Exhibit 10.1
EXECUTION COPY
STOCK AND WARRANT PURCHASE AGREEMENT
BY AND BETWEEN
ST. XXXXXXXX SEAWAY CORPORATION
AND
XXXXXXX XXXXXXXXX & COMPANY, INC.
DATED AS OF January 10, 2007
TABLE OF CONTENTS
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ARTICLE I
AGREEMENT TO PURCHASE AND SELL STOCK...........................................1
1.1 Authorization............................. ..............................1
1.2 Agreement to Purchase and Sell Common Stock..............................1
1.3 Per Share Purchase Price.................................................1
1.4 Agreement to Purchase and Sell Warrant...................................1
ARTICLE II
CLOSING........................................................................2
2.1 The Closing..............................................................2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................2
3.1 Organization, Good Standing and Qualification............................2
3.2 Capitalization...........................................................2
3.3 Subsidiaries.............................................................3
3.4 Due Authorization........................................................3
3.5 Valid Issuance of Stock..................................................3
3.6 Governmental Consents....................................................4
3.7 Non-Contravention........................................................4
3.8 Litigation...............................................................4
3.9 Full Disclosure..........................................................4
3.10 Intellectual Property....................................................5
3.11 Compliance with Law and Charter Documents................................5
3.12 Registration Rights......................................................5
3.13 Title to Property and Assets.............................................5
3.14 SEC Documents............................................................5
3.15 Absence of Certain Changes Since Balance Sheet Date......................6
3.16 Employee Benefits........................................................7
3.17 Tax Matters..............................................................9
3.18 Labor Agreements and Actions............................................10
3.19 Real Property Holding Corporation Status................................10
3.20 Environmental Matters ..................................................10
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR................................10
4.1 Organization, Good Standing and Qualification...........................11
4.2 Due Authorization.......................................................11
4.3 Non-Contravention.......................................................11
4.4 Authorization ...................................................11
4.5 Purchase For Own Account................................................11
4.6 Disclosure of Information...............................................12
4.7 Investment Experience...................................................12
4.8 Accredited Investor Status..............................................12
4.9 Restricted Securities...................................................12
4.10 Further Limitations on Disposition......................................12
4.11 Legends.................................................................13
ARTICLE V
COVENANTS.....................................................................14
5.1 Board of Directors......................................................14
5.2 Officers................................................................14
5.3 Corporation Location....................................................14
5.4 Securities Law Compliance...............................................15
5.5 Potential Transaction ..................................................15
5.6 Shareholder Vote .......................................................15
5.7 Class A Common Stock Issuance ..........................................16
5.8 Access to Information, Confidentiality .................................16
ARTICLE VI
CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING...............................17
6.1 Representations and Warranties True.....................................17
6.2 Performance.............................................................17
6.3 Compliance Certificate..................................................18
6.4 Securities Exemptions ..................................................18
6.5 Proceedings and Documents ..............................................18
6.6 Opinion of Company Counsel .............................................18
6.7 Share Authorization.....................................................18
6.8 Warrant ................................................................19
6.9 Shareholder Approval ...................................................19
ARTICLE VII
CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING............................19
7.1 Representations and Warranties True.....................................19
7.2 Payment of Purchase Price...............................................19
7.3 Securities Exemptions...................................................19
7.4 Proceedings and Documents ..............................................19
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ARTICLE VIII
MISCELLANEOUS ................................................................19
8.1 Successors and Assigns..................................................19
8.2 Governing Law...........................................................19
8.3 Counterparts............................................................20
8.4 Headings................................................................20
8.5 Notices.................................................................20
8.6 No Finder's Fees........................................................21
8.7 Amendments and Waivers..................................................21
8.8 Severability............................................................21
8.9 Entire Agreement........................................................21
8.10 Further Assurances......................................................21
8.11 Fees, Costs and Expenses................................................21
8.12 Survival................................................................22
8.13 No Third Party Beneficiary..............................................22
Signatures....................................................................23
Exhibit A Form of Warrant
Exhibit B Schedule of Exceptions
Exhibit C Form of Opinion of Company Counsel
Exhibit D Delaware Certificate of Incorporation
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STOCK AND WARRANT PURCHASE AGREEMENT
THIS STOCK AND WARRANT PURCHASE AGREEMENT (the "AGREEMENT"), dated as of
the 10th day of January, 2007, is by and between St. Xxxxxxxx Seaway
Corporation, a corporation authorized and existing pursuant to the laws of the
state of Indiana (the "COMPANY"), and Xxxxxxx Xxxxxxxxx & Company, Inc., a
corporation authorized and existing pursuant to the laws of the state of
Connecticut (the "INVESTOR").
W I T N E S S E T H:
WHEREAS, the Company desires to sell to the Investor, and the Investor
desires to purchase from the Company, shares of the Company's Common Stock and a
Warrant to purchase additional shares of the Company's Common Stock on the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing recital, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
1.1 AUTHORIZATION. As of the Closing (as defined below), the Company's
Board of Directors will have authorized the issuance, pursuant to the terms and
conditions of this Agreement, of three hundred twenty five thousand (325,000)
shares of the Company's Common Capital Stock, One Cent ($0.01) par value (the
"COMMON STOCK") which represents 75,000 shares to be issued at Closing and
250,000 shares issuable upon the exercise of the Warrant (as defined in Section
1.4 below).
1.2 AGREEMENT TO PURCHASE AND SELL COMMON STOCK. The Company hereby
agrees to sell to the Investor at the Closing, and the Investor agrees to
purchase from the Company at the Closing, 75,000 shares of Common Stock at a
price per share equal to the Per Share Purchase Price, as defined below. The
shares of Common Stock purchased and sold pursuant to this Agreement will be
collectively hereinafter referred to as the "PURCHASED SHARES."
1.3 PER SHARE PURCHASE PRICE. The "PER SHARE PURCHASE PRICE" shall mean
One Dollar ($1.00).
