SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement") is entered into
as of the 10th day of June, 1995, between TransTerra Co., a Nebraska corporation
("Buyer"), and Xxxxx Xxxxxxxxx (the "Seller").
WHEREAS, the parties hereto desire that Buyer purchase all of the
outstanding capital stock and other securities of X. Xxxxxxxxx & Company Inc., a
New York corporation (the "Company"), from Seller.
NOW, THEREFORE, in consideration of the payment of $1.00 and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby covenant and agree as follows:
SECTION 1. PURCHASE AND SALE OF THE STOCK.
1.1 SECURITIES. At the Closing (as defined in Section 1.5 hereof),
Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall purchase and receive from Seller, for the consideration hereinafter
specified, 25 shares of the capital stock of the Company (the "Stock"),
which shall constitute all of the outstanding shares of the capital stock of the
Company.
1.2 PURCHASE PRICE. The purchase price for the Stock (the "Purchase
Price") shall be an amount equal to $7,300,000. The Purchase Price shall be
paid by wire transfer at the Closing in immediately available funds to an
account designated by Seller ("Seller's Account").
1.3 EXISTING LIABILITIES. It is the parties' intent that the Seller
pay all liabilities of the Company existing as of the Closing or arising
thereafter and relating to the operation of the Company prior to the Closing,
including without limitation liabilities for taxes (and tax returns) through
the Closing and the items listed on the SCHEDULE OF CLAIMS AND LITIGATIONS
(the "Existing Liabilities"). As a result, immediately prior to the Closing
the Company, acting on behalf of the Seller, and the Buyer shall use all
reasonable efforts to estimate the Existing Liabilities and the amount of
that estimate shall be withheld
from the cash payment described in SECTION 1.2(a) above. The amount of any
other Existing Liabilities shall be promptly reimbursed to Buyer by Seller.
1.4 NO OTHER OBLIGATIONS. Buyer shall have no responsibility for any
liabilities or obligations of Seller of any nature whatsoever, whether now
existing or hereafter arising, attributable to any period prior to the Closing,
and whether known or unknown to Buyer.
1.5 CLOSING. The consummation of the purchase and sale herein
contemplated (the "Closing") shall take place at 10:15 o'clock a.m., local time,
at the offices of Xxxxxx Xxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, July 10, 1995 or as soon thereafter as all of the conditions to the
Closing specified in this Agreement shall have been fulfilled or waived by the
party or parties entitled to such fulfillment or such other date as the parties
may mutually agree (the "Closing Date").
1.6 PAYMENT FOLLOWING CLOSING. Following the Closing, Seller
promptly shall reimburse the Company for all existing liabilities for which
funds were not withheld pursuant to SECTION 1.3 above. Following the Closing,
Buyer promptly shall pay Seller all tangible assets in excess of $300,000 that
existed as of the closing as such assets are received.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Buyer as follows:
2.1 CORPORATE EXISTENCE; CAPITAL STOCK. The Company is a corporation
duly organized, validly existing and in good standing under the laws of New
York, has corporate power to own its properties and to carry on its business as
now being conducted, and is duly qualified and in good standing as a foreign
corporation in every jurisdiction where the failure to be qualified would
adversely affect its ownership of its properties or the conduct of its business
in any material respect. The Company has no subsidiaries. The authorized
capital stock of the Company consists of 200 shares, of which 25 are issued and
outstanding (those being the shares which comprise the Stock). Except for this
Agreement
2
and an option dated January 2, 1994, in favor of Lucky Coin (which option shall
be canceled upon the payment described in SECTION 1.2 above) (the "Option"),
there are no options, warrants, preemptive rights, conversion privileges or
other contracts which give any person or entity the right to acquire any capital
stock of the Company, whether from the Company, Seller or otherwise.
2.2 CORPORATE DOCUMENTS. Seller has furnished Buyer with a copy of
the Company's charter certified as of a recent date by the New York Secretary of
State, and a copy of the Company's bylaws of the Company certified as of a
recent date by the Secretary of the Company. Both documents are complete and
correct and reflect all amendments thereto as of the date of certification.
