SHARE PURCHASE AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 18 day of April, 1997,
BETWEEN:
MOTION PLUS INTERNATIONAL CORPORATION, A Delaware Corporation.
(hereinafter collectively called the "Vendors")
OF THE FIRST PART
A N D:
TRB SYSTEMS INTERNATIONAL INC. a corporation incorporated
under the laws of the State of Delaware,
(hereinafter called the "Purchaser")
OF THE SECOND PART
WHEREAS, the vendors own all of the authorized issued and outstanding
shares of capital stock (there being no other securities) of TRB
Systems Inc. (herein referred to as the "Corporation"), a corporation
engaged in the provision and sale of, and manufacture of bicycles,
motorized two wheeled transport, and exercise equipment in the
United States, and, generally, worldwide, from facilities in the
State of New Jersey and manufacturing facilities, worldwide ; and
AND WHEREAS, the Vendors desire to acquire 100% of the issued and
outstanding shares of the Purchaser's Common Stock, par value $0.001
per share (the "Exchange Shares), in consideration for their
conveyance of all shares of the Corporation's stock (which will
constitute 100% of the Corporation's authorized, issued and
outstanding securities); and
AND WHEREAS, the parties hereto agree that this transaction is to
be structured and completed in compliance with all requirements of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended:
NOW, THEREFORE, THIS AGREEMENT WITNESSETH THAT in consideration of
the covenants, agreements, warranties and payments herein set out
and provided for, the parties hereto hereby respectively covenant
and agree as follows:
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ARTICLE 1.00 - DEFINED TERMS
1.1 When used herein or in any amendments hereto, the following
terms shall have the following meanings respectively:
"Agreement" means this agreement and all schedules attached
to this agreement, in each case as they may be supplemented or amended from
time to time and the expressions "hereof", "herein", "hereto", "hereunder",
"hereby" and similar expressions refer to this agreement, and "Article",
"section" and "subsection" mean and refer to the specified Article, section
and subsection of this agreement;
"Auditors" means the Corporation's auditors, namely Xxxx Xxx; CPA;
"books and records" means the accounting books of original
entry including the general ledge, record of cash receipts and disbursements,
purchase journal and banking records;
"Business" means the business presently and heretofore
carried on by the Corporation, consisting of the provision and sale of, and
manufacture of bicycles, motorized two wheeled transport, and exercise in
the United States, and, generally, worldwide, from facilities in the State
of New Jersey and manufacturing facilities, worldwide;
"Business day" means a day other than a Saturday, Sunday or
a day that is a statutory holiday in the United States;
"Closing" means the closing of the transaction of purchase
and sale contemplated herein;
"Closing Date" or "Date of Closing" means April 18th, 1997
or such other date as may be mutually agreed upon in writing by the parties
hereto;
"Closing Financial Statements" has the meaning ascribed to
it in section 4.1.1 hereof;
"Common Shares" means the issued and outstanding common
shares in the capital of the Corporation;
"Corporation" means, TRB Systems, Inc., a corporation
incorporated under the laws of the State of Delaware;
"EBIT" means net earnings before income taxes, as determined
by the auditors, in accordance with GAAP;
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"Exchange Shares" means 100% of the common shares in the
capital of the Purchaser;
"Financial statements" means, collectively, the Closing
Financial Statements defined hereinabove;
"Intercompany Transactions" means, collectively, all
transactions of any nature between the Corporation and any Person associated
with or related to the Corporation or otherwise not dealing with the
Corporation on an arms-length basis;
"GAAP" means generally accepted accounting principles in
the United States, as appropriate, as in effect from time to time,
consistently applied;
"NASDAQ" means the National Association of Securities
Dealers and Quotations;
"Non Arm's Length Person" means any shareholder director,
officer, employee, affiliate or associate of the Corporation or any one or
more of the Vendors or any other Person who does not deal at arm's length
with the Corporation or any one or more of the Vendors;
"Person" includes an individual, a corporation, a joint
venture, a partnership, a trust or trustee, any unincorporated organization,
an association, joint venture or any other entity (including any
governmental, administrative or regulatory authority);
"Permitted Liens" means, at any time, such Liens as the
Purchaser may agree, in writing, shall constitute a Permitted Lien for the
purpose of this Agreement;
"Purchased Shares" shall have the meaning attributed thereto
in section 3.1 hereof;
"Requirements of Law" means, as to any Person, the
certificate of incorporation and by-laws or other organizational, governing
documents of such Person, and any law, treaty, regulation or rule, or
determination of an arbitrator or a court or other governmental authority or
agency, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject;
"Rule 144 means rule 144 of the United States Securities act
of 1933;
"SEC" means the Securities and Exchange Commission of the
United States;
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"Subsidiary", in relation to any body corporate, means any
corporation of which issued and outstanding securities are held, other than
by way of security only, by such body corporate, and includes any
corporation in like relation to a Subsidiary;
"this agreement", "herein", "hereto", "hereunder", "hereof" and similar
expressions refer to the within agreement and not to any particular portion
thereof, and include the schedules referred to in Article 2.00;
"Time of Closing" means two o'clock in the afternoon on the
Closing Date;
ARTICLE 2.00 - SCHEDULES
2.1 The following are the Schedules attached to and incorporated
in this Agreement by reference and deemed to be part hereof:
Schedule 1 - SB-2 for the Corporation and Purchaser, to
be completed as of April 30, 1997, and delivered to the president of the
Purchaser on or before the 15th day of July, 1997.
ARTICLE 3.00 - PURCHASE AND SALE
3.1 Subject to the terms and conditions hereof, the Vendors
covenant and agree to sell, assign and transfer to the Purchaser and the
Purchaser covenants and agrees to purchase from the Vendors, 100 % the
issued and outstanding shares owned by the Vendors in the capital of the
Corporation (the "Purchased Shares") for an amount equal, in the aggregate,
to the Purchase Price, payable as hereinafter set out.
