Exhibit 2.1
ED-Lam Acquisition Corporation
DIGITEC INFORMATION SYSTEMS, INCORPORATED
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (the "Agreement") is made on
January 18, 2001, by and between Ed-lam Acquisition Corporation,
a Nevada Corporation, with principal offices located at 0 Xxxx
Xxxxxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000 (the "Buyer") and
XXXXX X. XXXXXXX of 0000 Xxxxx Xxxx, Xxxxxxx Xxxxxxx, Xxxxx (the
"Seller"), said person being all of the sole shareholder of
DIGITEC INFORMATION SYSTEMS, INCORPORATED, a Texas Corporation
(the "Company").
WHEREAS, the Seller owns 1,000 shares of the voting common stock,
said shares constituting all of the issued and outstanding shares
of the capital stock of the Company (the "Shares"), and the
Seller desires to transfer to Buyer all such Shares solely in
exchange for voting stock of the Buyer, and Buyer desires to
acquire from the Seller in exchange for voting stock of the
Seller, the Shares on the terms and conditions herein set forth;
NOW, THEREFORE, the Seller and the Buyer mutually covenant and
agree as follows:
1. EXCHANGE OF SHARES OF COMPANY
FOR VOTING STOCK OF BUYER
1.1 On the terms and subject to the conditions herein expressed,
and based upon the representations, warranties and
agreements contained herein, at the Closing (as hereinafter
defined), the Seller agrees to transfer and assign the Shares to
Buyer and Buyer agrees to acquire the Shares from the Seller
solely in exchange for voting stock of Buyer (which shares shall,
in the aggregate, as of Date of Closing, have a Fair Market Value
of $750,000.00 determined by the Board of Directors).
2. THE CLOSING
2.1 The Closing. The Closing under this Agreement shall occur
at the offices of Digitec Information Systems, Inc., 0000 Xxxxx
Xxxx, Xxxxxxx Xxxxxxx, Xxxxx no later than 5:00 p.m. on, January
18, 2001, or on such earlier or later date on which the Seller and
Buyer agree (the "Closing").
2.2 Delivery of Certificates. At the Closing, the Seller will
deliver to Buyer the reissued Stock Certificates (issued to
Buyer) representing 100% of the then existing Shares of Company,
plus the documents referred to in Section VII hereof, in exchange
for delivery by Buyer to Seller of Stock Certificates of Buyer.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Seller (which
representations and warranties shall survive for a period of two
years after the Closing, regardless of what investigations, if
any, the Seller shall have made thereof prior thereto) as
follows:
3.1 Incorporation. Buyer is a corporation duly incorporated,
valid, existing and in good standing under the laws of Nevada.
3.2 Execution and Delivery of Agreement. The Board of Directors
of Buyer has duly and validly authorized the execution and
delivery of this Agreement and the performance of the
transactions contemplated hereby.
3.3 Absence of Adverse Agreements. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby will not constitute a default under or result
in the material breach of any term, condition, or provision of
the Articles of Incorporation or By-Laws of Buyer, or of any loan
agreement or
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instrument to which Buyer is a party.
3.4 Validity of Agreement. The Agreement, when executed and
delivered pursuant hereto, will constitute the legal, valid and
binding obligation of Buyer, enforceable in accordance with its
terms, except as rights to indemnity under the Agreement may be
limited under applicable law, and subject to any applicable
bankruptcy, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, rights
of offset and principles of equity;
3.5 Investment Intent. Buyer will acquire the Shares for its
own account and not with the view to the distribution thereof in
violation of any applicable securities laws.
3.6 Capitalization. The authorized capital stock of the Company
consists of 50,000,000 common shares, par value
$0.001, of which, as of the date of this Agreement, 11,500,000
are issued and outstanding and 10,000,0000 authorized shares of
preferred stock, par value $0.001, none of which are issued or
outstanding. The Shares are validly issued, fully paid and non-
assessable, and have not been issued in violation of the
preemptive rights of any person. There are no preemptive rights.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to Buyer (which
representations and warranties shall survive for a period of two
years after the Closing, regardless of what investigations, if
any, Buyer shall have made thereof prior thereto) as follows:
4.1 Incorporation. The Company is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Texas, licenses and authorizations to own
all of its respective properties and assets and to conduct the
business currently being conducted. The Company does not have
any subsidiaries.
