Exhibit 10.1
STOCK PURCHASE AGREEMENT
AMONG
JANDAH MANAGEMENT LIMITED
AND
XXXXXXX XXXXXX, XXXXX XXXXXX
AND XXXXX XXXXX
DATED AS OF MAY 21, 2004
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into on as of May 21, 2004, by
and among Jandah Holdings Limited, a corporation formed under the laws of the
British Virgin Islands (the "Purchaser"), and Xxxxxxx Xxxxxx, Xxxxx Xxxxxx and
Xxxxx Xxxxx (each a "Seller", and collectively the "Sellers"). The Purchaser and
the Sellers are referred to collectively herein as the "Parties".
WHEREAS, the Sellers own an aggregate of 9,500,000 shares of Common Stock
of Xxxxxxxx000.xxx, Inc., a Delaware corporation (the "Company").
WHEREAS, the Purchaser desires to acquire, and the Sellers desire to sell
9,276,000 shares of Common Stock held by them (the "Shares"), representing
approximately 82.8% of the issued and outstanding shares of Common Stock on a
fully diluted basis, upon the terms and subject to the conditions of this
Agreement;
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"Closing" has the meaning set forth in Section 2(c) below.
"Closing Date" has the meaning set forth in Section 2(c) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preface above.
"Company SEC Filings" has the meaning set forth in the Section 4(t) below.
"Common Stock" means any share of the Common Stock, par value $0.0001 per
share, of the Company.
"Confidential Information" means any information concerning the businesses
and affairs of the Company that is not already generally available to the
public.
"Disclosure Schedule" has the meaning set forth in Section 4 below.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement, (b) qualified defined contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified
defined benefit retirement plan or arrangement which is an Employee Pension
Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit
Plan or material fringe benefit or other retirement, bonus, or incentive plan or
program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Financial Statement" has the meaning set forth in Section 4(g) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Indemnified Party" has the meaning set forth in Section 8(d) below.
"Indemnifying Party" has the meaning set forth in Section 8(d) below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, domain names, Web
site addresses, trade dress, logos, trade names, and corporate names, together
with all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings,
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specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (f) all computer software
(including data and related documentation), (g) all other proprietary rights,
and (h) all copies and tangible embodiments thereof (in whatever form or
medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet contained within the
Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in Section
4(g) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section 4(g)
below.
"Most Recent Fiscal Year End" has the meaning set forth in Section 4(g)
below.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"Purchaser" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2(b) below.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under
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capital lease arrangements, and (d) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Sellers" has the meaning set forth in the preface above.
"Shares" has the meaning set forth in the preface above.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 8(d) below.
2. Purchase and Sale of Shares.
(a) Basic Transaction. On and subject to the terms and conditions of this
Agreement, the Purchaser agrees to purchase from each of the Sellers, and each
of the Sellers agrees to sell to the Purchaser, the number of Shares set forth
opposite such Seller's name on Schedule I annexed hereto for the consideration
specified below in this Section 2.
(b) Purchase Price. The Purchaser agrees to pay to the Sellers at the
Closing the purchase price set forth opposite each such Seller's name on
Schedule I annexed hereto (collectively, the "Purchase Price") by delivery of
cash in the amount of the Purchase Price payable by wire transfer or delivery of
other immediately available funds to such account as each Seller shall designate
in writing.
(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of XxXxxx Xxxx Xxxx,
LLC, 000 Xxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, commencing at 10:00
a.m. local time on the date hereof (the "Closing Date").
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(d) Deliveries at the Closing. At the Closing, (i) the Sellers will
deliver to the Purchaser the various certificates, instruments, and documents
set forth in Section 7(a) below, (ii) the Purchaser will deliver to the Sellers
the various certificates, instruments, and documents set forth in Section 7(b)
below, (iii) each of the Sellers will deliver to the Purchaser stock
certificates representing the number of Shares set forth opposite such Seller's
name on Schedule I annexed hereto, endorsed in blank or accompanied by duly
executed assignment documents, and (iv) the Purchaser will deliver to each of
the Sellers the Purchase Price as specified in Section 2(b) above.
3. Representations and Warranties of The Sellers Concerning the
Transaction. Each of the Sellers, severally but not jointly, represents and
warrants to the Purchaser that the statements contained in this Section 3 are
true, correct and complete as of the Closing Date with respect to himself or
itself, except as set forth in the Disclosure Schedule (as defined in Section 4
below).
(a) Authorization of Transaction. Each of the Sellers has full power
and authority to execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of the Sellers, enforceable in accordance with its terms and
conditions. The Sellers need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.
