EXHIBIT NO. 2
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is effective as of
September 1, 2001, by Urecoats Industries Inc., a Delaware corporation
(hereinafter referred to as "Buyer"), and Xxxxxxx Xxxxxxxxx, Xxxxx X. Xxxxxx,
Xxx Xxxxxxxxxxx, Xxxxxx Xxxxxxx, and Xxxxxx Xxxxxxxx (hereinafter collectively
referred to as "Sellers").
RECITALS
Sellers own all of the issued and outstanding shares of capital stock
(the "Shares") of Infiniti Paint Co., Inc., a Florida corporation (the
"Company").
Sellers desire to sell, and Buyer desires to purchase, all of the issued
and outstanding Shares of the Company, for the consideration and on the terms
set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITION. For purposes of this Agreement, the following terms have
the meanings specified or referred to in this Section 1:
"ACCOUNTS RECEIVABLE"--as defined in Section 3.8.
"APPLICABLE CONTRACT"--any Contract (a) under which the Company has or
may acquire any rights, (b) under which the Company has or may become subject
to any obligation or liability, or (c) by which the Company or any of the
assets owned or used by it is or may become bound.
"BALANCE SHEET"--as defined in Section 3.4.
"BUYER"--as defined in the first paragraph of this Agreement.
"BUYER SHARES"--as defined in Section 2.2(c).
"CLOSING"--as defined in Section 2.4.
"CLOSING DATE"--the date and time as of which the Closing actually takes
place, which shall be the date of this Agreement and the time set forth in
Section 2.4.
"COMPANY"--as defined in the Recitals of this Agreement.
"CONSENT"--any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONTRACT"--any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
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"DAMAGES"--as defined in Section 5.2.
"EMPLOYEE SELLERS"-Xxxxx X. Xxxxxx and Xxx Xxxxxxxxxxx.
"EMPLOYMENT AGREEMENTS"--as defined in Section 2.5(a)(iii).
"ENCUMBRANCE"--any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership,
except restrictions on transfer imposed by Federal securities laws.
"ENVIRONMENTAL LAWS"--as defined in Section 3.18.
"ERISA"--the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"ESCROW AGENT"--as defined in Section 2.2(b).
"ESCROW AGREEMENT"--as defined in Section 2.5(c).
"ESCROW AMOUNT"--as defined in Section 2.2(b).
"FACILITIES"--any real property, leaseholds, or other interests currently
or formerly owned or operated by Company and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated by any Company.
"GAAP"--generally accepted United States accounting principles, applied
on a basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to in Section 3.4 were prepared.
"GOVERNMENTAL AUTHORIZATION"--any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement.
"GOVERNMENTAL BODY"--any:
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity
and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
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"HAZARDOUS MATERIAL"--as defined in Section 3.18.
"INTELLECTUAL PROPERTY ASSETS"--as defined in Section 3.19.
"INTERIM BALANCE SHEET"--as defined in Section 3.4.
"KNOWLEDGE"--an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other matter;
or
(b) a prudent individual could be expected to discover or otherwise
become aware of such fact or other matter in the course of conducting a
reasonably comprehensive investigation concerning the existence of such fact
or other matter.
A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at
any time had, Knowledge of such fact or other matter.
"LEGAL REQUIREMENT"--any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution,
law, ordinance, principle of common law, regulation, statute, or treaty.
"NONCOMPETITION AGREEMENTS"--as defined in Section 2.5(a)(v).
"MANUFACTURING AGREEMENT"--as defined in Section 2.5(a)(iv).
"ORDER"--any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"ORGANIZATIONAL DOCUMENTS"--the articles or certificate of incorporation
and the bylaws of a corporation and any amendments thereto.
"PERSON"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other
entity or Governmental Body.
"PROCEEDING"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative,
or informal) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
"PURCHASE PRICE"--as defined in Section 2.2.
"RELEASE"--as defined in Section 3.18(g)(iii).
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"REPRESENTATIVE"--with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"SECURITIES ACT"--the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"SELLERS"--as defined in the first paragraph of this Agreement.
"SELLERS' RELEASE"--as defined in Section 2.5(a)(ii).
"SHARES"--as defined in the Recitals of this Agreement.
"SUBSIDIARY"--with respect to any Person, any corporation or other Person
of which securities or other interests having the power to elect a majority of
that corporation's or other Person's board of directors or similar governing
body, or otherwise having the power to direct the business and policies of
that corporation or other Person, are held by the Person, either directly or
indirectly.
"TAXES"-- as described in Section 3.10.
"TAX RETURN"--any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the administration,
implementation, or enforcement of or compliance with any Legal Requirement
relating to any Tax.
"THREATENED"--a claim, Proceeding, dispute, action, or other matter will
be deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.
2. SALE AND TRANSFER OF SHARES; OTHER TRANSACTIONS; CLOSING
2.1 SHARES. Subject to the terms and conditions of this Agreement, at
the Closing, Sellers shall sell and transfer the Shares to Buyer, and Buyer
will purchase the Shares from Sellers, free and clear of all Encumbrances.
2.2 PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Shares is One Million Five Hundred and Fifty Thousand Dollars ($1,550,000),
payable as follows:
(a) The SUM of Seven Hundred and Seventy Five Thousand ($775,000),
payable at Closing by bank cashier's or certified check payable to the order of,
or by wire transfer to accounts specified by, Sellers, EXCEPT that Forty Five
Thousand Dollars ($45,000) will be held in Escrow as set forth below AND Fifty
Two Thousand Ninety Seven Dollars and Twenty Nine Cents ($52,097.29),
representing Company loans to Sellers, shall be deducted from the Purchase Price
and the loans shall be deemed paid in full by the Sellers;
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(b) The SUM of Forty Five Thousand Dollars ($45,000) (the "Escrow
Amount"), which shall be deposited with Xxxxx & XxXxxxx, P.A., an escrow agent
(the "Escrow Agent") as designated by Seller at the Closing and paid to Buyer or
Sellers, as appropriate, as provided in Section 2.3 below; and
(c) Within ten (10) days following the Date of Closing, the issuance
and delivery of a total of 1,550,000 restricted shares of Common Stock of Buyer,
par value $.01 per share (the "Buyer Shares"), which the parties agree and
acknowledge has a value of approximately Seven Hundred and Seventy Five Thousand
Dollars ($ 775,000) as of the Closing Date.
(i) The Buyer's shares are being acquired by Sellers for
investment and not with a view to the unlawful distribution thereof.
(ii) Sellers consent and agree that the certificates for the
Buyer's shares shall contain a legend to the effect that the shares have not
been registered under the United States Securities Act of 1933, as amended (the
"Act") and may not be transferred, sold or hypothecated in the absence of an
effective registration statement with respect to Buyers shares, duly filed with
the Securities and Exchange Commission, or Buyer is provided with an opinion of
counsel, satisfactory to it that registration is not required under the Act.
2.3 ESCROW AMOUNT. The Escrow Amount, as adjusted herein, shall be paid
to Sellers on the first anniversary of the Closing Date, together with any
accrued interest thereon, and less the following amounts under the following
terms:
(a) sums equal to the amount of any unpaid Accounts Receivable
reflected on the Company's Balance Sheet as of August 31, 2001 which remain
unpaid, as of the first anniversary of the Effective Date will be withdrawn from
the Escrow Amount and paid to Buyer with the unpaid Accounts Receivable being
assigned to Sellers for collection, if they so desire;
The parties shall enter into an escrow agreement regarding the Escrow
Amount as contemplated in Section 2.2(b).
2.4 CLOSING. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Xxxxx & XxXxxxx, P.A., 0000 Xxxx
Xxxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, at 5:00 PM (local
time) on Tuesday, September 4, 2001 the "Closing Date").
2.5 CLOSING OBLIGATIONS. At the Closing:
(a) Sellers are delivering to Buyer:
(i) certificates representing the Shares, duly endorsed (or
accompanied by duly executed stock powers), for transfer to Buyer;
(ii) releases in the form of Exhibit 2.5(a)(ii) executed by
each Seller (collectively, "Sellers' Releases");
(iii) employment agreements in the form of Exhibit 2.5(a)(iii),
executed by each of the Employee Sellers (collectively, the "Employment
Agreements");
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(iv) manufacturing agreement in the form of Exhibit 2.5(a)(iv),
executed by Tropical Asphalt Products Corporation;
(v) non-competition agreements in the form of Exhibit
2.5(a)(v), executed by each Seller (collectively, the "Non-Compete Agreements");
(vi) a legal opinion of counsel to Sellers in form acceptable
to Buyer; and
(b) Buyer is delivering to Sellers:
(i) the cash portion of the Purchase Price deliverable at
Closing, by bank cashier's or certified check payable to the order of, or by
wire transfer to accounts specified by, Sellers;
(ii) proof of Buyer's authority and direction to transfer agent
to issue Buyer's Shares together with appropriate opinion of counsel authorizing
same, in the names of Sellers, and certificates representing the Buyer Shares in
the names of Sellers will be delivered within ten (10) days after the Closing
Date;
(iii) the Escrow Amount to the Escrow Agent referred to in
Section 2.5(c) by bank cashier's or certified check;
(iv) properly executed Employment Agreements;
(v) properly executed Manufacturing Agreement; and
(vi) a legal opinion of counsel to Buyer in form acceptable to
Seller.
