (collectively, the "Encumbrances"),
and upon delivery of the Shares hereunder, the Buyer
will acquire title
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thereto, free and clear of any and all Encumbrances.
Other than voting rights, redemption rights and such
other rights conferred by applicable charter
documents and by applicable law, there exist no
Securities Rights (as defined herein) with respect to
the Shares. All rights and powers to vote the Shares
are held exclusively by the Sellers. All of the
Shares are validly issued, fully paid and
non-assessable, were not issued in violation of the
terms of any agreement or other understanding, and
were issued in compliance with all applicable federal
and state securities or "blue sky" laws and
regulations. The certificates representing the Shares
to be delivered by the Sellers at the Closing are,
and the signatures and endorsements thereof or stock
powers relating thereto will be, valid and genuine.
For the purposes of this section, "Securities Rights"
means with respect to the Company's securities, any
options, warrants, subscription rights, other rights,
proxies, puts, calls demands, plans, commitments,
agreements, understandings or arrangements of any
kind relating to such securities (whether issued or
unissued) or any other securities convertible into or
exchangeable for an issuer's securities, and includes
all written or unwritten contractual rights relating
to the issuance, sale, assignment, transfer,
purchase, redemption, conversion, exchange,
registration or voting of such securities and all
rights conferred by the Company's governing documents
and by any applicable agreements.
ii. Power and Authority: Enforceability. The Sellers
have all requisite right, power and authority to
enter into this Agreement and each ancillary document
to be entered into by them pursuant hereto and to
sell, transfer and deliver the Shares owned by them
to the Buyer and perform their obligations hereunder
and thereunder, and this Agreement and each such
ancillary document constitutes or, will upon
execution thereof constitute, the legal, valid and
binding obligation of the Sellers, enforceable
against them in accordance with its terms, except to
the extent that their enforcement is limited by
bankruptcy, insolvency, reorganization or other laws
relating to or affecting the enforcement of
creditors' rights generally and by general principles
of equity.
iii. Organization of the Company. The Company is a
corporation duly organized, validly existing and in
good standing under the laws of Colorado. To the
knowledge of the Company and Sellers, neither the
ownership nor the leasing of the Company's properties
nor the conduct of its businesses requires the
Company to qualify to transact business as a foreign
corporation in any jurisdiction. The Company has all
requisite right, power and authority to (a) own or
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lease and operate its properties and assets, (b)
conduct its business as presently conducted, and (c)
engage in and consummate the transactions
contemplated hereby.
iv. Authorization; Enforceability. This Agreement and
all other documents to be executed and delivered by
the Company or the Sellers pursuant to this Agreement
have been and will be duly authorized, executed and
delivered by them, as applicable, and constitute, and
upon execution will constitute, the legal, valid and
binding obligations of the Company and the Sellers,
as applicable, enforceable against them, as
applicable, in accordance with their respective
terms, except to the extent that their enforcement is
limited by bankruptcy, insolvency, reorganization or
other laws relating to or affecting the enforcement
of creditors' rights generally and by general
principles of equity.
v. No Violation or Conflict. The execution, delivery
and performance of this Agreement by the Company and
the Sellers and the consummation by the Company and
the Sellers of the transactions contemplated hereby:
(a) do not and will not violate or conflict with any
provision of law or regulation, or any writ, order,
judgment or decree of any court or governmental or
regulatory authority, or any provision of the
Company's Articles of Incorporation or Bylaws, or
other organizational documents or any license,
franchise or permit to which Sellers or the Company
is a party or by which he is bound; and (b) do not
and will not, with or without the passage of time or
the giving of notice, result in the breach of, or
constitute a default, cause the acceleration of
performance or require any consent under, or result
in the creation of any lien, charge or encumbrance
upon any property or assets of Sellers or of the
Company pursuant to any instrument or agreement to
which the Sellers or the Company is a party or by
which the Sellers or the Company or their respective
properties or assets may be bound or affected, other
than instruments or agreements as to which consent
shall have been obtained or is in the process of
being obtained at or prior to the Closing, each of
which instruments or agreements is listed on Schedule
4.5 hereto.
vi. Consents and Approvals. No consent, approval,
waiver or authorization of, or registration,
qualification or filing with or notice to any
federal, state or local governmental or regulatory
authority, or any other Person, is required to be
made by the Sellers or the Company in connection with
the execution, delivery or performance of this
Agreement by the Company or by the Sellers or the
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consummation by the Company or the Sellers of the
transactions contemplated hereby, except for the
consents of governmental authorities set forth on
Schedule 4.20 and the consents of other persons to
the assignment of the Material Agreements set forth
on Schedule 4.28, all of which will be received or
are in the process of being received or in the
process of being received prior to the Closing.
vii. Brokers. There are no financial advisors, brokers,
finders, investment banking or similar fees,
commissions or expenses relating to this transaction.
viii. Capitalization. As of the date of this Agreement,
the authorized capital stock of the Company consists
solely of 25 million shares of common stock, of which
1,430,700 are issued and outstanding (the "Issued
Shares"), and 10 million shares of preferred stock,
of which none are issued and outstanding. All of the
Issued Shares are free and clear of any and all
Encumbrances (as defined in Section 4.1). Other than
voting rights, redemption rights and such other
rights conferred by applicable charter documents and
by applicable law, there exist no Securities Rights
(as defined in Section 4.1) with respect to the
Issued Shares. All of the Issued Shares are validly
issued, fully paid and non-assessable, were not
issued in violation of the terms of any agreement or
other understanding, and were issued in compliance
with all applicable federal and state securities or
"blue sky" laws and regulations.
ix. Absence of Undisclosed Liabilities. The Company
has no debt, obligation or liability, absolute,
fixed, contingent or otherwise, of any nature
whatsoever, whether due or to become due, including
any unasserted claim, whether incurred directly or by
any predecessor thereto, and whether arising out of
any act, omission, transaction, circumstance, sale of
goods or services, state of facts or other condition
which could have a material adverse effect on the
Company's financial condition or results of
operations, except: (i) those reflected or reserved
against on the Company's unaudited financial
statements for the third quarter ended September 30,
1999 in the amount shown therein, (ii) those that
have arisen in the ordinary course of business of the
Company after the date of the most recent Unaudited
financial Statements through the Closing Date, none
or which, individually or in the aggregate, has had
or will have a Material Adverse Effect and (iii)
those set forth in Schedule 4.9.
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x. Subsidiaries and Investments. The Company has no
Investments. The Company has no Subsidiaries.
xi. Financial Statements. True and complete copies of
the Company's audited financial statements for the
fiscal year ended December 31, 1998 and the unaudited
financial statements for the first quarter ended
March 31, 19999, the second quarter ended June 30,
1999 and the third quarter ended September 30, 1999
(collectively, the "Financial Statements") have been
delivered to the Buyer. The Financial Statements (i)
were prepared in accordance with the books of account
and other financial records of the Company, (ii)
present fairly the financial condition and results of
operations of the Company as of the dates thereof or
for the periods covered thereby, (iii) have been
prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a basis
consistent with the past practices of the Company and
(iv) include all adjustments (consisting only of
normal recurring accruals) that are necessary for a
fair presentation of the financial condition of the
Company and the results of the operations of the
Company, as of the dates thereof or the periods
covered thereby (subject to normal recurring year end
adjustments).