1.4 AGREEMENT TO PURCHASE AND SELL WARRANT. The Company
hereby agrees to sell to the Investor at the Closing, and the Investor agrees to
purchase from the Company at the Closing, a ten-year Warrant (the "WARRANT") in
the form attached hereto as EXHIBIT A to purchase from the Company up to two
hundred fifty thousand (250,000) shares of Common Stock of the Company at an
exercise price of One Dollar ($1.00) per share. The purchase price for the
Warrant shall equal Two Thousand Five Hundred Dollars ($2,500). The shares of
Common Stock purchasable upon exercise of the Warrant will be collectively
hereinafter referred to as the "WARRANT SHARES."
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2. CLOSING.
2.1 THE CLOSING. The purchase and sale of the Purchased Shares and the
Warrant will take place at the offices of Lev & Berlin, PC, 000 Xxxxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, at 10:00 a.m. EST, on or about April 30,
2007 or at such other time and place as the Company and the Investor mutually
agree upon (which time and place are referred to in this Agreement as the
"CLOSING"). At the Closing, the Company will deliver to the Investor, (i) the
Warrant issued in one or more warrants in such denominations as requested by
Investor to purchase up to an aggregate of two hundred fifty thousand (250,000)
shares of Common Stock of the Company; and (ii) one or more certificate(s)
representing the Purchased Shares in such denominations as requested by Investor
up to an aggregate of the Purchased Shares, all against delivery to the Company
by the Investor of the full purchase price of the Warrant and the Purchased
Shares, paid by cashier or certified check or wire transfer of funds to the
Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that the statements in this Section 3
are true, complete and correct, except as set forth in the Schedule of
Exceptions (the "SCHEDULE OF EXCEPTIONS") attached to this Agreement as
EXHIBIT B:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Indiana and has all corporate power and authority
required to (a) carry on its business as presently conducted, and (b) enter into
this Agreement, and all other agreements, securities and instruments
contemplated hereby, and the Warrant and to consummate the transactions
contemplated hereby and thereby. The Company is qualified to do business and is
in good standing in each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect. As used in this Agreement, "MATERIAL ADVERSE
EFFECT" means a material adverse effect on, or a material adverse change in, or
a group of such effects on or changes in, the operations, financial condition,
results of operations, prospects, assets or liabilities of the Company.
3.2 CAPITALIZATION. As of the date of this Agreement the capitalization
of the Company is as follows:
(a) PREFERRED STOCK. No shares of preferred stock are authorized,
issued or outstanding.
(b) COMMON STOCK. A total of 4,000,000 shares of Common Stock, One
Dollar ($1.00) par value are authorized, of which 427,069 shares are issued and
outstanding. All of such outstanding shares are validly issued, fully paid and
non-assessable. No such outstanding shares were issued in violation of any
preemptive right.
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(c) OPTIONS, WARRANTS, RESERVED SHARES. Except for the restated
stock option agreement to purchase 15,000 shares of Common Stock dated as of
September 21, 1987, as amended, and warrants to purchase 37,500 and 29,166
shares of Common Stock dated January 30, 2006 and June 13, 2006, respectively,
in each case, which are set to expire on September 21, 2007, there are no
outstanding options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from the Company of any
shares of its capital stock or any securities convertible into or ultimately
exchangeable or exercisable for any shares of the Company's capital stock. No
shares of the Company's outstanding capital stock, or stock issuable upon
exercise, conversion or exchange of any outstanding options, warrants or rights,
or other stock issuable by the Company, are subject to, and there are no
agreements to which the Company is subject affording any person any rights of
first refusal, preemptive rights or other rights to purchase such stock (whether
in favor of the Company or any other person), pursuant to any agreement or
commitment of the Company. As of the Closing Date, not less than two hundred
fifty thousand (250,000) shares of Common Stock are reserved for issuance upon
the exercise of the Warrant.
3.3 SUBSIDIARIES. The Company does not presently control, directly or
indirectly, any other corporation, partnership, trust, joint venture,
association, or other entity.
3.4 DUE AUTHORIZATION. Other than the Shareholder Approval (as defined
below), all corporate action on the part of the Company, its officers, directors
and shareholders necessary for the authorization, execution, delivery of, and
the performance of all obligations of the Company under, this Agreement, and the
Warrant and the authorization, issuance, reservation for issuance and delivery
of all of the Purchased Shares being sold under this Agreement and the Warrant
Shares has been taken or will be taken prior to the Closing, and this Agreement
constitutes, and the Warrant when executed, will constitute, valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as may be limited by (i)
applicable bankruptcy, insolvency, reorganization or others laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (ii) the effect of rules of law governing the availability of
equitable remedies.
3.5 VALID ISSUANCE OF STOCK.
(a) The Purchased Shares, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration provided for
herein, will be duly and validly issued, fully paid and nonassessable. The
Warrant Shares have been duly and validly reserved for issuance and, upon
issuance, sale and delivery in accordance with the terms of the Warrant for the
consideration provided for therein, will be duly and validly issued, fully paid
and nonassessable.
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(b) Based in part on the representations made by the Investor in
Section 4 hereof, the Purchased Shares, the Warrant and (assuming no change in
applicable law and no unlawful distribution of Purchased Shares or the Warrant
by the Investor or other parties) the Warrant Shares will be issued in
compliance with the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the "1933 ACT"), or in compliance with
applicable exemptions therefrom, and the registration and qualification
requirements of all applicable securities laws of the States of the United
States (provided that, with respect to the Warrant Shares, no commission or
other remuneration is paid or given, directly or indirectly, for soliciting the
issuance of the Warrant Shares upon the exercise of the Warrant).
3.6 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for the filing of such qualifications or
filings under the 1933 Act and the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") and the regulations thereunder and all applicable state
securities laws as may be required in connection with the transactions
contemplated by this Agreement. All such qualifications and filings will, in the
case of qualifications, be effective on the Closing and will, in the case of
filings, be made within the time prescribed by law.
3.7 NON-CONTRAVENTION. The execution, delivery and performance of this
Agreement and the Warrant by the Company, and the consummation by the Company of
the transactions contemplated hereby and thereby, do not and will not (i)
contravene or conflict with the Articles of Incorporation or Bylaws of the
Company; (ii) constitute a material violation of any provision of any federal,
state, local or foreign law binding upon or applicable to the Company; or (iii)
constitute a default under, give rise to any right of termination, cancellation
or acceleration of, or to a loss of any benefit to which the Company is entitled
under, or result in the creation or imposition of any lien, claim or encumbrance
on any material assets of the Company under any material contract to which the
Company is a party or any material permit, license or similar right relating to
the Company or by which the Company may be bound or materially affected.
