Exhibit 2.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into this 14th day
of February 2003, by and between CJC ENTERPRISES OF NEW YORK, INC., a New York
corporation ("CJC"), XXXXXX XXXXX, having offices at 0000 Xxxxxx Xxxxxxx Xxxx,
Xxxxxx, Xxx Xxxx ("Seller") and NEW ENGLAND ACQUISITIONS, INC., a Florida
corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, CJC will shortly open a sound and security store under the name
"Jazz Sound & Security" at 000X Xxxx Xxxxxx, Xxxx Xxxxxxxx, Xxx Xxxx (the
"Store"); and
WHEREAS, Xxxxx is the sole holder of the equity interest of CJC; and
WHEREAS, Seller desires to sell and transfer to Purchaser, and Purchaser
desires to purchase and acquire from Seller all of the equity interest in CJC
for the consideration and on the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto covenant and agree
as follows:
ARTICLE 1
PLAN OF ACQUISITION
1.1 Shares to be Purchased. On the terms and subject to the conditions set
forth herein, effective on the Closing Date (as defined below) Seller
shall sell, assign, convey, transfer and deliver to Purchaser, its
successors and assigns forever, and Purchaser shall purchase and acquire
from Seller, 200 shares of stock, no par value, issued to Seller by CJC
(the " CJC Shares"), free and clear of any and all liens, claims and
encumbrances.
1.2 Consideration. In full consideration of the sale and transfer of the
Shares, Purchaser shall issue to Seller 100,000 shares of Purchasers
common stock, $.00001 per share. (the "NEAI Shares") free and clear of
any and all liens, claims and encumbrances. In addition, Purchaser shall
issue to Seller an additional 50,000 such shares, subject to customary
adjustment for stock splits, recapitalizations and similar transactions,
per store for each store in addition to the Store opened or franchised by
Purchaser pursuant to this Agreement.
1.3 Effective Date and Closing Date. The Effective Date of this Agreement
shall be the date this Agreement is executed by each of the parties. The
closing of the transactions contemplated by this Agreement (the "Closing")
shall take place as of the close of business, New York City time, at the
offices of the Seller as hereinabove set forth on a date agreed upon by
the parties not more than two days after all of the conditions to
Closing set forth herein are satisfied or waived (the date on which
the Closing takes place being the "Closing Date") or at such other time
and place as the parties hereto shall agree. If the Closing Date has not
occurred on or before March 31, 2003, each party shall have the right to
terminate this Agreement as hereinbelow provided.
1.4 Execution and Delivery of Closing Documents. At the Closing, (a) Seller
will deliver to Purchaser a certificate representing the CJC Shares
duly endorsed in blank and (b) Purchaser will deliver to Seller a
certificate representing the NEAI Shares registered in the name of Seller.
At the Closing, each party also will execute and deliver such other
appropriate and customary documents as any other party reasonably may
request for the purpose of consummating the transactions contemplated
by this Agreement. All actions taken at the Closing will be deemed to have
been taken simultaneously at the time the last of any such actions is taken
or completed.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER AND CJC Seller and
CJC Jointly And Severally Represent And Warrant To Purchaser As Follows:
2.1 Organization and Good Standing of CJC. CJC is a corporation
duly organized, validly existing and in good standing under the laws of
the State of New York.
2.2 Power and Authority. CJC has the corporate power and authority to
own, lease and operate its properties and assets and to carry on
the business substantially identical to that of Jazz Audio Sound &
Security, 0000 Xxxxxx Xxxxxxx Xxxx, Xxxxxx, Xxx Xxxx ("CJC'S
Business").
2.3 Authorization and Validity. CJC has the corporate power and authority
to execute, deliver and perform its obligations under this Agreement and
the other documents executed or required to be executed by it in
connection with this Agreement. This Agreement and the other
documents executed or required to be executed by CJC in connection with
this Agreement have been duly authorized by all necessary corporate
action.