2.3 AUTHORIZATION OF AGREEMENT. Seller has the full legal right and
power to execute, deliver and perform this Agreement and to consummate the
transactions herein contemplated, and such execution, delivery and performance
do not violate (and do not, automatically or at the election of a third party,
result in the modification of the terms of) any provisions of the charter or
bylaws of the Company, or any agreement to which Seller or the Company is a
party or is otherwise bound or any order, decree, judgment, statute, rule or
regulation applicable to Seller or the Company.
2.4 FINANCIAL STATEMENTS. Seller has furnished Buyer with (a) balance
sheets of the Company as of December 31, 1994 (the "1994 Year-End Balance
Sheet") and 1993, and the related statements of income, stockholders equity and
cash flows for the years then ended (collectively, the "Financial Statements")
and (b) a balance sheet of the Company as of May 31, 1995, and the related
statement of income for the five-month period then ended (collectively, the
"Interim Statements"), together with respect to the Financial Statements, the
unqualified reports thereon of Xxxxxxx & Bodian, independent public accountant
for the Company. The Financial Statements and Interim Statements have been
prepared in accordance with generally accepted accounting principles ("GAAP")
consistently applied and, together with the notes thereto, present fairly the
financial position of the Company at the dates
3
shown and the results of operations for the periods then ended, except that the
Interim Statements do not contain customary year-end adjustments.
2.5 UNDISCLOSED LIABILITIES. Except as listed on the SCHEDULE OF
MATERIAL LIABILITIES, since December 31, 1994, the Company has not incurred or
suffered any material liabilities (whether accrued, absolute, contingent or
otherwise) that exist or arise out of any transaction or state of facts existing
on or prior to the date hereof other than (a) as and to the extent reflected or
reserved against on the face of the 1994 Year-End Balance Sheet (and not solely
in a footnote thereto), and (b) as and to the extent incurred in the ordinary
course of business (i.e., not including liabilities for breaches of contracts or
violations of law) consistent with past practices after December 31, 1994 and
with the expectation of a normal profit.
2.6 NO ADVERSE CHANGES. Except as indicated in the SCHEDULE OF
ADVERSE CHANGES, there has not occurred (a) any materially adverse change since
December 31, 1994 in the business, relationship with any material customer or
with the Pershing Division of Xxxxxxxxx, Xxxxxx and Xxxxxxxx Securities
Corporation, sales, income, profit margins, assets, liabilities or financial
condition of the Company; (b) any condition, event, circumstance, fact or other
occurrence, whether occurring before or since December 31, 1994, that may
reasonably be expected to have or result in such a materially adverse change; or
(c) any damage, destruction or loss since December 31, 1994, whether or not
covered by insurance, materially and adversely affecting the assets or business
of the Company.
2.7 SERVICES. The only product or service ever produced by the
Company is the provision of discount stock, bond and option brokerage services
(with the exception of certain clients listed on the SCHEDULE OF XXXX XXX'X
CLIENTS and on the SCHEDULE OF XXXXXX XXX XXXX'X CLIENTS who may be considered
non-discount clients), and the Company has provided those services in conformity
with all applicable laws, ordinances, regulations, trade and industry standards
and customer specifications now in effect. Seller has furnished to Buyer a
SCHEDULE OF CLAIMS AND LITIGATIONS which accurately describes
4
all customer and other claims made and related to the conduct of the business of
the Company since January 1, 1990 and the resolution thereof. The Company is a
member in good standing of the National Association of Securities Dealers, Inc.
Seller is not a member of any securities exchange.
