PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of the 19th day of September 2003, by and between
the following:
XXXXXX X. XXXXXX and XXXXXXXX X. XXXXXX, individual,
(hereinafter, the "Sellers"); and
PARAMCO FINANCIAL GROUP, INC., a Delaware corporation
(hereinafter "Paramco").
W I T N E S S E T H
WHEREAS, subject to the terms and conditions of this
Agreement, Paramco and Sellers desire for Paramco to purchase
from Sellers and for Sellers to sell to Paramco all of the
outstanding common stock of ROYAL FEDERAL, INC., a Louisiana
corporation (the "Royal Federal Stock" and "Royal Federal",
respectively); and
WHEREAS, the Board of Directors of Paramco deems it desirable
and in the best interests of Paramco and its stockholders that
Paramco purchase the Royal Federal Stock in consideration of
issuance by Paramco to Sellers an aggregate of one hundred
thousand (100,000) shares of Paramco Common Stock (the "Paramco
Shares"); and
WHEREAS, Sellers deems it desirable and in the best interests
of Sellers that Sellers sell the Royal Federal Stock to Paramco;
and
WHEREAS, Paramco and Sellers desire to provide for certain
undertakings, conditions, representations, warranties, and
covenants in connection with the transactions contemplated by
this Agreement; and
WHEREAS, Sellers and the Board of Directors of Paramco have
approved and adopted this Agreement, subject to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties
hereto do hereby agree as follows:
-1- Initials: Paramco _______
Seller _______
SECTION 1
DEFINITIONS
1.1 "Agreement", "Royal Federal", "Royal Federal Stock",
"Paramco", "Paramco Shares", "Sellers", respectively, shall have
the meanings defined in the foregoing preamble and recitals to
this Agreement.
1.2 "Closing Date" shall mean 10:00 a.m., local time,
September 19, 2003, at Denver, Colorado, the date on which the
parties hereto shall close the transactions contemplated herein;
provided that the parties can change the Closing Date and place
of Closing to such other time and place as the parties shall
mutually agree, in writing. As of the Closing Date, all Exhibits
to this Agreement shall be complete and attached to this
Agreement.
1.3 "1933 Act" shall mean the Securities Act of 1933, as
amended.
1.4 "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
1.5 "SEC Documents" shall have the meaning defined in
Section 3.5 hereof.
1.6 "Confidential information" shall have the meaning
defined in Section 11.1 hereof.
SECTION 2
AGREEMENT FOR PURCHASE AND SALE OF ROYAL FEDERAL STOCK
2.1 Substantive Terms of the Purchase and Sale of
Royal Federal Stock.
Sellers shall sell and deliver to Paramco one hundred
percent (100%) of the issued and outstanding capital stock of
Royal Federal in a form enabling Paramco, then and there, to
become the record and beneficial owner of said common stock,
consisting of one hundred (100) shares, which represent all of
the issued and outstanding capital stock of Royal Federal.
2.2 Consideration Paid by Paramco.
(a) Paramco shall deliver to Sellers the Paramco
Shares, as follows: one hundred (100,000) shares to be
issued in equal quantities of fifty thousand shares
(50,000) in the names of Xxxxxx X. Xxxxxx and Xxxxxxxx
X. Xxxxxx. The Paramco Shares shall be issued pursuant
to an exemption from registration under the 1933 Act
and from registration under any and all applicable
state securities laws and the certificates representing
the Paramco Shares shall bear the restrictive legend
set forth in Rule 144 of the Rules and Regulations of
the 1933 Act and any appropriate legend required under
applicable state securities laws. The Paramco Shares
shall be validly issued and outstanding, fully paid,
and non-assessable.
(b) It is the present intention of Paramco that,
following the Closing Date, Royal Federal will operate
as a wholly owned subsidiary of Paramco.