3.8 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation ("ACTION") pending : (a) against the Company, its
activities, properties or assets or, to the Company's knowledge, against any
officer, director or employee of the Company in connection with such officer's,
director's or employee's relationship with, or actions taken on behalf of, the
Company, or (b) that seeks to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement or the Warrant. To the Company's knowledge there
is no Action pending or currently threatened against the Company. To the
Company's knowledge, the Company is not a party to or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality and there is no Action by the Company currently
pending or which the Company intends to initiate.
3.9 FULL DISCLOSURE. The information contained in this Agreement and
the Schedule of Exceptions and the Warrant are true and complete in all material
respects and do not omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
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3.10 INTELLECTUAL PROPERTY
To the Company's knowledge, the Company has not violated or infringed,
and is not currently violating or infringing, and the Company has not received
any communications alleging that the Company (or any of its employees or
consultants) has violated or infringed or is currently violating or infringing
any or all patents or patent applications, software, know-how, registered or
unregistered trademarks and service marks or any applications therefor,
registered or unregistered copyrights, trade names, or any applications
therefor, trade secrets or other confidential or proprietary information of any
other person or entity, to the extent that any such violation or infringement,
either individually or together with all other such violations and
infringements, would have a Material Adverse Effect.
3.11 COMPLIANCE WITH LAW AND CHARTER DOCUMENTS. The Company is
not in violation or default of any provisions of its Articles of Incorporation
or Bylaws, both as amended, and except for any violations that would not, either
individually or in the aggregate, have a Material Adverse Effect. , the Company
has complied and is in compliance in all material respects with all applicable
statutes, laws, regulations and executive orders of the United States of
America,) and all states, foreign countries or other governmental bodies and
agencies having jurisdiction over the Company's business or properties;
provided, however, that the Company makes no representations or warranties with
respect to the Investment Company Act of 1940 (the "ICA").
3.12 REGISTRATION RIGHTS. The Company is not currently subject to any
grant or agreement to grant to any person or entity any rights (including
piggyback registration rights) to have any securities of the Company registered
with the United States Securities and Exchange Commission ("SEC") or any other
governmental authority.
3.13 TITLE TO PROPERTY AND ASSETS. The properties and assets
the Company owns are owned by the Company free and clear of all mortgages, deeds
of trust, liens, encumbrances and security interests except for statutory liens
for the payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests which arise in the ordinary course of
business and which do not affect material properties and assets of the Company.
3.14 SEC DOCUMENTS.
(a) The Company has filed with the SEC copies of its Annual Reports
on Form 10-KSB for the fiscal year ended March 31, 2006 ("FORM 10-KSB"), March
31, 2005 and March 31, 2004, and all other registration statements, reports and
proxy statements that have been required to be filed by the Company with the SEC
under the the Exchange Act, and the 1933 Act on or after March 31, 2006,
including, but not limited to, the Company's Quarterly Report on Form 10-QSB for
the quarter ended September 30, 2006 (to the extent it is filed with the SEC),
June 30, 2006 and its Current Reports on Form 8-K filed June 1, 2006 and June
30, 2006 (the Form 10-KSB, such Forms 10-QSB and 8-K, and such registration
statements, reports and proxy statements, are collectively referred to herein as
the "SEC DOCUMENTS"). Each of the SEC Documents, as of the respective date
thereof, does not, and each of the registration statements, reports and proxy
statements filed by the Company with the SEC after the date hereof and prior to
the Closing will not, as of the date thereof, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Company is not a party to any material contract,
agreement or other arrangement required to be filed as an exhibit to the SEC
Documents that is not so filed.
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(b) The Form 10-KSB includes the Company's audited financial
statements (the "AUDITED FINANCIAL STATEMENTS") for the fiscal year ended March
31, 2006 (the "BALANCE SHEET DATE") and 2005.The audited and unaudited
consolidated financial statements of the Company included in the SEC Documents
filed prior to the date hereof fairly present, in conformity with generally
accepted accounting principles ("GAAP") (except for the omission of certain
footnotes as permitted by Form 10-QSB) applied on a consistent basis (except as
may be indicated in the notes thereto) the consolidated financial position of
the Company and its consolidated subsidiaries as at the Balance Sheet Date and
the consolidated results of their operations and cash flows for the periods then
ended (subject to normal year and audit adjustments in the case of unaudited
interim financial statements).
(c) Except as and to the extent reflected or reserved against in
the Company's Audited Financial Statements (including the notes thereto), to the
knowledge of the Company, the Company has no material liabilities required to be
set forth in a balance sheet under GAAP (whether accrued or unaccrued,
liquidated or unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined or determinable) other
than: (i) liabilities incurred in the ordinary course of business since the
Balance Sheet Date that are consistent with the Company's past practices, (ii)
liabilities with respect to agreements to which the Investor is a party, and
(iii) other liabilities that either individually or in the aggregate, would not
result in a Material Adverse Effect.
(d) Since January 1, 2003, the Company has been in compliance, and
shall remain compliant, in all material respects with the requirements of the
1933 Act, the Exchange Act as well as the registration and/or qualification
requirements of all applicable state securities laws.
3.15 ABSENCE OF CERTAIN CHANGES SINCE BALANCE SHEET DATE. Since the
Balance Sheet Date, the business and operations of the Company have been
conducted in the ordinary course consistent with past practice, and except for
the transactions contemplated by this Agreement there has not been:
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(a) any declaration setting aside or payment of any dividend or
other distribution of the assets of the Company with respect to any shares of
capital stock of the Company, or any repurchase, redemption or other acquisition
by the Company or any subsidiary of the Company of any outstanding shares of the
Company's capital stock;
(b) any damage, destruction or loss, whether or not covered by
insurance, except for such occurrences that have not resulted, and are not
expected to result, in a Material Adverse Effect;
(c) any waiver by the Company of a valuable right or of a material
debt owed to it, except for such waivers that have not resulted, and are not
expected to result, in a Material Adverse Effect;
(d) any change or amendment to, or any waiver of any rights under,
a material contract or arrangement by which the Company or any of its assets or
properties is bound or subject, except for changes, amendments, or waivers which
are expressly provided for or disclosed in this Agreement or that have not
resulted, and are not expected to result, in a Material Adverse Effect; and
(e) any change by the Company in its accounting principles, methods
or practices or in the manner it keeps its accounting books and records, except
any such change required by a change in GAAP.
