EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS AGREEMENT made this 23 day of November, 2003, by and between
XXXXXXX XXXXXXX, individually and as Trustee of the Xxxxxxx Xxxxxxx Revocable
Living Trust ("Trust") ("Seller") and WALL ST. ACQUISITIONS, INC. ("Buyer").
RECITALS:
The following is a recital of facts underlying this Agreement:
Trust is the legal and beneficial owner of Forty (40) shares (the
"Shares"), representing one hundred (100%) percent of the issued and outstanding
shares of capital stock of Xxxxxx Welding Co. ("EWCO"), a Michigan corporation.
Seller has agreed to sell, and Buyer has agreed to buy, the Shares,
as well as any and all dividends now owing or hereafter to be declared thereon,
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of and in reliance upon the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. SALE AND PURCHASE. Seller shall sell and convey to Buyer, and
Buyer shall buy from Seller, the Shares, subject to the terms and conditions of
this Agreement.
2. A. PURCHASE PRICE AND PAYMENT. Buyer shall pay One Million
Eighty-Five Thousand Four Hundred Fifty 00/100
($1,085,450.00) Dollars (the "Purchase Price") for the
Shares. The Purchase Price shall be paid as follows:
(i) Seven Hundred Thirty-Five Thousand Four Hundred
Fifty and 00/100 ($735,450.00) Dollars in cash, by
cashier's check or wire transfer at Closing; and
(ii) The balance of Three Hundred Fifty Thousand and
00/100 ($350,000.00) Dollars in the form of common
shares of stock of Buyer (the "Share
Consideration") valued based on the price per
share for those shares (the "Private Placement
Shares") sold by Buyer during its private
placement of shares occurring between the date
hereof and Closing. (For example, if the Private
Placement Shares are sold for Five and 00/100
[$5.00] Dollars per share, Seller will receive
seventy thousand [70,000] common shares of Buyer's
stock.)
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B. SHARE CONSIDERATION. Seller understands and acknowledges
that Buyer is planning to merge with and into a "public
shell" upon or shortly following Closing. Upon such
merger, Seller shall receive the same treatment as all
other similarly situated stockholders of Buyer, which
would likely mean the exchange of the Share
Consideration for shares in the public shell. In that
event, the shares held by Seller will be subject to Rule
144 of the Securities Act and the restrictions on
transfer as set forth therein.
3. CLOSING. The Closing of the transactions contemplated by this
Agreement shall take place at the offices of Xxxxxx & Xxxxxx Attorneys, P.C.,
00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000, on or
before December 31, 2003, or as soon thereafter as the conditions precedent
contained in this Agreement have been satisfied, but if the conditions precedent
have not been satisfied and or waived by the applicable party in writing, the
Agreement shall terminate, as provided in Section 12, on January 31, 2004 (the
Closing Date"). Buyer may, at its option, accelerate the Closing Date upon five
(5) days prior written notice to Seller, subject to the satisfaction of the
Seller's conditions precedent. The Seller may, at its option, in the event that
a judgment is entered against Seller or EWCO in a certain lawsuit involving the
Xxxxxx family and the Seller's purchase of the Shares from them, accelerate the
Closing Date upon twenty (20) days prior written notice to Buyer, and Buyer
shall either close on the transaction upon the tenth day regardless of the
satisfaction of the conditions precedent or terminate the Agreement, in which
case neither party shall have any further liability or responsibility to the
other under the Agreement.
A. ACTIONS BY SELLER. At Closing, Seller shall deliver to
Buyer:
(i) The Shares, free and clear of all liens and
encumbrances thereon of every kind or nature, duly
endorsed in blank for transfer, or accompanied by
stock powers duly executed in blank or an executed
assignment separate from certificate;
(ii) The right to possession, to the extent that Seller
has or can obtain possession, of all keys, locks,
safe deposit boxes, safe combinations and other
similar items which Buyer shall require to obtain
full occupation and control of EWCO's assets and
properties;
(iii) The written blanket resignations of all officers
and directors of EWCO (except that Seller shall
continue as a director and shall have, following
Closing, the officer title of President);
(iv) The right to possession, to the extent that Seller
has or can obtain possession, of all minute books,
stock record books, books of account, corporate
seals, leases, contracts, agreements, securities,
customer lists, files and other documents,
instruments and paper (whether existing on paper,
film or other media or in electronic form)
belonging to
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EWCO, and shall cause full possession and control
of all the tangible and intangible assets and
properties of EWCO of every kind and nature, to be
accessible by Buyer;
(v) The Employment Agreement referred to in
Subparagraph 7K of this Agreement;
(vi) The certificate required by Subparagraph 9A of
this Agreement; and
(vii) Those other Closing certificates or documents
which Buyer or its counsel may reasonably request.
B. ACTIONS BY BUYER. At Closing, Buyer shall deliver, or in
the case of Subparagraph 3B(iii) shall cause EWCO to
deliver, to Seller:
(i) Cashier's check or wire transfer of funds in the
amount required by Subparagraph 2A of this
Agreement;
(ii) Those shares of common stock of Buyer representing
the Share Consideration;
(iii) The Employment Agreement referred to in
Subparagraph 7K of this Agreement;
(iv) Appropriate evidence of all necessary corporate
action by Buyer in connection with the
transactions contemplated by this Agreement,
including resolutions duly adopted by Buyer
approving the transactions contemplated by, and
authorizing the execution, delivery and
performance by Buyer, of this Agreement; and
(v) Such other Closing certificates or documents as
Seller or his counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents
and warrants to Buyer as follows:
A. GOOD STANDING. EWCO is a corporation duly organized,
existing and in good standing under the laws of the
State of Michigan, has full power and authority to own
its properties and to carry on its business as now
conducted, and is in good standing and duly qualified to
conduct business in each of the jurisdictions in which
the ownership or leasing of its properties or the
conduct of its business requires such qualification,
except for Tennessee in which EWCO has not registered
and in which EWCO maintain a sales office and employee
as salesman for the solicitation of orders in Tennessee.
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B. BYLAWS, MINUTE BOOKS AND RECORD BOOKS. Seller shall make
available for inspection at any reasonable time by
Buyer's duly authorized representative the bylaws,
minute books and record books of EWCO which Seller,
during Seller's period of owning the Shares, has
maintained as true, accurate and complete including
through the Closing Date. Seller does not represent the
completeness or accuracy of the minute books and record
books of EWCO for periods outside the Seller's ownership
of the Shares. All corporate action taken by EWCO during
Seller's period of ownership of the Shares has been duly
authorized in accordance with the bylaws of EWCO. In
addition, copies of any minutes of any meetings held or
of documents otherwise constituting corporate action by
EWCO subsequent to the execution of this Agreement shall
be properly recorded and shall be promptly furnished to
Buyer upon request.
C. SUBSIDIARIES. EWCO has no subsidiary or parent
corporation and no material aspect of the businesses of
EWCO is currently conducted through any (and there is
no) entity affiliated with EWCO or Seller, nor is any
asset comprising any portion of EWCO's business owned by
any such entity.
D. COMPETING INTERESTS. Except for the ownership of less
than a one (1%) percent interest in securities of
corporations the shares of which are publicly traded,
neither EWCO nor Seller and, to Seller's Knowledge, none
of EWCO's directors, officers or employees who report
directly to Seller, owns, directly or indirectly, any
interest or has any investment or profit or other
financial or economic participation in any corporation
or other entity which is a competitor of or which
otherwise, directly or indirectly, does business with
EWCO.
E. CAPITAL STOCK. EWCO has the following authorized
capitalization and shares issued and outstanding:
AUTHORIZED TREASURY PREFERRED
CAPITAL ISSUED AND OUTSTANDING SHARES SHARES
5,000 40 common None None
All of the outstanding shares identified as issued and
outstanding (which constitute the Shares) have been duly
authorized and validly issued and are fully paid and
nonassessable. One Hundred (100%) percent of the Shares
are owned by Seller. All treasury shares have been
cancelled and constitute authorized but unissued shares.
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F. STOCK. The Shares are, and on the Closing Date shall be,
unencumbered and owned legally and beneficially by
Seller with the lawful right, power and title of Seller
to sell, transfer, assign, convey and deliver the Shares
to Buyer free and clear of any liens, claims,
encumbrances or restrictions of any kind or nature
whatsoever. On the Closing Date, the Shares shall
constitute all of the outstanding equity interests in
EWCO. Upon delivery to Buyer, the Shares shall be free
and clear of all voting and other trust arrangements,
liens, claims, charges and encumbrances.
G. RIGHT TO PURCHASE OR ACQUIRE. No one now has, nor on the
Closing Date shall have, any equity or rights by way of
warrant, option, subscription, rights of exchange,
plans, contract or otherwise to purchase or otherwise
acquire (nor is EWCO obligated to issue) any portion of
the Shares or other capital stock or securities or
assets of EWCO to any person or entity, other than Buyer
under this Agreement.
H. FINANCIAL CONDITION. Schedule 4H consists of copies of
EWCO's financial statements (including balance sheets
and the related statements of income, stockholders'
equity and cash flows) for the fiscal years ended
December 31, 2001 and December 31, 2002, the period
ended June 30, 2003, the period ended September 30, 2003
and any interim monthly financial statements generated
from and after the date hereof which shall thereupon
become part of Schedule 4H (all of which are
collectively referred to as the "Financial Statements").
To Seller's Knowledge, the Financial Statements:
(i) Are true, complete and correct in all material
respects;
(ii) Fairly present the properties, assets, financial
position and results of operations of EWCO as of
the respective dates and for the respective
periods stated above; and
(iii) Have been prepared pursuant to and in accordance
with generally accepted accounting principles
applied on a consistent basis.
To Seller's Knowledge, for the respective dates and for
the respective periods stated in the Financial
Statements, all inventories reflected in the Financial
Statements have been valued in the aggregate at cost,
with cost determined using the first-in, first-out
method; adequate provision has been made in the
Financial Statements for doubtful accounts contested as
to existence or amount or doubtful as to collectibility;
and sales are stated in the Financial Statements net of
discounts, returns and allowances. Seller further
represents and warrants to Seller's Knowledge that EWCO
has not had and does not
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have any liability or obligation, whether accrued,
absolute, or contingent, arising out of transactions
entered into or any state of facts existing as of the
dates of the Financial Statements, except to the extent
reflected therein or on any Schedule attached hereto,
and except for contractual or other obligations of
performance (other than obligations arising by reason of
a default in performance) not required to be reflected
in the Financial Statements under generally accepted
accounting principles consistently applied. To Seller's
Knowledge, no provision in the Financial Statements is
necessary, under generally accepted accounting
principles, for liability on account of product
warranties or with respect to the design, development,
manufacture or sale of defective products or the
delivery of faulty services. To Seller's Knowledge, any
items of income or expense which are unusual or of a
nonrecurring nature are separately disclosed in the
Financial Statements.