xii. Conduct of Business. The Company has conducted its
businesses only in the ordinary and usual course
consistent with past practices and there has not
occurred any material adverse change in its condition
(financial or otherwise), results of operations,
properties, assets, liabilities, business or
prospects. Without limiting the generality of the
foregoing, except as disclosed on Schedule 4.12,
since September 30, 1999, the Company has not:
(1) declared or paid any dividends or other
distribution (whether in cash, stock or other
property) with respect to its capital stock, or
otherwise transferred or agreed to transfer any
assets to any of its shareholders or Affiliates;
(2) suffered any damage, destruction or loss, whether
or not covered by insurance, which has had or could
have an adverse effect on any of its properties,
assets, business or prospects;
(3) voluntarily or involuntarily sold, transferred,
surrendered, abandoned or disposed of any of its
assets or property rights (tangible or intangible),
other than inventory and minor amounts of personal
property, in the ordinary course of business
consistent with past
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practices at a price equal to the greater of fair
market value or book value;
(4) disclosed any proprietary or confidential
information to any third party;
(5) granted or made any mortgage or pledge or
subjected itself or any of its properties or assets
to any Encumbrance, except Permitted Encumbrances,
(6) created, incurred or assumed any liability or
indebtedness, for borrowed money or entered into any
capitalized lease obligations;
(7) made or committed to make any capital expenditures;
(8) applied any of its assets to the direct or
indirect payment, discharge, satisfaction or
reduction of any amount payable directly or
indirectly to or for the benefit of Sellers or any
Affiliate thereof or to the prepayment of any such
amounts, or otherwise entered into or modified any
arrangement with any Affiliate of the Company or
Sellers;
(9) written off the value of any inventory or any
accounts receivable or increased the reserves for
obsolete, damaged, spoiled or otherwise not usable
inventory or doubtful or uncollectible receivables;
(10) granted any increase in the compensation payable
or to become payable to directors, officers or
employees (including, without limitation, any such
increase pursuant to any bonus, pension,
profit-sharing or other plan or commitment or
otherwise), other than merit increases to officers
and employees (other than the Sellers and their
Affiliates) in the ordinary course of business and
consistent with past practices;
(11) altered the manner of keeping its books, accounts
or records, or changed in any manner the accounting
practices therein reflected;
(12) accelerated or delayed collection of notes or
accounts receivable in advance of or beyond their
regular dates or the dates when the same could have
been collected in the ordinary course of business
consistent with past practices;
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(13) allowed its levels of inventory to vary in any
material respect from the levels customarily
maintained;
(14) experienced any other event or condition of any
character which has had or could have, individually
or in the aggregate, a material adverse effect on the
condition (financial or otherwise), results of
operations, assets, liabilities. properties, business
or prospects of the Company, or on employee, customer
or supplier relations;
(15) engaged in or agreed to engage in any of the
transactions or occurrences which would be prohibited
prior to the Closing; or
(16) agreed, whether in writing or otherwise, to do any
of the foregoing.
xiii. Compliance with Laws. The Company has conducted
its business in compliance with all federal, state,
local and foreign laws, ordinances, regulations,
judgments, rulings, orders and other requirements
applicable to it, including without limitation those
relating to (a) employment, safety and health, and
(b) environmental protection, building, zoning and
land use. No governmental authority has asserted that
the Company is not in compliance with any such laws,
ordinances, regulations, judgments, rulings, orders
and other requirements. The Company is not subject to
any order, judgment or decree of any court or
governmental authority. The Buyer will be furnished
with true and correct copies of all reports of
inspections of the Company's businesses and
properties through the date hereof under all
applicable federal, state, foreign and local laws and
regulations. Except as set forth on Schedule 4.13,
there has been no inspection of the Company's
businesses and properties conducted by insurance
companies, consultants, or any other Persons. All
deficiencies noted in any such reports have been
corrected.
xiv. Litigation. Except as set forth on Schedule 4.14,
there are no actions, suits, investigations, claims
or proceedings pending or, to the knowledge of the
Company or the Sellers, threatened before any court,
governmental or regulatory authority or arbitrator:
(a) affecting the Company (as plaintiff or defendant)
which: (i) could, individually or in the aggregate,
have a material adverse effect on the condition
(financial or otherwise), results of operations,
properties, assets, liabilities, business or
prospects of the Company; or (ii) without limiting
the generality of the foregoing (A) threatens to
revoke, vary,
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modify or terminate any of the Governmental
Authorizations or to declare any of them invalid in
any respect; (B) involves any of the Company
intangible property; (C) involves any material claim
against the Company under any warranty, whether
express or implied, on products repaired, overhauls
or services sold by the Company; (D) involves any
material claim against the Company for injury to
persons, animals or property suffered as a result of
the sale, manufacture or distribution of any product
or performance of any repairs, overhauls or services
by the Company including, but not limited to, claims
arising out of the defective or unsafe nature of its
products or services; or (E) involves a claim for
specific performance, injunctive relief or other
equitable remedies; or (b) which questions the
legality or propriety of the transactions
contemplated by this Agreement; and there exist no
facts or circumstances known to the Company or the
Sellers creating a reasonable basis for the
institution of any such action, suit, investigation,
claim or proceeding described in clauses (a) or (b)
above. No action, suit, investigation, claim or
proceeding of the kind described in clauses (a) and
(b) above have been pending, settled or adjudicated
during the three years preceding the date of this
Agreement.
xv. Title to and Condition of Personal Property. The
Company has, and will have at Closing, good, valid
and marketable title to all of its Assets, including,
without limitation, each item of equipment and other
personal property, tangible and intangible(other than
inventory disposed of in the ordinary course of
business consistent with past practices to Persons
other than the Sellers or Affiliates of the Company
or the Sellers) and to each item of equipment and
other personal property, tangible and intangible,
acquired is free and clear of any Encumbrances
whatsoever except for Permitted Encumbrances.
Schedule 4.15 will contain a detailed list as of the
Closing Date of all machinery, equipment, vehicles,
furniture and other personal property owned by the
Company or used by the Company in the operation of
its business. All tangible personal property owned by
the Company or used by the Company in the operation
of its business is in good operating condition and in
a good state of maintenance and repair, ordinary wear
and tear excepted. There are no properties or assets,
tangible or intangible, owned by any Person other
than the Company which are used in connection with
the business of the Company.
xvi. Real Property. Schedule 4.16 contains a copy of
any leases for Real Property and/or improvements
thereon to which the Company
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is a party, guarantor or obligor. The Company does
not own any Real Property.
xvii. Governmental Authorizations. Set forth on Schedule
4.17 is a list of all authorizations, consents,
approvals, franchises, licenses and permits required
under applicable law or regulation for the operation
of the business of the Company as presently operated
(the "Governmental Authorizations"). To the knowledge
of the Sellers, all the Governmental Authorizations
have been duly issued or obtained and are in full
force and effect, and the Company is in compliance
with the terms of all the Governmental
Authorizations. Neither the Company nor the Sellers
have any knowledge of any facts which could be
expected to cause them to believe that the
Governmental Authorizations will not be renewed by
the appropriate governmental authorities in the
ordinary course. To the knowledge of the Sellers,
each of the Governmental Authorizations except as
disclosed in Schedule 4.17 may be assigned and
transferred to the Buyer in accordance with this
Agreement and will continue in full force and effect
thereafter, in each case without (i) the occurrence
of any breach, default or forfeiture of rights
thereunder, or (ii) the consent, approval, or act of,
or the making of any filings with, any Person.
xviii. Other Person Authorizations. Set forth on Schedule
4.18 is a list of all authorizations, consents,
approvals, franchises, licenses and permits required
by any Person for the operation of the business of
the Company as presently operated (the "Other Person
Authorizations"). To the knowledge of the Sellers,
all of the Other Person Authorizations have been duly
issued or obtained and are in full force and effect,
and the Company is in compliance with the terms of
all the Other Person Authorizations. The Sellers do
not have any knowledge of any facts which could be
expected to cause them to believe that the Other
Person Authorizations will not be renewed by the
appropriate Person in the ordinary course. To the
knowledge of the Sellers, each of the Other Person
Authorizations except as disclosed in Schedule 4.18
may be assigned and transferred to the Buyer in
accordance with this Agreement and will continue in
full force and effect thereafter, in each case
without (i) the occurrence of any breach, default or
forfeiture of rights thereunder, or (ii) the consent,
approval, or act of, or the making of any filings
with, any Person.
xix. Insurance. Set forth on Schedule 4.19 is a list of
all insurance policies providing insurance coverage
of any nature to the Company. The Company will
deliver to the Buyer a true and complete copy of
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all of the Company's insurance policies as amended.
