STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of
this 4th day of September, 2001, by and among PLRP Acquisition Corp., a
corporation organized pursuant to the laws of the State of Virginia (the
"Buyer"); Advantage Systems, Inc., a corporation organized under the laws of the
State of California ("the Company"); and Advantage Technologies, Inc., a
corporation organized under the laws of the State of Nevada (the "Seller" or
"ADVV"), being the sole Shareholder of the Company.
W I T N E S S E T H :
WHEREAS, the Seller is the owner of 100% of the Issued and Outstanding
Capital Stock of the Company, consisting of 90,000 shares of Common Stock, Par
Value $0.01 per share (the "Shares"), of the Company; and
WHEREAS, the Buyer wishes to purchase from the Seller, and the Seller
wishes to sell to the Buyer, the Shares owned by the Seller subject to the terms
and conditions contained in this Agreement.
N O W T H E R E F O R E ,
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree that the foregoing recitals are true and correct
and further agree as follows:
1. PURCHASE AND SALE; BUYER'S OBLIGATION CONDITIONED UPON HAVING OBTAINED
FINANCING.
(a) In consideration of the conveyance by the Seller of the Shares to
the Buyer,
(i) the Buyer shall pay the Seller the sum of $70,000.00 (the
"Purchase Price"); and
(ii) the Buyer specifically agrees to assume and be responsible
for certain debt of the Seller as is evidenced by that certain 8
% Series A $750,000.00 Senior Subordinated Convertible Redeemable
Debentures (the "ADVV Corp. Debentures"), denominated Series
A-001, convertible, from time to time, into authorized but
unissued shares of the ADVV Common Stock, Par Value $0.001 per
share, which debt the Seller warrants and represents to be sum of
$450,000.00, which sum includes unpaid principal together with
interest accrued and unpaid to date.
(iii) the Buyer shall offer to enter into Employment Contracts,
in the form as set forth in EXHIBIT 1(A) (III) to those persons
listed on SCHEDULE 1(A) (III); and
(iv) as a condition to, and upon its merger with, Pacel Corp.
("Pacel"), a Virginia corporation which owns 90% of the issued
and outstanding capital stock of the Buyer, the Buyer shall
require that any Plan of Merger to be entered into by the Buyer
and Pacel shall contain an undertaking by Pacel that, subject to
applicable federal and state securities laws, and the Rules and
Regulations of the United States Securities and Exchange
Commission (the "Commission"), within 730 days from the Closing
Date hereof, Pacel shall use its best efforts to declare and
issue a stock dividend of at least 2,500,000 shares of the Common
Stock, Par Value $0.01 per share, of the Company to Pacel's own
shareholders.
(b) In consideration of the payment by the Buyer to the Seller of the
Purchase Price, and for other valuable consideration,
(i) the Seller shall sell, assign, transfer, convey and deliver
the Shares to the Buyer, free and clear of any and all liens,
claims and encumbrances; and
(ii) the Seller shall assign and transfer to the Buyer its rights
to receive additional funding from the Holders of the ADVV Corp.
Debentures, which the Seller warrants and represents to the Buyer
to be the sum of $300,000.00.
(c) Upon receipt of this Agreement, the Seller shall execute both
copies of this Agreement and return one copy to the Buyer.
(d) The obligation of the Buyer to consummate the transactions
contemplated by, and with which to comply with the undertaking made by it,
under, this Agreement shall be conditioned upon its ability to obtain financing
with which to do so. Consequently, if the Buyer is unable to obtain financing in
an amount and on terms it, in its sole discretion, deems sufficient (i) to
purchase the Shares, or (ii) to consummate the transactions contemplated by this
Agreement, or (iii) to otherwise comply with the undertakings made by it under
this Agreement, then (iv), the Buyer shall have no obligation to do so, and (v),
neither the Seller nor the Company shall have any rights or recourse whatsoever
against the Buyer and its Officers, Directors, and Shareholders.
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2. CLOSING AND CLOSING AGREEMENTS.
(a) The Closing (the "Closing") of the purchase and sale of the Shares
shall be held on or before August 22 , 2001, (the "Closing Date"), at a specific
date, place and time mutually agreed to by the parties, unless the parties
mutually agree in writing to extend the date of Closing.
(b) At the Closing, the Sellers shall deliver to the Buyer the
certificate or certificates representing the Shares, along with an Assignment
Separate From Certificate (or an endorsement of the back of each certificate, if
agreed upon by the parties) duly endorsed in blank or accompanied by stock
powers executed in blank, with all signatures medallion guaranteed in order to
sell, transfer, convey and assign the Shares upon the payment of all cash sums
specified in Section 1 above, and such other duly executed instruments or
documents as may be reasonably requested by the Buyer in order to consummate the
transactions contemplated by this Agreement, including a letter from the Company
to the Company's Transfer Agent in the form set forth in EXHIBIT 1(C), notifying
the Transfer Agent of the transaction and instructing the Transfer Agent to
deliver to, and re-issue the Shares pursuant to the instructions of, PLRP
Acquisition Corp.
(c) At the Closing, the Buyer shall deliver to the Sellers
(i) the sum of $70,000.00, by U.S. Bank check or Wire Transfer,
to the Order of the Seller, along with two executed copies of
this Agreement; and
(ii) such other duly executed instruments or documents as may be
reasonably requested by Seller in order to consummate the
transactions contemplated by this Agreement.