(b) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller is subject or (B) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Seller is a party or by which he
or it is bound or to which any of the Seller's Shares or his assets is subject.
(c) Brokers' Fees. The Seller has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(d) Shares. The Seller holds of record and owns beneficially the
number of Shares set forth next to his name in Schedule I annex hereto, free and
clear of any restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, Security Interests, options,
warrants, purchase rights, contracts, commitments, equities, claims, and
demands. The Seller is not a party to any option, warrant, purchase right, or
other contract or commitment that could require the Seller to sell, transfer, or
otherwise dispose of any of his Shares or any capital stock of the Company
(other than this Agreement). The Seller is not a party to any voting trust,
proxy, or other agreement or understanding with respect to the voting of his
Shares or any capital stock of the Company.
(e) Diligence. All documents, certificates and instruments forwarded
to the Purchaser or any Seller prior to the Closing Date contains information
which is materially true
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and correct as of the Closing Date, except for such information which relates to
a specific date, in which case the Sellers represent and warrant that such
information remains true and correct as of such date.
4. Representations and Warranties of the Sellers Concerning the Company.
The Sellers represent and warrant, jointly and severally, to the Purchaser that
the statements contained in this Section 4 are correct and complete as of the
Closing Date, except as set forth in the disclosure schedule delivered by the
Sellers to the Purchaser on the date hereof and initialed by the Parties (the
"Disclosure Schedule"). Nothing in the Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty made herein,
unless the Disclosure Schedule identifies the exception with reasonable
particularity and describes the relevant facts in reasonable detail. Without
limiting the generality of the foregoing, the mere listing (or inclusion of a
copy) of a document or other item shall not be deemed adequate to disclose an
exception to a representation or warranty made herein (unless the representation
or warranty has to do with the existence of the document or other item itself).
The Disclosure Schedule will be arranged in paragraphs corresponding to the
lettered and numbered paragraphs contained in this Section 4.
(a) Organization, Qualification, and Corporate Power. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware. The Company is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction where such qualification is
required. The Company has full corporate power and authority and all licenses,
permits, and authorizations necessary to carry on the businesses in which it is
engaged and to own and use the properties owned and used by it. Section 4(a) of
the Disclosure Schedule lists the directors and officers of the Company. The
Sellers have delivered to the Purchaser correct and complete copies of the
charter and bylaws of the Company (as amended to date). The minute books
(containing the records of meetings of the stockholders, the board of directors,
and any committees of the Board of Directors) of the Company are true, correct
and complete, and contain true, correct and complete records of all meetings and
consents in lieu of meetings of the stockholders and the board of directors of
the Company (and any committees thereof), or similar governing bodies, since the
date of organization of the Company. The Company is not in default under or in
violation of any provision of its charter or bylaws.
(b) Capitalization. The entire authorized capital stock of the Company
consists of 60,000,000 shares of capital stock, consisting of 10,000,000
millions shares of preferred stock and 50,000,000 shares of Common Stock, of
which no shares of preferred stock are issued and outstanding, 11,200,000 shares
of Common Stock are issued and outstanding and 7,065,000 shares of Common Stock
are held in treasury. All of the issued and outstanding shares of Common Stock,
including the Shares, have been duly authorized, are validly issued, fully paid,
and nonassessable, and the Shares are held of record by the respective Sellers
as set forth in Section 4(b) of the Disclosure Schedule. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights with
respect to the Company.
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There are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of the Company.
(c) Noncontravention; Consent. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Company is subject or any provision
of the charter or bylaws of the Company or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Company is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets). Except pursuant to the Securities Act and the
Securities Exchange Act, the Company does not need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement.
(d) Brokers' Fees. The Company has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Title to Assets. The Company has good and marketable title to, or a
valid leasehold interest in, the properties and assets used by it, located on
their premises, or shown on the Most Recent Balance Sheet, free and clear of all
Security Interests, except for properties and assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance Sheet.
(f) Subsidiaries. Except for Xxxxxxxx000.xxx, Inc., a New York
corporation, the Company has no Subsidiaries and does not own, directly or
indirectly, any capital stock, equity or interest in any corporation, firm,
partnership, joint venture or other entity.
(g) Financial Statements. Section 4(g) of the Disclosure Schedule contains
copies of the following financial statements (collectively the "Financial
Statements"): (i) the balance sheets of the company at November 30, 2003 and
2002 and the related statements of operations and deficit, stockholders'
deficiency and cash flows for the fiscal years then ended, including the notes
thereto, as audited by Xxxxxx & Associates, LLC (the "Most Recent Fiscal Year
End"); and (ii) the balance sheet of the Company at February 29, 2004 and the
related statements of operations and deficit, stockholders' deficiency and cash
flows for the three month period then ended (the "Most Recent Fiscal Month End")
prepared by the Company's management (the "Most Recent Financial Statements").
The Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of the Company as of
such dates and the results of operations of the Company for such periods, are
correct and complete, and are consistent with the books and records of the
Company (which books and records are correct and complete).
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(h) Events Subsequent to Most Recent Fiscal Year End. Since the Most
Recent Fiscal Year End, there has not been any material adverse change in the
business, financial condition, operations, results of operations, or future
prospects of any of the Company. Without limiting the generality of the
foregoing, since that date:
(i) the Company has not entered into any agreement, contract, lease,
or license (or series of related agreements, contracts, leases, and
licenses) either involving more than $5,000 or outside the Ordinary Course
of Business;
(ii) no party (including the Company) has accelerated, terminated,
modified, or cancelled any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses) involving
more than $5,000 to which the Company is a party or by which any of them
is bound;
(iii) the Company has not imposed any Security Interest upon any of
its assets, tangible or intangible;
(iv) the Company has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans, and acquisitions);
(v) the Company has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either involving more than
$5,000 singly or in the aggregate;
(vi) the Company has not delayed or postponed the payment of
accounts payable and other Liabilities;
(vii) there has been no change made or authorized in the charter or
bylaws of the Company;
(viii) the Company has not issued, sold, or otherwise disposed of
any of its capital stock, or granted any options, warrants, or other
rights to purchase or obtain (including upon conversion, exchange, or
exercise) any of its capital stock;
(ix) the Company has not declared, set aside, or paid any dividend
or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of its
capital stock;
(x) the Company has not experienced any damage, destruction, or loss
(whether or not covered by insurance) to its property;
(xi) the Company has not borrowed any money from, or entered into
any other transaction with, any of its directors, officers and employees;
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(xii) the Company has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of
any existing such contract or agreement;
(xiii) the Company has not adopted, amended or modified any bonus,
profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee
Benefit Plan);
(xiv) the Company has not made any change in employment terms for
any of its directors, officers and employees;
(xv) there has not been any other material occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary
Course of Business involving the Company; and
(xvi) the Company has not committed to any of the foregoing.
(i) Undisclosed Liabilities. The Company has no Liability (and there is no
Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability), except for (i) Liabilities set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) and (ii)
Liabilities which have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business (none of which are in excess of $5,000 or results
from, arises out of, relates to, is in the nature of, or was caused by any
breach of contract, breach of warranty, tort, infringement, or violation of
law).
(j) Legal Compliance; Permits and Licenses. The Company and its Affiliates
has complied with the Securities Act (and the rules and regulations thereunder),
the Exchange Act (and the rules and regulations thereunder) and all other
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against any of them alleging any failure so to
comply. The Company has all certificates of occupancy, rights, permits,
certificates, licenses, franchises, approvals and other authorizations as are
reasonably necessary to conduct its respective business and to own, lease, use,
operate and occupy its assets, at the places and in the manner now conducted and
operated, except those the absence of which would not materially adversely
affect its respective business. The Company has not received any written or oral
notice or claim pertaining to the failure to obtain any material permit,
certificate, license, approval or other authorization required by any federal,
state or local agency or other regulatory body, the failure of which to obtain
would materially and adversely affect its business.
(k) Tax Matters. The Company has filed all United States federal, state,
county, local and foreign national, provincial and local returns and reports
which were required to be filed on or prior to the date hereof in respect of all
income, withholding, franchise, payroll, excise,
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property, sales, use, value-added or other taxes or levies, imposts, duties,
license and registration fees, charges, assessments or withholdings of any
nature whatsoever (together, "Taxes"), and has paid all Taxes (and any related
penalties, fines and interest) which have become due pursuant to such returns or
reports or pursuant to any assessment which has become payable, or, to the
extent its liability for any Taxes (and any related penalties, fines and
interest) has not been fully discharged, the same have been properly reflected
as a liability on the books and records of the Company and adequate reserves
therefore have been established. All such returns and reports filed on or prior
to the date hereof have been properly prepared and are true, correct (and to the
extent such returns reflect judgments made by the Company, as the case may be,
such judgments were reasonable under the circumstances) and complete in all
material respects. No tax return or tax return Liability of the Company has been
audited or, presently under audit. The Company has not given or been requested
to give waivers of any statute of limitations relating to the payment of any
Taxes (or any related penalties, fines and interest). There are no claims
pending or, to the knowledge of the Company, threatened, against the Company for
past due Taxes. All payments for withholding taxes, unemployment insurance and
other amounts required to be paid for periods prior to the date hereof to any
governmental authority in respect of employment obligations of the Company,
including amounts payable pursuant to the Federal Insurance Contributions Act,
have been paid or shall be paid prior to the Closing and have been duly provided
for on the books and records of the Company and in the Financial Statements.
