STOCK PURCHASE AGREEMENT By and Among JEFFREY K. DANIEL, CRAIG L. DANIEL AND EDWARD DANIEL as the Purchasers and OMNI U.S.A., Inc., a Nevada corporation as the Seller Dated as of December ___, 2005
By
and
Among
XXXXXXX
X.
XXXXXX, XXXXX X. XXXXXX AND XXXXXX XXXXXX
as
the
Purchasers
and
OMNI
U.S.A., Inc., a Nevada corporation
as
the
Seller
Dated
as
of December ___, 2005
TABLE
OF CONTENTS
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Page
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ARTICLE
I
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DEFINITIONS
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2
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1.1
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Certain
Defined Terms
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2
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1.2
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Other
Defined Terms
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5
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1.3
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Other
Interpretive Provisions
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6
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|
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||
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ARTICLE
II
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SALE
AND PURCHASE OF SHARES
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6
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2.1
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Transfer
of Shares
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6
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2.2
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Transfer
Taxes
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7
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ARTICLE
III
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CLOSING
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7
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3.1
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Time
and Place
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7
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3.2
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Transactions
at the Closing
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7
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(a)
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Purchasers
shall deliver the Promissory Note to the to Seller;
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7
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(b)
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Seller
shall deliver to Purchasers duly executed stock powers effecting
the
transfer of the Shares to Purchasers, in form reasonably acceptable
to
Purchasers;
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7
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(c)
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Seller
shall deliver to Purchasers the certificate referred to in
Section 8.2(c), and Purchasers shall deliver to Seller the
certificate referred to in Section 8.3(c); and
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7
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(d)
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Seller
shall deliver to Purchasers any and all other assignments, documents,
instruments and conveyances requested by Purchasers to effect the
consummation of the transactions contemplated by this Agreement
and to
evidence Purchasers’ interest in and title to the Shares.
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7
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ARTICLE
IV
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REPRESENTATIONS
AND WARRANTIES OF SELLER
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8
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4.1
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Due
Organization and Good Standing
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8
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4.2
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Authority
to Execute and Perform Agreements
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8
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4.3
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No
Broker
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8
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ARTICLE
V
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NO
REPRESENTATIONS AND WARRANTIES REGARDING THE ACQUIRED
COMPANIES
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8
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5.1
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No
Representations and Warranties as to Acquired Companies
|
8
|
|
5.2
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Access
to Books and Records
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9
|
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5.3
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Independent
Examination and Assumption of Risk
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9
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5.4
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Release
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9
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5.5
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Purchasers
acknowledge that the Shares were pledged to and are in the physical
custody of Textron Financial Corporation as consideration for the
Loan and
Security Agreement dated as of August 2, 2004.
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10
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5.6
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Survival
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10
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-i-
TABLE
OF CONTENTS
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Page
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ARTICLE
VI
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REPRESENTATIONS
AND WARRANTIES OF PURCHASERS
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10
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6.1
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Investment
Representation
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10
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6.2
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No
Purchaser Knowledge of Misrepresentation
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11
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6.3
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No
Broker
|
11
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ARTICLE
VII
|
COVENANTS
AND AGREEMENTS OF THE PARTIES EFFECTIVE PRIOR TO CLOSING
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11
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7.1
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Cooperation;
Consents
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11
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7.2
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Preservation
of Business
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12
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7.3
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Release
of Guarantees, etc
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12
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ARTICLE
VIII
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CONDITIONS
PRECEDENT TO CLOSING
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12
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8.1
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Conditions
Precedent to the Obligation of All Parties to Close
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13
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(a)
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No
Action or Proceeding
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13
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(b)
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Merger
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13
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(c)
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Closing
Transactions
|
13
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8.2
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Conditions
Precedent to the Obligation of Purchasers to Close
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13
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(a)
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Representations
and Warranties
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13
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(b)
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Covenants
|
13
|
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(c)
|
Certificate
|
13
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(d)
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Intellectual
Property
|
13
|
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8.3
|
Conditions
Precedent to the Obligation of Seller to Close
|
13
|
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(a)
|
Representations
and Warranties
|
14
|
|
(b)
|
Covenants
|
14
|
|
(c)
|
Certificate
|
14
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|
(d)
|
Releases.
The obligees of all Sellers shall have released Seller from all
such
Obligations pursuant to documents acceptable to Seller.
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14
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ARTICLE
IX
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COVENANTS
AND AGREEMENTS OF THE PARTIES AFTER CLOSING
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14
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9.1
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Maintenance
of Records by Purchasers
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14
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ARTICLE
X
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INDEMNIFICATION
|
15
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10.1
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Indemnification
by Purchasers
|
15
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10.2
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Notice
to Indemnifying Party
|
15
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10.3
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Third
Party Claims.