(d) At or subsequent to the Closing, the parties shall execute and
deliver any other instruments and take any actions, which may be reasonably
required for the implementation of this Agreement and the transactions
contemplated hereby.
3. COMPANY'S REPRESENTATIONS AND WARRANTIES. The "Company" is Advantage Systems,
Inc. -the wholly owned subsidiary that is being purchased. Advantage Technology,
Inc. is the corporation who is selling the stock of Advantage Systems, Inc.
In order to induce Buyer to enter into this Agreement and purchase the
Shares, the Company makes the following representations and warranties to Buyer,
which representations and warranties shall be true and correct as of the Closing
date as well as on the date hereof:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and has all requisite
corporate power and authority to carry on its business as now conducted.
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(b) All action on the part of the Company (and, to the extent required,
by the Seller) necessary for the authorization, execution, and delivery of this
Agreement, the performance of all obligations of the Company hereunder, and the
authorization, issuance, sale, and delivery of the Shares has been taken or will
be taken prior to the Closing, and this Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable in accordance with its terms.
Neither the Company's execution and delivery of this Agreement nor its
consummation of the transactions contemplated hereby requires the approval or
consent of any third party, whether governmental or otherwise.
(c) The Shares are duly and validly issued and authorized, fully paid
and non-assessable. Upon the conveyance of the Shares, the Buyer will be vested
with legal and valid title to the Shares, free and clear of all liens, pledges,
security interests, irrevocable proxies, encumbrances or restrictions of any
kind (except as provided herein).
(d) The Company's Capital Structure is now, and as at the Closing,
shall be, as follows:
(a) 10,000,000 shares of Common Stock, Par Value $0.01 per share, are
Authorized, of which 90,000 shares are Issued and Outstanding and are owned by
the Seller only.
(e) Except as set forth on SCHEDULE 3(E):
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(i) no other securities of the Company are authorized or issued
and outstanding;
(ii) there are no outstanding options, warrants, convertible
securities, scrip, rights to subscribe for, puts, calls, rights
of first refusal, tag-along agreements, nor any other agreements,
understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights
convertible into or exchangeable for any securities of the
Company or arrangements by which the Company is or may become
bound to issue additional securities of the Company, nor are
there any outstanding securities granted or issued by the Company
that are convertible into any securities of the Company, and none
is authorized;
(iii) no securities of the Company are subject to preemptive
rights or similar rights of the stockholders of the Company nor
are any securities subject to any liens or encumbrances imposed
through the actions or failure to act of the Company, or
otherwise;
(iv) there are no anti-dilution or price adjustment provisions
contained in any security authorized or issued by the Company (or
in the Company's Articles of Incorporation or By-Laws or in any
agreement providing rights to security holders) that will be
triggered by the transactions contemplated by this Agreement;
(v) the Company is not obligated or committed to purchase, redeem
or otherwise acquire any of its securities;
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(vi) there are no agreements or arrangements under which the
Company is obligated to register the sale of any of its
securities under the securities Act;
(vii) all presently exercisable voting rights in the Company are
vested exclusively in its outstanding shares of Common Stock,
each share of which is entitled to one vote on every matter to
come before its shareholders;
(viii) there are no voting trusts or other voting arrangements
with respect to any of the Company's securities; and
(ix) the assignments, endorsements, stock powers and other
instruments of transfer delivered by the Seller to the Buyer at
the Closing will be sufficient to transfer the Seller's entire
interest, legal and beneficial, in the Shares to the Buyer.
(f) The execution, delivery and performance of this Agreement and the
transactions contemplated by this Agreement will not conflict with, or
constitute or result in a breach, default or violation of:
(i) the Articles of Incorporation or Bylaws of the Company;
(ii) any law, ordinance, regulation or rule applicable to the
Company;
(iii) any order, judgment, injunction or other decree by which
the Company is bound; or
(iv) any written or oral contract, agreement, or commitment to
which the Company is a party; nor will such execution, delivery
and performance result in the creation of any lien or encumbrance
upon the Shares.
(g) The Company has delivered to Buyer:
(i) the unaudited balance sheet of the Company as of December 31,
2000;
(ii) the unaudited operating statement of the Company for the
fiscal year ending December 31, 200; and
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(iii) certain draft unaudited financial statements for the
Company for the seven month period ended at July 31,
2001(collectively, the "Financial Statements").
The Company Financial Statements have been and will be prepared in
accordance with generally accepted accounting principles (GAAP) applied on a
consistent basis, and fairly reflect and will reflect in all material respects
the financial condition of the Company as at the dates thereof and the results
of the operations of the Company for the periods then ended.
The Company has no material debt, liability, or obligation of any kind,
whether accrued, absolute, contingent, or otherwise, except:
(i) those reflected on the Company Financial Statements,
including the notes thereto; and
(ii) liabilities incurred in the ordinary course of business
since July 1, 2001, none of which, individually or in the
aggregate, exceed $100.00.
