EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement dated as of December 20, 2002, (the "Agreement") by and
among C B & D Corporation, a New Mexico Corporation (the "Buyer"), and Oak Ridge
Capital Group, Inc. (the "Seller"). The Buyer and the Seller are sometimes
referred to herein collectively as the "Parties" and individually as a "Party."
RECITALS
The Seller owns all of the outstanding capital stock of Charter Building and
Development Corporation, a New Mexico corporation ("Charter").
The Buyer desires to purchase from the Seller, and the Seller desires to sell to
the Buyer, all of the outstanding equity interests (collectively the "Shares")
in Charter, in return for cash and notes issued by the Buyer and on the terms
set forth in this Agreement.
Now, therefore, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties and covenants
herein contained, the Parties agree as follows:
SECTION 1. DEFINITIONS
In addition to other words and terms defined elsewhere in this Agreement, the
following words and terms shall have the meanings set forth below:
"Accredited Investor" has the meaning set forth in Regulation D promulgated
under the Securities Act.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Buyer" has the meaning set forth in the preface above.
"Closing" has the meaning set forth in Section 2.3(a) below.
"Closing Date" has the meaning set forth in Section 2.3(a) below.
"Confidential Information" means any information concerning the business and
affairs of Charter.
"Indemnified Party" has the meaning set forth in Section 8.4 below.
"Indemnifying Party" has the meaning set forth in Section 8.4 below.
"Knowledge" means actual knowledge after due inquiry or what a reasonable
person ought to have known in undertaking a transaction.
"Liability" means any liability (whether known or unknown, whether absolute
or contingent, whether liquidated or unliquidated and whether due or to become
due).
"Losses" means all charges, complaints, actions, suits, proceedings,
hearings, investigations, claims, demands, judgments, orders, decrees,
stipulations, injunctions, damages, dues, penalties, fines, costs, indebtedness,
Liabilities, obligations, Taxes, liens, expenses and fees, including all
attorneys' fees and court costs.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency.
"Party" has the meaning set forth in the preface above.
"Purchase Price" has the meaning set forth in Section 2.2 below.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, security interest,
encumbrance, charge or other lien, other than (a) mechanic's, materialmen's and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c) liens
arising under worker's compensation, unemployment insurance, social security,
retirement and similar legislation, (d) liens arising in connection with sales
of foreign receivables, (e) liens on goods in transit incurred pursuant to
documentary letters of credit, (f) purchase money liens and liens securing
rental payments under capital lease arrangements, and (g) other liens arising in
the Ordinary Course of Business and not incurred in connection with the
borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Seller Note" has the meaning set forth in Section 2.2 below.
"Shares" has the meaning set forth in the preface above.
"Tax" means any federal, state, local or foreign income, gross receipts,
capital stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, stamp, excise, occupation, sales,
use, transfer, value added, alternative minimum, estimated or other tax,
including any interest, penalty or addition thereto, whether disputed or not.
SECTION 2. PURCHASE AND SALE OF SHARES
2.1 Basic Transaction. On and subject to the terms and conditions of this
Agreement, the Buyer shall purchase from the Seller, and the Seller shall sell
to the Buyer, the Shares for the consideration specified below in this Section
2.
2.2 Purchase Price. The Buyer shall pay to the Seller at the Closing as the
aggregate purchase price for the Shares $3,129,265, subject to the adjustment,
if any, required pursuant to Section 2.3 (the "Purchase Price"), by delivery of
(i) a promissory note (the "Seller Note") in the form of Exhibit A attached
hereto in the aggregate original principal amount of $1,129,265 and (ii) cash
for the balance of the Purchase Price payable by certified or cashier's check or
wire transfer of immediately available funds to such account as shall be
designated by the Seller at least two business days prior to the Closing Date.
2.3 Closing
a. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Oak Ridge Capital
Group, Inc. in Albuquerque, New Mexico, commencing at 10:00 a.m. local time on
December 20, 2002 or, if later, on the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby or such other date as the
Parties mutually may determine (the "Closing Date").
b. Deliveries at the Closing. At the Closing, (i) the Seller will deliver to
the Buyer the various certificates, instruments and documents referred to in
Section 7.1 below, (ii) the Buyer will deliver to the Seller the various
certificates, instruments and documents referred to in Section 7.2 below; (iii)
the Seller will deliver to the Buyer certificates representing all of the
outstanding Shares, endorsed in blank or accompanied by duly executed assignment
documents; and (iv) the Buyer will deliver to the Seller the consideration
specified in Section 2.1 above.