2.8 CONDUCT OF BUSINESS IN NORMAL COURSE. (a) Subject to SECTION
2.8(b), the business of the Company has, since December 31, 1994, been conducted
only in the usual and ordinary course consistent with past practice. As of the
Closing, the Company will have a net book value of not less than $300,000
(following any dividends) computed pursuant to GAAP and satisfying the
regulatory net capital requirements. Except as indicated in the SCHEDULE OF
BUSINESS INFORMATION, or reflected on the ADP Report for May 1995, since January
1, 1995, no change has been made in compensation of officers and employees, and
no commitment has been made therefor, whose annual rate of compensation exceeds
$20,000 and, except as contemplated hereby, the Company has not paid (or
declared) any bonus or dividend. All transactions between the Company and its
stockholders, officers, directors, employees (and their family members) since
January 1, 1990 have been on terms no less favorable than those available from
unrelated third parties and are properly reflected in the financial records of
the Company. As of May 31, 1995, the Company had in excess of 11,000 customer
accounts on record of which more than 8,000 had positive equity as of the
purchase date. The trading activity of the Company's accounts since January 1,
1995 through June 30, 1995 is indicated in the Pershing Monthly Commission
Summary. The debit balances, credit balances, money fund balances and long and
short securities positions of the Company's clients as of July 7, 1995 are as
appears on the Pershing MoneyLine Report. The Pershing High Liability Account
Report, as of July 7, 1995, indicates accounts which merit special attention
with an eye to monitor risks. The July 7, 1995 Pershing Concentration Report
indicates accounts with unusual (and perhaps risky) concentrations of
securities. The audited financials for the years 1992, 1993, and 1994, and the
two most recent quarterly FOCUS reports for the Company have been delivered to
Buyer.
(b) Notwithstanding the foregoing, the Company shall be entitled to
dividend (or pay out as salary, bonus, or otherwise) to its stockholder
immediately prior to the Closing its cash on hand
5
(other than the $300,000 in cash net capital) and securities and fixed assets
listed on EXHIBIT A hereto which shall include the Company's contract with
Digitrade (but not the fixed assets used in the ordinary course of the Company's
business).
2.9 PROPERTIES AND ASSETS. The Company has good and marketable title
to all of its assets free and clear of any and all liens, claims, restrictions,
charges or encumbrances of any kind or character, other than (a) liens of
current taxes not delinquent as to payment; or (b) liens or interests of others
arising under contracts and commitments listed in the SCHEDULE OF CONTRACTS
(other than as a result of breaches thereof). All assets used in the operation
(or necessary for the continued operation) of the business of the Company are
either owned by the Company or leased pursuant to leases set forth on the
SCHEDULE OF CONTRACTS. Except for the Option, which shall be canceled prior to
the Closing, Seller owns all outstanding equity interests in the Company free
and clear of any liens, claims, encumbrances or other rights, and there are no
rights to purchase equity securities of the Company or other securities
convertible into or exercisable for any equity securities of the Company. The
assets of the company include the account papers for each of the 11,000 plus
customer accounts (and records regarding the approximately 10,000 respondents to
advertising who did not open accounts) and are sufficient so that following the
Closing the Company will be in compliance with all record keeping requirements.
2.10 ACCOUNTS RECEIVABLE. All of the Company's accounts receivable
result from the provision of brokerage services by the Company in the ordinary
course of its business. Except for the rights of Pershing to assert a setoff
pursuant to exchange rules or the other agreements between Pershing and the
Company, no obligor has any right to a credit, setoff or offset against any of
the accounts receivable, and all of the accounts receivable are collectible in
full with ordinary efforts within ninety days.
2.11 PATENTS, TRADEMARKS, ETC. The Company does not infringe any
patent, license, copyright, trademark or other right owned by any other person.
The SCHEDULE OF PROPRIETARY RIGHTS is complete and lists all patents,
trademarks, trade names, copyrights and applications therefor owned by
6
the Company or by others whereunder the Company has been licensed or has
acquired other rights; and all contracts and assignments relating thereto are
listed in the SCHEDULE OF CONTRACTS.
2.12 CONTRACTS. Except as listed on the SCHEDULE OF CONTRACTS: (a)
the Company is not a party to, or obligated under, any contract, lease for real
or personal property, arrangement, program or commitment pertaining to the
operations of the business of the Company (including, but not limited to, any
price sheets, advertising allowances, rebates or discounts) that provides for
aggregate payments in excess of U.S. $5,000 during its remaining term, except
for contracts for the purchase or sale of goods and services entered into in the
ordinary course of the business of the Company consistent with past practice and
either scheduled to be fulfilled within the next 90 days or terminable on 90 or
fewer days notice without penalty to the Company; (b) the Company has fulfilled,
or taken all action reasonably necessary to enable it to fulfill when due, all
material obligations of the Company under the contracts listed on the SCHEDULE
OF CONTRACTS; (c) there has not occurred any default, or any event which with
the lapse of time or the election of any person, or both, will become a default,
under any such contract; (d) all such contracts are legal, valid and binding
upon the Company and, to the knowledge of Seller, upon the other parties
thereto, and are in full force and effect. The Fully Disclosed Clearing
Agreement between the Company and Pershing is not terminable as a result of the
consummation of the transaction contemplated hereby. Seller and Pershing have
agreed that a change in ownership of the Company would not cause the termination
of the Fully Disclosed Clearing Agreement between the Company and Pershing and
that as soon after the Closing as requested by the Company, Pershing will
cooperate fully with a bulk transfer of all of the accounts to an affiliate of
Buyer. (See SCHEDULE OF MISCELLANEOUS CORRESPONDENCE.)
