STOCK PURCHASE AGREEMENT
EXHIBIT
10.2
This
Stock Purchase Agreement (the “Agreement”) is entered into between
Textechnologies, Inc, (the “Purchaser”), Charms Investments Limited (the
“Seller”) and Middleton Settlement Ltd, (the “Company”), effective as of
December 1st,
2006
(the “Effective Date”) For purposes of this Agreement, each of Purchaser and
Seller shall be referred to individually as a “Party” and both of them shall be
referred to collectively as the “Parties”.
Recitals
A. Seller
desires to sell all of the outstanding and issued shares (the “Stock”) of
MIDDLETON SETTLEMENT LIMITED a company registered under the laws of England
and
Wales under company number 05331110, owned by seller, which stock constitutes
100% of the total issued and outstanding shares of MIDDLETON SETTLEMENT LIMITED.
B. Buyer
desires to pay the entire purchase consideration by delivery to the seller
of
shares in the publicly traded company known as Textechnologies, Inc, and
seller
has agreed to accept as payment of the purchase price certain common shares
of
Textechnologies, Inc., as more fully described herein.
C. Seller
wishes to sell 100 % of the issued and outstanding common stock of MIDDLETON
SETTLEMENT LIMITED to Purchaser, and Purchaser wishes to purchase 100% of
the
common stock of MIDDLETON SETTLEMENT LIMITED from Seller, according to the
terms
and conditions of this Agreement.
Agreement
In
consideration of the premises and of the mutual covenants contained in this
Agreement, the Parties agree as follows:
1. Purchase
of Stock of
MIDDLETON SETTLEMENT LIMITED
1.1 Purchase
and
Sale.
Subject
to the terms and conditions of this Agreement, Seller agrees to sell to
Purchaser, and Purchaser agrees to purchase from Seller, all of the common
stock
of MIDDLETON SETTLEMENT LIMITED, a UK company, owned and controlled by seller
as
of date hereof.
1.2 Purchase
Price.
The
Purchase Price for the MIDDLETON SETTLEMENT Stock shall be $250,000 (Two
Hundred
Fifty Thousand) dollars US, the “Purchase Price”.
1.3 Closing.
The
purchase and sale of the stock of MIDDLETON SETTLEMENT LIMITED shall be
consummated in the manner described in this Section 1.3. Closing shall occur
on
or before December 1st,
2006
“Closing Date”). All parties agree that all representations, covenants and
warranties set fourth herein shall be true and correct as of the Closing
Date,
and same shall be a condition to Closing. At Closing, the following shall
occur:
(a) Purchaser
shall deliver to seller registered in Seller’s name one lump sum payment of
$250,000.
(b) Upon
receipt of the consideration specified in paragraph 1.2, Seller shall deliver
to
the Purchaser:
(i) a
stock
certificate or certificates representing 100 % of the issued and outstanding
common stock of MIDDLETON SETTLEMENT, together with Seller’s signature, which
signature shall be guaranteed by an eligible guarantor institution with
membership in an approved signature guaranty medallion program pursuant to
Securities and Exchange Commission Rule 17A8-15 if so requested by the
Purchaser, together with all Company’s kits including, and all documents
relating to the Company.
(ii)
A
certificate Good Standing confirming that MIDDLETON SETTLEMENT is incorporated
and in good standing as of the closing date.
(iii)
All
Books
and Records of the Company including but not limited to: By-laws, Articles
of
Incorporation (amendments, if any) and Minute Book.
(iv)
A
certificate from all officers of MIDDLETON SETTLEMENT acknowledging that
the
representations and warranties of the Company set forth herein are true and
correct as of the Closing.
2. Representations
0f
Seller.