SECTION 3. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER
The Seller represents and warrants to the Buyer that the statements contained
in this Section 3 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 3). Notwithstanding such representations and warranties,
the Buyer acknowledges that the Buyer and its representatives are fully informed
regarding all aspects of the business of Charter, including any Liability and
any potential Losses related to Charter, and have full Knowledge related to the
same.
3.1 Organization, Qualification and Corporate Power. Charter is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New Mexico. Charter has full power and authority and all
authorizations, licenses and permits necessary to carry on the business in which
it is engaged or in which it presently proposes to engage and to own and use the
properties owned and used by it.
3.2 Binding Agreement; Noncontravention. The Seller has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes a valid and binding obligation of the
Seller, enforceable in accordance with its terms. Neither the execution and the
delivery of this Agreement nor the consummation of the transactions contemplated
hereby, will (i) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, or require the payment of any amounts
under, or create in any party the right to accelerate, terminate, modify or
cancel or require any notice under any contract, lease, sublease, license,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest or other obligation to which
Charter is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Security Interest upon any of its
assets) or (ii) violate any provision of the charter, bylaws or other
organizational documents of Charter, or any statute, regulation, rule, judgment,
order, decree, stipulation, injunction, charge or other restriction of any
government, governmental agency or court to which Charter is subject. No notice
to, filing with or authorization, consent or approval of any government or
governmental agency by any of the Seller and Charter is necessary for the
consummation by the Seller of the transactions contemplated by this Agreement.
3.3 Brokers' Fees. With the exception of a fee that may be due and owing to
Xxxxx X. Xxxxx or an entity designated by him acceptable to the Seller, neither
the Seller nor Charter has any additional Liability or obligation to pay any
fees or commissions to any broker, finder, investment banker or agent with
respect to the transactions contemplated by this Agreement for which the Buyer
could become liable or obligated.
3.4 Investment. The Seller (a) understands that the Seller Note has not been,
and will not be, registered under the Securities Act, or under any state
securities laws, and is being offered and sold in reliance upon federal and
state exemptions for transactions not involving any public offering, (b) is
acquiring the Seller Note solely for its own account for investment purposes,
and not with a view to the distribution thereof, (c) is a sophisticated investor
with knowledge and experience in business and financial matters, (d) has
received certain information concerning the Buyer and has had the opportunity to
obtain additional information as desired in order to evaluate the merits and the
risks inherent in holding the Seller Note, (e) is able to bear the economic risk
and lack of liquidity inherent in holding the Seller Note, and (f) is an
Accredited Investor for purposes of the Securities Act and any state securities
laws.
SECTION 4. REPRESENTATIONS AND WARRANTIES CONCERNING THE BUYER
The Buyer represents and warrants to the Seller that the statements contained
in this Section 4 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing (as though made then and as
though the Closing were substituted for the date of this Agreement throughout
this Section 4).
4.1 Organization of the Buyer. The Buyer is a corporation, duly organized,
validly existing and in good standing under the laws of New Mexico.
4.2 Authorization of Transaction. The Buyer has full power and authority to
enter into this Agreement (including, without limitation, the Seller Note) and
to perform its obligations hereunder. The Buyer has duly authorized the
execution, delivery and performance of this Agreement (including without
limitation, the Seller Note). No other approval on the part of the Buyer is
necessary to authorize its execution, delivery and performance of this Agreement
(including, without limitation, the Seller Note). This Agreement (including
without limitation, the Seller Note) constitutes the valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms and
conditions. No notice to, filing with or authorization, consent or approval of
any government or governmental agency by the Buyer is necessary for the
consummation of the transactions contemplated by this Agreement (including
without limitation, the Seller Notes).
4.3 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify or cancel or require any notice under any contract, lease, sublease,
license, franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, Security Interest or other obligation to which the
Buyer is a party or by which it is bound or to which any of its assets is
subject or (ii) violate any provision of the operating agreement of the Buyer or
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge or other restriction of any government, governmental agency or court to
which the Buyer is subject.
4.4 Brokers' Fees. The Buyer does not have any Liability or obligation to pay
any fees or commissions to any broker, finder, investment banker or agent with
respect to the transactions contemplated by this Agreement for which the Seller
could become liable or obligated.
4.5 Investment. The Buyer (i) understands that the Shares have not been, and
will not be, registered under the Securities Act, or any state securities laws,
and are being offered and sold in reliance upon certain transactional exemptions
from the registration provisions of such laws, (ii) warrants and represents
that, with respect to the Shares, neither Buyer nor its Affiliates is an
"underwriter" within the meaning of the Securities Act, the Securities Exchange
Act, or any state securities laws, and (iii) represents and warrants that the
Shares acquired pursuant to this Agreement are being acquired solely for its own
account for investment purposes and not with a view to or for sale in connection
with any distribution thereof within the meaning of the Securities Act and the
rules and regulations promulgated thereunder.