(c) Buyer and Sellers will enter into an escrow agreement in the form
of Exhibit 2.5(c) (the "Escrow Agreement") with the Escrow Agent.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers, jointly and severally,
represent and warrant to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING.
(a) The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Florida, with full corporate
power and authority to conduct its business as it is now being conducted, to own
or use the properties and assets that it purports to own or use, and to perform
all its obligations under Applicable Contracts. The Company is duly qualified
to do business as a foreign corporation and is in good standing under the laws
of each state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification.
(b) Sellers have delivered to Buyer copies of the Organizational
Documents of the Company as currently in effect.
(c) The Company has no Subsidiaries.
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3.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Sellers, enforceable against Sellers in accordance with its terms.
Upon the execution and delivery by Sellers of the Escrow Agreement, the
Employment Agreements, the Manufacturer's Agreement, the Sellers' Releases, and
the Non-Compete Agreements (collectively, the "Sellers' Closing Documents"), the
Sellers' Closing Documents will constitute the legal, valid, and binding
obligations of Sellers, enforceable against Sellers in accordance with their
respective terms. Sellers have the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and the Sellers'
Closing Documents and to perform their obligations under this Agreement and the
Sellers' Closing Documents.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated herein will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A)
any provision of the Organizational Documents of the Company, or (B) any
resolution adopted by the board of directors or the shareholders of the Company;
(ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to challenge any of the
transactions contemplated herein or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which the Company or any Seller, or
any of the assets owned or used by the Company, may be subject;
(iii) contravene, conflict with, or result in a violation of any
of the terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by the Company or that otherwise relates to the
business of, or any of the assets owned or used by, the Company;
(iv) cause Buyer or the Company to become subject to, or to
become liable for the payment of, any Tax;
(v) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable Contract; or
(vi) result in the imposition or creation of any Encumbrance
upon or with respect to any of the assets owned or used by the Company.
SCHEDULE 3.2 lists each person that Sellers or the Company was required to
give any notice to or obtain any Consent from in connection with the execution
and delivery of this Agreement or the consummation or performance of any of the
transactions contemplated herein.
(c) Sellers are acquiring the Buyer Shares for their own account and
not with a view to their distribution within the meaning of Section 2(11) of the
Securities Act.
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3.3 CAPITALIZATION. The authorized equity securities of the Company
consist of ten million (10,000,000) shares of common stock, $.0001 par value per
share, of which one thousand (1,000) shares are issued and outstanding and
constitute the Shares. Sellers are the record and beneficial owners and holders
of the Shares, free and clear of all Encumbrances. SCHEDULE 3.3 sets forth the
Shares owned by each Seller. No legend or other reference to any purported
Encumbrance appears upon any certificate representing equity securities of the
Company. All of the Shares have been duly authorized and validly issued and are
fully paid and nonassessable. There are no Contracts relating to the issuance,
sale, or transfer of any equity securities or other securities of the Company.
None of the Shares was issued in violation of the Securities Act or any other
Legal Requirement.
3.4 FINANCIAL STATEMENTS. Sellers will cooperate with best efforts and
due diligence to deliver to Buyer: (a) an audited balance sheet of the Company
as at December 31, 2000 (including the notes thereto, the "Balance Sheet"), and
the related statements of income and retained earnings and cash flows for the
fiscal year then ended, together with the report thereon of Xxxx & Company,
P.A., 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx 00000, independent
certified public accountants, and (b) an unaudited balance sheet of the Company
as at June 30, 2001 (the "Interim Balance Sheet") and the related unaudited
consolidated statements of income, and retained earnings and cash flows for the
six months then ended, including in each case the notes thereto. Such financial
statements and notes fairly present the financial condition and the results of
operations, changes in shareholders' equity, and cash flows of the Company as at
the respective dates of and for the periods referred to in such financial
statements, all in accordance with GAAP, subject, in the case of interim
financial statements, to normal recurring year-end adjustments (the effect of
which will not, individually or in the aggregate, be materially adverse) and the
absence of notes (that, if presented, would not differ materially from those
included in the Balance Sheet); the financial statements referred to in this
Section 3.4 reflect the consistent application of such accounting principles
throughout the periods involved. Company will cause to be prepared financial
statements as of August 31, 2001 to be delivered no later than September 30,
2001, unless extended mutually by Buyer and Sellers.
3.5 BOOKS AND RECORDS. The books of account, minute books, stock record
books, and other records of the Company, all of which have been made available
to Buyer, are complete and correct and have been maintained in accordance with
sound business practices. The minute books of the Company contain accurate and
complete records of all meetings held of, and corporate action taken by, the
shareholders, the Boards of Directors, and committees of the Boards of Directors
of the Company.
3.6 TITLE TO PROPERTIES; ENCUMBRANCES. SCHEDULE 3.6 contains a complete
and accurate list of all leaseholds or other interests in real property owned by
the Company. The Company owns all the properties and assets (whether real,
personal, or mixed and whether tangible or intangible) that it purports to own,
including all of the assets reflected in the Balance Sheet and the Interim
Balance Sheet (except for assets held under capitalized leases disclosed or not
required to be disclosed in SCHEDULE 3.6 and personal property sold since the
date of the Balance Sheet and the Interim Balance Sheet, as the case may be, in
the ordinary course of business), and all of the properties and assets purchased
or otherwise acquired by the Company since the date of the Balance Sheet (except
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for personal property acquired and sold since the date of the Balance Sheet in
the ordinary course of business and consistent with past practice). Except as
set forth in SCHEDULE 3.6, all properties and assets owned by the Company are
free and clear of all Encumbrances.
3.7 CONDITION AND SUFFICIENCY OF ASSETS. The buildings, plants,
structures, and equipment owned or leased by the Company are structurally sound,
are in good operating condition and repair, and are adequate for the uses to
which they are being put, and none of such buildings, plants, structures, or
equipment is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. The building,
plants, structures, and equipment owned or leased by the Company are sufficient
for the continued conduct of the Company's business after the Closing in
substantially the same manner as conducted prior to the Closing.
3.8 ACCOUNTS RECEIVABLE. All accounts receivable of the Company that are
reflected on the Balance Sheet or the Interim Balance Sheet or on the accounting
records of the Company as of the Closing Date (collectively, the "Accounts
Receivable") represent valid obligations arising from sales actually made or
services actually performed in the ordinary course of business. The Accounts
Receivable are current and collectible net of the respective reserves shown on
the Balance Sheet or the Interim Balance Sheet or on the accounting records of
the Company as of the Closing Date (which reserves are adequate and calculated
consistent with past practice and, in the case of the reserve as of the Closing
Date, does not represent a greater percentage of the Accounts Receivable as of
the Closing Date than the reserve reflected in the Balance Sheet represented of
the Accounts Receivable reflected therein and does not represent a material
adverse change in the composition of such Accounts Receivable in terms of
aging). Subject to such reserves, each of the Accounts Receivable either has
been or will be collected in full, without any set-off, within ninety days after
the day on which it first becomes due and payable. There is no contest, claim,
or right of set-off, other than returns in the ordinary course of business,
under any Contract with any obligor of an Accounts Receivable relating to the
amount or validity of such Accounts Receivable. SCHEDULE 3.8 contains a
complete and accurate list of all Accounts Receivable as of August 31, 2001,
which list sets forth the aging of such Accounts Receivable.
3.9 NO UNDISCLOSED LIABILITIES. Except as set forth in SCHEDULE 3.9, the
Company has no liabilities or obligations of any nature (whether known or
unknown and whether absolute, accrued, contingent, or otherwise) except for
liabilities or obligations reflected or reserved against in the Balance Sheet or
the Interim Balance Sheet and current liabilities incurred in the ordinary
course of business since the respective dates thereof.
3.10 TAXES.
(a) The Company has filed or caused to be filed all Tax Returns that
are or were required to be filed by or with respect to it, either separately or
as a member of a group of corporations, pursuant to applicable Legal
Requirements up to and including the fiscal year ending December 31, 2000.