(l) Real Property. The Company does not own any real property. Section
4(l)(ii) of the Disclosure Schedule lists and describes briefly all real
property leased or subleased to the Company. The Sellers have delivered to the
Purchaser correct and complete copies of the leases and subleases listed in
Section 4(l)(ii) of the Disclosure Schedule (as amended to date). The Sellers
acknowledge that such lease shall be terminated on the Closing Date pursuant to
Section 7(a) below and the security deposit of the Company under such lease or
sublease will be returned to the Company.
(m) Intellectual Property.
(i) The Company owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary
or desirable for the operation of the businesses of the Company as
presently conducted and as presently proposed to be conducted. Each item
of Intellectual Property owned or used by the Company immediately prior to
the Closing hereunder will be owned or available for use by the Company on
identical terms and conditions immediately subsequent to the Closing
hereunder. The Company has taken all necessary and desirable] action to
maintain and protect each item of Intellectual Property that it owns or
uses.
(ii) The Company has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and none of the Sellers and the
directors and officers of the Company has ever received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that the
Company must license or
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refrain from using any Intellectual Property rights of any third party).
To the Knowledge of any of the Sellers and the directors and officers of
the Company, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of the Company.
(iii) To the Knowledge of any of the Sellers and the directors and
officers (and employees with responsibility for Intellectual Property
matters) of the Company, the Company will not interfere with, infringe
upon, misappropriate, or otherwise come into conflict with, any
Intellectual Property rights of third parties as a result of the continued
operation of its businesses as presently conducted and as presently
proposed to be conducted.
(n) Contracts. Except as set forth in Section 4(o) of the Disclosure
Schedule, the Company is not a party to any of the following contracts and other
agreements:
(i) any agreement (or group of related agreements) for the lease of
personal property to or from any Person providing for lease payments in
excess of $5,000 per annum;
(ii) any agreement (or group of related agreements) for the purchase
or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the
performance of which will extend over a period of more than one year,
result in a material loss to the Company, or involve consideration in
excess of $5,000;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of $5,000
or under which it has imposed a Security Interest on any of its assets,
tangible or intangible;
(v) any agreement concerning confidentiality or noncompetition;
(vi) any agreement with any of the Sellers and their Affiliates
(other than the as disclosed in the Company SEC Filings or on the
Disclosure Schedule);
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan or
arrangement for the benefit of its current or former directors, officers,
and employees;
(viii) any collective bargaining agreement;
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(ix) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $5,000 or providing severance benefits;
(x) any agreement under which it has advanced or loaned any amount
to any of its directors, officers, and employees outside the Ordinary
Course of Business;
(xi) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of the Company; or
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $5,000.
The Sellers have delivered to the Purchaser a correct and complete copy of each
written agreement listed in Section 4(n) of the Disclosure Schedule (as amended
to date). With respect to each such agreement: (A) the agreement is legal,
valid, binding, enforceable, and in full force and effect; (B) the agreement
will continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (C) no party is in breach or default, and no event has
occurred which with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration, under the
agreement; and (D) no party has repudiated any provision of the agreement.
(o) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company or any of the Sellers.
(p) Insurance. The Company does not currently maintain any form of
insurance.
(q) Litigation. Section 4(q) of the Disclosure Schedule sets forth each
instance in which the Company (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or, to the
Knowledge of any of the Sellers and the directors and officers of the Company,
is threatened to be made a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator. None of the actions, suits, proceedings, hearings, and
investigations set forth in Section 4(s) of the Disclosure Schedule could result
in any material adverse change in the business, financial condition, operations,
results of operations, or future prospects of the Company. None of the Sellers
and the directors and officers of the Company has any reason to believe that any
such action, suit, proceeding, hearing, or investigation may be brought or
threatened against the Company.
(r) Employees and Employee Benefits. The Company has only one (1)
employee, which employee is one of the Sellers, is not a party to or bound by
any collective bargaining agreement, and has not committed any unfair labor
practice. The Company does not maintain, nor has the Company maintained in the
past, any Employee Benefit Plans, or any plans, programs, policies, practices,
arrangements or contracts (whether group or individual) providing for payments,
12
benefits or reimbursements to employees of the Company, former employees, their
beneficiaries and dependents under which such employees, former employees, their
beneficiaries and dependents are covered through an employment relationship with
the Company, any entity required to be aggregated in a controlled group or
affiliated service group with the Company for purposes of ERISA or the Code
(including under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of
ERISA, at any relevant time).