Such policies are sufficient for compliance by the
Company with all requirements of law and all Material
Agreements. All of such policies are in full force
and effect and are valid and enforceable in
accordance with their terms, and the Company has
complied with all material terms and conditions of
such policies, including the payment of premium
payments. As set forth on Schedule 4.19, none of the
insurance carriers has indicated to the Company an
intention to cancel any such policy. The Company has
no claim pending or anticipated against any of the
insurance carriers tinder any of such policies and
there has been no actual or alleged occurrence of any
kind which may give rise to any such claim.
xx. Labor Relations. None of the employees of the
Company is a member of any labor union, and the
Company is not a party to, otherwise bound by or, to
the Company's or the Sellers's knowledge, threatened,
with any labor or collective bargaining agreement.
None of the employees of the Company is known to be
engaged in organizing any labor union or other
employee group that is seeking recognition as a
bargaining unit. Without limiting the generality of
Section 4.20, (i) no unfair labor practice complaints
are pending or, to the Company's or the Sellers's
knowledge, threatened against the Company, and (ii)
no Person has made or threatened to make any claim,
and to the Company's or the Sellers's knowledge, no
Person has made any claim and there is no known basis
for any material claim, against the Company under any
statute, regulation or ordinance relating to
employees or employment practices, including without
limitation those relating to age, sex and racial
discrimination, conditions of employment, and wages
and hours.
xxi. Employment Agreements and Employee Benefit Plans.
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(1) Employment Agreements. There are no employment,
consulting, severance or indemnification
arrangements, agreements, or understandings between
the Company and any officer, director, consultant or
employee ("Employment Agreements"). The Company has
no material unaccrued liability for any arrears of
wages, bonuses or other employee benefits (including,
without limitation, termination or severance pay,
sick pay, personal days and holiday pay) for any of
its employees.
(2) Employee Benefit Plans. The Company does not have
any employment benefit plans.
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xxii. Tax Matter.
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(1) All federal, state, local and foreign Tax
Returns and reports required to be filed
with respect to the Company or its
businesses or assets, including, without
limitation, any consolidated federal income
tax returns filed on behalf of the
affiliated group (as defined in Section
1504(a) of the Code) of which the Company is
a member, and any combined income tax return
filed on behalf of a group of corporations
of which the Company is a member, have been
duly and timely filed as required, are true,
correct and complete as filed, and reflect
accurately all liability for Taxes for the
periods to which such returns and documents
relate, and all amounts showing as owing
thereon have been paid. All Taxes upon the
Company or upon its properties, assets,
income or franchises which are due and
payable, and all assessments and taxes upon
any group of corporations of which the
Company is a member or upon such group's
properties, assets or income, through the
Closing Date have been paid, except as
reflected by accruals on the Closing Date
balance sheet. The parties acknowledge that
the federal income tax return for the final
year ended on October 31, 1998, has not yet
been filed.
(2) All Taxes collectible or payable by the Company or
relating to or chargeable against any of its assets,
revenues or income through the date of this Agreement
were fully collected and paid by such date and all
similar items collectible or payable through the
Closing Date will have been fully collected and paid
by that date. No taxation authority has audited the
records of the Company or given notice of its
intention to audit the records of the Company. No
claims or deficiencies have been asserted against the
Company with respect to any Taxes which have not been
paid or otherwise satisfied and there exists no
reasonable basis for the making of any such claims.
The Company has not waived any restrictions on
assessment or collection of Taxes or consented to the
extension of any statute of limitations relating to
taxation. All state sales taxes due and owing to the
State of Florida have been paid.
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xxiii. Material Agreements.
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(1) Schedule 4.23 sets forth a brief
description of all material written and oral
contracts or agreements to which the Company
is a party or by which the Company or any of
its assets or properties is bound or
affected, including without limitation any:
(a) contract resulting in a commitment for
expenditure or other obligation, or which
provides for the receipt or potential
receipt, involving in excess of $1,000 in
any instance, or series of related contracts
that in the aggregate give rise to rights or
obligations exceeding such amount;
(b) indenture, mortgage, promissory note,
loan agreement, guarantee or other agreement
or commitment for the borrowing or lending
of money or encumbrance of assets;
(c) agreement which restricts the Company
from engaging in any line of business or
from competing with any other Person;
(d) agreement or arrangement for the sale or
lease of any of the assets, property or
rights of the Company outside the ordinary
course of business or requiring the consent
of any party to the transfer and assignment
of any assets, property and rights;
(e) agreement relating to any Intangible
Property, including confidentiality or
secrecy agreements;
(f) agreement relating to the development,
manufacture, distribution or sale of any
products or products under development by
the Company;
(g) warranties made with respect to products
manufactured, packaged, distributed or sold
by the Company;
(h) contract for the purchase or lease by
the Company of goods, equipment, supplies or
capital assets or the performance by others
of services which the Company reasonably
anticipates will involve the payment by the
Company of more than $1,000 after the date
hereof or which extends beyond
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November 18, 1999 or contract for the
purchase by the Company of raw materials
which the Company reasonably anticipates
will involve the payment by the Company of
more than $1,000 after the date hereof or
which extends beyond November 18, 1999;
(i) contract for the sale of products of the
Company which the Company reasonably
anticipates will involve the payment of more
than $1,000 after the date hereof or which
extends beyond November 18, 1999;
(j) consignment, distributor, dealer,
manufacturers representative or sales agency
contract which the Company reasonably
anticipates will involve the payment of more
than $1,000 after the date hereof or which
extends beyond November 18, 1999 or
advertising representative, advertising or
public relations contract which the Company
reasonably anticipates will involve the
payment of more than $1,000 after the date
hereof or which extends beyond November 18,
1999;
(k) agreement, contract or arrangement with
any Affiliates of the Company or Sellers; or
(l) any other contract, agreement,
instrument, arrangement or commitment that
is material to the condition (financial or
otherwise), results of operations, assets,
properties, liabilities, business or
prospects of the Company (collectively, and
together with the Employment Agreements,
Plans and all other agreements required to
be disclosed on any Schedule to this
Agreement, the "Material Agreements"). The
Company has previously furnished to the
Buyer true, complete and correct copies of
all written agreements, as amended, required
to be listed on Schedule 4.25.
(2) To the knowledge of the Company and Sellers, each
of the Material Agreements are each in full force and
effect and are the valid and legally binding
obligations of the Company and enforceable in
accordance with their respective terms, subject only
to bankruptcy, insolvency or similar laws affecting
the rights of creditors generally and to general
equitable principles. Neither the Company nor the
Sellers have received notice of default by the
Company under any of the Material Agreements, and the
Company is not in default under any of the Material
Agreements and no event has occurred which, with the
18
passage of time or the giving of notice or both,
would constitute a default by the Company thereunder.