3.2 Subject to the hereinafter described conditions, the
Purchaser hereby agrees to exchange the equivalent of 100% of its common
Stock (100/100th share of the Purchaser), $0.001 par value (the "Exchange
shares"), with the Vendors for all of the Purchased Shares, which upon
transfer, will constitute 100% of the Companies to be acquired's authorized,
issued and outstanding securities.
3.2(a) The Purchaser shall call a special meeting of its
stockholders for the purpose of:
(a) Amending the Purchaser's articles of
incorporation in the following manner:
(b) New directors shall be elected and new
by-laws shall be adopted.
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(c) The Purchaser's entry into this agreement
shall be ratified, provided, however, that such ratification shall not be a
condition subsequent but a condition precedent to this agreement and that
by executing this Agreement, the Purchasers declare such ratification has
been effected.
3.2(b) Immediately following the calling of the said
meeting, all officers and Directors of the purchaser shall resign, effective
immediately after the meeting abovementioned.
3.2(c) The Purchaser hereby represents, warrants, covenants
and acknowledge that:
(c)(1) The Purchaser's Stock is being transferred without
Registration under the provisions of the Delaware Blue Sky Law pursuant to
exemptions provided under the Act and the analogous sections of the Delaware
Companies' Law;
(c)2 All of the Purchaser's Stock will bear legends
restricting its transfer, sale, conveyance or hypothecation within the
jurisdictional boundaries of the United States, unless such Acquired
companies' Stock is either registered under the provisions of Section 5
of the Act and under applicable state securities laws, or an opinion of
legal counsel is provided by the Purchaser certifying that such registration
is not required as a result of applicable exemptions therefrom;
(c)(3) The Purchaser shall not transfer any of the acquired
Companies' Stock except in compliance with all applicable laws; and
(c)(4) The Purchaser is acquiring the Acquired Companies'
Stock for its own account, for investment purposes only and not with a view
to further sale or distribution.
(d) The Vendors hereby represents, warrants, covenants and
acknowledges that:
(d)(1) The Stock is being transferred without registration
under the provisions of Section 5 of the Act:
(d)(2) All of the Exchange shares will bear legends restricting its
transfer, sale, conveyance or hypothecation within the jurisdictional
boundaries of the United States, unless such Exchange Shares are either
registered under the provisions of Section 5 of the act and under applicable
state and provincial securities laws, or an opinion of legal counsel is
provided by the Purchaser certifying that such registration is not required
as a result of applicable exemptions therefrom;
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(d)(3) The vendors shall not transfer any of the Acquired Companies'
Stock except in compliance with all applicable laws; and
3.2(d)(4) The vendors are acquiring the Acquired Companies' Stock for their
own account, for investment purposes only and not with a view to further
sale or distribution , except as permitted by law.
(d)(5) The vendors have made themselves fully and completely
familiar with all aspects of the Purchaser's business, operations, and
financial statements and, immediately following closing on this Agreement,
will assume operational control thereof.
3.3 The Certificates representing the shares being exchanged
shall each bear the following legend:
"THESE SHARES HAVE NEITHER BEEN REGISTERED WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION OR WITH THE SECURITIES REGULATORY AUTHORITIES OF THE
STATE OF DELEWARE (OR ANY OTHER STATE, OR NATIONAL AUTHORITY).
CONSEQUENTLY, THESE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS THEY ARE FIRST REGISTERED UNDER APPLICABLE STATE,
PROVINCIAL AND FEDERAL SECURITIES LAWS OR THE TRANSACTION'S EXEMPTION
THEREFROM IS DEMONSTRATED TO THE FULL SATISFACTION OF THE CORPORATION'S
LEGAL COUNSEL."
3.4 The Purchaser warrants and represents that except as
described herein, there are no other outstanding securities of any class
or of any kind or character of the Purchaser, there being no outstanding
subscriptions, options, warrants or other agreements or commitments
obligation the Purchaser to issue or sell any additional shares of the
Purchaser's Stock or any options or rights with respect thereto, or any
securities convertible into any shares of Stock of any class;
3.5 The Purchase Price shall be paid and satisfied in full by
the delivery of the issued Exchange Shares at the Times of Closing, said
shares to be held in escrow by Xxxxxx X. Xxx, Esq. until July 30, 1997,
pending the approval of the SB-2 by the Purchaser.
ARTICLE 4.00 - COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE VENDORS
4.1 The Vendors hereby jointly and severally covenant, represent
and warrant as follows and acknowledge that the Purchaser is relying upon
such covenants, representations and warranties in connection with the
purchase by the Purchaser of the Purchased Shares:
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4.1.1 On or before June 30, 1997, the Vendors shall
prepare the Financial statements of the Corporation and deliver them to the
Purchaser, who shall have 15 days to approve the same, or declare this
Agreement null and void.
4.2.2 TRB Systems Inc. has been duly incorporated and
organized and is validly subsisting and in good standing under the laws of
Delaware.
4.2.3 TRB Systems Inc. has the corporate power to own or
lease its property and carry on the Business. The said corporation is duly
qualified as a corporation to do business under the laws of New Jersey,
being the only jurisdictions in which the nature of its business or the
property owned or leased by it makes such qualification necessary.
4.2.4 The authorized capital of TRB Systems Inc. consists
of 1,000 shares with a par value of $1.00 each.
4.2.5 Of the authorized capital of the said corporation,
510 shares (and no more) have been duly and validly allotted and issued and
are outstanding as fully paid and non-assessable and are beneficially owned
by the he Vendors.