4.2 Capitalization. The authorized capitalization of the
Company consists solely of 1,000 shares of common stock, $1.00
par value. The Shares, consisting of 1,000 shares of common
stock owned by the Seller, are all of the issued and outstanding
shares of capital stock of the Company. The Shares are validly
issued, fully paid and non-assessable, and have not been issued
in violation of the preemptive rights of any person. There are
in existence no preemptive rights, calls, options, warrants,
agreements, understandings, commitments or rights of first
refusal, or similar rights or any other agreements to which the
Company or the Seller are a party or by which the Company or
Seller are bound relating to the issuance, redemption, transfer,
purchase or sale by any of them of any of the Company's capital
stock, or any other securities of the Company convertible into
capital stock or other securities of the Company.
4.3 Title to the Shares. The Shares are owned of record and
beneficially by the Seller as set forth in Section 1.1 next to
the name of the Seller and said Seller holds good, valid and
indefeasible title to the Shares. The Seller possesses full
authority and legal right to sell, transfer and assign the entire
legal and beneficial ownership of the Shares, free and clear of
all liens, encumbrances, pledges, charges, claims, restrictions,
rights of first refusal, voting trusts, voting agreements,
buy/sell agreements, preemptive rights, proxies or other
interests of any nature of any person. Upon transfer of the
Shares to Buyer hereunder at the Closing, Buyer will own the
entire legal and beneficial interest in the Shares, free and
clear of all of the liens, claims and encumbrances of any kind as
noted above, and subject to no legal or equitable restrictions of
any kind;
4.4 Financial Statements. The unaudited financial statements of
the Company for the current fiscal year end (the "Latest Balance
Sheet"), which have been delivered to Buyer, are complete and
correct in all material respects, have been prepared on a basis
consistent with that of prior periods, and present fairly the
financial condition and results of operations of the Company as
of and for the periods indicated. As of December 31, 2000, the
Company had no liabilities other than as indicated in the Latest
Balance Sheet. To the best of the knowledge of the Seller, all
accounts receivable on the books of the Company at the Closing
will be collectible as of the Closing at the face amount thereof,
less the accounts receivable deemed to be uncollectible, which
Seller represents to be less than three (3%) percent.
4.5 Taxes. Federal, state and local tax returns, reports and
estimates have been filed for the Company in correct form
for all periods in which such were due. All taxes shown thereby
to be payable have been paid or adequate provision has been made
therefore. Any additional tax liability asserted by the Internal
Revenue Service as a result of any
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examinations has been paid unless contested and disclosed to
Buyer in writing. The provisions for taxes shown on the Latest
Balance Sheet are adequate to cover the liabilities of the
Company for all taxes (including but not limited to, employee
income tax withholding, social security, franchise, sales, use,
ad valorem and unemployment taxes) to the date thereof. All
withholding taxes or other taxes the Company is obligated to
collect have been withheld or collected. Neither the Seller nor
the Company has made or filed any income tax elections to be
taxable as a DISC or under Subchapter S of the Internal Revenue
Code, nor any consents or waivers of statutes of limitation with
respect to the Company.
4.6 Schedules. The Seller has furnished to Buyer the following
documents marked for identification which constitute Schedules
hereto and reflect information as of the date hereof, which
Schedules have been accepted by Buyer.
Schedule (a). A list and brief description of all real and
personal property owned or leased by the Company and of all
leases or agreements under which the Company is lessor or lessee
or holds or operates any property, real or personal. The Seller
may exclude therefrom-miscellaneous personal property having a
current value of less than $1,000.00 in the aggregate.
Schedule (b). A list of (i) the ten largest suppliers (by dollar
volume) of products and services to the Company during the year,
indicating the existing contractual arrangements (if any) with
each such firm and (ii) the names of any suppliers of goods or
services to the Company with respect to which practical
alternative sources of supply are not available on comparable
terms and conditions, to the extent that interruption of such
goods or services would have a material adverse effect on the
business or properties of the Company, indicating the contractual
arrangements, if any, for continued supply from each firm.
Schedule (c). A list of all officers, directors, stockholders
and employees of the Company and information relating to their
respective compensation, a copy of the Company's current policy
with respect to employee compensation and benefits, and a written
description of any prior or proposed transactions of the Company
with any past or present officer, director, employee or
stockholder of the Company or any party related to such officer,
director, employee or stockholder, or any equity in which any of
the foregoing persons owns any interest.