I. NO DIVIDENDS, SPLITS AND CALLS. With the exception of S
Corporation tax distributions made by EWCO to the
Seller, since the date of June 30, 2003, EWCO has not
declared or paid any cash dividend nor any stock
dividend nor declared to be made any stock distribution
or authorized the creation of or issued or authorized or
effected any stock split or any securities convertible
into stock, or directly or indirectly redeemed,
purchased or otherwise acquired any of its stock or
agreed to take any such action, and through the Closing
Date Seller and/or EWCO shall not cause, authorize, take
or permit any of the foregoing actions, without Buyer's
prior written consent, except for the distribution to
the Seller of a certain note receivable describe in
Section 4W which may be distributed by EWCO to the
Seller prior to the Closing Date, and for which Seller
shall bear all tax obligations, if any, of Seller and
EWCO relating to such distribution.
J. ABSENCE OF MATERIAL CHANGE. To Seller's Knowledge,
except as described in Schedule 4J, any other Schedule
or in the Financial Statements, since June 30, 2003,
there have not been any material adverse changes, either
individually or in the aggregate, in the general
affairs, business, prospects, properties, financial
position, results of operations, or net worth of EWCO;
its business affairs have since such date been conducted
in the same manner as theretofore conducted and in the
usual and ordinary course, including payment of all
expenses and other obligations in the usual and ordinary
course; after the close of business on such date no
transaction has taken place or contract entered by EWCO
other than in the usual and ordinary course of business;
and specifically, without limitation of the foregoing,
since such date no material sales, removals, transfers
or deliveries of inventory (other than shipments of
inventory in the usual and ordinary course of business
consistent
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with past practices), machinery, fixtures or other
tangible or intangible assets of any nature have been
made.
K. NO MATERIAL LOSS. Since June 30, 2003, there have not
been any material casualties affecting EWCO or material
loss, damage or destruction to any of its properties or
assets.
L. CONTRACTS. To Seller's Knowledge, since June 30, 2003,
EWCO has not:
(i) Raised salaries, hourly rates or the rate of
bonuses or commissions or other compensation of
its personnel or agents, except for normal
increases therein consistent with past practice;
(ii) Materially varied insurance coverage;
(iii) Entered into (other than in the ordinary course of
business), materially amended or terminated any
material contract, agreement, franchise, permit or
license, except as described on Schedule 4L;
(iv) Compromised, released or settled any accounts
receivable or other claims against other persons,
or forgiven any debt owed to EWCO, except as
described on Schedule 4L; or
(v) Agreed to do any of the foregoing, except for any
agreement regarding the distribution of the
Seller's note receivable described in Section 4W,
and for which Seller shall bear all tax
obligations, if any.
M. UNDISCLOSED MATERIAL LIABILITIES. Except with respect to
liabilities incurred in the usual and ordinary course of
EWCO's business and liabilities disclosed in any
Schedule to this Agreement, Seller does not have
Knowledge of any fact, circumstance or condition which
might reasonably give rise to any material liability to
EWCO of any kind or nature whatsoever which is not
adequately reflected or specifically disclosed in the
Financial Statements, except for the liability of EWCO
in the amount of One Hundred Forty-Four Thousand and
00/100 ($144,000.00) Dollars relating to the recently
concluded arbitration involving Seller.
N. TAX LIABILITY. Schedule 4N shall contain copies of all
tax returns, including any amendments thereto, filed on
behalf of EWCO since January 1, 2001, along with the
dates on which each of those returns was filed. To
Seller's Knowledge, EWCO has, and on the Closing Date
shall have, properly, timely and accurately filed any
and all tax
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returns and governmental reports which are required to
be filed in all required jurisdictions; has properly
paid, and shall have properly paid on the Closing Date,
all amounts which have become or shall become a
liability or lien (except liens for taxes not yet due),
including but not limited to, all amounts as shown on
said returns and/or reports and also on all assessments
and all notices of deficiency or assessment; and has
not, and prior to the Closing Date shall not have,
without the written consent of Buyer, executed or agreed
to any waivers of rights or statutes of limitations on
any claims against it or on the right of any taxing or
governmental authority to assess additional taxes or
claims or to contest the income or loss reported with
respect to any tax period.
O. FULL DISCLOSURE. Seller does not have Knowledge of any
untrue or materially misleading statements made by
Seller in connection with this Agreement, or of any
events, transactions or other facts not disclosed in
writing to the Buyer which, either individually or in
the aggregate, might reasonably give rise to
circumstances or conditions which might have a material
adverse effect on the general affairs, business,
prospects, properties, financial position, results of
operations or net worth of EWCO.
P. GOOD TITLE. EWCO has a valid leasehold interest in all
leases of personalty, has good and transferable title to
all personalty of any kind or nature included among its
assets, and has a valid legal right to use all other
personalty used by it in its business, and to Seller's
Knowledge, all of the personalty included among its
assets are free and clear of all liens, encumbrances,
claims or other conditions affecting title or use except
for liens described in Schedule 4P.
Q. CONDITION OF ASSETS. To Seller's Knowledge, except as
listed on Schedule 4Q, all buildings and improvements
and all of the machinery and equipment owned or used by
EWCO are in good repair and reasonable operating
condition (given their age and normal wear and tear) and
are adequate to carry on EWCO's business as presently
conducted.
R. TITLE TO AND CONDITION OF REAL PROPERTY. EWCO owns no
real property. Schedule 4R contains a copy of the
applicable leases of real property leased by EWCO
("Leases"). The Leases are valid and enforceable and
neither EWCO nor the landlord is in default of the
Leases. To Seller's Knowledge, the properties, the use
of such properties and the conduct therein of the
business of EWCO do not violate any law, rule or
regulation of any governmental authority, including but
not limited to environmental laws, zoning ordinances and
building codes. The properties are served by utilities,
including but not limited to water, sewage, gas, waste
disposal, electricity and
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telephone, and Seller is not aware of any inadequacies
with respect to such utilities. To Seller's Knowledge,
no governmental authority having jurisdiction over the
properties has given any notice of a possible future
imposition of special assessments affecting such
properties or the exercise of the power of eminent
domain.
S. ENVIRONMENTAL. Except as disclosed in Schedule 4S and
except as to matters described in the 2001 Phase I and
II environmental assessment reports, the 2001 drain
sampling report, the 2001 Michigan site delisting
request, or the baseline environmental assessment all
prepared by ASTI for EWCO, to Seller's Knowledge EWCO
currently is, and during the period of xxxx Xxxxxx has
owned the shares has been, in compliance with all local,
state and federal laws and regulations regulating the
use, storage, transportation or disposal of hazardous
materials.
T. LIST OF CUSTOMERS AND CONTRACTS. Schedule 4T-1 lists the
ten (10) largest customers of, and Schedule 4T-2 lists
the ten (10) largest suppliers to, EWCO during the
twelve (12) months ended December 31, 2002, and the nine
(9) months ended September 30, 2003 (stating for each
the dollar volume of the sales or purchases, as the case
may be and the products sold or bought). Schedule 4T-3
shall list and include copies of (if in writing), all of
the existing contracts and commitments of EWCO of any
kind or nature whatsoever whether written or unwritten
involving consideration in excess of $25,000 or the
performance of which will not be complete within one
year from the date of this Agreement (including, without
limiting the generality of the foregoing, all collective
bargaining agreements; leases; notes and all other
evidences of indebtedness; mortgages; guarantee
agreements; pension, stock option, stock purchase,
bonus, profit sharing and other employee or executive
welfare or benefit plans or agreements; sales
representation and distribution agreements; purchase
orders and commitments; product warranties; and powers
of attorney), except only:
(i) each contract with a customer made (a) in the
usual and ordinary course of business on or after
the date hereof, or (b) prior to the date hereof
whereby EWCO is obligated to deliver less than
Twenty Five Thousand and 00/100 ($25,000.00)
Dollars in invoice value of finished goods in each
transaction or series of related transactions; and
(ii) each purchase commitment made (a) in the usual and
ordinary course of business at prevailing prices
on or after the date hereof, or (b) prior to the
date hereof which is not in excess of Twenty Five
Thousand and 00/100 ($25,000.00) Dollars in each
transaction or series of related transactions;
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The forms of written purchase and sales orders
used by EWCO are also included as part of Schedule
4T-3.
U. VALID OBLIGATION. To Seller's Knowledge, except as
otherwise indicated, all of the agreements, contracts
and commitments listed in Schedule 4T-3 and all of the
agreements, contracts and commitments not required to be
listed by reason of clauses (i) or (ii) of Subparagraph
4T are valid and binding obligations of the parties
thereto in accordance with their respective terms and
there has occurred no event which would constitute any
breach of or default in any provision of any such
agreement, contract or commitment or which would permit
the acceleration of any obligation of any party thereto
or the creation of a lien or encumbrance upon any asset
of EWCO or which would give rise to any such liabilities
upon the giving of notice or lapse of time. No
information has been brought to the attention of Seller
which might reasonably lead Seller to believe that any
such customer or supplier intends to alter in any
material respect the amount of such customer's or
supplier's dealings with EWCO, or would alter in any
material respect those dealings in the event of the
consummation of the transactions contemplated hereby.
V. LAWFUL OPERATION. To Seller's Knowledge, all of EWCO's
transactions have been conducted on an arms-length
basis. No portion of EWCO's sales or other ongoing
business relationships is dependent upon the friendship
or the personal relationships (other than those
customary within business generally) of Seller or any of
EWCO's officers, directors or other key employees. To
Seller's Knowledge, no employee of EWCO has violated the
published business policies of any third party with
respect to gifts, services or corporate business
practices.
W. RELATED LOANS. Except as described in Schedule 4W, EWCO
does not have outstanding loans or other advances
directly or indirectly to or from any stockholder, any
officer, director or employee of EWCO or any entity in
which Seller has a direct or indirect interest, other
than travel advances and business or entertainment
expenses in the usual and ordinary course of business,
and the note receivables of EWCO in the current amount
of $2,933,144 as of September 30, 2003 due EWCO from
Seller ("Seller Receivable"). The Seller shall at any
time prior to the Closing Date distribute the Seller
Receivable to Seller and upon such distribution, the
Seller Receivable will terminate and be of no further
effect, and Seller shall bear any and all tax
obligations of Seller and EWCO relating to such
distribution.
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X. COMPLIANCE. To Seller's Knowledge and except as
described in Subparagraph 0X, XXXX, with regard to its
business, assets, business practices and products, has
complied with all applicable laws, regulations, orders
and other requirements of governmental authorities,
except where such noncompliance does not have a material
adverse effect; is not subject to any judicial
governmental or administrative order, judgment or
decree; and no investigation, governmental or
administrative proceeding or other litigation of any
kind or nature to which it may be a party is now pending
or threatened. To Seller's Knowledge EWCO has obtained
all governmental licenses, permits, approvals,
authorizations, exemptions, classifications and
certificates material to the conduct of EWCO's business
or to the ownership of its properties (collectively
referred to herein as "Licenses"). Schedule 4X shall
list and include copies of all Licenses. To Seller's
Knowledge, except for normal returns (consistent with
past experiences of EWCO), there is no liability of EWCO
on account of product warranties or arising out of
working conditions in the manufacture or sale of
products or with respect to the manufacture or sale by
Seller of defective products or with respect to services
performed.
