STOCK PURCHASE AGREEMENT
BY AND BETWEEN
PAMG, LLC (BUYER)
and
THERMACELL TECHNOLOGIES, INC. (SELLER)
DATED MAY 30, 2000
1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into on May
30, 2000 (the "Effective Date") by and between PAMG, LLC, a Florida Limited
Liability Company (the "Buyer") and Thermacell Technologies, Inc., a Florida
corporation (the "Seller").
WHEREAS, Seller desires to issue to Buyer and, Buyer has agreed upon
the terms and conditions hereinafter set forth to acquire from Seller, an
aggregate of five million (5,000,000) shares of the authorized and issued common
stock (the "Shares") of Seller, at the per share price of twenty cents ($0.20);
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereby agree as follows:
1. Sale and Purchase of the Shares.
1.1. Purchase Price and Payment. The aggregate purchase price for the
Shares shall be $1,000,000 (the "Purchase Price"). The Purchase Price shall be
paid to Seller by Buyer as follows:
(a) Initial Closing. Within two weeks following the Effective Date, Buyer
will pay $500,000 to purchase up to 2,500,000 of the then-authorized and issued
voting common stock of the Seller (the "Initial Shares"). The Buyer's obligation
to purchase the Initial Shares is subject only to the following conditions:
(i) Mutual execution and delivery of this Stock Purchase Agreement
(including all schedules and exhibits) by Buyer and Seller;
(ii) Delivery of a resolution of the Board of Directors of the Seller
authorizing the Seller's execution and delivery of this Stock
Purchase Agreement (including all schedules and exhibits) and
(ii) Delivery of certificate(s) evidencing the Shares being purchased
registered in Buyer's (or its designated nominee's) name in the
denominations requested by Buyer.
(b) Second Closing. Provided that all of the conditions set forth in
Section 6 hereof have been performed or waived, Buyer will pay the balance of
the Purchase Price in exchange for the balance of the Shares not purchased as
set forth in subparagraph (a) above (the "Remaining Shares"), at a closing to
occur no later than the seventy-fifth day following the Effective Date, as
provided in Section 2.1 hereof.
2
(c) Buyer's Right to Put the Initial Shares. In the event that the
conditions set forth in Section 6 hereof are not satisfied by the seventy-fifth
day following the Effective Date, the Buyer will have the right to sell, and the
Seller will have the obligation to purchase, all or any portion of the Initial
Shares tendered to Seller by Buyer, at a price per share equal to the average
closing price for the ten-day period immediately preceding the date of such
tender.
2. Closing.
2.1. Time and Place. The closings described in Section 1 above (each, a
"Closing") shall take place at the offices of Xxxxx Xxxxxxxxx, Esq., 0000 X.
Xxxxxxx Xxxxxxx, 0xx Xxxxx, Xx. Xxxxxxxxxx, XX 00000, at 10:00 a.m., local time,
on Friday June 9, 2000 or at such other time, date and/or place as Buyer and
Seller may mutually agree in writing. The date upon which a Closing shall occur
is herein called the "Closing Date".
2.2. Closing Deliveries.
(a) Seller Deliveries. At the Closing, Seller will deliver or cause to
be delivered to Buyer and/or Buyer's attorney the following:
(i) the certificate, consents and other documents required to be
delivered by Seller pursuant to Section 6 hereof;
(ii) certificate(s) evidencing the Shares registered in Buyer's
(or its designated nominee's) name in the denominations requested by
Buyer.
(b) Buyer Deliveries. At the Closing, Buyer will deliver or cause to
be delivered to Seller the following:
(i) the Purchase Price; and
(ii) the certificate and other documents required to be delivered
by Buyer pursuant to Section 7 hereof.
3. Representations and Warranties of Seller. Seller hereby represents and
warrants to Buyer as follows:
3.1. Due Organization and Qualification. Seller and each of Seller's
subsidiaries are corporations duly organized, validly existing and in good
standing under the laws of the states of their respective incorporations. Seller
and each of its subsidiaries have all requisite power and authority to own,
lease and operate their respective assets and properties and to carry on their
respective businesses as presently conducted and as presently contemplated.
Seller and each of its subsidiaries are duly qualified to transact business and
in good standing in each jurisdiction in which the nature of their respective
businesses or the locations of their respective property (as defined in Section
12.2 hereof) requires such qualification, except where the failure to do so
would not have a material adverse effect on Seller's (or such subsidiaries')
business, operations, assets or condition (financial or otherwise).
3
3.2. Capitalization; Subsidiaries. The authorized capital stock of Seller
consists solely of 25,000,000 shares, 20,000,000 of which are designated as
Common Stock and 5,000,000 of which are designated as preferred stock. There are
as of the date hereof, and will be as of the Closing Date, 2,758,414 shares of
Common Stock issued and outstanding, and 3,180,855 shares of Common Stock
reserved with respect to options, warrants or other instruments convertible into
the Common Stock of the Seller. As of the date hereof, there is not and will not
be, as the case may be, any other shares of capital stock of Seller outstanding
or granted. All of the issued and outstanding shares of capital stock of Seller
have been duly authorized, and are validly issued, fully paid and
non-assessable. Except as set forth on Schedule 3.2, Seller has no subsidiaries
or any other equity or beneficial interest or investment in any other person (as
defined in Section 12.2 hereof).
3.3. Options; Shareholder Rights. Except as set forth on Schedule 3.3
hereto and other than as provided by this Agreement, there are no outstanding
obligations, options, warrants, convertible securities, subscriptions, or other
commitments or rights (matured or contingent) of any nature to acquire or
subscribe for any securities or other equity interest of or in Seller. Schedule
3.3 also sets forth the exercise price and expiration dates of all outstanding
options and warrants to acquire securities of Seller. There are no bonds,
debentures, notes or other indebtedness of Seller having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matter on which any stockholder of the Seller may vote. Except as set forth
on Schedule 3.3 and other than as provided by this Agreement, there are no
preemptive rights, rights of first refusal, voting rights, change of control or
similar rights, anti-dilution protections or other rights which any stockholder,
officer, employee or director of Seller would be entitled to exercise or invoke
as a result of the purchase by the Buyer of the Shares or any of the other
transactions contemplated hereby.
3.4. Constituent Documents. True and complete copies of the Seller's
Certificate of Incorporation and By-laws, and all amendments thereto up through
the date hereof (collectively, the "Constituent Documents"), have
been delivered to Buyer.
3.5. Financial Statements. The audited balance sheets and related
statements of income and cash flows of Seller as of and for the fiscal year
ended on September 30, 1999 (the "Financial Statements") true and complete
copies of all of which have been delivered to Buyer and are attached hereto as
Schedule 3.5, present fairly the financial condition of Seller as at the dates
indicated and the results of its operations for the periods covered thereby. The
Financial Statements have been prepared in accordance with GAAP (as defined in
Section 12.2 hereof) consistently applied subject to, only in the case of the
Interim Financial Statements, ordinary year-end adjustments, none of which are
material, individually or in the aggregate. The books and records of Seller are
in all material respects complete and correct, have been maintained in
accordance with good business practices, and accurately reflect the basis for
the financial condition and results of operations of Seller as set forth in the
Financial Statements.
3.6. Absence of Changes. Except as set forth on Schedule 3.6 hereto, since
September 30, 1999, there has not been (i) any significant adverse change in the
financial condition, results of operations, assets, liabilities or business of
Seller, (ii) any borrowing of or agreement to borrow any money or any
Liabilities (as defined in Section 12.2 hereof) incurred by Seller, other than
4
current Liabilities incurred in the ordinary course of business, (iii) any asset
or property of Seller made subject to a Lien (as defined in Section 12.2
hereof), (iv) any waiver of any valuable right of Seller, or the cancellation of
any debt or claim held by Seller, (v) any declaration or payment of dividends
on, or other distributions with respect to, or any direct or indirect redemption
or repurchase of, any shares of the capital stock of Seller, or any agreement or
commitment therefor, (vi) other than with respect to the transactions provided
by this Agreement, any issuance of any stocks, bonds or other securities of
Seller or options, warrants or rights or agreements or commitments to purchase
or issue such securities or grant such options, warrants or rights, (vii) any
mortgage, pledge, sale, assignment or transfer of any tangible or intangible
assets of Seller, except with respect to tangible assets and effected in the
ordinary course of business to persons not related to Seller, (viii) any loan by
Seller to any officer, director, employee or stockholder of Seller, or any
agreement or commitment therefor, (ix) any damage, destruction or loss (whether
or not covered by insurance) adversely affecting the assets, property or
business of Seller, (x) any material increase, direct or indirect, in the
compensation paid or payable to any officer, director, employee or agent of
Seller, (xi) any purchase or other acquisition of assets or property other than
in the ordinary course of business, (xii) any change in the accounting methods
or practices followed by Seller or (xiii) any commitment (contingent or
otherwise) to do any of the foregoing.