4.2.6 All of the Purchased shares are owned by the said
Vendors as the beneficial owners of record, with a good and marketable title
thereto, free and clear of all mortgages, liens, charges, security
interests, adverse claims, pledges, encumbrances and demands whatsoever,
including voting trusts shareholders' agreements, options or other
agreements of any kind and the said Vendors have the absolute right to
transfer the Purchased shares and they shall be enjoyed by the Purchaser
free from any interruption or disturbance subject only to the terms and
conditions herein.
4.2.7 TRB Systems Inc. has no subsidiaries and owns no
shares in the capital of any other corporation and has not agreed to acquire
any Subsidiary or any shares of the capital of any other corporation or to
acquire or lease any other business operations.
4.2.8 Deleted by agreement.
4.2.9 Deleted by agreement.
4.2.10 Deleted by Agreement.
4.2.11 Deleted by Agreement.
4.2.12 All of the Purchased Shares are owned by the said
Vendors as the beneficial owners of record, with a good and marketable title
thereto, free and clear of all mortgages, liens, charges, security
interests, adverse claims, pledges, encumbrances and
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demands whatsoever, including voting trusts, shareholders' agreements,
options or other agreements of any kind an the said vendors have the
absolute right to transfer the Purchased Shares and they shall be enjoyed
by the Purchaser free from any interruption or disturbance subject only to
the terms and conditions herein.
4.2.13 The Corporation does not have any Subsidiaries and
nor owns any shares in the capital of any other corporation and has not
agreed to acquire any Subsidiary or any shares of the capital of any other
corporation or to acquire or lease any other business operations.
4.2.14 No person, firm or corporation has any agreement or
option or any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement or option for the purchase from any one or
more of the Vendors of any of the Purchased Shares.
4.2.15 No person, firm or corporation has any agreement or
option or any right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement, including convertible securities, warrants
or convertible obligations of any nature, for the purchase, subscription,
allotment or issuance of any of the unissued shares in the capital of the
Corporation or of any securities of the Corporation.
4.2.16 Except with respect to product warranties provided
by the Corporation in the ordinary course of business, the Corporation is
not a party to or bound by any agreement of guarantee, indemnification,
assumption or endorsement or any other like commitment of the obligations,
liabilities (contingent or otherwise) or indebtedness of any person, firm or
corporation;
4.2.17 There are not now, nor will there be on Closing, any
material claims or potential or contingent claims against the Corporation
for product liability in respect of goods manufactured and/or sold by the
Corporation.
4.2.18 There are not now, nor will there be on Closing, any
material claims or potential or contingent claims against the Corporation
for product liability in respect of goods manufactured and/or sold by the
Corporation.
4.2.18 The Financial Statements have been prepared in
accordance with GAAP and present fairly:
4.2.18 (a) all the assets, liabilities (whether
accrued, absolute, contingent or otherwise) and the financial condition of
the Corporation as at the respective dates of the Financial Statements;
and
4.2.18 (b) the sales, earnings and results of
the operations of the Corporation during the periods covered by the
Financial Statements, respectively.
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4.2.19 The corporate records and minute books of the
Corporation contain complete and accurate minutes of all meetings of and
copies of all by-laws and resolutions passed by the directors and
shareholders of the Corporation since the incorporation of the Corporation,
all such meetings were duly called and held and the share certificate books
register of shareholders, register of transfers, register of directors and
other corporate registers of the Corporation are complete and accurate in
all material respects.
4.2.20 The Business has been carried on in the ordinary
course since the Inception of the Companies to be acquired. Since that t
ime there has been no change in the business operations, affairs or
condition of the Corporation, financial or otherwise, or arising as a
result of any legislative or regulatory change, revocation of any license
or right to do business, fire, explosion, accident, casualty, labor trouble,
flood, drought, riot, storm, condemnation, act of God or otherwise,
except changes occurring in the ordinary course of business, which changes
have not materially aversely affected and will not materially aversely
affect the organization, business, properties, prospects and financial
condition of the Corporation or the ability of the Corporation to carry on
Business.
4.2.21 The books and records, financial and otherwise, of
the Corporation fairly and correctly set out and disclose in all material
respects the financial position and result of operations of the Corporation
as at the date hereof and all material financial transactions of the
Corporation have been accurately recorded in such books and records.
4.2.22 Execution of this Agreement by the Vendors and
delivery of the Agreement by them to the Purchaser and their performance
hereunder have been duly authorized and no further action will be necessary
on the part of the Vendors to make this agreement valid and binding in
accordance with its terms upon the Vendors.
4.2.23 The entering into of this Agreement and the
consummation of the transaction of purchase and sale contemplated by this
Agreement will not result in a breach of any term or provision of or
constitute a default under the constating documents, by-laws or resolutions
of the Corporation or of any indenture, agreement, instrument, license,
permit or understanding to which the Corporation or any one or more of the
Vendors is a party or by which any one or more of them is bound, nor will
the consummation of such transaction accelerate any commitment or obligation
of the Corporation or result in the creation of any lien or encumbrance upon
any of the assets or property of the Corporation.
4.2.24 The entering into of this agreement and the
consummation of the transactions contemplated hereby will not result in the
violation of any law or regulation or any applicable order of any court,
arbitrator or governmental authority having jurisdiction over the
Corporation or the Vendors or their respective properties or businesses.
4.2.25 No consent, authorization, license, franchise,
permit, approval or order of any court or governmental agency or body or of
any lessor under any lease or of
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any person is required for the acquisition by the Purchaser of the
Purchased Shares or the completion of any of the other transactions
contemplated hereby or the continuance, following closing, of any rights
of the Corporation pursuant to any agreement affecting its assets or the
Business.
4.2.26 The Corporation will not, prior to the Closing
Date, hire any new employees, terminate any employee or increase the salary
or remuneration of any employee except in the normal course of business.