Sellers have delivered to Buyer copies of, and SCHEDULE 3.10(a) contains a
complete and accurate list of, all such Tax Returns relating to income or
franchise taxes filed since the inception of the Company. The Company has paid,
or made provision for the payment of, all Taxes that have or may have become due
pursuant to those Tax Returns or otherwise, or pursuant to any assessment
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received by Sellers or the Company, except such Taxes, if any, as are listed in
SCHEDULE 3.10(a) and are being contested in good faith and as to which adequate
reserves (determined in accordance with GAAP) have been provided in the Balance
Sheet and the Interim Balance Sheet. Any tax liabilities of Company prior to
Closing, are subject to claims against the Escrow Amount and to extent such
taxes exceed the Escrow Amount, Sellers jointly and individually will be liable
for same and will indemnify Company and Buyer from any taxes, penalties and
interest that may accrue.
(b) Except as set forth in SCHEDULE 3.10(b), the Company has never
been the subject of an audit, either at the federal or state level.
(c) The charges, accruals, and reserves with respect to Taxes on the
respective books of the Company are adequate (determined in accordance with
GAAP) and are at least equal to the Company's liability for Taxes. There exists
no proposed tax assessment against the Company except as disclosed in the
Balance Sheet. All Taxes that the Company is or was required by Legal
Requirements to withhold or collect have been duly withheld or collected and, to
the extent required, have been paid to the proper Governmental Body or other
Person.
(d) All Tax Returns filed by the Company are true, correct, and
complete. There is no tax sharing agreement that will require any payment by the
Company after the date of this Agreement.
3.11 NO MATERIAL ADVERSE CHANGE. Since the date of the Balance Sheet,
there has not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of the Company, and no event has
occurred or circumstance exists that may result in such a material adverse
change.
3.12 EMPLOYEE MATTERS.
(a) CASH COMPENSATION. SCHEDULE 3.12(a) contains a complete and
accurate list of the names, titles and cash compensation, including without
limitation wages, salaries, bonuses (discretionary and formula) and other cash
compensation (the "Cash Compensation") of all employees of the Company. In
addition, SCHEDULE 3.12(a) contains a complete and accurate description of any
promised increases in Cash Compensation of employees of the Company that have
not yet been effected.
(b) COMPENSATION PLANS. SCHEDULE 3.12(b) contains a complete and
accurate list of all employee benefit plans, compensation plans, arrangements
or practices (the "Compensation Plans") sponsored by the Company or to which
the Company contributes on behalf of its employees. The Compensation Plans
include without limitation, plans, arrangements or practices that provide for
severance pay, deferred compensation, incentive, bonus or performance awards,
and stock ownership or stock options. The Company has provided Buyer a copy of
each written Compensation Plan and a written description of each unwritten
Compensation Plan. Each of the Compensation Plans can be terminated or amended
at will by the Company. Each Compensation Plan has been administered and
maintained in compliance with all applicable Legal Requirements, including
ERISA. No threatened or pending claims, suits or other proceedings exist with
respect to any Compensation Plan other than normal benefit claims filed by
participants or beneficiaries.
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(c) EMPLOYEE POLICIES AND PROCEDURES. SCHEDULE 3.12(c) contains a
complete and accurate list of all employee manuals, policies, procedures and
work-related rules (the "Employee Policies and Procedures") that apply to
employees of the Company. The Company has provided Buyer a copy of all written
Employee Policies and Procedures and a written description of all unwritten
Employee Policies and Procedures. Each of the Employee Policies and Procedures
can be amended or terminated at will by the Company.
(d) LABOR COMPLIANCE. The Company
(i) has been and is in compliance with all laws, rules,
regulations and ordinances respecting employment and employment practices, terms
and conditions of employment and wages and hours, and
(ii) is not liable for any arrears of wages or penalties for
failure to comply with any of the foregoing.
The Company has not engaged in any unfair labor practice or discriminated
on the basis of race, color, religion, sex, national origin, age or handicap in
its employment conditions or practices.
There are no
(i) unfair labor practice charges or complaints or racial,
color, religious, sex, national origin, age or handicap discrimination charges
or complaints pending or threatened against the Company before any federal,
state or local court, board, department, commission or agency nor does any basis
therefor exist or
(ii) existing or threatened labor strikes, disputes,
grievances, controversies or other labor troubles affecting the Company, nor
does any basis therefor exist.
(e) UNIONS. No employees of the Company are represented by any
union, labor organization or collective bargaining unit. To the best knowledge
of Sellers, the employees of the Company have no intention to and have not
threatened to organize or join a union, labor organization or collective
bargaining unit.
(f) ALIENS. All employees of the Company are citizens of, or are
authorized to be employed in, the United States.
3.13 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.
(a) Except as set forth in SCHEDULE 3.13:
(i) the Company is, and has been at all times in full
compliance with each Legal Requirement that is or was applicable to it or to the
conduct or operation of its business or the ownership or use of any of its
assets; and
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(ii) no event has occurred or circumstance exists that (with or
without notice or lapse of time) (A) may constitute or result in a violation by
the Company of, or a failure on the part of the Company to comply with, any
Legal Requirement, or (B) may give rise to any obligation on the part of the
Company to undertake, or to bear all or any portion of the cost of, any remedial
action of any nature.
(b) SCHEDULE 3.13 contains a complete and accurate list of each
Governmental Authorization, including permits, that is held by the Company or
that otherwise relates to the business of, or to any of the assets owned or used
by, the Company. Each Governmental Authorization listed or required to be listed
in SCHEDULE 3.13 is valid and in full force and effect. Except as set forth in
SCHEDULE 3.13:
(i) the Company is, and at all times has been, in full
compliance with all of the terms and requirements of each Governmental
Authorization identified or required to be identified in SCHEDULE 3.13; and
(ii) no event has occurred or circumstance exists that may
(with or without notice or lapse of time) (A) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or
requirement of any Governmental Authorization listed or required to be listed
in SCHEDULE 3.13, or (B) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation, or termination of, or any modification
to, any Governmental Authorization listed or required to be listed in SCHEDULE
3.13.
The Governmental Authorizations listed in SCHEDULE 3.13 collectively
constitute all of the Governmental Authorizations necessary to permit the
Company to lawfully conduct and operate its businesses in the manner it
currently conducts and operates such business and to permit the Company to own
and use its assets in the manner in which it currently owns and uses such
assets.
3.14 LEGAL PROCEEDINGS; ORDERS.
(a) Except as set forth in SCHEDULE 3.14, there is no pending
Proceeding:
(i) that has been commenced by or against the Company or that
otherwise relates to or may affect the business of, or any of the assets owned
or used by, the Company; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated herein.
To the Knowledge of Sellers and the Company, (1) no such Proceeding has
been Threatened, and (2) no event has occurred or circumstance exists that may
give rise to or serve as a basis for the commencement of any such Proceeding.
Sellers have delivered to Buyer copies of all pleadings, correspondence, and
other documents relating to each Proceeding listed in SCHEDULE 3.14. The
Proceedings listed in SCHEDULE 3.14 will not have a material adverse effect on
the business, operations, assets, condition, or prospects of the Company.
12
(b) Except as set forth in SCHEDULE 3.14:
(i) there is no Order to which the Company, any Seller or
any of the assets owned or used by the Company, is subject;
(ii) no officer, director, agent, or employee of the Company
is subject to any Order that prohibits such officer, director, agent, or
employee from engaging in or continuing any conduct, activity, or practice
relating to the business of the Company;
(iii) the Company is, and at all times has been, in full
compliance with all of the terms and requirements of each Order to which it,
or any of the assets owned or used by it, is or has been subject; and
(iv) no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a violation
of or failure to comply with any term or requirement of any Order to which the
Company, or any of the assets owned or used by the Company, is subject.
3.15 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in
SCHEDULE 3.15, since the date of the Balance Sheet, the Company has conducted
its business only in the ordinary course of business and there has not been
any:
(a) change in the Company's authorized or issued capital stock of
the Company; grant of any stock option or right to purchase shares of capital
stock of the Company; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement, or
other acquisition by the Company of any shares of any such capital stock; or
declaration or payment of any dividend or other distribution or payment in
respect of shares of capital stock;
(b) amendment to the Organizational Documents of the Company;
(c) payment or increase by the Company of any bonuses, salaries, or
other compensation to any stockholder, director, officer, or (except in the
ordinary course of business) employee or entry into any employment, severance,
or similar Contract with any director, officer, or employee;
(d) adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or with any employees of the
Company;
(e) damage to or destruction or loss of any asset or property of
the Company, whether or not covered by insurance, materially and adversely
affecting the properties, assets, business, financial condition, or prospects
of the Company;
(f) entry into, termination of, or receipt of notice of termination
of (i) any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement, or (ii) any transaction involving a
total remaining commitment by or to the Company of at least $5,000;
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(g) sale (other than sales of inventory in the ordinary course of
business), lease, or other disposition of any asset or property of the Company
or mortgage, pledge, or imposition of any lien or other encumbrance on any
material asset or property of the Company, including the sale, lease, or other
disposition of any of the Intellectual Property Assets;
(h) cancellation or waiver of any claims or rights with a value to
the Company in excess of $5,000;
(i) material change in the accounting methods used by the Company;
or
(j) agreement, whether oral or written, by the Company to do any
of the foregoing.