3.7. Power and Authority. Seller has the requisite corporate power and
authority to execute and deliver this Agreement and all other agreements
contemplated by this Agreement and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and all
other agreements contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Seller. This Agreement has been duly
executed and delivered by Seller and is the valid and binding obligations of
Seller, enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, moratorium, insolvency or other
similar laws generally affecting the enforcement of creditors' rights, specific
performance, injunctive or other equitable remedies.
3.8. Tax Matters. Except as set forth on Schedule 3.8 hereto, Seller has
timely filed all Tax Returns (as defined in Section 12.2 hereof), that it has
been required to file, and has timely paid in full all Taxes (as defined in
Section 12.2 hereof) which are due and payable by it. Seller has established and
is maintaining current accruals that are adequate for the payment of any Taxes
incurred but not yet due and payable with respect to the property and operations
of Seller through the date hereof and will establish and maintain adequate
accruals for the payment of any Taxes in respect of the period through the
Closing Date. True and complete copies of the Tax Returns of Seller for the tax
year ended September 30, 1999 have previously been delivered to Buyer. Except as
set forth on Schedule 3.8, no waivers or extensions of any applicable statute of
limitations for the assessment or collection of Taxes with respect to any Tax
Returns of Seller are currently in effect or proposed. Seller has collected or
withheld and paid over to the proper governmental or regulatory bodies all
amounts required to be so collected or withheld and paid over under all
applicable laws. No action, suit, proceeding, investigation, audit, claim or
assessment is presently pending or, to Seller's knowledge (as defined in Section
12.2 hereof), threatened with regard to any Taxes that relate to Seller for
which Seller is or could reasonably be expected to be liable. There is no
unresolved claim by a taxing authority in any jurisdiction where Seller does not
anticipate to file Tax Returns that it is or could reasonably be expected to be
subject to taxation by such jurisdiction. There are no Liens for Taxes (other
than for Taxes not yet due and payable) upon the assets or property of Seller.
5
Seller has not (i) elected to be treated as a collapsible corporation
pursuant to Section 341(f) of the Code (as defined in Section 12.2 hereof); (ii)
elected to be treated as a Subchapter S corporation pursuant to Section 1362(1)
of the Code; or (iii) made any other election pursuant to the Code (other than
elections that relate solely to matters of accounting, depreciation, or
amortization) that would have an adverse effect on Seller, its financial
condition, its business as presently conducted or presently proposed to be
conducted or any of its properties or assets. Seller's net operating losses for
federal income tax purposes as of September 30, 1999 amount to $6,124,030.00,
and are not subject to any limitations imposed by Section 382 of the Code. The
full amount of such net operating losses are available to offset the taxable
income of Seller for the current taxable year, and, to the extent not so used,
succeeding years. The execution of the transactions contemplated by this
Agreement or any other agreement or arrangement, understanding or commitment
(contingent or otherwise) to which Seller is a party or by which it is bound
will not have the effect of limiting Seller's ability to use such net operating
losses in full to offset such taxable income. Seller has not made any payments,
is not obligated to make any payments and is not a party to any agreement that
could obligate it to make any payments that would not be deductible under
Section 280G of the Code. Seller is not a party to any tax allocation or sharing
agreement. Seller is not and has not been a member of an affiliated group filing
a consolidated federal income tax return and does not have any liability for the
Taxes of any entity (other than Seller) under Treasury Regulation ` 1.502-6 (or
any similar provision of state, local or foreign law), as a transferee or
successor, by contract, or otherwise.
3.9. Compliance with Laws; Permits. Seller is and has been in compliance in
all material respects with all federal, state, local and foreign laws, statutes,
ordinances, regulations, orders, judgments, injunctions, awards or decrees
(collectively, "Laws") applicable to it or any of its properties or operations,
including, without limitation all Environmental Laws (as defined in Section 12.2
hereof). Seller has not received any notice of violation or alleged violation of
any Law by it. Seller has all licenses, permits, orders and approvals of
federal, state, local and foreign governmental or regulatory bodies necessary
for the conduct of its business and operations (collectively, the "Permits").
All material Permits of Seller are set forth on Schedule 3.9 hereto and are
valid and in full force and effect. No violations have occurred in respect of
any such Permit and no action or proceeding is pending or, to Seller's
knowledge, threatened to revoke or limit any such Permit.
3.10. No Breach; Consents. The execution, delivery and performance of this
Agreement by Seller and the consummation of the transactions contemplated hereby
will not (i) result in any Lien upon any of the property of Seller (other than
in favor of Buyer) or (ii) violate, conflict with or otherwise result in the
breach of any of the terms and conditions of, result in a material modification
of or accelerate or trigger the rights of any person under, or constitute (or
with notice or lapse of time or both would constitute) a default under (a) any
of the Constituent Documents; (b) any instrument, contract or other agreement to
which Seller is a party or by or to which it or any of its properties is bound
or subject; (c) any Law applicable to Seller or any of its properties or
operations; or (d) any Permit. No consent, approval or authorization of, or
declaration or filing with, any governmental authority or other person
("Consent") is required on the part of Seller in connection with the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
6
3.11. Litigation; Claims. Except as set forth on Schedule 3.11 hereto,
there are no suits or actions, administrative, arbitration or other proceedings
or governmental investigations pending or, to Seller's knowledge, threatened
against or affecting Seller or any of its properties or assets. To Seller's
knowledge, no person has made a claim against Seller alleging any personal,
property or economic injury, loss or damage incurred as a result of or relating
to the use or consumption of any products sold or manufactured by or on behalf
of, or services rendered by Seller. There are no judgments, orders, injunctions,
decrees or awards against Seller which are not satisfied and remain outstanding.
3.12. Employment Matters. Seller has not at any time during the last three
(3) years had, nor is there now threatened, any walkout, strike, picketing, work
stoppage, planned work slowdown or any similar occurrence. There are no material
controversies or grievances pending or, to Seller's knowledge, threatened
between Seller and any of its employees. No union or other collective bargaining
unit has been certified or formally recognized by Seller. All key employees of
Seller have, or will have prior to the Closing Date, executed confidentiality,
non-compete and non-disclosure agreements in form and substance reasonably
satisfactory to Buyer. Seller is not aware that any officer or employee intends
to terminate his/her employment with Seller nor does Seller have any present
intention to terminate the employment of any of its officers or employees.
3.13. Material Agreements. Schedule 3.13 hereto sets forth a true and
correct list of all contracts and other agreements (as defined in Section 12.2
hereto) to which Seller is a party or by or to which any of Seller's properties
are bound or subject which (i) requires payments or performance having a stated
value in excess of $50,000 in any 12-month period or $75,000 in the aggregate;
(ii) has not been made in the ordinary course of business or the performance of
which, by its terms, extends over a period greater than ninety (90) days and is
not cancelable by Seller at any time without penalty; (iii) is an employment,
consulting, non-competition or indemnification agreement; (iv) is a franchise,
distributorship, licensing, supply or sales agency agreement; (v) is an
agreement providing for the sale, acquisition or lease of any properties of
Seller other than in the ordinary course of business; (vi) is a mortgage,
pledge, security agreement or other similar agreement with respect to any
tangible or intangible property of Seller; (vii) is a loan agreement, credit
agreement, promissory note, guaranty, letter of credit or any other similar type
of agreement; (viii) is a retainer agreement with attorneys, accountants,
investment bankers or other professional advisers; (ix) is an agreement with any
governmental authority; (x) is an agreement relating to a patent, trademark,
copyright or other item of Intellectual Property (as defined in Section 3.16
hereof) of Seller; (xi) is an agreement referred to in Section 3.23 hereof or is
otherwise material to the operations, business or financial condition of Seller;
or (xii) is a commitment or agreement to enter into any of the foregoing
(collectively, "Material Agreements"). True and correct copies of all Material
Agreements have been delivered to Buyer and each Material Agreement is a valid
agreement, in full force and effect and Seller is in compliance with all the
provisions of each such Agreement and no other party thereto is, to Seller's
knowledge, in default thereunder.
7
3.14. Real Estate. Seller does not own, in fee or otherwise, or have the
right or obligation to acquire any real property or buildings. Schedule 3.14
hereto sets forth all leases, subleases or other agreements under which Seller
has the right to use or occupy any real property. True and correct copies of
such leases, subleases and other agreements have been delivered to Buyer and
each is a valid agreement, in full force and effect and Seller is in compliance
with all the provisions of each such agreement and no other party thereto is, to
Seller's knowledge, in default thereunder.
3.15. Accounts and Notes Receivable; Payables. All accounts and notes
receivable reflected on the Financial Statements have arisen from bona fide
transactions in the ordinary course of business and are good and fully
collectible in the ordinary course of business at the aggregate recorded amounts
thereof on the Financial Statements, net of any applicable reserve for doubtful
accounts reflected on the Interim Balance Sheet, which reserve is adequate and
has been calculated in accordance with GAAP consistent with past practice. All
accounts and notes receivable of Seller that arose after September 30, 1999
through the date hereof and which will arise after the date hereof through the
Closing Date are (or will be) the result of bona fide transactions in the
ordinary course of business and are (or will be) good and fully collectible in
the ordinary course of business at the aggregate recorded amounts thereof, net
of any applicable reserve for doubtful accounts, which reserve is (or will be)
adequate and calculated in a manner consistent with past practice. There are no
recoupments, set-offs or counterclaims in respect of any such receivables. All
accounts payable of Seller, as reflected on the Financial Statements or arising
after the date thereof, are the result of bona fide transactions in the ordinary
course of business consistent with past practice and have been paid or are not
yet due and payable.