(s) Guaranties. The Company is not a guarantor or otherwise is liable for
any Liability or obligation (including indebtedness) of any other Person.
(t) Filings. The Company filed with the SEC annual reports on Form 10-KSB
for the year ended November 30, 2003 and its Quarterly Reports on Form 10-QSB
for the quarter ended February 29, 2004 under the Securities Exchange Act, as
defined below and Amendment No. 8 to Form SB-2 (Registration No. 333-100803)
(collectively, the "Company SEC Filings"), which complied at the time of filing
in all material respects with all applicable requirements of the Securities
Exchange Act or the Securities Act (as the case may be), as in effect on the
dates such forms reports, registration statement and documents were filed. None
of such Company SEC Filings, including any financial statements or schedules
included or incorporated by reference therein, contained when filed any untrue
statement of a material fact or omitted to state a material fact required to be
stated or incorporated by reference therein or necessary in order to make the
statements therein in light of the circumstances under which they were made not
misleading, except to the extent superseded by a Company SEC Filing filed
subsequently and prior to the date hereof. The Financial Statements included in
the Company SEC Filings fairly present in conformity in all material respects
with generally accepted accounting principles applied on a consistent basis
(except as may be indicated in the notes thereto and except for the absence of
footnotes in the unaudited financial statements), the financial position of the
Company as of the dates thereof and the results of operations and changes in
financial position for the periods then ended (subject, in the case of any
interim financial statements, to normal year-end adjustments). No change in the
business, assets, liabilities, condition (financial or other), or results of
operations of the Company has occurred between the date of filing of the Company
SEC Filings filed prior to the date hereof with the Securities and Exchange
Commission and the date hereof that would cause such Company SEC Filing,
including the financial statements and schedules included or incorporated by
reference therein, to contain, as of the date hereof, any untrue statement of a
material fact or to omit to state a material fact that would be required to be
stated or incorporated by reference therein or that would be necessary in order
to make the statements contained therein, as of the date hereof, not misleading.
(u) Representations and Warranties. The representations and warranties of
the Sellers Company included in this Agreement, and any list, statement,
document or information set forth in, attached to any schedule provided pursuant
to this Agreement or delivered hereunder (including the Disclosure Schedule),
are true and complete in all material respects and do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading, under the circumstance under which they were made.
13
(v) Certain Business Relationships with the Company. Except as disclosed
in the Company SEC Filings, none of the Sellers and their Affiliates has been
involved in any business arrangement or relationship with the Company within the
past 12 months, and none of the Sellers and their Affiliates owns any asset,
tangible or intangible, which is used in the business of the Company.
5. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Sellers that the statements contained in this
Section 4 are correct and complete as of the Closing Date, except as set forth
in Annex II attached hereto.
(a) Organization of the Purchaser. The Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Authorization of Transaction. The Purchaser has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Purchaser,
enforceable in accordance with its terms and conditions. The Purchaser need not
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Purchaser is subject or any provision
of its charter or bylaws or (B) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Purchaser is a party or by which it is bound or to which any of its assets
is subject.
(d) Brokers' Fees. The Purchaser has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Investment. The Purchaser is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act.
6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8 below).
The
14
Sellers acknowledge and agree that from and after the Closing the Purchaser will
be entitled to possession of all documents, books, records (including Tax
records), agreements, and financial data of any sort relating to the Company.
(b) Litigation Support. In the event and for so long as the Purchaser
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, each of the Sellers will cooperate
with the Purchaser or its counsel in the contest or defense, make available
their personnel, and provide such testimony and access to their books and
records as shall be necessary in connection with the contest or defense, all at
the sole cost and expense of the Purchaser.
(c) Transition. None of the Sellers will take any action that is designed
or intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Company from maintaining the same
business relationships with the Company after the Closing as it maintained with
the Company prior to the Closing.
(d) Confidentiality. Each of the Sellers will treat and hold as such all
of the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver promptly to
the Purchaser or destroy, at the request and option of the Purchaser, all
tangible embodiments (and all copies) of the Confidential Information which are
in his possession. In the event that any of the Sellers is requested or required
(by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, that Seller will notify the
Purchaser promptly of the request or requirement so that the Purchaser may seek
an appropriate protective order or waive compliance with the provisions of this
Section 6(d). If, in the absence of a protective order or the receipt of a
waiver hereunder, any of the Sellers is, on the advice of counsel, compelled to
disclose any Confidential Information to any tribunal or else stand liable for
contempt, that Seller may disclose the Confidential Information to the tribunal;
provided, however, that the disclosing Seller shall use his reasonable best
efforts to obtain, at the reasonable request of the Purchaser, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as the Purchaser shall
designate. The foregoing provisions shall not apply to any Confidential
Information which is generally available to the public immediately prior to the
time of disclosure.