Y. LABOR LAW COMPLIANCE. Except as described in Schedule
4Y, no employees of EWCO are represented by a union or
other labor organization; to Seller's Knowledge, EWCO
has complied with all applicable laws affecting
employment and employment practices, terms and
conditions of employment and wages and hours, and has
not engaged in any unfair labor practice, except where
such noncompliance does not have a material adverse
effect; neither Seller nor EWCO has received notice of
any charge or complaint alleging unfair labor practices
against EWCO filed with the National Labor Relations
Board; since January 1, 2001 there has been no labor
strike, slowdown or stoppage and neither EWCO nor Seller
has received notice that any such action is pending or
threatened against or affecting EWCO; to Seller's
Knowledge, no representation question exists respecting
the employees of EWCO; neither Seller nor EWCO has
received notice of any charge or grievance or
arbitration proceeding against EWCO arising out of or
under a collective bargaining agreement and to Seller's
Knowledge, no basis therefor exists; except under the
collective bargaining agreement disclosed in Schedule 4Y
and as may be required by law, no agreement which is
binding on EWCO, other than its real property lease,
restricts it from relocating or closing any of its
operations; and EWCO has not experienced any work
stoppage since January 1, 2001. There are no employee
benefit plans currently maintained by EWCO which are
subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") other
than those which shall be listed and included as part of
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Schedule 4T-3. To Seller's Knowledge, each of such plans
complies in all respects with the Internal Revenue Code
of 1986, as amended, and ERISA and the regulations
thereunder. Except as disclosed in Schedule 4Y, the
value of all accrued benefits are fully funded by the
assets of such plans. Schedule 4Y shall include copies
of the most recent trustee reports with respect to each
such plan. Except as disclosed in Schedule 4Y, no
"employee welfare benefit plans" and "employee pension
benefit plans" (within the meaning of Section 3[1] and
3[2], respectively, of ERISA) of EWCO have been
terminated since January 1, 2001. Schedule 4Y shall
include, to the extent required to be prepared and
furnished to participants, copies of all Internal
Revenue Service "determination letters" received by EWCO
for each plan.
Z. CONDITION OF INVENTORY. Except as set forth in Schedule
4Z and on the Financial Statements, to Seller's
Knowledge, all of the inventories (including raw
materials, work in process and finished goods) of EWCO
are in good condition, nondefective, and are usable in
the business of EWCO and, as to finished goods, are
saleable in the usual and ordinary course of EWCO's
business as conducted as of the date hereof, given
customary inventory turn experience.
AA. RECEIVABLES. Schedule 4AA shall list all receivables
written off doubtful as to collection or as to
which a reserve has been provided since December 31,
2002. Except the receivables listed on Schedule 4AA, to
Seller's Knowledge, all of EWCO's receivables existing
as of Closing (i) arise out of completed, bona fide
sales and deliveries of goods or services by EWCO in the
ordinary course of business and in accordance with the
terms and conditions of all related purchase orders,
contracts or other documents, and (ii) are fully
collectible given reasonable collection efforts by Buyer
or EWCO, including discounts, material offsets,
disputes, deductions or defenses, but excluding normal
returns (based on and consistent with past experiences
of EWCO).
BB. PERSONAL PROPERTY. Schedule 4BB-1 shall list all of the
tangible personal property and the ownership thereof
which is either owned or used by EWCO except for (i)
items of finished inventory, work in process and raw
materials, (ii) items having an initial cost of Five
Thousand and 00/100 ($5,000.00) Dollars or less, (iii)
items listed on Schedule 4BB-2 and (iv) items to be
acquired after the date hereof to the extent the
acquisition thereof is not prohibited under Paragraph 7
hereof. Except as described in Schedule 4BB-1, to
Seller's Knowledge, all tangible personal property owned
or used by EWCO is situated at the business premises of
EWCO and is currently used by EWCO in connection with
EWCO's business. Schedule 4BB-2 shall list or describe
all tangible personal property owned by or an
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interest in which is claimed by any other person
(whether a customer, supplier or other person) for which
EWCO is responsible, and to Seller's Knowledge, all such
property is in the actual possession of EWCO and is in
such physical condition that upon return of such
property in its present condition to its owner, EWCO
shall not be liable in any amount to such owner as a
result of such condition. Seller shall make available to
Buyer upon request copies of all written agreements
relating to the property listed on Schedule 4BB-2.
CC. INTELLECTUAL PROPERTY. Except as set forth on Schedule
4CC, EWCO owns no copyrights, patents, invention
disclosures, trademarks, service marks, whether
registered or at common law, applications therefor that
are pending or in the process of preparation. To
Seller's Knowledge, EWCO has not received notice that it
has or is now conducting its business in a manner which
is in violation of the intellectual property rights of
another. The manufacturing and engineering drawings,
process sheets, specifications, bills of material, trade
secrets, "know-how" and other like data of EWCO are
presently, and shall remain, at EWCO's premises.
DD. EMPLOYEES. Schedule 4DD-1 shall set forth the names,
positions and annual salaries of all officers and other
non-hourly rated employees of EWCO receiving
compensation at an annual rate (including bonuses,
commissions and other compensation) in excess of Thirty
Thousand and 00/100 ($30,000.00) Dollars, together with
the amount of bonuses and description of agreements or
arrangements, both oral and written, formal or informal,
for commissions and other compensation or benefits of
any nature to be paid or provided to any such persons
pursuant to agreement or custom or present
understanding. Except for the life insurance policies
described on Schedule 4DD-1, there are no insurance
policies on the lives of any of such officers or such
other persons, other than under EWCO's group policies,
the premiums of which have been paid or contributed by
EWCO. Schedule 4DD-1 shall also include copies of the
written employment agreements for the employees
identified. Schedule 4DD-2 shall list any officer or
other key employee of EWCO who terminated employment
with EWCO since January 1, 2001. Seller has no Knowledge
that any key employee (including Seller) is considering
the termination of employment. Except as specifically
identified on Schedule 4DD-1, all of EWCO's employees
are employed on an "at-will" basis.
EE. INSURANCE. Schedule 4EE shall contain a full and
complete list of all policies of insurance insuring the
real and personal property of EWCO and policies insuring
EWCO against risks. To Seller's
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Knowledge, all of the policies of insurance described
therein (copies of which are to be delivered as part of
Schedule 4EE) are in full force and effect as stated
therein and the premiums therefor have been paid as they
became due and payable.
FF. LITIGATION. Except as set forth on Schedule 4FF, there
is no litigation or proceeding pending, or to Seller's
Knowledge threatened against or relating to EWCO, its
properties or business, nor does Seller know of any
basis for any such action, or of any governmental
investigation relative to EWCO, its properties or
business.
GG. LAWFUL EXECUTION. Seller has full power and authority to
enter into this Agreement and to consummate the
transactions contemplated herein, and this Agreement and
any ancillary document executed by Seller has been duly
executed and delivered by Seller and is a valid and
legally binding obligation of Seller and is enforceable
in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, or
similar laws affecting creditors rights generally and by
general equitable principles (regardless of whether
considered in a proceeding at law or in equity). The
execution of this Agreement or the consummation of the
transaction contemplated herein will not result in a
breach or a default under an agreement contract, order
or judgment or other document to which Seller or EWCO is
a party or to which Seller's or EWCO's properties or
assets are subject.
HH. POWER TO SELL. Seller has complete and unrestricted
power to sell, assign and deliver to Buyer good and
unencumbered marketable title to the Shares, and at the
Closing, such title shall vest in Buyer.
The phrase "Seller's Knowledge" (or any similar variation) shall
mean (i) that information actually known to Seller, and (ii) that
information which a reasonable and prudent, informed chief executive
officer would, under the circumstances, be aware of.
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
A. DULY ORGANIZED. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Michigan.
B. LAWFUL EXECUTION. Buyer now has, or will have at
Closing, full corporate power to execute, deliver and
enter into this Agreement and to consummate the
transactions contemplated herein, and neither the
execution of this Agreement nor the consummation of the
transactions contemplated herein shall constitute or
cause a breach or
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violation of the charter or bylaws of Buyer or of any
covenants or obligations binding it or affecting any of
its properties.
C. AUTHORITY RELATIVE TO THIS AGREEMENT. The execution and
delivery of this Agreement by Buyer and the consummation
by it of the transactions contemplated have been duly
and validly authorized by all necessary corporate action
on the part of Buyer, and no other corporate proceedings
are necessary to authorize this Agreement or to
consummate the transactions contemplated. This Agreement
has been duly executed and delivered by Buyer and
constitutes (and will constitute) a legal, valid and
binding agreement of Buyer, enforceable against Buyer in
accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditor's rights generally and
by general equitable principles (regardless of whether
considered in a proceeding at law or in equity). The
execution and delivery of this Agreement by Buyer does
not, and the performance of this Agreement by it will
not require any consent, approval, authorization or
permit of, or filing with or notification to, any
governmental entity.
6. SURVIVAL OF AGREEMENTS AND REPRESENTATIONS. The agreement
referred to in Subparagraph 7K shall survive the Closing in accordance with its
terms. The representations, warranties and other agreements herein contained
shall survive the Closing and, notwithstanding any investigation (which does not
clearly reveal a breach of representation or warranty) by a party hereto, shall
continue in full force and effect for a period of twelve (12) months after the
Closing. The Seller shall have no liability (for indemnification or otherwise)
for breach of any covenant, obligation, representation or warranty, unless the
Buyer, in good faith, notifies the Seller in writing of the claim specifying the
factual basis for the claim in reasonable detail on or before the expiration of
the eighteen (18) month period from Closing. Notwithstanding the foregoing, the
representations and warranties contained in Subparagraphs 4E and 4F shall
forever survive the Closing and shall remain in full force and effect.
7. SELLER'S OBLIGATION PRIOR TO CLOSING. Seller covenants and
agrees that after the date hereof until Closing:
A. CONDUCT OF BUSINESS. Seller shall cause EWCO to carry on
its business in a good and diligent manner consistent
with prior practice in the usual and ordinary course,
shall not introduce any new method of management or
operation, shall consult with Buyer on a regular basis
with respect to all decisions which might materially
affect the business or the assets of EWCO and shall use
reasonable efforts to preserve EWCO's business
organization intact and conserve the goodwill and
relationships of its customers, suppliers and others
having business relations with it and to retain the
services of all officers, employees, agents and
representatives.
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B. MAINTAIN EXISTENCE. Seller shall maintain the corporate
existence of EWCO in good standing in the State of
Michigan and in each jurisdiction in which it is
qualified to do business.
C. EMPLOYEE COMPENSATION. Except with Buyer's prior written
consent or as described in Schedule 4L with respect to
normal increases consistent with past practice, no
increase shall be made in the compensation or rate of
compensation payable or to become payable to the
employees of EWCO and no new bonus, profit sharing,
retirement, insurance, death benefit, fringe benefit or
other extraordinary or indirect compensation shall
accrue, be set aside or be paid for or on behalf of any
of such employees, and no agreement or plan with respect
to the same shall be adopted or committed to.