3.16. Intellectual Property. Schedule 3.16 hereto sets forth all United
States and foreign patents, patent applications, service marks, trade names,
assumed names, trademarks, brands, copyrights, whether registered or
unregistered or existing under statute or common law, and all registrations,
applications and licenses to use any of the foregoing, owned or used by Seller
in the conduct of its business (the "Intellectual Property"). Seller has full
right, title and interest in and to all of such Intellectual Property, free and
clear of any Lien and no third party has any ownership right, title, interest,
claim in or Lien on any of the Intellectual Property. Seller has not granted or
assigned to any other person or entity any right to sell the products or
proposed products or to provide the services or proposed services of Seller.
None of the Intellectual Property nor, to Seller's knowledge, any product,
formula, formulation, process, method, know-how, substance, part or other
material relating to such Intellectual Property or otherwise being used in the
businesses of Seller infringes upon or violates any rights owned or held by any
other person. There is not pending, nor, to Seller's knowledge, threatened, any
claim, suit or action contesting or challenging the rights of Seller in or to
any Intellectual Property or the validity of any of the Intellectual Property.
To Seller's knowledge, there is no infringement upon or unauthorized use of any
of the Intellectual Property by any third party. There is no liability or
obligation of Seller to pay amounts for the use of any of the Intellectual
Property pursuant to any license or otherwise, and, except as set forth on
Schedule3.16, none of the Intellectual Property is licensed by or to Seller or
any of its affiliates or associates (each as defined in Section 12.2 hereof).
Seller has not received any notice or other communication indicating that any of
8
the letters patent, service marks or trademarks included in the Intellectual
Property are invalid. No officer, director, stockholder or affiliate of Seller
nor any of their respective associates has any right to or interest in any of
the Intellectual Property, including, without limitation, any right to payments
(by royalty or otherwise) in respect of any use or transfer thereof. All fees or
other amounts due to any governmental authority in respect of the Intellectual
Property, including any amounts payable in respect of filings, registrations
and/or renewals have been, and will be through the Closing Date, fully and
timely paid. All prior art known to Seller which may be or may have been
pertinent to the examination of any United States patent or patent application
listed on Schedule 3.16 has been cited to the United States Patent and Trademark
Office. To Seller's knowledge, all technical information developed by and
belonging to Seller which has not been patented has been kept confidential.
3.17. Title. Seller has good title to all of its properties and assets,
including the properties and assets reflected as assets on the Financial
Statements and those not so reflected on the 1998 Financial Statements because
not required to be reflected thereon, but which are used or useful in Seller's
business, or because acquired by Seller since September 30, 1999 (except those
disposed of in the ordinary course of business consistent with past practice
since the Seller's inception), free and clear of any Lien, except (i) as set
forth on Schedule 3.17 hereto (certain of which Liens, as designated therein,
shall be discharged and released as of the Closing Date (the "Discharged
Liens")); (ii) Liens for Taxes not yet due and payable; and (iii) Liens of
materialmen, mechanics, carriers, landlords and like persons which are not due
and payable or which are being contested in good faith and which are not
material in the aggregate. Other than solely through ownership of the shares of
Common Stock, no third party owns or has any rights to any assets, know-how or
other properties (tangible or intangible) presently used or contemplated to be
used in connection with or relating to Seller's business.
3.18. No Undisclosed Liabilities. At the time of the Closing, Seller shall
have no Liabilities, including guarantees and indemnities by Seller of
Liabilities of any other person, except (i) Liabilities as and to the extent
reflected on the Financial Statements; and (ii) Liabilities incurred by Seller
since September 30, 1999 (none of which is a Liability for breach of contract,
breach of warranty, tort, infringement, claim or lawsuit) in the ordinary course
of business consistent with past practice and in accordance with the provisions
of the Agreement and are properly reflected on the books of Seller. Seller is
not obligated under any contract or other agreement or subject to any Law,
charter or other corporate restriction which does or could reasonably be
expected to materially adversely affect Seller's business, properties, assets,
prospects or condition (financial or otherwise).
3.19. Inventories. All items of inventory reflected on the Financial
Statements and acquired by Seller since September 30, 1999 consist of a quantity
and quality usable and salable in the ordinary course of business, except for
obsolete or defective materials, all of which have been written down to net
realizable value or have been adequately reserved against on the books and
records of Seller (and on the Financial Statements, to the extent applicable) in
accordance with GAAP consistently applied, and are reflected on such books and
records at the lower of cost or market value, the cost thereof being determined
on a first-in, first-out basis in accordance with GAAP consistently applied.
9
3.20. Employee Benefit Plans. Schedule 3.20 hereto contains a true and
complete list of all pension, profit sharing, retirement, deferred compensation,
incentive, bonus, severance, disability, hospitalization, medical insurance,
life insurance and other employee benefit plans, programs or arrangements
maintained by Seller (or any affiliate thereof) or under which Seller (or any
affiliate thereof) has any obligations (other than obligations to make current
wage or salary payments) in respect of, or which otherwise cover, any of the
employees of Seller or their beneficiaries (each individually, an "Employee
Benefit Plan" and collectively, the "Employee Benefit Plans"). Seller has
delivered to Buyer true and complete copies of all documents, as they may have
been amended to the date hereof, embodying the Employee Benefit Plans. All
Employee Benefit Plans have complied in all material respects in form, operation
and administration with their respective provisions, any applicable provisions
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
the Code, and all other applicable laws and regulations. All contributions to
and payments from the Employee Benefit Plans which have been required to be made
in accordance with the provisions of the Employee Benefit Plans and, where
applicable, ERISA and the Code have been made or are adequately accrued and
reflected on the books and records of Seller. There are no unfunded Liabilities
in respect of any such Plan. Neither Seller, nor any of its officers, employees
or agents has committed any breach of fiduciary responsibility with respect to
the Employee Benefit Plans to which ERISA is applicable which could subject
Buyer or Seller to any Liability under ERISA. A maximum aggregate of 2,788,750
shares of Common Stock are reserved and/or eligible to be issued pursuant to all
stock option, stock appreciation, stock grant or similar plans of Seller, which
shares may be granted or issued only to employees, directors or consultants of
Seller.
3.21. Insurance. Schedule 3.21 hereto sets forth a true and complete list
and general description of all policies or binders of fire, liability, product
liability, workmen's compensation, vehicular, business interruption or other
insurance held by or on behalf of Seller (true and complete copies of all of
which policies and binders have been delivered to Buyer) specifying the insurer,
the policy number or covering note number with respect to binders, and
describing any pending claim(s) thereunder. All of such policies and binders are
in full force and effect, and provide adequate coverage for the properties and
operations conducted by Seller. Seller is not in default with respect to any
provision contained in any such policy or binder and has not failed to give any
notice or present any claim under any such policy or binder in accordance with
its terms. Seller has not received or given a written notice of cancellation or
non-renewal with respect to any such policy or binder.
3.22. No Misrepresentations. Neither this Agreement (including the
Schedules hereto), nor any certificate or document otherwise supplied by or on
behalf of Seller to Buyer in connection herewith, contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to Seller which
materially adversely affects the business, properties, prospects or financial
condition of Seller which has not been set forth in this Agreement (including
the Schedules hereto) or in the other documents or certificates furnished to
Buyer by or on behalf of Seller.
10
3.23. Transactions with Related Parties. Except as set forth on Schedule
3.23 hereto, no director, officer or affiliate of Seller nor any of their
respective associates: (i) has borrowed money from or loaned money to Seller
which has not been repaid; (ii) has any contractual, tort or other claim,
express or implied, of any kind whatsoever against Seller; (iii) has or has had,
since Seller's inception, an interest in any property, rights or assets owned
and/or used by Seller in its business; or (iv) is party to a contract or other
agreement with Seller or is engaged in any material transaction or arrangement
with Seller.
3.24. Environmental Matters. Seller has: (i) complied in all material
respects with all Environmental Laws; (ii) not received any notice that any real
property now or formerly owned, leased, managed, operated or otherwise used by
it is on any Federal, state or foreign "superfund" or similar list or has been
the site of any activity giving rise to any Liability; (iii) not received any
notice of any Environmental Claim (as defined in Section 12.2 hereof); and (iv)
stored, handled, used, released, discharged and disposed of all substances used
in its operations and wastes or by-products from its operations, whether
Hazardous Materials (as defined in Section 12.2 hereof) or not, in compliance
with all Environmental Laws. No Hazardous Materials or other substances or
wastes have been spilled, released, discharged or disposed of from, on or under
any property owned, leased or operated by Seller during its occupancy and use.