|
16
|
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(a)
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Defense
by Indemnifying Party
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16
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(b)
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Defense
by Indemnified Party
|
17
|
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(c)
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Dispute
as to Indemnification Responsibility
|
17
|
|
(d)
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Unauthorized
Settlement
|
18
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(e)
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Computation
of Losses
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18
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-ii-
TABLE
OF CONTENTS
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Page
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ARTICLE
XI
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TERMINATION;
REMEDIES
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19
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11.1
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Termination
Without Default
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19
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(a)
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Mutual
Consent
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19
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(b)
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Merger
|
19
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11.2
|
Attorneys’
Fees
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19
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ARTICLE
XII
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EXPENSES;
PUBLICITY
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19
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12.1
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Expenses
of Sale
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19
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12.2
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Publicity
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19
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ARTICLE
XIII
|
NOTICES
|
20
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13.1
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Notices
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20
|
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ARTICLE
XIV
|
MISCELLANEOUS
|
21
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14.1
|
Further
Assurances
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21
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14.2
|
Modifications
and Amendments; Waivers and Consents
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21
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14.3
|
Entire
Agreement
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21
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14.4
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Governing
Law and Venue
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22
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14.5
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Binding
Effect
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22
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14.6
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Counterparts
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22
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14.7
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Severability
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22
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14.8
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No
Third-Party Rights
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23
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14.9
|
Construction
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23
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-iii-
THIS
STOCK
PURCHASE AGREEMENT, dated as of December ___, 2005, is made and entered
into by and among Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx and Xxxxxx Xxxxxx
(collectively, the “Purchasers”) and Omni U.S.A., Inc., a Nevada corporation
(“Seller”), with reference to the following:
A. As
of the
execution of this Agreement Seller owns all of the issued and outstanding shares
of the capital stock, (the “Shares”) of Omni U.S.A., Inc., a Washington
corporation (“Omni-Washington”), and Xxxxxx Products Corporation (“Xxxxxx”);
(“Xxxxxx and Omni-Washington to be referred to as the “Acquired Companies”);
and
B. Purchasers
wish to purchase the Shares from Seller, and Seller wishes to sell the Shares
to
Purchasers, upon the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual promises
and covenants set forth herein, the parties hereby agree as
follows:
ARTICLE
I
DEFINITIONS
1.1 Certain
Defined Terms.
When
used in this Agreement, the following terms shall have the following
meanings:
“Affiliate”
shall
mean, with respect to any Person, (i) a Person directly or indirectly
controlling, controlled by or under common control with such Person or
(ii) an officer, director, general partner or manager, or a member of the
immediate family of an officer, director, general partner or manager, of such
Person. For these purposes, control means the possession, direct or indirect,
of
the power to direct or cause the direction of the management and policies of
a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise.
“Agreement”
shall
mean this Stock Purchase Agreement, including all exhibits and schedules, as
the
same may hereafter be amended, modified or supplemented from time to time in
accordance with the provisions of Section 14.2.
“Applicable
Law”
shall
mean, with respect to any Person, any domestic or foreign, Federal, state or
local statute, law, ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive, judgment, decree or other requirement of
any
Authority applicable to such Person or any of its Affiliates or any of their
respective properties, assets, officers, directors, general partners, managers,
employees, consultants or agents (in connection with such officer’s, director’s,
general partner’s, manager’s, employee’s, consultant’s or agent’s activities on
behalf of such Person or any of its Affiliates). Applicable Law shall not
include decisions of an Authority that are subject to appeal and are reasonably
expected to be appealed.
“Authority”
shall
mean any governmental, regulatory or administrative body, agency or authority,
any court or tribunal of judicial authority, any arbitrator or any public,
private or industry regulatory authority, whether international, national,
Federal, state or local.
“Business
Day”
shall
mean a day other than a Saturday, Sunday or other day on which commercial banks
in the County of Los Angeles, California are authorized or required by
Applicable Law to close.
“Closing”
shall
mean the consummation of the transactions contemplated by this
Agreement.
“Closing
Date”
shall
mean the date upon which the Closing occurs.
“Contracts”
of
a
Person shall mean all contracts, agreements, notes, indentures, bonds, options,
leases, subleases, easements, mortgages, warranties, guaranties, plans,
collective bargaining agreements, licenses, commitments or binding arrangements
of any nature whatsoever, express or implied, written or unwritten, and all
amendments thereto, entered into or binding upon that Person or to which any
property of that Person may be subject, together with all rights to make claims
thereunder and receive recoveries thereunder.
“Effective
Time”
shall
mean 11:59 p.m. Los Angeles time on the Closing Date.
“Licenses
and Permits”
of
a
Person shall mean all licenses and permits issued to that Person or in which
that Person has any interest (including the right to use).
“Lien”
shall
mean any lien, encumbrance, pledge, mortgage, security interest, lease, charge,
conditional sales contract, option, restriction, reversionary interest, right
of
first refusal, voting trust arrangement, preemptive right, claim under bailment
or storage contract, easement or any other adverse claim or right
whatsoever.
“Losses”
shall
mean all damages, awards, judgments, assessments, fines, penalties, charges,
costs, expenses and other payments, however suffered or characterized, all
interest thereon, all costs and expenses of investigating any claim, lawsuit
or
arbitration and any appeal therefrom, all reasonable attorneys’, accountants’,
investment bankers’ and expert witness’ fees incurred in connection therewith,
whether or not such claim, lawsuit or arbitration is ultimately defeated and,
subject to ARTICLE X, all amounts paid incident to any compromise or
settlement of any such claim, lawsuit or arbitration; provided, however, that
“Losses” shall not include or take account of any concepts of multiplier
valuation, including, without limitation, any multiplier based upon earnings,
cash flow or book value, and that “Losses” shall not include any punitive or
consequential damages.
“Merger”
shall
mean the merger between Omni Merger Sub, Inc., a Michigan corporation, Seller
and Brendan Technologies, Inc., a Michigan corporation.
“Order”
shall
mean any decree, order, judgment, writ, award, injunction, rule or consent
of or
by an Authority.
“Person”
shall
mean any entity, corporation, company, association, joint venture, joint stock
company, partnership, trust, organization, individual (including personal
representatives, executors and heirs of a deceased individual), nation, state,
government (including agencies, branches, departments, bureaus, boards,
divisions and instrumentalities thereof), trustee, receiver or
liquidator.
-3-
“Purchaser
Documents”
shall
mean this Agreement and all other agreements, instruments and certificates
to be
executed and delivered by Purchasers in connection with this
Agreement.
“Seller
Documents”
shall
mean this Agreement and all other agreements, instruments and certificates
to be
executed and delivered by Seller in connection with this Agreement.