-2- Initials: Paramco _______
Seller _______
SECTION 3
REPRESENTATIONS AND WARRANTIES OF PARAMCO
Paramco, in order to induce the Sellers to execute this
Agreement and to consummate the transactions contemplated herein,
represents and warrants to Sellers, as follows:
3.1 Organization and Qualification. Paramco is a corporation
duly organized, validly existing, and in good standing under the
laws of Delaware, with all requisite power and authority to own
its property and to carry on its business as it is now being
conducted. Paramco is duly qualified as a foreign corporation and
in good standing in each jurisdiction where the ownership, lease,
or operation of property or the conduct of business requires such
qualification, except where the failure to be in good standing or
so qualified would not have a material, adverse effect on the
financial condition or business of Paramco.
3.2 Ownership of Paramco. Paramco is authorized to issue two
classes of stock of up to 100,000,000 common shares, $0.001 par
value per share, of which approximately 29,182,747 are currently
issued and outstanding, and up to 10,000,000 preferred shares,
$0.001 par value per share of which there are no shares
outstanding. In addition, there are 3,350,000 warrants issued at
various exercise prices. In addition, there have been no options
issued under the current stock option plan.
3.3 Authorization and Validity. Paramco has the requisite
power and is duly authorized to execute and deliver and to carry
out the terms of this Agreement. The board of directors and
stockholders of Paramco have taken all action required by law,
its Articles of Incorporation and Bylaws, both as amended, or
otherwise to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby, subject to the satisfaction or waiver of the conditions
precedent set forth in Section 8 of this Agreement. Assuming this
Agreement has been approved by all action necessary on the part
of Sellers, this Agreement is a valid and binding agreement of
Paramco.
3.4 No Defaults. Paramco is not in default under or in
violation of any provision of its Articles of Incorporation or
Bylaws, both as amended. Paramco is not in default under or in
violation of any material provision of any indenture, mortgage,
deed of trust, lease, loan agreement, or other agreement or
instrument to which it is a party or by which it is bound or to
which any of its is subject, if such default would have a
material, adverse effect on the financial condition or business
of Paramco. Paramco is not in violation of any statute, law,
ordinance, order, judgment, rule, regulation, permit, franchise,
or other approval or authorization of any court or governmental
agency or body having jurisdiction over it or any of its
properties which, if enforced, would have a material, adverse
effect on the financial condition or business of Paramco. Neither
the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated herein, will
conflict with or result in a breach of or constitute a default
under any of the foregoing or result in the creation of any lien,
mortgage, pledge, charge, or encumbrance upon any asset of
Paramco and no consents or waivers thereunder are required to be
obtained in connection therewith in order to consummate the
transactions contemplated by this Agreement.
-3- Initials: Paramco _______
Seller _______
3.5 SEC Documents; Financial Statements. As of the Closing,
Paramco has filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the 1934 Act (all of the
foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto
and documents incorporated by reference therein being hereinafter
referred to as the "SEC Documents"). As of their respective
dates, the SEC Documents substantially complied in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the
SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. As of their respective dates, the financial
statements of Paramco included in the SEC Documents substantially
complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations
of the SEC with respect thereto. Such financial statements have
been prepared in substantial accordance with generally accepted
accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of
Paramco as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments).
No other information provided by or on behalf of Paramco to the
Sellers which is not included in the SEC Documents, including,
without limitation, contains any untrue statement of a material
fact or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they are or were made, not misleading. Neither the
Company nor any of its officers, directors, employees or agents
has provided the Sellers with any material, non-public
information.
3.6 Absence of Certain Changes. Since the most recent filing
by Paramco with the SEC, there has been no material adverse
change and no material adverse development in the business,
properties, operations, financial condition, results of
operations or prospects of Paramco. Paramco has not taken any
steps, and does not currently expect to take any steps, to seek
protection pursuant to any bankruptcy law nor does Paramco have
any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings.
3.7 Documents. The copies of all agreements and other
instruments that have been delivered by Paramco to Sellers are
true, correct, and complete copies of such agreements and
instruments and include all amendments thereto.
3.8 Disclosure. The representations and warranties made by
Paramco herein and in any schedule, statement, certificate, or
document furnished or to be furnished by Paramco to Sellers
pursuant to the provisions hereof or in connection with the
transactions contemplated hereby, taken as a whole, do not and
will not as of their respective dates contain any untrue
statements of a material fact, or omit to state a material fact
necessary to make the statements made not misleading.