To the Company and the Sellers's knowledge, none of
the other parties to the Material Agreements is in
default thereunder, nor has an event occurred which,
with the passage of time or the giving of notice or
both, would constitute a default by such other party
thereunder. Neither the Company nor the Sellers have
received notice of the pending or threatened
cancellation, revocation or termination of any of the
Material Agreements, nor are any of them aware of any
facts or circumstances which could reasonably be
expected to lead to any such cancellation, revocation
or termination.
(3) Except as otherwise indicated on Schedule 4.25, to
the knowledge of the Company and Sellers, each of the
Material Agreements may survive the transfer to the
Buyer pursuant to this Agreement and will continue in
full force and effect under the current terms
thereof, in each case without breaching the terms
thereof or resulting in the forfeiture or impairment
of any right thereunder and without the consent,
approval or act of, or the making of any filing with
any Person.
xxiv. Related Parties. Except as disclosed on Schedule
4.24, none of the Sellers nor any current director,
officer of the Company, or person who has resided at
the same address of any of such persons at any time
greater than thirty (30) days in the aggregate during
the past twenty-four (24) months (individually a
"Relate Party" and collectively the "Related
Parties") or any Affiliate thereof: (a) owns,
directly or indirectly, any interest in any Person
which is a competitor, potential competitor, supplier
or customer of the Company; (b) owns, directly or
Indirectly, in whole or in part, any property, asset
or right, real, personal or mixed, tangible or
intangible (including, but not limited to, any of the
Intangible Property) which is utilized by or in
connection with the business of the Company; (c) is a
customer or supplier of the Company; or (d) directly
or indirectly has an interest in or is a party to any
contract, agreement, lease, arrangement or
understanding, whether or not in writing, pertaining
or relating to the Company, except for employment,
consulting or other personal service agreements which
are listed on Schedule 4.26 hereto.
xxv. Absence of Certain Business Practices. None of the
Sellers, any Related Party, any Affiliate of the
Sellers or of any Related Party, any agent of the
Company, or any other Person acting on behalf of or
associated with the Company, acting alone or
together, has: (a) received, directly or indirectly,
any rebates, payments, commissions,
19
promotional allowances or any other economic
benefits, regardless of their nature or type, from
any customer, supplier, employee or agent of any
customer or supplier, official or employee of any
government (domestic or foreign) or other Person; or
(b) directly or indirectly, given or agreed to give
any money, gift or similar benefit to any customer,
supplier, employee or agent of any customer or
supplier, official or employee of any government
(domestic or foreign), or any political party or
candidate for office (domestic or foreign) or other
Person who was, is or may be in a position to help or
hinder the business of the Company (or assist the
Company in connection with any actual or proposed
transaction) which (i) may subject the Company to any
material damage or penalty in any civil, criminal or
governmental litigation or proceeding, (ii) if not
given in the past, may have had a material adverse
effect on the assets, business, operations or
prospects of the Company or (iii) if not continued in
the future, may materially adversely affect the
assets, business, operations or prospects of the
Company.
xxvi. Environmental Matters. The Sellers represent and
warrant that no property owned, leased, used or
occupied by the Company currently or in the past has
been used by the Company or any other Person to
manufacture, treat, store, or dispose of any
hazardous substance or any other regulated material,
and such property is free of all such substances and
materials. Without limiting the generality of Section
4.13, the Sellers and the Company, are in compliance
with all laws, regulations and other federal, state
or local governmental requirements, and all
applicable judgments, orders, writs, notices,
decrees, permits, licenses, approvals, consents or
injunctions relating to the generation, management,
handling, transportation, treatment, disposal,
storage, delivery, discharge, release or emission of
any waste, pollutant or toxic, hazardous or other
regulated substance (including, without limitation,
asbestos, radioactive material and pesticides and the
keeping and posting of all Material Safety Data
Sheets and waste manifests) or to any other actions,
omissions or conditions affecting the environment
(the "Environmental Laws"). Without limiting the
generality of Section 4.15, the Company has not
received any complaint, notice, order, or citation of
any actual or alleged noncompliance with any
Environmental Law, and there is no proceeding, suit
or investigation pending or, to the Sellers's
knowledge, threatened against the Company with
respect to any violation or alleged violation of the
Environmental Laws, and there is no reasonable basis
for the institution of any such proceeding, suit or
investigation.
20
xxvii. Certain Claims; Business Generally. There are no
claims existing or, to the best of the Company's and
the Sellers's knowledge, threatened under or pursuant
to any warranty, whether express or implied, on
products or services sold by the Company. To the
knowledge of the Company and the Sellers, there are
no claims existing and there is no basis for any
claim against the Company for injury to persons,
animals or property as a result of the sale,
distribution or manufacture of any product or
performance of any service by the Company including,
but not limited to claims arising out of the
defective or unsafe nature of its products or
services.
xxviii. Disclosure. No representation or warranty of the
Company or the Sellers contained in this Agreement,
and no statement, notice, certificate or other
document furnished by or on behalf of the Sellers or
the Company, the Buyer or their agents pursuant
hereto or in connection with the transactions
contemplated hereby, to the knowledge of the Company
and the Sellers, contains or will contain any untrue
statement of a material fact or omits to state a
material fact necessary in order to make the
statements contained herein or therein not misleading
or omits or will omit to state a material fact
necessary in order to provide a prospective purchaser
of the Company with full and proper information as to
the business, assets, prospects, financial condition
or results of operations of the Company.
ARTICLE e.
Certain Agreements
------------------
i. Preserve, Accuracy of Representations and
Warranties. Each of the parties hereto shall refrain
from taking any action which would render any
representation or warranty contained in this
Agreement inaccurate as of the Closing Date.
ii. Consents of Third Parties; Governmental Approvals.
--------------------------------------------------
(1) The Buyer and the Sellers will act
diligently and reasonably to secure, after
the Closing Date, the consent, approval or
waiver, in form and substance reasonably
satisfactory to the Buyer from any party to
any Material Agreement required to be
obtained to satisfy the conditions set forth
in this Agreement.
21
(2) During the period prior to and after the
Closing Date, the parties shall act
diligently and reasonably, and shall
cooperate with each other, to secure any
consents and approvals of any Person
required to be obtained by them in order to
permit the consummation of the transactions
contemplated by this Agreement, or to
otherwise satisfy the conditions set forth
in Section 7.2; provide that the Company
shall not make any agreement or
understanding affecting the Company as a
condition for obtaining any such consents or
approvals except with the prior written
consent of the Buyer (which consent shall
not be unreasonably withheld).
iii. Operations Prior to the Closing Date. The Company
will operate and carry on its business only in the
ordinary course and substantially as presently
operated. Consistent with the foregoing, the Company
will (i) keep and maintained the Company's assets in
good operating condition and repair and (ii) use its
reasonable efforts consistent with good business
practice to preserve the goodwill of the Securities
and Exchange Commission ("SEC"), the National
Association of Securities Dealers ("NASD"),
suppliers, contractors, licensors, employees,
customers, distributors and others having business
relations with it. The Sellers shall use all
reasonable efforts, consistent with past practices,
to promote the Company's business and to maintain the
reputation associated with the Company's business,
and shall not take or omit to take any action which
causes, or which is likely to cause, any
deterioration of the Company's present business or
relationships with the SEC or the NASD.
iv. Investigation. The representations, warranties and
covenants set forth in this Agreement shall not be
affected or diminished in any way by any
investigation (or failure to investigate) at any time
by or on behalf of the party for whose benefit such
representations, warranties and covenants were made.