Schedule (d). A list of all material franchises, business
licenses, permits, certificates or any evidence of governmental
approval held by the Company or any of their employees for the
benefit of the Company (and copies thereof).
Schedule (e). A list of all distribution, distributorship,
commission and/or royalty agreements accounting for more than
$10,000.00 per year in sales.
Schedule (f). A list of all policies of fire, liability,
xxxxxxx'x compensation, life and other forms of insurance held by
Company.
Schedule (g). A list and brief description of all litigation to
which the Company has been named a party during the last two (2)
years from the date thereof, and a list and brief description of
material pending or threatened litigation or administrative or
governmental proceedings to which the Company is or may become a
party, or by which its assets, operations, or franchises may be
materially affected.
Schedule (h). Copies of the Company's current pension, profit
sharing, retirement, bonus, stock bonus, stock repurchase,
hospitalization, insurance or other plans, and all policies or
practices, formal or informal, in effect with respect to the
employees of the Company, if any.
Schedule (i). A copy of all loans, notes, instruments of debt,
mortgages, liens, conditional sale or lease purchase agreements,
security agreements and other material encumbrances of the
Company not fully satisfied.
Schedule (j). A list of all other contracts (not referred to in
Schedules (a), (b), (e), (f) or (h) to which the Company is a
party or by which it is bound and which are in effect in respect
of which is or can be an obligation of more than $2,500.00.
Schedule (k). A list of all bank accounts, including current
balances, safe deposit boxes, and securities owned by the Company
and investments of the Company and amounts thereof, accompanied
by a list of names of all persons authorized to draw thereon or
to have access thereto.
Schedule (l). A list of all trademarks, service marks, trade
names, copyrights and similar rights, names, assumed names, or
marks used by the Company, which are owned by the Company or the
Seller, designating the owner(s) thereof.
Schedule (m). A copy of any of the most recent reports filed by
the Company with any Federal, State or local administrative or
governmental agency, including without limitation, the
Environmental Protection agency and Occupational Health and
Safety Administration, and a copy of the most recent reports or
communications received by the Company from such agencies.
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Schedule (n). Copies of the last three (3) years Income Tax
Returns of the Company, including all schedules and attachments
thereto, for the fiscal years ended fiscal year 1998, 1999, and
2000 which have been filed with the Internal Revenue Service.
The information furnished by the Seller to Buyer in accordance
with Section 4.6 hereof was prepared by the Seller after
reasonable investigation, and Seller knows of nothing at this
time, which would result in any material adverse change in said
information.
4.7 Title to Properties. The Company has good and marketable
title to or a valid and binding lease of the real and personal
property or interests therein described in the above Schedules
and all other material assets used in the ordinary course of its
business (including patents, copyrights, trade names, trademarks,
service marks and other names and marks used in connection with
the Company's operations and whether or not reflected in the
Latest Balance Sheet), free and clear of any liens, claims,
charges, options or other encumbrances. Except as disclosed in
Schedule (i), there are no financing statements filed or signed
which list the Company as debtor and no agreements exist
authorizing or permitting any person to sign or file any such
statements. All machinery, electronic equipment and other
equipment in regular use included in such personal property have
been well maintained and are in good and serviceable condition in
all material respects, reasonable wear and tear excepted. The
real property described in Schedule (a) constitutes all of the
interests in real property reflected in the Latest Balance Sheet,
and except as indicated in such schedule, no real property or
interest in real property have been acquired nor have any
agreements to acquire real property been entered into by the
Company, or the Seller for the benefit of the Company, since the
date of the Latest Balance Sheet. The buildings occupied by, and
the operations of the Company, conform in all material respects
with all applicable ordinances, regulations and zoning laws and
all applicable requirements of federal, state or local regulatory
authorities, to the extent that any failure to comply therewith
would or may have a material adverse effect on the business or
properties of the Company, and such buildings are in a reasonable
state of repair and have been well maintained. All leases of
real or personal property are valid and in full force and effect,
and the Company has not breached any provision of, or defaulted
in any respect under the terms of, any such lease, and there has
not been any event that with notice or lapse of time or both
would constitute a breach or default under any such lease;
4.8 Additional Agreements. Except for the contracts in the
Schedules referred to in Section 4.6, the Company is not a party
to any written or oral:
(i) Sales agency, distribution or advertising contract;
(ii) Contract with a labor organization;
(iii) Continuing contract for the future purchase of
services, materials, supplies or equipment in excess of the
requirements of its business now booked or for normal operating
inventories;
(iv) Lease under which it is lessor or lessee;
(v) Pension, profit sharing, retirement, bonus, and
hospitalization, insurance or similar plans or practices, formal
or informal, in effect with respect to its employees or others;
(vi) Contract or agreement of any other nature with any current
or former officer, director, shareholder or employee of the
Company; including any related party to such person;
(vii) Power of attorney; or
(viii) Contract or commitment not elsewhere disclosed in this
Agreement (including the Schedules hereto) and under which there
is or may be an obligation of more than $500.00.