Seller
represents, warrants and agrees to and with Purchaser as follows as of the
Effective Date and as of the date (the “Closing Date”) on which the purchase and
sale of the Shares is consummated:
(a) Seller
is
the sole beneficial, legal, and record owner of the MIDDLETON SETTLEMENT
LIMITED
Shares, and has good and marketable title to the Shares;
(b) Seller
has full power, authority, and legal right to sell the Shares;
(c) There
are
no charges, claims, liens, pledges, or other encumbrances on the
Shares;
(d) This
Agreement constitutes a legal and binding obligation of the Seller, and is
valid
and enforceable against the Seller and Seller’s successors in accordance with
its terms;
(e) Other
than applicable securities laws, there are no restrictions on Seller’s right or
ability to sell the Shares to Purchaser;
(f) The
Shares are registrable in the name of the Purchaser;
(g) The
Seller has full power, authority, and legal right to sell the Shares to the
Purchaser pursuant to the terms of this Agreement;
(h) The
execution, delivery and performance of this Agreement by the Seller does
not
require the consent or approval of any other person, entity or governmental
agency. This Agreement has been duly executed and delivered by Seller and
constitutes a legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with its terms and not in violation of any other
agreements, instruments, order or judgment by which Seller is bound or subject.
The Seller has the full right, power and authority to enter into this Agreement,
to consummate the transactions contemplated hereby and to perform its
obligations under this Agreement, and has taken all necessary action to
authorize such execution, delivery and performance. Seller has duly executed
and
delivered this Agreement, which is a legal, valid and binding obligation
of
Seller, enforceable against Seller in accordance with its terms, except as
such
enforceability may be limited by applicable bankruptcy, insolvency and similar
laws relating to creditors’ rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in
equity or at law)
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(i) The
execution and delivery of this Agreement and the performance of the obligations
imposed on Seller hereunder will not result in a violation of any order,
decree
or judgment of any court or governmental agency having jurisdiction over
Seller
or Seller's properties, will not conflict with constitute a default under,
or
result in the breach of, any contract, agreement or other instrument to which
Seller is a party or is otherwise bound and no consent, authorization or
order
of, or filing or registration with, any court or governmental agency is required
for the execution, delivery and performance of this Agreement by
Seller;
(j) There
is
no litigation or proceeding pending or, to the best knowledge of Seller,
threatened, against Seller, which would have an effect on the validity or
performance of this Agreement;
(k) There
are
no restrictions on the transfer of the Shares to Purchaser and Purchaser
is
entitled to have the Shares registered in its name;
(l) Upon
delivery
of the Shares and payment of the consideration therefor pursuant to this
Agreement, title to such securities, free and clear of all liens, encumbrances
and pledges (except for restrictions on transferability under the Act), will
pass to the Purchaser. The delivery of the Shares to the Purchaser pursuant
to
this Agreement will transfer legal and valid title thereto, free and clear
of
all liens, claims, charges and other encumbrances and other than as set forth
herein, subject to no condition to, or restriction on, the ability of the
holder
thereof to sell, assign or otherwise transfer such securities, whether set
forth
in such security or arising under contract or by operation of law, except
for
restrictions on transferability under the Act and any applicable state
securities laws;
(m) Seller
shall take all action necessary, as the Purchaser shall request, to cause
the
Company and/or its transfer agent to have the Purchaser registered as the
holder
of record of such securities at no cost to the Purchaser;
(n) The
Shares are not subject to any right of first refusal or other similar right
in
favor of any person;
(o) Seller
is
a director, officer, and major stockholder of the Company; and
3. Representations
0f
Purchaser.
Purchaser hereby represents, warrants, and agrees to and with Seller as
follows:
(a) Purchaser
has full power, authority, and legal right to purchase the Shares from Seller,
and the execution of this Agreement by Purchaser does not require the consent
of, or notice to, any party not previously obtained or given;
(b) This
Agreement constitutes a legal and binding obligation of the Purchaser, and
is
valid and enforceable against Purchaser and Purchaser’s successors in accordance
with its terms;
(c) Investment
Representations.
(i) Seller
acknowledges being informed that the Company’s common stock is being received as
part of the purchase consideration and delivered at closing to Purchaser
is not
registered under the Securities Act of 1933;
(ii)
Seller
has not obtained any representative to review or evaluate its purchase of
common
stock in the Company and, by reason of Purchaser’s knowledge and experience in
financial and business matters in general, Purchaser is capable of evaluating
the merits and risks of this transaction; seller has been afforded the
opportunity to have his financial and or legal advisor review or evaluate
the
merits of the transaction herein contemplated.