2.13 LITIGATION AND COMPLIANCE WITH CERTAIN LAWS. Except as disclosed
in the SCHEDULE OF CLAIMS AND LITIGATION and the SCHEDULE OF MISCELLANEOUS
CORRESPONDENCE: (a) there are no claims, actions, suits or proceedings pending,
or to the knowledge of Seller threatened or contemplated, against or affecting
the Company, at law or in equity, or before any federal, state, municipal or
other governmental authority, or before any arbitrator or arbitration panel,
whether by contract or otherwise;
7
(b) except for the NASD restriction letter (see SCHEDULE OF MISCELLANEOUS
CORRESPONDENCE) there is no decree, judgment or order of any kind in existence
restraining the Company, or any of its officers, employees, or directors, from
taking any actions of any kind in connection with the business of the Company;
(c) the Company has complied with all statutes, laws and regulations, orders and
decrees applicable to it, its business, or its assets; and (d) the Company has
not received any written notice of any claim that it is not in compliance
therewith.
2.14 EMPLOYEE RELATIONS. The Company (a) is not a party to any
collective bargaining agreement and has no knowledge of any other labor union or
group attempting to organize or represent the Company's employees; (b) is in
substantial compliance with applicable law respecting employment, wages and
hours; and (c) does not have any labor strikes threatened against it or any
material pending or threatened grievance or arbitration proceeding regarding
labor matters.
2.15 CUSTOMERS. Except as disclosed in the SCHEDULE OF SIGNIFICANT
ACCOUNTS, the Company did not have any customer who accounted for more than 1%
of the Company's annual revenue during 1993, 1994, or the first four months of
1995.
2.16 TAXES. All tax returns required to be filed by the Company with
any federal, territorial state, local or other governmental unit have been or
will be timely filed and were or are accurate and complete in all material
respects. No application for extension of time for filing any tax return or
consent to any extension of the period of limitations applicable to the
assessment or collection any tax is in effect or will, prior to the date of the
Closing, have been made by the Company without the written consent of Buyer.
The Company is not delinquent in the payment of any taxes claimed to be due by
any taxing authority.
2.17 EMPLOYEE BENEFITS. Except as described on the SCHEDULE OF
EMPLOYEE BENEFITS, the Company does not have any contracts or agreements with
employees or benefit plans for employees. The Company has no obligations or
liabilities of any nature under any contracts or agreements or plans that are no
longer in effect. The Company has performed all of its obligations under such
contracts,
8
agreements and plans, if any. All social security returns required to be filed
by the Company with any federal, territorial, state, local, or other
governmental unit have been or will be timely filed and were or are accurate and
complete in all material respects. No application for extension of time for
filing any social security return or consent to any extension of the period of
limitations applicable to the assessment or collection of social charges is in
effect or will, prior to the date of the Closing, have been made by the Company
without the written consent of Buyer. The Company is not delinquent to the
payment of any charges claimed to be due by any social security authority.