Seller has no Liability with respect to the clean-up or remediation of any
treatment, storage or disposal site or facility. Seller has provided to Buyer
true and complete copies of all environmental and Hazardous Materials reports,
studies and assessments in its possession or control with respect to its owned,
leased or operated real properties and/or any land adjacent thereto.
3.25. Authorization of Shares. Authorization of the Shares to be received
by Buyer has been duly authorized by all requisite corporate action of Seller,
and when issued, sold and delivered in accordance with this Agreement, the
Shares will be duly and validly issued, fully paid and non-assessable and not
subject to any preemptive, first refusal or other similar rights of any
stockholder of Seller or others.
3.26. Offering Exemption. The offering and sale of the Shares is exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act"). The aforesaid offering, sale and issuance is also either exempt from
registration under applicable state securities and "Blue Sky" laws or will be
exempt upon the timely filing of notices with the appropriate states, or have
been registered under applicable state securities laws.
3.27. Intermediaries. In the event that the Seller or the Buyer,
respectively, has engaged any intermediary to assist in bringing the parties
together for the purpose of exploring and/or consummating the transactions
contemplated by this Agreement, the party that engaged any such intermediary
will be solely responsible for any compensation due to that intermediary. The
Seller and Buyer each agrees to indemnify and hold each other harmless from and
against claims brought or threatened by an intermediary engaged by the other
(including reasonable attorneys' fees and costs). To the extent not
inconsistent, the indemnification rights in this Section 3.27 shall be applied
in accordance with Section 9 hereof.
11
3.28. Registration Rights. Except as set forth on Schedule 3.28 attached
hereto and as provided by this Agreement, no person has any right to cause
Seller to effect, or to participate in, the registration under the Securities
Act of any shares of Common Stock or any other securities (including, without
limitation, debt securities) of Seller.
3.29. Real Property Holding Corporation. Seller is not now and never has
been a "United States real property holding corporation," as defined in Section
897(c)(2) of the Code and Treasury Regulation 1.897-2(b) promulgated thereunder,
and Seller has filed with the Internal Revenue Service all statements, if any,
with its U.S. income tax returns that are required under Section 1.897-2(h) of
such regulations.
3.30. Investment Company Act. Seller is not an "investment company", as
that term is defined in, and is not otherwise subject to regulation under, the
Investment Company Act of 1940.
3.31. Security Interests; Indebtedness. Except as set forth on Schedule
3.31 attached hereto, none of Seller's collateral is subject to any Liens. In
addition, as of the date hereof Seller has no Indebtedness (as defined in
Section 12.2 hereof).
3.32. Disclosure Schedules. All Schedules to this Agreement are integral
parts to this Agreement. Nothing in a Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made herein, unless the
Schedule identifies the exception with reasonable particularity and describes
the relevant facts in reasonable detail. Seller is responsible for preparing and
arranging the Schedules corresponding to the numbered sections contained herein.
4. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:
4.1. Due Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and has the
requisite company power and authority to own, lease and operate its assets and
properties and to carry on its business as presently conducted.
4.2. Power of Buyer. Buyer has the requisite company power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly executed and delivered by Buyer and is the valid
and binding obligations of Buyer, enforceable against Buyer in accordance with
their terms, except as such enforceability may be limited by bankruptcy,
moratorium, insolvency or other similar laws generally affecting the enforcement
of creditors' rights, specific performance, injunctive or other equitable
remedies.
4.3. No Breach. The execution, delivery and performance of this Agreement
by Buyer and the consummation of the transactions contemplated hereby will not
violate, conflict with or otherwise result in the breach of any of the terms and
conditions of, result in a material modification of or constitute (or with
notice or lapse of time or both would constitute) a default under (i) any of the
organizational documents of Buyer; (ii) any material instrument, contract or
other agreement to which Buyer is a party or by or to which it or any of its
properties is bound or subject; or (iii) any Law applicable to Buyer or any of
its properties or operations.
12
4.4. Governmental and Other Consents. No consent, approval or authorization
of, or declaration or filing with, any governmental authority or other person is
required on the part of Buyer in connection with the execution, delivery and
performance of this Agreement by it or the consummation of the transactions
contemplated hereby.
4.5. Investment Intent. Buyer acknowledges that the Shares are not, and are
not presently contemplated (subject to the registration rights contained herein)
to be, registered under the Securities Act, or any state securities laws. The
Shares are being (or will be) acquired by Buyer for investment purposes only and
not (subject to the registration rights contained herein) with a view to the
distribution thereof. Buyer has no present intention to sell or otherwise
dispose of the Shares except in compliance with the provisions of the Securities
Act and applicable law. Buyer understands that the Shares must be held by it
indefinitely unless a subsequent disposition or transfer of any of said Shares
is registered under the Securities Act or is exempt from registration therefrom.
Buyer further understands that the exemption from registration afforded by Rule
144 (the provision of which are known to Buyer) promulgated under the Securities
Act depends on the satisfaction of various conditions, and that, if and when
applicable, Rule 144 may afford the basis for sales only in limited amounts.
4.6. Information. Buyer (i) has such knowledge and experience in financial
and business affairs that it is capable of evaluating the merits and risks
involved in purchasing the Shares; and (ii) is able to bear the economic risks
involving in purchasing the Shares.
5. Covenants and Agreements.
5.1. Pre-Closing Covenants and Agreements. The parties hereto covenant and
agree to perform or take any and all such actions to effectuate the following
from the date hereof until the earlier of the Closing Date or the termination of
this Agreement:
(a) Ongoing Operations. Seller shall carry on its business diligently
and substantially in the same manner as heretofore conducted, and shall
not, except with Buyer's prior written consent: (i) declare, make or pay
any distributions or dividends on its Common Stock or any other equity
securities; (ii) make or grant any increases in salary or other
compensation or bonuses to employees or terminate any employee (other than
for good cause); (iii) make any material adjustment in wages or hours of
work; (iv) enter into or amend any agreement or transaction with any person
or entity who or which is an associate or an affiliate of Seller; (v)
permit or engage in any of the actions set forth in Section 3.23 hereof;
(vi) dissolve, merge, consolidate, or liquidate; (vii) acquire, exchange or
dispose of any property or assets, other than in the ordinary course of
business; (viii) take any action, or suffer any action to be taken, which
could cause any of the representations or warranties of Seller contained
herein not to be true and correct on and as of the Closing Date; (ix) issue
or grant any shares of Common Stock or other securities, whether or not
such are exercisable for, convertible into or exchangeable for shares of
Common Stock or such other securities; (x) except as specifically provided
by this Agreement, amend or repeal any of its Constituent Documents; (xi)
except as specifically provided by this Agreement, incur any Indebtedness
or permit any of its assets or property to become subject to any Lien;
(xii) make any material capital expenditure; (xiii) enter into, terminate
or amend any Material Agreement; or (xiv) enter into any agreement to take
any of the foregoing actions.
13
(b) Investigation by Buyer. Buyer may, through its representatives
(including, without limitation, its counsel, accountants and consultants),
make such investigations of the properties, offices and operations of
Seller and such review or audit of the financial condition of Seller as it
deems necessary or advisable in connection with the transactions
contemplated hereby, including, without limitation, any investigations
enabling it to familiarize itself with such properties, offices, operations
and financial condition; provided, that no unreasonable interference with
the normal business operations of Seller be thereby caused. Such
investigations shall not, however, affect or limit any of Seller's
representations, warranties and agreements hereunder. Seller shall permit
Buyer and its authorized representatives to have full access to the
premises and to all books and records of Seller, and Buyer shall have the
right to make copies thereof and excerpts therefrom. Seller shall furnish
Buyer with such financial, customer, supplier and operating data and other
information with respect to Seller as Buyer may from time to time
reasonably request.
(c) Further Assurances. Each of the parties hereto shall, prior to, on
or after the Closing, as may be appropriate, execute such documents and
other papers and take such other further actions as may be reasonably
required to carry out the provisions hereof and effectuate the transactions
contemplated hereby. Each such party hereto shall use its best efforts to
fulfill or obtain the fulfillment of the conditions to the Closing,
including obtaining any Consents required in connection herewith.
(d) Expenses. Seller and Buyer shall, subject to the penultimate
sentence of Section 11 hereof, bear their respective expenses incurred in
connection with the negotiation, preparation, execution and performance of
this Agreement and the consummation of the transactions contemplated
hereby, whether or not the transactions contemplated hereby are
consummated, including, without limitation, all fees and expenses of
agents, representatives, counsel, brokers or finders, and accountants.
(e) Additional Disclosure. Seller shall promptly notify Buyer of, and
furnish Buyer with, any information it may reasonably request with respect
to the occurrence of any event or condition or the existence of any fact
that would cause any of the conditions to Buyer's obligation to consummate
the transactions contemplated by this Agreement not to be fulfilled. In
addition, any contract or other agreement of Seller entered into between
the date hereof and the Closing Date that would have been required to be
listed on Schedule 3.13 hereto if entered into prior to the date hereof
shall be delivered to Buyer by Seller promptly after being entered into and
shall be deemed to be a Material Agreement for all purposes of this
Agreement.
