Exhibit 10.1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March 15, 2005 (this
"Agreement"), by and among XXXXXXX XXXXXXXXX ("Seller"); HALTER CAPITAL
CORPORATION, a Texas corporation ("Purchaser"); and STRONG TECHNICAL, INC. a
Delaware corporation ("Company").
W I T N E S S E T H
WHEREAS, Seller desires to sell to Purchaser 14,635,000 shares of the
Company's common stock, par value $0.001 (the "Common Stock") (the "Shares"),
representing 82.6% of the Company's issued and outstanding shares of the Common
Stock of the Company, on the terms and conditions set forth in this Stock
Purchase Agreement ("Agreement"), and
WHEREAS, Purchaser desires to buy the Shares on the terms and
conditions set forth herein, and
WHEREAS the Company joins in the execution of this Agreement for the
purpose of evidencing its consent to the consummation of the foregoing
transactions and for the purpose of making certain representations and
warranties to and covenants and agreements with the Purchaser.
NOW THEREFORE, in consideration of the promises and respective mutual
agreements herein contained, it is agreed by and between the parties hereto as
follows.
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 Sale of the Shares. Subject to the terms and conditions herein set
forth, on the basis of the representations, warranties and agreements herein
contained, at the Closing Seller agrees to sell, assign, transfer and deliver
the Shares to Purchaser, and Purchaser agrees to purchase the Shares from the
Seller.
1.2 The Closing. The purchase of the Shares shall take place at the
office of the Purchaser in Frisco, Texas or such other place as Purchaser and
Seller may mutually agree on or before April 1, 2005, herein referred to as the
"Closing Date".
1.3 Instruments of Conveyance and Transfer. At the Closing, Seller
shall deliver certificates representing the Shares to Purchaser duly endorsed by
the Seller to the Purchaser, in form and substance satisfactory to Purchaser
("Certificates"), as shall be effective to vest in Purchaser all right, title
and interest in and to all of the Shares. See Article 8 below.
1.4 Consideration and Payment for the Shares. In consideration for the
Shares, Purchaser shall pay to the Seller a total purchase price of $273,500.00
(the "Purchase Price").
1.5 Conditions to Closing. Purchaser's obligation to close shall be
conditional upon the completion to Purchaser's satisfaction of the following
matters:
(a) Completion to Purchaser's satisfaction of its due diligence
examination of the books, records and properties of the Company;
(b) Execution and delivery by Seller and seven additional stockholders
of stock purchase agreements pursuant to which they will deliver and sell
2,995,000 shares of common stock that are registered for resale under the
Company's Form SB-2 registration statement, SEC File No. 333-112111 (the
"Registration Statement");
(c) The Company being in good standing and existence under Delaware law
with all franchise taxes current;
(d) Listing of the Company with Mergent's OTC Industrial Manual and
News Reports. In connection with such listing, Purchaser has agreed to advance
the filing fees, the amount of which (i) shall be credited to the Purchase
Price, or, (ii) shall be repayable on demand by Purchaser in the event this
Agreement shall fail to close for any reason; and
(e) Seller shall have filed an amendment to the Registration Statement
in the form of a Rule 424(b) prospectus to update the financial and other
information set forth in the Registration Statement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents, warrants and undertakes to the Purchaser that,
except as set forth in the Disclosure Schedule:
2.1 Transfer of Title. Seller shall transfer all right, title and
interest in and to the Shares to the Purchaser free and clear of all liens,
security interests, pledges, encumbrances, charges, restrictions, demands and
claims, of any kind or nature whatsoever, whether direct or indirect or
contingent.
(a) Due Execution. This Agreement has been duly executed and delivered
by the Seller.
(b) Valid Agreement. This Agreement constitutes, and upon execution and
delivery thereof by the Seller, will constitute, a valid and binding agreement
of the Seller enforceable against the Seller in accordance with its terms.
(c) Authorization. The execution, delivery and performance by the
Seller of this Agreement and the delivery by the Seller of the Shares have been
duly and validly authorized by the Company, and no further consent or
authorization of the Seller, the Company, its Board of Directors, or its
stockholders is required.