-4- Initials: Paramco _______
Seller _______
SECTION 4
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, in order to induce Paramco to execute this
Agreement and to consummate the transactions contemplated herein,
represents and warrants to Paramco as follows:
4.1 Organization and Qualification. Royal Federal is a
Louisiana corporation, duly organized, validly existing, and in
good standing under the laws of that state with all requisite
power and authority to own its property and assets and to carry
on its business as it is now being conducted. Royal Federal is
qualified as a foreign corporation and is in good standing in
each jurisdiction where the ownership, lease, or operation of
property or the conduct of its business requires such
qualification, except where the failure to be in good standing or
so qualified would not have a material, adverse effect on the
financial condition and business of Royal Federal.
4.2 Ownership of Royal Federal Stock. Royal Federal is
authorized to issue one class of stock, of up to one thousand
(1,000) shares of common stock, no par value per share. At the
date hereof, of such authorized shares, one hundred (100) shares
of common stock have been validly issued and are outstanding,
fully paid, and non-assessable. All of the shares of common stock
are owned of record and beneficially by the Sellers, who have not
granted any options, warrants, or other securities exercisable or
convertible into or any calls, commitments, or agreements of any
kind relating to any issued equity securities of Royal Federal.
There are no options, warrants, or other securities exercisable
or convertible into or any calls, commitments, or agreements of
any kind relating to any unissued equity securities of Royal
Federal by or on behalf of Royal Federal.
4.3 Authorization and Validity. The Sellers have the
requisite power and are duly authorized to execute and deliver
and to carry out the terms of this Agreement. Assuming this
Agreement has been approved by all action necessary on the part
of Paramco, this Agreement is a valid and binding agreement of
Sellers.
4.4 Royal Federal Financial Statements.
(a) Royal Federal financial statements (as prepared by
Sellers as the management of Royal Federal) for the current
fiscal year ending December 31, 2003 and any notes thereto,
fairly and accurately present the financial condition and
the results of operations, income, expenses, assets,
liabilities, changes in shareholders' equity, and cash flows
of Royal Federal , all in accordance with GAAP, consistent
with the past practices of Royal Federal (collectively,
"Royal Federal Financial Statements").
(b) Royal Federal Financial Statements are capable of
being examined and reported upon with an unqualified opinion
expressed by an independent public or certified public
accountant and will comply with the requirements and
standards set forth in Regulation S-X, as promulgated and
adopted by the Securities and Exchange Commission.
-5- Initials: Paramco _______
Seller _______
4.5 Conduct and Transactions of Royal Federal. Since
inception, Royal Federal has conducted the operations of its
business consistent with past practice and used its best efforts
to maintain and preserve its properties, key employees, and
relationships with customers and suppliers. Without limiting the
foregoing, during such period Royal Federal did not:
(a) Incur any liabilities except to maintain its
facilities and assets in the ordinary course of its
business;
(b) Declare or pay any dividends on any shares of
capital stock or make any other distribution of assets to
the holders thereof;
(c) Issue, reissue, or sell, or issue options or rights
to subscribe to, or enter into any contract or commitment to
issue, reissue, or sell, any shares of capital stock or
acquire or agree to acquire any shares of capital stock;
(d) Amend its Articles of Incorporation or Bylaws or
merge or consolidate with or into any other corporation or
sell all or substantially all of its assets or change in any
manner the rights of its capital stock or other securities;
(e) Pay or incur any obligation or liability, direct
or contingent, except in the ordinary course of its
business;
(f) Incur any indebtedness for borrowed money, assume,
guarantee, endorse, or otherwise become responsible for
obligations of any other party, or make loans or advances to
any other party except in the ordinary course of its
business;
(g) Increase in any manner the compensation, direct or
indirect, of any of its officers or executive employees,
except as otherwise disclosed in Exhibit 4.5(g), hereto; or
(h) Make any capital expenditures except in the
ordinary course of its business.