D. NEW CONTRACTS. Except with Buyer's prior written
consent, neither Seller nor EWCO shall waive any
material right or cancel, compromise or release any
material contract, debt or claim, or assume or enter
into any material contract, lease, license, obligation,
indebtedness, commitment, purchase or sale except
contracts for the sale or purchase of goods or services
in the usual and ordinary course. For purpose of this
Subparagraph 7D, all indebtedness for borrowed money,
and commitments or agreements having a duration in
excess of three (3) months (other than sales contracts
with customers in the usual and ordinary course of
business), are deemed to be material and not in the
usual and ordinary course of business.
E. DISPOSITIONS. Except with Buyer's prior written consent,
neither Seller nor EWCO shall acquire or dispose of any
capital asset having an initial cost of Three Thousand
and 00/100 ($3,000.00) Dollars or more.
F. ENCUMBRANCES. Except with Buyer's prior written consent,
Seller shall not cause EWCO to enter into or assume any
mortgage, pledge, conditional sale contract, security
agreement or title retention agreement, or permit any
lien, encumbrance or claim of any kind to attach to any
of EWCO's assets, whether now owned or hereafter
acquired.
G. INVENTORY. Seller shall not cause EWCO to materially
alter the physical contents or character of any of
EWCO's inventories so as to affect the nature of its
business or result in a change in the total dollar
valuation thereof other than as a result of transactions
in the usual and ordinary course of business.
H. AFFIRMATIVE OBLIGATIONS. Seller shall:
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(i) cause EWCO to maintain and keep in existing
condition, consistent with past practice, all of
EWCO's buildings, offices, shops and other
structures, and keep all machinery, tools,
equipment, fixtures and other property in the same
condition, repair and working order as existing at
the date hereof subject to normal wear and tear;
(ii) not merge or consolidate EWCO with any
corporation, business or other entity or cause
EWCO to acquire any asset of any other
corporation, business or other person (other than
inventory in the usual and ordinary course of
business of EWCO or as otherwise specifically
permitted by this Agreement);
(iii) not do any act or omit any act or permit any
omission to act, within Seller's control, which
shall cause a breach or default in any of EWCO's
contracts, commitments or obligations;
(iv) from the date hereof until Closing, afford Buyer,
its counsel and accountants, full access during
normal business hours and on reasonable notice to
all of EWCO's plants, offices, properties and
records including such access as may be necessary
to allow Buyer at its expense to make an audit or
otherwise satisfy itself of the accuracy of the
representations contained in this Agreement and
that the conditions contained in this Agreement
have been satisfied or complied with and Seller
shall furnish documents and all such other
information concerning EWCO's properties and
business as Buyer may reasonably request;
provided, however, that any investigation or
inquiry made by Buyer (which does not clearly
reveal a breach of a representation or warranty)
shall not affect the representations and
warranties contained in this Agreement or their
survival of the Closing; and
(v) shall continue to carry EWCO's existing insurance,
subject to variations in amounts required by
ordinary operations of the business through
Closing.
I. EXISTING AGREEMENTS. Seller shall not materially modify,
amend, cancel or terminate any of EWCO's existing
contracts or agreements, or agree to do so, without
Buyer's prior written consent, except as may occur in
the ordinary course of EWCO's business or which is
specifically permitted under this Agreement.
J. REPRESENTATIONS. Seller shall not take any action or
omit to take, any action within Seller's reasonable
control to the extent such action or omission might
result in any representation or warranty contained in
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this Agreement being inaccurate or incorrect in any
material respect on and as of the date of Closing.
K. EMPLOYMENT AGREEMENT. At the Closing, Seller shall
execute an Employment Agreement in the form attached
hereto as Exhibit 7K. Buyer shall cause EWCO to execute
that agreement at Closing.
L. EXCLUSIVITY. Seller shall use all reasonable efforts to
prevent the disclosure of any of the terms or conditions
hereof by Seller to any person other than the employees,
agents and representatives of EWCO that have a need to
know of the transaction, Seller's legal, accounting and
tax professionals, and to those persons that are
anticipated by the terms of this Agreement, such as by
way of example, those persons informed of the
transaction through Seller's participation in the
Buyer's capital raising efforts, and as long as this
Agreement shall remain effective, Seller shall not
negotiate with any other person with respect to the sale
of the Shares or the assets of EWCO.
M. CHANGEOVER ASSISTANCE. Prior to Closing, Seller shall
provide Buyer with access to EWCO's managerial employees
employed in connection with the operations of EWCO to
assist Buyer in all reasonable manner with its
investigations, preparation for Closing and the planning
for and implementation of the transition of ownership
and operations. Buyer shall schedule its activities and
requirements so as not to unreasonably disrupt the
ongoing business operations of EWCO.
8. BUYER'S COVENANTS.
A. INVESTIGATION. Any fact, information or documents
disclosed in writing by Seller or otherwise discovered by the Buyer in the
course of its investigation prior to or in connection with this Agreement of the
Closing which contravenes or appears to contravene any representation or
warranty made by the Seller in this Agreement shall immediately be brought to
the attention of the Seller in written notice. The Buyer agrees to allow the
Seller the opportunity to explain, amend its Schedules or take remedial action
concerning such facts prior to the Closing Date and to resolve the apparent or
actual contravention of such representation or warranty prior to the Closing
Date.
B. CONFIDENTIALITY. Any information provided or obtained
pursuant to this Agreement or otherwise from Seller or EWCO shall be received in
confidence and Buyer will refrain from disclosing any portion of such
information to any third person, except Buyer's legal, accounting and tax
professionals, and to those persons that are anticipated by the terms of this
Agreement, such as by way of example, those persons informed of the transaction
through Buyer's capital raising efforts.
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C. EMPLOYMENT SOLICITATION. In the event that the Agreement
is terminated for any reason, neither Buyer, not its employees, officers,
directors, shareholders or affiliates will, for a period of one year after the
date of termination, employ or solicit or offer to employ any person who is or
was an employee of EWCO at any time during the period between the date of this
Agreement and the date the Agreement is terminated.
D. RECORDS. The Buyer agrees to preserve until at least the
third anniversary of the Closing Date, or as otherwise required by law, all
records in their possession relating to EWCO and its business. Buyer will direct
employees of EWCO or its representatives, affiliates and successors to gather
and prepare such information as Seller may reasonably request following the
Closing Date without cost to the Seller (other than reimbursement of Buyer's or
EWCO's out of pocket costs), including without limitation in connection with any
legal proceedings and any filing of tax returns by the Seller after the Closing
Date. Buyer will allow Seller and its representatives access to such records
during regular business hours and EWCO's place of business and will permit
Seller to make extracts or copies of such records as is necessary for Buyer.
9. SELLER'S CONDITION PRECEDENT. All of the following shall be
conditions precedent to Seller's obligation to consummate the transactions
contemplated by this Agreement:
A. ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Buyer contained in this Agreement
shall be accurate and correct in all material respects
on and as of the date of Closing as if made on and as of
that date. Buyer shall have delivered to Seller a
certificate in form and substance satisfactory to Seller
dated the Closing Date and signed by Buyer certifying to
the accuracy of Buyer's representations and warranties.
B. BUYER'S COMPLIANCE. Buyer shall have complied in all
material respects with all of its obligations under this
Agreement.
C. EMPLOYMENT AGREEMENT. Buyer shall have caused EWCO to
execute the Employment Agreement referred to in
Subparagraph 7K.
D. PAYMENT TO LOZNAKS. EWCO shall have agreed to make the
payment in the amount of $144,000 to the applicable
previous Xxxxxx shareholders of EWCO pertaining to a
certain arbitration award involving Seller and certain
pending litigation involving Seller and EWCO, prior to
such payment's due date.
E. RELEASE OF GUARANTY. Seller shall have received a
complete, full and unconditional release of all personal
guarantees of EWCO obligations, including without
limitation, a certain personal guarantee provided to
Comerica Bank, or Seller shall have received written
assurances from Comerica Bank that the termination of
his personal guarantee will be provided promptly
following Closing.
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F. LITIGATION. No suit, action or other proceeding shall be
pending or threatened before any arbitration party,
court or governmental agency seeking to restrain,
prohibit or to obtain damages or other relief in
connection with this Agreement or the consummation of
the transactions contemplated herein and there shall
have been no investigation or inquiry made or commenced
by any governmental agency in connection with this
Agreement or the transactions contemplated hereby.
10. BUYER'S CONDITION PRECEDENT. All of the following shall be
conditions precedent to Buyer's obligation to consummate the transactions
contemplated by this Agreement:
A. ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Seller contained in this Agreement or
in any written document (including the Schedules
referred to herein) delivered to Buyer pursuant thereto
shall be accurate and correct in all material respects
on and as of the date of Closing as if made on and as of
that date. Seller shall have delivered to Buyer a
certificate in form and substance satisfactory to Buyer
dated the Closing Date and signed by Seller certifying
to the accuracy of Seller's representations and
warranties.
B. SELLER'S COMPLIANCE. Seller shall have complied in all
material respects with all of Seller's obligations under
this Agreement and all of the covenants contained in
Paragraph 7 shall have been performed and taken place.
D. LITIGATION. No suit, action or other proceeding shall be
pending or threatened before any court or governmental
agency seeking to restrain, prohibit or to obtain
damages or other relief in connection with this
Agreement or the consummation of the transactions
contemplated herein and there shall have been no
investigation or inquiry made or commenced by any
governmental agency in connection with this Agreement or
the transactions contemplated hereby.
E. MATERIAL ERROR. There shall not have been any material
error, misstatement or omission in any Schedule or other
document delivered in connection herewith.
F. MATERIAL ADVERSE EFFECTS. During the period from the
date hereof to the Closing there shall not have been any
material adverse effect, either individually or in the
aggregate, on the general affairs, business, prospects,
properties, financial position, results of operations or
net worth of EWCO as a result of any casualty or
disaster, accident, labor dispute, exercise of the power
of eminent domain or other governmental act, or any
other event or
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circumstance; EWCO shall not have sustained any material
loss or damage to its properties, whether or not
insured, which affects its ability to conduct its
business; and Buyer shall have received a certificate
dated the date of Closing signed by Seller to the
foregoing effect and representing to the further effect
that (i) all liabilities of EWCO at the Closing which
are not reflected in the Financial Statements are only
liabilities incurred since the date of the most recent
Financial Statements in the ordinary and usual course of
business, none of which were incurred in violation or
contravention of any provision of this Agreement, and
(ii) the conditions precedent provided in Subparagraphs
A, C, D and E have been satisfied. The delivery of such
certificate shall in no way diminish or supersede the
warranties and representations of Seller made in this
Agreement.
G. ACCURACY OF FINANCIALS. Buyer shall have been furnished
with a letter from the independent certified public
accountants of EWCO, dated the date of Closing and in
form and substance reasonably satisfactory to Buyer, to
the effect that a reading of the Financial Statements
did not cause them to believe that (i) the Financial
Statements are not stated on a basis consistent with
generally accepted accounting principles, applied on a
consistent basis, (ii) there was any change in the
Shares or EWCO's capital stock or long-term debt or any
decrease in the net assets of EWCO as compared with the
amounts shown in the most recent Financial Statements,
or (iii) there was a decrease, as compared with amounts
in the corresponding period in the preceding fiscal
year, in EWCO's net sales, operating earnings or pre-tax
income.