(d) Seller's Title to Shares; No Liens or Preemptive Rights; Valid
Issuance. Seller has and at the Closing will have good and valid title and
control of the Shares; there will be no existing impediment or encumbrance to
the sale and transfer of such Shares to the Purchaser; and on delivery to the
Purchaser of the Shares, good and valid title to all the Shares will pass to
Purchaser and all of the Shares will be free and clear of all taxes, liens,
security interests, pledges, rights of first refusal or other preference rights,
encumbrances, charges, restrictions (other than resale restrictions under
federal and state securities laws), demands, claims or assessments of any kind
or any nature whatsoever whether direct, indirect or contingent and shall not be
subject to preemptive rights, tag-along rights, or similar rights of any of the
stockholders of the Company. The Shares have been legally and validly issued in
compliance with all applicable U.S. federal and state securities laws, and are
fully paid and non-assessable shares of the Company's Common Stock; and the
Shares have all been issued under duly authorized resolutions of the Board of
Directors of the Company. At the Closing, Seller shall deliver to the Purchaser
Certificates representing the Shares free and clear of all liens, security
interests, pledges, encumbrances, charges, restrictions, demands or claims in
any other party whatsoever with appropriate stock powers with medallion
guarantees.
2.2 No Governmental Action Required. The execution and delivery by the
Seller of this Agreement does not and will not, and the consummation of the
transactions contemplated hereby will not, require any action by or in respect
of, or filing with, any governmental body, agency or governmental official.
2.3 Compliance with Applicable Law and Corporate Documents. The
execution and delivery by the Seller and the Company of this Agreement does not
and will not, and the sale by the Seller of the Shares and the consummation of
the other transactions contemplated by this Agreement does not and will not
contravene or constitute a default under or violation of (i) any provision of
applicable law or regulation, (ii) the articles of incorporation or by-laws of
the Company or (iii) any agreement, judgment, injunction, order, decree or other
instrument binding upon the Seller or any of his or the Company's assets, or
result in the creation or imposition of any lien on any asset of the Seller.
2.4 Not a Voting Trust: No Proxies. None of the Shares are or will be
subject to any voting trust or agreement. No person holds or has the right to
receive any proxy or similar instrument with respect to the Shares. Except as
provided in this Agreement, the Seller is not a party to any agreement which
offers or grants to any person the right to purchase or acquire any of the
Shares. There is no applicable local, state or federal law, rule, regulation, or
decree which would, as a result of the sale contemplated by this Agreement,
impair, restrict or delay any voting rights with respect to the Shares.
2.5 Survival of Representations. The representations and warranties
herein by the Seller will be true and correct in all material respects on and as
of the Closing Date with the same force and effect as though said
representations and warranties had been made on and as of the Closing Date and
will survive the Closing Date as provided in Section 7.1(c). .
2.6 Adoption of Company's Representations. The Seller adopts and
remakes as his own each and every representation, warranty and undertaking made
by the Company in Article 3 below as if they had made such representations,
warranties and undertakings to the Purchaser directly.
2.7 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission payable by the Purchaser or the
Company in connection with the transactions contemplated by this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY
The Company represents, warrants and undertakes to the Purchaser that,
except as set forth on the Disclosure Schedule:
3.1 Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
(a) with full power and authority to own, lease, use, and operate its properties
and to carry on its business as and where now owned, leased, used, operated and
conducted. The Company has no subsidiaries. The Company is not qualified to
conduct business in any jurisdiction other than the States of Delaware and South
Carolina, and (b) all actions taken by the current directors and stockholders of
the Company have been valid and in accordance with the laws of the State of
Delaware and all actions taken by the Company have been duly authorized by the
current directors and stockholders of the Company as appropriate.
3.2 (a) Company Authority. The Company has all requisite corporate
power and authority to enter into and perform this Agreement and to consummate
the transactions contemplated herein.
(b) Due Authorization. The execution, delivery and performance by the
Company of this Agreement has been duly and validly authorized and no further
consent or authorization of the Company, its Board of Directors or its
stockholders is required. The Seller is not disqualified from acting as a
director with respect to the transactions contemplated hereby by reason of his
interest in the transactions.
(c) Valid Execution. This Agreement has been duly executed and
delivered by the Company.
(d) Binding Agreement. This Agreement constitutes, and upon execution
and delivery thereof by the Company, will constitute, a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditor's rights generally or the availability of equitable
remedies.
(e) No Violation of Corporate Documents or Agreements. The execution
and delivery of this Agreement by the Company and the performance by the parties
hereto of its obligations hereunder will not cause, constitute, or conflict with
or result in (i) any breach or violation, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under any of the provisions of, or
constitute a default under, any license, indenture, mortgage, charter,
instrument, certificate of incorporation, bylaw, judgment, order, decision,
writ, injunction, or decree or other agreement or instrument or proceeding to
which the Company or its stockholders are a party, or by which they may be
bound, nor will any consents or authorizations of any party other than those
hereto by required, (ii) an event that would cause the Company to be liable to
any party, or (iii) an event that would result in the creation or imposition or
any lien, charge or encumbrance on any asset of the Company or on the securities
of the Company to be acquired by the Purchaser.