3.16 EMPLOYEE BENEFITS.
(a) As used in this Section 3.16, the following terms have the
following meanings: (1) "BENEFIT ARRANGEMENT" means any material benefit
arrangement that is not an Employee Benefit Plan, including (i) each material
employment or consulting agreement, (ii) each material arrangement providing for
insurance coverage or workers' compensation benefits, (iii) each material bonus
or deferred bonus arrangement, (iv) each material arrangement providing any
termination allowance, severance or similar benefits, (v) each equity
compensation plan, (vi) each deferred compensation plan and (vii) each material
compensation policy and practice maintained by the Company covering the
employees, former employees, officers, former officers, directors and former
directors of the Company, and the beneficiaries of any of them; (2) "BENEFIT
PLAN" means an Employee Benefit Plan or Benefit Arrangement; (3) "COBRA" means
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, as set
forth in Section 4980B of the Code and Part 6 of Title I of ERISA; (4) "EMPLOYEE
BENEFIT PLAN" means any employee benefit plan, as defined in Section 3(3) of
ERISA, that is sponsored or contributed to by the Company or any ERISA Affiliate
covering employees or former employees of the Company; (5) "EMPLOYEE PENSION
BENEFIT PLAN" means any employee pension benefit plan, as defined in Section
3(2) of ERISA, that is regulated under Title IV of ERISA, other than a
Multiemployer Plan; (6) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended; (7) "ERISA AFFILIATE" of the Company means any other
person or entity that, together with the Company as of the relevant measuring
date under ERISA, was or is required to be treated as a single employer under
Section 414 of the Code; (8) "GROUP HEALTH PLAN" means any group health plan, as
defined in Section 5000(b)(1) of the Code; (9) "MULTIEMPLOYER PLAN" means a
multiemployer plan, as defined in Section 3(37) and 4001(a)(3) of ERISA; and
(10) "PROHIBITED TRANSACTION" means a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA, respectively.
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(b) Since January 1, 2003, neither the Company nor any of its ERISA
Affiliates sponsors or has sponsored, maintained, contributed to, or incurred an
obligation to contribute to, any Employee Pension Benefit Plan (whether or not
terminated). Since January 1, 2003, neither the Company nor any of its ERISA
Affiliates sponsors or has sponsored, maintained, contributed to, or incurred an
obligation to contribute to, any Multiemployer Plan (whether or not terminated).
(c) Since January 1, 2003, no Employee Benefit Plan has
participated in, engaged in or been a party to any Prohibited Transaction, and
neither the Company nor any of its ERISA Affiliates has had asserted against it
any claim for any material tax or material penalty imposed under ERISA or the
Code with respect to any Employee Benefit Plan nor, to the Company's knowledge,
is there a basis for any such claim. To the knowledge of the Company, Since
January 1, 2003, no officer, director or employee of the Company has committed a
material breach of any responsibility or obligation imposed upon fiduciaries by
Title I of ERISA with respect to any Employee Benefit Plan, with respect to
which breach the Company is directly or indirectly liable.
(d) Other than routine claims for benefits, there is no material
claim pending involving any Benefit Plan by any Person against such plan or the
Company or any ERISA Affiliate, nor, to the Company's knowledge, is any such
material claim threatened. There is no pending, or to the Company's knowledge,
threatened Proceeding involving any Employee Benefit Plan before the IRS, the
United States Department of Labor or any other governmental authority.
(e) No material violation of any reporting or disclosure
requirement imposed by ERISA or the Code exists with respect to any Employee
Benefit Plan.
(f) Each Benefit Plan has been maintained in all material respects,
by its terms and in operation, in accordance with ERISA (if applicable), the
Code and all other applicable federal, state, local and foreign laws. Since
January 1, 2003, the Company and its ERISA Affiliates have made full and timely
payment of all amounts required to be (i) contributed under the terms of each
Benefit Plan and such laws, or (ii) required to be paid as expenses under such
Benefit Plan.
(g) Except pursuant to the provisions of COBRA, neither the Company
nor any ERISA Affiliate maintains any Employee Benefit Plan that provides
benefits described in Section 3(1) of ERISA to any former employees or retirees,
or the beneficiaries of any of them, of the Company or its ERISA Affiliates.
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3.17 TAX MATTERS.
(a) All deficiencies asserted or assessments made as a result of
any examinations by the Internal Revenue Service or any state, local or foreign
taxing authority have been fully paid, or are fully reflected as a liability in
the Audited Financial Statements. Since January 1, 2003, the Company has filed
on a timely basis all Tax Returns required to have been filed by it and has paid
on a timely basis all Taxes required to be paid. All such Tax Returns are true,
complete and correct in all material respects. The provisions for Taxes in the
Audited Financial Statements have been determined in accordance with GAAP. No
liability for Taxes has been incurred by the Company since the Balance Sheet
Date other than in the ordinary course of its business. No director, officer or
employee of the Company having responsibility for Tax matters has reason to
believe that any Taxing authority has valid grounds to claim or assess any
additional Tax with respect to the Company in excess of the amounts shown in the
Audited Financial Statements for the periods covered thereby. As used in this
Agreement, (1) "TAXES" means (x) all federal, state, local and other net income,
gross income, gross receipts, sales, use, ad valorem, value added, intangible,
unitary, capital gain, transfer, franchise, profits, license, lease, service,
service use, withholding, backup withholding, payroll, employment, estimated,
excise, severance, stamp, occupation, premium, property, prohibited
transactions, windfall or excess profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts with respect thereto, (y)
any liability for payment of amounts described in clause (x) whether as a result
of transferee liability, of being a member of an affiliated, consolidated,
combined or unitary group for any period, or otherwise through operation of law
and (z) any liability for the payment of amounts described in clauses (x) or (y)
as a result of any tax sharing, tax indemnity or tax allocation agreement or any
other express or implied agreement to indemnify any other person for Taxes; and
the term "TAX" means any one of the foregoing Taxes; and (2) "TAX RETURNS" means
all returns, reports, forms or other information required to be filed with
respect to any Tax.