H. FINANCING. Buyer shall have entered into a satisfactory
arrangement with Comerica Bank in connection with
assuming EWCO's obligations to Comerica Bank and shall
have secured such acquisition and working capital
financing which in Buyer's sole and absolute discretion
is sufficient to consummate the transactions
contemplated by this Agreement, including the successful
completion of the private placement by Buyer.
11. ADJUSTMENTS AND PRORATIONS. There shall be no adjustments or
prorations made in connection with this transaction.
12. DUE DILIGENCE. At the date hereof, Buyer has not yet had an
opportunity to complete its investigation or analysis of the business, assets,
liabilities, properties and affairs of EWCO and certain of the Schedules,
information and other documents to be delivered hereafter pursuant to this
Agreement and relating to EWCO's assets, liabilities, commitments, properties
and business. As of the execution of this Agreement Seller's Schedules will not
be complete, and Seller shall complete the preparation of all such Schedules,
information and documents and use his best efforts to deliver them to Buyer as
soon as possible after the date hereof (and as and when available) but the last
of which shall be delivered not later than December 1, 2003. Buyer shall
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have all of the period to the date which is ten (10) business days after the
date of receipt by it of the last of such Schedules in which to investigate,
ascertain and verify all of the facts, information and other matters contained
in or referenced therein, and otherwise to investigate, in any manner which it
may choose, the business and affairs of EWCO. If in Buyer's good faith judgment
there is any inaccuracy in any representation or breach of any warranty
contained herein, or any failure of EWCO or Seller to perform any of the
commitments, covenants or conditions contained in this Agreement, or if there
exists any error, misstatement or omission with regard to any of the Schedules,
information or other documents referred to herein or if Buyer in its sole
judgment is not satisfied with the results of its investigation or the contents
of any of the Schedules, information or other documents, or with the results of
its examination of the business and condition (financial or otherwise) of EWCO,
Buyer may, after complying with the requirements of Subparagraph 8A, terminate
this Agreement at any time prior to the end of such period by written notice to
Seller.
13. TERMINATION.
A. MUTUAL AGREEMENT. This Agreement may be abandoned or
terminated on or before the Closing by mutual agreement
of Buyer and Seller. If the Closing hereinafter referred
to shall not have taken place on or prior to January 31,
2004, other than as a result of a breach by either party
hereto, this Agreement shall automatically terminate.
B. BREACH OF WARRANTY. In addition to Buyer's rights
provided in Paragraph 13 of this Agreement, Buyer or
Seller may terminate this Agreement at any time prior to
the Closing by giving the other party written notice
thereof, if and only if:
(i) there is any breach of or failure by the party not
terminating to perform any commitment or covenant
under this Agreement;
(ii) any warranty or representation made by the party
not terminating this Agreement shall be or become
materially untrue or any condition precedent to
Closing shall not have been fulfilled, provided
that the Buyer shall have complied with
Subparagraph 8A before exercising this right of
termination; or
(iii) there shall exist any material error, misstatement
or omission on the part of the party or parties
not terminating which renders a Schedule,
representation, document or Information delivered
in connection herewith materially inaccurate or
misleading to the party terminating this
Agreement, provided that the Buyer shall have
complied with Subparagraph 8A before exercising
this right of termination.
Such notice shall clearly specify the cause for
termination.
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C. WAIVER OF CONDITION PRECEDENT. By instrument in writing
delivered to the other, either Buyer or Seller may waive
any condition precedent, covenant or condition contained
herein for the benefit of the party delivering such
waiver, and upon the exercise of such right or waiver,
the transactions shall be closed in accordance with the
terms contained in this Agreement as modified.
D. IN THE EVENT OF TERMINATION. In the event this Agreement
is abandoned or terminated as provided in Paragraph 12
or Subparagraphs 13A or 13B, this Agreement shall
forthwith become wholly void and of no effect, without
liability of any party to the other for such
termination, but such termination shall not effect a
party's claim for breach of any representation or
warranty occurring prior to termination.
14. DESTRUCTION OR DAMAGE. Unless waived by Buyer, if any material
portion of the assets of EWCO is destroyed or damaged by fire or other casualty
and that damage is not repaired or restored by Seller or EWCO prior to Closing,
then at Buyer's option (which shall be exercised within ten (10) days of notice
of the destruction or damage) (i) this Agreement shall terminate and no party
shall thereafter have any liability to the other, or (ii) Buyer may proceed to
Closing and Seller shall cause EWCO to pay over and/or assign to Buyer all
insurance proceeds and/or claims accruing to EWCO's benefit with respect to that
casualty.
15. INDEMNIFICATION AND LIMITATION OF LIABILITY OF SELLER.
A. BUYER'S INDEMNITY. Without limiting any other rights or
remedies available to Buyer, Seller shall indemnify,
defend and hold harmless EWCO, Buyer, Buyer's
shareholders, officers directors and successors and
assigns from, against and with respect to any claim,
liability, obligation, loss, damage, assessment,
judgment, cost and expense (including, without
limitation, reasonable attorneys' and accountants' fees
and costs and expenses reasonably incurred in
investigating, preparing, defending against or
prosecuting any litigation or claim, action, suit,
proceeding or demand) of any kind or character arising
out of or in any manner incident, relating or
attributable to, net of any applicable EWCO or Buyer
insurance proceeds and without giving effect to any tax
benefit to the indemnified party, (i) any material
inaccuracy in any representation or breach of warranty
of Seller contained in this Agreement or in any
Schedule, certificate, instrument of transfer or other
document or agreement executed by Seller in connection
with this Agreement or otherwise made or given in
connection with this Agreement, (ii) any failure by
Seller to perform or observe, or to have performed or
observed, in full any covenant, agreement or condition
to be performed or observed by him under this Agreement
or under any certificates or other documents or
agreements executed by Seller in
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connection with this Agreement, (iii) the enforcement of
Buyer's rights to purchase the Shares under this
Agreement, and (iv) any agreements, contracts,
negotiations or other dealings by EWCO or Seller with
any person concerning the sale of the Shares. However,
Seller's obligations, if any, to indemnify Buyer
hereunder shall be limited to the amount of Three
Hundred Fifty Thousand and 00/100 ($350,000.00) Dollars
or the then current value of the Share Consideration as
it may increase or decrease in value; unless the claim
for indemnity is based on the intentional
misrepresentation or fraud of Seller, in which case
there shall be no such limitation on Buyer's right to
indemnify.
B. SELLER'S INDEMNITY. Without limiting any other rights or
remedies available to Seller, Buyer shall indemnify,
defend and hold harmless Seller from, against and with
respect to any claim, liability, obligation, loss,
damage, assessment, judgment, cost and expense
(including, without limitation, reasonable attorneys'
and accountants' fees and costs and expenses reasonably
incurred in investigating, preparing, defending against
or prosecuting any litigation or claim, action, suit,
proceeding or demand) of any kind or character arising
out of or in any manner, incident, relating or
attributable to and without giving effect to any tax
benefit to the indemnified party (i)any material
inaccuracy in any representation or breach of warranty
of Buyer contained in this Agreement or in any
certificate, instrument of transfer or other document or
agreement executed by Buyer in connection with this
Agreement or otherwise made or given in connection with
this Agreement, and (ii) any failure by Buyer to perform
or observe, or to have performed or observed, in full
any covenant, agreement or condition to be performed or
observed by it under this Agreement or under any
certificates or other documents or agreements executed
by Buyer in connection with this Agreement. However,
Buyer's obligations, if any, to indemnify Seller
hereunder shall not exceed the amount of Three Hundred
Fifty Thousand and 00/100 ($350,000.00) Dollars, unless
the claim for indemnity is based on the intentional
misrepresentation or fraud of Buyer, in which case there
shall be no such limitation on Seller's right to
indemnification.
C. LIMITATION OF LIABILITY AND REMEDIES. The parties agree
that based upon a number of factors, including without
limitation, the expedited time schedule for the
transaction, the Seller's liability to Buyer or EWCO for
any and all matters arising out of this Agreement, or
the transactions contemplated herein, including without
limitation, any breach of the Seller's representations,
warranties, covenants, obligations or conditions, shall
be limited to the amount of Three Hundred Fifty Thousand
and 00/100 ($350,000.00) Dollars or the then current
value of the Share Consideration as it may increase or
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decrease in value; unless the claim for indemnity is
based on the intentional misrepresentation or fraud of
Seller, in which case there shall be no such limitation
on Buyer's right to indemnify. Furthermore, any claim,
liability, obligation, loss, damage, assessment,
judgment, cost and expense of Buyer, its successors,
assigns or affiliates of any kind or character arising
out of or in any manner, incident, relating or
attributable to this Agreement, or the transaction
described herein, including without limitation those
arising from Seller's failure to indemnify Buyer,
Buyer's successor and assigns, or Seller's breach of any
representation, warranty, covenant or obligation of this
Agreement, may be satisfied only out of the proceeds of
sale received upon execution of any judgment for such
amounts upon the Share Consideration and out of any
dividend from the Share Consideration payable to Seller,
or loans secured (or which can be secured) by Seller
based on and secured by the Share Consideration, and the
Buyer waives and the Seller shall not be liable for any
deficiency. The proceeds of any portion of the Share
Consideration liquidated to satisfy any such claim,
liability, obligation, loss, damage, assessment,
judgment, cost and expense shall be net of the tax cost
to the Seller to liquidate such Share Consideration. The
Buyer acknowledges and agrees that the Seller may not be
permitted by applicable laws to sell, transfer or assign
the Share Consideration for some period of time after
the Closing, and in such event, and in the event Seller
is otherwise unable to liquidate the Share Consideration
(or any portion thereof) or to borrow funds against
those shares, the Buyer agrees to withhold from the
exercise of such execution remedy until such applicable
restrictive periods have lapsed. The Buyer hereby
acknowledges and agrees that from and after Closing, its
sole remedy with respect to the claims arising
hereunder, shall be pursuant to the indemnification
provsions contained herein.
16. PAYMENT OF EXPENSES. Regardless of whether the transactions
contemplated by this Agreement are consummated, each of the parties hereto shall
pay all of the expenses incurred by such party in connection herewith
(including, in the case of Seller, expenses related to the services of Seller's
counsel and accountants with respect hereto). Seller shall pay the fees and
costs of Seller's professional advisors, and Buyer shall pay the fees and costs
of Buyer's professional advisors.
17. BROKERAGE. Seller represents and warrants to Buyer that the
services of a broker or finder have not been used by Seller in connection with
any of the matters pertaining to this transaction and that no broker's or
finder's fee shall become payable by Buyer by reason of the execution of this
Agreement or the consummation of the transactions contemplated herein or arising
out of the acts or omissions of Seller or EWCO. Seller shall hold harmless and
indemnify Buyer and Buyer's officers, directors, and shareholders from and
against any claim for broker's, finder's or financial advisor's fees, including
any cost or expense incurred in connection with the defense of any suit claiming
such fees, or in any other manner pertaining to claims for such fees,
-25-
which may become payable by reason of the acts or omissions of Seller or EWCO.