3.3 Authorized Capital, No Preemptive Rights, No Liens; Anti-Dilution.
As of the date hereof, the authorized capital of the Company is 100,000,000
shares of Common Stock, par value $0.001 per share, and 10,000,000 shares of
Preferred Stock, par value $0.001. The issued and outstanding capital stock of
the Company is 17,765,650 shares of Common Stock and no shares of Preferred
Stock. All of the shares of capital stock are duly authorized, validly issued,
fully paid and non-assessable. No shares of capital stock of the Company are
subject to preemptive rights or similar rights of the stockholders of the
Company or any liens or encumbrances imposed through the actions or failure to
act of the Company, or otherwise. As of the date hereof (i) there are no
outstanding options, warrants, convertible securities, scrip, rights to
subscribe for, puts, calls, rights of first refusal, tag-along agreements, nor
any other agreements, understandings, claims or other commitments or rights of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for any shares of capital stock of the Company, or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company, and (ii) there are no agreements or arrangements
under which the Company is obligated to register the sale of any of its
securities under the Securities Act of 1933, and (iii) there are no
anti-dilution or price adjustment provisions contained in any security issued by
the Company (or in the Company's certificate of incorporation or bylaws or in
any agreement providing rights to security holders) that will be triggered by
the transactions contemplated by this Agreement. The Company has furnished to
Purchaser true and correct copies of the Company's certificate of incorporation
and bylaws.
3.4 No Governmental Action Required. The execution and delivery by the
Company of this Agreement does not and will not, and the consummation of the
transactions contemplated hereby will not, require any action by or in respect
of, or filing with, any governmental body, agency or governmental official.
3.5 Compliance with Applicable Law and Corporate Documents. The
execution and delivery by the Company of this Agreement and the performance by
the parties hereto of the transactions contemplated hereby does not and will not
contravene or constitute a default under or violation of (i) any provision of
applicable law or regulation, (ii) the Company's certificate of incorporation or
bylaws, or (iii) any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or any its assets, or result in the creation
or imposition of any lien on any asset of the Company. To the best of its
knowledge, the Company is in compliance with and conforms to all statutes, laws,
ordinances, rules, regulations, orders, restrictions and all other legal
requirements of any domestic or foreign government or any instrumentality
thereof having jurisdiction over the conduct of its businesses or the ownership
of its properties.
3.6 Financial Statements. (a) The Purchaser has received a copy of the
audited financial statements of the Company for the fiscal year ended June 30,
2004 and the six months ended December 31, 2004 ("Financial Statements"). The
Financial Statements fairly present the financial condition of the Company at
the dates indicated and its results of their operations and cash flows for the
periods then ended and, except as indicated therein, reflect all claims against,
debts and liabilities of the Company, fixed or contingent, and of whatever
nature. (b) Since December 31, 2004 (the "Balance Sheet Date"), there has been
no material adverse change in the assets or liabilities, or in the business or
condition, financial or otherwise, or in the results of operations or prospects,
of the Company, whether as a result of any legislative or regulatory change,
revocation of any license or rights to do business, fire, explosion, accident,
casualty, labor trouble, flood, drought, riot, storm, condemnation, act of God,
public force or otherwise and no material adverse change in the assets or
liabilities, or in the business or condition, financial or otherwise, or in the
results of operation or prospects, of the Company except in the ordinary course
of business. (c) Since the Balance Sheet Date, the Company has not suffered any
damage, destruction or loss of physical property (whether or not covered by
insurance) affecting its condition (financial or otherwise) or operations
(present or prospective), nor has the Company issued, sold or otherwise disposed
of, or agreed to issue, sell or otherwise dispose of, any capital stock or any
other security of the Company and has not granted or agreed to grant any option,
warrant or other right to subscribe for or to purchase any capital stock or any
other security of the Company or has incurred or agreed to incur any
indebtedness for borrowed money. (d) The Financial Statements are contained in
the Company's filings and reports made with the Securities and Exchange
Commission ("SEC") since the Company's formation (the "SEC Reports"). The SEC
Reports are (i) accurate and complete, (ii) contain all information required to
be filed under the rules and regulations of the SEC, (iii) are not subject to
any outstanding SEC comment letters or inquiries, and (iv) do not contain any
false statement of fact or fail to state ant fact necessary to make the facts
stated therein not misleading.