14
5.2. Post-Closing Covenants and Agreements. Buyer and Seller covenant and
agree from and after the Closing Date to perform or take the following actions:
(a) Price Protection. In the event that Seller shall at any time after
the Closing Date grant or issue to any person (other than, subject to
Section 5.2, pursuant to stock or options to be granted pursuant to a plan
approved by Seller's Board of Directors to employees or consultants of
Seller to purchase up to a maximum aggregate amount equal to 3,000,000
shares of Common Stock) shares of Common Stock or issue any securities
convertible into or exchangeable for shares of Common Stock where the per
share consideration paid for such securities is less than the per share
price (appropriately adjusted for any stock splits, reverse stock splits,
stock dividends, combinations, subdivisions or other similar
recapitalizations of Seller's Common Stock) paid by Buyer for the Shares
after giving effect to any issuances covered by this Section 5.2, Seller
shall issue to Buyer (without any additional consideration therefor), such
number of additional shares of Common Stock as would result in the price
paid by Buyer per share of Common Stock (including the additional shares of
Common Stock to be issued under this Section 5.2) being equal to the
weighted average of the prices paid for shares of Common Stock by Buyer and
such other person.
(b) Registration Rights.
(i) Demand Registration. Buyer may, by written notice to Seller
(a "Demand Notice"), demand that Seller register for sale under the
Securities Act all or any portion of the Shares (or securities issued
in exchange therefor) held by Buyer (or its successor in interest) in
the amount and manner specified in the Demand Notice. Seller shall be
obligated to register securities pursuant to this Section 5.2(b)(i) on
one occasion only; provided, that such obligation shall be deemed
satisfied only when a registration statement covering all registrable
securities specified in the Demand Notice shall have become effective.
(ii) Piggyback Registration. If, during any time that Buyer owns
any Shares (or securities issued in exchange therefor), Seller shall
determine to register for its own account or the account of others
under the Securities Act any of its equity securities, it shall send
to Buyer (or its successor in interest) written notice of such
determination and, if within twenty (20) days after receipt of such
notice, Buyer (or its successor in interest) shall so request in
writing, Seller shall include in such registration statement all of
the Shares (or securities issued in exchange therefor) held by, or
which upon payment of Installment Payments will be held by, Buyer (or
its successor in interest), and requested to be registered by Buyer.
Notwithstanding the foregoing, in the event that any registration
shall be in whole or in part an underwritten offering, the number of
registrable securities to be included in such an underwriting may be
reduced (pro rata among the Buyer and its assigns and the holders of
the other registrable securities contemplated being included in such
registrations based on the number of registrable securities requested
to be registered by each of them) if and to the extent that the
managing underwriter shall be of the good faith opinion (expressed in
writing) that such inclusion would reduce the number of registrable
securities to be offered by Seller or otherwise adversely affect such
offering. Nothing herein shall be construed so as to require Seller,
in connection with any proposed offering, to engage the services of an
underwriter, as, for example, if Seller shall file a registration
statement under Rule 415 of the Securities Act without the services or
engagement of any underwriter. This "piggy-back" registration right
shall not apply to an offering of equity securities of Form S-4 or S-8
(or their then equivalent forms) relating to securities to be issued
solely in connection with an acquisition of any entity or business or
securities issuable in connection with a stock option or other
employee benefit plan.
15
(iii) Registration Procedures. Whenever Seller is required by
this Section 5.2(b) to effect the registration of any securities under
the Securities Act, Seller will:
a. prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with
respect to such securities as expeditiously as possible after
delivery of a Demand Notice but in no event later than 90 days
after receipt of the Demand Notice, and use its best efforts to
cause such registration statement to become effective under the
Securities Act not later than 120 days from the date of the
Demand Notice. Such registration statement shall remain effective
for the lesser of 180 days or until all of Buyer's securities
included in such registration statement have been sold
("Requisite Period");
b. promptly prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to
keep such registration statement effective for the Requisite
Period and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement;
c. promptly furnish to Buyer and to each underwriter such
number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus) as Buyer
reasonably may request in order to facilitate the intended
disposition of the securities covered by such registration
statement;
d. use its best efforts (x) to register or qualify the
securities covered by such registration statement under the
securities or "Blue Sky" laws of such jurisdictions as Buyer or,
in the case of an underwritten public offering, the managing
underwriter reasonably shall request, (y) to prepare and file in
those jurisdictions such amendments (including post effective
amendments) and supplements, and take such other actions, as may
be necessary to maintain such registration and qualification in
effect at all times for the period of distribution contemplated
thereby and (z) to take such further action as may be necessary
or advisable to enable the disposition of the securities covered
by such registration statement in such jurisdictions; provided,
that Seller shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
e. use its best efforts to list the securities covered by
such registration statement with any securities exchange on which
the Common Stock is then listed, or, if the Common Stock is not
then listed on a national securities exchange, use its best
efforts to facilitate the reporting of the Common Stock on The
NASDAQ Stock Market;
16
f. immediately notify Buyer and, if applicable, each
underwriter participating in the offering covered by such
registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of
the happening of any event of which Seller has knowledge as a
result of which the prospectus contained in such registration
statement, as then in effect, includes any untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing and
promptly amend or supplement such registration statement to
correct any such untrue statement or omission;
g. immediately notify Buyer of the issuance by the
Commission of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for
that purpose and use its best effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible time;
h. permit, at Seller's expense subject to the immediately
succeeding proviso, a single firm of counsel and a single
accounting firm designated by Buyer to review the registration
statement and all amendments and supplements thereto for a
reasonable period of time prior to their filing; provided,
however, that in no event shall Seller be required to reimburse
Buyer for legal and accounting fees in excess of $25,000 per
registration statement and Seller shall not file any document in
a form to which such counsel reasonably objects;
i. if the offering is an underwritten offering, enter into a
written agreement with the managing underwriter in such form and
containing such provisions as are usual and customary in the
securities business for such an arrangement between such
underwriter and companies of Seller's size and investment
stature, including, without limitation customary indemnification
and contribution provisions;
j. if the offering is an underwritten offering, at the
request of Buyer, use its best efforts to furnish to Buyer on the
date that securities are delivered to the underwriter(s) for sale
pursuant to such registration: (x) a copy of an opinion dated
such date of counsel representing Seller for the purposes of such
registration, addressed to the underwriter(s), reasonably
satisfactory to Buyer and such underwriter(s) and (y) a copy of a
letter dated such date from the independent public accountants
retained by Seller, addressed to the underwriter(s), reasonably
satisfactory to Buyer and such underwriter(s);
k. make available for inspection by Buyer, any underwriter
participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained
by Buyer or underwriter, all financial and other records,
pertinent corporate documents and properties of Seller, and cause
Seller's officers, directors and employees to supply all
information reasonably requested by Buyer, or such underwriter,
attorney, accountant or agent in connection with such
registration statement;
l. provide a transfer agent and registrar, which may be a
single entity, for the securities not later than the effective
date of the registration statement;
17
m. take all actions reasonably necessary to facilitate the
timely preparation and delivery of certificates (not bearing any
legend restricting the sale or transfer of such securities)
representing the securities to be sold pursuant to the
registration statement and to enable such certificates to be in
such denominations and registered in such names as Buyer or any
underwriter may reasonably request; and
n. take all other reasonable actions necessary to expedite
and facilitate the registration of the securities pursuant to the
registration statement.
(iv) Registration Expenses. All expenses incurred by Seller in
complying with this Section 5.2(b), including, without limitation, all
registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants, fees and
expenses (including counsel fees) incurred in connection with
complying with state securities or "Blue Sky" laws, fees of the
National Association of Securities Dealers, Inc., fees of transfer
agents and registrars and legal and accounting fees and disbursements
of up to $25,000 for Buyer shall be borne by Seller.
(v) Other Agreements. In connection with any registration
pursuant to this Section 5.2(b), Buyer and Seller hereby agree to
execute such agreements as are usual and customary in a transaction of
this nature, including, without limitation, agreements relating to
hold-back periods (for both Buyer and Seller), indemnification and
contribution.