4.2.27 The aggregate amount of salaries, pension, bonuses,
rents or other remuneration of any nature paid or payable by the
Corporation to or for the Vendors or Non Arm's Length Persons subsequent
to the execution of this Agreement and up to the Time of Closing will be
made only at the regular rates heretofore paid.
4.2.28 No capital expenditures, except in the ordinary
course of business, will be made or authorized by the Corporation after the
date hereof and up to the Time of Closing, without the prior written consent
of the Purchaser.
4.2.29 Listed in Schedule 1 is a complete list of all
outstanding bonds, debentures, mortgages, notes or other evidence of
indebtedness or other security instruments of the Corporation, none of
which are presently in default and the Corporation is not under any
agreement to and shall not create or issue any bonds, debentures, mortgages,
notes or other evidence of indebtedness or other security agreements from
the date hereof until Closing without the written consent of the Purchaser.
4.2.30 The Corporation is not a party to any lease or
agreement in the nature of a lease, whether as lessor or lessee, except
those leases described in Schedule 1 hereto (in which is specified the
parties to each of such leases, their dates of execution and expiry dates,
any options to renew, any consents required, the locations of any leased
lands and premises and the rental payable thereunder), and each of such
leases is in good standing and in full force and effect without amendment
thereto and the Corporation is not in breach of any of the covenants,
conditions or agreements contained in each such lease; and there are no
consents required from or on behalf of any persons to the transaction
contemplated by this Agreement.
4.2.31 The Corporation is not a party to any conditional
sales contract, hire-purchase agreement or other title retention agreement.
4.2.32 The Corporation is not and will not be, at the Time
of Closing, a party to any agreement to acquire or to acquire any beneficial
interest in any real or immovable property.
4.2.33 The Corporation maintains appropriate policies of
insurance, given the nature of the Business, and such insurance coverage
will be continued in full force and effect to and including the Date of
Closing. The Corporation is not in default with respect
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to any of the provisions contained in any such insurance policy and has not
failed to give any notice or present any claim under any such insurance
policy in due and timely fashion. Schedule 4 hereto lists all insurance
policies of the Corporation, specifying the insurance company, insurance
agent, policy number, type of coverage and amount of coverage.
4.2.34 There are no actions, suits or proceedings,
including product warranty claims, pending or threatened against or
affecting the Corporation, at law or in equity or before or by any federal,
provincial, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, and the Vendors is
not aware of any existing ground on which any such action, suit or
proceeding might be commenced with any reasonable likelihood of success.
4.2.35 Except for agreements, contracts and commitments in
the ordinary course of business which have no more than three (3) months to
run, the Corporation is not a party to any outstanding agreement, contract
or commitment, whether written or oral, except as stated in Schedule 3
attached hereto.
4.2.36 All vacation pay, bonuses, commissions and other
emoluments are accurately reflected and have been accrued in the books of
account of the Corporation.
4.2.37 The Corporation is and at Closing will be in
substantial compliance in all jurisdictions in which it employs persons,
with legislation governing hours of work, termination and severance pay,
vacation pay and similar employee rights, the Worker's Compensation Act
and all such similar statutes.
4.2.38 The uses of the real properties owned or leased by
the Corporation referred to in this agreement or the Schedules hereto are
not in material breach of any statute, by-law, ordinance, regulation,
covenant, restriction or official plan.
4.2.39 The Corporation owns, possesses and has a good and
marketable title to its undertaking, property and assets, free and clear of
any and all mortgages, liens, pledges, charges, security interests,
encumbrances, actions, claims or demands of any nature whatsoever or
howsoever arising.
4.2.40 The conduct of the business does not infringe
upon the patents, trade marks, trade names or copyrights, domestic or
foreign, of any other person, firm or corporation.
4.2.41 Annexed hereto in Schedule 1 is a true and complete
list showing the name of each bank, trust company or similar institution in
which the Corporation has accounts or safe deposit boxes and the names of
all persons authorized to draw thereon or to have access thereto; and
4.2.42 The Corporation is conducting the Business in
compliance with all applicable laws, rules and regulations of each
jurisdiction in which the Business is carried
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on, is not in breach of any such laws, rules or regulations, except for
breaches which in the aggregate are immaterial, and is duly licensed,
registered or qualified in each jurisdiction in which the Corporation owns
or leases property or carries on the Business, to enable the business to be
carried on as now conducted and its property and assets to be owned, leased
and operated, and all such licenses, registrations and qualifications are
valid and subsisting and in good standing and none of the same will be
canceled or amended by virtue of the transaction of purchase and sale
herein provided for.
4.2.43 All facilities and equipment owned and used by the
Corporation in connection with the Business are in good operating condition
and are in a state of good repair and maintenance.
4.2.44 There are not now any loans or other indebtedness
outstanding between the Corporation and the Vendors, or any directors,
officers, shareholders or employees of the corporation or former directors,
officers, shareholders or employees of the Corporation or former directors,
officers, shareholders or employees of the corporation or any Non Arms
Length Persons, other than normal salaries, bonuses, fringe benefits and
the obligation to reimburse for expense incurred on behalf of the
Corporation in the normal course of business.
4.2.45 To the best of the Vendors knowledge, there are no
liabilities of the Corporation of any kind whatsoever, whether or not
accrued and whether or not determined or determinable, in respect of which
the Corporation or the Purchaser may become liable on or after Closing and
relating to periods before Closing except liabilities which have been
disclosed on, reflected in or provided for in the Financial Statements and
any liabilities incurred in the ordinary course of business and attributable
to the period since February, 1983, none of which is materially adverse,
individually or in the aggregate, to the Business, operations, affairs or
financial condition of the Corporation.