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(iii)
Seller
has examined this Agreement and has been given access to all underlying
documents related to this transaction, or will be on or before the Closing
date,
and is (or will be) satisfied that it has received such information as Purchaser
deems necessary or appropriate as a prudent and knowledgeable investor to
verify
the accuracy of such information and to evaluate the merits and risks of
buying
common stock in the Company. Purchaser has carefully evaluated its financial
resources, investment condition and the risks attendant upon this investment,
and acknowledges that it is able to bear the economic risks of this
investment;
(iv)
Seller
realizes that neither the Securities and Exchange Commission nor the securities
regulatory body of any country or state has received, considered or passed
upon
the accuracy or adequacy of the information and representations made in this
Agreement;
(v)
At
the
time of this Agreement or on or before the Closing, seller reviewed the economic
consequences of this Agreement, was afforded access to the books and records
of
the Company (including but not limited to corporate minute book and filings
with
the U.S. Securities and Exchange Commission), conducted an independent
investigation of the business of the Company, and was fully familiar with
the
financial affairs of the Company. Seller has had the opportunity to discuss
the
sale of the Shares with Purchaser and the Company, and seller has obtained
or
been given access to all information concerning, including information
concerning the Closing, that seller has requested;
(vii)
Seller
confirms that it has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in the Company and of making an informed investment decision. Seller understands
the term "accredited investor" as used in Regulation D promulgated under
the
United States Securities Act of 1933 and represents and warrants to the
purchaser
Textechnologies, Inc. that seller is an "accredited investor" for purposes
of
acquiring the Common Stock purchased by it hereunder;
(viii)
Seller
acknowledges being informed and agrees that certificates for Company common
stock issued to it are subject to the provisions of securities Regulations
and
(viv)
Both
parties hereby acknowledge that this is not an arms length transaction per
se as
Seller is the largest bloc shareholder of Textechnologies, Inc., though both
acknowledge that the consideration given is both adequate and fair given
current
market evaluations of the company.
(d) Previous Agreements.
Neither
then execution, delivery, nor performance of this Agreement shall conflict
with
or result in the breach of any material term, condition, provision of or
constitute a default under any material agreement, contract instrument or
lease
to which Purchaser is a party or by which Purchaser is bound.
(e) Seller
understands that the Shares and the transfer of Shares pursuant to this
Agreement have not been registered under federal or state securities laws
and
the Shares are “restricted” securities as defined in Rule 144 under the
Securities Act of 1933, as amended (the “Act”). Purchaser understands that the
sale, offer for sale, transfer, pledge or hypothecation of the Shares may
only
be accomplished if there is an effective registration statement covering
that
transaction (under applicable U.S. federal and state securities laws) or
if the
transaction is exempt from registration (under all U.S. federal and state
securities laws)
4
(f) Purchaser
understands that until Closing, Seller shall continue as a director, officer,
and major stockholder of MIDDLETON SETTLEMENT LIMITED, and shall operate
the
business in the ordinary course of business.
4. Representations
of the
Company.
4.1 Due
Organization and
Qualification; Subsidiaries; Due Authorization.
The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of formation, with full corporate
power and authority to own, lease and operate its respective business and
properties and to carry on its respective business in the places and in the
manner as presently conducted. The Company is in good standing as a foreign
corporation in each jurisdiction in which the properties owned, leased or
operated, or the business conducted, by it requires such qualification. The
undersigned signatory executing this Agreement on behalf of the Company is
the
President of the Company and has full authority to execute this Agreement
on
behalf of the Company. The Board of Directors of the Company have approved
the
transactions contemplated by this Agreement.
(a) The
Company does not own, directly or indirectly, any capital stock, equity or
interest in any corporation, firm, partnership, joint venture or other
entity.
(b) The
Company has all requisite corporate power and authority to execute and deliver
this Agreement, and to consummate the transactions contemplated hereby and
thereby. The Company has taken all corporate action necessary for the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, and this Agreement constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance
with
its respective terms, except as may be affected by bankruptcy, insolvency,
moratoria or other similar laws affecting the enforcement of creditors’ rights
generally and subject to the qualification that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefore may be brought.
4.2 No
Conflicts or
Defaults.