(h) The Company has duly filed all material Tax Returns (as defined
below), and all returns and reports of all other governmental units having
jurisdiction with respect to Taxes (as defined below) imposed on it or on its
operations, all such Tax Returns were complete and accurate when filed, and all
Taxes payable by the Company have been paid to the extent that such Taxes have
become due (whether or not shown on any tax return). All Taxes payable by the
Company for all periods through December 31,2000, have been accrued or paid in
full. [As used herein (i)the term "Tax" shall include any tax or similar
governmental charge, assessment, impost, or levy (including without limitation
income taxes, franchise taxes, transfer taxes or fees, sales taxes, use taxes,
gross receipt taxes, value added taxes, employment taxes, excise taxes, ad
valorem taxes, property taxes, withholding taxes, payroll taxes, minimum taxes,
or windfall profit taxes) together with any related penalties, fines, additions
to tax, or interest imposed by the United States or any state, county, local or
foreign government, or subdivision or agency of any government; and (ii) the
term "Tax Return" shall mean any return (including any information return),
report, statement, schedule, notice, form, estimate, or declaration of estimated
tax to be filed with any governmental authority relating to any Tax.]
(i) The Company represents and warrants that, except as otherwise
provided under this Agreement, and all applicable securities laws, the resale,
in full or part, of the Company's Shares purchased by the Buyer shall not be
subject to any limitation; therefore, should any limitation whatsoever to the
resale of the Shares by the Buyer apply, the Company shall assure the Buyer that
the proposed resale is authorized and permitted in compliance with all the
relevant provisions of any applicable federal or state securities law.
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(j) Except as disclosed in EXHIBIT 3(J):
------------
(i) there are no actions, suits, arbitrations, regulatory
proceedings or other litigation, proceedings or governmental
investigations pending or threatened against or
(ii) affecting the Company or any of its officers, directors,
employees, agents or stockholders thereof in their capacity as
such, or any of the Company's properties or businesses, and there
is no reason for the Company or the Seller to believe otherwise,
irrespective of whether or not they believe the actions, suits,
arbitrations, regulatory proceedings or other litigation,
proceedings or governmental investigations are valid or not;
(ii) all of the proceedings pending or threatened against the
Company or the Seller are fully covered by insurance policies (or
other indemnification agreements with third parties) and are
being defended by the insurers (or such third parties), and there
is no reason for the Company or the Seller to believe otherwise,
irrespective of whether or not they believe the proceedings are
valid or not;
(iii) neither the Company nor the Seller is subject to any order,
judgment, decree, injunction, stipulation or consent order of or
with any court or other governmental authority, and neither the
Company nor the Seller have entered into any agreement to settle
or compromise any proceeding pending or threatened against it or
them which has involved any obligation other than the payment of
money or for which the Company or the Seller have any continuing
obligation, and there is no reason for the Company or the Seller
to believe otherwise, irrespective of whether or not they believe
the order, judgment, decree, injunction, stipulation or consent
order is valid or not; and
(iv) there are no claims, actions, suits, proceedings or
investigations pending or threatened by or against the Company or
the Seller with respect to this Agreement, or in connection with
the transactions contemplated hereby or thereby, and no Person
has objected or threatened to object thereto, and there is no
reason for the Company or the Seller to believe otherwise,
irrespective of whether or not they believe the claims, actions,
suits, proceedings or investigations are valid or not.
(k) The Company represents that the signature of the party signing this
Agreement on behalf of the Company:
(i) is the signature of a duly authorized representative of the
Company; and
(ii) is binding upon the Company.
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(l) No representation or warranty of the Company contained in this
Agreement, and none of the statements or information concerning the Company
contained in this Agreement, contains or will contain any untrue statement of a
material fact nor will such representations, warranties, covenants, or
statements taken as a whole omit a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4. SELLER'S REPRESENTATIONS AND WARRANTIES. The "Seller" is ADVV - the
corporation who is selling the Shares.
In order to induce Buyer to enter into this Agreement and purchase the
Shares, the Seller makes the following representations and warranties to Buyer,
which representations and warranties shall be true and correct as of the Closing
date as well as on the date hereof:
(a) The Seller has full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Seller and the consummation of
the transactions contemplated hereby have been duly and validly authorized, and
this Agreement constitutes the legal, valid and binding obligation of the
Seller, enforceable in accordance with its terms. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby requires the approval or consent of any third party, whether governmental
or otherwise.
(b) The Seller is the only legal, record and beneficial owner of the
Shares. The Shares are free and clear of all liens, pledges, security interests,
irrevocable proxies, encumbrances or restrictions of any kind. Upon the
conveyance of the Shares, the Buyer will be vested with legal and valid title to
the Shares, free and clear of all liens, pledges, security interests,
irrevocable proxies, encumbrances or restrictions of any kind.
(c) There is no outstanding right, agreement, power of attorney,
commitment or understanding of any nature whatsoever, that:
(i) calls for the issuance, sale, pledge or other disposition of
the Shares;
(ii) obligates the Seller to enter into any of the foregoing; or
(iii) relates to the voting or control of such the Shares.
(d) The execution, delivery and performance of this Agreement and the
transactions contemplated by this Agreement will not conflict with, or
constitute or result in a breach, default or violation of:
(i) the Articles of Incorporation of By-Laws of the Seller or the
Company;
(ii) any law, ordinance, regulation or rule applicable to the
Seller or the Company;
(iii) any order, judgment, injunction or other decree by which
the Seller or the Company is bound; or
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(iv) any written or oral contract, agreement, or commitment to
which the Seller or the Company is a party; nor will such
execution, delivery and performance result in the creation of any
lien or encumbrance upon the Shares.