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Purchaser. The obligation of the
Purchaser to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3 and
Section 4 above shall be true and correct in all material respects at and
as of the Closing Date;
15
(ii) the Company shall have procured all of the third party consents
specified in Section 5(b) above;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, (C)
affect adversely the right of the Purchaser to own the Shares or to
control the Company, or (D) affect adversely the right of the Company to
own its assets and to operate its businesses (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(iv) the Sellers shall have delivered to the Purchaser a certificate
to the effect that each of the conditions specified above in Section
7(a)(i)-(iii) is satisfied in all respects;
(v) Xxxxxxx Xxxxxx shall have executed and delivered the Consulting
Agreement as in form and substance satisfactory to the Purchaser;
(vi) The Sellers shall have delivered to the Purchaser an agreement
and release executed by Xxxxxxx Xxxxxx and International Global
Communications, Inc. for the termination of the Company's sublease
arrangement at 000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxx Xxxx, along with
any security deposit of the Company held by Xxxxxxx Xxxxxx and/or
International Global Communications, Inc. with respect to such sublease.
(vii) the Sellers shall have delivered to the Purchaser the written
resignation of each current officer, director (subject to any applicable
filings under the Securities and Exchange Act of 1934, as amended) and
employee of the Company;
(viii) the Sellers shall have delivered to the Purchaser a written
consent of the sole director of the Company, dated as of the Closing Date,
which consent shall appoint Xx. Xx Xxx Xxxx as the President of the
Company;
(ix) the Purchaser shall have received from counsel to the Sellers
an opinion in form and substance satisfactory to Purchaser, addressed to
the Purchaser, and dated as of the Closing Date;
(x) the Purchaser shall have received executed purchase agreements
from each of the selling securityholders listed on the Amendment No. 8 to
Form SB-2 (Registration No. 333-100803) in form and substance satisfactory
to the Purchaser along with originally issued stock certificates
evidencing the shares of the Company's common stock being purchased;
(xi) the Purchaser shall have received executed purchase agreements
from each of Xxxxx Xxxxx and Grushko & Xxxxxxx, P.C. to purchase an
aggregate of 450,000 shares
16
of the Company's common stock (representing the entire equity holdings in
the Company of such holders) along with originally issued stock
certificates evidencing the shares of the Company's common stock being
purchased;
(xii) the Purchaser shall have received originals of all previous
issued and redeemed share certificates and warrants issued by the Company,
all marked "cancelled"; and
(x) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Purchaser.
The Purchaser may waive any condition specified in this Section 7(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Sellers. The obligation of the Sellers
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 5 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Purchaser shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and
no such injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(iv) the Purchaser shall have delivered to the Sellers a certificate
to the effect that each of the conditions specified above in Section
7(b)(i)-(iii) is satisfied in all respects; and
(v) all actions to be taken by the Purchaser in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Sellers.
(v) execution of the Consulting Agreement between the Company and
Xxxxxxx Xxxxxx as set on Exhibit .
17
The Requisite Sellers may waive any condition specified in this Section 7(b) if
they execute a writing so stating at or prior to the Closing.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the representations
and warranties of the Parties contained in this Agreement shall survive the
Closing hereunder (even if the damaged Party knew or had reason to know of any
misrepresentation or breach of warranty or covenant at the time of Closing) and
continue in full force and effect forever thereafter (subject to any applicable
statutes of limitations).
(b) Indemnification Provisions for Benefit of the Purchaser.
(i) In the event any of the Sellers breaches (or in the event any
third party alleges facts that, if true, would mean any of the Sellers has
breached) any of their representations, warranties, and covenants
contained herein, and, provided that the Purchaser makes a written claim
for indemnification against any of the Sellers pursuant to Section 10(h)
below within such survival period, then each of the Sellers agrees to
indemnify the Purchaser, jointly and severally, from and against the
entirety of any Adverse Consequences the Purchaser may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences the Purchaser may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or the alleged breach).
(ii) Each of the Sellers agrees to indemnify the Purchaser from and
against the entirety of any Adverse Consequences the Purchaser may suffer
resulting from, arising out of, relating to, in the nature of, or caused
by any Liability of the Company (x) for any Taxes of the Company with
respect to any Tax year or portion thereof ending on or before the Closing
Date (or for any Tax year beginning before and ending after the Closing
Date to the extent allocable (determined in a manner consistent with
Section 9(c)) to the portion of such period beginning before and ending on
the Closing Date), to the extent such Taxes are not reflected in the
reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income)
shown on the face of the Most Recent Balance Sheet (rather than in any
notes thereto).