4.9 Litigation. Except as set forth in Schedule (g) hereto,
there are no actions, suits, proceedings or investigations
pending, or threatening against, or affecting the Company, at law
or in equity or before or by any federal, state, municipal or
other governmental department, commission, board, agency or
instrumentality, and the Company is not in default wit respect to
any order, writ, injunction or decree of any court or federal,
state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality. Neither the Company
nor the Seller are a party to or subject to any judgment, order
or decree entered in any action or proceeding brought by any
governmental agency or any other party against the Company or the
Seller, enjoining them or any of them in respect of, or the
effect of which is to limit, restrict, regulate or prohibit, any
business practice or the conduct of their business or the
acquisition of any property. There are no actions, suits,
proceedings or claims pending or threatened against the Seller
with respect to or in any manner affecting the ownership of the
Shares, or wherein an unfavorable ruling, decision or finding
would render unlawful or otherwise adversely affect the
consummation of the transactions contemplated by the Agreement;
4.10 Use of Properties. The Company has conducted and is now
conducting its business and operations in compliance with all
zoning laws and deed restrictions, if any, applicable to its
properties, and with all other
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4.10 applicable laws, rules, regulations, and ordinances,
including without limitations, those relating to licensing and
permits, business practices and occupational safety, health and
employment practices, and pollution and other environmental
problems. The Company is not nor by consummation of the
transactions contemplated hereby will it be in violation of, or
in default with respect to, any deed restrictions applicable to
its real property, any applicable law or any applicable rule,
regulation, or any writ or decree of any court or any
governmental or quasi-governmental commission, board, bureau,
agency, or instrumentality, or delinquent with respect to any
report required to be filed with any governmental or quasi-
governmental commission, board, bureau, agency or
instrumentality; all real property owned by the Company for
development, or which the Company has an option or contract to
purchase, it suitable for the use for which it is intended and
there are no restrictions, legal or physical, which will encumber
or restrict such use;
4.11 Enforceability of Agreement. The Seller has all requisite
power, authority and capacity to enter into this Agreement and to
perform his respective obligations hereunder. The Agreement
constitutes a valid and legally binding obligation of Seller,
enforceable in accordance with its terms. Neither the execution
and delivery of this Agreement nor the performance hereof will
constitute or result in the breach of any term, condition or
provision of, or constitute a default under, the articles of
incorporation, bylaws or other corporate document of the Company,
or under any material agreement or other instrument to which the
Company or the Seller are a party, or under any law, regulation,
judgment or order binding upon the Company or the Seller, or
result in the creation of any lien, charge or encumbrance against
the Shares or the Company or any of its assets.
4.12 No Defaults. The Company has performed all obligations
required to be performed all obligations required to be performed
by it to date and is not in default, in any material respect,
under any of the agreements, contracts, or other documents to
which it is a party, nor has there occurred any event that with
notice or the lapse of time or both would constitute a material
default under such agreements, contracts or other documents,
except as set forth in the Schedules hereto. Except for those
contracts which by their express terms are nonassignable, the
Company is not a party to any contract or agreement which is
nonassignable or which will be adversely affected by the sale of
the Shares;
4.13 Adverse Events. Since the date of the Latest Balance Sheet
up to and including the Closing there has not been:
(1) Any material change, favorable or adverse, in the business,
operations, liabilities, expenses, gross operating profits,
financial condition, assets, or prospects of the Company, except
for any adverse change in the market for products manufactured by
the Company as of the date hereof, or occurring after the date
hereof and prior to the Closing; or
(2) Any theft, damage, destruction or casualty loss (whether or
not covered by insurance) materially and adversely affecting the
business, the results of operations, any material asset, or the
prospects or financial condition of the Company; or
(3) Any labor disputes, other than routine grievance matters,
none of which are material, except for pending labor negotiations
involving the Company; or
(4) Any declaration, setting aside or payment of any dividend or
other distribution in respect to the capital stock of the
Company; or
(5) Any change in the number of shares or classes of the
Company's outstanding or authorized capital stock as described in
Section 4.2 hereof, or any transfer of the Shares or any interest
therein; or
(6) Any liens place on assets other than in the ordinary course
of business; nor any sale of equity securities of the Company,
including options, warrants, subscriptions, calls, or other
understandings or commitments;
(7) Any amendments to the articles of incorporation or bylaws of
the Company.