2.18 ENVIRONMENTAL MATTERS. The Company is not in violation of any
Environmental Law (as defined below) nor has there ever been any event
("Environmental Event") at, on or in connection with, any of the assets owned or
leased by the Company that would be deemed a release or a disposal of any
hazardous, toxic or dangerous substance, waste or material, including any
petroleum or crude oil or fraction thereof, friable asbestos or asbestos
containing material, polychlorinated biphenyls or urea formaldehyde foam
insulation (any or all of the foregoing are herein referred to as "Hazardous
Material") as defined in, regulated by, or for the purpose of, or in violation
of, any federal, territorial state, local or other statute, law, ordinance,
code, rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning any such substance, waste or
material now in effect ("Environmental Law"). There are no threatened actions,
notices of violation, notices of non-compliance, orders, citations or notices
with respect to air emissions, water discharges, or noise from any assets owned
or leased by the Company, or any part thereof during the occupancy of the
Company ("Environmental Action") issued by any court, any governmental authority
or any other entity which is authorized by law to issue orders under any
Environmental Law ("Environmental Agency") or from anyone else. If the Seller
or the Company receives (a) any notice of an Environmental Event affecting the
Company or its assets, or (b) any notice of an Environmental Action from any
Environmental Agency or from anyone else, Seller shall give, within seven (7)
days, written notice thereof to Buyer. The Company has all certificates,
licenses and permits (the "Permits") necessary under Environmental Laws
9
for the Company to conduct its operations. No underground storage tanks exist
and no Hazardous Materials exist on any property owned or leased by the Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to Seller as follows:
3.1 CORPORATE EXISTENCE. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nebraska,
United States of America and has corporate power to own its properties and to
carry on its business as now being conducted.
3.2 CORPORATE DOCUMENTS. Buyer has furnished Seller with a copy of
its charter certified as of a recent date by the Secretary of State of the State
of Nebraska, and a copy of its bylaws certified as of a recent date by the
Secretary of Buyer. Both documents are complete and correct and reflect all
amendments thereto as of the date of certification.
3.3 AUTHORIZATION OF AGREEMENTS. The execution, delivery and
performance of this Agreement has been duly authorized by the Board of Directors
of Buyer in conformity with all requirements of Buyer's bylaws and Certificate
of Incorporation and applicable law. Buyer has full corporate power to execute,
deliver and perform this Agreement and to consummate the transactions herein
contemplated, and such execution, delivery and performance do not violate any
provisions of the Certificate of Incorporation or bylaws of Buyer, or any
agreement to which Buyer is a party or is otherwise bound and which is material
to any business of Buyer or any order, decree, judgment, statute, rule or
regulation applicable to Buyer, the violation of which might have a materially
adverse effect on any business of Buyer.
SECTION 4. CERTAIN AGREEMENTS FOLLOWING THE CLOSING.
Seller hereby covenants that the following shall apply beginning on
the Closing Date and thereafter where applicable:
10
4.1 LEASE OF ASSETS. Seller will lease the Company's fixed assets
and the space in the 000 Xxxx 00xx Xxxxxx condominium to the Company following
the Closing as described in the lease attached hereto as Exhibit B.
4.2 NON-COMPETITION AGREEMENT. Seller agrees that he will not, at
any time during the three years following the termination of his employment with
the Company (whether by resignation or otherwise), engage directly or indirectly
as an owner, director, officer, employee, agent or otherwise for any entity,
other than the Company, which sells or provides any competing service without
the prior written consent of Buyer. "Competing service" shall mean any stock,
bond or option brokerage business.
4.3 CONSULTING AGREEMENT. For a period extending for three months
following the date of the Closing, Seller agrees to perform such general
consultive services within the expertise and qualifications of Seller including,
but not limited to, rendering advice with respect to the management of the
Company, at such times and places as may be mutually convenient on substantially
a full time basis. The Company shall reimburse Seller for his reasonable
expenses incurred at the Company's request in performing his obligations under
this paragraph. In consideration for Seller's services provided herein, the
Company shall pay Seller $10,000 on the tenth day of each calendar month
commencing the date hereof.
SECTION 5. SURVIVAL OF REPRESENTATIONS AND INDEMNITY.
5.1 SURVIVAL OF REPRESENTATIONS. Subject to the provisions of
Section 5.3 hereof, all representations, warranties and agreements made by the
parties hereto shall survive the Closing and the Closing shall constitute a re-
affirmation of the truth and correctness as of the Closing of the
representations and warranties of Buyer and Seller contained in this Agreement;
and any investigation by a party to be indemnified on account of any breach of
such representations, warranties or agreements shall not be a defense to a claim
for indemnification unless the breach was in fact known to the party claiming
indemnification prior to the Closing.