The
execution and delivery of this Agreement by the Company and the consummation
of
the transactions contemplated hereby do not and shall not (a) contravene
the
Certificate of Incorporation or By-laws of the Company or (b) with or without
the giving of notice or the passage of time (i) violate, conflict with, or
result in a breach of, or a default or loss of rights under, any covenant,
agreement, mortgage, indenture, lease, instrument, permit or license to which
the Company is a party or by which the Company is bound, or any judgment,
order
or decree, or any law, rule or regulation to which the Company is subject,
(ii)
result in the creation of, or give any party the right to create, any lien,
charge, encumbrance or any other right or adverse interest (“Liens”) upon any of
the assets of the Company, (iii) terminate or give any party the right to
terminate, amend, abandon or refuse to perform, any agreement, arrangement
or
commitment to which the Company is a party or by which the Company’s assets are
bound, or (iv) accelerate or modify, or give any party the right to accelerate
or modify, the time within which, or the terms under which, the Company is
to
perform any duties or obligations or receive any rights or benefits under
any
agreement, arrangement or commitment to which it is a party.
4.3 Financial
Statements.
The
Company shall provided seller financial information, including copies of
the
balance sheets of the Company at 2002, 2003, and 2004 the related statements
of
operations and stockholders’ cash flows for the fiscal years then ended,
including the notes thereto, as audited by the Company, chartered accountants,
and the balance sheet of the Company (all such statements being referred
to
collectively as the “Financial Statements”). The Financial Statements, together
with the notes thereto, have been prepared in accordance with U.S. generally
accepted accounting principles applied on a basis consistent throughout all
periods presented. These statements present fairly the financial position
of the
Company as of the dates and for the periods indicated. The books of account
and
other financial records of the Company have been maintained in accordance
with
good business practices. The Company is aware of no facts or circumstance,
not
disclosed in the Company’s SEC Reports or hereby which adversely affects the
Company assets or affects the financial condition of the Company.
5
4.4 Indebtedness;
Contracts; No
Defaults.
The
Company has no instruments, agreements, indentures, mortgages, guarantees,
notes, commitments, accommodations, letters of credit or other arrangements
or
understandings, whether written or oral, to which the Company is a party
that
are currently in default or past due.
(a) Neither
the Company, nor any other person or entity is in breach or in default under
any
contract, agreement, arrangement, commitment or plan to which the Company
is a
party, and no event or action has occurred, is pending or is threatened,
which,
after the giving of notice, passage of time or otherwise, would constitute
or
result in such a breach or default by the Company or any other person or
entity.
The Company has not received any notice of default under any contract,
agreement, arrangement, commitment or plan to which it is a party.
(i) any
agreement of any nature including but not limited to: any employment or
consulting agreement, contract or commitment, with any employee or individual
consultation or salesperson or consulting or sales agreement, contract or
commitment with a firm or other organization; any agreement or plan, including,
without limitation, any stock option plans, stock appreciation rights plan
or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the occurrence of any
of
the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement, any agreement, contract or commitment containing
any covenant limiting the freedom of Textechnologies, Inc. to engage in any
line
of business or to compete with any person; any agreement, contract or commitment
relating to capital expenditures and involving future payments; any agreement,
contract or commitment relating to the disposition or acquisition of assets
or
any interest in any business enterprise any dealer, distribution, joint
marketing or development agreement; or any other agreement, contract or
commitment.
(ii) any
fidelity or surety bond or completion bond;
(iii)
any
lease
of personal property;
(iv)
any
mortgages, indentures, loans or credit agreements, security agreements or
other
agreements or instruments relating to the borrowing of money or extension
of
credit;
(v)
any
purchase order or contract for the purchase of materials; and
(vi)
any
construction contracts.
4.5 Real
Property.
The
Company currently is leasing it’s space and in negotiations with the Landlord
for possible purchase of the property outright.
4.6 Compliance
with
Law.
The
Company is not conducting its respective business or affairs in violation
of any
applicable federal, state or local law, ordinance, rule, regulation, court
or
administrative order, decree or process, or any requirement of insurance
carriers. The Company has not received any notice of violation or claimed
violation of any such law, ordinance, rule, regulation, order, decree, process
or requirement.
6
(a) The
Company is in compliance with all applicable federal, state, and local laws
and
regulations relating to the protection of the environment and human health.
There are no claims, notices, actions, suits, hearings, investigations,
inquiries or proceedings pending or, to the knowledge of the Company, threatened
against the Company that are based on or related to any environmental matters
or
the failure to have any required environmental permits, and there are no
past or
present conditions that the Company has reason to believe are likely to give
rise to any liability or other obligations of the Company under any
environmental laws.