3.16 CONTRACTS; NO DEFAULTS.
(a) SCHEDULE 3.16(a) contains a complete and accurate list, and
Sellers have delivered to Buyer true and complete copies, of:
(i) each Applicable Contract that involves performance of
services or delivery of goods or materials by the Company;
(ii) each Applicable Contract that involves performance of
services or delivery of goods or materials to the Company of an amount or
value in excess of $5,000;
(iii) each Applicable Contract that was not entered into in
the ordinary course of business and that involves or could involve
expenditures or receipts of the Company in excess of $5,000;
(iv) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other Applicable Contract
affecting the ownership of, leasing of, title to, use of, or any leasehold or
other interest in, any real or personal property (except personal property
leases and installment and conditional sales agreements having a value per item
or aggregate payments of less than $5,000 and with terms of less than one year);
(v) each licensing agreement or other Applicable Contract
with respect to patents, trademarks, copyrights, or other intellectual property,
including agreements with current or former employees, consultants, or
contractors regarding the appropriation or the non-disclosure of any of the
Intellectual Property Assets;
(vi) each joint venture, partnership, and other Applicable
Contract (however named) involving a sharing of profits, losses, costs, or
liabilities by the Company with any other Person;
(vii) each Applicable Contract containing covenants that in any
way purport to restrict the business activity of the Company or limit the
freedom of the Company to engage in any line of business or to compete with any
Person;
(viii) each power of attorney that is currently effective and
outstanding;
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(ix) each Applicable Contract for capital expenditures in
excess of $5,000; and
(x) each amendment, supplement, and modification (whether
oral or written) in respect of any of the foregoing.
(b) Except as set forth in SCHEDULE 3.16(b):
(i) no Seller (or any person related to Seller) has or may
acquire any rights under, and neither Seller has or may become subject to any
obligation or liability under, any Contract that relates to the business of, or
any of the assets owned or used by, the Company; and
(ii) no officer, director, agent, employee, consultant, or
contractor of the Company is bound by any Contract that purports to limit the
ability of such officer, director, agent, employee, consultant, or contractor to
(A) engage in or continue any conduct, activity, or practice relating to the
business of the Company, or (B) assign to the Company or to any other Person any
rights to any invention, improvement, or discovery.
(c) Except as set forth in SCHEDULE 3.16(c), each Contract
identified or required to be identified in SCHEDULE 3.16(a) is in full force and
effect and is valid and enforceable in accordance with its terms.
(d) Except as set forth in SCHEDULE 3.16(d):
(i) the Company is, and at all times has been, in full
compliance with all applicable terms and requirements of each Contract under
which the Company has or had any obligation or liability or by which the Company
or any of the assets owned or used by the Company is or was bound;
(ii) each other Person that has or had any obligation or
liability under any Contract under which the Company has or had any rights is,
and at all times has been, in full compliance with all applicable terms and
requirements of such Contract;
(iii) no event has occurred or circumstance exists that (with
or without notice or lapse of time) may contravene, conflict with, or result in
a violation or breach of, or give the Company or other Person the right to
declare a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Applicable Contract;
and
(iv) the Company has not given to or received from any other
Person, at any time, any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential violation or breach of, or
default under, any Contract.
3.17 INSURANCE.
(a) Sellers have delivered to Buyer:
15
(i) true and complete copies of all policies of insurance to
which the Company is a party or under which the Company, or any director of the
Company, is or has been covered at any time within the three years preceding the
date of this Agreement; and
(ii) true and complete copies of all pending applications for
policies of insurance.
(b) SCHEDULE 3.17(b) describes:
(i) any self-insurance arrangement by or affecting the
Company, including any reserves established thereunder;
(ii) any contract or arrangement, other than a policy of
insurance, for the transfer or sharing of any risk by the Company; and
(iii) all obligations of the Company to third parties with
respect to insurance (including such obligations under leases and service
agreements) and identifies the policy under which such coverage is provided.
(c) SCHEDULE 3.17(c) sets forth, by year, for the current policy
year and each of the two preceding policy years:
(i) a summary of the loss experience under each policy;
(ii) a statement describing each claim under an insurance
policy for an amount in excess of $5,000, which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer, type of
insurance, and period of coverage; and
(C) the amount and a brief description of the claim; and
(iii) a statement describing the loss experience for all claims
that were self-insured, including the number and aggregate cost of such claims.
(d) All policies to which the Company is a party:
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is financially sound
and reputable;
(C) taken together, provide adequate insurance coverage
for the assets and the operations of the Company;
(D) are sufficient for compliance with all Legal
Requirements and Contracts to which the Company is a party or by it is bound;
(E) will continue in full force and effect following the
consummation of the transactions contemplated herein; and
16
(F) do not provide for any retrospective premium
adjustment or other experienced-based liability on the part of the Company.
No Seller or the Company has received (A) any refusal of coverage or
any notice that a defense will be afforded with reservation of rights, or (B)
any notice of cancellation or any other indication that any insurance policy is
no longer in full force or effect or will not be renewed or that the issuer of
any policy is not willing or able to perform its obligations thereunder.
The Company has paid all premiums due, and has otherwise performed
all of its respective obligations, under each policy to which the Company is a
party or that provides coverage to the Company or director thereof.
The Company has given notice to the insurer of all claims that may be
insured thereby.
3.18 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 3.18:
(a) ENVIRONMENTAL LAWS. Neither the Company nor any of its assets
is currently in violation of, or subject to any existing, pending or threatened
investigation or inquiry by, any governmental authority, or subject to any
remedial obligations under, any Environmental Laws, and this representation and
warranty would continue to be true and correct following disclosure to the
applicable governmental authorities of all relevant facts, conditions and
circumstances, if any, pertaining to the Company.
(b) USE OF ASSETS. The assets of the Company have never been used
in a manner that would be in violation of any of the Environmental Laws.
(c) PERMITS. The Company has not obtained and is not required to
obtain, and Sellers have no knowledge of any reason Buyer will be required to
obtain, any permits, licenses or similar authorizations to construct, occupy,
operate or use any buildings, improvements, fixtures and equipment owned by the
Company by reason of any Environmental Laws.
(d) SUPERFUND LIST. None of the former or present assets of the
Company are or have been listed on any federal or state list of sites for which
investigation or remediation under Environmental Laws has occurred or is
anticipated, nor are any of the Company's assets subject to any liens arising
under Environmental Laws.
(e) HAZARDOUS MATERIALS. There are no aboveground or underground
storage tanks, PCB-containing equipment, or asbestos-containing materials at,
on, or under any of the Company's Facilities which contain Hazardous Materials.
There is no radon or other Hazardous Material present in the ambient air at the
Facilities in excess of permissible limits established by Environmental Law or
for which redemption or control is anticipated or ongoing.
The Company does not have any liability, whether contingent or actual,
with respect to Hazardous Materials that have been released at any property
adjacent to or geologically or hydrologically connected with the Company's
Facilities.
17
There are no Hazardous Materials present on or in the environment at the
Company's Facilities or at a geologically or hydrologically adjoining property,
including any Hazardous Materials contained in barrels, above or underground
storage tanks, landfills, land deposits, dumps, equipment (whether movable or
fixed) or other container, either temporary or permanent, and deposited or
located in land, water, sumps, or any other part of the Company's assets, or
incorporated in to any structure therein or thereon.
There has been no Release or, to the knowledge of Sellers, threat of
Release, of any Hazardous Materials at or from the Company's Facilities or at
any other location where any Hazardous Materials generated at the Company's
Facilities have been treated, stored, transferred, recycled, or disposed, and
the Company has not received, and has no basis to expect, any actual or
threatened order, notice, or other communication from any governmental authority
or private citizen, of any actual or potential violation or failure to comply
with any Environmental Law, or of any actual or threatened obligation to
undertake or bear the cost of any investigation, remediation, or payment of
penalties with respect to any of the Company's Facilities or any other
properties or assets at which Hazardous Materials were transported, treated,
stored, handled, transferred, disposed, recycled, or received.
(f) REPORTS. The Company has delivered to Buyer true and complete
copies and results of all reports, studies, analyses, tests, and monitoring
results possessed or commissioned by the Company or its predecessors pertaining
to Hazardous Materials or compliance with Environmental Laws.
(g) DEFINITIONS.
(i) "Environmental Laws" shall mean any and all foreign or
domestic federal, state, municipal and local laws, statutes, ordinances, rules,
regulations, orders, and determinations of any governmental authority, and
judicial and administrative interpretations thereof, whether currently in
existence or hereafter enacted, issued, or promulgated, pertaining to health,
safety, or the environment in effect in any and all jurisdictions in which the
Company is conducting or at any time has conducted business, or where the
Company's assets are located, including without limitation, the Clean Air Act;
the Comprehensive Environmental Response, Compensation and Liability Act; the
Federal Water Pollution Control Act; the Occupational Safety and Health Act;
the Resource Conservation and Recovery Act; the Toxic Substances Control Act;
the Hazardous Materials Transportation Act; the Emergency Planning and Community
Right-to-Know Act; the Federal Insecticide, Fungicide, and Rodenticide Act; the
Oil Pollution Act; comparable state and local laws; and other laws pertaining
to protection or conservation of the environment, in each case as modified and
amended.