(e) Except as disclosed in EXHIBIT 4 (E):
-------------
(i) neither the Company nor the Seller is subject to any order,
judgment, decree, injunction, stipulation or consent order of or
with any court or other governmental authority, and neither the
Company nor the Seller have entered into any agreement to settle
or compromise any proceeding pending or threatened against it or
them which has involved any obligation other than the payment of
money or for which the Company or the Seller have any continuing
obligation, and there is no reason for the Company or the Seller
to believe otherwise, irrespective of whether or not they believe
the order, judgment, decree, injunction, stipulation or consent
order is valid or not; and
(ii) there are no claims, actions, suits, proceedings or
investigations pending or threatened by or against the Company or
the Seller with respect to this Agreement, or in connection with
the transactions contemplated hereby or thereby, and no Person
has objected or threatened to object thereto, and there is no
reason for the Company or the Seller to believe otherwise,
irrespective of whether or not they believe the claims, actions,
suits, proceedings or investigations are valid or not.
(f) The Seller is not required to make filings under The Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including, by way of
illustration, and not limitation, Schedule 14C's.
(g) The Seller represents that the signature of the party signing this
Agreement on behalf of the Seller:
(i) is that of the Seller; and
(ii) is binding upon the Seller; and
(h) The representations and warranties contained in this Section do not
contain any untrue statement of a material fact or omit to state a material fact
required or necessary to be stated therein to make the statements made therein,
in light of the circumstances in which they were made, not misleading.
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5. BUYER'S REPRESENTATIONS AND WARRANTIES. The "Buyer" is Acquisition Corp.
In order to induce the Seller to enter into this Agreement and sell the
Shares, Buyer makes the following representations and warranties to the Seller,
which representations and warranties shall be true and correct as of the Closing
date as well as the date hereof:
(a) The Buyer has all requisite right, power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby,
including the full legal right and power and all authority and approval
required:
(i) to execute and deliver, or authorize execution and delivery
of, this Agreement and all other instruments executed and
delivered by or on behalf of the Buyer in connection with the
purchase of its Shares;
(ii) to delegate authority pursuant to a power of attorney; and
(iii) to purchase and hold such Shares.
(b) Neither the Buyer's execution and delivery of this Agreement nor
its consummation of the transactions contemplated hereby requires the approval
or consent of any third party.
(c) This Agreement constitutes the legal, valid and binding obligation
of the Buyer enforceable in accordance with its terms.
(d) The Buyer represents that the signature of the party signing this
Agreement on behalf of the Buyer:
(i) is the signature of a duly authorized representative of the
Buyer; and
(ii) is binding upon the Buyer.
(e) The Buyer represents and warrants that the information set forth
herein concerning the Buyer is complete, true, and correct.
(f) The representations and warranties contained in this Section do not
contain any untrue statement of a material fact or omit to state a material fact
required or necessary to be stated therein to make the statements made therein,
in light of the circumstances in which they were made, not misleading.
6. CONDITIONS TO BUYER'S OBLIGATIONS.
The obligations of Buyer to consummate the transactions contemplated
hereby shall be subject to the satisfaction on or prior to the Closing of all of
the following conditions, except such conditions as Buyer may waive:
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(a) The Seller and/or Company shall have complied in all material
respects with all of its agreements and covenants contained herein required to
be complied with at or prior to the Closing, and all the representations and
warranties of the Seller and Company contained herein shall be true at and as of
the Closing with the same effect as though made at and as of the Closing.
(b) All action (including notifications and filings) that shall be
required to be taken by the Seller and/or Company in order to consummate the
transactions contemplated hereby shall have been taken and all consents,
approvals, authorizations and exemptions from third Parties (if any) that shall
be required in order to enable the Seller and/or Company to consummate the
transactions contemplated hereby shall have been duly obtained.
(c) No order of any court or governmental or regulatory authority or
body which restrains or prohibits the transactions contemplated hereby shall be
in effect on the Closing date and no suit or investigation by any government
agency to enjoin the transactions contemplated hereby or seek damages or other
relief as a result thereof shall be pending or threatened as of the Closing.