SECTION 5. PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the execution
of this Agreement and the Closing.
5.1 General. Each of the Parties agrees to use its best efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement (including satisfying the closing conditions set
forth in Section 7 below).
5.2 Notices and Consents. The Seller will cause Charter to give any notices to
third parties, and to use its best efforts to obtain any third party consents,
that the Buyer may request in connection with the matters pertaining to Charter.
Each of the Parties promptly shall take any additional action that may be
necessary, proper or advisable in connection with any other notices to, filings
with and authorizations, consents and approvals of governments, governmental
agencies and third parties that such Party is required to give, make or obtain.
5.3 Operation of Business. The Seller will not cause or permit Charter to
engage in any practice, take any action, embark on any course of inaction or
enter into any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing, the Seller will not cause or permit
Charter to engage in any practice, take any action, embark on any course of
inaction or enter into any transaction that will result in any misrepresentation
or breach of warranty under Section 3 above without the prior written consent of
the Buyer.
5.4 Preservation of Business. The Seller will cause Charter to carry on its
business substantially in the same manner as conducted presently and to keep its
business and properties substantially intact, including its present operations,
physical facilities, working conditions and relationships with lessors, lenders,
licensors, suppliers, customers and employees.
5.5 Full Access. The Buyer acknowledges that the Seller has permitted and has
caused Charter to permit, representatives of the Buyer to have reasonable access
at reasonable times, and in a manner so as not to interfere with the normal
business operations of Charter, to all premises, properties, books, records,
contracts, Tax records and documents of or pertaining to Charter. The Buyer also
acknowledges that the Seller has provided the Buyer with any information
pertaining to the business and affairs of Charter that the Buyer has requested.
The Buyer agrees to, and will cause its Affiliates, attorneys, accountants,
consultants, directors, officers, employees, agents and representatives to,
treat and hold any Confidential Information received from any of the Seller and
Charter in the course of the reviews contemplated by this Agreement, whether
such reviews were/are conducted before, on or after the date hereof and, if this
Agreement is terminated for any reason whatsoever, agrees to return to the
Seller all tangible embodiments (and all copies) thereof, and the Buyer will not
use, disclose or otherwise divulge and will cause its Affiliates, attorneys,
accountants, consultants, directors, officers, employees, agents and
representatives not to use, disclose or otherwise divulge any or all such
Confidential Information to any person or entity; provided, however, that this
sentence shall not apply to any information (i) which, at the time of
disclosure, is available publicly, (ii) which, after disclosure, becomes
available publicly through no fault of the Buyer, (iii) which the Buyer knew or
to which the Buyer had access prior to disclosure, or (iv) which a third party
discloses to the Buyer (unless the Buyer knows disclosure by the third party
violates any agreement between the third party and Charter).
5.6 Notice of Developments. The Seller shall give prompt notice to the Buyer
of any material development affecting the assets, Liabilities, business,
financial condition, operations, results of operations or future prospects of
Charter. Each Party shall give prompt notice to the others of any material
development affecting the ability of the Parties to consummate the transactions
contemplated by this Agreement. No disclosure by any Party pursuant to this
Section 5.6, however, shall be deemed to amend or supplement the Disclosure
Schedule or Annex I or to prevent or cure any misrepresentation, breach of
warranty or breach of covenant without the prior written consent of the other
Party.
5.7 Exclusivity. The Seller will not (and will not cause or permit Charter to)
(i) solicit, initiate or encourage the submission of any proposal or offer from
any person (including any of them) relating to any (A) liquidation, dissolution
or recapitalization, (B) merger or consolidation, (C) acquisition or purchase of
securities or assets, or (D) similar transaction or business combination
involving Charter or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in or
facilitate in any other manner any effort or attempt by any other person to do
or seek any of the foregoing. The Seller shall notify the Buyer immediately if
any person makes any proposal, offer, inquiry or contact with respect to any of
the foregoing.
5.8 [INTENTIONALLY OMITED]
..
5.9 No Dividends. During the period from the date hereof until the Closing,
Charter shall not make, declare or pay any dividend or distribution on, or
directly or indirectly issue, sell, redeem, purchase or otherwise acquire any
shares of its outstanding equity securities or amend its articles of
incorporation, bylaws or other organizational documents.