All statements contained herein or in any schedule,
certificate, exhibit, list or other document
delivered pursuant hereto shall be deemed to be
representations and warranties for purposes of this
Agreement. No representation, warranty, covenant or
agreement of an), party shall limit the generality of
any other representation, warranty, covenant or
agreement of such party.
v. Notification. Each party to this Agreement shall
promptly notify the other parties in writing of the
occurrence, or threatened occurrence, of (i) any
event that, with the lapse of time or notice or both,
would constitute a breach of this Agreement by such
party; (ii) any event that would cause any
representation or warranty made by
22
such party in this Agreement to be false or
misleading in any respect; and (iii) any event which
would have been required to be disclosed herein had
such event occurred on or prior to the date of this
Agreement. Each party shall promptly notify the other
of any action, suit or proceeding that is instituted
or threatened against such party to restrain,
prohibit or otherwise challenge the legality of any
transaction contemplated by this Agreement. The
Sellers shall promptly notify the Buyer of any
lawsuit, claim, proceeding or investigation that may
be threatened, brought, asserted or commenced against
the Company or which should have been listed in any
Schedule hereto if such lawsuit, claim, proceeding or
investigation had arisen prior to the date hereof.
The updating of any schedule pursuant to this Section
5.5 shall not be deemed to release any party for the
breach of any representation, warranty or covenant
hereunder or of any other liability arising
hereunder.
vi. Reasonable Efforts. Subject to the terms and
conditions of this Agreement, each of the parties
shall use its diligent and reasonable efforts in good
faith to take or cause to be taken as promptly as
practicable all reasonable actions, that are within
its control to cause to be fulfilled: (i) those
conditions precedent to its obligations to consummate
the transactions contemplated hereby; and (ii) those
actions upon which the conditions precedent to the
other party's obligations to consummate this
Agreement are dependent.
ARTICLE f.
Additional Agreements
---------------------
i. Certain Tax Returns and Indemnity. Any Tax
(including, without limitation income tax, a sales
Tax, use Tax or documentary stamp Tax) directly
attributable to the sale or transfer of the Shares
shall be paid by the Sellers. The Buyer and the
Company agree to timely sign and deliver such
certificates or forms as may be necessary or
appropriate to establish an exemption from (or
otherwise reduce), or make a report with respect to,
such Taxes.
ii. Survival. The representations and warranties of
the parties hereto contained in this Agreement or in
any exhibit or schedule to this Agreement shall
survive the Closing Date for five (5) years.
23
iii. Indemnification.
----------------
(1) By the Seller. Subject to the limitations set forth
in Section 6.3(d), the Seller agree, jointly and
severally, to indemnify and hold harmless the Buyer
and their respective directors, officers, employees
and agents from, against and in respect of, the full
amount of any and all liabilities, damages, claims,
deficiencies, fines, assessments, losses, taxes,
penalties, interest, costs and expenses, including,
without limitation, reasonable fees and disbursements
of counsel (collectively, the "Losses"), arising
from, relating to, caused from (whether in whole or
in part), in connection with, or incident to:
(a) any breach, inaccuracy or violation of
any of the representations, warranties,
covenants or agreements of the Company or
the Seller contained in this Agreement, in
any schedule or exhibit to this Agreement or
in any document or certificate delivered by
them at or prior to the Closing;
(b) any and all loss or liability, including
the costs and expenses of prosecution or
defense incurred by the Buyer as a
consequence of or relating to any claims
and/or litigation relating to the Shares or
any other matters before the Closing;
(c) any and all Taxes, due or claimed to be
due (including, without limitation, Taxes on
properties, income, franchises, licenses,
sales, services and payrolls) by any
federal, state, local and foreign authority
applicable to the Company and/or the Shares
in respect of or attributable to any and all
periods ending on or before the Closing
Date; and
(d) any and all actions, suits, proceedings,
demands, assessments or judgments, costs and
expenses incidental to any of the foregoing.
(2) By the Buyer. Subject to the limitations set forth
in Section 6.4(d), the Buyer agrees to indemnify and
hold harmless the Sellers from, against and in
respect of, the full amount of any and all Losses
arising from, in connection with, or incident to:
(a) any breach, inaccuracy or violation of
any of the representations, warranties,
covenants or agreements of the Buyer
contained in this Agreement, in any schedule
or exhibit to this Agreement or in any
document or certificate delivered by the
Buyer at or prior to the Closing;
24
(b) any and all actions, suits, proceedings,
demands, assessments or judgments, costs and
expenses incidental to any of the foregoing.
(3) Indemnity Procedure. A party or parties
responsible for indemnifying another party
against any matter pursuant to this
Agreement is referred to herein as the
"Indemnifying Party" and a party or parties
entitled to indemnity is referred to as the
"Indemnified Party."
An Indemnified Party under this Agreement shall, with respect to claims
asserted against such party by any third party, give written notice to each
Indemnifying Party of any liability which might give rise to a claim for
indemnity under this Agreement within 60 business days of the receipt of any
written claim from any such third party, and with respect to other matters for
which the Indemnified Party may seek indemnification, give prompt written notice
to each Indemnifying Party of any liability which might give rise to a claim for
indemnity; provided, however, that any failure to give such notice will not
waive any rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are materially prejudiced.
As to any claim, action, suit or proceeding by a third party, the
Indemnifying Party shall be entitled, together with the Indemnified Party, to
participate in the defense, compromise or settlement of any such matter through
the Indemnifying Party's own attorneys and at its own expense. The Indemnified
Party shall provide such cooperation and such access to its books, records and
properties as the Indemnifying Party shall reasonably request with respect to
such matter; and the parties hereto agree to cooperate with each other in order
to ensure the proper and adequate defense thereof, it being understood that the
Indemnified Party shall control any such defense, all at the Indemnifying
Party's expense. The Indemnifying Party shall pay all reasonable photocopying
and reproduction charges for any photocopies or reproductions required.
An Indemnifying Party shall not make any settlement of any claims
without the written consent of the Indemnified Party, which consent shall not be
unreasonably withheld. Without limiting the generality of the foregoing, it
shall not be deemed unreasonable to withhold consent to a settlement involving
injunctive or other equitable relief against the Indemnified Party or its
assets, employees or business.
With regard to claims of third parties for which indemnification is
payable hereunder, such indemnification shall be paid by the Indemnifying Party
upon the earliest to occur of: (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five days prior to the date that the judgment creditor has the right to
execute the judgment or if earlier the date that the Indemnified Party must post
any bond with respect to any judgment or other judicial ruling; (ii) the entry
of an unappealable judgment or final appellate decision against the Indemnified
Party; (iii) a settlement of the claim; or (iv) with respect to indemnities for
Tax liabilities,
25
upon the issuance of any resolution by a taxation authority. Notwithstanding the
foregoing, expenses of counsel to the Indemnified Party shall be reimbursed on a
current basis by the Indemnifying Party. With regard to other claims for which
indemnification is payable hereunder, such indemnification shall be paid
promptly by the Indemnifying Party upon demand by the Indemnified Party.