4.7 Permits
and
Licenses.
The
Company is current in all certificates of occupancy, rights, permits,
certificates, licenses, franchises, approvals and other authorizations as
are
reasonably necessary to conduct its respective business and to own, lease,
use,
operate and occupy its assets, at the places and in the manner now conducted
and
operated. The Company has not received any written or oral notice or claim
pertaining to the failure to obtain any permit, certificate, license, approval
or other authorization required by any federal, state or local agency or
other
regulatory body.
4.8 Litigation.
There
is no claim, dispute, action, suit, proceeding or investigation pending or,
to
the knowledge of the Company, threatened, against or affecting the business
of
the Company, or challenging the validity or propriety of the transactions
contemplated by this Agreement, at law or in equity or admiralty or before
any
federal, state, local, foreign or other governmental authority, board, agency,
commission or instrumentality, nor to the knowledge of Middleton Settlement
has
any such claim, dispute, action, suit, proceeding or investigation been pending
or threatened, during the 12 month period preceding the date hereof; (b)
there
is no outstanding judgment, order, writ, ruling, injunction, stipulation
or
decree of any court, arbitrator or federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, against
or
affecting the business of Middleton Settlement and that it has not received
any
written or verbal inquiry from any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality concerning
the possible violation of any law, rule or regulation or any matter disclosed
in
respect of its business.
4.9 Certificate
of Incorporation
and By-laws; Minute Books.
The
copies of the Certificate of Incorporation and By-laws (or similar governing
documents) of Middleton Settlement and all amendments to each are true, correct
and complete. The minute books of Middleton Settlement contains true and
complete records of all meetings and consents in lieu of meetings of their
respective Board of Directors (and any committees thereof), or similar governing
bodies, since the time of their respective organization. To the best of the
directors knowledge, the stock books of Textechnologies, Inc. are true, correct
and complete.
4.10
Patents;
Trademarks and Intellectual Property Rights. Textechnologies, Inc. does not
own
or possesses any patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, Internet web site(s) or proprietary
rights
of any nature, nor to Textechnologies, Inc. knowledge is Textechnologies,
Inc.
in violation of other’s patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, Internet web site(s) or
proprietary rights of any nature..
4.11
Trading.
Textechnologies, Inc. Common Stock is currently listed for trading on the
OTC
Pink Sheets (the “Bulletin Board”), and Textechnologies, Inc. has received no
notice that its Common Stock is subject to being delisted therefrom. To the
knowledge of Textechnologies, Inc. there is no action, inquiry or investigation
pending or threatened against Textechnologies, Inc. by Nasdaq, the NASD or
the
SEC.
4.12
Consents.
No consent, waiver,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other federal, state,
county, local or other foreign governmental authority, instrumentality, agency
or commission (“Governmental
Entity”)
is
required by or with respect to Middleton Settlement in connection with the
execution and delivery of this Agreement and any Related Agreements to which
the
Company is a party or the consummation of the transactions contemplated hereby
and thereby, except for such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required
under
applicable securities laws.
7
4.20 Employees.
All
employees of Middleton Settlement Limited shall continue to be employed by
Middleton Settlement Limited who shall continue to be their employer , the
employees of Middleton Settlement shall not become employees of Textechnologies,
Inc.
4.21 SEC
Filings; Financial
Statements.
Textechnologies, Inc. has filed all forms, reports and documents required
to be
filed with the SEC (collectively, the “Textechnologies, Inc. SEC
Reports”).
The
Textechnologies, Inc. SEC Reports (i) at the time they were filed, complied
as to form in all respects with the requirements of the Securities Act or
the
Exchange Act, as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement
of fact
or omit to state a fact require 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. Except to the extent set forth in the preceding sentence,
Textechnologies, Inc. makes no representation or warranty whatsoever concerning
the Textechnologies, Inc. SEC Reports as of any time other than the time
they
were filed.
4.22 No
Changes.