4.2.46 There is not now nor will there be at the Time of
Closing any application pending for the issuance of articles of amendment to
the originating documents of the Corporation.
4.2.47 The Corporation is not in default in the filing of
any corporate return or report that may be required under any federal,
provincial and/or municipal law or regulation.
4.2.48 The Corporation has duly and timely filed all tax
returns required to be filed by it and has paid all taxes and installments
of taxes which are due and payable, and has paid all assessments and
reassessments, and all other taxes, governmental charges, penalties, interest
and fines due and payable by it on or before the date hereof; the Canadian
federal and all provincial income tax liability of the corporation has
been reviewed and determined by the XXX for all fiscal years up to and
including the fiscal year ended June 30, 1996; adequate provision has
been made for taxes payable for the current period of which tax returns
are not yet required to be filed; there are no agreements,
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waivers or other arrangements providing for an extension of time with
respect to the filing of any tax return by, or payment of any tax,
governmental charge or deficiency against, the Corporation in respect of
taxes, governmental charges or assessments, asserted by such authority; the
Corporation has with held from each payment made to any of its officers,
directors, employees, former directors, officers and employees the amount of
all taxes, including but not limited to income tax, and other deductions
required to be withheld therefrom and has paid the same to the proper tax
or other receiving officers within the time required under the applicable
tax legislation.
4.2.49 The XXX has not issued a Notice of determination
with respect to the Vendors or the Corporation.
4.2.50 The Vendors have no information or knowledge of any
facts relating to the vendors, the Business, the Corporation or the
Purchased shares which, if known to the Purchaser, might reasonably be
expected to deter the Purchaser from completing the transaction of purchase
and sale herein contemplated.
4.2.51 The vendors have attached the questionnaire
requested of them as Schedule 6, and understand that the Purchasers are
relying on the information therein, and the said information is warranted
to be true and correct.
ARTICLE 5.00 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
5.1 The Purchaser covenants, represents and warrants as follows
and acknowledges that the vendors are relying upon such covenants,
representations, warranties and covenants in connection with the sale
by the Vendors of the Purchased Shares:
5.1.2 The purchaser has been duly incorporated, and is
validly subsisting and in good standing under the laws of the State of
Delaware;
5.1.3 The execution of this Agreement by the Purchaser,
and its delivery to the Vendors, and the performance by the Purchaser
hereunder, have been duly authorized and no further action will be
necessary on the part of the Purchaser to make this Agreement valid and
binding in accordance with its terms upon the Purchaser;
5.1.4 The execution and delivery by the Purchaser of
this agreement and the performance of its obligations hereunder will not
violate the constating documents or by-laws of the Purchaser, any indenture
or other agreement, written or oral, to which it is a party, or by which it
is bound, or any law, rule, regulation or order to which it is subject;
5.1.5 OMIT
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5.1.6 None of the assets of the Purchaser have been
pledged to secure debt of the Purchaser.
5.1.7 The Purchaser has the corporate power to own or
lease its property and carry on its Business.
5.1.8 No person, firm or Corporation has any agreement or
option or any right or privilege (whether by-law, pre-emptive or contractual)
capable of becoming an agreement or option for the purchase of any shares
in the Purchaser.
5.1.9 OMIT
5.1.10 Except with respect to product warranties provided
by the purchaser in the ordinary course of business, the Purchaser is not a
party to or bound by any agreement of guarantee, indemnification, assumption
or endorsement or any other like commitment of the obligations, liabilities
(contingent or otherwise) or indebtedness of any person, firm or corporation;
5.1.11 There are not now, nor will there be on Closing, any
material claims or potential or contingent claims against the Purchaser for
product liability in respect of goods manufactured and/or sold by the
Purchaser.
5.1.12 The financial statements of the Purchaser Statements
have been reviewed and accepted as fair and valid by the Vendors.
5.1.13 The corporate records and minute books of the
Purchaser contain complete and accurate minutes of all meetings of and copies
of all by-laws and resolutions passed by the directors and shareholders of
the Purchaser since the incorporation of the Purchaser, all such meetings
were duly called and held and the share certificate books, register of
shareholders, register of transfers, register of directors and other
corporate registers of the Purchaser are complete and accurate in all
material respects.
5.1.14 The books and records, financial and otherwise, of
the Purchaser fairly and correctly set out and disclose in all material
respects the financial position and result of operations of the Purchaser
as at the date hereof and all material financial transactions of the
Purchaser have been accurately recorded in such books and records.
5.1.15 Execution of this Agreement by the Purchaser and delivery
of the agreement by them to the Vendors and their performance hereunder have
been duly authorized and no further action will be necessary on the part of
the Purchaser to make this agreement valid and binding in accordance with
its terms upon the Purchaser.
5.1.16 The entering into of this Agreement and the consummation of
the transaction of purchase and sale contemplated by this Agreement will
not result in a breach of any term or provision of or constitute a default
under the constating documents,
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by-laws or resolutions of the Corporation or of any indenture, agreement,
instrument, license, permit or understanding to which the Purchase is a
party or by which it is bound, nor will the consummation of such
transaction accelerate any commitment or obligation of the Purchaser or
result in the creation of any lien or encumbrance upon any of the assets
or property of the Purchaser.
5.1.17 The entering into of this Agreement and the consummation
of the transactions contemplated hereby will not result in the
violation of any law or regulation or any applicable order of any
court, arbitrator or governmental authority having jurisdiction over
the Purchaser.
5.1.18 No consent, authorization, license, franchise,
permit, approval or order of any court or governmental agency or body
or of any lessor under any lease or of any person is required for the
acquisition by the Purchaser of the Purchased Shares or the completion
of any of the other transactions contemplated hereby or the continuance,
following closing, of any rights of the Purchaser pursuant to any agreement
affecting its assets.