Buyer represents and warrants to Seller that the services of a broker or finder
have not been used by Buyer in connection with any of the matters pertaining to
this transaction and that no broker's or finder's fee shall become payable by
Seller by reason of the execution of this Agreement or the consummation of the
transactions contemplated herein or arising out of the acts or omissions of
Buyer. Buyer shall hold harmless, and indemnify Seller from and against, any
claim for broker's, finder's or financial advisor's fees, including any cost or
expense incurred in connection with the defense of any suit claiming such fees,
or in any other manner pertaining to claims for such fees, which may become
payable by Seller by reason of the acts or omissions of Buyer.
18. COOPERATION AFTER CLOSING. After Closing, Seller and Buyer
shall cooperate with each other in connection with the interchange of
information which shall be necessary in order for each of them to discharge
their respective obligations in connection with the defense of litigation or
governmental proceedings to which they are a party, the enforcement of their
rights against third parties arising out of their respective business
operations, the collection and presentation of information for their respective
accountants in connection with the preparation of interim and annual financial
reports required of them and the preparation of tax returns. Buyer shall be
responsible, with the Seller's input and involvement, for the preparation,
filing and payment of all taxes (excluding those based on the "S" Corporation
earnings of, or distributions made by, EWCO for the period prior to Closing) and
tax returns of EWCO after the Closing. As a condition of this cooperation, each
party shall be entitled to reimbursement for the actual direct costs of its
provisions of documents and the services of persons whose attendance or time is
required by the other, and requests shall be scheduled and/or their satisfaction
performed in such a manner as not to unreasonably disrupt the business
operations of the party of which that cooperation has been required.
19. EMPLOYEES. Seller shall use its reasonable efforts to persuade
all of EWCO's employees and agents as are currently employed or retained by EWCO
to remain employees or agents of EWCO.
20. ACCOUNTING RECORDS. Buyer and Seller each agree with the other
that the original sales and accounting records of EWCO shall be retained by
Buyer within the United States for a period of five (5) years after the date
hereof and that Buyer shall afford to Seller reasonable access thereto as may be
necessary for purposes of preparing tax returns, financial statements or for
such other purposes as Seller may reasonably request.
21. APPROVAL OF COUNSEL. All instruments or documents to delivered
by any party to this Agreement shall be in form and content reasonably
satisfactory to the counsel for the party receiving such instrument or document.
22. PUBLIC ANNOUNCEMENT. No public announcement of the details of
this transaction shall be made, nor shall an announcement be made to the
employees of EWCO unless that announcement and the form thereof has the prior
written approval of Buyer and Seller.
23. SCHEDULES. Each Schedule shall be identified by a cover page
and initialed on each page by Seller or counsel for Seller. Buyer or Buyer's
authorized representative (for
-26-
purposes of identification and to acknowledge receipt only) shall likewise
initial each page thereof. Each Schedule shall be deemed an integral part of
this Agreement.
24. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (except as may otherwise be specifically provided herein to the
contrary) if delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed or mailed by certified or
registered mail with postage prepaid or shipped and receipted by express courier
service, charges prepaid by shipper addressed as follows (or to such other
address as may be designated by notice given pursuant hereto):
IF TO BUYER: Wall St. Acquisitions, Inc.
X.X. Xxx 00000
Xxxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
WITH A COPY TO: Xxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxx Attorneys, P.C.
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000
IF TO SELLER: Xxxxxxx Xxxxxxx
c/o Xxxxxx Welding Company
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
WITH A COPY TO: Xxxxxxx X. Heritage III, Esq.
Xxx, Xxxxxxx & Giarmarco, P.C.
000 Xxxx Xxx Xxxxxx Xxxx
Xxxxx Xxxxx Xxxxxxxx Center
Xxxx, Xxxxxxxx 00000
25 ADDITIONAL UNDERTAKINGS. Seller and Buyer shall each take
those actions and execute and deliver those documents and instruments as shall
be reasonably necessary in order to fulfill the intent and purpose of this
Agreement both prior and subsequent to Closing, and shall cooperate in any
filing, registration, investigation or other activity that shall be required or
shall occur subsequent to Closing as a result of or in connection with this
transaction.
26. GOVERNING LAW. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of Michigan.
27. BINDING EFFECT. All of the terms and provisions of this
Agreement by or for the benefit of the parties shall be binding upon and inure
to the benefit of their successors, assigns, heirs and personal representatives.
The rights and obligations provided by this Agreement shall not be assignable by
any party, other than by Buyer to a wholly-owned subsidiary or affiliate or a
successor to its business. Except as expressly provided herein, nothing herein
is intended to confer
-27-
upon any person, other than the parties and their successors, any rights or
remedies under or by reason of this Agreement.
28. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
29. NO RELIANCE. No third party is entitled to rely on any of the
representations, warranties and agreements contained in this Agreement. The
parties assume no liability to any third party because of any reliance on the
representations, warranties and agreements contained in this Agreement.
30. CAPTIONS. Captions to paragraphs and subparagraphs of this
Agreement have been included solely for the sake of convenient reference and are
entirely without substantive effect.
31. ENTIRE AGREEMENT. Except for the agreement referred to in
Subparagraph 7K, this Agreement (including the Schedules referred to herein)
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, including without limitation a certain letter of intent between the
parties executed November 10, 2003, and there are no warranties, representations
or other agreements between the parties in connection with the subject matter
hereof except as set forth specifically herein. No amendment, supplement,
modification, waiver or termination of this Agreement shall be implied or be
binding (including, without limitation, any alleged waiver based on a party's
knowledge of any inaccuracy in any representation or warranty contained herein)
unless in writing and signed by the party against which such amendment,
supplement, modification, waiver or termination is asserted. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly therein provided.
-28-
THIS AGREEMENT has been entered into as of the date first set forth above.
WALL ST. ACQUISITIONS, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Its: CHAIRMAN/CEO
"Buyer"
/s/ Xxxxxxx Xxxxxxx
--------------------------------------
XXXXXXX XXXXXXX
"Seller"
-29-
SCHEDULES TO STOCK PURCHASE AGREEMENT
Schedule 4H EWCO's Financial Statements
Schedule 4J Material Adverse Changes
Schedule 4L Contracts Amended or Compromised
Schedule 4N EWCO Tax Returns
Schedule 4P Liens on Personalty
Schedule 4Q Condition of Assets
Schedule 4R Real Property Owned or Leased
Schedule 4S Environmental Issues
Schedule 4T-1 10 Largest Customers
Schedule 4T-2 10 Largest Suppliers
Schedule 4T-3 Contracts and Commitments
Schedule 4W Related Loans
Schedule 4X Compliance Matters
Schedule 4Y Labor Matters
Schedule 4Z Condition of Inventory
Schedule 4AA Receivables
Schedule 4BB-1 Personal Property Owned
Schedule 4BB-2 Personal Property Leased or Consigned
Schedule 4CC Intellectual Property
Schedule 4DD-1 Employees of EWCO
Schedule 4DD-2 Terminated Employees of EWCO
Schedule 4EE Insurance policies
Schedule 4FF Litigation
Exhibit 7K Employment Agreement
Exhibit 9B Opinion of counsel
FIRST AMENDMENT TO
SHARE PURCHASE AGREEMENT
AMENDMENT made this 1st day of February, 2004 by and among, WALL ST.
ACQUISITIONS, INC. ("Purchaser"), and XXXXXXX XXXXXXX, individually, and as
trustee of the XXXXXXX XXXXXXX REVOCABLE LIVING TRUST ("Trust") ("Seller"). .
R E C I T A L S:
A. Purchaser and Seller are parties to a Share Purchase Agreement
dated November 23, 2003 (the "Agreement").
B. Purchaser and Seller desire to amend the Agreement as set
forth herein.
C. Capitalized terms not otherwise defined herein shall have the
meaning given such term in the Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Section 3 of the Agreement is amended by changing the
reference to the date of December 31, 2003 therein, to February 20, 2004 and the
reference to the date of January 31, 2004 therein, to March 1, 2004.
2. Sections 3(A)(v) and 3(B)(iii) of the Agreement are
deleted in their entirety and replaced with the following::
"An Employment Agreement between Seller and EWCO, inform mutually
agreed upon between the parties and as referred to in Subparagraph
7K of this Agreement"
3. Section 4(N) of the Agreement is deleted in its entirety
and replaced with the following:
"Schedule 4N shall contain copies of all federal and Michigan income
or SBT tax returns, including any amendments thereto, filed on
behalf of EWCO since January 1, 2001. To Seller's Knowledge, EWCO
has, and on the Closing Date shall have, properly, timely and
accurately filed any and all tax returns and governmental reports
which are required to be filed in all required jurisdictions; has
properly paid, and shall have properly paid on the Closing Date, all
amounts which have become or shall become a liability or lien
(except liens for taxes not yet due), including but not limited to,
all amounts as shown on said returns and/or reports and also on all
assessments and all notices of deficiency or assessment; and has
not, and prior to the Closing Date shall not have, without the
written consent of Purchaser, executed or agreed to any waivers of
rights or statutes of
-1-
limitations on any claims against it or on the right of any taxing
or governmental authority to assess additional taxes or claims or to
contest the income or loss reported with respect to any tax period."
4. Section 4(Q) of the Agreement is deleted in its entirety and
replaced with the following:
"To Seller's Knowledge, except as listed on Schedule 4Q all
buildings and improvements and all of the machinery and equipment
owned or used by EWCO are in good repair and reasonable operating
condition (given their age and normal wear and tear) and are
adequate to carry on EWCO's business as presently conducted. Except
as provided herein, the Seller does not represent or warrant the
condition of the EWCO assets and facilities, and all assets and
facilities (including without limitation, the buildings,
improvements, machinery and equipment) will be in their "AS IS"
condition."
5. Section 4(R) of the Agreement is deleted in its entirety
and replaced with the following:
"EWCO owns no real property. Schedule 4R contains a copy of the
applicable leases of real property leased by EWCO ("Leases"). To the
Seller's Knowledge, the Leases are valid and enforceable and neither
EWCO nor the landlord is in default of the Leases. To Seller's
Knowledge, the properties, the use of such properties and the
conduct therein of the business of EWCO do not violate any law, rule
or regulation of any governmental authority, including but not
limited to environmental laws, zoning ordinances and building codes.
The properties are served by utilities, including but not limited to
water, sewage, gas, waste disposal, electricity and telephone, and
Seller is not aware of any inadequacies with respect to such
utilities. To Seller's Knowledge, no governmental authority having
jurisdiction over the properties has given any notice of a possible
future imposition of special assessments affecting such properties
or the exercise of the power of eminent domain."