4.6 Compensation Due Employees. As of the Closing Date,
Royal Federal will not have any outstanding liability for payment
of wages, payroll taxes, vacation pay (whether accrued or
otherwise), salaries, bonuses, pensions, contributions under any
employee benefit plans or other compensation, current or
deferred, under any labor or employment contracts, whether oral
or written, based upon or accruing in respect of those services
of employees of Royal Federal that have been performed prior to
the Closing Date, except as specified on Exhibit 4.6 hereto. As
of the Closing Date, Royal Federal will not have any unfunded,
contingent or other liability under any defined benefits plan or
any other retirement or retirement-type plan, whether such
plan(s) are to continue or are thereupon terminated, except for
the normal on-going obligations for future contributions under
such plan(s) not related, generally or specifically, to the
termination of such plan(s) or except as specified on Exhibit 4.6
hereto.
4.7 Union Agreements and Employment Agreements. Royal
Federal is not a party to any union agreement or any organized
labor dispute. Royal Federal has no written or verbal employment
agreements with any of its employees, except as listed in Exhibit
4.7 hereto.
-6- Initials: Paramco _______
Seller _______
4.8 Contracts and Leases. Except as listed in Exhibit 4.8
hereto, Royal Federal is not a party to any written or oral
leases, commitments, or any other agreements. On the Closing
Date, Royal Federal has paid or performed in all material
respects all obligations required to be paid or performed by any
of them to such date and will not be in default under any
document, contract, agreement, lease, or other commitment to
which any of them is a party.
4.9 Insurance. All insurance against losses or damages or
other risks which are in force for the benefit of any of Royal
Federal are set forth in Exhibit 4.9 hereto.
4.10 Liabilities. Royal Federal has no liabilities, except
as described in Exhibit 4.10 hereto, which liabilities are also
set forth in relevant detail on Royal Federal Financial
Statements.
4.11 Proprietary Rights. Royal Federal owns or is duly
licensed to use such trademarks and copyrights as are necessary
to conduct its business as presently conducted. The conduct of
business by Royal Federal does not, to the best knowledge of
Sellers, infringe upon the trademarks or copyrights of any third
party.
4.12 Internal Controls. Since inception,
(a) There have been no transactions except in
accordance with the general or specific authorization of
management of Royal Federal;
(b) Royal Federal has devised and maintained systems of
internal accounting controls and procedures (the "Internal
Controls") that were designed with the objective of providing
reasonable assurance that (1) Royal Federal transactions were
properly authorized; (2) Royal Federal assets were
safeguarded against unauthorized or improper use; and (3)
Royal Federal transactions were properly recorded and
reported, all (i) to permit the preparation of Royal Federal
financial statements in conformity with generally accepted
accounting principles and (ii) to maintain accountability for
assets and expenses.
(c) Royal Federal's chief executive officer and its
chief financial officer have evaluated Royal Federal Internal
Controls, which evaluation included a review of the controls'
objectives and design and the controls' implementation by
Royal Federal and its management. In the course of the
Internal Controls' evaluation, Royal Federal management
sought to identify data errors, controls problems, or acts of
fraud and to confirm that appropriate corrective action,
including process improvements, were being undertaken. The
Internal Controls were also evaluated on an ongoing basis by
other personnel in Royal Federal organization. Among other
matters, Royal Federal has sought to determine whether there
were any "significant deficiencies" or "material weaknesses"
in the Internal Controls, or whether Royal Federal had
identified any acts of fraud involving personnel who had a
significant role in the Internal Controls. For purposes of
this subsection, "significant deficiencies" means "reportable
conditions" (control issues that could have a significant
adverse effect on the ability to record, process, summarize
and report financial data in the financial statements) and
"material weakness" means a particularly serious reportable
condition where the Internal Controls do not reduce to a
relatively low level the risk that misstatements caused by
error or fraud may occur in
-7- Initials: Paramco _______
Seller _______
amounts that would be material in relation to Royal Federal
Financial Statements and not be detected within a timely
period by employees in the normal course of performing their
assigned functions. Royal Federal has also sought to deal
with other Internal Controls matters in the evaluation
thereof, and, in each case if a problem were identified,
Royal Federal considered what revision, improvement and/or
correction to make in accord with its on-going procedures.
4.13 Contracts and Agreements. Royal Federal is not a party
to any material contracts or agreements in respect of the
operation of its business, except as listed in Exhibit 4.13
hereto.