5.1.19 The Purchaser has not declared, directly or indirectly,
or paid any dividends or declared or made any other distribution on any
of its shares since April 9th, 1997 and no dividends declared or
distributions authorized remain unpaid. The Purchaser will not declare
and pay any dividends or make any other distributions on any of its
issued shares prior to the Closing Date. The Purchaser has not,
directly or indirectly, redeemed, purchased or otherwise acquired any
of its shares or agreed to do so.
5.1.20 No payments, benefits or credits have been granted,
made or authorized, since April 9th, 1997, by the Purchaser to its
officers, directors, shareholders or employees, or to its former
officers, directors, shareholders or employees or to any Non Arms
Length Persons, except in the ordinary course of business and at the
regular rates payable to them as salary, pension, bonuses, rents or
other remuneration of any nature.
5.1.21 The Purchaser will not, prior to the Closing Date, hire
any new employees, terminate any employee or increase the salary or
remuneration of any employee except in the normal course of business.
5.1.22 The aggregate amount of salaries, pension, bonuses,
rents or other remuneration of any nature paid or payable by the
Purchaser to or for the Vendors or Non Arm's Length Persons subsequent
to the execution of this Agreement and up to the time of closing will be
made only at the regular rates heretofore paid, and no such payment will
be due and owing to any employee, director, or officer of the Purchaser
after the closing.
5.1.23 No capital expenditures, except in the ordinary course of
business, will be made or authorized by the Purchaser after the date hereof
and up to the Time of Closing, without the prior written consent of the
Vendors.
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5.1.24 The Purchaser is not a party to any written or oral
agreement for the employment of any officers or individual. All
employees are hired for an indefinite period subject to immediate
termination on 24 hours notice. The employment contracts described in
Schedule 7 hereto are valid and in good standing and fully reflect and
outline the entire agreement between each employee and the Purchaser.
5.1.25 The Purchaser is not a party to any agreement providing
for a pension plan, profit sharing plan or bonus based on profit with any
employee, officer or director of the Purchaser.
5.1.26 The Purchaser has not made any agreements with any labor
union or employee association nor made commitments to or conducted
negotiations with any labor union or employee association with respect
to any future agreements and none of the Vendors is aware of any current
attempts to organize or establish any labor union or employee association
in the Purchaser.
5.1.27 The Purchaser has no outstanding debts whatsoever, nor
will it have any at the time of closing.
5.1.28 The Purchaser is not a party to any lease or agreement
in the nature of a lease, whether as lessor or lessee, except those
leases described in Schedule 9 hereto (in which is specified the parties
to each of such leases, their dates of execution and expiry dates, any
options to renew, any consents required, the locations of any leased
lands and premises and the rental payable thereunder), and each of such
leases is in good standing and in full force and effect without amendment
thereto and the Purchaser is not in breach of any of the covenants,
conditions or agreements contained in each such lease; and there are no
consents required from or on behalf of any persons to the transaction
contemplated by this Agreement.
5.1.29 The Purchaser is not a party to any conditional sales
contract, hire-purchase agreement or other title retention agreement.
5.1.30 The Purchaser maintains appropriate policies of insurance,
given the nature of its and its subsidiaries businesses, and such insurance
coverage will be continued in full force and effect to and including the
Date of Closing, The Purchaser is not in default with respect to any of
the provisions contained in any such insurance policy and has not failed
to give any notice or present any claim under any such insurance policy in
due and timely fashion
5.1.31 There are no actions, suits or proceedings, including
product warranty claims, whether or not purportedly on behalf of the
Purchaser, pending or threatened against or affecting the Purchaser,
at law or in equity, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, and the Purchaser is not aware of
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any existing ground on which any such action, suit or proceeding might
be commenced with any reasonable likelihood of success.
5.1.32 The service marks, trade names, trade marks and patents,
both domestic and foreign, used in whole or in part in or required for
the proper carrying on of the businesses of the Purchaser and its
subsidiaries are owned by or validly licensed to the Purchaser with the
sole and exclusive right to use the same and are in good standing and duly
registered in all appropriate offices to preserve the right thereof and
thereto;
5.1.33 Except for agreements, contracts and commitments in the
ordinary course of business which have no more than three (3) months to
run, the Purchaser is not a party to any outstanding agreement, contract
or commitment, whether written or oral in the nature of a prepaid service
contract.
5.1.34 All vacation pay, bonuses, commissions and other emoluments
are accurately reflected and have been accrued in the books of account of
the Purchaser.
5.1.35 The Purchaser is and at Closing will be in substantial
compliance in all jurisdictions in which in employs persons, with
legislation governing hours of work, termination and severance pay,
vacation pay and similar employee rights, the Worker's Compensation
Act and all such similar statutes. The uses of the real properties owned
or leased by the Purchaser referred to in this Agreement or the Schedules
hereto are not in material breach of any statute, by-law, ordinance,
regulation, covenant, restriction or official plan.
5.1.36 Except as set out and described in Schedule 10 hereto,
the Purchaser owns, possesses and has a good and marketable title to its
undertaking, property and assets, free and clear of any and all mortgages,
liens, pledges, charges, security interests, encumbrances, actions, claims
or demands of any nature whatsoever or howsoever arising.
5.1.37 The conduct of the businesses of the Purchaser and any
of its subsidiaries do not infringe upon the patents, trade marks,
trade names or copyrights, domestic or foreign, of any other person,
firm or corporation.
5.1.38 DELETED.
5.1.39 DELETED.
5.1.40 There are not now any loans or other indebtedness
outstanding between the Purchaser and its shareholders, or any of them,
its directors or any of them, and/or its officers or any of them, or
employees of the Purchaser or former directors, officers, shareholders
or employees of the Purchaser or any Non Arms Length Persons, other than
normal salaries, bonuses, fringe benefits and the obligation to reimburse
for expenses incurred on behalf of the Purchaser in the normal course of
business.