4.14 Liabilities. There are no liabilities of the Company of
any kind whatsoever, whether or not accrued or contingent and
whether or not determined or determinable other than:
(1) Liabilities disclosed or provided for in the Latest Balance
Sheet in accordance with generally accepted accounting
principles;
(2) Liabilities disclosed in the Schedules referred to herein;
(3) Liabilities under contracts in respect of which there is or
may be an obligation of $2,500.00 or more;
(4) Liabilities incurred in the ordinary course of business
since the date of the Latest Balance Sheet which are not required
to be disclosed in any Schedule, none of which have a materially
adverse effect on the business, results of operations, assets,
financial condition, prospects or manner of conducting the
business of the Company and none of which are attributable to any
period prior to the date of the unaudited balance sheet of the
Company as of December 31, 2000.
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(5) Liabilities relating to workmen's compensation insurance
claims which are in the aggregate not in excess of $25,000.00.
4.15 Insurance. All of the insurance policies of the Company
are in full force and effect and neither the Seller nor the
Company has knowledge of any threat by any insurance carrier to
terminate any of the insurance policies now held by the Company
or increase any premiums in respect thereof, nor has the Company
failed to comply with any material conditions contained in any of
such policies. The Company is insured with respect to loss or
damage to buildings, equipment and inventory, public liability,
products liability, xxxxxxx'x compensation and all other risks
normally insured against by companies similarly situated.
4.16 Corporate Records. True and correct copies of the articles
of incorporation and bylaws of the Company or any predecessor to
the Company have been delivered to Buyer. The corporate minute
books of the Company will be delivered to Buyer at Closing, and
contain the minutes of all of the meetings of its directors and
shareholders which have been held. In addition, the corporate
minute books accurately reflect the current officers and
directors of the Company;
4.17 Accuracy of Representations, Warranties and Covenants. No
representation, warranty or statement made by the Seller in or
pursuant to this Agreement, the Exhibits or the Schedules
contains or will at Closing contain any untrue statement of a
material fact or omits or will omit to state any material fact
necessary to make such representation, warranty or statement not
misleading, in light of the circumstances in which it was made.
5. COVENANTS OF BUYER
5.1 Covenants. The Buyer covenants and agrees that between the
date hereof and the Closing:
(a) Without the prior written consent of the Seller, the Buyer
shall not take any action which would cause or tend to cause any
conditions precedent to any obligations hereunder not to be
fulfilled, including, without limitation, taking, causing to be
taken, or permitting or suffering to be taken or to exist any
action, condition or thing which would cause the representations
and warranties made by it in Section 3 hereof not to be true,
correct and accurate as of the Closing.
(b) Buyer shall promptly file or submit and diligently prosecute
any and all applications or notices with public authorities,
federal, state or local, domestic or foreign, and all other
requests for approvals to any private persons, including
franchisers, the filing or granting of which is necessary, or is
deemed necessary or appropriate by, any of the parties hereto,
for the consummation of the transactions contemplated hereby.
(c) Buyer shall take all-reasonable steps which are within their
power to cause to be fulfilled any conditions precedent to the
Seller's obligation to consummate the transactions contemplated
hereby which are dependent upon the actions of Buyer.
6. COVENANTS OF SELLER
The Seller covenants and agrees that, between the date hereof and
the Closing:
6.1 Access. The Seller will afford to the authorized
representatives of Buyer, upon request, reasonable access to the
offices, properties, books and records of the Company and will
furnish Buyer with such additional financial and operating data
and other information as may be reasonably requested in writing
prior to the Closing.
6.2 Amendment to Schedules. The Seller shall promptly amend the
Schedules hereto to ensure that such Schedules remain true,
correct and complete in all material respects between the date of
this Agreement and the Closing. Delivery by the Seller of any
amended Schedule shall constitute a representation and warranty
by the Seller to each amended Schedule to the same extent as the
original Schedules.