In the past 30 calendar days at Middleton Settlement there have not been,
occurred or arisen any:
(a) amendments
or changes to the Certificate of Incorporation or Bylaws
(b) capital
expenditure or commitment
(c) destruction
of, damage to or loss of any assets, business or customer (whether or not
covered by insurance);
(d) labor
trouble or claim of wrongful discharge or other unlawful labor
practice
(e) change
in
accounting methods or practices (including any change in depreciation or
amortization policies or rates)
(f) revaluation
of any assets;
(g) declaration,
setting aside or payment of a dividend or other distribution with respect
to the
capital stock or any direct or indirect redemption, purchase or other
acquisition of its capital stock
(h) increase
in the salary or other compensation whether cash or equity-based, payable
or to
become payable to any of the officers, directors, employees or advisors or
the
declaration, payment or commitment or obligation of any kind for the payment,
of
a bonus or other salary or compensation to any such person;
(i) increase,
or announcement of any increase, in the wages, salaries, compensation, bonuses,
incentives, pension, or other benefits payable to any of employees, consultants,
or directors;
(j) Loans
to
any person or entity, of any indebtedness, of any indebtedness, issuance
or sale
of any debt or guaranteeing of any debt securities of others;
8
(k) waiver
or
release of any right or claim of including any write-off or other compromise
of
any account receivable ;
(l) the
commencement or notice or threat or reasonable basis therefor of any lawsuit;
(m) issuance
or sale, or contract to issue or sell of any shares of the capital stock
or any
or securities exchangeable, convertible or exercisable therefor, or any
securities, warrants, options or rights to purchase any of the
foregoing;
(n) event
or
condition of any character that has had or is reasonably likely to have an
adverse effect upon this transaction;
(o) transaction
outside of the ordinary course of business.
(p) negotiation
or agreement or any officer or employee thereof to do any of the things
described in the preceding clauses (a) through (o).
4.23 Minute
Books.
The minutes of Middleton Settlement (to be delivered to counsel for the
Purchaser on or before the Closing Date) are the only minutes of Middleton
Settlement and contain a reasonably accurate summary of all meetings of the
Board of Directors (or committees thereof) of Middleton Settlement and their
respective shareholders or actions by written consent since the time of
incorporation.
4.24 Environmental
Matters.
(a) Hazardous
Material.
Middleton Settlement has never: (i) operated any underground storage tanks
at any properties at any time owned, operated, occupied or leased;
(b) Hazardous
Materials
Activities.
The
Company has never transported, stored, used, manufactured, disposed of, released
or exposed its employees or others to engaged in any Hazardous Materials
in
violation of any law in effect on or before the Effective Time, nor has either
of them disposed of, transported, sold, or manufactured any product containing
a
Hazardous Material (any or all of the foregoing being collectively referred
to
as “Hazardous Materials Activities”). Activities in violation of any rule,
regulation, treaty or statute promulgated by any Governmental Entity in effect
prior to or as of the date hereof to prohibit, regulate or control Hazardous
Materials or any Hazardous Material Activity.
(c) Environmental
Liabilities.
No
action, proceeding, revocation proceeding, amendment procedure, writ, injunction
or claim is pending, or to the knowledge of the Company, threatened concerning
any Environmental Permit, Hazardous Material or any Hazardous Materials Activity
of the Company. The Company has no knowledge of any fact or circumstance
which
could reasonably be expected to involve the Company in any environmental
litigation or impose upon the Company any environmental liability.
4.25 Compliance
with
Laws.
The Company has not received any notices of violation with respect to, has
complied with, and is not in violation of, and any foreign, federal, state
or
local statute, law or regulation.
4.26 Warranties;
Indemnities.
The Company has not given any warranties or indemnities relating to products
or
technology sold or licensed or services rendered by the Company.
9
4.27 Compliance.
The
Company has complied with all laws, regulations and orders applicable to
its
present and proposed business and has all permits, variances, orders, approvals,
and licenses required thereby. There is no term or provision of any mortgage,
indenture, contract, agreement or instrument to which the Company is a party
or
by which it is bound or of any provision of any existing state or federal
judgment, decree, order, statute, rule or regulation applicable to or binding
upon the Company, that would reasonably cause an adverse effect on the Company
or affect this Agreement, or, so far as the Company may now reasonably foresee,
in the future is reasonably likely to cause an adverse effect on the Company.
None of the Shareholders of the Company nor any employee of the Company is
in
violation of any term of any contract or covenant (either with the Company
or
with another entity) relating to employment, patents, proprietary information
disclosure, non competition or non-solicitation.
5.
Additional
Covenants.