(b) With respect to all amounts in respect of Taxes imposed upon
the Company, or for which the Company is or could be liable, whether to taxing
authorities (as, for example, under law) or to other persons or entities (as,
for example, under tax allocation agreements), and with respect to all taxable
periods or portions of periods ending on or before the Closing Date, all
applicable Tax laws and agreements have been complied with in all material
respects, and all such amounts required to be paid by the Company to taxing
authorities or others have been paid.
(c) Since January 1, 2003, the Company has not received notice that
the Internal Revenue Service or any other taxing authority has asserted against
the Company any deficiency or claim for additional Taxes in connection with any
Tax Return, and no issues have been raised (and are currently pending) by any
taxing authority in connection with any Tax Return. Since January 1, 2003, the
Company has not received notice that it is or may be subject to Tax in a
jurisdiction in which it has not filed or does not currently file Tax Returns.
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3.18 LABOR AGREEMENTS AND ACTIONS.
(a) No collective bargaining agreement exists that is binding on
the Company, and no petition has been filed or proceedings instituted by an
employee or group of employees with any labor relations board seeking
recognition of a bargaining representative.
(b) As of the date of this Agreement, the Company has no employees
or consulting agreements or other arrangements.
(c) All individuals who are performing or have, since January 1,
2003, performed services for the Company and are or were classified by the
Company as "independent contractors" qualify for such classification under
Section 530 of the Revenue Act of 1978 or Section 1706 of the Tax Reform Act of
1986, as applicable, except for such instances which would not, in the
aggregate, have a Material Adverse Effect.
3.19 REAL PROPERTY HOLDING CORPORATION STATUS. Since January 1, 2003,
the Company has not been a "United States real property holding corporation", as
defined in Section 897(c)(2) of the U.S. Internal Revenue Code of 1986, as
amended, and in Section 1.897-2(b) of the Treasury Regulations issued thereunder
(the "REGULATIONS"), and the Company has filed with the Internal Revenue Service
all statements, if any, with its United States income tax returns which are
required under Section 1.897-2(h) of the Regulations.
3.20 ENVIRONMENTAL MATTERS. The Company is in compliance with all
applicable federal, state, local and foreign laws, principles of common laws,
civil laws, regulations, and codes, as well as orders, decrees, judgments or
injunctions, issued, promulgated, approved or entered thereunder relating to
pollution, protection of the environment or public health and safety
("Environmental Laws"), except to the extent that a failure to be in compliance
would not have a Material Adverse Effect on the Company. There is no civil,
criminal or administrative judgment, action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or demand letter pending
or, to the knowledge of the Company, threatened against the pursuant to
Environmental Laws; and, to the knowledge of the Company, there are no past or
present events, conditions, circumstances, activities, practices, incidents,
agreements, actions or plans that would reasonably be expected to prevent
material compliance with, or which have given rise to or will give rise to
material liability under, Environmental Laws.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE INVESTOR. The
Investor hereby represents and warrants to the Company, and agrees that:
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4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Investor is a corporation duly organized, validly existing and in good standing
under the laws of the State of Connecticut and has all corporate power and
authority required to (a) carry on its business as presently conducted, and (b)
enter into this Agreement, and all other agreements, securities and instruments
contemplated hereby, and to consummate the transactions contemplated hereby and
thereby. The Investor is qualified to do business and is in good standing in
each jurisdiction in which the failure to so qualify would have a material
adverse effect on, or a material adverse change in, or a group of such effects
on or changes in, the operations, financial condition, results of operations,
prospects, assets or liabilities of the Investor.
4.2 DUE AUTHORIZATION. All corporate action on the part of the
Investor, its officers, directors and shareholders necessary for the
authorization, execution, delivery of, and the performance of all obligations of
the Investor under this Agreement has been taken or will be taken prior to the
Closing, and this Agreement constitutes valid and legally binding obligations of
the Investor, enforceable against the Investor in accordance with their
respective terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or others laws of general application relating to or
affecting the enforcement of creditors' rights generally and (ii) the effect of
rules of law governing the availability of equitable remedies.
4.3 NON-CONTRAVENTION. The execution, delivery and performance of this
Agreement by the Investor, and the consummation by the Investor of the
transactions contemplated hereby and thereby, do not and will not (i) contravene
or conflict with the Articles of Incorporation or Bylaws of the Investor; (ii)
constitute a material violation of any provision of any federal, state, local or
foreign law binding upon or applicable to the Investor; or (iii) constitute a
default under, give rise to any right of termination, cancellation or
acceleration of, or to a loss of any benefit to which the Investor is entitled
under, or result in the creation or imposition of any lien, claim or encumbrance
on any material assets of the Investor under any material contract to which the
Investor is a party or any material permit, license or similar right relating to
the Investor or by which the Investor may be bound or materially affected.
4.4 AUTHORIZATION. This Agreement constitutes the Investor's valid and
legally binding obligation, enforceable in accordance with its terms except as
may be limited by (a) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and (b) the effect of rules of law governing the
availability of equitable remedies. The Investor has full corporate power and
authority to enter into this Agreement.
4.5 PURCHASE FOR OWN ACCOUNT. The Purchased Shares, the Warrant Shares
and the Warrant to be purchased by the Investor hereunder will be acquired for
investment for the account of Investor, not as a nominee or agent, and not with
a view to the public resale or distribution thereof within the meaning of the
1933 Act, and the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. The Investor also
represents that it has not been formed for the specific purpose of acquiring the
Purchased Shares, the Warrant Shares and the Warrant.
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4.6 DISCLOSURE OF INFORMATION. The Investor has received or has had
full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the Purchased Shares, the
Warrant Shares and the Warrant to be purchased by the Investor under this
Agreement. The Investor further has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Purchased Shares, the Warrant and the Warrant Shares and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Investor or to which the
Investor had access. The foregoing, however, does not in any way limit or modify
the representations and warranties made by the Company in Section 3.