(c) Pre-emptive Rights. At any time prior to issuing additional shares of
Common Stock (or any security convertible into or exchangeable for Common Stock)
(the "Proposed Issuance"), other than up to a maximum of 3,000,000 shares of
Common Stock issuable pursuant to any of Seller's stock option, stock
appreciation, stock grant or similar plans, Seller shall first offer to Buyer
(or its successor in interest) the right to subscribe to such Proposed Issuance,
in the following manner:
Seller shall give prompt written notice to Buyer and any other stockholder
who, at the time of such Proposed Issuance, has a similar pre-emptive right
(the "Pre-emptive Stockholders"), if any, stating the amount and the terms
and conditions of the Proposed Issuance;
(y) For ten (10) calendar days after the receipt of such written
notice by Buyer, Buyer shall have the right to subscribe to purchase
such number of the additional shares of Common Stock (or any security
convertible into or exchangeable for Common Stock) as it requests in
writing but not to exceed the amount determined by multiplying the
aggregate additional shares of Common Stock (or any security
convertible into or exchangeable for Common Stock) offered by the
quotient of (x) the sum of the Shares (or if all of the Installment
18
Payments have not as of such date been fully made, the maximum number
of shares of Common Stock which may be obtained by Buyer upon payment
of all such Installment Payments) divided by (y) all of Seller's
outstanding shares of Common Stock (including for this purpose if all
of the Installment Payments have not as of such date been fully made,
the maximum number of shares of Common Stock which may be obtained by
Buyer upon payment of all such Installment Payments). Buyer may
purchase any portion of the Proposed Issuance only on the same terms
and conditions as such additional shares of Common Stock (or any
security convertible into or exchangeable for Common Stock) are sold
by Seller to other parties; and
(z) To the extent any Pre-emptive Stockholder shall not purchase the
entire amount of shares of Common Stock to which such Pre-emptive
Stockholder is entitled to purchase in the Proposed Issuance (the
"Refused Shares"), then Seller shall give prompt written notice to
Buyer of the aggregate amount of Refused Shares and for ten (10)
calendar days after receipt of such second written notice Buyer shall
be entitled to purchase an amount of Refused Shares not to exceed the
amount determined by multiplying the aggregate Refused Shares by the
quotient of (x) the number of shares of Common Stock owned by Buyer,
or to be owned by Buyer upon payment of all Installment Payments,
after giving effect to any shares purchased pursuant to clause (y) of
this Section 5.2(g) in the Proposed Issuance (collectively, the
"Aggregate Buyer's Shares") by (y) the sum of the Aggregate Buyer's
Shares plus the number of shares held by all Pre-emptive Stockholders
who exercised rights under clause (y) of this Section 5.2(g) (after
giving effect to any shares so purchased).
(d) Use of Proceeds. The net proceeds received by Seller from the sale of
the Shares shall be used by Seller substantially for the purposes of working
capital and for such other purposes as Buyer may expressly consent to in
writing.
(e) Non-Disclosure and Confidentiality Agreements. Seller shall cause each
current director, employee and consultant of Seller, within ten (10) days of the
19
date hereof, and shall cause each person who becomes a director, employee or
consultant of Seller subsequent to the date hereof, to execute an agreement
relating to matters of non-disclosure, non-competition and confidentiality, in a
form reasonably satisfactory to Buyer.
(f) Rule 144A Information. Seller shall, at all times during which it is
neither subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor exempt
from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, provide in
writing, upon the written request of Buyer or a prospective buyer of Shares from
Buyer all information required by Rule 144A(d)(4)(i) of the General Regulations
promulgated by the Commission under the Securities Act (the "Rule 144A
Information"). Seller shall also, upon the written request of Buyer, cooperate
with and assist Buyer or any member of the National Association of Securities
Dealers, Inc. PORTAL System in applying to designate and thereafter maintain the
eligibility of the Shares for trading through PORTAL. Seller's obligations under
this Section 5.2(f) shall at all times be contingent upon Buyer's obtaining from
any prospective third party buyer of Shares a written agreement to take all
reasonable precautions to safeguard the Rule 144A Information from disclosure to
anyone other than a person who will assist such third party buyer in evaluating
the purchase of any such Shares.
(g) Rule 144. Seller covenants that (i) at all times after Seller first
becomes subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, Seller will use its best efforts to comply with the current public
information requirements of Rule 144(c)(1) under the Securities Act, (ii) if
prior to becoming subject to such reporting requirements an over-the-counter
market develops for the Common Stock, Seller will use its best efforts to make
publicly available the information required by Rule 144(c)(2) under the
Securities Act and (iii) at all such times as Rule 144 is available for use by
the holder(s) of Shares, Seller will furnish each such holder upon request with
all information within the possession of Seller required for the preparation and
filing of Form 144 (or any successor or similar form promulgated under the
Securities Act).
(h) Financial Reports. Seller covenants and agrees that, from the date
hereof through the closing of a Designated Offering, it shall furnish Buyer with
the following:
(i) Quarterly Reports. As soon as practicable, and in any case within
45 days after the end of each calendar quarter, quarterly unaudited
financial statements all prepared in accordance with GAAP consistently
applied, including (x) an unaudited balance sheet as of the last day of
such quarter, (y) an unaudited statement of income for such quarter and (z)
a cash flow statement for such quarter. The foregoing financial statements
shall be certified by the President or Chief Financial Officer of Seller to
the effect that such statements fairly present the financial position and
financial results of Seller as at and for the fiscal period covered and
shall be accompanied by a written explanation and analysis of any
significant problems, events and achievements, and a commentary on
developing changes in the business outlook of Seller, together with a
statement as to their anticipated effect on future operations.
20
(ii) Annual Reports. As soon as practicable, and in any case within 75
days after the end of each fiscal year (beginning with the fiscal year
ending September 30, 2000), a balance sheet as of the end of such fiscal
year, a statement of income and a statement of cash flows of Seller for
such year, setting forth in each case in comparative form the figures from
Seller's previous fiscal year, all prepared in accordance with GAAP
consistently applied and audited by the independent auditor of Seller.
(iii) Other Information. Promptly, such other information regarding
the business, prospects, financial condition, operations, property or
affairs of Seller as Buyer reasonably may request from time to time.
(i) Board Representation. Immediately following the Effective Date, Seller
shall take such corporate or other actions as may be necessary so that Seller's
Board of Directors (the "Board") shall consist of five members. Buyer, upon the
Effective Date, and for so long as Buyer (or its successor in interest) shall
own at least 19.9% of the outstanding Common Stock, shall be entitled to
designate at least one -fifth of the Board. For so long as Buyer owns more than
20% or more of the outstanding Common Stock, Buyer (or its successor in
interest) shall be entitled to designate at least two-fifths of the Board.
Seller shall use its best efforts to cause any person(s) designated by Buyer to
serve on the Board to be elected to the Board. Except for any removal for
"cause" as defined under applicable law, any director designated by Buyer may be
removed or replaced only with the prior written consent of Buyer. Any director
designated by Buyer who shall either resign, die or become unable or unwilling
to serve shall be replaced with a candidate designated by Buyer. Seller shall
call, and use its best efforts to hold, regular meetings of the Board not less
often than quarterly; provided, however, that Buyer shall have the right to call
meetings of the Board and management of Seller, on no less than five business
days' notice, once each fiscal quarter. Seller shall pay all reasonable travel
expenses and other out-of-pocket disbursements of directors incurred by such
directors in connection with their attendance at such meetings. Seller's By-laws
shall be amended to provide that each director designated by Buyer shall be a
member of all committees of the Board established and maintained from time to
time. Seller agrees to indemnify its directors to the full extent of the law and
to obtain and maintain in full force and effect directors' and officers'
liability insurance coverage covering the directors (including the director(s)
designated by Buyer) in an amount not less than $1,000,000.
(j) Required Consents. Seller may not, during the period beginning on the
Effective Date and for so long as Buyer (or its successor in interest) shall own
at least 19.9% of the outstanding Common Stock, (except as otherwise indicated),
take any of the following actions without the consent or approval of Buyer's
designee(s)); provided, that if at the time of such proposed action Seller, for
any reason whatsoever, shall not have on its Board a person who was designated
by Buyer, then Seller may not take the following actions without the prior
written consent of Buyer (which consent may be withheld, delayed or conditioned
in Buyer's sole discretion):
(i) any amendment of this Agreement or amendment or repeal of any
Constituent Document which is adverse to Buyer; or
(ii) setting the number of members of the Board at any number other
than five (5).
21
6. Conditions Precedent to the Obligation of Buyer to Close. The obligation
of Buyer to complete the Closing is subject to the fulfillment on or prior to
the Closing Date:
6.1. Agreements and Conditions. On or before the Closing Date, Seller shall
have complied with and duly performed in all material respects all agreements
and conditions on its part to be complied with and performed by such date
pursuant to this Agreement.
6.2. Approvals. On or before the Closing Date, the Seller shall have sought
and obtained any necessary approvals as to the sale of the Shares to Buyer and
the resulting change in control of the Seller, so as to satisfy any state law
control share act requirements, and such other matters as may be necessary to
effectuate the transactions contemplated hereby.
6.3. Representations and Warranties. The representations and warranties of
Seller contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made on and as of the Closing Date.
6.4. Loss, Damage or Destruction. Between the date hereof and the Closing
Date there shall not have been any loss, damage or destruction to or of any of
the assets, property or business of Seller in excess of $50,000 in the
aggregate, whether or not covered by insurance, nor shall the assets,
properties, business or prospects of Seller have been adversely affected in any
significant way as a result of any fire, accident, or other casualty, war, civil
strife, riot or act of God or the public enemy or otherwise.