(d) The Buyer shall have received the written opinions, dated as at the
Closing Date, from counsel to the Seller and to the Company, to the effect that:
(i) the Seller and the Company have been duly incorporated and
are existing as corporations in good standing under the laws of
the State of Nevada;
(ii) the Seller and the Company are legally authorized to carry
on their business under the laws of the State of California, as
well the laws of all other States and jurisdictions in which they
conduct business;
(iii) the Shares have been duly issued and are fully paid and
nonassessable;
(iii) the Seller and the Company have the full right, power and
authority to enter into this Agreement and to carry out and
consummate the transactions contemplated herein, the Seller has
full power and authority to sell, assign, or transfer the Shares,
and delivery of such shares to the Buyer will transfer to the
Buyer title thereto free and clear of all liens, pledges,
encumbrances, security interests, or claims;
(iv) this Agreement has been duly executed and delivered by the
Seller and the Company, and this Agreement constitutes the legal,
valid and binding obligation of the Seller and of the Company
enforceable against the Company and the Seller in accordance with
its respective terms;
(v) the approval of the requisite majority of the Shareholders of
the Seller and of the Company to consummate the transactions
contemplated herein has been duly and properly obtained, under
duly authorized resolutions made at duly convened Meetings of the
Shareholders of the Seller and of the Company;
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(vi) the execution, delivery and performance of this Agreement by
the Company and the Seller, and the consummation of the
transactions contemplated hereby, will not:
(A) violate any provisions of the Articles of Incorporation,
as amended, or the By-Laws of the Seller or the Company;
(B) violate any provision of applicable Law or rule or
regulation of any Governmental Authority;
(C) permit any Governmental Authority to impose any
restrictions or limitations of any nature on any of the
Seller or the Company or the Buyer with respect to the
transactions contemplated hereby;
(D) violate, conflict with, or result in the breach of any
of the terms of, result in a material modification of, or
otherwise give any other contracting party or Person the
right to terminate, or constitute a default under, any
contract or other agreement to which the Company or the
Seller is a party or by or to which it or they or any of
their assets or properties may be bound or subject;
(E) violate any order, judgment, injunction, award or decree
of any court, arbitrator or Governmental Authority against,
or binding upon, the Company or the Seller or to which any
of their assets or properties may be bound or subject;
(F) result in the creation of any security interest, lien,
encumbrance, adverse claim, proscription or restriction on
any property or asset (whether real, personal, mixed,
tangible or intangible), right, contract, agreement or
business of the Seller or the Company; or
(G) violate, conflict with, modify or cause any default
under or acceleration of (or give any party any right to
declare any default or acceleration upon notice or passage
of time or both), in whole or in part, any charter, article
of incorporation, bylaw, mortgage, lien, deed of trust,
indenture, lease, agreement, instrument, order, injunction,
decree, judgment, law or any other restriction of any kind
to which either the Seller or the Company are a party or by
means of which either of them or any of their properties may
be bound or subject;
(viii) as at the date of this Agreement, and, as at the date of
the Closing,
(A) the Seller had, has, and will have, full and valid title
and control of the Shares;
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(B) there was, is, and will be no existing impediment or
encumbrance to the sale and transfer of such Shares to the
Buyer;
(C) and on delivery to the Buyer of the Shares,
(x) all of the Shares will have been, are, and will be free and
clear of all taxes, liens, encumbrances, charges or assessments
of any kind and shall not be subject to preemptive rights,
tag-along rights, or similar rights of any shareholder of the
Company;
(y) all of the Shares will have been, are, and will be legally
and validly issued in material compliance with all applicable
Laws;
(z) all of the Shares will have been, are, and will be fully paid
and non- assessable shares, and all the Shares have all been,
are, and will be issued under duly authorized resolutions of the
Board of Directors of the Company;
(ix) the offer, issue, sale, and delivery of the Shares under the
circumstances contemplated by the Agreement constitute exempted
transactions under the Securities Act, and registration of the
Shares under the Securities Act is not required in connection
with any such offer, issue, sale, or delivery of such Shares;
(x) after reasonable investigation, such counsel has no actual
knowledge of
(A) any actions, suits, arbitrations, regulatory
proceedings or other litigation, proceedings or
governmental investigations pending or threatened
against or affecting the Seller or the Company or any
of its officers, directors, employees, agents or
stockholders thereof in their capacity as such, or
any of the Company's properties or businesses; or
(B) of any order, judgment, decree, injunction,
stipulation or consent order of or with any court or
other Governmental Authority to which the Company or
the Seller is subject.
(e) The Buyer shall have received letters, dated as at the
Closing Date, from the independent certified public accountants to the
Seller and the Company, to the effect that they are, and during the
period covered by their report(s) relating to the Seller and the
Company Financial Statements, defined in SECTION 3 of this Agreement,
they were, independent certified public accountants with respect to the
Seller and the Company within the meaning of the Securities Act of
1933, as amended, and the rules and regulations thereunder, and that,
on the basis of procedures (but not an examination made in accordance
with GAAP) which consisted of a reading of the latest available
unaudited interim financial statements of the Seller and the Company
dated July 31, 2001, a reading of the latest available Minutes of the
Meetings of the Stockholders and of the Boards of Directors of the
Seller and the Company, inquiries to certain officers and other
employees of the Seller and the Company responsible for financial and
accounting matters, and other specified procedures and inquiries,
nothing has come to their attention that caused them to believe that:
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(i) the Seller and the Company Financial Statements
were not prepared in accordance with generally
accepted accounting principals consistent in all
material respects with those followed in the
preparation of the audited financial statements, or
are not a fair presentation of the information
purported to be shown;
(ii) there was any change in the capital stock or
debt of the Seller or the Company or any decrease in
the net current assets or stockholders's equity of
the Seller or the Company as of the date of the
latest available monthly financial statements of the
Seller or the Company as of a specified date not more
than three Business Days prior to the date of such
letter [from CPA's], each as compared with the
amounts shown in the Seller or the Company Financial
Statements, other than as disclosed in this Agreement
or any change or decrease [which shall be set forth
in such letter from CPA's], which the Buyer in its
sole discretion shall accept;
(iii) there was any decrease in consolidated net
sales, net earnings, or net earnings per share (on a
primary or a fully diluted basis) of the Common Stock
of the Seller or the Company during the period from
the Seller or the Company Financial Statements Date
to the date of the latest available consolidated
monthly financial statements of the Seller or the
Company to a specified date not more than three
Business Days prior to the date of such letter, each
as compared with the corresponding period in 2001,
other than as disclosed in this Agreement or any
decrease (which shall be set forth in such letter)
which the Buyer in its sole discretion shall accept.