4.14 Minute Books. The minute books of Royal Federal
contains true, complete, and accurate records of all meetings and
other corporate actions of its shareholders and Board of
Directors, and true and accurate copies thereof have been
delivered to counsel for Paramco prior to the Closing Date. The
signatures appearing on all documents contained therein are the
true signatures of the persons purporting to have signed the
same.
4.15 Litigation. Except as set forth in Exhibit 4.15, there
are no actions, suits, proceedings, orders, investigations, or
claims (whether or not purportedly on behalf of Royal Federal)
pending against or affecting Royal Federal at law or in equity or
before or by any federal, state, municipal, or other governmental
department, commission, board, agency, or instrumentality,
domestic or foreign, nor has any such action, suit, proceeding,
or investigation been pending or threatened in writing during the
12-month period preceding the date hereof, which, if adversely
determined, would materially and adversely affect the financial
condition of Royal Federal which seeks to prohibit, restrict, or
delay the consummation of the stock sale contemplated hereby.
Royal Federal is not operating under or subject to, or in default
with respect to, any order, writ, injunction, or decree of any
court or federal, state, municipal, or other governmental
department, commission, board, agency, or instrumentality.
4.16 Taxes. At the Closing Date, all tax returns required to
be filed with respect to the operations or assets of Royal
Federal prior to Closing Date have been correctly prepared in all
material respects and timely filed, and all taxes required to be
paid in respect of the periods covered by such returns have been
paid in full or adequate reserves have been established for the
payment of such taxes. Except as set forth in Exhibit 4.16, as of
the Closing Date, Royal Federal has not requested any extension
of time within which to file any tax returns, and all known
deficiencies for any tax, assessment, or governmental charge or
duty shall have been paid in full or adequate reserves have been
established for the payment of such taxes. Royal Federal tax
returns are true and complete in all material respects. No audits
by federal or state authorities are currently pending or
threatened.
4.17 No Defaults. Royal Federal is not in default under or
in violation of any provision of its Articles of Incorporation or
Bylaws. Royal Federal is not in default under or in violation of
any material provision of any indenture, mortgage, deed of trust,
lease, loan agreement, or other agreement or instrument to which
it is a party or by which it is bound or to which any of its
assets are subject, if such default would have a material,
adverse effect on the financial condition or business of Royal
Federal. Royal Federal is not in violation of any statute, law,
ordinance, order, judgment, rule, regulation, permit, franchise,
or other approval or authorization of any court or governmental
agency or body having jurisdiction over it or any of its
properties which, if enforced,
-8- Initials: Paramco _______
Seller _______
would have a material, adverse effect on the financial condition
or business of Royal Federal. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions
contemplated herein, will conflict with or result in a breach of
or constitute a default under any of the foregoing or result in
the creation of any lien, mortgage, pledge, charge, or
encumbrance upon any asset of Royal Federal and no consents or
waivers thereunder are required to be obtained in connection
therewith in order to consummate the transactions contemplated by
this Agreement.
4.18 Documents. The copies of all agreements and other
instruments that have been delivered by Sellers to Paramco are
true, correct, and complete copies of such agreements and
instruments and include all amendments thereto.
4.19 Disclosure. The representations and warranties made by
Sellers herein and in any schedule, statement, certificate, or
document furnished or to be furnished by Royal Federal and/or
either of Sellers to Paramco pursuant to the provisions hereof or
in connection with the transactions contemplated hereby taken as
a whole do not and will not as of their respective dates contain
any untrue statements of a material fact, or omit to state a
material fact necessary to make the statements made not
misleading.
SECTION 5 INVESTIGATION; PRESS RELEASE
5.1 Investigation.
(a) Paramco acknowledges that it has made an
investigation of Royal Federal to confirm, among other
things, the assets, liabilities, and status of business of
Royal Federal and the cash position, accounts receivable,
liabilities, and mortgages in process. In the event of
termination of this Agreement, Paramco will deliver to
Sellers all documents, work papers, and other materials and
all copies thereof obtained by Paramco, or on its behalf,
from Royal Federal or Sellers, whether obtained before or
after the execution hereof, will not use, directly or
indirectly, any confidential information obtained from Royal
Federal or Sellers hereunder or in connection herewith, and
will keep all such information confidential and not used in
any way detrimental to Royal Federal or Sellers except to the
extent the same is publicly disclosed by Royal Federal or
Sellers.