4.7 INVESTMENT EXPERIENCE. The Investor understands that the purchase
of the Purchased Shares, the Warrant Shares and the Warrant involves substantial
risk. The Investor: (a) has experience as an investor in securities of companies
and acknowledges that it is able to fend for itself, can bear the economic risk
of its investment in the Purchased Shares, the Warrant Shares and the Warrant
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of this investment in the
Purchased Shares, the Warrant Shares and the Warrant and protecting its own
interests in connection with this investment and/or (b) has a preexisting
personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables the
Investor to be aware of the character, business acumen and financial
circumstances of such persons.
4.8 ACCREDITED INVESTOR STATUS. The Investor is an "accredited
investor" within the meaning of Regulation D promulgated under the 0000 Xxx.
4.9 RESTRICTED SECURITIES. The Investor understands that the Purchased
Shares, the Warrant Shares and the Warrant to be purchased by the Investor
hereunder, and any Warrant Shares to be purchased by the Investor upon exercise
of the Warrant, are characterized as "restricted securities" under the 1933 Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the 1933 Act and applicable
regulations thereunder such securities may be resold without registration under
the 1933 Act only in certain limited circumstances. The Investor is familiar
with Rule 144 of the SEC, as presently in effect, and understands the resale
limitations imposed thereby and by the 1933 Act. The Investor understands that
the Company is under no obligation to register any of the securities sold
hereunder.
4.10 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Purchased Shares, the Warrant, or the
Warrant Shares unless and until:
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(a) there is then in effect a registration statement under the 1933
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) the Investor has notified the Company of the proposed
disposition and has furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and the Investor has furnished the
Company, at the expense of the Investor or its transferee, with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such securities under the 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) of this Section 4.7, no
such registration statement or opinion of counsel will be required for any
transfer of any Purchased Shares, the Warrant, or any Warrant Shares in
compliance with SEC Rule 144, Rule 144A or Rule 145(d), or if such transfer
otherwise is exempt, in the view of the Company's legal counsel, from the
registration requirements of the 1933 Act, provided that, in the case of any
transfer that is otherwise exempt, the transferee agrees in writing to be
subject to the terms of this Section 4 to the same extent as if the transferee
were the original Investor hereunder.
4.11 LEGENDS. Certificates evidencing the Purchased Shares and the
Warrant Shares will bear each of the legends provided for below and the Warrant
will bear the legends set forth in (a) and (b) below:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND
THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
(b) Any legends required by any applicable state securities laws or
any agreements contemplated hereby.
In addition, the Warrant shares shall also contain the following legend:
TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT PURSUANT TO WHICH
THESE SHARES WERE PURCHASED FROM THE CORPORATION. COPIES OF THOSE
RESTRICTIONS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE
CORPORATION, AND NO TRANSFER OF SUCH SHARES OR OF THIS
CERTIFICATE, OR OF ANY SHARES OR OTHER SECURITIES (OR CERTIFICATES
THEREFOR) ISSUED IN EXCHANGE FOR OR IN RESPECT OF SUCH SHARES,
SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS
THEREIN SET FORTH SHALL HAVE BEEN COMPLIED WITH.
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In connection with a sale, the legend set forth in Section 4.8(a) hereof will be
removed by the Company from any certificate evidencing Purchased Shares or the
Warrant Shares upon delivery to the Company of an opinion by counsel, reasonably
satisfactory to the Company, that a registration statement under the 1933 Act
that such security can be freely transferred in a public sale without such a
registration statement being in effect and that such transfer will not
jeopardize the exemption or exemptions from registration pursuant to which the
Company issued the Purchased Shares, the Warrant or the Warrant Shares.
5. COVENANTS.
5.1 BOARD OF DIRECTORS.
5.1.1 Subject to the Shareholder Approval (as defined below), the
Company and the Investor agree that the Board of Directors of the Company,
immediately after Closing, shall consist of:
(a) One appointee of Xxxx Xxxxxxxxxx, who shall initially be Xxxxxx
X. Xxxxx; and
(b) Two or more appointees of the Investor, one of whom shall serve
as the Chairman of the Board, who shall initially be Xxxxxxx Xxxxxxxxx.
5.1.2 Subject to the Shareholder Approval, and receipt of the same by
the existing Board Members of the Company, the Company shall deliver to the
Investor resignations of such Board Members to be effective as of Closing (the
"BOD RESIGNATIONS").
5.2 OFFICERS. The Company and the Investor agree that immediately
following the Closing, the Board of Directors of the Company shall appoint
Xxxxxxx Xxxxxxxxx as President, Chairman and Treasurer and Xxxxx X. Xxxxxx as
Secretary. The Company shall cause the existing officers of the Company to
tender their resignations or the Board of Directors shall remove such officers
effective as of Closing (the "OFFICER RESIGNATIONS").
5.3 CORPORATE LOCATION. Prior to the Closing, the Company shall submit
a proposal to its shareholders to change its state of incorporation to the state
of Delaware. In addition, following the Closing, the Company may relocate its
principal place of business and corporate office.
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5.4 SECURITIES LAW COMPLIANCE. The Company agrees that it has, since
January 1, 2003, been in compliance, and shall remain compliant, in all material
respects with the requirements of the 1933 Act and the Exchange Act as well as
the registration and/or qualification requirements of all applicable state
securities laws, except to the extent they are based upon or relate to the ICA,
with respect to which the Company makes no representations or warranties.
5.5 POTENTIAL TRANSACTION. The Investor agrees that it shall make
reasonable best efforts to locate, and secure an entity with which the Company
would engage in a reverse merger or other similar transaction, and to review
documentation related to and assist in the negotiation of the related
transaction (the "FUTURE TRANSACTION"); provided, however, that any such Future
Transaction and the terms hereof shall be subject to the approval of the Board
of Directors of the Company and, if required, the Company's shareholders;
provided further that the Investor, or its affiliates, shall receive no salary
or consulting fees from the Company in connection with its obligations under
this Section 5.5.