11
5.2 INDEMNIFICATION BY SELLER. Subject to the provisions of Section
5.3 hereof, Seller shall indemnify Buyer against and hold Buyer harmless from
any and all loss, cost, damage or expense arising out of or resulting from (a)
breach or incorrectness of any of the representations, warranties or covenants
of Seller contained in this Agreement or the schedules referred to herein, or
(b) the Seller's or the Company's failure to comply with any applicable laws
(applicable to this Agreement and the transactions contemplated herein), or (c)
the assertion against the Company or Buyer of any Existing Liability, or (iv)
the reasonable expenses or costs incurred by Buyer, including reasonable
attorneys' fees, in connection with investigating, attempting to correct, or
defending against the assertion of any claims, liens or charges against which
Buyer is entitled to indemnity pursuant to the foregoing provisions, provided
that (i) Buyer shall give prompt notice in writing to Seller of the facts and
circumstances giving rise to any claims by Buyer under this Section, (ii)
subject to the limitations of any contract of insurance, Buyer shall tender to
Seller the opportunity to manage and control any defense against any such claim,
it being understood that Buyer may participate at its expense in any such
defense assumed by Seller and that the assumption of management and control of
any such defense shall not, itself, constitute any admission by Seller of
liability to Buyer or to any other entity, (iii) Buyer shall cooperate
reasonably with Seller in the prosecution of any such defense, and (iv) Buyer
shall not compromise or settle any such claim without the prior written consent
of Seller which shall not be unreasonably withheld.
5.3 LIMITATION ON INDEMNIFICATION OBLIGATIONS OF SELLER. The
potential liability of Seller under the provisions of Section 5.2 hereof shall
be subject to written notice of the matter giving rise to such potential
liability being given to Seller prior to the expiration of the applicable
statutes of limitation.
5.4 INDEMNIFICATION BY BUYER. Buyer shall indemnify Seller against
and hold Seller harmless from any and all loss, cost, damage or expense arising
out of or resulting from (a) breach or incorrectness of any of the
representations, warranties or covenants of Buyer contained in this Agreement or
the schedules referred to herein, (b) any and all liabilities and obligations
arising out of the business
12
of the Company after the Closing Date, provided that such liabilities or
obligations do not arise out of or result from any breach or incorrectness of
any of the representations or warranties of Seller contained in this Agreement
or the schedules referred to herein, and (c) the reasonable expenses or costs
incurred by Seller, including reasonable attorneys' fees, in connection with
investigating, attempting to correct, or defending against the assertion of any
claims against which Seller is entitled to indemnity pursuant to the foregoing
provisions, provided that (i) Seller shall give prompt notice in writing to
Buyer of the facts and circumstances giving rise to any claims by Seller under
this Section, (ii) subject to the limitations of any contract of insurance,
Seller shall tender to Buyer the opportunity to manage and control and defend
against any such claim, it being understood that Seller may participate at its
expense in any such defense assumed by Buyer and that the assumption of
management and control of any such defense shall not, itself, constitute any
admission by Buyer of liability to Seller or to any other entity, (iii) Seller
shall cooperate reasonably with Buyer in the prosecution of any such defense,
and (iv) Seller shall not compromise or settle any such claim without the prior
written consent of Buyer which shall not be unreasonably withheld.
SECTION 6. GENERAL
6.1 FURTHER ASSURANCES. Each party hereto agrees that at any time
and from time to time after the Closing they will execute and deliver to the
other such further instruments or documents as the other may reasonably require
to give effect to the transactions contemplated hereunder.
6.2 EXPENSES. Except as expressly provided herein the parties hereto
shall each bear their respective costs and expenses incurred in the consummation
of this transaction.
6.3 TRANSFER TAXES. All federal, state, territorial and local sales,
transfer or similar taxes that may be payable by reason of the sale, assignment
transfer, conveyances and delivery of the Securities shall be paid by the party
on which the applicable law imposes the obligation therefor.
6.4 NON-ASSIGNMENT. This Agreement shall not be assignable by either
party without the written consent of the other. Notwithstanding the foregoing,
Buyer may assign its rights hereunder
13
to an affiliate or a wholly-owned subsidiary of Buyer, but no such assignment
shall relieve Buyer of any of its obligations hereunder. Subject to the
foregoing this Agreement shall be binding upon and inure to the benefit of the
respective heirs, successors, assigns and personal representatives of the
parties hereto.