(b) Sellers acknowledge that he has made an
investigation of Paramco, which has included, among other
things, the opportunity of discussions with executive
officers of Paramco, and its accountants, investment bankers,
and counsel. In the event of termination of this Agreement,
Sellers will deliver to Paramco all documents, work papers,
and other materials and all copies thereof obtained by either
of them, or on behalf of either of them, from Paramco,
whether obtained before or after the execution hereof and
will not use, directly or indirectly, any confidential
information obtained from Paramco hereunder or in connection
herewith, and will keep all such information confidential and
not used in any way detrimental to Paramco, except to the
extent the same is publicly disclosed by Paramco.
-9- Initials: Paramco _______
Seller _______
(c) Except in the event that any party hereto discovers
in the course of its respective investigation any breach of a
representation or warranty by the other party hereto and does
not disclose it to such other party prior to the Closing
Date, no investigation pursuant to this Section 5.1 shall
affect or be deemed to modify any representation or warranty
made by any party hereto.
5.2 Press Release. Paramco and Sellers shall agree with each
other as to the form and substance of any press releases and the
filing of any documents with any federal or state agency related
to this Agreement and the transactions contemplated hereby and
shall consult with each other as to the form and substance of
other public disclosures related thereto; provided, however, that
nothing contained herein shall prohibit either party from making
any disclosure that its counsel deems necessary.
SECTION 6 BROKERAGE
6.1 Brokers and Finders. Except for Stanton, Walker &
Company, neither Paramco nor Sellers, or any of their respective
officers, directors, employees, or agents, has employed any
broker, finder, or financial advisor or incurred any liability
for any fee or commissions in connection with initiating the
transactions contemplated herein. Stanton, Walker & Company has
been engaged by Paramco and Paramco is solely liable for any fee
or commission earned by Stanton, Walker & Company. Each party
hereto agrees to indemnify and hold the other party harmless
against or in respect of any other commissions, finder's fees, or
brokerage fees incurred or alleged to have been incurred with
respect to initiating the transactions contemplated herein as a
result of any action of the indemnifying party.
SECTION 7
CLOSING AGREEMENTS AND POST-CLOSING
7.1 Closing Agreements. On the Closing Date, the following
activities shall occur, the following agreements shall be
executed and delivered, and the respective parties thereto shall
have performed all acts that are required by the terms of such
activities and agreements to have been performed simultaneously
with the execution and delivery thereof as of the Closing Date:
(a) Sellers shall have executed and delivered documents
to Paramco sufficient then and there to transfer record and
beneficial ownership to Paramco of the Royal Federal Stock,
consisting of an aggregate of 100 shares of common stock of
Royal Federal;
(b) Paramco shall have delivered to Sellers the
Paramco Shares, consisting of one hundred thousand (100,000)
shares of Paramco's Common Stock, as follows: Fifty thousand
(50,000) shares in the name of Xxxxxx X. Xxxxxx and Fifty
thousand (50,000) shares in the name of Xxxxxxxx X. Xxxxxx.
(c) Sellers shall have executed employment
agreements with Royal Federal under terms which are fully
satisfactory to Paramco.
-10- Initials: Paramco _______
Seller _______
SECTION 8
CONDITIONS PRECEDENT TO PARAMCO'S OBLIGATIONS TO CLOSE
The obligations of Paramco to consummate this Agreement are
subject to satisfaction on or prior to the Closing Date of the
following conditions:
8.1 Representations and Warranties. The representations and
warranties of Sellers contained in this Agreement shall be true
and correct in all material respects on and as of the Closing
Date, and Sellers shall have performed in all material respects
all of his obligations hereunder theretofore to be performed.
8.2 Other. The joint conditions precedent in Section 10
hereof shall have been satisfied and all documents required for
Closing shall be acceptable to Counsel for Paramco.