6. Section 4(U) of the Agreement is deleted in its entirety and
replaced with the following:
"To Seller's Knowledge, except as otherwise indicated on such
Schedule, all of the agreements, contracts and commitments listed in
Schedule 4T-3 and all of the agreements, contracts and commitments
not required to be listed by reason of clauses (i) or (ii) of
Subparagraph 4T are valid and binding obligations of the parties
thereto in accordance with their respective terms and there has
occurred no event which would constitute any material breach of or
default in any provision of any such agreement, contract or
commitment or which would permit the acceleration of any obligation
of any party thereto or the creation of a lien or encumbrance upon
any asset of EWCO or which would give rise to any such liabilities
upon the giving of notice or lapse of time. No information has been
brought to the attention of Seller which might reasonably lead
Seller to believe that any such customer or supplier intends to
alter in any material respect the amount of such customer's or
supplier's dealings with EWCO, or would alter in any material
respect those dealings in the event of the consummation of the
transactions contemplated hereby."
7. Section 4(X) of the Agreement is deleted in its entirety and
replaced with the following:
"To Seller's Knowledge and except as described in Subparagraph 4M,
in Schedule 4X or in any other Schedule, EWCO, with regard to its
business, assets, business practices and products, has complied with
all applicable laws, regulations, orders and other requirements of
governmental authorities, except where such noncompliance does not
have a material adverse effect; is not subject to any judicial
governmental or administrative order, judgment or decree; and no
investigation, governmental or administrative proceeding or other
litigation of any kind or nature to which it may be a party is now
pending or threatened. To Seller's Knowledge EWCO has obtained all
governmental licenses, permits, approvals, authorizations,
exemptions, classifications and certificates material to the conduct
of EWCO's business or to the ownership of its properties
(collectively referred to herein as "Licenses"). Schedule 4X shall
list and include copies of all Licenses. To Seller's Knowledge,
except for normal returns (consistent with past experiences of
EWCO), there is no material liability of EWCO on account of product
warranties or arising out of working conditions in the manufacture
or sale of products or with respect to the manufacture or sale by
Seller of defective products or with respect to services performed
which are not insured against, in whole, pursuant to applicable EWCO
insurances"
8. Section 4(Y) of the Agreement is deleted in its entirety and
replaced with the following:
"Except as described in Schedule 4Y, no employees of EWCO are
represented by a union or other labor organization; to Seller's
Knowledge, EWCO has complied with all applicable laws affecting
employment and employment practices, terms and conditions of
employment and wages and hours, and has not engaged in any unfair
labor practice, except where such noncompliance does not have a
material adverse effect; neither Seller nor EWCO has received notice
of any charge or complaint alleging unfair labor practices against
EWCO filed with the National Labor Relations Board; since January 1,
2001 there has been no labor strike, slowdown or stoppage and
neither EWCO nor Seller has received notice that any such action is
pending or threatened against or affecting EWCO; to Seller's
Knowledge, no representation question exists respecting the
employees of EWCO; neither Seller nor EWCO has received notice of
any charge or grievance or arbitration proceeding against EWCO
arising out of or under a collective bargaining agreement and to
Seller's Knowledge, no basis therefor exists; except under the
collective bargaining agreement disclosed in Schedule 4Y and as may
be required by law, no agreement which is binding on EWCO, other
than its real property lease, restricts it from relocating or
closing any of its operations; and EWCO has not experienced any
work stoppage since January 1, 2001. There are no employee benefit
plans currently maintained by EWCO which are subject to the
provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") other than those which shall be listed and
included as part of Schedule 4T-3. To Seller's Knowledge, each of
such plans complies in all respects with the Internal Revenue Code
of 1986, as amended, and ERISA and the regulations thereunder.
Except as disclosed in Schedule 4Y, the value of all accrued
benefits are fully funded by the assets of such plans. Except as
disclosed in Schedule 4Y, no "employee welfare benefit plans" and
"employee pension benefit plans" (within the meaning of Section 3[1]
and 3[2], respectively, of ERISA) of EWCO have been terminated since
January 1, 2001. Schedule 4Y shall include, to the extent required
to be prepared and furnished to participants, copies of all Internal
Revenue Service "determination letters" received by EWCO for each
plan"
8. Section 4(CC) of the Agreement is deleted in its entirety and
replaced with the following:
"Except as set forth on Schedule 4CC, EWCO owns no copyrights,
patents, invention disclosures, trademarks, service marks, whether
registered or at common law, applications therefor that are pending
or in the process of preparation. Except as set forth on Schedule
4CC, to Seller's Knowledge, EWCO has not received notice that it has
or is now conducting its business in a manner which is in violation
of the intellectual property rights of another. The manufacturing
and engineering drawings, process sheets, specifications, bills of
material, trade secrets, "know-how" and other like data of EWCO are
presently, and shall remain, at EWCO's premises."
9. Section 4(DD) of the Agreement is deleted in its entirety and
replaced with the following:
"Schedule 4DD-1 shall set forth the names, positions and annual
salaries of all officers and other non-hourly rated employees of
EWCO receiving compensation at an annual rate (including bonuses,
commissions and other compensation) in excess of Thirty Thousand and
00/100 ($30,000.00) Dollars, together with the amount of bonuses and
description of agreements or arrangements, both oral and written,
formal or informal, for commissions and other compensation or
benefits of any nature to be paid or provided to any such persons
pursuant to agreement or custom or present understanding. Except for
the life insurance policies described on Schedule 4DD-1, there are
no insurance policies on the lives of any of such officers or such
other persons, other than under EWCO's group policies, the premiums
of which have been paid or contributed by EWCO. Schedule 4DD-1 shall
also include copies of the written employment agreements for the
employees identified. Schedule 4DD-2 shall list any officer or other
key employee of EWCO who terminated employment with EWCO since
January 1, 2001. Seller has no Knowledge that any key employee
(including Seller) is considering the termination of employment. To
Seller's Knowledge, except as specifically identified on Schedule
4DD-1, all of EWCO's non-union employees are employed on an
"at-will" basis."
10. The "Seller's Knowledge" definition in the Agreement is
deleted in its entirety and replaced with the following:
"The phrase "Seller's Knowledge" (or any similar variation) shall
mean (i) that information actually known to Seller, and (ii) that information
which a reasonable and prudent, informed chief executive officer would, under
the circumstances, be aware of and shall not include the knowledge of any other
person, including, without limitation, (a) employees of EWCO; (b) accounting and
tax representatives of EWCO and/or Seller; and (c) legal representatives of EWCO
and/or Seller."
11. Section 6 of the Agreement is amended by changing the
reference to twelve (12) months therein, to nine (9) months and the reference to
eighteen (18) months therein to twelve (12) months.
12. Section 7(K) of the Agreement is deleted in its entirety and
replaced with the following:
"EMPLOYMENT AGREEMENT. At the Closing, Seller shall execute an
Employment Agreement in a form to be mutually agreed upon by
Purchaser and Seller. Purchaser shall cause EWCO to execute that
agreement at Closing"
13. Section 9(C) is deleted in its entirety and replaced with the
following:
"EMPLOYMENT AGREEMENT. Purchaser and Seller shall have mutually
agreed to a form of Employment Agreement as referred to in
Subparagraph 7K, and Purchaser shall have caused EWCO to execute the
Employment Agreement."
14. Section 12 of the Agreement is deleted in its entirety and
replaced with the following:
"DUE DILIGENCE. As of the date hereof, Purchaser has completed its
investigation or analysis of the business, assets, liabilities,
properties and affairs of EWCO and certain of the Schedules,
information and other documents to be delivered by Seller and EWCO.
No further due diligence is required by Purchaser nor permitted
pursuant to this Agreement. Such completion of the due diligence
investigation does not in any way affect or diminish the
representations and warranties made by Seller herein"
15. Section 13(A) of the Agreement is amended by changing the
reference to the date of January 31, 2004 therein, to March 1, 2004.
16. Section 13(D) of the Agreement is amended by deleting the word
"abandoned".
17. As amended herein, the Agreement remains in full force and
effect and is hereby ratified and affirmed.
THIS AMENDMENT TO THE AGREEMENT has been entered into as of the date first set
forth above.
WALL ST. ACQUISITIONS, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Its: CHAIRMAN/CEO
"Purchaser"
/s/ Xxxxxxx Xxxxxxx
--------------------------------------
XXXXXXX XXXXXXX, individually and as
Trustee of the Xxxxxxx Xxxxxxx
Revocable Living Trust
"Seller"
SECOND AMENDMENT TO
SHARE PURCHASE AGREEMENT
AMENDMENT made this 18th day of February, 2004 by and among, WALL
ST. ACQUISITIONS, INC. ("Purchaser"), and XXXXXXX XXXXXXX, individually, and as
trustee of the XXXXXXX XXXXXXX REVOCABLE LIVING TRUST ("Trust") ("Seller"). .
R E C I T A L S:
A. Purchaser and Seller are parties to a Share Purchase Agreement
dated November 23, 2003 (the "Agreement").
B. Purchaser and Seller amended the Agreement on February 1,
2004.
B. Purchaser and Seller desire to amend the Agreement as set
forth herein.
C. Capitalized terms not otherwise defined herein shall have the
meaning given such term in the Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Section 3 of the Agreement is amended by changing the
reference to the date of February 20, 2004 therein, to March 18, 2004 and the
reference to the date of March 1, 2004 therein, to April 1, 2004.
2. Section 2(A)(ii) of the Agreement is hereby deleted in
its entirety and replaced with the following:
"The balance of Three Hundred Fifty Thousand and 00/100
($350,000.00) Dollars in the form of 70,000 common shares,
based on an anticipated value of Five and 00/100 [$5.00]
Dollars per share price at closing, of stock of Buyer (the
"Share Consideration"). The 70,000 shares issued to Seller (or
such greater or lesser number of shares is required based on
the circumstances and any adjustment as described below) will
represent 5.109% of Buyer before conversion of any bridge
notes, incentive stock options, bridge "warrants,
underwriters' warrants or additional common shares or warrants
issued pursuant to other acquisitions or transactions. If the
price per share of Buyer at its Initial Public Offering
("IPO") is greater than or less than $5.00, then the number of
shares issued to Seller will be adjusted, upwards or
downwards, accordingly to equate with the $350,000 value."
3. Section 2(B) of the Agreement is hereby deleted in its
entirety and replaced with the following:
-1-
"SHARE CONSIDERATION. Seller understands and
acknowledges that Buyer is planning to undertake an IPO of its
shares following Closing. Upon such IPO, Seller shall receive
the same treatment as all other similarly situated
stockholders of Buyer, including that shares held by Seller
will be subject to Rule 144 of the Securities Act and the
restrictions on transfer as set forth therein."
4. Section 13(A) of the Agreement is amended by changing
the reference to the date of March 1, 2004 therein, to April 1, 2004.
5. As amended herein, the Agreement remains in full force
and effect and is hereby ratified and affirmed.
THIS AMENDMENT TO THE AGREEMENT has been entered into as of the date first set
forth above.
WALL ST. ACQUISITIONS, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Its: CHAIRMAN, CEO
"Purchaser"
/s/ Xxxxxxx Xxxxxxx
--------------------------------------
XXXXXXX XXXXXXX, individually and as
Trustee of the Xxxxxxx Xxxxxxx
Revocable Living Trust
"Seller"
THIRD AMENDMENT TO
SHARE PURCHASE AGREEMENT
AMENDMENT made 23 day of March, 2004 by and among WALL ST.