6.5. No Legal Proceedings. No court or governmental action or proceeding
shall have been instituted or threatened to restrain or prohibit the
transactions contemplated hereby. Additionally, on the Closing Date there shall
be no court or governmental action or proceeding pending or threatened against
or affecting Seller which involves a demand for any judgment or recovery,
whether or not covered by insurance, and which may result in any material
adverse change in the business, operations, properties or condition, financial
or otherwise, of Seller.
6.6. Certificate. Buyer shall have received a certificate dated the Closing
Date and executed by a duly authorized executive officer of Seller that the
conditions expressed in Sections 6.1, 6.2 and 6.3 have been fulfilled.
6.7. Consents. Seller shall have obtained all Consents necessary to
effectuate this Agreement and to consummate the transactions contemplated hereby
and delivered copies thereof to Buyer.
6.8. Assignment of Intellectual Property. All officers, directors and key
employees of Seller shall have executed and delivered to Seller an unconditional
and irrevocable assignment of all of their rights to and interests in any
intellectual property, including, without limitation, all United States and
foreign patents, patent applications, service marks, inventions, formula, trade
secrets, trade names, trademarks, brands, copyrights, whether registered or
unregistered or under statute or common law, and all registrations, applications
and licenses to use any of the foregoing, which relate to or may be used by
Seller in the conduct of its business as currently conducted by Seller or as
reasonably contemplated by the parties to be conducted.
22
6.9. Certificates of Status. Buyer shall have received a certificate from
the Secretary of the State of Florida, dated within five (5) days of the Closing
Date, certifying that Seller is in good standing in such jurisdiction.
6.10. Consent and Waiver of Shareholder and Other Rights. Buyer shall have
received evidence reasonably satisfactory to it that all preemptive rights,
anti-dilution rights, voting rights, rights of first refusal or other
shareholder rights held by any stockholder of Seller that are or may be created
or triggered as a result of the execution and delivery, and/or consummation of
the transactions contemplated by, this Agreement have been irrevocably and
unconditionally waived in writing and such stockholders shall have consented to
Seller's execution and delivery of, and its consummation of the transactions
contemplated by, this Agreement.
6.11. Confidentiality Agreements. Buyer shall have received evidence
reasonably satisfactory to it that all directors, employees and consultants of
Seller have executed confidentiality, non-compete or non-disclosure agreements
in form and substance reasonably satisfactory to Buyer.
6.12. Due Diligence. Buyer shall have completed and been satisfied with the
results of its legal, business and accounting due diligence review of Seller.
6.13. Closing Share Stock Certificate(s). Buyer shall have received a stock
certificate or certificates registered in its (or its nominee's) name evidencing
the Shares.
7. Conditions Precedent to the Obligations of Seller to Close. The
obligations of Seller to complete the Closing are subject to the fulfillment on
or prior to the Closing Date of all of the following conditions:
7.1. Agreements and Conditions. On or before the Closing Date, Buyer shall
have complied with and duly performed in all material respects all agreements
and conditions on its part to be complied with and performed by such date
pursuant to this Agreement.
7.2. Representations and Warranties. The representations and warranties of
Buyer contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made on and as of the Closing Date.
7.3. No Legal Proceedings. No court or governmental action or proceeding
shall have been instituted or threatened to restrain or prohibit the
transactions contemplated hereby.
7.4. Certificate. Seller shall have received a certificate dated the
Closing Date and executed by an authorized executive officer of Buyer that the
conditions expressed in Sections 7.1, 7.2 and 7.3 have been fulfilled.
23
7.5. Payment of Purchase Price. Buyer shall have paid the Purchase Price.
8. Survival of Representations and Warranties of Seller. Notwithstanding
any right of Buyer fully to investigate the affairs of Seller, Buyer has the
right to rely upon the representations, warranties, covenants and agreements of
Seller contained in this Agreement. All representations and warranties contained
in this Agreement (including the Schedules hereto) and in any certificate
required hereby to be delivered with respect hereto will be deemed to be
representations and warranties hereunder and, except for those representations
and warranties contained in Sections 3.2, 3.3, 3.7, 3.8, 3.24 and 3.33 hereof,
shall survive for twenty-four (24) months following the Closing Date. The
representations and warranties contained in Sections 3.2, 3.3, 3.7 and 3.33
hereof shall survive the Closing Date indefinitely and the representations and
warranties contained in Sections 3.8 and 3.24 hereof shall survive until the
expiration of any applicable statute of limitations. No claim or cause of action
resulting from a breach of any representation or warranty hereunder may be
asserted unless asserted in writing to the party as to which or whom there is
alleged a breach of representation or warranty prior to the expiration of the
applicable survival period; provided, however, that all such representations and
warranties shall survive after the applicable survival period with respect to
any claim so made in writing by a party hereto prior to the expiration thereof
until, and shall expire when, such claim is finally resolved.
9. Indemnification.
9.1. Obligation of Seller to Indemnify. Subject to the limitations and
expiration dates contained in Section 8 hereof and to this Section 9, Seller
shall, indemnify, defend and hold harmless Buyer and its directors, officers,
equity holders, agents, affiliates, successors and permitted assigns
(collectively, "Buyer's Related Indemnitees") or each of them from and against,
and shall pay and/or reimburse the foregoing persons for, any and all losses,
liabilities, claims, obligations, damages and costs and expenses (including
reasonable attorneys' fees and disbursements and other costs incurred or
sustained by an Indemnitee (as defined below) in connection with the
investigation, defense or prosecution of any such claim or any action or
proceeding between the Indemnitee and the Indemnifying Party (as defined below)
or between the Indemnitee and any third party or otherwise), whether or not
involving a third-party claim (collectively, "Losses"), relating to or arising
out of the breach of any representation, warranty, covenant or agreement of
Seller hereunder.
9.2. Obligation of Buyer to Indemnify. Subject to the limitations and
expiration dates contained in Section 8 hereof and to this Section 9, Buyer
shall indemnify, defend and hold harmless Seller and its directors, officers,
shareholders, agents, affiliates, successors and permitted assigns from and
against, and shall pay and/or reimburse the foregoing persons for, any and all
Losses relating to or arising out of the breach of any representation, warranty,
covenant or agreement of Buyer contained in this Agreement.
9.3. Notice to Indemnifying Party. If any party (the "Indemnitee") receives
notice of any claim or the commencement of any action or proceeding with respect
to which the other party (or parties) is obligated to provide indemnification
(the "Indemnifying Party") pursuant to Sections 9.1 or 9.2 hereof, the
Indemnitee shall give the Indemnifying Party written notice thereof within a
reasonable period of time following the Indemnitee's receipt of such notice.
Such notice shall describe the claim in reasonable detail and shall indicate the
amount (estimated if necessary) of the Losses that have been or may be sustained
24
by the Indemnitee. The Indemnifying Party may, subject to the other provisions
of this Section 11.3, compromise or defend, at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel, any such matter involving
the asserted liability of the Indemnitee in respect of a third-party claim. If
the Indemnifying Party elects to compromise or defend such asserted liability,
it shall within 30 days (or sooner, if the nature of the asserted liability so
requires) notify the Indemnitee of its intent to do so, and the Indemnitee,
shall reasonably cooperate, at the request and reasonable expense of the
Indemnifying Party, in the compromise of, or defense against, such asserted
liability. The Indemnifying Party will not be released from any obligation to
indemnify the Indemnitee hereunder with respect to a claim without the prior
written consent of the Indemnitee, unless the Indemnifying Party delivers to the
Indemnitee a duly executed agreement settling or compromising such claim with no
monetary liability to or injunctive relief against the Indemnitee and a complete
release of the Indemnitee with respect thereto. The Indemnifying Party shall
have the right to conduct and control the defense of any third-party claim made
for which it has been provided notice hereunder. All costs and fees incurred
with respect to any such claim will be borne by the Indemnifying Party. The
Indemnitee will have the right to participate, but not control, at its own
expense, the defense or settlement of any such claim; provided, that if the
Indemnitee and the Indemnifying Party shall have conflicting claims or defenses,
the Indemnifying Party shall not have control of such conflicting claims or
defenses and the Indemnitee shall be entitled to appoint a separate counsel for
such claims and defenses at the cost and expense of the Indemnifying Party. If
the Indemnifying Party chooses to defend any claim, the Indemnitee shall make
available to the Indemnifying Party any books, records or other documents within
its control that are reasonably required for such defense.
9.4. Adjustment to Indemnification. To the extent that Seller shall be
obligated to indemnify Buyer for Losses pursuant to this Section 9, in order to
reflect that Buyer is, or may become, an equity holder of Seller, the
determination of the amount of such Losses shall be adjusted by dividing the
amount of Losses (prior to giving effect to this provision) by the percentage of
the aggregate outstanding shares of Common Stock not held by Buyer (or its
successor). To the extent that the Installment Payments have not been completed
and all of the Shares have not been acquired, solely for purposes of the
determination set forth above, the Installment Payments shall be deemed to have
been made and all of the Shares shall be deemed to be held by Buyer as of the
date of any determination of Losses required to be made pursuant to this Section
9.4.