(4) Limitation. No party shall have any
obligation under the indemnification
provisions set forth in Sections 6.3(a) or
6.3(b) until the aggregate of all claims for
which such party is responsible under such
indemnification provisions with respect to
any breach of a representation or warranty
exceeds $1,000 provided, however, that if
any party is responsible for indemnification
hereunder for any amount in excess of such
amount, then such amount shall not be deemed
applicable and such party shall be
responsible to fully indemnify the other
party for all such claims.
(5) Indemnification Payments Net of Taxes.
All sums payable by an Indemnifying Party as
indemnification under this Section 6.4 shall
be paid free and clear of all deductions or
withholdings (including any taxes or
governmental charges of any nature) unless
the deduction or withholding is required by
law, in which event or in the event the
Indemnified Party shall incur any liability
for tax chargeable or assessable in respect
of any such payment, the Indemnifying Party
shall pay such additional amounts as shall
be required to cause the net amount received
by the Indemnified Party to equal the full
amount which would otherwise have been
received by it had no such deduction or
withholding been made or no such liability
for taxes been incurred.
(6) Set-Off. The Buyer shall be entitled, at
its discretion and in addition to any other
rights and remedies they may have in law and
in equity, to set off at any time and from
time to time, the amount of any losses
against any obligations of the Buyer to the
Company or Seller under this Agreement or
under any of the agreements entered into
pursuant hereto.
iv. Exclusive Dealing with the Buyer. From
the date hereof to the Closing Date (or the
earlier termination of this Agreement in
accordance with its terms) Sellers shall
not, directly or indirectly, solicit or
initiate discussions or negotiations with,
or enter into any agreement with any person
or entity (other than the Buyer) concerning
any of the transactions contemplated hereby,
except as required to effect the
consummation of the transactions
contemplated herein. The Sellers also agree
that they will not sell, transfer or dispose
of any
26
shares of the Company's common stock until
the Closing Date (or the date on which this
Agreement is terminated), whichever is
earlier.
v. Lock-Up Agreements. After the Closing
Date, each Seller will own 200,000 shares of
the Company's common stock or 400,0000
shares will be owned collectively by the
Sellers (such shares shall be referred to as
the "Remaining Shares") Each Seller agrees
that beginning on the Closing Date and for a
period of nine months thereafter( the
"Lock-up Period"), the Remaining Shares will
be subject to a lock-up agreement. The
lock-up agreement will provide that during
the Lock-Up Period, the Sellers can
collectively sell 133,000 shares of the
Company's common stock per quarter.
Notwithstanding the foregoing, the Buyer may
agree to release the Sellers from their
lock-up agreements at any time.
vi. Access and Inspection. Each party hereto
has allowed and shall allow the other
parties ( as applicable) and their
authorized representatives full access
during normal business hours from and after
the date hereof and prior to the Closing
Date to all of the properties, books,
contracts, commitments and records of the
Company for the purpose of making such
investigations as any party may reasonably
request in connection with the transactions
contemplated hereby, and shall furnish such
party such information concerning its
affairs as that party may reasonably
request.
vii. Confidential Treatment of Information.
From and after the date hereof, the parties
hereto shall and shall cause their
representatives to hold in confidence this
Agreement (including the Exhibits and
Schedules hereto), all matters relating
hereto and all data and information obtained
with respect to the other parties or their
business, except such data or information as
is published or is a matter of public
record, or as compelled by legal process. In
the event this Agreement is terminated
pursuant to the terms contained herein, each
party shall promptly return to the other(s)
any statements, documents, schedules,
exhibits or other written information
obtained from them in connection with this
Agreement, and shall not retain any copies
thereof.
viii. Publicity. The parties agree to
reasonably cooperate in issuing any press
release or other public announcement or
Making any governmental filing concerning
this Agreement or the transactions
contemplated hereby. Nothing contained
herein shall prevent any party from at any
time furnishing any information to any
governmental
27
authority which it is by law or otherwise so
obligated to disclose or from making any
disclosure which its counsel deems necessary
or advisable in order to fulfill such
party's disclosure obligations under
applicable law.
ARTICLE g.
Closing Conditions Precedent; Termination
-----------------------------------------
i. Closing. The consummation of the sale
and purchase and the transfers and
deliveries to be made pursuant to this
Agreement (the "Closing") shall take place
at 2:00 p.m. local time (but shall be deemed
to have occurred at 12:01 a.m. local time)
at the offices of English, XxXxxxxxx &
X'Xxxxx, P.A., on March 31, 2000 (the
"Closing Date"), or at such other place,
time or date as may be agreed to by the
parties, unless extended by either party for
a sixty (60) day period. All proceedings to
be taken and all documents to be executed at
the Closing shall be deemed to have been
taken, delivered and executed
simultaneously, and no proceeding shall be
deemed taken nor documents deemed executed
or delivered until all have been taken,
delivered and executed.
(1) At the Closing, the Company and the
Sellers shall deliver to the Buyer:
(i) Stock certificates for of the shares of capital stock of
Mizar being surrendered hereunder, duly endorsed or with stock
powers attached in blank.
(ii) All corporate records of Mizar, including without
limitation corporate minute books, stock books, stock transfer
books, corporate seals, financial statements, financial
records (including the general ledger) and such other
corporate books and records as may reasonably be requested by
the Buyer and its counsel.
(iii) Copy of the Articles of Incorporation of the Company
certified as of a recent date by the Secretary of State of
Colorado and a copy of the by-laws of the Company certified on
the Closing Date by the secretary or an assistant secretary of
the Company;
(iv) Certificate of good standing of the Company issued as of
a recent date by the Secretary of State of Colorado;
(v) Incumbency certificates, duly executed and dated the
Closing Date, with respect to the officers of the Company
executing this Agreement;
28
(vi) Copies of the resolutions of the Board of Directors of
the Company authorizing the execution, delivery and
performance of this Agreement and the transactions
contemplated hereby, certified by the secretary or an
assistant secretary of the Company as of the Closing Date;
(vii) Executed Resignations of the officers and directors of
the Company as of the Closing Date;
(viii) Such other assignments and other instruments of
transfer or conveyance as the Buyer may reasonably request or
as may be otherwise necessary to evidence and effect the sale,
assignment, transfer, conveyance and delivery of the Shares to
the Buyer; and
(ix) a Certficate signed by the Sellers as described by
Section 7.2(e) of this Agreement.
In addition to the above deliveries, the Company and the Sellers shall take all
steps and actions as the Buyer may reasonably request or as may otherwise be
necessary to put the Buyer in actual possession or control of the Shares.
(2) At the Closing, the Buyer shall deliver
to the Company and/or the Sellers:
(a) A bank or cashier's check for
the amount of Seventy Two Thousand
Dollars ($72,000.00);
(b) Copies of the Articles of
Incorporation of the Buyer or its
assignee;
(c) Certificates of good standing of
the Buyer issued as of a recent date
by the Secretary of State of the State
of Florida, if applicable;
(d) Incumbency certificates, duly
executed and dated the Closing Date,
with respect to the officers of the
Buyer executing this Agreement, if
applicable;
(e) Copies of the resolutions of Boards
of Directors of the Buyer authorizing
the execution, delivery and
performance of this Agreement and the
transactions contemplated hereby,
certified by the secretary or an
29
assistant secretary of the Buyer, as
of the Closing Date, if applicable;
and
(f) The certificate contemplated in
Section 7.3(c), duly executed by the
duly authorized officers of the Buyer.
ii. Conditions Precedent to the Obligations of the
Buyer. The obligations of the Buyer to consummate the
transactions contemplated by this Agreement are
subject to the satisfaction at or prior to the
Closing of the following conditions, unless waived by
the Buyer:
(1) Representations and Warranties True. The
representations and warranties of the
Company and the Sellers contained in this
Agreement and in any certificate or other
document delivered pursuant to this
Agreement shall be true and correct in all
material respects (except for
representations and warranties which are by
their terms qualified by materiality, which
shall be true and correct in all respects)
as of the Closing Date with the same force
and effect as though made on and as of such
date.