3.7 No Litigation. The Company is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or pending or
threatened governmental investigation. The Company is not subject to or in
default with respect to any order, writ, injunction, or decree of any federal,
state, local, or foreign court, department, agency, or instrumentality.
3.8 No Taxes. The Company is not, and will not become with respect to
any periods ending on or prior to the Closing Date, liable for any income,
sales, withholding, franchise, excise, license, real or personal property taxes
(a "Tax") to any foreign, United States federal, state or local governmental
agencies whatsoever. All United States federal, state, county, municipality
local or foreign income Tax returns and all other material Tax returns
(including information returns) that are required, or have been required, to be
filed by or on behalf of the Company have been or will be filed as of the
Closing Date and all Taxes due pursuant to such returns or pursuant to any
assessment received by the Company have been or will be paid as of the Closing
Date. The charges, accruals and reserves on the books of the Company in respect
of taxes or other governmental charges have been established in accordance with
the tax method of accounting. All returns that have been filed relating to Tax
are true and accurate in all material respects. No audit, action, suit,
proceeding or other examination regarding taxes for which the Company may have
any liability is currently pending against or with respect to the Company and
neither Seller nor the Company has received any notice (formally or informally)
of any audit, suit, proceeding or other examination. No material adjustment
relating to any Tax returns, no closing or similar agreement have been entered
into or issued or have been proposed (formally or informally) by any tax
authority (insofar as such action relate to activities or income of or could
result in liability of the Company for any Tax) and no basis exists for any such
actions. The Company has not changed any election, adopted or changed any
accounting method or period, filed any amended return for any Tax, settled any
claim or assessment of any Tax, or surrendered any right to claim any refund of
any Tax, or consented to any extension or waiver of the statute of limitations
for any Tax. The Company has not had an "ownership change" as that term is
defined in Section 382 of the Internal Revenue Code of 1986, as amended and in
effect.
3.9 Conduct of the Business. From and after December 31, 2004 until the
Closing Date:
(a) The Company has continued to be operated in the usual and
ordinary manner in which its business has been conducted in the past
and during such period. The Company has not made any expenditures or
entered into any commitments which, when compared to past operations of
its business, are unusual or extraordinary or outside the scope of the
normal course of routine operations;
(b) The Company has kept in a normal state of repair and
operating efficiency all tangible personal property used in the
operation of its business;
(c) The Company has used its best efforts to maintain the good
will associated with its business, and the existing business
relationships with its agents, customers, lessors, key employees,
suppliers and other persons having relations with it;
(d) The Company has not entered into any contract, agreement
or action, or relinquished or released any rights or privileges under
any contracts or agreements, the performance, violation, relinquishment
or release of which could, on the date on which such contract or
agreement was entered into, or such rights or privileges were
relinquished or released, be reasonably foreseen to have a material
adverse effect;
(e) The Company has not made, or agreed to make, any
acquisition of stock or assets of, or made loans to, any person not in
the ordinary course of business;
(f) The Company has not sold or disposed of any assets or
created or permitted to exist any encumbrance on its assets except (x)
in the ordinary course of business and which could not, on the date of
such sale, disposition, creation or permission, be reasonably foreseen
to have a material adverse effect or (y) as otherwise permitted by this
Agreement;
(g) The Company has kept true, complete and correct books of
records and accounts with respect to its business, in which entries
will be made of all transactions on a basis consistent with past
practices and in accordance with the tax method of accounting
consistently applied by the Company;
(h) The Company has paid current liabilities as and when they
became due and has paid or incurred no fees and expenses not in the
ordinary course of its business;
(i) There has been no declaration, setting aside or payment of
any dividend or other distribution in respect of any Shares or any
other securities of the Company (whether in cash or in kind);
(j) The Company has not redeemed, repurchased, or otherwise
acquired any of its securities or entered into any agreement to do so;
(k) The Company has not made any loan to, or entered into any
other transaction with, any of its directors, officers, and employees;
(l) The Company has not made or pledged to make any charitable
or other capital contribution outside the ordinary course of business;
and
(m) There has not been any other occurrence, event, incident,
action, failure to act or transaction outside the ordinary course of
business that would have a material adverse effect.
3.10 Liabilities.
(a) Except as set forth in the Financial Statements and the
SEC Reports, the Company has no liabilities or obligations.