“Tax”
shall
mean any and all taxes, fees, levies, duties, tariffs and imposts (together
with
any and all interest penalties and additions to tax assessed with respect
thereto) imposed by any Authority.
“Tax
Benefit”
shall
mean the aggregate of (a) any increased deductions or losses allowable to
the indemnified party for federal income tax purposes in the same year or in
a
subsequent taxable period or reduction in income or gains for federal income
tax
purposes in the same year or in a subsequent taxable period, multiplied by
the
aggregate tax-effected marginal tax rate for the indemnified party, and
(b) the amount of any increase in any Tax credit allowable to the
indemnified party in the same year or in a subsequent taxable period or
reduction in any recapture of Tax credits allowable to the indemnified party
in
the same year or in a subsequent taxable period, in each case determined under
the Applicable Laws in effect on the date of payment and discounted to present
value from the due date of the Tax Return (without extension) for the period
in
which such items are allowable to the date of payment of the indemnification
amount at the prime rate of interest in effect on the date of payment as quoted
in The Wall Street Journal.
“Transfer
Taxes”
shall
mean all Taxes (other than Taxes measured on or by net income) incurred or
imposed upon Seller, Purchaser, the Company or any subsidiary thereof by reason
of the transfer of the Shares to Purchasers pursuant to this Agreement,
including sales and use taxes, real property transfer taxes, excise taxes,
and
stamp, documentary, filing, recording, permit, license, registration or
authorization duties or fees (including penalties and interest in respect of
any
of the foregoing).
1.2 Other
Defined Terms.
In
addition to those terms defined above, the following terms shall have the
respective meanings given to them in the Sections indicated below:
|
Term
|
Section
|
|
Indemnified
Party
|
10.3
|
|
Indemnifying
Party
|
10.3
|
|
Purchase
Price
|
Section 2.2
|
|
Purchasers
|
Preamble
|
|
Shares
|
Preamble
|
|
Seller
Indemnified Parties
|
Section 10.2
|
|
Seller
|
Preamble
|
|
Third
Party Claim
|
10.4
|
1.3 Other
Interpretive Provisions.
References in this Agreement to “Articles,” “Sections,” “Exhibits” and
“Schedules,” shall be to the Articles, Sections, Exhibits and Schedules of this
Agreement, unless otherwise specifically provided; any of the terms defined
in
this Agreement may, unless the context otherwise requires, be used in the
singular or the plural and in any gender depending on the reference; the words
“herein”, “hereof” and “hereunder” and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; and except as otherwise specified in
this Agreement, all references in this Agreement (i) to any Person shall be
deemed to include such Person’s permitted heirs, personal representatives,
successors and permitted assigns; and (ii) to any agreement, any document
or any other written instrument shall be a reference to such agreement, document
or instrument together with all exhibits, schedules, attachments and appendices
thereto, and in each case as amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof; and
(iii) to any law, statute or regulation shall be deemed references to such
law, statute or regulation as the same may be supplemented, amended,
consolidated, superseded or modified from time to time.
-4-
ARTICLE
II
SALE
AND PURCHASE OF SHARES
2.1 Transfer
of Shares.
Subject
to the terms and conditions of this Agreement, at the Closing, Seller shall
sell, transfer and assign the Shares to each Purchaser in the guaranties set
forth on Schedule 1 hereto) , and Purchasers shall purchase, acquire and accept
the Shares from Seller.
2.2 Purchase
Price and Payment Thereof.
The
aggregate amount (the “Purchase Price”) to be paid to Seller for the Shares
shall be Six Hundred Seventy-Two Thousand Dollars ($672,000.00). At the Closing,
Purchasers shall pay the entire Purchase Price to Seller by delivery of a
Promissory Note, in the form set forth as Exhibit A hereto.
2.2 Transfer
Taxes.
Purchasers shall be solely responsible for the payment of any and all Transfer
Taxes incident to the sale and transfer of the Shares contemplated
herein.
ARTICLE
III
CLOSING
3.1 Time
and Place.
The
Closing, which shall be effective as of the Effective Time, shall take place
at
the offices of Xxxx & Xxxxx PC, 0000 Xxxxxxx Xxxx Xxxx, 00xx
Xxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, at 10:00 a.m. local time on the date of the
closing of the Merger, or at such other place and time as Purchasers and Seller
shall mutually agree in writing.
3.2 Transactions
at the Closing.
At the
Closing, the following shall occur, all of which shall be deemed to occur
simultaneously:
(a) Purchasers
shall deliver the Promissory Note to the to Seller;
(b) Seller
shall deliver to Purchasers duly executed stock powers effecting the transfer
of
the Shares to Purchasers, in form reasonably acceptable to
Purchasers;
-5-
(c) Seller
shall deliver to Purchasers the certificate referred to in Section 8.2(c),
and Purchasers shall deliver to Seller the certificate referred to in
Section 8.3(c); and
(d) Seller
shall deliver to Purchasers any and all other assignments, documents,
instruments and conveyances requested by Purchasers to effect the consummation
of the transactions contemplated by this Agreement and to evidence Purchasers’
interest in and title to the Shares.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller
represents and warrants the following to Purchasers.
4.1 Due
Organization and Good Standing.
Seller
is a corporation duly incorporated, validly existing and in good standing under
the Applicable Laws of its jurisdiction of organization.
4.2 Authority
to Execute and Perform Agreements.
Seller
has the requisite right, power and authority to enter into, execute and deliver
this Agreement and all other Seller Documents and to transfer, convey and sell
the Shares to Purchasers at the Closing.
4.3 No
Broker.