2.4 Binding Effect. This Agreement and the other documents executed
or required to be executed by CJC and Seller in connection with this
Agreement have been or will have been duly executed and delivered by CJC
and Seller and are or will be, when executed and delivered, the legal,
valid and binding obligations of CJC and Seller enforceable against
them in accordance with their terms except to the extent that:
(a) enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by equitable
principles of general applicability; and
(c) rights to indemnification may be limited by considerations of public
policy.
2.5 No Violation. Neither the execution and performance of this Agreement or
the agreements described herein nor the consummation of the
transactions described herein or therein will:
(a) result in a violation or breach of (i) the certificate of incorporation
or by-laws of CJC; or (ii) any material agreement or other material
instrument under which CJC is bound or to which any of its assets or
rights are subject, or result in the creation or imposition of any lien,
charge or encumbrance upon any of such assets or rights or the CJC
Shares, or
(b) violate, in any material respect, any applicable law or regulation or
any judgment or order of any court or governmental agency.
CJC has complied in all material respects with all applicable laws,
regulations and licensing requirements, and has filed with the proper
authorities all necessary statements, applications, notices, reports and
any other filings with respect to CJC's Business.
2.6 Permits and Licenses; Compliance. CJC possesses all necessary governmental
licenses, franchises, permits, approvals, authorizations, and rights,
whether federal, state, local or foreign, that are necessary for CJC to
engage in CJC's Business. CJC is in compliance with all such governmental
licenses, franchises, permits, approvals, authorizations, or rights, and
all federal, state or local laws or regulations now applicable or
reasonably expected to be applicable to it.
2.7 Title to Assets. CJC owns its assets and rights free and clear of all
liens, claims and encumbrances and upon consummation of the
transactions contemplated hereby, CJC shall retain good and valid title
thereto, free and clear of all liens, claims and encumbrances.
2.8 Consents. Other than the consent of Xxxxx Xxxxxx as landlord of the Store,
no authorization, consent, approval, permit or license of, or filing with,
any governmental or public body or authority, any lender or lessor or any
other person or entity is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement
or the agreements or transactions contemplated hereby on the part of CJC or
Seller.
2.9 Balance Sheet. The Balance sheet of CJC, (the "CJC Balance Sheet")
attached hereto as Exhibit 2.9 presents fairly the financial position of
CJC as of the date thereof and has been prepared in accordance with
generally accepted accounting principles consistently applied. CJC has
never had any operations. CJC has no liabilities, either absolute or
contingent, other than as set forth on the CJC Balance Sheet.
2.10 Absence of Certain Changes. Since the date of the CJC Balance Sheet, CJC
has not, with respect to CJC's Businesses:
(a) suffered any material adverse change in its assets;
(b) mortgaged, pledged or subjected to any lien, lease, security interest or
other charge or encumbrance any of its assets;
(c) suffered any damage or destruction to or loss (whether or not covered by
insurance) that could reasonably be expected to or does materially and
adversely affect CJC's Business;
(d) written up or written down the carrying value of any of its assets in
any material amounts;
(e) waived any material rights or forgiven any material claims; or
(f) entered into any other commitment or transaction or experienced any
other event that is material to this Agreement or to any of the other
agreements and documents executed or to be executed pursuant to this
Agreement or to the transactions described herein or therein, or that
could reasonably be expected to have, or has had, a material adverse
effect on its assets or rights.
2.11 Litigation. No legal or administrative or other adversary proceeding or
investigation is currently pending against CJC or Seller and, to the
best knowledge of CJC or Seller, none is threatened or contemplated
by any governmental agency or other third party with respect to CJC or
CJC's Business. Neither CJC nor Seller is subject to any continuing court
or administrative order, writ, injunction or decree applicable
specifically to them or which would affect CJC's Business or the rights of
Purchaser hereunder.