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5.1.41 All receivables recorded on the books of the Purchaser
are bona fide and good and, subject to an allowance for doubtful accounts
taken in accordance with GAAP, collectible without set-off or counter-claim.
5.1.42 There are no liabilities of the Purchaser of any kind
whatsoever, whether or not accrued and whether or not determined or
determinable, in respect of which the Corporation or the Purchaser
may become liable on or after Closing and relating to periods before
Closing except liabilities which have been disclosed on, reflected in or
provided for in the Financial Statements;
5.1.43 The Purchaser is not in default in the filing of any
corporate return or report that may be required under any federal, state
and/or municipal law or regulation.
5.1.44 All inventories on hand at the Time of Closing will be of
good and marketable quality, capable of being sold in the ordinary course
of the Business at current market prices.
5.1.45 The Purchaser has duly and timely filed all tax returns
required to be filed by it and has paid all taxes and installments of
taxes which are due and payable, and has paid all assessments and
reassessments, and all other taxes, governmental charges, penalties,
interest and fines due and payable by it on or before the date hereof;
the American federal and all state income tax liability of the Purchaser
has been reviewed and determined by the Internal Revenue Service of the
United Stated or the applicable state for all fiscal years up to and
including the fiscal year ended in 1994; adequate provision has been made
for taxes payable for the current period for which tax returns are not yet
required to be filed; there are no agreements, waivers or other arrangements
providing for an extension of time with respect to the filing of any tax
return by, or payment of any tax, governmental charge or deficiency against
the Purchaser in respect of taxes, governmental charges or assessments,
asserted by such authority; the Purchaser has withheld from each payment
made to any of its officers, directors, employees, former directors,
officers and employees the amount of all taxes, including but not limited to
income tax, and other deductions required to be withheld therefrom and has
paid the same to the proper tax or other receiving officers within the time
required under the applicable tax legislation.
5.1.46 The Purchaser has no information or knowledge of any facts
relating to the Purchaser, its subsidiaries, its business or the businesses
of its subsidiaries which, if known to the Vendors, might reasonably be
expected to deter the Vendors from completing the transaction and sale
herein contemplated.
ARTICLE 6.00-COVENANTS OF THE VENDORS
6.1.1 The Vendors covenant and agree with the Purchaser that on or
before the Closing Date they will do or cause to be done the following:
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6.1.2 Take all necessary steps and proceedings required to permit all of
the Purchased Shares to be duly and regularly transferred to the Purchaser
of its nominee;
6.1.3 Until the Time of Closing continue to operate the business of the
Corporation prudently and in such a manner as preserve and maintain the
goodwill of the Corporation;
6.1.4 All necessary corporate actin and proceedings by the Purchaser shall
have been taken to permit the due execution and delivery of this Agreement
and the valid transfer of the Purchased Shares to the Purchaser;
6.1.5 DELETED.
6.1.6 DELETED.
ARTICLE 7.00-COVENANTS OF THE PURCHASER
7.1 The Purchaser covenants and agrees with the Vendors that on
or before the Closing Date it will do or cause to be done the following:
7.2 all necessary corporate action and proceedings by the Purchaser
shall have been taken to permit the due execution and delivery of this
Agreement and the valid transfer of the Exchange Shares to the Vendor;
and
7.3 DELETED.
7.4 provide the Vendors at least four (4) days prior to the Closing
Date, with a list of all persons in possession of all of the keys, credit
cards, books, records, files and other properties of the Purchaser and
deliver to the Vendors custody of all such keys, credit cards, books,
records, files and other property in the possession of any person whom
the Vendors designate by notice in writing to the Purchaser at least four
(4) days prior to the Closing Date as not being authorized to continue to
possess any of the foregoing;
7.1.1 DELETED.
7.1.2 obtain written releases from all lessors of real and personal
property that such leases satisfied in full and of no further effect;
7.1.3 cause such directors and officers of the Purchaser and any of its
subsidiaries as the Vendor may specify to resign in favor of nominees of
the Vendor, such resignations to be effective as at the Time of Closing;
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7.1.4 DELETED.
7.1.5 up to the Time of Closing continue to operate the businesses of the
Purchaser and its subsidiaries prudently and in such a manner as to preserve
and maintain the goodwill of the Purchaser and its subsidiaries; and
7.1.6 on the Closing Date of this Agreement, the Purchaser's aggregate
cash assets will be at least $0.00; its total assets will be at least $215;
and its liabilities, whether accrued or inchoate but excluding liabilities
as a result of the transaction contemplated hereby, shall not exceed
$10,000;
ARTICLE 8.00-SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
8.1 The covenants, representations and warranties of the Vendors
contained in this Agreement and contained in any document or certificate
given pursuant hereto shall survive the Closing herein provided for and,
notwithstanding Closing, nor any investigation made by or on behalf of the
Purchaser, shall continue in full force and effect for the benefit of the
Purchase following the Closing Date.
8.2 The covenants, representations and warranties of the
Purchaser contained in this Agreement and contained in any document or
certificate given pursuant hereto shall survive the closing herein provided
for and, notwithstanding Closing, nor any investigation made by or on behalf
of the Vendors, shall continue in full force and effect for the benefit of
the Vendors following the Closing Date.