(g) All exhibits respecting the Company and/or the Seller or
either of them have been, or shall be, delivered in final form at least
five Business Days prior to the Closing Date (not counting the Closing
Date itself as one of such days), including all of the documents and
other items required to be delivered at Closing as provided in SECTION
2 herein.
(h) The Buyer shall have obtained financing with which to
consummate the transactions contemplated by this Agreement and with
which to comply with the undertaking made by it under this Agreement,
so that, if the Buyer is unable to obtain financing in an amount and on
terms it, in its sole discretion, deems sufficient (i) to purchase the
Shares, or (ii) to consummate the transactions contemplated by this
Agreement, or (iii) to otherwise comply with the undertakings made by
it under this Agreement, then (iv), the Buyer shall have no obligation
to do so, and (v), neither the Seller nor the Company shall have any
rights or recourse whatsoever against the Buyer and its Officers,
Directors, and Shareholders.
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7. CONDITIONS TO THE SELLER'S OBLIGATIONS.
The obligations of the Seller to consummate the transactions
contemplated hereby shall be subject to the satisfaction on or prior to
the Closing of all of the following conditions, except such conditions
as the Seller may waive:
(a) The Buyer shall have complied in all material respects
with all of its agreements contained herein required to be complied
with at or prior to the Closing, and all of the representations and
warranties of the Buyer contained herein shall be true in all material
respects at and as of the Closing with the same effect as though made
at and as of the Closing.
(b) All action (including notifications and filings) that
shall be required to be taken by the Buyer in order to consummate the
transactions contemplated hereby shall have been taken and all
consents, approvals, authorizations and exemptions from third Parties
that shall be required in order to enable the Buyer to consummate the
transactions contemplated hereby shall have been duly obtained.
(c) No order of any court or governmental or regulatory
authority or body which restrains or prohibits the transactions
contemplated hereby shall be in effect on the Closing date and no suit
or investigation by any government agency to enjoin the transactions
contemplated hereby or seek damages or other relief as a result thereof
shall be pending or threatened in writing as of the Closing.
(d) The Seller shall have received from the Buyer all of the
documents and other items required to be delivered at Closing as
provided in SECTION 2 herein.
8. SURVIVAL AND INDEMNIFICATION.
(a) The representations, warranties, covenants and agreements
contained herein shall survive for a period of two years from the date
of Closing, unless the covenant or agreement specifies another period
of time.
(b) From and after the date of Closing, the Seller and/or and
the Buyer, as the case may be, shall indemnify and hold harmless the
other (the party seeking indemnification being referred to as the
"Indemnified Party") from and against any and all claims, losses,
liabilities and damages, including, without limitation, amounts paid in
settlement, reasonable costs of investigation and reasonable fees and
disbursements of counsel, arising out of or resulting from the
inaccuracy of any representation or warranty, or the breach of any
covenant or agreement, contained herein or in any instrument or
certificate delivered pursuant hereto, or in the case of the Seller
and/or Company, any claim arising from any action prior to the date of
Closing, by the party against whom indemnification is sought (the
"Indemnifying Party").
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(c) The Indemnified Party shall promptly notify the
Indemnifying Party in writing of any claim for indemnification,
specifying in detail the basis of such claim, the facts pertaining
thereto and, if known, the amount, or an estimate of the amount, of the
liability arising therefrom. The Indemnified Party shall provide to the
Indemnifying Party as promptly as practicable thereafter all
information and documentation necessary to support and verify the claim
asserted and the Indemnifying Party shall be given reasonable access to
all books and records in the possession or control of the Indemnified
Party or any of its affiliates which the Indemnifying Party reasonably
determines to be related to such claim.
9. DISCLOSURE AND ACCESS TO INFORMATION.
The Company, for so long as the Buyer maintains ownership of
any Shares, shall, at the Buyer's request, fully disclose, give full
access to and make available to any inspection all records, shareholder
lists and any other document or information related to the Company; the
Buyer shall have the right to make copies of the aforesaid documents
and/or to ask for a copy thereof to be delivered to the address set
forth in Section 10 below.
10. NOTICES.
(a) Any notice, request, instruction or other document
required by the terms of this Agreement to be given to any other Party
hereto shall be in writing and shall be given either
(i) by telephonic facsimile, in which case notice
shall be presumptively deemed to have been given at
the date and time displayed on the sender's
transmission confirmation receipt showing the
successful receipt thereof by the recipient;
(ii) by hand delivery or Federal Express or other
method in which the date of delivery is recorded by
the delivery service, in which case notice shall be
presumptively deemed to have been given at the time
that records of the delivery service indicate the
writing was delivered to the addressee;
(iii) by prepaid telegram, in which case notice shall
be presumptively deemed to have been given at the
time that the records of the telegraphic agency
indicate that the telegram was telephoned or
delivered to the recipient or addressee, as the case
may be; or
(iv) by U.S. mail to be sent by registered or
certified mail, postage prepaid, with return receipt
requested, in which case notice shall be
presumptively deemed to have been given forty-eight
(48) hours after the letter was deposited with the
United States Postal Service.