5.6 SHAREHOLDER VOTE.
(a) The Company agrees to call a special meeting of the
shareholders in accordance with this Section 5.6 and to prepare and file any and
all related and required proxy solicitation and shareholder voting materials
(the "PROXY STATEMENT") in order to cause the shareholders to approve the
following:
(1) To approve the transaction contemplated herein;
(2) To change the state of incorporation of the Company to
Delaware;
(3) To approve the authorization and issuance of the proposed
Class A Common Stock (as defined in Section 5.7);
(4) To elect the directors set forth in Section 5.1.1 herein;
(5) To decrease the par value of the Common Stock from One
Dollar ($1.00) to (One Cent) $0.01;
(6) To approve the authorization of 1,000,000 of a blank check
preferred class of shares;
(7) To approve the increase in the number of shares of Common
Stock of the Company (or its successor in interest) from 4,000,000
shares to 50,010,000 shares; and
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(8) To approve any other items necessary in order to effect
the transactions contemplated herein, along with any typical and
customary items to be voted upon by the shareholders of the Company.
(The approval of the items (1)-(8) above shall be hereinafter referred to as the
"SHAREHOLDER APPROVAL".
(b) The Company agrees to use reasonable best efforts to file proxy
materials with the SEC within forty-five (45) days of the date hereof to
effectuate the matters contemplated in Section 5.6(a); and to conduct the
related shareholder meeting within one hundred eighty (180) days of the date
hereof, unless extended by the Company and the Investor in good faith.
(c) In the event that Company is unable to obtain the Shareholder
Approval by April 30, 2007 (unless extended by mutual agreement between the
Company and the Investor), then the Company shall have no further obligation to
seek or obtain Shareholder Approval, and Investor may cancel its proposed
purchase of the Common Stock and the Warrant pursuant to this Agreement.
5.7 CLASS A COMMON STOCK ISSUANCE. The Company agrees that upon the
Shareholder Approval and immediately prior to the Closing, the Company shall
issue to each holder of Common Stock of record as of the record sate set forth
in such Proxy Materials, a number of shares of Class A Common Stock equal to the
number of shares of Common Stock held by such shareholder. The rights and
preferences of the holders of Class A Common Stock shall be set forth in the
Certificate of Incorporation (the "CERTIFICATE OF INCORPORATION") attached as
Exhibit D, including the prohibition on transfer, voting and trading; no
certificates will be issued and the shares will be evidenced on book record
only; pursuant to which (i) all right, title and interest to any dividends,
distributions or proceeds resulting from the investments described in Notes D
and E to the Company's quarterly financial statements for the quarter ended
September 30, 2006 that are declared or otherwise
distributed by the Company shall be allocated only to the holders of Class A
Common Stock, (ii) any proceeds of such investments shall be paid to the holders
of the Class A Common Stock as soon as practicable, and (iii) the only expenses
allocated to such investments will be out of pocket expenses directly related to
such investments.
5.8 ACCESS TO INFORMATION; CONFIDENTIALITY
(a) Access to Information. Upon the execution hereof, and
continuing until the closing of the transactions contemplated hereby or the
earlier termination of this Agreement (or, in the event of any claims made in
accordance with this Agreement, until the resolution thereof), the Company
shall: (i) give Investor and its authorized representatives reasonable access
from time to time to all of the Company's books, records, senior personnel,
offices and other facilities and properties; (ii) permit Investor to make such
copies of any documents and inspections thereof from time to time as Investor
may reasonably request; and (iii) cause the Company's officers and other
employees to furnish Investor with such financial and operating data and other
information with respect to the Company, as from time to time Investor may
reasonably request; provided, however, that any such access shall be conducted
at Investor's expense, at reasonable times, under the supervision of personnel
of the Company, and in such a manner as to maintain the confidentiality of this
Agreement and the transactions contemplated hereby in accordance with the terms
hereof. Investor agrees to retain all information so obtained from the Company
on a confidential basis, and the Company agrees to retain any information
obtained from Investor on a confidential basis. In the event that the
transactions contemplated hereby and described herein (the "Transactions") shall
not be completed for any reason, each party shall return promptly to the other
party all information received by such party in this connection.
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(b) Non-Disclosure. Investor agrees that all information received
from the Company shall be treated as confidential information. Investor shall
not share such information with any other person or entity, except the SEC,
attorneys, investors, accountants and auditors involved in the Transactions,
without the express written consent of the Company. The Company agrees that all
information received from Investor shall be treated as confidential information,
except as required by law.
(c) Public Announcements. Investor shall not make any announcement
of the Transactions without the prior written consent of the Company, except as
may be required by law, in which event Investor shall obtain the Company's prior
written approval of the form and content of such announcement, which the Company
shall not unreasonably withhold or delay. The Company shall not make any
announcement of the Transactions without the prior written consent of Investor,
except as may be required by law, in which event the Company shall obtain the
Investor's prior written approval of the form and content of such announcement,
which Investor shall not unreasonably withhold or delay. The foregoing shall not
restrict in any respect either party's ability to communicate information
concerning this Agreement and the Transactions to the Company's and Investor's
respective officers, directors, employees, professional advisers and affiliates,
and, to the extent relevant, to third parties whose consent is required in
connection with the Transactions.
6. CONDITIONS TO THE INVESTOR'S OBLIGATIONS AT CLOSING. The obligations of the
Investor under Sections 1 and 2 of this Agreement are subject to the fulfillment
or waiver, on or before the Closing (defined in Section 2.1), of each of the
following conditions:
6.1 REPRESENTATIONS AND WARRANTIES TRUE. Each of the
representations and warranties of the Company contained in Section 3 will be
true and correct on and as of the Closing, except as set forth in the Schedule
of Exceptions with the same effect as though such representations and warranties
had been made as of the Closing, and continue for three years.
6.2 PERFORMANCE. The Company will have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing and will have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described herein.
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6.3 COMPLIANCE CERTIFICATE. The Company will have delivered to the
Investor at the Closing a certificate signed on its behalf by its Chief
Executive Officer or Chief Financial Officer certifying that the conditions
specified in Sections 6.1 and 6.2 hereof have been fulfilled.