2.12 Capitalization. The CJC shares represent, and at the Closing will
represent, all of the outstanding equity securities of CJC. Other
than Purchaser, no person has, or at the Closing will have, the right to
acquire any equity security of CJC.
2.13 Opening of Additional Stores. Purchaser, directly or through one or more
subsidiaries, shall have the exclusive right to open additional stores
under the name "Jazz Audio Sound & Security" or "Jazz Audio" if Purchaser
or any such subsidiary provides the funding reasonably necessary therefor
within sixty days of notice of a request for funding is given to Purchaser
by CJC or Seller. Such notice shall provide the location of each
additional store, the lease terms, sales and net income projections
and such other information as shall be reasonably necessary for
Purchaser or any such subsidiary to determine if it desires to provide
the funding. In the event that Purchaser or all such subsidiaries
decline to provide funding for any particular store or stores, such
declination shall not constitute a waiver of their right to open and
provide funding for any other additional stores, but Seller may then open
such specified store independent of Purchaser.
2.14 Franchising. Purchaser, directly or through one or more subsidiaries,
shall have the exclusive right to franchise additional stores under the
name "Jazz Audio Sound & Security" or "Jazz Audio" provided Purchaser or
any such subsidiary provides the funding reasonably necessary therefor
within sixty days of notice of a request for funding is given to Purchaser
by CJC or Seller. The notice shall include such information as shall be
reasonably necessary for Purchaser or any such subsidiary to determine
if it desires to provide the funding. In the event Purchaser and all
such subdiaries decline to provide such funding, Seller may then franchise
additional stores independent of Purchaser.
2.15 Condition of Assets. CJC's assets are in good working condition and
repair (except for ordinary wear and tear) for their intended use in
the ordinary course of business and conform in all material respects
with all applicable ordinances, regulations and other laws and there are
no known defects therein.
2.16 Authorized Dealer. CJC is an authorized dealer of the products described
in Exhibit 2.16 hereto.
2.17 Marks and Names. CJC is entitled to use all marks and names utilized by
the store located at 0000 Xxxxxx Xxxxxxx Xxxx, Xxxxxx, Xxx Xxxx operating
as "Jazz Audio Sound & Security" without the payment of any amounts
therefor. Purchaser shall make no claim to exclusive use of such name which
shall prevent the continuation of the use of such name by any store
currently authorized by Seller to do so, nor by any store which seller may
be permitted to open pursuant to this Agreement.
2.18 Finder's Fee. CJC has not incurred any obligation for any finder's,
broker's, or agent's fee in connection with this Agreement or the
transactions contemplated hereby.
2.19 Environmental and Other Matters. CJC shall market and install its products
with valid permits, licenses, authorizations, certificates, consents,
exemptions and approvals (collectively, "Permits") required under any
applicable law, rule or regulation relating to or addressing the
environment, health, safety or hazardous materials (collectively,
"Environmental Law"), including Permits necessary for the operation of
CJC's Business. There are no unresolved past or pending, or to CJC's
or Seller's knowledge, threatened claims under any Environmental Law
against CJC with respect or to CJC's Business or to CJC's or Seller's
knowledge are there any circumstances that may form a basis of any such
claim.
2.20 Liens on Assets. There are no liens held by any party on CJC's assets.
2.21 Investment Representations.
(a) Solely for the purpose of this Section 2.21, the term "NEAI Shares"
shall refer to such shares as well as any additional shares issued
pursuant to Section 1.2 hereof. The NEAI Shares will be acquired by
Seller for his own account and not with a view to or for sale or other
disposition in connection with any transaction that will not be exempt
from the registration requirements of the Securities Act of 1933 (the
"Securities Act") and any applicable state securities laws
(b) Seller is capable of evaluating the merits and risks of an investment
in the NEAI Shares and has such knowledge, experience and skill in
financial and business matters that he is capable of evaluating the
merits and risks of the investment in NEAI Shares and the suitability
of the NEAI Shares as an investment and can bear the economic risk of
an investment therein for an indefinite period of time. No
representations have been made or can be made with respect to the
future value, if any, of the NEAI Shares or the profitability or
success of the business of NEAI.