No
financial advisor, broker, finder, agent or similar intermediary has acted
for
or on behalf of Seller in connection with this Agreement or the transactions
contemplated herein, and no financial advisor, broker, finder, agent or similar
intermediary is entitled to any broker’s or finder’s or similar fee or other
commission in respect of such transactions based on any agreement, arrangement
or understanding with Seller or the Company.
ARTICLE
V
NO
REPRESENTATIONS AND WARRANTIES
REGARDING
THE ACQUIRED COMPANIES
5.1 No
Representations and Warranties as to Acquired Companies.
Seller
is conveying the Shares to Purchasers in an “As Is” transaction, and Seller is
not making any representation, warranty or assurance whatsoever to Purchasers
with respect to the Acquired Companies or their assets, liabilities, Contracts,
operations, businesses or prospects. Further, to the fullest extent permitted
by
Applicable Law, Seller disclaims as to the Acquired Companies’ assets any
implied or express warranty of merchantability, any implied or express warranty
of fitness for any particular purpose, any implied or express warranty with
respect to physical condition and any other warranty of any nature which may
be
implied by applicable statutory or judicial authority.
5.2 Access
to Books and Records.
Purchasers acknowledge that it has conducted any and all inspections,
investigations, interviews of management, financial and operating personnel,
audits and analyses with respect to the Acquired Companies and their assets,
liabilities, Contracts, operations and businesses which it has elected to make
or obtain.
-6-
5.3 Independent
Examination and Assumption of Risk.
Purchasers further acknowledge that they are familiar with the assets,
liabilities, operations, Contracts and business of the Acquired Companies as
a
result of their former ownership interest and executive positions with Seller
and that in electing to purchase the Shares hereunder, Purchasers are relying
exclusively upon its own independent investigations and examinations of all
matters relating to the Acquired Companies and not upon (a) any statement
of Seller, the Acquired Companies or any of their respective officers,
directors, managers, employees, agents, accountants, financial advisors or
attorneys not contained herein or (b) the genuineness, accuracy or
completeness of any of the books and records of the Acquired Companies. Finally,
Purchasers acknowledge that the nature of the circumstances surrounding the
recent acquisition of the controlling interest in Seller has been such that
Seller would not necessarily be aware of whether there exists any fact or
circumstance which would not be discoverable by Purchasers in their
investigations but which, if known to Purchasers, would materially affect
Purchasers’ decision to purchase the Shares; that it is a material inducement to
Seller’s entering into the transaction contemplated herein that it not be
required to undertake the effort and expense of the additional investigations,
examinations and due diligence which would be required to enable it to be aware
of any such matters; and that, therefore, neither Seller, the Acquired Companies
nor any other Person has made, nor are Purchasers relying upon, any
representation or warranty whatsoever concerning the Acquired Companies or
their
respective assets, liabilities, Contracts, operations, businesses or prospects,
other than the limited representations and warranties set forth in
ARTICLE IV.
5.4 Release.
Purchasers for themselves and on behalf of all of their Affiliates, hereby
generally, fully and irrevocably releases Seller, its agents, employees,
Affiliates, independent contractors and other representatives from any and
all
claims that Purchasers or any such Affiliate may now have or hereafter acquire
against any of them in respect of any cost, loss, liability, damage, expense,
action or cause of action, whether foreseen or unforeseen, known or unknown,
arising out of or related to any patent, latent or other defects in or the
physical or environmental condition of the Owned Real Property or the property
leased by the Acquired Companies under any real property leases. With respect
to
the releases and waivers set forth in this Section 5.4, Purchasers
expressly waive the benefits of Section 1542 of the California Civil Code,
which provides as follows:
“A
general
release does not extend to claims which the creditor does not know or suspect
to
exist in his favor at the time of executing the release, which if known by
him
must have materially affected his settlement with the debtor.”
Purchasers
have been advised by its legal counsel and understands the significance of
this
waiver of Section 1542 relating to unknown, unsuspected and concealed
claims. By its initials below, Purchaser acknowledges that it fully understands,
appreciates, and accepts all of the terms of this Section 5.4.
|
________________
Purchaser
Initials
|
_______________
Purchaser
Initials
|
________________
Purchaser
Initials
|
-7-
5.5 Purchasers
acknowledge that the Shares were pledged to and are in the physical custody
of
Textron Financial Corporation as consideration for the Loan and Security
Agreement dated as of August 2, 2004.
5.6 Survival.
The
provisions of this Article V shall survive the Closing
indefinitely.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES OF PURCHASERS
Each
Purchaser represents and warrants to Seller that:
6.1 Investment
Representation.
Purchaser will acquire the Shares solely for its own account for investment
and
not with a view toward any resale or distribution thereof. Each Purchaser agrees
that the Shares may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under the Securities
Act of 1993, except pursuant to an exemption from such registration available
under such Act, and without compliance with foreign securities laws, in each
case, to the extent applicable. Each Purchaser has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of its purchase of the Shares.
6.2 No
Purchaser Knowledge of Misrepresentation.
No facts
or circumstances are believed by Purchasers to exist which, if within Seller’s
knowledge, would constitute a breach of any representation, warranty or covenant
of Seller set forth in this Agreement or any Seller Document.
6.3 No
Broker.
No
broker, finder, agent or similar intermediary has acted for or on behalf of
Purchasers in connection with this Agreement or the transactions contemplated
hereby, and no broker, finder, agent or similar intermediary is entitled to
any
broker’s, finder’s, or similar fee or other commission in connection therewith
based on any agreement, arrangement or understanding with Purchasers or any
action taken by Purchasers.
ARTICLE
VII
COVENANTS
AND AGREEMENTS OF THE PARTIES
EFFECTIVE
PRIOR TO CLOSING
7.1 Cooperation;
Consents.