6.4 SECURITIES EXEMPTIONS. The offer and sale of the Purchased Shares
and the Warrant to the Investor pursuant to this Agreement will be exempt from
the registration requirements of the 1933 Act and the registration and/or
qualification requirements of all applicable state securities laws.
6.5 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto will be reasonably satisfactory in form and substance to the
Investor, and the Investor will have received all such counterpart originals and
certified or other copies of such documents as it may reasonably request. Such
documents shall include (but not be limited to) the following:
(a) CERTIFIED CHARTER DOCUMENTS. A copy of (i) a Certificate of
Incorporation and Good Standing certified as of a recent date by the Secretary
of State of Delaware as a complete and correct copy thereof, and (ii) the Bylaws
of the Company (as amended through the date of the Closing) certified by the
Secretary of the Company as true and correct copies thereof as of the Closing.
(b) BOARD RESOLUTIONS. A copy, certified by the Secretary of the
Company, of the resolutions of the Board of Directors of the Company providing
for the approval of this Agreement and the issuance of the Purchased Shares and
the Warrant and the other matters contemplated hereby.
(c) BOD AND OFFICER RESIGNATIONS. The signed copies of the BOD
Resignations and Officer Resignations, effective at Closing, shall be delivered
to the Investor on or prior to Closing.
6.6 OPINION OF COMPANY COUNSEL. The Investor will have received an
opinion of Company counsel, dated as of the date of the Closing, substantially
in the form attached hereto as EXHIBIT C.
6.7 SHARE AUTHORIZATION. The Company's Board of Directors shall have
authorized the issuance, pursuant to the terms and conditions of this Agreement,
of three hundred twenty five thousand (325,000) shares of the Common Stock
issuable as part of the Purchased Shares and Warrant Shares.
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6.8 WARRANT. The Company will have issued the Warrant.
6.9 SHAREHOLDER APPROVAL. Shareholder Approval shall have been obtained
in accordance with Section 5.6 herein.
7. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations of the
Company to the Investor under this Agreement are subject to the fulfillment or
waiver on or before the Closing (defined in Section 2.1), of each of the
following conditions:
7.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Investor contained in Section 4 will be true and correct on
the date of the Closing with the same effect as though such representations and
warranties had been made as of the Closing.
7.2 PAYMENT OF PURCHASE PRICE. The Investor will have delivered to the
Company the full purchase price for the Purchased Shares as specified in Section
1.2 and the full purchase price for the Warrant as specified in Section 1.4, in
accordance with the provisions of Section 2.
7.3 SECURITIES EXEMPTIONS. The offer and sale of the Purchased Shares
and the Warrant to the Investor pursuant to this Agreement will be exempt from
the registration requirements of the 1933 Act and the registration and/or
qualification requirements of all applicable state securities laws.
7.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto will be reasonably satisfactory in form and substance to the
Company and to the Company's legal counsel, and the Company will have received
all such counterpart originals and certified or other copies of such documents
as it may reasonably request.
7.5 SHAREHOLDER APPROVAL. Shareholder Approval shall have been obtained
in accordance with Section 5.6 herein.
8. MISCELLANEOUS.
8.1 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the parties hereto
and the respective successors and assigns of the parties. Neither party will
assign this agreement without the consent of the other party.
8.2 GOVERNING LAW. This Agreement will be governed by and construed
under the internal laws of the State of Delaware as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware,
without reference to principles of conflict of laws or choice of laws, except to
the extent Indiana law mandatorily governs any specific provision hereof.
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8.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
8.4 HEADINGS. The headings and captions used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement. All references in this Agreement to sections, paragraphs,
exhibits and schedules will, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits and schedules attached hereto, all of which
exhibits and schedules are incorporated herein by this reference.
8.5 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement will be given in writing and will be deemed
effectively given upon personal delivery to the party to be notified, or three
(3) business days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, or on the first business day
after by deposited with a nationally recognized courier service such as FedEx
for next business day delivery, or by facsimile with confirmed receipt and
addressed to the party to be notified at the address indicated for such party
below or at such other address as the Investor or the Company may designate by
giving at least ten (10) days advance written notice pursuant to this Section
8.5:
To Investor at:
Xxxxxxx Xxxxxxxxx & Company
00 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
To the Company at:
The St. Xxxxxxxx Seaway Corporation
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxx
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With a copy to:
Lev & Berlin
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
8.6 NO FINDER'S FEES. Each party represents that it neither is nor will
be obligated for any finder's or broker's fee or commission in connection with
this transaction. The Investor will indemnify and hold harmless the Company from
any liability arising out of its breach of the representations contained in the
first sentence of this Section. The Company will indemnify and hold harmless the
Investor from any liability arising out of its breach of the representations
contained in the first sentence of this Section.
8.7 AMENDMENTS AND WAIVERS. This Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Investor. Any amendment or waiver
effected in accordance with this Section 8.7 will be binding upon the Investor,
the Company and their respective permitted successors and assigns.
8.8 SEVERABILITY. If any provision of this Agreement is held to be
unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
8.9 ENTIRE AGREEMENT. This Agreement, together with all Exhibits and
schedules hereto, constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
8.10 FURTHER ASSURANCES. From and after the date of this Agreement,
upon the request of the Investor or the Company, the Company and the Investor
will execute and deliver such instruments, documents or other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
8.11 FEES, COSTS AND EXPENSES. All fees, costs and expenses
(including, without limitation, attorneys' fees and expenses) incurred by either
party hereto in connection with the preparation, negotiation and execution of
this Agreement and the Warrant, and the consummation of the transactions
contemplated hereby and thereby, shall be the sole and exclusive responsibility
of such party.
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8.12 SURVIVAL. The representations and warranties and the covenants to
be performed prior to the Closing set forth in this Agreement shall survive for
a period of three (3) after the Closing.
8.13 NO THIRD PARTY BENEFICIARY. Nothing in this Agreement will confer
any third party beneficiary or other rights upon any person or entity that is
not a party to this Agreement.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ST. XXXXXXXX SEAWAY CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
Hereunto Duly Authorized
XXXXXXX XXXXXXXXX & CO., INC.
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chief Executive Officer
Hereunto Duly Authorized
[SIGNATURE PAGE TO COMMON STOCK AND WARRANT PURCHASE AGREEMENT]
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