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(b) Notice shall be sent:
(i) If to the Buyer, to:
Xxxxx Xxxxxxx, President
PLRP Acquisition Corp.
c/o Parcel Corp.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Telephone Number (000) 000-0000
Facsimile Telephone Number (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxx X. Xxxxxxx, Xx., Esq.
0000 Xxxxx Xxxxxxx Xxxxx
Number 1408
Xxxx Xxxx Xxxxx,Xxxxxxx 00000
Office Telephone Number: (561) 659 - 1810
Facsimile Telephone Number: (561) 659 - 1810
(ii) If to the Company, to:
Xxxxxx X. Xxxxxxx, President
Advantage Systems, Inc
===================
Telephone Number: (___) ___ - ____
Facsimile Telephone Number: (___) ___ - ____
with a copy (which shall not constitute notice) to
___________________, Esq.
Telephone Number: (___) ___ - ____
Facsimile Telephone Number: (___) ___ - ____
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(iii) If to the Seller, to:
Xxxxxx X. Xxxxxxx, President
Advantage Technologies, Inc
===================
Telephone Number: (___) ___ - ____
Facsimile Telephone Number: (___) ___ - ____
with a copy (which shall not constitute notice) to
___________________, Esq.
Telephone Number: (___) ___ - ____
Facsimile Telephone Number: (___) ___ - ____
(iv) or to such other address as a Party may have
specified in writing to the other Parties using the
procedures specified above in this Section.
11. Entire Agreement and Binding Effect.
(a) This Agreement constitutes the entire agreement between the Parties
hereto and supersedes all prior agreements, understandings, negotiations and
discussions, both written and oral, between the Parties hereto with respect to
the subject matter hereof and are not intended to confer upon any other person
any rights or remedies hereunder except as expressly provided herein.
(b) The Parties have not relied upon any promises, representations,
warranties, agreements, covenants or undertakings, other than those set forth or
referred to herein.
-18-
12. BENEFITS; ASSIGNMENT.
(a) This Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their respective estates, heirs, legal representatives,
successors and assigns.
(b) No assignment of any rights or obligations hereunder may be made by
the Seller or by the Company without the prior written consent of the Buyer.
(c) The Buyer may freely its rights and obligations hereunder without
the consent of the Seller or of the Company.
13. WAIVER.
No waiver of any of the provisions of this Agreement will be deemed to
constitute or will constitute a waiver of any other provision hereof (whether or
not similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly so provided.
14. AMENDMENT.
No amendment of any provision of this Agreement shall be valid unless
the same shall be in writing and signed by all of the Parties hereto.
15. NO THIRD PARTY BENEFICIARY.
Unless otherwise expressed in this Agreement, nothing expressed or
implied in this Agreement is intended, or will be construed, to confer upon or
give any person or entity other than the Parties hereto and their respective
successors and assigns any rights or remedies under or by reason of this
Agreement.
16. CONSTRUCTION.
(a) The Parties have participated jointly in the negotiation and
drafting of this Agreement.
(b) In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.
(c) Any reference to any federal, state, local or foreign statute or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.
(d) The specifications of any dollar amount in the representations and
warranties or otherwise in this Agreement is not intended and shall not be
deemed to be an admission or acknowledgment of the materiality of such amounts
or items, nor shall the same be used in any dispute or controversy between the
Parties to determine whether any obligation, item or matter (whether or not
described herein or included in any schedule) is or is not material for purposes
of this Agreement.
-19-
17. SECTION HEADINGS.
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
any provisions of this Agreement.
18. COUNTERPARTS.
This Agreement may be executed by the Parties hereto in separate
counterparts, each of which will be deemed to be one and the same instrument;
19. APPLICABLE LAW; RESOLUTION OF DISPUTES; VENUE; JURISDICTION; WAIVER OF JURY
TRIAL.
(a) This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Virginia, without giving
effect to the principles of conflicts of Law thereof.
(b) The Parties hereto irrevocably agree and consent that all disputes
concerning this Agreement or any claim or issue of any nature (whether brought
by the Parties hereto or by any other person whatsoever) arising from or
relating to this Agreement or to the corporate steps taken to enter into it
(including, without limitation, claims for alleged fraud, breach of fiduciary
duty, breach of contract, tort, etc.) which cannot be resolved within reasonable
time through discussions between the opposing entities, shall be resolved solely
and exclusively by means of arbitration to be conducted in the City of Manassas
in the State of Virginia, which arbitration will proceed in accordance with the
rules of the American Arbitration Association (or any successor organization
thereto) then in force for resolution of commercial disputes.
(c) The Arbitrators themselves shall have the right to determine and to
arbitrate the threshold issue of arbitrability itself, the decision of the
Arbitrators shall be final, conclusive, and binding upon the opposing entities,
and a judgment upon the award may be obtained and entered in any federal or
state court of competent jurisdiction.