(c) Seller understands that the NEAI Shares will not have been registered
under the Securities Act or any applicable state securities laws, that
the NEAI Shares will be characterized as "restricted securities" under
federal securities laws, and that under such laws and applicable
regulations the NEAI Shares cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom. In this connection, Seller represents that he is familiar
with Rule 144 under the Securities Act, as currently in effect, and
understands the resale limitations imposed thereby and by the
Securities Act.
(d) Purchaser is aware that Seller will issue "stop transfer" instructions
to its transfer agent for the NEAI Shares in connection with the NEAI
Shares to the extent customary for securities which are "restricted
securities."
(e) Seller understands that Purchaser is the only person that can register
the NEAI Shares under the Securities Act and Purchaser has no
obligation or intentions to do so.
(f) Seller consents to the placement of a legend on the certificate
evidencing the NEAI Shares stating that they have not been registered
under the Securities Act or under any other applicable securities laws,
setting forth or referring to the restrictions on transferability and
sale thereof and including placement of any additional language as may
be required by applicable state securities laws.
(g) Seller has downloaded, printed and had the opportunity to carefully
review Purchaser's filings made with the Securities and Exchange
Commission.
(h) There have never been any oral or written contracts, understandings,
agreements or arrangements pursuant to which the Seller may at any date
sell or otherwise dispose of the NEAI Shares or cause the title in the
NEAI Shares to vest in any other person or entity.
(i) There have never been any oral or written contracts, understandings,
agreements or arrangements between Seller and any other person or
entity by which any such person or entity will benefit in such manner
as to be deemed equivalent to an owner of any of the NEAI Shares,
including, but not limited to, the application of income or proceeds
received from a sale thereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to CJC and Seller as follows:
3.1 Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Florida.
3.2 Power and Authority. Purchaser has the corporate power and authority to
own, lease and operate its respective properties and assets and to carry on
its respective business as currently being conducted.
3.3 Authority and Validity. Purchaser has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
other documents executed or required to be executed by it in connection
with this Agreement, and this Agreement and the other documents executed
or required to be executed by Purchaser in connection with this
Agreement have been duly authorized by all necessary corporate action of
Purchaser.
3.4 Binding Effect. This Agreement and the other documents executed or
required to be executed by Purchaser in connection with this Agreement have
been duly authorized, executed and delivered by Purchaser and are or will
be, when executed and delivered, the legal, valid and binding obligations
of Purchaser enforceable against it in accordance with their terms except
to the extent that:
(a) enforceability may be limited by bankruptcy, insolvency or other similar
laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by equitable
principles of general applicability; and
(c) rights to indemnification may be limited by considerations of public
policy.
3.5 No Violation. Neither the execution and performance of this Agreement or
the agreements described herein nor the consummation of the
transactions described herein or therein will:
(a) result in a violation or breach of (i) the articles of incorporation or
by- laws of Purchaser or (ii) any material agreement or other material
instrument under which Purchaser is bound or to which any of the assets
of Purchaser are subject, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets or properties of
Purchaser; or
(b) violate, in any material respect, any applicable law or regulation or
any judgment or order of any court or governmental agency.
Purchaser has complied in all material respects with all applicable laws,
regulations and licensing requirements, and has filed with the proper
authorities all necessary statements, applications, notices, reports and
any other filings with respect to Purchaser's business.
3.6 Consents. No authorization, consent, approval, permit or license of, or
filing with, any governmental or public body or authority, any lender or
lessor or any other person or entity is required to authorize, or is
required in connection with, the execution, delivery and performance of
this Agreement or the agreements or transactions contemplated hereby on
the part of Purchaser.