(b) Except as set forth in the Disclosure Schedule, since
December 31, 2004, the Company has not:
(i) subjected to encumbrance, or agreed to do so to
any of its assets, tangible or intangible other than purchase
money liens in the ordinary course of business on equipment
used in the conduct of business and incurred to finance the
purchase price of the equipment involved and which do not
cover any other asset of the Company;
(ii) except as otherwise contemplated hereby, engaged
in any transactions affecting its business or properties not
in the ordinary course of business consistent with past
practice or suffered any extraordinary losses or waived any
rights of substantial value except in the ordinary course of
business; or
(iii) other than in the ordinary course of business
consistent with past practice, granted or agreed to grant, or
paid or agreed to pay any increase in the rate of wages,
salaries, bonuses or other remuneration of any officer,
director or consultant of the Company or any increase of 5% or
more in the rate of wages, salaries, bonuses or other
remuneration of any non-officer/director or employee or become
a party to any employment contract or arrangement with any of
its directors, officers, consultants or employees or become a
party to any contract or arrangement with any director,
officer, consultant or employee providing for bonuses, profit
sharing payments, severance pay or retirement benefits, other
than as set forth in any Exhibit or Schedule hereto.
3.11 ERISA Compliance. The Company maintains no "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974 ("ERISA"), under which the Company or any ERISA Affiliate has any
current or future obligation or liability or under which any employee of the
Company or any ERISA Affiliate has any current or future right to benefits.
3.12 Insurance. The Disclosure Schedule includes a true and correct
list of all policies or binders of insurance of the Company in force, specifying
the insurer, policy number (or covering note number with respect to binders) and
amount thereof and describing each pending claim thereunder. Such policies are
in full force and effect. The Company is not in default with respect to any
provisions contained in any such policy or binder, nor has it failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion. There are no outstanding unpaid claims under any such policy or binder,
or claims for worker's compensation. The Company has not received notice of
cancellation or non-renewal of any such policy or binder. The Company has never
been, and is not now, the subject of any claim relating to damage or injury in
excess of the Company's then-current product liability policy limits or which
has been disclaimed by the Company's insurer. Such insurance will lapse on the
Closing Date.
3.13 Compliance with Law. To the best of its knowledge, the Company has
complied with, and is not in violation of any provision of laws or regulations
of federal, state or local government authorities and agencies, including any
environmental laws and regulations. There are no pending or threatened
proceedings against the Company by any federal, state or local government, or
any department, board, agency or other body thereof.
3.14 Consents. The Disclosure Schedule lists all consents ("Consents")
of third parties required to be obtained as a result of the change of control of
the Company hereby.
3.15 Agreements. Except as set forth in the Disclosure Schedule, the
Company is not a party to any material agreement, loan, credit, lease, sublease,
franchise, license, contract, commitment or instrument or subject to any
corporate restriction. The Disclosure Schedule identifies every loan or credit
agreement, and every fully or partially executory agreement or purchase order
pursuant to which the Company is obligated to deliver goods or perform services,
pay for goods, services or other property, or repay any loan, including, without
limitation, any agreement with present or former officers, directors,
consultants, agents, brokers, vendors, customers and/or dealers of any nature.
True, correct and complete copies of all such agreements have been delivered to
Purchaser. Neither the Company nor any other party is in default under any such
agreement, loan, credit, lease, sublease, franchise, license, contract,
commitment, instrument or restriction. No such instrument requires the consent
of any other party thereto in order to consummate the sales of the Shares
hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Unless specifically stated otherwise, Purchaser represents and warrants
that the following are true and correct as of the date hereof and will be true
and correct through the Closing Date as if made on that date:
4.1 Agreement's Validity. This Agreement has been duly executed and
delivered by Purchaser and constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
4.2 Investment Intent. Purchaser is acquiring the Shares for its own
account for investment and not with a view to, or for sale or other disposition
in connection with, any distribution of all or any part thereof.
4.3 Restricted Securities. Purchaser understands that the Shares have
not been registered pursuant to the Securities Act or any applicable state
securities laws, that the Shares will be characterized as "restricted
securities" under federal securities laws, and that under such laws and
applicable regulations the Shares cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption therefrom.
4.4 Legend. It is agreed and understood by Purchaser that the
Certificates representing the Shares shall each conspicuously set forth on the
face or back thereof a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
4.5 Disclosure of Information. Purchaser acknowledges that it has been
furnished with information regarding the Company and its business, assets,
results of operations, and financial condition to allow Purchaser to make an
informed decision regarding an investment in the Shares. Purchaser represents
that it has had an opportunity to ask questions of and receive answers from the
Company regarding the Company and its business, assets, results of operation,
and financial condition.