6.5 NOTICES. All notices, requests, demands and other communications
provided for in this Agreement shall be in writing and addressed as follows or
to such other address as either party shall notify the other of in writing:
(i) If to Seller, addressed to:
Xxxxx Xxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(ii) If to Buyer, addressed to:
TransTerra Co.
0000 Xxxxx 000xx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Attention: J. Xxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: X. Xxxxxxxx Xxxxxxxxx, Jr.
Tel: (000) 000-0000
Fax: (000) 000-0000
14
6.6 BROKERAGE AND FINDERS' FEES; INDEMNIFICATION. Each party
represents to the other party that it has not incurred any liability for
brokerage, commissions, finders' fees or like compensation in respect of the
transactions contemplated hereunder. Seller will indemnify and hold harmless
Buyer, and Buyer will indemnify and hold harmless Seller, against and in respect
of any claim for brokerage or other commissions relative to this Agreement and
the transactions contemplated hereby, based in any way on agreements,
arrangements or understandings claimed to have been made by such indemnifying
party with any third party.
6.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon the same instrument.
6.8 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements, arrangements
and communications, whether oral or written; and this Agreement shall not be
modified or amended other than by written agreement of the parties hereto.
Captions appearing in this Agreement are for convenience only and shall not be
deemed to explain, limit or amplify the provisions hereof.
6.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of New York. All disputes arising in connection
with this Agreement shall be finally settled under the Rules of Conciliation and
Arbitration of the American Arbitration Association by one or more arbitrators
located in New York City appointed in accordance with said Rules.
6.10 THIRD PARTIES. Nothing in this Agreement, whether expressed or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any other person other than the parties and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third person to either party
hereto, nor shall any provision give any third party any right of subrogation or
actions over or against either party hereto.
6.11 SCHEDULES. The schedules attached to this Agreement are
incorporated herein by reference and shall be considered part of this Agreement.
15
IN WITNESS WHEREOF, the undersigned have executed this Securities
Purchase Agreement as of the day and year first written above.
TRANSTERRA CO.
By: /s/ Xxxx Xxx Xxxxxxxx
----------------------------------------
Chairman
SELLER:
/s/ Xxxxx Xxxxxxxxx
---------------------------------------------
Xxxxx Xxxxxxxxx
16
TABLE OF CONTENTS
Page
SECTION 1. PURCHASE AND SALE OF THE STOCK . . . . . . . . . . . . . . . . . 1
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . 1
Existing Liabilities . . . . . . . . . . . . . . . . . . . . . . 1
No Other Obligations . . . . . . . . . . . . . . . . . . . . . . 2
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . 2
Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . 2
Corporate Documents. . . . . . . . . . . . . . . . . . . . . . . 3
Authorization of Agreement . . . . . . . . . . . . . . . . . . . 3
Financial Statements . . . . . . . . . . . . . . . . . . . . . . 3
Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . 4
No Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . 4
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conduct of Business in Normal Course . . . . . . . . . . . . . . 4
Properties and Assets. . . . . . . . . . . . . . . . . . . . . . 6
Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Litigation and Compliance with Certain Laws. . . . . . . . . . . 7
Employee Relations . . . . . . . . . . . . . . . . . . . . . . . 8
Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . 8
Environmental Matters. . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . . 10
Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . 10
Corporate Documents. . . . . . . . . . . . . . . . . . . . . . . 10
Authorization of Agreements. . . . . . . . . . . . . . . . . . . 10
SECTION 4. CERTAIN AGREEMENTS PENDING AND FOLLOWING THE CLOSING . . . . . . 10
Lease of Assets. . . . . . . . . . . . . . . . . . . . . . . . . 11
Non-Competition Agreement. . . . . . . . . . . . . . . . . . . . 11
Consulting Agreement . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5. SURVIVAL OF REPRESENTATIONS AND INDEMNITY. . . . . . . . . . . . 11
Survival of Representations. . . . . . . . . . . . . . . . . . . 11
Indemnification by Seller. . . . . . . . . . . . . . . . . . . . 12
Limitation on Indemnification Obligations of Seller. . . . . . . 12
Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . 12
SECTION 8. GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 13
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 13
Non-Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 13
i
Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Brokerage and Finders' Fees; Indemnification . . . . . . . . . . 15
Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 15
Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ii