3.7 Finder's Fee. Purchaser has not incurred any obligation on behalf of
itself or CJC or Seller for any finder's, broker's or agent's fee in
connection with the transactions contemplated hereby.
ARTICLE 4
COVENANTS OF CJC AND SELLER
4.1 Employment Agreement. At the Closing, CJC and Seller shall enter into an
Employment Agreement in the form attached hereto as Exhibit 4.1.
4.2 Assistance in Preparation of Reports. Subsequent to the Closing, at
reasonable requests, CJC and Xxxxx shall assist Purchaser and its
accountants and attorneys in the preparation of Purchaser's reports to be
filed with the Securities and Exchange Commission, including audited
consolidated financial statements, to the extent that such reports
relate to CJC. CJC shall pay directly or reimburse Purchaser for all
costs in connection with such reports solely to the extent they relate to
CJC.
4.3 Conduct of Business. CJC shall until the earlier of the Closing Date or
the termination of this Agreement, conduct CJC's Business in the ordinary
course of such business and not alter its reasonable business practice or
take or omit to take any action that in any manner could reasonably be
expected to adversely affect its revenues; provided, however, that this
shall not prevent CJC from making such changes in the manner in which it
conducts such business as it deems appropriate in the exercise of its
reasonable business judgment.
4.4 Access to Information. From the date hereof until the earlier of the
Closing or the termination of this Agreement, upon reasonable notice, CJC
shall and shall cause its officers, directors, employees, agents,
representatives, accountants and counsel to: (i) afford the officers,
employees and authorized agents, accountants, counsel and representatives
of Purchaser reasonable access to the facilities, books and records of CJC
and to those officers, directors, employees, managers, members, agents,
accountants and counsel of CJC who have any knowledge relating to, and to
the books and records of CJC relating to, the Assets and (ii) furnish to
such representatives of Purchaser such additional financial and operating
data and other information regarding the assets, properties and good
will of the Assets or Rights (or legible copies thereof) as Purchaser or
such representatives may from time to time reasonably request.
4.5 Purchase of Inventory. CJC shall purchase its inventory from Seller or a
corporation designated by Seller is an affiliate at prices equal to 105% of
the actual cost thereof to Seller or such affiliated corporation.
ARTICLE 5
CONDITIONS TO CLOSING
5.1 Conditions to Obligations of CJC and Seller. The obligations of CJC and
Seller to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, at or prior to the Closing of each of the
following conditions in all material respects:
(a) Representations, Warranties and Covenants. The representations and
warranties of Purchaser contained in this Agreement shall have been true
and correct as of the date they were made or deemed to have been made
and shall be true and correct as of the Closing Date, with the same
force and effect as if made as of the Closing Date, except for such
changes as are expressly permitted or contemplated by this Agreement,
and other than such representations and warranties as are made as of
another date. The covenants and agreements contained in this Agreement
to be complied with by Purchaser on or before the Closing Date shall
have been complied with. CJC shall have received a certificate from
Purchaser to such effect, dated as of the Closing Date and signed by
the Chief Executive Officer of Purchaser.
(b) No Proceeding or Litigation. No legal or regulatory action shall have
been commenced or threatened by or before any court or any federal,
state or local governmental authority (collectively, "Governmental
Authority") against CJC, Seller or Purchaser seeking to restrain or
adversely alter the transactions contemplated by this Agreement or which
is likely to render it impossible or unlawful to consummate such
transactions or which could reasonably be expected to have a material
adverse effect on the condition of Purchaser (financial or otherwise) or
on its respective assets, properties or prospects.