(c) Indemnification Provisions for Benefit of the Sellers. In the event
the Purchaser breaches (or in the event any third party alleges facts that, if
true, would mean the Purchaser has breached) any of its representations,
warranties, and covenants contained herein, and, provided that any of the
Sellers makes a written claim for indemnification against the Purchaser pursuant
to Section 10(h) below within such survival period, then the Purchaser agrees to
indemnify each of the Sellers from and against the entirety of any Adverse
Consequences the Seller may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Seller may suffer after
the end of any applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by the breach (or the alleged breach).
18
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give
rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Section 8, then the Indemnified Party
shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15
days after the Indemnified Party has given notice of the Third Party Claim
that the Indemnifying Party will indemnify the Indemnified Party from and
against the entirety of any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified
Party that the Indemnifying Party will have the financial resources to
defend against the Third Party Claim and fulfill its indemnification
obligations hereunder, (C) the Third Party Claim involves only money
damages and does not seek an injunction or other equitable relief, (D)
settlement of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely
to establish a precedential custom or practice materially adverse to the
continuing business interests of the Indemnified Party, and (E) the
Indemnifying Party conducts the defense of the Third Party Claim actively
and diligently.
(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 8(d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (which consent shall not
to be unreasonably withheld), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnified Party which consent shall not be unreasonably withheld.
(iv) In the event any of the conditions in Section 8(d)(ii) above is
or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly
19
and periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (C) the
Indemnifying Parties will remain responsible for any Adverse Consequences
the Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim to the fullest
extent provided in this Section 8.
(e) Other Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have with respect to the Company
or the transactions contemplated by this Agreement. Each of the Sellers hereby
agrees that he will not make any claim for indemnification against the Company
by reason of the fact that he or it was a director, officer, employee, or agent
of the Company or was serving at the request of the Company as a partner,
trustee, director, officer, employee, or agent of another entity (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether such claim is pursuant to
any statute, charter document, bylaw, agreement, or otherwise) with respect to
any action, suit, proceeding, complaint, claim, or demand brought by the
Purchaser against such Seller (whether such action, suit, proceeding, complaint,
claim, or demand is pursuant to this Agreement, applicable law, or otherwise).
9. Tax Matters. The following provisions shall govern the allocation of
responsibility as between Purchaser and Sellers for certain tax matters
following the Closing Date:
(a) Tax Periods Ending on or Before the Closing Date. The Purchaser shall
prepare or cause to be prepared and file or cause to be filed all Tax Returns
for the Company for all periods ending on or prior to the Closing Date which are
filed after the Closing Date. The Purchaser shall permit the Sellers to review
and comment on each such Tax Return described in the preceding sentence prior to
filing. The Sellers shall reimburse Purchaser for Taxes of the Company with
respect to such periods within fifteen (15) days after payment by Purchaser or
the Company of such Taxes to the extent such Taxes are not reflected in the
reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) shown on
the face of the Closing Balance Sheet.
(b) Tax Periods Beginning Before and Ending After the Closing Date. The
Purchaser shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of the Company for Tax periods which begin before the Closing
Date and end after the Closing Date. Sellers shall pay to Purchaser within
fifteen (15) days after the date on which Taxes are paid with respect to such
periods an amount equal to the portion of such Taxes which relates to the
portion of such Taxable period ending on the Closing Date to the extent such
Taxes are not reflected in the reserve for Tax Liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) shown on the face of the Closing Balance Sheet. For
purposes of this Section, in the case of any Taxes that are imposed on a
periodic basis and are payable for a Taxable period that includes (but does not
end on) the Closing Date, the portion of such Tax which relates to the portion
of such Taxable period ending on the Closing Date shall (x) in the case of any
Taxes other than Taxes based upon or related to income or receipts, be deemed to
be the amount of such Tax for the entire Taxable period multiplied by a
20
fraction the numerator of which is the number of days in the Taxable period
ending on the Closing Date and the denominator of which is the number of days in
the entire Taxable period, and (y) in the case of any Tax based upon or related
to income or receipts be deemed equal to the amount which would be payable if
the relevant Taxable period ended on the Closing Date. Any credits relating to a
Taxable period that begins before and ends after the Closing Date shall be taken
into account as though the relevant Taxable period ended on the Closing Date.
All determinations necessary to give effect to the foregoing allocations shall
be made in a manner consistent with prior practice of the Company.
(c) Cooperation on Tax Matters.