(ii) "Hazardous Material" shall mean any pollutant,
contaminant, chemical, solid or hazardous waste, toxic or hazardous substance,
toxic material or petroleum product (including without limitation crude oil or
any fraction thereof), that is regulated, listed, or controlled under
Environmental Laws or which is toxic or harmful to human health or the
environment, including without limitation any material which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic, or
mutagenic, and any salt water, brine, asbestos, naturally occurring radioactive
material, polychlorinated biphenyl, urea formaldehyde, radon gas or
electromagnetic waves.
18
(iii) "Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, escaping, leaching, migrating,
emitting, dumping or disposing into the environment of any kind whatsoever
(including also the abandonment or discarding of barrels, containers, tanks or
other receptacles containing any Hazardous Material) or the existence of a
Hazardous Material on, in or under the Company's Facilities.
3.19 INTELLECTUAL PROPERTY.
(a) INTELLECTUAL PROPERTY ASSETS--The term "Intellectual Property
Assets" includes, without limitation:
(i) the name and trademark "Infiniti Paint Co., Inc.", all
fictional business names, trading names, registered and unregistered trademarks,
service marks, and applications, if any (collectively, "Marks");
(ii) all domestic and foreign patents, patent applications,
and inventions and discoveries that may be patentable, if any (collectively,
"Patents");
(iii) all copyrights in both published works and unpublished
works, if any (collectively, "Copyrights"); and
(iv) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology,
plans, drawings, formulas, recipes, and blue prints (collectively, "Trade
Secrets"); owned, used, or licensed by the Company as licensee or licensor.
(b) SCHEDULE 3.19 contains a complete and accurate list and summary
description, including any royalties paid or received by the Company, of all
Intellectual Property Assets owned, leased or licensed by the Company.
(c) KNOW-HOW NECESSARY FOR THE BUSINESS. The Intellectual Property
Assets are all those necessary for the operation of the Company's business as
it is currently conducted. The Company is the owner of all right, title, and
interest in and to each of the Intellectual Property Assets, free and clear of
all liens, security interests, charges, encumbrances, equities, third-party
rights, and other adverse claims, and has the right to use without payment to a
third party all of the Intellectual Property Assets.
3.20 DISCLOSURE. No representation or warranty of Sellers in this
Agreement or in the Schedules hereto or in any document contemplated herein
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
There is no fact known to any Seller that has specific application to any Seller
or the Company (other than general economic or industry conditions) and that
materially adversely affects the assets, business, prospects, financial
condition, or results of operations of the Company that has not been set forth
in this Agreement or the Schedules hereto.
3.21 RELATIONSHIPS WITH SELLERS. Except as set forth in SCHEDULE 3.21,
no Seller or any person affiliated with any Seller has had, any interest in any
property (whether real, personal, or mixed and whether tangible or intangible),
19
used in or pertaining to the Company's business. No Seller has owned (of record
or as a beneficial owner) an equity interest or any other financial or profit
interest in, a Person that has (i) had business dealings or a material financial
interest in any transaction with the Company other than business dealings or
transactions conducted in the ordinary course of business with the Company at
substantially prevailing market prices and on substantially prevailing market
terms, or (ii) engaged in competition with the Company with respect to any line
of the products or services of the Company (a "Competing Business") in any
market presently served by the Company.
3.22 OMITTED.
3.23 BROKERS OR FINDERS. Neither Sellers, the Company nor any of their
agents have incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar payment in
connection with this Agreement, except for Sellers obligation to pay a finders
fee to Xxxxxx X. Xxxxxxx, C.P.A.
3.24 ACKNOWLEDGEMENTS.
(a) Sellers acknowledge and represent that Buyer has provided them
with Buyer's latest annual report on Form 10-K duly filed with the Securities
and Exchange Commission for year ended December 31, 2000 and with Buyers
quarterly report filed on form 10Q with the Securities and Exchange Commission,
for the quarter ended June 30, 2001.
(b) Sellers further acknowledge that they have had reasonable time
and opportunity to examine these reports;
(c) Sellers further acknowledge that they have had the opportunity
to ask questions of and receive answers from the Buyer or persons acting on its
behalf concerning the terms and conditions of, and all of the matters relating
to, the Buyer; Sellers have also been given the opportunity to obtain such
additional information with respect to the Buyer as Sellers have desired,
including but not limited to, any additional information necessary to verify
the accuracy of the information set forth in the financial statements and other
disclosures made in the above mentioned reports.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
Sellers as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware.
4.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Upon the execution and delivery by Buyer of the Escrow Agreement, the Employment
Agreements, the Shareholder Agreement and the Registration Rights Agreement
(collectively, the "Buyer's Closing Documents"), the Buyer's Closing Documents
will constitute the legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms. Buyer has the absolute
20
and unrestricted right, power, and authority to execute and deliver this
Agreement and the Buyer's Closing Documents and to perform its obligations under
this Agreement and the Buyer's Closing Documents.
(b) Neither the execution and delivery of this Agreement by Buyer
nor the consummation or performance of any of the transactions contemplated
herein by Buyer will give any Person the right to prevent, delay, or otherwise
interfere with any of the transactions contemplated herein pursuant to:
(i) ny provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
(iv) any Contract to which Buyer is a party or by which Buyer
may be bound.
SCHEDULE 4.2 lists each person that Buyer was required to give any notice
to or obtain any Consent from in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the transactions
contemplated herein.
4.3 INVESTMENT INTENT. Buyer is acquiring the Shares for its own account
and not with a view to their distribution within the meaning of Section 2(11) of
the Securities Act.
4.4 CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated herein. To Buyer's Knowledge, no such Proceeding has
been Threatened.
4.5 BUYER SHARES. All of the Buyer Shares have been duly authorized and,
when issued in connection with the transactions contemplated herein, will be
validly issued, fully paid and non-assessable.
5. INDEMNIFICATION; REMEDIES.
5.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE. All
representations, warranties, covenants, and obligations in this Agreement, the
Schedules hereto, and any other certificate or document delivered pursuant to
this Agreement will survive the Closing for a period of two years. The right to
indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
21
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
5.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS. Sellers, jointly
and severally, will indemnify and hold harmless Buyer, the Company, and their
respective Representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage, expense (including
costs of investigation and defense and reasonable attorneys' fees) or diminution
of value, whether or not involving a third-party claim (collectively,
"Damages"), arising, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Sellers in
this Agreement or any other certificate or document delivered by Sellers
pursuant to this Agreement;
(b) any breach by either Seller of any covenant or obligation of
such Seller in this Agreement;
(c) any product liability or breach of warranty claims relating to
products sold or services performed by the Company prior to or on the Closing
Date, and all general liability claims arising out of or relating to occurrences
of any nature relating to the Company's business prior to the Closing Date,
whether any such claims are asserted prior to, on or after the Closing Date;
(d) all liabilities of the Company, whether direct or indirect,
fixed or contingent, known or unknown, arising out of or resulting from any
violation or non-compliance with any Environmental Law or any Release caused by
acts, omissions, events or conditions existing or occurring prior to the
Closing;
(e) any claims, liabilities, obligations, damages, costs and
expenses, whether direct or indirect, known or unknown, fixed or contingent,
claimed or demanded by third parties against Buyer and arising out of or
resulting from any violation or non-compliance with any Environmental Law or any
Release caused by acts, omissions, conditions, events or occurrences prior to
the Closing;
(f) any obligation or liability under or related to any Compensation
Plan or the termination thereof prior to Closing; or
(g) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with either Seller or the Company
(or any Person acting on their behalf) in connection with any of the
transactions contemplated herein.
The remedies provided in this Section 5.2 will not be exclusive of or
limit any other remedies that may be available to Buyer or the other Indemnified
Persons.
5.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Sellers, and will pay to Sellers the amount of any
Damages arising, directly or indirectly, from or in connection with (a) any
22
breach of any representation or warranty made by Buyer in this Agreement or in
any certificate delivered by Buyer pursuant to this Agreement, (b) any breach by
Buyer of any covenant or obligation of Buyer in this Agreement, (c) any claim by
any Person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in connection with any of
the transactions contemplated herein, or (d) any breach by Buyer or claim by any
Person for Buyer's failure to provide timely payments for any Company obligation
which was personally guaranteed by Sellers.