SECTION 6. POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following the Closing:
6.1 General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the Parties
shall take all reasonable action (including the execution and delivery of such
further instruments and documents) in a reasonably timely manner as the other
Parties reasonably may request for such purposes. The Seller acknowledges and
agrees that from and after the Closing the Buyer will be entitled to possession
of all documents, books, records, agreements and financial data of any sort
relating to Charter.
6.2 Litigation Support. In the event and for so long as any Party actively is
contesting or defending against any charge, complaint, action, suit, proceeding,
hearing, investigation, claim or demand in connection with (i) any transaction
contemplated under this Agreement or (ii) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction prior to the Closing involving Charter,
the other Party shall cooperate with such first Party and such first Party's
counsel in the contest or defense, make available such other Party's personnel
and provide such testimony and access to such other Party's books and records as
shall be necessary in connection with the defense or contest, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Section 8 below).
6.3 Transition. The Seller will not take any action that primarily is designed
or intended to have the
effect of discouraging any lender, lessor, licensor, customer, supplier or other
business associate of Charter from maintaining the same business relationships
with Charter after the Closing as it maintained with Charter prior to the
Closing. The Seller will refer all customer inquiries relating to the business
of Charter to the Buyer from and after the Closing.
6.4 Confidentiality. From and after the Closing Date, the Seller will (i)
maintain all of the Confidential Information in confidence and not disclose any
portion of the Confidential Information to any person other than its attorneys
and accountants who need to know such Confidential Information in connection
with the terms of this Agreement and (ii) deliver promptly to the Buyer or
destroy, at the request and option of the Buyer, all tangible embodiments (and
all copies) of Confidential Information which are in its possession. In the
event that the Seller is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, the Seller will notify the Buyer promptly of the request or
requirement so that the Buyer may seek an appropriate protective order or waive
compliance with the provisions of this Section 6.4. If, in the absence of a
protective order or the receipt of a waiver hereunder, the Seller nonetheless
is, on the advice of counsel, compelled to disclose any Confidential Information
to any tribunal or else stand liable for contempt, the Seller may disclose the
Confidential Information to the tribunal; provided, however, that the Seller
shall use its best efforts to obtain, at the request of the Buyer, an order or
other assurance that confidential treatment will be accorded to such portion of
the Confidential Information required to be disclosed as the Buyer shall
designate. The foregoing provisions shall not apply to any Confidential
Information which is generally available to the public immediately prior to the
time of disclosure.
SECTION 7. CONDITIONS TO OBLIGATION TO CLOSE
7.1 Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
a. The representations and warranties set forth in Section 3 above shall be
true and correct in all respects at and as of the Closing Date;
b. The Seller shall have performed all of its obligations and agreements and
complied with all of its covenants hereunder prior to the Closing;
c. The Seller and Charter shall have procured and delivered to the Buyer all
of the third party consents described in Section 5.2 above;
d. No action, suit or proceeding shall be pending or threatened before any
court or quasi-judicial or administrative agency of any federal, state, local or
foreign jurisdiction wherein an unfavorable judgment, order, decree,
stipulation, injunction or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement, (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or (iii)
materially affect adversely the right of the Buyer to own, operate or control
any of the Shares or the business or operations of Charter (and no such
judgment, order, decree, stipulation, injunction or charge shall be in effect);
e. Since the date of this Agreement there will have been no material adverse
change in the financial condition, operating results, business prospects, assets
and employees or the customer or supplier relations of Charter, and no casualty
loss or damage to any material portion of the assets of Charter (whether or not
covered by insurance);
The Buyer may waive any condition specified in this Section 7.1 if it executes a
writing so stating at or
prior to the Closing.
7.2 Conditions to Obligation of the Seller. The obligation of the Seller to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
a. The representations and warranties set forth in Section 4 above shall be
true and correct in all respects at and as of the Closing Date;
b. The Buyer shall have performed all of its obligations and agreements and
complied with all of its covenants hereunder prior to the Closing;
c. No action, suit or proceeding shall be pending or threatened before any
court or quasi-judicial or administrative agency of any federal, state, local or
foreign jurisdiction wherein an unfavorable judgment, order, decree,
stipulation, injunction or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such judgment, order, decree, stipulation, injunction or
charge shall be in effect);
The Seller may waive any condition specified in this Section 7.2 if it executes
a writing so stating at or prior to the Closing.