5.1 Brokerage
Commissions and
Finders’ Fees.
There
are no brokerage commissions or finders fees payable as a result of the
transaction.
5.2 Conduct
of
The
Company.
During the period from the date of this Agreement and continuing until the
Closing Date, the Company, agrees to carry on its business in the usual,
regular
and ordinary course in substantially the same manner as heretofore conducted,
to
pay the debts and Taxes of the Company when due, to pay or perform other
obligations when due, and, to the extent consistent with such business, use
its
commercially reasonable efforts consistent with past practice and policies
to
preserve intact the present business organizations of the Company, all with
the
understanding that the Company must eliminate all liabilities of the Company
prior to the Closing Date. The Company shall promptly notify the Purchaser
of
any event or occurrence or emergency not in the ordinary course of business
of
the Company and any material event involving the Company.
5.3 The
Company shall not, without the prior written consent of its board of directors
and if required by law of its majority shareholders:
(a) declare,
set aside or pay any dividends on or make any other distributions (whether
in
cash, stock or property) in respect of any of its capital stock, or split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of capital stock of the Company, or repurchase, redeem or otherwise
acquire, directly or indirectly, any shares of the capital stock of the Company
(or options, warrants or other rights exercisable therefor) except for
repurchases of shares of the Company’s Common Stock from employees of the
Company, as the case may be, in connection with the termination of their
employment;
(b) issue,
grant, deliver or sell or authorize or propose the issuance, grant, delivery
or
sale of, or purchase or propose the purchase of, any shares of the Company
capital stock or securities convertible into, or subscriptions, rights, warrants
or options to acquire, or other agreements or commitments of any character
obligating Middleton Settlement to issue or purchase any such shares or other
convertible securities, or accelerate the vesting of any stock options, except
for the issuance of shares of the Company’s Common Stock upon the exercise or
conversion of those options, warrants or other rights, or convertible securities
that are outstanding on the date hereof;
(c) cause
or
permit any amendments to the Articles of Incorporation or Bylaws of the
Company;
(d) acquire
or agree to acquire by merging or consolidating with, or by purchasing any
assets or equity securities of, or by any other manner, any business or any
corporation, partnership, association or other business organization or division
thereof;
10
(e) sell,
lease, license or otherwise dispose of any of its properties or
assets;
(f) incur
any
indebtedness for borrowed money or guarantee any such indebtedness or issue
or
sell any debt securities or guarantee any debt securities;
(g) grant
any
loans to others or purchase debt securities of others or amend the terms
of any
outstanding loan agreement;
(h) grant
any
severance or termination pay to any director, officer, employee, or service
provider of the Company;
(i) adopt
any
employee benefit plan, or enter into any employment contract, pay or agree
to
pay any special bonus or special remuneration to any director or employee,
or
increase the salaries or wage rates of its employees;
(j) revalue
any of its assets, including without limitation writing down the value of
inventory or writing off notes or accounts receivable other than in the ordinary
course of business;
(k) make
or
change any election in respect of Taxes, adopt or change any accounting method
in respect of Taxes, enter into any closing agreement, settle any claim or
assessment in respect of Taxes, or consent to any extension or waiver of
the
limitation period applicable to any claim or assessment in respect of
Taxes;
(l) accelerate
the vesting schedule of any of the outstanding stock options of the
Company;
(m) take,
or
agree in writing or otherwise to take, any of the actions described in
sub-Sections (a) through (l) above, or any other action that would prevent
the Company from performing or cause the Company not to perform its covenants
hereunder, or any other action not in the ordinary course of the business
or
inconsistent with past practice of the Company.
5.4 Termination
of
Agreements.
The Company shall terminate, or cause to be terminated, prior to the Closing
Date, all agreements between the Company and any person (other than
non-disclosure, confidentiality, invention agreements, and any other agreements
entered into as expressly contemplated and provided for by this Agreement).
There are no subsidiaries of the Company.
5.5 Expenses.
Each
respective Party will pay all expenses and fees of their respective legal
counsel, accountants, and other agents and advisers incurred pursuant to
this
Agreement regardless of whether the transactions contemplated in this Agreement
are consummated.
6. Miscellaneous.
6.1 Entire
Agreement.