5.4 ESCROW; RIGHT OF SET-OFF. Upon notice to Sellers specifying in
reasonable detail the basis for such set-off, Buyer may set off any amount to
which it may be entitled under this Section 5 against amounts otherwise payable
under Section 2.3 hereof or may give notice of a Claim in such amount under the
Escrow Agreement. The exercise of such right of set-off by Buyer in good faith,
whether or not ultimately determined to be justified, will not constitute a
breach of this Agreement by Buyer. Neither the exercise of nor the failure to
exercise such right of set-off or to give a notice of a Claim under the Escrow
Agreement will constitute an election of remedies or limit Buyer in any manner
in the enforcement of any other remedies that may be available to it.
5.5 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.
(a) Promptly after receipt by an indemnified party under Section 5.2
or 5.3 of notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an indemnifying party
under such Section, give notice to the indemnifying party of the commencement of
such claim, but the failure to notify the indemnifying party will not relieve
the indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's failure to give
such notice.
(b) If any Proceeding referred to in Section 5.5(a) is brought
against an indemnified party and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will, unless the
claim involves Taxes, be entitled to participate in such Proceeding and, to the
extent that it wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party fails to
provide reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory
to the indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Section 10 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the indemnifying
23
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (iii) the indemnified party will
have no liability with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
(d) Sellers hereby consent to the non-exclusive jurisdiction of any
court in which a Proceeding is brought against any Indemnified Person for
purposes of any claim that an Indemnified Person may have under this Agreement
with respect to such Proceeding or the matters alleged therein, and agree that
process may be served on Sellers with respect to such a claim anywhere in the
world.
5.6 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
6. GENERAL PROVISIONS.
6.1 EXPENSES. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated herein, including all fees and expenses of
agents, representatives, counsel, and accountants. Sellers will cause the
Company not to incur any out-of-pocket expenses in connection with this
Agreement. In the event of termination of this Agreement, the obligation of each
party to pay its own expenses will be subject to any rights of such party
arising from a breach of this Agreement by another party. Notwithstanding the
foregoing, attorneys fees shall be paid to Xxxxx X. Broad, Esquire, in the
amount of Two Thousand Five Hundred Dollars ($2,500) by Buyer and One Thousand
Dollars ($1,000) from each of the Sellers at the Closing, and Company shall be
responsible for payment of the reasonable accounting fees of Levi, Cahlin & Co.,
certified public accountants.
6.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity
with respect to this Agreement or the transactions contemplated herein will be
issued, if at all, at such time and in such manner as Buyer determines. Unless
24
consented to by Buyer in advance or required by Legal Requirements, Sellers
shall, and shall cause the Company to, keep this Agreement strictly confidential
and may not make any disclosure of this Agreement to any Person. Sellers and
Buyer will consult with each other concerning the means by which the Company'
employees, customers, and suppliers and others having dealings with the Company
will be informed of the transactions contemplated herein, and Buyer will have
the right to be present for any such communication.
6.3 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Sellers: Xxxxxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxx Xxxxxx
Xxxx # 0
Xxxxxxxxx, Xxxxxxx 00000
Xxxxx X. Xxxxxx
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Xxx Xxxxxxxxxxx
0000 XX 00xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxxxxx
00000 XX 00xx Xxxxxx
Xxxx 00
Xxxxx, Xxxxxxx 00000
copy to: Xxxxx X. Broad, P.A.
Attorney At Law
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Broad, Esquire
Facsimile: (000) 000-0000
Buyer: Urecoats Industries Inc.
Powerline Business Park
0000 Xxxxx Xxxxxxxxx Xxxx
Xxxxx X-0
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Executive Vice President
Facsimile: (000) 000-0000
25
copy to: Xxxxx & XxXxxxx, P.A.
0000 Xxxx Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esquire
Facsimile: (000) 000-0000
6.4 JURISDICTION; SERVICE OF PROCESS. Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Broward County, Florida, in accordance with the Rules of the
American Arbitration Association then in effect (except to the extent that the
procedures outlined below differ from such rules). The parties agree to act as
expeditiously as possible to select arbitrators and conclude the dispute. The
selected arbitrators must ender their decision in writing. The cost and expenses
of the arbitration and of enforcement of any award in any court shall be borne
by the losing party. If advances are required, each party will advance one-half
of the estimated fees and expenses of the arbitrators. Judgment may be entered
on the arbitrators' award in any court having jurisdiction. Although arbitration
is contemplated to resolve disputes hereunder, either party may proceed to court
to obtain an injunction to protect its rights hereunder, the parties agreeing
that either could suffer irreparable harm by reason of any breach of this
Agreement. Pursuit of an injunction shall not impair arbitration on all
remaining issues. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
6.5 FURTHER ASSURANCES. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
6.6 WAIVER. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
6.7 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter
(including the Letter of Intent between Buyer and Sellers dated May 18, 2001)
and constitutes (along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the party to be charged with the
amendment.
26
6.8 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither party
may assign any of its rights under this Agreement without the prior consent of
the other parties except that Buyer may assign any of its rights under this
Agreement to any Subsidiary of Buyer. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.
6.9 SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
6.10 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
6.11 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
6.12 GOVERNING LAW. This Agreement will be governed by the laws of the
State of Texas without regard to conflicts of laws principles.
6.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the date first set forth above.
BUYER:
URECOATS INDUSTRIES INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
Date: 9-4-01
27
SELLERS:
XXXXXXX XXXXXXXXX
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Date: 9-4-01
XXXXX X. XXXXXX
By: /s/ Xxxxx X. Xxxxxx
---------------------
Date: 9/4/01
XXX XXXXXXXXXXX
By: /s/ Xxx Xxxxxxxxxxx
---------------------
Date: 9-4-01
XXXXXX XXXXXXX
By: /s/ Xxxxxx Xxxxxxx
---------------------
Date: 9/4/01
XXXXXX XXXXXXXX
By: /s/ Xxxxxx Xxxxxxxx
---------------------
Date: 9-4-01
28
EXHIBIT 2.5(a)(ii) - FORM OF SELLERS RELEASE
--------------------------------------------
GENERAL RELEASE
---------------
Know All Men By These Presents:
That ( SELLER X ), first party, for and in consideration of the sum of $10.00
(Ten Dollars), or other valuable considerations, received from or on behalf of
URECOATS INDUSTRIES INC., a Delaware corporation, the receipt and sufficiency of
which are hereby acknowledged, HEREBY remises, releases, acquits, satisfies, and
forever discharges INFINITI PAINT CO., INC., a Florida corporation, second
party, of and from all, and all manner of action and actions, cause and causes
of action, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions, claims and demands
whatsoever, in law or in equity, which said first party ever had, now has, or
which any personal representative, successor, heir or assign of said first
party, hereafter can, shall or may have, against said second party, for, upon or
by reason of any matter, cause or thing whatsoever, from the beginning of the
world to the day of these presents. (Wherever used herein the terms "first
party" and "second party" shall include singular and plural, heirs, legal
representatives, and assigns of individuals, and the successors and assigns of
corporations, wherever the context so admits or requires.)
IN WITNESS WHEREOF, the undersigned has signed and sealed these presents
this _____ day of _____________, 2001.
Signed, sealed and delivered in the presence of:
--------------------------------- -----------------------------
Witness #1 Signature (Name of Seller)
-----------------------------
Printed Name
---------------------------------
Witness #2 Signature
-----------------------------
Printed Name
STATE OF FLORIDA )
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____ day of
___________, 2001, by (Name of Seller), who is personally known to me or who has
produced ___________________________ as identification.
-----------------------------
NOTARY PUBLIC
Print Name: _________________
My Commission No.: __________
My Commission Expires: ______
(Notary Seal)
29
EXHIBIT 2.5(a)(iii)
-------------------
EMPLOYMENT AGREEMENTS
---------------------
XXXXX X. XXXXXX AND XXX XXXXXXXXXXX
-----------------------------------
(ATTACHED)
30
EXHIBIT 2.5(a)(iv)
------------------
MANUFACTURING AGREEMENT
-----------------------
TROPICAL ASPHALT PRODUCTS CORPORATION
-------------------------------------
(ATTACHED)
31
EXHIBIT 2.5(a)(v)
-----------------
FORM OF NONCOMPETITION AGREEMENT
--------------------------------
NON-COMPETITION AGREEMENT
-------------------------
THIS NON-COMPETITION AGREEMENT (hereinafter "Agreement") made as of
September 4, 2001, effective September 1, 2001, by and between INFINITI PAINT
CO., INC., a Florida corporation (hereinafter "INFINITI"), with offices at 0000
Xxxxx Xxxxxxxxx Xxxx, Xxxxx X-0, Xxxxxxx Xxxxx, Xxxxxxx 00000 and (Seller X)
(hereinafter "Seller X"), an employee of TROPICAL ASPHALT PRODUCTS CORPORATION
(hereinafter "TROPICAL"), a Florida corporation, with an office located at 0000
Xxxxx 00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000.