ARTICLE 5
COVENANTS OF THE PARTIES
5.1 General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other Party may request, all
at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under Article 7 below). The
Purchaser has had the opportunity to review and inspect all documents, books,
records (including Tax records), properties, agreements, field operations,
environmental records and compliance, and financial data of any sort relating to
the Company, and to discuss the Company with its employees, customers and
vendors.
5.2 Notices and Consents. The Seller will, and will cause the Company
to, give any notices to third parties, and the Seller will use its best efforts,
and will cause the Company to use its best efforts, to obtain any third-party
Consents that the Purchaser may request. Each of the Parties will (and the
Seller will cause the Company to) give any notices to, make any filings with,
and use its best efforts to obtain any required authorizations, Consents, and
approvals of governmental bodies.
5.3 Transition. Seller will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Company from maintaining the same
business relationships with the Company after the Closing as it maintained with
the Company prior to the Closing. The Seller will refer all customer inquiries
relating to the business of the Company to the Purchaser from and after the
Closing.
5.4 Distribution. The Company shall transfer and assign all
intellectual property rights, customer lists, provider lists and agreements,
business methods and goodwill associated with the technical staffing business of
the Company, as listed in the Disclosure Schedule, to the Seller or his
designee, in exchange for a the forgiveness by Seller of any existing or
potential obligation of the Company to the Seller or any affiliate or family
member of Seller, including any loans to the Company and accrued and unpaid
salary to Seller or any affiliate or family member of Seller.
ARTICLE 6 - THE CLOSING
6.1 Time of Closing. The Closing of the transactions hereby shall occur
as expeditiously as possible after the satisfaction of all conditions to
Closing, but in any event on or before April 1, 2005.
6.2 Deliveries. The Closing shall occur as a single integrated
transaction, as follows.
(a) Delivery by Seller. Seller shall deliver to Purchaser:
(i) The Shares;
(ii) copies of resolutions by the Board of Directors of
the Company approving the terms of this Agreement and
the execution of the Agreement by the Company;
(iii) copies of all books, records and documents relating
to the Company, including the corporate records and
stock records of the Company;
(iv) any other such instruments, documents and
certificates as are required to be delivered by
Seller or its representatives pursuant to the
provisions of this Agreement;
(v) the Consents;
(vi) the Disclosure Schedule; and
(vii) evidence of the satisfaction of all conditions set
forth in Section 1.5.
(b) Delivery by Purchaser. Purchaser shall deliver to Seller:
(i) The balance of the Purchase Price in U.S. currency by
wire transfer to a bank account designated in writing
by the Seller or by delivery of a certified check;
(ii) copies of resolutions of the Board of Directors of
Purchaser approving the terms of the Agreement and
the execution of this Agreement by the Purchaser; and
(iii) Instruments of conveyance covering the excluded
assets.
(c) Post-Closing Actions
(i) Immediately upon the Closing Date, the Board of
Directors of the Company shall resolve to appoint Xxx
X. Xxxxxx and Xxxxx Xxxxxx, Xx. as directors of the
Company with immediate effect.
(ii) Following the appointment of such persons to the
Board of Directors of the Company, the Seller and all
others shall resign from the Board of Directors and
as officers.
ARTICLE 7
INDEMNIFICATION
7.1 Purchaser Claims. (a) Seller shall indemnify and hold harmless
Purchaser, its successors and assigns, against, and in respect of:
(i) Any and all damages, losses, liabilities, costs, and
expenses incurred or suffered by Purchaser that result from, relate to,
or arise out of:
(A) Any failure by Seller to carry out any covenant
or agreement contained in this Agreement;
(B) Any material misrepresentation or breach of
warranty by Seller contained in this Agreement, the Disclosure
Schedule, or any certificate, furnished to Purchaser by Seller
pursuant hereto; or
(C) Any claim by any Person for any brokerage or
finder's fee or commission in respect of the transactions
contemplated hereby as a result of Seller' dealings,
agreement, or arrangement with such Person.
(ii) Any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs,
and other expenses (including, without limitation, reasonable legal
fees and expenses) incident to any of the foregoing including all such
expenses reasonably incurred in mitigating any damages resulting to
Purchaser from any matter set forth in subsection (i) above.
(b) The amount of any liability of Seller under this Section
7.1 shall be computed net of any tax benefit to Purchaser from the
matter giving rise to the claim for indemnification hereunder and net
of any insurance proceeds received by Purchaser with respect to the
matter out of which such liability arose.