SECTION 8. REMEDIES FOR BREACHES OF THIS AGREEMENT
8.1 Survival. All representations, warranties, covenants and agreements
contained in this Agreement, and any financial statements, deeds, certificates
(including closing certificates), instruments, schedules or other documents
delivered pursuant hereto or otherwise in connection herewith will survive the
execution and delivery of this Agreement for a period of one year after the
Closing Date.
8.2 Indemnification Provisions For Benefit of the Buyer. The Seller agrees to
indemnify the Buyer from and against all Losses resulting from, arising out of,
relating to, in the nature of or caused by the breach of any representation or
warranty of the Buyer contained in Section 3 above or the breach of any covenant
of the Seller contained in this Agreement.
8.3 Indemnification Provisions For Benefit of the Seller. The Buyer agrees to
indemnify the Seller from and against all Losses resulting from, arising out of,
relating to, in the nature of or caused by the breach of any representation or
warranty of the Buyer contained in Section 4 above or the breach of any covenant
of the Buyer contained in this Agreement.
8.4 Matters Involving Third Parties. If any third party shall notify any Party
(the "Indemnified Party") of a claim with respect to any matter which may give
rise to a claim for indemnification against any other Party (the "Indemnifying
Party") under this Section 8, then the Indemnified Party shall notify the
Indemnifying Party thereof promptly (and in any event within 10 business days
after receiving any written notice from a third party). The Indemnifying Party's
liability hereunder to the Indemnified Party shall be reduced to the extent the
Indemnifying Party is materially adversely prejudiced by the Indemnified Party's
failure to provide timely notice hereunder. In the event any Indemnifying Party
notifies the Indemnified Party within 10 business days after the Indemnified
Party has given notice of the matter that the Indemnifying Party is assuming the
defense thereof, (A) the Indemnifying Party will defend the Indemnified Party
against the matter with counsel of its choice reasonably satisfactory to the
Indemnified Party, (B)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense (except that the
Indemnifying Party will be responsible for the fees and expenses of the separate
co-counsel to the extent the Indemnified Party reasonably concludes that the
counsel the Indemnifying Party has selected has a conflict of interest), (C) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the matter without the written consent of the
Indemnifying Party (which shall not be unreasonably withheld), and (D) the
Indemnifying Party will not consent to the entry of any judgment with respect to
the matter, or enter into any settlement which does not include a provision
whereby the plaintiff or claimant in the matter releases the Indemnified Party
from all Liability with respect thereto, without the written consent of the
Indemnified Party (which shall not be unreasonably withheld). In the event the
Indemnifying Party does not notify the Indemnified Party within 10 business days
after the Indemnified Party has given notice of the matter that the Indemnifying
Party is assuming the defense thereof, however, the Indemnified Party may defend
against the matter in any manner it may deem appropriate.
ARTICLE 9. TERMINATION
9.1 Termination of Agreement. This Agreement and the transactions
contemplated hereby may be: terminated at any time prior to the Closing as
follows
a. by mutual consent of the Parties;
b. by the Buyer in the event the Seller breaches, or by the Seller in the
event the Buyer breaches, any representation, warranty or covenant contained in
this Agreement (except where the breach would not have a material adverse effect
upon the ability of the Parties to consummate the transactions contemplated by
this Agreement);
c. by the Buyer if the Closing shall not have occurred on or before December
24, 2002, by reason of the failure of any condition precedent under Section 7.1
hereof (unless the failure results primarily from the Buyer breaching any
representation, warranty or covenant contained in this Agreement); or
d. by the Seller if the Closing shall not have occurred on or before
December 24, 2002, by reason of the failure of any condition precedent under
Section 7.2 hereof (unless the failure results primarily from the Seller
breaching any representation, warranty or covenant contained in this Agreement).
9.2 Effect of Termination. If any Party terminates this Agreement pursuant to
Section 9.1 above, all obligations of the Parties hereunder shall terminate
without any Liability of any Party to any other Party (except for any Liability
of any Party then in breach); provided, however, that the confidentiality
provisions contained herein shall survive termination.
ARTICLE 10. MISCELLANEOUS
10.1 Press Releases and Announcements. No Party shall issue any press release
or announcement relating to the subject matter of this Agreement without the
mutual approval of the other Parties; provided, however, that any Party may make
any public disclosure it believes in good faith is required by law or regulation
(in which case the disclosing Party will advise the other Parties prior to
making the disclosure).
10.2 No Third Party Beneficiaries. This Agreement shall not confer any rights
or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
10.3 Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements or representations by or among the Parties,
written or oral, that may have related in any way to the subject matter hereof.
10.4 Succession and Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of such
Party's rights, interests or obligations hereunder without the prior written
approval of the other Party; provided, however, that the Buyer may (i) assign
any or all of its rights and interests hereunder to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to perform its
obligations hereunder.