Prior to
the Closing Date, each party shall cooperate with the other to the end that
the
parties shall (a) in a timely manner make all necessary filings with, and
conduct negotiations with, all Authorities and other Persons the consent or
approval of which, or a License or Permit from which, is required for the
consummation of the transactions contemplated herein and (b) provide to
each other party such information as the other party may reasonably request
in
order to enable it to prepare such filings and to conduct such negotiations.
The
parties shall also use their respective best efforts to expedite the review
process and to obtain all such necessary consents, approvals, licenses and
permits as promptly as practicable. All such notices and requests for third
party (i.e., non-Authority) approvals shall seek the complete release of Seller
and its post-closing Affiliates from any and all liability to the third party.
Purchasers shall assume and bear the risk and consequences of (including, but
not limited to, any claims by any third party for breach of contract), and
shall
indemnify and hold harmless Seller and its post-Closing Affiliates from and
against, any and all Losses incurred, suffered by or claimed against them
directly or indirectly as a result of, based upon or arising from any failure
to
obtain any required approvals of third parties in connection with the
transactions contemplated by this Agreement, and in no event shall the failure
to obtain any such approvals excuse Purchasers from their obligations to effect
the Closing. Purchasers shall bear all costs and expenses (including fees paid
to Authorities) incurred to obtain such consents, approvals, licenses and
permits.
-8-
7.2 Preservation
of Business.
From the
date hereof through the Closing Date, Seller shall cause the Company to conduct
its business only in the ordinary course and consistent with its prior
practices.
7.3 Release
of Guarantees, etc.
Before
and, if necessary, after the Closing, Purchasers shall cooperate with Seller
in
seeking to have Seller and their Affiliates released from all guarantees,
indemnities and other liabilities that Seller or any such Affiliate has given
or
incurred in respect of the indebtedness or obligations of Omni-Washington and
Xxxxxx (the “Parent Obligations”). In this regard Purchasers shall use
commercially reasonable efforts to substitute, as of the Closing Date,
Purchasers or any of its Affiliates (or such other Person as may be acceptable
to the obligee thereunder) for Seller or its Affiliates as a party to each
such
guaranty, indemnity or other arrangement and to cause Seller and their
Affiliates to be forever released from all liability in respect thereof. From
and after the Closing, Purchasers shall be responsible for, and shall indemnify
Seller and all other Seller Indemnified Parties from and against, all Losses
incurred by Seller and such other Seller Indemnified Parties or their insurers
under any such guaranty, indemnity or other arrangement.
ARTICLE
VIII
CONDITIONS
PRECEDENT TO CLOSING
8.1 Conditions
Precedent to the Obligation of All Parties to Close.
The
obligations of Seller and Purchasers to consummate the transactions contemplated
hereby shall be subject to the fulfillment, at or prior to the Closing, of
all
of the conditions set forth below:
(a) No
Action or Proceeding.
No
preliminary or permanent injunction or other Order nor any Applicable Law shall
be in effect enjoining or otherwise materially impairing the consummation of
the
transactions contemplated by this Agreement.
(b) Merger.
The
Merger shall have closed.
(c) Closing
Transactions.
All of
the transactions required under Section 3.2 shall have
occurred.
8.2 Conditions
Precedent to the Obligation of Purchasers to Close.
The
obligation of Purchasers to consummate the transactions contemplated hereby
shall be subject to the fulfillment, at or before the Closing Date, of the
following conditions:
(a) Representations
and Warranties.
The
representations and warranties of Seller contained in this Agreement and in
any
Seller Document that are qualified by materiality shall be true and correct
as
of the Closing Date, and the representations and warranties of Seller contained
in this Agreement that are not so qualified shall be true and correct in all
material respects as of the Closing Date, in each case as if made as of the
Closing Date (other than such representations and warranties as are made as
of
another date, which shall be true and correct as of such date), except for
changes permitted or contemplated by this Agreement.
-9-
(b) Covenants.
The
covenants and agreements contained in this Agreement to be complied with by
Seller at or before the Closing shall have been complied with in all material
respects.
(c) Certificate.
Seller
shall have delivered to Purchasers a certificate to the effect of
Sections 8.2(a) and (b) signed by Seller and addressed to Purchases and
their lenders.
(d) Intellectual
Property.
All
intellectual property owned by Seller prior to the Effective Time shall have
been transferred to Omni-Washington or Xxxxxx pursuant to documents reasonably
acceptable to Purchasers.
8.3 Conditions
Precedent to the Obligation of Seller to Close.
The
obligation of Seller to consummate the transactions contemplated hereby shall
be
subject to the fulfillment, at or before the Closing Date, of the following
conditions:
(a) Representations
and Warranties.
The
representations and warranties of Purchasers contained in this Agreement and
any
Purchaser Document that are qualified by material adverse effect shall be true
and correct as of the Closing Date, and the representations and warranties
of
Purchasers contained in this Agreement that are not so qualified shall be true
and correct in all material respects as of the Closing Date, in each case as
if
made as of the Closing Date (other than such representations and warranties
as
are made as of another date, which shall be true and correct as of such date),
except for changes permitted or contemplated by this Agreement.
(b) Covenants.
The
covenants and agreements contained in this Agreement to be complied with by
Purchasers at or before the Closing shall have been complied with in all
material respects.
(c) Certificate.
Purchasers shall have delivered to Seller a certificate to the effect of
Sections 8.3(a) and (b) signed by Purchasers and addressed to
Seller.
(d) Releases.
The
obligees of all Sellers shall have released Seller from all such Obligations
pursuant to documents acceptable to Seller.
ARTICLE
IX
COVENANTS
AND AGREEMENTS OF THE PARTIES AFTER CLOSING
9.1 Maintenance
of Records by Purchasers.