ARTICLE 9.00-CONDITIONS OF CLOSING
9.1 The sale and purchase of the Purchase Shares is subject to
the following terms and conditions, each of which is hereby declared to be
for the exclusive benefit of the Purchaser to be fulfilled and performed at
or prior to the Time of Closing:
9.2 The covenants, representations and warranties of the Vendors
contained in this Agreement or any Schedule hereto or certificate or other
document delivered or given to the Purchaser pursuant to this Agreement,
including without limitation the representations and warranties contained in
Article 4.00 shall be true and correct on and as of the Closing Date with
the same force and effect as if they had been made as of the date hereof,
each and every one of which is hereby deemed to be a condition;
9.3 The Vendors shall provide at the Time of Closing a
certificate dated the Closing Date,, to the effect that the covenants,
representations and warranties of the Vendors contained herein are true and
correct on and as of the Closing Date, with the same force and effect as
though made on and as of such date, provided that the acceptance of such
certificate and the closing of the transaction herein provided for shall
not be a
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waiver of the said covenants, representations and warranties which
shall continue in full force and effect as provided herein;
9.4 The Vendors shall have complied with all covenants
and agreements herein agreed to be performed or caused to be performed by
it;
9.5 At the Closing Date, there shall have been no
material adverse change in the affairs, assets, liabilities, financial
condition or business of the Corporation from that shown on or reflected
in the Financial Statements;
9.6 At the Closing Date, there shall have been no
material adverse change in the affairs, assets of the Corporation shall
have occurred prior to the Time of Closing;
9.7 Any consent, authorization, license, franchise,
permit, approval or order of any court or governmental agency or regulatory
body required for the acquisition by the Purchaser of the Purchased Shares
shall have been obtained;
9.8 The Purchaser shall provide at the Time of Closing
a certificate dated the Closing Date, to the effect that the covenants,
representations and warranties of the Purchaser contained herein are true
and correct on and as of the Closing Date, with the same force and effect
as though made on and as of such date, provided that the acceptance of
such certificate and the closing of the transaction herein provided for
shall not be a waiver of the said covenants, representations and warranties
which shall continue in full force and effect as provided herein; and
9.9 The Purchaser shall have complied with all covenants
and agreements herein agreed to be performed or caused to be performed by
it.
9.10 The Purchaser shall provide to the Vendors the written
opinion of the Purchaser's legal counsel in the form annexed hereto and
marked Exhibit 13.
ARTICLE 10.00-CLOSING ARRANGEMENTS
10.1 The closing shall take place at the Time of Closing
at such offices as are agreed to in writing among the parties hereto at
least 24 hours prior to the said Closing.
10.2 At the Time of Closing and upon fulfillment of
all the condition set out in this Agreement, which have not been waived
in writing by the Vendors or the Purchaser, the Vendors shall deliver to
the Purchaser proper certificates for all the Purchased Shares.
ARTICLE 11.00-NOTICE
11.1 Any notice or other document to be given by any
party hereto to any other party shall be in writing and may be given by
personal delivery the offices of Xxxxxx X. Xxx, known to both parties
hereto.
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11.2 Any notice or other document aforesaid, if delivered, shall
be deemed to have been given or made on the date on which it was delivered
or, if mailed, shall be deemed to have been given and received on the fourth
(4th) business day following the date on which it was mailed; provided that
if there exists at the time of mailing of a notice hereunder or within four
(4) business days thereafter a labor dispute or other event which would
affect the normal delivery of the notice by the postal service of the United
States, then such notice will only be effective if actually delivered.
11.3 The parties hereto may change any address for
notices hereunder, from time to time, by notice given in accordance
with the foregoing.
ARTICLE 12.00-GENERAL
12.1 Time shall be of the essence of this Agreement.
12.2 This Agreement may be executed in one or more
counterparts, each of which when so executed shall constitute an original
and all of which together shall constitute one and the same agreement.
12.3 This Agreement, including the Schedules hereto,
constitutes the entire agreement between the parties hereto. There are
not and shall not be any verbal statements, representations, warranties,
undertaking or agreements between the parties and this Agreement may not
be amended or modified in any respect except by written instrument signed
by the parties hereto.
12.4 This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
laws of the State of New York. Any and all disputes arising under this
Agreement whether as to interpretation, performance or otherwise, shall
be subject to the exclusive jurisdiction of the Courts of the State of New
York. Each of the parties hereto hereby irrevocably attorns to the
jurisdiction of the Courts of the State of New York.
12.5 The headings used herein are inserted for
convenience of reference only and shall not affect the construction of or
interpretation of this Agreement.
12.6 Except as other wise set out in this Agreement,
each of the parties hereto shall pay all of its own costs and expenses of
the transaction of purchase and sale including all fees and expenses of its
accountants, counsel and officers.
12.7 In the event that any Article or section of this
Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall not affect the
remainder of the provisions hereof, but such part shall be fully severable,
and this Agreement shall be construed and enforced as if such invalid or
unenforceable part had never been inserted herein and the parties do hereby
agree that
232
they would have signed this Agreement without such invalid or
unenforceable part included herein.
12.8 In this Agreement words importing the singular
number only shall include the plural and vice versa; and words importing
the masculine gender shall include the feminine and vice versa.
12.9 This Agreement shall enure to the benefit of
and be binding upon the parties hereto and their respective heirs,
legal personal representatives, successors and permitted assigns.
12.10 Where the date for the expiry of any time period
or for the closing of any thing hereunder expires or falls upon a day which
is not a Business Day, the time so limited extends to and the thing shall
be done on the day next following that is a Business Day.
12.11 The parties hereto agree that no disclosure or
public announcement with respect to this Agreement or any of the
transactions contemplated by this Agreement shall be made by any party
hereto without the prior written consent of the other parties hereto.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement on the day and year first above written.
SIGNED, SEALED AND DELIVERED )
in the presence of )
/s/Xxxxx Xxxxxxxx/s/ )
) /s/Xxxxx Xxx/s/, President
) TRB SYSTEMS
INTERNATIONAL, INC.
) /s/Xxxxx Xxx/s/, President
) MOTION PLUS
INTERNATIONAL CORP.
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