5.2 Conditions to Obligations of Purchaser. The obligations of Purchaser to
consummate the transactions contemplated by this Agreement shall be subject
to the fulfillment, at or prior to the Closing, of each of the following
conditions in all material respects:
(a) Representations, Warranties and Covenants. The representations and
warranties of CJC and Seller contained in this Agreement shall have been
true and correct as of the date as of which they were made or deemed to
have been made and shall be true and correct as of the Closing Date,
with the same force and effect as if made as of the Closing Date except
for such changes as are expressly permitted or contemplated by this
Agreement, other than such representations and warranties as are made
as of another date. The covenants and agreements contained in this
Agreement to be complied with by CJC and Seller on or before the Closing
Date shall have been complied with. Purchaser shall have received a
certificate from CJC and Seller to such effect dated as of the Closing
Date and signed by Seller and the Chief Executive Officer of CJC.
(b) No Proceeding or Litigation. No legal or regulatory action shall have
been commenced or threatened by or before any Governmental Authority
against CJC, Purchaser or Seller seeking to restrain or adversely alter
the transactions contemplated hereby or which is likely to render it
impossible or unlawful to consummate the transactions contemplated by
this Agreement or which could have a material adverse effect on the
Assets or rights.
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification of CJC and Seller.
(a) Subject to the terms and conditions of this Article, Purchaser hereby
agrees to indemnify, defend and hold each of Seller and CJC and its
officers, directors, agents, attorneys and affiliates harmless from and
against all losses, obligations, assessments, penalties, liabilities,
costs, damages, reasonable attorneys' fees and expenses (collectively,
"Damages") asserted against or incurred by CJC or Seller or such
identified persons by reason of or resulting from (i) a representation
or warranty made by Purchaser herein being incorrect or untrue or (ii) a
breach by Purchaser of any covenant contained herein or in any of the
agreements executed pursuant hereto.
(b) CJC and Seller agree to cooperate with Purchaser in the event of any
settlement negotiated by Purchaser with regard to the indemnification
provided herein.
6.2 Indemnification of Purchaser.
(a) Subject to the terms and conditions of this Article, CJC and Seller
hereby agree to indemnify, defend and hold Purchaser and its officers,
directors, agents, attorneys and affiliates harmless from and against
all Damages asserted against or incurred by Purchaser or such
indemnified persons by reason of or resulting from (i) a representation
or warranty made by CJC or Seller herein being incorrect or untrue or
(ii) a breach by CJC or Seller of any covenant contained herein or in
any of the agreements executed pursuant hereto.
(b) Purchaser agrees to cooperate with CJC and Seller in the event of any
settlement negotiated by CJC or Seller with regard to the
indemnification provided herein.
(c) Assertion and Resolution of Indemnification Claim Any permitted
indemnities under Sections 6.1 and 6.2 hereof (an "Indemnified Party")
shall give notice to the person responsible for indemnification (an
"Indemnifying Party") of any claim as to which indemnification may be
sought as soon as possible after the Indemnified Party has actual
knowledge thereof and the amount thereof, if known. The Indemnified
Party shall supply to the Indemnifying Party any other information in
the possession of the Indemnified Party regarding such claim, and will
permit the Indemnifying Party (at its expense) to assume the defense of
any third party claim and any litigation resulting therefrom, provided
that counsel for the Indemnifying Party who shall conduct the defense
of such claim or litigation shall be reasonably satisfactory to the
Indemnified Party, and provided further that the failure by the
Indemnified Party to give notice as provided herein will not relieve the
Indemnifying Party of its indemnification obligations hereunder except
to the extent that the Indemnifying Party is damaged as a result of
the failure to give notice. If the Indemnifying Party has assumed the
defense of a third party claim, the Indemnifying Party shall not be
entitled to settle such third party claim without the prior written
consent of the Indemnified Party, which consent shall not be
unreasonably withheld, provided that such consent shall not be required
if such settlement involves only the payment of money and the claimant
provides to the Indemnified Party, in form and substance reasonably
satisfactory to such Indemnified Party, a release from all liability in
respect of such third party claim. The Indemnified Party shall have the
right at all times to participate in the defense, settlement,
negotiations or litigation relating to any third party claim or demand
at its own expense. If the Indemnifying Party does not assume the
defense of any matter as above provided, then the Indemnified Party
shall have the right to defend any such third party claim or demand, and
will be entitled to settle any such claim or demand in its discretion
for the account or benefit of the Indemnified Party. In any event,
the Indemnified Party will cooperate in the defense of any such action
at the expense of the Indemnifying Party and the records of each party
shall be available to the other with respect to such defense.