(d) In the event any Party to this Agreement commences any litigation,
proceeding or other legal action in connection with or relating to this
Agreement, or any matters described or contemplated herein or therein, with
respect to any of the matters described or contemplated herein or therein, the
Parties to this Agreement hereby:
-20-
(i) agree as an alternative method of service to service of
process in any legal proceeding by mailing of copies thereof to such party at
its address set forth here in for communications to such Party;
(ii) agree that any service made as provided herein shall be
effective and binding service in every respect; and
(iii) agree that nothing herein shall affect the rights of any
Party to effect service of process in any other manner permitted by Law; and
EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY
DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY
RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED
HEREIN OR THEREIN, AND AGREE TO TAKE ANY AND ALL ACTION
NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
(e) Each entity or Party involved in litigation or arbitration shall be
responsible for its own costs and expenses of any litigation or arbitration
proceeding, including its own attorney's fees (for any litigation, arbitration,
and any appeals).
20. REMEDIES CUMULATIVE.
No remedy made available by any of the provisions of this Agreement is
intended to be exclusive of any other remedy, and each and every remedy is
cumulative and is in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity.
21. EQUITABLE REMEDIES.
The Seller and/or the Company acknowledges and agrees that the Buyer
will not have an adequate remedy at law in the event of any breach by the Seller
and/or the Company of this Agreement and that, therefore, the Buyer shall be
entitled, in addition to any other remedies which may be available to it, to
injunctive and/or other equitable relief to prevent or remedy a breach.
22. RESIGNATION OF OFFICERS AND DIRECTORS.
If so requested by the Buyer, the Company shall cause Xxxxxx Xxxxxxx
and Xxx Xxxx shall tender their resignations as Officers and Directors of, and
as trustees or fiduciaries of any plan or arrangement involving employee
benefits with respect to, the Company effective as of the Closing Date.
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23. Bank Accounts.
Prior to, and, then, on the day of the Closing, the Seller or the
Company will arrange:
(a) for the Company's then current bank account to be closed;
(b) for all funds from said bank account to be transferred into a bank
account to be selected by the Buyer; and
(c) for the delivery of all bank account statements and records
pertaining to the Company's (former) bank account to the Buyer.
24. FURTHER DOCUMENTATION.
The Parties shall execute and deliver any other instruments or
documents and take any further actions after the execution of this Agreement,
which may be reasonably required for the implementation of this Agreement and
the transactions contemplated hereby.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
THE BUYER:
PLRP ACQUISITION CORP.
_______________________ By:_________________________________
Xxxxx Xxxxxxx, President
_______________________ By:_________________________________
F. Xxx Xxxxxxx, Secretary
THE COMPANY:
ADVANTAGE SYSTEMS, INC.
_______________________ By:_________________________________
Xxxxxx X. Xxxxxxx, President
_______________________ By:_________________________________
, Secretary
-22-
THE SELLER:
ADVANTAGE TECHNOLOGIES, INC.
_______________________ By:_________________________________
Xxxxxx X. Xxxxxxx, President
_______________________ By:_________________________________
, Secretary
-23-
EXHIBIT 1 (C)
ADVANTAGE TECHNOLOGIES, INC.
0000 X. XXXX XXXXXX
XXXXXXXXX, XX 00000
(000) 000-0000
August _______ , 0000
Xxxxxx Transfer & Registrar,
000 XX Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxx 00000
Attention:________________
Dear: ___________________
Re: Stock Purchase Agreement entered into as of August _________, 2001, by and
among PLRP Acquisition Corp. (The "Buyer"); Advantage Systems, Inc. (the
"Subsidiary"); and Advantage Technologies, Inc., being the Parent and sole
Shareholder of the Subsidiary.
Pursuant to the Stock Purchase Agreement, our Parent, Advantage
Technologies, Inc. has sold 100% of our Issued and Outstanding Capital Stock,
consisting of 90,000 shares of Common Stock, Par Value $0.01 per share (the
"Subsidiary Shares") to PLRP Acquisition Corp.
Therefore, upon presentation to you of the Certificates representing
the Subsidiary Shares, we hereby authorize and direct you to re-issue these
Certificates pursuant to the instructions of the Buyer's authorized agent, who
is
Xxxxx Xxxxxxx, President
PLRP Acquisition Corp.
c/o Parcel Corp.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Telephone Number (703) 257 - 4759
Facsimile Telephone Number (703) 361 - 6706
Please be advised that PLRP Acquisition Corp. has relied upon this
instruction letter as an inducement to enter into the Stock Purchase Agreement
and, accordingly, PLRP Acquisition Corp. is a Third-Party Beneficiary to these
Instructions.
-24-
As the Registered Owner of the Subsidiary Shares, Advantage
Technologies, Inc. has also executed this letter to adopt and confirm these
instructions.
Therefore, kindly execute this letter in the space indicated to
acknowledge your agreement to act in accordance with these instructions. Should
you have any questions concerning this matter, please contact me at (408)
000-0000.
Very truly yours,
ADVANTAGE SYSTEMS, INC.
By:________________________________
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer
ADVANTAGE TECHNOLOGIES, INC.,
as Registered Owner
By:________________________________
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer
ACKNOWLEDGED AND AGREED:
[TRANSFER AGENT]
August _______ , 2001
Oxford Transfer & Registrar,
000 XX Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxx 00000
By:________________________________
Name: _____________________________
Title: President
-25-