This
Agreement constitutes the entire agreement between the Parties with respect
to
the subject matter hereof and the parties acknowledge that the contemplated
transactions constitute related party transactions due to common share
ownerships in the purchaser ,the seller and the company and the company agrees
to disclose the transaction as a related party transaction and accounting
of the
transaction shall reflect the related party nature thereof.
6.2 Notice.
All
notices, requests, demands, directions and other communications (“Notices”)
provided for in this Agreement shall be in writing and shall be mailed or
delivered personally or sent by telecopier or facsimile to the applicable
Party
at the address of such Party set forth below in this Section 6.2. When mailed,
each such Notice shall be sent by first class, certified mail, return receipt
requested, enclosed in a postage prepaid wrapper, and shall be effective
on the
third business day after it has been deposited in the mail. When delivered
personally, each such Notice shall be effective when delivered to the address
for the respective Party set forth in this Section 6.2. When sent by Telecopier
or facsimile, each such Notice shall be effective on the first business day
on
which or after which it is sent. Each such Notice shall be addressed to the
Party to be notified as shown below:
11
Purchaser: Textechnologies,
Inc.
Attention
Xxxxx Xxxxxxxx,
Chief
Executive Officer
Fax.:
(00) 0000-000-0000
Seller:
Charms
Investments Limited
c/o
T F C
Secretarial Services,
Grettton
House, Grand Turks,
Turks
and
Caicos Islands, B.W.I.
Fax:
(00)
0000 000 0000
Either
Party may change his or its respective address for purposes of this Section
6.2
by
giving the other Party notice of the new address in the manner set forth
above.
6.3 Severability.
Whenever possible, each provision of this Agreement shall be interpreted
in such
a manner as to be effective and valid under applicable law, and if any provision
of this Agreement shall be or become prohibited or invalid in whole or in
part
for any reason whatsoever, that provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remaining
portion of that provision or the remaining provisions of this
Agreement.
6.4 Non-Waiver.
The
waiver of any Party of a breach or a violation of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach
or violation of any provision of this Agreement.
6.5 Amendment.
No
amendment or modification of this Agreement shall be deemed effective unless
and
until it has been executed in writing by the Parties to this Agreement. No
term
or condition of this Agreement shall be deemed to have been waived, nor shall
there by any estoppel to enforce any provision of this Agreement, except
by a
written instrument that has been executed by the Party charged with such
waiver
or estoppel.
6.6 Inurement.
This
Agreement shall be binding upon all of the Parties, and it shall benefit,
respectively, each of the Parties, and their respective successors and assigns.
This Agreement shall not be assignable by any Party. There are no third party
beneficiaries to this Agreement.
6.7 Headings.
The
headings to this Agreement are for convenience only; they form no part of
this
Agreement and shall not affect its interpretation.
6.8 Counterparts.
This
Agreement may be executed in one or more counterparts, all of which taken
together shall constitute a single instrument.
6.9 Survival
of Representations
and Warranties.
Each
covenant, agreement, representation, warranty of the Parties under this
Agreement and their obligations hereunder shall survive for two years the
execution of this Agreement.
12
6.10 Arbitration.
Any
controversy arising out of, connected to, or relating to any matters herein
of
the transactions between Seller, the Company, or Purchaser (including for
purposes of arbitration, affiliates, professional advisors, accountants,
attorneys, or agents of the Purchaser, the Company, and/or Seller, on behalf
of
the undersigned, or this Agreement, or the breach thereof, including, but
not
limited to any claims of violations of United States law or statute shall
be
settled by arbitration. In the event of such a dispute, each party to the
conflict shall select an arbitrator, both of whom shall select a third
arbitrator, which shall constitute the three-person arbitration board. The
decision of a majority of the board of arbitrators, who shall render their
decision within thirty (30) days of appointment of the final arbitrator,
shall
be binding upon the parties.
IN
WITNESS WHEREOF, this Agreement is executed on the dates set forth below
to be
effective as of the Effective Date.
PURCHASER:
| ____________________________________________ | |
| Signature | |
| Date: ____________________________________ | By: Textechnologies Inc |
| Title: Xxxxx Xxxxxxxx, Director |
SELLER:
| ____________________________________________ | |
| Signature | |
| Date: ____________________________________ | By: Charms Investments Limited |
| Title: Xxxxxxx Xxxxxxxx, Director |
13