6.3 Indemnification of Negligence of Indemnitee. The indemnification provided
in this Article shall be applicable whether or not negligence of
the Indemnified Party is alleged or proven.
ARTICLE 7
TERMINATION
7.1 Termination by CJC or Seller. CJC and Seller shall have the right to
terminate this Agreement if the conditions in Section 5.1 have not
been satisfied or waived by CJC on or before March 31, 2003.
7.2 Termination by Purchaser. Purchaser shall have the right to terminate this
Agreement if the conditions in Section (b) have not been satisfied or
waived by Purchaser on or before March 31, 2003.
7.3 Termination by Agreement of CJC and Purchaser. CJC and Purchaser may
terminate this Agreement at any time by their mutual written consent.
7.4 Damages. If this Agreement is terminated pursuant to Article, the parties
shall retain any rights they may have against each other for any breach of
any of the terms and conditions of this Agreement.
ARTICLE 8
RESCISSION
8.1 Right to Rescind. Except as expressly otherwise set forth in Section 8.4
hereof, in the event that the aggregate Current Value, as that term is
defined in Section 8.2 below, of the NEAI Shares or any securities into
which such securities may have become converted and all securities
distributed and the value of any other property in connection therewith
is less than $250,000 on the first day that the New York Stock Exchange is
open for trading subsequent to the one year anniversary of the Closing Date
(the "Rescission Date"), Seller shall have the right to rescind his
purchase of the NEAI Shares as set forth herein.
8.2 Current Value of a Security. For purposes hereof, Current Value of a
security shall be determined as follows:
(a) If the security is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange or listed
for trading on NASDAQ or the NASD Bulletin Board, the Current Value
of a share or other unit shall be the last reported sale price of
such security on such exchange or system or Bulletin Board or if no
such sale is made on such day, the average of the closing high bid
and low asked prices for such day on such exchange or system; or
Bulletin Board; or
(b) If the security is not so listed or admitted to unlisted trading
privileges but bid and asked prices are reported by the National
Quotation Bureau, Inc. or any successor thereto, the Current Value
shall be the average of last reported high bid and low asked prices
reported by the National Quotation Bureau, Inc.; or
(c) If the Security is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the Current
Value shall be the book value of a share or other unit thereof as at
the end of the fiscal quarter of Purchaser ending immediately prior
to the one year anniversary of the Closing Date determined in
accordance with generally accepted accounting principles
consistently applied.
8.3 Procedure for Rescission. In the event that Seller is entitled to rescind
his purchase of the NEAI Shares pursuant to the provisions of this Article
and desires to do so, he must give notice to that effect to Purchaser not
later than five days subsequent to the Rescission Date (the "Rescission
Notice"). The Rescission Notice must also state the time, during normal
business hours, at Purchaser's then principal business office that
Seller shall deliver to Purchaser the NEAI Shares or any securities into
which such securities may have become converted and all securities and
any other property distributed in connection therewith to Purchaser (the
"Rescission Closing"). In the event that Seller duly gives the
Rescission Notice to Purchaser and delivers such securities and
property to Purchaser in accordance therewith and herewith, Seller shall
thereupon deliver to Seller the CJC Shares or any securities into which
such securities may have become converted and all securities and any other
property distributed in connection therewith.