(i) The Purchaser and Sellers shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the
filing of Tax Returns pursuant to this Section and any audit, litigation
or other proceeding with respect to Taxes. Such cooperation shall include
the retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and
explanation of any material provided hereunder. The Company and Sellers
agree (A) to retain all books and records with respect to Tax matters
pertinent to the Company relating to any taxable period beginning before
the Closing Date until the expiration of the statute of limitations (and,
to the extent notified by the Purchaser or Sellers, any extensions
thereof) of the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority, and (B) to
give the other Party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other
party so requests, the Company or the Sellers, as the case may be, shall
allow the other party to take possession of such books and records.
(ii) The Purchaser and the Sellers further agree, upon request, to
use their best efforts to obtain any certificate or other document from
any governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including
with respect to the transactions contemplated hereby).
(iii) Purchaser and Sellers further agree, upon request, to provide
the other party with all information that either party may be required to
report pursuant to Section 6043 of the Code and all Treasury Department
Regulations promulgated thereunder.
(d) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement (including any New York
State Gains Tax, New York City Transfer Tax and any similar tax imposed in other
states or subdivisions), shall be paid by the Sellers when due, and the Sellers
will, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, and, if required by applicable law, the
Purchaser will, and will cause its affiliates to, join in the execution of any
such Tax Returns and other documentation.
21
10. Miscellaneous.
(a) Nature of Certain Obligations.
(i) The covenants of each of the Sellers in Section 2(a) above
concerning the sale of his Shares to the Purchaser and the representations
and warranties of each of the Sellers in Section 3(a) above concerning the
transaction are several obligations. This means that the particular Seller
making the representation, warranty, or covenant will be solely
responsible to the extent provided in Section 8 above for any Adverse
Consequences the Purchaser may suffer as a result of any breach thereof.
(ii) The remainder of the representations, warranties, and covenants
in this Agreement are joint and several obligations. This means that each
Seller will be responsible to the extent provided in Section 8 above for
the entirety of any Adverse Consequences the Purchaser may suffer as a
result of any breach thereof.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
Purchaser and the Sellers; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
(c) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(e) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of his
or its rights, interests, or obligations hereunder without the prior written
approval of the Purchaser and the Sellers; provided, however, that the Purchaser
may (i) assign any or all of its rights and interests hereunder to one or more
of its Affiliates and (ii) designate one or more of its Affiliates to perform
its obligations hereunder (in any or all of which cases the Purchaser
nonetheless shall remain responsible for the performance of all of its
obligations hereunder).
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
22
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Sellers: Copy to:
------------------ --------
To address set forth Xxxxxx & Xxxxxx, LLP
opposite such Seller's 0000 Xxxxx 0, 0xx Xxxxx
Name on Schedule I Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Purchaser: Copy to:
___________________________ XxXxxx Xxxx Xxxx, LLC
___________________________ 000 Xxxxxxxx, Xxxxx 0000
___________________________ Xxx Xxxx, Xxx Xxxx 00000
Attn:______________________ Attn: Xxxxxxx Xxxx, Esq.
Facsimile No. Facsimile No.: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
facsimile, telex or ordinary mail), but no such notice, request, demand, claim,
or other communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Purchaser and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
23
(k) Expenses. Each of the Parties will bear his or its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. The Sellers agree that the
Company has not borne and will not bear any of the Sellers' costs and expenses
(including any of their legal fees and expenses) in connection with this
Agreement or any of the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. 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. 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. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
(m) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(n) Specific Performance. Each of the Parties acknowledges and agrees that
the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 10(p)
below), in addition to any other remedy to which they may be entitled, at law or
in equity.
(o) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in County of New York, State
of New York, in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. Each Party also agrees not to bring
any action or proceeding arising out of or relating to this Agreement in any
other court. Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other Party with respect
thereto.
24
(p) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
[Signatures appear on the next page]
25
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
PURCHASER:
JANDAH MANAGEMENT LIMITED
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
SELLERS:
----------------------------
XXXXXXX XXXXXX
----------------------------
XXXXX XXXXXX
----------------------------
XXXXX XXXXX
SCHEDULE I
-------------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES BEING
NAME AND NUMBER OF SOLD TO
ADDRESS SHARES OWNED PURCHASER PURCHASE PRICE
-------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxx 6,600,000 6,376,000 $211,365
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
-------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx 2,000,000 2,000,000 $ 66,300
00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
-------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx 900,000 900,000 $ 29,835
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
-------------------------------------------------------------------------------------------------------------------
TOTAL 9,500,000 9,276,000 $307,500
-------------------------------------------------------------------------------------------------------------------
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