W I T N E S S E T H :
WHEREAS, at the time of execution of this Agreement, INFINITI is a wholly-
owned subsidiary of Urecoats Industries Inc.;
WHEREAS, INFINITI is engaged in the business of selling, marketing, and
distributing adhesives, sealants, coatings, paints, and foam products, directly
to contractors (hereinafter "INFINITI'S BUSINESS"); and
WHEREAS, simultaneously with the execution of this Agreement, INFINITI and
TROPICAL entered into an exclusive manufacturing agreement (hereinafter
"Manufacturing Agreement").
NOW, THEREFORE , in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the parties hereto, the parties hereto agree as
follows:
1. RECITALS.
The foregoing recitals are true and correct.
2. NON-COMPETITION.
(a) As a material inducement to INFINITI entering into the Manufacturing
Agreement, SELLER X agrees that he will not during the term of the Manufacturing
Agreement become associated in any manner, directly or indirectly, with a new
entity of any kind, for the purpose of commencing a new business which engages
in any business the same or substantially similar to INFINITI'S BUSINESS, in the
United States, without INFINITI's prior express written consent, which consent
shall not be unreasonably withheld.
(b) SELLER X acknowledges that the occurrence of any of the events and/or
activities set forth in Paragraph 2(a) above are events and/or activities that
will by their very nature result in irreparable injury to INFINITI which
irreparable injury cannot adequately be compensated by damages in an action at
law.
32
(c) SELLER X covenants and agrees that if he violates this Agreement,
INFINITI, in addition to the equitable relief provided for in Paragraph 4
hereof, shall be entitled to an accounting and repayment of all profits,
compensation, commissions, remuneration, or benefits which SELLER X directly or
indirectly, has realized and/or may realize as a result of, growing out of, or
in connection with any such violation.
3. NONSOLICITATION OF EMPLOYEES AND CUSTOMERS; NONACCEPTANCE OF BUSINESS FROM
CUSTOMERS. At all times while TROPICAL maintains the Manufacturing Agreement
with INFINITI, SELLER X shall not, directly or indirectly, for himself or for
any other person, firm, corporation, partnership, association or other entity
(a) employ or attempt to employ or enter into any contractual arrangement with
any employee or former employee of INFINITI in connection with any business
competitive with the INFINITI BUSINESS, nor shall SELLER X make known the names
and addresses of such customers or any information relating in any manner to
INFINITI'S trade or business relationships with such customers, other than in
connection with the performance of SELLER X's duties under this Agreement.
4. REASONABLENESS OF RESTRICTIONS.
(a) SELLER X has carefully read and considered the provisions of Paragraph
2 hereof, and agrees that the restrictions set forth in such Paragraph 2
(including, but not limited to, the time period of restriction and the
geographical areas of restriction) are fair and reasonable and are reasonably
required for the protection of the interests of INFINITI.
(b) In the event that, notwithstanding the foregoing, any of the
provisions of Paragraph 2 shall be held to be invalid or unenforceable, the
remaining provisions thereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable parts had not been included
therein. In the event that any provision of Paragraph 2 hereof relating to time
period and/or areas of restriction shall be declared by a court of competent
jurisdiction to exceed the maximum time period or areas such court deems
reasonable and enforceable, said time period and/or areas of restriction shall
be deemed to become, and thereafter be, the maximum time period and/or area
which such court deems reasonable and enforceable.
5. EQUITABLE RELIEF.
In the event of a breach by SELLER X of any of the provisions of Paragraph
2(a), INFINITI, in addition to and not in limitation of any other rights,
remedies, or damages available to INFINITI at law or in equity, shall be
entitled to a permanent injunction in order to prevent or to restrain any such
breach by SELLER X or any and all persons directly or indirectly acting for,
with or on behalf of SELLER X.
6. MISCELLANEOUS PROVISIONS.
(a) TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party with or without cause
upon thirty (30) days prior written notice. Notwithstanding the foregoing, the
parties hereto agree that the provisions of Paragraph 2 of this Agreement shall
continue to apply for the period(s) of time set forth herein.
33
(b) NOTICES. All notices required or permitted to be given under the
terms of this Agreement shall be in writing. Notices may be personally delivered
to a party or may be mailed or sent via overnight delivery service by a
nationally recognized overnight delivery carrier to a party at its address first
set forth above or sent via facsimile. Notices are deemed given when actually
received by the party being noticed. However, if a notice is mailed to a party
by certified mail, return receipt requested, proper postage prepaid, in an
envelope addressed to the address of the party set forth in the first paragraph
of this Agreement (or such other address as may be designated by a party by
giving notice thereof to the other party), then such notice shall be deemed
given on the date that it is turned over to the custody of the United States
Postal Service.
(c) FURTHER ASSURANCES. All parties shall execute and deliver such other
instruments and do such other acts as may be necessary to carry out the intent
and purposes of this Agreement.
(d) GENDER. Whenever the context may require, any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural and vice versa.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts. All executed counterparts shall constitute one agreement,
notwithstanding that all signatories are not signatories to the original or the
same counterpart.
(f) CAPTIONS. The captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit, extend or prescribe the
scope of this Agreement or the intent of any provision hereof.
(g) COMPLETENESS AND MODIFICATION. This Agreement constitutes the entire
understanding among the parties concerning the subject matter hereof and it
supersedes all prior or contemporaneous agreements or understandings. No waiver
or modification of the terms hereof shall be valid unless in writing signed by
the party or parties to be charged and only to the extent therein set forth. No
covenant, representation or condition not expressed in this Agreement shall
offset or be effective to interpret, change or restrict the express provisions
of this Agreement.
(h) SEVERABILITY. The invalidity in whole or in part of any covenant,
promise or undertaking, or any section, subsection, paragraph, sentence, clause,
phrase or word, or of any provision of this Agreement shall not affect the
validity of the remaining portions thereof.
(i) BINDING EFFECT. This Agreement shall be binding upon the heirs,
personal representatives, guardians, legal representatives, administrators,
assigns and successors of the parties hereto.
(j) ATTORNEYS' FEES. In the event of any litigation arising out of this
Agreement, the prevailing party shall be entitled to court costs and reasonable
attorneys' fees at the trial and at the appellate levels.
(k) ASSIGNMENT. Neither party to this Agreement shall be permitted to
assign any rights or obligations under this Agreement without the prior written
consent of the other party.
34
(l) GOVERNING LAW AND VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida. The parties
hereto agree that all actions and proceedings relating directly or indirectly
hereto shall be litigated in any state court or federal court located in Broward
County, Florida, and the parties hereby expressly consent to the jurisdiction of
any such courts and to venue therein and consent to service of process in any
such action or proceeding by certified or registered mailing of the summons and
complaint therein directed to the parties at their respective addresses set
forth in this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and date first above written.
INFINITI PAINT CO., INC.
By: ______________________________
Title: ______________________________
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this ___ day of ___,
2001, by INFINITI PAINT COMPANY, INC., a Florida corporation, by _____________
as _____________, on behalf of such company, who is personally known to me or
who has produced ___________ as identification and who did not take an oath.
Notary Public:
sign
print
State of Florida at Large (Seal)
My Commission Expires:
_______________________
SELLER X
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this ___ day of ___,
2001, by Seller X, who is personally known to me or who has produced
_______________________ as identification and who did not take an oath.
Notary Public:
sign
print
State of Florida at Large (Seal)
My Commission Expires:
35
SCHEDULE 3.2
------------
SELLERS AND/OR COMPANY NOTICE AND/OR CONSENT
--------------------------------------------
NCFI, Mount Airy, North Carolina
Merrill Lynch Line of Credit
Xxxxxxx Xxxxx Term Loan
NMHG (Yale Fork Lift #1)
NMHG (Yale Fork Lift #2)
The Associates (Isuzu Truck)
Powerline Business Park, Property Lease
Ford Motor Credit, Ford Explorer
UBVL Auto Lt., Auto Lease Chevy Tahoe
SCHEDULE 3.3
------------
SHARES OWNED BY EACH SELLER
---------------------------
NAME AND ADRESSES NUMBER OF SHARES
--------------------------------- ----------------
Xxxxxxx Xxxxxxxxx 280
0000 Xxxxx Xxxxx Xxxxxx, Xxxx # 0
Xxxxxxxxx, Xxxxxxx 00000
Xxxxx X. Xxxxxx 280
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Xxx Xxxxxxxxxxx 280
0000 XX 00xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxxx 80
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxxxx 80
00000 XX 00xx Xxxxxx, Xxxx 00
Xxxxx, Xxxxxxx 00000
TOTAL SHARES 1,000
36
SCHEDULE 3.6
------------
LIST OF LEASEHOLDS OR OTHER INTERESTS IN REAL PROPERTY
------------------------------------------------------
Infiniti Leases of Real Property
0000 X. Xxxxxxxxx Xxxx
Xxxxx X-0 and Q-10
Xxxxxxx Xxxxx XX 00000
Yale Forklift #1
Yale Forklift #2
Chevy Tahoe 1999 XX
Xxxx Explorer 1999 Xxxxx Xxxxx
Isuzu Truck
Inventory
Accounts Receivable
SCHEDULE 3.8
------------
LIST OF ACCOUNTS RECEIVABLE AND AGING
-------------------------------------
(ATTACHED)
(*NOTE: OMITTED CONFIDENTIAL INFORMATION)
SCHEDULE 3.9
------------
LIABILITIES AND OBLIGATIONS
---------------------------
NONE
SCHEDULE 3.10(a)
----------------
LIST OF TAX RETURNS
-------------------
1. Florida Corporate Income/Franchise and Emergency Excise Tax Return-Year 1998
2. Florida Corporate Income/Franchise and Emergency Excise Tax Return-Year 1999
3. Florida Corporate Income/Franchise and Emergency Excise Tax Return-Year 2000
4. 1999 Florida Intangible Tax Return for Corporation, Partnership, and
Fiduciary Filers as of January 1, 1999
5. 2000 Florida Intangible Tax Return for Corporation, Partnership, and
Fiduciary Filers as of January 1, 2000
6. 2001 Florida Intangible Tax Return for Corporation, Partnership, and
Fiduciary Filers as of January 1, 2000
7. United States Income Tax Return for a S Corporation-Year 1998
8. United States Income Tax Return for a S Corporation-Year 1999
9. United States Income Tax Return for a S Corporation-Year 2000
37
SCHEDULE 3.10(b)
----------------
AUDITS
------
NONE
SCHEDULE 3.12(a) AND (b)
------------------------
LIST OF NAMES, TITLES, CASH COMPENSATION, EMPLOYEE BENEFIT PLANS,
-----------------------------------------------------------------
COMPENSATION PLANS, ARRANGEMENTS, AND/OR PRACTICES
--------------------------------------------------
QUARTERLY AND
EMPLOYEE TITLE ANNUAL/HOURLY ANNUAL BONUSES
--------------- --------- ------------- ------------------
Xxxxx X. Xxxxxx VP $ 150,000.00 See Empl. Contract
Xxx Xxxxxxxxxxx VP $ 150,000.00 See Empl. Contract
Xxxxx Xxxxxxx Manager $ 36,400.00 $ 300-$800
Xxxxx Xxxx Sales $ 42,000.00 $ 300-$800
Xxxx Xxxx Bookeeping $ 15.00 per hour
32 hour min $ 300-$800
Xxxxx Xxxxx Driver/WH $ 33,800.00 $ 300-$800
SCHEDULE 3.12(c)
----------------
LIST OF EMPLOYEE MANUALS, POLICIES, PROCEDURES, AND WORK-RELATED RULES
----------------------------------------------------------------------
Vacation: One week after one year; two weeks after two years; one extra day per
year for each year of employment thereafter until a maximum of three
weeks of vacation per year is achieved.
Paid Holidays: When falling on a weekday, you will be paid for the following
holidays:
Christmas
New Year's Day
Thanksgiving
Fourth of July
Memorial Day
Labor Day
Sick Days: Three days per year for non-salaried employees. As a salaried
employee, no deductions will be made for missing work due to illness. If this
privilege is abused for salaried employees, the policy will be reviewed.
Performance Evaluation Criteria: Under development.
38
SCHEDULE 3.13
-------------
COMPLIANCE WITH LEGAL REQUIREMENTS AND GOVERNMENTAL AUTHORIZATIONS
------------------------------------------------------------------
NONE
SCHEDULE 3.14
-------------
LEGAL PROCEEDINGS AND ORDERS
----------------------------
1. Infiniti Paints vs Xxxxxxx X Xxxxxxxx & MBT Industries
Case # 01010258 04
17th Judicial Circuit Court Broward County
Xxxxxxx X. Xxxxxxxxx Esq represents Infiniti Paints.
2. Infiniti Paints vs Ameri-Foam Inc
Balance Due $2,646.69
Demand Letter sent by US regular and Certified return receipt requested
on July 26, 2001
No response received to date
No further instruction from Infiniti to pursue this matter.
SCHEDULE 3.15
-------------
ABSENCE OF CERTAIN CHANGES AND EVENTS
-------------------------------------
NONE
SCHEDULE 3.16(a)
----------------
LIST OF CONTRACTS
-----------------
(i) None
(ii) None
(iii) None
(iv) A. Real Property Lease for G2/Q10 0000 X. Xxxxxxxxx
Xx, Xxxxxxx Xxxxx Xx 00000
B. Leases on 2 Yale forklifts
C. Lease on 1999 Chevy Tahoe and 1999 Ford Explorer
D. Isuzu Box Truck
(v) Licensing agreement with Rohm & Xxxx for RP1
(vi) None
(vii) Non Compete with MCC
(viii) None
(ix) None
(x) None
39
SCHEDULE 3.16(b)
----------------
CONTRACTS RIGHTS
----------------
NONE
SCHEDULE 3.16(c)
----------------
ENFORCEABILITY OF CONTRACTS
---------------------------
NONE
SCHEDULE 3.16(d)
----------------
COMPLIANCE WITH CONTRACTS
-------------------------
(i) Yes
(ii) None
(iii) None
(iv) None
SCHEDULE 3.17(b)
----------------
INSURANCE ARRANGEMENTS, CONTRACTS, AND OBLIGATIONS
--------------------------------------------------
(i) None
(ii) None
(iii) All three vehicles, policy numbers on file.
SCHEDULE 3.17(c)
----------------
INSURANCE POLICIES
------------------
(i) None
(ii) None
(iii) None
40
SCHEDULE 3.18
-------------
ENVIRONMENTAL MATTERS
---------------------
(a) None
(b) None
(c) Bulk storage tanks may need a containment wall. Company
may need to apply for a permit to handle Isocyanate
storage.
(d) None
(e) None
(f) None
(g) (i) None
(ii) None
(iii) None
SCHEDULE 3.19
-------------
LIST AND SUMMARY DESCRIPTION OF ALL INTELLECTUAL PROPERTY ASSETS
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1. STERLING - Silver-Aluminum Roof Paint
2. STERLING - Silver-Aluminum Fibred Roof Mastic
3. PC3 - Fibred Knife-Grade Elastomeric Patching Compound
4. GUARDIAN - 100% Acrylic Satin-Gloss House & Trim Paint
5. CHALK-BOND+BLACK SPF - 100% Acrylic Primer for Spray Polyurethane Foam
6. CHALK-BOND+ - Penetrating Chalky Wall & Surface Sealer
7. AQUASEAL 2000 - Waterborne Acrylic, Multi-Surface Sealer
8. ACRYLIC CONCRETE MODIFIER - 100% Acrylic Resin Additive for Roof
Waterproofing Slurry Coats
9. TUFCOAT 8540 ALUMINUM - 100% Solids, Polyurea-Urethane Hybrid Coating
10. POLAR - Premium Vinyl Acrylic Flat and Satin-Gloss Roof Paints
11. MULTI-GRIP CLEAR - 100% Acrylic, Waterborne Adhesion Primer
12. GREAT WHITE - 100% Acrylic Elastomeric Roof Coating
13. ARCTIC - Flat White, Vinyl Acrylic Roof Paint
14. ALPINE - Premium Quality, 100% Acrylic Satin-Gloss Roof Paint
15. ATS-13 CLEAR TOPCOAT - 100% Acrylic, Clear Waterborne Roof Tile Sealant
16. ATS-13 - 100% Acrylic, Pigmented Roof Tile Sealant
17. RAINCOAT - High-Build Acrylic Waterproofing Coating
18. GUARDIAN - 100% Acrylic Satin-Gloss House & Trim Paint
19. PC-1 - Smooth Brush-Grade Elastomeric Patching Compound
20. POLAR - Premium Vinyl-Acrylic Satin-Gloss Roof Paint
21. POLAR - Premium Vinyl-Acrylic Flat Roof Paint
22. PC-3 - Fibred Knife-Grade Elastomeric Patching Compound
23. CHALK-BOND+PIGMENTED - Penetrating Chalky Wall & Surface Sealer
24. ACRYLIC CONCRETE MODIFIER - For Waterproofing Hardcoats
25. ALPINE - Premium 100% Acrylic Satin-Gloss Roof Paint
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SCHEDULE 3.21
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RELATIONSHIPS WITH SELLERS
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Xxxxxxx Xxxxxxxxx (President) owns and operates Tropical Asphalt Products the
Toll manufacturer of water based Company products. Xxxxxx Xxxxxxx and Xxxxxx
Xxxxxxxx are employees of Tropical Asphalt Products Corporation.
SCHEDULE 4.2
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LIST OF EACH PERSON BUYER IS REQUIRED TO GIVE NOTICE AND/OR OBTAIN CONSENT
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NONE
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