8.4 Purchaser's Right to Terminate Seller's Right of Rescission.
Notwithstanding anything herein to the contrary, in the event that Seller
duly gives the Rescission Notice, Seller may at its sole option issue and
deliver to Purchaser at the Rescission Closing securities whose then
Current Value when added to the then Current Value of the NEAI Shares or
any securities into which such securities may have become converted and all
securities and the value of any other property distributed in
connection therewith is not less than $250,000. Upon such issuance
and delivery, Purchaser's right of rescission pursuant to this Article
shall terminate and be of no force and effect.
ARTICLE 9
MISCELLANEOUS
9.1 Survival of Representations and Warranties. The representations and
warranties contained herein shall survive the Closing.
9.2 Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Agreement and the transactions contemplated hereby.
9.3 Entire Agreement. This Agreement and the schedules and exhibits hereto
contain the complete agreement among the parties with respect to
the transactions contemplated hereby and supersede all prior
agreements and understandings among the parties with respect to such
transactions.
9.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed
an original, and such counterparts together shall constitute only one
original.
9.5 Notices. All notices, demands, requests, or other communications that may
be or are required to be given, served or sent by any party to any other
party pursuant to this Agreement shall be in writing and shall be
addressed as follows:
If to CJC:
CJC Enterprises Of New York, Inc.
0000 Xxxxxx Xxxxxxx Xxxx
Xxxxxx, XX
If to Purchaser:
New England Acquisitions, Inc.
0 Xxxxx Xxxx
Xxx Xxx, XX 00000
If to Seller:
Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxxx Xxxx
Xxxxxx, XX
Any party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served
or sent. Each notice, demand, request or communication that is mailed,
delivered or transmitted in the manner described above shall be deemed
sufficiently given, served, sent and received for all purposes at such time
as it is delivered to the addressee, with the return receipt, the delivery
receipt, the affidavit of messenger, or (with respect to a telecopy or
other electronic transmission) the confirmation of receipt being deemed
conclusive evidence of such delivery, or at such time as delivery is
refused by the addressee upon presentation.
9.1 Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the
term hereof, the provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or
unenforceable provision were never a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of
this Agreement a provision as similar in its terms to such illegal,
invalid or unenforceable provision as may be possible and be legal, valid
and enforceable.
9.2 Successors and Assigns. This Agreement and the rights, interests and
obligations hereunder shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted
assigns.
9.3 Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed and enforced in accordance with
the laws of the State of New York and exclusive venue shall lie in the
state and federal courts in the State of New York.
9.4 Amendment, Waiver and Other Action. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the
parties against which enforcement of the amendment, modification or
supplement is sought.
9.5 Legal Representation. The parties to this Agreement acknowledge that they
have been advised that they should seek and have had the opportunity to
seek counsel to review this Agreement and to obtain the advice of such
counsel relating thereto.
9.6 Assignment. Neither this Agreement nor any right created hereby shall be
assignable by any party hereto without the written consent of the other
parties.
9.7 Captions. The captions in this Agreement are for convenience of reference
only and shall not limit or otherwise affect any of the terms or
provisions hereof.
9.8 Number and Gender. Whenever the context requires, references in this
Agreement to the singular number shall include the plural; the plural
number shall include the singular; and words denoting gender shall
include the masculine, feminine, and neuter.
9.9 Public Announcements. Except to the extent that CJC or Purchaser or Seller
believes on the advice of counsel that public disclosure is required by
law, no party to this Agreement shall make, or cause to be made, any press
release or public announcement in respect of this Agreement or
the transactions contemplated hereby or otherwise communicate with any
news media without prior notification to the other parties. The parties
shall cooperate as to the time and contents of any such press release or
public announcement, but if they are unable to reach an agreement as to the
time and contents of such press release or public announcement, each shall
be free to make such press release or public announcement as it deems
necessary.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.
NEW ENGLAND ACQUISITIONS, INC. CJC ENTERPRISES OF NEW YORK, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxx Xxxxx
_________________ __________________
Its: President Its: President
/s/ Xxxxxx Xxxxx
__________________
Xxxxxx Xxxxx