6.3 Actions Prior to Closing. The Seller agrees that prior to
Closing, they will not cause the Company to, without the prior
written consent of Buyer:
(a) Mortgage, pledge or subject to lien, charge, security
agreement or any other encumbrance, the Shares or any of the
Company's assets, or issue, incur, assume or guarantee any
indebtedness;
(b) Sell, transfer or dispose of any of the Company's assets,
except in the ordinary course of business;
(c) Waive any rights of substantial value or allow any material
franchise, license, permit or governmental approval to lapse;
(d) Enter into any transaction (except as specifically provided
for in this Agreement) or make any commitment other than in the
ordinary course of business;
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(e) Make any increase in employee compensation or benefits or
pay or become obligated to pay any bonuses or other remuneration
in excess of the salaries, commissions and wage rates shown on
Schedule (c) hereto;
(f) Declare, set aside or pay any distribution or any dividend
to any shareholder of the Company;
(g) Amend, renew, extend, modify or terminate any franchise,
contract, agreement, license, permit or governmental approval
(except for routine renewals and extensions of licenses, permits
and other governmental approvals by the Company in the ordinary
course of business); provided, however, that agreements with
suppliers may be amended or renewed in the ordinary course of
business so long as any such amendment or renewal does not
adversely affect the revenues or the liabilities of the Company
thereunder;
(h) Take any action which would cause or tend to cause any
conditions precedent to any obligations hereunder not to be
fulfilled, including, without limitation, taking, causing to be
taken, or permitting or suffering to be taken or to exist any
action, condition or thing which would cause the representations
and warranties made under Section 4 hereof not to be true;
(i) Amend the articles of incorporation, bylaws or other
corporate documents of Company; or
(j) Make any change in the authorized, issued or outstanding
capital stock of the Company, or issue or agree to issue any of
its securities, or any option, call, subscription, warrant, right
or other commitment with respect to any of the securities of the
Company.
From and after the date hereof, the Seller will cause the Company
to operate and maintain their business
during the period prior to the Closing in substantially the same
manner in which it has been operated
and maintained.
6.4 Governmental Approvals. The Seller shall promptly file or
submit and diligently prosecute any and all applications or
notices with public authorities, federal, state or local,
domestic or foreign, and all other requests for approvals to any
private persons, the filing or granting of which is necessary, or
is deemed necessary or appropriate by any of the parties hereto,
for the consummation of the transactions contemplated hereby, or
for the preventing of any termination of any material right,
privilege, license, agreement of or any material loss or
disadvantage to the Company or Buyer upon the consummation of the
transactions contemplated hereby;
6.5 Conditions Precedent. The Seller shall take all reasonable
steps which are within their power to cause to be fulfilled those
of the conditions precedent to Buyer's obligations to consummate
the transactions contemplated hereby which are dependent upon the
actions of the Seller or the Company;
6.6 Transfer of Shares. The Seller will not, prior to closing,
transfer, pledge, assign or sell any of the Shares, or any
interest therein;
6.7 Redemption of Shares. The Seller will not cause the
Company, prior to closing, to redeem any of the Shares, or any
interest therein, except as authorized herein.
7. CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions
contemplated hereby shall be subject to the following conditions:
7.1 Representations and Warranties True and Correct. At the
Closing, all representations and warranties of the Seller
contained herein shall have been true on the date hereof and
shall be true and correct as of the Closing as if made for the
first time as of the Closing; and the Seller and the Company
shall have performed all obligations and complied with all
covenants required by this Agreement to be performed or complied
with by them or by the Company prior to the Closing. Buyer shall
have been furnished with a certificate, signed by the Seller and
dated as of the Closing, to the foregoing effect;
7.2 Governmental Approvals Obtained. All approvals of
applications to public authorities, federal, state of local, and
all approvals of any private persons the granting of which is
necessary for the consummation of the transactions contemplated
hereby, or for the preventing of any termination of any material
right, privilege, license, or agreement of the Company or Buyer,
upon consummation of the transactions contemplated hereby, shall
have been obtained on terms satisfactory to Buyer.
7.3 Franchise Approval Obtained. Buyer shall have received
reasonable assurance from Southwestern Xxxx and other material
franchisers, that Buyer will be able to continue the existing
franchise agreements.