In order
to facilitate the resolution of any claims relating to the Company or its
business made against or incurred by Seller or any of its Affiliates prior
to
the Closing or arising out of facts or circumstances in existence prior to
the
Closing, for a period of seven (7) years after the Closing, Purchasers shall
(i) retain, or cause the Company to retain, the books and records of the
Company relating to periods prior to the Closing in a manner reasonably
consistent with their past practices and (ii) upon reasonable notice,
afford the officers, employees and authorized agents and representatives of
Seller and its Affiliates and successors-in-interest reasonable access to all
such books and records during normal business hours (including the right, at
their expense, to make photocopies thereof).
-10-
ARTICLE
X
INDEMNIFICATION
10.1 Indemnification
by Purchasers.
Each
Purchaser shall indemnify defend and hold harmless Seller, each of Seller’s
Affiliates, assigns and successors in interest, and each of their respective
stockholders, members, partners, directors, officers, managers, employees,
agents, attorneys and representatives (collectively, the “Seller Indemnified
Parties”), from and against any and all Losses which may be incurred or suffered
by any such party and which may arise out of or result from (a) any breach
of any representation, warranty, covenant or agreement of Purchasers contained
in this Agreement or in any other Purchaser Document, (b) the operations of
Xxxxxx and Omni-Washington before and after the Closing Date. (c) any claim
that
the transaction contemplates herein were improper or invalid, and (d) the
enforcement by any Seller Indemnified Party of any of its rights under this
Section 10.1 or any other indemnification covenant contained in this
Agreement or any other Purchaser Document.
10.2 Notice
to Indemnifying Party.
Any
party (the “Indemnified Party”) seeking indemnification pursuant to this
Agreement shall promptly give the party from whom such indemnification is sought
(the “Indemnifying Party”) written notice of the matter with respect to which
indemnification is being sought, which notice shall specify in reasonable
detail, if known, the amount or an estimate of the amount of the liability
arising therefrom and the basis of the claim or indemnification obligation.
Such
notice shall be a condition precedent to any liability of the Indemnifying
Party
for indemnification hereunder, but the failure of the Indemnified Party to
give
such prompt notice shall not adversely affect the Indemnified Party’s right to
indemnification hereunder unless, in the case of a claim made by a third party,
the defense of that claim is materially prejudiced by such failure.
10.3 Third
Party Claims.
(a) Defense
by Indemnifying Party.
In
connection with any indemnification claim arising out of a claim or legal
proceeding (a “Third Party Claim”) by a Person who is not a party to this
Agreement, the Indemnifying Party at its sole cost and expense may, upon written
notice to the Indemnified Party, assume the defense of any such Third Party
Claim (a) if it acknowledges to the Indemnified Party in writing its
obligations to indemnify the Indemnified Party with respect to all elements
of
such Third Party Claim (subject to any limitations on such liability contained
in this Agreement). If the Indemnifying Party assumes the defense of any such
Third Party Claim, it may use counsel of its choice to prosecute such defense,
subject to the approval of such counsel by the Indemnified Party, which approval
shall not be unreasonably withheld or delayed. The Indemnified Party shall
be
entitled to participate in (but not control) the defense of any such Third
Party
Claim, with its counsel and at its own expense. If the Indemnifying Party
assumes the defense of any such Third Party Claim, the Indemnifying Party shall
take all steps necessary to pursue the resolution thereof in a prompt and
diligent manner, and the Indemnified Party shall cooperate with the Indemnifying
Party in such defense and make available to the Indemnifying Party all
witnesses, pertinent records, materials and information in the Indemnified
Party’s possession or its control relating thereto as are reasonably required by
the Indemnifying Party, without cost to the Indemnifying Party. The Indemnifying
Party shall be entitled to consent to a settlement of, or the stipulation of
any
judgment arising from, any such Third Party Claim, with the consent of the
Indemnified Party, which consent shall not be unreasonably withheld or delayed;
provided, however, that no such consent shall be required from the Indemnified
Party if (a) the Indemnifying Party pays or causes to be paid all Losses
arising out of such settlement or judgment concurrently with the effectiveness
thereof (as well as all other Losses theretofore incurred by the Indemnified
Party which then remain unpaid or unreimbursed), (b) in the case of a
settlement, the settlement is conditioned upon a complete release by the
claimant of the Indemnified Party and (c) such settlement or judgment does
not require the encumbrance of any asset of the Indemnified Party or impose
any
restriction upon its conduct of business. Notwithstanding the foregoing,
however, Seller, if it is the Indemnified Party, shall in all cases be entitled
to control of the defense of any such action if it (a) may result in
liabilities which, taken with other then existing claims by the Seller
Indemnified Parties under this ARTICLE X, would not be fully indemnified
hereunder, or (b) may have an adverse impact on the operations or the
financial condition of Seller or any of its Affiliates (including an effect
on
the tax liabilities, earnings or ongoing business relationships of Seller or
any
of its Affiliates thereafter) even if the Indemnifying Party pays all
indemnification amounts in full.
-11-
(b) Defense
by Indemnified Party.
If the
Indemnifying Party acknowledges in writing its obligation to indemnify the
Indemnified Party with respect to such Third Party Claim but declines to assume
and control the defense thereof or fails to give notice of its intention to
do
so to the Indemnified Party within 30 days after its receipt of notice of such
Third Party Claim from the Indemnified Party, the Indemnified Party shall assume
and control the defense of such Third Party Claim; the Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make available to
the
Indemnified Party, at the Indemnifying Party’s expense, all such witnesses,
records, materials and information in the Indemnifying Party’s possession or
under its control relating thereto as are reasonably required by the Indemnified
Party; and the Indemnifying Party shall be permitted to join in the defense
of
such Third Party Claim and employ counsel at its expense. No such Third Party
Claim may be settled by the Indemnified Party without the prior written consent
of the Indemnifying Party, which shall not be unreasonably
withheld.