ACQUISITIONS, INC. ("Buyer"), and XXXXXXX XXXXXXX, individually, and as trustee
of the XXXXXXX XXXXXXX REVOCABLE LIVING TRUST ("Seller").
R E C I T A L S:
A. Buyer and Seller are parties to a Share Purchase Agreement
dated November 23, 2003, as amended by a First Amendment to Share Purchase
Agreement dated February 1, 2004 and a Second Amendment to Share Purchase
Agreement dated February 17, 2004 (together, the "Agreement").
B. Buyer and Seller desire to further amend the Agreement as set
forth herein.
C. Capitalized terms not otherwise defined herein shall have the
meaning given such term in the Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Paragraph 1 of the of the Agreement is amended to read as
follows: "Seller shall sell and convey to Buyer, and Buyer shall buy from
Seller, ten (10%) percent of the Shares (constituting four [4] shares and
hereinafter referred to as the "Purchased Shares"), subject to the terms and
conditions of this Agreement."
2. Paragraph 2 of the Agreement is deleted in its entirety and
replaced with the following: "Buyer shall pay Four Hundred Fifteen Thousand Four
Hundred Fifty and 00/100 ($415,450.00) Dollars (the "Purchase Price") for the
Purchased Shares, which amount shall be paid in cash, by cashier's check, or
wire transfer at Closing."
3. Paragraph 3 of the Agreement is amended to change the date of
March 17, 2004 therein to March 30, 2004.
4. Subparagraph 3A(i) of the Agreement is amended to change the
reference to "Shares" therein to "Purchased Shares."
5. Subparagraph 3B(i) of the Agreement is amended to change the
reference to "Subparagraph 2A" therein to "Paragraph 2."
6. Subparagraph 3B(ii) is deleted in its entirety.
7. Paragraph 4 of the Agreement is amended by changing the
reference to "Shares" to "Purchased Shares" in Subparagraphs 4F and 4G. In
addition, Subparagraph 4F is further amended by changing the word "all" in the
second sentence thereof to "ten (10%) percent."
-1-
8. Paragraph 10 of the Agreement is amended to add a new
Subparagraph 101, titled "Redemption Agreement" and which shall read as follows:
"Seller and EWCO shall have entered into and closed on a Stock Redemption
Agreement, in form satisfactory to Buyer, which closing shall occur immediately
prior to closing on this Agreement and pursuant to which redemption all of the
Shares (excluding the Purchased Shares) shall be redeemed by EWCO, resulting in
the Purchased Shares representing all of the outstanding equity interest in
EWCO."
9. Subparagraph 15A of the Agreement is amended by deleting the
last sentence thereof and replacing it with the following: "However, Seller's
obligations, if any, to indemnify Buyer hereunder shall be limited to the amount
of $350,000.00, in the aggregate, including any amounts which Seller may become
obligated to EWCO by way of an indemnification obligation as specified in the
Redemption Agreement; unless the claim for indemnity is based on the intentional
misrepresentation or fraud of Seller, in which case there shall be no such
limitation on Buyer's right of indemnification."
10. Subparagraph 15C of the Agreement is amended to delete the
phrase, "or the then current value of the Share Consideration as it may increase
or decrease in value"; and the second, third, fourth, and fifth sentences
contained in Subparagraph 15C are deleted in their entirety and replaced with
the following: "Furthermore, any claim, liability, obligation, loss, damage,
assessment, judgment, cost and expense of Buyer, its successors, assigns or
affiliates of any kind or character arising out of or in any manner, incident,
relating or attributable to this Agreement, or the transaction described herein,
including without limitation those arising from Seller's failure to indemnify
Buyer, Buyer's successors and assigns, or Seller's breach of any representation,
warranty, covenant or obligation of this Agreement, may be satisfied only by way
of set-off against the Promissory Note issued to Seller by EWCO in connection
with the Redemption Agreement, capped, however, at the amount of Three Hundred
Fifty Thousand and 00/100 ($350,000.00) Dollars. At Closing, Buyer shall assign
this right of indemnification to EWCO for purposes of enforcement of this
provision. Buyer hereby acknowledges and agrees that from and after Closing, its
sole remedy with respect to the claims arising hereunder, shall be pursuant to
the indemnification provisions contained herein and the right of EWCO to enforce
such claim."
11. As amended herein, the Agreement remains in full force and
effect and is hereby ratified and affirmed.
THIS THIRD AMENDMENT TO SHARE PURCHASE AGREEMENT has been entered
into as of the date first set forth above.
WALL ST. ACQUISITIONS, INC.
By: /s/ Xxxx X. Xxxxx /s/ Xxxxxxx Xxxxxxx
-------------------------------------- --------------------------------------
XXXXXXX XXXXXXX, individually and
Its: CHAIRMAN, CEO as Trustee of the Xxxxxxx Xxxxxxx
Revocable Living Trust
"Buyer" "Seller"
FOURTH AMENDMENT TO
SHARE PURCHASE AGREEMENT
AMENDMENT made 2nd day of April, 2004 by and among TARPON
INDUSTRIES, INC. (f/k/a WALL ST. ACQUISITIONS, INC.) ("Buyer"), and XXXXXXX
XXXXXXX, individually, and as trustee of the XXXXXXX XXXXXXX REVOCABLE LIVING
TRUST ("Seller").
R E C I T A L S:
A. Buyer and Seller are parties to a Share Purchase Agreement
dated November 23, 2003, as amended by a First Amendment to Share Purchase
Agreement dated February 1, 2004, a Second Amendment to Share Purchase Agreement
dated February 17, 2004 and a Third Amendment to Share Purchase Agreement dated
March 23, 2004 (together, the "Agreement").
B. Buyer and Seller desire to further amend the Agreement as set
forth herein.
C. Capitalized terms not otherwise defined herein shall have the
meaning given such term in the Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Paragraph 3 of the Agreement is amended by changing the
reference to the date of March 30, 2004 therein, to April 2, 2004 and the
reference to the date of April 1, 2004 therein, to April 5, 2004.
2. Paragraph 6 of the of the Agreement is deleted in its entirety
and replaced with the following: "Except for claims for indemnity based on the
intentional misrepresentation or fraud of a party and for the representations
and warranties contained in Subparagraphs 4E and 4F which shall survive the
Closing for the applicable statute of limitations, the representations,
warranties, covenants and other agreements contained in this Agreement shall
terminate as of the Closing and shall not survive the Closing. The Buyer agrees
that to fullest extent permitted by law that any and all claims related to the
Seller's breach of representations, warranties, covenants and other agreements
contained in this Agreement, except for claims for indemnity based on the
intentional misrepresentation or fraud of a party and for the representations
and warranties contained in Subparagraphs 4E and 4F, shall be barred and are
hereby waived effective as of the Closing."
3. Paragraph 13A of the Agreement is amended by changing the
reference to the date of April 1, 2004 therein, to April 5, 2004.
4. Paragraph 15A of the Agreement is deleted in its entirety and
replaced with the following: "Seller shall indemnify, defend and hold harmless
Buyer, its shareholders, officers, directors, and its successors and assigns
from, against and with respect to any claim, liability, obligation, loss,
damage, assessment, judgment, cost and expense (including, without limitation,
reasonable attorneys' and accountants' fees and costs and expenses reasonably
incurred in investigating, preparing, defending against or prosecuting any
litigation or claim, action, suit,
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proceeding or demand) of any kind or character arising out of or in any manner
incident, relating or attributable to, net of any applicable EWCO or Buyer
insurance proceeds and without giving effect to any tax benefit to the
indemnified party, (i) any material inaccuracy in the representations and
warranties contained in Subparagraphs 4E and 4F, (ii) any failure by Seller to
perform or observe, or to have performed or observed, in full any covenant,
agreement or condition to be performed or observed by him under this Agreement
up and to Closing, (iii) the enforcement of Buyer's rights to purchase the
Purchased Shares under this Agreement, and (iv) any agreements, contracts,
negotiations or other dealings by EWCO or Seller with any person concerning the
sale of the Shares. However, Seller's obligations, if any, to indemnify Buyer
hereunder shall be limited to the amount of $350,000.00, in the aggregate,
including any amounts which Seller may become obligated to EWCO by way of an
indemnification obligation as specified in the Redemption Agreement; unless the
claim for indemnity is based on the intentional misrepresentation or fraud of
Seller, in which case there shall be no such limitation on Buyer's right of
indemnification."
5. Subparagraph 15C of the Agreement is deleted in its entirety
and replaced with the following: "The parties agree that based upon a number of
factors, including without limitation, the expedited time schedule for the
transaction, the Seller's liability to Buyer or EWCO for any and all matters
arising out of this Agreement, or the transactions contemplated herein,
including without limitation, any breach of those of Seller's representations,
warranties, covenants, obligations or conditions which survive Closing, shall be
limited to the amount of Three Hundred Fifty Thousand and 00/100 ($350,000.00)
Dollars: unless the claim for indemnity is based on the intentional
misrepresentation or fraud of Seller, in which case there shall be no such
limitation on Buyer's right to indemnity. Furthermore, any claim, liability,
obligation, loss, damage, assessment, judgment, cost and expense of Buyer, its
shareholders, officers, directors, and its successors and assigns of any kind or
character arising out of or in any manner, incident, relating or attributable to
this Agreement, or the transaction described herein, including without
limitation those arising from Seller's failure to indemnify Buyer, Buyer's
successors and assigns, or Seller's breach of any representation, warranty,
covenant or obligation of this Agreement which survives Closing, shall be
satisfied only by way of set-off against the Promissory Note issued to Seller by
EWCO in connection with the Redemption Agreement, capped, however, at the amount
of Three Hundred Fifty Thousand and 00/100 ($350,000.00) Dollars. At Closing,
Buyer shall assign this right of indemnification to EWCO for purposes of
enforcement of this provision. Buyer hereby acknowledges and agrees that from
and after Closing, its sole remedy with respect to the claims arising hereunder,
shall be pursuant to the indemnification provisions contained herein and the
right of EWCO to enforce such claim."
6. Subparagraph 9D of the Agreement is deleted in its entirety
and replaced with the following: "EWCO, or Buyer on EWCO's behalf, shall have
made payment in the amount of $144,000 to the applicable previous Xxxxxx
shareholders of EWCO pertaining to a certain arbitration award involving Seller
and certain pending litigation involving Seller and EWCO."
7. Subparagraph 9E of the Agreement is deleted in its entirety
and replaced with the following: "Seller shall have received a complete, full
and unconditional release of all personal guarantees of EWCO obligations,
including without limitation, a certain personal guarantee provided to Comerica
Bank."
8. As amended herein, the Agreement remains in full force and
effect and is hereby ratified and affirmed.
THIS FOURTH AMENDMENT TO SHARE PURCHASE AGREEMENT has been entered
into as of the date first set forth above.
TARPON INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxx /s/ Xxxxxxx Xxxxxxx
---------------------------------- --------------------------------------
Its: CHAIRMAN, CEO XXXXXXX XXXXXXX, individually and as
Trustee of the Xxxxxxx Xxxxxxx
Revocable Living Trust
"Buyer" "Seller"
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