(c) The representations and warranties of Seller contained in
this Agreement, the Disclosure Schedule, or any certificate delivered
by or on behalf of Seller pursuant to this Agreement or in connection
with the transactions contemplated herein shall survive the
consummation of the transactions contemplated herein and shall continue
in full force and effect for a period until the expiration of any
applicable statutes of limitation provided by law ("Survival Period").
Anything to the contrary notwithstanding, the Survival period shall be
extended automatically to include any time period necessary to resolve
a written claim for indemnification which was made in reasonable detail
before expiration of the Survival Period but not resolved prior to its
expiration, and any such extension shall apply only as to the claims so
asserted and not so resolved within the Survival Period. Liability for
any such item shall continue until such claim shall have been finally
settled, decided, or adjudicated.
(d) Purchaser shall provide written notice to Seller of any
claim for indemnification under this Article as soon as practicable;
provided, however, that failure to provide such notice on a timely
basis shall not bar Purchaser's ability to assert any such claim except
to the extent that Seller are actually prejudiced thereby, provided
that such notice is received by Seller during the applicable Survival
Period. Purchaser shall make commercially reasonable efforts to
mitigate any damages, expenses, etc. resulting from any matter giving
rise to liability of Seller under this Article.
7.2 Defense of Third-Party Claims. With respect to any claim by
Purchaser under Section 7.1, relating to a third party claim or demand,
Purchaser shall provide Seller with prompt written notice thereof and Seller may
defend, in good faith and at its expense, by legal counsel chosen by it and
reasonably acceptable to Purchaser any such claim or demand, and Purchaser, at
its expense, shall have the right to participate in the defense of any such
third party claim. So long as Seller are defending in good faith any such third
party claim, Purchaser shall not settle or compromise such third party claim. In
any event Purchaser shall cooperate in the settlement or compromise of, or
defense against, any such asserted claim.
7.3 Seller Claims. Purchaser shall indemnify and hold harmless Seller
against, and in respect of, any and all damages, claims, losses, liabilities,
and expenses, including without limitation, legal, accounting and other
expenses, which may arise out of: (a) any material breach or violation by
Purchaser of any covenant set forth herein or any failure to fulfill any
obligation set forth herein, including, but not limited to, the obligation to
satisfy the Assumed Liabilities; (b) any material breach of any of the
representations or warranties made in this Agreement by Purchaser; or (c) any
claim by any Person for any brokerage or finder's fee or commission in respect
of the transactions contemplated hereby as a result of Purchaser's dealings,
agreement, or arrangement with such Person.
ARTICLE 8
MISCELLANEOUS
8.1 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understanding related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement or the
written statement, certificates, or other documents delivered pursuant hereto or
in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not set forth.
8.2 Notices. Any notice or communications hereunder must be in writing
and given by depositing same in the United States mail addressed to the party to
be notified, postage prepaid and registered or certified mail with return
receipt requested or by delivering same in person. Such notices shall be deemed
to have been received on the date on which it is hand delivered or on the third
business day following the date on which it is to be mailed. For purpose of
giving notice, the addresses of the parties shall be:
If to Seller:
-------------
Xxxxxxx Xxxxxxxxx
000 Xxxxxx Xxxxxx
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000
Fax: __________________
If to Purchaser or Company to:
------------------------------
Halter Capital Corporation
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
8.3 Governing Law. This Agreement shall be governed in all respects,
including validity, construction, interpretation and effect, by the laws of the
State of Texas (without regard to principles of conflicts of law).
8.4 Consent to Jurisdiction. Each party irrevocably submits to the
exclusive jurisdiction of the appropriate state or federal court in the State of
Texas for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby or thereby. Each party
agrees to commence any such action, suit or proceeding in Dallas, Texas. The
parties agree that any service of process to be made hereunder may be made by
certified mail, return receipt requested, addressed to the party at the address
appearing in Section 9.2. Such service shall be deemed to be completed when
mailed and sent and received by Telecopier. Seller and Purchaser each waives any
objection based on forum non-conveniens. Nothing in this paragraph shall affect
the right of Seller or Purchaser to serve legal process in any other manner
permitted by law.
8.5 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.6 Waivers and Amendments; Non-Contractual Remedies; Preservation of
Remedies. This Agreement may be amended, superseded, canceled, renewed, or
extended, and the terms hereof may be waived, only by a written instrument
signed by authorized representatives of the parties or, in the case of a waiver,
by an authorized representative of the party waiving compliance. No such written
instrument shall be effective unless it expressly recites that it is intended to
amend, supersede, cancel, renew or extend this Agreement or to waive compliance
with one or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any such
right, power or privilege, or any single or partial exercise of any such right,
power of privilege, preclude any further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity. The rights and remedies of any party based
upon, arising out of or otherwise in respect of any inaccuracy in or breach of
any representation, warranty, covenant or agreement contained in this Agreement
shall in no way be limited by the fact that the act, omission, occurrence or
other state of facts upon which any claim of any such inaccuracy or breach is
based may also be the subject of any other representation, warranty, covenant or
agreement contained in this Agreement (or in any other agreement between the
parties) as to which there is no inaccuracy or breach.