10. Intentionally Left Blank.
11. Termination. This Agreement may be terminated prior to the Closing:
(a) at any time by the mutual consent in writing of all the parties
hereto;
25
(b) by Buyer in writing if the Closing shall not have occurred by the
seventy-fifth day following the Effective Date;
(c) at any time by Buyer in writing upon a material breach of any of
the representations, warranties, covenants or agreements of Seller and/or
the Principal Shareholder contained in this Agreement; or
(d) at any time by Seller in writing upon a material breach of any of
the representations, warranties, covenants or agreements of Buyer contained
in this Agreement.
In the event of termination of this Agreement by Seller or Buyer as set
forth above, this Agreement shall forthwith terminate and there shall be no
liability on the part of Seller or Buyer, or any of their respective equity
owners, officers, directors, affiliates and employees; provided, that no party
shall be relieved of any Losses occurring or sustained as a result of a
termination following such party's material breach of any representation,
warranty, covenant or agreement contained in this Agreement. Notwithstanding any
termination of this Agreement, the provisions of Sections 5.1(d), 5.2(c),
Section 9, this Section 11 and Section 12 hereof shall survive.
12. Miscellaneous.
12.1. Consent to Jurisdiction. Any legal action, suit or proceeding in
equity or at law arising out of or relating to this Agreement and the
transactions contemplated hereby shall be instituted exclusively in the state or
Federal courts located in the State of Florida and each party agrees not to
assert, by way of motion, as a defense, or otherwise, in any such action, suit
or proceeding, any claim that such party is not subject personally to the
jurisdiction of any such court, 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 any such court. Each party further irrevocably submits to the
jurisdiction of any such court in any such action, suit or proceeding. Any and
all service of process and any other notice in any such action, suit or
proceeding shall be effective against any party if given personally or by
registered or certified mail, return receipt requested, or by any other means of
mail that requires a signed receipt, postage prepaid, mailed to such party as
herein provided. Nothing herein contained shall be deemed to affect or limit the
right of any party to serve process in any other manner permitted by applicable
law.
12.2. Certain Definitions. As used in this Agreement, the following terms
shall have the following meanings unless the context otherwise clearly requires:
(a) "Affiliate", with respect to any person, means and includes any
other person controlling, controlled by or under common control with such
person.
(b) "Associate" shall have the meaning ascribed thereto in Rule 405 of
the Securities Act.
(c) "Code" means the Internal Revenue Code of 1986, as amended, and
the applicable Treasury Regulations (as hereinafter defined).
26
(d) "Contracts and other agreements" means and includes all contracts,
agreements, understandings, indentures, notes, bonds, loans, instruments,
leases, mortgages, commitments, obligations or other binding arrangements,
oral or written.
(e) "Environmental Claim" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, directives, claims,
Liens, investigations, proceedings or notices of noncompliance or violation
(written or oral) by any person alleging potential Liability (including
Liability for enforcement, investigatory costs, cleanup costs, governmental
response costs, removal costs, remedial costs, natural resources damages,
property damages, personal injuries or penalties) arising out of, based on
or resulting from (i) the presence, or release or threatened release into
the environment, of any Hazardous Materials at any location (whether or not
owned) operated, leased or managed by Seller or (ii) any and all claims by
any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence or
release of any Hazardous Materials.
(f) "Environmental Laws" mean any laws, statutes, regulations, rules
or orders which relate to or otherwise impose Liability or a standard of
conduct concerning the discharge, emission, storage, treatment,
transportation, handling, release, threatened release, or disposal of
Hazardous Materials, including, but not limited to, the Air Pollution
Control Act, as amended, the Federal Water Pollution Control Act, as
amended, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Resource Conservation and Recovery
Act of 1976, as amended, and the Toxic Substances Control Act of 1976, as
amended, and any other similar Federal, state or local statutes.
(g) "GAAP" means United States generally accepted accounting
principles.
(h) "Hazardous Materials" means any pollutant, contaminant, hazardous,
radioactive or toxic substance, material, constituent or waste, or any
other waste, substance, chemical or material regulated under any
Environmental Law, including (i) petroleum, crude oil and any fractions
thereof, (ii) natural gas, synthetic gas and any mixtures thereof, (iii)
asbestos and/or asbestos-containing material, (iv) radon and (v)
polychlorinated biphenyls ("PCBs"), or materials or fluids containing PCBs.
(i) "Indebtedness" means (i) all indebtedness for borrowed money or
for the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and payable
in accordance with customary practices), (ii) any other indebtedness which
is evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations in respect of outstanding letters of credit, acceptances and
similar obligations, and (iv) all Liabilities secured by any Lien on any
property owned by Seller even though Seller has not assumed or otherwise
become liable for the payment thereof.
(j) "Liabilities" means debts, liabilities or obligations, whether
absolute or contingent, asserted or unasserted, accrued or unaccrued,
liquidated or unliquidated, matured or unmatured, due or to become due, or
fixed or unfixed.
27
(k) "Lien" means and includes any lien, pledge, mortgage, security
interest, claim, lease, charge, option, right of first refusal or offer,
easement, servitude, transfer restriction or voting requirement under any
or similar agreement, or any other encumbrance, restriction or limitation
whatsoever.
(l) "Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, governmental or regulatory body or other entity.
(m) "Permitted Transfer" means any distribution and/or transfer by the
Principal Shareholder to a spouse (other than pursuant to any divorce or
separation proceeding or settlement), parents, children (natural or
otherwise), stepchildren or grandchildren or to a trust for any of their
benefit; provided, however, that prior to such Permitted Transfer, such
transferee shall agree in writing to be bound by the obligations imposed of
the Principal Shareholder under this Agreement as if such transferee were
originally a signatory to this Agreement.
(n) "Property" means real, personal or mixed property, tangible or
intangible.
(o) "Seller's knowledge" means the actual knowledge of Seller and/or
any other executive officer of Seller, after their conducting reasonable
inquiries of the appropriate employees of Seller.
(p) "Tax Returns" means all written returns, declarations, reports,
forms, estimates, information returns and statements filed in respect of
any Taxes and supplied to any taxing authority in connection with any
Taxes.
(q) "Taxes" (or "Tax" where the context requires) means all Federal,
state, county, local, foreign and other taxes (including, without
limitation, income, profits, premium, estimated, excise, sales, use,
occupancy, gross receipts, franchise, ad valorem, severance, capital levy,
production, transfer, withholding, employment, unemployment compensation,
payroll-related and property taxes, and other governmental charges and
assessments), whether or not measured in whole or in part by net income,
and including deficiencies, interest, additions to tax or interest and
penalties with respect thereto.
(r) "Treasury Regulations" means the regulations promulgated under the
Code.
12.3. Publicity. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be issued without
advance approval of the form and substance thereof by Buyer and Seller jointly.
12.4. Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission, or by overnight courier,
certified, registered, or express mail, postage or fees prepaid, and shall be
28
deemed given when so delivered personally, telegraphed, telexed, sent by
facsimile transmission or by overnight courier or express mail service or, if
mailed, four days after the date of mailing, as follows:
if to Buyer, to:
PAMG, LLC
C/O Premier Asset Management Group, Inc.
0000 X. Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxxxx XxXxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxxxx, Esq.
0000 X. Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
if to Seller, to:
Thermacell Technologies, Inc..
000 Xxxxxxxx Xxxx.
Xxxxxxx Xxxxx,. XX 00000
Attn: President
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Any party may by notice given in accordance with this Section 12.4 to
the other parties designate another address or person for receipt of notices
hereunder.
12.5. Entire Agreement. This Agreement (including the Schedules hereto) and
the certificates executed in connection with the consummation of the
transactions contemplated hereby embody the entire agreement and understanding
of the parties hereto with respect to the subject matter hereof and supersede
all prior agreements and understandings between the parties hereto.
12.6. Waivers and Amendments. This Agreement may be amended, superseded or
canceled only by a written instrument signed by all of the parties hereto. Any
of the terms or conditions hereof may be waived only by a written instrument
signed by the party or parties to be bound thereby. No delay on the part of any
29
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.
12.7. Binding Effect; Assignment; Third Party Beneficiary. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
12.8. Variations in Pronouns. All pronouns and any variations thereof refer
to the masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
12.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
12.10. Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect or limit the meaning or interpretation of
this Agreement.
12.11. No Strict Construction. The language used in the Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party
hereto.
12.12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida applicable to agreements made
and to be performed entirely within such jurisdiction.
12.13. Conflicts. To the extent there is a conflict between the terms of
this Agreement and any other document or agreement relating to the sale of the
Shares from the Seller to the Buyer, the terms of this Agreement shall govern.
12.14. Subsidiaries. All references to Seller in this Agreement shall refer
to Seller and any of its subsidiaries unless the context of this Agreement
clearly requires otherwise.
[INTENTIONALLY LEFT BLANK]
30
IN WITNESS WHEREOF, the parties hereto have executed this
Stock Purchase Agreement on the date first above written.
PAMG, LLC, by and through its Initial Member and Manager, Premier
Asset Management Group, Inc.
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
THERMACELL TECHNOLOGIES, INC..
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