10.5 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
10.6 Headings. The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.7 Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement or any of the
agreements contemplated hereby shall be in writing and shall be deemed to have
been given when delivered personally to the recipient, one business day after
being sent to the recipient by reputable overnight courier service (charges
prepaid), or five business days after being mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent to each Party at the address
below:
If to the Seller:
Oak Ridge Capital Group, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
If to the Buyer:
CB & D Corporation
00000 Xxxxx, Xxxxx X,
Xxxxxxxxxxx, XX, 00000
Attention: Xxxx X. Xxxxxx
Any Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail or electronic mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the individual
for whom it is intended. Any Party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other Parties notice in the manner herein set forth.
10.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the
internal laws (and not the law of conflicts) of the State of Minnesota.
10.9 Amendments and Waivers. No amendment, modification or waiver of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by the Buyer and the Seller. No waiver by any Party of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence.
10.10 Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration or area of the term or provision, to delete specific words or phrases
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
10.11 Expenses. Each of the Parties will bear its own costs and expenses
incurred in compliance with the terms and conditions of this Agreement and in
connection with the consummation of the transactions contemplated hereby. The
Parties agree that Charter will not bear any cost or expense as a result of any
of the foregoing (including by reason of the Seller causing Charter to take any
action pursuant to Section 5 above prior to the Closing).
10.12 Construction. The language used in this Agreement, including the
documents, 'instruments, agreements, exhibits, schedules and annexes hereto will
be deemed to be the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied against any Party.
Any reference to any federal, state, local or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The Parties intend that each representation,
warranty and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty or covenant contained herein
in any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first representation,
warranty or covenant.
10.13 Incorporation of Exhibits, Annex and Schedules. Any Exhibits, Annex and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
10.14 Specific Performance. Each of the Parties acknowledges and agrees that
the other Party would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees that the other
Party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the Parties and the
matter (subject to the provisions set forth in Section 10.15 below), in addition
to any other remedy to which they may be entitled, at law or in equity.
10.15 Submission to Jurisdiction. Each of the Parties submits to the exclusive
jurisdiction of any state or federal court sitting in Minneapolis, Minnesota, in
any action or proceeding arising out of or relating to this Agreement, agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court and agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
Parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety or other security
that might be required of any other Party with respect thereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the first date written above.
C B & D CORPORATION
/s/ Xxxxx X. Xxxxx
-------------------
By: Xxxxx X. Xxxxx
-------------------
Its: President
OAK RIDGE CAPITAL GROUP, INC.
/s/ Xxxxx X. Xxxxxx XX
-----------------------
By: Xxxxx X.Xxxxxx XX
----------------------
Chief Financial Officer
SECURITY AGREEMENT EXHIBIT 2.1A
THIS AGREEMENT (the "Agreement") is effective December 20, 2002, by and
between C B & D Corporation (the "Buyer") and Oak Ridge Capital Group, Inc. (the
"Secured Party").
RECITALS:
A. Pursuant to an understanding between the Buyer and the Secured
Party, the Buyer has purchased all of the outstanding shares of common stock in
Charter Building and Development Corporation, a New Mexico corporation, from the
Secured Party.
B. In connection with the purchase, the Buyer has issued and
delivered to the Secured Party a Promissory Note (the
"Promissory Note") in partial payment of the purchase price.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing recitals which are
expressly incorporated herein by reference; the following terms, covenants, the
purchase of such stock; and conditions; and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Party hereto agree as follows:
1. Grant of Security Interest. To secure the obligations of the Buyer
under the Promissory Note (the "Obligations"), the Buyer hereby grants to the
Secured Party a security interest in the assets described on Exhibit A attached
hereto, which is incorporated herein by reference. Such assets described on
Exhibit A are herein collectively referred to as the "Collateral."
2. Representation and Warranty. The Buyer hereby represents and
warrants to the Secured Party that the Buyer has full power, capacity and
authority to execute this Agreement, to perform the Buyer's obligations
hereunder, and to subject the Collateral to the security interest created
hereby.
3. Covenants. So long as any of the Obligations remains unpaid, the
Buyer further covenants and agrees that the Buyer shall execute such financing
statements and other instruments and perform such acts as the Secured Party may
reasonably request to establish and maintain a valid and properly perfected
security interest in the Collateral.