8.7 Binding Effect; No Assignment, No Third-Party Rights. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. This Agreement is not
assignable without the prior written consent of each of the parties hereto or by
operation of law. This Agreement is for the sole benefit of the parties hereto
and their permitted assigns, and nothing herein, expressed or implied, shall
give or be construed to give to any person, including any union or any employee
or former employee of Seller, any legal or equitable rights, benefits or
remedies of any nature whatsoever, including any rights of employment for any
specified period, under or by reason of this Agreement.
8.8 Further Assurances. Each party shall, at the request of the other
party, at any time and from time to time following the Closing Date promptly
execute and deliver, or cause to be executed and delivered, to such requesting
party all such further instruments and take all such further action as may be
reasonably necessary or appropriate to carry out the provisions and intents of
this Agreement and of the instruments delivered pursuant to this Agreement.
8.9 Severability of Provisions. If any provision or any portion of any
provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of the Agreement, or the application of such provision or portion of
such provision is held invalid or unenforceable to person or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby and such provision or portion of any provision as shall have
been held invalid or unenforceable shall be deemed limited or modified to the
extent necessary to make it valid and enforceable, in no event shall this
Agreement be rendered void or unenforceable.
8.10 Exhibits and Schedules. All exhibits annexed hereto, and all
schedules referred to herein, are hereby incorporated in and made a part of this
Agreement as if set forth herein. Any matter disclosed on any schedule referred
to herein shall be deemed also to have been disclosed on any other applicable
schedule referred to herein.
8.11 Captions. All section titles or captions contained in this
Agreement or in any schedule or exhibit annexed hereto or referred to herein,
and the table of contents to this Agreement, are for convenience only, shall not
be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement. All references herein to sections shall be
deemed references to such parts of this Agreement, unless the context shall
otherwise require.
8.12 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the Closing Date occurs, each party hereto shall pay
its own expenses incidental to the preparation of this Agreement, the carrying
out of the provisions hereof and the consummation of the transactions
contemplated. For the avoidance of doubt, any fees and expenses incurred by the
Seller or the Company in connection with entering into this Agreement and the
transactions contemplated hereby after January 1, 2005 shall be paid by the
Seller and not the Company.
8.13 Public Announcements. The parties agree to consult with each other
before issuing any press release or making any public statement or completing
any public filing with respect to this Agreement or the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement with any national securities exchange or quotation system,
will not issue any such press release or make any such public statement prior to
consultation.
8.14 Non-confidentiality. Notwithstanding Section 8.13, the Company,
Seller and Purchaser, and each employee, representative or other agent of the
same (collectively the "Covered Parties"), may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to a Covered Party relating to such tax treatment
and tax structure.
8.15 Release. Seller, for himself and his other family members, heirs,
successors, and assigns (collectively the "Releasing Parties") hereby release,
acquit, and forever discharge any and all claims and demands of whatever kind or
character, whether vicarious, derivative, or direct, whether contingent or
liquidated, or whether known or unknown, that he or they, individually,
collectively, or otherwise, have or may have or assert or may assert against the
Company; the Purchaser, any subsidiary, affiliated, or related company, or other
related entity; or any officer, director, fiduciary, agent, employee,
representative, insurer, attorney, accountant, financial advisor, consultant,
partner, or shareholder of the Company or Purchaser; or any successors and
assigns of the Company, the Purchaser or the other entities, companies,
partnerships, persons or parties just named (collectively the "Released
Parties") based upon any theory of federal, state or local statutory or common
law, the breach of any provision of any contract (express or implied), or with
respect to any facts or circumstances that exist with respect to the
relationship among the Company or the Releasing Parties, whether known or
unknown, through the date of execution of this Agreement.
***Signature Page Follows***
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date first written herein above.
/s/ Xxxxxxx Xxxxxxxxx
------------------------------
XXXXXXX XXXXXXXXX
HALTER CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxxx
---------------------------
Xxxxx Xxxxxx, President
STRONG TECHNICAL, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
----------------------------
Xxxxxxx Xxxxxxxxx, President