(2) Covenants Performed. All of the terms,
covenants and conditions of this Agreement
to be performed or complied with by the
Company or the Sellers on or prior to the
Closing Date shall have been duly performed
or complied with in all respects.
(3) No Material Adverse Change. There shall
not have occurred any event or condition of
any character which has adversely affected
or may adversely affect in any material
respect the Buyer's ability to operate the
business of the Company as such business is
currently being operated, and no event or
condition shall have occurred which has
adversely affected or may adversely affect
in any material respect the Purchased Assets
or the condition financial or otherwise) of
the Company or the Company's assets,
liabilities, earnings, book value, business,
Operations or prospects.
(4) Consents. The Sellers and the Company
shall have obtained all authorizations
consents and approvals of Persons reasonably
necessary or desirable to consummate the
transactions contemplated by this Agreement,
each of which
30
shall have been obtained without the
imposition of any adverse terms or
condition.
(5) Company's and Sellers's Certificate. The
Company and the Sellers shall have delivered
to the Buyer a certificate executed by the
President of the Company and the Sellers,
dated the Closing Date, certifying in such
detail as the Buyer may reasonably request,
that the conditions specified in Sections
7.2(a), (b) and (c) above have been
fulfilled and as to such other matters as
the Buyer may reasonably request.
(f) Listing on OTC Bulletin Board. The Company's common stock
shall have been approved for listing on the OTC Bulletin Board. In
connection with obtaining a listing on the OTC Bulletin Board, the
Company intends to sell approximately 1 to 2 million shares of its
common stock in a private offering. If the NASD notifies the Buyer and
the Sellers that the Company's common stock will not be listed on the
OTC Bulletin Board, the Buyer shall have thirty (30) days to decide if
it wishes to waive this condition precedent to Closing and shall inform
the Buyer of its decision within said time period.
(g) Governmental Consents. All consents and approvals required
by governmental authorities for the consummation of the transactions
contemplated by this Agreement shall have been obtained or shall be in
the process of being obtained. To the best of the Sellers and the
Company's knowledge, all of such consents and approvals shall have been
obtained or will be obtained without the imposition of any conditions
which would adversely affect the Buyer or the Company.
(h) No Litigation. No litigation, arbitration or other
proceeding shall be pending or, to the knowledge of the parties,
threatened by or before any court, arbitration panel or governmental
authority; no law or regulation shall have been enacted after the date
of this Agreement; and no judicial or administrative decision shall
have been rendered; in each case, which enjoins, prohibits or
materially restricts, or seeks to enjoin, prohibit or materially
restrict, the consummation of the transactions contemplated by this
Agreement.
(i) Company's Financial Condition. The Company shall have cash
balances equal to am amount greater than $500 and less than $700 and
total liabilities shall not exceed $0 on the Closing Date.
(j) Deliveries. Each of the items specified in Section 7.l(a)
shall have been executed and/or delivered, as applicable, to the Buyer.
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iii. Conditions Precedent to the
Obligations of the Sellers. The
obligations of the Sellers to
consummate the transactions
contemplated by this Agreement are
subject to the satisfaction at or
prior to the Closing of the following
conditions.
(1) Representations and Warranties True. The
representations and warranties of the Buyer
contained in this Agreement or in any
certificate or other document delivered
pursuant to this Agreement shall be true and
correct in all material respects (except for
representations and warranties which are by
their terms qualified by materiality, which
shall be true and correct in all respects)
as of the Closing Date with the same force
and effect as though made on and as of such
date.
(2) Covenants Performed. The terms,
covenants and conditions of this Agreement
to be performed or complied with by the
Buyer on or prior to the Closing Date shall
have been duly performed or complied with in
all respects.
(3) The Buyer's Certificate. The Buyer shall
have delivered to the Sellers a certificate
executed by its President, dated the Closing
Date, certifying in such detail as the
Company may reasonably request, that the
conditions specified in Sections 7.3(a) and
(b) above have been fulfilled.
(4) No Litigation. No litigation,
arbitration or other proceeding shall be
pending or, to the knowledge of parties,
threatened by or before any court,
arbitration panel or governmental authority;
no law or regulation shall have been enacted
after the date of this Agreement; and no
judicial or administrative decision shall
have been rendered; in each case, which
enjoins, prohibits or materially restricts,
or seeks to enjoin, prohibit or materially
restrict, the consummation of the
transactions contemplated by this Agreement.
(5) Deliveries. Each of the items specified
in Section 7.l(b) shall have been executed
and/or delivered, as applicable, to the
Company and/or the Sellers.
32
iv. Termination. Anything contained in this
Agreement to the contrary notwithstanding,
this Agreement may be terminated at any time
prior to the Closing Date:
(1) by the mutual consent of the Sellers and
the Buyer;
(2) by the Buyer if it is not satisfied with
investigation of the Company's business and
financial condition;
(3) by the Buyer in the event of any
material breach by the Sellers of any of
their respective agreements, representations
or warranties contained herein and the
failure of the Sellers to cure such breach
within 14 days after receipt of notice from
the Buyer requesting such breach to be
cured; or
(4) by the Sellers in the event of any
material breach by the Buyer of any of the
Buyer's agreements, representations or
warranties contained herein and the failure
of the Buyer to cure such breach within 14
days after receipt of notice from the
Company requesting such breach to be cured.
v. Notice of Termination. Any
party desiring to terminate this
Agreement pursuant to Section 7.4
shall give notice of such
termination to the other parties to
this Agreement.
vi. Effect of Termination. In the
event that this Agreement shall be
terminated pursuant to Section 7.4,
all further obligations of the
parties under this Agreement shall
be terminated without further
liability of any party to the
other, provided that nothing herein
shall relieve any party from
liability for its breach or
violation of this Agreement.
Without limiting the generality of
any other provision herein, the
terms of Sections 8.10 through 8.12
and 8.16 hereof shall survive any
such termination.
ARTICLE h.
Miscellaneous
i. Notices. Any notice, request, demand or
other communication required or permitted
under this Agreement
33
shall be in writing and shall be delivered
personally or sent by prepaid overnight
courier for next business day delivery to
the parties at the addresses set forth below
their names below (or at such other
addresses as shall be specified by the
parties by like notice).
If to the Buyer:
----------------
XXXX.XXX, INC.
0000 XX 00xx Xxx. Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
With a copy to:
---------------
English, XxXxxxxxx & O'Bryan, P.A.
Attn: Xxxxx X. Xxxx, Esq.
000 X. X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
If to the Sellers:
------------------
Xxxxxx X. Xxxxx
Xxxx X. Xxx
c/x Xxxxx Energy Company
Such notices, demands, claims and other communications shall be deemed
given when actually received or in the case of delivery by overnight
service with guaranteed next business day delivery, the next business
day or the day designated for delivery.
ii. Entire Agreement. This Agreement nd the
exhibits and schedules to this Agreement
contain every obligation and understanding
among the parties relating to the subject
matter hereof and merge all prior
discussions, negotiations and agreements, if
any, among them, and none of the parties
shall be bound by any representations,
warranties, covenants, or other
understandings, other than as expressly
provided or referred to herein.