(c) Dispute
as to Indemnification Responsibility.
If the
Indemnifying Party does not acknowledge in writing its obligation to indemnify
the Indemnified Party with respect to such Third Party Claim, the Indemnified
Party may assume and control the defense thereof and the Indemnifying Party
shall cooperate with the Indemnified Party in such defense and make available
to
the Indemnified Party, at the Indemnified Party’s expense, all such witnesses,
records, materials and information in the Indemnifying Party’s possession or
under its control relating thereto as are reasonably required by the Indemnified
Party. The Indemnifying Party shall be permitted to join in the defense of
such
Third Party Claim and employ counsel at its expense. No such Third Party Claim
may be settled by either party without the prior written consent of the other
party, which shall not be unreasonably withheld. In the event that it is
ultimately determined that the Indemnified Party is not entitled to indemnity
hereunder with respect to such Third Party Claim, the Indemnifying Party shall
have no liability to the Indemnified Party with respect to any Losses relating
thereto. In the event that it is ultimately determined that the Indemnified
Party is entitled to indemnity hereunder with respect to such Third Party Claim,
the Indemnifying Party shall be liable to the Indemnified Party for all Losses
sustained by the Indemnified Party relating thereto; provided, however, that
in
the event that a settlement offer solely for money damages is made by the Third
Party Claimant, and the Indemnifying Party notifies the Indemnified Party in
writing of the Indemnifying Party’s willingness to accept the settlement offer
and pay the amount called for by such offer in the event that it is ultimately
determined that the Indemnified Party is entitled to indemnity hereunder with
respect to such Third Party Claim, and the Indemnified Party declines to accept
such offer, the liability, if any, of the Indemnifying Party hereunder shall
be
limited to the lesser of (i) the amount of the settlement offer that the
Indemnified Party declined to accept or (ii) the aggregate Losses of the
Indemnified Party with respect to such claim.
-12-
(d) Unauthorized
Settlement.
If the
Indemnified Party settles any Third Party Claim without the consent of the
Indemnifying Party in contravention of any of the provisions of this
Section 10.4, the Indemnified Party shall not be entitled to indemnity
hereunder with respect to such Third Party Claim.
(e) Computation
of Losses.
For
purposes of calculating any Losses suffered by an Indemnified Party pursuant
to
Sections 10.1 or 10.2, or under any other specific indemnification covenant
contained in this Agreement, the amount of the Losses suffered by the
Indemnified Party shall be the net amount of costs, expenses, losses or damages
so suffered after giving effect to (i) any insurance proceeds recoverable
with respect to the indemnified matter, (ii) any Tax Benefits attributable
to such Losses and (iii) any other expenditures no longer required to be
made by the Indemnified Party as a result of such indemnified matter. Each
Loss
shall bear interest at a fluctuating rate of interest equal to the prime rate
(as published in the Wall Street Journal) from the date incurred to the date
the
indemnification payment with respect thereto is made.
ARTICLE
XI
TERMINATION;
REMEDIES
11.1 Termination
Without Default.
Anything
herein to the contrary notwithstanding, this Agreement and the transactions
contemplated by this Agreement may be terminated only as follows (and in no
other manner):
(a) Mutual
Consent.
By the
mutual consent in writing of the parties.
(b) Merger.
The
Merger does not close.
11.2 Attorneys’
Fees.
If
Seller or Purchasers bring an action against the other by reason of any alleged
breach of any covenant, provision or condition hereof, or otherwise arising
out
of this Agreement, the unsuccessful party shall pay to the prevailing party
all
reasonable attorneys’ fees and costs incurred by the prevailing party, in
addition to any other relief to which it may be entitled.
-13-
ARTICLE
XII
EXPENSES;
PUBLICITY
12.1 Expenses
of Sale.
Purchasers shall bear all direct expenses incurred in connection with the
negotiation and preparation of this Agreement and the other Seller Documents
or
Purchaser Documents, as the case may be.
12.2 Publicity.
Up to
the Effective Time, no publicity release or announcement concerning this
Agreement or the transactions contemplated herein shall be issued without
advance written approval of the form and substance thereof by Purchasers and
Seller (which approval shall not be unreasonably withheld or delayed); provided,
however, that such restrictions shall not apply to any disclosure required
by
Authorities, Applicable Law or the rules of any securities exchange which may
be
applicable. For a period of ten (10) days after the Closing Date, the parties
shall consult with each other before issuing any press release or public
statement with respect to this Agreement or the transactions contemplated
hereby, and, except as may be required by Applicable Law or the rules of any
securities exchange which may be applicable, will not issue any such press
release or public statement prior to such consultation.
ARTICLE
XIII
NOTICES
13.1 Notices.
All
notices, requests and other communications hereunder shall be in writing and
shall be delivered by courier or other means of personal service (including
by
means of a nationally recognized courier service or professional messenger
service), or sent by telex or telecopy or mailed first class, postage prepaid,
by certified mail, return receipt requested, in all cases addressed
to:
|
Purchasers:
|
c/o
Asia Capital, Inc
0000
Xxxx Xxxx
Xxxxxxx,
Xxxxx 00000
Attn:
Xxxxxxx Xxxxxx
Fax:
000-000-0000
|
|
With
a copy to:
|
Xxxxxxx
Xxxxxxx, Esq.
000
X. Xxxxxxxx Xxxxxx
Xxxxxxxx
XX 00000
Fax:
(000) 000-0000
|
|
Seller:
|
Xxxx
Xxxx
Research
Center Plaza
0000
Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
|
|
With
a copy to:
|
Xxxxx X.