4. Remedies in the Event of an Event of Default. Upon the occurrence of
an Event of Default as defined in the Promissory Note, the Secured Party may
exercise any or all of the following remedies, together with all other remedies
provided hereunder or under applicable law; provided, that no exercise of any
one or more of such remedies shall preclude the Secured Party from exercising
any other remedies at the same time or at any other time:
(a) Exercise any or all remedies provided under the Promissory
Note; and
(b) Exercise any or all of the remedies of a secured party
under the New Mexico and Minnesota Uniform Commercial Codes
with respect to the Collateral (including the right to offer
and sell the Collateral privately to purchasers).
5. Survival of Representations, Warranties, and Covenants. All
representations, warranties, and covenants contained in this Agreement shall
survive the execution, delivery, and performance of this Agreement and the
creation and payment of the Obligations.
6. Preservation of Rights. The Secured Party shall not be obligated to
preserve any rights the Buyer may have against prior parties, to realize on the
Collateral at all or in any particular manner or order, or to apply any cash
proceeds of the Collateral in any particular order of application.
7. Reimbursement of Expenses. The Buyer will reimburse the Secured
Party for all expenses (including fees and disbursements of counsel) reasonably
incurred by the Secured Party in the perfection, defense, or enforcement of the
security interests granted hereby, including expenses incurred in any
litigation, bankruptcy, or insolvency proceeding.
8. Termination. This Agreement and the security interests granted
hereunder shall terminate on the first date as of which all principal of and
interest on the Promissory Note shall have been paid.
9. Effect of Promissory Note. This Agreement is executed and delivered
pursuant to the Promissory Note, and is subject to the terms, conditions, and
agreements in the Promissory Note.
10. Severability. The invalidity of all or any part of any section of
this Agreement shall not render invalid the remainder of this Agreement or the
remainder of such section. In any provision of this Agreement is so broad as to
be unenforceable, such provision shall be interpreted to be only as broad as is
enforceable.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
IN WITNESS WHEREOF, the Buyer and the Secured Party have duly executed this
Agreement on the date and year first above written.
CB & D CORPORATION
/s/ Xxxxx X. Xxxxx
-----------------------------
By: Xxxxx X. Xxxxx
Its: President
OAK RIDGE CAPITAL GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx XX
-----------------------------
By: Xxxxx X. Xxxxxx XX
Its: Chief Financial Officer
PROMISSORY NOTE EXHIBIT 2.1B
Albuquerque, New Mexico
$1,129,265.00 DECEMBER 20, 2002
PROMISE TO PAY. C B & D CORP. ("BORROWER") promises to pay to the order of OAK
RIDGE CAPITAL GROUP, INC. ("LENDER"), at its office at 000 Xxxxx Xxxxxx, Xxxxx
000, Xxxxxx Xxxxxx, XX 00000, or at such other place as the holder hereof may,
from time to time designate in writing, in lawful money of the United States of
America, the principal sum of One Million One Hundred Twenty Nine Thousand Two
Hundred and Sixty Five Dollars ($1,129,265.00), and to pay interest on the
principal balance of this note outstanding, from the date hereof at the rate and
on the terms set forth below.
STOCK PURCHASE AGREEMENT. This note is issued pursuant to the terms of that
certain Stock Purchase Agreement dated as of December 20, 2002, by and between
the Borrower and the Lender (as the same may be amended or restate from time to
time, the "STOCK PURCHASE AGREEMENT").
PAYMENT. Interest at a rate of Seven Percent (7.00%) per annum on this note
shall accrue beginning immediately and be payable quarterly beginning on March
31, 2002. Interest on this note shall be computed on a 365/360 simple interest
basis; that is, by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding. The Borrower will
pay Lender at Lender's address shown above or at such other place as Lender may
designate in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and late charges.
Principal on this note shall be payable annually beginning on December 31, 2003
(provided, however, that the Lender agrees that an adjustment may be warranted
based on a review of the financial statements of the Borrower subsequent to such
date) from "GROSS CASH FLOW" (defined as revenues of the Borrower less customary
and traditional expenses of the Borrower pursuant to Generally Accepted
Accounting Principles less a Forty Percent (40.00%) provision made for income
taxes, less a provision for dividend payments made to preferred shareholders of
the Borrower in the annual aggregate amount of Fifty Seven Thousand Six Hundred
Dollars ($57,600), the total of which is then multiplied by.50). Principal on
this note shall bear interest from the date hereof until the date of its payment
at the stated interest rate. Notwithstanding the above, in any event, Borrower
shall pay the then outstanding principal balance of this note together with all
accrued and unpaid interest on the earlier of (i) December 31, 2009, or (ii) the
acceleration of this note pursuant to certain acceleration events (the
"ACCELERATION EVENTS").