34
iii. Assignment. This Buyer may assign this
Agreement to another business entity and it
is contemplated that the Buyer will assign
this Agreement. The Sellers agree that any
assignee of the Buyer shall have all rights,
obligations and duties of the Buyer under
this Agreement. . However, this Agreement
may not be assigned by Sellers, without the
written consent of each Buyer. Subject to
the preceding sentence, this Agreement shall
be binding upon and inure to the benefit of
the parties hereto and their respective
successors, heirs, personal representatives,
legal representatives, and permitted
assigns.
iv. Waiver and Amendment. Any representation,
warranty, covenant, term or condition of
this Agreement which may legally be waived,
may be waived, or the time of performance
thereof extended, at any time by the party
hereto entitled to the benefit thereof, and
any term, condition or covenant hereof may
be amended by the parties hereto at any
time. Any such waiver, extension or
amendment shall be evidenced by an
instrument in writing executed on behalf of
the appropriate party by a person who has
been authorized by such party to execute
waivers, extensions or amendments on its
behalf. No waiver by any party hereto,
whether express or implied, of its rights
under any provision of this Agreement shall
constitute a waiver of such party's rights
under such Provisions at any other time or a
waiver of such party's rights under any
other provision of this Agreement. No
failure by any party hereto to take any
action against any breach of this Agreement
or default by another party shall constitute
a waiver of the former party's right to
enforce any provision of this Agreement or
to take action against such breach or
default or any subsequent breach or default
by such other party.
v. No Third Party Beneficiary. Except with
respect to the officers, directors,
employees and agents expressly referenced in
Section 6.5 and the Buyer's assignee
described in Section 8.3 hereof, nothing
expressed or implied in this Agreement is
intended, or shall be construed, to confer
upon or give any Person other than the
parties hereto and their respective heirs,
personal representatives, legal
representatives, successors and permitted
assigns, any rights or remedies under or by
reason of this Agreement.
35
vi. Severability. In the event that any one
or more of the provisions contained in this
Agreement shall be declared invalid, void or
unenforceable, the remainder of the
provisions of this Agreement shall remain in
full force and effect, and such invalid,
void or unenforceable provision shall be
interpreted as closely as possible to the
manner in which it was written.
vii. Expenses. Each party agrees to pay,
without right of reimbursement from any
other party, the costs incurred by it
incident to the performance of its
obligations under this Agreement and the
consummation of the transactions
contemplated hereby, including, without
limitation, costs incident to the
preparation of this Agreement, and the fees
and disbursements of counsel, accountants
and consultants employed by such party in
connection herewith.
viii. Headings. Article titles and headings to
sections herein are inserted for convenience
of reference only and are not intended to be
a part of or to affect the meaning or
interpretation of this Agreement. The
schedules and exhibits referred to herein
shall be construed with and as an integral
part of this Agreement to the same extent as
if they were set forth verbatim herein. The
specification of any dollar amount in the
representations or warranties contained in
this Agreement or the inclusion of any
specific item in any schedule hereto is not
intended to imply that such amounts, or
higher or lower amounts, or the items so
included or other items, are or are not
material, and neither party shall use the
fact of the setting of such amounts or the
inclusion of any such item in any dispute or
controversy between the parties as to
whether any obligation, item or matter not
described herein or included in a Schedule
is or is not material for purposes of this
Agreement.
ix. Counterparts. 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. Any facsimile copy of a
manually executed original shall be deemed a
manually executed original.
36
x. Litigation; Prevailing Party. In the
event of any litigation with regard to this
Agreement, the prevailing party shall be
entitled to receive from the non-prevailing
party and the non-prevailing party shall pay
upon demand all reasonable attorneys fees
and legal expenses for the prevailing party.
xi. Injunctive Relief. It is possible that
remedies at law may be inadequate and,
therefore, the parties hereto shall be
entitled to equitable relief including,
without limitation, injunctive relief,
specific performance or other equitable
remedies in addition to all other remedies
provided hereunder or available to the
parties hereto at law or in equity.
xii. Governing Law and Venue. This Agreement
has been entered into and shall be construed
and enforced in accordance with the laws of
the State of Florida without reference to
the choice of law principles thereof. This
Agreement shall be subject to the exclusive
jurisdiction of the courts of the State of
Florida located in Broward County, Florida
or the United States District Court for the
Southern District of Florida. The parties to
this Agreement agree that any breach of any
term or condition of this Agreement shall be
deemed to be a breach occurring in the State
of Florida by virtue of a failure to perform
an act required to be performed in the State
of Florida and irrevocably and expressly
agree to submit to the jurisdiction of the
courts of the State of Florida for the
purpose of resolving any disputes among the
parties relating to this Agreement or the
transactions contemplated hereby. The
parties irrevocably waive, to the fullest
extent permitted by law, any objection which
they may now or hereafter have to the laying
of venue of any suit, action or proceeding
arising out of or relating to this
Agreement, or any judgment entered by any
court in respect hereof brought in Broward
County, Florida, and further irrevocably
waive any claim that any suit, action or
proceeding brought in Broward County,
Florida, has been brought in an inconvenient
forum.
xiii. Risk of Loss. Prior to the Closing, the
risk of loss or damage to, or destruction of
any or all of the Company's property and
assets, including, without limitation, the
Purchased Assets, shall remain with the
Company.
37
xiv. Further Assurances. On the Closing Date,
the company shall (i) deliver to the Sellers
such other bills of sale, deeds,
endorsements, assignments and other good and
sufficient instruments of conveyance and
transfer, in form reasonably satisfactory to
the Buyer and its counsel, and the Buyer may
reasonably request or as may be otherwise
reasonably necessary to vest in the Buyer
all the right, title and interest of the
Company in, to or under any or all of the
Assets, and (ii) take all steps as may be
reasonably necessary to put the Buyer in
actual possession and control of all the
Assets. From time to time following the
Closing, the Company and the Sellers shall
execute and deliver, or cause to be executed
and delivered, to the Buyer such other
instruments of conveyance and transfer as
the Buyer may reasonably request or as may
be otherwise necessary to more effectively
convey and transfer to, and vest in, the
Buyer and to put the Buyer in possession of,
any part of the Assets, and, in the case of
licenses, certificates, approvals,
authorizations, agreements, contracts,
leases, easements and other commitments
included in the Assets which cannot be
transferred or assigned effectively without
the consent of third parties which consent
has not been obtained prior to the Closing,
to cooperate with the Buyer at its request
in endeavoring to obtain such consent
promptly.
xv. Remedies Cumulative. No remedy made
available by any of the provisions of this
Agreement is intended to be exclusive of any
other remedy, and each and every remedy
shall be cumulative and shall be in addition
to every other remedy given hereunder or now
or hereafter existing at law or in equity.
xvi. Participation of Parties; Construction.
The parties hereto acknowledge that this
Agreement and all matters contemplated
herein, have been negotiated among all
parties hereto and their respective legal
counsel and that all such parties have
participated in the drafting and preparation
of this Agreement from the commencement of
negotiations at all times through the
execution hereof. This Agreement shall be
construed and interpreted without regard to
any presumption or other rule or
interpretation against the party who may
have had primary responsibility for drafting
this Agreement.
38
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
BUYER:
XXXX.XXX, INC.
By:/s/ Xxxxxx Xxxxxxxx
----------------------
Xxxxxx Xxxxxxxx
Sellers:
/s/ Xxxxxx X. Xxxxx
-------------------------------
XXXXXX X. XXXXX
/s/ Xxxx X. Xxx
-------------------------------
XXXX X. XXX
39