SECTION 9
CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS TO CLOSE
The obligation of Sellers to consummate this Agreement is
subject to the satisfaction on or prior to the Closing Date of
the following conditions:
9.1 Representations and Warranties. The representations and
warranties of Paramco contained in this Agreement shall be true
and correct in all material respects on and as of the Closing
Date, and Paramco shall have performed in all material respects
all of its obligations hereunder theretofore to be performed.
9.2 Other. The joint conditions precedent in Section 10 hereof
shall have been satisfied.
SECTION 10
JOINT CONDITIONS PRECEDENT
The obligations of Paramco and Sellers to consummate this
Agreement shall be subject to satisfaction or waiver in writing
by all parties of each and all of the following additional
conditions precedent at or prior to the Closing Date:
10.1 Other Agreements. All of the agreements contemplated by
Section 7.1 of this Agreement shall have been executed and
delivered, and all acts required to be performed thereunder as of
the Closing Date shall have been duly performed, including,
without limitation, completion of all exhibits to this Agreement.
-11- Initials: Paramco _______
Seller _______
10.2 Absence of Litigation. At the Closing Date, there shall
be no action, suit, or proceeding pending or threatened against
any of the parties hereto by any person, governmental agency, or
subdivision thereof, nor shall there be pending or threatened any
action in any court or administrative tribunal, which would have
the effect of inhibiting the consummation of the transactions
contemplated herein.
SECTION 11
CONFIDENTIALITY
11.1 Paramco acknowledges that its principals have, and
will, acquire information and materials from Sellers and/or Royal
Federal and knowledge about the technology, business, products,
strategies, customers, clients and suppliers of Royal Federal and
that all such information, materials and knowledge acquired, are
and will be trade secrets and confidential and proprietary
information of Royal Federal (collectively, such acquired
information, materials, and knowledge are the "Confidential
Information"). Paramco, itself, and behalf of its principals,
covenants to hold such Confidential Information in strict
confidence, not to disclose it to others or use it in any way,
commercially or otherwise, except in connection with the
transactions contemplated by this Agreement and not to allow any
unauthorized person access to such Confidential Information.
11.2 The Confidential Information disclosed by the Sellers
and/or Royal Federal to Paramco shall remain the property of the
disclosing party.
11.3 Paramco, and its principals, shall maintain in secrecy
all Confidential Information disclosed to them by Sellers and/or
Royal Federal using not less than reasonable care. Paramco, and
its principals, shall not use or disclose in any manner to any
third party any Confidential Information without the express
written consent of the Sellers unless or until the Confidential
Information is:
(a) publicly available or otherwise in the public
domain; or
(b) rightfully obtained by any third party without
restriction; or
(c) disclosed by Sellers and/or Royal Federal without
restriction pursuant to judicial action, or government
regulations or other requirements.
11.4 The obligations of Paramco under Sections 11.1, 11.2,
and 11.3 of this Agreement shall expire upon the sooner of the
Closing or one year from the date hereof as to Confidential
Information consisting of commercial and financial information
and two years from the date hereof as to Confidential Information
consisting of technical information. For this purpose, technical
information shall include without limitation all developments,
inventions, innovations, designs, discoveries, trade secrets and
know-how, whether or not patentable or copyrightable.
-12- Initials: Paramco _______
Seller _______
SECTION 12
TERMINATION AND WAIVER
12.1 Termination. This Agreement may be terminated and
abandoned on the Closing Date by:
(a) the mutual consent in writing of the parties
hereto;
(b) Paramco, if the conditions precedent in Sections 8
and 10 of this Agreement have not been satisfied or waived by
the Closing Date; and
(d) Sellers, if the conditions precedent in Sections 9
and 10 of this Agreement have not been satisfied or waived by
the Closing Date.
If this Agreement is terminated pursuant to Section 12.1, the
parties hereto shall not have any further obligations under this
Agreement, and each party shall bear all costs and expenses
incurred by it.
SECTION 13
NATURE AND SURVIVAL OF REPRESENTATIONS, ETC.