7.4 Resignations. Written resignations of all directors and
officers of the Company except Seller will be delivered at the
Closing. The resignations will also provide for a resignation of
all power and authority held by them to handle Company funds or
accounts, among other things;
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7.5 Approval of Amended Schedules. The Buyer shall approve all
amendments to the Schedules to be furnished by the Seller as
noted in Section 4.6.
8. CONDITIONS TO OBLIGATIONS OF THE SELLER
The obligations of the Seller to consummate the transactions
contemplated hereby shall be subject to the following conditions:
8.1 Representations and Warranties True and Correct. The
representations and warranties of Buyer contained herein shall
have been true on the date hereof and shall be true and correct
as of the Closing as if made for the first time as of Closing;
and Buyer shall have performed all obligations and complied with
all covenants required by this Agreement to be performed or
complied with by Buyer prior to the Closing.
8.2 Action by Seller Subsequent to Closing. Seller agrees that,
subsequent to closing, they will not cause the Company to,
without the prior written consent of Buyer:
(a) Amend the articles of incorporation, bylaws or other
corporate documents of Company; or
(b) Make any change in the authorized, issued or outstanding
capital stock of the Company, or issue or agree to issue any of
its securities, or any option, subscription, warrant or other
stock right with respect to the stock of the Company until the
notes described in paragraph 1.1 are paid in full.
9. MISCELLANEOUS
9.1 Notices. Any notice, request, instruction or other
document to be given under this Agreement after the date hereof
by any party hereto to any other party shall be in writing and
shall be delivered personally or sent by registered or certified
mail, postage prepaid, to the addresses shown on the signature
pages of this Amendment, or to such other address or person as
any party may designate by written notice to the other.
9.2 Termination.
(a) Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the
transactions contemplated herein abandoned at any time prior to
Closing:
(i) By mutual written consent signed by Buyer and Seller;
(ii) By Buyer, if any condition to their obligations as set forth
in this Agreement has not been met and has not been waived; or
(iii) By Seller, if any condition to their obligations as set
forth in this Agreement has not been met and has not been waived.
(iv) In the event of any material loss or damage to the Company's
properties and assets prior to the Closing, then Buyer may elect
to cancel and terminate this Agreement by written notice to
Seller within ten days after receipt of notice of such damage or
destruction from the Company and the Seller.
(b) In the event of the termination of this Agreement pursuant
to the provisions hereof, this Agreement shall immediately become
void and have no effect, without any liability on the part of any
party hereto, and all expenses related hereto shall be borne by
the party incurring them.
9.3 Expenses. Buyer shall bear all expenses incurred in
connection with this Agreement and with the performance of their
obligations hereunder. The Seller and Buyer agree and represent
to each other that no third person has brought the parties
together or been instrumental in this transaction to such an
extent as to be entitled to compensation therefore. Accordingly,
each of the parties hereto shall indemnify the other for any
liability to any broker, finder of other third party for any fees
in connection with the transactions contemplated hereby resulting
from such indemnifying party's actions in connection herewith.
9.4 Indemnification of Buyer. The Seller agrees that,
notwithstanding any investigation of the assets, properties,
books, records, and business of the Company made by or on behalf
of Buyer prior to the Closing, the Seller shall indemnify Buyer
and each of their officers and directors and each person who
"controls" Buyer within the meaning of Section 15 of the
Securities Act of 1933, and shall hold such persons harmless from
and against all damages, losses, claims, liabilities and
expenses, including attorneys' fees (net of any insurance
proceeds, or similar recoveries, and net of any reserves
established by the Company specifically for such damages, losses,
claims, liabilities and expenses) caused by or arising out of (i)
any breach of warranty, representation or covenant contained in
this Agreement or in any Exhibit or Schedule delivered pursuant
hereto, arising within two years of the Closing
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or (ii) any claim, lawsuit, obligation, tax deficiency, or other
liability asserted with respect of any undisclosed liabilities of
the Company arising within two years of the Closing. Anything in
this Agreement to the contrary notwithstanding, claims made
against the Seller for indemnification hereunder shall not
exceed, in the aggregate, $250,000.00. In the event Buyer
proposes to make any claim hereunder, they shall deliver notice
to the Seller signed by an officer of Buyer stating the nature of
such claim and the amount claimed, if known. The Seller shall
have 30 days from the receipt of such notice to notify Buyer
whether or not they dispute their liability hereunder with
respect to such claim or demand. If such claim is asserted by a
third party (a "third party claim"), the Seller may, at his sole
option, elect to defend Buyer, at their cost, against such third
party claim such election to be made within the 30 day period
noted above; provided that such defense shall be conducted by
counsel satisfactory to Buyer, and the Seller shall not enter
into any settlement of such claim without written consent of
Buyer. With respect to non-third party claims as to which the
Seller disputes their liability or with respect to third party
claims as to which they elect not to defend, the liability of the
Seller shall be determined by a final and nonappealable judgment
entered by a court of competent jurisdiction or by written
consent of the Seller. Buyer's rights of indemnification set
forth herein, or the rights of offset set forth in Section 9.7
below, shall not be its exclusive remedy (whether at law or in
equity) for any breach of the covenants, representations or
warranties contained in this Agreement, or in any Exhibit or
Schedule delivered pursuant hereto, and/or for any other recovery
hereunder.