Xxxxxxxx
Xxxx
& Xxxxx PC
0000
Xxxxxxx Xxxx Xxxx, 00xx
Xxxxx
Xxx
Xxxxxxx, XX 00000
Fax:
(000) 000-0000
|
-14-
All
notices, requests and other communications shall be deemed given on the date
of
actual receipt or delivery as evidenced by written receipt, acknowledgement
or
other evidence of actual receipt or delivery to the address specified above.
In
case of service by telecopy, a copy of such notice shall be personally delivered
or sent by registered or certified mail, in the manner set forth above, within
three (3) Business Days thereafter. Any party hereto may from time to time
by
notice in writing served as set forth above designate a different address or
a
different or additional Person to which all such notices or communications
thereafter are to be given.
ARTICLE
XIV
MISCELLANEOUS
14.1 Further
Assurances.
Each of
the parties shall use its reasonable and diligent best efforts to proceed
promptly with the transactions contemplated hereby, to fulfill the conditions
precedent for such party’s benefit or to cause the same to be fulfilled and to
execute such further documents and other papers and perform such further acts
as
may be reasonably required or desirable to carry out the provisions hereof
and
the transactions contemplated hereby.
14.2 Modifications
and Amendments; Waivers and Consents.
At any
time prior to the Closing Date or termination of this Agreement, all of the
parties hereto may, in writing, amend or modify this Agreement, extend the
time
for the performance of any of the obligations or other acts hereunder, waive
any
inaccuracies in the representations and warranties contained herein or in any
other agreement or document delivered in connection herewith, or waive
compliance with any of the covenants or agreements contained herein; provided,
however, that no such waiver shall operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
or
permits a waiver or consent by or on behalf of any party hereto, such waiver
or
consent shall be given in writing.
14.3 Entire
Agreement.
This
Agreement (including any exhibits hereto, the Seller Disclosure Schedule and
the
Purchaser Disclosure Schedule) and the agreements, documents and instruments
to
be executed and delivered pursuant hereto or thereto or in connection herewith
or therewith are intended to embody the final, complete and exclusive agreement
among the parties with respect to the purchase of the Shares and related
transactions; are intended to supersede all prior agreements, understandings
and
representations written or oral, with respect thereto; and may not be
contradicted by evidence of any such prior or contemporaneous agreement,
understanding or representation, whether written or oral.
14.4 Governing
Law and Venue.
This
Agreement is to be governed by and construed in accordance with the Applicable
Laws of the State of California pertaining to contracts made and to be performed
wholly within such State, and without regard to the conflicts of laws principles
thereof. Any suit brought hereon, whether in contract, tort, equity or
otherwise, shall be brought in the state or federal courts sitting in the County
of Los Angeles, California, the parties hereto hereby waiving any claim or
defense that such forum is not convenient or proper. Each party hereby agrees
that any such court shall have in personam jurisdiction over it, consents to
service of process in any manner prescribed in ARTICLE XII or in any other
manner authorized by California law, and agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner specified by
Applicable Law.
-15-
14.5 Binding
Effect.
This
Agreement and the rights, covenants, conditions and obligations of the
respective parties hereto and any instrument or agreement executed pursuant
hereto shall be binding upon the parties and their respective successors,
assigns and legal representatives. Neither this Agreement, nor any rights or
obligations of any party hereunder, may be assigned by Seller or Purchasers
without the prior written consent of the other party hereto.
14.6 Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts, each
of
which shall be deemed an original of the party or parties who executed such
counterpart but all of which together shall constitute one and the same
instrument. In making proof of this Agreement it shall not be necessary to
produce or account for more than one counterpart evidencing execution by each
party hereto.
14.7 Severability.
In the
event that any provision or any part of any provision of this Agreement shall
be
void or unenforceable for any reason whatsoever, then such provision shall
be
stricken and of no force and effect. However, unless such stricken provision
goes to the essence of the consideration bargained for by a party, the remaining
provisions of this Agreement shall continue in full force and effect, and to
the
extent required, shall be modified to preserve their validity.
14.8 No
Third-Party Rights.
Nothing
in this Agreement, whether express or implied, is intended to confer any rights
or remedies under or by reason of this Agreement on any Persons other than
the
parties to it, each Indemnified Party, and their respective successors and
assigns, nor is anything in this Agreement intended to relieve or discharge
the
obligation or liability of any third Persons to any party to this Agreement,
nor
shall any provision give any third Persons any right of subrogation over or
action against any party to this Agreement.
14.9 Construction.
The
language in all parts of this Agreement shall in all cases be construed simply,
according to its fair meaning, and not strictly for or against any of the
parties hereto. Without limitation, there shall be no presumption against any
party on the ground that such party was responsible for drafting this Agreement
or any part thereof, and any rule of law, including, but not limited to,
Section 1654 of the California Civil Code, or any legal decision that would
require interpretation of any claimed ambiguities in this Agreement against
the
party that drafted it has no application and is expressly waived.
-16-
IN
WITNESS
WHEREOF, the parties hereto have duly executed this Agreement as of the day
and
year first above written.
| SELLER: | ||
| OMNI U.S.A., INC. | ||
|
a
Nevada Corporation
|
||
| |
|
|
| By: | ||
|
Name: Xxxx X. Xxxx, XX |
||
|
Title:
Chairman
|
||
| PURCHASERS: | ||
| |
|
|
|
Xxxxxxx X. Xxxxxx |
||
|
|
||
| |
|
|
|
Xxxxxx Xxxxxx |
||
| |
|
|
|
Xxxxx X. Xxxxxx |
||
-17-