13.1 All statements contained in any certificate or other
instrument delivered by or on behalf of Paramco or Sellers
pursuant to this Agreement or in connection with the transactions
contemplated hereby shall be deemed representations and
warranties by such party. All representations and warranties and
agreements made by Paramco or Sellers in this Agreement or
pursuant hereto shall survive the Closing Date hereunder until
the expiration of the 12th month
following the Closing Date.
SECTION 14 MISCELLANEOUS
14.1 Notices. Any notices or other communications required
or permitted hereunder shall be sufficiently given if written and
delivered in person or sent by registered mail, postage prepaid,
addressed as follows:
to Sellers: Xxxxxx X. Xxxxxx
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxxxxx X. Xxxxxx
000 Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxx, XX 00000
-13- Initials: Paramco _______
Seller _______
to Paramco: Paramco Financial
Group, Inc. Attn:
Xxxx X. Xxxxx 0000
Xx. Xxxxxx Xxxxxx
Xxxxx 000 Xxxxxx,
Xxxxxxxx 00000
or such other address as shall be furnished in writing by the
appropriate person, and any such notice or communication shall be
deemed to have been given as of the date so mailed.
14.2 Time of the Essence. Time shall be of the essence of
this Agreement.
14.3 Costs. Each party will bear the costs and expenses
incurred by it in connection with this Agreement and the
transactions contemplated hereby.
14.4 Cancellation of Agreement. In the event that this
Agreement is canceled by mutual agreement of the parties or by
failures of any of the conditions precedent set forth in
Paragraphs 8, 9, and 10, neither Sellers nor Paramco shall be
entitled to any damages, fees, costs, or other consideration.
14.5 Entire Agreement and Amendment. This Agreement and
documents delivered at the Closing Date hereunder contain the
entire agreement between the parties hereto with respect to the
transactions contemplated by this Agreement and supersedes all
other agreements, written or oral, with respect thereto. This
Agreement may be amended or modified in whole or in part, and any
rights hereunder may be waived, only by an agreement in writing,
duly and validly executed in the same manner as this Agreement or
by the party against whom the waiver would be asserted. The
waiver of any right hereunder shall be effective only with
respect to the matter specifically waived and shall not act as a
continuing waiver unless it so states by its terms.
14.6 Counterparts. This Agreement may be executed in one or
more counterparts each of which shall be deemed to constitute an
original and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other
party.
14.7 Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the
State of Colorado.
14.8 Attorneys' Fees and Costs. In the event any party to
this Agreement shall be required to initiate legal proceedings to
enforce performance of any term or condition of this Agreement,
including, but not limited to, the interpretation of any term or
provision hereof, the payment of moneys or the enjoining of any
action prohibited hereunder, the prevailing party shall be
entitled to recover such sums, in addition to any other damages
or compensation received, as will reimburse the prevailing party
for reasonable attorneys' fees and court costs incurred on
account thereof (including, without limitation, the costs of any
appeal) notwithstanding the nature of the claim or cause of
action asserted by the prevailing party.
-14- Initials: Paramco _______
Seller _______
14.9 Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their
respective heirs, executors, personal representatives,
successors, and assigns, as the case may be.
14.10 Access to Counsel. Each party hereto acknowledges that
each has had access to legal counsel of her or its own choice and
has obtained such advice therefrom, if any, as such party has
deemed necessary and sufficient prior to the execution hereof.
Each party hereto acknowledges that the drafting of this
Agreement has been a joint effort and any ambiguities or
interpretative issues that may arise from and after the execution
hereof shall not be decided in favor or, or against, any party
hereto because the language reflecting any such ambiguities or
issues may have been drafted by any specific party or her or its
counsel.
14.11 Captions. The captions appearing in this Agreement are
inserted for convenience of reference only and shall not affect
the interpretation of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-15- Initials: Paramco _______
Seller _______
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
PARAMCO FINANCIAL GROUP, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------
Xxxx X. Xxxxx
President
SELLERS
/s/ XXXXXX X. XXXXXX
------------------------------
XXXXXX X. XXXXXX
/s/ XXXXXXXX X. XXXXXX
------------------------------
XXXXXXXX X. XXXXXX
-16- Initials: Paramco _______
Seller _______