ACCELERATION EVENTS. The following events shall be considered Acceleration
Events pursuant to this note:
ASSET SALES. An event pursuant to which the Borrower or any of its
subsidiaries or affiliates receives any cash proceeds from an "ASSET SALE"
(defined as any sale, transfer or other disposition by the Borrower or any of
its subsidiaries or affiliates of all of the assets or substantially all of the
assets of the Borrower or any of its subsidiaries or affiliates).
INSURANCE PROCEEDS. An event pursuant to which the Borrower or any of
its subsidiaries or affiliates elects in its or their respective discretion not
to continue as an operating entity or entities after such party or parties
receives any cash proceeds from any "RECOVERY EVENT" (defined as the receipt by
the Borrower or any of its subsidiaries or affiliates of any cash insurance
proceeds or awards payable by reason of theft, loss, physical destruction,
damage, or any other similar event with respect to any property or assets of the
Borrower or any of its subsidiaries or affiliates (other than Recovery Events in
which the insurance proceeds therefrom do not exceed $100,000)).
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
of accrued and unpaid interest. Rather, they will reduce the principal balance
of the note.
LATE CHARGE. If an interest or principal payment is fifteen (15) days or more
late, Borrower will be charged Five Percent (5.00%) of the unpaid portion of the
regularly scheduled payment.
EVENTS OF DEFAULT. The following shall constitute an "EVENT OR EVENTS OF
DEFAULT" on the part of Borrower: (a) Borrower fails to make any payment when
due; (b) Borrower breaks any promise Borrower has made to Lender, or Borrower
fails to comply with or to perform when due any other term, obligation,
covenant, or condition contained in this note or any agreement related to this
note, or in any other agreement Borrower has with Lender; (c) any written
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished; (d) Borrower dissolves or Borrower becomes
insolvent, a receiver is appointed for any part of Borrower's property, Borrower
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or insolvency laws;
(e) any creditor tries to take any of Borrower's property on or in which Lender
has a lien or security interest; (f) a material adverse change occurs in
Borrower's financial condition, or Lender reasonably believes the prospect of
payment or performance of the indebtedness is impaired. Notwithstanding the
above, if the Borrower fails to cure any default within thirty (30) calendar
days after effective date of Lender's default notice (including) payment of any
late charges due and Lender's attorney fees provided herein), then the Lender
may at is option, declare the remaining unpaid balance immediately due and
payable, and proceed to enforce payment of the entire remaining unpaid balance,
plus any accrued interest,
together with reasonable attorney's fees and late charges due. If the final day
for curing such default shall fall on a Sunday, or non-business day of Lender,
then the period for curing the default shall extend to the close of business on
the next regular business day of Lender.
LENDER'S RIGHTS. Upon the occurrence of an Event or Events of Default, this note
shall bear interest at the lesser of (i) Eighteen Percent (18%) per annum, or
(ii) the maximum interest rate permitted by law. Upon an occurrence of an Event
or Events of Default, Lender may declare the entire unpaid principal balance on
this note and all accrued unpaid interest immediately due, after notice of
default and Borrower's rights to cure have been exhausted, and then Borrower
will pay that amount. Lender may hire or pay someone else to help collect this
note if Borrower does not pay. Borrower also will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's attorney's fees
and Lender's legal expenses whether or not there is a lawsuit, including
attorney's fees and legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection. If not prohibited by applicable law,
Borrower also will pay any court costs, in addition to all other sums provided
by law.
SECURITY INTEREST. Borrower grants to Lender a security interest in, and herby
assigns, conveys, delivers, pledges, and transfers to Lender all of Borrower's
right, title and interest in and to the common stock of Charter Building and
Development Corp., a New Mexico corporation.
GENERAL PROVISIONS. Lender may delay of forgo enforcing any of its rights or
remedies under this note without losing them. Lender may renew or extend
(repeatedly and for any length of time) this note, or release any party or
guarantor of collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed necessary
by Lender. Lender reserves the right in its sole and reasonable discretion to
inspect and review the financial statement of Borrower at anytime. Borrower
agrees to provide reviewed financial statements prepared in accordance with
Generally Accepted Accounting Principles, (GAAP), to Lender on an annual basis
for Lender's review.
BORROWER REPRESENTS TO LENDER THAT BORROWER HAS READ AND UNDERSTANDS ALL OF THE
PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY THEREOF.
BORROWER:
CB & D CORP.
By: /s/ Xxxxx X. Xxxxx
----------------------
Name :Xxxxx X. Xxxxx
Title: President