9.5 Indemnification of the Seller. Buyer agrees to indemnify
the Seller and hold the Seller harmless from and against all
damages, losses, claims, liabilities and expenses, including
attorney's fees, caused by or arising out of any breach of the
covenants, representations or warranties (net of any insurance
proceeds or similar recoveries) of Buyer contained in this
Agreement arising within two years after the Closing. In the
event the Seller proposes to make any claim hereunder, they shall
deliver a notice to Buyer signed by the Seller stating the nature
of such claim and the amount claimed, if known. Buyer's
liability hereunder shall be determined in the same manner as the
liability of the Seller is to be determined as set forth in
Section 9.6 hereof.
9.6 Release From Personal Guarantees. Seller has personally
guaranteed indebtedness of the Company including, but not limited
to, notes with City National Bank and Guaranty Bank, a schedule
of which indebtedness has been provided to Buyer and is
incorporated herein by reference. Buyer shall obtain the release
of Seller's personal guarantees of Company indebtedness within
thirty (30) days of Closing.
9.7 Employment Agreement With Xxxxx X. Xxxxxxx. Buyer shall, at
closing, enter into a written employment agreement with Seller
for a term of five years in form identical to Exhibit "A"
attached hereto and incorporated by reference.
9.8. Purchase Agreement for Digitec Building. Buyer/Digitec
shall, at closing, execute a purchase agreement for a term of ten
(10) years with Seller, for the real property located at 1610
Xxxxx, Sulphur Springs, Texas upon such terms and conditions as
may be agreed to prior to Closing.
9.9 Miscellaneous. This Agreement (together with the Exhibits,
financial statements, Schedules and other documents referred to
herein) constitutes the entire contract and understanding between
the parties hereto and supersedes all prior agreements,
arrangements and understandings relating to the subject matter
hereof. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto.
This Agreement and the rights and obligations hereunder shall not
be assignable. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties
hereto, and their respective heirs, legal representatives,
successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement. Each
respective spouse of a Seller joins in this agreement to evidence
her agreement to be bound hereby and to evidence here consent to
the execution hereof and performance of the terms hereof by her
respective spouse and hereby consents to the sale of the Shares,
approves the provisions hereof and acknowledges that her interest
in the Shares, to whatever extent, if any, she may have any
interest, is subject to this Agreement. Such spouse agrees to
execute the endorsement and any other transfer document
evidencing transfer of the Shares delivered hereunder if she is
requested to do so, and hereby appoints her husband as her agent
and attorney-in-fact to act on her behalf and for her in regard
to transferring the Shares to the extent of her interest, if any,
therein at and upon Closing. The foregoing appointment is
irrevocable, coupled with an interest and shall survive death or
incapacity.
9.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Texas and
shall be performable in Xxxxxxx County, Texas.
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EXECUTED THIS 18 DAY OF JANUARY 2001.
BUYER SELLER
ED-LAM ACQUISITION CORP. DIGITEC INFORMATION
SYSTEMS, INC.
By:/S/Xxxxxx X. Xxxxx /s/Xxxxx X.Xxxxxxx
Xxxxxx X. Xxxxx, President Xxxxx X.Xxxxxxx, President
Ed-lam Acquisition Corp. Digitec Information Systems, Inc.
PRO-FORMA
TRIDEN TELECOM, INC.
BY: /s/Xxxxxx X. Xxxxx /s/Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx, President Xxxxx X. Xxxxxxx
Triden Telecom, Inc. Majority Shareholder
Digitec Information Systems,Inc.
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